stock market

FX Daily: Asia in the driver's seat

The dollar is softer and pro-cyclical currencies are following the yuan higher after news that China is preparing a CNY 2tn rescue package for the stock market. The BoJ revised inflation expectations lower but signalled further progress towards the target, keeping anticipation for a hike in June alive. We expect New Zealand CPI to be soft tonight.

 

USD: China and Japan in focus

The dollar has been mostly moved by developments from outside of the US since the start of the week. China remains the centre of attention before key central bank meetings in the developed world. Risk sentiment was boosted overnight as the Chinese government is reportedly considering a large CNY 2tn package to support the struggling stock markets. The rescue plan should be mostly targeted to the Hang Seng stock exchange, which has sharply underperformed global equities of late. This is a strong message that conveys Beijing’s intention to artificially support Chinese ma

Read more
Boosting Stimulus: A Look at Recent Developments and Market Impact

A Sleepy Week for the Indices?

Finance Press Release Finance Press Release 12.02.2021 15:45
For once, we have a week in 2021 where the market really didn't move all that much.Except for weed stocks that whipsawed GameStock-like and Bitcoin and Dogecoin making waves thanks to Lord Elon, it's really been kind of a boring week for the major indices.The S&P and Nasdaq closed at another record high Thursday (Feb. 11), while the Dow barely retreated from its own record high. The red-hot Russell has lagged this week.However, it’s all relative. No index has moved upwards or downwards more than about 0.30% week-to-date.It’s about time we had a week of relative quiet in the market.The sentiment is indeed still rosy right now. The economic recovery appears to be gaining steam, and the Q1 GDP decline everyone predicted might not be as sharp as we anticipated. We could also be days away from trillions of dollars of much-needed stimulus getting pumped into the economy.Earnings continue to impress, too, and are on pace to rise by over 20% in 2021. Since 1980, only 12 years have earnings increased by 15% or more. Except for 2018, the market gained an average of 12% in all of those years.We could also days away from FDA approval of a one-dose vaccine from Johnson and Johnson (JNJ).The COVID numbers and vaccine trend could truly turn the tide of things. More people in the U.S. have now been vaccinated than total cases, and the week kicked off (Feb. 8) with vaccine doses outnumbering new cases 10-1. Dr. Fauci also claims that vaccines could be available to the general public by April.But we're not out of the woods yet. Sure this week has been calm.But it’s almost been “too calm.”I still worry about complacency, valuations, and the return of inflation.“You wouldn’t know it from the sedate action in the averages,” but Wall Street is on “a highway to the danger zone,” CNBC ’s Jim Cramer said.“In a frothy market, stocks will have enormous rallies that are totally disconnected from the underlying fundamentals.”He’s not wrong.Look at the Buffett Indicator as of February 4. Where I track this indicator usually updates once a week and shows the total U.S. stock market valuation to the GDP. If you take the US stock market cap of $48.7 trillion and the estimated GDP of $21.7 trillion, we're nearly 224% overvalued and 84% above the historical average. This ratio has not been at a level like this since the dotcom bubble.Worse? This chart was dated February 4. The market’s only risen since then.This is what I mean by don’t be fooled by the relative calm of this week.The S&P 500’s forward 12-month P/E ratio is also well above its 10-year average of 15.8. The Russell 2000 is also back at a historic high above its 200-day moving average. Tech stock valuations are again approaching dotcom bust levels.Still not sold? Look at Goldman’s non-profitable tech index. It’s approaching an absurd 250% year-over-year performance.Bank of America also believes that a market correction could be on the horizon due to signs of overheating.While I don’t foresee a crash like we saw last March, I still maintain that some correction before the end of Q1 could happen.Corrections are healthy and normal market behavior, and we are long overdue for one. They are also way more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.Bank of America also echoed this statement and said that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and ‘as good as it gets’ earnings revisions.”The key word here- buyable.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one where I could help people who needed help, instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don't think that a decline above ~20%, leading to a bear market will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. The Streaky S&P Is Back at a Record Figure 1- S&P 500 Large Cap Index $SPXThe S&P continues to trade as a streaky index. It seemingly rips off multiple-day winning streaks or losing streaks weekly.After the S&P 500 ripped off a streak of gains in 6 of 7 days, it promptly went on a 3-day losing streak, followed by another record close.I would hardly call that a 3-day losing streak, though. I’d even say it was a boring week for the S&P 500 with muted moves.The outlook is healthy, though, especially when you consider earnings. More than 80% of S&P stocks that have reported earnings thus far have beaten estimates.What could be on tap for next week? Who even knows anymore. But if earnings keep on outperforming, and the sentiment remains stable, it could be another strong week.The S&P’s RSI is ticking up towards overbought. However, because it’s still below 70, and because of the streaky manner in which the index has traded, it remains a HOLD.A short-term correction could inevitably occur by the end of Q1 2021, but for now, I am sticking with the S&P as a HOLD.For an ETF that attempts to directly correlate with the performance of the S&P, the SPDR S&P ETF (SPY) is a good option.For more of my thoughts on the market, such as red-hot small-caps and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
S&P 500 Correction Looming, Just as in Gold – Or Not?

S&P 500 Correction Looming, Just as in Gold – Or Not?

Monica Kingsley Monica Kingsley 12.02.2021 16:50
Stocks are clinging to the 3,900 level, and the bulls aren‘t yielding. Without much fanfare, both the sentiment readings and put/call ratio are at the greed and compacent end of the spectrum again. How long can it last, and what shape the upcoming correction would have? Right now, the warning signs are mounting, yet the bears shouldn‘t put all their eggs into the correction basket really, for it shapes to be a shallow one – one in time, rather than in price.Gold‘s hardship is another cup of tea, standing in stark comparison to how well silver and platinum are doing. At the same time, the dollar hasn‘t really moved to the upside – there is no dollar breakout. If the greenback were to break to the upside, that would mean a dollar bull market, which I don't view as a proposition fittingly describing the reality – I called the topping dollar earlier this week. The world reserve currency will remain on the defensive this year, and we saw not a retest, but a local top.This has powerful implications for the precious metals, where the only question is whether we get a weak corrective move to the downside still, or whether we can base in a narrow range, followed by another upleg (think spring). February isn't the strongest month for precious metals seasonally, true, but it isn't a disaster either. As has been the case throughout the week, I‘ll update and present the evidence of internal sectoral strength also today.One more note concerning the markets – in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsThird day of hesitation, this time again with a thrust to the downside. Marginally increasing volume, which speaks of not too much conviction by either side yet. As the very short-term situation remains tense, my yesterday‘s words still apply today:(…) I think this corrective span has a bit further to run in time really. (…) the bears are just rocking the boat, that‘s all.The market breadth indicators are deteriorating, without stock prices actually following them down. Thus far, the correction is indeed shaping to be one in time and characterized by mostly sideways trading. Unless you look at the following chart.Volatility has died down recently, yet a brief spike (not reaching anywhere high, just beating the 24 level) wouldn‘t be unimaginable to visit us by the nearest Wednesday. In all likelihood, it would be accompanied by lower stock prices. Well worth watching.Credit Markets and TechThere is a growing discrepancy between high yield corporate bonds (HYG ETF) and its investment grade counterpart (LQD ETF). Both leading credit market ratios have been diverging not only since the end of Jan, but practically throughout 2021. The theme of rising yields is exerting pressure on the higher end of the debt market as the stock investment fever goes on – that‘s my take.No, this is not a bubble – not a parabolic one. The tech sector is gradually assuming leadership in the S&P 500 advance, accompanied by microrotations as value goes into favor and falls out of it, relatively speaking. Higher highs are coming, earnings are doing great, and valuations aren‘t an issue still.Gold, Silver and RatiosUnder pressure right as we speak ($1,815), the yellow metal‘s technical outlook hasn‘t flipped bearish. Should we get to last Thursday‘s lows, it would happen on daily indicators ready to flash a bullish divergence once prices stabilize. But for all the intense bearish talk, we haven‘t broken below the late Nov lows.For those inclined so, I am raising the arbitrage trade possibility. Long silver, short gold would be consistent with my prior assessment of the gold-silver ratio going down. Similarly to bullish gold bets, that‘s a longer-term trade, which however wouldn‘t likely take much patience to unfold and stick.A bullish chart showing that gold isn‘t following the rising yields all that closely these days. Decoupling from the Treasury yields is a positive sign for the sector, and exactly what you would expect given the (commodity) inflation and twin deficits biting.Silver continues to trade in its bullish consolidation, and unlike in gold, its short-term bullish flag formation remains intact. The path of least resistance for the white metal remains higher.Gold juniors (black line) keep their relative strength vs. the senior gold miners, and the mining sector keeps sending bullish signals, especialy when silver miners enter the picture.SummaryThe stock market tremors aren‘t over, and the signs of deterioration keep creeping in. The bull run isn‘t however in jeopardy, and there are no signals thus far pointing to an onset of a deeper correction right now.The gold bulls find it harder to defend their gains, unlike the silver ones. That‘s the short-term objective situation, regardless of expansive monetary and fiscal policies, real economy recovery, returning inflation and declining U.S. dollar. The new upleg keeps knocking on the door, and patience will be richly rewarded.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

S&P 500 Correction Delayed Again While Silver Runs

Monica Kingsley Monica Kingsley 15.02.2021 14:15
The window of opportunity for the stock bears is slowly but surely closing down as Friday‘s gentle intraday peek higher turned into a buying spree before the closing bell. The sentiment readings and put/call ratio are at the greed, euphoric and compacent end of the spectrum again. I asked on Friday:(…) How long can it last, and what shape the upcoming correction would have? Right now, the warning signs are mounting, yet the bears shouldn‘t put all their eggs into the correction basket really, for it shapes to be a shallow one – one in time, rather than in price.Today, I‘ll say that waiting for a correction is like waiting for Godot. Trust me, I have come to experience quite some absurd and Kafkaesque drama not too long ago. What an understatement.One week ago, I called the dollar as making a local top, and look where we are in the process. Coupled with the steepening pace of rising long-dated Treasury yields, that‘s a great environment for financials (XLF ETF) as they benefit from the widening yield curve.Gold remains a drag on the precious metals performance, with silver and platinum flying. The miners‘ outlook and internal dynamics between various mining indices, provides a much needed proof to those short on patience. Little wonder, after 5+ months of downside correction whose target I called on Aug 07 in the article S&P 500 Bulls Meet Non-Farm Payrolls. Little wonder given the monstrous pace of new money creation beating quite a few prior interventions combined.Yet, the precious metals complex is coming back to life as the economic recovery goes on, and will get new stimulus fuel. Commodity prices are rising steeply across the board, yet inflation as measured by CPI, will have to wait for the job market to start feeling the heat, which it obviously doesn‘t in the current pace of job creation and low participation rate. Until labor gets more powerful in the price discovery mechanism (through market-based dynamics!), the raging inflationary fire will be under control, manifesting only in (financial) asset price inflation. That‘s precisely what you would expect when new money is no longer sitting on banks‘ balance sheets, but flowing into the economy. Again quoting my Friday‘s words:(…) One more note concerning the markets – in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsThe weekly S&P 500 chart is still one of strength, without a top in sight. And the lower volume, I don‘t view as concerning at all.After a three day sideways consolidation, stock bulls forced a close higher on Friday. Low volume, but still higher prices. The bears missed an opportunity to act, having hesitated for quite a few days. Not that the (big picture) path of least resistance weren‘t higher before that, though.The market breadth indicators got a boost on Friday, but it‘s especially the new highs new lows that have a way to go. One would expect a bigger uptick given Friday‘s price advance, but the overall message is still one of cautious but well grounded optimism.Credit Markets, Treasuries and DollarThe high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio performance is lining up nicely with the S&P 500 one, and definitely isn‘t flashing a warning sign for the days to come.Long-term Treasuries are declining at a faster pace than has been the case in late 2020, which is (not immediately right now, but give it time and it‘ll turn out to be) concerning. Thus far though, the money flows are positive for the stock (and other risk on) markets as the liquidity tide keeps hitting the tape.Who suffers? The dollar. No, it‘s not breaking higher (retracing breakout before a run higher – no) above the 50-day moving average or any way you draw a declining resistance line on higher time frames. The greenback is getting ready for another powerful downleg.Gold and SilverGold bulls have repelled another selling wave, which was however not the strongest one. The fact there was one in the first place even, is more (short-term) concerning for the gold bulls. But please remember that it was first gold that got it right in jumping higher on the unprecedented money printing spree as we entered spring 2020, followed by copper, base metals, agricultural commodities, and also oil now (remember my recent bullish calls for over $80 per barrel in less than 2 years). Gold keeps catching breath, frustrating the bulls who „know“ it can only go higher, but its spark isn‘t there at the moment. A perfect example is Monday‘s session thus far – spot gold 0.25% down, spot silver 1.25% up. It‘s been only on Friday when I touted the gold-silver spread trade idea as not having exhausted its potential yet, not by a long shot:(…) For those inclined so, I am raising the arbitrage trade possibility. Long silver, short gold would be consistent with my prior assessment of the gold-silver ratio going down. Similarly to bullish gold bets, that‘s a longer-term trade, which however wouldn‘t likely take much patience to unfold and stick.Silver keeps acting in a bullish way, tracking commodities ($CRB) performance much better than gold does at the moment. While both are a bullish play with the many factors arrayed behind their upcoming rise, it‘s silver that will reap the greatest rewards – today and in the days and weeks ahead. Gold and Silver MinersBack to the beaten down and underperforming gold. See that the yellow metal still isn‘t following the rising yields all that closely these days. Decoupling from the Treasury yields bodes well for precious metals universally, and it‘s precisely what you would expect given the (commodity) inflation, twin deficits biting, and the dollar balancing on the brink.The miners examination also proves no change in the underlying bullish dynamic that is largely playing out below the surface. We‘re seeing the continued outperformance of junior gold miners vs. the seniors, and also the great burst of life in the silver miners – these are outperforming ever more visibly the rest of the mining companies.This is a long awaited chart to flip bullish. Thus far, we have had one recent bullish divergence only (the GDX refusal to break to new lows when gold broke below its Jan lows) – once gold miners start leading the yellow metal, the sentiment in the precious metals community would get different compared to today really.SummaryThe deterioration in stock market got postponed with the latter half of Friday bringing in fresh buying pressure. Would the bears appear, at least to rock the boat a little? They had a good chance all the prior week, but didn‘t jump at the opportunity. Their window is closing, slowly but surely. The stock bull run is on, and there are no signals thus far pointing to an onset of a deeper correction soon.The gold bulls continue lagging behind their silver counterparts, predictably. That‘s the objective assessment regardless of unprecendented monetary and fiscal policies, unfolding real economy recovery, inflation cascading through the system, and the dollar struggling to keep its head above water. The new upleg keeps knocking on the door, and patience will be richly rewarded (unless you took me up on the gold-silver arbitrage trade, and are popping the champagne already).
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Still No S&P 500 Correction, Still No Real Change in the Metals

Monica Kingsley Monica Kingsley 16.02.2021 16:11
Yesterday‘s thin volume session didn‘t bring any material changes as the window of opportunity for the stock bears to act, is slowly but surely closing down. Friday‘s intraday move brought increasingly higher prices, and Monday‘s trading extended gains even more. Euphoric, complacent greed as evidenced by the sentiment readings and put/call ratios, is on.I asked on Friday:(…) How long can it last, and what shape the upcoming correction would have? Right now, the warning signs are mounting, yet the bears shouldn‘t put all their eggs into the correction basket really, for it shapes to be a shallow one – one in time, rather than in price.Both on Monday and today, I‘ll say that waiting for a correction is like waiting for Godot. Right from the horse‘s mouth as my personal experience with quite some absurd and Kafkaesque drama got richer recently.The dollar keeps topping out, which I called it to do a week ago – and its losses have been mounting since. Long-dated Treasury yields are rising in tandem, which is a great environment for financials (XLF ETF) and emerging markets (EEM ETF). The former benefit from the widening yield curve, the latter from plain devaluation.Gold performance is still short-term disappointing, and silver and platinum are leading. But it‘s the miners and the moves between various mining indices, that work to soothe the bulls‘ impatience. Understandable as we are in 5+ months of downside correction whose target I called on Aug 07 in the article S&P 500 Bulls Meet Non-Farm Payrolls, witnessing record pace of new money creation.The ongoing economic recovery will get new stimulus support, and that will work to broaden the precious metals advance. Commodity prices are universally rising, and over time, inflation as measured by CPI, will do so too. But not until the current pace of job creation picks up and participation rate turns – we‘re far from that moment. Until then, inflation will be apparent only in (financial) asset prices, which is in line with new money no longer sitting on banks‘ balance sheets, but flowing into the real economy. Again quoting my Friday‘s words:(…) One more note concerning the markets – in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsThe bulls had an opportunity to act for quite a few days in a row, yet missed it. Their inaction confirms that the path of least resistance for stocks is to still rise.The market breadth indicators have improved on Friday, but especially the new highs new lows has a way to go. It could have ticked upwards more given Friday‘s price advance, but didn‘t. The put/call ratio has moved upwards (see chart below), but the overall message is still one of cautious yet reasonable optimism – not enough to trigger the sizable correction quite some participants are constantly awaiting.Credit Markets, Treasuries and DollarThe high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio performance isn‘t out of whack with the S&P 500, but the investment grade corporate bonds to longer dated Treasuries (LQD:IEI) are not confirming exactly. Before the corona crash, the high yield ones were leading the investment grade ones for countless quarters. From the Mar 2020 bottom, the investment grade ones were in the pool position. And since the end of Dec 2020, the high yield ones are leading again, but investment grade ones aren't going up anymore, but down the way long-term Treasuries do. One more sign of the euphoric stage in stocks we're in.Long-term Treasuries are the chart to watch for the market to throw a fit – or not. They‘re declining at a faster pace than has been the case in late 2020, which can bring about trouble - not immediately right away, but over time it can turn out so. The dynamic of money moving into the stock market is thus far still positive as the many risk on assets are gaining on the fast pace of new money creation. The worry about a sudden, sharp reversal is misplaced for now.The dollar is on the receiving end – there is no breakout verification before a run higher in progress – no. Neither above the 50-day moving average, nor any way you draw a declining resistance line on higher time frames. The greenback is about to test and break below its 2021 lows. Solidly below.Gold and SilverGold bulls stood their ground on Friday, yet their yesterday‘s and today‘s performance is rather weak. Not disastrously so, but still indicative of the headwinds gold bulls face. Gold‘s spark isn‘t there at the moment. Putting it into context, please remember that it was first gold that jumped in the unrivalled money printing era arrival in spring 2020, followed by copper, base metals, agricultural commodities, and also oil now (remember my recent bullish calls for over $80 per barrel in less than 2 years). Silver price action is the bullish one, in line with commodities ($CRB) performance being much stronger now. Silver is definitely better positioned to benefit from the upcoming precious metals rise – today and in the days and weeks ahead. Gold and Silver MinersThe heat gold is taking from rising Treasury yields, is also progressively weaker. The decoupling from rising nominal (real) yields bodes well for precious metals universally, and it‘s precisely what you would expect given the (commodity) inflation, twin deficits, and the dollar on the brink.Gold to all corporate bonds chart reflects the current dillydallying nicely. Gold isn‘t breaking down into a bearish downtrend. The miners examination also proves no change in the underlying bullish dynamic playing out below the surface. Junior gold miners are oputperforming. the seniors, and there is also the great burst of life in the silver miners – these are outperforming ever more visibly the rest of the crowd.Once this chart flips bullish, we have the new upleg clearly visible. Thus far, we have had one recent bullish divergence only (the GDX refusal to break to new lows when gold broke below its Jan lows) – once gold miners start leading the yellow metal, the sentiment in the precious metals community would get different compared to today really.SummaryThe deterioration in stocks got postponed as both Friday and Monday brought new buyers into the market. Would the bears appear, at least to rock the boat a little? I stand by my call that they had a good chance all the prior week, but didn‘t jump at the opportunity – their window is closing, slowly but surely. The stock bull run is on, and there are no signals thus far pointing to an onset of a deeper correction soon.The gold bulls continue lagging behind their silver counterparts, predictably, with both under pressure in Tuesday‘s premarket. Coupled with the miners‘ signals, and unprecendented monetary and fiscal stimulus, unfolding real economy recovery, inflation making its way through the system, and the dollar struggling to keep its head above water, the new PMs upleg is a question of time.
US Industry Shows Strength as Inflation Expectations Decline

Got Bond Concerns?

Finance Press Release Finance Press Release 17.02.2021 15:25
The market largely continued last week’s mixed moves, with the S&P and Nasdaq mildly retreating from record highs and the Dow eking out another record close.The sentiment remains mostly rosy thanks to earnings that continue to impress, plummeting virus numbers worldwide, indicators that the economic recovery is gaining steam, and imminent stimulus.But we’re not out of the woods yet, and I still worry about complacency and valuations.But now, you can add one more concern to the list- rising bond yields.On Tuesday (Feb. 16), the 10-year Treasury yield jumped 9 basis points to top 1.30% for the first time since February 2020. The 30-year rate also hit its highest level in a year.Why is this concerning?Rising interest rates=less attractive stocks.Sure, the banks benefit. But what do you think this means for growth sectors such as tech that have benefited from low-rates?You couple that with the fact that according to the Buffet Indicator (Total US stock market valuation/GDP), the market could be 228% overvalued, and tech stocks may be at valuations not seen since the dotcom bubble? Genuine concerns.A rebound in rates could also put a dent in the economic recovery if both companies and consumers find it increasingly expensive to borrow.While I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.Bank of America also echoed this statement and said last week that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and ‘as good as it gets’ earnings revisions.”Corrections are healthy and normal market behavior, and we are long overdue for one. They are also way more common than most realize. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017).A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. The Streaky S&P Is Back at a Record Figure 1- S&P 500 Large Cap Index $SPXThe S&P continues to trade as a streaky index. It seemingly rips off multiple-day winning streaks or losing streaks weekly.Before Tuesday’s (Feb. 16) “decline” (if you can call it that), here’s how the S&P has traded in February. It kicked off the month by ripping off a streak of gains in 6 of 7 days. It then promptly went on a 3-day losing streak, followed by a two-day winning streak and more record closes.Then it declined a 0.06% to kick off the President’s Day shortened trading week.More than 80% of S&P stocks that have reported earnings have beaten estimates, which is quite impressive. Yes, the forward P/E ratio is historically high. However, this P/E ratio has coincided with growing earnings.With the index also up 5.9% month-to-date and a healthy outlook for the second half of the year, we could have some more room to run.While the S&P’s RSI is still hovering around overbought levels, it’s remained stable at a HOLD level, mainly reflecting its muted moves over the last week and change.A short-term correction could inevitably occur by the end of Q1 2021, but for now, I am sticking with the S&P as a HOLD.For an ETF that attempts to directly correlate with the performance of the S&P, the SPDR S&P ETF (SPY) is a good option.For more of my thoughts on the market, such as red-hot small-caps and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Is That the S&P 500 And Gold Correction Finally?

Monica Kingsley Monica Kingsley 17.02.2021 16:21
The stock bears finally showed they aren‘t an extinct species – merely a seriously endangered one. Yesterday‘s close though gives them a chance to try again today, but they should be tame in expectations. While there is some chart deterioration, it‘s not nearly enough to help fuel a full on bearish onslaught in the S&P 500. There is no serious correction starting now, nothing to really take down stocks seriously for the time being.The Fed remains active, and monetary policy hasn‘t lost its charm (effect) just yet. Commodities and asset price inflation has been in high gear for quite some time, yet it‘s not a raging problem for the Main Street as evidenced by the CPI. Food price inflation, substitution and hedonistic adjustments in its calculation, are a different cup of tea, but CPI isn‘t biting yet.Meanwhile, the real economy recovery goes on (just check yesterday‘s Empire State Manufacturing figures for proof), even without the $1.9T stimulus and infrastructure plans. Once we see signs of strain in the job market (higher participation rate, hourly earnings and hours worked), then the real, palpable inflation story can unfold. But we‘re talking 2022, or even 2023 to get there – and the Fed will just let it overshoot to compensate for the current and prior era.Meanwhile, the wave of new money creation (we‘re almost at double the early 2020 Fed‘s balance sheet value - $4T give or take then vs. almost $7.5T now – and that‘s before the multiplier in commercial banks loan creation kicks in) keeps hitting the markets, going into the real economy, predictably lifting many boats. It‘s my view that we have to (and will) experience a stock market bubble accompanied by the precious metals and commodities one – to a degree, simultaneously, for the stock market is likely to get under pressure first. Again, I am talking the big picture here – not the coming weeks.Meanwhile, the intense talk of S&P 500 correction any-day-week-now is on, just as outrageous gold, silver and miners‘ drop projections. Let‘s examine the bear market is gold – some say that the late 2015 marked bottom, I‘m of the view that the 2016 steep rally was a first proof of turning tide. But the Fed got serious about tightening (raising rates, shrinking its balance sheet), and gold reached the final bottom in Aug 2018. Seeing through the hawks vs. dove fights at the Fed in the latter half of 2018 (December was a notable moment when Powell refused to the markets‘ bidding, remained hawkish in the face of heavy, indiscriminate selling across the board – before relenting).Since then, gold was slowly but surely gathering steam, and speculation in stocks was on. The repo crisis of autumn 2019 didn‘t have a dampening effect either – the Fed was solidly back to accomodative back then. These have all happened well before corona hit – and it wasn‘t able to push gold down really much. The recovery from the forced selling, this deflationary episode (which I had notably declared back in summer 2020 to be a one-off, not to be repeated event), was swift. Commodities have clearly joined, and the picture of various asset classes taking the baton as inflation is cascading through the system, is very clear.Quoting from my yesterday‘s analysis:(…) The dollar keeps topping out, which I called it to do a week ago – and its losses have been mounting since. Long-dated Treasury yields are rising in tandem, which is a great environment for financials (XLF ETF) and emerging markets (EEM ETF). The former benefit from the widening yield curve, the latter from plain devaluation.Gold performance is still short-term disappointing, and silver and platinum are leading. But it‘s the miners and the moves between various mining indices, that work to soothe the bulls‘ impatience. Understandable as we are in 5+ months of downside correction whose target I called on Aug 07 in the article S&P 500 Bulls Meet Non-Farm Payrolls, witnessing record pace of new money creation.The ongoing economic recovery will get new stimulus support, and that will work to broaden the precious metals advance. Again quoting my Friday‘s words:(…) in our print-and-spend-happy world, where the give or take $1.9T stimulus will sooner or later come in one way or another, we better prepare on repricing downside risk in the precious metals, and also better not to fixate on the premature bubble pop talk too closely. I have been stating repeatedly that things have to get really ridiculous first, and this just doesn‘t qualify yet in my view. All those serious correction calls have to wait – in tech and elsewhere, for we‘re going higher overall – like it or not.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookFinally, there is a whiff of bearish activity. Will it last or turn out a one day event as thus far in Feb? The chances for a sideways correction to last at least a little longer, are still on, however the short- and medium-term outlook remains bullish.Credit Markets and TreasuriesHigh yield corporate bonds (HYG ETF) wavered yesterday, trading in a sideways pattern during recent days. Encouragingly, yesterday‘s session attracted increasing volume, which I read as willingness to buy the dip. One dip and done?Long-term Treasuries (TLT ETF) are the key chart on my radar screen right now. The rise in yields is accelerating, and if progressing unmitigated, would throw a spanner into many an asset‘s works. Even though it‘s not apparent right now, there is a chance that we‘ll see a slowdown, even a temporary stabilization, over the coming sessions. The larger trend in rates is higher though, and in the dollar to the downside.Gold, Silver and CommoditiesThe heat gold is taking from rising Treasury yields, has gotten weaker recently, with the decoupling from rising nominal (real) yields being a good omen for precious metals universally. The dynamics of commodity price inflation, dollar hardly balancing under the weight of unprecedented economic policy and twin deficits, attests to the gold upleg arriving sooner rather than later.Let‘s step back, and compare the performance of gold, silver, copper and oil. The weekly chart captures the key turns in monetary policy, the plunge into the corona deflationary bottom, and crucially the timing and pace of each asset‘s recovery. Gold and silver were the first to sensitively respond to activist policies, followed by copper, and finally oil. Is their current breather really such a surprise and reversal of fortunes? Absolutely not.SummaryThe bearish push in stocks has a good chance of finally materializing today. How strong will its internals be, will it entice the bulls to step in – or not yet? The stock bull run is firmly on, and there are no signals thus far pointing to an onset of a deeper correction with today‘s price action.The gold bulls continue lagging behind their silver counterparts, predictably, with both under continued pressure. The yields are rising a bit too fast, taking the metals along – temporarily, until they decouple to a greater degree. Combined with the miners‘ signals, and unprecendented monetary and fiscal stimulus, unfolding real economy recovery, inflation making its way through the system, and the dollar struggling to keep its head above water, the new PMs upleg is a question of time.
Boosting Stimulus: A Look at Recent Developments and Market Impact

S&P 500 Correction – No Need to Hold Onto Your Hat

Monica Kingsley Monica Kingsley 18.02.2021 16:09
Yesterday‘s bearish price action in stocks was the kind of shallow, largely sideways correction I was looking for. Not too enthusiastic follow through – just rocking the boat while the S&P 500 bull run goes on. Stocks are likely to run quite higher before meeting a serious correction. As I argued in yesterday‘s detailed analysis of the Fed policies, their current stance won‘t bring stocks down. But it‘s taking down long-term Treasuries, exerting pressure on the dollar (top in the making called previous Monday), and fuelling commodities – albeit at very differnt pace. The divergencies I have described yesterday, center on weak gold performance – not gaining traction through the monetary inflation, instead trading way closer in sympathy with Treasury prices. Gold has frontrunned the other commodities through the corona deflationary shock, and appears waiting for more signs of inflation. It didn‘t make a final top in Aug 2020, and a new bear market didn‘t start. It‘s my opinion that thanks to the jittery Treasury markets, we‘re seeing these dislocations, and that once the Fed focuses on the long end of the curve in earnest, that would remove the albatross from gold‘s back.I can‘t understate how important the rising yields are to the economy (and to the largest borrower, the government). Since 1981, we‘ve been in one long bond bull market, and are now approaching the stage of it getting questioned before too long. The rates are rising without the real economy growing really strongly, far from its potential output, and characterized by a weak labor market. Not exactly signs of overheating, but we‘ll get there later this year still probably.It‘s like with generating inflation – the Fed policies for all their intent, can‘t command it into happening. The Treasury market is throwing a fit, knowing how much spending (debt monetization) is coming its way, and the Fed‘s focus is surely shifting to yields at the long end. Bringing it under control would work to dampen the rampant speculation in stocks, and also lift gold while not hurting commodities or real economy recovery much. Sounds like a reasonable move (yield curve control), and I believe they‘re considering it as strongly as I am talking about it.Let‘s quote yesterday‘s special report on gold, inflation, and commodities:(…) the wave of new money creation (we‘re almost at double the early 2020 Fed‘s balance sheet value - $4T give or take then vs. almost $7.5T now – and that‘s before the multiplier in commercial banks loan creation kicks in) keeps hitting the markets, going into the real economy, predictably lifting many boats. It‘s my view that we have to (and will) experience a stock market bubble accompanied by the precious metals and commodities one – to a degree, simultaneously, for the stock market is likely to get under pressure first. Again, I am talking the big picture here – not the coming weeks.Let‘s examine the bear market is gold – some say that the late 2015 marked bottom, I‘m of the view that the 2016 steep rally was a first proof of turning tide. But the Fed got serious about tightening (raising rates, shrinking its balance sheet), and gold reached the final bottom in Aug 2018. Seeing through the hawks vs. dove fights at the Fed in the latter half of 2018 (December was a notable moment when Powell refused to the markets‘ bidding, remained hawkish in the face of heavy, indiscriminate selling across the board – before relenting).Since then, gold was slowly but surely gathering steam, and speculation in stocks was on. The repo crisis of autumn 2019 didn‘t have a dampening effect either – the Fed was solidly back to accomodative back then. These have all happened well before corona hit – and it wasn‘t able to push gold down really much. The recovery from the forced selling, this deflationary episode (which I had notably declared back in summer 2020 to be a one-off, not to be repeated event), was swift. Commodities have clearly joined, and the picture of various asset classes taking the baton as inflation is cascading through the system, is very clear.Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsFinally, a daily downswing – not meaningful, but it‘s as good as it gets. The slightly lower volume though shows that there is not a raging conviction yet that this sideways move is over.The market breadth indicators aren‘t at their strongest. Both the advance-decline line and advance-decline volume dipped negative, which isn‘t worrying unless you look at new highs new lows as well. While still positive, $NYHL is showing a divergence by moving below the mid-Feb lows. Seeing its decline to carve a rounded bottom a la end Jan would be a welcome sight to the stock bulls. Before then, nothing stands in the way of muddling through in a shallow, corrective fashion.Credit Markets and TreasuriesThe divergence in both leading credit market ratios – high yield corporate bonds to short-term Treasuries (HYG:SHY) and investment grade corporate bonds to longer-dated Treasuries (LQD:IEI) – show the bond market strains. HYG:SHY clearly supports the S&P 500 rally, while LQD:IEI isn‘t declining in tandem with long-term Treasuries. Instead, it‘s carving out a bullish divergence as it‘s trading well above the Sep and Oct lows – unlike the TLT.Speaking of which, such were my words yesterday, calling for a Treasury reprieve to happen soon:(…) Long-term Treasuries (TLT ETF) are the key chart on my radar screen right now. The rise in yields is accelerating, and if progressing unmitigated, would throw a spanner into many an asset‘s works. Even though it‘s not apparent right now, there is a chance that we‘ll see a slowdown, even a temporary stabilization, over the coming sessions. The larger trend in rates is higher though, and in the dollar to the downside.The dollar is still topping out, and a new daily upswing doesn‘t change that – I look for it to be reversed, and for the new downleg reasserting itself.Gold, Silver and CommoditiesThe encouraging, budding short-term resilience of gold to rising Treasury yields, got a harsh reality check yesterday. While the latter ticked higher, gold declined regardless. Closing at the late Nov lows, it‘s still relatively higher given the steep rise in long-term Treasury yields since. A bullish divergence, but a more clear sign of (directional) decoupling (negating this week‘s poor performance) is needed.Let‘s look again at gold, silver, and commodities in the medium run. Silver decoupled from gold since the late Nov bottom in both, while commodities haven‘t really looked back since early Nov. Till the end of 2020, gold wasn‘t as markedly weak as it has become since, and actually tracked the silver recovery from the late Nov bottom. And the reason it stopped, are the long-term Treasury yields, which quickened their rise in 2021. It looks like an orderly decline in TLT is what gold would appreciate – not a rush to the Treasury exit door.SummaryThe bearish push in stocks has a good chance of finally materializing also today. How strong will its internals be, will it entice the bulls to step in again? Signs are for this correction to run a bit longer in time – but the stock bull run is firmly on, and there are no signals thus far pointing to an onset of a deeper correction right away.The gold bulls recovered a little of the lost ground, but that doesn‘t flip the short-term picture their way in the least. While the yellow metal is leading silver today, its overall performance in the short run remains disappointing, and the silver-gold spread trade I introduced you to a week ago, a much stronger proposition. Still, given the miners‘ signals, unprecendented monetary and fiscal stimulus, unfolding real economy recovery, inflation making its way through the system, and the dollar struggling to keep its head above water, the new PMs upleg is a question of time.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Gold’s Downtrend: Is This Just the Beginning?

Finance Press Release Finance Press Release 18.02.2021 16:43
With the yellow metal just posting its lowest close since June and a bearish pattern forming, how vulnerable is gold to a further decline?Gold and mining stocks just broke to new yearly lows – as I warned you in my previous analyses. And that’s only the beginning.Let’s jump right into the charts, starting with gold.Figure 1 - COMEX Gold FuturesIn early February, gold broke below the rising red support line and it then verified it by rallying back to it and then declining once again. It topped almost exactly right at its triangle-vertex-based reversal, which was yet another time when this technique proved to be very useful.Gold has just closed not only at new yearly lows, but also below the late-November lows (in terms of the closing prices, there was no breakdown in intraday terms). This means that yesterday’s (Feb. 17) closing price was the lowest daily close since late June 2020. At the moment of writing these words, gold is also trading below the April 2020 intraday high.Gold was likely to slide based on myriads of technical and cyclical factors, while the fundamental factors remain very positive – especially considering that we are about to enter the Kondratiev winter, or we are already there. As a reminder, Kondratiev cycles are one of the longest cycles and the stages of the cycle take names after seasons. “Winter” tends to start with a stock market top that is caused by excessive credit. In this stage gold is likely to perform exceptionally well… But not right at its start. Even the aftermath of the 1929 top (“Winter” started then as well), gold stocks declined for about 3 months before soaring. In the first part of the cycle, cash is likely to be king. And it seems that the performance of the USD Index is already telling investors to buckle up.And speaking of stocks, what about mining stocks? As you might already well know, just as with gold, the miners moved below the November lows in terms of both the intraday prices and daily closing prices. What does that mean? If you’d like to explore mining stocks in detail and are curious to know more about their prices and possible exit levels, then our full version of the analyses contains exactly what you need to know.Getting back to gold…Figure 2If the fact that gold invalidated its breakout above its 2011 high, despite the ridiculously positive fundamental situation, doesn’t convince you that gold does not really “want” to move higher before declining profoundly first, then the above chart might.As I wrote above, gold is currently more or less when it was trading at the April 2020 top. Where was the USD Index trading back then? It was moving back and forth around the 100 level.100!The USD Index closed a little below 91, and gold is at the same price level! That’s a massive 9 index-point decline in the USDX that gold shrugged off just like that.There’s no way that gold could “ignore” this kind of movement and be “strong” at the same time. No. It’s been very weak in the previous months, which is a strong sign (not a fundamental one, but a critical one nonetheless) that gold is going to move much lower once the USD Index finally rallies back up.Right now, waiting for gold to rally is like waiting for the light to turn green, arguing that eventually it has to turn green, while not realizing that the light is broken (gold just didn’t rally despite the huge decline in the USDX). Yes, someone will fix it and eventually it will turn green, but it doesn’t mean that it makes much sense to wait for that to happen, instead of looking around and crossing the street if it’s safe to do so.Yes, gold is likely to rally to new highs in the coming years. And silver is likely to skyrocket. But in light of just two of the above-mentioned factors (gold’s extreme underperformance relative to the USD Index and the invalidation of a critical breakdown) doesn’t it make sense not to purchase gold right now (except for the insurance capital that is) in order to buy it after several weeks / few months when it’s likely to be trading at much lower levels?We live in very specific times. Getting a “like” on a post or picture becomes a necessary daily activity and means of self-validation. Not “liking” something that others posted or that is massively “liked” may be frowned upon or even viewed as being disrespectful. Plus, it seems that no matter what you do, everyone gets offended very easily. When did honesty, independence and common-sense stop being virtues?When it comes to gold investment analysis, it’s surprisingly similar. You either like gold and think that it’s going higher right away or you’re “one of them”. “Them” can be anyone who tries to manipulate gold or silver prices, “banksters”, or some kind of unknown enemy. “ Analysts' ” goal is often no longer to be as objective as possible and to provide as good and as unbiased an analysis as possible, but to simply be cheering for gold and provide as many bullish signals as possible regardless of what one really thinks about them. The above may seem pleasant to readers, but it’s not really in their best interest. In order to make the most of any upswing, it’s best to enter the market as low as possible and to exit relatively close to the top. What happens before a price is as low as possible? It declines. Why would something like that (along with those describing it) be hated by gold investors? It makes no sense, but yet, it’s often the case.Top of FormBottom of FormThe discussion – above and below – can be viewed as something positive or negative for any investor, but while reading it, please keep in mind that our goal is the same as yours – we want to help investors make the most of their precious metals investments. Call us old-fashioned, but regardless of how unpleasant it may seem, we’ll continue to adhere to honesty, independence and common-sense in all our analysesOk, but why on Earth would the USD Index rally back up? The Fed is printing so much dollars – why would they be worth more?!Because the currencies are valued with relation to each other and whether or not the USD Index moves higher or lower doesn’t depend only on what the Fed is doing.Figure 3What other monetary authorities do matters as well and right now the ECB is outprinting the Fed (that’s what the decline in the green line above means), which means that the euro is likely to fall more than the U.S. dollar. Therefore, the EUR/USD currency exchange rate would be likely to decline and since this exchange rate is the biggest (over 50%) component of the USD Index, it makes perfect sense – from the fundamental point of view – to expect the USD Index to move higher.Can gold rally despite higher USD Index values? Absolutely. However, it would first have to start to behave “normally” relative to the USD Index, and before that happens it would have to stop being extremely weak relative to it. And the fact that gold is at the same price level despite a 9-index-point decline in the USDX is extreme weakness.To make the technical discussion easier, I’m attaching the previous chart once again.Figure 4On Monday (Feb. 15), I wrote the following about the above chart:The size and shape of the 2017-2018 analogue continues to mirror the current price action . However, today, it’s taken 118 less days for the USD Index to move from peak to trough.Also, it took 82 days for the USDX to bottom in 2017-2018 (the number of days between the initial bottom and the final bottom) and the number amounts to 21.19% of the overall duration. If we apply a similar timeframe to today’s move, it implies that a final bottom may have formed on Feb. 12. As a result, the USDX’s long-term upswing could begin as soon as this week.Also noteworthy, as the USDX approached its final bottom in 2017-2018, gold traded sideways. Today, however, gold is already in a downtrend. From a medium-term perspective, the yellow metal’s behavior is actually more bearish than it was in 2017-2018.Also supporting the historical analogue, the USD Index’s current breakout above its 50-day moving average is exactly what added gasoline to the USDX’s 2018 fire. Case in point? After the 2018 breakout, the USDX surged back to its previous high. Today, that level is roughly 94.5.Based on this week’s rally it seems that the final bottom formed on Tuesday (Feb. 16) – just 2 trading days away from the analogy-based target, and in perfect tune with what I wrote back then. The breakout above both: the declining blue line, and the 50-day moving average was verified, and the short-term outlook here is clearly bullish.But isn’t the current situation similar to what happened in mid-2020? The correction that was followed by another decline?In a way, it is. In both cases, the USD Index moved higher after a big decline, but that’s about it as far as important similarities are concerned.What is different is the entire context. Even a single look at the above chart provides an instant answer. The mid-2020 correction was like the mid-2017 correction, and what we see right now is the post-bottom breakout, just as we saw in the first half of 2018.There are multiple details on the above chart that confirm it, including the sizes of the medium-term declines, the position of the price relative to the declining support/resistance lines, as well as relative to the 50-day moving average, and even the green arrows in the RSI indicator show how similar the preceding action was in case of this indicator. The vertical dashed line shows “where we are right now” in case of the analogy.Also, the fact that the general stock market has not yet declined in any substantial way only makes the short-term outlook worse (particularly for silver and miners). When stocks do slide, they would be likely to impact the prices of miners and silver particularly strongly.And please remember, we’re looking for the bottom in the precious metals sector not because we’re the enemy of gold or the precious metals investor . On the contrary, we’re that true friend that tells you if something’s not right, even if it may be unpleasant to hear. We want to buy more and at better prices close to the bottom, and we’ll continue to strive to assist you with that as well.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
US Industry Shows Strength as Inflation Expectations Decline

For stocks, has the “Rational Bubble” Popped?

Finance Press Release Finance Press Release 19.02.2021 15:38
In keeping with last week’s theme, the market has mainly traded sideways this week. However, that correction I’ve been calling for weeks? We have potentially started.While I don’t foresee a crash like we saw last March and feel that the wheels are in motion for a healthy 2021, I still maintain that some correction before the end of Q1 could happen.Bank of America also echoed this statement and said last week that “We expect a buyable 5-10% Q1 correction as the big ‘unknowns’ coincide with exuberant positioning, record equity supply, and as good as it gets’ earnings revisions.”Yes, the sentiment is still positive. That won’t change overnight. Vaccines seem more effective than we thought, especially against other variants of the virus. All that extra stimulus money and record low-interest rates could keep pushing stocks to more records and stimulate pent-up consumer spending. It’s not like the Fed is going to switch this policy up anytime soon, either.They don’t call it a stimulus for nothing.For weeks we’ve likely been in a rational bubble. Dhaval Joshi , the chief European investment strategist for BCA Research, has said that low bond yields meant the rally we’ve seen with stocks made sense.“Rational, because the nosebleed valuations are justified by a fundamental driver. And not just any fundamental driver, but the most fundamental driver of all – the bond yield.”Take a look at this chart comparing a “rational bubble” to an “irrational bubble.”But now? Things have possibly changed. Complacency, valuations, surging bond yields, and inflation concern me.They’re all connected. But look especially into the 10-year yield. It’s hovering around 1.30% for the first time in over a year.Why is this concerning?Rising interest rates=less attractive stocks.Look at this other chart. Forward P/E ratios are continuing to rise along with bond yields. In high-growth sectors, such as tech, this is especially concerning. The chart shows, in fact, that tech earnings yields have now been surpassed by the bond yield plus a fixed amount.The only three ways this can be resolved are for stock prices to decline, bond yields to fall, or earnings to rise and improve stock valuations. Considering earnings season is over, only options 1 or 2 seem feasible in the near-term.You combine this info with the Buffet Indicator (Total US stock market valuation/GDP), and you have a market that could be 228% overvalued.I’ve already correctly called the Russell 2000’s pullback after how much it’s overheated. Since February 9th, when I switched the call to a sell, it’s declined roughly 3.40%.More could follow.Look. Corrections are healthy and normal market behavior, and we are long overdue for one. Only twice in the last 38 years have we had years WITHOUT a correction (1995 and 2017), and we haven’t seen one in a year.A correction could also be an excellent buying opportunity for what could be a great second half of the year.My goal for these updates is to educate you, give you ideas, and help you manage money like I did when I was pressing the buy and sell buttons for $600+ million in assets. I left that career to pursue one to help people who needed help instead of the ultra-high net worth.With that said, to sum it up:While there is long-term optimism, there are short-term concerns. A short-term correction between now and the end of Q1 2021 is possible. I don’t think that a decline above ~20%, leading to a bear market, will happen.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. A Needed Cool Down for the Russell 2000Figure 1- iShares Russell 2000 ETF (IWM)Since February 9, the Russell 2000 small-cap index has lagged behind the other indices after significantly overheating. I switched my call to a SELL then, and it promptly declined by 3.40%.I do love small-caps for 2021, though, and I really like this decline. If it declines about another 1.50%, I’d feel more confident switching the call to a BUY.As tracked by the iShares Russell 2000 ETF (IWM) , small-cap stocks have been on a rampage since November.Since the market’s close on October 30, the IWM has gained nearly 44.5% and more than doubled ETFs’ returns tracking the larger indices. If you thought that the Nasdaq was red hot and frothy, you have no idea about the Russell 2000.Not to mention, year-to-date, it’s already up a staggering 14%.Judging from these types of returns, the IWM’s decline since February 9 is hardly shocking. But for me, it’s still not enough, outside of switching the call to a HOLD.It pains me not to recommend you to BUY the Russell just yet. I love this index’s outlook for 2021. Aggressive stimulus, friendly policies, and a reopening world could bode well for small-caps. Consumer spending, especially for small-caps, could be very pent-up as well.But we need to just hold on and wait for it to cool down just a little bit more for a better entry point.HOLD. If and when there is a deeper pullback, BUY for the long-term recovery.For more of my thoughts on the market, such as the streaky S&P, inflation, and emerging market opportunities, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Kiss of Life for Gold

Monica Kingsley Monica Kingsley 22.02.2021 16:24
The narrow trading range in stocks continues, and the shallow sideways correction will eventually resolve itself with another upleg. The signs are countless, and the riskier part of the credit market spectrum agrees. As money flows from the Tresury markets, and sizable cash balances are sitting on many a balance sheet, there is plenty of fuel to power the S&P 500 advance.With volatility in the tame low 20s and the put/call ratio again moving down, the bears‘ prospects are bleak. As I wrote last week, their time is running out, and a new stock market upleg approaches. It‘s the bond market that‘s under pressure, with both investment grade corporate bonds and long-dated Treasuries suffering in the accelerated decline.Gold is the most affected, as the sensitivity of its reaction to the rising long-tern yields, has picked up very noticeably. How long before these draw both the Fed‘s attention and action – what will we learn from Powell‘s testimony on Tue and Wed? And when will the much awaited stimulus finally arrive, and force repricing beyond the metals markets?Before that, gold remains on razor‘s edge, while silver leads and platinum flies for all the green hydrogen promise. The dollar has given back on Thu and Fri what it gained two days before, and remains in its bear market. Not even rising yields were able to generate much demand for the world reserve currency. Its lower prices stand to help gold thanks to the historically prevailing negative correlation, counterbalancing the Treasury yields pressure.Plenty of action that‘s bound to decide the coming weeks‘ shape in the precious metals. And not only there as oil experienced 2 days of lossess in a row – practically unheard of in 2021 so far. On Saturday, I‘ve added a new section to my site, Latest Highlight, for easier orientation in the milestone calls and timeless pieces beyond the S&P 500 and gold. Enjoy!Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe weekly indicators suggest that a reversal is still not likely. There is no conviction behind the weekly decline, and signs are still pointing to a sideways consolidation underway.The daily chart reflects the relatively uneventful trading – we‘re in a phase of bullish base building before powering off to new highs. See how little the daily indicators have retreated from their extended readings, and the barely noticeable price decline associated.S&P 500 InternalsAll the three market breadth indicators show improved readings, and my eyes are on new highs new lows throwing their weight behind the prior two indicators‘ advance. The overall impression is one of balance.The value to growth (VTV:QQQ) ratio shows that tech (XLK ETF) has fallen a bit out out of step recently – we‘re undergoing another microrotation into value stocks. The stock market leadership is thus broadening, confirming the findings from the advance-decline line (and advance-decline volume) examination.Credit MarketsOne chart to illustrate the bond market pressures – high yield corporate bonds are holding gained ground while investment grade corporate bonds and long-dated Treasuries are plunging like there is no tomorrow. With each of their rebound attempt sold, the dislocations are increasing – a great testament to the euphoric stage of the stock market advance. Gold and TreasuriesGold price action isn‘t as bearish as it might seem based on last week‘s moves. Yes, the readiness to decline in sympathy with rising yields, is diconcerting, but the yellow metal stopped practically at the late Nov lows, and refused to decline further. Low prices attracted buying interest, and due to the overwhelmingly negative sentiment for the week ahead, the yellow metal may surprise on the upside. Time for the bulls to prove themselves as the tone of coming weeks‘ trading in gold is in the balance.The daily chart‘s correlation coefficient has moved into strongly positive territory in 2021, illustrating the headwinds gold faces. Despite the prevailing wisdom, such strongly positive correlation isn‘t the rule over extended periods of time. That‘s the message of the daily chart – but let‘s step back and see the bigger picture similarly to the way I did on Friday witht the $HUI:$GOLD ratio.Not an encouraging sight at the moment. The tightness of mutual relationship is there, and given the decreased focus on timing (one candle representing one week) coupled with the correlation coefficient being calculated again over a 20 period sample, the week just over shows that regardless of the post-Nov resilience, gold is clearly getting under more pressure.Gold and DollarLet‘s do the same what I did about long-term Treasuries and gold, also about the dollar and gold. Their historically negative correlation is receding at the moment as the two face their own challenges. The key question is when and from what level would the fiat currency and its nemesis return to trading in the opposite directions. Such a time is highly likely to be conducive to higher gold prices.On the weekly chart, the negative correlation periods are winning out in length and frequency. Certainly given the less sensitive timining component through weekly candlesticks and 20-period calculation, the current strength and level of positive correlation is rather an exception and not a rule. Combining this chart‘s positive correlation between the two with the daily chart‘s negative yet rising readings, highlights in my view a potential for seeing an upset in the momentary relationship.In other words, the gold decline over the past now almost 7 months going hand in hand with mostly sliding dollar, would turn into higher gold prices accompanied by lower dollar values. How much higher gold prices, that depends on the long-term Treasuries market – that‘s the one playing the decisive role, not the dollar at the moment.Gold, Silver and MinersSilver is doing fine, platinum very well, while gold struggles and needs to prove itself. That‘s the essence of the long silver short gold trade idea – the silver to gold ratio attests to that.Quoting from Friday‘s analysis:(…) The dynamics favoring silver are unquestionable – starting from varied and growing industrial applications, strengthening manufacturing and economy recovery, poor outlook in silver above ground stockpile and recycling, to the white metal being also a monetary metal. Silver is bound to score better gains than gold, marred by the Bitcoin allure, would. Final chart of today‘s extensive analysis is about the two miners to gold ratios, and the divergencies they show. The ETF-based one (GDX:GLD) is sitting at support marked by both the late Nov and late Jan lows, while $HUI:$GOLD is probing to break below its late Jan lows, and these were already lower than the respective late Nov lows.Both ratios are sending a mixed picture, in line with the theme of my latest reports – gold is on razor‘s edge, and the technical picture is mixed given its latest weakness. That‘s the short run – I expect that once the Fed‘s hand is twisted enough in TLT and TLH, and speculation on yield curve control initiation rises, the focus in the precious metals would shift to inflation and its dynamics I‘ve described both on Wed and Fri. SummaryThe sellers in stocks aren‘t getting far these days, and signals remain aligned behind the S&P 500 advance to reassert itself. Neither the Russell 2000, nor emerging markets are flashing divergencies, and the path of least resistance in stocks remains higher.Gold‘s short-term conundrum continues - positive fundamentals that are going to turn even more so in the near future, yet the key charts show the king of metals under pressure, with long-term Treasury yields arguably holding the key to gold‘s short-term future. The decoupling events seen earlier this month, got a harsh reality check in the week just over. Yet, that‘s not a knock-out blow – the medium- and long-term outlook remains bright, and too many market players have rushed to the short side in the short run too.
US Industry Shows Strength as Inflation Expectations Decline

It‘s Only Tech That‘s Sold – Not S&P 500, Gold Or Silver

Monica Kingsley Monica Kingsley 23.02.2021 15:52
S&P 500 is getting under modest pressure, and technology is to blame. Is the correction about to turn nasty from sideways? Still no signs of that, even as the investment grade corporate bonds are being sold of as hard as long-term Treasuries. Yet, these corporate instruments have only now broken below their late Oct lows – unlike long-dated Treasuries, whose price action resembles free fall.These government debt instruments are arguably the key asset class for every precious metals investor to watch. What used to be gentle decoupling signs over the latest weeks and months, got thoroughly tested the prior week. Yet, I stood firm in not calling gold down and out. The support zone at late Nov lows generated a rebound that was oh so likely to materialize.Silver naturally outperformed, both copper and oil had a strong day, and agrifoods are making new highs. The inflation dynamics described in Friday‘s article aptly called Why the Sky Is Not Falling in Precious Metals, continues unabated, and the pressure keeps building inside the metals and commodities. Not even the dollar managed to benefit from the rising yields – the resumption of its bear market I called on Feb 08, is one of the 2021 themes. Money keeps flowing from the Treasuries market, and there is plenty sitting on the sidelines (corporate or private) to still deploy and power stocks and precious metals higher. Also those ready to withstand Bitcoin volatility (hello, the weekend Elon Musk tweet follow through), stand to benefit – cryptos are behaving like a store of value, a hedge against currency debasement. I wrote in my very first 2021 analysis that the Bitcoin correction wouldn‘t get far.Powell‘s testimony is about to bring volatility, but does it have the power to change underlying trends? Not really – while his latest high profile assessments brought about a downswing, stocks recovered in spite of the GameStop (contagion?) drama too. Should we see a replay of the above, new highs are coming – and they are, in both stocks and precious metals. We‘re in a commodities supercycle on top!Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe daily chart shows yesterday‘s turn of events clearly. The volume increased, indicating that the bulls will need to grapple with more downside.Both the advance-decline line and advance-decline volume have curled noticeably, yet new highs new lows continues higher. That‘s a confirmation of the broad based nature of the stock market advance, further illustrated with the following chart.What if all the constituent shares in the S&P 500 had equal weight (i.e. there is no $NYFANG)? The above chart is the reflection – and it‘s challenging the latest highs. The rotation theme I‘m discussing so often, means in this case taking the baton from tech, and seeing it pass to value stocks. Such broad advance is a healthy characteristic of bull runs far from making a top.TechnologyHere is the culprit behind yesterday‘s decline – on increasing volume, technology (XLK ETF) has plunged. Yet it‘s the semiconductors (XSD ETF) that I am looking at for clues as to how reasonable has the decline been. And given how the tech is holding up, it‘s a bit accentuated.Credit MarketsHigh yield corporate bonds to short-term Treasuries (HYG:SHY) ratio is still behaving reasonably – the overlaid S&P 500 prices (black line) aren‘t accelerating to the downside. Thus far, everything keeps pointing to stocks behaving a bit more sensitively than throughout 2021 mostly, yet far from crashing or showing their readiness to. The real correction has to wait still – this is not the real deal.Gold, Silver and TreasuriesGold price action indeed proved not to be as bearish. Finally, we‘re seeing a clear refusal to move down even as Treasury yields continue to plunge. How long will this new dynamics stick, where would it take the yellow metal? I treat it as a valuable first swallow.The scissors between gold and silver keep widening, and the white metal again outperformed yesterday. That‘s exactly the dynamics of the new precious metals upleg that I‘m expecting.Both depicted miners to gold ratios show a clear pattern of post Nov resilience. GDX:GLD is not breaking to new lows, while $HUI:$GOLD rejected them. Bobbing around, searching for a local bottom before launching higher? That‘s my leading scenario.SummaryThe unfolding correction got a new twist with yesterday‘s downswing in stocks, and unless tech gets its act together, appears set to run further. Emerging markets fell harder than the Russell 2000 yesterday, which is another proof that the correction isn‘t yet over.Gold and silver price action remain encouraging, and the same can be said about oil and many other commodities. Once the stimulus bill is passed, the positive fundamentals that are going to turn even more so, given the Fed‘s accomodative policies. Will these work to stave off the rising Treasury yields as well? If so, then gold‘s fundamentals got a crucial boost, which would soon be seen in the technicals too. As I wrote yesterday, the metals didn‘t get a knock-out blow – the medium- and long-term outlook remains bright, and too many market players on the short side in the short run, means a high likelihood of a reversal – which is precisely what we saw.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Tech Holds the Key to S&P 500

Monica Kingsley Monica Kingsley 24.02.2021 15:38
The Powell inspired, coinciding (have your pick) S&P 500 stop run is almost history now, with the futures trading over 3,880 again as we speak. No surprise here, but since the long-term Treasuries plunge went on largely unabated, that‘s concerning.Even if not now as in right away, TLT and TLH have to power to trouble the stock bulls seriously. And the financials benefiting from the greater spread, won‘t save the day, as the key chart to watch now is technology and also healthcare. Healthcare especially because biotech didn‘t get its act together yesterday really, while semiconductors did better. With consumer discretionaries hurt, utilities and consumer staples can‘t be relied on in a rising rates environment, and communications can‘t save the day either. The sectoral outlook remains mixed, even as value continues greatly outperforming growth this month. The stock bulls simply need tech clearly stabilized and turning here so as to think about new S&P 500 highs again. Long-term Treasuries are starting to hold greater sway over the stock market fate now, too. The dollar‘s woes thus far continue playing out largely in the background.Did gold shake off the TLT shackles? Still early to say, but the clear, directionally opposite move gives the bulls benefit of the doubt thus far. Yesterday‘s gold session didn‘t convince me, so I am not trumpeting the end of yellow metal‘s downside yet. Still, cautious optimism remains – even in the short run, let alone for the medium- to long-term: there, the (bullish) picture is simply clearer.Let‘s remember my yesterday‘s words about trends and flashes in the pan:(…) Powell‘s testimony is about to bring volatility, but does it have the power to change underlying trends? Not really – while his latest high profile assessments brought about a downswing, stocks recovered in spite of the GameStop (contagion?) drama too. Should we see a replay of the above, new highs are coming – and they are, in both stocks and precious metals. We‘re in a commodities supercycle on top!Let‘s get right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookYesterday‘s intraday reversal reached just a little above Monday‘s closing prices, highlighting that more needs to be done for the index to regain upside momentum. The Powell testimony reversal was a good start, and stock bulls need to do more once this event gets in the rear view mirror later today. Given the premarket action reaching 3,890, the case is not lost.Credit MarketsHigh yield corporate bonds (HYG ETF) recovered, and crucially did better than stocks. The volume comparison is also a tad more positive. Should this credit market outperformance in the short run hold, then the S&P 500 is more likley to advance than not, too.High yield corporate bonds to short-term Treasuries (HYG:SHY) ratio is still behaving reasonably – the overlaid S&P 500 prices (black line) aren‘t accelerating to the downside. The cue to move higher in stocks is apparent.TechnologyIt‘s the tech (XLK ETF) again – its yesterday‘s reversal is not nearly enough for the S&P 500 to think about taking on new highs. Semiconductors (XSD ETF) subtly outperformed, but they don‘t give outrageously bullish signs either. The tech jury is still out, and this heavyweight sector remains vulnerable, with consequences to the S&P 500 if it doesn‘t keep on the muddle through recovery path at the very least.Treasuries and DollarNo spike in TLT volume shows there isn‘t real willingness to buy the dip the way it were in mid Feb – back then, I could call for a moderation in the decline‘s pace for at least a day, now I can‘t do that. This chart presents the greatest challenge for the markets – going well beyond stocks, precious metals and commodities. Dollar bulls are predictably on the run. Truly bearish chart targeting much lower lows, in line with the theme I‘ve been banging throughout 2020‘s latter half – the dollar has gotten on the defensive, and would remain there throughout 2021. The technical rebound is over, and not even higher yields can help the greenback much.Gold, Silver and PlatinumTrue, gold‘s yesterday‘s candle leaves much to be desired for the bulls, but once again, we‘re seeing a clear refusal to move down even as Treasury yields continue to plunge. It‘s still a valuable first swallow, and more has to follow. Gold isn‘t getting anywhere in today‘s premarket while silver, copper, oil and soybeans are all up mildly. Agrifoods reached a new 2021 high yesterday – commodities clearly like and anticipate the inflationary Fed speak message they get.One look at the precious metals group – gold the laggard, silver leading, and platinum even more so – check out on the caption when the latter decoupled – 2 weeks before silver did. The anatomy of the unfolding precious metals upleg goes on in this predictable fashion, where platinum has the power to keep running more along the lines of commodities such as copper. That means powerfully.Yesterday‘s watchout though are the miners, which dragged down both the $HUI:$GOLD and GDX:GLD ratios – not below their lows, but still. A great illustration of the yellow metal‘s woes, and low credibility of its yesterday‘s candle with a sizable lower knot.SummaryStock bulls are far out of the woods yet, and technology stabilization must kick in first. Little proof thus far it‘s there, and I view the rising rates as starting to bite the stock market too.Gold and silver also got under the Powell pressure yesterday, and haven‘t escaped the confines of Treasury yields pressure thus far. The markets are clearly wary of the testimony‘s part II still.
How Bond Yields Are Affecting Gold

How Bond Yields Are Affecting Gold

Finance Press Release Finance Press Release 24.02.2021 17:54
As U.S. Treasury yields rise, gold, which is seen as an inflation hedge, is hurting. Despite the obvious warning signs, investors remain bullish.After Monday’s (Feb. 22) supposedly “groundbreaking” rally, the situation in gold developed in tune with what I wrote yesterday . The rally stopped, and miners’ decline indicated that it was a counter-trend move.Figure 1Despite Monday’s (quite sharp for a daily move) upswing, the breakdown below the neck level of the broad head-and-shoulders remains intact. It wasn’t invalidated. In fact, based on Monday’s rally and yesterday’s (Feb. 23) decline, it was verified. One of the trading guidelines is to wait for the verification of the breakdown below the H&S pattern before entering a position.What about gold stocks ratio with other stocks?Figure 2It’s exactly the same thing. The breakdown below the rising long-term support line remains intact. The recent upswing was just a quick comeback to the broken line that didn’t take it above it. Conversely, the HUI to S&P 500 ratio declined once again.Consequently, bearish implications of the breakdowns remain up-to-date . Having said that, let’s consider the more fundamental side of things.Swimming Against the CurrentAfter trading lower for six consecutive days, gold managed to muster a three-day winning streak. However, with the waves chopping and the ripple gaining steam, every swim higher requires more energy and yield’s decelerating results.For weeks , I’ve been warning that a declining copper/U.S. 10-Year Treasury yield ratio signaled a further downside for gold. And with the ratio declining by 2.88% last week, gold suffered a 2.51% drawdown.Please see below:Figure 3Over the long-term, the ratio is a reliable predictor of the yellow metal’s future direction. And even though the weekly reading (3.04) hit its lowest level since May 2020, it still has plenty of room to move lower.Figure 4For context, I wrote previously:To explain the chart above, the red line depicts the price of gold over the last ~21 years, while the green line depicts the copper/U.S. 10-Year Treasury yield ratio. As you can see, the two have a tight relationship: when the copper/U.S. 10-Year Treasury yield ratio is rising (meaning that copper prices are rising at a faster pace than the U.S. 10-Year Treasury yield), it usually results in higher gold prices. Conversely, when the copper/U.S. 10-Year Treasury yield ratio is falling (meaning that the U.S. 10-Year Treasury yield is rising at a faster pace than copper prices), it usually results in lower gold prices.As the star of the ratio’s show, the U.S. 10-Year Treasury yield has risen by more than 47% year-to-date (YTD) and the benchmark has surged by more than 163% since its August trough.Please see below:Figure 5On Jan. 15 , I warned that the U.S. Federal Reserve (FED) had painted itself into a corner. With inflation running hot and Chairman Jerome Powell ignoring the obvious, I wrote that Powell’s own polices (and their impact on real and financial assets) actually eliminate his ability to determine when interest rates rise.As a result, the central bank had two options:If they let yields rise, the cost of borrowing rises, the cost of equity rises and the U.S. dollar is supported (all leading to shifts in the bond and stock markets and destroying the halcyon environment they worked so hard to create).To stop yields from rising, the U.S. Federal Reserve (FED) has to increase its asset purchases (and buy more bonds in the open market). However, the added liquidity should have the same net-effect because it increases inflation expectations (which I mentioned yesterday, is a precursor to higher interest rates). Opening door #2, Powell’s deny-and-suppress strategy is now playing out in real time. On Feb. 23 – testifying before the U.S. Senate Banking Committee – the FED Chairman told lawmakers that inflation isn’t an issue.“We’ve been living in a world for a quarter of a century where the pressures were disinflationary,” he said.... “The economy is a long way from our employment and inflation goals.”And whether he’s unaware or simply ill-informed, commodity prices are surging. Since the New Year, oil and lumber prices have risen by more than 24%, while corn and copper prices are up by more than 14%.Please see below:Figure 6In addition, relative to finished goods, the entire basket of inputs is sounding the alarm.Figure 7To explain the chart above, the blue line is an index of the price businesses receive for their finished goods. Similarly, the green line is an index of the price businesses pay for raw materials. As you can see, the cost of doing business is rising at a torrent pace.More importantly though, Powell’s assertion that inflation is an urban legend has been met with eye rolls from the bond market . To repeat what I wrote above: Powell’s own policies (and their impact on real and financial assets) actually eliminate his ability to determine when interest rates rise.Case in point: the U.S. 10-year to 2-year government bond spread is now at its highest level since January 2017.Please see below:Figure 8To explain the significance, the figure is calculated by subtracting the U.S. 2-Year Treasury yield from the U.S. 10-Year Treasury yield. When the green line is rising, it means that the U.S. 10-Year Treasury yield is increasing at a faster pace than the U.S. 2-Year Treasury yield. Conversely, when the green line is falling, it means that the U.S. 2-Year Treasury yield is increasing at a faster pace than the U.S. 10-Year Treasury yield.And why does all of this matter?Because the above visual is evidence that Powell has lost control of the bond market.At the front-end of the curve, Powell can control the 2-year yield by decreasing the FED’s overnight lending rate (which was cut to zero at the outset of the coronavirus crisis). However, far from being monolithic, the 5-, 10-, and 30-year yields have the ability to chart their own paths.And their current message to the Chairman? “We aren’t buying what you’re selling.” As such, the yield curve is likely to continue its steepening stampede.Circling back to gold, all of the above supports a continued decline of the copper/U.S. 10-Year Treasury yield ratio. With yields essentially released from captivity, even copper’s 8.02% weekly surge wasn’t enough to buck the trend.As a result, gold’s recent strength is likely a mirage. The yellow metal continues to bounce in fits and starts, thus, it’s only a matter of time before the downtrend continues. Furthermore, with the USD Index still sitting on the sidelines, a resurgent greenback would add even more concrete to gold’s wall of worry.And speaking of gold’s wall of worry, the sentiment surrounding it is far from being negative.Figure 9 - Source: Investing.comThe above chart shows the sentiment of Investing.com’s members. 64% of them are bullish on gold. As you can see above, there are also other popular markets listed: the S&P 500, Dow Jones, DAX, EUR/USD, GBP/USD, USD Index, and Crude oil. The sentiment for gold is the most bullish of all of them. Yes, the general stock market is climbing to new all-time highs every day now, and yet, people are even more bullish on gold than they are on stocks.When gold slides, the sentiment is likely to get more bearish and particularly high “bearish” readings – say, over 80% would likely indicate a good buying opportunity. Naturally, this is not the only factor that one should be paying attention to.The bottom line? As it stands today, being long the precious metals offers a poor risk-reward proposition. However, in time (perhaps over the next several months), the dynamic will reverse, and the precious metals market will shine once again.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Bonds And Stimulus Are Driving Big Sector Trends And Shifting Capital

Chris Vermeulen Chris Vermeulen 25.02.2021 03:36
Falling Bonds and rising yields are creating a condition in the global markets where capital is shifting away from Technology, Communication Services and Discretionary stocks have suddenly fallen out of favor, and Financials, Energy, Real Estate, and Metals/Miners are gaining strength.  The rise in yields presents an opportunity for Banks and Lenders to profit from increased yield rates. In addition, historically low interest rates have pushed the Real Estate sector, including commodities towards new highs.  We also note Miners and Metals have shown strong support recently as the US Dollar and Bonds continue to collapse.  The way the markets are shifting right now is suggesting that we may be close to a technology peak, similar to the DOT COM peak, where capital rushes away from recently high-flying technology firms into other sectors (such as Banks, Financials, Real Estate, and Energy).The deep dive in Bonds and the US Dollar aligns with the research we conducted near the end of 2020, which suggested a market peak may set up in late February. We also suggested the markets may continue to trade in a sideways (rounded top) type of structure until late March or early April 2021.  Our tools and research help us to make these predictions nearly 4 to 5+ months before the markets attempt to make these moves.  You can read this research here:2021 MAY BE A GOOD YEAR FOR THE CANNABIS/MARIJUANA SECTORPRICE AMPLITUDE ARCS/GANN SUGGEST A MAJOR PEAK IN EARLY APRIL 2021 – PART IIWHAT TO EXPECT IN 2021 PART II – GOLD, SILVER, AND SPYIf our research is correct, we may have started a “capital shift” process in mid-February where declining Bonds, rising yields and the declining US Dollar push traders to re-evaluate continued profit potential in the hottest sectors over the past 6 to 12+ months.  This would mean that Technology, Healthcare, Comm Services and Discretionary sectors may suddenly find themselves on the “not so hot” list soon.Bonds Collapsing While Yields Continue To RiseThe following TLT Weekly chart highlights the extended downward trend taking place in Treasury Bonds.  This downside pricing pressure would usually support a rising stock market and moderately weaker precious metals.  But given the way the US Dollar is also declining, we are seeing fear become more of an issue as the high-flying stock market starts to look quite a bit over valued.  Rising yields also puts Financials and banking/lending near the top of the list for future profit potential.US Dollar Struggling To Find SupportThe Invesco US Dollar ETF, (UUP) Weekly below chart shows how weak the US Dollar has been after the COVID-19 price rotation.  The continued decline in price levels after May 2020 is a very clear indication that the US Dollar is reacting to the continued stimulus efforts as well as the decreased economic expectations.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Combined, the Bonds and US Dollar decline are raising the fear-factor among global investors and causing many to rethink where future growth and profits will originate.  Many are landing on the Financial and Energy sectors right now.Financial Sector Begins To Skyrocket HigherThe following Direxion Financial Bull 3x ETF (FAS) Weekly chart shows the incredible advance in the Financial Sector over the past 6+ months.  Almost like a sleepy rally, Financials have been rallying while traders have been focused on Technology, Healthcare and other sectors that seemed hot.  This shifting trend in sectors, and the associated shifting capital, suggests we may be nearing a tidal shift in sector trends – moving away from Technology and into Financials, Energy, Real Estate, and others.Volatility is still 2x to 3x what we have seen 4 to 5+ years ago.  This suggests any breakdown in trends could prompt a very volatile price correction/transition.  As sectors continue to shift, we urge traders to pay attention to the risks in the markets related to this elevated volatility which seems to be present in every sector. We believe we may be starting an extended “capital shift” process which may last well into March/April 2021 before real opportunities setup possibly in May or June.  The markets will do what they always do, react to traders, capital, and global central bank influence.  There are times when certain sectors enter a euphoric phase and there are times when the global markets revalue risk.  We may be nearing an end to a euphoric phase and starting a revaluation phase. This means many various sectors and symbols will present some very real opportunities for profits over the next few weeks and months.  Marijuana, Cryptos, Metals, Miners, Financials & Real Estate appear to be leading opportunities related to sector trends.  If these trends continue throughout 2021, we may see a revaluation/capital shift to propel these trends higher.Don’t miss the opportunities in the broad market sectors over the next 6+ months, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Learn how the BAN strategy can help you spot the best trade setups because staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Have a great rest of the week!
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Why Tech Is Giving Me Jeepers – Watch Out, Gold

Monica Kingsley Monica Kingsley 25.02.2021 16:08
Powell testimony is over, with markets rejoicing the promise of still accomodative Fed. Value keeps surging over growth, and regardless of yesterday‘s great performance, tech has a vulnerable feel to it – semiconductors lead higher, fine, but communications didn‘t confirm, and the healthcare-biotech dynamic isn‘t painting an outperformance picture either. Real estate isn‘t taking as strong a cue while consumer discretionaries recovery could also be stronger. Thus far though, no need to think about taking losses to optimize your gains elsewhere.Just as I wrote yesterday:(…) the financials benefiting from the greater spread, won‘t save the day, as the key chart to watch now is technology and also healthcare. … The sectoral outlook remains mixed, even as value continues greatly outperforming growth this month. … Long-term Treasuries are starting to hold greater sway over the stock market fate now, too. The dollar‘s woes thus far continue playing out largely in the background.Did gold shake off the TLT shackles? I‘m getting increasing doubts that only a strong move to the upside would dispel. As long-term Treasuries were staging an intraday reversal, gold took an intraday plunge before recovering. Not a good sign of internal intraday strength. Could it be a bullish flag? Still possible, but again, gold would have to rally from here. Doing so would result in a bullish divergence in its daily indicators.The precious metals sectoral dynamics remains positive though – silver and platinum are bullishly consolidating, and as I‘ll show you in today‘s final chart, the many mining indices are doing fine as well. The overly strong reflationary (I would call a spade a spade, and say inflationary) efforts are driving commodities higher in a supercycle just starting out.Not to get complacent, GameStop (GME) squeeze has made a comeback yesterday. Will it coincide with broader stock market woes on par with late Jan? Way too early to say – let‘s jump right into the charts for an objective momentary view instead.Here they are, all courtesy of www.stockcharts.com.S&P 500 and Its InternalsStrong S&P 500, everything looks fine on the surface – just as should be, befitting buy the dip mentality. Strong volume, no meaningful intraday setback, so far so good.The equal weight S&P 500 chart is looking better and better day by day. New highs, strong uptrend, broadening leadership. It‘s a mirror reflection of the big names‘ woes, and a testament to value outperforming growth. This bull run is far from making a top.Credit MarketsHigh yield corporate bonds (HYG ETF) had a good day yesterday, and so did the high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio. Yet it‘s the daily stock market outperformance that is noticeable here – optimistic sign of an all clear signal. I‘m not taking it totally at face value given tech performance – in a short few days, I can easily become more convinced though.TechnologyStrong daily tech (XLK ETF) upswing, yet only half the prior downside erased so far, and the volume could be higher compared to the preceding downswing. Semiconductors (XSD ETF) are leading again, fine. Yet it‘s the heavyweight names that matter the most to me right now – check out yesterday‘s observations:(…) The tech jury is still out, and this heavyweight sector remains vulnerable, with consequences to the S&P 500 if it doesn‘t keep on the muddle through recovery path at the very least.DollarLook how little the Powell tremors achieved – the dollar bulls are still on the run. Upswings are being sold as the greenback remains on the defensive, targeting much lower lows this year. The technical rebound is over, and not even higher yields can help the greenback much.Gold, Silver and MinersFor a second day in a row, gold‘s performance isn‘t convincing – the willingness to clearly and directionally decouple from rising yields, is being questioned. On the other hand, e.g. the 10-year UST yield is approaching the summer 2019 lows – it‘s at 1.38% now. I‘m looking for the rising rates to slow down and possibly even pull back a little from here over the coming weeks. Or would the market just like to slice through that resistance? Inflation isn‘t universally that strong right now yet I think – just look at the velocity of money.Everything silver related is doing fine, silver miners (SIL ETF) rebounded strongly, First Majestic Silver Corp (AG) and Hecla (HL) are in clearly bullish patterns. The white metal‘s every dip is being bought, the silver-to-gold ratio keeps improving, and even gold juniors (GDXJ) started once again outperforming the seniors (GDX). The bullish signals under the surface keep increadingly more coming to the fore, and the miners to gold ratio‘s ($HUI:$GOLD and GDX:GLD) is the final ingredient missing.SummaryStock bulls did great yesterday, but everything isn‘t fine yet in the tech realm. Due to its sheer weight in the S&P 500 index, pulling the cart a bit more enthusiastically is what the 500-strong index needs to take on new highs, because value stocks can‘t do it all.Gold and silver fared mostly well during the Powell testimony part II, yet gold didn‘t convince me really again. I look for the yellow metal bulls to get tested soon. The wildcard is reaction to the rising Treasury yields as they‘re in a key resistance zone of summer 2019 lows overall (10-year approaching it, and as regards 30-year, it‘s been overcome already). Plunging dollar and short-term gold-dollar correlation moving to positive figures, isn‘t a pleasant sight for coming days.
Does Gold Have a Green Light to $1700?

Does Gold Have a Green Light to $1700?

Finance Press Release Finance Press Release 26.02.2021 16:21
Gold just doesn’t seem to care and is stubbornly ignoring its inverse relationship with the USDX. What accounts for gold’s current downward trend?It’s really hard to get a more bearish combination of factors for gold than what we just saw.A good way to start the discussion would be to reply to a question that I received about the USD Index recently.Hi, I have been reading your articles about the USD bottoming and moving in a similar pattern to 2018. I am seeing a possible head and shoulder pattern on Jan 18th (left shoulder), Feb 5 th (the head), and Feb 17th (right shoulder). For all its problems, the euro seems to be going higher and higher. Just wondering what your thoughts are.Figure 1Indeed, the head-and-shoulders pattern formed as you described it (I added a dotted neckline to the formation on the above chart), but since it wasn’t as significant as the breakout above the declining medium-term resistance line, the implications of the latter overwhelmed the bearish implications of the H&S formation. The USD index invalidated the breakdown below the neck level of the formation, so what was previously a sell signal, has now turned into a buy signal. Consequently, we have yet another reason to expect higher values of the USD Index in the following weeks and months.Figure 2Based on the obvious similarity to early 2018, the verification of the breakdown is likely the final step before a major rally in the USDX. This will likely translate into lower precious metals and mining stock prices, especially if the general stock market declines as well.Let’s use another question that I received to segue to the following part of the analysis.What happens to gold if the dollar crashes, instead of going up?That’s just what happened early during the day, yesterday (Feb. 25). Well, it was just intraday action rather than a big medium-term crash, however, it shows what could happen. Simply put, gold declined anyway. Why did it do so? Because it wanted to do so based on technical/emotional factors. Maybe that was just a temporary reversion in direction? No – when the USD Index came back up, gold declined even more, and we see the continuation of this pattern today as well.What if the USD Index declines much more? The last time when gold was trading at these levels in 2020, the USD Index was trading at about 100. The latter declined about 10 index points and gold is at the same level. So, gold has already proven its ability to ignore the USD’s declines. There will be a time, when gold soars in response to even mild declines in the USDX, but this is likely to happen only after gold declines significantly – and it “wants” to rally.Figure 3In previous analyses , I commented on the above chart in the following way:The move higher in gold was notable, but nothing game changing. The last time gold moved above the declining short-term resistance line, was when it actually topped. The invalidation of the breakdown marked the start of another very short-term decline. The small decline in today’s overnight trading might be the very beginning of this invalidation that leads to another slide.That’s exactly what happened. The failed breakout led to another slide and gold is currently right after its breakdown to new 2021 lows. The road to ~$1,700 gold is now fully open. That’s when gold would be likely to take some sort of breather and gather strength (well, weakness, but “gathering weakness” just doesn’t sound right) for another wave down – likely to $1,500 or so.Please note that gold didn’t close at new yearly lows yesterday. This observation is important in comparison with the fact that…Figure 4Mining stocks did.Miners closed at new 2021 lows yesterday, even though gold didn’t, which once again proves their weakness and once again confirms the bearish outlook.I previously wrote that gold’s ~$1,700 target is likely to be aligned with the GDX’s ~$31 target and this remains up-to-date. After that, I expect some kind of corrective upswing – perhaps to $33 or so, and then another – big – move lower. Please note that the corrective upswing would be yet another (and final) verification of the head and shoulders pattern, and its very bearish implications would take place only after this verification. That’s why I expect the decline to be particularly significant. You can read more about this broad H&S pattern over here.Silver just went through a triangle-vertex-based reversal , and it seems to have indeed triggered a reversal.Figure 5Silver moved a bit higher on Wednesday (Feb. 24) and in yesterday’s early trading, but it didn’t exceed the recent high. This means that my previous comments on the above chart remain up-to-date:The move lower is not yet super significant, but given the reversal point, it could just be the beginning. Remember the triangle-vertex-based reversal at the beginning of the year? Back then, practically nobody wanted to believe that silver and the precious metals market was topping at that time. It was the truth, though. Gold and mining stocks were never higher since that time and the same thing would have most likely happened to silver if it wasn’t the #silversqueeze popularity that gave it its most recent boost.Now, there’s also another triangle-vertex-based-reversal in a few days , and since these reversals tend to work on a near-to basis, silver might top any day now, even if it hasn’t topped earlier today.Based on what’s happening in the markets right now, it seems just as possible that silver and the rest of the precious metals market will form a temporary bottom within the next few days.Figure 6Moreover, please note that it’s the last delivery day for silver futures, and instead of a supply-crunch-based rally, we see a decline. Naturally, this is bearish.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Will There Be Roaring Twenties for Gold?

Finance Press Release Finance Press Release 26.02.2021 16:59
The 2020s might be less roaring than the 1920s, which seems like good news for gold.The United States is strongly polarized, with blue versus red, liberals versus conservatives, and so on. People are divided along many lines, but the biggest division line is between those who count decades from 0 to 9 and those who count them from 1 to 10. It is intuitive for many people to adopt the first method, especially that we think of decades as ‘the 20s’, ‘the 30s’, and so on. However, the catch is that there was no Year Zero, so the first decade of the common era was years 1 to 10. Following this logic, the current decade started on January 1, 2021, not January 1, 2020.So, I feel fully entitled to investigate how gold will behave in the new decade. The issue is especially interesting as some analysts claim that we are entering the Roaring Twenties 2.0. Are they correct?On the surface, there are some similarities. The 1920s were a decade that followed the nightmare of World War I and the Spanish Flu pandemic . It was a time of quick economic growth (the U.S. GDP grew more than 40 percent in that period) and rapid technological innovation fueled predominantly by the rising access to electricity and big improvements in transportation (automobiles and planes).Fast forward one century and we land in the 2020s, which is a decade following the nightmare of the coronavirus pandemic . There are hopes for an acceleration in technological progress driven mainly by the rising scope of remote work, digital solutions, cloud computing, artificial intelligence, Internet of Things, 5G networks, robotization, super-batteries, electric vehicles, and so on. And given the pent-up demand and months spent in lockdowns, consumers are ready to congregate and spend!However, there are good reasons to be skeptical about the narrative of the Roaring Twenties 2.0 . The era of post-war prosperity was fueled by the return to the normalcy in the sphere of economic policy. I refer here to the fact that after WWI, there was a successful transition from a wartime economy to a peacetime economy. In contrast, in the aftermath of the Great Recession , there is a gradual transition from the peacetime economy to a wartime economy, that was only accelerated during the epidemic and the Great Lockdown .In particular, both the government spending and the fiscal deficits were sharply reduced in the post-war era. In consequence, the U.S. public debt declined, especially in real terms. Similarly, the Fed reversed its monetary policy and allowed for monetary contraction (and quick recession) in 1919-20 to reverse wartime inflation .In other words, the tighter monetary and fiscal policies led to an environment of economic prosperity. Also helpful for the U.S. were developments such as trustbusting and an economic recovery in Germany after its hyperinflation – all developments that will not replay in the 2020s.In contrast, neither the fiscal policy nor the monetary policy are going to normalize anytime soon , even if the COVID-19 pandemic is brought under control. The national debt has risen by almost $7.8 trillion under Trump’s presidency – a level that rivals Italy’s. The debt-to-GDP ratio has soared, as the chart below shows. And Joe Biden doesn’t worry about deficits – instead, with his plan of $1.9 trillion economic stimulus, he is going to balloon the public debt even further by increasing government spending.But maybe we shouldn’t worry about the debt? After all, after WW2, the public debt was even higher, but the economy didn’t collapse – actually, it grew so rapidly that the debt-to-GDP ratio diminished significantly. Yup, that’s correct, but after the pandemic, the economy will not recover as quickly as in the aftermath of WW2. Oh, and by the way, the economy grew its way out of debt only thanks to several years of high inflation .Therefore, the current complacency and naïve belief in low- interest rates and debt-driven economic recovery makes the scenario of the Roaring Twenties 2.0 not very likely, despite all the fantastic technological progress we are observing. So, instead of acceleration, we could rather observe an economic slowdown due to the poor economic policy that hampers the expansion of the private sector. Indeed, the recent report by the World Bank warns about the lost decade: “If history is any guide, unless there are substantial and effective reforms, the global economy is heading for a decade of disappointing growth outcomes.” This is good news for the gold market.But even if the Roaring Twenties 2.0 do happen, it wouldn’t have to be very bad for the yellow metal. It’s true that the 1920s was a period of wealth, prosperity, and decadence in which people didn’t think about preserving capital and investing in safe-haven assets such as gold . In contrast, there was a lot of risk-taking fueling the boom in the stock market. However, the Roaring Twenties were an inflationary period of debt-driven growth that ended in the systemic economic crisis called the Great Depression – and gold can shine in such an macroeconomic environment .Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
New York Climate Week: A Call for Urgent and Collective Climate Action

Stocks, Gold – Rebound or Dead Cat Bounce?

Monica Kingsley Monica Kingsley 01.03.2021 15:10
None of Friday‘s intraday attempts to recapture 3,850 stuck, and the last hour‘s selling pressure is an ill omen. Especially since it was accompanied by high yield corporate bondsh weakening. It‘s as if the markets only now noticed the surging long-end Treasury yields, declining steeply on Thursday as the 10y Treasury yield made it through 1.50% before retreating. And on Friday, stocks didn‘t trust the intraday reversal higher in 20+ year Treasuries either.Instead, the options traders took the put/call ratio to levels unseen since early Nov. The VIX however doesn‘t reflect the nervousness, having remained near Thursday‘s closing values. Its long lower knot looks encouraging, and the coming few days would decide the shape of this correction which I have not called shallow since Wed‘s suspicious tech upswing. Here we are, the tech has pulled the 500-strong index down, and remains perched in a precarious position. Could have rebounded, didn‘t – instead showing that its risk-on (high beta) segments such as semiconductors, are ready to do well regardless.That‘s the same about any high beta sector or stock such as financials – these tend to do well in rising rates environments. Regardless of any coming stabilization / retreat in long-term Treasury yields, it‘s my view that we‘re going to have to get used to rising spreads such as 2y over 10y as the long end still steepens. The markets and especially commodities aren‘t buying Fed‘s nonchalant attitude towards inflation. Stocks have felt the tremors, and will keep rising regardless, as it has been historically much higher rates that have caused serious issues (think 4% in 10y Treasuries).In such an environment, the defensives with low volatility and good earnings are getting left behind, as it‘s the top earners in growth, and very risk-on cyclicals that do best. They would be taking the baton from each other, as (micro)rotations mark the stock market bull health – and once tech big names join again, new highs would arrive. Then, the $1.9T stimulus has made it past the House, involves nice stimulus checks, and speculation about an upcoming infrastructure bill remains. Coupled with the avalanche of new Fed money, this is going into the real economy, not sitting on banks‘ balance sheets – and now, the banks will have more incentive to lend out. Margin debt isn‘t contracting, but global liquidity hasn‘t gone pretty much anywhere in February. Coupled with the short-term dollar moves, this is hurting emerging markets more than the U.S. - and based on the global liquidity metrics alone, the S&P 500 is oversold right now – that‘s without the stimulus package. It‘s my view that we‘re experiencing a correction whose shape is soon to be decided, and not a reversal of fortunes.Just like I wrote at the onset of Friday:(…) Would we get a bounce during the U.S. session? It‘s possible to the point of likely. The damage done yesterday though looks to have more than a few brief sessions to run to repair. True, some stocks such as Tesla are at a concerning crossroads, and in general illustrate the vulnerability of non-top tech earners within the industry. Entering Mon‘s regular session, the signs are mixed as there hasn‘t been a clear reversal any way I look at it. Still, this remains one of the dips to be bought in my view – and the signs of it turning around, would be marked by strengthening commodities, and for all these are worth, copper, silver and oil especially.As for gold, it should recover given the retreating long-term yields, but Fri didn‘t bring any signs of strength in the precious metals sector, to put it mildly. Look for TLT for directions, even as real rates, the true determinant, remain little changed and at -1%, which means very favorable fundamentals for the yellow metal. And remember that when the rate of inflation accelerates, rising rates start to bite the yellow metal less.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Its InternalsFriday‘s session doesn‘t have the many hallmarks of a reversal. Slightly higher volume, yet none of the intraday upswings held. The Force index reveals that the bears just paused for a day, that there wasn‘t a true reversal yet. The accumulation is a very weak one thus far, and the sellers can easily show more determination still.Credit MarketsHigh yield corporate bonds (HYG ETF) are plain and simple worrying here. The decent intraday upswing evaporated as the closing bell approached. A weak session not indicative of a turnaround.The high yield corporate bonds to short-dated Treasuries (HYG:SHY) performance was weaker than the stock market performance, which isn‘t a pleasant development. Should the bond markets keep trading with a more pessimistic bias than stocks, it could become quite fast concerning. As said already, the shape of the correction is being decided these days.Stocks, Smallcaps and Emerging MarketsAfter having moved hand in hand, emerging markets (EEM ETF) have weakened considerably more over the prior week than both the S&P 500 and the Russell 2000 (IWM ETF). EEM is almost at its late Jan lows – given Fri‘s spike, watching the dollar is key, and not just here.TechnologyTechnology (XLK ETF) didn‘t reverse with clarity on Friday, regardless of positive semiconductors (XSD ETF) performance. At least the volume comparison here is positive, and indicates accumulation. Just as I was highlighting the danger for S&P 500 and gold early Thursday, it‘s the tech sector that holds the key to the 500-strong index stabilization.Gold and SilverReal rates are deeply negative, long-dated Treasuries indeed turned higher on Friday, yet gold plunged right to its strong volume profile support zone before recovering a little. Its very short-term performance is disappointing, It was already its Tue performance that I called unconvincing – let alone Wed‘s one. I maintain that it‘s long-dated Treasury yields and the dollar that are holding the greatest sway. Rates should retreat a little from here, and the gold-dollar correlation is only slightly positive now, which translates into a weak positive effect on gold prices.But it‘s silver that I am looking to for earliest signs of reversal – the white metal and its miners have the task clear cut. Weeks ago, I‘ve been noting the low $26 values as sufficient to retrace a reasonable part of prior advance, and we‘ve made it there only this late. Thu and Fri‘s weakness has much to do with the commodities complex, where I wanted still on Thu to see copper reversing intraday (to call it a risk-on reversal), which it didn‘t – and silver suffered the consequences as well. Likewise now, I‘m looking to the red metal, and will explain in today‘s final chart why.Precious Metals RatiosThere is no better illustration of gold‘s weakness than in both miners to gold ratios that are bobbing around their local lows, rebounding soundly, and then breaking them more or less convincingly again. The gold sector doesn‘t yet appear ready to run.Let‘s get the big picture through the copper to oil ratio. Its current 8 months long consolidation has been punctured in the middle with oil turning higher, outperforming the red metal – and that brought the yellow one under pressure increasingly more. Yet is the uptick in buying interest in gold a sign of upcoming stabilization and higher prices in gold that Fri‘s beaten down values indicate? Notably, the copper to oil ratio didn‘t break to new lows – and remains as valuable tool to watch as real, nominal interest rates, and various derivatives such as copper to Treasury yields or this very ratio.SummaryStock bulls are almost inviting selling pressure today with the weak finish to Fri‘s session. While the sectoral comparisons aren‘t disastrous, the credit markets indicate stress ahead just as much as emerging markets do. Still, this isn‘t the end of the bull run, very far from it – new highs are closer than quite a few might think.Gold and silver took an even greater beating on Fri than the day before. Naturally, silver is much better positioned to recapture the higher $27 levels than gold is regarding the $1,800 one. With the long-dated Treasuries stabilization indeed having resulted in a short-term dollar upswing, the greenback chart (and its effects upon the metals) is becoming key to watch these days. Restating the obvious, gold is far from out of the woods, and lacking positive signs of buying power emerging.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

After Gold’s Slide, What Happens to Miners?

Finance Press Release Finance Press Release 01.03.2021 17:42
After gold came down hard last week, it might be in a for a short pause and corrective upswing. What will the yellow metal’s next chapter bring for the miners? How high can they go if gold rallies from here?As gold recently moved very close to my approximate target of $1,700, the senior miners (GDX) ended Friday’s (Feb. 26) session $0.13 above my initial downside target of $31 . And while an eventual flush to the $23 to $24 range (or lower) remains on the table, a corrective upswing could be next in line.To explain, if gold can bounce off of the $1,670 to $1,700 range, the GDX ETF will likely follow suit. Thus, while the miners are likely to move drastically lower over the medium-term, a decline of nearly 11% over the last two weeks has given way to short-term oversold conditions.Please see below:Figure 1Even more precise, if you analyze the chart below, you can see that the GDX ETF has garnered historical support at roughly $29.52. Moreover, the level also coincides with the early-March high, the mid-April low and the 61.8% Fibonacci retracement level. As a result, a corrective upswing to ~$33/$34 could be the miners’ next move.Please see below:Figure 2 - VanEck Vectors Gold Miners ETF (GDX), GDX and Slow Stochastic Oscillator Chart Comparison – 2020Remember though, if gold does bounce off of the $1,670 to $1,700 range, and the miners are able to ride the momentum higher, ~$33 to ~$34 is where the rally likely ends. From there, the bearish medium-term trend will likely continue, with the miners declining to my secondary target range of $23 to $24.From a medium-term perspective, the potential head and shoulders pattern – highlighted by the shaded green boxes above – also deserves plenty of attention.Ever since the mid-September breakdown below the 50-day moving average , the GDX ETF was unable to trigger a substantial and lasting move above this MA. The times when the GDX was able to move above it were also the times when the biggest short-term declines started.Looking at the chart above, the most recent move higher only made the similarity of this shoulder portion of the bearish head-and-shoulders pattern to the left shoulder ( figure 26 - both marked with green) bigger. This means that when the GDX breaks below the neck level of the pattern in a decisive way, the implications are likely to be extremely bearish for the next several weeks or months.Due to the uncanny similarity between the two green rectangles, I decided to check what happens if this mirror-similarity continues. I used purple, dashed lines for that. There were two important short-term price swings in April 2020 – one shows the size of the correction and one is a near-vertical move higher.Copying these price moves (purple lines) to the current situation, we get a scenario in which GDX (mining stocks) moves to about $31 and then comes back up to about $34. This would be in perfect tune with what I wrote previously. After breaking below the head-and-shoulders pattern, gold miners would then be likely to verify this breakdown by moving back up to the neck level of the pattern. Then, we would likely see another powerful slide – perhaps to at least $24.This is especially the case, since silver and mining stocks tend to decline particularly strongly if the stock market is declining as well. And while the exact timing of the market’s slide is not 100% clear, the day of reckoning for stocks is coming . And it might be very, very close.As I explained previously, based on the similarities to the 1929 and 2008 declines, it could be the case that the precious metals sector declines for about 3 months after the general stock market tops. And it seems that we won’t have to wait long for the latter. Perhaps the next big move lower in stocks is already underway.In conclusion, the sun may be about to shine on the precious metals, even if the upcoming rally is not yet destined to last. If the yellow metal can rally off of the $1,670 to $1,700 range, the miners have a pathway to ~$33/$34. Supporting a short-term bounce, abnormally high short interest in U.S. Treasuries could be a contrarian indicator , with a temporary calming of the priors weeks’ yield surge adding fuel to the PMs’ fire. If so, the favorable backdrop could support a temporary bounce before gold and the miners resume their medium-term downtrends.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
US Industry Shows Strength as Inflation Expectations Decline

Treasury Yields Rally May Trigger A Crazy Ivan Event (Again) In The Market

Chris Vermeulen Chris Vermeulen 01.03.2021 20:05
Since shortly after the US November elections, my research team and I have been clear about our research and our belief that the bullish rally in the markets would continue to drive the strongest sectors higher and higher.  In December 2020, we shared an article suggesting our proprietary Fibonacci Price Amplitude Arcs and GANN theory indicated a major price peak could set up in early April 2021.  On February 3, 2021, we also published an early warning that Treasure Yields were set up to prompt a big topping pattern sometime over the next 6+ months .  We followed that up with a February 21, 2021 article suggesting future Gold and Silver price trends may be tied to the moves in Treasury Yields and the resulting stock market trends.Now that the Treasury Yields have completed what we suggested would be required to start a “revaluation event” in the stock market, we believe that a “Crazy Ivan” event may soon setup in the global markets.  Many months back (August 28, 2019), we published an article about precious metals were about to pull a Crazy Ivan price event (https://www.thetechnicaltraders.com/precious-metals-crazy-ivan-followup/). This prediction came true in 2020 and 2021.  Now, we are suggesting the global markets may pull a new type of Crazy Ivan event – a price revaluation event prompted by the rise in Treasury Yields.The Yields SetupIn our February 3, 2021, research article about the Treasury Yields, we suggested that a series of setup processes take place that prompt a broad market correction related to Treasury Yields.  First, Yields must fall from levels above the Breakdown Threshold to levels below the Setup Threshold to complete the first stage of the setup.  This first stage sets up the potential for moderate sideways price trends nearing a peak, or congestion.  The second stage of this setup is that Yields must fall to levels below ZERO.  This move creates the potential for one of two outcomes when Yields begin to rally.If Yields rally back above the Setup Threshold and/or the Breakdown Threshold, but then stall and reverse back below the Breakdown Threshold, then the markets will likely stall/congest or enter a sideways/rolling top type of trend for a period of 2 to 6+ months. If Yields rally back above both the Setup Threshold and the Breakdown Threshold and continue to rally higher, then the markets begin to start a sideways/correction event which we are calling a Crazy Ivan event.We have highlighted all the areas in the charts below where the Yields have fallen to levels below ZERO on this chart and you can clearly see how the SPX reacted to these upside Yields recovery events.  Every time (in RED) where the Yields rallied above the Setup and Breakdown Threshold levels, a broad market downtrend setup within 6 to 12+ months of this event.  We believe the markets are about to do the same type of thing and we are calling it a Crazy Ivan event because we believe the current market setup is vastly different than the previous setups.If the markets start to roll over and volatility continues to stay higher or rise, we can benefit from it with our Options Trading Signals which we use non-direction trades to sell premiums. This allows options traders to profit from volatility and not worry about which way the market moves.The current Crazy Ivan setupThe following current Yields chart shows a more detailed example of what is currently taking place related to the Crazy Ivan setup.  Yields are back above the 1.35 level on this chart and have quickly rallied above the Setup and Breakdown Threshold levels.  If Yields continue to rally from this level, we believe the markets will quickly shift into a sideways/rolling top formation which will eventually prompt a new Crazy Ivan price event (a big revaluation event).  If yields stall near these current levels and move back below the Breakdown Threshold, then we may still see a bit of sideways trading for a while, but usually the markets will begin to resume an upward price trend if Yields stay below the Breakdown Threshold.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The outcome hinges on what Yields do in the next 4 to 12+ months and we believe traders and investors need to prepare for big shifting trends in major sectors and indexes going forward.  The setup process is already complete at this point.  We are not waiting for anything to further complete this potential for the Crazy Ivan event.  We are just watching Yields to see if they continue higher or stall and move back below the Breakdown Threshold.  At this point, the Crazy Ivan price revaluation event is almost a certainty – it is just a matter of time.What we expect to see is not the same type of market trend that we have experienced over the past 8+ years – this is a completely different set of market dynamics. Don’t miss the opportunities in the broad market sectors in 2021, which will be an incredible year for traders of the BAN strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.In the second part of this article we will publish later this week, we will review and share more data and details related to the rising Yields and the pressures that will likely be placed on the global markets.  You don't want to miss the conclusions of our research.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

What Correction in Stocks? And Gold?

Monica Kingsley Monica Kingsley 02.03.2021 16:30
Stocks thoroughly rebounded yesterday, and corporate credit markets did even better. These are optimistic signs as the shape of the correction has been decided – again, as shallow, less than 5% one. Long-termTreasuries are no longer in a free fall, volalility has retreated back to the low 20s, and the put/call ratio swung back towards the bottom of its recent range.Technology has rebounded as well, and the microrotations in the stock market keep being the haollmark of stock bull‘s health, and the risk-on (high beta) sectors and segments such as financials, semiconductors, or capex (capital expenditure such as construction and engineering) - and airlines are catching breath too.Such was the sectoral themes likely to do well that I mentioned yesterday:(…) That‘s the same about any high beta sector or stock such as financials – these tend to do well in rising rates environments. Regardless of any coming stabilization / retreat in long-term Treasury yields, it‘s my view that we‘re going to have to get used to rising spreads such as 2y over 10y as the long end still steepens. The markets and especially commodities aren‘t buying Fed‘s nonchalant attitude towards inflation. Stocks have felt the tremors, and will keep rising regardless, as it has been historically much higher rates that have caused serious issues (think 4% in 10y Treasuries).In such an environment, the defensives with low volatility and good earnings are getting left behind, as it‘s the top earners in growth, and very risk-on cyclicals that do best. They would be taking the baton from each other, as (micro)rotations mark the stock market bull health – and once tech big names join again, new highs would arrive. Then, the $1.9T stimulus has made it past the House, involves nice stimulus checks, and speculation about an upcoming infrastructure bill remains. Coupled with the avalanche of new Fed money, this is going into the real economy, not sitting on banks‘ balance sheets – and now, the banks will have more incentive to lend out. Margin debt isn‘t contracting, but global liquidity hasn‘t gone pretty much anywhere in February. Coupled with the short-term dollar moves, this is hurting emerging markets more than the U.S. - and based on the global liquidity metrics alone, the S&P 500 is oversold right now – that‘s without the stimulus package. It‘s my view that we‘re experiencing ... not a reversal of fortunes. … this remains one of the dips to be bought in my view.All right, we‘re seeing a rebound in progress, on the way to new highs – but what about the embattled gold? Its seasonality component was „slated“ to help the bulls in Feb, and the king of metals instead succumbed to nominal yields pressure. Would the Mar historically negative slant be likewise invalidated – and again precisely for the reason called long-dated Treasuries?Regardless of the immensely positive fundamentals behind the precious metals (including real rates, the true determinant, little changed and at -1%), it has thus far been commodities and Bitcoin who rose and held on to their gains since the 2H 2020. Please remember the big picture chart about commodities and precious metals taking turns in rising that I presented on Feb 17. The bullish case for gold (let alone silver) isn‘t lost – merely thoroughly questioned these weeks of sordid $HUI:$GOLD underperformance.Are we seeing signs of decreasing financial asset price inflation – or an accelerating one? It‘s the inflation and inflation expectations that are weighed against the nominal rates trajectory. As the rate of inflation accelerates, rising nominal rates would bite the yellow metal less – and there is no denying that the risk of inflation is running as high as can be.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookSo far, so (very) good in stocks – volume is lagging but the Force index still flipped positive, indication that at worst, we‘re likely to muddle through in a sideways to higher trading pattern over the nearest days.Credit MarketsAfter a worrying move on Friday, high yield corporate bonds (HYG ETF) are once again assuming leadership, and I see this chart as the one with more bullish implications for the coming days than the S&P 500 alone. That‘s the dynamic I am looking for in a good run.Both leading credit market ratios – high yield corporate bonds to short-dated Treasuries (HYG:SHY) and investment grade corporate bonds to longer-dated ones (LQD:IEI) – are looking to get back in closer sync than has been the case in 2021 thus far. It would take time, but would prove that the stock market can still keep on rising when faced with even higher nominal rates than we saw thus far.TechnologyTechnology (XLK ETF) clearly reversed, and while the volume isn‘t convincing on a standalone basis, coupled with semiconductors (XSD ETF) and other value stocks performance, it‘s encouraging enough to treat any significant correction calls heard elsewhere, as again plain wrong and premature, for the full picture view didn‘t support such calls in the first place, and you know what is being said about every broken clock being right twice a day…Having said so, let‘s turn to precious metals, which offered more than a few bullish signs way earlier in Feb. Based on the evolving charts and gold‘s failure to gain credible traction, I was at least able to time most of the downside before it happened – such as last week. Still, there has been little bullish that could be said about the PMs complex, as encouraging signs emerged only to be gone shortly. So, where do we stand at the moment?Gold and Copper to Oil RatioRising TLT rates are turning a corner, but the yellow metal is staying at the strong volume profile support zone that marks the April-May consolidation zone. Earlier today, gold cut all the way to its lower end (that‘s low $1,700s) before rebounding. The danger zone hasn‘t been cleared in the least yet, but the signs of silver reversing once again from a double test of $26, is as encouraging as copper rising again, and oil not tanking.The copper to oil ratio whose long-term perspective I featured yesterday, is making a clear turn on the daily chart. Coupled with the TLT stabilization, and the dollar trading with relatively little correlation to gold these days, the table is set for a short-term rebound in the metals. How far would these take the sector? The numerous bears would have you believe that not too far & that another downleg to ridiculously low values is at hand, but I am not convinced and prefer reading the tape instead. Yes, even in the mostly bearish PMs chart setups where nothing bullish has stuck for longer than several day over the past weeks. I repeat that the $1.9T stimulus bill (and infrastructure bill, even slavery reparations if we get that far really) hasn‘t been truly factored in by the markets – and yesterday‘s S&P 500 action proves that.Silver and MinersSilver keeps consolidating in a bullish pattern well above $26 still (not that it would be the line in the sand though), and when the silver miners (SIL ETF) start leading again, a new silver upleg would be born. For now, these are still mirroring the weak gold miners‘ performance, which is free from bullish signals for the yellow metal still. The gold sector isn‘t yet ready to run, plain and simple.SummaryStock bulls are on a solid recovery path, and new all time highs are again closer in sight. Crucially, the corporate credit markets and S&P 500 sectoral performance confirm, and once emerging markets join (the dollar weakens again), more fuel to the rally would be available.Gold remains precariously perched, yet isn‘t breaking down – the bull run off last spring‘s consolidation remains intact – regardless of the short-term gloom and doom. I see the metals as likely to recover next as the Treasury yields stop biting. Restating the obvious, gold is far from out of the woods.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Great ADP Figures But Things Can Still Turn Nasty

Monica Kingsley Monica Kingsley 05.03.2021 15:48
Powell gave a wait-and-see answer to my yesterday‘s rhetorical question about the bears just starting out, indeed. The S&P 500 plunged, breaking far outside the Bollinger Bands confines, illustrating the extraordinary nature of the move. Rebound would be perfectly natural here (and we‘re getting one as we speak) – but will it be more than a dead cat bounce?Stocks partially recovered from last Friday‘s intraday plunge, and good news about the stimulus clearing House followed after the market close – stock bulls took the opportunity, and Monday‘s session gave signs that the worst is over. Tuesday‘s move partially negated that, but even after Wednesday, the short-term case was undecided (even as tech kept acting relatively weak).Yesterday‘s session though gives the short-term advantage to the bears, and that‘s because of the weak performance I see in other stock market indices and bonds. The Russell 2000 got under pressure, negating what by yesterday still looked like a shallow correction there. So did the emerging markets and their bonds. More downside can materialize either suddenly or slowly over the coming say 1-2 weeks. It depends on the tech and its heavyweight names, where these find support. Corporate credit markets aren‘t weakening as dramatically though – as you‘ll see illustrated later on, both high yield corporate bonds and the HYG:SHY ratio are holding up much better than stocks. While that‘s bullish, the S&P 500 apparently hasn‘t yet learned to live with higher rates – let alone considerably higher ones.The key element playing the markets now, is the Fed‘s approach to inflation, rising long-term Treasuries in the face of central bank inaction and inflation denialism, which translates into the dollar taking the turn higher courtesy of the stresses induced across many asset classes. I asked yesterday:(...) How far is the Fed announcing yield curve control, or at least a twist program? Markets crave more intervention, and those calling for rate hikes to materialize soon, are landing with egg on their faces – mark my words, the Fed is going to stay accommodative longer than generally anticipated – have we learned nothing from the Yellen Fed?The ostrich pose on inflation isn‘t helping – it‘s sending Treasuries down, turning much of the rest red. Does the Fed want to see the market forcing some kind of answer / action the way it did in Dec 2018? The Fed is risking such a development now, this time through inaction, and not thanks to monetary tightening as back then.While some argue that inflation just brings a Fed rate hike closer, I really doubt that this option is treated seriously inside the Eccles building. It would be the right choice if you were serious about fighting inflation before it takes root – but in whose interest is that? Just look at the transitory statements, Fed official beliefs that to see it hit even 3% would be extraordinary, and you understand that their models understating it considerably in the first place, aren‘t even sending them the correct, magnitudinal signals.I see it as more probable that they would just try to suppress its symptoms, and succumb to the markets even more vocally demanding some action, by going the twist route. In effect, they would be then fighting the war on two fronts, as I explained in the middle of Feb already.Food inflation running hot, commodities on fire, and gold is going nowhere still. The bears are vocal, and I‘ve laid down a realistic game plan yesterday, discussing the gold support levels and perspectives. If you‘re disappointed that gold isn‘t doing as well as commodities, consider the mid-Feb described cascading inflation process as it devours more and more of the financial landscape – we still have a weak job market that doesn‘t contribute to the inflationary pressures, relegating the true, undeniable inflation to the 2022-3 timeframe.Let‘s keep the big picture – gold is in a secular bull market that started in 2018 (if not in late 2015), and what we‘re seeing since the Aug 2020 top, is the soft patch I called. The name of the game now, is where the downside stops – I am not capitulating to (hundreds dollars) lower numbers below $1,650 on a sustainable basis. The new precious metals upleg is a question of time even though the waiting is getting longer than comfortable for many, including myself. Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsReasonably heavy volume with most of yesterday‘s candle, pushing vigorously to start a new downtrend. Given yesterday‘s move, some kind of retracement is likely today as a minimum, but the bears have the upper hand now.Credit MarketsHigh yield corporate bonds (HYG ETF) haven‘t declined below last week‘s lows, and are still at bullish divergence readings. Will they keep above these? Doing so is essential for the still unfolding S&P 500 correction.High yield corporate bonds to short-dated Treasuries (HYG:SHY) aren‘t as panicky as stocks here, which is more than mildly optimistic.Put/Call Ratio and VolatilityThe put/call ratio is well below the Feb or Jan highs, while the volatility index is much higher relatively to these. While that‘s an opportunity for even more panic, volatily would quickly die down if today‘s S&P 500 upswing sticks. Then, it would be time to evaluate the changes in posture. Either way, this correction appears to have longer to run still.TechnologyTechnology (XLK ETF) compared to the value stocks (VTV ETF) shows where the engine of decline is – and it‘s starting to have an effect on value, high beta plays. Not until tech stabilizes, can the correction be called as really close to over – just check how the equal weighted S&P 500 (RSP ETF) suffers right now.Gold, Silver and MinersAnother bite into the volume profile support zone, and the gold upswing isn‘t here still. Another missed daily opportunity to rebound. The yellow metal is still in a precarious position until it shakes off the rising (nominal, not real) rates albatross.Silver is in a technically stronger position, but signs of deterioration are creeping here too. It‘s painfully obvious when the miners are examined – the silver ones are leading to the downside, and the gold ones, well seniors outperforming juniors isn‘t a sign of strength really. The sky isn‘t definitely clear here.SummaryStock bulls have to once again try to repair the damage, and their success depends on the tech the most. The S&P 500 internals are slightly deteriorating, but the credit market performance remains more solid. New highs remain a question of time (and the stimulus carrot).Gold remains acting weak around the lower border of its support zone, and silver is joining in the deterioration, not to mention the mining indices. The yellow metal is though short-term holding up rather well, when the TLT and USDX pressures are considered.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

3… 2… 1… Let the Corrective Rally Begin

Finance Press Release Finance Press Release 05.03.2021 16:43
Folks, it seems that gold has formed an interim bottom, and a short-term corrective upswing is now likely, before the medium-term downtrend resumes.Any further declines from this point are not likely to be significant for the short-term. The same applies to silver and the miners.In yesterday’s (Mar. 4) intraday Gold & Silver Trading Alert , I described briefly why I think that the very short-term bottom is already in (or is at hand), and in today’s analysis, I’ll illustrate my points with charts. Let’s start with gold.Figure 1 – COMEX Gold Futures (GC.F)Gold just reached its 61.8% Fibonacci retracement level (based on the entire 2020 rally), and it just bounced off the declining red support line based on the August and November 2020 bottoms.Gold didn’t reach the previous 2020 lows just yet, but it moved very close to them and the two strong above-mentioned support levels could be enough to trigger a corrective upswing. After all, no market can move up or down in a straight line without periodic corrections.I previously wrote that when gold moves $1,693 we’ll be closing any remaining short positions, and when gold moves to $1,692, we’ll automatically open long positions in the miners. Since gold moved below $1,690, that’s exactly what happened.Yesterday (Mar. 4), gold futures were trading below $1,692 for about 10 minutes, so if you acted as I had outlined it in the Gold & Silver Trading Alerts, you made your purchases then. The GDX ETF was trading approximately between $30.80 and $31 (NUGT was approximately between $49.30 and $50) at that time – this seems to have been the exact daily bottom.One of the bullish confirmations came from the silver market .Figure 2 – COMEX Silver FuturesI previously wrote that silver is likely to catch up with the decline at its later stage, while miners are likely to lead the way.While gold miners showed strength yesterday, silver plunged over 4% before correcting part of the move. Yesterday’s relative action showed that this was most likely the final part of a short-term decline in the precious metals sector, and that we should now expect a corrective rebound, before the medium-term decline resumes. If not, it seems that the short-term bottom is at hand and while silver might still decline somewhat in the very short term, any declines are not likely to be significant in case of the mining stocks. At least not until they correct the recent decline by rallying back up.Speaking of mining stocks, let’s take a look at the GDX ETF chart.Figure 3 - VanEck Vectors Gold Miners ETF (GDX)Mining stocks showed strength yesterday. Even though gold moved visibly to new yearly lows, the GDX didn’t move to new intraday lows. The GDXJ did move to new intraday lows, but the decline was relatively small compared to what happened in gold and to what happened on the general stock market. The latter declined substantially yesterday and the GDXJ is more correlated with it than GDX – hence GDXJ’s underperformance was normal. Still, compared to both gold’s decline and stocks’ decline, the GDXJ and GDX declined very little.The price level at which miners showed strength matters greatly too. Miners stopped their decline practically right in my target area, which I based on the 50% Fibonacci retracement and the 2020 highs and lows. Moreover, the proximity of the $31 level corresponds to the 2019 high and the 2016 high. Since so many support levels coincide at the same price (approximately), the latter is likely to be a very strong support.Moreover, the RSI was just close to 30, which corresponded to short-term buying opportunities quite a few times in the past.How high are miners likely to rally from here before turning south once again? The nearest strong resistance is provided by the neck level of the previously broken head and shoulders pattern, which is slightly above $34.Also, let’s keep in mind the mirror similarity in case of the price action that preceded the H&S pattern and the one that followed it. To be precise, we know that the second half of the pattern was similar to its first half (including the shape of pattern’s shoulders), but it’s not yet very clear if the follow-up action after the pattern is going to be similar to the preceding price action. It seems quite likely, though. If this is indeed the case, then the price moves that I marked using green and purple lines are likely to be at least somewhat similar.This means that just as the late-April 2020 rally was preceded by a counter-trend decline, the recent decline would likely be followed by a counter-trend rally. Based on the size of the April counter-trend move, it seems that we could indeed see a counter-trend rally to about $34 this time.There’s also an additional clue that might help you time the next short-term top, and it’s the simple observation that it was relatively safe to exit one’s long positions five trading days after the bottom.That rule marked the exact bottom in November 2020, but it was also quite useful in early February 2021. In early December 2020, it would take one out of the market only after the very first part of the upswing, but still, let’s keep in mind that it was the “easy” part of the rally. The same with the October 2020 rally. And now, since miners are after a confirmed breakdown below the broad head and shoulders pattern, it’s particularly important not to miss the moment to get back on the short side of the market, as the next move lower is likely to be substantial. Therefore, aiming to catch the “easy” part of the corrective rally seems appropriate.So, if the bottom was formed yesterday, then we can expect to take profits from the current long position off the table close to the end of next week.Finally, let’s take a look at the USD Index.Figure 4 – USD IndexWhile the medium-term breakout continues to be the most important technical development visible on the above chart (with important bullish implications for the following months), there is one factor that could make the USD Index decline on a temporary basis.This factor is the similarity to the mid-2020 price pattern. I previously commented on the head and shoulders pattern that had formed (necklines are marked with dashed lines), but that I didn’t trust. Indeed, this formation was invalidated, but a bigger pattern, of which this formation was part, wasn’t invalidated.The patterns start with a broad bottom and an initial rally. Then it turns out that the initial rally is the head of a head-and-shoulders pattern that is then completed and invalidated. This is followed by a sharp rally, and then a reversal with a sizable daily decline.So far, the situations are similar.Last year, this pattern was followed by a decline to new lows. Now, based on the breakout above the rising medium-term support line, such a bearish outcome doesn’t seem likely, but we might see the pattern continue for several more days, before they disconnect. After all, this time, the USD Index is likely to really rally – similarly to how it soared in 2018 – and not move to new lows.What happens before the patterns disconnect? The USD Index could decline temporarily.Back in November 2020, the second top was below the initial one, and we just saw the USD Index move to new yearly high. Did the self-similar pattern break yet? In a way yes, but it doesn’t mean that the bearish implications are completely gone.In mid-2020, the USD Index topped after moving to the previous important intraday low – I marked it with a horizontal line on the above chart.Right now, the analogous resistance is provided by the September 2020 bottom and at the moment of writing these words, the USD Index moved right to this level.Consequently, it could be the case that we see a decline partially based on the above-mentioned resistance and partially based on the remaining self-similar pattern. The latter would be likely to lose its meaning over the next several days and would be decisively broken once the USD Index rallies later in March. The above would create a perfect opportunity for the precious metals sector to correct the recent decline – and for miners (GDX ETF) to rally to $34 or so.Please note that if gold rallies here – and it’s likely to – then this will be the “perfect” time for the gold and stock market permabulls to “claim victory” and state that the decline is over and that they were right about the rally all along. Please be careful when reading such analyses in the following days, especially if they come from people that have always been bullish. If someone is always bullish, the odds are that they won’t tell you when the next top is going to be (after all, this would imply that they stop being bullish for a while). Just because anyone can publish an article online, doesn’t mean that they should, or that others should follow their analyses. The internet is now replete people who claim to have expertise in the markets, and we all saw what happened to the profits of those who bought GameStop at $300. It’s the same thing that happened to the profits of those who were told since the beginning of this year that gold is going to rally – they turned into losses. What we see as well are internet echo chambers, where you are more likely to only read articles that express what you already agree with, instead of being exposed to differing viewpoints that shed light on other critical factors.Gold is likely to rally from here, but it’s highly unlikely that this was the final bottom, and that gold can now soar to new highs. No. The rally in the USD Index has only begun and while it could pull back, it’s likely to soar once again, similarly to how it rallied in 2018. And gold is likely to respond with another substantial wave lower. This doesn’t mean we’re permabears either or that we want to see gold fail. On the contrary, gold has a bright future ahead, but not before it goes through a medium-term decline after this corrective rally is over.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Stimulus And Consumers Are The Keys To Further US/Global Economic Recovery – Part I

Stimulus And Consumers Are The Keys To Further US/Global Economic Recovery – Part I

Chris Vermeulen Chris Vermeulen 08.03.2021 03:55
At this point in our lives, we are hoping the new COVID-19 vaccines will do their part to help move the world towards more normal consumer and economic activities.  The US Senate recently a new $1.9 Trillion stimulus package that should continue to provide assistance to various levels of consumer, state governments, and corporate enterprises.  The next question in our mind is “what will the recovery look like if/when it happens?”.  We need to look at three critical components of the global economy to help answer this question: Consumer Activity, Debt, and Supply/Demand Functions.Consumer activity makes up more than 60% of the US GDP.  It also drives money flow as consumers engage in economic activity, create credit for new purchases and help to balance the supply/demand equilibrium functioning properly.  The participation of the consumer within an economy is essential for a healthy growing economy.WHERE ARE CONSUMERS NOW & WHERE WILL THEY BE IN THE FUTURE?The US has passed more than $4 Trillion in COVID-19 stimulus over the past 12+ months.  At the same time, global central banks have also engaged in various easy money policies to spark global economic activity.  When we combine the efforts of world governments and central banks, we've seen an unprecedented amount of money deployed throughout the globe recently – and that money needs to find its purpose and use in the global economy quickly of the global economy is going to recover enough to spark a new wave of economic growth.We believe two key components of consumer engagement are at play right now; investing/trading in the US and global markets and Real Estate.  Whereas US consumers have been reducing debt exposure on credit cards and tightening their spending in other ways, trading volumes in the stock market Indexes and ETFs have increased dramatically over the past 12 months.  Additionally, low supply and low interest rates have kept the US housing market active, in addition to the boost in activity from people moving to more rural areas as the work-from-home phenomenon settles into the new normal.CASE-SHILLER HOME PRICE INDEXThis Case-Shiller 20-City Composite Home Price Index chart, below shows how quickly home prices have rallied over the past 12 months. Just prior to the COVID-19 pandemic, this index was flattening.  Then the moratorium on foreclosures and extended assistance for homeowners pulled many homes back off the market in early 2020.  That reduced supply and prompted a rally in home prices across the US.The assistance provided to these “at-risk” homeowners accomplished two very important economic benefits.  It eliminated a wave of new foreclosures (albeit possibly temporarily) and it prompted a seller's market because supply had been constricted.  The result is that many homeowners witnessed a 6% to 10% increase in their home values over the last 12+ months.DELINQUENCY RATES ON CONSUMER LOANSUnlike in 2006-2008 when delinquency rates skyrocketed during the housing crisis, throughout the COVID-19 pandemic, delinquency rates collapsed to the lowest levels over the past 25+ years.  Consumers took their extra capital, stimulus checks, and federal assistance and used the past 12+ months to eliminate certain debts.  Even though we are starting to see an uptick in delinquency rates in Q4 2020, these levels would have to climb considerably before we get close to the levels before the COVID-19 pandemic.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!This suggests that a broad spectrum of US consumers are in a much better economic position related to revolving debt, or credit card debt, than they were before the COVID-19 pandemic.  If these consumers begin to engage in a new economic recovery by engaging in a healthy credit expansion, we may see a boost to certain sectors of the economy over the next 24 to 36+ months.REAL PERSONAL CONSUMPTION EXPENDITURESUnlike many other indicators, Real Personal Consumption has risen past the pre-COVID-19 peak levels.  This suggests that consumers are still spending money on Durable Goods and are continuing to buy essential items to support their lifestyles and families.  Yes, there are a number of people that are unemployed or have transitioned to other types of work, but the stimulus efforts and extended unemployment assistance has translated into real consumer engagement for Durable Goods, as we can see from the chart below.Remember, Durable Goods are not typically found at Grocery Stores or Walmart.  They are items that have extended life-cycles (greater than three years); such as cars, planes, trains, furniture, appliances, jewelry, and books.  This rise in Durable Goods suggests that a large segment of the US consumer is actively engaged in making bigger-ticket purchases recently – possibly as a result of buying a new home, transitioning away from traditional work environments, and/or repositioning family essentials in preparation for a post COVID-19 world.  This type of economic engagement may continue for many months forward.CONSUMER PRICE INDEX – ALL URBAN CONSUMERSThe following Consumer Price Index chart shows that general consumer prices briefly dipped when COVID-19 hit in March 2020, but they have since rallied to new highs.  This is partially a result of the rise in home prices and rising commodity prices, which contribute to a rise in price levels for consumers.All of this data is showing that the US consumer is actually much more economically healthy than consumers were in the midst of the 2007-08 housing crisis. The stimulus efforts and partial economic shutdown did result in a large number of displaced or disadvantaged consumers, but it also shows that many US consumers were able to quickly transition into a different type of economic environment with very little extended economic risks.The new $1.9 Trillion stimulus package will offer even more assistance to consumers.  This new stimulus will be spent as new COVID-19 vaccines are being rolled out, suggesting the US is quickly moving away from extended risks related to the pandemic.  This means consumers will likely start attempting to go back to normal in certain ways.  Does this mean that the recovery efforts will strengthen the bullish price trend in the future and the US stock markets will continue to rally?In our effort to better identify opportunities for traders and investors as the post-COVID-19 recovery unfolds, we will continue to identify various market sectors that my research team and I believe have a strong potential for increased bullish price trends.  All of the data we've presented so far suggests the US consumer is much healthier than many people consider and that many US consumers are still actively engaged in some type of work/income solution.  The only reason why housing, durable goods, CPI, and other economic indicators continue to rise is because US consumers are actively engaged in buying/consuming bigger, durable goods.  This suggests the new $1.9 Trillion COVID relief effort may begin to push the US economy further into overdrive, and possibly pushing the supply/demand balance even further beyond the equilibrium zone.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.In Part II of this article, we'll take the data we've reviewed already and apply it to current market conditions, trends, and technical setups as we look for new opportunities in consumer-based sectors.  My team and I believe some very big sector trends are going to set up as a result of everything that is converging on the US and global markets.  It's time to get ready for some big trends. 
New York Climate Week: A Call for Urgent and Collective Climate Action

How to Join the Mining Party… Before it Ends

Finance Press Release Finance Press Release 08.03.2021 18:39
Forget gold and silver for a moment. Do you hear the music? Yes, it’s coming from the mining ETFs club. But how long will the party last?And more importantly, why miners, you may ask? Because miners tend to outperform in the early days of a major rally.After closing only $0.10 below my initial downside target of $31 on Mar. 1 , the GDX ETF could be ripe for an upward revision. Able to ignore much of last week’s chaos, the GDX ETF’s outperformance of gold and silver signals that the tide has likely turned.Please see below:Figure 1To that point, I warned on Mar. 1 that help was on the way:The GDX ETF has garnered historical support at roughly $29.52. The level also coincides with the early-March high, the mid-April low and the 61.8% Fibonacci retracement level. As a result, a corrective upswing to ~$33/$34 could be the miners’ next move.Furthermore, after alerting subscribers on Mar. 4 – writing that when gold moves to $1,692, we’ll automatically open long positions in the miners – the GDX ETF ended Friday’s (Mar. 5) session up by 3.2% from my initial entry of ~$30.80 - $31. Thus, from here, the GDX ETF has roughly 3.8% to 7.0% upside (as of Friday’s close) before the $33/$34 levels signals that the momentum has run its course.For now, though, positioning for more upside offers a solid risk-reward proposition . Prior to the initial decline, miners were weak relative to gold . However, after outperforming on Mar. 5, their steady hand was a sign of short-term strength. If you analyze the chart below, you can see that the size and shape of the current price action actually mirrors what we witnessed back in April.Please see below:Figure 2 - VanEck Vectors Gold Miners ETF (GDX), GDX and Slow Stochastic Oscillator Chart Comparison – 2020For context, I wrote on Mar. 5:Miners stopped their decline practically right in my target area, which I based on the 50% Fibonacci retracement and the 2020 highs and lows. Moreover, the proximity of the $31 level corresponds to the 2019 high and the 2016 high. Since so many support levels coincide at the same price (approximately), the latter is likely to be a very strong support. Moreover, the RSI was just close to 30, which corresponded to short-term buying opportunities quite a few times in the past.In addition, a short-term upswing could provide a potential pathway to $35 – as this level also corresponds with the GDX ETF’s late-February high, its monthly declining resistance line and its 50-day moving average. The abundance of resistance levels – combined with the fact that an upswing would further verify the GDX ETF’s breakdown below the neckline of its potential head and shoulders pattern – should keep the upward momentum in check.Over the medium-term, the potential head and shoulders pattern – marked by the shaded green boxes above – also deserves plenty of attention.For context, I wrote previously:Ever since the mid-September breakdown below the 50-day moving average , the GDX ETF was unable to trigger a substantial and lasting move above this MA. The times when the GDX was able to move above it were also the times when the biggest short-term declines started.(…)The most recent move higher only made the similarity of this shoulder portion of the bearish head-and-shoulders pattern to the left shoulder (figure 2 - both marked with green) bigger. This means that when the GDX breaks below the neck level of the pattern in a decisive way, the implications are likely to be extremely bearish for the next several weeks or months.Due to the uncanny similarity between the two green rectangles, I decided to check what happens if this mirror-similarity continues. I used purple, dashed lines for that. There were two important short-term price swings in April 2020 – one shows the size of the correction and one is a near-vertical move higher.Copying these price moves (purple lines) to the current situation, we get a scenario in which GDX (mining stocks) moves to about $31 and then comes back up to about $34. This would be in perfect tune with what I wrote previously. After breaking below the head-and-shoulders pattern, gold miners would then be likely to verify this breakdown by moving back up to the neck level of the pattern. Then, we would likely see another powerful slide – perhaps to at least $24.This is especially the case, since silver and mining stocks tend to decline particularly strongly if the stock market is declining as well. And while the exact timing of the market’s slide is not 100% clear, stocks’ day of reckoning is coming . And it might be very, very close.As I explained previously, based on the similarities to the 1929 and 2008 declines, it could be the case that the precious metals sector declines for about 3 months after the general stock market tops. And it seems that we won’t have to wait long for the latter. In fact, the next big move lower in stocks might already be underway, as the mid-Feb. 2021 top could have been the final medium-term top.In conclusion, the gold miners should continue to glisten as oversold conditions buoy them back to the $33-$35 range. Due to the GDX ETF’s recent strength, combined with gold rallying off of the lows on Mar. 5, the PMs could enjoy a profitable one-week (or so) party. However, with the celebration likely to be short-lived, it’s important to keep things in perspective. While this week’s performance may elicit superficial confidence, medium-term clouds have already formed. As a result, positioning for an extended rally offers more risk than reward.(We normally include the "Letters to the Editor" section in the full version of Gold & Silver Trading Alerts only, but today I decided to include it also in this free version of the full (about 10x bigger than what you just read) analysis, so that you get the idea of how this part of the analysis looks like. It might be quite informative too. Enjoy:)Letters to the EditorQ: Could you update your thoughts regarding physical [gold and silver] for those looking to acquire additional positions - specifically, what do you think premiums and availability are going to look like when/if spot goes a $100 or $200 down from here? By way of example, I bought some U.S. gold buffaloes at $1854 spot at $1954. Those same coins at $1710 spot are still around $1930, if there are any to be found.A: It’s a tough call, because the premium values don’t follow the technical patterns. Still, based on the analogy to situations that seem similar to what we saw recently, it seems that we can indeed say something about the likely physical values close to the likely $1,450 bottom.Figure 43 - Source: didthesystemcollapse.orgThe above chart shows the eBay premium for 1 oz Gold American Eagle coins over the spot gold price.In April 2020, the premium spiked at about 14%. It was likely even higher in March (we don’t have the direct data), but the volatility back then was bigger than it is right now, so it seems that the current premium and the April 2020 premium values are a better proxy for the future bottoming premiums than the March 2020 bottom premium would be. If the volatility increases, one could see the premium at about 15% or so.With gold at about $1,450, the above-mentioned information means Gold American Eagle coins can cost about $1,670.Still, since gold futures prices seem more predictable than the prices of bullion coins, I’d focus on the former even while timing the purchase of the latter.Moreover, please note that I’m planning to focus on buying mining stocks close to the bottom and move to metals only later. The reason is that miners tend to outperform in the early days of a major rally (just like they did in the first quarter of 2016). The fact that the premium is likely to be high when gold bottoms in a volatile manner is yet another reason for the above. When switching from mining stocks to physical holdings several weeks or months later, one might be buying at a smaller premium over the spot, and also after having gained more on miners than on the metals. Of course, the above is just my opinion, and you can purchase whatever you want – after all, it’s your capital and your investment decisions.Q: Please note that I am glad to see gold moving downwards but I am a little confused – the trading report I just received recommends selling at 1690ish but the mailing previously said 1450ish - please see attached.Could you please investigate and advise.A: If anything in the Gold & Silver Trading Alerts seems confusing, please refer to the “Summary”, the trading/investment positions, and the “Overview of the Upcoming Part of the Decline” sections for clarification. In this case, we exited the remaining short positions when gold hit $1,693 and almost immediately entered long ones (when gold hit $1,692). We now have long positions in the mining stocks with the plan to exit them in a week or so, and re-enter short positions then, because the next big move is likely to be to the downside (perhaps as low as $1,450 or so). Also, the above is just my opinion, not a recommendation or investment advice.Q: Hi P.R., thanks for the advice on this trend, it’s been an amazing trade.As I’m trading on XAUUSD, are you also able to advise the targets for a gold long entry,or should I wait for the final bottom before opening any longs?A: I’m very happy that you’re making profits thanks to my analyses. While I think that the very short-term (for the next 5 trading days or so) outlook for gold, silver and mining stocks is bullish, I think the targets are more predictable for mining stocks than they are for gold and – especially – silver. Still, this time, the short-term upside target for gold is also relatively clear – at about $1,770. That’s why I put the $1,758 in the “For-your-information target” for gold in the “Summary” section below.Q: Are we looking for the short-term upside move to be 1-5 weeks before the final decline into the 1350-1500 zone? I'm a little unsure of the timing you're laying out.A: I’m looking for the short-term upswing to take place between 1 and 3 weeks – that’s the part of the “Overview of the Upcoming Part of the Decline” section about it:It seems to me that the initial bottom has either just formed or is about to form with gold falling to roughly $1,670 - $1,680, likely this week.I expect the rebound to take place during the next 1-3 weeks.After the rebound (perhaps to $33 - $34 in the GDX), I plan to get back in with the short position in the mining stocks.In my opinion it’s most likely that this counter-trend rally will take about 1 – 1.5 weeks. Then, I think that the decline to about $1,450 in gold will start.Q: Thank you for sending out the Alert # 2 with the new changes in the Gold and Silver trades today. This is necessary, so please send out the alert once you enter back to the short positions, please.A: I’m happy that you enjoyed this intraday Alert. I will indeed send you – my subscribers – an intraday confirmation that the long positions were closed and when we enter new short positions. Still, please note that we already have binding profit-take exit prices in place, which means that when prices move to the target levels (e.g., GDX to $33.92), the long positions should be automatically closed, and profits should be taken off the table – even without an additional confirmation from me (it takes time for me to write and send the message and then some time usually passes before one is able to act on my message).Q: You have informed us to make the move when the Gold price “REACHES” $1693.00. My question is; Does the word “Reach” mean when the price touches that point, if only for a moment, or does “Reach” mean when it closes the day at or below $1693.00?Thank you for your response to this question.A: “Reaching” a price means the same thing as “touching” the price or “moving to” the price. This means moving to this price level on an intraday basis – even for just one tick . If I mean closing prices, I will specifically describe them as such.For instance, I currently have binding exit positions for the current long position in the mining stocks – and these are exactly the price levels that I have put in my brokerage account as a limit sell order.Q: Please comment on the Hindenburg Omen for stocks:Figure 44 - Source: RefinitivA: Thanks. The Hindenburg omen is not one of the most reliable indicators - even on the above chart, it’s clear that most of the signals were not followed by declines. Please note how many fake initial signals there were before stocks finally declined in 2019 or 2020. There are many other reasons to think that stocks are going to move much lower, though. In the very short-term they could still move higher, but this move could be fake and could turn out to be the right shoulder of the head-and-shoulders top formation.Q: 1) for shorter-term trades such as the potential 10% pop in the GDX, is NUGT better?2) the plan after we re-enter a short trade when the GDX gets to $33/$34 might mean a longer haul before we hit rock bottom . You have mentioned time-scales up to 20 weeks (ish). Due to a longer holding period , would the CFD route be a cheaper route when compared to NUGT? I’m asking in general terms because each provider imposes different fees and I don’t expect you to comment on the fees charged by IG, which is the service I use.I also recognize that NUGT only offers 2 X leverage, whereas CFD’s offer up to five times leverage.Finally, the manner in which you detail the rich tapestry of the economic forces that impact PMs is revealing and educational. I find this all fascinating.I have my own views which can be summed up like this: How many inflationary false-dawns and panics has the bond market had? Ever since 2008, when the FED launched QE, there have been numerous bouts and hissy fits of inflationary expectations that have subsequently sunk like a dodgy soufflé. I think this time is no different and it’s entirely possible the 30-year bond could drop to ZERO. I am in the deflationary camp.How might the 10 year at zero or possibly sub-zero and longer, out on the duration curve to (TLT ETF) dropping to 0.5%, affect the price of gold?Your thoughts as ever, are much appreciatedA: 1) That depends on whether one seeks leverage or not, and how much thereof. Please note that some short-term trades could sometimes become medium-term trades if the market decides to consolidate or move in the other direction before continuing the predicted trend. In this case, non-leveraged instruments are at an advantage over the leveraged ones, because they don’t suffer from the back-and-forth trading as much as the leveraged ones do.If one’s desired exposure to the GDX ETF wouldn’t exceed the cash that one dedicated to trading, then in order to have the same exposure one would simply have half of the capital employed in NUGT (which is 2x leveraged). This way, the exposure would be identical, but the NUGT would imply additional risk of losing more capital if the trade takes much longer than planned and/or if the price moves adversely first.Please note that there is also an additional way to gain leverage (it’s not available for everyone, though) and that is through the use of margin on one’s brokerage account. I’d prefer to use margin for the GDX before aiming to gain leverage through NUGT.In other words, I’d first use more cash for GDX before I’d go into NUGT. If I wanted to have even bigger exposure than the one achieved by employing more capital to GDX, I would then consider using margin, and then I would consider using NUGT if I still wanted to get more leverage.There might be some traders who would seek to combine both for even bigger leverage (buying NUGT on margin), but this is definitely not something that I’d recommend to most people. In fact, it seems that in many cases, sticking to the GDX would be a good way to go.2) I think I already replied to the first part of your question (NUGT vs. CFD) above. Also, for other people reading this reply – please note that CFDs (contracts for difference) are not available in many areas, including the USA and Canada.I’m glad to read that you enjoy reading my explanations of the current situation in the markets (precisely, my opinions on it).Real interest rates are one of the most important drivers for gold (along with the USD Index), so a drop in the 10-year rates to zero or sub-zero levels would likely be very beneficial for the gold prices.Figure 45Also, based on the pace at which the rates have rallied recently, they might be topping here, but… There was no decline in the previous 40 years that was as big as what we saw between 2018 and 2020. Consequently, the corrective upswing might be bigger as well. Also, the above chart is not necessarily the scale that is big enough to make very long-term conclusions.Figure 46Over the past centuries, whenever the rates fell very low, they then rallied back up with vengeance. After WW2, it theoretically would have been a “good idea” to keep stimulating the economy with low rates – and yet, they soared. Right now, the monetary authorities strive to be very dovish and keep pumping liquidity into the system, and yet the rates are rallying anyway.So, while the analogy to the previous years – or the past few decades – suggests that the rally in the rates might be over or close to being over, the very long-term chart suggests otherwise.To make the situation even more complicated, if the stock market has already topped in February, and we have already entered the Kondratiev winter cycle, it means that we can theoretically expect the rates to fall, then rise in a credit crunch, and then fall much lower.All in all, the outlook for the interest rates is anything but simple and clear. Perhaps what we see right now already IS the credit crunch and the 10-year rates are on their way to above 2% - after all, they used to return above their 200-day moving average after the previous medium-term declines. It seems to me that the move above 2% in the 10-year rates could correspond with gold’s decline below $1,500.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Stocks Shaking Off Weak Tech As Gold Bottoms?

Stocks Shaking Off Weak Tech As Gold Bottoms?

Monica Kingsley Monica Kingsley 09.03.2021 15:28
Stocks spiked higher, but not before going sideways to down prior on the day. And the close to the session hasn‘t been convincing either – does it count as a reversal? In my view, we haven‘t seen one yesterday really, regardless of this correction not being over just yet. There are still some cracks I tweeted yesterday about in need closing first, such as the worrying corporate bonds performance, manifest in the HYG:SHY ratio, or the tech searching for the bottom (it‘s $NYFANG precisely). Quoting from yesterday‘s extensive analysis spanning beyond stocks, metals and the Fed:(…) Stocks have had a great run over the past 4 months, getting a bit ahead of themselves in some aspects such as valuations. Then, grappling with the rising long-term rates did strike.So did inflation fears, especially when looking at commodities. Inflation expectations are rising, but not galloping yet. What to make of the rising rates then? They‘re up for all the good reasons – the economy is growing strongly after the Q4 corona restrictions (I actually expect not the conservative 5% Q1 GDP growth, but over 8% at least) while inflation expectations are lagging behind. In other words, the reflation (of economic growth) is working and hasn‘t turned into inflation (rising or roughly stable inflation expectations while the economy‘s growth is slowing down). We‘re more than a few quarters from that – I fully expect really biting inflation (supported by overheating in the job market) to be an 2022-3 affair. As regards S&P 500 sectors, would you really expect financials and energy do as greatly as they do if the prospects were darkening?Stocks are well positioned to keep absorbing the rising nominal rates. What has been the issue, was the extraordinarily steep pace of such move, leaving long-term Treasuries trading historically very extended compared to their 50-day moving averages. While they can snap back over the next 1-2 weeks, the 10y Treasury bond yield again breaking 1.50% is a testament to the Fed not willing to do anything at the moment. Little does the central bank care about commodities moves, when it didn‘t consider any market moves thus far as unruly.Gold market offered proof of being finally ready for a rebound, and it‘s visible in the closing prices of the yellow metal and its miners. Being more than a one day occurence, supported by yesterday presented big picture signals, the market confirmed my yesterday‘s suggestion of an upcoming gold. It appears we‘ll get more than a few days to assess the legs this rally is made of, facilitating nimble charting of the waters ahead my usual way:(…) Just as I was calling out gold as overheated in Aug 2020 and prone to a real soft patch, some signs of internal strength in the precious metals sector were present this Feb already. And now as we have been testing for quite a few days the first support in my game plan, we‘re getting once again close to a bullish formation that I called precisely to a day, and had been banging the bearish gold drum for the following two days, anticipating the downside that followed. Flexibility and broad horizons result in accentuated, numerous other portfolio calls – such as long Bitcoin at $32,275 or long oil at $58 practically since the great return with my very own site. We‘re now on the doorstep of visible, positive price outperformance in the gold miners (GDX ETF) as gold prices didn‘t break the higher bullish trend by declining through both the Mar 4 presented supports of my game plan. As I wrote yesterday, if prices move higher from here, they have simply bounced off support, especially given the accompanying signs presented, not the least of which is the dollar getting back under pressure. Make no mistake, the greenback isn‘t in a bull market – it‘s merely consolidation before plunging to new 2021 lows. I have not been presenting any USDX declining resistance lines and breakout arguments, because prices can be both above such a line, and lower than at the moment of „breakout“ at the same time – ultimately, rising and declining supports and resistances are a play on the speed of the move, where pure inertia / deceleration / reprieve doesn‘t break the prior, higher trend. And as I called in summer 2020 the dollar to roll over and keep plunging, that‘s still what‘s unfolding.How does it tie in to commodities and stocks? We‘re not at extreme moves in either, and I see copper, iron, oil, agrifoods as benefiting from the reflationary efforts greatly. Similarly and in spite of the $NYFANG travails, it would be ill-advised to search for stock market tops now (have you seen how well the Dow Industrials is doing?) – no, we‘re not approaching a top that I would need to call the way I did in the early Sep buying climax. This is still the time to be running with the herd, and not against it – you can ignore the noise to the contrary for both the S&P 500 and commodities have a good year ahead. As for precious metals, we might have seen the bottom already – and in any case by the current shape of things, I don‘t see it occuring quarters ahead and hundreds buck lower.Bringing up the constant reevaluation of position‘s rationale, market reactions and narratives:(…) It‘s the markets‘ discounting mechanism of the future that counts – just as gold cleared the deflationary corona crash in psring 2020, just as it disregarded the tough Fed tone of 2H 2018, just as it sprang vigorously higher in early 2016 stunning bears in all three cases with sharp losses over many months, or just as stocks stopped declining well before economic news got better in April 2020 or March 2009. Make no mistake, the markets consider transitioning to a higher inflation environment already now (the Fed timidly says that reopening will spike it, well, temporarily they say), when inflation expectations are still relatively low, yet peeking higher based on the Fed‘s own data. Gold is in a secular bull market that started in 2018 (if not in late 2015), and what we‘re seeing since the Aug 2020 top, is the soft patch I called. The name of the game now, is where the downside stops – and it‘s one of the scenarios that it has just happened, especially if gold convincingly closed back above $1,720 without undue delay.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookWe have seen two intraday reversals to the downside yesterday, yet I think the effects would prove a temporary obstacle to the bulls only. Such candlestick patterns usually slow down the advance, but don‘t end it – and that‘s consistent with my yesterday‘s words of most of the downside being already in. Once the 3,900 zone is confidently passed, the bears would have missed the chance to reach below Thursday‘s lows.Credit MarketsHigh yield corporate bonds (HYG ETF) still ilustrate ongoing fragility for they have plunged below their Feb lows. This correction doesn‘t appear to be as totally over just yet, also given the sectoral picture that I am showing you next.Put/Call Ratio and VolatilityOption players clearly aren‘t concerned by yesterday‘s S&P 500 price action, and the VIX is painting a similarly neutral picture – just as the sentiment overall. Very good, we‘re primed to go higher next, from a starting position far away from the extreme greed levels.Technology and ValueThe sectoral divergence continues, and tech is still the weakest link in the whole S&P 500 rebound. The big $NYFANG names, the Teslas of this world, are the biggest drag, and not until these carve out a sustainable bottom (this needn‘t happen at the 200-day moving average really), I can declare this correction as getting close to over. It‘s the cyclicals, it‘s value stocks that is pulling the 500-strong index ahead, with financials (XLF ETF), industrials (XLI ETF) and energy (XLE ETF) leading the charge.Treasuries and DollarNominal, long-term Treasury rates have at least slowed their quickening Feb pace, even in the face of no action plan on the table by the Fed – the dollar moved higher on the realization next, and it‘s my view that once new Fed intervention is raised, it would have tremendous implications for the dollar, and last but not least – the precious metals.Gold and SilverFinally, this is the much awaited sign, enabling me to sound some bullish tone in gold again – the miners are outperforming the yellow metal with more than a daily credibility, which I view as key given the lackluster gold price action before yesterday (absence of intraday rebounds coupled with more downside attempts). It would turn stronger once the gold juniors start outperforming the seniors, which is not the case yet.Coupled with the 4-chart big picture view from yesterday, it‘s my view that the gold market is laying the groundwork for its turning:(…) Real rates are negative, nominal rates rose fast, and inflation expectations have been trending higher painfully slowly, not reflecting the jump in commodities or the key inflation precursor (food price inflation) just yet – these are the factors pressuring gold as the Fed‘s brinkmanship on inflation goes on. Once the Fed moves to bring long-term rates under control through intervention – hello yield curve control or at least twist – then real rates would would be pressured to drop, which would be a lifeline for gold – the real questions now are how far gold is willing to drop before that, and when that Fed move would happen. Needless to add as a side note regarding the still very good economic growth (the expansion is still young), stagflation is what gold would really love.Silver is carving out a bottom while both copper and platinum are turning higher already – these are That‘s the essence of one of my many profitable plays presented thus far – long silver short gold spread – clearly spelled out as more promising than waiting for gold upswing to arrive while the yellow metals‘ bullish signs have been appearing through Feb only to disappear, reappear, and so on.SummaryStocks haven‘t seen a real reversal yesterday, but more backing and filling till the tech finds bottom, appears due. The medium-term factors favor the bulls, but this correction isn‘t over yet, definitely not in time.Now, gold can show some strength – and silver naturally even more. The signs overall favoring a rebound, are appearing with increasing clarity for the short term, and the nearest weeks will show whether we have made a sustainable bottom already, or whether the $1,670 zone will get tested thoroughly. The bulls have the upper hand now.
New York Climate Week: A Call for Urgent and Collective Climate Action

Stocks Love Rising CPI, and Gold Should Too

Monica Kingsley Monica Kingsley 10.03.2021 16:09
Monday‘s reversal I didn‘t trust, gave way to another upswing – still within this getting long in the tooth correction. It‘s not over, and corporate bonds aren‘t yet confirming – it has lately become a reasonable expectation that when the higher quality debt instruments (think LQD, TLT) have a good day, junk corporate bonds get under pressure, but seeing their (HYG) performance more aligned with the S&P 500 is what I am looking for in a rally on solid footing.Which is what we‘re not having yet. Just compare the tech performance to the rest of the market, especially when viewed from the decling new highs new lows (yes, these closed higher on Monday). It‘s apparent that yesterday‘s S&P 500 upswing was the result of reallocation to tech to the detriment (mild, but still) of much of the rest, in light of the key development of the day – falling Treasury yields.The stock market simply keeps dealing with the rising nominal rates, which would be easier when these move less fast and steeply than till now. Consolidation of their recent move appears underway, in fits and starts, as long-term Treasuries are:(…) trading historically very extended compared to their 50-day moving averages. While they can snap back over the next 1-2 weeks, the 10y Treasury bond yield again breaking 1.50% is a testament to the Fed not willing to do anything at the moment. On one hand, the central bank is fine with commodities on the move, which aren‘t yet really showing in CPI, (today‘s 0.4% reading is a baby step in this direction) and which the Fed claims would be only transitory. On the other hand, the bond market is buying into this assertion to a degree, because otherwise the long-term bonds decline would continue rather unabated. As we are in the reflationary stage when economic growth is rising faster than both inflation and inflation expectations, this laissez faire approach to inflation isn‘t likely to bite the Fed now as much as to truly wake up the bond vigilantes. It‘s that the „high rates“ we‘re experiencing currently, do not compare to the early 1980s, which underscores the fragility of the current monetary order. The Fed knows that, and it has been evident in the long preparatory period and baby steps in the prior rate raising and balance sheet shrinking cycle. The market will see through this, and the central bank would be forced to move to bring long-term rates down through yield curve control or a twist program, which would break the dollar, drive emerging markets, and not exactly control inflation – real rates would drop like a stone in such a scenario, turning around gold profoundly. But we‘re not yet there, as inflation is still too low and economic growth too high to force this scenario to play out. Market players are though already hedging against the rising (commodity prices thus far chiefly) inflation – and gold is still mostly on the defensive even as TIPS are starting to turn. What we‘re seeing in the miners to gold ratio, are green shoots in obvious need of follow through to turn the yellow metal sustainably around.Bottom line, if I had to pick only two markets to watch right now, it would be long-term Treasuries and the dollar.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookDaily rebound with a long upper knot, indicating consolidation ahead just as much as the low credibility Monday reversal. Force index is turning positive, but I am not looking at it to absolutely spike just yet. Overall though, the balance of forces is slowly but surely shifting towards the buyers, which would become more evident once we clear the key 3,900+ zone – perhaps even later today.Credit MarketsHigh yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio is the key non-confirmation, which can be partially explained by the bond market strains and reallocations into the long end of the curve instruments. Stocks are as a result relatively extended, yet without accompanying warning signs in the put/call ratio or the VIX. So far so good.Technology, Value and UtilitiesWhat a difference a day (of higher TLT prices makes)! Technology, which has been trading almost like utilities (lower black line) lately (yeah, reopening), rebounded ($NYFANG likewise strongly), and the value stocks endured a modest daily setback. Part and parcel of the microrotations as the stock market is getting used to higher nominal rates within the stock bull run as evidenced by the rebounding bullish percent index. Yes, this S&P 500 correction is in its latter innings.Treasuries and DollarNominal, long-term Treasury rates retreated on the day, and so did the dollar. Emerging markets liked that more than their bonds, which means that the current reprieve in yields is more likely temporary than not.Gold in the SpotlightMiners‘ outperformance of the yellow metal goes on, today illustrated with the stronger $HUI. Given the CPI readings just in, the gold bulls have a good reason to run with the assumption that even Fed‘s own real inflation underestimating models, are starting to reveal its slow appearance in the basket of consumer prices.It was on Monday when I showed you this chart first, and we‘re within a gold rebound highlighting some relative strength in the yellow metal vis-a-vis the rising rates – in the latter half of the 7-month long correction. The key narrative shift would be one of focus on inflation, inflation expectations, which would be also manifest in the Treasury inflation-protected securities (TIPS) chart. Thus far, the presented big picture view is a reason for modest, guarded optimism (in need of constant monitoring).Silver and Its MinersSilver has turned higher yesterday, and so did platinum – it‘s however the silver miners (SIL ETF), which is making the upswing a little suspect, as in need to prove itself stronger.SummaryStocks are likely to take yesterday‘s setback in their stride, and this long, drawn out correction increasingly appears to be approaching its inevitable end. The medium-term factors favor the bulls, and new highs are a question of broad based advance across the sectors, adjusted for the reopening trades favoring high beta stocks.The belated and thus far rather meek gold rebound can proceed, and should the mining stocks keep their outperformance (ideally accompanied by silver miners doing the same with respect to the white metal), that would be a hallmark of the unfolding rebound carrying on. For now, guarded optimism is still the name of the game in the precious metals arena.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Gold, Miners: How Long Will Short-Term Rally Last?

Finance Press Release Finance Press Release 10.03.2021 16:45
Gold rallied, gold miners soared to new March highs and the USD Index finally moved lower; and most likely, these price moves are not yet over.The precious metals market finally moved yesterday (Mar. 9) after providing us with bullish indications for quite a few days. Let’s jump right into charts and examine the details, starting with the part of the precious metals market that showed particular strength – mining stocks.Figure 1 - VanEck Vectors Gold Miners ETF (GDX)Even though gold moved lower in early March, gold miners stopped declining after reaching my target area based several techniques – most importantly the 50% Fibonacci retracement based on the entire 2020 rally, and the previous lows and highs. Just as miners’ relative weakness had previously heralded declines for the entire precious metals sector, their strength meant that a rally was about to start. And that’s just what we saw yesterday (Mar. 9).Ultimately, it seems that the above corrections will result in the GDX ETF moving to about $34 or so.The resistance levels in the $34 - $35 area are provided by:The late-February 2020 highThe rising neck level of the previously completed head and shoulders patternThe analogy to how big miners’ correction was in April (assuming that the mirror similarity continues)The declining blue resistance lineThe 50-day moving averageAdditionally, please note that the last few local tops were accompanied by RSI at about 50. The latter is currently below 45, suggesting that this rally has more potential, but that it’s not particularly extreme.The confirmation that the top is indeed in might come from the volume. Please note that the last three times when we saw really important tops, the GDX rallied on particularly strong volume. If we see something like that within the next 5 trading days or so (quite likely on Monday or close to it), we’ll have an even bigger chance of catching the reversal.Consequently, the GDX is likely to form a top in the above-described area.After breaking below the head-and-shoulders pattern, gold miners would then be likely to verify this breakdown by moving back up to the neck level of the pattern. Then, we would likely see another powerful slide – perhaps to at least $24.This is especially the case, since silver and mining stocks tend to decline particularly strongly if the stock market is declining as well. And while the exact timing of the market’s slide is not 100% clear, the day of reckoning for stocks is coming , and it might be very, very close.As I explained previously, based on the similarities to the 1929 and 2008 declines, it could be the case that the precious metals sector declines for about three months after the general stock market tops. And it seems that we won’t have to wait long for the latter. In fact, the next big move lower in stocks might already be underway, as the mid-Feb. 2021 top could have been the final medium-term top.Let’s consider what the GDX and GLD did on an intraday basis yesterday.Figure 2 - VanEck Vectors Gold Miners ETF (GDX) and Gold ETF (GLD) ComparisonAs I already wrote, mining stocks rallied to new monthly highs, and the above 4-hour chart (each candlestick represents 4 hours of trading) makes it crystal-clear that the late-February bottom was the moment after which miners stopped declining and started to trade sideways. Gold (here: the GLD ETF, which I’m using to have an apples-to-apples comparison – both ETFs trade on the same exchange) continued to decline in March. Well, to be precise, miners did form new yearly lows in March, and we went long almost right at one of those intraday lows , but the moves were not significant enough to really change anything.So, since miners no longer wanted to decline, and there were only two other things left for them to do: either nothing or rally.They had been doing nothing for several days, due to the lack of bullish leadership in gold. They just got this leadership yesterday, and they soared.Now, let’s keep in mind what I wrote in yesterday’s intraday Alert – namely, that mining stocks tend to rally particularly well in the initial part of the upswing, and then they underperform during the final part of the rally . So, when gold is above $1,750 or so, miners might already be rallying to a limited degree. Consequently, miners might rally above $34.27, but that is far from being certain. They might actually rally slightly less – perhaps to exactly $34 or so.I applied the Fibonacci retracement levels to the above chart, but I actually used them as Fibonacci extensions. My current upside target for gold is at about $1,770 (which corresponds to about $166 in the GLD ETF) and it’s at about $34 for mining stocks (GDX ETF). The Fibonacci extensions emphasize that if both targets were to be reached, then it means that gold so far rallied (intraday) about half of its entire rally, while mining stocks rallied (intraday) about 61.8% of their entire rally. This perfectly fits miners’ tendency to outperform in the initial part of a given move, which makes both price targets more reliable.Having said that, let’s move to gold.Figure 3 - COMEX Gold FuturesGold rallied strongly after bottoming right in the middle of my target area and after moving almost right to its June 2020 bottom, and after almost doubling its initial January decline. Yesterday’s rally also meant invalidation of the brief breakdown below the 61.8% Fibonacci retracement level based on the entire 2020 rally. Thus, the very short-term trend is up.Please keep in mind that the upswing might be relatively short-lived – perhaps lasting only one week or so. There’s a triangle-vertex-based reversal point on Monday, so it wouldn’t be surprising to see an interim top at that time, especially considering that:The triangle-vertex-based turning points have been working particularly well in the recent past – they marked the January and February tops.The corrective upswings during this medium-term decline (especially in mining stocks) often took about a week to complete – at least the easy part of the upswing took a week.The USD Index has been rallying relentlessly – just like in 2018 – in the last couple of days, but a quick pullback would not be surprising. In fact, it seems that one is already underway.Figure 4 - USD Index (DX.F)On March 8, the USD Index had closed above its lowest daily closing price of August 2020 (92.13), but yesterday, it closed back below this resistance. This means that we just saw an invalidation of the breakout – which is a bearish sign for the short term.How low could the USD Index move during this pullback? Not particularly low, as the similarity to 2018 implies a rather unbroken rally. The February 2021 high of 91.6 seems to be a quite likely target, but we might see the USDX move a bit lower as well – perhaps to one of the classic Fibonacci retracements based on the recent upswing – lowest of them (the 61.8% one) being at about 90.8.This pullback might trigger a question about the validity of the analogy to the 2018 rally, which seems to have taken place without any interruptions.Figure 5The analogy seems to remain intact when looking at it from the long-term point of view. Let’s keep in mind the recent decline was a bit sharper and it took less time to complete.The 2017 – 2018 decline took 387 day (between the top and the first low) and then there were 82 days between the initial and the final low (21.19% of the decline).This time, there were 269 days between the top and the first low. Adding 21.19% to this time, points to Feb. 12 as the "proportionately identical" bottom time target. The final bottom formed on Feb. 25 - just 9 trading days away from the analogy-based target. The analogy remains clearly intact.“So, doesn’t it imply that there shouldn’t be any pullbacks until the USD Index rallies above 94? ”No. And this becomes obvious once we zoom in.Figure 6You see, it’s not true that there were no pullbacks during the 2018 rally. There were, but they were simply too small to be visible from the long-term point of view.The first notable pullback took place in early May 2018, and it contributed to a corrective upswing in the precious metals market. To be precise, the USD Index declined after rallying for 56 trading days, but gold rallied earlier – 51 trading days after the USD Index’s final bottom. The USDX’s immediate-top formed 16 trading days after its final bottom, and gold’s bottom formed 10 trading days after the USD’s final bottom.Comparing this to the size of the previous decline in terms of the trading days, it was:51 – 56 trading days / 283 trading days = 18.02% - 19.79%10 – 16 trading days / 283 trading days = 3.53% - 5.65%Now, let’s examine the current situation.Figure 7The preceding decline lasted for 200 trading days and there were 41 – 42 trading days between the final USDX bottom and the short-term reversals in gold and USDX. Comparing this to the final USDX bottom, we get 7 – 8 trading days.Applying the previous percentages to the length of the most recent medium-term decline in the USD Index provides us with the following:18.02% - 19.79% x 200 trading days = ~36 - ~40 trading days3.53% - 5.65% x 200 trading days = ~7 - ~11 trading daysThe above estimation of about 36 – 40 trading days almost perfectly fits the current 41 – 42-day delay, and the estimation of about 7 – 11 trading days almost perfectly fits the current delay of 7 – 8 trading days.In other words, the analogy to the 2018 performance does not only remain intact – it actually perfectly confirms the validity of the current corrective upswing. Once again, it’s very likely just a pullback, not a big trend reversal.Also, please note that back in 2018, the USD Index corrected after moving back above its mid-2017 lows and now we see the analogy to that – the USDX corrects after moving back above its mid-2020 lows. Back in 2017, the USD Index corrected to approximately its previous short-term high (the January 2018 high). Now, the February high is providing strong support at about 91.6 – that’s where this brief correction might end – on an approximate basis.The above perfectly fits the scenario in which the precious metals market rallies on a very short-term basis (likely to about $1,770 in gold and about $34 in GDX), and then resumes its medium-term decline.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Stocks Bulls Can Take a Rest – But Gold Ones Can‘t

Monica Kingsley Monica Kingsley 11.03.2021 15:40
The daily banging on the 3,900 threshold shows in yesterday‘s upper knot, and this milestone has very good chances of being conquered today. More important than the exact timing though, are the internals marking the setup – we‘ve indeed progressed very far into this correction. While not historically among the longest ones, it‘s still getting long in the tooth – just as I was writing throughout the week.And it is getting stale, even if I look at the star non-cofirnation, the high yield corporate bonds. Relatively modest daily upswing, outshined by investment grade corporate bonds. Yes, the credit markets are calming down, and the tiny daily long-term Treasuries upswing doesn‘t reflect that fully just yet. Besides giving breathing room to defensives such as utilities and consumer staples, it‘s also very conducive to the precious metals sector.Copper, oil or agrifoods aren‘t flashing warning signs either – this is a healthy consolidation of steep prior gains as the dollar is getting again under pressure on retreating yields. Just as stocks are undergoing the larger rotation in favor of high beta value plays (financials and manufacturing ones are doing great, airlines jumped), the leaders out of the corona deflationary crash are leading no longer (technology). The picture of the unfolding reflationary recovery is a healthy one as rates are rising on account of improving economic environment, and inflation doesn‘t really bite yet.Ideal environment for the stock market to do well (hello my profitable open position), and for commodities to do really well. While the Fed is prepping the markets for (temporary, they say) higher inflation readings, gold didn‘t react too bullishly to yesterday‘s mildly positive CPI data – just wait for PPI data which would reflect the surging commodity prices more adequately. At the moment, evaluating the strength and internals of precious metals rebound, is the way to go as we might very well have seen the gold bottom, with the timid $1,670 zone test being all the bears could muster. Time and my dutiful reporting will tell.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsVolume isn‘t sharply contracting, and coupled with the price action, the rebound above 3,900 has good chance of succeeding. The path most ahead to entertain your imagination as well, looks as a little congested series of daily candles followed by a longer white one. We‘re in a stock bull market after all, and still not in danger of a significant (10%+) correction as I have been writing throughout 2021.Market breadth indicators have turned the corner really, underscoring accumulation within a returning bull market advance – just as the bullish percent index shows. A brief sideways to higher consolidation of this week‘s advance would only help to solidify it before the next run higher.Credit MarketsHigh yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio‘s degree of non-confirmation has decreased, at least if you take direction into view. Finally, high yield corporate bonds are turning higher, and once they catch breath even more, the all time highs already in sight would be conquered as smoothly as the 3,900 zone I delineated earlier.Gold Sector ExaminedVery mild upswing in both the gold miners and gold – along the lines of a daily consolidation with bullish undertones. This early in the precious metals upswing, miners are in the pool position, and their relative and gradually increasing strength has been visible since the early Mar days. So far so good here.Silver, Platinum and the RestSilver isn‘t yet outshining the rest of the crowd, and that‘s good, for it often tends to do so in the later stages of the precious metals sector advance. Within the coming precious metals advance, I continue to view silver outperformance as expected. Part monetary metal, part commodity, it‘s uniquely position to benefit. Its yesterday‘s setback is nothing to be concerned about as the gold, gold miners and platinum rebound keeps doing largely well.Comparing the gold miners to gold ($HUI:$GOLD) ratio to the silver miners to silver (SIL:$SILVER) ratio is returning a bullish snapshot of the current advance too. The beaten down gold sector is leading the charge, and the silver one will play catch-up in time.SummaryHaving reached the 3,900 zone, the S&P 500 is likely to consolidate the gains next. Due to the improving key markets (corporate bonds and tech), I am not looking for any this week‘s potential setback to turn the tide in this aging correction really.The gold upswing is proceeding, helped by the weakening dollar and ever so slightly retreating Treasury yields. After clearing the volume profile defined support at $1,720 and stretching a little below, the bulls next objective is the roughly $1,775 figure marking the Feb lows. Should that one be conquered, the odds of having seen gold bottom this Monday, would have dramatically increased.
US Industry Shows Strength as Inflation Expectations Decline

Intraday Market Analysis – Dow Jones Reaches New Highs

John Benjamin John Benjamin 12.03.2021 08:29
US 30 surges from daily supportUS Congress’s green light on the $1.9 trillion relief package seems to have put stock markets back on track. This came in as half-expected on the technical side as the index bounced off the year-long bullish trendline on the daily chart.From the hourly perspective, the breakout above the previous high (32050) has triggered a broader rally fuelled by short-coverings.As the RSI shows signs of overheating, a limited pullback might attract more buyers. 32300 near the short-term trendline would be the support to watch for.XAGUSD recovers from key supportLower treasury yields have made the non-yielding metal more attractive, right when buyers bid up the price from its daily support level (24.80).Following the previously mentioned RSI divergence, an indication of a potential reversal, silver saw a limited drop then rallied above the first resistance of 26.20.After a brief consolidation, the price could rise towards the next target around 27.00 as long as it stays above 25.60.To the downside, 24.80 is critical in keeping the bullish sentiment intact.NZDUSD looks for a bullish breakoutThe New Zealand dollar is having its fair share of markets’ renewed affection for risk assets. A rebound from the psychological level of 0.7100, a two-month low has brought the pair to its first hurdle: 0.7270 where strong selling pressure could cap the rally.The kiwi is gathering momentum near the rising trendline as the RSI falls back into the neutral zone. If buyers can overcome this resistance, an extended rally may push the price towards 0.7400.A drop below 0.7160 though could lead to a retest of the daily support.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Resting Stock Bulls and Gold Question Marks

Monica Kingsley Monica Kingsley 12.03.2021 16:12
Stock bulls went right for all time highs yesterday, clearing the 3,900 threshold in this correction – one that is in its very late innings indeed. But the preceding upswing has been sharp, and not all the internals support such a swift recovery, which is why I am still looking for consolidation to strike at any moment.We might be actually experiencing such a daily one right now, as today‘s premarket session has sent S&P 500 futures a few dozen points down. The big picture is though one of of the stock market getting used to rising rates, which are rising in reflection of the economic growth. But what about the snapback short-term rally in long-term Treasuries? It‘s not materializing as the instrument went down again yesterday – unconvincingly bobbing above recent lows. The defensive sectors such as consumer staples and utilities, reversed yesterday (at a time when technology rose), sending a warning that we‘re about to see higher rates again. Probably not happening as fast as through Feb, but still. Let‘s bring up my recent perspective on high rates, what they are exactly:(…) the „high rates“ we‘re experiencing currently, do not compare to the early 1980s, which underscores the fragility of the current monetary order. The Fed knows that, and it has been evident in the long preparatory period and baby steps in the prior rate raising and balance sheet shrinking cycle. The market will see through this, and the central bank would be forced to move to bring long-term rates down through yield curve control or a twist program, which would break the dollar, drive emerging markets, and not exactly control inflation – real rates would drop like a stone in such a scenario, turning around gold profoundly. But the market knows the Fed isn‘t getting ready to really do anything more than it does right now. Gold rebounded on Tuesday, and the rally took it above $1,730 but the daily reversal is concerning. As I wrote yesterday in the title, the gold bulls can‘t rest – but they are resting, and prices are back at the lower end of the $1,720 volume profile.Assessing the damage in the early stages of today‘s session will clarify whether the rally‘s dynamics are still intact, or not – regardless of today‘s headwinds. Silver isn‘t exactly at its strongest today, and we‘re likely to get soon into the session an idea about where miners‘ strength is. And it‘s more likely that it won‘t be anything to write home about.Let‘s recall my yesterday‘s words, and pick what‘s relevant to the metals:(…) While the Fed is prepping the markets for (temporary, they say) higher inflation readings, gold didn‘t react too bullishly to yesterday‘s mildly positive CPI data – just wait for PPI data which would reflect the surging commodity prices more adequately. At the moment, evaluating the strength and internals of precious metals rebound, is the way to go as we might very well have seen the gold bottom, with the timid $1,670 zone test being all the bears could muster. Time and my dutiful reporting will tell.Commodities are likely to do well in this reflationary phase, and the same goes for its turn to inflation. With precious metals, much depends upon their discounting mechanism‘s timing – when would they start doubting the transitory inflation utterances.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe S&P 500 upswing continues in pretty much a straight line, and the frequency of upper knots raises the probability of a short-term reprieve. Yes, it‘s risk-on, but a little pause would be healthy. Credit MarketsHigh yield corporate bonds have moved higher yesterday, mirroring the S&P 500 advance. That‘s encouraging even though the high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio is still visibly lagging behind stocks. The non-confirmation‘s seriousness has though decreased markedly over the two last sessions, pointing to improving internals of the upcoming stock market upleg.Technology and ValueTechnology has been rallying on decreasing volume, also demonstrating a prominent upper knot. If there is one sector where the coming S&P 500 consolidation would originate, it would be here. Value stocks held their own yesterday, in a nod to the high beta reopening trades. I am not looking for VTV to weaken distinctly here.Gold and YieldsThe gold upswing reversed intraday while long-term Treasuries (TLT ETF) hadn‘t really moved in their tight daily range. Erasing much of the overnight selling today, would be probably the most the bulls would be able to achieve today. But even that isn‘t the deciding factor to determine the fate of the recovery off the $1,670 area.Upswing in the BalanceGold miners are still painting a positive picture. They are outperforming gold while silver isn‘t spiking – the white metal is under even more pressure today than gold itself. So, the signs from miners and silver balance each other out to a degree. The whole sectors keeps hanging in the balance after yesterday‘s session. Each day or even hour the bulls don‘t utilize to reverse today‘s setback, is questioning the upswing continuation. Not much to add here as the daily momentum apprears shifting to the bears again.SummaryHaving conquered the 3,900 zone, the S&P 500 is likely to consolidate the gains next. The put/call ratio and volatility are at relatively lower readings, and the next setback for stocks would come from tech again. Not overly dramatic, but a brief challenge still.The gold upswing stalled, and its fate is being decided. Having fallen through the volume profile defined support at $1,720, the bulls objective is to recapture this zone. Tall order..
New York Climate Week: A Call for Urgent and Collective Climate Action

Are The US Markets Sending A Warning Sign?

Chris Vermeulen Chris Vermeulen 16.03.2021 01:05
After an incredible rally phase that initiated just one day before the US elections in November 2020, we've seen certain sectors rally extensively.  Are the markets starting to warn us that this rally phase may be stalling?  We noticed very early that some of the strongest sectors appear to be moderately weaker on the first day of trading this week.  Is it because of Triple-Witching this week (Friday, March 19, 2021)?  Or is it because the Treasury Yields continue to move slowly higher?  What's really happening right now and should traders/investors be cautious?The following XLF Weekly chart shows how the Financial sector rallied above the upper YELLOW price channel, which was set from the 2018 and pre COVID-19 2020 highs.  Early 2021 was very good for the financial sector overall, we saw a 40%+ rally in this over just 6 months on expectations that the US economy would transition into a growth phase as the new COVID vaccines are introduced. Be sure to sign up for our FREE market trend analysis and signals now so you don’t miss our next special report!We are also concerned about an early TWEEZERS TOP pattern that has set up early this week.  If price continues to move lower as we progress through futures contract expiration week, FOMC, and other data this week, then we may see some strong resistance setting up near $35.25.  Have the markets gotten ahead of themselves recently?  Could we be setting up for a moderately deeper pullback in price soon?The following SSO, ProShares S&P 500 ETF Weekly chart, shows a similar setup.  Although the rally in the SSO is not quite the same range as the XLF, we are seeing a solid TWEEZERS TOP pattern setup on the SSO chart over a period of many weeks.  We also found the moderate weakness in the US indexes interesting this morning.  Last week, we continued to see very strong buying trends.  Today, we see those trends have almost vanished.  Are the markets setting near highs waiting for some announcement or news to push them into a new trend?The US stock markets have not experienced a moderate price pullback since August 2020 – when the SPY pulled back almost 11%.  Volatility is still quite high with 2% to 3%+ swings between trading days.  A moderate pullback from these levels could represent another -8.5% to -14% decline before true support is found.Watching the Yields, Precious Metals, and the moderate weakness in trend that started this trading week, we can only suggest that active traders/investors remain moderately cautious.  Our BAN Trader Pro strategy is currently 100% CASH (no trades) for a reason.  Pay attention to this rotation in the markets and the moderate weakness recently.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Have a great week!
US Industry Shows Strength as Inflation Expectations Decline

Stock Bulls Run – Will Gold Ones Too?

Monica Kingsley Monica Kingsley 16.03.2021 15:37
Resting on Friday, surging on Monday. Feeble downswing attempt defeated right after the open, and then just bullish price action. Retail data today, and another FOMC meeting tomorrow – I view the former as not too likely to spoil today‘s market action. About the latter, remembering the latest reactions to Powell pronouncements, I look for the markets to be affected to a much greater degree.Don‘t look for material surprises, or be spooked by bets on the Fed tightening through dot plot adjustment or other forward guidance tools.I expect no change from what I wrote yesterday:(…) Who could be surprised, given the modern monetary theory ruling the economic landscape? The Fed amply accomodative, one $1.9T stimulus bill just in, and a $2T infrastructure one in the making. That‘s after the prior Trump stimulus, and who would have forgotten how it all started in April 2020? The old congressional saying „a billion here, a billion there, and pretty soon you‘re talking real money“, needs updating.Global liquidity isn‘t retreating exactly, emerging markets are building a solid base regardless of the dollar going higher two days in a row, and emerging market bonds are fighting to recover just as much as long-dated Treasuries. Coupled with the sectoral analysis, this is conducive for the unfolding stock market upswing and for commodities as well. We‘re still in a constructive environment for both, and I look within the latter at especially copper, nickel and iron to do well. Meanwhile, the precious metals upswing is going fine, and the miners keep outperforming – both gold and silver ones. The time for the bulls isn‘t running out, and the real battles will come once the gold bulls conquer the volume profile thin zone around $1,760. Will the bulls reach it on tomorrow‘s Fed underplaying the threat of inflation and showing tolerance to its overshoot? That‘s certainly one of the possibilities.The best course of action is to keep a pretty close eye on the metals – no bullish / bearish change from Thursday‘s words:(…) At the moment, evaluating the strength and internals of precious metals rebound, is the way to go as we might very well have seen the gold bottom, with the timid $1,670 zone test being all the bears could muster. Time and my dutiful reporting will tell.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe S&P 500 upswing is ready to proceed further now, and slight volume hint tells me to look for higher prices today. Credit MarketsHigh yield corporate bonds (HYG ETF) continue trading in a weak pattern, which however hasn‘t been able to force the stock market down. And not that I looked at it to have a chance to. I continue to view the junk corporate bond market as under pressure in sympathy with investment grade corporate bonds and long-dated Treasuries, which scored modest gains yesterday too. It‘s a euphoric rush into stocks simply. VolatilityThe volatility index shows no signs of panic returning, and the put/call ratio is getting very complacent again. Doesn‘t look like the boat will capsize today really.Value Stocks and TechValue stocks (VTV ETF) repelled a daily downswing attempt, which is positive considering that technology (XLK ETF) rose more strongly. The leadership in the stock market advance is broadening, and that‘s good news for the bulls.Gold Upswing AnatomyGold added modestly to its recent gains, and would do well to clear the $1,730 area some more really. The low volume is a sign that current prices aren‘t attracting enough interest to step in, and either buy or sell. Given the below chart though, the initiative is still within the bulls.It‘s that the miners keep outperforming gold without really slowing down, and that‘s still what I like to see well before the upswing makes an intermediate top. The daily indicators remain far from extended. Will the bulls take advantage accordingly?Silver, Copper and OilSilver is consolidating and by no means outperforming, as it so often does at the very late stage of precious metals upswings. The deductive conclusion is that the days of the upswing aren‘t likely over just yet.Both copper and oil are consolidating within their bullish patterns, and today‘s downswing taking both down around 1.5% from yesterday‘s prices shown above, is taking them nearer to where I would increase weighting. Yes, I‘m bullish stocks and commodities still, and look for precious metals to be gradually joining in some more.SummaryAfter the brief consolidation of S&P 500 gains, we‘re again in the full upswing mode, and the credit markets aren‘t a show stopper. The stock market bull is alive and well, and deeper correction has been yet again delegated to the dustbin. The top is very far off as this still nascent recovery gets so much stimulus fuel that overheating becomes a very real possibility this year already.Gold keeps turning an important corner on, but the bulls could get more comfortable only with an upswing that clears the $1,730 zone now, given the strong performance mining indices are showing. Adding to that even more decreased sensitivity to rising yields would compound the pleasant sight for the bulls. The runup to tomorrow‘s Fed will be telling.
Squaring the Bets Prior to the Fed

Squaring the Bets Prior to the Fed

Monica Kingsley Monica Kingsley 17.03.2021 15:14
Barely visible, but still a red candle – does yesterday mark a turning point? Even the volatility index refused to decline further on the day, and the option traders increased their put allocations. Is this a real reason to be cautious, or it represents mere window dressing before the Fed?When it comes to the sectoral view, not much has really changed in the S&P 500. Technology rose yesterday but gave up all intraday gains. Value stocks appear ready for a breather, and financials, energy and industrials all declined. That doesn‘t bode extraordinarily well for today‘s session, but this is not the place to look at when it comes to trading today‘s markets.It‘s the long-term Treasuries that I am focused on the most. Still as extended as lately ever relative to their 50-day moving average, they‘re weighing heavily on the markets. Stocks have gotten used to their message of rising inflation and economic recovery as we‘re still in the reflation phase, and not in the inflation one – but it‘s the precious metals that are suffering here, showing best in the copper to 10y Treasury yield ratio.I am not looking for the Fed to act today by adjusting its forward guidance stance or language, or taking a U-turn on inflation. No, they‘ll maintain the transitory stance even though markets are transitioning to a higher inflation environment already. The Fed won‘t do much this time.My prior Monday‘s words ring true also today:(…) Inflation expectations are rising, but not galloping yet. What to make of the rising rates then? They‘re up for all the good reasons – the economy is growing strongly after the Q4 corona restrictions (I actually expect not the conservative 5% Q1 GDP growth, but over 8% at least) while inflation expectations are lagging behind. In other words, the reflation (of economic growth) is working and hasn‘t turned into inflation (rising or roughly stable inflation expectations while the economy‘s growth is slowing down). We‘re more than a few quarters from that – I fully expect really biting inflation (supported by overheating in the job market) to be an 2022-3 affair. As regards S&P 500 sectors, would you really expect financials and energy do as greatly as they do if the prospects were darkening?So, I am looking for stocks to do rather well as they are absorbing the rising nominal rates. And this still translates into yesterday‘s throughts:(…) Global liquidity isn‘t retreating exactly, emerging markets are building a solid base regardless of the dollar going higher two days in a row, and emerging market bonds are fighting to recover just as much as long-dated Treasuries. Coupled with the sectoral analysis, this is conducive for the unfolding stock market upswing and for commodities as well. We‘re still in a constructive environment for both, and I look within the latter at especially copper, nickel and iron to do well. For gold, the key question remains whether copper upswings will outpace any yield increases on the long end, which have moderated their increases in Mar compared to Feb. That‘s good but not nearly enough given that even gold afficionados have come to expect lower prices lately quite en masse. Sign of capitulation off which the upswing was born? Yes, and the key questions now are whether we‘re seeing a pause, or a top in the upswing, and whether the next selling pressure would break below the $1,670 zone or not – see my early March game plan. The volume profile thin zone around $1,760 appears out of reach for now, without a Fed catalyst. I don‘t look for the central bank to invite any speculation on when the next rate hike might come (forget Brazil‘s example). They might not even talk about bringing down rates at the long end through a twist program. I certainly don‘t look for clues as to increasing the $120bn monthly pace of monetary injections. Unless the market perceives the Fed as underplaying the threat of inflation and showing tolerance to its palpable overshoot, the overall mix of positions and conference statements might bring gold under renewed pressure as it meanders a little below $1,730 as we speak.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe S&P 500 upswing took another daily breather yesterday in the end, and the volume doesn‘t send clear signals either way. Consolidation followed by new highs appears though the most likely scenario.Credit MarketsAfter quite some time, stocks are trading at very elevated levels relative to the high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio. Now, it‘s three days in a row that the latter doesn‘t confirm the stock market upswing. The bulls better be cautious here over at least a few sessions as the latest historical evidence shows that Fed pronouncements haven‘t been accompanied by fully risk-on moves exactly.Let‘s not forget the big picture, and that‘s of the stock market rising at the expense of debt instruments. Please note how little has the early Mar correction achieved in denting the S&P 500 appeal. The stock market bull is alive and well, very well actually.Gold in the StraitsGold still remains resilient to rising yields, but its inability to rally convincingly is worrying for the bulls. After all, this $1,730 zone shouldn‘t have been any real obstacle after three days of the rally, yet the yellow metal had to rise from the dead on Friday to fight another day. And given that it hasn‘t progressed since, it makes me think the bulls are hanging around for a remotely possible Fed surprise only.It‘s only the miners that are kind of still positive here. Yet, even their upswing was challenged yesterday, but that was on low volume. And that‘s constructive for the bulls when it comes to interpreting yesterday‘s events.The lack of silver outperformance before the sellers take over, is another sign why the upswing might not be over just yet. Still, these are just secondary clues, for nothing is more bullish than rising prices, which is what we obviously haven‘t seen in the metals much really.Key Ratio SpeaksWhile not tracking each other as closely as lately, the copper to 10y Treasury yield is sending an ominous signal still. The key question is whether long-dated Treasuries rise, or gold falls – I am not looking for copper to deviate from the current steeply rising trajectory much.SummaryS&P 500 is again entering daily consolidation mode, justifying my decision to take some of the prior profits off the table earlier today. While the Fed won‘t likely deliver real surprises later today, the credit markets are flashing warning signs more noticeably than yesterday. Still, the stock market bull is very far from making a top.Gold is being increasingly more challenged and stuck in the $1,730 zone, instead of clearing it.The yellow metal awaits today‘s Fed pronouncements, and barring a dovish(ly perceived) surprise, it looks ready to give up a portion of recent gains. All eyes on long-term Treasuries remains the battle cry.
New York Climate Week: A Call for Urgent and Collective Climate Action

Reversing the Fed Moves?

Monica Kingsley Monica Kingsley 18.03.2021 15:22
Fed messaging was rightfully interpreted as dovish – full employment is in effect its single mandate now. Yes, the central bank will tolerate higher inflation, and has prepped the markets for its advent (as if these didn‘t know already). Powell managed to walk the fine line between economic optimism, pushback on the idea of raising rates or taper, and yet implicitly acknowledged the growing liquidity concerns with one little, gentle prod. Markets naturally liked the tone, overlooking no mention of action on rising yields, and stocks, metals and commodities turned positive on the day – quite strongly so. The dollar declined visibly as long-term Treasuries recovered intraday losses on high volume. Highly charged finish to the day, but today‘s analysis will show that little has actually changed in its internals. Rates are rising for the good reason of improving economy and its outlook, reflation (economic growth rising faster than inflation and inflation expectations) hasn‘t given way to all out inflation, and stocks with commodities remain in a secular bull market. We‘re in the decade of real assets outperforming paper ones, but that will become apparent only much later into the 2020s.So, the central bank confirmed my yesterday‘s assessment of its tone and Treasuries take:(…) I am not looking for the Fed to act today by adjusting its forward guidance stance or language, or taking a U-turn on inflation. No, they‘ll maintain the transitory stance even though markets are transitioning to a higher inflation environment already. The Fed won‘t do much this time.They might not even talk about bringing down rates at the long end through a twist program. I certainly don‘t look for clues as to increasing the $120bn monthly pace of monetary injections. Unless the market perceives the Fed as underplaying the threat of inflation and showing tolerance to its palpable overshoot, the overall mix of positions and conference statements might bring gold under renewed pressure as it meanders a little below $1,730 as we speak.Long-term Treasuries … are weighing heavily on the markets. Stocks have gotten used to their message of rising inflation and economic recovery... – but it‘s the precious metals that are suffering here, showing best in the copper to 10y Treasury yield ratio.For gold, the key question remains whether copper upswings will outpace any yield increases on the long end, which have moderated their increases in Mar compared to Feb. That‘s good but not nearly enough given that even gold afficionados have come to expect lower prices lately quite en masse. Sign of capitulation off which the upswing was born? Yes, and the key questions now are whether we‘re seeing a pause, or a top in the upswing, and whether the next selling pressure would break below the $1,670 zone or not – see my early March game plan. The volume profile thin zone around $1,760 appears out of reach for now, without a Fed catalyst.And while we got a good confidence building one yesterday, I don‘t see it as strong enough to power precious metals higher immediately. It‘s nice that gold is decoupling from the rising yields but I view its upswing as demanding on current and future patience. Gold miners are still showing the way, and will be a key barometer in telling whether today‘s premarket downswing in antidollar, risk-on plays is a meaningful turn or not. For now, the renewed long-term Treasury yield increases (and tech selloff to a degree) point to reemergence of lingering Fed doubts.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe upper knot in the S&P 500 upswing spells short-term caution. The chart posture would be stronger without it, but at the same time, the volume and candle itself aren‘t ones of reversal. The most likely outcome of upcoming sessions still appears as resumption of the prior grind higher, which is in line with my yesterday‘s message of consolidation followed by new highs as the most likely scenario.Credit MarketsThe long upper knot in the high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio shows that the bond market isn‘t on board with the Fed – at a time when stocks aren‘t panicking in the least. Given the big picture in the economy and the combo of monetary and fiscal policy initiatives, I look for this to be a storm in the tea cup when it comes to (higher future) stock prices, and I am keenly on the lookout for possible deterioration in the corporate bond markets as relates to the S&P 500.Technology and ValueThe tech upswing wasn‘t really convincing, but it‘s been value stocks‘ turn to drive higher S&P 500 prices. No change in dynamic here. It‘s however the relation to not as strong Russell 2000 or emerging markets yesterday that hints at headwinds in stocks for today. A play on patience, again.Inflation ExpectationsYesterday‘s Fed message gave no reason for these to decline, and prior uptrend continues unabated. Bond yields haven‘t though frontrunned them yesterday, which I however look to see changed today.Precious MetalsThe gold ETF formed a bullish candle, tracking the rising miners well. But likewise to the HYG:SHY ratio‘s upper knot message, this one is concerning as well. The key question is about the staying power of GDX outperformance – the key argument for the gold market character having changed with the Mar 08 bottom, which might very well be THE bottom, and not a local one. The decoupling of the yellow metal from rising yields is even more visible now than when I first showed you the weekly $GOLD - TLT overlay chart two weeks ago.Platinum goes down while the copper engine runs (and silver did join in yesterday). This chart sends a message of short-term indecision extending to other commodities, including oil. SummaryS&P 500 is in my view merely testing the buyers‘ resolve, and doesn‘t want to turn the consolidation on declining VIX into a rush to the exit door. Despite the surprisingly early turn against the Fed day move, this doesn‘t represent a trend change or arrival of the dreaded steep correction. The stock market bull is very far from making a top.Gold is again under pressure today, back in the $1,730 zone instead of having cleared it. Understandable given the dollar and Treasuries reversal of yesterday‘s Fed moves, but not rushing to the downside head over heels.
US Industry Shows Strength as Inflation Expectations Decline

Breaking the Spell of Rising Yields

Monica Kingsley Monica Kingsley 19.03.2021 15:00
Markets didn‘t buy into the Fed messaging, and quite a few moves were reversed. Stocks declined, commodities got under pressure, and oil took it on the chin. Long-dated Treasuries plunged again as the dollar reversed Wednesday‘s losses. Overall picture is one of nervousness as the Fed‘s statements and their consistency are getting a second look. Plus, triple witching can exaggerate today‘s trade swings, getting reversed in subsequent sessions too.The greatest adjustment is arguably in the inflation projections – what and when is the Fed going to do before inflation raises its ugly head in earnest. There is still time, but the market is transitioning to a higher inflation environment already nonetheless. In moments of uncertainty that hasn‘t yet turned into sell first, ask questions later, let‘s remember the big picture. Plenty of fiscal support is hitting the economy, the Fed is very accomodative, and all the modern monetary theory inspired actions risk overheating the economy later this year. As I wrote yesterday:(…) Rates are rising for the good reason of improving economy and its outlook, reflation (economic growth rising faster than inflation and inflation expectations) hasn‘t given way to all out inflation, and stocks with commodities remain in a secular bull market. We‘re in the decade of real assets outperforming paper ones, but that will become apparent only much later into the 2020s.The largely undisturbed rise in commodities got checked yesterday just as stocks did, but the higher timeframe trends (technical and fundamental drivers) hadn‘t changed, which will be apparent once the dust settles. As I‘ll lay out in today‘s analysis, the gold market is springing back to life, and the precious metals upswing rationale is still very much on the table, and the decoupling from rising nominal yields goes on – I view yesterday‘s selloff in the miners as partially equity markets driven.Bottom line, I made good decisions to subscribers‘ benefit by closing profitable stock market positions before the downswing hit, and not writing off gold.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookOrderly downswing yesterday that wouldn‘t stand out on the chart in a few weeks really. The only stunning thing about it is how soon after Wednesday‘s FOMC it came. Yet, this chart isn‘t sending signals of a key reversal just in.Credit MarketsThe non-confirmation in the high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio caught up with the 500-strong index yesterday. Is a new downtrend starting here? While high yield corporate bonds for the all the Treasuries market turmoil haven‘t arguably bottomed yet, the degree to which they can pull stocks down still, is an open question. Conversely, once HYG swings higher again, stocks would get on a firmer footing.Technology and ValueThe tech sold off again, and the interest-rate sensitive defensives (utilities, consumer staples and REITs) suffered yesterday. Yes, even the sharply recovering real estate sector did. Coupled with value stocks giving up intraday gains, the stock market internals have (not insurmountedly, but temporarily) deteriorated.Gold and SilverGold not following the declining TLT path is the most important green shoot within the market. The yellow metal held up very well in yesterday‘s selling pressure across the board, and not even gold miners (viewed through a $HUI overlay or $HUI:$GOLD ratio) gave up on the upswing – more downside price action in the latter would have to come today to cast real doubts.Weekly chart examination of essentially equivalent metrics (enriched with the key copper ingredient) shows clearly the PMs decoupling stage – silver cast off the shackles still in 2020 while gold is doing so now. It‘s still early on in the process, but invalidating excessively bearish targets – gold has the benefit of my doubt, until I call that one off. I don‘t think that would happen today.Crude OilThe one-way trip starting in Nov met its largest downswing yesterday, signifying we better get used to oil no longer moving in one direction only. Amid the reports of excess stockpiles and European lockdowns denting the demand, OPEC+ is keeping up with the production cuts, undermined largely by Iranian exports only. But look how little has the oil index ($XOI) declined – it‘s relative position shows the excessive nature of yesterday‘s move. In my view, oil would be rangebound once it bottoms, before breaking higher again. The world economy is improving, leading indicators are rising, and the only fly in the ointment are yields, and a stronger dollar pressuring emerging markets. The forces of reflation, liquidity and demand growth will outweigh this unfolding, temporary setback. SummaryS&P 500 is once again experiencing downswing, yet the VIX hasn‘t truly spiked – and neither has the put/call ratio. While there is no stampede to the exit door, the market internals have deteriorated, and may take more than a few sessions to get repaired. For one, tech is again in the driving seat.Gold has been quite resilient lately, and yesterday‘s developments also outside of the bonds arena are boding well for the $1,670 bottom hypothesis. Especially given the hints presented above, and that stock market weakness coupled with safe haven play attraction, might help here further.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Gold Miners: Why Apparent Strength is Just a Facade

Finance Press Release Finance Press Release 22.03.2021 16:41
Despite everyone saying the bottom is in, and that gold and miners are set for takeoff, the signs still point south. The real question: how low can they go?Let’s take a look at some price targets for where the GDX and GDXJ mining ETFs might land up.With the miners attempting to reclaim Pride Rock, it won’t be long until the GDX ETF is singing Hakuna Matata.Rising U.S. Treasury yields? No problem.A reinvigorated USD Index? Who cares.But while strength is often viewed through the eyes of the beholder, the GDX ETF is far from being The Lion King. Sure, its bravery in the face of familiar foes is reason for optimism. However, we’ve seen this movie before. While the recent rally may resemble Mufasa, beneath the surface, the GDX ETF’s tepid price action looks a lot like Simba.If you analyze the chart below, you can see that the GDX ETF moved to the upper level of my initial target range. However, with the Mar. 19 close eliciting a sell signal from the stochastic oscillator (the black and red lines at the bottom section of the chart), a historical reenactment (repeat of the early-2021 performance) could deliver another sharp move lower.In addition, the shape of the early-January swoon is eerily similar to today’s price action. Case in point: back in January, the GDX ETF enjoyed a material daily rally, consolidated , then sunk like a stone. Because of that, the recent move higher and a few days of back-and-forth trading ( consolidation ) is nothing to write home about.To explain, I wrote on Mar. 18:Mining stocks followed gold higher, and they moved to the upper part of my previous target area, but not yet to its upper border. As you may recall, I mentioned the possibility of GDX moving to the $34 - $35 area and my original target for this rally was slightly below $34.The GDX ETF now encountered the strongest combination of resistance areas, while the Stochastic indicator moved above the 80-level. Technically, the situation is now much more bearish in the GDX ETF chart than it was at the beginning of the year. Back in January, the GDX ETF was only at the declining blue resistance line.Now, in addition to being very close to the above-mentioned line it’s also at:The neck level of the previously broken broad head and shoulders patternThe 50-day moving averageThe previous (late-February) highs.Consequently, it’s highly likely that we’ve either just seen a top or one is close at hand.But if we’re headed for a GDX ETF cliff, how far could we fall?Well, while the S&P 500 is a key variable in the equation, there are three reasons why the GDX ETF might form an interim bottom at roughly ~$27.50 (assuming no big decline in the general stock market ):The GDX ETF previously bottomed at the 38.2% and 50.0% Fibonacci retracement levels. And with the 61.8% level next in line, the GDX ETF is likely to garner similar support.The GDX ETFs late-March 2020 high should also elicit buying pressure.If we copy the magnitude of the late-February/early-March decline and add it to the early-March bottom, it corresponds with the GDX ETF bottoming at roughly $27.50.Keep in mind though: the interim downside target is based on the assumption of a steady S&P 500 . If the stock market plunges, all bets are off. For context, when the S&P 500 plunged in March 2020, the GDX ETF fell below $17, and it took less than two weeks for it to move as low from $29.67. As a result, U.S. equities have the potential to make the miners’ forthcoming swoon all the more painful.If gold forms an interim bottom close to $1,600, this could also trigger a corrective upswing in the mining stocks, but it’s too early to say for sure whether that’s going to be the case or not.Also supporting the potential move, the GDX ETF’s head and shoulders pattern – marked by the shaded green boxes above – signals further weakness ahead.I wrote previously:Ever since the mid-September breakdown below the 50-day moving average , the GDX ETF was unable to trigger a substantial and lasting move above this MA. The times when the GDX was able to move above it were also the times when the biggest short-term declines started.(…)The most recent move higher only made the similarity of this shoulder portion of the bearish head-and-shoulders pattern to the left shoulder) bigger. This means that when the GDX breaks below the neck level of the pattern in a decisive way, the implications are likely to be extremely bearish for the next several weeks or months.Turning to the junior gold miners , the GDXJ ETF will likely be the worst performer during the upcoming swoon. Why so? Well, due to its strong correlation with the S&P 500, a swift correction of U.S. equities will likely sink the juniors in the process.What’s more, erratic signals from the MACD indicator epitomizes the GDXJ ETF’s heightened volatility.Please see below:To explain, I wrote on Mar. 12:The above chart is a big red warning flag for beginner investors . The flag reads: “verify the efficiency of a given tool on a given market, before applying it”.The bottom part of the above chart features the MACD indicator . Normally, when the indicator line (black) crosses its signal line (red), we have a signal. If it’s moves above the signal line, it’s a buy sign, and if it moves below it, it’s a sell sign.But.If one actually looks at what happened after the previous “buy signals” in the recent months, they will see that in 5 out of 6 cases, these “buy signals” practically marked the exact tops, thus being very effective sell signals! In the remaining case, it was a good indication that the easy part of the corrective upswing was over.I’m not only describing the above due to its educational value, but because we actually saw a “buy signal” from the MACD, which was quite likely really a sell signal.More importantly though, the MACD indicator is far from a light switch. While false buy signals often precede material drawdowns, the reversals don’t occur overnight. As a result, it’s perfectly normal for the GDXJ ETF to trade sideways or slightly higher for a few days before moving lower. This is what we saw last weekBut how low could the GDXJ ETF go?Well, just like the GDX ETF, the S&P 500 is an important variable . However, absent an equity rout, the juniors could form an interim bottom in the $34 to $36 range and if the stocks show strength, juniors could form the interim bottom higher, close to the $42.5 level. For context, the above-mentioned ranges coincide with the 50% and 61.8% Fibonacci retracement levels and the GDXJ ETF’s previous highs (including the late-March/early-April high in case of the lower target area). Thus, the S&P 500 will likely need to roll over for the weakness to persist beyond these levels.Some people (especially the permabulls that have been bullish on gold for all of 2021, suffering significant losses – directly and in missed opportunities) will say that the final bottom is already in. And this might very well be the case, but it seems highly unlikely to me. On a side note, please keep in mind that I’m neither a permabull nor a permabear for the precious metals sector, nor have I ever been. Let me emphasize that I’m currently bearish (for the time being), but earlier this month, we went long mining stocks on March 4 and exited this trade on March 11.Another reason (in addition to the myriads of signals coming not only from mining stocks, but from gold, silver, USD Index, stocks, their ratios, and many fundamental observations) is the situation in the Gold Miners Bullish Percent Index ($BPGDM), which is not yet at the levels that triggered a major reversal in the past. The Index is now back above 27. However, far from a medium-term bottom, the latest reading is still more than 17 points above the 2016 and 2020 lows.Back in 2016 (after the top), and in March 2020, the buying opportunity didn’t present itself until the $BPGDM was below 10.Thus, with sentiment still relatively elevated, it will take more negativity for the index to find the true bottom.The excessive bullishness was present at the 2016 top as well and it didn’t cause the situation to be any less bearish in reality. All markets periodically get ahead of themselves regardless of how bullish the long-term outlook really is. Then, they correct. If the upswing was significant, the correction is also quite often significant.Please note that back in 2016, there was an additional quick upswing before the slide and this additional upswing had caused the $BPGDM to move up once again for a few days. It then declined once again. We saw something similar also in the middle of 2020. In this case, the move up took the index once again to the 100 level, while in 2016 this wasn’t the case. But still, the similarity remains present.Back in 2016, when we saw this phenomenon, it was already after the top, and right before the big decline. Based on the decline from above 350 to below 280, we know that a significant decline is definitely taking place.But has it already run its course?Well, in 2016 and early 2020, the HUI Index continued to move lower until it declined below the 61.8% Fibonacci retracement level. The emphasis goes on “below” as this retracement might not trigger the final bottom. Case in point: back in 2020, the HUI Index undershot the 61.8% Fibonacci retracement level and gave back nearly all of its prior rally. And using the 2016 and 2020 analogues as anchors, this time around, the HUI Index is likely to decline below 231. In addition, if the current decline is more similar to the 2020 one, the HUI Index could move to 150 or so, especially if it coincides with a significant drawdown of U.S. equities.Moreover, let’s keep in mind that an unwinding of NASDAQ speculation could deliver a fierce blow to the gold miners. Back in 2000, when the dot-com bubble burst, the NASDAQ lost nearly 80% of its value, while gold miners lost more than 50% of their value.Please see below:Right now, the two long-term channels above (the solid blue and red dashed lines) show that the NASDAQ is trading well above both historical trends.Back in 1998, the NASDAQ’s last hurrah occurred after the index declined to its 200-day moving average (which was also slightly above the upper border of the rising trend channel marked with red dashed lines).And what happened in the first half of 2020? Well, we saw an identical formation.The similarity between these two periods is also evident if one looks at the MACD indicator . There has been no other, even remotely similar, situation where this indicator would soar so high.Furthermore, and because the devil is in the details, the gold miners’ 1999 top actually preceded the 2000 NASDAQ bubble bursting. It’s clear that miners (the XAU Index serves as a proxy) are on the left side of the dashed vertical line, while the tech stock top is on its right side. However, it’s important to note that it was stocks’ slide that exacerbated miners’ decline. Right now, the mining stocks are already declining, and the tech stocks continue to rally. Two decades ago, tech stocks topped about 6 months after miners. This might spoil the party of the tech stock bulls, but miners topped about 6 months ago…Also supporting the 2000 analogue, today’s volume trends are eerily similar. If you analyze the red arrows on the chart above, you can see that the abnormal spike in the MACD indicator coincided with an abnormal spike in volume. Thus, mounting pressure implies a cataclysmic reversal could be forthcoming.Interestingly, two decades ago, miners bottomed more or less when the NASDAQ declined to its previous lows, created by the very first slide. We have yet to see the “first slide” this time. But, if the history continues to repeat itself and tech stocks decline sharply and then correct some of the decline, when they finally move lower once again, we might see THE bottom in the mining stocks. Of course, betting on the above scenario based on the XAU-NASDAQ link alone would not be reasonable, but if other factors also confirm this indication, this could really take place.Either way, the above does a great job at illustrating the kind of link between the general stock market and the precious metals market that I expect to see also this time. PMs and miners declined during the first part of the stocks’ (here: tech stocks) decline, but then they bottomed and rallied despite the continuation of stocks’ freefall.Even more ominous, the MACD indicator is now eliciting a clear sell signal . And displaying a reading that preceded the dot-com bust in 2000, the NASDAQ Composite – and indirectly, the PMs – continue to sail toward the perfect storm.As further evidence, the HUI Index/S&P 500 ratio has broken below critical support.Please see below:When the line above is rising, it means that the HUI Index is outperforming the S&P 500. When the line above is falling, it means that the S&P 500 is outperforming the HUI Index. If you analyze the right side of the chart, you can see that the ratio has broken below its rising support line. For context, the last time a breakdown of this magnitude occurred, the ratio plunged from late-2017 to late-2018. Thus, the development is profoundly bearish.For further context, the ratio is mirroring the behavior that we witnessed in early 2018. After breaking below its rising support line, the ratio rallied back to the initial breakdown level (which then became resistance) before suffering a sharp decline. And with two-thirds of the analogue already complete today – with the ratio rallying back to its initial breakdown level (now resistance) last week – a sharp reversal could occur sooner rather than later.In addition, because last week’s bounce was merely a technical development, the HUI Index’s recent strength is nothing to write home about. What’s more, the early-2018 top in the HUI Index/S&P 500 ratio is precisely when the USD Index began its massive upswing. Thus, with history likely to rhyme again, the outlook for the PMs remains profoundly bearish.Moreover, please note that the HUI to S&P 500 ratio broke below the neck level (red, dashed line) of a broad head-and-shoulders pattern and it verified this breakdown by moving temporarily back to it. The target for the ratio based on this formation is at about 0.05 (slightly above it). Consequently, if the S&P 500 doesn’t decline at all (it just closed the week at 3913.10), the ratio at 0.05 would imply the HUI Index at about 196. However, if the S&P 500 declined to about 3,200 or so (its late-2020 lows) and the ratio moved to about 0.05, it would imply the HUI Index at about 160 – very close to its 2020 lows.In conclusion, with the miners’ recent confidence likely to fade, it’s only a matter of time before they show their true colors. With the USD Index raring to go and U.S. Treasury yields seemingly exploding on a daily basis, the PMs recent move higher is akin to swimming against a strengthening current: while they’re making progress, each stroke requires more and more energy. In addition, if a drawdown of U.S. equities enters the equation, the metaphor will be akin to swimming against a tsunami. The bottom line? Long positions in the PMs offers more risk than reward over the next several weeks or so. However, once the medium-term climax is complete, it will be smooth sailing once again.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

After The Fed Week – What's Next? Part II

Chris Vermeulen Chris Vermeulen 22.03.2021 18:41
In the first part of this research article, we shared more detail related to the Excess Phase Peak technical pattern that is setting up in the NASDAQ and to highlight the validity of our Gann/Fibonacci Technical research which suggested a peak in the markets may set up sometime after April 1, 2021.  We've received many questions and comments from our readers and followers related to these articles.  Many people seem to believe we are calling for an April 1 market peak based on this research, yet the technical patterns we are highlighting suggest a longer-term market peak may already be setting up. In this second part of our more detailed “what next” article, my research team and I will highlight exactly why we believe traders and investors need to be prepared for an extended technical topping pattern and how it will likely set up over the next 60 to 90+ days.  Let's continue our research from Part I and go into more detail related to this technical setup.In Part I, we focused on the NASDAQ and how the recent downside price rotation may align with our Gann/Fibonacci research as well as align with the Excess Phase Topping pattern highlighted in our November 2020 research.  Now, we're going to focus on the Dow Jones Industrial Average and our Custom US Stock Market Index showing how these two market sectors have yet to react like the NASDAQ already has.Dow Jones Has Yet To Break Key Price ChannelLooking at the chart below, we can see that the INDU has yet to break the YELLOW upward price trend line.  We  have not seen price move below this support channel yet, thus we don't have any confirmation that a weakening in price trend is taking place.  In fact, recently the INDU has rallied higher over the last few weeks as capital has shifted away from the NASDAQ and into various other sectors. Next, we believe the INDU still has another 3% to 5% to rally further before reaching the GREEN 1.618% Fibonacci Price Amplitude Arc on the chart below.  This suggests the INDU may continue to rally a bit further before reaching resistance while the NASDAQ may attempt a more moderate price rally within the sideways (#B) Flagging channel.  This setup suggests the INDU and SPY have not yet reacted to price weakness like the NASDAQ already has.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!We've drawn a MAGENTA line on this chart highlighting what we believe a “technical breakdown” in price will look like for the INDU.  First, a rollover top sets up, prompting a downward price trend to set up the sideways Flagging trend.  After 4 to 8+ weeks of sideways Flagging, a broad downtrend will take place where price will fall -10% to -15% - targeting the CYAN support level near $29,000.  Much like the NASDAQ, this critical support level is the last line of defense before a bigger breakdown in price may occur – possibly resulting in a very deep price correction.Custom US Stock Market Index Chart Mirrors INDUThis final Custom US Stock Market Index Weekly chart, below, shows a similar type of setup as the INDU.  These Custom Index charts are tools we use to help gauge the overall market trends and possible technical setups.  They help to normalize price trends and variances between the major US indexes and provide a different perspective of price on a chart.The first thing we notice when looking at this chart is that the Custom US Stock Market Index has yet to break the YELLOW upward price channel – just like the INDU chart.  Secondly, we can see the Custom US Stock Market Index chart is much closer to the heavy MAGENTA Fibonacci Price Amplitude Arc than the INDU chart is – this suggests there may only be a 3% to 5% upside potential left in the markets related to any potential rally attempt.  Readers need to understand this does not mean that markets are limited to +3% to +5% at this stage – many sectors may trend +10% or more while the Custom US Stock Market Index chart rallies only 1.5% or so.  The stock market is a “market of stocks” - not a single entity related to the Custom US Stock Market Index chart.  Therefore, we may see various rally ranges in various sectors while we see more muted trends in some of these major indexes.The last thing we want to point out on this chart is the Fibonacci Price Amplitude Arc that originates from February 2020 (pre-COVID-19 highs).  It appears there is a high likelihood of a weakening uptrend on this chart after April 15, 2021.  It also appears there is a likely APEX inflection point near May 5 through May 10.  This APEX in price may become a key date for a potential breakdown in the trend on this Custom US Stock Market Index chart.Overall, what we are seeing on this chart is that we have yet to break below the YELLOW upward price trend line and we are nearing the key Fibonacci Price Amplitude Arc levels – this suggests the markets may be nearing a period of consolidation and/or weakening upward price trending. The key to all of these setups is the process of the Excess Phase Peak setup - where price must complete the four phases (A through D) before finally attempting a larger breakdown event (#E).Additionally, traders should stay keenly aware that various sectors will likely continue to trend in wide ranges with varying degrees of trend slopes while this extended pattern continues to setup.  On this Custom US Stock Market Index chart, we are suggesting that the #C breakdown event (targeting #D), may take place in July or August 2021.  This suggests we have about 3+ months of rotational sideways trending to navigate before the extended Excess Phase Peak #C breakdown event takes place.As these trends continue to setup, we want you to understand how various opportunities for trend will continue to setup over the next few months in various sectors and indexes.  These price rotations will likely prompt 8% to 25% price trends in a number of the best performing sectors and symbols.  The key to finding and targeting this success is to know which sectors/trends are have the highest probability for success.  That is what our Best Asset Now strategy does for us – it shows us when to engage with the market trends and which assets are the best performing assets to invest in.Don't miss the opportunities in the broad market sectors over the next 6+ months.  2021 and beyond are going to be incredible years for traders.  What we expect to see is not the same type of market trend that we have experienced over the past 8+ years – this is a completely different set of market dynamics. You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribersHave a great week!
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Bitcoin, no genius required

Korbinian Koller Korbinian Koller 24.03.2021 09:44
Why do we mention this? Bitcoin is in a massive uptrend right now, and we are about to see another leg up. Typically, the choice of participating or staying sidelined is with more minor consequences than this time around. We are in a wealth transferring market cycle. An event happening typically every 93 years. An event at the end of a fiat currency dissolving into hyperinflation and leaving many in despair. E.g. have you noticed your grocery bill being over 20% higher and mass media not mentioning it? Get informed and not mislead and do not wrongly be instructed that this bitcoin ship has sailed and there are no ways to participate at these levels. They will look timid in a few years to come.S&P-500 Index, Weekly Chart, Warning signs of a larger cycle ending:S&P 500 Index in US Dollar, monthly chart as of February 19th, 2021.We posted a similar to the above chart on February 19th in our weekly Silver chartbook to indicate a possible extended stock market with a more than typical retracement possibility.S&P-500 Index, Weekly Chart, Double top with Indicator divergence confirmation:S&P 500 Index in US Dollar, weekly chart as of March 22nd, 2021.Now only five weeks later, we see the first possible cracks. The weekly chart shows a possible directional change with divergences in both a directional indicator (Stochastic in yellow) and a momentum oscillator (Commodity Channel index in white), confirming this suspicion through divergences. Hence, we might get a trend reversal over the next few weeks or months. BTC-USDT, Daily Chart, Possible breakout (Short to midterm):Bitcoin in US Dollar, daily chart as of March 23rd, 2021.While due to the need to cover margin calls an actual market crash would temporarily drag all asset classes down, in the early stages of a trend direction change, money would flow from the stock market into safety asset classes like Bitcoin. The chart above shows Bitcoin in a consolidation phase that looks to resolve through a breakout to the upside. Besides, we find fractal volume transaction support at the US$50,870 price level.BTC-USDT, Weekly Chart, Bitcoin, no genius required:Bitcoin in US Dollar, weekly chart as of March 22nd, 2021.The weekly chart of Bitcoin illustrates the health of the recent trend extension. Price is trading above directional support (yellow trendline) and within the norm of Fibonacci retracement levels.Bitcoin, no genius required:Systems promising more than a hundred percent returns earned within a year, sell at exorbitant prices. You do not need to have such returns as compound interest takes very well care for those getting consistent. Why would vendors sell these unique methodologies instead of making their own fortunes with them?In short, you need high-quality principle-based guidelines, apply hard work and be independent of the good opening of others versus getting fooled by “rich quick” schemes and fool’s gold promises. There is no genius required, just good old hard work like in any other field that requires mastery for competition level.If trading were a mathematical competition, we would find all rocket scientists to be the winners in this game. But the is far from the truth. Instead, it is precisely the opposite based on a simple principle distinction. The mathematical mind seeks a precise and optimal solution. It aims at a reduction to a constant. This approach fails the high degree of aspects defining the human psyche and all the grey zones that come with it. It is much more essential to find a trading approach that fits your personality.Consequently, eliminate any system purchase. One needs to work refining one’s own path. One needs to find a niche in the time frame, market, and volatility to one’s specific personal makeup.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|March 23rd, 2021|Tags: Bitcoin, Bitcoin correction, Bitcoin mining, crypto analysis, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Why Retreating Yields Don‘t Lift All Boats

Monica Kingsley Monica Kingsley 24.03.2021 15:09
Stocks declined but won‘t they run higher next? Tuesday‘s downswing changed precious little, and the Congressional testimony was a non-event. The key happening was in long-dated Treasuries, which rose yet again – the much awaited rebound is here, and brings consequences to quite a few S&P 500 sectors.The index is likely to advance, but the engine is going to be tech this time – not value stocks. I view this as a deceptive, fake strength in the bull market leadership passing over to value inevitably next. That‘s why I expect the S&P 500 advance to unfold still, a bit rockier than it could have been otherwise. This will hold true for as long as TLT is at least somewhat rising:(…) technology would recover some of the lost ground on rates stabilization. ...the $UST10Y move has been a very sharp one, more than tripling from the Aug 2020 lows.Technology though declined yesterday, and so did value stocks. Many markets went through selloffs yesterday, among commodities most notably oil. While nothing has substantially changed, we got a serious whiff of risk-off environment, pertaining precious metals too.Especially concerning was the miners underperformance, given that none of the moves indicated accumulation within the sector. Reason number two to expect PMs short-term vulnerability was ignorance of retreating yields that stretches a bit further below what can be viewed as a run of the mill PMs upswing correction. A short-term crack in the TLT decoupling dam that can still be reversed even though it doesn‘t look likely at the moment – better not to wave it off it though.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookRegardless of yesterday‘s setback, the outlook in stocks hasn‘t changed. Once the current corrective move is over and value reassumes leadership, expect the gains to be more pronounced than what we would experience rather shortly.Credit MarketsBoth high yield corporate bonds (HYG ETF) and investment grade corporate bonds (LQD ETF) moved higher, and in the latter, the upswing was backed by a rising volume. The bond markets are coming back into favor, taking a little luster off the stock market appeal on the daily basis.Nowhere is yields influence better seen than in financials (XLF ETF), which give the impression of expecting futher retreat in yields, and haven‘t thus far reached any meaningful support. That would provide headwinds to the S&P 500 advance, especially as it translates into other cyclicals.Gold and SilverGiven the above chart, my yesterday‘s words ring even truer seeing Tuesday‘s closing prices:(…) Similarly to Mar 12, the precious metals upswing is being challenged – miners (GDX ETF) are underperforming. Today‘s session will tell whether we‘re witnessing consolidation, or a renewed rollover to the downside, the chances of which have risen yesterday.The bearish turn is just as visible in silver and silver miners, and it would be premature to declare it a bullish divergence. Given that silver bulls didn‘t attempt a rebound, and volume isn‘t consistent with capitulation, the risks to the downside materially increased.Precious Metals and CopperThe full precious metals sector got under serious pressure yesterday, and so did copper. Given the upswing having rolled over to the downside yesterday (especially when viewed through $HUI:$GOLD metrics), the bulls have to prove themselves through a stronger action than a dead cat bounce.SummaryS&P 500 upswing has better prospects of continuing than not, and the volatility and put/call ratio readings confirm we aren‘t in for a true setback really. The stock bull market is far from having made a top, and will continue grinding higher.Gold and silver decline going hand in hand with even weaker miners, means that the upswing was effectively ended – the only thing that can bring it back, is renewed miners outperformance and expected alignment of the yellow metal to Treasury yield moves, which is absent at the moment.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Mining ETFs: Headed for Their Next Slide?

Finance Press Release Finance Press Release 24.03.2021 16:34
The mining ETFs (the GDX and GDXJ) have hit resistance and look tired. After their corrective rally, a slide looks promising. The miners are done correcting and if they were at a water amusement park, would they head for the lazy river? How about the wave pool? Nah… they’d be headed straight for the slides. If you’ve been waiting for a high-quality sign that the next big move in the precious metals sector is underway – you just got it.There are days on the markets when nothing happens, there are days when what happens is visible only to some ( like Monday’s session ), and there are days when the market’s signals are crystal-clear – as if the charts were practically screaming at the person examining them. Yesterday, was one of the latter kind of days.Without further ado, let’s take a look at the key development that we just saw in the precious metals’ world – the big decline in the GDX ETF – proxy for mining stocks.After the tiny breakdown that I described yesterday (Mar. 24), the GDX ETF declined significantly, and it even opened the session with a price gap. If you look at the left side of the chart, you’ll see that this is the way in which the big January decline started. In the next 2 months, the value of the GDX ETF declined by over $8.But is the corrective upswing really over? Did the move higher end at a price level that was likely to stop it? Yes, definitely so.On March 10 (when we were already long), I wrote the following :Even though gold moved lower in early March, gold miners stopped declining after reaching my target area based several techniques – most importantly the 50% Fibonacci retracement based on the entire 2020 rally, and the previous lows and highs. Just as miners’ relative weakness had previously heralded declines for the entire precious metals sector, their strength meant that a rally was about to start. And that’s just what we saw yesterday (Mar. 9).Ultimately, it seems that the above corrections will result in the GDX ETF moving to about $34 or so.The resistance levels in the $34 - $35 area are provided by:The late-February 2020 highThe rising neck level of the previously completed head and shoulders patternThe analogy to how big miners’ correction was in April (assuming that the mirror similarity continues)The declining blue resistance lineThe 50-day moving averageConsequently, it makes sense for the GDX ETF to slide form here, as the corrective rally that was likely to take place is most likely already over.The clearly visible sell signal from the stochastic indicator (lower part of the chart) confirms the above as well.Having said that, let’s take a look at even bigger decline in the GDXJ ETF – proxy for junior mining stocks.While senior gold miners declined 2.54% yesterday, junior miners declined by 4.04%.The remarkable thing about both declines is that they took place almost without gold’s help. GLD ended yesterday’s session just 0.73% lower. The general stock market – another market that could temporarily impact the prices of mining stocks – declined by 0.76% yesterday.In comparison, the declines that we saw in both proxies for mining stocks were huge. This is very important , because the recent declines in the precious metals sector and the recent rallies in the precious metals sector were preceded by – respectively – the relative weakness of miners compared to gold and the relative strength of miners compared to gold.What we saw yesterday is a crystal-clear sign that the waiting for the next big move lower is over.This month’s “buy” signal from the MACD indicator seems to have once again marked a great shorting opportunity. On March 12 , I wrote the following:The above chart is a big red warning flag for beginner investors . The flag reads: “verify the efficiency of a given tool on a given market, before applying it”.The bottom part of the above chart features the MACD indicator . Normally, when the indicator line (black) crosses its signal line (red), we have a signal. If it’s moves above the signal line, it’s a buy sign, and if it moves below it, it’s a sell sign.But.If one actually looks at what happened after the previous “buy signals” in the recent months, they will see that in 5 out of 6 cases, these “buy signals” practically marked the exact tops, thus being very effective sell signals! In the remaining case, it was a good indication that the easy part of the corrective upswing was over.I’m not only describing the above due to its educational value, but because we actually saw a “buy signal” from the MACD, which was quite likely really a sell signal.I recently added that the MACD indicator is far from a light switch. While false buy signals often precede material drawdowns, the reversals don’t occur overnight. As a result, it’s perfectly normal for the GDXJ ETF to trade sideways or slightly higher for a few days before moving lower. This is what we saw last week.And yesterday, we saw the 4%+ daily slide, which means that everyone who shorted the market based on the MACD’s “buy” signal is already profitable.Once again – please remember to check whether a given technique or indicator actually worked for your favorite market before applying it and entering a trade.Another market that appears to confirm the bearish narrative is silver.Silver moved lower in a more visible manner, which might be surprising to some investors (especially those that went long based on the “ silver short squeeze ” movement almost two months ago), but it’s not surprising to me. If the history repeats itself to a considerable degree, then it’s not odd to see the same kind of performance that we saw in the similar stage of a given price move.In this case, I already discussed the self-similarity present in the silver market, and I marked the similar patterns with red rectangles. The current situation seems similar to early March 2020, when silver was just starting a major decline while being between its 50- and 200-day moving average. Let’s keep in mind that gold actually moved to a new high in early March, and silver was very far from doing so. Back then, silver underperformed, so it’s no wonder that it’s underperforming right now. While the silver shortage was the topic of the day for many days about two months ago, it seems that more bearish headlines will soon be more popular.Please note that a move below ~$24 in silver will imply that everyone who bought in late January or February, when silver was particularly popular is already in the red. As silver then moves even lower, those investors will most likely feel significant emotional pressure to sell – and some will, most likely making the decline bigger and sharper.Gold seems to have topped in the lower part of my target area and the levels reached by its price as well as the levels reached by the stochastic indicator seem to indicate that the top is indeed in.Gold reversed after failing to break above the declining short-term resistance line, relatively close to its triangle-vertex-based reversal , which is a bearish combination. The stochastic (lower part of the chart) didn’t move to the 80 level, but it was very close to it and it was the proximity of this level that was enough for the tops to form in quite a few previous cases – including the November 2020 top. Based on yesterday’s closing price, we didn’t see a sell signal in this indicator yet, but once we see just a little more weakness, we’ll get this confirmation. Based on what we saw in mining stocks yesterday, it seems that we’ll see it shortly.Right now, traders are likely taking the wait-and-see approach with regard to the USD Index. The latter just moved to its previous yearly highs. It’s already after verification of the breakout above the February highs, so it seems that it’s ready to break higher any day – or hour – now. When that happens, I expect the rally to take the USDX to at least 94, perhaps to 94.5 or 95. The September 2020 high is 94.8, so this level is the most likely upside target for the short term. I don’t think that the rally in the USD Index would end once it reaches the proximity of 95, but that’s when we might see another breather (perhaps after a breakout above this level and perhaps before the breakout, it’s too early to tell at this time).All in all, it seems that the next move lower in the precious metals market is already underway and that we’re going to see new 2021 lows in gold and mining stocks in the next several weeks or days.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Risk-off Is Back Again

Monica Kingsley Monica Kingsley 25.03.2021 15:44
Stocks reversed yesterday, and the close below 3,900 indicates short-term weakness instead of muddling through in a tight range. Especially the sectoral reaction to still retreating yields, is worrying. Yesterday‘s session means a reality check for prior reasonable expectations:(…) The index is likely to advance, but the engine is going to be tech this time – not value stocks. I view this as a deceptive, fake strength in the bull market leadership passing over to value inevitably next. That‘s why I expect the S&P 500 advance to unfold still, a bit rockier than it could have been otherwise. Tech faltered yesterday, and neither the other sectors were convincing. Rotation within stocks didn‘t work yesterday or the day before, and that‘s short-term concerning for the stock market bull health – as in, the path ahead would be truly rockier, and accompanied by brief, sharp selloffs such as the one bringing S&P 500 futures to 3,865 moments ago. The bull market isn‘t though over by a long shot – all we‘re going through is a recalibration of the rising inflation – I still stand by my year end call for $SPX at 4200.It‘s commodities that are under the greatest pressure now, and the copper and oil signals doesn‘t bode well for the immediate future. These are likely starting consolidation of post-Nov 2020 sharp gains – they are no longer frontrunning inflation expectations. This has also consequences for silver, which is more vulnerable here than the yellow metal now.Gold is again a few bucks above its volume profile $1,720 support zone, and miners aren‘t painting a bullish picture. Resilient when faced with the commodities selloff, but weak when it comes to retreating nominal yields. The king of metals looks mixed, but the risks to the downside seem greater than those of catching a solid bid.That doesn‘t mean a steep selloff in a short amount of time just ahead – rather continuation of choppy trading with bursts of selling here and there. What could change my mind? Decoupling from rising TLT yields returning – in the form of gold convincingly rising when yields move down. Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookWhile yesterday‘s volume isn‘t consistent with a true reversal, it still says we‘re not done with the downside, which however shouldn‘t reach all too far. Force index on the other hand, looks as starting its decline, so the short-term picture is mixed. Whether the 50-day moving average test would lead to a rebound, is an open question – but I think it will.Credit MarketsThe high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio gave up all of yesterday‘s gains, but isn‘t leaving stocks as extended here. Much depends upon whether squaring the risk-on bets would continue, or not. Both stocks and the ratio appear consolidating here, and not rolling over to the downside.Technology and FinancialsTechnology (XLK ETF) showing weakness while financials (XLF ETF) aren‘t yet ready to run – that‘s a fair description of the moment. What‘s most concerning, is the tech weakness on still rising long-term Treasuries.Treasuries and Inflation ExpectationsVolume behind the TLT upswing is drying up, and S&P 500 sectors are sensing another turn to the downside. Utilities aren‘t getting anywhere while $NYFANG is as weak as could reasonably be, which doesn‘t bode well for stocks.Commodities showed daily resilience as inflation trades meekly turned around – but make no mistake, inflation expectations runup appear getting questioned on a short-term basis, and the more volatile commodities feel that.Gold and MinersThe precious metals sector remains under pressure, and the renewed and visible miners underperformance highlights that. Yesterday‘s gold upswing happened on lower volume than the preceding downswing, adding to the woes. Silver though remains more vulnerable to the downside than gold, and miners aren‘t painting a bullish picture at all.SummaryWith the tech underperformance returning to the fore, the S&P 500 is short-term exposed, but the momentarily elevated put/call ratio looks as marking not too much downside left as prices approach the 50-day moving average. Once value stocks turn upwards, the stock bull market would be running again.Until gold and silver miners show outperformance again, both metals remain vulnerable to short-term downside – silver more so than gold, which could catch a bid as a safe haven play. But should gold strength return on declining yields, that would be another missing ingredient in the precious metals bull market.
US Industry Shows Strength as Inflation Expectations Decline

Have Commodities Peaked? We doubt it

Chris Vermeulen Chris Vermeulen 25.03.2021 19:47
While everyone was paying attention to the FOMC, Gold & Silver, and the Treasury Yields, it appears the recent commodity rally trend took a big hit on Thursday, March 18, 2021.  Our guess is that the FOMC statement did nothing to support the continued commodity price rally as the US Fed continued with near-zero interest rates and economic support through 2023.  The rally in commodities was likely based on expectations of a much stronger economic recovery as the COVID vaccines take the pressure off economic shutdowns and further restrictive economic conditions, but that may not be the case.Commodities Rollover May Be Misleading TradersThe rollover in commodities suggests the markets are reacting to renewed expectations, post-FOMC.  They may continue to consolidate near support (near $16.30) before attempting to move higher as traders digest the Fed comments and fall back into economic recovery expectations.  Any move below $16.00 as seen on the chart below may likely prompt a consolidation phase within historical support channels (see the Weekly DBC chart below).Commodities Attempting to Base Near SupportThe following weekly DBC chart shows how the COVID-19 event collapsed commodity prices and how they've just recently rallied back to levels above the pre-COVID price range – above $15.00. When we start to look at longer-term trends, we start to see a number of key price levels that become important technical factors related to future trends.  The support levels that setup in 2019, pre-COVID, are still very valid current support levels for commodities.  If a continued economic recovery takes place, DBC will likely find support above $15 and then begin another rally phase targeting prices above $19 to $20.  This current rollover in commodity prices may be nothing more than a pause in price before another rally starts.Commodities Break Major Monthly Price ChannelLastly, looking at the Monthly DBC chart, below, highlights the very long-term price trends and what becomes immediately evident is that price has recently broken above the RED downward sloping price channel line. The momentum of the price rally that recently broke this downward price channel was strong enough to pierce this downward sloping channel – and it would not be uncommon for price to pause after this price breach.  The YELLOW support levels, from the weekly DBC chart, continue to confirm the $15 to $16 as active support.  Any price rotation or pause near this level will likely hold within this support range before attempting another move higher.Be sure to sign up for our free market trend analysis and signals nowso you don’t miss our next special report!We targeted price lows from 2012~2014 as a potential upside price target if the rally phase continues.  After breaking the major downward sloping price trend, it is very likely that once DBC prices rally above $18.50, a continued rally phase may target the $25 price level with an extended run over many months.Historically, a rally in commodities does not always prompt a rally in the US major indexes.  In 2007~08, commodities rallied extensively while the US stock market collapsed.  In 2010~11, commodities rallied as the US stock market rallied more than 27%.  In 2016~2018, commodities rallied as the US stock market rallied more than 62%.  The current breakout above the RED longer-term price channel suggests we may see a stock market rally aligned with a commodity price rally based on the recent comments by the US Fed.  Unless a major credit market or other catastrophic event takes place, we believe this upward trend in commodities may prompt an extended recovery rally in both commodities and the US stock market.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and manage positions for maximum profits from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets, and this year we see a change in leading sectors taking place from what they were last year.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with educational daily market video, updates, research, and my trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist, which ranks the hottest ETFs, which is updated daily for my subscribers.Happy Trading!
Boosting Stimulus: A Look at Recent Developments and Market Impact

Precious Metals Miners Setting Up For A Breakout Rally – Wait For Confirmation

Chris Vermeulen Chris Vermeulen 26.03.2021 19:23
Precious Metals have continued to slide sideways as the US stock markets have rallied into the FOMC meeting last week.  Not by coincidence, metals have continued to base/bottom near recent lows as concerns about the global debt/credit markets, central banks, and precious metal supplies continue to linger.  The US Fed indicated it will do whatever is necessary to support the recovering economy.  The question my research team asks in relation to the basis for a move in metals/miners is “do the global markets believe the global central banks still have control of the underlying global banking/credit markets well enough to prevent another massive rally in metals?”.This question should be first and foremost for metals precious metals enthusiasts.  Recently, there has been quite a bit of concern related to a Silver Squeeze and COMEX deliveries.  Currently, there is some speculation that the Perth Mint has a very limited supply of physical metals on hand and nearly 60x that amount on their balance sheets (Source: https://www.reddit.com/r/Wallstreetsilver/comments/mc18no/perth_mint_unallocated_silver_is_not_backed_by/).  We're no expert related to this lack of physical inventory, but if it is true, then a breakout rally in metals (a true metals SQUEEZE) could be just days or weeks away.Wait For Confirmation Of Miners Bullish BreakoutThe charts we are including in this article suggest “Wait For Breakout Confirmation” because we believe the current technical/price setup may prompt a bit of an extended bottoming formation.  If and when the breakout in miners happens, the upside price move could be very quick and efficient.The Weekly NUGT chart, below, shows how well price has consolidated near the $51 level and how the extended downside trend line (originating from the 2016 peak) aligns with the current price level.  Our researchers believe once this trend line is breached to the upside, NUGT may attempt a rally to levels above $108, the 0.618 Fibonacci Price Extension level, fairly quickly (possibly within 3 to 6+ months).  The $146 target level, a full 100% Fibonacci measured move, would represent a massive +167% price rally in NUGT (if it happens).  Quite literally, this breakout setup could be very explosive if and when it happens.Junior Silver Miners Showing Stronger Support – Waiting For Breakout ConfirmationThe following Weekly SILJ Junior Silver Miners chart shows a different type of price setup.  Junior Silver Miners have held up much stronger than Gold Miners over the past 6 months.  The reported Silver Squeeze could prompt a really big breakout trend IF and WHEN the current Pennant/Flag formation completes (which appears to be only a few weeks away).Be sure to sign up for our free market trend analysis and signals nowso you don’t miss our next special report!The first (0.618) Fibonacci target is near $20.50 – a 40% increase from current price levels.  The second target, a100% Fibonacci measured move, is near $25.25 – a 74% increase from current price levels.  Ideally, this type of breakout move in Metals Miners will happen as a pause in the upward movement of the US Dollar takes place.I believe the US stock market will continue to rally 4% to 8%, or more, over the next (3 to 5+) few weeks.  After that, we may start to see more weakness in the US stock market and the price trends leading up to this period of weakness is where we think Metals and Miners may start to rally.Again, we need to wait for confirmation of these breakout moves.  The technical/price setup we are seeing in both NUGT and SILJ suggests a potential breakout move may happen within the next 2 to 5+ weeks. There could be a deeper downside price move, a washout price low, that happens as the APEX of this move completes.  It is not uncommon for a “washout” trend to happen near a Flag/Pennant APEX.Overall, the next few weeks in the markets suggest we are likely to see fairly big sector trends and moderately strong support for Metals and Miners.  The strength of the US Dollar will likely keep metals from attempting any type of breakout move for a few more weeks.  When the Metals/Miners breakout move starts, though, it could be VERY EXPLOSIVE.Don’t miss the opportunities to profit from the broad market sector rotations we expect, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Have a great weekend!
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Silver´s situation changed, you change

Korbinian Koller Korbinian Koller 27.03.2021 19:19
This week’s price action changed the probability for the short term towards the highest likelihood of continued sideways movement within the established range of the last eight months. Consequently, opportunities have been opening up in the related mining sector. Meaning now is the time to prep this additional field of leverage and sift through one’s choices on how to strike once Silver has found its bottom.Weekly Chart of Silver Spot Price compared to Mining Companies:Silver Spot Price compared to Mining Companies, weekly chart as of March 24th, 2021.The main work in trading is to be prepared. “Make a plan, and trade that plan.” Comparing fundamentals and charts, we found the above candidates to be prime for additional holdings to your spot price trading and physical holdings.The weekly comparison chart shows the strong relationship of mining company valuation towards the actual Silver spot trading price. It also illustrates a beta component meaning the miners move from a percentage perspective proportionally more than the spot price. Depending on your risk appetite, you can pick what suits your aggressiveness of investment style best. This requires adjustment of risk through position size. Miners offer a stock market exposure with leverage and an instrument where you wouldn’t mind owning a part of the company you are holding stocks in. This in an environment where thinking from a wealth preservation perspective is vital.  Silver in US-Dollar, Daily Chart, Silvers situation changed, you change:Silver in US-Dollar, daily chart as of March 24th, 2021.The daily chart above shows why we find the short to mid-term picture to be changed. A significant tight trading range (yellow box) broke to the downside. The bears were able to get the upper hand and not only over this range but price also broke through a significant supply zone based on maximum volume transactions at the US$26.11 price zone. This results in a successful second leg of a downtrend within the broad sideways range fulfilling the bear flag marked in red lines.Weekly Chart, Silver in US-Dollar, Refining the plan:Silver in US-Dollar, weekly chart as of March 24th, 2021.The weekly chart of Silver shows in white the last eight months’ sideways range. Within that range, we had three dominant zones. Trading at the bottom of range three (green box) suggests the highest likelihood of turning point to be at trading prices right at this moment or below. (all the way down to US$22.50). Watching Gold, the sector leader for relative strength or weakness towards Silver and the individual mining stocks to pick out the highest likely turning spot and the low-risk entry point is the goal over the upcoming weeks. In short, while prices trade within the yellow circle price range, US$22.50 to US$25.05 mining chart evaluation is advised.Monthly Chart, Silver in US-Dollar, Lift Off delay:Silver in US-Dollar, monthly chart as of March 24th, 2021.While none of these events changed the larger time frame outlook, the time component when the monthly and weekly trades will follow through to the upside has been delayed—an excellent time to plan one’s next trading instruments and entry point levels.Silvers situation changed, you change:Through training, one can adapt to a more free mindset, allowing one to see clearly if plans pan out differently to formulate a different approach. This ability to rapidly change one’s opinion helps to perceive the market for what it is and not be emotionally involved if the future becomes different from anticipated. Welcoming the change, knowing it offers new opportunities, is the mental state a good speculator operates from.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|March 25th, 2021|Tags: Gold, low risk, Silver, silver bull, Silver Chartbook, technical analysis, time frame, trading principles|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

What Could Slay the Stock & Gold Bulls

Monica Kingsley Monica Kingsley 29.03.2021 15:31
Put/call ratio didn‘t lie, and the anticipated S&P 500 upswing came on Friday – fireworks till the closing bell. Starting on Thursday, with the rising yields dynamic sending value stocks higher – and this time technology didn‘t stand in the way. What an understatement given the strong Friday sectoral showing, acocmpanied by the defensives swinging higher as well. And that‘s the characterization of the stock market rise – it‘s led by the defensive sectors with value stocks coming in close second now.Still last week, the market confirmed my early Friday‘s take:(…) While it‘s far from full steam ahead, it‘s a welcome sight that the reflation trade dynamic has returned, and that technology isn‘t standing in the way. I think we‘re on the doorstep of another upswing establishing itself, which would be apparent latest Monday. Credit markets support such a conclusion, and so does the premarket turn higher in commodities – yes, I am referring also to yesterday‘s renewed uptick in inflation expectation.Neither running out of control, nor declaring the inflation scare (as some might term it but not me, for I view the markets as transitioning to a higher inflation environment) as over, inflation isn‘t yet strong enough to break the bull run, where both stocks and commodities benefit. It isn‘t yet forcing the Fed‘s hand enough, but look for it to change – we got a slight preview in the recent emergency support withdrawal and taper entertainment talking points, however distant from today‘s situation.Commodities have indeed turned again higher on Friday, as seen in both copper and oil – and so did inflation expectations. While some central banks (hello, Canada) might be ahead in attempting to roll back the emergency support, the Fed isn‘t yet forced by the bond market to act – which I however view as likely to change over the coming months.With 10-year Treasury yields at 1.67%, last week‘s decline didn‘t reach far before turning higher. Remembering stock market woes the first breach of 1.50% caused, stocks have coped well with the subsequent run up – while in the old days of retirees actually being able to live off interest rate income, a level of 4% would bring about trouble for S&P 500, now the level is probably just above 2%. Yes, that‘s how far our financialized economy has progressed – and I look for volatility to rise, and stocks to waver and likely enter a correction at such a bond market juncture. As always, I‘ll be keeping a close eye on the signs, emerging or not, as we approach that yield level.Again quoting my Friday‘s words, what else to expect as the bond markets takes notice:(…) Now, look for the fresh money avalanche, activist fiscal and moterary policy to hit the markets as a tidal wave. Modern monetary theorists‘ dream come true. Unlike during the Great Recession, the newly minted money isn‘t going to go towards repairing banks‘ balance sheets – it‘s going into the financial markets, lifting up asset prices, and over to the real economy. So far, it‘s only PPI that‘s showing signs of inflation in the pipeline – soon to be manifest according to the CPI methodology as well.Any deflation scare in such an environment stands low prospects of success. For deflation to succeed, a stock market crash followed by a depression has to come first. And as inflation is firing on just one cylinder now (asset price inflation not accompanied by labor market pressures), it isn‘t yet strong enough to derail the stock bull run. The true inflation is a 2022-3 story, which is when we would be likely in a full blown financial repression and bond yields capped well above 2% while inflation rate could run at double that figure. Then, the Fed wouldn‘t be engaged in a twist operation, but in yield curve control, which the precious metals would love, for they love low nominal and negative real rates.Gold might be already sensing that upcoming pressure on the Fed to act – remember their run for so many months before the repo crisis of autumn 2019 broke out:(…) After the upswing off the Mar 08 lows faltered, the bears had quite a few chances to ambush this week, yet made no progress. And the longer such inaction draws on, the more it is indicative of the opposite outcome.Not only that gold miners outperformed the yellow metal on Friday, with their position relative to silver, the king of metals is sending a signal that it would be the one to take leadership in the approaching precious metals upswing. And the dollar wouldn‘t be standing in the way – let‘s continue with my Friday‘s thoughts:(…) When I was asked recently over Twitter my opionion on the greenback, I replied that its short-term outlook is bullish now – while I think the world reserve currency would get on the defensive and reach new lows this year still, it could take more than a few weeks for it to form a local top. Once AUD/USD turns higher, that could be among its first signs.Once higher rates challenge the stock market bull, the dollar would do well in whiff of deflationary environment (remember the corona runup of spring 2020), but it would be the devaluation that would break it – and it‘s my view that devaluation would not happen against other fiat currencies, but against gold (and by extension silver). With devaluation (it‘s still far away in the future), a true inflation would arrive and stay, which forms a more drastic scenario to the more orderly one I discussed earlier in today‘s article.Another challenge for the stock market bull comes from taxes, as the current and upcoming infrastructure stimuli (wait, there is the $2T one to move the U.S. to a carbon-neutral future on top) would result in higher tax rates next year, which would further hamper productive capital allocation as people and institutions would seek to negate their effect. Needless to say, gold, miners and real assets would do very well in such an environment.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookStrong S&P 500 upswing on Friday, on a not too shabby volume. The key question is whether the bulls can keep the momentum on Monday, and ideally extend the gains at least a little. Signs are they would be able to achieve that.Credit MarketsHigh yield corporate bonds (HYG ETF) reached the mid-Mar highs, and need to confirm Friday‘s upswing – odds are they would continue higher on Monday as well, because the volume comparison is positive and daily indicators don‘t appear yet ready to turn down.Inflation ExpectationsInflation expectation as measured by Treasury inflation protected securities to long-dated Treasuries (TIP:TLT) ratio, keep making higher highs and higher lows – the market is recalibrating towards a higher inflation environment, but not yet running ahead of the Fed as the 10-year Treasury yield (black line) shows. It‘s so far still orderly.Smallcaps and Emerging MarketsThe Russell 2000 (IWM ETF, upper black line) is underperforming the S&P 500, and so are the emerging markets (EEM ETF) – both signals of the defensive nature of the stock market upswing. The animal spirits aren‘t there to the full extent (don‘t be fooled by the strong VTV showing), but have been making a return since Thursday.Gold, Silver and MinersA new turn is taking shape within the Tuesday-challenged precious metals upswing – the miners appear yet again assuming leadership. The call I made on Thursday, hinting at a change, appears materializing to the bulls‘ benefit.Comparing gold and silver at the moment, results in the conclusion of the yellow metal leading higher after all – and the positive turn in copper (which is also reflected in the copper to 10-year Treasury yield ratio) confirms that.Crude OilBlack gold keeps defending the 50-day moving average, showing the reflation trade in both commodities and stocks isn‘t over yet. The oil index ($XOI) is once again pointing higher, and so is the energy ETF (XLE). While Friday‘s volume was relatively modest, oil has good prospects to keep recovering this week.SummaryThe odds of an S&P 500 upswing were confirmed by the Friday‘s upswing, in line with the put/call ratio indications. Credit markets concur, and while the sectoral constellation isn‘t totally bullish, it can still carry the index to new highs.Miners made an important turn higher relative to gold, and the sector can enter today‘s trading on a stronger footing than was the case on Friday. The green shoots in the precious metals sector appear likely to take a turn for the better this week and next. As always, keeping a close eye on the gold‘s relationship to nominal yields, is essential – be it decoupling from rising ones, or a strong upswing on retreating ones.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

How To Spot Boom and Bust Cycles

Chris Vermeulen Chris Vermeulen 29.03.2021 16:04
One of the most important aspects of trading is being able to properly identify major market cycles and trends. The markets will typically move between four separate stages: Bottoming/Basing, Rallying, Topping/Distribution, and Bearish Trending.  Each of these phases of market trends is often associated with various degrees of market segment trending as well.  For example, one of the most telling phrases of when the stock market is nearing an eventual Topping/Distribution phase is when the housing market gets super-heated.  Yet, one of the most difficult aspects of this Excess Phase rally trend is that it can last many months or years, and usually longer than many people expect.Until Gold Really Starts To Rally, Expect A Continued Rally In The Stock MarketWhen an Excess Phase rally is taking place in the stock market, we expect to see the Lumber vs. Gold ratio moving higher and typically see the RSI indicator stay above 50.  Demand for lumber, a commodity necessary for building, remodeling, and other consumer essential spending, translates well as an economic barometer for big-ticket consumer spending. Extreme peaks in this ratio can often warn of a pending shift in consumer spending and how the stock market reacts to an Excess Phase Peak.  Let's take a look at some of the historical reference points on this longer-term Weekly Lumber vs. Gold chart below.First, the 1992 to 2005 ratio levels represent a moderately low Gold price level compared to a somewhat inflated Lumber price level.  You can see how that dramatically changed between 2005 and 2012 – this was a time when Gold started a historic rally phase just before the Housing/Credit crisis of 2008-09.Since that time, the Lumber to Gold ratio has stayed below historical low reference points (near 0.6).  This shift in the Lumber to Gold ratio suggests that demand for Gold outpaced demand for Lumber over the past 10+ years.  Now, the Lumber to Gold ratio is climbing back to levels near or above that 0.6 level and may soon move higher if the post-COVID economic recovery continues while demand for Gold stays somewhat muted.Traders need to pay attention to this current rally in the Lumber vs. Gold ratio because a breakout rally above the 0.60 level would likely mean a continued rally phase for the US stock market and strong sector trending related to consumer spending, housing, and speculative sectors.  Whereas, a failure to rally above the 0.60 level at this stage may indicate that the US stock market will begin to stall and potentially move into a sideways correction before starting a new trend.Be sure to sign up for our free market trend analysis and signals nowso you don’t miss our next special report!Lastly, we have drawn some Std Deviation channels on this longer-term Lumber to Gold Weekly chart above.  It is very important to understand that a continued rally in the Lumber to Gold ratio will break above the upper downward sloping channel from the 1999 peak and potentially prompt a big upside price rally – likely pushing the US stock market to extended new highs.A Closer Look At The Current SetupWhen we zoom into the current price trends on the following Lumber to Gold ratio chart below, we can clearly see the two recent rally trends; the first after the 2016 US elections and the second after the COVID-19 bottom.  The most important aspect of this chart right now is that any continued rally in the Lumber to Gold ratio may quickly breach the 0.60 historical range and potentially prompt a very big rally in the US stock market over the next few months.The new COVID stimulus and the continued efforts to pass an Infrastructure Bill in the US Congress may prompt enough of a capital injection into the US economy to set off a “booster phase” rally at this stage in the economic recovery.  One simply can't rely on the fact that the Lumber to Gold ratio is near a historically critical level, we need to actually wait to see confirmation of a breakdown in this trend before we can say what is likely to happen in the near future.  If the ratio climbs above 0.60 and continues to rally higher, then it is very likely that the US and Global stock market trends will also continue much higher.Historical Peaks & Rallies – When To Be ConcernedThis longer-term Lumber to Gold ratio chart shows how the SPY continued to rally through various stages of the rally in the ratio level. We also have to remember the peak in 2000 was related to two important economic events; the DOT COM bubble burst and the 9/11 terrorist attacks.  Subsequently, the breakdown in the Lumber to Gold ratio that started in 2004 was related to a broadly weakening housing market trend – prompted by an ever-increasing Fed Funds Rate which began in 2004-05.  Currently, we have the US Fed promising “near-zero” rates through 2022 and an easy money policy throughout that time to support stronger global market recovery.  Barring any unforeseen credit, economic, or global market event, we believe a breakout rally in the Lumber to Gold ratio, assuming Gold stays below $2250 and does not enter a breakout rally phase, will coincide with a moderately strong US stock market rally.When should you start to be concerned that a top is setting up based on this ratio?Very simply put, when you see Gold start to rally above $2150~$2250 and breakout into a true rally while the price of Lumber begins to fall somewhat sharply, then we believe traders should start to actively protect positions and prepare for a bigger breakdown in the stock market trend.  Until Gold starts to react as a proper hedge, this speculative “excess phase” rally will likely continue higher.As a warning for all our friends and followers, a breakdown of this upside rally trend could be sudden if a major market event takes place.  For example, if a sudden collapse in the credit/debt markets were to happen (related to risk exposure or bank/financial firm failures), then we may see a very sudden breakdown in this ratio.  Additionally, if war or geopolitical economic tensions break out where excessive global risks become a factor, then we may also see this ratio turn negative quickly.Traders need to understand the potential for a continued stock market rally near these current levels is quite strong, but there are still risks of a sudden breakdown in trending.  The question that nobody can answer is “what will the catalyst event be and when could it happen?”. Until then, trade the hottest sectors using my Best Asset Now strategy, which you can learn NOW by signing up for my FREE webinar that will teach you how to find the best sectors to trade.Until the end of the trend is upon us, get ready for some really interesting global market trends and sector opportunities.  It is very likely that volatility will stay higher than normal prompting 2% to 4%+ rotations in market trends.  These next few years are going to be a trader's dream market in terms of trending and price rotation. For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Enjoy your Sunday!
Liquidity Boost for Stocks and Gold?

Liquidity Boost for Stocks and Gold?

Monica Kingsley Monica Kingsley 30.03.2021 15:53
Friday‘s great run gave way to yesterday‘s consolidation, and stock bulls appear in need of more before taking out the psychological 4,000 mark. The Archegos crash isn‘t causing contagion fears the way GameStop in late Jan did. The current volatility and put/call ratio simply doesn‘t reflect that.The theme is still one of reflation – while inflation expectations are rising, and so are the inflation data for those who care to examine them closely enough, true inflation isn‘t yet here with us. Markets are merely transitioning to a higher inflation environment already, not buying the Fed‘s transitory explanation. Commodities are basing at the conquered levels before another run higher.Make no mistake though, the current S&P 500 upswing is heavily reliant on the defensive sectors – technology isn‘t standing in the way, utilities and consumer staples are doing great, and so are several areas within the real estate sector such the residential one, or REIT ETFs that can be expected to keep doing well. Couple that with value stocks not really retreating, and you get the current view of S&P 500 advance structurally.Credit markets though are a little lagging behind – thanks to the return of rising yields, working its predictable magic on investment grade corporate bonds as well. Such were my points from yesterday‘s extensive analysis, diving into the big picture across the markets and the economy:(…) With 10-year Treasury yields at 1.67%, last week‘s decline didn‘t reach far before turning higher. Remembering stock market woes the first breach of 1.50% caused, stocks have coped well with the subsequent run up – while in the old days of retirees actually being able to live off interest rate income, a level of 4% would bring about trouble for S&P 500, now the level is probably just above 2%. Yes, that‘s how far our financialized economy has progressed – and I look for volatility to rise, and stocks to waver and likely enter a correction at such a bond market juncture. As always, I‘ll be keeping a close eye on the signs, emerging or not, as we approach that yield level.The bond market isn‘t merely anticipating an economic recovery that has good chances of overheating still this year, it‘s also reacting to:(…) the fresh money avalanche, activist fiscal and moterary policy to hit the markets as a tidal wave. Modern monetary theorists‘ dream come true. Unlike during the Great Recession, the newly minted money isn‘t going to go towards repairing banks‘ balance sheets – it‘s going into the financial markets, lifting up asset prices, and over to the real economy. So far, it‘s only PPI that‘s showing signs of inflation in the pipeline – soon to be manifest according to the CPI methodology as well.Any deflation scare in such an environment stands low prospects of success. Continuing:(…) For deflation to succeed, a stock market crash followed by a depression has to come first. And as inflation is firing on just one cylinder now (asset price inflation not accompanied by labor market pressures), it isn‘t yet strong enough to derail the stock bull run. The true inflation is a 2022-3 story, which is when we would be likely in a full blown financial repression and bond yields capped well above 2% while inflation rate could run at double that figure. Then, the Fed wouldn‘t be engaged in a twist operation, but in yield curve control, which the precious metals would love, for they love low nominal and negative real rates.As I wrote on Twitter, it‘s a question of time when gold starts anticipating the policy turn, snifffing it out just like the Fed having to abandon hawkish positions of late 2018, or the runup to the repo crisis of autumn 2019. We got quite a few decoupling signs, some on prolonged basis, but gold isn‘t yet leading commodities the way it did both before and after the corona deflationary shock. Let‘s not forget about the currencies and arbitrage opportunities there – the yen carry trade is still very much alive, making it a no brainer to borrow in declining currency while parking the proceeds elsewhere – and the one-way trading in $USDJPY in 2021 is a fitting testament thereof. A powerful argument against deflation on our doorstep, by the way.Quite to the (deflationary shock) contrary at the moment – both commodities and precious metals are under pressure in today‘s premarket session. Another undoing of the miners‘ outperformance?Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookDaily consolidation on average volume – no hinting at serious troubles down the road. Buy the dip mentality still rules the day.Credit MarketsHigh yield corporate bonds (HYG ETF) chart looks a bit tired to the upside – the bulls had to defend against a serious downswing yesterday first. Contracting volume precedes rising volume, and the best the bulls can hope for, is sideways trading coupled with downswing rejection followed by another move higher.Technology and ValueTechnology (XLK ETF) repelled an intraday downswing while value stocks (VTV ETF) merely couldn‘t keep up all the gained ground during the day. So far so good in the run up or base building on the path to new all time highs.Gold in the SpotlightThe daily resilience in the miners would come under heavy pressure today, and GDX can be expected to close lower. Would they still show outperformance vs. the yellow metal? I wouldn‘t bet the farm on it – it appears the Mar 04 game plan will be tested soon instead.Miners to gold (black line) still keeps painting a bullish picture on the weekly chart, as it refuses to follow the yellow metal to the downside. Where would it be should the $1,670 support zone get tested again – would that level be sufficient enough to power a rebound?Silver, Miners and CopperSilver clearly illustrates the sectoral weakness – the selling waves get harder to repel, and upswing attempts are happening on lower volume. While copper goes sideways, the white metal is breaking lower, and its miners aren‘t showing any strength at all.SummaryS&P 500 keeps consolidating Friday‘s gains without signs of upcoming, groundbreaking weakness. With volatility at around 20, the path of least resistance remains overall higher – until tech says no more. Again, no hint at that today still.Gold is again approaching the $1,670 support, and miners‘ performance will send as valuable clues just as before the Mar 08 bottom. Given today‘s downswing, that will be an even more important indication, bearing medium-term consequences as well.
New York Climate Week: A Call for Urgent and Collective Climate Action

Stocks: big moves!

Kseniya Medik Kseniya Medik 31.03.2021 11:05
Stepping up the ladder to 4000 The stock market keeps steadily going upwards towards the mark of 4000. While there have been and will be inevitable dropdowns below the support of the 50-MA, the overall trend is a clear uptrend. What's important is that the recent turbulence was not as high as the one in September-October - that's a sure sign of true recovery and stabilization of the economy seen in the corporate environment. Having that as a background, let's review particular stocks now. Tweeting down No one can deny Elon Musk the liberty to say whatever he finds necessary on Twitter. That doesn't mean it does any good to the valuation of Tesla, though. Sometimes we may even think that he does it intentionally like that time when he said that Tesla's value is too high - and the stock dropped. The announcement that Tesla may be bought with Bitcoins didn't prevent the stock price from going down. Partially, because of another controversial tweet about unions that the US authorities are considering as a possible threat to labor union participants. On the other side, there was another comment that Elon Musk tweeted - and eventually deleted is that very soon, Tesla may weigh more than Apple. Whatever there is, the support of 550 is there, and it may be reached again. At the same time, a bounce upwards is also possible. For this reason, if you're considering taking a rather risky mid-term position, you may think of buying Tesla - that's if you're ready to hold out enough time until it starts recovering. Because when it does, then from the current $600 to the all-time high of $900 it's a 50% value growth potential. Chinese affairs Alibaba is now under double pressure. First, Jack Ma's company is under direct pressure, scrutiny, and counteraction from the side of the Chinese authorities. Second, strategically, global geopolitical tension between China and the "Western world" growing around the Uyghur region is making the future of Alibaba even more cloudy than it is now. In any case, the stock is now at nine-month lows. Moreover, it trades above the support zone of 215-220. Technically, a bounce upwards is very possible. If it happens, then there is the entire $100 above to meet the all-time high again. Potentially, it's an almost 50% value gain possibility - that may take a few months, though. Therefore, Alibaba may be a risky buy for a long-term strategy. Or, observe it further as fundamentally, grounds are shaking beneath Jack Ma's feet. Beating everyone Shooting up from $50 to $54, Coca-Cola performed as well as never since the start of the recovery. Definitely, it's one of the best performers of the S&P 500 so far. Fundamentally, it has a very good business outlook. Sales are going better and better, most observers suggest it's a buy stock - for a long-term scenario. For the short-term, though, you have to take into account that this growth was really aggressive. Not that it never happens in the stock market but this stock has been oscillating between the two sides of the indicated channel since March. Currently, it's in an upswing. However, observe it closely as it approaches $55. At or slighly above that mark, it may reverse to do a technical correction - in this case, it may go all the way down to $51-52. Therefore, observe possible reversal pattern in the shotrt-term - they may occur at any time. Remember that you can trade stocks not only through Metatrader 5 but also through the FBS Trader app!
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Stocks, Gold and the Troubling Yields

Monica Kingsley Monica Kingsley 31.03.2021 16:03
Yesterday‘s consolidation in stocks was a bullish one, and the S&P 500 upswing has good prospects of proceeding unimpeded. Strange but true if you consider that also a plan to considerably raise taxes would be announced today, so as to help pay for the stimulus wave. The bond markets are calmly overlooking that so far, enabling the run to the 4,000 mark.And it still appears a question of time. Inflation isn‘t yet biting (forget about the German CPI data for now), fresh money keeps hitting the markets, and Archegos is about to become a distant memory. Stocks seem immune to the rising yields spell at the moment, meaning that value trades can remain at elevated levels while technology is stuck in no man‘s land and defensives are consolidating recent sharp gains (consolidating until the rising yields come back with vengeance).And there is little reason given the Fed‘s stance why they shouldn‘t. Much of the marketplace is buying into the transitory inflation story, and inflation expectations aren‘t yet running too hot. As the economic growth is stronger than current or future inflation, we‘re still at a good stage in the inflation cycle – everyone benefits and no one pays.When such reflation starts to give way to decreasing or stagnant growth rates accompanied by rising inflation metrics, the stock market performance stops being as positive as it had been since the Mar 2020 bottom. At such a time, the current transitioning to a higher inflation environment would be at a very different (commodity prices) stage, and so would the bond yields (no longer well below 2% on 10-year Treasuries).Points made in my Monday‘s extensive analysis, ring true also today:(…) With 10-year Treasury yields at 1.67%, last week‘s decline didn‘t reach far before turning higher. Remembering stock market woes the first breach of 1.50% caused, stocks have coped well with the subsequent run up – while in the old days of retirees actually being able to live off interest rate income, a level of 4% would bring about trouble for S&P 500, now the level is probably just above 2%. Yes, that‘s how far our financialized economy has progressed – and I look for volatility to rise, and stocks to waver and likely enter a correction at such a bond market juncture. As always, I‘ll be keeping a close eye on the signs, emerging or not, as we approach that yield level.Gold isn‘t yet sensing the coming Fed intervention – similar to Europe or Australia, the central bank would have to take aim at the long end of the curve in earnest – yield curve control I raised mid-Feb already, as twist wouldn‘t be enough at that stage. Look for a full fledged financial repression and deflation standing no chance then – boon to all real assets, a time when gold would truly shine.For now though, Fed‘s credibility isn‘t being questioned and challenged in the markets. Bond yields are rising in an orderly fashion – if you can consider the 2021 run as orderly. I can‘t but I am not calling the shots at the Fed either so as to highlight the record 2021 TLT price extension below its longer-term moving averages. The unchallenged USD/JPY exchange rate shows that the yesterday mentioned yen carry trade is running hot:(…) making it a no brainer to borrow in declining currency while parking the proceeds elsewhere – powerful argument against deflation on our doorstep, by the way.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookStocks consolidated in a bullish fashion, and the stage is set for an upswing next. I see it as merely a question of time, and the early reaction to non-farm employment change, is neutral – look for the key Friday figure though.Credit MarketsHigh yield corporate bonds (HYG ETF) underperformed yesterday as both the investment grade corporate bonds and long-dated Treasuries rose. The HYG daily volume shows that this upswing isn‘t a done deal yet.Russell 2000 and Emerging MarketsWhile the 500-strong index is basing, both smallcaps (IWM ETF) and emerging markets (EEM ETF) attempt a turn higher. See how elevated $SPX remained vs. the two – it‘s clear the current upswing is a defensive one.Gold in the SpotlightGold miners weren‘t able to repeat their Monday‘s feat exactly, but aren‘t plunging faster than gold either. Sending inconclusive signals, is the takeaway – unless you step back and look at exactly the same weekly chart, which reveals miners comfortably outperforming the yellow metal. Be still ready for a coming test of my Mar 04 game plan, though.Gold with the overlaid copper to 10-year Treasury yield ratio (black line) shows that in the current (consolidation) phase of the commodities bull run, gold has lost its luster with yesterday‘s upswing. Again, how fast and from what level would it regain its footing, is the key question - $1,670 or not.Silver, Platinum and CopperSilver selling pressure unfortunately still dominates as the volume shows. White metal is in the straits much more than copper or platinum, which are merely going sideways (just as oil is).SummaryS&P 500 keeps consolidating Friday‘s gains without signs of upcoming, groundbreaking weakness. With volatility moving down again, the path of least resistance is still up – and tech isn‘t saying no.Gold is again in the proximity of the $1,670 support, and miners‘ performance will send as valuable clues just as before the Mar 08 bottom. Nothing convincing to draw conclusions either way at the moment.
US Industry Shows Strength as Inflation Expectations Decline

Gold Just Can’t Seem to Breakout

Finance Press Release Finance Press Release 31.03.2021 16:18
Confirmed, unconfirmed, verified, and invalidated: breakouts and breakdowns are now ubiquitous. And the implications are bearish for gold.Let’s start today’s analysis with a discussion of the key market that everyone is interested in – gold.Gold’s Failed Breakout – A Sell SignIn short, gold just invalidated its small breakout above the declining blue resistance line. The previous breakout was small and thus it required a confirmation. It never got one, and instead gold plunged, invalidating the move. This is yet another sell sign that we saw.It also serves as further proof that ever since the beginning of the year, gold permabulls (many people continue to claim that gold can only go up, even now) were destroying value rather than creating it. On a side note, we have nothing against checking out the work of other analysts, but we encourage you to check if someone was both bullish and bearish on a given market. If they never changed their mind, it seems that you can save some time by not reading what they come up with, as you already know the outcome. Besides it’s not like they would prepare you in advance for any decline (in case of permabulls).Getting back to the current market situation – since gold moved lower quite visibly yesterday (Mar. 30), and even (almost) reached its early-March high, it might be tempting to think that the decline is over. This seems unlikely in my opinion.The less important reason for the above is visible right on the above chart. Earlier this month, gold topped very close to its triangle-vertex-based reversal. The previous two triangle-vertex-based reversals also triggered declines. So, if something similar triggered similar moves, then it might be worth checking how big did the previous declines end up being.Both previous 2021 declines were followed by quite visible declines. The one that started in early Jan. took gold over $130 lower, and the one that started in mid-Feb. took gold over $170 lower. The current decline started at $1,754.20, so if the history is to rhyme (as it often does), gold would be likely to decline to at least $1,584 - $1,624. This target area corresponds quite well to the support provided by the early Mar. and early Apr. 2020 lows.The more important reasons due to which it seems likely that the decline will continue are: the rally in the USD Index and the rally in the long-term interest rates.The USD’s RallyAs far as the latter is concerned, it seems unlikely that we’ll see the Fed stepping into action with another Operation Twist until the general stock market slides. Otherwise, such a big intervention might seem uncalled for. Consequently, the long-term rates are likely to rally some more. And gold is likely to respond by declining further.As far as the USD Index in concerned, it just moved to new yearly highs, and since the nearest strong resistance is relatively far (from the short-term point of view), it seems that the move higher will continue with only small corrections along the way.The USD Index has not only confirmed the breakout above its Feb. highs, but it even managed to break above the rising red support line. This line, along with the rising black line based on the Feb. and mid-March lows, creates a rising wedge pattern that was already broken to the upside. The moves that tend to follow such breakouts often are as big as the size of the wedge. I used red, dashed lines for this target-determining technique. Based on it, the USD Index is likely to rally to about 96.65.The above target is slightly above the mid-2020 highs, so it might seem more conservative to set the upside target at those highs, close to the 94.5-94.8 area. The mid-2020 highs are likely to trigger a breather, but it doesn’t have to be the case that the USD Index pauses below these highs. Conversely, it could be the case that the USD Index first breaks above the mid-2020 highs and consolidates after the breakout. In fact, that’s what it did with regard to the breakout above the Feb. 2021 highs.Consequently, I’m broadening the target area for the USD Index, so that it now encompasses also the more bullish scenario in which the USDX takes out the mid-2020 highs before consolidating.Either way, we’re currently in the “easy part” of the USD’s rally. Even if it’s going to consolidate at or below the mid-2020 highs, it’s still very likely to first get there, and this implies a move higher by at least another full index point. This means that the gold price is likely to decline some more before finding short-term support. The scenario fits very well with the situation that I outlined based on the gold chart earlier today.Silver LossesSilver just broke to new 2021 lows. Everyone buying silver (futures) in Jan. / Feb. is now at a loss and in an increasingly inconvenient situation.Why would this be important? Because it means that everyone who jumped into the silver market with both feet based on just very brief research (“research”?) which in many cases was following instructions provided at various forums is in a losing position right now.Sometimes the losses are small – for the very few, who were early, but in some cases, the losses are already quite visible – especially for those, who bought close to $30.Why is this important? Because it emphasizes the need to verify the quality of the information that one chooses to act on, and because it’s a tipping point after which the previous buyers are likely to start becoming sellers, thus adding to decline’s sharpness.The “new silver buyers” losses are not huge yet, but after another move lower, they will likely become such and the sales from those buyers would likely make these declines even bigger.When everyone and their brother was particularly bullish on silver a few months ago, I wrote that they might be quite right, but the timing was terrible. So far, the losses for those, who bought silver earlier this year are not that big, but, in my opinion, they are likely to become much bigger in the following weeks.Of course, I expect silver price to soar in the following years (well over $100), but not without plunging first in the short and/or medium term.The Miners’ Relative StrengthLet’s take a look at the mining stocks. In yesterday’s analysis , I explained the likely reason behind the temporary strength in the mining stocks, and I emphasized that it’s not likely to last. This explanation remains up-to-date:Ultimately, it’s never possible to reply to the “why did a given market move” other than that “because buyers won over sellers”. It’s not particularly informative, though. The reason that seems most likely to me is that it was… a purely technical development that “needed” to happen for a formation to be complete.This hypothesis would explain also one odd thing that happened yesterday. Namely, while the GDX closed the day slightly higher, the GDXJ ended the day lower. This would make sense if the general stock market declined ( junior mining stocks – GDXJ tend to follow its lead more than seniors – GDX) – but the point is that the general stock market ended yesterday’s session basically flat (declining by mere 0.09% decline).“Ok, so what kind of formation are miners completing?”Quite likely the head and shoulders formations. The reason for yesterday’s underperformance of the GDXJ would be the fact that in case of this ETF’s head-and-shoulders formation , the neckline is descending much more visibly. These formations are more visible on the 4-hour charts – so, let’s zoom in.Currently – based on yesterday’s (Mar. 30) closing prices – both formations are completed, and while it could still be the case that both ETFs move back to their previous necklines to verify the breakdowns, the implications are already bearish for the short term.The price targets based on those formations are $29.6 and $40.7 for the GDX and GDXJ, respectively. However, let’s keep in mind that the H&S-based targets should be viewed as “minimum” targets, not necessarily the final ones.All in all, the technical picture currently favors lower precious metals (and mining stock) prices over the next several weeks. In my view, this is either the middle or the final part of the very final decline in the precious metals market, before it takes off based on multiple positive factors of long-term nature.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Stock ATHs and Gold Double Bottom

Monica Kingsley Monica Kingsley 01.04.2021 15:25
Bullish run in stocks that lost steam before the close – does that qualify as a reversal? Given the other moves such as in the Dow Industrials, Russell 2000 and emerging markets, it‘s unlikely that the S&P 500 met more than a temporary setback. Just look at the rush into risk-on assets as an immediate reaction to the infrastructure and taxation plans – see the high yield corporate bonds moving higher (and this time also investment grade corporate bonds finally) as long-dated Treasuries keep losing ground, and the dollar noticeably wavered.Yes, emerging worries about how this will be all paid for – not that an ideological challenge to modern monetary theory would be gaining any traction, but rather what would be the (quite predictable) effect of steep tax increases? Reduction in economic activity, unproductive moves to outset the effects, decrease in potential GDP? Remember the time proven truth that whatever the percentage rate, the government always takes in less than 20% GDP in taxes. The only question is the degree of distortions that the tax rate spawns.So, the S&P 500 upswing has good prospects of proceeding unimpeded (more profits!) as:(…) Stocks seem immune to the rising yields spell at the moment, meaning that value trades can remain at elevated levels while technology is stuck in no man‘s land and defensives are consolidating recent sharp gains (consolidating until the rising yields come back with vengeance).And there is little reason given the Fed‘s stance why they shouldn‘t. Much of the marketplace is buying into the transitory inflation story, and inflation expectations aren‘t yet running too hot. As the economic growth is stronger than current or future inflation, we‘re still at a good stage in the inflation cycle – everyone benefits and no one pays.Neither the 10-year Treasury yield, nor inflation expectations as measured by TIP:TLT ratio or RINF, are signalling trouble for the stock market. It‘s only commodities ($CRB) that have been consolidating through March – but that‘s of little consequence if you switch the view to a weekly chart (a bullish flag). The path of least resistance remains higher, and that rings true for copper, base metals, agrifoods or oil. If in doubt, look at lumber marching unimpeded to new highs.Precious metals are noticing the changing leadership baton, and have rebounded. Anticipating the copper upswing next? So much of the red metal would be needed in the years to come, whatever the actual rate of car fleet electrification. The same for ubiquitous silver applications well beyond solar panels. The cry in our Roaring Twenties is for more copper, nickel, zinc – just wait when the industrial giants‘ hunger for raw materials turns its focus onto Wall Street as the key sourcing (prospecting) place.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Its InternalsStocks haven‘t genuinely reversed yesterday – the slighly higher volume doesn‘t pass the smell test. Higher highs are the most likely scenario next.A bit mixed picture in the market breadth indicators at first sight, but not more concerning than on a daily basis only. More volume behind the upswings is missing, essentially – and new highs new lows are lagging behind their mid-Mar highs. I expect the situation to be resolved over the coming week, as tomorrow‘s non-farm payrolls won‘t likely disappoint market expectation too much really.Credit MarketsHigh yield corporate bonds (HYG ETF) confirmed the stock market upswing with a bullish move on high volume, closing at daily highs. The slow motion run into risk-on again appears underway.Tech, Value and FinancialsTech (XLK ETF) rose, and so did industrials (XLI) before retreating similarly to consumer staples (XLP ETF) or real estate (XLRE ETF). Value stocks (VTV ETF) and financials (XLF ETF) scored modest declines too, but I chalk it down to the indiscriminate selling wave into the close – it‘s a temporary setback only.Gold in the SpotlightBoth gold and gold miners rebounded strongly yesterday as the futures touched $1,680. Rising volume behind both moves, yet a partial retreat before the close – not really worrying. The key point to note is the higher high miners made when compared to their pre-Mar 08 levels.Gold‘s Force index is likely to cross over into positive territory finally again, and the open question is for how long it remains there. Thus far, there is no reason to doubt the rebound‘s veracity. The missing piece in the puzzle is the copper to Treasury yields ratio, which should better start confirming the upswing so as to lend it more credibility.Silver, Platinum and CopperSilver jumped higher as well, being a little weaker than the yellow metal in comparison, which is fine given the upcoming precious metals upleg being led by the king of metals. The key move happened in copper, which would truly power the upswing once it clears the $4.10 zone. The other side of the coin is where would the 10-year Treasury yield trade at that time, of course.SummaryS&P 500 is likely to challenge the 4,000 mark before too long, and the stock market bull top remains very far in sight thereafter still.Precious metals rebounded, and miners confirm the gold move. Once the commodities consolidation is over and copper joins in the party, the sky would get clearer for both metals sensing the upcoming Fed (yield curve control) move.
New York Climate Week: A Call for Urgent and Collective Climate Action

S&P 500 Fireworks and Gold Going Stronger

Monica Kingsley Monica Kingsley 05.04.2021 15:13
Bullish run in stocks is on, driven by tech gains and value swinging higher as well. Throughout the markets, risk-on has been making a return as long-dated Treasury yields retreated, dollar fell and commodities continue their bullish flag formation. As I have tweeted on Thursday, it were the investment grade corporate bonds that signalled the turnaround in yields spreading to TLT next. Given such a constellation, the dollar‘s appeal is taking a dive as the bond market gets its reprieve. When nominal yields retreat while inflation (and inflation expectations) keep rising, real rates decline, and that leads to dollar‘s decline.Stocks are more focused on the tidal wave of liquidity rather than the tax increases that follow behind. So far, it‘s still reflation – tame inflation expectations given the avalanche of fresh money, real economy slowly but surely heating up (non-farm payrolls beat expectations on Friday), and not about the long-term consequences of tax hikes:(…) Reduction in economic activity, unproductive moves to outset the effects, decrease in potential GDP? Remember the time proven truth that whatever the percentage rate, the government always takes in less than 20% GDP in taxes. The only question is the degree of distortions that the tax rate spawns.And as the falling yields were embraced by tech with open arms, the sector‘s leadership in the S&P 500 upswing is back. As you‘ll see further on, the market breadth isn‘t pitiful either – slight non-confirmation yes, but I am looking for it to be gradually resolved with yet another price upswing, and that means more open profits (that‘s 7 winning stock market 2021 trades in a row).The Fed thus far quite succeeded in passing the inflation threat off as transitory, but the rebalancing into a higher inflation envrionment is underway – just look at the bullish consolidation across many commodities.The crucial copper to 10-year Treasury yield ratio is slowly turning higher as the red metal defends gained ground, oil rebound is progressing and lumber is moving to new highs. And don‘t forget the surging soybeans and corn either. Apart from having positive influence upon S&P 500 materials or real estate sectors, precious metals have welcomed the turn, rebounding off the double bottom with miners‘ leadership and silver not getting too hot yet. And that‘s positive for the white metal‘s coming strong gains – let alone the yellow one‘s.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Its InternalsSlightly lower volume during the whole week and Friday is merely a short-term non-confirmation. It isn’t a burning issue as stocks closed the week on a strong note. The bullish price action on the heels of improving credit markets and technology-led S&P 500 upswing, has good chances of going on.See by how much market breadth improved vs. Thursday – both the advance-decline line and advance-decline volume turned reasonably higher, and given the tech leadership in the upswing, new highs new lows merely levelled off. For them to turn higher, value stocks would have to step to the fore again.Credit MarketsThe high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio confirmed the stock market upswing with its own bullish move, and the two are overlaid quite nicely at the moment. No whiff of non-confirmation here.Tech and ValueTech (XLK ETF) rose strongly, and value stocks (VTV ETF) stocks more than defended prior gains. Even financials (XLF ETF) moved higher, regardless of the rising Treasuries. The breadth of the stock market advance isn‘t weak at all, after all.Gold in the SpotlightLet‘s quote the assessment from my Easter update:(…) There had been indeed something about the gold decoupling from rising Treasury yields that I had been raising for countless weeks. The rebound off Mar 08 low retest is plain out in the open, miners keep outperforming on the upside, and the precious metals sector faces prospects of gradual recovery, basing with a tendency to trade higher before the awaited Fed intervention on the long end of the curve comes – should the market force its hand mightily enough. Either way for now, given the rising inflation and inflation expectations, a retreat in nominal rates translates into a decline in real rates, which is what gold loves.That‘s the dynamic of calm days – once the Fed finally even hints at capping yields, expect gold fireworks. Remember, the ECB, Australia and others are in that fight at the long end of the curve already. And with so much inflation in the pipeline as the PPI underscores, an inflationary spike is virtually baked in the cake.Another weekly gold chart, this time with miners overlaid. Since the Mar 08 bottom, their outperformance has become very apparent, and miners made a higher high as gold approached the bottom last week. Coupled with the waning power of the sellers, these are positive signs for the precious metals sector.Gold‘s daily chart reveals the rebound‘s veracity – just as sharp as the dive to the second bottom was. Silver moved higher, scoring smaller gains than the yellow metal, which isn‘t however an issue as the white metal tends to outperform in the latter stages of precious metals upswings. We aren‘t there yet, and haven‘t seen it outperform in mid-Mar either.SummaryS&P 500 has challenged and conquered the 4,000 mark, and the upswing‘s internals keep being aligned bullishly. No sharp correction in sight indeed.Precious metals rebound lives on, accompanied by the miners‘ outperformance. Copper and many commodities keep consolidating, which is actually bullish given the retreat in yields. Another confirmation of the approaching upleg in commodities and precious metals as inflation starts running hotter and hotter.
US Industry Shows Strength as Inflation Expectations Decline

New S&P 500 Highs or Metals Rising?

Monica Kingsley Monica Kingsley 06.04.2021 15:59
Bullish run in stocks is on, driven by tech gains and value not yielding an inch. A rare constellation given the the long-dated Treasuries performance especially – as if the narratives were flipped, and value „could“ move up on rising yields. Well, liquidity and bets on the stocks benefiting from the coming infrastructure bill. Any way you look at it, the market breadth is positive and ready to support the coming upswing continuation, even though I look for a largely sideways day in stocks on Tuesday given the aptly called fireworks to happen yesterday. Sizable long profits in stock market trades #6 and #7 have been taken off the table – 149 points in my Standard money managements, and 145 points in the Advanced money management that comes on top.Both the VIX and put/call ratio are at extended levels – the first below 18 (formerly unimaginable to stock market non-bulls), the second approaching local lows again. As I have written yesterday:(…) Throughout the markets, risk-on has been making a return as long-dated Treasury yields retreated, dollar fell and commodities continue their bullish flag formation. As I have tweeted on Thursday, it were the investment grade corporate bonds that signalled the turnaround in yields spreading to TLT next. Given such a constellation, the dollar‘s appeal is taking a dive as the bond market gets its reprieve. When nominal yields retreat while inflation (and inflation expectations) keep rising, real rates decline, and that leads to dollar‘s decline.It‘s the (extra Archegos related?) liquidity that has helped to erase quite steeper intraday decline in the long-dated Treasuries (TLT ETF) but the dollar took it on the chin. Quoting my yesterday‘s dollar observations:(…) As I have tweeted on Thursday, it were the investment grade corporate bonds that signalled the turnaround in yields spreading to TLT next. Given such a constellation, the dollar‘s appeal is taking a dive as the bond market gets its reprieve. When nominal yields retreat while inflation (and inflation expectations) keep rising, real rates decline, and that leads to dollar‘s decline.The Fed thus far quite succeeded in passing the inflation threat off as transitory, but the rebalancing into a higher inflation envrionment is underway – just look at the bullish consolidation across many commodities.Apart from oil, there have been quite a few commodity moves up yesterday – copper leading the rebound out of its sideways pattern, lumber reaching for new highs, agrifoods far from breaking below consolidation lows. These are the pockets of strength as the $CRB index moved down yesterday.Not the case of precious metals, if a joint view is taken. The rebound off the double bottom goes on, miners are in the pool position (senior ones, that is), and silver isn‘t reaching for the stars yet.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookQuite an overshoot above the mid-Feb and mid-Mar highs, daily indicators are quite extended, and sideways trading today would be a bullish achievement. The upswing continuation next isn‘t in jeopardy in the least though.Credit MarketsThe high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio is trading in lockstep with the stock market upswing, sending no warning signs.Tech, Finance and UtilitiesTech (XLK ETF) rose strongly, and financials (XLF) as one of the value stocks (VTV ETF) bellwethers moved higher regardless of the intraday turn in TLT, which was however embraced by defensives such as utilities (XLU ETF). Quite good market breadth still.Gold and SilverGold not moving much while miners rose still, which is bullish for the full precious metals sector – the upswing simply continues, and as each of the resistances ($1,760s being the next one) is cleared, the odds of no retest of the second bottom rise. Needless to say, seeing gold and miners roll over from here, wouldn‘t be a bullish development at all.Silver didn‘t rise yesterday, which is of little consequence though, as the white metal is famed for moving in bursts at times. Given the copper performance, especially in the face of barely budging Treasury yields, both precious metals stand a good chance of rising today. The degree of miners‘ outperformance would provide further clues.SummaryS&P 500 run above 4,070 is likely to be consolidated but I‘m not looking for a sharp correction starting here in the least. Tech could face short-term headwinds now given its upcoming resistance test, but that‘s about it.Precious metals rebound goes on, with the miners still outperforming. Copper though appears pointing the way higher now too as the approaching upleg in commodities and precious metals in response to inflation running hotter and hotter, gains traction.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II

Chris Vermeulen Chris Vermeulen 06.04.2021 20:49
In this second part of our exploration of the recent US Dollar rally and what it may be reacting to in relation to the current US stock market highs and continued rally, we will explore some of the underlying factors that are translating into US Dollar strength while the US stock market continues to push higher.In the first part of this research article, we highlighted the US Dollar reaction to the 2008-09 credit market crisis and how the US Dollar actually started to bottom/rally in early 2008 – just as the rollover top in the US stock markets continued to setup.  The way the US Dollar reacts to stress factors in the global markets is to strengthen as a safe haven as capital is constantly seeking the best environment for investment and profits.  When the markets enter a period of turmoil, the US Dollar typically begins to strengthen before the global markets really begin to react to the fear or turmoil.The recent news of large financial institutions and hedge funds taking large losses and closing operations is somewhat similar to the Lehman event of 2008.  These types of larger corporate debt collapses have wide-range global market effects.  Sometimes, these events can ripple into other global corporations who engaged in this level of financing or credit functions.  For example, Credit Suisse's attempt to recoup potential losses from the Greensill collapse may be a very complicated and fruitless process according to a recent Wall Street Journal article.Weekly US Dollar Shows Uptrend StartingThe current US Dollar Weekly chart, below, shows how the US Dollar has strengthened over the past 3 months and how this current uptrend aligns with the $89 lows from early 2018.  One of the most interesting aspects of this chart is the peak in early 2020, as the COVID-19 virus market collapse bottomed, which was followed by an extended decline.  As mentioned earlier, the US Dollar acts as a safe haven during times of uncertainty and chaos.  Obviously, the initial COVID-19 market selloff prompted quite a bit of uncertainty and chaos, prompting the US Dollar to rise nearly 9% in just two weeks.  Does the current upside trending in the US Dollar translate into more uncertainty and chaos in the markets?Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The recent bottom on this Weekly US Dollar chart happened on January 6, 2021. This was the day that Congress certified the US state electors.  It was also the day that chaos took place in Washington DC.  From that point onward, the US Dollar began a decidedly upward price trend.  Since that low on January 6, the US Dollar has risen over 4.60%.  Over that same time, the SPY has rallied more than 7.5%, which obviously fails to show any US or global market concerns.Weekly Smart Cash vs. US Dollar CorrelationsThe following chart shows the US Dollar (as a GOLD line) and our Custom Smart Cash Index (as a BLUE line) and highlights the threshold of the US Dollar that usually prompts a breakdown in price in the stock market.  The ORANGE threshold level on this chart for the US Dollar is 94.10 and the PURPLE threshold level on this chart 99.50.  Once the US Dollar reaches levels above the ORANGE threshold, the SPY becomes much more volatile and tends to retrace lower over time.  Once the US Dollar reaches above the PURPLE threshold, it appears the US Dollar reaches major resistance, stalls, and contracts, which prompts a fairly large upside price trend in the SPY.Currently, the US Dollar Index is trading just above 93.00 and it just 1.1 away from the ORANGE threshold.  Should the US Dollar continue to rally over the next few weeks and months, our research suggests the US stock market will enter a period of increased volatility with broad sector trending/rotation.  As you can see on this chart, near the end of 2018, the US Dollar Index rallied above the ORANGE threshold while the Custom Smart Cash Index entered a period of extended price volatility (2019 through the COVID-19 bottom in 2020).  Once the US Dollar Index fell back below the ORANGE threshold (July/August 2020), the Custom Smart Cash Index began to rally estensively.The current rally in the US stock market will likely continue until the US Dollar Index moves comfortably over the ORANGE threshold, there is a strong possibility the US stock market will enter a period of extended volatility and trending.  That means that the current bullish price trend may enter a broader rally phase – targeting a new excess phase peak.  Or, it may shift into more of a sideways price trend with a broad range of price rotation – like what happen in 2015 to 2016.Interestingly enough, near the end of 2016, as the US stock market bottomed and began to rally, the sectors that lead that rally included precious metals, miners, utilities, regional banking, and technology (later in 2017).  This suggests we need to watch metals & miners as well as utilities and regional banking sectors later in 2021.Currently, the leading sector trends are Real Estate, REITS, US Financials, Global Infrastructure, Global Natural Resources, Technology, Consumer Services, and Aerospace & Defense.  These leading sectors suggest many traders/investors believe the next few years will be filled with various advantages in technology, raw materials, consumer activities and infrastructure/defense spending.  Get ready for some really big trends in various sectors and be prepared to jump into some of these bigger trends.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those sectors that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.For those who believe in the power of trading sectors that show relative strength and momentum but don’t have the time to do the research every day, let my BAN Trader Pro newsletter service do all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my BAN Trader Pro subscribers.Happy Trading!
On the Verge of Stocks Pullback

On the Verge of Stocks Pullback

Monica Kingsley Monica Kingsley 07.04.2021 15:51
S&P 500 is still consolidating Monday‘s sharp gains, showered with liquidity. Yet it seems that eking out further gains is getting harder as the price action took the index quite far from its key moving averages. If I had to pick one sign of stiffer headwinds ahead, it would be the tech sector‘s reaction to another daily retreat in Treasury yields – the sector didn‘t rally, and neither did the Dow Jones Industrial Average. Value stocks saved the day, and it appears we‘re about to see them start doing better again, relatively speaking.Yes, the risk-reward ratio for the bulls is at unsavory levels in the short run. What about being short at this moment then? It all depends upon the trading style, risk tolerance and time horizon. I‘m not looking for stocks making a major top here as the bull run is intact thanks to:(..) Well, liquidity and bets on the stocks benefiting from the coming infrastructure bill. Any way you look at it, the market breadth is positive and ready to support the coming upswing continuation, even though I look for a largely sideways day in stocks on Tuesday given the aptly called fireworks to happen yesterday. Sizable long profits in stock market trades #6 and #7 have been taken off the table – 149 points in my Standard money managements, and 145 points in the Advanced money management that comes on top.My prognosis for yesterday‘s session materialized, and we have seen quite a record number (around 95%) of stocks trading above their 200-day moving averages, which is similar to the setup right after the post-dotcom bubble bear market 2002/3 lows, or 1-2 years after the bull market run off the Mar 2009 lows. Hard to say which one is more hated, but I see the run from Mar 2020 generational low as the gold medal winner, especially given the denial accompanying it since.Gold made a run above $1,740 in line with retreating yields and copper not giving up much gained ground, but the immediate run‘s continuation to the key $1,760s or even better above $1,775 looks set to have to wait for a few sessions. I don‘t expect today‘s FOMC minutes release to change that. While the metals are likely to take their time, the healthy miners‘ outperformance supports its continuation once the soft patch we appear entering, is over.The Thursday called dollar downswing is playing out, putting a floor below the commodities, which are undergoing a much needed correction from their late Feb top. It‘s not over yet, and the shy AUD/USD upswing is but one clue. Given the oil price meandering around $60 (by the way, not even the unlikely decline to $52 would break black gold‘s bull run), the USD/CAD performance as of late is disappointing, as the greenback got mostly stronger since mid Mar. More patience in the commodities arena appears probable as we‘re waiting for both Treasury yields and inflation expectations to start rising again.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe SPX headwinds are readily apparent, and a brief pullback would be healthy. Don‘t look though for too much downside.Russell 2000 and Emerging MarketsSmallcaps are still underperforming for now, but emerging markets scored gains thanks to improving yield differentials and another down day in the world reserve currency.Focus on TechnologyTech (XLK ETF) was the key retreating sector yesterday – little wonder the mid Feb resistance it‘s approaching. The big names ($NYFANG, black line) are lagging behind still, showing that the sector got a little ahead of itself on a short-term basis.Gold and SilverGold‘s Force index finally crossed into positive territory, but the yellow metal isn‘t taking yet advantage of retreating yields in a visually outstanding way. Quite some resistance in the $1,740s needs to be cleared first, which would likely take a while, but the rally‘s internals are still on the bulls‘ side.Gold miners keep strongly outperforming the yellow metal, with the seniors (GDX ETF) doing particularly great – better than gold juniors or silver miners. Seeing signs of the silver sector getting too ahead, wouldn‘t likely be bullish at all unless sustained – at the current stage, I can‘t underline these words enough in the ongoing physical silver squeeze.Gold to Silver RatiosSince the gold bottom was hit in early Mar (that‘s still the leading hypothesis), the precious metals‘ leadership has moved to the yellow metal – and it‘s visible in both the gold to silver ratio and gold miners to silver miners one. The time for the white metal to (out)shine would come, but clearly isn‘t and won‘t be here any day now.SummaryS&P 500 is likely to keep consolidating gained ground, and (shallow) bear raids wouldn‘t be unexpected here – in spite of solid corporate credit markets performance. Yet, it‘s the extraordinary nature of VIX trading and put/call ratio moves, that point to the bull market run as intact and merely in need of a breather.Precious metals are likely to run into short-term headwinds before clearing out the next major set of resistances above $1,760s. The upswing though remains healthy and progressing, and will be led by the gold sector.
New York Climate Week: A Call for Urgent and Collective Climate Action

Navigating the Tidal Wave of Liquidity

Monica Kingsley Monica Kingsley 08.04.2021 15:50
S&P 500 moved marginally higher in spite of its short-term very extended position, powered by liquidity and almost defying the odds. Credit markets were hinting at deterioration, the yen carry trade I talked a week ago has run into a brick wall as viewed by the USD/JPY exchange rate reversal – but stocks didn‘t listen, and their market breadth indicators are actually quite healthy.We‘re still in the rare constellation I discussed two days ago – Treasury yield moves are exerting no real pressure either on value stocks or technology including heavyweights, which are picking up the tech upswing slack. Microrotations still pointing higher are the name of the game, on the wave of infrastructure bill expectations as well.Still, the risk-reward ratio for the bulls is at unsavory levels in the very short run even as the longer time frame perspectives remain really bright. Consider these points made yesterday:(…) we have seen quite a record number (around 95%) of stocks trading above their 200-day moving averages, which is similar to the setup right after the post-dotcom bubble bear market 2002/3 lows, or 1-2 years after the bull market run off the Mar 2009 lows. Hard to say which one is more hated, but I see the run from Mar 2020 generational low as the gold medal winner, especially given the denial accompanying it since.Gold kept its run above $1,740 intact and regardless of the daily weakness in the miners – should that one be repeated more consistently, it would become worrying for the bulls. Looking though again at the USD/JPY chart, I‘m increasingly optimistic that the currents working against the king of metals, have turned. That‘s because whenever yen, the currency perceived by the market place as a safe haven one, strengthens, gold tends to follow its cue – and that‘s where we are now. The precious metals run to the key $1,760s or even better above $1,775 is approaching, and has already sent my open gold position solidly into the black. The soft patch I cautioned against at the onset of yesterday‘s session, has materialized in the miners, and might be very well over by today‘s closing bell. Yes, I look for mining stocks to reverse yesterday‘s weakness even in the competition for money flows with the S&P 500 holding up gained ground.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 keeps hugging the upper border of Bollinger Bands, and the willingness to trade at these extended levels, has decreased as the volume shows. Long-term investors correctly perceive higher highs as coming, short-term ones view the entry point as unfavorable.Credit MarketsBond markets wavered yesterday – both corporate and Treasury ones. Yet, note the turn higher in both high yield corporate bonds and investment grade ones, defying TLT – this bodes well for the stock market upswing health.Focus on Technology and ValueTech (XLK ETF) reversed its Tuesday‘s retreat, and $NYFANG (lower black line) powered upwards while value stocks (upper black line) or Dow Jones Industrial Average didn‘t yield an inch. The advance is broad-based but tech heavyweights might take a moment in overcoming their mid-Mar highs.Inflation ExpectationsThe Treasury inflation protected securities to long-dated Treasuries (TIP:TLT) ratio appears ready to move upwards, and the rising yields are clearly doubting its recent dip.Gold in the SpotlightGold miners compared to gold, don‘t paint a daily picture of strength. Jumping to conclusions on account of the hanging man formation in gold, would be premature though.Zooming out, the weekly gold chart with overlaid copper to 10-year Treasury yield, paints a picture of (bullish) turnaround and decoupling. Gold has been clearly attempting to move higher lately, and that will reflect upon the precious metals complex positively as it undergoes its own rotations lifting gold, silver or miners at different stages and magnitudes.SummaryS&P 500 is likely to keep consolidating gained ground, and (shallow) bear raids wouldn‘t be unexpected here – in spite of the strong market breadth. We‘re witnessing VIX trading well below 20 for four sessions in a row while the put/call ratio has risen to the approximate midpoint of its usual range – the bull market is intact, and a breather wouldn‘t be surprising here.Miners moving higher again is the first step to power gold upwards sustainably again, but the shifting currency winds would help here as strengthening yen would facilitate beating the next major set of resistances above $1,760s.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Mining Stocks: A House Built on Shaky Ground

Finance Press Release Finance Press Release 08.04.2021 16:43
It’s tempting to say that miners are showing strength compared to gold based on the GDX’s performance, but other mining proxies say otherwise.Just because a house is standing doesn't mean its foundations are solid, and that's exactly the case with the miners.There’s one extra thing that I would like to point out about mining stocks’ technical picture today (Apr. 8), and that’s their performance relative to gold.Some investors might say that mining stocks are showing strength compared to gold as the GDX to gold ratio broke above its declining resistance line.However, I don’t think it’s fair to say so. I think that seeing a breakout in the GDX to gold ratio is not enough for one to say that the miners to gold ratio is breaking higher.After all, the GDX ETF is just one proxy for mining stocks, and if miners were really showing strength here, one should also see it in the case of other proxies for the mining stocks when compared to gold.For instance, the HUI Index to gold ratio, the XAU Index to gold ratio, and the GDXJ ( junior mining stocks ) to gold ratio.There is no breakout in the HUI to gold ratio whatsoever. In fact, the ratio is quite far from its declining resistance line. Even if we chose other late-2020 tops to draw this line, there would still be no breakout.There is no breakout in the XAU to gold ratio either. The previous attempts for the XAU to gold ratio to rally above their 2020 high marked great shorting opportunities, which is very far from being a bullish implication.But the most bearish implication comes from gold’s ratio with another ETF – the GDXJ.The GDXJ to gold ratio actually provides a sell signal, as the tiny breakout above the declining resistance line was already invalidated.Five out of five previous attempts to break above the declining resistance line failed and were followed by short-term declines. Is this time really different?It seems to me that the five out of five efficiency in the GDXJ to gold ratio is more important than a single breakout in the GDX to gold ratio, especially considering that it was preceded by a similar breakout in mid-March. That breakout failed and was followed by declines.Taking all four proxies into account, it seems that the implications are rather neutral to bearish. Especially when taking into account another major ratio - the one between HUI and S&P 500 is after a major, confirmed breakdown.All in all, the implications of mining stocks’ relative performance to gold and the general stock market are currently bearish.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
US Industry Shows Strength as Inflation Expectations Decline

Stocks: Q1'2021 earnings reports coming!

Kseniya Medik Kseniya Medik 09.04.2021 15:21
What will move the market on April 12-16? The third full week of April is expected to be relatively quiet on Forex - with a few exceptions. Primarily, it will be the Reserve Bank of New Zealand that announces its Cash Rate on Wednesday – that may create shifts in NZD/USD and other pairs with NZD. Also, Australian labor authorities will announce the Employment Change and Unemployment Rate – some upbeat data may push AUD. Other than that, no major events are planned for the Forex week. In the meantime, the stock market is opening the earnings reports season – that’s the prime time for stock market movers. The US corporate landscape may be experiencing turbulence through the middle of the next month. Therefore, fasten your seatbelts, and prepare to see your stocks moving in MT5 and FBS Trader. Trade ideas JPMorgan and Goldman Sachs These major banks will release their earnings on Wednesday before the US market open. Both brought strong financial performance results in the previous quarter, and the market is not expecting any less than that this time. Both stocks are now slightly below the recently made all-time highs and will likely beat them if the outlook is optimistic. Bank of America and Citigroup Another couple of the largest US banks, these two are notably different in their stock price performance. While BAC has been pretty bullish lately – probably, the most bullish among all the banks – and its stock has been busy making a new all-time high, Citigroup has not yet reached the pre-virus levels. That’s why the release of the earnings report may be crucial for Citi to possibly form a stronger uptrend. That is, if investors are satisfied with the results on Thursday. PepsiCo PepsiCo releases its earnings report on Thursday, too. Its stock price performance has been notably turbulent, with a clear resistance in the area of $145-147: this was the pre-virus all-time high that was challenged only once since the virus kicked in. In December, the stock price moved up and even inched above it but then plunged to $130 – another key level that has been supporting the stock price all along since May. Currently, Pepsico stock is very close to the resistance area again. Therefore, a strong earnings report may finally push it through to new all-time highs. General Electric Friday will bring us the report of General Electric. This stock’s performance has been quite peculiar: it was going flat until the very end of 2020 where it suddenly took off to currently trade slightly above the pre-virus high that corresponds to an important level of 2018. Beating that level and moving into the upside may start a whole new strategic uptrend for General Electric which has done a lot to restructure its financial layout and make investors happy. You can trade stocks in the FBS Trader app or in MetaTrader 5!
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

The Curious Staircase Rally in Stocks

Monica Kingsley Monica Kingsley 09.04.2021 15:58
Another day of tiny S&P 500 gains defying gravity, boosted by overnight price action. Well, liquidity overpowering junk corporate bonds opening with a bullish gap only to partially close it. With some credit market hints at deterioration present, the yen carry trade is getting a new lease on life today, and that‘s generally bullish for risk-on assets such as stocks – but not really for precious metals.With all the Fed support, the Powell bid is in, affecting „traditional“ sectoral dynamics of rotation. Value is probably about to feel the heat if you look at the very long lower knot in financials (XLF ETF) yesterday. Yes, this interest rate sensitive sector still rose in the face of long-dated Treasuries‘ gains. Needless to say, technology loved that, and its heavyweights ($NYFANG) keep driving the sector up. It looks to be a question of time before Tesla (TSLA) joins – Square (SQ) already did.The key question is the rotation‘s degree – now that the yields appear ready to retreat still a little more (the 10-year yield appears targeting the low 1.50% figure if not declining further), which is what technology anticipates even though utilities and consumer staples have been dragging their feet a little lately. But value stocks aren‘t selling off in the least (yet?). Is the TINA still strongly in effect when those stock market segments that could have been expected under more stringent monetary policy to be sold, aren‘t no more? Rising tide lifting really all boats – in stocks.Gold has retreated from yesterday‘s almost $1,760 highs accompanied by continued miners‘ outperformance. That‘s likely on account of the yen getting under pressure today, even though gold defended the Mar 08 bottom in spite of $USDJPY peaking in the closing days of Mar. The yellow metal is still sensitively reacting to the nominal yield moves, which are serving as a tailwind – both in the short run and when you zoom out and add copper into the picture (final chart of yesterday‘s analysis).One of the key things that I am still waiting for before declaring the gold bottom to be absolutely in, is its run above the key $1,760s or even better above $1,775 level. Let‘s though first watch for the miners not running out of steam.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 keeps hugging the upper border of Bollinger Bands, yet the willingness to trade at these extended levels has slightly returned yesterday. Hard to time any bear raid in these circumstances really.Credit MarketsVery tight correlation indeed as the high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio keeps tracking the stock market moves. Not even the HYG volume picked up yesterday, making it impossible to call for a turnaround as investment grade corporate bonds (LQD ETF) keep rising in sympathy with TLT.Technology and ValueTech (XLK ETF) sprang to new highs on TLT erasing its Wednesday‘s losses while value again kept gained ground. Broad-based advance not pointing to much downside really unless $NYFANG turns in earnest.Gold and SilverGold turned strongly higher on the retreat in rising nominal yields (even as inflation expectations ticked lower yesterday) and the yen tailwind, but the volume behind the rally off the second imperfect bottom, is quite weak overall (concerning).Silver joined in yesterday‘s party, and both copper and platinum moved higher as well. Seeing the white metal not spiking yesterday is actually a positive sign of the precious metals upswing health, daily woes notwithstanding.Crude OilPrecious few directional signals in oil, yet higher prices are still favored by the oil index ($XOI). This consolidation is still relatively young, and not even a crash to roughly $52.50 would break the uptrend.SummaryS&P 500 keeps consolidating in a vulnerable and stretched position, yet offers no signs of an immediate retracement of a portion of prior gains. The current setup is unfavorable for short-term oriented (bullish leaning) traders who prefer higher signal clarity to the tight correlation we‘ve seen this week.After yesterday‘s fireworks, miners hold the key in today‘s session as the $1,760s are still a tough nut to crack – the precious metals‘ upswing health will be tested.
The SPY Is Nearing Resistance @ $410... Read On To Find Out What Is Next

The SPY Is Nearing Resistance @ $410... Read On To Find Out What Is Next

Chris Vermeulen Chris Vermeulen 09.04.2021 21:49
My shorter-term analysis for the markets continues to stay Bullish and suggests the US reflation trade, the strengthening of the US and the global economy, and recovery from the COVID-19 restrictions will likely prompt a moderately strong upside price trend leading into at least mid Q2:2021.  The recent strength of the US Dollar is helping to push capital into the US markets as foreign investors attempt to shift capital away from Emerging Market and currency weakness and the Treasury Yield rallies seem to have indicated a moderate warning related to global central banks attempting to front-run inflation concerns.SPY Targeting $410, then $425 or higherIf the US Dollar continues to strengthen and foreign capital continues to flow into the US stock market, then my research team and I believe a continued “melt-up” bullish price trend will continue, similar to what happened in 2018~2019.  As we can see on the chart below, the upside price target for the SPY is $410.15.  Once that level is reached, we believe a moderate sideways Bull Flag will set up and prompt another upside price rally targeting $425~$430.The rally in the US stock market will likely continue until key factors break down.  We don't know what those key factors are going to be, but we are watching our custom indexes and proprietary price modeling systems to identify if and when that breakdown takes place.  Currently, we don't see any real risk to a sudden downside price trend based on our research.  Of course, some sudden collapse in the global credit/banking industry, war, or some other unknown externality could easily disrupt the current balance of the markets.Right now, we are targeting the $410 level on the SPY and expect the next leg higher to target $425~430.  We believe the current market environment supports a continued $24~$28 Fibonacci Expansion range stepping higher as moderate pullback events take place after reaching subsequent upside targets.  This “upward stepping” price pattern will likely continue as the reflation trade pushes a continued “melt-up” price event. Remember, our research may change suddenly if needed and the best way to stay ahead of these market setups/trends is to get my daily BAN Trader Pro pre-market video that covers the charts of the major indexes, bonds, gold and silver, and other asset classes and sectors delivered top your inbox every morning. As with all things, we make decisions based on what we know right now and not based on what may or may not happen as a guess.  Our research and custom indicators suggest a strengthening US Dollar will pull foreign capital investments into US sectors/stocks and likely prompt another “melt-up” type of trend over the next few weeks and months.Don’t miss the opportunities to profit from the broad market sector rotations we expect this year, which will be an incredible year for traders of my Best Asset Now (BAN) strategy.  You can sign up now for my FREE webinar that teaches you how to find, enter, and profit from only those Best Assets Now that have the most strength and momentum. Staying ahead of sector trends is going to be key to success in volatile markets.Lastly, take some time this weekend to check out all the great speakers at the Wealth 365 Summit, the world's largest online trading and investment conference. Make sure you register today!Have a great weekend!
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Stocks or Gold – Which Is in the Catbird Seat?

Monica Kingsley Monica Kingsley 12.04.2021 15:13
S&P 500 spurted higher after prior days of tiny gains. Still lining up the upper border of the Bollinger Bands on the daily chart, stocks keep defying gravity. But the corporate credit markets are sending a gentle warning sign as they failed to move higher in unison on Friday. Given the Fed support and liquidity injections talked on Friday:(…) the Powell bid is in, affecting „traditional“ sectoral dynamics of rotation. Value is probably about to feel the heat if you look at the very long lower knot in financials (XLF ETF) yesterday. Yes, this interest rate sensitive sector still rose in the face of long-dated Treasuries‘ gains. Needless to say, technology loved that, and its heavyweights ($NYFANG) keep driving the sector up. It looks to be a question of time before Tesla (TSLA) joins – Square (SQ) already did.The spanner in the works proved to be long-dated Treasuries as these gave up all intraday gains, and closed in a non-bullish fashion. The retreat in rising yields is running into headwinds, much sooner than the 10-year one could reach the low 1.50% figure at least. Value stocks and cyclicals such as financials appear calling it out, and both rose on Friday – and so did industrials and technology, all without tech heavyweights‘ help. Utilities and consumer staples went mostly sideways, disregarding the danger of yields about to rise again.The rotation simply isn‘t much there, and the TINA trade isn‘t letting much air to come out of the S&P 500 sectors that would be expected to sell off in a more relaxed monetary policy. Treasury holders keep demanding higher rates, disregarding the soft patch in inflation expectations since mid-Mar. And they‘re right in doing so, for the PPI missed badly on Friday – the development I had been anticipating since mid-Feb.Inflation in the pipeline is one of the reasons behind gold‘s resilience – and its continued rebound off the imperfect double bottom test.While the yellow metal‘s candlestick on Friday mirrors the USD/JPY one, the miners erased opening losses in a bullish show of outperformance. Given the continued consolidation in commodities keeping a partial lid on silver, that‘s bullish – gold appears sensing the upcoming pressure on the Fed to act once yields reach levels high enough to cause havoc across the markets, starting with stocks, just as I described on Mar 29.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 Outlook and Its InternalsS&P 500 keeps pushing higher, into the upper border of Bollinger Bands that are now widening. Taking into account prior week‘s Easter-shortened trading, the weekly volume behind the upswing just in, is considerably lower than before – and that‘s not bullish.Market breadth indicators aren‘t arrayed in an overly bullish way. Both the advance-decline line and advance-decline volume have been lately unconvincing, but at least new highs new lows turned up. They‘re still below the early April peak, revealing that not as many stocks are pushing to make new highs.Credit MarketsVery tight correlation between the high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio and the stock market ended on Friday, and it remains to be seen whether that was a one day occurence only. Investment grade corporate bonds (LQD ETF) gave up half of intraday gains as long-dated Treasuries declined – the downward pressure appears returning into the debt markets.Technology and FinancialsTech (XLK ETF) turned from the sector most heavily extended to the south of its 50-day moving average, to the north of it. And given the hesitation a ka reversal in TLT reflecting upon $NYFANG, the sector‘s steep gains are likely to meet a headwind soon – and value stocks appear to be anticipating that with an upswing of their own, reflected in the financials (black line).Inflation ExpectationsInflation expectations as measured by the TIP:TLT ratio are basing, but bond yields refuse to budge, clearly agreeing that there is higher inflation coming. Gold and SilverGold miners are keeping the sector above water, and the daily gold downswing becomes much less credible as a result.Silver and copper daily downswings are in line with the gold one – there is no indication of a pocket of underperformance in commodities or elsewhere about to spill over and exert pressure on the precious metals sector.SummaryS&P 500 upswing is leaving the index in a vulnerable position, and especially the tech‘s reversal is leaving it in a perched place where no sector is however being really sold off. The current setup is still unfavorable for short-term oriented (bullish leaning) traders who prefer higher signal clarity to the tight correlation we‘ve seen this week, even more so given the corporate credit markets non-confirmation.Miners did their job on Friday, and the precious metals upswing hasn‘t lost its spark in spite of both metals closing down. The $1,760s are still a tough nut to crack, but I look for these levels to be challenge in the near future.
New York Climate Week: A Call for Urgent and Collective Climate Action

Gold Miners: Corrections are Normal

Finance Press Release Finance Press Release 12.04.2021 16:41
Keep your eye on the ball. Just because the GDX ETF went up last week doesn’t mean that it’s in an uptrend. Corrections are part of the game.Just as the USD Index recently (last week) suffered a countertrend decline within a medium-term uptrend, so has the GDX ETF experienced a corrective upswing within a medium-term downtrend.Nothing moves in a straight line, so recent developments in both the gold miners and the USD Index are nothing to worry about. Everyone is still on track. Gold and the miners are headed for a medium-term downtrend and the USD Index is still gathering steam and will be leaving the station.With the gold miners attempting to dig themselves out of their 2021 hole, the labor of love could end as quickly as it began. With a temporary retreat of the USD Index last week and dormant U.S. Treasury yields doing much of the heavy lifting, the GDX ETF had plenty of help breaking down its wall of worry.However, with April showers likely to derail further construction activity, off-site momentum may not be as kind. Case in point: the GDX ETF is still trading below the neckline of its bearish head & shoulders pattern, and while the senior miners’ bounce above their March high may seem like a ground-breaking event, the synthetic strength is likely to hammer the miners over the medium term. Why so? Well, like a current running on extremely low voltage, Friday’s (Apr. 9) intraday bounce occurred on relatively low volume – with the positive momentum evaporating into the close.Please see below:As further evidence, the March/April corrective upswing took the form of a zigzag pattern, which is indicative of a countertrend move within a medium-term downtrend. In addition, if you analyze the chart above, notice how fits and starts were part of the senior miners’ price action back in January? In both cases, the GDX ETF moved above the declining blue resistance line and the 50-day moving average. Yet … the GDX ETF is lower now than it was then.Furthermore, back in January, the GDX ETF initially ignored gold’s daily (Jan. 6) weakness. Thus, Friday’s (Apr. 9) outperformance by the GDX ETF is far from an all-clear. In fact, it could be the final creak before the foundation crumbles.Some might say that mining stocks are showing strength compared to gold as the GDX to gold ratio broke above its declining resistance line.However, I don’t think it’s fair to say so. I think that seeing a breakout in the GDX to gold ratio is not enough for one to say that the miners to gold ratio is breaking higher.After all, the GDX ETF is just one proxy for mining stocks, and if miners were really showing strength here, one should also see it in the case of other proxies for the mining stocks when compared to gold.For instance, the HUI Index to gold ratio, the XAU Index to gold ratio, and the GDXJ ( junior mining stocks ) to gold ratio.There is no breakout in the HUI to gold ratio whatsoever. In fact, the ratio is quite far from its declining resistance line. Even if we chose other late-2020 tops to draw this line, there would still be no breakout.There is no breakout in the XAU to gold ratio either. The previous attempts for the XAU to gold ratio to rally above their 2020 high marked great shorting opportunities, which is very far from being a bullish implication.But the most bearish implication comes from gold’s ratio with another ETF – the GDXJ.The breakout in the GDXJ to gold ratio is only tiny and unconfirmed. These moves always (since Oct. 2020) provided sell signals – the small breakout below the declining resistance line were always invalidated and they were then followed by visible short-term declines.Five out of five previous attempts to break above the declining resistance line failed and were followed by short-term declines. Is this time really different?It seems to me that the five out of five efficiency in the GDXJ to gold ratio is more important than a single breakout in the GDX to gold ratio, especially considering that the latter was preceded by a similar breakout in mid-March. That breakout failed and was followed by declines.Taking all four proxies into account, it seems that the implications are rather neutral to bearish. Especially when taking into account another major ratio - the one between HUI and S&P 500 is after a major, confirmed breakdown.When the ratio presented on the above chart above is rising, it means that the HUI Index is outperforming the S&P 500. When the line above is falling, it means that the S&P 500 is outperforming the HUI Index. If you analyze the right side of the chart, you can see that the ratio has broken below its rising support line. For context, the last time a breakdown of this magnitude occurred, the ratio plunged from late-2017 to late-2018. Thus, the development is profoundly bearish.Playing out as I expected, a sharp move lower was followed by a corrective upswing back to the now confirmed breakdown level (which is now resistance). Mirroring the behavior that we witnessed in early 2018, after breaking below its rising support line, the HUI Index/S&P 500 ratio rallied back to the initial breakdown level (which then became resistance) before suffering a sharp decline. And with two-thirds of the analogue already complete, the current move lower still has plenty of room to run. Likewise, the early-2018 top in the HUI Index/S&P 500 ratio is precisely when the USD Index began its massive upswing. Thus, with history likely to rhyme, the greenback could spoil the miners’ party once again.In addition, the HUI to S&P 500 ratio broke below the neck level (red, dashed line) of a broad head-and-shoulders pattern and it verified this breakdown by moving temporarily back to it. The target for the ratio based on this formation is at about 0.05 (slightly above it). Consequently, if the S&P 500 doesn’t decline, the ratio at 0.05 would imply the HUI Index at about 196. However, if the S&P 500 declined to about 3,200 or so (its late-2020 lows) and the ratio moved to about 0.05, it would imply the HUI Index at about 160 – very close to its 2020 lows.All in all, the implications of mining stocks’ relative performance to gold and the general stock market are currently bearish.But if we’re headed for a GDX ETF cliff, how far could we fall?Well, there are three reasons why the GDX ETF might form an interim bottom at roughly ~$27.50 (assuming no big decline in the general stock market ):The GDX ETF previously bottomed at the 38.2% and 50.0% Fibonacci retracement levels. And with the 61.8% level next in line, the GDX ETF is likely to garner similar support.The GDX ETFs late-March 2020 high should also elicit buying pressure.If we copy the magnitude of the late-February/early-March decline and add it to the early-March bottom, it corresponds with the GDX ETF bottoming at roughly $27.50.Keep in mind though: if the stock market plunges, all bets are off. Why so? Well, because when the S&P 500 plunged in March 2020, the GDX ETF moved from $29.67 to below $17 in less than two weeks. As a result, U.S. equities have the potential to make the miners’ forthcoming swoon all the more painful.Also supporting the potential move, the GDX ETF’s head and shoulders pattern – marked by the shaded green boxes in the first chart above – signals further weakness ahead.I wrote previously:The most recent move higher only made the similarity of this shoulder portion of the bearish head-and-shoulders pattern to the left shoulder) bigger. This means that when the GDX breaks below the neck level of the pattern in a decisive way, the implications are likely to be extremely bearish for the next several weeks or months.Turning to the junior gold miners , the GDXJ ETF will likely be the worst performer during the upcoming swoon. Why so? Well, due to its strong correlation with the S&P 500, a swift correction of U.S. equities will likely sink the juniors in the process. Besides, junior miners have been underperforming recently even without general stock market’s help.Furthermore, erratic signals from the MACD indicator epitomizes the GDXJ ETF’s heightened volatility. Remember though that the MACD indicator is far from a light switch. While false buy signals often precede material drawdowns, the reversals don’t occur overnight. As a result, it’s perfectly normal for the GDXJ ETF to trade sideways or slightly higher for a few days before moving lower.Please see below:And unlike its senior counterpart, the GDXJ ETF cemented its relative underperformance by moving lower on Friday.So, how low could the GDXJ ETF go?Well, absent an equity rout, the juniors could form an interim bottom in the $34 to $36 range. Conversely, if stocks show strength, juniors could form the interim bottom higher, close to the $42.5 level. For context, the above-mentioned ranges coincide with the 50% and 61.8% Fibonacci retracement levels and the GDXJ ETF’s previous highs (including the late-March/early-April high in case of the lower target area). Thus, the S&P 500 will likely need to roll over for the weakness to persist beyond these levels.Some people (especially the permabulls that have been bullish on gold for all of 2021, suffering significant losses – directly and in missed opportunities) will say that the final bottom is already in. And this might very well be the case, but it seems highly unlikely. On a side note, please keep in mind that I’m neither a permabull nor a permabear for the precious metals sector, nor have I ever been. Let me emphasize that I’m currently bearish (for the time being), but about a month ago, we went long mining stocks on March 4 and exited this profitable trade on March 11.As another reliable indicator (in addition to the myriads of signals coming not only from mining stocks, but from gold, silver, USD Index, stocks, their ratios, and many fundamental observations) the Gold Miners Bullish Percent Index ($BPGDM) isn’t at levels that elicit a major reversal. The Index is now back at 40. However, far from a medium-term bottom, the latest reading is still more than 30 points above the 2016 and 2020 lows.Back in 2016 (after the top), and in March 2020, the buying opportunity didn’t present itself until the $BPGDM was below 10.Thus, with sentiment still relatively elevated, it will take more negativity for the index to find the true bottom.The excessive bullishness was present at the 2016 top as well and it didn’t cause the situation to be any less bearish in reality. All markets periodically get ahead of themselves regardless of how bullish the long-term outlook really is. Then, they correct. If the upswing was significant, the correction is also quite often significant.Please note that back in 2016, there was an additional quick upswing before the slide and this additional upswing had caused the $BPGDM to move up once again for a few days. It then declined once again. We saw something similar also in the middle of 2020. In this case, the move up took the index once again to the 100 level, while in 2016 this wasn’t the case. But still, the similarity remains present.Back in 2016, when we saw this phenomenon, it was already after the top, and right before the big decline. Based on the decline from above 350 to below 280, we know that a significant decline is definitely taking place.But has it already run its course?Well, in 2016 and early 2020, the HUI Index continued to move lower until it declined below the 61.8% Fibonacci retracement level. The emphasis goes on “below” as this retracement might not trigger the final bottom. Case in point: back in 2020, the HUI Index undershot the 61.8% Fibonacci retracement level and gave back nearly all of its prior rally. And using the 2016 and 2020 analogues as anchors, this time around, the HUI Index is likely to decline below 231. In addition, if the current decline is more similar to the 2020 one, the HUI Index could move to 150 or so, especially if it coincides with a significant drawdown of U.S. equities.In conclusion, akin to Humpty Dumpty, “all the King's horses and all the King's men” are unlikely to put the GDX ETF back together again. With the HUI Index to gold ratio, the XAU Index to gold ratio and the GDXJ ETF to gold ratio all splintering beneath the surface, the GDX ETF’s recent strength simply masks all of the cracks in the precious metals’ foundation. Furthermore, with the USD Index and U.S. Treasury yields threatening to swing the wrecking ball, the metals’ house of cards could soon face demolition. Thus, even though the long-term outlook for gold, silver , and mining stocks is very bullish, the short- and perhaps medium-term outlooks remain profoundly bearish, and investors that ignore the warning signs will likely find themselves submerged in the rubble.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Still a Bullish Fever in Stocks?

Monica Kingsley Monica Kingsley 13.04.2021 15:46
S&P 500 went nowhere yesterday – just like the prior Monday, heavy buying into Friday‘s close met no follow-up the day after. After almost touching 16 to close the week, VIX peeked higher yesterday only to reverse back down. Nice try but if you look at the put/call ratio turning down simulatenously, the alarm bells are far from ringing.The S&P 500 rise of late isn‘t without its good share of non-confirmations though. The ones seen in Russell 2000 and emerging markets got a fresh company in the corporate credit markets. No denying that the stock market is in a strong uptrend, but it got a bit too stretched vs. its 50-day moving average – a consolidation in short order would be a healthy move, but the CPI readings above expectations don‘t favor one today.If you look at the put/call ratio again, its lows throughout Mar and Apr haven‘t been reaching the really exuberant levels of prior months, hinting at a less steep path of S&P 500 gains. And what about the volume print as stocks went about making new highs? Not encouraging either, and it‘s not that rising yields would be causing trouble:(…) The retreat in rising yields is running into headwinds, much sooner than the 10-year one could reach the low 1.50% figure at least. Value stocks and cyclicals such as financials appear calling it out, and both rose on Friday.And financials had a good day yesterday too. Technology welcomed the reprieve, and the heavyweights joined in increasingly more. Again though, more than a little stretched, these $NYFANG generals are rising while the troops (broader tech) are hesitating, which makes a down day / consolidation quite likely, especially should the TLT retreat again. As I wrote yesterday:(…) The rotation simply isn‘t much there, and the TINA trade isn‘t letting much air to come out of the S&P 500 sectors that would be expected to sell off in a more relaxed monetary policy. And that‘s probably what gold is sensing as it grew weak yesterday. The rising yields aren‘t yet at levels causing issue for the S&P 500, but the commodities‘ consolidation coupled with nominal yields about to rise, has been sending gold down yesterday – and miners confirmed that weakness by leading lower. This would likely be a daily occurence only unless and until copper gives in and slides – that‘s because of the inflation expectations having stabilized for now, but Treasury yields not really retreating. Yes, gold misses inflation uptick that would bring real rates down a little again – and is getting one in today‘s CPI as we speak.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 is no longer trading above the upper border of Bollinger Bands, but volume isn‘t picking yet up either. That makes a largely sideways consolidation the more likely scenario here.Credit MarketsBoth high yield corporate bonds (HYG ETF) and the investment grade ones (LQD ETF) declined yesterday while long-dated Treasuries went nowhere – but the bullish spirits in stocks didn‘t evaporate proportionately. This non-confirmation isn‘t too pressing at the moment.Technology and ValueTech (XLK ETF) stumbled yesterday, and it wasn‘t because of $NYFANG (black line) – yet value stocks didn‘t sell off either during these lately turning vapid rotations.Smallcaps and Emerging MarketsThe long underperformance in both indices vs. the S&P 500 goes on, and is actually a stronger watchout than the corporate credit markets at the moment. Inflation ExpectationsInflation expectations as measured by the TIP:TLT ratio are basing, but bond yields are aiming higher again, making higher inflation on the horizon a virtual certainty.Gold, Silver and MinersThe daily underperformance in miners is worrying – this daily leadership to the downside, where gold and silver declined proportionately to each other. Given that commodities didn‘t point to greater weakness, I consider yesterday‘s precious metals downswing as a bit exaggerated. SummaryS&P 500 still appears as entering a consolidation, but I‘m not looking for way too much downside. The Big Tech names would decide, and if you look at Tesla doing well yesterday, the S&P 500 correction would play out rather in time than in price.Gold depends upon the miners‘ path, and nominal yields trajectory. Once more inflation spills over into CPI readings, that would work to negate temporary weakness caused by real rates pressures, which is what we are getting.
Boosting Stimulus: A Look at Recent Developments and Market Impact

New Day, New ATHs with Gold in the Wings

Monica Kingsley Monica Kingsley 14.04.2021 16:07
S&P 500 went up yet again yesterday, and the corporate credit markets‘ non-confirmation quite resolved itself. While the same can‘t be said about smallcaps or emerging markets in the least, S&P 500 doesn‘t care, and keeps up the staircase rally without real corrections to speak of.Not even intraday ones, unless you count the sharp and brief premarket one yesterday before the CPI figures came out. That‘s the result of the sea of liquidity in practice, and the avalanche of stimuli. The 1.50% yield scare on 10-year Treasuries is long forgotten, and technology welcomes every stabilization, every retreat from even quite higher levels, and value stocks barely budge. No real rotation to speak of and see here, move along.Such were my recent observations:(…) No denying that the stock market is in a strong uptrend, but it got a bit too stretched vs. its 50-day moving average – a consolidation in short order would be a healthy move, but the CPI readings above expectations don‘t favor one today.Talking gold prospects early yesterday:(…) And that‘s probably what gold is sensing as it grew weak yesterday. The rising yields aren‘t yet at levels causing issue for the S&P 500, but the commodities‘ consolidation coupled with nominal yields about to rise, has been sending gold down yesterday – and miners confirmed that weakness by leading lower. This would likely be a daily occurence only unless and until copper gives in and slides – that‘s because of the inflation expectations having stabilized for now, but Treasury yields not really retreating. Yes, gold misses inflation uptick that would bring real rates down a little again – and is getting one in today‘s CPI as we speak.CPI inflation is hitting in the moment, and its pressure would get worse in the coming readings. Yet the market isn‘t alarmed now as evidenced by the inflation expectations not running hot – the Fed quite successfully sold the transitory story, it seems. Unless you look at lumber, steel or similar, of course. None of the commodities have really corrected, and the copper performance bodes well for the precious metals too.The stalwart performance in the miners goes on after a daily pause as gold gathers strength and silver outperformed yesterday. Silver miners and gold juniors are pulling ahead reliably as well, not just gold seniors.The run on $1,760 awaits.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 is no longer trading above the upper border of Bollinger Bands, the price action remains bullish, and volume is ever so slowly picking up (sending weak early signs thereof), but the bulls better watch out for a catalyst forcing a down day once in a while again.Credit MarketsBoth high yield corporate bonds (HYG ETF) and the investment grade ones (LQD ETF) turned around yesterday, and so did long-dated Treasuries – and that supports the bullish spirits in stocks. It was indeed right to view the prior non-confirmation as not too pressing at the moment.Technology and ValueTech (XLK ETF) rose strongly yesterday, and so did the kingmaker $NYFANG (lower black line) and Tesla that I called out yesterday. But value stocks didn‘t sell off – a powerful testament to the TINA trades driving no real rotations to speak of as nothing gets really sold off just on its own.Gold and MinersGold isn‘t in a decline mode anymore, and appears picking up strength so as to take on the $1,760s. Volume is returning, and the current reprieve in rising yields is welcome.Miners returned to the limelight, and it‘s my view they would lead gold by breaking above their recent highs convincingly, as the tide in the metals has turned. Time and desirably a catalyst of such move, is all that is needed. Geopolitics (to the short-term rescue) or more unavoidable inflation data bringing down real rates, that‘s I am looking for next.Silver and MinersSee the gold and silver miners trading in lockstep, remember gold juniors as well, and you get this bullish picture where the whole precious metals sector is slowly coming back to the limelight. In case of silver, the return in volume is boding well for the days ahead – all without the classic signs of bearish isolated silver outperformance. SummaryS&P 500 and the still elusive consolidation – the Fed speakers won‘t likely trigger one today, but bulls, watch out for some daily downside with little to no warning in your plans, after all.Gold and miners‘ paths are aligned, and nominal yields trajectory is boding well for the days ahead when patience is still needed before the nearest resistances in both assets are taken out with conviction.
New York Climate Week: A Call for Urgent and Collective Climate Action

US Equities Climb A “Wall Of Worry” To New Highs

Chris Vermeulen Chris Vermeulen 14.04.2021 18:26
Low volume rallies have become a standard of trending recently.  We see higher volume when volatility kicks in near areas of broad market volatility.  Otherwise, we see lower volume trending push the prices higher recently in a “melt-up” type of mode.Two recent standout events confirm this type of trending and volatility phases of the markets: (1) the September 2020 to early November 2020 (pre-US Election) rotation in price; and (2) the recent February 2021 to late March 2021 sideways price rotation related to the FOMC meeting/comments.  Both of these events centered around external market components and prompted an extended period of price volatility related to uncertainty.  After these events passed, price fell back into a low volume rally mode for many months, where most of the actual price gains happened.The following Daily QQQ chart highlights my observations related to this type of price activity.  We start in the pre-COVID-19 price rally from October 2019 to the peak near mid-February 2020.  It is easy to see the decreased volume activity while prices climbed more than 27%.  Then, the COVID-19 even sent volatility skyrocketing higher and prices collapsed by 30%.  This type of “Wall Of Worry” trending is common and presents a very clear opportunity for traders.After the March 2020 bottom, prices began another low volume rally that lasted from April 2020 to August 2020 – totaling a substantial +45% gain.  Again, starting in mid November 2020 and ending in mid February 2021, the QQQ rallied over 15% in a low volume “melt-up” trend.Come watch over 60 investment and trading LEGENDS share their secrets with you for free – click here for your FREE TICKET!Currently, the volume has started to subside after the FOMC meeting/comments volatility and we are starting to see moderately strong upward price trending in the QQQ.  This suggests we have entered another “Wall Of Worry” trend which may continue for many weeks or months.The following Weekly XLY, SPDR Consumer Discretionary ETF chart highlights how diverse this “Wall of Worry” trend really is.  It translates into other sectors with almost the same velocity as it does in the QQQ.  In this example, we can see the strong trending, highlighted by GREEN ARROWS, at the same time as the decreasing volume took place.  Each of these rally trends coincides with the QQQ trends.  The rally from April 2020 to August 2020 represented a +35% gain.  The rally from November 2020 to February 2021 represented a +21% gain.  The current rally attempt has already advanced over 17% higher and may continue to rally for many more weeks.If there is no future disruption of this low volume trending, then we may expect to see the US stock market continue to move in this manner for many weeks or months to come.  These low-volume “Wall Of Worry” trends can be very profitable and can prompt big moves in sector ETFs.Many traders continue to miss opportunities in these markets because of worry or concerns of a breakdown in the trend. Eventually, something will prompt a correction or breakdown of this rally trend.  But until that happens, traders need to be able to identify and profit from these strong low volume rallies as they present some of the lowest volatility price advances recently. Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about the BAN strategy and how to identify and trade better sector setups by registering for my FREE Trading Course here. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Enjoy the rest of the week!
US Industry Shows Strength as Inflation Expectations Decline

Stocks, Gold and Commodities Meet the Fed

Monica Kingsley Monica Kingsley 15.04.2021 15:56
S&P 500 in the red – unprecedented. Don‘t pin your hopes too high for a (sharp) correction though. Yes, this time stocks listened to the weakening corporate credit markets, and the daily retreat in long-dated Treasuries inspired some profit taking in tech. Quite some run there as yields stabilized, which has turned XLK from very stretched to the downside of its 50-day moving average, to the upside extreme. Tesla also followed suit but I doubt this is a true reversal of tech fortunes.As stated yesterday:(…) That‘s the result of the sea of liquidity in practice, and the avalanche of stimuli. The 1.50% yield scare on 10-year Treasuries is long forgotten, and technology welcomes every stabilization, every retreat from even quite higher levels, and value stocks barely budge. No real rotation to speak of and see here, move along.CPI inflation is hitting in the moment, and its pressure would get worse in the coming readings. Yet the market isn‘t alarmed now as evidenced by the inflation expectations not running hot – the Fed quite successfully sold the transitory story, it seems. Unless you look at lumber, steel or similar, of course. None of the commodities have really corrected, and the copper performance bodes well for the precious metals too.And the Fed mightily confirmed the message yesterday, which is what commodities loved. Inflation has a free reign, all it has to do is to take advantage of it. And if I look at rising oil filtering into higher gasoline and food prices, the real inflation will keep on biting (even though black gold is excluded from CPI calculations).I don‘t expect these recent observations to change much, especially since we got the daily breather yesterday – but 3, let alone 2 red candles in a row? I haven‘t seen that in stocks for quite a while:(…) No denying that the stock market is in a strong uptrend, but it got a bit too stretched vs. its 50-day moving average – a consolidation in short order would be a healthy move, but the CPI readings above expectations don‘t favor one [on Tuesday].Precious metals didn‘t swing higher immediately, but I expect them to take the commodities‘ cue next. When Powell says the Fed isn‘t thinking about selling bonds back into the market, and that he learned a lesson (hello, late 2018), real rates aren‘t probably rising much any time soon. It appears to me a question of time before inflation expectations squeeze the nominal yields some more, which is what gold would love.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookDaily downswing on marginally higher volume that doesn‘t shift the perspective towards a corrective territory in the least. The correct question instead is probably whether the S&P 500 upswing reasserts itself the next day or the day after.Credit MarketsBoth high yield corporate bonds (HYG ETF) and the investment grade ones (LQD ETF) reversed to the downside yesterday, and long-dated Treasuries didn‘t have a good day either. The reversals are though not to be trusted as I look for the upswing in both to continue.Technology and ValueTech (XLK ETF) driven by $NYFANG (lower black line) and then also Tesla (TSLA), were the key underperformers yesterday. Value stocks kept moving higher, and higher SPX prices are more likely next in this no real rotations to speak of environment, courtesy of all the extra liquidity.Inflation ExpectationsYields are not rising, but aren‘t yet retreating either. Have the rising inflation expectations been banished? I‘m not convinced even though they aren‘t running hotter in the wake of PPI and CPI figures, which are bound to get worse next – if copper and oil are to be trusted (they are). Remember that this is the Fed‘s stated mission for now – to let inflation run to make up for prior periods of its lesser prominence. Gold in the LimelightNominal yields are gradually taking the pressure off the yellow metal as the miners keep outperforming gold. Seniors (GDX ETF) would lead gold by breaking above their recent highs convincingly (solidly above $35 on rising volume and bullish candle shape), as the tide in the metals has turned. The unavoidable inflation data bringing down real rates would do the trick.Silver, Copper and OilWhile silver recovered intraday losses, both copper and oil surged on the Fed reaffirmations. The table is set for miners and both precious metals to move higher next. outperformance.SummaryWhat a fast S&P 500 correction, how did you like it? The bulls have yet again reversed the setback in today‘s premarket session, and the slow grind higher keeps going on.Gold and miners are likely to take a cue from the surging commodities, and grow emboldened by the nominal yields retreat. Patience is still needed before the nearest resistances in both assets are taken out with conviction.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Gold Fireworks Doubt the Official Inflation Story

Monica Kingsley Monica Kingsley 16.04.2021 16:09
The S&P 500 red candle and then some – erased in a day, that‘s what you get with the Fed always having your back. The staircase climb certainly looks like continuing without any real breather. Whatever steep ascent you compare it to (Jun or early Sep 2020), this one is different in that it doesn‘t offer but token corrections. Not that it would be reasonable to expect a steep downswing given the tide of liquidity, but even sideways trading has become rarer than it used to be.With the VIX still below 17 and the put/call ratio in the middle of its slowly but surely less complacent range, the path of least resistance is higher – the signs are still aligned behind the upswing to go on: (…) Don‘t pin your hopes too high for a (sharp) correction though. Yes, [on Wednesday] stocks listened to the weakening corporate credit markets, and the daily retreat in long-dated Treasuries inspired some profit taking in tech. Quite some run there as yields stabilized, which has turned XLK from very stretched to the downside of its 50-day moving average, to the upside extreme. Tesla also followed suit but I doubt this is a true reversal of tech fortunes.Just at yesterday‘s moves – technology surged higher without too much help from the behemoths, and value stocks surged. Even financials ignored the sharp retreat in yields. Yes, that‘s the result of retails sales outdoing expectations and unemployment claims dropping sharply – the economic recovery is doing fine, manufacturing expands, and inflation doesn‘t yet bite. We‘re still in the reflationary stage where economic growth is higher than the rate of inflation or its expectations.Gold loved the TLT upswing and Powell‘s assurances about not selling bonds back into the market in rememberance of eating a humble pie after the Dec 2018 hissy fit in the stock market (isn‘t this the third mandate actually, the cynics might ask). I called for the sharp gains across the precious metals board sending my open position(s) even more into the black – both on Wednesday:(…) CPI inflation is hitting in the moment, and its pressure would get worse in the coming readings. Yet the market isn‘t alarmed now as evidenced by the inflation expectations not running hot – the Fed quite successfully sold the transitory story, it seems. Unless you look at lumber, steel or similar, of course. None of the commodities have really corrected, and the copper performance bodes well for the precious metals too.and Thursday:(…) Precious metals didn‘t swing higher immediately, but I expect them to take the commodities‘ cue next. When Powell says the Fed isn‘t thinking about selling bonds back into the market, and that he learned a lesson (hello, late 2018), real rates aren‘t probably rising much any time soon. It appears to me a question of time before inflation expectations squeeze the nominal yields some more, which is what gold would love.The stalwart performance in the miners goes on after a daily pause as gold gathers strength and silver outperformed yesterday. Silver miners and gold juniors are pulling ahead reliably as well, not just gold seniors.The run on $1,760 awaits.This is just the beginning, and as I had been repeatedly stating on Twitter:(…) The GDX closing convincingly above $35 would usher in great gold and silver moves.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookNew ATHs, again and this time on rising volume – the momentum still remains with the bulls even though the daily indicators are waning in strength, and as said earlier, $NYFANG causes a few short-term wrinkles.Credit MarketsThe high yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio performance got better aligned with the S&P 500 one, now that nominal yields have retreated.Smallcaps and Emerging MarketsReflecting the turn in the Treasury markets, both the Russell 2000 (IWM ETF) and emerging markets (EEM ETF) clearly turned higher, confirming the direction the S&P 500 has been on practically non-stop since late Mar.Inflation ExpectationsInflation expectations are going down, that‘s the conventional wisdom – and nominal yields duly follow. But the RINF ETF isn‘t buying the TIPS message all that much, proving my yesterday‘s point:(...) Have the rising inflation expectations been banished? I‘m not convinced even though they aren‘t running hotter in the wake of PPI and CPI figures, which are bound to get worse next – if copper and oil are to be trusted (they are). Remember that this is the Fed‘s stated mission for now – to let inflation run to make up for prior periods of its lesser prominence. Gold in the LimelightGold is surging higher ahead of the nominal yields retreat, as the bond vigilantes failed yet again to show up. In the meantime, the inflationary pressures keep building up...Gold, Silver and MinersAs stated the day before, seniors (GDX ETF) would lead gold by breaking above their recent highs convincingly (solidly above $35 on rising volume and bullish candle shape), as the tide in the metals has turned. The unavoidable inflation data bringing down real rates would do the trick, which is exactly what happened. Silver scored strong gains as well, yet didn‘t visibly outperform the rest of the crowd. I look for the much awaited precious metals upleg to go on, and considerably increase open profits.SummaryThe daily S&P 500 downswing is history, and the relentless push higher (best to be compared with a rising tide), goes on.Gold and miners took a cue from the surging commodities, and nominal yields retreat. Patience has been rewarded, and a close above $1,775, is what I am looking for next as the gold bottom is in.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Are Metals & Miners Starting A New Longer-Term Bullish Trend?

Chris Vermeulen Chris Vermeulen 19.04.2021 03:53
Almost in stealth mode, precious metals have begun to bottom and start a new upside price trend while the US stock market focused on the FOMC meeting a few weeks back and current economic data.  Gold, Silver, and many of the Miner ETFs recently started a moderately strong push higher – almost completely behind the scenes of the hype in the markets regarding IPOs and Bitcoin's new recent highs.All the Gold traders know that when Gold starts a new leg higher, it could mean inflation fears are being amplified in the global markets and/or fear is starting to creep back into the markets.  After the recent rally in the US major indexes and as we plow through Q1:2021 earnings, it makes sense that some fear and inflation concerns are starting to take precedence over other concerns.  Will the markets just continue to push higher and higher? Or are the market nearing some type of intermediate-term peak after rallying from November 2020? Only time will tell...The recent move in Gold and Silver prices suggests traders and investors are starting to act more aggressively to hedge against downside market risks.  My research team and I believe these upside trends may confirm an upside breakout trend in Precious Metals and Miners within 2 to 4+ weeks. You may find some of our earlier research articles related to metals, including our April 15th price targets for Gold, Silver, and Platinum, and our research from March 26th where we explore an impending miners breakout rally.Custom Metals Index Shows Breakout Starting – 433 Level Is ConfirmationLet's start by reviewing our Custom Metals Index Weekly chart, below.  The continued downward price slide from the early August 2020 peak has extended more than 8 months. Recent lows also align with the peak levels just before the COVID-19 market collapse (February 2020).  Our research suggests this level will act as a strong support level and may prompt a new bullish price leg in Precious Metals and Miners if we continue to see confirmation of this uptrend in the future. Confirmation for our research team would be a strong close above 433 on our Custom Metals Index chart – closing above the 2021 Yearly highs.We urge readers to pay close attention to the RED price channels on this Custom Metals Index chart.  These historic price channels may become very relevant in the near future.  A strong upside price breakout in precious metals may prompt a rally that extends aggressively higher – attempting to reenter this current price channel.  If this were to happen, Gold would have to rally above $2165 by July 2021.  This would certainly put Precious Metals into a new longer-term bullish price trend.Junior Gold Miners Need To Continue Higher To Confirm Breakout/Rally TrendThe following GDXJ chart highlights the base/bottom that has setup in Junior Gold Miners and also highlights the past failed breakout attempts following the CYAN downward sloping trend line.  If this current breakout attempt is valid, we will see a continued upward price trend that confirms the breach of this downward sloping trend line over the next 5 to 15+ days.  We expect this move to happen fairly quickly given how traders have shifted focus recently into hedging against downside price concerns.Miners and Junior Miners tend to lead Precious Metals prices in volatile price trends.  Junior Miners act as a leader for the Precious Metals sector as investors expect stronger Precious Metals prices to translate into stronger earnings for Junior Miners.  Therefore, when traders perceive Precious Metals prices are bottoming or starting a new uptrend, Junior Miners will likely lead the rally in metals because Junior Miners will directly benefit (bottom-line profits) if metals prices move higher. Ideally, we would like to see a strong close above $53~54 to confirm this upside breakout trend.  This past standout high/resistance level seems key for any continuation of any bullish breakout trends.14+ Months Into A New Depreciation Cycle – What Next?As the US stock market continues to push into new all-time highs almost every week and inflation concerns are starting to rise, while global central banks are still acting to support the global market recovery, it seems oddly similar to the 2001~2009 Depreciation Phase which prompted a rally in Gold from $262 to over $1900 (over 700%).  We wrote about this change in global cycle trends in our December 18, 2020 research entitled Metals & Miners Shifting Gears.The Monthly Gold chart below highlights our research into the broader Appreciation/Depreciation phases of the global markets.  Notice how Gold rallied during the last Depreciation phase (from 2001 to 2011) – even starting to rally higher just before the Depreciation phase started and continuing for nearly a year after it ended.  This happens because global traders/investors start shifting their focus into hedging against risk before the Depreciation Phase actually kicks into gear – just like what is happening right now; on the right edge of this chart.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!The price Appreciation Phase ended near the end of 2019 (just before the COVID-19 market collapse). Yet, the US stock market has continued to rally higher and higher over the past 24 months, well into the start of the Depreciation Phase cycle.  This is what we call an “Excess Phase Rally” - where prices continue to trend because of momentum and herd mentality from traders.  As we are seeing right now, certain sectors, technology, and the US major indexes are still pushing to new all-time highs.  This is partially because traders continue to pile into the momentum trades/trends – chasing those profits.Gold has started to react to the Depreciation cycle in a way that suggests the global markets may eventually transition into a bit of a sideways price trend or come under some type of renewed valuation concerns over the next 3 to 5+ years.  This type of general market concern, as well as the desire to hedge against risk, may prompt a continued rally in Gold to levels above $3000 - as shown on this chart. Staying ahead of these types of sector trends is going to be key to developing continued success in these markets.  As some sectors fail, others will begin to trend higher.  Learn how BAN strategy can help you spot the best trade setups. You can learn how to find and trade the hottest sectors right now in my FREE course. For those who believe in the power of relative strength, cycles and momentum then the BAN Trader Pro newsletter service does all the work for you in determining what to buy, when to buy it, and how to take profits while minimizing downside risk. In Part II of this article, we'll highlight continued opportunities in various metals/mining stocks/ETF as well as continue to highlight our believe that Precious Metals and Miners are starting a broad market transition into the Depreciation Phase cycle.  Are you ready for it?  Are you ready for increased global stock market volatility and trends while Precious Metals may start a new 140% to 250% potential price rally?Have a great weekend!
US Industry Shows Strength as Inflation Expectations Decline

Pausing Stocks and Gold Fireworks

Monica Kingsley Monica Kingsley 19.04.2021 16:28
The S&P 500 went back to relentless rallying on Friday, yet the selling wave before the close looks to indicate hesitation ahead. Even though VIX is attacking the 16 level, and the put/call ratio ticked higher, the bulls are little disturbed thus far – and they‘re unlikely to get upset. Whatever consolidation comes, would be a sideways one – one to be bought.That‘s the result of ample liquidity in the system, which is denting the rotations. Yields can go up or down, yet the sectoral adjustments to the downside aren‘t largely there, and that extends beyond the recently discussed financials. It concerns tech specifically, as the sector appears at a turning point – it defended gains: (…) without too much help from the behemoths, and value stocks surged. …. Retail sales outdoing expectations and unemployment claims dropping sharply – the economic recovery is doing fine, manufacturing expands, and inflation doesn‘t yet bite. We‘re still in the reflationary stage where economic growth is higher than the rate of inflation or its expectations.Gold loved the TLT upswing and Powell‘s assurances about not selling bonds back into the market in rememberance of eating a humble pie after the Dec 2018 hissy fit in the stock market (isn‘t this the third mandate actually, the cynics might ask). I called for the sharp gains across the precious metals board sending my open position(s) even more into the black.Miners keep supporting the upswing in both metals, and the technical picture has turned, reflecting the economic realities and commodities‘ run anounced on Wednesday. Now, it‘s up to gold and silver to catch up on what they missed since the early Aug 2020. Inflation is running hotter, and the Fed is tolerant of it, amply supplying liquidity. The gold bottom is in, and much brighter days ahead.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookNew ATHs, again and this time on rising volume – the momentum still largely remains with the bulls in spite of the late day selling pressure, and as said earlier, $NYFANG causing a few short-term wrinkles.Credit MarketsBoth high yield corporate bonds (HYG ETF) and investment grade ones (LQD ETF) have weakened, driven by the TLT retreat. This is a bearish omen unless the bulls step in, which could take a while.Technology and ValueReflecting the decline in long-dated Treasuries, tech wavered while its big names declined, and it was up to value stocks to save the day.Gold in the LimelightThe gold sector is running, and miners show no signs of stopping their solid outperformance of the yellow metal. These two have risen on Friday in spite of TLT turning lower again – the decoupling from nominal yields is getting more pronounced.The miners to gold ratio is as well pointing higher, and the higher low it made at the end of March, speaks volumes. The pressure is to go higher as the next precious metals upleg unfolds.Miners in FocusGold seniors (GDX ETF) are matched in strength by silver miners (SIL ETF), and have convincingly broken above their recent highs and the declining resistance line connecting November and January tops. The unavoidable inflation data bringing down real rates are at work, and silver can be once again expected to start doing better than gold soon, and to considerably increase the open profits.SummaryThe daily S&P 500 consolidation looms, but will be a buying opportunity – not a sign of a market top. If you disliked the staircase climb for offering precious few opportunities to join without a discounted entry, your time is approaching.Gold and miners keep surging as the commodities signposted, little hampered by the daily increase in nominal yields. Patience has been rewarded, and as we closed above $1,775, the gold bottom can be declared as in.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

SPX Short Squeeze – Here Or Not?

Monica Kingsley Monica Kingsley 22.04.2021 16:07
S&P 500 turned around at the open, and didn‘t look back. Is the selling over, have the markets turned the corner? Buy the dip looks to have won the day, VIX has been beaten back, and corporate credit markets scored strong gains. The benefit of the doubt would go with the bulls as the Russell 2000 and emerging markets joined in the buying spree. Heck, even the option traders turned more complacent again.The table looks set for brighter days, but it‘s the odd performance in value (the reopening fireworks don‘t seem to go stale ever really) ignoring retreating yields, which the tech heavyweights strangely neither rejoiced. That reminds me of the dog that didn‘t bark story. I‘m thus looking for a daily consolidation of surprisingly easily gained ground without ruling out a weak downswing attempt – but it‘s the upside potential that‘s looking short-term limited here. The daily SPX chart doesn‘t give me confidence yet to declare this correction as not returning next week.Nominal yields have again retreated a little, and inflation expectations are sending inconclusive messages – but don‘t forget that inflation is what the Fed ultimately wants. It just has to balance that with the Treasuries market not going into a tailspin – for now, mission accomplished, inflation expectations have peaked, move along, nothing to see here.But the higher commodity prices are sending a clear message to the contrary – look for the PPI readings to be affecting CPI increasingly more. Markets aren‘t waiting for the Fed, and have been transitioning to a higher inflation environment already, even though the Fed sold the transitory talking points quite well – it would indeed be a 2022-3 story when inflation supported by the overheating job market would kick in. That‘s the context decreasing nominal yields should be interpreted in.Gold welcomes this reflation period with nominal yields becoming a tailwind, as reflation is also a time when commodities do great, not just the stock market. And we‘re in the decade of precious metals and commodities super bull runs – and these are well underway. The debasement of fiat currencies against real assets is set to continue, and will accelerate given the unprecedented fiscal and monetary support already and ahead – sorry dollar bulls, the greenback declines are resuming – just look at the yen and yields nodding to the metals upswing.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe dip was bought right at the open yesterday, in a tentative sign of strength. A superficial one, precisely, for the correction might not be over.Credit MarketsBoth the high yield corporate bonds (HYG ETF) and investment grade ones (LQD ETF) rose in tandem, but the volume wasn‘t entirely there – similar to stocks. Regardless of the sectoral imbalances discussed below, it‘s a strong argument for why any resumption of selling won‘t likely get too far.Technology and ValueValue keeps pulling the 500-strong index ahead while the leadership in tech remains outside the woefully underperforming heavyweights. I‘m looking at that to change over time, though.Gold and SilverGold upswing is still in a healthy shape, with miners outperforming. The retreating nominal yields have turned into a tailwind as gold gathers strength to break the $1,800 level shortly.Yesterday was characterized by silver‘s strength, and that means an issue of varying proportions usually ahead. But I am interpreting the chart as a weak setback only, a very temporary one – this isn‘t any kind of turnaround.Gold‘s Big PictureThis is the key chart proving that the precious metals upleg has started weeks ago – the caption says it all. Look for much higher prices ahead as weeks and months roll by.SummaryThe shallow S&P 500 consolidation won‘t likely continue today as another good unemployment figure came in, and I look for the sectoral imbalances to improve later today and tomorrow.Gold and miners are taking a little breather, together with silver. Nothing unexpected or groundbreaking, the precious metals upleg is well established already, and $1,800 will be history as early as next week, when the rip your face off rally continues.
Boosting Stimulus: A Look at Recent Developments and Market Impact

The Tax Plan to Slay the Stock Bull?

Monica Kingsley Monica Kingsley 23.04.2021 16:11
A day like almost any other – S&P 500 about to take again on the ATHs until the capital gains tax hike proposal came, shaving off 50 points in stocks within an hour. The 4,415 support held though, both before and after the closing bell. Are we ready to shake off the cold water and resume running higher again?Depends on where you look – stocks have quite some recovering still to do, and it‘s the precious metals and commodities that are performing best today. Both as an index and sectoral collection, the S&P 500 sustained broad damage, concentrated in the tech heavyweights. The volatility spike has been partially repelled but option traders seem expecting another shoe to drop, which attests to us better dampening expectations of a fast return above 4,170.Look still though how little has changed, as if the tax raising plans haven‘t been around since the infrastructure bill or implicitly even before. It‘s still April, and markets are pricing in not only this select reality, but broader tax increases coming. Yes, they have woken up, and the reflation paradigm is getting an unwelcome companion. This hit won‘t bring down the bull, but will slow it down – and the implications for broader economy will only hasten the pronounced advent of the commodities supercycle (well underway since the corona deflationary crash last year). As the Chinese say, may you live in interesting times, and I am glad to have caught the April 2020 turnaround reasonably well. I‘m bringing this up just to say that this isn‘t the time to turn bearish on stocks yet – not in the least. The initial panic is over, real economy keeps recovering (amazing how fast were the reasonably good unemployment claims of yesterday forgotten, right?), inflation expectations aren‘t running progressively hotter, and Treasury yields continue retreating.Another argument for why this is a storm in a tea cup (I‘m talking merely stock market perspective now, not the very real consequences about to hit the economy like a trainwreck in slow motion), is the Russell 2000 and emerging markets performance yesterday – reasonably bullish given the setback most keenly felt in the S&P 500 and Bitcoin. Unless the latter recaptures $52,500 promptly and convincingly, it‘s going to remain in hot water as yet another tax cash cow on the horizon, which aligns nicely with the Yellen weekend cryptos announcement. A bit over 24hrs ago in response to a question from my great West Coast subscriber, I highlighted Bitcoin vulnerability as it has been unable to revert back above the 50-day moving average, drawing the $52,500 line in the „bulls still have a chance“ sand. Now, I would have to be convinced by the upswing‘s strength recapturing said level, which I‘m not expecting even though the asset trades quite extended relative to the lower border of its daily chart Bollinger Bands.Thus far, precious metals, copper, oil and other commodities are holding up best – little surprising given the risk-off nature of yesterday‘s move and potentially misplaced hopes that the 28% collectibles tax on the metals would survive. These things tend to creep.Gold or miners held up reasonably well yesterday, and I look for them to be fastest in recapturing the lost ground, followed by silver. The precious metals upleg has started, we‘re in a real assets super bull market, and this little hiccup won‘t derail it. The sad implication would actually drive it as capital formation would be hampered, unproductive behaviors encouraged, and potential output lowered. Pretty serious consequences – add to which inflation as that‘s what the Fed ultimately wants, and the recipe for more people falling into higher tax brackets through illusory gains, is set. Then, as inflation starts firing on all cylinders – a 2022-3 story when the job market starts overheating – the pain would be felt more keenly. And this is supposed to be the environment where the dollar would be in a bull run, now and ever? Wake up:(…) we‘re in the decade of precious metals and commodities super bull runs – and these are well underway. The debasement of fiat currencies against real assets is set to continue, and will accelerate given the unprecedented fiscal and monetary support already and ahead – sorry dollar bulls, the greenback declines are resuming – just look at the yen and yields nodding to the metals upswing.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe intraday reversal is thus far lacking volume and follow through. That means it would be premature to jump to conclusions as to the shallow correction extending deeper.Credit MarketsThe high yield corporate bonds to short-term Treasuries (HYG:SHY) ratio isn‘t panicking either. So far, the move has been hesitant and orderly.Technology and ValueValue keeps being most resilient, and the tech sector stands in the middle, dragged lower by the heavyweights. I would like these to stop leading to the downside so as to declare the correction as approaching its end in terms of prices.Inflation ExpectationsThe inflation expectations are in a momentary limbo, but seem as likely to rise again shortly. That would be one more piece of the puzzle bringing real rates down, making the yellow metal‘s fundamental outlook more positive (as if it hadn‘t been already).Gold and SilverThe decline across the gold sector has been orderly yesterday, and the retreating yields (helped by the stock market turmoil) are putting a nice floor below the king of metals. I look for miners to keep leading higher shortly again.The key message is the one by the copper to 10-year Treasuries yield – a little hesitation yesterday, hinting at a little more time being necessary to overcome the $1,800 barrier next.SummaryThe S&P 500 is at a crossroads determining how low would the shock-facilitated consolidation stretch. Thus far, signs are modestly leaning in favor of the worst being in, and a gradual repair coming next.Gold and miners took a daily dive in sympathy with stocks yesterday, but I look for the precious metals sector to recover fastest, and overcome the next resistance convincingly.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Gold Miners: Were Upswings Just an Exhausting Sprint?

Finance Press Release Finance Press Release 26.04.2021 16:22
Indicators are pointing to gold and mining ETFs running out of breath. They don’t seem to have what it takes to the move to the finish line.Despite gold, silver and mining stocks’ recent corrective upswings, the precious metals are running out of steam. After bursting off of the lows – while failing to recognize that it’s a marathon and not a sprint – the precious metals’ late-week breather signals that their stamina isn’t what it used to be.Moreover, with false breakouts and sanguine sentiment causing an adrenaline rush that’s likely to fade, the precious metals’ transformation from stalwart to sloth could leave investors feeling increasingly dejected.Case in point: with the HUI Index (a proxy for gold mining stocks ) already verifying the breakdown below the neckline of its bearish H&S pattern – which didn’t occur until later in 2008 – the miners’ outlook is actually more bearish now than it was then.Please see below:To explain, note that the 2007 – 2008 and the 2009 – 2012 head and shoulders patterns didn’t have the right shoulders all the way up to the line that was parallel to the line connecting the bottoms. I marked those lines with green in the above-mentioned formations. In the current case, I marked those lines with orange. Now, in both cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02.That’s why I previously wrote that “it wouldn’t be surprising to see a move to about 300 in the HUI Index”. And that’s exactly what we saw – the recent high was slightly above 299.This means that the recent rally is not a game-changer, but rather a part of a long-term pattern that’s not visible when one focuses on the short-term only.The thing is that the vast majority of individual investors and – sadly – quite many analysts focus on the trees while forgetting about the forest. During the walk, this might result in getting lost, and the implications are no different in the investment landscape.From the day-to-day perspective, a weekly – let alone monthly – rally seems like a huge deal. However, once one zooms out and looks at the situation from a broad perspective, it’s clear that:“What has been will be again, what has been done will be done again; there is nothing new under the sun.” (-Ecclesiastes 1:9)The rally is very likely the right shoulder of a broad head and shoulders formation. “Very likely” and not “certainly”, because the HUI Index needs to break to new yearly lows in order to complete the pattern – for now, it’s just potential. However, given the situation in the USD Index (i.a. the positions of futures traders as seen in the CoT report , and the technical situation in it), it seems very likely that this formation will indeed be completed. Especially when (not if) the general stock market tumbles.In addition, three of the biggest declines in the mining stocks (I’m using the HUI Index as a proxy here), all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the decline exceeded the size of the head of the pattern.Can we see gold stocks as low as we saw them last year? Yes.Can we see gold stocks even lower than at their 2020 lows? Again, yes.Of course, it’s far from being a sure bet, but the above chart shows that it’s not irrational to expect these kind of price levels before the final bottom is reached. This means that a $24 target on the GDX ETF is likely conservative.In addition, mining stocks are currently flirting with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early 2020 high.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.I know, I know, this seems too unreal to be true… But wasn’t the same said about silver moving below its 2015 bottom in 2020? And yet, it happened.Keep in mind though: scenario #2 most likely requires equities to participate. In 2008 and 2020, the sharp drawdowns in the HUI Index coincided with significant drawdowns of the S&P 500 . However, with the words ‘all-time high’ becoming commonplace across U.S. equities, the likelihood of a three-peat remains relatively high.Senior Miners: GDX ETFMoving on to the GDX ETF, the senior miners were unable to hold the upper trendline of their corrective zigzag pattern. Similar to the price action in late 2020/early 2021, the GDX ETF rallied slightly above the upper trendline of its roughly one-and-a-half-month channel before eventually rolling over. More importantly, though, the GDX ETF’s failure in early 2021 ended up being a prelude to the senior miners’ severe drawdown.Please see below:Furthermore, with the senior miners likely to peak in the coming days, the GDX ETF is poised to move from the right shoulder of its bearish H&S pattern. Following in the HUI Index’s footsteps, the GDX ETF’s correction back to the high of its left shoulder signals that the upward momentum has likely run its course.If that wasn’t enough, the GDX ETF’s stochastic oscillator is also flashing a clear sell signal. If you analyze the two red arrows positioned at the bottom of the chart above, you can see that the black line has once again crossed the red line from above. As a result, the GDX ETF’s days are likely numbered.Junior Miners: GDXJ ETFAs further evidence on this bearish scenario, let’s take a look at other proxies for the mining stocks. When analyzed through the lens of the GDXJ ETF, the junior miners remain significant underperformers.Please see below:To explain, the GDXJ ETF is now back below its late-Feb. highs - please note how weak it remains relative to other proxies for mining stocks. Unlike the HUI or the GDX, the GDXJ didn’t move visibly above its late-Feb. highs and it had already invalidated this small breakout.Moreover, the GDXJ/GDX ratio has been declining since the beginning of the year, which is remarkable because the general stock market hasn’t plunged yet. This tells us that when stocks finally slide, the ratio is likely to decline in a truly profound manner – perhaps similarly to what we saw last year.So, how low could the GDXJ ETF go?Well, absent an equity rout, the juniors could form an interim bottom in the $34 to $36 range. Conversely, if stocks show strength, juniors could form the interim bottom higher, close to the $42.5 level. For context, the above-mentioned ranges coincide with the 50% and 61.8% Fibonacci retracement levels and the GDXJ ETF’s previous highs (including the late-March/early-April high in case of the lower target area). Thus, the S&P 500 will likely need to roll over for the weakness to persist beyond these levels.Also, contrasting the GDX ETF’s false breakout, both the HUI and the XAU indices ended the week below the necklines of their previous (based on the rising necklines) bearish H&S patterns. Moreover, if you analyze the right side of the charts below, while both the HUI and XAU indices initially bounced above their necklines, investors quickly sold the rallies.Mirroring the GDX ETF, both indices are also eliciting sell signals from their stochastic oscillators. And with the GDX ETF the only wolf still howling at the moon, expect the senior miners to follow the rest of the pack lower in the near future.Also, eliciting bearish undertones, the HUI Index/S&P 500 ratio has recorded a major, confirmed breakdown. And with the ratio nowhere near recapturing its former glory, it’s another sign that the GDX ETF is a significant outlier.Please see below:When the ratio presented on the above chart above is rising, it means that the HUI Index is outperforming the S&P 500. When the line above is falling, it means that the S&P 500 is outperforming the HUI Index. If you analyze the right side of the chart, you can see that the ratio has broken below its rising support line. For context, the last time a breakdown of this magnitude occurred, the ratio plunged from late-2017 to late-2018. Thus, the development is profoundly bearish.Playing out as I expected, a sharp move lower was followed by a corrective upswing back to the now confirmed breakdown level (which is now resistance). Mirroring the behavior that we witnessed in early 2018, after breaking below its rising support line, the HUI Index/S&P 500 ratio rallied back to the initial breakdown level (which then became resistance) before suffering a sharp decline. And with two-thirds of the analogue already complete, the current move lower still has plenty of room to run. Likewise, the early-2018 top in the HUI Index/S&P 500 ratio is precisely when the USD Index began its massive upswing. Thus, with history likely to rhyme, the greenback could spoil the miners’ party once again.In addition, the HUI to S&P 500 ratio broke below the neck level (red, dashed line) of a broad head-and-shoulders pattern and it verified this breakdown by moving temporarily back to it. The target for the ratio based on this formation is at about 0.05 (slightly above it). Consequently, if the S&P 500 doesn’t decline, the ratio at 0.05 would imply the HUI Index at about 196. However, if the S&P 500 declined to about 3,200 or so (its late-2020 lows) and the ratio moved to about 0.05, it would imply the HUI Index at about 160 – very close to its 2020 lows.All in all, the implications of mining stocks’ relative performance to gold and the general stock market are currently bearish.But if we’re headed for a GDX ETF cliff, how far could we fall?Well, there are three reasons why the GDX ETF might form an interim bottom at roughly ~$27.50 (assuming no big decline in the general stock market ):The GDX ETF previously bottomed at the 38.2% and 50.0% Fibonacci retracement levels. And with the 61.8% level next in line, the GDX ETF is likely to garner similar support.The GDX ETFs late-March 2020 high should also elicit buying pressure.If we copy the magnitude of the late-February/early-March decline and add it to the early-March bottom, it corresponds with the GDX ETF bottoming at roughly $27.50.Keep in mind though: if the stock market plunges, all bets are off. Why so? Well, because when the S&P 500 plunged in March 2020, the GDX ETF moved from $29.67 to below $17 in less than two weeks. As a result, U.S. equities have the potential to make the miners’ forthcoming swoon all the more painful.The Gold Miners Bullish Percent Index ($BPGDM)As another reliable indicator (in addition to the myriads of signals coming not only from mining stocks, but from gold, silver, USD Index, stocks, their ratios, and many fundamental observations) the Gold Miners Bullish Percent Index ($BPGDM) isn’t at levels that trigger a major reversal. The Index is now approaching 47. However, far from a medium-term bottom, the latest reading is still more than 37 points above the 2016 and 2020 lows.Back in 2016 (after the top), and in March 2020, the buying opportunity didn’t present itself until the $BPGDM was below 10.Thus, with the sentiment still relatively elevated, it will take more negativity for the index to find the true bottom.The excessive bullishness was present at the 2016 top as well and it didn’t cause the situation to be any less bearish in reality. All markets periodically get ahead of themselves regardless of how bullish the long-term outlook really is. Then, they correct. If the upswing was significant, the correction is also quite often significant.Please note that back in 2016, there was an additional quick upswing before the slide and this additional upswing caused the $BPGDM to move up once again for a few days. It then declined once again. We saw something similar also in the middle of 2020. In this case, the move up took the index once again to the 100 level, while in 2016 this wasn’t the case. But still, the similarity remains present.Back in 2016, when we saw this phenomenon, it was already after the top, and right before the big decline. Based on the decline from above 350 to below 280, we know that a significant decline is definitely taking place.But has it already run its course?Well, in 2016 and early 2020, the HUI Index continued to move lower until it declined below the 61.8% Fibonacci retracement level. The emphasis goes on “below” as this retracement might not trigger the final bottom. Case in point: back in 2020, the HUI Index undershot the 61.8% Fibonacci retracement level and gave back nearly all of its prior rally. And using the 2016 and 2020 analogues as anchors, this time around, the HUI Index is likely to decline below 231. In addition, if the current decline is more similar to the 2020 one, the HUI Index could move to 150 or so, especially if it coincides with a significant drawdown of U.S. equities.The NASDAQCircling back to the NASDAQ Composite, the unwinding of excessive speculation could deliver a fierce blow to the gold miners. Case in point: when the dot-com bubble burst in 2000, the NASDAQ lost nearly 80% of its value, while the gold miners lost more than 50% of their value.Please see below:Right now, the two long-term channels above (the solid blue and red dashed lines) show that the NASDAQ is trading well above both historical trends.Back in 1998, the NASDAQ’s last hurrah occurred after the index declined to its 200-day moving average (which was also slightly above the upper border of the rising trend channel marked with red dashed lines).And what happened in the first half of 2020? Well, we saw an identical formation.The similarity between these two periods is also evident if one looks at the MACD indicator . There has been no other, even remotely similar, situation where this indicator would soar so high.Furthermore, and because the devil is in the details, the gold miners’ 1999 top actually preceded the 2000 NASDAQ bubble bursting. It’s clear that miners (the XAU Index serves as a proxy) are on the left side of the dashed vertical line, while the tech stock top is on its right side. However, it’s important to note that it was stocks’ slide that exacerbated miners’ decline. Right now, the mining stocks are already declining, and the tech stocks continue to rally. Two decades ago, tech stocks topped about 6 months after miners. This might spoil the party of the tech stock bulls, but miners topped about 6 months ago…Also supporting the 2000 analogue, today’s volume trends are eerily similar. If you analyze the red arrows on the chart above, you can see that the abnormal spike in the MACD indicator coincided with an abnormal spike in volume. Thus, mounting pressure implies a cataclysmic reversal could be forthcoming.Interestingly, two decades ago, miners bottomed more or less when the NASDAQ declined to its previous lows, created by the very first slide. We have yet to see the “first slide” this time. But, if the history continues to repeat itself and tech stocks decline sharply and then correct some of the decline, when they finally move lower once again, we might see THE bottom in the mining stocks. Of course, betting on the above scenario based on the XAU-NASDAQ link alone would not be reasonable, but if other factors also confirm this indication, this could really take place.Either way, the above does a great job at illustrating the kind of link between the general stock market and the precious metals market ( gold , silver , and mining stocks) that I expect to see also this time. PMs and miners declined during the first part of the stocks’ (here: tech stocks) decline, but then they bottomed and rallied despite the continuation of stocks’ freefall.Even more ominous, the MACD indicator is now flashing a clear sell signal . And because the current reading is analogous to the one that preceded the dot-com bust, the NASDAQ Composite – and indirectly, the PMs – continues to sail toward the perfect storm.With all of that said: how will we know when a medium-term buying opportunity presents itself?We view price target levels as guidelines and the same goes for the Gold Miners Bullish Percent Index (below 10), but the final confirmation will likely be gold’s strength against the ongoing USDX rally. At many vital bottoms in gold, that’s exactly what happened, including the March bottom.In conclusion, with the gold miners running low on strength, stamina and staying power, their fragile foundation is already crumbling beneath the surface. With the HUI, XAU and GDXJ proxies unable to match wits with the GDX ETF, the lone survivor is unlikely to put up much of a fight going forward. Moreover, with the USD Index poised to bounce off of the 61.8% Fibonacci retracement level (the precious metals have a strong negative correlation with the U.S. dollar), the foursome are likely to huff and puff their way to lower prices. However, after a period of medium-term recovery, the precious metals will be ready to run with the bulls once again.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Should you buy Microsoft and Google before earnings?

Kseniya Medik Kseniya Medik 27.04.2021 13:09
What will happen? Two stock giants – Microsoft and Google – will publish earnings reports for the first quarter of 2021 on Tuesday after the market closes. Microsoft will release their financial results after midnight on April 27 at 00:30 (formally April 28) MetaTrader time (GMT+3), while Google at the midnight. By the way, the stock market is open from 16:30 to 23:00 MT (GMT+3). What to expect? Google is expected to deliver $15.45 earnings per share, while Microsoft – $1.76. How to trade on earnings? Check the economic calendar at the time of release to compare the actual data with the estimate. If the earnings come out better than expected, the stock price will move up. In case of worse-than-forecasted earnings, the stock price will move down. Microsoft outlook Microsoft hit an all-time high yesterday, breaking above $260.00. Therefore, the way up to the next round number of $270.00 is open. Since expectations are high, Microsoft is rallying up even ahead of the earnings report. Forecasts are bullish, thus the stock is likely to keep climbing up. However, the RSI indicator is just below the 70.00 level. Once it breaks above this level, the stock becomes overbought and the reverse down may occur. Thus, be aware of the support levels at the low of April 14 at $255 and the psychological mark of $250. If the stock price goes down, it is likely to stop ahead of these levels rather than break out them. Google outlook Analysts forecast that Google is likely to beat market estimates as its main source of profit – the advertising segment – recovered. Let’s look at the chart. If earnings are encouraging, Google may rise to the next round number of $2400, but the RSI indicator went above 70.00, signaling the overbought conditions. Therefore, the rally up shouldn’t last long. Support levels are at the recent low of $2250 and the 50-day moving average of $2140. Download the FBS Trader app to trade anytime anywhere! For personal computer or laptop, use MetaTrader 5!
Boosting Stimulus: A Look at Recent Developments and Market Impact

Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues

Chris Vermeulen Chris Vermeulen 28.04.2021 00:35
A recent Forbes article highlights the incredible increase in market leverage since the start of the COVID-19 crisis.  There has never been a time in recent history where market leverage has reached these extreme levels.  Additionally, highly leveraged market peaks are typically associated with asset bubbles. The easy money policies and global central bank actions have prompted one of the longest easy money market rallies in history.  Historically low interest rates, US Federal Reserve and global central bank asset-buying programs, and extended overnight credit support have prompted some traders and investors to move into a more highly leveraged position expecting the rally to stay endless.  Although, the reality of the global market trends may be starting to cause traders and investors to become a bit unsettled.  Precious Metals, Utilities, and Bonds have all started reacting to perceived fear related to this extended bullish rally trend recently.https://www.forbes.com/sites/greatspeculations/2021/04/24/uh-oh-market-leverage-at-all-time-high/?sh=29eadac1e8a9My research team and I believe the current market rally will likely continue as capital shifts away from extended market sectors.  We believe the transition away from the new US President and the new policies associated with this change of leadership has already started taking place – which is why Precious Metals, Utilities, and Bonds are starting to trend.  Yet, we believe the momentum behind this current rally is likely to extend through the end of April and into early May 2021. Custom Volatility Index Shows Bullish Trending & Price Volatility RisksOur Custom Volatility Index chart, below, shows the US markets have just recently rallied back to previous bullish market trending levels (above 13 on this chart).  Once this Custom Volatility Index reaches these levels, we normally expect two market traits to continue.  First, we expect bullish trending because the Volatility Index above 10~11 strongly suggests an extended bullish trend is in place.  Secondly, we expect moderate price rotation to take place after the Volatility Index reaches levels above 13~14.It is very common for the Volatility Index to move above the 13~14 level in extended rally trends.  Yet, it is also common for the markets to rotate or retrace after reaching these levels.  Therefore, this Custom Volatility Index chart shows the US markets have moved into extreme bullish price trending and has already reached a peak level near 15 – which suggests we can expect some moderate price rotation within the next 3 to 5+ weeks.Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!Whenever the US major indexes trend higher in longer-term extended trends, the Custom Volatility Index typically stays above 10~11 and continually attempts to rally above 12~13.  The “Peak Volatility Channel” on this chart highlights areas of extreme peaks in the markets.  When the Custom Volatility Index reaches this level, price becomes more likely to rotate or retrace a bit before attempting to move higher.  Smart Cash Index Shows Global Markets Need To Break Above 210 TO Begin A New Rally PhaseOur following Custom Smart Cash Index shows the global markets have been struggling to move higher over the past few months.  Even though the US markets have attempted to rally to new highs, the Smart Cash Index chart shows this recent rally has not been seen in the global markets. My team and I believe the next rally phase in the markets must initiate with the Smart Cash Index chart rallying above 210 and representing a moderately strong global market push higher throughout the May/June 2021 time span.  If the Smart Cash Index fails to move above the 210 price level, the we believe a moderate price correction may be setting up for May or June 2021 where the US markets may move moderately lower, attempting to retest recent support, then begin another rally attempt.Currently, the global stock market and financial system leverage may be an unknown catalyst for some type of future market movements.  The Forbes article suggests these new all-time high leverage levels are likely the result of global central bank policies where traders and investors believe the central banks will continue to support the markets indefinitely.  As much as we would like to think this may be the case, the reality is that, at some point, normalization will take place in the global markets and that presents an ominous deleveraging event in the future.We are watching how the market's sectors are shifting trends and how some of the strongest sectors are shifting and weakening over the past 60+ days.  For example, the Russell 2000 had been one of the strongest market sectors up until about 2 months ago.  Now it appears to be trading in a sideways trend – attempting to move back into a bullish price trend.Our research team believes traders and investors need to be prepared for quickly shifting sector trends over the next 6+ months as this highly leveraged global market event plays out.  Our research suggests a price rotation event is near and the global markets are still trending in a moderately strongly bullish trend. The strongest sectors are going to continue to be the best performers over time.  Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about how I identify and trade these sectors by registering for my FREE course here. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Enjoy the rest of your Sunday!
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Want To Invest In Real Estate But Don’t Have The Down Payment?

Chris Vermeulen Chris Vermeulen 28.04.2021 15:51
As an asset class, real estate should be a part of every balanced investment portfolio. That's because real estate investments generally have a low correlation to stocks, can offer lower risk, and provide greater diversification.Today about 65% of Americans own a home, but that means that tens of millions of Americans have no exposure to real estate. Making matters worse, becoming a homeowner today is harder than in previous generations, with 1 in 5 millennials believing they will never be able to afford a home. Is there a way to get exposure to the real estate market for as little as $100?Residential real estate market trendFrom the chart below, we can see that the residential real estate market continues to climb and the median price of houses sold in the US is near recent all-time highs of $347,500. Even though mortgage rates remain near all-time lows, the appreciation of prices in certain pockets of the country are making many cities and areas simply unaffordable for most. Things look much the same for industrial, commercial, agricultural, and most other specialized real estate subsectors.how can you invest in real estate through the stock marketThe stock markets offer three different ways you can invest in real estate, and today we will be looking at three of them: REITs, ETNs, and ETFs.A REIT is a real estate investment trust and it generally owns, manages, and/or finances income-producing real estate assets. REITs are generally highly liquid (trading like stocks) and are known to produce steady income through dividends as opposed to focusing on capital appreciation.There are hundreds of REITs, with the most popular focused on retail, residential, healthcare, office, and mortgages. Having REIT status enables those companies to avoid paying taxes at the corporate level as taxes are paid by the investors when they receive distributions of income in the form of dividends.Sign up for my free trading newsletter so you don’t miss the next opportunity!A real estate ETN is unsecured debt of real estate assets, essentially a type of bond with a maturity date (but without interest payments). ETNs do not provide ownership of the underlying assets, but their performance is directly correlated to the performance of those assets.Investors need to be wary that they can lose all of their ETN investment if the underlying debt goes into default. They also face closure risk if the issuer closes the ETN before maturity by paying the prevailing price in the market (potentially creating a loss for the investor). Despite these risks, some investors prefer ETNs because of the tax treatment for long-term ETN holdings.A real estate ETF is the same as any ETF, being a basket of securities in the real estate sector that can be bought and sold on the stock market. Real estate ETFs often focus on a collection of REITs, offering investors a way to diversify their real estate bets without the torture of researching hundreds of REITs. REIT ETFs offer investors to earn dividend income like REITS while also benefiting from higher diversification and greater market liquidity, which are the hallmarks of all ETFs.  what makes a good reit etf?First, you need to decide if you want a mortgage or equity REITs, as well as if you are looking for an objective-specific REIT (like storage facilities) or something more broad and big-picture (like residential real estate). Your REIT ETF should also have a good amount of assets under management in order to keep expense ratios down, and always check to see if the ETF you are interested in has sufficient liquidity.The charts below show you the performance of the three largest real estate ETFs. Each of these ETFs have over $5 billion of assets, are highly liquid, and a slightly different focus in either the index they track or the real estate assets they are comprised of.Vanguard Real Estate Index Fund (NYSEARCA: VNQ)Vanguard focuses on US equity REITS with a small allocation to specialized REITS and real estate firms.iShares U.S. Real Estate ETF (NYSEARCA: IYR)The iShares REIT, above, follows the Dow Jones U.S. Real Estate Index, whereas Schwab’s REIT ETF (below) follows the smaller Dow Jones U.S. Select REIT Index. Schwab US REIT ETF (NYSEARCA: SCHH)For those of you that get my daily BAN Hotlist, you will know that real estate triggered a signal more than a month ago indicating the sector to be in an uptrend. Real estate continues to be a top-performing sector, with all three of the biggest ETFs gaining more than 15% so far in 2021. In fact, more than 90% of all real estate ETFs have outperformed the S&P500 this year. When you add in the fact that some of the REIT ETFs are also producing annual dividend rates as high as 7-8%, it becomes clear that real estate ETFs should be part of your portfolio.The strongest sectors are going to continue to be the best performers over time.  Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about the BAN strategy and how to identify and trade better sector setups by registering for our FREE step-by-step guide. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts.More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Happy Trading!
New York Climate Week: A Call for Urgent and Collective Climate Action

Gold Can’t Wait to Fall – Even Without USDX’s Help

Finance Press Release Finance Press Release 30.04.2021 15:45
Gold started its decline without anyone’s assistance. And when the USDX takes off, that downhill tumble can only increase.The USDX declines and the precious metals sit by idly, twiddling their thumbs. If they had the strength that’s being talked about, they should be soaring by now, or getting ready to. So, what’s their problem?In the previous days, I discussed the signals coming from the precious metals market or for the precious metals market, as they kept on emerging, and we just received yet another round of indications. And yes, they also confirm the bearish outlook for the following weeks - or a few months.Let’s start by looking at the USD Index.On the above chart you can see that this week, the USD Index broke to new monthly lows. And you can also see that gold didn’t move to a new monthly high. In fact, it was not even close to doing so – it just closed the day below $1,770. This is a clearly bearish sign for gold.And what about the USD Index?It’s making a second attempt to break below its 61.8% Fibonacci retracement level. Will it be successful? It might be, but… Another support level is just around the corner. Perhaps the proximity to the rising support line based on the January and February lows was actually enough to trigger the rebound yesterday. In this case, the bottom in the USDX is already in. But, we’ll know with much greater certainty when the USDX finally breaks above the declining resistance line and then confirms this breakout.On the above 4-hour USD Index chart we see that the previous short-term breakout was invalidated, which triggered a substantial sell-off, but… Whatever was likely to happen based on this invalidation seems to have already happened. And it seems that we’re about to see another attempt to break higher. Will the USD Index be successful this time? That’s quite likely, but that’s not the most important thing from the precious metals investors’ and traders’ point of view.PMs Play the Fiddle While USDX BurnsThe key thing is that during the recent declines in the USDX (and during the move to new highs in case of the general stock market), gold , silver, and mining stocks didn’t soar. They “should have” if the situation was normal or bullish. They declined instead, which means it’s highly likely that even if the USD Index doesn’t break out now (but a bit later), the decline in the PMs will not be avoided but only delayed.In fact, to be more precise, it’s unlikely to be delayed as well – what might be delayed is the increase in the pace at which gold, silver, and miners are about to slide. After all, gold and gold stocks are already moving lower (while silver is trading sideways).By the way, silver’s lack of movement recently is perfectly normal in the early stage of a decline – the white metal tends to catch up big-time in the final part of a given move.On the above gold chart, you can clearly see how gold moved back up to its rising short-term resistance line this week, and – instead of invalidating the breakdown – it bounced from it and declined once again. This is what verifications of breakdowns look like.Also, let’s keep in mind that the situation now seems to be a mirror image of what we saw in April – June 2020, and at the same time it’s somewhat similar to what we saw at the beginning of the year. You can see the former (the rectangles are identical) on the above chart, and you can see the similarity to the early January action below.Just as was the case in early January, we first saw a pause – a rebound – and the decline continued only thereafter. It seems that the Jan. 7, 2021 price action is quite similar to what we saw yesterday (Apr. 29). Moreover, please note that both happened just above the declining blue support line. It was the final pause before the move higher was invalidated.Having said the above, let’s move to gold stocks:Miners: GDX and GDXJ ETFsIn yesterday’s analysis, I described the GDX’s previous performance in the following way:Gold stocks’ intraday recovery that we saw yesterday may seem profound, but not if we consider what happened in the USD Index and the general stock market. The former declined substantially while the latter was close to its all-time highs. This is a combination of factors that “should have” made gold miners move to new highs – and a daily gain of less than half percent is a sign of weakness, not strength.In today’s pre-market trading the S&P 500 futures moved to new highs, and gold miners showed gains in the London trading, but they are nothing to write home about – and more importantly, nothing that would change the bearish forecast for gold I described more broadly previously .The bearish interpretation of the previous “strength” turned out to have been correct – the GDX ETF declined yesterday.The decline was even more visible and important in the case of the GDXJ ETF, where we have trading positions.This ETF for junior gold and silver miners ( gold miners have much bigger weight in it, though) moved and closed back below its March 2021 highs.Consequently, we have a situation in which:The USD Index is about to reverse and rally.Gold signals that it just can’t wait for the USD Index to rally, and it’s already declining (the pace at which it declines is likely to greatly increase once the USD Index takes off).Gold miners behave relatively normally, which in this case means that they are declining more than gold does (GLD just closed 1.14% below the highest daily close of April, while the GDX just closed 5.59% below the highest daily close of April). Besides, their recent move back to the May 2020 highs and the subsequent decline further increases the odds that the decline is going to shape the right shoulder of a huge head and shoulders formation with extremely bearish implications (once completed).GDXJ is underperforming GDX just as I’ve been expecting it to. While GDX declined by 5.59% so far (in terms of the closing prices), GDXJ declined by 5.67%. This might seem an unimportant level of underperformance, but the perspective changes once one realizes that GDXJ is more correlated with the general stock market than GDX is. Consequently, GDXJ should be showing strength here, and it isn’t. If stocks don’t decline, GDXJ is likely to underperform by just a bit, but when (not if) stocks slide, GDXJ is likely to plunge visibly more than GDX.The above combination tells me that we are very well positioned in case of our short position in the GDXJ.Besides, as an analytical cherry on the bearish GDXJ cake, please note that we just saw a sell signal from the MACD indicator (lower part of the chart) while it was visibly above 0, and after a relatively big short-term rally. We saw this kind of performance only several times in the previous year, and it meant declines in almost all cases. We saw it only once before this year – in early January, and a sizable decline followed.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
US Industry Shows Strength as Inflation Expectations Decline

Gold Sings a “Hot N Cold” Song

Finance Press Release Finance Press Release 30.04.2021 18:18
Although spring has begun, we can still find ourselves in winter, or even summer. Gold may benefit from such a seasonal aberration.Oh, how wonderful, spring has finally started, hasn’t it? We have April, after all. Well, in calendar terms, it’s indeed spring, but economically it can be summer already or still the beginning of winter. How so? I refer here to Kondratiev cycles (also known as Kondratieff cycles or Kondratyev cycles).As a reminder, Nikolai Kondratiev was a Russian economist who noted in the 1920s that capitalist economies experience long super-cycles, lasting 40-60 years (yup, it’s not a very precise concept). His idea was that capitalism was not on an inevitable path to destruction, but that it was rather sustainable and cyclical in nature. Stalin didn’t like this conclusion and ordered a prison sentence and, later, an execution for Kondratiev. And you thought that being an economist is a boring and safe profession!The Kondratiev cycles, also called waves, are composed of a few phases, similar to the seasons of the year. In 2018, I defined them as follows:Spring : economic upswing, technological innovation which drives productivity, low inflation , bull market in stocks, low level of confidence (winter’s legacy).Summer : economic slowdowns combined with high inflation and bear market in stocks, this phase often ends in conflicts.Autumn : the plateau phase characterized by speculative fever, economic growth fueled by debt, disinflation and high level of confidence.Winter : a phase when the excess capacity is reduced by deflation and economic depression, debt is repaid or repudiated. There is a stock market crash and high unemployment rate , social conflicts arise.However, other economists define these phases in a slightly different manner. For them, spring is an inflationary growth phase, summer is a period of stagflation (inflationary recession ), autumn a deflationary growth period, while winter is a time of deflationary depression.So, which phase are we in? That’s a very good question. After all, the whole concept of Kondratiev cycles is somewhat vague, so it’s not easy to be precise. But some experts believe that we are likely in the very early part of the winter after a very long autumn . Indeed, there are some important arguments supporting such a view.First, we have been experiencing a long period of disinflation (and later just low inflation), a decline in the bond yields , and economic growth fueled by debt. I refer here to the time from the end of the Great Recession until the Covid-19 pandemic , but one can argue that autumn lasted since the early 1980s, when both interest rates and inflation peaked, as the chart below shows.Second, winter is believed to be a depression phase with stock and debt markets collapsing, but with commodity prices increasing. And this is exactly what we are observing right now. I refer here to the rally in several commodity prices. This is at least partially caused by the disruption in the supply chains amid the epidemic in the U.S. and worldwide pandemic, but if the bull market in commodities sets in for good, this could be a negative harbinger for the stock market. After all, more expensive raw materials eat into corporate profits.Third, winter is thought of as a period that tears the social fabric of society and deepens the inequalities. The data is limited, but the coronavirus crisis has been one of the most unequal in modern U.S. history, as its costs have been borne disproportionately by the poorer parts of society that have been unable to work online.So, “winter is coming” may be a belated warning, as winter could have already begun. Later during this period, we could see bankruptcies of firms and financial institutions, and even some governments, as a delayed consequences of the coronavirus crisis. This is bad news for the whole of Westeros and its economy, but good for gold. Investors who don’t like the cold should grab a golden blanket to hedge them from the winter.However, in 2018, I expressed the opinion that summer may come in the 2020s, as the debts are rising and the inflationary pressure is growing:As the global economy recovered and now expands, inflation is low, while stocks still rally, we enjoy spring. This is why gold has remained in a broad sideways trend in the last few years. However, as we are on the edge of the next technological revolution, confidence is finally rising and there are worries about higher prices, and we could enter the summer phase in the not-so-distant future.And I still believe that my opinion makes sense. Indeed, after the global financial crisis of 2007-9, we have seen several spring features: low inflation, a bull market in stocks, and a low level of confidence (after all, there was “the most hated rally in the stock market”), which was a legacy of winter, i.e., the collapse of Lehman Brothers and the following economic crisis .And summer is generally a period of stagflation, which is exactly what I’m expecting. You see, after a strong economic recovery in the nearest quarters, the U.S. economy is likely to return to a mediocre pace of economic growth, but with much higher inflation. After all, there is strong monetary and fiscal stimulation ongoing right now, another feature of summer. Meanwhile, winter is generally a deflationary period, so the specter of inflation rather suggests that summer may be coming and investors should hedge themselves against waves of gold.Luckily, gold offers its protection not only against winters, but also against summers . Indeed, gold performs the worst during autumns, when there is disinflation, like in the 1980s and the 1990s, and the best during winters (due to the economic crisis – remember the 2000s?) and the summers (due to high inflation – remember the 1970s?).Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get a 7-day no-obligation trial for all of our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Will Biden Build Back Better… Gold?

Finance Press Release Finance Press Release 04.05.2021 13:22
New spending is coming! And because of that, Biden’s speech to Congress was fundamentally positive for gold.Last week was full of big events. The FOMC released its newest statement on monetary policy meeting, while Powell held the press conference. On the same day, President Joe Biden made his first speech to Congress . Let’s take a look at his words.First of all, Biden laid out his American Jobs Plan , which proposes more than $2 trillion to upgrade US infrastructure and create millions of jobs. No matter that infrastructure spending has no stimulus effect, according to economic research .Second, if you think that $2 trillion is a lot of money, given America’s huge indebtedness, you are clearly wrong. Two trillion is practically nothing and definitely not enough, so Biden proposed another $1.8 trillion American Family Plan in investments and tax credits to provide lower-income and middle-class families with inexpensive childcare.Third, Biden understands that all these expenditures cannot be funded solely by increasing already huge fiscal deficits (see the chart below) and issuing new bonds.So, he proposed a hike in tax rates:It’s time for corporate America and the wealthiest 1% of Americans to pay their fair share. Just pay their fair share (…) We take the top tax bracket for the wealthiest 1% of Americans –those making $400,000 or more – back up to 39.6%.No matter that corporate taxes are implicit taxes on labor and that the current proposals for tax hikes are unlikely to fund the White House’s ambitious plans.Biden also proposed several reforms of the labor market: a 12-week paternal leave for families and an increase of the minimum wage to $15 an hour.So, in short, his speech called for several bold economic policies aiming to increase government spending and strengthen the American welfare state. Sounds good… for gold.Implications for GoldWhat does the Biden speech, and more generally his economic agenda, imply for the precious metals market? Well, it seems that the President cares not only about the workers, but also about the gold bulls. His plan is fundamentally positive for the yellow metal . After all, Biden wants to further increase government spending, which will weaken the long-term pace of economic growth and add to the mammoth pile of the public debt .There are also hints that this massive government spending flowing directly to the citizens could ignite inflation . After all, the US economy has already recovered from the pandemic recession , at least in the GDP terms, as the chart below shows. So, Biden’s economic agenda risks that the economy will overheat igniting inflation.He also adopted a more confrontational stance toward China, which could elevate the geopolitical worries and increase the demand for safe-haven assets such as gold .Another potential benefit is the proposal to raise corporate taxes, which is clearly negative for the US stock market and the greenback . Hence, gold could gain at their expense, especially if we see a pullback in the equity market…Last but not least, the increase in the minimum wage, and other labor market reforms, will not help in a quick employment recovery, so the Fed will maintain its dovish policy for longer. Indeed, we should look at Biden’s message together with the Fed’s signals. Biden proposed trillions of dollars in new spending, while Powell reiterated no hurry to raise interest rates . What a policy mix! We have both easy monetary policy and loose fiscal policy , a golden policy mix , indeed.Gold didn’t react strongly to these events, which is a bit disturbing, but this can be explained by the gains on Wall Street, as investors felt reassured that a financial bonanza would last undisturbed. So, the economic confidence remains high, but if it wanes, especially if inflationary threats come to the surface, gold may perform better.If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Should you buy Microsoft and Google before earnings? - 04.05.2021

Kseniya Medik Kseniya Medik 04.05.2021 13:59
What will happen?Two stock giants – Microsoft and Google – will publish earnings reports for the first quarter of 2021 on Tuesday after the market closes. Microsoft will release their financial results after midnight on April 27 at 00:30 (formally April 28) MetaTrader time (GMT+3), while Google at the midnight. By the way, the stock market is open from 16:30 to 23:00 MT (GMT+3). What to expect?Google is expected to deliver $15.45 earnings per share, while Microsoft – $1.76.How to trade on earnings?Check the economic calendar at the time of release to compare the actual data with the estimate.If the earnings come out better than expected, the stock price will move up. In case of worse-than-forecasted earnings, the stock price will move down.Microsoft outlookMicrosoft hit an all-time high yesterday, breaking above $260.00. Therefore, the way up to the next round number of $270.00 is open. Since expectations are high, Microsoft is rallying up even ahead of the earnings report. Forecasts are bullish, thus the stock is likely to keep climbing up. However, the RSI indicator is just below the 70.00 level. Once it breaks above this level, the stock becomes overbought and the reverse down may occur. Thus, be aware of the support levels at the low of April 14 at $255 and the psychological mark of $250. If the stock price goes down, it is likely to stop ahead of these levels rather than break out them. Google outlookAnalysts forecast that Google is likely to beat market estimates as its main source of profit – the advertising segment – recovered. Let’s look at the chart. If earnings are encouraging, Google may rise to the next round number of $2400, but the RSI indicator went above 70.00, signaling the overbought conditions. Therefore, the rally up shouldn’t last long. Support levels are at the recent low of $2250 and the 50-day moving average of $2140. Download the FBS Trader app to trade anytime anywhere! For personal computer or laptop, use MetaTrader 5!
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

NASDAQ: The Leaders Lead. Or Attempt to, and Fail

Finance Press Release Finance Press Release 05.05.2021 15:20
The most bearish development for gold came from… the NASDAQ. And no, these are not six typos in a row. Let me explain.The tech stocks were the strongest part of the stock market in the previous year or so, and for a good reason. Due to the lockdown-induced surge in remote work, the need for all sorts of tech improvements (in both: software and hardware) soared. So, it’s no wonder that the NASDAQ was the strongest part of the market. It was the sole leader.Now, there’s a rule in every market that leaders… Well, lead. This makes perfect sense, no surprise yet. But, there’s a point after which the leaders stop leading and stocks that are relatively weak or have less favorable fundamentals are catching up, eventually rallying more than the leaders. Why would this be the case? Because those who understand the markets and what’s going on are already invested, and those who are neither as knowledgeable nor experienced – the investment public – enter the market.The investment public makes purchases often without any regard to fundamentals (or technicals) – they buy because a given asset seems cheap compared to other assets. And what would be cheap in the final part of the upswing – after the market professionals have already established their positions in well-positioned assets? The poorly positioned assets. The stocks/markets that were – for a good reason – neglected previously. So, they start buying those, and the laggards become the new leaders.The NASDAQ was the leader that started to underperform while other stocks soared. The last few months were as clear as it gets in terms of emphasizing that. While the S&P 500 Index soared to new all-time highs, the only thing that the tech stocks managed to do was to attempt to break to new highs.Attempt.And fail.Last week’s shooting-star-shaped weekly reversal was bearish on its own, but considering that it was also a failure to break to new highs, the bearish fire got gasoline poured over it.Now, this could have been accidental, and it was prudent to wait for another decline before stating that the top in the stock market is most likely in…Until we saw yesterday’s slide. The NASDAQ is already over 2% lower this week, and it’s only after two sessions.Why is this important? Because if we have indeed seen a major top on the stock market , then it tells us a lot about the next moves on the precious metals market. And – in particular – about mining stocks.The history might not repeat itself, but it does rhyme, and those who insist on ignoring it are doomed to repeat it.And there’s practically only one situation from more than the past four decades that is similar to what we see right now.It’s the early 2000s when the tech stock bubble burst. It’s practically the only time when the tech stocks were after a similarly huge rally. It’s also the only time when the weekly MACD soared to so high levels (we already saw the critical sell signal from it). It’s also the only comparable case with regard to the breakout above the rising blue trend channel. The previous move above it was immediately followed by a pullback to the 200-week moving average, and then the final – most volatile – part of the rally started. It ended on significant volume when the MACD flashed the sell signal. Again, we’re already after this point.The recent attempt to break to new highs that failed seems to have been the final cherry on the bearish cake.Why should I – the precious metals investor, care?Because of what happened in the XAU Index (a proxy for gold stocks and silver stocks ) shortly after the tech stock bubble burst last time.What happened was that the mining stocks declined for about three months after the NASDAQ topped, and then they formed their final bottom that started the truly epic rally. And just like it was the case over 20 years ago, mining stocks topped several months before the tech stocks.Mistaking the current situation for the true bottom is something that is likely to make a huge difference in one’s bottom line. After all, the ability to buy something about twice as cheap is practically equal to selling the same thing at twice the price. Or it’s like making money on the same epic upswing twice instead of “just” once.And why am I writing about “half” and “twice”? Because… I’m being slightly conservative, and I assume that the history is about to rhyme once again as it very often does (despite seemingly different circumstances in the world). The XAU Index declined from its 1999 high of 92.72 to 41.61 – it erased 55.12% of its price.The most recent medium-term high in the GDX ETF (another proxy for mining stocks) was at about $45. Half of that is $22.5, so a move to this level would be quite in tune with what we saw recently.And the thing is that based on this week’s slide in the NASDAQ that followed the weekly reversal and the invalidation, it seems that this slide lower has already begun.Wait, you said something about three months?Yes, that’s approximately how long we had to wait for the final buying opportunity in the mining stocks to present itself based on the stock market top.The reason is that after the 1929 top, gold miners declined for about three months after the general stock market started to slide. We also saw some confirmations of this theory based on the analogy to 2008.All in all, the precious metals sector would be likely to bottom about three months after the general stock market tops. If the last week’s highs in the S&P 500 and NASDAQ were the final highs, then we might expect the precious metals sector to bottom in the middle of the year – in late July or in August.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Stocks and Gold – Hot and Hotter

Monica Kingsley Monica Kingsley 06.05.2021 15:50
The rebound off Tuesday‘s lows continued semisuccessfully yesterday – further upside was rejected in spite of signs of strength both within the S&P 500 and outside markets. Technically, the bulls are still on a dicey, vulnerable ground – but increasingly less so. It‘s that VIX is calming down, and the put/call ratio has sharply moved into its complacent spectrum. And not only that – new highs new lows are rising in spite of the advance-decline line being little moved.These are all budding signs of the upcoming break higher, and no change in the reflationary positive dynamics for stocks, let alone the red hot commodities. These (copper, agrifoods, base metals, lumber, oil) continue appreciating in spite of nominal yields pulling back a little these days. Make no mistake though, deflation isn‘t about to break out. Lower yields no longer work in support of all the defensive sectors – technology has passed the leadership baton long ago to value stocks (think Mar), but appears to be bottoming here in spite of the reversal late yesterday. That‘s positive as any S&P 500 advance has to count on both value and tech pulling ahead more or less simultaneously. A welcome sign of returning animal spirits in the 500-strong index would be the Russell 2000 juices flowing again. Thus far, even the emerging markets are hesitating.Not that they should be – the USD Index looks very vulnerable to me here, and its anticipated downside move (the smoke and mirror games I talked about on Monday and Wednesday are nothing but a distraction) would help lift international markets, and is also part of the explanation behind the strong commodity performance these days. This CRB Index move is key, and shows how far have real assets progressed in shaking off the dollar link – if you compare the dollar‘s value in early Feb and now, you are looking at very meaningfully higher commodity prices over that same time period.Gold and silver are about to shake off the dollar shackles as they catch up to commodities that have left them in the dust since Aug or Nov. The key metrics such as nominal or real yields support the precious metals rebound increasingly more – don‘t be fooled, gold would break above the $1,800 resistance, whether you look at it as a purely psychological one, or as a neckline of an inverse head and shoulders on the daily chart. The advance across the real assets, the precious metals and commodities super bull, would be more well rounded then. As I wrote yesterday:(…) I‘m known for incessantly beating the copper bullish drum, and also the oil one, and here we are with further gains added since my latest oil analysis. Silver might pull back a little here, but look for it to mirror the insatiable appetite for base metals and other commodities. Beyond the Green New Deal mandates, the monetary demand is set to help power the white metal higher.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookShort-term vulnerability and drying up volume as we‘re waiting for the daily indicators to turn brighter. Some more sideways trading would do that trick.Credit MarketsThe corporate credit markets keep signalling higher stock prices next, though. Notably, both HYG and LQD rose in spite of long-dated Treasuries turning up as well.Technology and ValueDid it bottom, did it not? For much of yesterday‘s session, the tweezer bottom approximating formation was in place. Both semiconductors (XSD ETF) and heavyweights ($NYFANG) gave up the encouraging intraday gains, and value (VTV ETF) wasn‘t strong enough to save the day. The question of a tech bottom remains of crucial importance, and looking at the distance between both XLK and $NYFANG price swings relative to the 50-day moving average, the odds are good for higher tech prices right next.Inflation ExpectationsInflation expectations have moderated their run, and are currently consolidating. The key sign here is that Treasury yields are no longer frontrunning them, but have come modestly down lately. Coupled with the USD/JPY below 109.20 making a rounding top, that‘s one less headwind for gold.Gold, Silver and MinersMiners aren‘t underperforming, and the tentative signs of strength beyond the intraday flavor returning, are there.Silver didn‘t outperform yesterday, which means that the precious metals sector isn‘t approaching short-term overheating. At the same time, the copper to 10-year Treasuriy yields is increasingly supportive of the coming gold upleg.SummaryS&P 500 is short-term consolidating only, and getting ready for a new upswing whenever the technology behemoths turn. These are the decisive factor of sustainable and noticeable stock market gains. Gold and miners have bullishly consolidated yesterday, and are amply supported by related markets to score strong gains next.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Gold & Silver Begin New Advancing Cycle Phase

Chris Vermeulen Chris Vermeulen 06.05.2021 17:17
Before going into detail regarding my latest research and cycle phases, I want you to think of these cycle phases as Advancing and Declining cycle trends.  They act as a “build-up of trend”, then an “unwinding of trend”.  In each instance, trends can be either Bullish, Bearish, or Neutral in nature.  My research team and I believe a new Bullish Cycle Phase has begun in Gold and Silver.  If our research is correct, the next Advancing Cycle Phase may prompt a broad rally in Gold and Silver.Understanding Cycle Phase Analysis & Trends in MetalsWe interpret these cycle phases as unique trend segments involved in a broader cycle scope.  For example, over a longer-term rally, we may see many Bullish Advancing and Declining cycle phases take place – one after another.  Conversely, we may see many Bearish cycle phases take place in an extended downtrend.  Another type of cycle phase can also exist, the Reversal Cycle Phase – where price Advances in one direction and Declines in the opposite direction.  This type of Rotation Cycle Phase exists as the current completed Cycle on the Gold chart, below.As we are nearing the end of the current Declining Cycle Phase as seen in the chart below, we will soon begin the new Advancing Cycle Phase in Gold.  Gold's Reversal Cycle Phase that took place between December 21, 2020, and May 10, 2021, will likely close higher than the midpoint (or Apex) of the total Cycle Phase.  This suggests a new bullish price trend has taken over and the price is more likely to move higher in the next Advancing Cycle Phase. If this trend continues, then the price will continue to rally higher in the Declining Cycle Phase as well – as we saw in the first Cycle Phase: between March 16, 2020, and August 3, 2020.Gold & Silver Phase Tables – Will Price Continue A New Bullish Cycle Phase?To help explain our Cycle research, we've put together these tables to detail the Cycle Phases and price logic we use to interpret each Advancing and Declining phase.  Each table entry consists of an Advancing, then Declining Cycle Phase.  Combined, they make up a complete Cycle Phase.  We are measuring price at the midpoint (Apex) of the Cycle Phase to determine if any Advancing or Declining Cycle Phase is Bullish or Bearish in trend.  If both Advancing and Declining Cycle Phases show the same trend direction, we define that completed Cycle Phase as Bullish or Bearish.  If they differ in trend types, we define that completed Cycle Phase as a Reversal Phase.Sign up for my free trading newsletter so you don’t miss the next opportunity!Gold has been in a downtrend recently while Silver has continued to stay somewhat bullish in a sideways price trend.  You can see from the tables below, Gold recently completed a Reversal Cycle Phase (ending with a Bullish Declining Phase) while Silver has continued to exhibit Bullish Cycle Phases since March 9, 2020.Both Gold and Silver ended their last completed Cycle Phases recently.  Gold will end the last completed Cycle Phase on May 10, 2021.  Silver ended its last completed Cycle Phase on April 12, 2021. The next Advancing Cycle Phase for both Gold and Silver will begin this week and next week – and will continue until July 19, 2021.  After that, the Declining Cycle Phase will begin and last until late September, for Gold, and late October for Silver.If our research is correct, we may see extended bullish trending over the next 6+ months in both Gold and Silver.Silver Cycle Phases Continue To Show Stronger Bullish TrendingThe following Silver Weekly Chart highlights the Cycle Phases and highlights the price trends for each Advancing and Declining Cycle Phase.  While Gold has experienced an extended Bearish Cycle Phase over the past 5+ months, Silver has continued to show stronger bullish price Cycle Phases and continues to attempt higher closing price levels at the end of each Cycle Phase.  We believe this suggests Silver is likely to see some explosive upside price trending when the $28.42 level (the higher YELLOW line) is breached.  This level represents historical price resistance for Silver.  Once this level is breached, we believe Silver will begin to advance higher very quickly.Remember, we have until July 19, 2021, before the first Advancing Cycle Phase in Silver ends.  This Advancing Phase may prompt a move above the $28.42 level and may attempt to rally above $30.00 as we have drawn on the chart (below). If the Declining Cycle Phase continues this bullish trend, we may see Silver trading above $32.00 ~ $33.00 before Halloween 2021.  This would represent a +26.5% rally in Silver from the last completed Cycle Phase price level.In closing, we want to suggest that a rally as we are proposing in Gold and Silver will also present a renewed risk factor for the US and global markets (potentially). In the past, we have seen precious metals rally while the US stock market rallies.  It is not uncommon for precious metals to begin to move higher while the US stock market continues to move higher.  This type of price activity simply suggests that global traders/investors are moving capital into Precious Metals as the US stock market climbs a strengthening “wall of worry”.  This type of price action happened from 2004 to 2009 – prior to the Credit Crisis/Housing Crisis.As we've been suggesting for many months, the next few years are going to be full of incredible opportunities for traders and investors. Smart traders will quickly identify these phases of the market and will understand how to position themselves to take advantage of this next phase. You can learn more about how I identify and trade Gold, Silver, and the markets by watching my FREE step-by-step guide to finding and trading the best sectors. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily pre-market reports, proprietary research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers. Sign up today!Happy Trading!
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Ready for More Hot Gold and Stocks Profits

Monica Kingsley Monica Kingsley 07.05.2021 16:22
One final attempt to go down before reversing to strong gains all the way to the closing bell – the S&P 500 returned to trading back at the upper border of its prolonged consolidation range. Again at 4,200, new ATHs are back in sight – that‘s at least what the impression from declining VIX says, and the option traders might disagree here all they want, they‘re likely to be the next cannon fodder in the bullish advance.Needless to say that my reasonably and justifiably aggressive long positions in both S&P 500 and gold, are innundated with rising profits. Initiated in the vicinity of Tuesday‘s lows, I look for more gains in stocks (we‘ll get to the metals shortly) in spite of smallcaps still lagging behind (don‘t worry, they‘ll catch up over time, and I will cover that), and precisely because emerging markets are rejoicing over further dollar woes. Yes, the glitzy and fake tightening show is officially over since I first vocally called for it in Monday‘s analysis.Keep an eye on the big picture presented yesterday:(…) no change in the reflationary positive dynamics for stocks, let alone the red hot commodities. These (copper, agrifoods, base metals, lumber, oil) continue appreciating in spite of nominal yields pulling back a little these days. Make no mistake though, deflation isn‘t about to break out. Lower yields finally coincided with (supported) the defensive sectors the way it ideally should – technology bottom searching is over, Dow Jones Industrial Average is spurting higher, utilities recovered, and consumer staples continued upwards as if nothing happened at all. Maybe is this heavy on P&G sector placing faith in the market leader‘s pricing power to result in a success once September arrives with the rest of crowd following? That‘s the part of the cost-push inflation I discussed on Monday. I truly hope that people are paying attention, and don‘t put all their eggs into e.g. the dollar basket when it comes to commodities:(…) the USD Index … anticipated downside move ... would help lift international markets, and is also part of the explanation behind the strong commodity performance these days. This CRB Index move is key, and shows how far have real assets progressed in shaking off the dollar link – if you compare the dollar‘s value in early Feb and now, you are looking at very meaningfully higher commodity prices over that same time period.Gold and silver fireworks arrived, and more is to come! What a better proof than a broad based advance across the sector, starting with both metals, and extending to gold and silver miners left and right. Not to mention the copper fires burning brightly – if you were listening to my incessant red metal bullish calls, you‘re very happy now. And just as in the precious metals, there is more to come here too. So happy for all you who had the patience to wait out a couple of adverse sessions, because:(…) The key metrics such as nominal or real yields support the precious metals rebound increasingly more – don‘t be fooled, gold would break above the $1,800 resistance, whether you look at it as a purely psychological one, or as a neckline of an inverse head and shoulders on the daily chart. The advance across the real assets, the precious metals and commodities super bull, would be more well rounded then. As for Bitcoin, such was my yesterday‘s (still valid) assessment in a series of updates of the leading, but currently lagging crypto when compared to Ethereum or Dogecoin, the latter being a true middle finger to the financial system. GameStop, silver squeeze, Doge...Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookYesterday‘s rebound happened on rising volume, lending it credibility for the sessions to come. The bears weren‘t obviously convinced enough to sell as yesterday‘s volume lagged behind Tuesday‘s one.Credit MarketsThe corporate credit markets kept yesterday and still keep today signalling higher stock prices next. Notably, both HYG and LQD rose again in spite of long-dated Treasuries turning up as well.Technology and ValueTechnology did indeed bottom, and the heavyweights contributed reasonably enough to its advance. Semiconductors could have fared a little better, but that‘s not a major issue. At the same time, value stocks continued their steep ascent, as reliably as ever.S&P 500 Market BreadthThe S&P 500 advance wasn‘t accompanied by either new highs new lows or the advance-decline line turning up noticeably. Might be disappointing at first sight, but the overall impression is still of a healthy and quite broad advance.Gold and Miners Short-TermMiners and gold are in tune with each other, jointly pulling the cart of the precious metals advance. No further words are necessary here, I believe.Gold, Silver and Miners Long-TermJust as strongly when I doubted the miners to gold plunge on Monday, the ratio swiftly recovered starting Tuesday and extending gains yesterday. Please note silver springing to leadership position again – gradually first, more obviously throughout this week on the silver squeeze heels, which would be a volatile ride, but once again, silver is the best of both worlds – the monetary and industrial applications ones.Crude OilCrude oil pulled back a little yesterday, but the series of higher highs and higher lows since April hasn‘t been violated. The table remains set for further gains, and the only question is how fast these come – I‘m standing by my calls for at least $80 West Texas Intermediate before 2022 is over. Seasonality is still good for black gold, so enjoy the ride!SummaryS&P 500 is readying another reach for the highs, finally supported (a ka not being hampered by) technology. Risk on is returning and high beta stock markets pockets are expected to keep doing well. Gold, silver and miners have firmly positioned themselves to extend yesterday‘s much awaited and well deserved gains. The upleg is just getting started, now that the few weeks‘ consolidation is over.
Boosting Stimulus: A Look at Recent Developments and Market Impact

GDX, HUI: Will Paradise Turn into a Dystopia?

Finance Press Release Finance Press Release 10.05.2021 16:29
The GDX and HUI Index are enjoying a blissful moment. With HUI behaving civilly, will the GDX cling to the unrealistic and try to leap to cloud “ten”?With the GDX ETF punching a hole through its glass ceiling, the senior miners are now witnessing an environment that’s beyond their wildest dreams: sunshine, clear skies and a utopia that’s eluded them since the beginning of the New Year. However, while leaving paradise is often more difficult than arriving, the GDX ETF’s recent vacation is likely coming to an end. And with the senior miners about to resume the daily grind of real life, their optimism will likely fade with the tropical sun.To explain, while the GDX ETF remains on cloud nine, the HUI Index (a proxy for gold mining stocks ) has already left the resort. With the latter’s long-term outlook still intact and its broad head & shoulders pattern remaining on schedule, I wrote previously that the right shoulder would likely form after the HUI Index reaches 300. And after closing at 301.72 on May 7, the BUGS (after all, HUI is called the Gold Bugs Index) are currently living up to expectations.Please see below:Moreover, while corrective short-term upswings within a medium-term downtrend can feel discouraging, it’s important to remember that similar instances occurred in 2008 and 2012. Remember: Tom Petty & The Heartbreakers warned us that the waiting is the hardest part. However, in the end, the wait should be more than worth it.To explain, note that the 2007 – 2008 and the 2009 – 2012 head and shoulders patterns didn’t have the right shoulders all the way up to the line that was parallel to the line connecting the bottoms. I marked those lines with green in the above-mentioned formations. In the current case, I marked those lines with orange. Now, in both cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02.That’s why I previously wrote that “it wouldn’t be surprising to see a move to about 300 in the HUI Index”. And that’s exactly what we saw. To clarify, one head-and-shoulders pattern – with a rising neckline – was already completed, and one head-and-shoulders pattern – with a horizontal neckline – is being completed, but we’ll have the confirmation once miners break to new yearly lows.For more context, I wrote previously:The recent rally is not a game-changer, but rather a part of a long-term pattern that’s not visible when one focuses on the short-term only.The thing is that the vast majority of individual investors and – sadly – quite many analysts focus on the trees while forgetting about the forest. During the walk, this might result in getting lost, and the implications are no different in the investment landscape.From the day-to-day perspective, a weekly – let alone monthly – rally seems like a huge deal. However, once one zooms out and looks at the situation from a broad perspective, it’s clear that:“What has been will be again, what has been done will be done again; there is nothing new under the sun.” (-Ecclesiastes 1:9)The rally is very likely the right shoulder of a broad head and shoulders formation. “Very likely” and not “certainly”, because the HUI Index needs to break to new yearly lows in order to complete the pattern – for now, it’s just potential. However, given the situation in the USD Index (i.a. the positions of futures traders as seen in the CoT report , and the technical situation in it), it seems very likely that this formation will indeed be completed. Especially when (not if) the general stock market tumbles.In addition, three of the biggest declines in the mining stocks (I’m using the HUI Index as a proxy here), all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the decline exceeded the size of the head of the pattern.Can we see gold stocks as low as we saw them last year? Yes.Can we see gold stocks even lower than at their 2020 lows? Again, yes.Of course, it’s far from being a sure bet, but the above chart shows that it’s not irrational to expect these kind of price levels before the final bottom is reached. This means that a $24 target on the GDX ETF is likely conservative.In addition, mining stocks are currently flirting with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early 2020 high.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.I know, I know, this seems too unreal to be true… But wasn’t the same said about silver moving below its 2015 bottom in 2020? And yet, it happened.Keep in mind though: scenario #2 most likely requires equities to participate. In 2008 and 2020, the sharp drawdowns in the HUI Index coincided with significant drawdowns of the S&P 500 . However, with the words ‘all-time high’ becoming commonplace across U.S. equities, the likelihood of a three-peat remains relatively high.Circling back to the GDX ETF, on May 7, the senior miners inched closer to their May 2020 high. And while the development may seem bullish on the surface, the price action actually creates symmetry between the GDX ETF’s left and right shoulders. With May 2020’s peak occurring at nearly the same level, a move lower from here would only enhance the validity of the GDX ETFs H&S pattern.On top of that, this is the third time that the GDX ETF has poked its head above the upper trendline of its roughly one-and-a-half-month channel. An ominous sign, the GDX ETF’s swoon in late 2020/early 2021, occurred precisely after the senior miners delivered their third act. Furthermore, a small breakout without confirmation is akin to a promise from a friend that can’t keep his word. Thus, with the GDX ETF still underperforming gold on a relative basis, it’s important to analyze the recent price action within its proper context.Please see below:For more context, I wrote on May 5:The history might not repeat itself, but it does rhyme, and those who insist on ignoring it are doomed to repeat it. And there’s practically only one situation from more than the past four decades that is similar to what we see right now.It’s the early 2000s when the tech stock bubble burst. It’s practically the only time when the tech stocks were after a similarly huge rally. It’s also the only time when the weekly MACD soared to so high levels (we already saw the critical sell signal from it). It’s also the only comparable case with regard to the breakout above the rising blue trend channel. The previous move above it was immediately followed by a pullback to the 200-week moving average, and then the final – most volatile – part of the rally started. It ended on significant volume when the MACD flashed the sell signal. Again, we’re already after this point.The recent attempt to break to new highs that failed seems to have been the final cherry on the bearish cake.Why should I – the precious metals investor care?Because of what happened in the XAU Index (a proxy for gold stocks and silver stocks ) shortly after the tech stock bubble burst last time.What happened was that the mining stocks declined for about three months after the NASDAQ topped, and then they formed their final bottom that started the truly epic rally. And just like it was the case over 20 years ago, mining stocks topped several months before the tech stocks.Mistaking the current situation for the true bottom is something that is likely to make a huge difference in one’s bottom line. After all, the ability to buy something about twice as cheap is practically equal to selling the same thing at twice the price. Or it’s like making money on the same epic upswing twice instead of “just” once.And why am I writing about “half” and “twice”? Because… I’m being slightly conservative, and I assume that the history is about to rhyme once again as it very often does (despite seemingly different circumstances in the world). The XAU Index declined from its 1999 high of 92.72 to 41.61 – it erased 55.12% of its price.The most recent medium-term high in the GDX ETF (another proxy for mining stocks) was at about $45. Half of that is $22.5, so a move to this level would be quite in tune with what we saw recently.And the thing is that based on this week’s slide in the NASDAQ that followed the weekly reversal and the invalidation, it seems that this slide lower has already begun.“Wait, you said something about three months?”Yes, that’s approximately how long we had to wait for the final buying opportunity in the mining stocks to present itself based on the stock market top.The reason is that after the 1929 top, gold miners declined for about three months after the general stock market started to slide. We also saw some confirmations of this theory based on the analogy to 2008. Consequently, we might see the next major bottom – and the epic buying opportunity in the mining stocks – about three months after the general stock market tops. The NASDAQ might have already topped, so we’re waiting for the S&P 500 to confirm the change in the trend.The bottom line?New lows are likely to complete the GDX ETF’s bearish H&S pattern and set the stage for an even larger medium-term decline. And if the projection proves prescient, medium-term support (or perhaps even the long-term one) will likely emerge at roughly $21.But why ~$21?The target aligns perfectly with the signals from the GDX ETF’s 2020 rising wedge pattern. You can see it in the left part of the above chart. The size of the move that follows a breakout or breakdown from the pattern (breakdown in this case) is likely to be equal (or greater than) the height of the wedge. That’s what the red dashed line marks.The target is also confirmed when applying the Fibonacci extension technique. To explain, if we take the magnitude of the GDX ETF’s recent peak-to-trough decline and extrapolate it by multiplying it by the Fibonacci sequence, the output results in a target adjacent to $21. I used the Fibonacci retracement tool to show that in the above chart. Interestingly, the same technique was useful in 2020 in order to time the March bottom.The broad head-and-shoulders pattern with the horizontal neckline at about $31 points to the $21 level as the likely target.Likewise, when analyzing the situation through the lens of the GDXJ ETF, the junior miners are eliciting the same bearish signals. If you analyze the chart below, you can see that despite the recent strength, the GDXJ ETF is still trading below its medium-term rising support line (the thick black line below). More importantly, though, with the junior miners failing to reclaim this key level, their bearish H&S pattern remains intact.Even more ominous, the GDXJ ETF remains a significant underperformer of the GDX ETF. Despite sanguine sentiment and a strong stock market creating the perfect backdrop for the junior miners, the GDXJ ETF has failed to live up to the hype.To explain, I wrote previously:GDXJ is underperforming GDX just as I’ve been expecting it to. Once one realizes that GDXJ is more correlated with the general stock market than GDX is, GDXJ should be showing strength here, and it isn’t. If stocks don’t decline, GDXJ is likely to underperform by just a bit, but when (not if) stocks slide, GDXJ is likely to plunge visibly more than GDX.Expanding on that point, the GDXJ/GDX ratio has been declining since the beginning of the year, which is remarkable because the general stock market hasn’t plunged yet. However, once the general stock market suffers a material decline, the GDXJ ETF’s underperformance will likely be heard loud and clear.Please see below:So, how low could the GDXJ ETF go?Well, absent an equity rout, the juniors could form an interim bottom in the $34 to $36 range. Conversely, if stocks show strength, juniors could form the interim bottom higher, close to the $42.5 level. For context, the above-mentioned ranges coincide with the 50% and 61.8% Fibonacci retracement levels and the GDXJ ETF’s previous highs (including the late-March/early-April high in case of the lower target area). Thus, the S&P 500 will likely need to roll over for the weakness to persist beyond these levels.Moreover, the HUI Index/S&P 500 ratio has recorded a major, confirmed breakdown. And with the ratio nowhere near recapturing its former glory, it’s another sign that a storm is brewing. Moreover, after moving back and forth for the last few months, not only has the HUI Index/S&P 500 ratio broken below its rising support line (the upward sloping black line below), but the ratio has also broken below the neckline of its roughly 12-month H&S pattern (the dotted red line below). As a result, given the distance from the head to the neckline, the HUI Index/S&P 500 ratio is on a collision course back to (at least) 0.050.Please see below:When the ratio presented on the above chart above is rising, it means that the HUI Index is outperforming the S&P 500. When the line above is falling, it means that the S&P 500 is outperforming the HUI Index. If you analyze the right side of the chart, you can see that the ratio has broken below its rising support line. For context, the last time a breakdown of this magnitude occurred, the ratio plunged from late-2017 to late-2018. Thus, the development is profoundly bearish.Playing out as I expected, a sharp move lower was followed by a corrective upswing back to the now confirmed breakdown level (which is now resistance). Mirroring the behavior that we witnessed in early 2018, after breaking below its rising support line, the HUI Index/S&P 500 ratio rallied back to the initial breakdown level (which then became resistance) before suffering a sharp decline. And with two-thirds of the analogue already complete, the current move lower still has plenty of room to run. Likewise, the early-2018 top in the HUI Index/S&P 500 ratio is precisely when the USD Index began its massive upswing. Thus, with history likely to rhyme, the greenback could spoil the miners’ party once again.In addition, the HUI to S&P 500 ratio broke below the neck level (red, dashed line) of a broad head-and-shoulders pattern, and it verified this breakdown by moving temporarily back to it. The target for the ratio based on this formation is at about 0.05 (slightly above it). Consequently, if the S&P 500 doesn’t decline, the ratio at 0.05 would imply the HUI Index at about 196. However, if the S&P 500 declined to about 3,200 or so (its late-2020 lows) and the ratio moved to about 0.05, it would imply the HUI Index at about 160 – very close to its 2020 lows.All in all, the implications of mining stocks’ relative performance to gold and the general stock market are currently bearish.But if we’re headed for a GDX ETF cliff, how far could we fall?Well, there are three reasons why the GDX ETF might form an interim bottom at roughly ~$27.50 (assuming no big decline in the general stock market ):The GDX ETF previously bottomed at the 38.2% and 50.0% Fibonacci retracement levels. And with the 61.8% level next in line, the GDX ETF is likely to garner similar support.The GDX ETFs late-March 2020 high should also elicit buying pressure.If we copy the magnitude of the late-February/early-March decline and add it to the early-March bottom, it corresponds with the GDX ETF bottoming at roughly $27.50.Keep in mind though: if the stock market plunges, all bets are off. Why so? Well, because when the S&P 500 plunged in March 2020, the GDX ETF moved from $29.67 to below $17 in less than two weeks. As a result, U.S. equities have the potential to make the miners’ forthcoming swoon all the more painful.In conclusion, with gold, silver and mining stocks staying at the same springtime resort, their departure from reality implies plenty of jet lag at the end of their trip. And with the clock ticking, passengers boarding and their flight nearing takeoff, a return to real life is just around the corner. Moreover, with the USD Index long overdue for some R & R, a reversal of fortunes could leave the precious metals suffering severe envy. Thus, while gold, silver and mining stocks have enjoyed nothing but sun, sand and surf over the last few weeks, the pile of work that awaits them will likely keep them swamped over the medium term.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Tesla is at local dips. Time to buy?

Kseniya Medik Kseniya Medik 11.05.2021 13:09
This article describes how Tesla is positioned now on the stock market, what headwinds and tailwinds it has, and what analysts forecast.US-China tensionsJoe Biden has left 25% tariffs on imported Chinese electric vehicles imposed by Donald Trump. As a result, Elon Musk’s plans to expand its Shanghai plant and make it a global export hub have been ruined. It’s not beneficial for Tesla, that’s why the company now is likely to decrease the proportion of China's output in its global production. What happens in China, stays in China There were disputes over how Tesla handles consumer data and whether it can violate the national safety rules. As a result, Tesla agreed to build a data center in Shanghai by the end of June and store the data gathered by Tesla’s cars locally.Tesla’s sales in China growTesla's sales in China have been rising even despite the regulatory pressure from the Chinese government. The company has generated $3 billion in revenue in China in the first quarter of 2021, it’s three times more than a year ago and accounts for 30% of total Tesla’s revenue.Competition is getting hotterHowever, Tesla is not the only electric vehicle producer in China. It’s competing with Nio, which is quite popular in China. Besides, electric-vehicle competition is growing around the globe: Lucid Motors, Ford, and Volkswagen. Chip shortageThere is a chip shortage around the world, and it creates some significant problems for electric-vehicle producers and Tesla as well. However, it cannot be viewed as a negative factor only for Tesla, it’s a challenge for the whole EV industry and also other sectors dependent on chips. Besides, it will only be a temporary setback.Buy or not to buy?It’s a tricky question as some analysts believe that Tesla has more room to fall further, while at the same time others forecast Tesla to skyrocket. For example, Wedbush's Dan Ives expects Tesla to reach $1000! Isn’t it too optimistic, what do you think?As you may have noticed, there are more headwinds than tailwinds for now, but Tesla tends to rise no matter what. So when such a company as Tesla is at the local dips, it’s likely to attract buyers as it has many investors that believe in the company and it’s still the #1 electric vehicle producer. Let’s look at what the charts will tell us!Tech analysisTesla has dropped out of the ascending channel. It’s approaching the psychological mark of $600.00. Since the RSI indicator is not yet below the 30.00 level, the stock may drop to this support level. However, the falling should stop at that point as the stock is already below the lower line of Bollinger Bands and the 200-day moving average just below $600 will be a strong barrier. When it reverses up, it may meet resistance levels at the 50-day moving average of $680.00 and late-April highs of $750.00. Download the FBS Trader app to trade anytime anywhere! For personal computer or laptop, use MetaTrader 5!
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Bulls Getting Caught in the Whirlwind

Monica Kingsley Monica Kingsley 11.05.2021 15:49
Seemingly uneventful and tight range day in S&P 500 gave way to extraordinary selling once the 4,220 intraday support broke – extraordinary by recent standards. The bulls obviously have quite some damage to repair before thinking about taking on new highs. Prices have moved back into the prolonged consolidation, in what isn‘t a true breakdown though yet. Neither the smallcaps, nor the emerging markets, let alone S&P 500 fell on sharply rising volume, which speaks in favor of a bad day, chiefly driven by tech (yes, I‘m looking at you, $NYFANG) and weak credit markets. Look at market breadth – new highs new lows stunningly rose yesterday in spite of the 500-strong index losing quite a few dozen points.Classic risk off positioning, if only the defensives as a group did a lot better – but it could have been worse had commodities joined in the melee. They didn‘t, and they are thus the dog that didn‘t bark, detracting credibility from yesterday‘s stock market plunge (unless they catch up next, that is).Both copper and lumber reversed, but won‘t this turn out as another buying opportunity, especially in copper? Little has changed in the reflationary and reopening trades – financials managed to shake off the rising yields easily yesterday. True, VIX and put/call ratio aren‘t painting a picture of calmness, but especially the option traders are positioned a bit too bearishly at the moment. Again, it‘s a question of how long before the tech bottom hunters step in. Make no mistake though, growth is going to keep lagging behind value.Gold, silver and miners are in a vulnerable position even though neither the technical nor fundamental reasons behind their rally changed. The rising yields are a testament of rotation out of stocks into bonds not having worked yesterday, and should commodities such as copper get hurt again, precious metals would land in hot water likely. Thus far though, no sign thereof – the momentum remains with the bulls overall, and higher time frames confirm that.Miners are not flashing outrageous underperformance, merely a modest daily one – the short-term fate of the precious metals upleg will be determined by long-dated Treasuries, copper and should the dollar (or USD/JPY) move, then through the contribution of fiat currencies. Even a brief comparison of the USD Index and the dollar-yen pair reveals though that risk-on is the prevailing move of 2021.Crude oil was less hurt by all the selling yesterday, but should it break below $64 on a closing basis, $62 could very easily come next. The daily indicators have weakened, and the bulls don‘t appear ready to break above $66 next.Cryptos are also in a wait and see mode, yet with noticeably less bearish undertones than black gold. Bitcoin remains choppy around its flat 50-day moving average, and should better return trading above it – no prodding by Ethereum though helps. The bulls are still taking a short-term break.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 suffered a sizable daily setback, and the recent consolidation‘s lows are likely to have to be defended next. Deceleration of the daily declines accompanied by a lower knot ideally would be the first sign that I would be looking for – alongside a positive turn in the credit markets.Credit MarketsCorporate bonds showed no strength relative to long-dated Treasuries, and that doesn‘t bode well for today‘s session. High yield corporate bonds have though still been performing better in April than the two instruments represented by black lines on the above chart, which attests to risk-on being still the environment we‘re in.Technology and ValueTechnology gave up all the gains since Thursday, and $NYFANG broke below its rising blue support line, and the deterioration among the heavyweights continues. Besides tech, $TSLA illustrates that eloquently just like $ARKK. The rotation out of the behemoths is weighing down the index – this is the area where bleeding needs to stop.VolatilityThe VIX open within the body of Friday‘s candle (harami position) didn‘t bode well, and volatility having closed significantly above Friday‘s open, attests to the strength of yesterday‘s move. This spike doesn‘t appear as over yet.Gold, Silver and MinersGold and miners are in a vulnerable position, and consolidation of recent sharp gains would be healthy and desired. The volume in both gold and silver shows the sellers don‘t have enough conviction, and pullbacks remain buying opportunities regardless of the threatening nominal yields move (inflation expectations made a similarly sharp uptick yesterday).The weekly chart shows how little has changed, how minuscule power has been sapped yesterday. The upleg across the precious metals remains alive and well as we aren‘t crashing into a deflation.BitcoinBitcoin reverted back below the 50-day moving average, and neither Ethereum is crashing. The technical outlook is though turning neutral, and the bulls will have to prove themselves. Until prices return back above the blue moving average, Bitcoin remains short-term vulnerable.SummaryS&P 500 got under selling pressure that is showing no signs of abating, yet the weakness remains concentrated in quite a few tech names. Besides these, credit markets aren‘t doing fine either.Gold, silver and miners continue being resilient, and the coming correction would likely be a shallow one. Increasing nominal yields are countered by rising inflation expectations and copper prices, helping to keep the metals out of harm‘s way.Crude oil bulls will have to step up to the plate, and defend the unfolding upsing that‘s threating to crash below the recent lows.Bitcoin is getting sold off today as well, and the bullish to neutral short-term outlook of yesterday, is turning to a neutral one as a minimum.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Bulls Coming to Terms with Inflation

Monica Kingsley Monica Kingsley 12.05.2021 15:43
Bulls had to fight hard to recover from intraday downside, and hadn‘t managed to close the menacing gap at the open. The VIX gap remained unchallenged too, but the volatility metric soundly retreated from its daily highs, and not even the option traders did add to their bearish bets. The tide seems to be in the early stages of turning as technology caught a solid bid and the behemoths didn‘t disappoint on a daily basis. Growth not lagging as badly is essential to the 500-strong index, but look for it to keep underperforming value.While a lot more needs to be done, the strongest sign of bullish resolve has come from the Russell 2000 and emerging markets. Both welcomed the continuing dollar woes, and faced off with the rising rates that would ultimately cut into their profitability – much further down the road. Let‘s put my yesterday‘s words into perspective:(…) Neither the smallcaps, nor the emerging markets, let alone S&P 500 fell on sharply rising volume, which speaks in favor of a bad day, chiefly driven by tech (yes, I‘m looking at you, $NYFANG) and weak credit markets. Look at market breadth – new highs new lows stunningly rose yesterday in spite of the 500-strong index losing quite a few dozen points.Classic risk off positioning, if only the defensives as a group did a lot better – but it could have been worse had commodities joined in the melee. They didn‘t, and they are thus the dog that didn‘t bark, detracting credibility from yesterday‘s stock market plunge (unless they catch up next, that is).The key points are improving corporate credit markets and commodities rejecting more downside (with the exception of lumber). Copper still keeps doing great, confirming my assessment that this would turn out as another buying opportunity. Gold, silver and miners stood the test, and remain consolidating at the high ground gained. Real rates turning more negative are their powerful ally, which explains why the rising nominal yields haven‘t exerted lasting selling pressure. Miners are by no means lagging behind, and silver isn‘t getting as overheated so as to put the precious metals upleg into danger, and neither are the USD/JPY move consequences (still positive on a daily basis). The sizable open gold profits will continue growing in all likelihood.Overall, we seem to be having a risk-off move in stocks not spilling over to commodities, precious metals or cryptos, all driven by the growing inflation threat – the market is getting attentive again. How long before it forces the Fed to talk, act and not play ostrich? The evidence isn‘t strong thus far, but there is a lot of time left till the Jun Fed meeting. Needless to say, bold moves would crater risk-on assets, which is why I‘m not expecting any real action yet with the 10-year yield at 1.64% only. CPI may force them as much as it wants today, but that won‘t do the trick as I just tweeted..Crude oil remains underpinned in the very short run by the Middle East tensions and the Colonial Pipeline shutdown, making for a positive technical outlook and rising open oil profits.Among cryptos, Ethereum keeps doing fine without any meaningful pullback or deceleration, but Bitcoin remains choppy around its flat 50-day moving average. The rising support line connecting its Apr and May lows better hold as the risk of extending losses should prices break below $56,300 roughly, is very real and would coincide with e.g. Ethereum taking a breather.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookNo daily volume indicative of a true reversal, and market breadth indicators turning deeply negative – such are the consequences of value stocks participating in yesterday‘s selloff. Repeating yesterday‘s notes, deceleration of the daily declines accompanied by a lower knot ideally would be the first sign that I would be looking for – alongside a positive turn in the credit markets. And we‘re near to getting both.Credit MarketsHigh yield corporate bonds made at least some attempt to close the bearish daily gap, and the volume doesn‘t say it was a desperate attempt. Contrast that with the quality debt instruments, and you see risk-on seeking to return.Technology and ValueTechnology bleeding stopped yesterday, yet didn‘t bring about a broader rally. We‘re still waiting for both growth and value to pull in the same direction – for that though, the market has to cope with the inflation fears first though.Gold, Silver and MinersGold and miners keep aligned in a strong position after yesterday‘s downswing was rejected, and it is precisely the 10-year yield lagging woefully behind the inflation expectations this week why the rising nominal yields aren‘t a credible threat.Silver daily outperformance isn‘t too worrying, not even should it be fully retraced next – the copper to 10-year Treasury yield ratio keeps moving in support of the precious metals upleg. We aren‘t crashing into a deflation – the markets are once again facing the high inflation reality.Crude OilCrude oil bullish consolidation is in its latter stages as the the rising volume heralds. Look for the uptrend to reassert itself next.SummaryS&P 500 recovered from heavy intraday selling pressure, and both tech and credit markets appear to be turning. Once the market comes to terms with the rising inflation and stops worrying about a Fed response this early, stocks would take on the recent highs once again. And that includes Nasdaq as the $NDX outlook has flipped bullish throughout yesterday‘s recovery (I hope the bulls were taking advantage – it‘s not too late to do so now).Gold, silver and miners keep chugging along, and the sound rejection of lower values bodes well for the short-term. The only question remains how much basebuilding do we have still ahead before the next upswing, amply supported by the negative real rates.Crude oil bulls look to have no more waiting in front, and amid the headlines arriving, I look for black gold to close solidly above $66 before the week is over.Bitcoin is still hesitating while Ethereum runs, presenting a potential vulnerability in its mostly neutral to bullish short-term outlook. I specifically don‘t like the upside rejection of today, thus striking a cautious tone.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Gold: Lose a Battle to Win the War

Gold: Lose a Battle to Win the War

Finance Press Release Finance Press Release 12.05.2021 16:00
Gold scored some victories over the past days, but it’s playing a risky game. One misstep and the yellow metal might lose the war.Sometimes, a good strategist needs to give up a few battles to eventually win the war. Or, at least, convince their enemy that they’re defeated while preparing a counterattack. Just the same, a chess player may need to sacrifice a piece in order to checkmate a king. Sun Tzu has spoken, and the Art of War translates well here.In the world of trading, the same rules often apply. A good investor needs to give up a few unfavorable days to eventually score a final victory. Again, controlling one’s emotions and adhering to patience are key. These principles are important when waiting out gold’s temporary upswings in a medium-term downswing, and also when waiting for gold’s eventual ascent. Don’t let short-term intraday moves cloud your vision.Yesterday (May 11), I wrote that the rally in gold and stocks might have just burnt itself out, and the markets didn’t wait long to agree with me.Is it 100% certain that the top is in? Absolutely not, as there are no certainties in any market, and sound position management should be utilized at all times. But based on what happened yesterday, and what we saw in today’s pre-market trading, the odds that the corrective top is already in have greatly increased.Let’s take a look at the charts for details, starting with the stock market .The Influence of the Stock MarketThe markets are self-similar (which is another way of saying that they have a fractal nature), which generally means that while the history tends to rhyme, it also tends to rhyme in similar shapes of alike or various sizes.For example, the rally from 2018–2020 seems very similar to the rally from 2020 to the present.Both rallies started after a sharp decline, and the first notable correction took the form of back-and-forth trading around the previous high. I marked those situations with green rectangles.Then the rally continued with relatively small week-to-week volatility. I created rising support lines based on the final low of the broad short-term consolidation and the first notable short-term bottom.This line was broken, and some back-and-forth trading followed, but it was only about half of the previous correction in terms of price and time.Then, we saw a sharp rally that then leveled off. And that was the top . The thing that confirmed the top was the visible breakdown below the rising support line right after stocks invalidated a tiny breakout to new highs. That’s what happened in February 2020, and that’s what happened this month.Combining this with the recent underperformance of the NASDAQ (the previous leader which just moved to new monthly lows) suggests that this might have indeed been the top.“But why didn’t the mining stocks or silver end yesterday’s session higher given the above, and the fact that stocks declined yesterday? Any tips on that?”I see two likely reasons.One is that the stock market reversed before the end of the day, so many investors and traders might have thought that the correction was already over, and they were eager to jump back into the market. This would explain why mining stocks (and GameStop) ended yesterday’s session higher.The second reason is that miners don’t necessarily slide right after the top. Sometimes, they tend to move back and forth, testing the previous high (on lower volume).That’s what happened in early January 2021, and that’s what happened yesterday. Did it change anything with regard to the bearish implications of the current situation? Not at all. Besides, the most bearish thing about gold stocks is visible on the long-term HUI Index chart.The HUI IndexWhile corrective short-term upswings within a medium-term downtrend can feel discouraging, it’s important to remember that similar instances occurred in 2008 and 2012. And to some extent also in early 2000.The head and shoulders patterns from 2007 – 2008 and from 2009 – 2012 had the final tops – the right shoulders – very close to the price where the left shoulders topped. And in early 2020, the left shoulder topped at 303.02.This week’s intraday high in the HUI Index was 307.56, and yesterday’s closing price (the highest closing price we saw recently) was 302.92. That’s one-tenth of an index point away from the left shoulder’s top; if the HUI slides from here – which seems likely – we’ll have a near-perfectly symmetrical H&S pattern with very bearish implications for the following weeks and months.I previously wrote that “it wouldn’t be surprising to see a move to about 300 in the HUI Index”. And that’s exactly what we saw. To clarify, one head-and-shoulders pattern – with a rising neckline – was already completed, and one head-and-shoulders pattern – with a horizontal neckline – is being completed, but we’ll have the confirmation once miners break to new yearly lows.Consequently, the recent rally is not a game-changer, but rather a part of a long-term pattern that’s not visible when one focuses on the short term only.Let’s get back to the broader tops for a while.Gold, Its Battles and the WarIn August 2020 – at the top – gold’s peak was forming over approximately 4 trading days, and it plunged on the fifth day.At the beginning of this year – at the yearly top – gold was peaking for 2-4 trading days (depending on how one treats the initial daily decline that was then followed by a small corrective upswing) and it plunged on the fifth day.Today is the fourth day of what is likely to become a topping pattern (we will know for sure only after gold slides). Consequently, the fact that gold didn’t slide profoundly yesterday (except for the intraday decline) is not odd at all. Conversely, it’s in tune with the previous topping patterns.Moreover, please note that since gold is repeating (to some extent) its 2011-2013 performance (actually, more of an average of gold’s trading performances from the above period and from 2008), it’s particularly normal for it to form a broader top here.I previously wrote that the situation is similar to 2008 in a way and to 2012-2013 in a slightly different way. When I’m looking at it now, it’s quite normal that the gold market is mixing both previous performances. But it’s always easy to see things with the benefit of hindsight.In 2008, before the final slide, we had clearly lower lows as well as lower highs. During the 2012-2013 consolidation we had a more or less horizontal pattern that was then followed by the final slide. Right now, we have something in between – we have lower highs and lower lows, but it’s not as clear as it was in 2008.Back in 2008, it took gold 29 weeks to move from the initial (March 2008) top to the final (October 2008) top.Back in 2011-2013, it took gold 55 weeks to move from the initial (September 2011) top to the final (October 2013) top.The arithmetic average of the above is 42 weeks, and last week was the 39 th week after the August 2020 top. If gold stops here or shortly, it will be almost right in the middle of the similarity between both periods.Consequently, the way gold and mining stocks are performing now is perfectly normal for a medium-term decline – it’s not a game-changer. The medium-term forecast for gold remains bearish.What’s Going on With the Euro?Let’s get back to the issue of head and shoulders patterns – this time in the context of the currency markets.What one might not notice at first sight, but what is very important, the USD Index just invalidated a small breakdown below the head-and-shoulders pattern, and it rallied back above its neckline. This is a classic buy sign and a sign that the breakdown below the rising support line will be invalidated shortly.There’s also a potential head and shoulders pattern present in the euro.The European currency moved to the line that’s parallel to the rising neck level of the potential head and shoulders pattern. If it now declines and moves to new yearly lows, the situation will be extremely bearish – what is more, not only for the euro but also for the precious metals market, which tends to move in tune with the dollar competitor.As far as silver is concerned, there’s not much new to report – my forecast for silver hasn’t become more bullish recently. The white metal continues to repeat its 2019-2020 performance, and it’s after a short-term period of outperformance relative to gold, which indicates major tops. Unlike gold or mining stocks, silver recently moved to its early-2021 high.Interestingly, please note that silver is repeating more or less the same pattern from the past that the general stock market does. And we all know what happened to silver (and mining stocks) when the general stock market plunged in March 2020.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Where's The Beef? Is The US Fed Behind The Inflation Curve?

Chris Vermeulen Chris Vermeulen 12.05.2021 17:24
We recently completed some interesting research related to one of our newest Custom Indexes – the Commodities to Smart Cash Index (C2SC Heat Index) - weighted by the US Dollar and VIX.  We've been reviewing this new index for months watching it to see how it reacts to various trends in Lumber, Gold, Treasury Yields, the Smart Cash Index, and other weighted values.  Recently, we added the Fed Funds Rate to this chart and suddenly things took on a different perspective.We had drawn horizontal lines on the Commodities to Smart Cash index highlighting historical high, low, and confluence price levels.  Historically, when we see a chart that channels in a sideways range, one can often identify high and low price thresholds while also trying to find a confluence level (where a continued rise or decline in price is likely to continue). We can see how the US Fed reacted to rising inflationary concerns almost immediately as the C2SC Index rose near or above 6.5 (the RED Confluence level) throughout the past 25 years.  Each time, in 1994, 1999, and 2005, when a period of increasing inflationary trends, the Fed was quick to act to contain inflation.  The only time the Fed acted differently was in 2013~2015 and in 2020~now.Where's The Fed?  Watch Precious Metals For Signs Of PanicIn 2013~2015, the C2SC Index rose above the Confluence level (the RED line) multiple times, yet the Fed kept rates extremely low – ignoring inflationary risks at that time.  Then, in 2016, the Fed raised rates very slightly in an effort to test the global market's reaction to tightening financial policy ahead of a big US election event.  By mid-2017, the C2SC index started rising and the US Fed continued to raise interest rates.  By late 2017, the C2SC index had risen past the RED Confluence level again and the US Fed continued to raise rates well into early Summer 2018. In August 2018, the Fed attempted another 0.25% raise that broke the market trend and prompted a broad market decline into December 2018.  In reaction to this breakdown in US markets, the US Fed dropped the Fed Funds Rate from 2.5% to 1.5% in a panic move.  It stayed at that level until COVID-19 hit in February/March 2020.Looking at the C2SC index, commodities have rallied more than 300% above the past 25 years of historic highs recently while Yields and Gold/Silver continue to stay rather muted in trends.  Our concern is that the US Fed, in an effort to spark a solid post-COVID-19 economic recovery, has ignored the risks related to the extreme excess phase rally taking place throughout the globe in commodities, Cryptos, non-tangible speculative assets (NFTs, digital and others) as well as the risks associated with an eventual raising of interest rates to curb this inflationary excess phase.  Gold and Silver have just started what appears to be a new bullish price trend.  Will the US Fed be pushed to raise rates soon to curb this incredible bubble rally?We started bouncing around the idea that the US Fed was inadvertently prompting a South Seas Company type of bubble event by allowing gross amounts of capital into the markets and artificially keeping interest rates near zero.  For those of you who don't know the story of the South Seas  Company in London (1720), you can read more about it here: https://www.britannica.com/event/South-Sea-BubbleFOMO Hyper-inflation Continues (until it ends)In short, The South Seas Company was awarded £7 million to finance the war against France by the House of Lords.  This bill, known as the South Sea Bill, allowed the South Sea Company a monopoly on the trade to South America (mostly Slave trade) and was expected to be a boost to the companies bottom line as the war with France ended with the Treaty of Utrecht (1713).  Over the next 5+ years, the South Seas Company enjoyed robust profits and trade. Shares of the South Sea Company rose to 10x their value.  Then, the South Seas Company, with King George I of Great Britain as governor of the company in 1781, suggested taking over the national debt of Great Britain in 1720. Sign up for my free trading newsletter so you don’t miss the next opportunity!The South Seas Company accomplished this incredible feat and shares started to skyrocket higher from $128.5 to over $1000 in just 7 months.  As the hype continued to drive speculation and rumors, other stocks (some newly formed companies) were quick to catch the hype and quickly rallied to extreme highs as false statements, word-of-mouth hype and a general hyperbolic frenzy continued to drive speculation.What brought down the South Seas Company was unbridled rumors, outright lies, hyperbolic speculation, and, eventually, a flood of money from France's modernized economy.  When the trend finally broke down, it took about 12 months for the entire bubble to deflate – leaving speculative investors holding empty bags.The rally of the South Seas Company is very similar to what we are seeing right now in the US economy and in digital assets.  There were a number of facets in place to drive this type of hyperbolic rally.  First, the South Seas Company took over the national debt – essentially acting like the US Federal Reserve for Great Britian.  Secondly, the wild speculation related to ongoing business activities and future expectations prompted an over-enthusiastic buying frenzy – driving prices higher by 10x traditional valuation levels.In the end, with all the speculation, hype and people of title involved, the expected profits and returns from the South Seas Company never really materialized.  The stock price started to decline and finally broke downward very sharply near late 1720 – almost 3 months after it peaked.Is The US Fed Preparing To Make A Move Soon?The recent rally in the US stock markets has seemed to stall recently, as can be seen in this Smart Cash Index chart below.  Still, the recent rally since the November 2020 elections is nothing short of amazing – very similar to the rally in 2017 and into early 2018 – almost straight up.Our research team believes a continued market rally may keep attempting to “melt-up” as long as the US Fed does not step in to try to curb inflationary aspects of the markets.  It is hard to argue that traders and investors are going to suddenly change their minds in the midst of this FOMO rally - although, it does happen at some point.There are really two concerns related to how this may end: the US Fed suddenly acting to curb inflation by raising rates and/or the consumers suddenly realizing the valuation levels have exceeded realistic expectations.  We feel the rise in commodity prices as well as the current uptrend in precious metals and Copper may be pushing consumers closer and closer to that sudden realization that valuations are grossly advanced in comparison to real expectations.When you look at this Smart Cash Index Monthly chart, below, you see that the Fed Funds Rate is still anchored near ZERO while the Smart Cash Index is nearing the highest levels since the January 2018 Ultimate Peak.  The primary difference is that the US Federal Reserve is not acting to raise rates like they were in 2018 or even just before the Housing Bubble (2005~06).  This suggests the rally may continue in a hyper-inflation trend and may push well beyond anyone's expectations in the near future. Remember, our C2SC Heat Index is showing the current rally is nearly 300%+ above normal upper ranges.  How far will it go?  We really don't know how far this could continue to rally or where the ultimate peak is going to set up.  All we can suggest at this point in time is that we've entered uncharted waters and we don't have many historical reference points to use for our analysis. All we can do is ride this trend out using our advanced price modeling systems and watch for signs of a breakdown in support and correlative assets (like Precious Metals, Bonds, Utilities, and the Fed Funds Rate). If the Fed suddenly starts making moves to address pending inflation, then we may see some big volatility hit the markets.  We feel the Fed will slowly move to address inflationary concerns over the next 12+ months – not move in a sudden, aggressive manner. We need to watch how commodities continue to rally and how consumers react to these inflationary price concerns.  If global consumers suddenly shift away from spending as prices continue to rally, then we may start to see a dynamic shift in how the economy continues to expand/recover.  Consumers become very protecting of capital/resources when an economy shifts from expansion to contraction.Either way, there are going to be some really big trends in 2021 and 2022 for traders/investors.  This is the type of setup that can make fortunes for skilled traders/investors.  The bigger question is, will you be ready to jump into the strongest sectors when this downside trending ends?  Do you know which sectors present the best opportunities for future profits?  You can learn more about how I identify and trade the markets by watching my FREE step-by-step guide to finding and trading the best sectors. Don’t miss the opportunities in the broad market sectors over the next 6+ months.  Staying ahead of these sector trends is going to be key to developing continued success in these markets. My BAN Trader Pro newsletter service does all the work for you with daily pre-market reports, proprietary research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers. Sign up today!Have a great week!
New York Climate Week: A Call for Urgent and Collective Climate Action

Caution, the crypto sector is getting a bit overheated in the short-term

Florian Grummes Florian Grummes 13.05.2021 12:41
It’s been a massive rally over the last 15 months in the crypto sector since bitcoin bottom at US$3,800 on March 13th, 2020. reaching price at around US$65,000 bitcoin saw a price explosion of more than 1,600%! Now however the sector seems ripe for some form of a healthy pullback and a breather. Bitcoin – Caution, the crypto sector is getting a bit overheated in the short-term!ReviewBitcoin year to date, Daily Chart as of May 10th, 2021. Source: TradingviewSince the beginning of the year, the price of Bitcoin has increased by almost 100%. Thus, the outperformance of Bitcoin compared to almost all other asset classes continued mercilessly. It seems as if bitcoin, or rather the crypto sector, wants to suck up everything like a black hole.Bitcoin´s waning momentum is a warning signalHowever, the Bitcoin markets have also been witnessing an increasingly waning momentum since late February. In particular, the pace of the rise had slowed down more and more since prices pushed above US$60,000 in March for the first time. Although another new all-time high was reached on April 14th at around US$65,000, the bulls are showing more and more signs of fatigue after the spectacular rally. Interestingly enough, this last new all-time high coincided exactly with the stock market debut of Coinbase.Only a few days later, a significant price slide down to just under US$50,000 happened, which was caused by a huge wave of liquidations. According to data provider Bybt, traders lost a total of more than US$10.1 billion that Sunday through liquidations forced by crypto exchanges. More than 90% of the funds liquidated that day came from bullish bets on Bitcoin or other digital currencies. In this regard, the world’s largest crypto exchange Binance was at the center of the earthquake with liquidation worth nearly US$5 billion. As the price of bitcoin fell, many of these bets were automatically liquidated, putting further pressure on the price and leading to a vicious cycle of further liquidations. Many (especially inexperienced) crypto traders were wiped out without warning.Year to date gains sorted by market-cap. Source Messari, May 10th 2021.After a quick recovery back to US$56,000, bitcoin continued its correction and fell back to US$47,000 by April 25. Since then, it has managed a remarkable recovery, as the bitcoin bulls are trying hard to restart the uptrend. So far, this recovery has at least reached a high of US$59,600. Nevertheless, the price development of bitcoin remains rather tough until recently, while numerous altcoins and so called “shitcoins” experienced incredible price explosions in recent weeks.The exciting question now is whether the current recovery remains just a countermove within a larger correction or whether the turnaround has already been seen and Bitcoin is therefore on the way to new all-time highs?Technical Analysis For Bitcoin in US-DollarBitcoin, Weekly Chart as of May 13th, 2021. Source: Tradingview.On the weekly chart, bitcoin has been stuck at the broad resistance zone between US$58,000 and US$65,000 for the past two and a half months. At the same time, the bulls continue trying to break out of the uptrend channel which is in place since 14 months. However, the recent pullback has so far only begun to clear the overbought situation, if at all. A somewhat larger pullback or simply the continuation of the consolidation would certainly do the market good. On the downside, the support zone between US$41,000 and US$45,000 remains the predestined support zone in case the bears should actually show some more penetration. If, on the other hand, price rise above approx. US$61,000, the chances for a direct continuation to new all-time highs increases quite a lot.Weekly Chart with a fresh sell signalOverall, the big picture remains bullish and higher bitcoin prices remain very likely in the medium to longer term. However, since reaching US$ 58,000 for the first time at the end of February, bitcoin has been increasingly weakening in recent weeks. Another healthy pullback towards the support zone of US$41,000 to US$45,000 USD could recharge the bull´s batteries. With fresh powers a breakout to new all-time highs in the summer is likely. Obviously, a good buying opportunity cannot be derived from the weekly chart at the moment. Rather, the stochastic sell signal calls for patience and caution.Bitcoin, Daily Chart as of May 13th, 2021. Source: TradingviewOn the daily chart, bitcoin slipped out of a bearish wedge on April 14th and has been attempting a countermovement since the low at just under US$47,000. However, this recovery is somewhat tenacious and currently hangs on the upper edge of the uptrend channel. Given the overbought stochastic and the relatively large distance to the exponential 200-day moving average (US$41,694), another pullback has an increased probability. The liquidation wave on April 18th clearly showed how quickly the whole thing can slide, given the exuberant speculation with derivatives and leverage.Of course, the bulls (and thus rising prices) have always a clear advantage in a bull market. Also, in view of the huge monetary expansions, speculation on the short side is not recommended. One is better advised with regular partial profit-taking (without selling one’s core long positions completely) as well as a solid liquidity reserve, with which one can take advantage of the opportunities that arise in the event of more significant pullbacks. The blind “buy & hold” or “hodl” strategy has also proven its strengths and can rightfully be maintained given the bullish medium to longer-term outlook.Daily Chart now on a sell signalSummarizing the daily chart, bitcoin is so far “only” in a countermovement within the pullback that began on April 14th. Only with a breakout above approx. US$61,000 the bulls would clearly be gaining the upper hand again. In this case, a rally towards approx. US$69,000 USD becomes very possible. On the downside, however, bitcoin prices below US$53,000 would signal that the bears have successfully fended off the breakout above the upper edge of the uptrend channel in the short term. The next step would then be a continuation of the correction and thus lower prices in the direction of the support zone around US$44,000 as well as the rising exponential 200-day moving average.Sentiment Bitcoin – Caution, the crypto sector is getting a bit overheated in the short-termBitcoin Optix as of May 9th, 2021. Source: SentimentraderThe rather short-term “Bitcoin Optix” currently reports a balanced sentiment. What is striking is the fact that the last sentiment highs since February have always been weaker. I.e. the sentiment momentum is falling. At the same time, the temporary panic on April 25th brought an exaggeration to the downside (panic low = green circle), with which the ongoing recovery can be explained.Crypto Fear & Greed Index as of May 12th, 2021. Source: Crypto Fear & Greed Index The much more complex and rather long-term “Crypto Fear & Greed Index” currently indicates a slightly exaggerated optimism or “increased greed”.Crypto Fear & Greed Index as of May 12th, 2021. Source: SentimentraderIn the very long-term comparison, sentiment is somewhat overly optimistic.Overall, quantitative sentiment analysis is increasingly sending warning signals. In particular, the decreasing momentum of the sentiment peaks with simultaneously exploding altcoin prices must be taken seriously. Therefore, a contrarian entry opportunity is definitely not present in the crypto space. Instead, one is well advised to wait patiently for the next wave of panic or liquidation.Seasonality Bitcoin – Caution, the crypto sector is getting a bit overheated in the short-termBitcoin seasonality. Source: SeasonaxStatistically, the sideways spring phase for bitcoin ends at the beginning of May. This has often been followed by a sharp rally into June. However, this year bitcoin only reached an important high on April 14th and has been consolidating since then. Hence, the seasonal pattern doesn’t really match up with this year’s price action so far.In conclusion, the seasonality is basically changing from neutral to green these days. However, the course of the year has not been in line with the seasonal pattern. A continuation of the consolidation therefore seems more likely.Sound Money: Bitcoin vs. GoldBitcoin/Gold-Ratio as of May 10th, 2021. Source: TradingviewAt prices of US$58,075 for one bitcoin and US$1,835 for one troy ounce of gold, the bitcoin/gold-ratio is currently trading at around 31.7. This means that you currently have to pay almost 32 ounces of gold for one bitcoin. Put the other way around, one troy ounce of gold currently costs about 0.03 bitcoin. Thus, bitcoin has been running sideways against gold at a high level for a good month and a half.You want to own Bitcoin and gold!Generally, buying and selling Bitcoin against gold only makes sense to the extent that one balances the allocation in those two asset classes! At least 10% but better 25% of one’s total assets should be invested in precious metals physically, while in cryptos and especially in bitcoin one should hold at least between 1% and 5%. If you are very familiar with cryptocurrencies and bitcoin, you can certainly allocate much higher percentages to bitcoin on an individual basis. For the average investor, who is primarily invested in equities and real estate, 5% in the still highly speculative and highly volatile bitcoin is a good guideline!Overall, you want to own gold as well as bitcoin, since opposites complement each other. In our dualistic world of Yin and Yang, body and mind, up and down, warm and cold, we are bound by the necessary attraction of opposites. In this sense you can view gold and bitcoin as such a pair of strength. With the physical component of gold and the pristine digital features of bitcoin you have a complementary unit of a true safe haven for the 21st century. You want to own both! – Florian GrummesMacro Outlook and Crack-Up-BoomFED Balance Sheet. © Holger Zschaepitz via Twitter @Schuldensuehner, May 7th 2021.The U.S. Federal Reserve’s total assets continued to rise in recent weeks, reaching a new all-time high of USD 7,810 billion. The biggest increase was in holdings of U.S. Treasury securities, which rose by USD 25.66 billion to a total of USD 5,040 billion.ECB Balance Sheet. © Holger Zschaepitz via Twitter @Schuldensuehner, May 4th 2021.The ECB balance sheet also reached a new all-time high of EUR 7,568 billion. Driven by ultra-lax monetary policy (quantitative easing), total assets rose by a further EUR 9.7 billion. The ECB balance sheet is now equivalent to 76.2% of euro area GDP.Bloomberg Commodity Index. © Holger Zschaepitz via Twitter @Schuldensuehner, May 5th 2021.Due to these massive monetary expansions, the consequences of this irresponsible central bank policy are now slowly but surely becoming more and more apparent. For example, the Bloomberg Commodity Index has more than doubled since March 2020 and most recently rose to its highest level since 2011. Numerous commodities are reaching new highs, fueling inflation fears. The loss of confidence in fiat currencies typical of the crack-up boom is taking hold. This mass psychological phenomenon is gradually building up and may already be unstoppable. The accelerating crack-up boom is the ideal environment for precious metals, commodities and cryptocurrencies.Mentions of Inflation. © Holger Zschaepitz via Twitter @Schuldensuehner, May 5th 2021.Even Bank of America (BofA) recently acknowledged in a commentary that “inflation is here.” In doing so, they referenced the exploded number of mentions of “inflation.”Conclusion: Bitcoin – Caution, the crypto sector is getting a bit overheated in the short-termEthereum new all-time highs © Holger Zschaepitz via Twitter @Schuldensuehner, May 10, 2021.One of the main beneficiaries of the increasing flight out of the fiat systems in recent months has been cryptocurrencies. First and foremost, it was bitcoin which led the way up for the entire sector. Now, the second largest cryptocurrency by market capitalization, Ethereum, has risen to a new all-time high well above $4,300. Ethereum dominance reached a new record of 19%. Since the beginning of the year, Ethereum has thus gained nearly 500%.Bitcoin Dominance © Holger Zschaepitz via Twitter @Schuldensuehner, May 10, 2021.The market capitalization of the entire crypto sector did reach more than US$2.5 trillion. Mainly due to the price explosion in Ethereum and Altcoins during recent weeks, Bitcoin dominance had been fading down to below 44%.Ethereum Market Capitalization © Messari via Twitter @RyanWatkins_, May 10, 2021.With a Bitcoin dominance of below 40%, however, the air has always been very thin for altcoins in the past, and sharp pullbacks followed in 2017 and 2018. The speculative madness became particularly dramatic in the case of the fun and meme coin Dogecoin. This essentially worthless coin has been rising from US$0.005 to US$0.672 in just a few months, making it worth almost as much as the Daimler Group. Once again, the markets are thus providing an example of the extent to which the vast quantities of fiat currencies created out of thin air are distorting everything and fueling wild speculation.Be careful, be patient!Overall, it is imperative to advise caution in the current environment. While a long-term top in bitcoin is not yet in sight, a significant correction or sharp pullback should not come as a surprise and would be good for the overheated sector. The “worst case” envisages a pullback in the direction of around US$44,000. In this area, bitcoin would already be a buying opportunity again. In this scenario, the altcoins would temporarily but very likely take a severe beating. Subsequently, bitcoin could take the lead again and march on towards US$100,000 once this pullback is done. Alternatively, the tenacious sideways consolidation continues until bitcoin prices above US$61,000 confirm the continuation of the rally to new all-time highs.Analysis sponsored and initially published on May 10th, 2021, by www.celticgold.eu. Translated into English and partially updated on May 13th, 2021.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Florian Grummes|May 13th, 2021|Tags: Bitcoin, Bitcoin correction, bitcoin crashing, Bitcoin dominance, Bitcoin Sentiment, bitcoin/gold-ratio, crypto analysis, cryptocurrency, Dogecoin, Ethereum, Ethereum correction, Gold, technical analysis|0 CommentsAbout the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running is own record label Cryon Music & Art Productions. His artist name is Florzinho.Florian GrummesPrecious metal and crypto expertwww.midastouch-consulting.comFree newsletterSource: www.celticgold.eu
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Everything Going Down the Inflation Drain?

Monica Kingsley Monica Kingsley 13.05.2021 15:41
The inflation scare amplified by CPI data caught the mainstream off guard, and the S&P 500 made no attempt at the opening gap. Both the VIX and put/call ratio sharply rose to levels unseen in quite a while – while volatility remains well below the late Jan, Feb, or early Mar spikes, the options ratio keeps trending higher since late Feb.Technology disappointed and so did the tech heavyweights, but these might put up a fight in the tentative support zone reached. The heavy selling didn‘t spare value stocks or the Russell 2000 either. Emerging markets suffered too, amplified by the rush into the dollar. While steeply up on the day, the greenback is having issues meaningfully extending gains today as not only the USD/JPY pair highlights.Are there any bright spots in the indiscriminate selling across the many assets?Credit markets certainly aren‘t one – neither corporate nor Treasury ones. Unless these turn thus facilitating the Nasdaq and S&P 500 rebound, the relief stock market rallies can‘t be trusted yet. Commodities and precious metals held up relatively well, but their test is coming – should the Fed get serious about fighting inflation, commodity superstars such as lumber, copper (extending to silver) would suffer – don‘t look for that though – all we‘re experiencing now, is:(...) a risk-off move driven by the growing inflation threat – the market is getting attentive again. How long before it forces the Fed to talk, act and not play ostrich? The evidence isn‘t strong thus far, but there is a lot of time left till the Jun Fed meeting. Needless to say, bold moves would crater risk-on assets, which is why I‘m not expecting any real action yet with the 10-year yield...… at 1.69% only, which isn‘t yet serious enough to spur the Fed into action.Gold and miners remain relatively resilient, and one isn‘t leading the other to the downside. With high inflation already here (don‘t look for too much relief once the low year-on-year comparison base is history), real rates are turning more negative – and nominal ones aren‘t yet catching up onto what‘s coming. Seriously, I don‘t know why majority of market participants have been caught this much off guard by the inflation data, which is the basis of cost-push inflation I had been talking quite many times already.Caught in the selling wave eventually, black gold cratered overnight but not before I took sizable oil profits off the table. The tide appears to be turning though as the low $64 held earlier today, so I have issued an Intraday Update for Oil #1 featuring new trading position details.And the same profit-taking happened in Bitcoin too, via a waiting exit order right below the rising support line connecting its Apr and May lows that I talked yesterday. What a headline-facilitated plunge it brought (as if Elon Musk didn‘t know about the real world costs of crypto mining earlier etc.), not sparing Ethereum either. No surprise here, let‘s keep an eye on the bottom forming next.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookBottomless S&P 500 pit that doesn‘t attract buyers to step in just yet. The obvious support in sight is the 50-day moving average, but how much of an undershoot it would take to turn stocks around? We haven‘t yet seen deceleration of the daily declines accompanied by a lower knot ideally, though today‘s session is shaping up promising for precisely this outcome.Credit MarketsHigh yield corporate bonds to short-dated Treasuries (HYG:SHY) ratio with overlaid S&P 500 prices shows that the latter are taking a lead (i.e. being more panicky) when it comes to the unfolding selling wave. HYG certainly didn‘t enthuse yesterday, and neither did the less risky counterparts.Technology and ValueValue and growth sold off in tandem, and the question remains whether $NYFANG support zone would hold. Examining the volume and steepness of the price declines, chances are it would, which has positive implications for $NDX naturally as well. Once yields stabilize, animal spirits would start returning, but don‘t look for them arriving in force very soon – there is quite some technical damage to repair first.Inflation ExpectationsTreasury yields are slowly but surely catching up on to the inflation scare. The long consolidation in yields is in its latter stages, and inflation expectations didn‘t wait in continuing their upward march. One more reason why gold is taking the selling left and right, in its stride.Gold, Silver and MinersThe caption says it all – gold keeps up bullishly consolidating, and odds are that the nominal yields won‘t bite now that inflation is finally broadly recognized to be an issue. What a wait!Silver didn‘t lead to the downside yesterday either, and the copper to 10-year Treasury yield ratio is still underpinning the precious metals upleg, which I am not really looking to sink into the early spring desperation.BitcoinBitcoin waterfall arrived, and prices haven‘t convincingly stabilized so far. Even Ethereum was hurt in the selling, but no issues, it seems a question of time only before cryptos turn up again. Stay tuned!SummaryS&P 500 is showing signs of stabilization, and much depends upon the tech and credit markets performance next. Today should provide modestly optimistic signs, by no means though guaranteed in the panic gripping the markets since Monday. Once S&P 500 and Nasdaq come to terms with the rising inflation and stop worrying about a Fed response this early, the 500-strong index would take on the recent highs once again. Gold, silver and miners are still well positioned to repel the downside pressures, with silver being arguably the most (short-term) vulnerable now. The basebuilding continues, and the only question remaining is how much of it is still ahead before the next upswing (amply supported by negative real rates) arrives.Crude oil lived up to its volatile reputation, but the tide appears turning here as well. Amid the headlines and positive seasonality, my outlook on black gold remains bullish.Bitcoin has quite some recovering ahead, and its stabilization has started. I would look for indications of decreased vulnerability next, which are obviously at a much lower level in Ethereum.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Junior Miners Should be Rallying – What’s Holding Them Back?

Junior Miners Should be Rallying – What’s Holding Them Back?

Finance Press Release Finance Press Release 14.05.2021 15:50
Junior miners may soon suffer a breakdown of the short-term support line. So, what’s responsible for their underperformance of gold and stocks?Today’s technical part of the analysis is going to be brief, as I have discussed multiple things this week and my comments remain up-to-date. There’s not much to add today, and we’ll go over only one technical chart – the one where we have trading positions – the GDXJ ETF chart. Unlike in the previous days, today I’m going to look at it from the more short-term point of view – through the 4-hour chart.Before looking at it, please note that yesterday’s (May 13) session was relatively boring in the case of gold futures (they ended the day $1.20 higher), and quite positive for the GLD ETF, at least at first sight, as it closed $0.70 higher. The seemingly odd discrepancy between the two is just a result of different times that are taken into account for calculating both markets’ performance. All in all, yesterday’s session was positive for gold.The S&P 500 index ended yesterday’s session 1.22% higher. At face value, this seems positive. Technically, it was just a comeback to the previously broken lows (mid-April and early May ones), which was followed by a small move lower before the end of the day, so from this point of view, this session was bearish.Taking day-to-day price changes, though, yesterday’s session was positive for both: gold and the general stock market. Consequently, the GDXJ ETF should have rallied as its price is generally influenced by both. And what actually happened?The GDXJ ETF declined by 1.18%.This is an extremely bearish short-term sign as its obvious that exactly the opposite happened to what was actually supposed to happen. The most likely reason? Junior miners simply can’t wait to decline.Junior mining stocks (the GDXJ ETF is often used as a proxy for them) declined to their rising short-term support line yesterday and ended the session close to it. There was no breakdown, but given the weak trading performance compared to gold and stocks, it seems that we won’t have to wait for it to materialize.And speaking of relative performance – it’s not just the day-to-day performance. Yesterday’s intraday low in the GDXJ ETF was just one cent above the intraday March high. For comparison, gold’s intraday low yesterday was over $50 above its intraday March high. And the S&P 500 was 91.12 index points (over 2%) above its intraday March high.My May 11 comments on the additional reason behind juniors’ weakness remain up-to-date:But what about juniors? Why haven’t they been soaring relative to senior mining stocks? What makes them so special (and weak) right now? In my opinion, it’s the fact that we now – unlike at any other time in the past – have an asset class that seems similarly appealing to the investment public. Not to everyone, but to some. And this “some” is enough for juniors to underperform.Instead of speculating on an individual junior miner making a killing after striking gold or silver in some extremely rich deposit, it’s now easier than ever to get the same kind of thrill by buying… an altcoin (like Dogecoin or something else). In fact, people themselves can engage in “mining” these coins. And just like bitcoin seems similar to gold to many (especially the younger generation) investors, altcoins might serve as the “junior mining stocks” of the electronic future. At least they might be perceived as such by some.Consequently, a part of the demand for juniors was not based on the “sympathy” toward the precious metals market, but rather on the emotional thrill (striking gold) combined with the anti-establishment tendencies ( gold and silver are the anti- metals, but cryptocurrencies are anti-establishment in their own way). And since everyone and their brother seem to be talking about how much this or that altcoin has gained recently, it’s easy to see why some people jumped on that bandwagon instead of investing in junior miners.This tendency is not likely to go away in the near term, so it seems that we have yet another reason to think that the GDXJ ETF is going to move much lower in the following months – declining more than the GDX ETF. The above + gold’s decline + stocks’ decline is truly an extremely bearish combination, in my view.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

When Euphoria Ends, Gold Bulls Enter the Scene

Finance Press Release Finance Press Release 14.05.2021 16:11
Market participants are very optimistic about an economic recovery, but these positive expectations may be exaggerated. The end of this euphoria should be good for gold.The optimism about the pace of economic recovery from the 2020 recession is growing. The analysts race in upward revisions of GDP growth in the coming quarters. For example, the IMF – in the April 2021 edition of the World Economic Outlook – expects at the moment that the US economic output will increase by 6.4% this year, compared to the 5.1% growth forecasted in January.The euphoric mood has some justification, of course. The vaccination is progressing, entrepreneurs are used to operating under sanitary restrictions, economies are reopening and governments are spending like crazy. At the same time, central banks are maintaining ultra-easy monetary policy , keeping financial conditions loose.Furthermore, some economic data is consistent with strong rebounding, especially in manufacturing. For instance, the IHS Markit U.S. Manufacturing PMI Index posted 59.1 in March, up from 58.6 in February – being the second-highest value on record since May 2007 when data collection began. Services are also recovering vigorously, as the IHS Markit US Services PMI Index registered 60.4 in March, up from 59.8 in February. It’s the fastest rate of growth since July 2014.Now, the question is how strong the current boom is and how long it is going to last. Well, there is no need to argue that we will see a few strong quarters of GDP growth in the US and other countries. But for me, the euphoria is exaggerated. You see, the current recovery is not surprising at all. As the Great Lockdown plunged the world into a deep economic crisis , the Great Unlocking is boosting the global economy.And there is the base effect . There was a low base in 2020, so the seemingly impressive recovery in 2020 is partially merely a statistical phenomenon. Let’s illustrate this effect. In Q2 2020, the real GDP plunged from $19,020 to $17,302 trillion or 9.03%year-over-year, as the chart below shows.However, the rebound to the pre-recession level would imply the jump of 9.93%, almost one percentage higher! This is how the math works: when you divide a numerator by a smaller denominator, you get a greater percentage. So, it would be alarming if the recovery were not strong after one of the deepest crises in history.Another issue that makes me more skeptical than most pundits is the fact that the main reason behind economic growth upgrades is massive fiscal stimulus . Uncle Sam injected more than 13 percent of the GDP in government spending (only in 2020) that ballooned the fiscal deficits . Meanwhile, the Fed widened its balance sheet by almost $4 trillion. So, it would be quite strange if we didn’t see impressive numbers in light of such unprecedented inflows of monetary and fiscal liquidity. But it means that the impressive recovery in statistics is driven, at least partially, by soaring money supply and public debt (see the chart below).And my three last concerns. First, the job recovery is more sluggish than the GDP recovery . The unemployment rate is still above the pre-pandemic level, while the labor force participation stands significantly below the level seen in February 2020. Second, a full return to normal life will occur if vaccines remain effective. But there is a tail risk of new variants of the virus, which could even be vaccine-resistant . Third, history teaches us that when the pandemic ends, social unrest may reemerge. After all, the epidemic left us with deepening inequalities and rising living costs.What does it all mean for the gold market? Well, the market euphoria about the economic rebound is negative for gold. We have already seen how these optimistic expectations freed the risk appetite and boosted economic confidence, sending bond yields higher, but gold prices lower.However, just as the doomsday scenarios created in the midst of the epidemic were excessively negative, the current ones seem to be too optimistic. I expect that with the year progressing, these expectations will soften or shift to the medium-term, which could be more challenging. After all, the low base effect will disappear, and both the monetary and fiscal policies will have declining marginal utility. At the same time, there will be an increased risk of high inflation , debt crisis , stock market correction or even financial crisis . After all, the current levels of stock indices are partially caused not by fundamentals, but by the elevating risk tolerance thanks to the central banks standing behind most asset classes ready to intervene in case of problems.It seems that this process has already begun and the reopening trade is waning. Economic confidence is very high, so the room for further increases is limited. The low-hanging fruits have been collected, and when economies reopen fully, the structural problems will become more important than the cyclical ones. Investors have started to worry about higher inflation, especially because the Fed remains unmoved by rising prices. A jobless recovery would prolong the Fed’s very dovish stance , as the US central bank focuses now on full employment rather than on stable prices. All these factors explain why the price of gold has been rebounding recently, and why it can rise even further later this year , although the fact that the US enjoys a stronger recovery than the EU or Japan could support the interest rates and the greenback , creating some downward pressure on the yellow metal.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Being a Gold Bull Is Now Far Too Easy - Don’t Be Deceived

Finance Press Release Finance Press Release 17.05.2021 15:18
Easy choices lead to a hard life (or at least losses), and because gold’s downside move is delayed, it’s extremely easy to be bullish on gold right now.It’s easy to get carried away by the day-to-day price action, and it’s even easier to feel the emotions that other market participants are feeling while looking at the same short-term price action. Right now, it’s tempting to be bullish on gold. It’s “easy” to be bullish on gold while looking at what happened in the last 1.5 months. But what’s easy is rarely profitable in the long run.“Easy choices – hard life. Hard choices – easy life” – Jerzy GregorekLet’s get beyond the day-to-day price swings. The Fed has been keeping the interest rates at ultra-low levels for many months, and it has just pledged to keep them low for a long time. The world is enduring the pandemic, and the amount of money that entered the system is truly astonishing. The savings available to investors skyrocketed. The USD Index has been beaten down from over 100 to about 90. And yet, gold is not at new highs. In fact, despite the 2020 attempt to rally above its 2011 high, gold’s price collapsed, and it invalidated the breakout above these all-important highs. It’s now trading just a few tens of dollars higher than it had been trading in 2013, right before the biggest slide of the recent years.Something doesn’t add up with regard to gold’s bullish outlook, does it?Exactly. Gold is not yet ready to soar, and if it wasn’t for the pandemic-based events and everything connected to them, it most likely wouldn’t have rallied to, let alone above its 2011 highs before declining profoundly. And what happens if a market is practically forced to rally, but it’s not really ready to do so? Well, it rallies… For a while. Or for a bit longer. But eventually, it slides once again. It does what it was supposed to do anyway - the only thing that changes is the time. Everything gets delayed, and the ultimate downside targets could increase, but overall, the big slide is not avoided.Let’s say that again. Not avoided, but delayed.And this is where we are right now. In the following part of the analysis, I’m going to show you how the situation in the USD Index is currently impacting the precious metals market, and how it’s likely to impact it in the following weeks and months.Riding investors’ emotional roller coaster, the love-hate relationship between financial markets and the USD Index is quite absurd. However, with alternating emotions often changing like the seasons, the greenback’s latest stint in investors’ doghouse could be nearing its end. Case in point: with the most speculative names in the stock market enduring a springtime massacre, beneath the surface laughter has already turned into tears. And while gold, silver and mining stocks have been buoyed by the intense emotional high that’s only visible on the surface, it’s only a matter of time before the veneer is lifted.To that point, while I won’t romanticize the USD Index’s recent underperformance, it’s important to remember that extreme pessimism is often the spark that lights the USD Index’s fire.Please see below:To explain, the bars above track various market participants’ four-week allocations to the U.S. dollar, while the horizontal light blue line above tracks the USD Index. If you analyze the right side of the chart, you can see that fund flows have fallen off of a cliff in recent weeks. However, if you analyze the behavior of the USD Index near Jan-20, Jan-21 and Mar-21, you can see that extremely pessimistic fund flows are often followed by short-term rallies in the USD Index. As a result, with the latest readings already breaching -4 (using the scale on the left side of the chart), USD-Index bears have likely already offloaded their positions.What’s more, not only did the USD Index end last week up by 0.10%, but the greenback invalidated the breakdown below its head & shoulders pattern – which is quite bullish – and also invalidated the breakdown below its rising dashed support line (the black line below). Moreover, while the greenback fell below the latter again on May 14, the short-term weakness is far from a game-changer as the breakdown is not confirmed.Please see below:On top of that, with the USD Index hopping in the time machine and setting the dial on 2016, a similar pattern could be emerging. To explain, I wrote on May 11:While the self-similarity to 2018 in the USD Index is not as clear as it used to be (it did guide the USDX for many weeks, though), there is also another self-similar pattern that seems more applicable now. One of my subscribers noticed that and decided to share it with us (thanks, Maciej!).Here’s the quote, the chart, and my reply:Thank you very much for your comprehensive daily Gold Trading Reports that I am gladly admitting I enjoy a lot. While I was analyzing recent USD performance, (DX) I have spotted one pattern that I would like to validate with you if you see any relevance of it. I have noticed the DX Index performing exactly in the same manner in a time frame between Jan. 1, 2021 and now as the one that started in May 2016 and continued towards Aug. 16. The interesting part is not only that the patterns are almost identical, but also their temporary peeks and bottoms are spotting in the same points. Additionally, 50 daily MA line is almost copied in. Also, 200 MA location versus 50 MA is almost identical too. If the patterns continue to copy themselves in the way they did during the last 4 months, we can expect USD to go sideways in May (and dropping to the area of 90,500 within the next 3 days) and then start growing in June… which in general would be in line with your analysis too.Please note the below indices comparison (the lower represents the period between May-Dec 2016 and higher Jan – May 2021). I am very much interested in your opinion.Thank you in advance.And here’s what I wrote in reply:Thanks, I think that’s an excellent observation! I read it only today (Monday), so I see that the bearish note for the immediate term was already realized more or less in tune with the self-similar pattern. The USDX moved a bit lower, but it doesn’t change that much. The key detail here would be that the USDX is unlikely to decline much lower, and instead, it’s likely to start a massive rally in the next several months - that would be in perfect tune with my other charts/points.I wouldn’t bet on the patterns being identical in the very near term, though, just like the late June 2016 and early March 2021 weren’t that similar.As soon as the USD Index rallies back above the rising support line, the analogy to 2016 will be quite clear once again –the implications will be even more bullish for the USDX and bearish for the precious metals market for the next several months.Please note that back in 2016, there were several re-tests of the rising support line and tiny breakdowns below it before the USD Index rallied. Consequently, the current short-term move lower is not really concerning, and forecasting gold at much higher levels because of it might be misleading. I wouldn’t bet on the silver bullish forecast either. The white metal might outperform at the very end of the rally, but it has already done so recently on a very short-term basis, so we don’t have to see this signal. And given the current situation in the general stock market – which might have already topped – silver and mining stocks might not be able to show strength relative to gold at all.If that wasn’t enough, the USD Index’s long-term breakout remains intact . And when analyzing from a bird’s-eye view, the recent weakness is largely inconsequential.Please see below:Moreover, please note that the correlation between the USD Index and gold is now strongly negative (-0.92 over the last 10 days) and it’s been the case for several weeks now. The same thing happened in early January 2021 and in late July – August 2020. These were major tops in gold.The bottom line?After regaining its composure , ~94.5 is likely the USD Index’s first stop. In the months to follow, the USDX will likely exceed 100 at some point over the medium or long term.Keep in mind though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is doing (and likely to do) better than the Eurozone and Japan, and it’s this relative outperformance that matters , not the strength of just one single country or monetary area. After all, the USD Index is a weighted average of currency exchange rates and the latter move on a relative basis.In conclusion, with investors and the USD Index likely headed toward reconciliation, the greenback’s medium-term prospects remain robust. With macroeconomic headwinds aligning with technical catalysts, investors’ risk-on inertia is already showing cracks in its foundation. And with the USD Index considered a safe-haven currency, a reversal in sentiment will likely catapult the USD Index back into the spotlight. Moreover, with gold, silver and mining stocks often moving inversely to the U.S. dollar, the mood music will likely turn somber across the precious metals market. The bottom line? With the metals’ mettle likely to crack under the forthcoming pressure, their outlook remains profoundly bearish over the next few months.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Same Old Song and Dance – Almost

Monica Kingsley Monica Kingsley 17.05.2021 16:21
Pendulum keeps swinging back into the S&P 500 bullish camp, as the Nasdaq rebound was mightily aided by rising long-dated Treasuries while value couldn‘t care less about their direction. Just as sharply the VIX rose, that steeply it retreated over the past two days, hinting that stocks are returning back to the old normal, which means about to go upwards. Option traders didn‘t agree that profoundly, but they aren‘t sending a trustworthy warning sign.I care more about corporate bond markets returning to life, and the retreating yields once the less alarming nature of Thursday‘s PPI has been digested. The transitory inflation story got modestly supported, but while I think that the red hot CPI inflation would die down a little (i.e. not keep rising ever as steeply as was the case with Wednesday‘s data) once the year on year base to compare it against normalizes, a permanently elevated plateau of high and rising inflation would be a reality for more than foreseeable future simply because the Fed would be as behind as Arthur Burns was in fighting the 1970s inflation, and upward price pressures in the job market pressures would kick in.Given though the mammoth scale of money printing and fiscal injections that surely has the bond vigilantes rolling in their graves, it‘s miraculous that the bond markets aren‘t revolting more, much more. Okay, you may look at it as that the 10-year Treasury yield has more than tripled since August, but the low base (0.5% rate) is distorting the view. Plenty of room still before financial repression enters stage right even more noticeably (we are nowhere near the panic yield levels causing genuine hardship for the S&P 500), but we have time – I am looking for a reprieve in the Treasuries markets, which would help especially the tech sector recovery.Gold and silver enjoy the retreating yields, unequivocally. And not even copper‘s short-term vulnerability as the red metal consolidates, is spoiling the technical picture much. Gold miners continue leading higher as silver ones keep lagging behind, but that‘s not an issue – the precious metals sector is primed to go up and extend my open gold profits.As the hottest running commodities take a breather (lumber sorely needs consolidation instead of down limit moves, copper‘s most bullish outcome would be sideways to a little lower trading, with soybeans being best positioned to weather last week‘s setback):(…) it seems that precious metals would lead select pockets in commodities (yes, silver looks ready to do that job, and that extends to the so far still range bound silver miners one day) higher as we keep transitioning to a higher inflation environment for months already.The Fed isn‘t serious about fighting inflation, otherwise it wouldn‘t be rolling out the procession on almost daily basis. Negative real rates would start supporting the metals increasingly more as the decoupling from nominal yields gathers more steam. The precious metals upleg is still in its early stages.Crude oil recovered from Thursday‘s setback, hitching a ride alongside other commodities on Friday. Still within its latest range, and on not stellar volume, but the bulls deserve continued benefit of the doubt as bullish spirits return, making the open oil position even more profitable.Bitcoin has been struggling over the weekend, giving up Friday‘s gains and then some. The next bottom remains elusive but the cryptocurrency isn‘t down and out. Outshined by its competitors though, oh yes – Ethereum continues bullishly basing, making the open Ethereum position profitable.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 recovery continues – just as sharply as the index went down. Makes you think to what degree were the algos‘ risk-adjustments per volatility implied, exacerbating the selloff and driving powerfully the comeback,Credit MarketsCorporate bonds – whether high yield or investment grade ones – confirmed the stock market recovery with upswings of their own, and long-dated Treasuries aren‘t likely to stand in the way next.VolatilityFurther confirmation of how fast the correction came, and disappeared, came from the volatility spike getting lost faster than it could influence its moving averages anyhow.Technology and ValueTech recovery is confirmed by the $NYFANG one, and I view the lower volume as little concerning. The TLT breather and inflation expectations calming down a little, would be more important, and value stocks show that their return of bullish spirits is to be taken seriously.Gold, Silver and MinersGold and miners keep trading in harmony, and the miners‘ outperformance reasserting itself bodes well for the week ahead. Just as I wrote on Friday, check once again how little an TLT uptick coincided with that turn.Silver isn‘t wildly outperforming gold in any way, pointing to this precious metals upswing as having further to run. In spite of the sideways to down consolidation in copper, its ratio to 10-year Treasury yield remains healthy and supportive of further metals‘ run, and of commodities in general – but these are likely to take a breather (compared to their prior perfomance) once Treasury yields would go sideways. So, keep the overt bullishness in check.Bitcoin and EthereumBitcoin continues building a base, but the volume behind the downswings looks to favor the sellers now. Ethereum is another cup of tea, continuing to form a bullish flag before another advance, but it must return to outperformance first. We aren‘t there yet.SummaryS&P 500 bulls are ready to defend and extend gains, and credit markets confirm the drive higher both in tech and value as Russell 2000 catches its daily breath too.Gold, silver and miners are well positioned for the upswing continuation, powered by further retreat in real rates. Higher precious metals prices are ahead.Crude oil is still bullishly range bound, and the resumption of deliveries to the South and East won‘t crater it. Neither would the Middle East tensions spike it tough, but that‘s relevant to the precious metals too.Bitcoin‘s short-term outlook isn‘t yet bullish, but this can‘t be said about Ethereum to the same degree, which would be outperforming the best known crypto hands down. For those in favor of spread trades, going long Ethererum while shorting Bitcoin (the positions‘ relative moves with equal risk exposure), seems a great idea. Ethereum outlook remains bullish, and the sole question remains how far and for how long it would pull back before another upleg.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Metals Preparation For A Big Upside Move (Part II)

Chris Vermeulen Chris Vermeulen 18.05.2021 05:23
In the first portion of this research article, I highlighted the correlation between Gold and the US Dollar as well as the correlation between the US Dollar and the EURUSD and JPYUSD.  The purpose of this example was to highlight the different phases of US Dollar appreciation vs depreciation compared to the EURUSD/JPYUSD.  The EURUSD and JPYUSD are often compared to the US Dollar as major global currencies.  Therefore, when the US Dollar moves into a depreciation phase, we expect to see the EURUSD and JPYUSD move into an appreciation phase.How this correlated to the price of Gold and the phases of advancing vs declining precious metals is simple to understand.  Gold will stall, or more broadly downward, while the US Dollar is within an advancing/appreciation phase.  Gold will move higher or begin an upward trend bias when the US Dollar begins to generally weaken or moves into a declining/depreciation phase.Understanding Cycle Phases & Correlative Gold Price Trend BiasIn the first portion of this research article, I highlighted this relationship by detailing the 2007-08 US Dollar depreciation phase that lasted until a major bottom setup in 2014 (almost exactly 7 years).  That next US Dollar appreciation phase lasted until a recent major peak in March 2020 (almost exactly 7 years).  If the US Dollar continues to decline in value after the COVID-19 virus event and the change in cycle phases, we can expect another 5 to 7+ years of advancing precious metals prices as a result.The recent bottoming in Gold, just above the $1700 price level, set up a very unique scenario related to potential future advances in price.  The current Gold rally from the 2015 lows, near $1045.40, to recent highs near $2089.20 represents almost a 100% price advance.  In my opinion, this rally in Gold is similar to the rally that took place between 2000 and 2005 – starting near the end of a US stock market appreciation phase and lasting about 3.5 years into a US stock market depreciation phase.  Our researchers believe the US stock market has completed a recent price appreciation phase in 2018~2019 and that we are only about 1~2 years into a new US stock market depreciation phase – which may last until 2027~2029.The Monthly Gold Futures chart, below, highlights these Appreciation/Depreciation phases and the advancing/declining price of Gold over the past 25+ years.  We want you to pay very close attention to how Gold started to rally in 2000 as the markets peaked because of the DOT COM rally.  This rally started in the midst of a US stock market appreciation phase – just like what happened in 2015.  Gold prices rallied from the 2000 lows to reach the initial +100% advance by early 2006 (in the midst of a housing market rally and in the midst of a Depreciation US stock market phase).  After that, Gold rallied another +265% reaching a peak price level $1923.70 in September 2011.Currently, Gold has rallied approximately 100% from the 2015 lows – similar to the 2000~2006 rally.  The current downside price move in Gold suggests the recent highs, near $2089.20 in August 2020, complete a Cup-n-Handle pattern.  Additionally, because we have just entered a US stock market Depreciation phase, we believe the price of Gold will continue to advance to levels highlighted in the chart above.  The first target level is $2600, then $3200, then $3790.Sign up for my free trading newsletter so you don’t miss the next opportunity!Our Currency Correlation Inverse Trend Index also aligns with the Appreciation/Depreciation cycle phases.  If the US Dollar continues to decline in value over the next 2 to 5+ years, attempting to consolidate below $84 as it has done in the past, then we believe the EURUSD/JPYUSD currency values may advance above the threshold (near 0.65) to prompt a stronger rally in precious metals over the next 4+ years.US Dollar & Currency Correlations Suggest Big Advance In Metals Is PendingThe primary driver of this move is the declining US Dollar – not the move higher in the EURUSD or JPYUSD.  These other currencies are simply barometers of the global perception of the strength of the US Dollar.  A weakening US Dollar will usually be prompt a moderate advance in Gold prices.  We believe the correlation between the US Dollar value (above or below the 85~86 level), as well as the correlation of the strength of the EURUSD and JPYUSD in comparison to the US Dollar, may prompt a change in how Gold reacts to moderate trend bias as well as how Gold reacts to changes in the US Dollar trends.  The bias trend of Gold within this extended market cycle phase tends to mitigate Gold price volatility as the US Dollar temporarily bottoms/bases and starts to rise.  This suggests a broader rally in Gold throughout this new market cycle phase may extend much higher than many people expect.The following Monthly Custom Metals Inverse Trend chart, below, highlights the bottoming/basing formation in the currency correlation compared to Gold.  You can see the moderately deep bottom that set up in Gold between the peak in 2011 and the bottom in 2015, as well as the recent rally in gold to the new highs.  The recent moderate selloff in Gold correlated to a very minor decline in the Inverse Currency Index – suggesting that a bigger rally is setting up as currencies rotate into the new cycle phase.Our Custom Metals Index Weekly chart, below, highlights the recent upward price rotation in the precious metals/miners sectors.  Pay very close attention to the RED price channels on this chart and the LIGHT BLUE arching GANN Fan resistance levels near the recent tops in price.  We believe any upside price advance above these current GANN arcs will prompt a rally that may push metals prices back into the RED price channels – advancing possibly +10% to +30% higher before the end of 2021.  This advance may prompt Gold to rally to levels near our $2600 price target before the end of 2021.  Silver may advance to levels above $39~$44, more than 30% to 40% from current price levels if Gold continues to advance as we expect.US Dollar Flirting With Massive Price Decline Once $89.00 Is BreachedOne key factor that is likely to drive this new advance in Gold and Silver – the US Dollar trends.  I am watching two critical support levels in the US Dollar right now; $89.70 and $89.20.  If the US Dollar falls below either of these support levels, Gold will likely advance higher as the currency depreciation cycle phase appears to be continuing to engage as we expect.  Remember, the key level for the US Dollar is that 85~86 level. The closer we get to those levels, the more conviction traders and investors will have regarding the advancing precious metals prices.  The 89 price level for the US Dollar is likely the breaking point for this cycle phase to really break loose so watch that level very closely.As the US stock market attempts to shrug off inflationary concerns and worries that the US Fed may be forced to raise rates to curb inflationary trends, Traders and Investors should start to pay attention to precious metals and the currency correlations related to these broader market cycle phases.  My research team and I have published a number of articles related to these Appreciation/Depreciation cycle phases and attempted to warn of potential market volatility events over the past 8+ months, including: How To Spot The End of an Excess Phase (November 27, 2020); Are We Days Away From Potential GANN/Fibonacci Price Peak? (March 17, 2021); Adapting Dynamic Learning Shows Possible Upside Price Rally In Gold & Silver (November 22, 2020).What is important to understand about this potential cycle phase shift and new precious metals trend bias is that it may take many weeks or months to complete before the bigger rally really starts to build momentum.  Yet, the evidence is starting to build that a decreasing US Dollar trend may prompt this new cycle phase shift in the currency correlation and that may prompt a big shift in how precious metals and miners start to rally higher.  Right now, we are seeing Gold and Silver start to shift into a new bullish trend bias – therefore, we may be starting to see a shifting in expectations; which is very similar to what we saw in 2000~2005 – just before Gold exploded higher.Make sure you stay on top of the prices of precious metals if you want to be able to take advantage of the expected rally. Every morning I share my market analysis and review the price action of precious metals with my premium subscribers of BAN Trader Pro. Join now to get my pre-market video analysis deilvered to your inbox every morning, and get ready for a great ride in Gold and Silver over the coming months and years!Enjoy the rest of your weekend!!
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Credit Market Wheels in Danger of Coming Off?

Monica Kingsley Monica Kingsley 18.05.2021 15:59
SPX backing and filling worthy of Monday‘s session – with important rotations below the surface. Namely, tech and Nasdaq underwent daily consolidation on long-dated Treasuries retreating a little. Key point though was rejection of the intraday downside, making the S&P 500 pendulum likelier to swing this week again bullish. The VIX spike was rejected while option traders didn‘t give up much of their bearish resolve, which doesn‘t spoil the bullish picture though.Stock trading yesterday was accompanied by the bond markets moving down. Such a non-confirmation is encouraging in its implications, as the markets are still taking seriously the transitory inflation messaging in light of the less alarming nature of Thursday‘s PPI. Seems like we‘re in for a few relatively stable weeks of Treasury yields undeperforming inflation expectations before the yield climb returns:(…) The transitory inflation story got modestly supported, but while I think that the red hot CPI inflation would die down a little (i.e. not keep rising ever as steeply as was the case with Wednesday‘s data) once the year on year base to compare it against normalizes, a permanently elevated plateau of high and rising inflation would be a reality for more than foreseeable future simply because the Fed would be as behind as Arthur Burns was in fighting the 1970s inflation, and upward price pressures in the job market pressures would kick in.Given though the mammoth scale of money printing and fiscal injections that surely has the bond vigilantes rolling in their graves, it‘s miraculous that the bond markets aren‘t revolting more, much more. Okay, you may look at it as that the 10-year Treasury yield has more than tripled since August, but the low base (0.5% rate) is distorting the view. Plenty of room still before financial repression enters stage right even more noticeably (we are nowhere near the panic yield levels causing genuine hardship for the S&P 500), but we have time – I am looking for a reprieve in the Treasuries markets, which would help especially the tech sector recovery.Final sign of encouragement for the S&P 500 bulls comes from the Russell 2000 and emerging markets, which had a better day than the 500-strong index. At the same time, the dollar went on to challenge its May lows, and is likely to break below them – in line with my dollar bearish calls.Gold and silver fireworks go on, and the miners support these moves – including silver ones springing to life. Just as I stated a month ago, the unavoidable inflation data are bringing down real rates, are at work. What started as a decoupling from rising nominal yields that I talked in early Mar, continues in a more obvious day, sharply increasing my open gold profits.Crude oil upswing is unfolding according to plan, and the lower volume isn‘t as concerning so as to invalidate it. Crucially, the oil sector ($XOI) continues pulling ahead, and remains fully supportive of making the open oil position even more profitable.Bitcoin and Ethereum rebounded off their daily bottom yesterday, and in spite of choppy trading throughout the session, the Ethereum position was profitably closed. Bitcoin doesn‘t appear to be out of the woods yet, but the Ethereum chart is looking more constructive as time passes by.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 bullish consolidation goes on, and amid the sideways trading of the present, bulls are still the favored party.Credit MarketsCorporate bonds – whether high yield or investment grade ones – disagreed with the stock market daily resilience, and followed long-dated Treasuries to the downside. Such action though looks as a daily fluctuation, and isn‘t reason good enough to reevaluate the bullish outlook. Technology and Value$NYFANG didn‘t participate in the daily tech setback while value mostly held gained ground. Technology is giving an impression of being ready for rebound continuation which would tie in well with the relative Treasury market calm.Gold, Silver and MinersGold and miners are gaining speed, the latter especially – and that bodes well for the former, extending into silver naturally as well. Please note that this is happening against the backdrop of modestly rising nominal rates (see my earlier words about the ever more apparent decoupling).Silver confirms and so does the copper to 10-year yield ratio. Just as I talked on May 06, precious metals are assuming the baton from commodities – catching up.Crude OilCrude oil is back in the growth mode, yet the lower daily volume advises patience, and perhaps also indicates less volatile trading the day ahead (today). Either way, I am not looking for its sharp downside reversal.SummaryS&P 500 bulls are getting ready amid all the backing and filling for further advance, unless the corporate credit markets throw a fit. That‘s though unlikely to be of lasting importance.Gold, silver and miners upswing goes full speed ahead, so look up as higher prices are on the immediate horizon.Crude oil is yet another bullish bet, and its chart and oil index performance support higher prices still.Bitcoin woes continue, and Ethereum is better placed to return to growth sooner. All doesn‘t seem calm though in the crypto land at the moment.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Gold: Reversal Is the Name of the Game

Finance Press Release Finance Press Release 19.05.2021 15:47
When the USDX declines, the PMs usually celebrate and rise as a result. However, this was not the case yesterday – and we can’t ignore it.“Reversal” is the name of the game, at least when it comes to the precious metals market.The USD Index declined profoundly once again yesterday (May 18), and gold, silver, and mining stocks ignored this move. They didn’t want to follow in its footsteps anymore.As you can see, the USD Index reached its horizontal support provided by the previous important low. Low that was formed after a fake breakdown below the neck level of a supposedly bearish head-and-shoulders pattern. The USDX is not only at similar price levels; it’s also right after a supposedly bearish breakdown below. The reversal could be just around the corner, or we might have already seen it, given today’s (small, but still) pre-market move higher.As I mentioned above, yesterday’s sizable decline in the USDX should have triggered substantial rallies in the PMs. What happened instead?Reversals .What Happened to Gold?Gold reversed right at its triangle-vertex-based… well, reversal, and the combination of resistance lines.The reversal in gold took place after gold moved very close to its mid-January highs and the 50% Fibonacci retracement based on the August 2020 – March 2021 decline.The sizes of the current rally (taking the second March bottom as the starting point) and the rally that ended at the beginning of this year are practically identical at the moment.Just as the rallies from early 2012 and late 2012 (marked with blue) were almost identical, the same could happen now.The March 2021 low formed well below the previous low, but as far as other things are concerned, the current situation is similar to what happened in 2012.The relatively broad bottom with higher lows is what preceded both final short-term rallies – the current one, and the 2012 one. Their shape as well as the shape of the decline that preceded these broad bottoms is very similar. In both cases, the preceding decline had some back-and-forth trading in its middle, and the final rally picked up pace after breaking above the initial short-term high.Interestingly, the 2012 rally had ended in huge volume, which is exactly what we saw on Friday. To be 100% precise, the 2012 rally didn’t end then, but it was when over 95% of the rally was over. Gold moved very insignificantly higher since that time. Most importantly, though, it was the “dollars to the upside, hundreds of dollars to the downside” situation. And it seems that we are in this kind of situation right now once again.Interestingly, back in 2013 gold started its gargantuan (…) slide from about $1,800 and it is not far from this level also today.Moreover, let’s keep in mind that the RSI indicator just topped slightly above 70, which is what tends to happen when gold tops. The upside seems very limited. In fact, it seems that the top in gold is already in.The lower part of the above chart shows how the USD Index and the general stock market performed when gold ended its late-2012 rally and was starting its epic decline. In short, that was when the USD Index bottomed, and when the general stock market topped. I don’t want to get into too many USD-related short-term details, as I did that yesterday, but let’s take a closer look at the short-term developments on the stock market .Stock MarketIn short, the situation doesn’t look pretty. To explain, I wrote the following on May 11:The markets are self-similar (which is another way of saying that they have a fractal nature), which generally means that while the history tends to rhyme, it also tends to rhyme in similar shapes of alike or various sizes.For example, the rally from 2018–2020 seems very similar to the rally from 2020 to the present. Both rallies started after a sharp decline, and the first notable correction took the form of back-and-forth trading around the previous high. I marked those situations with big rectangles.Then the rally continued with relatively small week-to-week volatility. I created rising support lines based on the final low of the broad short-term consolidation and the first notable short-term bottom.This line was broken, and some back-and-forth trading followed, but it was only about half of the previous correction in terms of price and time.Then, we saw a sharp rally that then leveled off. And that was the top . The thing that confirmed the top was the visible breakdown below the rising support line right after stocks invalidated a tiny breakout to new highs. That’s what happened in February 2020, and that’s what happened this month.“Time is more important than price; when the time comes, the price will reverse”. Both rallies took an almost identical amount of time: 60 weeks vs. 59 weeks.Stocks moved a bit higher recently, but yesterday’s and today’s pre-market decline seem to be telling investors that the initial slide was not just another correction in the bull market. This is the first time when the S&P 500 was unable to get back above its rising support line after temporarily breaking below it. Instead, we saw an attempt to rally, and now we see another slide lower.This is bearish for gold’s forecast , but also very bearish for silver and mining stocks, which are more correlated with the stock market than gold is.Speaking of silver, let’s take a look at its price chart.The white metal has clearly reversed yesterday (May 18), and at the moment of writing these words, it’s trading back below its May 10 high and the $28 level. Just like it is the case with gold, it seems to me that the outlook for silver is bearish.Mining stocks seem to have reversed in a rather odd manner, but in one that’s ultimately in tune with how tops are formed based on technical analysis principles.The same (or very similar) opening and closing price levels accompanied by an intraday reversal after an intraday decline – when seen after a short-term rally – are called a “hanging man” candlestick. In short, it’s one of the reversal candlestick patterns. It should have been confirmed by a huge volume – it wasn’t, so it’s not that important, though.The most important details are still based on the preceding day’s huge volume, the RSI, and the way the GDX ETF topped in the past.The GDX ETF soared to new highs on volume that was much greater than 40M shares. This happened only three times in the past 12 months. In each of those three cases, it was a major top, or it was very, very close to it.The RSI just moved above 70, and it happened only twice recently. One time it heralded the 2020 top, and the other time we saw it in late February 2020 – right before a huge slide started.Consequently, taking all the above into account, it seems to me that the situation in the precious metals market is very bearish right now, as it seems to be either topping or after the top. If I didn’t have a short position in the junior mining stocks right now, I would have opened it today.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
US Industry Shows Strength as Inflation Expectations Decline

Stock Market Attempts To Break Support Channel – What's Next?

Chris Vermeulen Chris Vermeulen 19.05.2021 22:12
The recent price volatility related to the surprise Jobs number, nearly ten days ago, and the potential for inflationary price trends extended beyond the Fed expectations has created a unique type of sideways price rotation on the INDU chart.  This recent price volatility suggests the markets are struggling to identify future trend bias as well as attempting to shake out certain traders and investors (running stops).Additionally, the downside price trend we've recently seen in Lumber, breaking away from the continued rally mode, and Bitcoin, breaking downward nearly -54% from recent highs, suggests a broad market “washout” is taking place.  How far will this trend continue?  Will the US stock market break downward like Bitcoin has recently done?  Let's take a look at the charts and try to answer some of these questions.Before we continue exploring charts, I suggest readers review some of my recent research posts relating to this potential downward price trend in the US/Global markets, including: Are We Days Away From Potential Gann/Fibonacci Price Peak? (March 17, 2021); Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues (April 25, 2021); and Are Apple, Tesla, and Bitcoin Entering a Technical ‘Excess Phase Top’? Should You Be In Cash Right Now? Part II (May 15, 2021).Expect Continued Price Volatility As Markets Attempt To Establish New TrendsWe'll start by exploring the Dow Jones Industrial Average Daily chart, below, and the first thing we want to highlight is the extended upward (YELLOW) price trend channel.  This upward sloping price channel has been in force since the March 2020 COVID-19 lows.  It was confirmed by the November 2020 lows and retested in March 2021.  Typically, when price channels this strongly over an extended period of time, the price channel becomes a psychological barrier/wall for price trending.  When it is breached or broken, price trends often react moderately aggressively – with excessive volatility.Over the past 10+ days, near the right edge of this chart, we can see that price has started to react with much higher volatility and broad sideways price trends.  It appears the INDU chart has entered a new phase of market price activity – moving away from moderately low volatility bullish trending and into much higher volatility sideways rotation.  We attribute this to a shift in how traders and investors perceive the future actions of the US Fed and how risks are suddenly much more prominent than they were 3+ weeks ago.  It appears the “rally euphoria” has ended and traders are starting to adjust expectations related to a slower economic reflation of the global economy.Depending on how traders and investors perceive the future growth opportunities in the US and global markets, as well as how new strains of the COVID-19 virus may continue to disrupt global economies, we may see a fairly big change in trend throughout the rest of 2021 and possibly into 2020.  In our opinion, the tremendous rally phase that took place between October 2020 and now has been anchored on the perception that the COVID vaccines would allow for an almost immediate and nearly full economic recovery attempt.  Now, after we are seeing various new strains of COVID ravage India, Europe, Africa and parts of South-East Asia, expectations may be changing quickly.Everything Hinges On How Price Reacts Near The YELLOW Support Channel LineThis Weekly Dow Jones Industrial Average chart highlights the same upward sloping price trend from the March 2020 COVID-19 lows.  It also shows the start of the broad market rotation over the past three weeks and highlights three key “standout lows” that we interpret as critical support levels.  These support levels are at $32,090, 30,575, and $29,875.Sign up for my free trading newsletter so you don’t miss the next opportunity!If we continue to see downward price trending which breaks through the YELLOW upward sloping price channel line, it is very likely that price will continue to move lower while attempting to find new support near these standout low price levels.  This suggests any breakdown in the INDU may prompt a further -5% to -11% downside price move.If the recent price rotation stalls and continues to find support above the YELLOW upward sloping price channel line, then we expect the US markets to transition into a sideways bottoming formation which will prompt another rally attempt in the near future. Everything hinges on what happens over the next few weeks related to this key YELLOW upward sloping price channel.What this means for traders and Investors is that certain market sectors are still posed for strength and growth over the next 6 to 12 months.  The recent downside price volatility suggests broad market concerns related to a continued reflation trade are certainly evident in how the markets are trending.  Yet, within this potential sideways rotation, there are sectors and trends that still present very real opportunities for profits. If the major US indexes find support above the YELLOW price channel line and attempt to mount another rally, traders need to be prepared for this potential opportunity in the markets – attempting to target the best and strongest market sectors.As I just mentioned, everything hinges on what happens over the next few days and weeks related to the YELLOW price support channel.  One way or another, the markets are either going to attempt to rally higher while this support channel holds or a bigger breakdown event may take place as price breaks below the support channel and attempts to find new, lower, support.Learn why we moved our BAN clients into CASH over a week ago and learn how we use the BAN trading strategy to manage risks and take advantage of the strongest market sectors. Please take a minute to learn about our BAN Trader Pro strategy and how it can help you identify and trade better sector setups.  Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades.  You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.Enjoy the rest of your day!!
Gold Approaches $1,900 amid FOMC Minutes and Crypto Sell-Off

Gold Approaches $1,900 amid FOMC Minutes and Crypto Sell-Off

Finance Press Release Finance Press Release 20.05.2021 16:31
The latest FOMC minutes were dovish, especially in light of the recent increase in inflation and elevated asset valuations. What does it mean for gold?Yesterday, the FOMC published minutes from its last meeting in April . They’ve shown two things doing that: first, that some of the central bankers are worried about the inflation and elevated asset valuations; and, second, that the Fed is going to remain dovish despite all these concerns .Indeed, some FOMC participants noted that the demand for labor had started to put some upward pressure on wages. Moreover, a number of them pointed out the protracted supply disruptions and the insufficient pre-emptive hawkish reaction from the Fed as potentially inflationary factors:A number of participants remarked that supply chain bottlenecks and input shortages may not be resolved quickly and, if so, these factors could put upward pressure on prices beyond this year. They noted that in some industries, supply chain disruptions appeared to be more persistent than originally anticipated and reportedly had led to higher input costs. (…)A couple of participants commented on the risks of inflation pressures building up to unwelcome levels before they become sufficiently evident to induce a policy reaction.When it comes to financial stability and asset valuations, several FOMC members pointed out elevated risk appetite and very low credit spreads . And certain participants noted dangers related to the low interest rates and excessive risk-taking: if the risk appetite fades, the asset prices could decline with potentially harmful consequences for the financial sector and the economy:Regarding asset valuations, several participants noted that risk appetite in capital markets was elevated, as equity valuations had risen further, IPO activity remained high, and risk spreads on corporate bonds were at the bottom of their historical distribution. A couple of participants remarked that, should investor risk appetite fall, an associated drop in asset prices coupled with high business and financial leverage could have adverse implications for the real economy. A number of participants commented on valuation pressures being somewhat elevated in the housing market. Some participants mentioned the potential risks to the financial system stemming from the activities of hedge funds and other leveraged investors, commenting on the limited visibility into the activities of these entities or on the prudential risk-management practices of dealers’ prime-brokerage businesses. Some participants highlighted potential vulnerabilities in other parts of the financial system, including run-prone investment funds in short-term funding and credit markets. Various participants commented on the prolonged period of low interest rates and highly accommodative financial market conditions and the possibility for these conditions to lead to reach-for-yield behavior that could raise financial stability risks.So, given all these concerns about financial stability and higher inflation, the Fed should send some hawkish signals, right? Not at all! On the contrary, the US central bank reiterated its ultra-dovish stance, justifying that the economy was far from achieving full employment.Participants commented on the continued improvement in labor market conditions in recent months. Job gains in the March employment report were strong, and the unemployment rate fell to 6.0 percent. Even so, participants judged that the economy was far from achieving the Committee's broad-based and inclusive maximum-employment goal. Payroll employment was 8.4 million jobs below its pre-pandemic level. Some participants noted that the labor market recovery continued to be uneven across demographic and income groups and across sectors.After all, higher inflation would only be transitory, and when these short-term factors fade, inflation will decrease:In their comments about inflation, participants anticipated that inflation as measured by the 12-month change of the PCE price index would move above 2 percent in the near term as very low readings from early in the pandemic fall out of the calculation. In addition, increases in oil prices were expected to pass through to consumer energy prices. Participants also noted that the expected surge in demand as the economy reopens further, along with some transitory supply chain bottlenecks, would contribute to PCE price inflation temporarily running somewhat above 2 percent. After the transitory effects of these factors fade, participants generally expected measured inflation to ease. Looking further ahead, participants expected inflation to be at levels consistent with achieving the Committee's objectives over time (…) Despite the expected short-run fluctuations in measured inflation, many participants commented that various measures of longer-term inflation expectations remained well anchored at levels broadly consistent with achieving the Committee's longer-run goals.Yeah, sure, but why should we believe the Fed if they were surprised by the CPI readings in April? They anticipated inflation moving above 2 percent, and meanwhile the CPI inflation surged above 4 percent as the chart below shows!But at least inflation expectations remain well-anchored, don’t they? Well, not exactly . As the chart below shows, the market-based expectations of inflation have significantly risen recently. Similarly, the University of Michigan’s index that measures inflation expectations for the next five years rose from 2.7 percent in April to 3.1 percent in May – it’s the highest level in a decade.Interestingly, even the Fed staff doesn’t believe in transitory inflation. After all, they forecast that the actual GDP would be above its potential until 2022-2023:With the boost to growth from continued reductions in social distancing assumed to fade after 2021, GDP growth was expected to step down in 2022 and 2023. However, with monetary policy assumed to remain highly accommodative, the staff continued to anticipate that real GDP growth would outpace that of potential over much of this period, leading to a decline in the unemployment rate to historically low levels.Economics 101 teaches us that when the economy operates above its potential, it implies overheating and inflation that reflects more fundamental or lasting factors than base effects and short-term supply disruptions.Implications for GoldWhat do the recent FOMC minutes imply for gold? Well, the Fed remaining dovish despite all the inflationary risks and elevated asset valuations (many assets plunged yesterday, especially cryptocurrencies) is bullish for gold .Sure, a few members became ready to start talking about tapering the quantitative easing and tightening the monetary policy :A number of participants suggested that if the economy continued to make rapid progress toward the (policy-setting) Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases.However, “a number” is not “the majority”, so we shouldn’t expect such a discussion in the mainstream anytime soon, especially in light of the disappointing April nonfarm payrolls and recent declines in the stock market.The price of gold rose yesterday, approaching $1,900. It might have been due to the FOMC minutes, but also the sell-off in cryptocurrencies and the following outflow of money from them into old, good gold.Given these shifts in the marketplace, it seems that Fed’s worries about fading risk appetite were justified. If risk appetite wanes further, gold should shine as a safe-haven asset .If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
New York Climate Week: A Call for Urgent and Collective Climate Action

Gold, Silver, Miners: The Zenith and Its Shadows

Finance Press Release Finance Press Release 21.05.2021 14:49
Most likely we saw the precious metals reach their zenith on May 19, like the tropical sun on the day of the equinox. What will come afterward?Usually, when we think about the zenith, we have in mind a natural phenomenon caused by the tropical sun being exactly over our heads. But the zenith can also mean that something reached its peak – and just as the sun starts casting increasingly longer shadows after retreating from the highest point in the sky, the same happens when an asset on the market starts backing out after topping.Its shadow – i.e., its ramifications – is cast in one particular direction, and it usually goes this way until the sun sets. Therefore, just as the shadows are getting longer, and longer, and longer, the drop after the top could go lower, and lower, and lower…During yesterday’s (May 20) session, we saw more or less the repeat of the previous day’s indications – gold stocks reversed once again, and gold is trading where it was trading two days ago. Silver is already trading lower. Consequently, much of my previous comments remain up-to-date.On Wednesday, gold miners reversed in a classically bearish way, and yesterday’s low-volume session (also a reversal) looks like Wednesday’s reversal’s shadow.The GDX ETF first tried to rally to new highs, then it failed to hold them. Wednesday’s reversal took place on big volume (important bearish confirmation), and the “shadow reversal” took place on relatively low volume. The low volume doesn’t confirm the reversal, but it more or less invalidates the seemingly bullish fact that miners closed yesterday’s session higher.Moreover, please note that the volume was similarly low to what we saw on January 7, 2021, when the 4-day top was ending. Yesterday was the fourth day of what appears to be a broad top.Let’s also keep in mind that the RSI indicator just moved back below 70 after being above it. This happens rarely, and when it happened previously (in the past 1.5 years), it meant that a huge price decline was about to follow.Silver reversed in a different manner.The white metal didn’t move to new highs yesterday. Conversely, it moved lower, and then it only recovered intraday decline without moving visibly higher ( silver futures ended the day only $0.04 higher). The true reversal happened on Tuesday – and what we saw yesterday and on Wednesday was just its consequence. It’s quite often the case that the tops and bottoms in the precious metals market take place more or less (!) simultaneously, but not necessarily exactly on the same day. Consequently, what we saw this week is quite normal.Gold didn’t manage to move to new intraday highs yesterday – however, it didn’t decline visibly either.It moved a bit lower in today’s pre-market trading, and overall, it’s just $8 higher than it was at the end of Tuesday’s session. This might seem positive given that gold managed to move slightly above its declining medium-term resistance lines. However, given what’s happening in the mining stocks and all the signals from them, I doubt this breakout will really hold.Here’s another reason: the Fed is attempting to control the long-term rates, and we just saw a short-term exodus from the cryptocurrency market. Theoretically, capital should be flowing into gold as a safe-haven / inflation-hedge asset, and it should be soaring . But it’s not. It did move higher recently, but compared to what “should have” happened given the importance of the above-mentioned developments, the reaction is barely noticeable.Instead, gold seems to be insisting on repeating – to some extent – its 2012 performance, and – to some extent – its 2008 performance. Either way, it seems that gold is about to slide.The reversal in gold took place after gold moved very close to its mid-January highs and the 50% Fibonacci retracement based on the August 2020 – March 2021 decline.The sizes of the current rally (taking the second March bottom as the starting point) and the rally that ended at the beginning of this year are practically identical at the moment.Just as the rallies from early 2012 and late 2012 (marked with blue) were almost identical, the same could happen now.The March 2021 low formed well below the previous low, but as far as other things are concerned, the current situation is similar to what happened in 2012.The relatively broad bottom with higher lows is what preceded both final short-term rallies – the current one, and the 2012 one. Their shape as well as the shape of the decline that preceded these broad bottoms is very similar. In both cases, the preceding decline had some back-and-forth trading in its middle, and the final rally picked up pace after breaking above the initial short-term high.Interestingly, the 2012 rally ended in huge volume, which is exactly what we saw also on May 19 this year.What is even more interesting is that back in 2013 gold started its gargantuan (…) slide from about $1,800 and it is not far (from the long-term point of view) from this level also today.Moreover, let’s keep in mind that the RSI indicator just topped slightly above 70, which is what tends to happen when gold tops. The upside seems very limited. In fact, it seems that the top in gold might already be in.The lower part of the above chart shows how the USD Index and the general stock market performed when gold ended its late-2012 rally and was starting its epic decline. In short, that was when the USD Index bottomed, and when the general stock market topped.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Gold: The Past Years Are Often the Best Guides

Finance Press Release Finance Press Release 24.05.2021 15:36
As we know, history tends to rhyme. It’s never the same, but when you zoom out, the bigger picture often looks very similar. What does it mean for gold?Short-term implicationsWith gold’s back-and-forth price action mirroring its behavior from 2012, the yellow metal is likely destined for devaluation.Back then, gold zigzagged with anxiety before suffering a material drawdown. In fact, in early October 2012, it moved slightly above the initial highs right before sliding.Moreover, while the yellow metal has bounced above its declining resistance line (the black line below), the price action mirrors gold’s behavior from early January. If you analyze the blue line below, you can see that investors’ optimism regarding gold’s short-term breakout quickly faded and the yellow metal sunk like a stone. In addition, with gold’s RSI (Relative Strength Index) moving slightly above 70 before the January swoon occurred, an identical development is already playing out in real time.Gold seems to be insisting on repeating – to some extent – its 2012 performance, and – to some extent – its 2008 performance. Either way, it seems that gold is about to slide.The reversal in gold took place after gold moved very close to its mid-January highs and the 50% Fibonacci retracement based on the August 2020 – March 2021 decline.The sizes of the current rally (taking the second March bottom as the starting point) and the rally that ended at the beginning of this year are practically identical at the moment.Just as the rallies from early 2012 and late 2012 (marked with blue) were almost identical, the same could happen now.The March 2021 low formed well below the previous low, but as far as other things are concerned, the current situation is similar to what happened in 2012.The relatively broad bottom with higher lows is what preceded both final short-term rallies – the current one, and the 2012 one. Their shape as well as the shape of the decline that preceded these broad bottoms is very similar. In both cases, the preceding decline had some back-and-forth trading in its middle, and the final rally picked up pace after breaking above the initial short-term high.Interestingly, the 2012 rally ended on huge volume, which is exactly what we saw also on May 19 this year. Consequently, forecasting much higher gold prices here doesn’t seem to be justified based on the historical analogies.The lower part of the above chart shows how the USD Index and the general stock market performed when gold ended its late-2012 rally and was starting its epic decline. In short, that was when the USD Index bottomed, and when the general stock market topped.Back in 2008, gold corrected to 61.8% Fibonacci retracement, but it stopped rallying approximately when the USD Index started to rally, and the general stock market accelerated its decline. This time the rally was not as volatile, so the lower – 50% Fibonacci retracement level will hold the rally in check.Taking into consideration that the general stock market has probably just topped and the USD Index is about to rally, then gold is likely to slide for the final time in the following weeks/months. Both above-mentioned markets support this bearish scenario and so do the self-similar patterns in terms of gold price itself.MACD and the Long TermApproaching the subject from a different side, remember the huge gap between the U.S. 10-Year Treasury yield and the U.S. 10-Year breakeven inflation rate? The situation in the very long-term MACD indicator is yet another confirmation that what we saw recently is similar to what we saw before the huge 2012 – 2013 slide. We get the same confirmation from the gold to bonds ratio, and I’ll move to that a bit later.With February’s monthly close the last piece of the puzzle, the MACD indicator’s sell-signal is now perfectly clear. If you analyze the chart below (at the bottom right), you can see that the MACD line has crossed the signal line from above – a development that preceded significant drawdowns in 2008 and 2011.Based on gold’s previous performance after the major sell signals from the MACD indicator, one could now expect gold to bottom in the ~$1,200 to ~1,350 range. Given the price moves that we witnessed in 1988, 2008 and 2011, historical precedent implies gold forming a bottom in this range. However, due to the competing impact of several different variables, it’s possible that the yellow metal could receive the key support at a higher level.Only a shade below the 2011 high, today’s MACD reading is still the second-highest reading in the last 40 years. More importantly though, if you analyze the chart below (the red arrows at the bottom), the last four times the black line cut through the red line from above, a significant drawdown occurred.Also ominous is that the magnitude of the drawdowns in price tend to coincide with the magnitude of the preceding upswings in MACD. And with today’s reading only surpassed by 2011, a climactic move to the $1,250/$1,450 range isn’t out of the question for gold. The above is based on how low gold had previously declined after a similarly important sell signal from the MACDNow, the month is not over yet, so one might say that it’s too early to consider the sell signal that’s based on monthly closing prices , but it seems that given the level that the MACD had previously reached and the shape of the top in the black line, it makes the situation so similar to 2011/2012 that the sell signal itself is just a cherry on the bearish analytical cake.Considering the reliability of the MACD indicator a sell signal for major declines, the reading also implies that gold’s downtrend could last longer and be more severe than originally thought. As a result, $1,500 remains the most likely outcome, with $1,350 still in the cards.As further evidence, if you focus your attention on the monthly price action in 2008, you can see that gold is behaving exactly as it did before it suffered a significant decline.Please see below:To explain, after making a new all-time high in 2008 (that was a breakout above the 1980 tops), gold declined back to its rising support line before recording a short-term corrective upswing. This upswing ended approximately at gold’s previous monthly closing price. I marked it with a horizontal, blue, dashed line.Similarly, if you analyze the right side of the chart, you can see that an identical pattern has emerged. With gold’s corrective upswing following a reconnection with its rising support line, history implies that a sharp decline should occur in the coming months and that the reversal is at hand or already behind us. After all, the thing that triggered the decline almost a year ago was the fact that gold made a new all-time high . Moreover, the recent high was very close to the previous high in terms of the monthly closing prices (Dec. 2020 - $1,895.10 vs. the recent intraday high of $1,891.30).What about the HUI Index?Not only are ominous signs emerging from gold’s medium-and-long-term charts, but beneath the surface, the gold miners are also folding their hands. If you analyze the chart below, you can see that the HUI Index back-and-forth price action mirrors its behavior from 2008 and 2012 and its bearish head & shoulders pattern is also gaining similarity. In addition, the BUGS (after all, HUI is called the Gold Bugs Index) stochastic oscillator has moved all-in like the 2012 analogue (depicted at the bottom part of the chart below), and thus, it seems to be only a matter of time before the HUI Index completely blows its bankroll.Please see below:To explain, the HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over. And with investors rejecting the HUI’s recent attempt to break above the 61.8% level, the house of cards is slowly coming down.The bottom line?If the HUI Index hasn’t already peaked, history implies that a top is increasingly imminent. As a result, in my opinion, now is the time to enter short positions and not exit them.Now, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02.That’s why I previously wrote that “it wouldn’t be surprising to see a move to about 300 in the HUI Index”. And that’s exactly what we saw (a move above 320 is still close to 300 from the long-term point of view). To clarify, one head-and-shoulders pattern – with a rising neckline – was already completed, and one head-and-shoulders pattern – with a horizontal neckline – is being completed, but we’ll have the confirmation once miners break to new yearly lows.In addition, the recent rally is not a game-changer, but rather a part of a long-term pattern that’s not visible when one focuses on the short term only.The thing is that the vast majority of individual investors and – sadly – quite many analysts focus on the trees while forgetting about the forest. During the walk, this might result in getting lost, and the implications are no different in the investment landscape.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Option Traders Are a Bit Too Calm Again

Monica Kingsley Monica Kingsley 25.05.2021 16:18
S&P 500 rose once again, and the slight retreat before the close isn‘t an issue in light of constructive credit markets. Tech, communications, industrials, value, real estate and financials rose while healthcare and notably utilities didn‘t play along. VIX has calmed down yet again, but the put/call ratio scored bullish complacency readings not seen for months. The boat is increasingly getting tilted towards the bullish side - but open long profits can keep growing.Credit markets though aren‘t flashing warnings signs – be that corporate bonds, Treasuries of various maturities, or different Treasury spreads such as the 10 to 2 year one. It‘s just the dollar that is tanking here on the Fed telegraphing taper vs. the market continued bet that it‘s still bluffing, for now:(…) Stocks, bonds and currencies aren‘t reacting much – it‘s only commodities that are in consolidation mode, but this can be chalked down to inflation expectations calming down over the prior three trading days. Until the Fed truly moves or makes its forward guidance as unequivocal as can be in this respect, the markets would be in a doubting attitude (or at a minimum, a wait and see one).The S&P 500 is firing on both cylinders at the moment, with technology jumping higher off very oversold levels, and $NYFANG not lagging too noticeably behind. Nasdaq is well bid at the moment, and it remains to be seen how value takes to retreating yields in the still ruling reopening trades atmosphere.Gold and miners aren‘t flashing warning signs, and the silver outperformance isn‘t a call to the exit door. The charts and macroeconomics speak in favor of continued bullish consolidation before a spurt higher in all three assets. And as the Fed isn‘t perceived in the least as about to get tough(er) (whatever that means, cynics would say), the path of least resistance remains up as the copper to 10-year yield ratio confirms. No, not too much cream has come off in commodities. Open gold profits can keep growing at their own pace but I wouldn‘t be surprised by a brief setback first either..Crude oil bulls have proved themselves on the Iranian (no) sanction news, and the oil index ($XOI) remains overall constructive, but favoring a little pullback in black gold first. The downswing attempt I wrote about yesterday, is increasingly unlikely now while the upside potential got greatly exhausted. Time to wait for another mispricing – one that would offer corrections to join the budding trend.Bitcoin and Ethereum still remain vulnerable as the prior buying fizzled out without taking on the upper border of the $38,000 - $40,000 zone that would let the bulls start turning the tide. It hadn‘t happened yet, and the retracement of yesterday‘s upswing is reaching a bit too far for both Bitcoin ($37,000) and Ethereum ($2,435) – the lookout remains tense.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 path of least resistance still looks to be up, and Nasdaq 100 definitely feels like joining (black line). The tired chart look still favors some consolidation first, though.Credit MarketsThe debt markets, whether corporate or Treasury ones, favor the stock market upswing to continue. The sentiment is turning back to risk-on.Technology and ValueTech driven by both riskier segments and $NYFANG is equally participating as value is in the S&P 500 upswing.Gold, Silver and MinersGold sector keeps cooling off, unchallenged on the downside. Nominal yields posture remains positive.Silver offers a little roller coaster ride, but the copper to 10-year Treasury yield ratio is still in quite fine shape, and real rates aren‘t biting.Bitcoin and EthereumThe tug of war is at a precarious stage – how much of yesterday‘s gains would be erased today? The bulls don‘t seem to be out of the woods yet.SummaryS&P 500 faces little immediate danger of plunging lower – we are about to have a likely uneventful session today.Gold and miners aren‘t however remotely seriously challenged by the bears, and consolidation before another upswing (also in silver) seems most probable.Crude oil has reached the top of its recent range, expecially when the oil sector is considered.Bitcoin and Ethereum still remain at crossroads, but the coming upper or lower knot‘s prominence, would be telling.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Eerily Serene Risk-off Markets

Monica Kingsley Monica Kingsley 26.05.2021 15:29
S&P 500 had a mixed day, and the credit market underlines the shift to risk-off. Halfway shift, to be precise – the high yield corporate bonds recovered the intraday downside but value sold off all the way to the closing bell. Well, rising yields used to add to tech‘s problems since mid Feb, and retreating yields don‘t breathe enough life into the sector now. It‘s clearly visible that the high beta segments are facing the yields‘ headwinds while $NYFANG is in the black, but more than a little lagging.The Treasury market reprieve I announced on May 18 to last more than a good few weeks, is here. While it works to lift tech and hamper value, the days of value doing fine are far from over as the VTV:QQQ ratio illustrates:(…) We‘re still in the value outperforming growth environment (reflation and reopening themes), it‘s just right now (last few days) that tech is pulling stronger ahead than value. ... Value‘s reaction to the yields trajectory ahead would be telling, and I have no doubts there is quite some more juice left in the long value trade (and that the Russell 2000 isn‘t rolling over to the downside here).Emerging markets are welcoming the dollar woes and yields reprieve, and the Russell 2000 isn‘t too much of a drag either. VIX refused further downside yesterday, and is hedging off bets as much as the option players do – no change in prior trends here, just a move away from the complacent end of the spectrum. The stock bull run is still about dips being bought.The key move is in the debt markets, and concerns inflation (expectations). For now, it appears that the Fed trial baloons (Kaplan, even Yellen – thinking about talking taper, suggesting rate hikes) have worked in dialing back the inflation trades to a degree (stock market correction isn‘t thus necessary for players to pile into Treasuries) – more about the Fed‘s „coming soon“ taper bluff:(…) The market simply isn‘t convinced the Fed is serious about taking on inflation through (gradual) removal of the punch bowl – or about shaping its forward guidance credibly this way (yet). Inflation expectations are cooling down a little, and the Treasury market is tracking them closely. But this doesn‘t mean that bonds are taking the central bank seriously – this move is part and parcel of the transitory vs. getting (practically permanently unless a Fed game changer arrives – still unlikely) elevated inflation readings debate.While I think that the red hot CPI inflation would die down a little (i.e. not keep rising ever as steeply as was the case with Wednesday‘s data) once the year on year base to compare it against normalizes, a permanently elevated plateau of high and rising inflation would be a reality for more than foreseeable future simply because the Fed would be as behind as Arthur Burns was in fighting the 1970s inflation, and upward price pressures in the job market pressures would kick in.The much awaited Jun 10 CPI readings would likely come on the hotter side of the spectrum, but would be part and parcel of a continued move to a higher inflation environment where commodities‘ pressures are amplified by job market ones – not that the distortions and disincentives to work wouldn‘t be there.Gold and silver are set to benefit, either way you look at it. Be it through the Fed or market‘s perceptions of the Fed (i.e. buying into its bluff), nominal rates are retreating while real rates remain very constructive for continued precious metals run. The only short-term warning sign comes from miners that aren‘t surging higher. Open gold and silver profits can keep growing at their own pace but I wouldn‘t be surprised by a brief setback first either:(…) The charts and macroeconomics speak in favor of continued bullish consolidation before a spurt higher in all three assets. And as the Fed isn‘t perceived in the least as about to get tough(er) (whatever that means, cynics would say), the path of least resistance remains up as the copper to 10-year yield ratio confirms. No, not too much cream has come off in commodities. Crude oil traded with little volatility yesterday, but the bulls are a little short-term exposed as the oil index ($XOI) shows. Downswing attempt, however modest, shouldn‘t be surprising.Bitcoin and Ethereum are recovering in fits and starts, and the picture is turning bullish especially for the latter. With Bitcoin, the upper border of the $38,000 - $40,000 zone hasn‘t been cleared yet, but the signs from both Ethereum and Cardano are bullish already. It surely seems the market doesn‘t want to crash some more right now as the rally hasn‘t run out of steam yet.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 wavered a little yesterday, with signs pointing to more significant overnight deterioration not materializing. Nasdaq 100 is likewise probably going to consolidate its gains next – unless the value trade kicks in again, disregarding the yields‘ growing calm.Credit MarketsThe debt markets recovery is on, and I am looking at high yield corporate bonds for clues as to the S&P 500 upswing veracity.Technology and ValueTech was driven just by $NYFANG yesterday, pointing to the strong risk-off nature of yesterday‘s session.Inflation ExpectationsBond yields and inflation expectations are turning down relatively sharply, continuing to track each other closely. It certainly looks like we‘re in for a calm summer (my prior words).Gold, Silver and MinersGold and silver rising while miners keep lagging behind, isn‘t a truly bullish sign. Wait and see is the right course of action as there hasn‘t been any reversal (let alone attempt at it), protecting sizable open profits.The weekly perspective offers mixed view of miners to gold ratio‘s breather while the copper to 10-year yield isn‘t budging – yet (see above what I wrote about taking the cream off commodities).Crude OilBlack gold is a little extended here, and consolidation of recent sharp gains is the most likely outcome, the oil index says so too.SummaryYesterday‘s S&P 500 posture deterioration is likely to remain temporary unless the credit markets move down, taking Nasdaq 100 with them. Muddle through seems most likely for today.Gold and silver upswing would be on sounder footing when the miners decide to join, and do away with the stark non-confirmation.Crude oil has reached the top of its recent range, expecially when the oil sector is considered – an opportunity after readjustment to no Iranian sanction news, is in the making.Bitcoin and Ethereum are likely to continue their recovery, overcoming the key resistance zone in the first, and reasserting upside momentum in the latter (the overnight price action has been very positive).Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
US Industry Shows Strength as Inflation Expectations Decline

Gold: The Rainy Season Is Coming

Finance Press Release Finance Press Release 26.05.2021 16:06
Exact weather is hard to predict, even with forecasts, but we can look for clouds on the horizon to prepare ahead of time.During the dry season, people near the equator feel like the sun is getting closer each day, making the heat unbearable at some point. The weather needs to periodically correct itself, allowing for some torrential downpours – this way life can survive. The same happens on the market; we can’t try to reach the sun by rallying incessantly. Patience is key. One thing is certain – a major storm front is moving closer, taking into account how the PMs behave.Gold just moved higher once again, but mining stocks refused to follow. This is one of the most reliable indications that a top is being formed.Before moving to the precious metals sector, let’s take a look at the USD Index.When I described the above chart yesterday (May 25), I wrote that the USD Index had been trading at about 89.6. Since this is the level at which the USD Index closed the day (approximately), practically everything that I wrote about its chart remains up-to-date:This week’s move lower is a continuation, and most likely the final part, of a specific multi-bottom pattern that the USD Index exhibited recently.I marked those situations with green. The thing is that the U.S. currency first declined practically without any corrections , but at some point it started to move back and forth while making new lows. The third distinctive bottom was the final one. Interestingly, the continuous decline took place for about a month, and the back-and-forth declines took another month (approximately). In July 2020, the USDX fell like a rock, and in August it moved back and forth while still declining. In November 2020, the USDX fell like a rock (there was one exception), and in December it moved back and forth while still declining.Ever since the final days of March, we’ve seen the same thing all over again. The USD Index fell like a rock in April, and in May we’ve seen back-and-forth movement with lower lows and lower highs.What we see right now is the third of the distinctive lows that previously marked the end of the declines.And what did gold do when the USD Index rallied then?In August, gold topped without waiting for USD’s final bottom – which is natural, given how extremely overbought it was in the short term.In early January, gold topped (which was much more similar to the current situation given the preceding price action) when the USDX formed its third, final distinctive bottom.The USD Index is after a two-month decline, half of which was the back-and-forth kind of decline. It’s forming the third – and likely the final – bottom, and gold just refused to react positively to this situation in today’s pre-market trading.This might be “it” – the markets might be forming their final reversals here, starting to follow the most bearish (in the case of gold) part of the analogy to the price action in 2008 and 2012.The Repeating PatternGold has now moved higher, and it even moved slightly above $1,900 in today’s pre-market trading, which seems positive. But it doesn’t change anything with regard to gold’s analogies to how it performed in 2008 and 2012 right before the slide.Gold seems to be insisting on repeating – to some extent – its 2012 performance, and – to some extent – its 2008 performance. Either way, it seems that gold is about to slide.The initial reversal in gold took place after gold moved very close to its mid-January highs and the 50% Fibonacci retracement based on the August 2020 – March 2021 decline. Yesterday’s close was the first close above this important resistance, so the breakout was not confirmed.The sizes of the current rally (taking the second March bottom as the starting point) and the rally that ended at the beginning of this year are practically identical at the moment. The current move is only a little bigger.Just as the rallies from early 2012 and late 2012 (marked with blue) were almost identical, the same could happen now.The March 2021 low formed well below the previous low, but as far as other things are concerned, the current situation is similar to what happened in 2012.The relatively broad bottom with higher lows is what preceded both final short-term rallies – the current one, and the 2012 one. Their shape as well as the shape of the decline that preceded these broad bottoms is very similar. In both cases, the preceding decline had some back-and-forth trading in its middle, and the final rally picked up pace after breaking above the initial short-term high.Interestingly, the 2012 rally ended on huge volume, which is exactly what we saw also on May 19 this year. Consequently, forecasting much higher gold prices here doesn’t seem to be justified based on the historical analogies.The thing I would like to emphasize here is that gold didn’t form the final top at the huge-volume reversal on Sep. 13, 2012. It moved back and forth for a while and moved a bit above that high-volume top, and only then the final top took place (in early October 2012).The same happened in September and in October 2008. Gold reversed on huge volume in mid-September, and it was approximately the end of the rally. The final top, however, formed after some back-and-forth trading and a move slightly above the previous high.Consequently, the fact that gold moved a bit above its own high-volume reversal (May 19, 2021) is not an invalidation of the analogy, but rather its continuation.There’s one more thing I would like to add, and it’s that back in 2012, gold corrected to approximately the 61.8% Fibonacci retracement level – furthermore, the same happened in 2008 as you can see in the below chart. Consequently, the fact that gold moved above its 50% Fibonacci retracement doesn’t break the analogy either. And even if gold moves to $1,940 or so, it will not break it. It’s not likely that it is going to move that high, as in both cases –in 2008 and 2012 – gold moved only somewhat above its high-volume reversal before forming the final top. So, as this year’s huge-volume reversal took place close to the 50% retracement and not the 61.8% retracement, it seems that we’ll likely see a temporary move above it, which will create the final top. And that’s exactly what we see happening so far this week.The lower part of the above chart shows how the USD Index and the general stock market performed when gold ended its late-2012 rally and was starting its epic decline. In short, that was when the USD Index bottomed, and when the general stock market topped.Back in 2008, gold corrected to 61.8% Fibonacci retracement , but it stopped rallying approximately when the USD Index started to rally, and the general stock market accelerated its decline. This time the rally was not as volatile, so the lower – 50% Fibonacci retracement level will hold the rally in check.Taking into consideration that the general stock market has probably just topped, and the USD Index is about to rally, then gold is likely to slide for the final time in the following weeks/months. Both above-mentioned markets support this bearish scenario and so do the self-similar patterns in terms of gold price itself.While gold moved to new highs, the GDX ETF didn’t (and neither did silver ).It moved mere nine cents higher and this move took place on relatively low volume – making that a bearish indication, not a bullish one.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Stock Market Cycles Tipping The Balance From Euphoria To Complacency - Is Gold Setting Up For A Rally Above $2000 Again?

Chris Vermeulen Chris Vermeulen 27.05.2021 01:28
Gold has set up a very strong confluence pattern across multiple foreign currencies recently.  This upside confluence pattern suggests that Gold has now moved into a much stronger bullish price phase compared to various currency pairs.  This upside move in precious metals aligns very well with my broad market cycle phase research. I urge traders/investors to start paying attention as we transition into this new longer-term cycle phase.Recently, my team and I published a series of articles related to these longer-term cycle phases and how they related to the current market trends.  The biggest concept we want to highlight is that we've transitioned away from an Appreciation cycle phase and into the early stages of a Depreciation cycle phase.  Often, near this type of transition, the global markets experience a unique type of Excess Phase Peak.  This type of price pattern happens because traders/investors are slower to identify the end of a trend and often attempt to continue the Thrill/Euphoric phase of the previous market trend – until the markets prove them wrong.You can review some of our most recent research posts about these topics here: US Dollar Breaks Below 90 - Continue To Confirm Depreciation Cycle Phase (May 23, 2021); Bitcoin Completes Phase #3 Of Excess Phase Top Pattern - What Next? (May 20, 2021) and; What To Expect - A Critical Breakout Warning For Gold, Silver & Miners Explained (May 18, 2021).Stock Market CyclesThe custom graphic shown below highlights the phases of typical market trends through various stages of market trends.  My team and I believe we have crossed the peak level (or are very near to that crossover point) and have begun to move into the Complacency and Anxiety phases of the market trend.  As suggested, above,  the psychological process for traders/investors at this stage is to hope and plan for the never-ending bullish price trend while the reality of the market trend suggests a transition has already started taking place and the market phase has shifted.Our research suggests the last Appreciation phase in the market took place from mid/late 2010 to mid/late 2019.  That means we started a transition into a Depreciation cycle phase very near to the beginning of 2020.  Our belief that a moderate price rotation is pending within the markets stems from the excess phase rally that took place after the COVID-19 virus event.  We've witnessed the sideways price trend in precious metals over the past 8+ months which suggested that global traders were confident an economic recovery would take place (eventually).  Yet, the question before everyone is, as we move away from an Appreciation cycle phase and into a Depreciation cycle phase, what will that recovery look like?  Can we expect the recovery to be similar to levels seen in the previous Appreciation cycle phase?  Let's take a look at how these phases translated into trends in the past.Appreciation and Depreciation Cycle PhasesThe first Depreciation cycle phase (1983~1992) took place after an extended deflationary period where the debt to GDP was rather low comparatively. It also took place within a decade or so after the US moved away from the Gold Standard.  The strength in trending we saw in the US stock market was directly related to the decreasing interest rates and strong focus on credit/equities growth throughout that phase.The second Depreciation cycle phase (2001~2010) took place after the DOT COM rally prompted a huge boom cycle in equities and as a series of US/global events rocked the US economy.  First, the September 11, 2001 attack in New York, and second, by the engagement in the Iraq War.  Additionally, the US Fed was actively supporting the US economy after the 9/11 terrorist attacks, which prompted many American's to focus on supporting a stronger US economy.  This, in turn, prompted a huge rally in the housing market as banks and policies supported a large speculative rally (FOMO) in Real Estate.The current Depreciation cycle phase (2019~2027+) comes at a time where the US Fed has been actively supporting the US/global economy for more than 11 years and after an incredible rally in Real Estate and the US stock market.  Additionally, a new technology, Crypto currencies, has taken off throughout the world as an alternate, decentralized, asset class – somewhat similar to how the DOT COM rally took off. As we've seen this incredible rally in global equities, Cryptos, commodities and other assets over the past 7+ years, we believe the last Appreciation cycle phase is transitioning into an Excess Phase Peak (see the Euphoria/Complacency phases above), which may lead to some incredibly volatile price trends in the future.Sign up for my free trading newsletter so you don’t miss the next opportunity!You may be asking yourself, “how does this translate into precious metals cycles/trends?” after we've gone through such a longer-term past cycle phase review...The recent upside price trends in precious metals are indicative of two things; fear and demand.  First, the economic recovery and new technology are increasing demand for certain precious metals and rare earth elements (such as battery and other technology).  Second, the move in Gold and Silver recently is related to credit, debt, economic and cycle phase concerns.  As we've seen Bitcoin move dramatically lower and as we start to move into a sideways price trend in the US stock market, there is very real concern that the past price rally has reached an intermediate Excess Phase Peak.Please take a moment to learn about our BAN Trader Pro strategy and how it can help you identify stock market cycles, which phase we are in, and how that will lead us to trade better sector setups.  Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades.  You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.Have a great day!!
Hanging by a Proverbial Thread

Hanging by a Proverbial Thread

Monica Kingsley Monica Kingsley 27.05.2021 15:34
S&P 500 in a tight range with bearish undertones in the credit markets – but where is the decline? Given the ample Fed support, don‘t count on too much unless the 4,180s zone gives in yet again. Highly unlikely according to the VIX, and even option traders have turned more complacent again. The S&P 500 may be in a precarious balance all it wants, but will gladly take any bullish clue (hello, unemployment claims) – unless the markets lose the faith in the Fed, the bulls are quite safe:(…) For now, it appears that the Fed trial baloons (Kaplan, even Yellen – thinking about talking taper, suggesting rate hikes) have worked in dialing back the inflation trades to a degree (stock market correction isn‘t thus necessary for players to pile into Treasuries) – more about the Fed‘s „coming soon“ taper bluff.The market simply isn‘t convinced the Fed is serious about taking on inflation through (gradual) removal of the punch bowl – or about shaping its forward guidance credibly this way (yet). Inflation expectations are cooling down a little, and the Treasury market is tracking them closely. But this doesn‘t mean that bonds are taking the central bank seriously – this move is part and parcel of the transitory vs. getting (practically permanently unless a Fed game changer arrives – still unlikely) elevated inflation readings debate.The much awaited Jun 10 CPI readings would likely come on the hotter side of the spectrum, but would be part and parcel of a continued move to a higher inflation environment where commodities‘ pressures are amplified by job market ones – not that the distortions and disincentives to work wouldn‘t be there.While inflation expectations dipped a little yesterday, bond yields mostly refused to decline – that‘s a short-term phenomenon, a daily noise worth keeping an eye on, together with the performance of red hot commodities. Copper being in better shape, with sound fundamentals underlined by the speculative stockpiling, rose a little yesterday, but lumber lacking the longer-term advantage of timber confirming its advance, reversed to the downside. Commodities are for now a mixed bag in consolidation mode, but their secular bull market is unquestionable, and so far it‘s only the precious metals that are calling the Fed‘s taper bluff. All the excess liquidity has to find a home somewhere, and it‘s in the financial markets, driving up asset prices – with the pace of appreciation the only variable until Fed‘s true game changer arrives. Again, that‘s unlikely.Precious metals are behaving as if the inflation battle has been lost, with all that‘s going on being about managing perceptions only. And boy and girl, these are attended to finely – the Fed balance sheet keeps expanding but inflation is cascading through the PMI, PPI and CPI. The lull having arrived, would prove of fleeting shelf life as I am looking for the inflation fires to reignite in the autumn surely. Crude oil is refusing to budge much, and keeps (bullishly) consolidating near the upper end of its recent range, with the oil index not too visibly underperforming. Bitcoin and Ethereum are recovering in fits and starts, and have rejected overnight downside. That‘s encouraging, and the picture keeps turning bullish especially for the latter. With Bitcoin, the upper border of the $38,000 - $40,000 zone hasn‘t been cleared yet, but the signs from both Ethereum and Cardano are strong already. No matter the many hit jobs (another China miner one for ESG superficial consumption), unless punitive taxation of crypto profits and / or digital national currencies arrive, the market is safe from another takedown. In this light, the summer Fed report on cryptocurrencies could be insightful, but don‘t pin your hopes for great impact too high.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookS&P 500 took a daily breather unlike Nasdaq 100, but everything isn‘t fine below the surface.Credit MarketsThe struggling corporate credit markets epitomize the daily uncertainty. The long-dated Treasuries rise doesn‘t appear to be over, which would underpin especially Nasdaq 100.Technology and ValueTech was driven just by $NYFANG yesterday, pointing to the strong risk-off nature of yesterday‘s session – in spite of solid VTV performance. These two messages are non-congruent.Gold, Silver and MinersGold is short-term perched high, especially should nominal yields rise some more than they did yesterday. Coupled with the tamed inflation expectations of latest days, the yellow metal is short-term vulnerable.Silver is taking the copper to 10-year Treasury yield cue, and would be more volatile than gold in the near term.Bitcoin and EthereumEthereum is taking a daily breather while Bitcoin is working off its prior retreat. The pressure to go higher is slowly building.SummaryS&P 500 is likely to remain choppy with a general upward bias that only a clear break of 4,180 would invalidate, which is unlikely to happen though.Gold and silver upswing would be on sounder footing when the miners decide to join, and do away with the stark non-confirmation. Dips are still being bought.Crude oil offered a modest intraday downswing that tellingly didn‘t attract new sellers.Bitcoin and Ethereum are likely to continue their recovery, but it won‘t happen in a clear line pointing one way.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Buy the Dip, Again?!

Monica Kingsley Monica Kingsley 28.05.2021 16:16
S&P 500 attempted a breakout, but retreated. Is that a reversal, or proof of more pressure building up? Much starker move in the high yield corporate bonds would speak in favor of a reversal, but only until the higher end of the debt markets is examined. Or the volume for that matter, as these would put the reversal hypothesis to rest.VIX continues turning lower, and option traders are getting the message – finally, the put/call ratio appears to be on a declining path, meaning that fewer market participants are expecting another shoe to drop. As if one fell in the first place, really. Is that the worst of the inflation scare being over, for now? Probably yes, and the retreating Treasury yields are mollifying – but as explained in ample detail, this calm before the (autumn) storm, is deceptive. Calling the Fed‘s bluff, precious metals (and some commodities) are onto something, really.One more proof why the stock market bears are at a disadvantage, comes from other indices, namely the Russell 2000 (look for value to benefit), and emerging markets. The magic of ample Fed support is making its way through the system, lifting prices in many asset classes amid still rampant speculation. It‘s only the cream of select commodities that has been taken off – in the big scheme of things, nothing but a consolidation within an existing secular bull market, is happening there. While the inflation trades have been dialed back to a degree, they haven‘t been broken as the Fed is in a reactive, not proactive mode. More precisely, it remains in denial of the inflation ahead.Gold is holding up strongly, and has been in little need of miners‘ support lately. Both are consolidating, readying for another push higher that would coincide with further retreat in long-dated Treasury yields – unless these are counterbalanced with the collapse of inflation trades. Once again, I am not looking for that to happen – soft patch, prolonged commodities consolidation yes, turn to deflation no. In such an environment, silver would have a tougher ride and be vulnerable to volatile swings defined by how the inflation, yields, expectations and Fed action bets play out.Crude oil isn‘t offering but token discounts to enter on the buyers‘ side, and remains reasonably well supported by the oil index price action. The lower daily volume isn‘t an issue – the daily chart remains bullish.Bitcoin and Ethereum went through a steep overnight correction, and they would enter the Memorial weekend stormy waters not exactly in a rising mode. While the sellers appear to be in control, odds are that Ethereum would turn around first, followed by Bitcoin moving with less veracity, but still – even later today. The daily indicators are likely to carve out a bullish divergence next. I‘ll discuss it more in the nearest upcoming analysis, which would be on Tuesday – enjoy your long weekend!Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 OutlookS&P 500 daily hesitation goes on, for as long as Nasdaq 100 plays ball and carves out its own modest consolidation pattern.Credit MarketsDaily struggle in high yield corporate bonds needs to be read in the context of high open, and intrasession reallocation to the quality debt instruments. Unless we push lower in earnest, this is a storm in the tea cup for equities as the HYG:SHY ratio confirms.Technology and Value$NYFANG wasn‘t strong enough to drive tech yesterday, but the many sectors forming value such as financials or consumer discretionaries, performed solidly – and the industrials did smashing too. More market breadth is though what the S&P 500 needs.Gold, Silver and MinersGold very modestly declined even as the miners opened threateningly down. The temporary woes might not be over, but illustrate the yesterday mentioned limited scope for gold to decline.Supported by the copper to 10-year Treasury yield ratio, the precious metals sector stood the test yesterday, but we might be at the higher range of the ratio‘s range, which would send especially silver under pressure once the ratio‘s correction occurs.Crude OilCrude oil‘s slow march higher continues, and neither the oil index nor the volume signal weakness ahead today.SummaryS&P 500 is likely to remain choppy with a general upward bias that only a clear break of 4,180 would invalidate, which is unlikely to happen though – especially with the end of month window dressing.Gold and silver might see modest profit taking today, but the upswing remains on solid footing, awaiting the miners to join and lead again.Crude oil offered an even more modest intraday downswing than the day before – one that tellingly didn‘t attract new sellers.Bitcoin and Ethereum are likely to refuse lower prices, but the only open question remains when that would happen – still before the Memorial weekend, or after.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Intraday Market Analysis – USDJPY Looks For Buying Interest

John Benjamin John Benjamin 01.06.2021 10:20
USDJPY retraces in search of supportThe US dollar’s rally ran out of steam for lack of liquidity during the long weekend in the US and the UK.Traders are cautious in bidding up amid thin trading volume especially after last week’s surge above the psychological level of 110.00. The RSI is retreating into the neutrality area. The bearish MA cross may attract some selling interest in the near term.The zone between 109.00 and 109.30, a former resistance, would be a key support to watch for. The peak at 110.20 is the resistance in case of rebound.XAUUSD breaks out of horizontal consolidationGold stays on high ground following a retreat in Treasury yields at the end of last week. The precious metal is consolidating its gains after the previous round of rallies.The general direction remains upward despite a choppy path. A bullish breakout above 1911.00 after a brief pause suggests strong buying interest.1900.50 is the immediate support as buyers build up their stakes. 1927.50 would be the next target. Then an extended rally may send the price back to January’s peak at 1959.00.US 30 recovers towards peakUS stock markets remain well-supported by recovery momentum into the summer. The Dow Jones index is still rising steadily towards the previous high at 35100.The rally above the supply zone around 34500 suggests that the bulls were willing to pay up to reverse the sell-off. A break above the intermediate resistance at 34700 could increase the bullish momentum.As the price achieves a series of higher highs again, an overbought RSI may briefly temper the bullish fever. 34220 is the closest support.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

USDX: Trick or Treat, Looks Like an Early Halloween

Finance Press Release Finance Press Release 01.06.2021 16:24
The FED has recently been tricked with its own money. Could the central bank’s scary reverse repos become a treat for the USDX?The USD Index (USDX)With the ghosts of 2015 attempting to scare the U.S. Federal Reserve (FED) into tapering its asset purchases, the latest reverse repo nightmare could be gold, silver and mining stocks version of the boogeyman. Case in point: with the liquidity fright helping the USD Index sleep better at night, the greenback should benefit from the FED’s latest house of horrors: And with the central bank’s daily reverse repos hitting an all-time high of $485 billion on May 27 (with another $479 billion sold on May 28), Halloween may come early this year.Please see below:To explain, the green line above tracks the daily reverse repo transactions executed by the FED, while the red line above tracks the federal funds rate. If you focus your attention on the red line, you can see that after the $400 billion level was breached in December 2015, the FED’s rate-hike cycle began. Thus, with current inflation dwarfing 2015 levels and U.S. banks practically throwing cash at the FED, is this time really different?Likewise, with reduced liquidity poised to bolster the USD Index, not only are the fundamentals trending up but also the technicals. The USD Index jumped above its declining resistance line based on May’s highs, as well as the declining resistance line that started with the late-March high. This is important not only (and not primarily) because of the double-breakout. It’s important and particularly bullish, as it emphasizes that the third – and quite likely the final – short-term bottom in a row is already in.In addition, the USD Index might be in the early innings of forming an inverted head & shoulders pattern. For context, an inverted H&S pattern is a bullish development that if formed, could usher the USD Index well above 94.5 (to about 97-98). However, completing the right shoulder requires an upward breach of 93 (the blue line), so at this point, it’s more of an indication than a confirmation.Please see below:For more context, I wrote previously:This week’s move lower is a continuation, and most likely the final part, of a specific multi-bottom pattern that the USD Index exhibited recently.I marked those situations with green. The thing is that the U.S. currency first declined practically without any corrections , but at some point it started to move back and forth while making new lows. The third distinctive bottom was the final one. Interestingly, the continuous decline took place for about a month, and the back-and-forth declines took another month (approximately). In July 2020, the USDX fell like a rock, and in August it moved back and forth while still declining. In November 2020, the USDX fell like a rock (there was one exception), and in December it moved back and forth while still declining.Ever since the final days of March, we’ve seen the same thing all over again. The USD Index fell like a rock in April, and in May we’ve seen back-and-forth movement with lower lows and lower highs.What we see right now is the third of the distinctive lows that previously marked the end of the declines.And what did gold do when the USD Index rallied then?In August, gold topped without waiting for USD’s final bottom – which is natural, given how extremely overbought it was in the short term.In early January, gold topped (which was much more similar to the current situation given the preceding price action) when the USDX formed its third, final distinctive bottom.I received a few questions recently asking what would need to happen for me to change my mind on the precious metals sector’s outlook. There are multiple reasons, and it’s impossible to list all of them. However, one of the reasons that would make me strongly consider that the outlook has indeed changed (at least for the short term) would be a confirmed breakdown in the USD Index below the 2021 lows to which gold would actually react.As further evidence, the Euro Index might be in the midst of forming a bearish H&S pattern. If you analyze the right side of the chart below, you can see that the symmetrical pattern has the current rally mirroring the summer of 2020. And while we’re still in the early innings of forming the right shoulder, three peaks were recorded during the second half of 2020 before the Euro Index eventually rolled over. Likewise, with a symmetrical setup that seems to already be in motion, the Euro Index may be heading down a similar path of historical ruin. In the second half of 2020, the decline was not that big, but it’s no wonder that this was the case as that was only the left shoulder of the pattern. Completion of the right shoulder, however, would imply another move lower, at least equal to the size of the head – to about the June 2020 lows or lower.Gold and the EuroFurthermore, last week’s decline actually ushered the Euro Index back below the dashed resistance line of its monthly channel. And with its recent triple top mirroring the price action we witnessed in mid-to-late 2020 – before the Euro Index plunged – it won’t take long for confidence to turn into fear.Please see below:More importantly, though, the completion of the masterpiece could have a profound impact on gold, silver and mining stocks. To explain, gold continues to underperform the euro. If you analyze the bottom half of the chart above, you can see that material upswings in the Euro Index have resulted in diminishing marginal returns for the yellow metal. Thus, the relative weakness is an ominous sign, and if the Euro Index reverses, it could weigh heavily on the precious metals over the medium term.If that wasn’t enough, with the USD Index hopping in the time machine and setting the dial to 2016, a bullish pattern is slowly emerging. To explain, I wrote on May 11:While the self-similarity to 2018 in the USD Index is not as clear as it used to be (it did guide the USDX for many weeks, though), there is also another self-similar pattern that seems more applicable now. One of my subscribers noticed that and decided to share it with us (thanks, Maciej!).Here’s the quote, the chart, and my reply:“Thank you very much for your comprehensive daily Gold Trading Reports that I am gladly admitting I enjoy a lot. While I was analyzing recent USD performance, (DX) I have spotted one pattern that I would like to validate with you if you see any relevance of it. I have noticed the DX Index performing exactly in the same manner in a time frame between Jan. 1, 2021 and now as the one that started in May 2016 and continued towards Aug. 16. The interesting part is not only that the patterns are almost identical, but also their temporary peeks and bottoms are spotting in the same points. Additionally, 50 daily MA line is almost copied in. Also, 200 MA location versus 50 MA is almost identical too. If the patterns continue to copy themselves in the way they did during the last 4 months, we can expect USD to go sideways in May (and dropping to the area of 90,500 within the next 3 days) and then start growing in June… which in general would be in line with your analysis too.Please note the below indices comparison (the lower represents the period between May-Dec 2016 and higher Jan – May 2021). I am very much interested in your opinion.Thank you in advance.”And here’s what I wrote in reply:“Thanks, I think that’s an excellent observation! I read it only today (Monday), so I see that the bearish note for the immediate term was already realized more or less in tune with the self-similar pattern. The USDX moved a bit lower, but it doesn’t change that much. The key detail here would be that the USDX is unlikely to decline much lower, and instead, it’s likely to start a massive rally in the next several months - that would be in perfect tune with my other charts/points.I wouldn’t bet on the patterns being identical in the very near term, though, just like the late June 2016 and early March 2021 weren’t that similar.As soon as the USD Index rallies back above the rising support line, the analogy to 2016 will be quite clear once again –the implications will be even more bullish for the USDX and bearish for the precious metals market for the next several months.”Please note that back in 2016, there were several re-tests of the rising support line and tiny breakdowns below it before the USD Index rallied. Consequently, the current short-term move lower is not really concerning, and forecasting gold at much higher levels because of it might be misleading. I wouldn’t bet on the silver bullish forecast either. The white metal might outperform at the very end of the rally, but it has already done so recently on a very short-term basis, so we don’t have to see this signal. And given the current situation in the general stock market – which might have already topped – silver and mining stocks might not be able to show strength relative to gold at all.On top of that, the USD Index’s long-term breakout remains intact . And when analyzing from a bird’s-eye view, the greenback’s recent weakness is largely inconsequential.Please see below:Moreover, please note that the correlation between the USD Index and gold is now strongly negative (-0.90 over the last 30 days) and it’s been the case for several weeks now. The same thing happened in early January 2021 and in late July – August 2020; these were major tops in gold.The bottom line?After regaining its composure , ~94.5 is likely the USD Index’s first stop. In the months to follow, the USDX will likely exceed 100 at some point over the medium or long term.Keep in mind though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is doing (and likely to do) better than the Eurozone and Japan, and it’s this relative outperformance that matters , not the strength of just one single country or monetary area. After all, the USD Index is a weighted average of currency exchange rates and the latter move on a relative basis.In conclusion, ghouls, goblins and ghosts are popping up everywhere, and while the USD Index has been under investors’ negative spell, the curse may have just been broken. Moreover, with plenty of skeletons in the financial markets’ closet and liquidity slowly being drained from the system, the narrative of excessive money printing has become an old wives’ tale. More importantly, though, with the greenback finding technical support at roughly the same time, we could be witnessing a paradigm shift in U.S. dollar sentiment. The bottom line? With gold, silver and mining stocks benefiting from the USD Index’s recent struggles, a coven is gathering, and it will likely torch the precious metals over the medium term.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
US Industry Shows Strength as Inflation Expectations Decline

Reversals, Inflation, and Scares of Any Kind

Monica Kingsley Monica Kingsley 02.06.2021 15:59
S&P 500 stumbled in its upward run again, but has it been decisively so? VIX has risen, the put/call ratio as well – but that‘s little more than white noise, for nothing has dramatically changed in the markets. We‘re chopping along without advance clues either way – unless you look at inflation expectations and Treasury yields. The Jun 10 CPI reading is ahead:(…) While I think that the red hot CPI inflation would die down a little (i.e. not keep rising ever as steeply as was the case with Wednesday‘s data) once the year on year base to compare it against normalizes, a permanently elevated plateau of high and rising inflation would be a reality for more than foreseeable future simply because the Fed would be as behind as Arthur Burns was in fighting the 1970s inflation, and upward price pressures in the job market pressures would kick in.The much awaited Jun 10 CPI readings would likely come on the hotter side of the spectrum, but would be part and parcel of a continued move to a higher inflation environment where commodities‘ pressures are amplified by job market ones – not that the distortions and disincentives to work wouldn‘t be there.The Treasury market‘s lull only means that inflation trades have been dialed back somewhat, but haven‘t been broken. As I wrote on May 27, so far it‘s only the precious metals that are relentlessly calling the Fed‘s bluff – by rising almost in a straight line. And when you thought the transitory or permanently elevated inflation debate couldn‘t get any more ridiculous, there comes the Dudley dove talking how transitory could become permanent – it‘s almost as miraculous as being half pregnant.Seriously, it‘s a testament to the Fed communication‘s success that the transitory story has been swallowed hook, line and sinker to this degree. We‘re getting a temporary reprieve but the cost-push inflation isn‘t going away. At the same time, we‘re in a reflationary period before inflation starts biting noticeably more. How close before the wheels come off, and would that come from inflation or growth worries? There are two distinct possibilities: GDP growth and its projections start sputtering, or inflation (including inflation expectations) don‘t come down nearly enough as much as the transient camp believes. I‘m in the latter camp.Timing is everything, though. Any growth scare wouldn‘t materialize before we „discover“ that inflation isn‘t really going away. Add the job market pressures entering the fray – discussed on May 19 – you‘ll sooner take fright over persistent inflation hitting the growth prospects than seeing them downgraded first. No deflationary scare quarters ahead either, sorry – 2021 will be another good year in stocks.This also speaks against a sharp (think 10% and higher) correction in the stock market over the summer, and likewise affects commodities. These would employ a wait and see approach, with precious metals sticking out like a sore finger. Forget the taper dog and pony show. When the Fed is forced to move, precious metals win – either way.Gold and silver aren‘t giving up gained ground – why should they? Miners have awaken from their slumber, and the greater risk in this bull market run is being out rather than in. The new long consolidation will get an upside breakout in its own due time, across the board.Crude oil sharply rose on the OPEC pronouncements (U.S. can‘t possibly act as a swing producer anymore – the policy supporting that isn‘t there anymore), and the upswing has been supported by the oil index. The daily chart remains bullish, and the pressure to go higher I discussed yesterday, is being resolved.Bitcoin and Ethereum are likewise preparing to overcome yesterday‘s modest retracement of prior rebound. The charts in both speak in favor of taking on the red resistance line discussed yesterday. The strength to go higher is there.Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq OutlookS&P 500 daily reversal leaves much to be desired, and neither the Nasdaq 100 is plunging.Credit MarketsHigh yield corporate bonds scored gains while the quality debt instruments treaded water. That‘s an inconclusive, yet mildly positive sign for the risk-on trades.Technology and ValueIt‘s only select tech segments that are being hit here. I‘m leaning towards microrotations rather than huge red flag explanation.Gold, Silver and MinersA sideways and volatile day in gold, where rising miners and not throwing a spanner in the works nominal yields, are casting their verdict.The copper to 10-year Treasury yield ratio is the only one to bring about (short-term) wrinkles.No worries though as the copper chart is by no means in a crash mode – nominal yields retreat isn‘t over, and would power both metals higher (as it interplays with inflation). Aka real rates rule.Crude OilCrude oil offered a one-way session, and its upswing was amply supported by volume. Oil companies didn‘t lag behind – the next upswing is underway with not too many resistances ahead.SummaryS&P 500 is getting ready for another upside breakout – it‘s a question of time.Gold and silver remain well bid and technically primed to go higher, let alone fundamentally.The upleg is very far from over, and the only watchout in the short run is the copper to 10-year yield ratio.Crude oil consolidation is over, and odds favor a new upleg to proceed.Bitcoin and Ethereum are consolidating, but rebound continuation is more probable.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Gold: First Steps Down in the Short Term

Gold: First Steps Down in the Short Term

Finance Press Release Finance Press Release 03.06.2021 16:03
Gold rallying on low volume yesterday was a clear bearish sign; the yellow metal dropped about $15 in today’s pre-market trading. What will happen next?Yesterday’s (Jun. 2) and today’s sessions were quite rich in signals for gold, silver, and mining stocks, but only if one knows where to watch.Gold: Short-Term MovesGold closed ~$5 higher yesterday, and this move took place on relatively low volume. In fact, gold hasn’t rallied on volume this low since Apr. 26. This is a bearish sign for the short term, and indeed after the Apr. 26 session, gold moved lower in the following days.And, right on cue, gold was about $15 down in today’s pre-market trading . While this decline might seem surprising to some, it’s actually a perfectly natural thing for gold to do right now.The low-volume daily rally was only a confirmation, as we knew that Tuesday’s daily reversal was critical all along – based on the triangle-vertex-based reversal we recently saw. Combination of this with highly overbought RSI, a sell signal from the stochastic indicator, and, most importantly, the analogies to how the situation in gold developed in 2008 and 2012, provides us with an extremely bearish outlook for gold.Many other factors are pointing to these similarities, and two of them are the size of the correction relative to the preceding decline and to the previous rally. In 2012 and 2008, gold corrected to approximately the 61.8% Fibonacci retracement level. Gold was very close to this level this year, and since the history tends to rhyme more than it tends to repeat itself to the letter, it seems that the top might already be in.In both years, 2008 and 2012, there were three tops. Furthermore, the rallies that took gold to the second and third top were similar. In 2008, the rally preceding the third top was bigger than the rally preceding the second top. In 2012, they were more or less equal. I marked those rallies with blue lines in the above chart – the current situation is very much in between the above-mentioned situations. Also, the current rally is bigger than the one that ended in early January 2021 but not significantly so.Since I realize that it’s most difficult to stay on track right at the top, let me remind you about two key facts:We have open-ended QEs – money is being pumped into the system at an unprecedented pace, even when stocks are well beyond their all-time highs. The world has been in a pandemic for over a year, and the economies were hit hard. And yet, gold – the king of safe hedges – did not manage to soar above its 2011 highs and then stay above them. Given how extremely positive the fundamental situation is, gold’s reaction is even more extremely bearish. This market is simply not ready to soar without declining significantly first. The bull market and bear markets move in stages, and the final slide was postponed multiple times, but it’s clear that gold is not ready to soar to new highs without completing this final stage – the downswing.Remember what happened when gold previously attempted to break above major long-term highs? It was in 2008 and gold was breaking above its 1980 high. Gold wasn’t ready to truly continue its bull market without plunging first. This downswing was truly epic, especially in the case of silver and mining stocks; and now even gold’s price patterns are like what we saw in 2008.Lessons Learned From HistoryMy previous comments on the analogies to 2008 and 2012 remain up-to-date:Back in 2008, gold corrected to 61.8% Fibonacci retracement , but it stopped rallying approximately when the USD Index started to rally, and the general stock market accelerated its decline.Taking into consideration that the general stock market has probably just topped, and the USD Index is about to rally, then gold is likely to slide for the final time in the following weeks/months. Both above-mentioned markets support this bearish scenario and so do the self-similar patterns in terms of gold price itself.What would change my mind with regard to gold itself? Perhaps if it broke above its January 2021 highs and confirmed this breakout. This would be an important technical indication on its own, but it would also be something very different from what happened in 2008 and 2012. If that happened along with strength in mining stocks, it would be very bullish. Still, if the above happened, and miners didn’t react at all or they declined, it would not be bullish despite the gains in the gold price itself.The March 2021 low formed well below the previous low, but as far as other things are concerned, the current situation is similar to what happened in 2012.The relatively broad bottom with higher lows is what preceded both final short-term rallies – the current one, and the 2012 one. Their shape as well as the shape of the decline that preceded these broad bottoms is very similar. In both cases, the preceding decline had some back-and-forth trading in its middle, and the final rally picked up pace after breaking above the initial short-term high.Interestingly, the 2012 rally ended on huge volume, which is exactly what we saw also on May 19 this year. Consequently , forecasting much higher silver or gold prices here doesn’t seem to be justified based on the historical analogies.The thing I would like to emphasize here is that gold didn’t form the final top at the huge-volume reversal on Sep. 13, 2012. It moved back and forth for a while and moved a bit above that high-volume top, and only then the final top took place (in early October 2012).The same happened in September and in October 2008. Gold reversed on huge volume in mid-September, and it was approximately the end of the rally. The final top, however, formed after some back-and-forth trading and a move slightly above the previous high.Consequently, the fact that gold moved a bit above its own high-volume reversal (May 19, 2021) is not an invalidation of the analogy, but rather its continuation.There’s one more thing I would like to add, and it’s that back in 2012, gold corrected to approximately the 61.8% Fibonacci retracement level – furthermore, the same happened in 2008 as you can see in the below chart. Consequently, the fact that gold moved above its 50% Fibonacci retracement doesn’t break the analogy either. And even if gold moves to $1,940 or so, it will not break it. It’s not likely that it is going to move that high, as in both cases –in 2008 and 2012 – gold moved only somewhat above its high-volume reversal before forming the final top. So, as this year’s huge-volume reversal took place close to the 50% retracement and not the 61.8% retracement, it seems that we’ll likely see a temporary move above it, which will create the final top. And that’s exactly what we see happening so far this week.The lower part of the above chart shows how the USD Index and the general stock market performed when gold ended its late-2012 rally and was starting its epic decline. In short, that was when the USD Index bottomed, and when the general stock market topped.Also, please note that while it might seem bullish that gold managed to rally above its declining black resistance line recently (the one based on the 2020 top and the 2021 top), please note that the same happened in 2012 – I marked the analogous line with red. The breakout didn’t prevent gold from sliding. When the price reached the line, we saw a short-term bounce, but nothing more than that – the gold price fell through it in the following weeks.Meanwhile, the USD Index has just confirmed its short-term breakout, suggesting that the analogy to 2016 and the similarity to how it bottomed (triple bottom with lower lows) in mid-2020 remains intact – and so does the bullish outlook for the universally-hated-and-massively-shorted U.S. currency.The USD Index reversed yesterday in a supposedly bearish manner, but today’s pre-market price action shows that it was just a fake reversal. It seems that a major bottom in the USDX is already in, as the breakout above the declining short-term resistance line (that started with the April top) was verified. And with the outlook for the USD Index being bullish, the implications for the precious metals market are bearish.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

When Markets Get Scared and Reverse

Monica Kingsley Monica Kingsley 03.06.2021 16:09
S&P 500 wasted another good opportunity to rise – one where the credit markets were largely aligned. Is it a sign of upcoming tremors that the 500-strong index couldn‘t defend the daily gains? Commodities weren‘t under pressure, the dollar wasn‘t surging (looking at the closing prices), precious metals did well, and even lumber enjoyed a white candle again.Inflation expectations retreated, and so did Treasury yields – what‘s holding stocks then? Neither uncertainty about the Fed policy, nor surging inflation cutting into P&L, nor crashing bonds – what we‘re seeing is run of the mill volatility as stocks move both into a structurally higher inflation environment, and await Fed moves which are much farther down the time line than the markets appreciate. Heck, even the option traders keep undergoing the earlier announced shift to complacency.Yes, the taper talk has dialed back the inflation trades to a degree, but hasn‘t knocked them off in the least. In a reflation, both stocks and commodities do well, and we‘re still far away from worrying about weakening GDP growth rates (today‘s ADP and unemployment data are a good proof thereof) – in my view, worries about inflation not retreating nearly enough during this Treasury market lull (taking up this summer) would come into the picture first.Reopening trades aren‘t over, the housing market activity (housing starts, new home sales) has slowed down a little while XLRE keeps running, financials remain as strong as value (yes, there is more juice in that trade still), and no mad rush into tech (growth) is underway. Capacity utilization isn‘t at the top of the pre-corona range exactly, and oil prices (these serve as additional tax, a drag on the economy) aren‘t biting nearly enough. The job market isn‘t at the strongest either, and the hours worked don‘t match prior extremes either. Last but not least, global supply chains haven‘t entirely recovered to meet the reopenings-boosted demand.Plenty of extra reasons why I talked the transitory vs. getting structurally elevated (unanchored) inflation yesteerday:(…) The Treasury market‘s lull only means that inflation trades have been dialed back somewhat, but haven‘t been broken. As I wrote on May 27, so far it‘s only the precious metals that are relentlessly calling the Fed‘s bluff – by rising almost in a straight line. And when you thought the transitory or permanently elevated inflation debate couldn‘t get any more ridiculous, there comes the Dudley dove talking how transitory could become permanent – it‘s almost as miraculous as being half pregnant.Seriously, it‘s a testament to the Fed communication‘s success that the transitory story has been swallowed hook, line and sinker to this degree. We‘re getting a temporary reprieve but the cost-push inflation isn‘t going away. At the same time, we‘re in a reflationary period before inflation starts biting noticeably more. How close before the wheels come off, and would that come from inflation or growth worries? There are two distinct possibilities: GDP growth and its projections start sputtering, or inflation (including inflation expectations) don‘t come down nearly enough as much as the transient camp believes. I‘m in the latter camp.Timing is everything, though. Any growth scare wouldn‘t materialize before we „discover“ that inflation isn‘t really going away. Add the job market pressures entering the fray – discussed on May 19 – you‘ll sooner take fright over persistent inflation hitting the growth prospects than seeing them downgraded first. No deflationary scare quarters ahead either, sorry – 2021 will be another good year in stocks.This also speaks against a sharp (think 10% and higher) correction in the stock market over the summer, and likewise affects commodities. These would employ a wait and see approach, with precious metals sticking out like a sore finger. Forget the taper dog and pony show. When the Fed is forced to move, precious metals win – either way.In other words, we‘re undergoing stock market and commodities‘ gyrations as we‘re settling into the new reality of higher inflation including expectations, which isn‘t yet putting the stock market to test. Neither the 10-year yield rising way over 2.5% would derail the sttock bull run – but the associated volatility would be keenly felt already at the 2% level. We‘re very far from that, meaning I am not worried about the stock market leadership baton passing exlusively over to tech (growth) stocks. That would equal panic.Gold ascent is slowing down, but miners don‘t support a lasting downswing. Volatility around the $1,900 mark, yes but a plunge on stock market downswing / Fed tapering / commodities reversal, no – as if any of the three actually applied. After initial selling when liquidity needs to be raised no matter where from (the AMC saga coming soon to a theater near you), gold is likely to recover, and faster than silver (the white metal would suffer from any marked slowdown in inflation, I must add).Crude oil rose strongly once again, and so did the oil index – the energy sector ETF is doing great. The daily chart still remains bullish, offering no clues of a reversal, let alone of a correction.Bitcoin and Ethereum recovery goes on, and I‘m looking for more base building before the bulls take on and overcome the red ETH resistance line featured on Tuesday. Patience is needed before more confidence returns into the sector.Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 OutlookS&P 500 and Nasdaq wavering in latest days is an eloquent warning sign that the bears will try their luck – and they would ultimately fail.Credit MarketsHigh yield corporate bonds actually outperformed the rest of the crowd, making the SPX stumble harder to stomach.Technology and ValueTechnology had a mixed day while value remains unyielding. It‘s true that the daily leadership was with XLK yesterday, but that still remains white noise as value isn‘t yet down and out. Not by a long shot.Gold, Silver and MinersGold rose a little stronger than the miners yesterday, but the move in either shouldn‘t be overrated. While the yellow metal can‘t break higher with confidence now, its dips remain to be bought.The copper to 10-year Treasury yield ratio stabilized yesterday, but the swing in either copper or long-dated Treasuries spells no short-term calm.Bitcoin and EthereumBitcoin and Ethereum charts are solidly recovering, but some breather next wouldn‘t surprise me. Overall, the stage remains set to go higher.SummaryWhat doesn‘t go up, must come down – but look for any S&P 500 downside to be largely bought when the dust settles.Gold and silver remain well bid, but the slowing pace of gains means that the bears might come out from hibernation – only to be repelled though. Look for copper to stabilize as a precondition, with miners not falling through the floor.Crude oil odds favor a new upleg to proceed, but unless commodities and metals rebound, black gold would get vulnerable.Bitcoin and Ethereum are peeking higher, and rebound continuation is more probable than other scenarios.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Another Taper Mirage Comes and Goes

Monica Kingsley Monica Kingsley 04.06.2021 16:01
S&P 500 succumbed to the bears – partially. The ADP figures lifted the dollar and put Treasury yields under pressure, which equals encouraging speculation that taper is coming. Rest assured, it isn‘t in practice, apart from communication exercises otherwise known as forward guidance, all happening during a week when the Fed injected $32bn into the markets. Today‘s non-farm payrolls can modestly boost that fata morgana, but it‘s a taper bridge too far. They can‘t meaningfully tighten, and they know it – look what happened last time Powell emphatically insisted (Dec 2018).But the market reaction is what matters, and yesterday‘s session in (not only tech) stocks, precious metals and commodities, highlights the degree to which the transitory inflation story has been swallowed hook, line and sinker, dialing back the inflation commodity trades meaningfully (sideways). Should the transition into a higher inflation environment be appreciated for what it is, the dive in gold, silver and copper wouldn‘t have been that steep. On the other hand, the sharpest moves tend to be the countertrend ones – yes, I‘m still of the opinion that the current reflationary period with reopening rush (more juice left in value over growth trades) is conducive to higher stock market and commodity prices. Including precious metals, naturally.For more proof, look at the barely budging inflation expectations (TIP:TLT rather than RINF which got spooked a bit too much – similarly to tech yesterday), and have a read of my extensive Wednesday and Thursday analyses, well worth it each but best when combined for your daily dose of countenance in the markets. What‘s new now, are the taper starting date (as if the discussion was initiated in the first place at all) considerations:(…) what‘s holding stocks then? Neither uncertainty about the Fed policy, nor surging inflation cutting into P&L, nor crashing bonds – what we‘re seeing is run of the mill volatility as stocks move both into a structurally higher inflation environment, and await Fed moves which are much farther down the time line than the markets appreciate. Heck, even the option traders keep undergoing the earlier announced shift to complacency.Yes, the taper talk has dialed back the inflation trades to a degree, but hasn‘t knocked them off in the least. In a reflation, both stocks and commodities do well, and we‘re still far away from worrying about weakening GDP growth rates (today‘s ADP and unemployment data are a good proof thereof) – in my view, worries about inflation not retreating nearly enough during this Treasury market lull (taking up this summer) would come into the picture first.Moreover, the taper talk and market reaction to it, are exposing a key vulnerability in the Treasury market. The Fed is well aware that its ample support is a condition sine qua non, and that rising yields (rising real rates) aren‘t in the largest borrower and real economy‘s interests. Financial repression has to come into the picture, and that‘s one of the reasons why precious metals have been on a tear lately. We‘re also a long way from inflation breaking the back of stock market bulls:(…) we‘re undergoing stock market and commodities‘ gyrations as we‘re settling into the new reality of higher inflation including expectations, which isn‘t yet putting the stock market to test. Neither the 10-year yield rising way over 2.5% would derail the sttock bull run – but the associated volatility would be keenly felt already at the 2% level. We‘re very far from that, meaning I am not worried about the stock market leadership baton passing exlusively over to tech (growth) stocks. That would equal panic.Gold got spooked, and the PMs dive bore signs of panic, but like it or not, the weakness has been consistent with the commodities retreat. While gold is the ultimate currency, real money in the JPM‘s own admission, it‘s sensitive to real rates moves – and expectations thereof. These took a hit yesterday, and it was as I warned earlier, more readily apparent in silver. Quoting yesterday‘s comment at my own site:(…) ADP data came in positive, dollar rose and so did yields as the market (incorrectly) thinks that taper is closer. And tomorrow’s strength in non-farm payrolls would only reinforce that. The truth is though that the Fed can’t withdraw some liquidity, raise rates or even slow down the monetary expansion. Gold and commodities beyond copper (not oil though) are reacting, and miners don’t offer clues that this daily setback would be over. The taper smoke and mirrors game got a new lease on life, but the inflation trades aren’t over.In other words, we have a way to go in stabilizing the metals, but these prices would prove a buying opportunity – not a selling one.Oil is a different cup of tea – rising but not yet exerting enough pressure to sink the GDP growth story. Elevated, but supported by the oil index. A breather next would not be unimaginable – it would be welcome.Cryptos got hit by the broken heart emoji Elon tweet, well what can I say about such tweets. Doge to the moon next? The bulls need to regain footing, and rather fast.Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq OutlookS&P 500 took a smaller hit than Nasdaq, and the volume in either isn‘t consistent with a reversal storyline. As said yesterday, I am looking for the bears to ultimately fail.Credit MarketsHigh yield corporate bonds intraday reversal is equally worrying as the long-term Treasuries dive to its daily lows.Technology and ValueTechnology including $NYFANG overreacted in my view – but value continued to cheer the rise in yields. That‘s one more reason why stocks aren‘t dipping anywhere far.Gold, Silver and MinersGold plunge doesn‘t reveal weakness through miners leading to the downside, and while respectable, the volume could have been bigger. The plunge seems overdone when nominal yields are concerned.Silver and copper have been the missing pieces in the puzzle of gold‘s steep move yesterday. Note however that the copper to 10-year Treasury yield ratio isn‘t breaking down in any way.Bitcoin and EthereumBitcoin and Ethereum plunged on the headline, but would likely recover as the unrealistic taper expectations are dialed back.SummaryS&P 500 bears served us the raid yesterday, but I am looking for a swift recovery of the ground lost. The taper myth isn‘t simply to be taken seriously.Gold and silver remain well bid, and not even yesterday‘s plunge was a chart game changer. Dips remain to be bought, and the bull run is very far from over. As I wrote yesterday, the bears might come out from hibernation – only to be repelled though. Look for copper to stabilize as a precondition, with miners not falling through the floor.Crude oil is relentlessly rising, and as long as other commodities join in the party, a meaningful correction isn‘t favored. In other words, today‘s price action won‘t almost definitely see one.Bitcoin and Ethereum aren‘t as weak as the chart would suggest, and once yet another Elon disappointment is worked off (high hopes, disappointment, new hopes – wash, rinse, repeat), no thinking about thinking about talking taper would support the crypto bulls.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
US Industry Shows Strength as Inflation Expectations Decline

Where Next in the Taper Drama

Monica Kingsley Monica Kingsley 07.06.2021 12:02
S&P 500 duly rose on the little weaker than expected non-farm payrolls as the taper theme (start of discussions moving to serious contemplation) got dialed back. The Fed‘s forward guidance manouevers can continue, and inflation trades breathed a sigh of relief. Encouragingly for the S&P 500, reflation trades weren‘t affected as evidenced by value stocks rising again regardles of the long-dated Treasuries action.Of course, volatility welcomed the retreat in yields as much as technology did – but the option traders aren‘t buying into the upswing nearly as much. Practically speaking, Friday‘s moves in the dollar, some commodities and precious metals, reversed a great chunk of the preceding day‘s bigger swings. The guessing game on the Fed‘s taper goes on, and the upcoming CPI readings won‘t add to the markets‘ peace. Most likely, fuelling the sense of taper urgency as the inflation figures won‘t be coming on the low side. Add in the job market slowly catching fire, and you‘ll understand why I have been calling for months for elevated inflation readings.It‘s the market reaction what matters – what is at stake, is how much the Fed is still expected to fight inflation, whether it plays ostrich in toeing the transitory line much to the satisfaction or dismay of the marketplace. As I wrote on Friday:(…) Should the transition into a higher inflation environment be appreciated for what it is, the dive in gold, silver and copper wouldn‘t have been that steep. On the other hand, the sharpest moves tend to be the countertrend ones – yes, I‘m still of the opinion that the current reflationary period with reopening rush (more juice left in value over growth trades) is conducive to higher stock market and commodity prices. Including precious metals, naturally.Moreover, the taper talk (...is…) exposing a key vulnerability in the Treasury market. The Fed is well aware that its ample support is a condition sine qua non, and that rising yields (rising real rates) aren‘t in the largest borrower and real economy‘s interests. Financial repression has to come into the picture, and that‘s one of the reasons why precious metals have been on a tear lately. We‘re also a long way from inflation breaking the back of stock market bulls.So stocks have taken the risk-on cue, amply reversing Thursday‘s losses – but the same can‘t be said about gold, silver or copper. Precious metals pared Thursday‘s setback to a good degree only, and these words apply to miners as well. Not that conducive conditions hadn‘t been in place to facilitate more gains, but the optimism over Fed moves being dialed back to a more distant future, is more guarded. Understandably so when Janet Yellen would welcome higher inflation and higher rates as per her G7 meeting proclamation. The bulls aren‘t out of the woods – all eyes on nominal yields, inflation expectations and the dollar now.Oil is refusing to budge, and the oil index doesn‘t favor too much downside. Should commodities stall again though, oil would be no exception – in spite of its next upleg getting underway after the long sideways consolidation (with a bullish slant, however).Cryptos can‘t get their mojo, but aren‘t falling through the floor either. The consolidation goes on, and bulls better step in and overcome Thursday‘s highs for the recovery to continue. That‘s not unimaginable for Ethereum or Cardano, though – it‘s only that Bitcoin is acting really weak relatively speaking.Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq OutlookBoth S&P 500 and Nasdaq 100 grew sharply, and if you look under the hood, the signals are positive. If only higher volume confirmed them.Credit MarketsHigh yield corporate bonds met an intraday setback, which is part of the short-term watchouts.Technology and ValueTechnology including $NYFANG dialed back Thursday‘s overreaction – just as was likely, and the value stocks confirming in the upswing stretching over to high beta plays in tech as well, are a positive sign for Monday.Gold, Silver and MinersIt‘s nice that gold recovered from yet another dive but, its white candle could have closed nearer to the daily highs – it‘s concerning that it didn‘t, and the same applies to miners. The return of strength has been suboptimal when nominal rates solely are assessed. Of course, that ties in to the retreat in inflation expectations being the other side of the coin, coupled with rising rates expectation underpinning the dollar.Silver recovered stronger than copper, but the red metal‘s ratio enriched with 10-year Treasury yield view, could have driven stronger gold gains. However, silver‘s outperformance isn‘t worrying here.Crude OilCrude oil is continuing its low volatility rise, volume isn‘t drying up, and the oil index supports the upleg to proceed.SummaryS&P 500 bears got on the defensive again, and credit markets give the bulls benefit of the doubt. How will another attempt at all time highs unfold, is to be closely observed for signs of strength / weakness.Gold and silver remarkably rebounded, but could have recouped even more of Thursday‘s losses. It remains a (short-term) red flag they didn‘t. The bulls haven‘t proved themselves entirely, which can be explained by yields, inflation and dollar.dynamics.Crude oil bullish chart message hasn‘t weakened one iota on Friday, and black gold‘s upleg remains underway – while a meaningful correction isn‘t favored, taking a breather would be healthy.Bitcoin and Ethereum meek recovery, bottom searching after Elon‘s broken heart emoji tweet goes on, and the Miami show didn‘t help much. The longer prices stay this low without steadily attempting a march higher, the more vulnerable they are.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Gold Miners: Which Door Will Investors Choose?

Finance Press Release Finance Press Release 07.06.2021 16:14
With the current situation suggestive of a Monty Hall problem, investors are clinging to the first, bullish door. But what if a different option is more likely?The Monty Hall problem is a form of a probability puzzle, and what it shows is immensely unintuitive. Suppose you are on a game show, and you need to choose one of three doors. Behind one of them is a car and behind the others, goats. You pick a door, and then the host (who knows what’s behind them) opens one of the remaining doors, behind which there is a goat. The host now asks: “Do you want to change your door choice for the remaining doors?” So, what do you do?It turns out that if you change the door, the probability of winning the car increases… two times! You have a 2/3 chance, instead of a 1/3. Tremendously unintuitive, indeed, but what if the same is happening on the market now? With a bullish prospect representing the door of the first choice, and the technicals and fundamentals the host’s help, wouldn’t it be safer to switch the door to win eventually?The Gold MinersWith investors stuck in their own version of the Monty Hall problem , guessing ‘what's behind door No.1’ has market participants scrambling to find the bullish gateway. However, with doors two and three signaling a much more ominous outcome for gold, silver and mining stocks, the key to unlocking their future performance may already be hiding in plain sight.Case in point: with the analogue from 2012 signaling a forthcoming rush for the exits, there are no fire escapes available for investors that overstay their welcome. And because those who cannot remember the past are condemned to repeat it (George Santayana), doubters are likely to lose more than just their pride.While the most recent price action is best visible in the short-term charts, it is actually the HUI Index’s very long-term chart that provides the most important details (today’s full analysis includes 44 charts, but the graph below is one of the key ones). The crucial thing happened two weeks ago, and what we saw last week was simply a major confirmation.What happened two weeks ago was that gold rallied by almost $30 ($28.60) and at the same time, the HUI – a flagship proxy for gold stocks… Declined by 1.37. In other words, gold stocks completely ignored gold’s gains.That shows exceptional weakness on the weekly basis and is a very bearish sign for the following weeks. And it has important historical analogies.Back in 2008, right before a huge slide, in late September and early October gold was still moving to new intraday highs, but the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market declined then. If stocks hadn’t declined back then so profoundly, gold stocks’ underperformance of gold would likely be present but more moderate. In fact, that’s exactly what happened in 2012.The HUI Index topped on September 21, 2012, and that was just the initial high in gold. At that time the S&P 500 was moving back and forth with lower highs – so a bit more bearish than the current back-and-forth movement in this stock index. What happened in the end? Gold moved to new highs and formed the final top (October 5, 2012). It was when the S&P 500 almost (!) moved to new highs, and despite both, the HUI Index didn’t move to new highs.The similarity to how the final counter-trend rally ended in 2012 (and to a smaller extent in 2008) ended is uncanny. The implications are very bearish for the following weeks, especially given that the gold price is following the analogy to 2008 and 2012 as well.All the above is what we had already known last week. In that case, let’s move to last week’s confirmation. The thing is that the stochastic oscillator just flashed a clear sell signal . This is important on its own as these signals often preceded massive price declines. However, extremely bearish implications come from combining both: the sell signal and the analogy of 2008 and 2012. Therefore, we should consider the sell signal in the HUI-based stochastic oscillator as yet another sign serving as confirmation that the huge decline has just begun.Thus, if history rhymes, as it tends to, the HUI Index will likely decline profoundly. How low could the gold stocks fall? If the similarity to the previous years continues, the HUI could find medium-term support in the 100-to-150 range. For context, high-end 2020 support implies a move back to 150, while low-end 2015 support implies a move back to 100. And yes, it could really happen, even though it seems unthinkable.But which part of the mining stock sector is likely to decline the most? In my view, the junior mining stocks.The Junior MinersGDXJ is underperforming GDX just as I’ve been expecting it to. Once one realizes that GDXJ is more correlated with the general stock market than GDX is, GDXJ should be showing strength here, and it isn’t. If stocks don’t decline, GDXJ is likely to underperform by just a bit, but when (not if) stocks slide, GDXJ is likely to plunge visibly more than GDX.Expanding on that point, the GDXJ/GDX ratio has been declining since the beginning of the year, which is remarkable because the general stock market hasn’t plunged yet. And once the general stock market suffers a material decline, the GDXJ ETF’s underperformance will likely be heard loud and clear.Please see below:Why haven’t the juniors been soaring relative to senior mining stocks? What makes them so special (and weak) right now? In my opinion, it’s the fact that we now – unlike at any other time in the past – have an asset class that seems similarly appealing to the investment public. Not to everyone, but to some. And this “some” is enough for juniors to underperform.Instead of speculating on an individual junior miner making a killing after striking gold or silver in some extremely rich deposit, it’s now easier than ever to get the same kind of thrill by buying… an altcoin (like Dogecoin or something else). In fact, people themselves can engage in “mining” these coins. And just like bitcoin seems similar to gold to many (especially the younger generation) investors, altcoins might serve as the “junior mining stocks” of the electronic future. At least they might be perceived as such by some.Consequently, a part of the demand for juniors was not based on the “sympathy” toward the precious metals market, but rather on the emotional thrill (striking gold) combined with the anti-establishment tendencies ( gold and silver are the anti- metals, but cryptocurrencies are anti-establishment in their own way). And since everyone and their brother seem to be talking about how much this or that altcoin has gained recently, it’s easy to see why some people jumped on that bandwagon instead of investing in junior miners.This tendency is not likely to go away in the near term, so it seems that we have yet another reason to think that the GDXJ ETF is going to move much lower in the following months – declining more than the GDX ETF. The above + gold’s decline + stocks’ decline is truly an extremely bearish combination, in my view.In conclusion, once gold, silver and mining stocks’ doors finally slam shut, over-optimistic investors will likely go down with the ship. And with the most volatile segments of the precious metals market eliciting the most bearish signals, those left holding the bag will likely wonder how it all went wrong. Moreover, with gold’s relative outperformance signaling waning investors’ optimism, the miners – and more specifically, the GDXJ ETF – will likely suffer the brunt of the forthcoming selling pressure. The bottom line? With the walls closing in on gold, silver and mining stocks, the game show will likely end with investors left empty-handed.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Gold – Healthy Pullback or Escalation Until Midsummer?

Florian Grummes Florian Grummes 07.06.2021 18:52
Gold and silver prices experienced quite a roller coaster ride over the last few days. Given the fast recovery on Friday we see two potential scenarios for the precious metal markets to unfold. Gold – Healthy Pullback or Escalation Until Midsummer?ReviewThe double low at US$1,676 in mid-March and at US$1,678 at the end of March marked the end of the eight-month correction in the gold market. In the past two months, gold was able to recover from this double low by a whopping US$240. Our conservative recovery targets of US$1,785 and US$1,855 were quickly achieved. Furthermore, gold continued its recovery until US$1,916 so far.Over the last two weeks however, the bulls (despite various attempts) failed to recapture the psychological US$1,900 level. Not surprisingly, a fast pullback brought prices back to US$1,856 on Friday early morning in the Asian markets. From here, gold came roaring back to US$1,895 as the latest non-farm payroll US job data missed expectations later during that day.The silver price, on the other hand, was able to hold up somewhat better than the gold price during the entire correction since last august. However, once the attack on the resistance zone around US$30 failed at the beginning of February, silver prices got beaten down together with the falling gold price. Accordingly, Silver reached its low on March 31 at US$23.78. But in contrast to gold, this level thus marked a higher low within the correction that began on August 7th. Currently, silver is trading just below US$28 keeping eye contact with the crucial hard resistance zone around US$30.Overall, thanks to the significant recovery over the last two months, the picture for the precious metals sector has improved significantly. The healthy pullback has been completed. The bull-market is intact. The question now remains how much time gold and silver will need to break out to new all-time highs and what type of pullback(s) we are going to see during the run up to new all-time highs.Technical Analysis: Gold in US-DollarWeekly Chart – Clear Breakout from the Downtrend ChannelGold in US-Dollars, weekly chart as of June 6th, 2021. Source: TradingviewOn the weekly chart, gold prices had managed to easily jump above the downtrend line of the previous nine and a half months in mid of May. Thus, the correction, which began with the new all-time high at US$2,075 on August 7th, 2020, has now most likely ended. Ultimately, this healthy correction seems to have unfolded in a bullish flag pattern.At the same time, gold has been reaching the midline of the three-year uptrend channel (currently around US$1,920). In addition, the 61.8% retracement of the correction at US$1,923 has been missed so far. Thus, the zone between US$1,920 and US$1,925 remains a strong hurdle. If the bulls would manage to break through US$1,925 a quick rally towards the next resistance zone around US$1,950 to 1,960 is extremely likely. This zone around US$1,960 however is a concrete resistance as gold had failed miserably in early November and early January at this level.Overall, the weekly chart is bullish with a slightly overbought stochastic. But there aren't any signals pointing to a pullback or a trend change here. In fact, the bullish momentum makes the continuation of the rally towards US$1,960 quite likely. If on the other hand the pullback from last week gains strength, expect a target zone of US$1,820 to US$1,845. Here, a very good buying opportunity would probably arise shortly before the seasonally best time of the year.Daily Chart – Stochastic With A Fresh Sell SignalGold in US-Dollars, daily chart as of June 6th, 2021. Source: TradingviewOn the daily chart gold had to weather a quick pullback last Thursday and early Friday morning. This pullback led prices back to the upper edge of the former downtrend channel, hence testing the resting breakout. So far, bulls managed to come back immediately, and the daily cycle might have ended in an extremely quick fashion with a low Friday morning in Asia.In the best case, the bulls still have enough fuel to extend the recovery towards the 61.8% retracement at US$1,923 and especially towards the hard resistance around US$1,960. Such an advance would likely free some more momentum (especially in silver) and could even create an escalation until midsummer. An escalation would mean that gold would test the US$2,000 to US$2,025 range before any more significant pullback can unfold.A more defensive perspective on the other hand would be, that a healthy but larger pullback has already started last Wednesday. Gold would likely come under some more selling pressure in this scenario. This could mean a continued sell-off down to the 200-day moving average (US$1,843) and the 38,2%-retracement at US$1,825 within June and July.In both cases gold will test its 200-day moving average at some point. In the “escalation” scenario it would take quite some more time and gold would first explode towards around US$2,000 before a larger pullback would then wipe out all the euphoria later in autumn again. Alternatively, we will get the pullback towards the upper edge of the former downtrend now and gold uses this little correction as a launch-pad for higher prices later in the summer. Subsequently, an attack on the US$2,000 level is expected sooner or later this summer (July to September). Overall, the picture in the precious metals sector has certainly improved considerably thanks to the strong recovery over the last two months. As well, it needs to be noted that the real momentum is going to be in silver market, once the resistance at US$30 is has been overcome.Commitments of Traders for Gold – Healthy Pullback or Escalation Until Midsummer?Commitments of Traders for Gold as of June 6th, 2021. Source: SentimentraderDue to the gold price recovery over the last two months, the Commitment of Trades Report (CoT) has deteriorated again. The cumulative net short position stood at 248,175 contracts as of last Tuesday. In the long-term comparison, this set-up however, is rather high and continues to urge caution and patience. Hence, the CoT-report delivers a sell signal.Sentiment for Gold – Healthy Pullback or Escalation Until Midsummer?Sentiment Optix for Gold as of June 6th, 2021. Source: SentimentraderSentiment numbers for gold are showing a rather neutral rating at the moment. So far, the recovery has not created any significant optimism let alone extreme euphoria. It is however extremely likely that the ongoing recovery will at least see some form of exaggerated optimism before it rolls over or pauses. Thus, sentiment does not stand in the way of a continuation of the rally.Seasonality for Gold – Healthy Pullback or Escalation Until Midsummer?Seasonality for Gold over the last 53-years as of June 6th, 2021. Source: SeasonaxOver the last 53-years a strong seasonal pattern has evolved for the gold market. Accordingly, gold would find its typical early summer low somewhere in June or July. Subsequently, a strong advance would follow in the next step pushing gold prices to a seasonal top around late September or early October.In the current situation this could mean a continuation of the pullback that started last Wednesday over the next few weeks. From a projected low around US$1,820 to US$1,840 gold would then be ready to strongly rally during midsummer.Seasonality for Gold over the last 5-years as of June 6th, 2021. Source: SeasonaxHowever, reducing gold´s historical movements to the last five years shows quite a different seasonal cycle! Hence, in the current bull market since 2016 gold tends to show strength up until mid to end of August before rolling over significantly in September. The weakness in June and July has not been evident over the last five years.Given this statistical evidence gold has quite a high probability of simply continuing its rally towards US$1,960 and US$2,000 to US$2,025 over the next two to three months! Only after such a rally a large pullback would be likely.Sound Money: Bitcoin/Gold-RatioSound Money Bitcoin/Gold-Ratio as of June 6th, 2021. Source: TradingviewWith prices of approx. US$36,000 for one Bitcoin and US$1,890 for one troy ounce of gold, the Bitcoin/Gold-ratio is currently sitting at around 19. That means you now have to pay only 19 ounces of gold for one Bitcoin. Put the other way around, an ounce of gold currently only costs 0.052 Bitcoin. Thus, Bitcoin has lost around 45% against gold to where it traded in March and April.You want to own Bitcoin and gold!Generally, buying and selling Bitcoin against gold only makes sense to the extent that one balances the allocation in those two asset classes! At least 10% but better 25% of one’s total assets should be invested in precious metals physically, while in cryptos and especially in bitcoin one should hold at least between 1% and 5%. If you are very familiar with cryptocurrencies and bitcoin, you can certainly allocate much higher percentages to bitcoin on an individual basis. For the average investor, who is primarily invested in equities and real estate, 5% in the still highly speculative and highly volatile bitcoin is a good guideline!Overall, you want to own gold as well as bitcoin, since opposites complement each other. In our dualistic world of Yin and Yang, body and mind, up and down, warm and cold, we are bound by the necessary attraction of opposites. In this sense you can view gold and bitcoin as such a pair of strength. With the physical component of gold and the pristine digital features of bitcoin you have a complementary unit of a true safe haven for the 21st century. You want to own both! – Florian GrummesMacro update and Crack-up-Boom:FED Balance Sheet. © Holger Zschaepitz via Twitter @Schuldensuehner, June 3rd, 2021.As in almost every other week, the Fed balance sheet has hit a fresh all-time high. Fed chairman Jerome Powell keeps the printing press rumbling despite rising inflation. The total assets expanded by 0.4% to a new record of US$7.94 trillion. The Fed’s balance sheet now equals 36% of the GDP for the U.S..ECB Balance Sheet. © Holger Zschaepitz via Twitter @Schuldensuehner, June 5th, 2021.Of course Madame Lagarde is pushing even harder and the ECB balance sheet is now on course to 80% of Eurozone’s GDP. This rise to the moon looks more and more parabolic as the total assets rose by another 14.5 billion EUR on QE . You can be sure that none of these irresponsible central bankers will have the guts to return to a more sustainable monetary policy.World total stock market cap. © Holger Zschaepitz via Twitter @Schuldensuehner, June 6th, 2021.One of the most obvious consequences is asset price inflation of course. While the worldwide economic has been rather muted the market cap of all stock markets combined hit a new all time driven by the overflowing liquidity provided by nearly all central banks on this planet.But while further rising equity portfolios are certainly to be welcomed by most investors, the increased cost of living is becoming a serious problem for many people. This is true especially since the vast majority of people in any society is always struggling to meet ends needs. They simply don´t own anything that they could invest. Hence the rising tension within most western societies. Those who at least understand what’s going on are forced to become speculators and often use credit and margin to somehow profit from the asset price inflation. However, with credit and margin but without experience they only increase the imbalances in the system.Inflation pops © Holger Zschaepitz via Twitter @Schuldensuehner, May 31st, 2021.Overall, the crack-up-boom is up and running and accelerating. Like a dance on the volcano. And Central bankers are doing everything to outpace any deflationary forces by simply printing more and more. Yet, the worldwide race to the bottom has no exit but is a dead end.Conclusion: Gold – Healthy Pullback or Escalation Until Midsummer?Never before in the last 50 years it was more important to own some physical gold and silver. Independently of any price appreciation or any potential speculative gains. Simply as a protection against the loss of purchasing power and many other looming worst case scenarios.As well from a technical point of view it is vital to now own a full physical position in precious metals. The 8-month pullback from the new all-time high is done and the bulls are back in the driving seat. Once gold sustainably takes out its all-time high at US$2,075 expect an acceleration and a rather quick rally towards approx. US$2,500 and probably higher. By then you will only run behind a train that has left the station. Physical supply is already tight, and premiums are often absurdly high.Technically speaking, gold is in a recovery since March 31st which still has room to continue towards US$1,960 and approx. US$2,025. Judging from the past, gold bulls should have enough strength to push prices towards those two numbers over the coming two to four months. Any pullback or breather on the way higher should be welcomed as one of the last chances to buy gold below US$2,000 and silver below US$30.Hence, the “healthy pullback” scenario over the coming weeks might be perfect for anybody who still needs to get positioned. However, in a bull market surprises are usually happening to the upside and a direct escalation until midsummer would leave many marveling at the wayside.To conclude, buy any dip.Source: www.celticgold.euFeel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.About the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is also chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks.
US Industry Shows Strength as Inflation Expectations Decline

Gold: Do Not Underestimate My… Copper?

Finance Press Release Finance Press Release 09.06.2021 16:03
Copper is often overlooked when looking for gold price movement clues. But this time, its breakout invalidation may have the high ground.Do you know what the key commodity in today’s world is? Crude oil. It’s the most commonly used good on the planet. In terms of versatility and number of applications, silver is not far behind, but there is also one more market that definitely comes to one’s mind when one hears “world commodity” – copper. And for a good reason – while it doesn’t have as unique properties as silver or gold, copper is much cheaper and thus more widely available.Consequently, what’s happening in copper prices might have quite profound effects on the rest of the world, including the precious metals market. And the thing is: something very important happened to the price of copper recently.The Importance of the Brown MetalNamely, copper has just invalidated its breakout to new highs, which means that – just like in the case of gold in August 2020 – it wasn’t strong enough to soar higher. Well, it’s not to say that copper is weak, as it has more than doubled its price since the 2020 lows. However, it does mean that it’s likely time for a bigger corrective downswing, especially given that we haven’t seen one in many months. For instance, when gold invalidated its breakout above the 2011 high despite very bullish fundamentals, it meant that forecasting gold at lower levels was very much justified.Likewise, when copper failed to hold its breakout above the 2008 high back in 2011, it was followed by a multi-year decline. Will the same happen this time? I wouldn’t bet on that given the amount of money being pumped into the system, but even if this is not the case, copper is likely to suffer a significant drawdown on a temporary basis. No market can move up or down in a straight line, and neither copper nor gold nor silver are exceptions to this rule.Ok, but why is it important for the precious metals investors?Because of two things:Both markets tend to move in a big way at similar times. The more local moves can vary, but the really big price moves are usually aligned. For example, the 2008 – 2011 rally and the fact that they both bottomed in late-2015 / early-2016.The copper price is quite closely related to the general stock market and the former’s inability to hold above its previous highs seems to be an indication of a change in the trend in the general stock market as well.As I wrote before, the general stock market’s decline is not required for the precious metals sector to decline, but it would likely exacerbate the decline, just like it did in 2008 – especially in the case of silver and mining stocks.And speaking of stocks, let’s check what the S&P 500 is doing.The markets are self-similar (which is another way of saying that they have a fractal nature), which generally means that while the history tends to rhyme, it also tends to rhyme in similar shapes of alike or various sizes.For example, the rally from 2018–2020 seems very similar to the rally from 2020 to the present. Both rallies started after a sharp decline, and the first notable correction took the form of back-and-forth trading around the previous high. I marked those situations with big rectangles.Then the rally continued with relatively small week-to-week volatility. I created rising support lines based on the final low of the broad short-term consolidation and the first notable short-term bottom.This line was broken, and some back-and-forth trading followed, but it was only about half of the previous correction in terms of price and time.Then, we saw a sharp rally that then leveled off. And that was the top . The thing that confirmed the top was the visible breakdown below the rising support line right after stocks invalidated a tiny breakout to new highs. That’s what happened in February 2020, and that’s what seems to be taking place right now.Back in 2020, the rally ended when the weekly RSI moved above 70 once again and when the S&P moved slightly to its new highs. While the history doesn’t have to repeat itself to the letter, if we see another small move higher – to new highs – that also takes the RSI above 70, please keep in mind that it’s not really a bullish development, but actually history forming its final rhyme. And the implications appear bearish for the precious metals sector, as it’s likely to be hit by the first wave of stock market declines – just like it was the case in 2008, 2020, and… 1929.Moreover, mining stocks’ performance relative to hold has been heralding the declines across the precious metals market for some time now.While gold is not doing much today, it’s important to note that yesterday it moved quite close to its previous highs (and visibly above $1,900) before declining. And how did gold miners react?In short, they didn’t. And the GDX ETF has just closed at a new monthly low.Even without considering the invalidation of the breakout to new highs, the sell signal from the RSI and stochastic indicators, and even without noticing that the GDX corrected to its 61.8% Fibonacci retracement without invalidating it, one can clearly see that gold stocks refused to follow gold higher during the most recent rebound. This is bearish – and quite profoundly so.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Inflation Storm Coming

Monica Kingsley Monica Kingsley 10.06.2021 16:15
S&P 500 going nowhere, repelling selling pressure concentrated to value as tech mostly defended the daily ground – that‘s a fair summary of the stock market going into today‘s CPI. VIX rising and the put/call ratio as complacent as can be, are signs of quite some moves ahead.I won‘t go into the transitory vs. getting permanently elevated inflation arguments too much today – see them covered in detail namely on Jun 08, Jun 02, May 27, May 17, and May 12.Over the coming month – most likely starting with the CPI readings for September – the low yearly base effect and reopening rush would be sufficiently history. But the strained and disrupted supply chains beyond microchips, high cost base as evidenced by the CRB index lumping many commodities together, difficulties hiring, and not exactly labor market friendly policies a la minimum wages, would deliver a one-two punch to the transitory concepts – because transitory as in temporary, brings up to my mind J. M. Keynes „In the long run, we‘re all dead“ quote.As I‘ve stated on Twitter, commodities with silver, then gold are more in danger than stocks for today - but even these would eventually recover. The Fed isn‘t in a position to do more than token steps to satisfy public consumption, so keep in mind the big picture regarding taper, rate raising, or even the (market declared so historically) balance sheet contraction success on a lasting basis (we‘re not in the post WWII era when the U.S. could grow its way out of debt as in the „City on the Hill“ inspirational speech decades later.(…) The dollar doesn‘t look to be turning around – Thursday‘s upswing has been erased, but look for the greenback to reflexively rise when confronted with „taper now“ prospects. But is the Fed ready to welcome higher rates, and work towards them? I look for plenty of assurances that the support would be very gradually withdrawn so as not to affect the markets…Toothless compromises for public consumption fit into the picture greatly too...Look, the $6T boondoggle is dead on arrival, and won‘t turn out nearly so in the end and fast enough, which would take a little pressure off the still hot inflation trades. Commodities, followed by silver, and finally gold would feel (by extent of reaction) the short-term pinch, but remember that inflation fires on two engines - and the job market one is arriving.Commodities exerting cost-push influence, and job market pressures, would be a one-two punch to the transitory inflation arguments. Deflationary shock simply isn‘t likely at the moment – the market will more probably find out the Fed isn‘t as serious about taper as it pretends to be – the ostrich pose. Or we might be cushioned into a higher inflation environment actually (thank you, Janet), being told it‘s for our own good.Gold is confirming yesterday mentioned point of being more vulnerable than silver to a scared dump, and the miners weakness still shows it won‘t be smooth sailing for the yellow metal either. And it isn‘t. Copper is worrying down even more, hinting that today‘s session will be far from a calm one in the bond arena. Remember though the big picture once again:(…) the red metal‘s bullish bias is clearly there, both in the short run and medium-term as I had been stating months ago that you can‘t (attempt to) build a green economy without copper, silver, or nickel, among much else. It‘s massive and we‘re in a commodities superbull already – and the lumber arguments (not confirmed by timber weakness as I remarked) can be easily refuted by the $CRB index performance.Crude oil would likely be among the more hesitant movers today, still consolidating.Bitcoin has shown rare daily strength yesterday – one that wasn‘t reflected universally in the crypto space. However impressive daily run, residual doubts remain, and Ethereum is still range bound.Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq OutlookS&P 500 again didn‘t move much, and neither did Nasdaq. Both calm and nervousness before today‘s CPI, likely to be resolved higher.Credit MarketsHigh yield corporate bonds‘ yet another black candle looks ominously – but only for the short term. Quality debt instruments rising is a sign of rush to safety and uncertainty ahead of CPI. As said yesterday too, it‘s though still a bullish sign that HYG rose.Technology and ValueTechnology including $NYFANG again had a relatively good day, and the unease shown by its black candle is to be seen foremost in value.Inflation ExpectationsThey‘re moving lower, but the TIP:TLT ratio isn‘t to be trusted even as the lull in yields remains on through the summer.Gold, Silver and MinersThe above is a picture of momentary stress to be reversed like a spring board, exactly in line with either of these two tweets before that happened: first on inflation, second on transitory vs. permanently elevated.Bitcoin and EthereumThe crypto bulls aren‘t out of the woods yet, but it‘s not unreasonable to expect the biting inflation to improve their stance.SummaryS&P 500 remains well positioned for further gains, and it paid off to wait through the premarket tremors in Nasdaq too.Gold and silver are well positioned to withstand the pressures, and the miners to invalidate their recent weakness.Crude oil would likely hitch a ride in a tight range on the bullish side, without sprinting.Bitcoin and Ethereum look to be entereing a wait and see session today – the bulls have much work ahead, not only in bringing Ethereum out of its sideways consolidation.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Why Inflation Trades Have Further to Run

Monica Kingsley Monica Kingsley 14.06.2021 16:04
S&P 500 ran out of steam shortly after Friday‘s open, yet caught fire before the close. The sectoral disbalance driven by retreating yields went on, and tech remains still the engine of stock market growth – but look for the leadership to broaden into financials, industrials or energy as we go forward. Volatility made a new 2021 low while the put/call ratio has sharply risen to more neutral readings. Paring the bets is getting underway before this week‘s FOMC – the Fed is perceived to perhaps want to at least start debating taper, if not present the sketch of its seriously watered down shape. They‘ll make taper hints and noises at most, it would be much ado about nothing – the markets are just getting spooked now, most notably the dollar (having risen on the unreasonable expectation something palpable and material would come out of that – but remember, talk is cheap, and Jackson Hole is the more likely venue and time that would happen, with 2022 most probably being the year of taper).Another example of undue anticipatory reaction is Friday‘s gold weakness, in all likelihood to Thursday‘s Macron push to make G7 sell their gold to bail out Africa. Gold market appears taking it seriously, which wouldn‘t benefit the G7 populations during these times of still uneasy monetary activism left and right.Back to stocks – the 500-strong index increase was defensive in nature, with tech delivering the lion‘s share. Value is sputtering during the yields reprieve that I see lasting through the summer. Autumn, that would be another cup of tea – apart from the unyielding $CRB index, rising oil prices affecting sectors beyond transportation, and the job market heating up (hiring difficulties), the serene period in Treasuries would be over. Yes, that means I think the bond markets have it wrong with their sudden appreciation, and that equities and commodities are right not to tumble.Deflationary episode or a noticeably disinflationary one isn‘t in our future – the disconnect between inflation expectations expressed as TIP:TLT and RINF, is growing. Just as the experience on the ground. Even if we take a look at 2-year basis (May / Apr 2019 as a starting period to take out "low base argument“), we get per annum CPI for May 2021 at 2.55% and Apr 2021 at 2.23%. Hardly a deceleration, but a continuously building up inflation momentum when prior months are equally robustly examined.Inventories are down across many sectors beyond autos, and need to be replenished as economic activity isn‘t going down and parts of the world are reopening. That would help put upside pressure upon prices, even to the point of inflation surprise spikes – economic activity isn‘t moving down, and the inventory buildup would spill over into 2022.When I stated on Tuesday that inflation would be sold as being for our own good, it indeed is – remember that both the Fed and Treasury want higher inflation. One more sign to put the transitory argument at bay, and one more nail in the dollar‘s coffin. As if the heavy spending wasn‘t breaking the camel‘s back already – and no, the $6T boondoggle reshaping and adjourning doesn‘t count as making a difference.Gold is getting inordinarily spooked while neither miners nor silver nor commodities would call for that – Macron effect and taper fears in play. When I look at the key ratios, including copper to 10-year yield, the yellow metal‘s weakness is unjustified, especially as relates to silver. Keeping in mind the big picture, it‘s when the Fed moves, or declines to move as per market perceptions, that precious metals would benefit. The current on guard position in case they did the right thing and fought inflation, is misplaced. At the same time though, the miners to gold ratio had a third consecutive week of retreating – quite a consolidation waiting to be reversed.Crude oil knows no respite, and doesn‘t mind rising in spite of weaker oil index or XLE, the energy ETF. Part of its allure apart from the supply situation comes from the real assets drive, the unyielding $CRB index, and the rising economic activity. Corrections remain to be bought, and $68 remains a memory.Bitcoin has broken above the declining resistance line connecting May and Jun rebound highs, but Ethereum isn‘t thus far mirroring its relative strength. Both cryptos remain rather choppy, and the Saturday down, Sunday up trading shows that.On a different note, tomorrow there will be no regular analysis, only brief updates should the market conditions including retail sales data require that. I need to set aside serious time and give color to the important and beneficial negotiations about the future. Thank you for your support and understanding – I hope that one day would be enough. I have thus prepared a longer piece for today, and will be back in time well before the Fed with the regular daily report on Wednesday.Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq OutlookS&P 500 upswing was once again clearly driven by the Nasdaq surge, which didn‘t look at the daily pause in yields.Credit MarketsHigh yield corporate bonds have wavered, but given the rest of the credit markets‘ performance, the HYG close wasn‘t all too weak.Technology and ValueSelect technology segments apart from $NYFANG continued rising better than the heavyweights or merely pausing value stocks.Gold, Silver and MinersMiners declined, but refused to lead gold to the downside. The yellow metal‘s decline is most probably the Macron effect and Fed fears result as the move in either real or nominal rates doesn‘t justify that in the least. But again, I think this Treasury rise would ultimately fail, and rates would be back to rising.Silver outperformance isn‘t stark as regards commodities, and the copper to 10-year yield ratio isn‘t flashing warning signs for the white metal. Once the uncertainty in the king of metals is removed (needless to say, no new flush of supply through the open market a la central bank sales decades ago, is what the gold market would welcome the most), the current consolidation can be resolved through another upswing.Bitcoin and EthereumA little mixed picture in cryptos where Bitcoin relative strength isn‘t confirmed by Ethereum‘s moves. The bulls haven‘t entirely reasserted themselves.SummaryS&P 500 remains well positioned to push higher unless value stocks panic over retreating yields again or to a greater degree than before. Nasdaq upside momentum is strong enough to cushion stock market downside at the moment, and credit markets aren‘t in a risk-off mode.My Wednesday‘s words about gold being more vulnerable than silver to a scared dump, came true – only the catalyst was different. Miners weren‘t spooked to such a degree on Friday though, meaning the gold storm might not be as serious as the mounting fears indicate.While ripe for a breather, crude oil once again didn‘t take one, but the oil index weakness (sideways consolidation) warrants short-term caution – the oil outlook though remains bullish.Bitcoin moves aren‘t yet mirrored at least equally strongly in Ethereum. While encourating gains, the bulls can‘t celebrate just yet.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Gold: Skis Are On, Time to Choose the Slope

Finance Press Release Finance Press Release 16.06.2021 15:56
Depending on the upcoming FOMC meeting, gold will need to choose one of the two ways down – the ski trail or the black slope. Which one lies ahead?In the skiers’ vernacular, a ski trail is a very easy way down, with a light gradient at full length. It looks like the late-2012 decline in gold. However, there is also a black slope – a steep and dangerous road on which inexperienced skiers can hurt themselves badly; it’s very similar to what happened to gold in 2008 and 2020. While we don’t know yet which way we will choose to go down (as we have probably just reached the top), the nearest FOMC event will most likely shove us towards one of them. Let’s put our helmets on.The world is holding its breath for today’s comments from the Fed, knowing that one of the approaches would be a game-changer.If the Fed hints that it’s ready to taper its stimulus, the long-term rates will likely rally, whereas stocks, precious metals and commodities will likely slide. But if they don’t do that, it seems that whatever has been going on in the above markets will likely continue based on their technical developments.In the case of gold, it means either a measured late-2012-style decline or a more powerful slide similar to the moves we saw in 2008 and 2020. Which one will it be? Either way, the next big move is likely to be to the downside (even if dovish comments were to spur some immediate-term gains). Why? Because history tends to rhyme, and right now, gold is simply repeating its price patterns from the past that were preceded by relatively similar events (invalidation of the breakout to new all-time highs – just like in 2008; similarity with regard to price moves, volume, and key indicators – just like in 2011-2012).Gold declined once again today, but since it remains between the declining medium-term support line and the rising short-term resistance line, the tug-of-war between bulls and bears remains in place.The above chart is likely either perplexing, confusing or appearing random for those who haven’t stumbled upon the technical analysis toolkit. But to those who have learned about its principles and have used it themselves, the above chart is very exciting. And to those who took the expertise to the next level and see an even bigger picture, the chart is relatively calm, and normal.Gold: How Exciting Are Recent Moves?Why would the above chart be so exciting? Because gold just broke below its rising dashed support line and closed the day below it. This is the first time that it managed to do that, despite coming close to it a few times before. The excitement is even bigger because of what happened on an intraday basis – gold moved back to its declining support line based on the 2020 and 2021 highs and then it moved back up. Consequently, based on the same session, both bulls and bears have an indication that “they were right all along”. Was yesterday’s session a major breakdown, or a confirmation of the May breakout?But how excited can you get if it’s clear that gold is simply repeating its price patterns from the past that were preceded by relatively similar events (invalidation of breakout to new all-time highs – just like in 2008; similarity with regard to price moves, volume, and key indicators – just like in 2011-2012).Watching a football match is not as exciting when you already know the outcome, is it?What’s likely to happen now? Gold is likely to move back and forth, but will ultimately break below the declining support line, which will be a major “uh-oh” moment for those who think that gold will move higher from here based on the very positive fundamental situation. Yes, it is very positive, but it doesn’t mean that gold would rally right away. It could decline despite the fundamentals, just like it did in 2008 and in 2013. And it seems that it’s about to slide.Back in 2008, gold corrected to 61.8% Fibonacci retracement , but it stopped rallying approximately when the USD Index started to rally, and the general stock market accelerated its decline.Taking into consideration that the general stock market has probably just topped, and the USD Index is about to rally, then gold is likely to slide for the final time in the following weeks/months. Both above-mentioned markets support this bearish scenario and so do the self-similar patterns in terms of gold price itself.Moreover, while the pace of gold’s decline in 2012 started off slow, the momentum picked up later on as the drawdown became more vicious. As a result, the tepid pace of gold’s current slide remains deceptive and isn’t a cause for concern.Please see below:The relatively broad bottom with higher lows is what preceded both final short-term rallies – the current one, and the 2012 one. Their shape as well as the shape of the decline that preceded these broad bottoms is very similar. In both cases, the preceding decline had some back-and-forth trading in its middle, and the final rally picked up pace after breaking above the initial short-term high.Interestingly, the 2012 rally ended on huge volume, which is exactly what we saw also on May 19 this year. Consequently , forecasting much higher gold prices here doesn’t seem to be justified based on the historical analogies.The thing I would like to emphasize here is that gold didn’t form the final top at the huge-volume reversal on Sep. 13, 2012. It moved back and forth for a while and moved a bit above that high-volume top, and only then the final top took place (in early October 2012).The same happened in September and in October 2008. Gold reversed on huge volume in mid-September, and it was approximately the end of the rally. The final top, however, formed after some back-and-forth trading and a move slightly above the previous high.Consequently, the fact that gold moved a bit above its own high-volume reversal (May 19, 2021) is not an invalidation of the analogy, but rather its continuation.The lower part of the above chart shows how the USD Index and the general stock market performed when gold ended its late-2012 rally and was starting its epic decline. In short, that was when the USD Index bottomed, and when the general stock market topped.Also, please note that while it might seem bullish that gold managed to rally above its declining black resistance line recently (the one based on the 2020 top and the 2021 top), please note that the same happened in 2012 – I marked the analogous line with red. The breakout didn’t prevent gold from sliding. When the price reached the line, we saw a short-term bounce, but nothing more than that – the gold price fell through it in the following weeks. Consequently, if history rhymes, the support provided by the current declining medium-term support line is unlikely to trigger anything more than a short-term bounce. And since we’re already after this event, gold’s next attempt to break below it might be successful.Having said that, let’s take a look at silver.Silver’s Failed Attempts to Break OutSilver price confirmed its breakdown below its rising support line, and it has just finished invalidating its fifth attempt to break above the early January highs. This is a clearly bearish combination, even without taking into account the similarity between now, 2020, and 2008.Let’s keep in mind that silver might hesitate to decline substantially at first, but then play a huge catch-up close to the end of the decline – just as it did in 2020.Miners: Breaking Below Support Lines Without USDX HelpThe breakdown in the GDX ETF is also crystal clear. Moreover, it’s almost confirmed, as the GDX ETF closed below its rising dashed support line for the second day in a row.We saw a buy signal from the stochastic indicator, but the breakdown in terms of closing prices is more important, as the buy signals from the stochastic (below 20) were not that reliable so far this year. Please note that the mid-January buy signal was followed by much lower prices in the following weeks. The same was the case with the first buy signal that we saw in late February.And indeed, the supposedly bullish signal has already been reversed by another sell signal. Thus, the trend remains down and the outlook remains bearish.The breakdown is also clear in the case of the 4-hour chart featuring the proxy for junior miners – the GDXJ ETF.On the above chart, we see that the huge-volume rally has once again worked as a sell signal – in the past, it often heralded short-term declines like the current one.What’s particularly interesting, gold and gold miners have broken decisively below their rising support lines without the USD Index’s help. This is a sign of weakness in the PMs market.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Gold Asks: Will the Economic Boom Continue?

Finance Press Release Finance Press Release 17.06.2021 15:59
The US GDP has already recovered from the pandemic recession. What’s next for the economy and the gold market?Ladies and Gentlemen, the economic crisis has ended. Actually, not only is the recession over but so is the recovery! This is at least what the recent GDP readings are indicating. As the chart below shows, the US nominal GDP has already jumped above the pre-pandemic level . The real GDP, which takes inflation into account, remained in the first quarter of 2021 below the size of the economy seen at the end of 2019, but it will likely surpass this level in the second quarter of the year.As one can see in the chart below, in terms of GDP growth, the situation is a bit worse, as the annual percentage changes are still below the pre-epidemic level . However, this should change in the second quarter of 2021 when the growth pace is likely to peak amid base effect and reopening of the economy.So, the question is: what’s next? Will the economic boom become well-established or will we see a lot of volatility or even new slumps? Given the recent flux of disappointing high-frequency indicators that fell considerably short of expectations (just think about April’s nonfarm payrolls ), the question is very relevant.Well, there are many threats to growth , that’s for sure. The first is, of course, the ever-evolving coronavirus and its new variants. However, judging by preliminary evidence, the vaccines should remain effective, allowing economies to function freely.The second obvious danger is clearly the economy overheating and higher inflation . The Fed and the Congress injected a lot of liquidity into the economy although it would recover if it was left to its own devices thanks to the rollout of vaccinations and easing lockdowns. So, much of government funds arrived just when the economy practically recovered, which is a recipe for higher prices and inflation-related turbulences in the financial markets.Third, the increase in debt – both private and public – makes the global economy more fragile. Given the level of indebtedness, even small increases in real interest rates would be dangerous. They would increase the costs of servicing debts for the governments and could hit the asset prices. The fact that the Fed will be under great pressure to remain very dovish is, of course, positive for gold prices . Even if we see some effort to normalize the monetary policy , interest rates and the Fed’s balance sheet will never return to the pre-recession levels.Last but not least, there is a threat of financial crisis . Many people are worried that there is a bubble in the stock market (and in other markets as well, such as the cryptocurrency market). Indeed, the equities have been reaching new peaks and the valuations are elevated. The margin debt has also jumped. Not surprisingly, the relative frequency of Google searches for the “stock market bubble” has recently risen (just as for the word “inflation”).Even the Fed in its latest Financial Stability Report expressed some concerns. This is what the Fed Governor Lael Brainard said in a statement linked to the report :Vulnerabilities associated with elevated risk appetite are rising. Valuations across a range of asset classes have continued to rise from levels that were already elevated late last year. Equity indices are setting new highs, equity prices relative to forecasts of earnings are near the top of their historical distribution, and the appetite for risk has increased broadly, as the "meme stock" episode demonstrated. Corporate bond markets are also seeing elevated risk appetite, and the spreads of lower quality speculative-grade bonds relative to Treasury yields are among the tightest we have seen historically. The combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a re-pricing event.To sum up, the US economy has already recovered from the coronavirus recession, which is bad for safe-haven assets such as gold , as the yellow metal doesn’t like economic expansions. However, there are important threats to sustainable economic growth, which should support the price of gold.Actually, there is still room for gold to rally further . This is because we are in an inflationary phase of the economic expansion (this boom will be more inflationary than the post- Great Recession period), and all the money created during the pandemic has flowed into the asset markets, pushing their prices into elevated levels not necessarily justified by fundamentals (just think about Dogecoin). Gold could benefit from such a bubble, as well as from an inflationary and hot environment. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
Have Gold Stocks Lost All Their Vigor?

Have Gold Stocks Lost All Their Vigor?

Finance Press Release Finance Press Release 21.06.2021 16:10
Gold sank profoundly on Jun. 17, taking its crew along. While it has the strength to go up for one more breath, other PM assets may not be that tough.The Gold MinersWhile investors believed that superficial strength indicated clear skies ahead, I warned on Jun. 14 that storm clouds were likely to rain on gold, silver and mining stocks’ parade.I wrote:Not only has gold’s RSI fallen precipitously, but the yellow metal’s stochastic oscillator is also at levels that preceded significant historical drawdowns. As a result, while a $100+ decline is likely to materialize in the short term , an even larger decline will likely occur over the medium term. And with the 2008 and 2012-2013 analogues becoming even more valid by the day, gold’s ominous path forward will likely catch many market participants by surprise.And with the technical realities finally drowning the yellow metal, it was a tough pill to swallow for those that didn’t heed the warning.Please see below:As part of the problem, the vast majority of individual investors and – sadly – quite many analysts focus on the trees while forgetting about the forest. However, once one zooms out and looks at the situation from a broad perspective, it’s clear that: “What has been will be again, what has been done will be done again; there is nothing new under the sun.” (-Ecclesiastes 1:9)Therefore, while investors often focus all of their attention on the yellow metal, I warned on Jun. 14 that the HUI Index’s ominous behavior signaled significant downside for gold, silver and mining stocks.I wrote:With the HUI Index acting as the PMs’ canary in the coal mine, the bearish implications are as clear as day when eyeing the long-term chart. In the past three weeks, two key events unfolded:The stochastic oscillator delivered a clear sell signal.The self-similarity patterns became increasingly valid.And with last week’s price action adding further confirmation, investors’ optimism is showing severe cracks in its foundation.On top of that, even though the HUI Index plunged by more than 10% last week , the carnage may not be over. Case in point: the HUI Index is in the midst of forming the right shoulder of its bearish head & shoulders pattern, and if completed, could result in a profound decline over the medium term. For context, with gold approaching its late-April bottom and its rising medium-term support line, the yellow metal could bounce at roughly $1,750. In the process, the gold miners may follow suit. However, the bearish implications remain intact over the medium term, and a significant slide is likely to follow.Please see below:To explain, if you held firm in 2008 and 2013 and maintained your short positions, you almost certainly realized substantial profits. And while there are instances when it’s wise to exit one’s short positions and re-enter at more attractive prices, the smooth declines of gold, silver, and mining stocks mean that the risk-reward of doing so is tilted toward the downside. Or to put it more bluntly, the prospect of missing out on the forthcoming slide makes exiting the short positions a risky investment decision. For context, we believe that holding the short position is the most prudent course of action. However, if gold, silver and mining stocks become extremely oversold, we may consider covering on a short-term basis.If that wasn’t enough, I warned previously that the recent plunge was weeks in the making:I wrote the following about the week start started on May 24 :What happened three weeks ago was that gold rallied by almost $30 ($28.60) and at the same time, the HUI – a flagship proxy for gold stocks… Declined by 1.37. In other words, gold stocks completely ignored gold’s gains. That shows exceptional weakness on the weekly basis and is a very bearish sign for the following weeks.To that point, the HUI Index is still following two medium-term historical analogies. To explain, back in 2008, right before a huge slide, in late September and early October gold was still moving to new intraday highs, but the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market declined then. If stocks hadn’t declined back then so profoundly, gold stocks’ underperformance relative to gold would likely be present but more moderate.Moreover, in 2012, the HUI Index topped on Sep. 21, and that was just the initial high in gold. At that time the S&P 500 was moving back and forth with lower highs – so a bit more bearish than the current back-and-forth movement in this stock index. And what was the eventual climax? Well, gold moved to new highs and formed the final top (Oct. 5). It was when the S&P 500 almost (!) moved to new highs, and despite both, the HUI Index didn’t move to new highs. Thus, the similarity to how the final counter-trend rally ended in 2012 (and to a smaller extent in 2008) ended is uncanny .On top of that, the stochastic oscillator (which flashed a clear sell signal ) is singing a similar tune. Not only do these signals often precede massive price declines on their own, but the analogies of 2008 and 2012 serve as confirmation that the huge decline has only just begun and that forecasting lower gold prices is currently justified.Thus, if history rhymes, as it tends to, the HUI Index will likely decline profoundly and find medium-term support in the 100-to-150 range. For context, high-end 2020 support implies a move back to 150, while low-end 2015 support implies a move back to 100. And yes, it could really happen, even though it seems unthinkable.The HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over. Now, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02.That’s why I previously wrote that “it wouldn’t be surprising to see a move to about 300 in the HUI Index”. And that’s exactly what we saw (a move above 320 is still close to 300 from the long-term point of view). To clarify, one head-and-shoulders pattern – with a rising neckline – was already completed, and one head-and-shoulders pattern – with a horizontal neckline – is being completed, but we’ll have the confirmation once miners break to new yearly lows.Furthermore , three of the biggest declines in the mining stocks (I’m using the HUI Index as a proxy here), all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern.As a result, we’re confronted with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early 2020 high.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.Keep in mind though: scenario #2 most likely requires equities to participate. In 2008 and 2020, the sharp drawdowns in the HUI Index coincided with significant drawdowns of the S&P 500 . However, with the Fed turning hawkish and investors extremely allergic to higher interest rates, the likelihood of a three-peat remains relatively high.Let’s zoom in.To explain, the senior miners’ weekly decline occurred relatively uninterrupted, with little buying pressure witnessed on Jun. 18. Moreover, not only did the GDX ETF close below its April lows and its March highs, but it also dipped below the 61.8% Fibonacci retracement level. Thus, while the senior miners’ RSI (Relative Strength Index) signals a buying opportunity (by falling below 30), the technical damage (breakdown below the 61.8% Fibonacci retracement) justifies the bearish outlook even in the short run. Of course, I remain on the lookout for this breakdown’s invalidation as it would be a sign of potential strength.Finally, let’s consider the size of the possible corrective upswing based on the analogy to 2012. Back then, the GDX ETF’s corrective upswing didn’t recapture 61.8% or even 38.2% of its previous decline, and the bullish correction was rather “muted” relative to gold. Thus, the notable detail here is that the GDX ETF started its November 2012 correction with the RSI close to 30, but also when it moved slightly below its previous (August) lows, and the final short-term bottom took place after the second (!) day when it declined on big volume.So, if history is going to continue to rhyme (which seems likely), even if gold corrects quite visibly, gold stocks’ corrective upswing might not be that significant. If we see “screaming short-term buy signals” or something like that, we might close or even briefly switch to the long side, but for now, the trend remains down.In conclusion, gold, silver and mining stocks’ plight was a humbling experience for many investors. And while the recent slide highlights the importance of investing without emotion, we remain confident that the precious metals will soar once again. However, because secular bull markets don’t occur in a straight line, based on the similarity to how similar situations developed in the past, a final profound decline will likely occur before the metals resume their resurgence. As a result, even though gold, silver, and mining stocks are poised to shine in the long run, I still think that short positions in the precious metals sector – especially in the junior miners – currently remain attractive from a risk-reward perspective.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Fed Didn‘t Tame Inflation

Monica Kingsley Monica Kingsley 21.06.2021 16:45
As resilient as it had been before Wednesday, S&P 500 met selling pressure on Friday, including the best performing tech sector. Bullard‘s comments on the „inflation surprise“ and first rate hike before 2022 is over – are they full of hot air, testing the waters before taper, or serious intent? Given the ease with which precious metals and then select commodities such as copper or soybeans tumbled, rate hikes might appear to be baked in the cake now – but in reality, it‘s the unyielding inflation that would prove rather persistent than transitory.The Fed did the bare minimum, acknowledging inflation in passing, implying it would go away on its own. But it‘s more complicated than that – bank credit creation isn‘t strong, and had been declining before bond yields bottomed in Aug 2020. Are banks reluctant to lend, or customers to borrow? The result of production not ramping up as wildly as expected (reopening trades) is compounding the disturbed supply chains and commodity prices rising (cost-push inflation). Add to that job market pressures, and you have a recipe for inflation being more transitory than originally thought. In other words, cyclical and structural as import-export prices hint at too..Money in the system isn‘t flowing into production or capacities expansion – inventories have instead been drawn down, and need to be replenished. Just as I have written the prior Monday, that would be putting upside pressure on prices as much Europe awakening or hard hit countries such as India springing back. So, fresh money results in excess liquidity, trapped in the system, and flowing to bonds, which explains the Fed‘s need to act and fix repo rate at 0.05%. So much for the recent spike in Treassuries – this whiff of „almost deflation“ has it wrong, and yields will revert to rising – regardless of when exactly (or if) other parts of the intended $6T stimulus package get enacted.Sure, the Fed actions have shortened the (sideways) lull in Treasuries, made the dollar spike, but haven‘t changed the underlying dynamic of the free market not willing to pick up the slack in credit creation should the Fed indeed taper. Chances are, they would still taper, but later in 2022 – such was and still is my expectation, with bank credit creation being (hopefully) the key variable on their watch as a deciding factor. In the meantime, the inflation problem will get even more embedded – not a fast galloping inflation or hyperinflation, but a serious problem raising its ugly head increasingly more through the years to come.In short, the Fed played the dot plot perceptions game which amounts to no serious attempt to nip inflation in the bud. The markets (precious metals, commodities) got thrown off prior trends, but will see through the bluff that can‘t be followed by actions. The inflation trades (and by extension modest rise in yields as we drift towards 2.50% on the 10-year before that tapering actually starts, with positive consequences for financials and cyclicals) haven‘t been killed off, and will reassert themselves when the markets test the Fed (and they will). To be clear, I am calling for persistently elevated (not hyper) inflation (PCE deflator readings coming soon) with the 10-year yield reverting to its more usual trading range – so essential to financial repression reducing the real value of all obligations.Keep also the following macroeconomic point on your mind – inflation isn‘t strong enough currently to knock off the P&L to make stocks roll over, we‘re still in a reflation and commodities super bull market. Lower GDP growth potential equals growth (tech) doing fine, but expect the stock market leadership to broaden yet again to include the beaten down industrials and financials.So, there is no taper (wait for Jackson Hole), but we‘re enduring almost a taper tantrum, and stocks might need to test the 4,050 – 4,100 broad support zone that has more chances of holding than not. Doing so, it would confirm that value is far from down and out, and that we have further to run. As menacing as the VIX looks, the put/call ratio is already positioned on a rather cautious side, meaning that no great S&P 500 correction is starting here. It doesn‘t look so currently – the dislocation in credit markets (high yield end) appears temporary.Gold and silver are being hit by the hawkish Fed bets, and so are the inflation expectations. Miners are buying into it, meaning that the miners to gold ratio is threatening a downswing on the weekly chart. Has the true downtrend in the metals started? The yellow metal is actually sitting at two strong supports, and silver to gold ratio remains still in an uptrend. Simply put, the last 3 days trading action appears too exagerrated given the bond market disequilibrium amplifying the dollar upswing. Sure, it‘s a stiff headwind, but the Fed is still as easy as can be, and the copper to 10-year yield ratio remains constructive on the weekly chart, and starting to doubt the decline‘s veracity on the daily one.Oil is a great example of the commodities fever being far from over, and I‘m looking for more (basing) strength in black gold in spite of the oil index getting inordinarily spooked alongside many real assets. That‘s consistent with the persistent inflation not yielding much at all.Bitcoin and Ethereum also appear buying into the hawkish Fed narrative, when in reality money is still loose. But the dollar effect is in play in cryptos too – even if the dollar is range bound on high time frames, its current upswing hasn‘t fizzled out yet – the markets aren‘t yet near doubting the Fed.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 daily downswing still looks to be part of a correction, and no topping pattern. Nasdaq has held up relatively well, and I‘m expecting more strength in tech, followed gradually by value.Credit MarketsThe intraday reversal in high yield corporate bonds is what matters the most, and better be followed by local bottom forming here.Technology and ValueTechnology has been quite resilient, contrasting with the doom and gloom in value or more lag in smallcaps.Gold, Silver and MinersGold and miners are reacting as if tightening was already on, and real rates actually not declining. While the dollar link has been more influential, gold price action next would decide the fate of both technical factors mentioned in the caption. Another, stronger support line including 2019 lows, is below.Silver has been and is likely to outperform gold, and in hindsight, the current storm would be of the rea cup variety. While copper rebound isn‘t here yet, the ratio to 10-year yield indicates a reprieve.Bitcoin and EthereumNeither Bitcoin nor Ethereum chart is bullish, and the only argument not to boot, is the presence of two BTC supports.SummaryS&P 500 is approaching a deciding point in its still reflationary era. Value stabilizing in the face of rising tech and Treasuries would be the next bull market run objective.Gold and silver aren‘t out of the woods just yet but tentative signs of stabilization look to be here. Conquering the pre-FOMC levels, attacking $1,900 seems for now to be more than a few weeks away.Crude oil remains well positioned to extend gains as the commodity selloff on Thursday barely touched it. The oil outlook remains bullish.Bitcoin and Ethereum aren‘t on an immediate winning streak, and the recent closing lows in Bitcoin (below 33,000) remain to be monitored for a turn in sentiment. The weekly basing pattern though can‘t be ignored, making a break below 30,000 unlikely to succeed the earlier we were to move into the 35,000 – 40,000 range. That‘s a big if.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Dialing Back the Fed Fears for Now

Dialing Back the Fed Fears for Now

Monica Kingsley Monica Kingsley 23.06.2021 16:17
S&P 500 extended gains as the Powell testimony calmed the markets that the punch bowl isn‘t going away „any day now“ - that urgent it might have felt to some given the post-FOMC hit first to precious metals, and then to select commodities with stocks. If the dollar is getting second thoughts about buying into the hawkish Fed (at least a little), then Treasuries certainly are. And it‘s the performance of value stocks that‘s signalling a certain paring of the tightening bets. While reflation or inflation trades aren‘t over, value is still set to underperform tech, and only select sectors are to rejoin its stock market leadership. Yes, the market breadth is going to widen as stock bull run is far from over, and what we have seen (despite the special alarm bells attached), is a run of the mill shallow correction. That‘s what bull markets do, they climb a wall of worry. Open profits are growing.So, we got a preview of what a true tightening attempt could look like at its earliest stages, and at the same time the Powell pledge not to raise rates unless the recovery is complete, so to say. So as not to disturb the the job market recovery, assuring us at the same time that 1970s stagflation isn‘t on the horizon. For now, it indeed isn‘t as economic growth is still running faster than (current) inflation, which means that any growth scare is far down the road. Yet, the no stagflation assurances smack of this inflation narrative progression, so a healthy dose of suspicion is well placed. It‘s my view that the inflation expectations jawboning bought the central bank just a little time before the inflation trades regain traction. The Fed simply doesn‘t appear to want to act decisively.With more taper discussions deferred to Jackson Hole, the best the Fed can do now, is to attempt to reinterpret the meaning of the word transitory – and that‘s exactly what Bostic is already doing. Suddenly, the phase of higher inflation won‘t be less than 3 months as originally expected, but perhaps 2 to 3 quarters. That‘s a world of difference!Gold and silver are bound to like this shift in meanings, and market based inflation expectations are starting to see through that language. Even though miners and miners to gold ratio aren‘t marking such a turning point yet, the wait and see posture is there already. Given the commodity moves (CRB not too far from prior highs already, copper recovering from its bearish overshoot, oil stubbornly extending gains little by little), silver is likely to lead gold during the next meaningful upswing. For now, basing isn‘t over just yet – but the below Fed posture will come back to haunt it as much as opting to focus on PCE deflator (taken to extremes, you downgrade from a steak to a hamburger to what next? Cat or dog food?):(…) In short, the Fed played the dot plot perceptions game which amounts to no serious attempt to nip inflation in the bud. The markets (precious metals, commodities) got thrown off prior trends, but will see through the bluff that can‘t be followed by actions. The inflation trades (and by extension modest rise in yields as we drift towards 2.50% on the 10-year before that tapering actually starts, with positive consequences for financials and cyclicals) haven‘t been killed off, and will reassert themselves when the markets test the Fed (and they will). To be clear, I am calling for persistently elevated (not hyper) inflation (PCE deflator readings coming soon) with the 10-year yield reverting to its more usual trading range – so essential to financial repression reducing the real value of all obligations.Crude oil welcomes the current tightening perceptions reprieve, and the oil sector is running ahead in the anticipated stock market breadth broadening. Steep downswings aren‘t favored, and black gold would suffer only should the Fed turn genuinely hawkish, which they objectively can‘t do now. So, more oil profits are ahead.Cryptos have rebounded after the 30,000 support in Bitcoin held on a closing basis. It‘s up to the bulls now to prove that the washout marks the start of accumulation as favored by the weekly charts.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 daily upswing continued, driven yet again by Nasdaq – more gains are likely, with or without preceding sideways consolidation.Credit MarketsHigh yield corporate bonds extended gains more vigorously than the defensive, higher quality debt instruments.Technology and ValueTechnology driven by $NYFANG was the engine of yesterday‘s growth, with value unable to extend gains (still consolidating within its current underperformance).Gold, Silver and MinersGold and miners are holding on to the recent lows, giving impression of being about to peek higher as the Fed noises die down for now.Silver hasn‘t yet gotten its mojo back but the copper to 10-year yield ratio suggests an upswing attempt isn‘t that far away.Bitcoin and EthereumLocal bottom looks to be in place, and the bulls need to defend current levels as a very minimum in order to keep in the game.SummaryS&P 500 looks ready to consolidate and extend gains, with Nasdaq still in the driving seat.Gold and silver upswing attempt is coming next as in Fed hawkishness gets duly reassessed. Even though miners don‘t favor much lasting success currently, the base building before renewed push higher (above $1,820) is underway.Crude oil looks likely to extend gains thanks to reflation, and money is flowing back into commodities now that the Fed is reinterpreting the „context of tightening and transitory“.Bitcoin and Ethereum have staved off further downside for now, but the bulls would need to break above 44,000 minimum in Bitcoin so as to regain bull market momentum. That‘s tall order for now.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Is There a Next Housing Bubble That Will Make Gold Shine?

Finance Press Release Finance Press Release 25.06.2021 16:33
Home prices are surging, making some investors worry about the housing market. These fears seem to be exaggerated, but bubble-like conditions are widespread.House prices are surging. As the chart below shows, the S&P/Case-Shiller U.S. National Home Price Index has reached 239 in February 2021, the highest number in history and about 30% higher than during the 2006 peak.What’s more, the National Home Price Index has jumped 12% year-over-year in February , which is the highest annualized gain since January 2006 when the housing bubble started deflating as can be seen in the chart below. At the same time, inventory in many regions has hit record lows.Not surprisingly, some analysts started to worry about the formation of the next housing bubble . The previous one led to the global financial crisis . However, at least some part of the recent increases can be explained by other factors than mere expectations of price increases, which characterizes a bubble.The mortgage rates plunged thanks to the Fed’s zero-interest-rate policy and accommodative monetary policy . The easy fiscal policy with stimulus checks also added fuel to the fire, especially given that people couldn’t spend money on services, so they spent more on housing.The demographic factors also helped to move prices up. Many Millennials have just entered the prime home-buying age, and the pandemic made a lot of people demand more space as they work remotely.In other words, the recent surge in prices is likely a result of an imbalance between tight supply (that rises too slowly to meet booming demand fueled by low interest rates ) and income growth rather than an irrational exuberance. Furthermore, lending standards are also tighter now. Please take a look at the chart below, which shows the home price index vis-à-vis the GDP (presented also as an index).As one can see, in the 2000s there was a clear, huge divergence between the pace of GDP growth and the pace of home prices’ appreciation that lasted a few years before the bubble burst. But since the end of the Great Recession , the growth in house prices was below the GDP growth. Therefore, I would say that there is no bubble in the housing market. Not yet, at least – house prices started to diverge from GDP growth during the pandemic recession …Hence, it would be smart to monitor the housing market carefully. However, so far, gold bulls shouldn’t count on the housing bubble and its burst as important factor that could support the price of the yellow metal. Nevertheless, the recent ultra-low real interest rates and high inflation should support both: gold and houses . After all, they are both hard assets sensitive to interest rates and are being eagerly bought during inflationary periods.More importantly, despite the fact that it’s maybe too early to call the national bubble in the housing market (although some locations are really hot), in many markets there are bubble-like conditions. Just think about soaring stock market indices reaching one record after another. Or negative-yielding bonds worth about $18 trillion. Or surging used car prices that have just hit an all-time high. Or lumber that has become America’s hottest commodity.Or Dogecoin, a cryptocurrency that was created as a joke. It has gained about 8,500% this year, despite the recent sell-off in the cryptocurrency market. As a popular tweet commented on this, “Moderna created a lifesaving vaccine in record time and is worth $70 billion. Dogecoin became a meme and is worth $87 Billion.”The widespread character of these price increases is the reason why some analysts refer to the “everything bubble”. It might be an exaggeration, but the scope of bubble-like conditions clearly shows that markets are awash in liquidity. All this new money supply and excess liquidity simply entered the economy, exerting inflationary pressure across the board and boosting mainly risk assets.Indeed, there is inflation, but still mainly in the asset markets, not in the consumer sphere. However, this is changing, as the April CPI reading has clearly indicated. Producer/commodity inflation could advance into the next stage in which consumer prices are also generally increasing. Inflated asset valuations and rising prices of goods suggest that caution is warranted, and it would be smart to allocate some portion of the investment portfolio toward gold.The bottom line is that the global expansion will continue, which is bad for gold. However, the growth is fueled by excessive liquidity and ultra-low interest rates, which also creates inflationary pressure and bubble-like conditions. Gold could be supported by all this – it may even thrive if inflation turns out to be higher and more lasting than it’s widely believed.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter . Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhD Sunshine Profits: Effective Investment through Diligence & Care.
Stock ATHs, Hesitant Metals and Simmering Inflation

Stock ATHs, Hesitant Metals and Simmering Inflation

Monica Kingsley Monica Kingsley 28.06.2021 15:42
S&P 500 keeps powering to new highs, and little wonder – thanks to the infrastructure stimulus euphoria. The return of (at least some) strength into value stocks at expense of tech outside $NYFANG, clearly marks the risk-on shift as much as credit markets do. And what about the much awaited PCE deflator data? The figure aligned with the inflation camp much better, yet the marketplace arguably expects better inflation data ahead - the transitory inflation thesis is the mainstream one, but I‘m still of the opinion that inflation wouldn‘t decline as meaningfully, especially when measured through CPI, PPI, and import-export prices, proving more persistent than generally appreciated. Markets‘ inflation optimism can be seen in the relatively muted Treasury yields increase. If they were worried as much as before, the spike would have been larger, but we‘re well into the summer lull in the bond markets I announced back in May, with yields rising again in autumn – gradually moving well beyond 2% on the 10-year yield.Contrast the modest yields increase with financials rising, real estate consolidating, and you‘ll come to the conclusion that the path of least resistance for the S&P 500 is still higher. Tech is unlikely to be derailed – and hasn‘t been as value continued its recovery. VIX keeps pushing for new lows, making consecutive series of lower highs, and I also remarked on Friday about the option traders:(…) Depending on tech heavyweights for the lion‘s share of gains isn‘t though an immediate concern – the market breadth is slowly improving after value stocks were bombed out post-FOMC. Signs of life are returning, facilitated by the Fed‘s $8.1T and growing reasons to celebrate, so don‘t be spooked by too many lower knots in VIX when there is no panic in the options arena either.PCE deflator ... is favorable to the Fed as it defers the taper speculation further to the future. Together with the redefinition of how long transitory used to last earlier, and what transitory (inflation) means now, the central bank wins in leaving the punch bowl available for longer (the job market offers plenty of excuses too).As we have to square hawkish-turned-dovish Fed talk with growing monetary (and fiscal) support, the biggest risk would be a hawkish miscalculation. Certainly the evolving position on inflation at the central bank is illustrative of deferring the problem to the future, for it to perhaps go away on its own as job market is talked instead. If only inflation expectations (be they TIP:TLT or RINF) cooperated… It looks to me the inflation trades are merely consolidating now before another upleg – CRB index has already erased all the post-FOMC plunge, with materials (XLB ETF) having much further to go before the damage there gets repaired too.Gold and miners remain petrified for now, modestly resilient vs. the daily increase in nominal yields, and not reacting to the stubborn current inflation, let alone future one. Treasury yield spreads though show the markets aren‘t expecting inflation to run out of control. Even the red metal dipped on the positive inflation news, sending the copper to 10-year yield ratio to the bottom of its recent range. The explanation lies in the dollar resilience, keeping a lid on precious metals in the on-off tightening rhetoric, regardless of where real rates and TIPS are now and about to go.Crude oil keeps though trending higher, offering brief dips that are all too fast reversed. The bullish outlook is on, and oil stocks paint a great future ahead – the associated volatility might not be always pleasant, but black gold is far from making a top..Cryptos base building hypothesis still hasn‘t been invalidated, and the weekend rebound actually confirmed it. Steep upswing on high volume though is missing as much as moving back to the upper ranges of the post mid-May plunge.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is going higher, with tech stocks taking a breather as the stock market breadth widens.Credit MarketsThe return of risk-on in credit markets, is on.Technology and ValueUnder the sectoral S&P 500 hood, we see the advance being driven by value stocks rebound, and $NYFANG, which is a little contradictory message – explained only by the market taking note of persistent inflation.Gold, Silver and MinersGold and miners still keep going nowhere – there is no momentary sign of strength, and actually creeping deterioration as also seen in the selling into GDX strength. Bigger move is coming – keep an eye on the miners. Silver isn‘t yet leading gold, and the copper move was at odds with the 10-year Treasury yield one. Precious metals are obviously afraid of tightening, but they would be led by real assets (commodities including copper) in readjusting to the current MMT on steroids still reality.Crude OilAdd in the reopenings, increased economic activity, and supply picture, and you‘ll get the highly resilient crude oil – bullish chart primed for further gains.SummaryS&P 500 keeps reaching higher as value is coming back to life, and Nasdaq consolidates – yet another rotation in the ongoing bull market.Gold and silver short-term bullish momentum is absent, miners are weak, and the dollar upswing risk can‘t be overlooked – precious metals are ignoring real rates and inflation at the moment, and are still basing.Crude oil seesaw ended shortly after Friday‘s open, and the consolidation has indeed been resolved with higher prices, supported by rising oil equities.Bitcoin and Ethereum are no longer hanging by a thread, but need to approach the upper border of their recent range to improve their short-term outlook noticeably.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

USDX, Gold: The Hunter and the Prey

Finance Press Release Finance Press Release 28.06.2021 16:44
Just before the hunt begins, the hunter needs to be sure its prey feels safe. Will we see a promising short-term rally in gold?After the USD Index reasserted its dominance once again, its bellowing howl sent shivers down the spine of currency traders. When the U.S. Dollar Index is on the hunt, the precious metals are often its prey. The alpha wolf is poised to lead the pack over the medium term, and the sheep will likely be sent to the slaughter, but the predator needs to gather force first; a peaceful period of prosperity should ensue over the next several days. And this short-term decline could help uplift gold, silver, and mining stocks.To explain, I warned last week that a short-term decline was likely after the USD Index’s RSI (Relative Strength Index) jumped above 70. And after eliciting some weakness, another pullback to the 38.2% Fibonacci retracement level also aligns with the price action that we witnessed in 2016.Please see below:To that point, after the USD Index broke above its short-term declining resistance line in 2016, it followed that up by retreating a bit below its rising support (dashed) line and then consolidated for about a month before rallying sharply. In the process, the USD Index corrected to approximately its 38.2% Fibonacci retracement level before rallying once again (in fact, it moved slightly below it). For context, there was also a huge intraday reversal in the following days, but it was an event-driven one (it was when Donald Trump won the elections), so it’s unlikely to be repeated. As of today, with the 38.2% Fibonacci retracement level at about 91.3, the USDX could bottom close to this level. Now, this might not seem like a big deal, but it becomes quite important once one considers what happened in gold during the final part of the move to the 38.2% retracement in 2016. That was when gold made most of its gains.However, given the yellow metal’s inability to bounce after its profound decline, the forthcoming rally will likely be weaker than originally expected. For context, the initial projection was based on the similarity to gold’s behavior in 2012. However, with the yellow metal struck in neutral and failing to gain any traction, the current environment seems more bearish than it was in 2012. The bearish gold price forecasts currently seem justified , in the medium term.Moreover, if the USD Index can surpass 93, the greenback will complete its inverse head & shoulders pattern, and the milestone implies a short-term target of roughly 98.Let’s keep in mind that the near-term decline in the USD Index is likely to be small – and nothing more than a blip on the radar screen, when viewed from the long-term point of view. The USD Index often records material upswings during the middle of the year. If you analyze the chart below, you can see that summertime surges have been mainstays on the USD Index’s historical record. Likewise, double bottoms often signal the end of major declines and often ignite significant rallies. For example, in 2004, 2005, 2008, 2011, 2014 and 2018, a retest of the lows (or close to them) occurred before the USD Index began its upward flights. In addition, back in 2008, U.S. equities’ plight added even more wind to the USD Index’s sails. And if the general stock market suffers another profound decline (along with gold miners and silver ), a sharp re-rating of the USDX is likely in the cards.Please see below (quick reminder: you can click on the chart to enlarge it):If that wasn’t enough, the thesis is also supported by the USD Index’s long-term chart. To explain, the USDX’s long-term breakout remains intact, and if we steady the binoculars, the greenback’s uptrend is clearly in place.Please see below:Moving on to the Euro Index, the recent symmetrical decline mirrors the drawdown that we witnessed in mid-2020. And if the Euro Index breaks below the neckline of its bearish head & shoulders pattern, the slide could be fast and furious. For context, completion of the right shoulder signals a decline to (roughly) the June 2020 lows or even lower. However, with a short-term corrective downswing in the USD Index likely to usher the Euro Index higher, the development should help support gold, silver, and mining stocks this week.Please see below:For context, I wrote previously:The completion of the masterpiece could have a profound impact on gold, silver and mining stocks. To explain, gold continues to underperform the euro. If you analyze the bottom half of the chart above, you can see that material upswings in the Euro Index have resulted in diminishing marginal returns for the yellow metal. Thus, the relative weakness is an ominous sign. That’s another point for the bearish price prediction for gold.Circling back to the 2016 analogue, the USD Index has already hopped into the time machine. And with the flashback eliciting memories of past glory, a reenactment won’t be applauded by the PMs.As you can see on the above chart, what we saw this year was quite similar to what happened in 2016. The analogy that I described previously worked just like in the past. Namely, the back-and-forth movement after the breakout was followed by a quick rally.The bottom line?Once the momentum unfolds , ~94.5 is likely the USD Index’s first stop. In the months to follow, the USDX will likely exceed 100 at some point over the medium or long term. Keep in mind though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is outperforming the Eurozone and the EUR/USD accounts for nearly 58% of the movement of the USD Index – the relative performance is what really matters .In conclusion, while wolves will likely circle gold, silver and mining stocks over the medium term, the leader of the pack – the USD Index – is well-fed for now and shouldn’t disrupt the precious metals’ short-term corrective upswing. However, when its stomach growls and the hunt continues, the alpha’s bared teeth, fixed stare, and horizontal ears may scare gold, silver and mining stocks to death. Thus, while the precious metals are likely safe in the short term, the nights might grow colder and darker even amid the summer sun.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

The Run Ignoring Inflation

Monica Kingsley Monica Kingsley 29.06.2021 15:58
S&P 500 reached new highs powered by technology, even as value or Russell 2000 took a daily breather. With VIX going nowhere, and the put/call ratio turning complacent, the path of least resistance remains higher, and not even emerging markets are derailed by the strong dollar. While yesterday‘s stock market upswing was a defensive one as the credit markets and tech internals reveal, there is little to upset the cart – Thursday‘s ISM manufacturing will probably show solid expansion, and it would be only Friday‘s non-farm payrolls (better said what effect these could have on the Fed‘s labor market rationale for keeping the punch bowl available) to bring about volatile trading.With the Fed support intact and fiscal one not retreating either, with inflation expectations not spiking, the current data are disregarded to a degree. Incorrectly in my view as Friday‘s:(…) PCE deflator ... figure aligned with the inflation camp much better, yet the marketplace arguably expects better inflation data ahead - the transitory inflation thesis is the mainstream one, but I‘m still of the opinion that inflation wouldn‘t decline as meaningfully, especially when measured through CPI, PPI, and import-export prices, proving more persistent than generally appreciated. The Fed is behind the curve in taking on inflation even according to El-Erian, and its monetary actions support both the Treasury markets and the red hot real estate. The lull in Treasuries is likely to last into the autumn, and the ensuing yields increase would reflect both the economic recovery and newfound appreciation of inflation. I maintain we‘re still in a reflation – a period of economic growth stronger than inflation – in a multi-year economic expansion, and also that inflation will surprise those considering it transitory (as if this word had any meaning still attached, after all the time length redefinitions). As a side note, if only consumer price inflation was measured without substitution, hedonistic adjustments, and owner‘s equivalent rent. In this environment, tech is unlikely to be derailed, and value will play catch up.Precious metals are feeling the heat of inflation not being taken seriously, and miners are leading to the downside – not a bullish short-term perspective. Silver is inspired by copper‘s short-term woes more than by the CRB resilience. Coupled with the dollar keeping high ground, both metals are facing stiff headwinds.Crude oil is likely to shake off the production quota increase uncertainty looming over the coming OPEC meeting – the correction has been thus far muted, with oil stocks bearing the brunt of the selling pressure. But that‘s nothing that couldn‘t be repaired over the nearest weeks – XLE would contribute to stock market gains, and black gold would remain way more resilient than oil stocks.Cryptos are scoring gains as the base building hypothesis grows in strength, and the bulls have the initiative.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is going higher, with tech stocks once again in the driver‘s seat.Credit MarketsThe risk-off turn in the credit markets wasn‘t overly strong.Technology and ValueTech was primarily driven by $NYFANG as other sectors either held ground, or modestly declined.Gold, Silver and MinersGold and miners still keep going nowhere, and the yesterday mentioned creeping deterioration is increasing the danger of a broader short-term decline.Also the GDX:GLD ratio ($HUI:$GOLD isn‘t properly calculated today unfortunately) reflects the momentary straits in the precious metals market. Silver remains under pressure as much as copper does.Bitcoin and EthereumQuite a few good days in a row in the crypto space – the bulls are on the move.SummaryS&P 500 keeps consolidating yesterday‘s late session gains, preparing for a fresh upswing.Gold and silver are on the defensive in the short-term, and miners aren‘t pointing in the bullish direction at the moment – precious metals keep ignoring real rates and inflation.Crude oil chart remains bullish, and the steep energy sector decline won‘t be of a lasting duration.Bitcoin and Ethereum are scoring gains as the base building hypothesis grows in strength, and overcoming the recent corrective highs followed by the 200-day moving averages, are the next medium-term objectives.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
High Returns in Real Assets and Tech

High Returns in Real Assets and Tech

Monica Kingsley Monica Kingsley 30.06.2021 16:06
S&P 500 at new highs, is the predictable daily refrain almost. Risk-on credit markets and not so risk-on stock market sectoral overview, aren‘t an obstacle as tech can be depended upon for the delivery of gains. The degree of value underperformance is the other variable – market breadth though keeps improving under the surface as declining yields aren‘t biting value stocks as much. Real estate and homebuilders keep doing fine, healthcare in spite of the significant biotech underperformance too, and energy with materials and industrials haven‘t said their last word either.VIX keeps behaving and so does the put/call ratio – we‘re into the summer lull in the bond market, and the mostly sideways trading in the benchmark 10-year yield, is highly conducive to the above sectoral snapshot. The slowly strengthening dollar is what to keep an eye on, especially as regards precious metals and commodities. As I wrote yesterday:(…) there is little to upset the cart – Thursday‘s ISM manufacturing will probably show solid expansion, and it would be only Friday‘s non-farm payrolls (better said what effect these could have on the Fed‘s labor market rationale for keeping the punch bowl available) to bring about volatile trading.Inflation would do the unsettling trick, but inflation expectations are telling us indeed to be patient this season – I‘m still of the opinion that:(…) inflation wouldn‘t decline as meaningfully, especially when measured through CPI, PPI, and import-export prices, proving more persistent than generally appreciated. The Fed is behind the curve in taking on inflation even according to El-Erian, and its monetary actions support both the Treasury markets and the red hot real estate. The lull in Treasuries is likely to last into the autumn, and the ensuing yields increase would reflect both the economic recovery and newfound appreciation of inflation. I maintain we‘re still in a reflation – a period of economic growth stronger than inflation – in a multi-year economic expansion, and also that inflation will surprise those considering it transitory (as if this word had any meaning still attached, after all the time length redefinitions). As a side note, if only consumer price inflation was measured without substitution, hedonistic adjustments, and owner‘s equivalent rent.Precious metals are on the defensive – on one hand, being hurt by the inflation-had-peaked assumptions, on the other, disregarding the ample monetary support. PMs sentiment is negative, and miners aren‘t offering a glimmer of hope – just a daily rebound attempt yesterday that partially fizzled out. Good for starters, but a lot more needs to happen. On a bullish note though, copper and CRB performance is boding well – the money printing tide lifting all boats, at various rates and times.Crude oil remains arguably most resilient of the pack, and the rising economic activity prospects are likely to outweigh the production quota increase uncertainty. Oil stocks though need more time to catch their breadth, and the commodity remains likely to outperform them.Cryptos gave up some recent gains, in what appears to be merely a correction. Ethereum keeps doing relatively better, which is a strong indicator in favor of the base building hypothesis turning into accumulation.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is going higher, with tech stocks still in the driver‘s seat – without as much as a daily consolidation.Credit MarketsCredit markets are back to risk-on, with TLT visibly having issues to rise too much.Technology and ValueTech remains primarily driven by $NYFANG, with value having another weak day on retreating yields.Inflation ExpectationsTreasury yields aren‘t following the TIP:TLT inflation expectations to the downside – bonds aren‘t entirely buying the inflation retreat story. Rightfully so, because it‘s temporary in perspective only.Gold, Silver and MinersGold reluctantly followed miners to the downside – the pressure had been building over many prior days. The retrace in both signifies that the bulls aren‘t throwing in the towel. Looking at copper and silver, rightfully so.Crude OilI‘m taking the energy sector‘s underperformance with a pinch of salt.SummaryS&P 500 keeps consolidating yesterday‘s lackluster session gains, preparing for a fresh upswing whenever Nasdaq is ready to rise again.Gold and silver are on the defensive in the short-term, and it would be too early to declare stabilization in the miners as completed. As precious metals keep ignoring real rates and inflation, sustained bullish momentum is far away.Crude oil chart remains bullish above the weak $72 or stronger $70 supports, and the steep energy sector decline won‘t likely last long.Bitcoin and Ethereum are having a daily pullback, but the Ethereum outperformance hasn‘t been lost. The base building hypothesis grows in strength, and overcoming the recent corrective highs followed by the 200-day moving averages, are the next medium-term objectives.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

HUI: The Illusionist's Trick Left Investors Speechless

Finance Press Release Finance Press Release 06.07.2021 15:52
The gold miners’ 2021 gains prompted a standing ovation among investors. However, they didn’t notice a magic trick until everything vanished.The Gold MinersAfter the HUI Index plunged by more than 10% and made all of its 2021 gains disappear, the magic trick left investors in a state of shock. But while Mr. Market still hasn’t sawed the HUI Index in half, the illusionist is likely gearing up for his greatest reveal. Case in point: while the Zig Zag Girl captivated audiences in the 1960s, the HUI Index’s zigzag correction leaves little to the imagination. And with the recent swoon a lot more than just smoke and mirrors, the HUI Index’s short-term optimism will likely vanish into thin air.To explain, despite the profound drawdown, the HUI Index hasn’t been able to muster a typical relief rally. Moreover, with ominous signals increasing week by week, if history rhymes (as it tends to), the HUI Index will likely find medium-term support in the 100-to-150 range. For context, high-end 2020 support implies a move back to 150, while low-end 2015 support implies a move back to 100. And yes, it could really happen, even though such predictions seem unthinkable.Please see below:Furthermore, the underperformance of gold stocks relative to gold is also worthy of attention. With the junior miners often performing the worst during medium-term drawdowns, short positions in the GDXJ ETF will likely offer the best risk-reward ratio. To that point, if you held firm in 2008 and 2013 and maintained your short positions, you almost certainly realized substantial profits. And while there are instances when it’s wise to exit one’s short positions, the prospect of missing out on the forthcoming slide makes it quite risky.To explain, I warned that the recent plunge was weeks in the making:I wrote the following about the week beginning on May 24:What happened three weeks ago was that gold rallied by almost $30 ($28.60) and at the same time, the HUI – a flagship proxy for gold stocks… Declined by 1.37. In other words, gold stocks completely ignored gold’s gains. That shows exceptional weakness on the weekly basis and is a very bearish sign for the following weeks.Thus, while the HUI Index remains steady for the time being, back in 2008, the ominous underperformance signaled that trouble was ahead. To explain, right before the huge slide in late September and early October, gold was still moving to new intraday highs; the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market suffered materially. If stocks hadn’t declined back then so profoundly, gold stocks’ underperformance relative to gold would have likely been present but more moderate.Nonetheless, the HUI Index’s bearish head & shoulders pattern is extremely concerning. When the HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02. Thus, three of the biggest declines in the mining stocks (I’m using the HUI Index as a proxy here), all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern.In addition, when the HUI Index peaked on Sep. 21, 2012, that was just the initial high in gold. At that time, the S&P 500 was moving back and forth with lower highs. And what was the eventual climax? Well, gold made a new high before peaking on Oct. 5. In conjunction, the S&P 500 almost (!) moved to new highs, and despite the bullish tailwinds from both parties, the HUI Index didn’t reach new heights. The bottom line? The similarity to how the final counter-trend rally ended in 2012 (and to a smaller extent in 2008) remains uncanny.As a result, we’re confronted with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early-2020 high.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.Keep in mind though: scenario #2 most likely requires equities to participate. In 2008 and 2020, sharp drawdowns in the HUI Index coincided with significant drawdowns of the S&P 500. However, with the Fed turning hawkish and investors extremely allergic to higher interest rates, the likelihood of a three-peat remains relatively high.If we turn our attention to the GDX ETF, lower highs and lower lows have become mainstays of the senior miners’ recent performance. Moreover, while the GDX ETF’s swift drawdown occurred on significant volume, the recent bounce hasn’t garnered much optimism. As a result, we’re likely witnessing a corrective upswing within a medium-term downtrend.Please see below:Finally, comparing the current price action to the behavior that we witnessed in 2012, back then, the GDX ETF corrected back to the 38.2% Fibonacci retracement level and then continued to make lower highs before eventually rolling over. And today, the senior miners are displaying similar weakness. Gold stocks are declining even while correcting, and the lack of meaningful upswings signals that the current environment is very bearish.In conclusion, while gold, silver, and mining stocks will attempt to pull rabbits out of their hats, the bunnies’ bounce will likely fade over the medium term. Moreover, with the precious metals searching for a magic bullet that likely doesn’t exist, another disappointment could leave investors without an ace in the hole. The bottom line? While gold, silver, and mining stocks will likely dazzle the crowd in the years to come, their wizardry could resemble black magic in the coming months.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
New York Climate Week: A Call for Urgent and Collective Climate Action

The Rise of Precious Metals and Commodities

Monica Kingsley Monica Kingsley 06.07.2021 16:15
S&P 500 closed Friday on a strong note, and as the holiday-shortened week is usually accompanied by positive seasonality, it would be reasonable to expect extension of gains. Is therre any show stopper at the moment? Credit markets are strong and in a risk-on mode – but what about the odd strength in long-dated Treasuries? Are the stock traders getting it right – or the bond ones? Remember that such divergencies can take a long time to resolve, and don‘t require immediate action. It‘s the same with the Industrials and Transports in the Dow theory. So, don‘t jump to S&P 500 bearish conclusions just yet.The stock market advance is characterized by improving market breadth, and a fresh push of reflationary trades. It would have been all too easy to lose one‘s cool post the June FOMC, and declare value to have topped – while tech amply helped by heavyweights powers the S&P 500 advance, value performance ain‘t too shabby. Even financials are weathering relatively well the retreating yields pressure, counterbalanced by the Fed relaxing share buybacks and dividend rules. Real assets including energy are surging again, and the Fed‘s bluff is being called.Little wonder when all the central bank did, was influence inflation expectations, and precisely nothing about current inflation – let alone pressures in the pipeline. I‘ve discussed the cost-push pressures building up, leading to inflation becoming unanchored. Add job market pressures beyond the difficulties in hiring, and the issue grows more persistent. While it‘s not biting overly noticeably for the financial markets to take notice the way they did in Mar and early May, left unattended, inflation would come to bite in the not so distant future. The takeaway is that with the constant redefinitions of what transitory should mean now, the concept of Fed as inflation fighter is subject to well deserved mockery.Look for the lull in Treasury market to continue, it‘s almost goldilocks economy as the monetary and fiscal support rivals wartime footing circumstances. Makes you wonder what would be on the table if we were faced with a recession. Thankfully, that‘s not on the horizon – we‘re in a multi-year economic expansion that won‘t end with the tapering or tightening games this year or next, not in the least.As I wrote on Friday, thinking also about the value strength:(…) accompanied by the Treasury yields‘ inability to retreat further. Near the top of its recent range, the 10-year Treasury yield is trading within the summer bond market calm atmosphere, and so are the beaten down inflation expectations at a time when the dollar is catching a strong bid. Notably, commodities haven‘t been derailed in the least, so pay no attention to lumber – the real assets‘ world is much richer and profitable.Remember the big picture – fiscal stimulus very much on, monetary accomodation aggressive, no worries about the economic expansion slowing down. Pickup in economic activity associated with inventories replenishment is sure to be kicking reliably on. Open long profits in the S&P 500 and Nasdaq can keep growing!Precious metals are duly reacting today to the pressures to go higher, building up for weeks. Look for miners to confirm the upswing that isn‘t going unnoticed in the commodities arena either.Crude oil took off on the absence of OPEC+ deal, but I am looking for it to base in the $70s before we see triple digit crude prices next week. The Brent crude lag looks a bit suspicious to me, so a little breather might be in order here.Crypto bears are getting a beating, with the odds favoring upswing to continue – the Ethereum outperformance of Bitcoin is conducive to the accumulation thesis I had been mentioning for weeks.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is going higher, and so is Nasdaq. The decreasing volume might usher in a little consolidation over time but there is no imminent reason to call for one today.Credit MarketsCredit markets performance remains strong across the board, but I am looking for TLT to face headwinds soon.Technology and ValueTech is up, value is up – what else to wish for? Defending the gained ground, that is.Gold, Silver and MinersGold is attempting to go higher, and based on the yield-inflation spread getting ever more compressed and a tad off inflation expectations, I‘m looking for miners to confirm the upcoming gold advance.Silver and copper are also building energy to go higher, and it‘s my view they would surge to recapture a good portion of the post FOMC decline before taking a breather.Bitcoin and EthereumStrong base building in the cryptos continues, and the bulls have the tactical advange at the moment.SummaryS&P 500 keeps trading near its highs, with a bullish bias, characterized by sectoral rotations and improving market breadth including in Nasdaq. A little sideways consolidation appears looming, but I am looking for a positive week.Gold and silver bulls are getting ever more strongly on the move, and Friday‘s upper knot is a preview of things to come – the depressed nominal yields with unrelenting inflation are helping attract buying interest.Crude oil enjoyed more than its fair share of good news, but remains bullish today‘s tremors notwithstanding. Great future ahead for black gold, the Saudi Arabia – UAE spat regardless.Bitcoin and Ethereum bulls are the favored side these days as the weekly charts posture isn‘t yet in jeopardy. The basing pattern looks to be one of accumulation rather than distribution.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
US Industry Shows Strength as Inflation Expectations Decline

Bitcoin, stay on course

Korbinian Koller Korbinian Koller 12.07.2021 14:07
We post live entries and exits of trades in our free Telegram channel . We are not doing this to encourage shadow trading since, in principle, one should not trade another person’s trading system. This free service is provided for confidence-building, especially when jittery markets like right now tempt amateurs to stray from their approach. Confidence to use it as a confirmation tool when your signals align and provide a discussion board to share doubts and ask questions in difficult times.Don’t let Bitcoin get away, it has a high probability to take off soon.Bitcoin is going through a rough patch of building a bottom. When inherently volatile Bitcoin gets squeezed into tight sideways ranges, low-risk entry points get harder to execute. Over time, there is no directional follow-through, and a trader’s confidence gets weary. Typically, this leads to a low probability of being exposed to the final push-through move. One quickly can accumulate losing trades now trying to chase or otherwise catch a trade with a different than usual entry approach.BTC-USD, Weekly Chart, Cyclical probabilities:Bitcoin in US-Dollar, weekly chart as of July 11th, 2021.Why are we warning to keep focused here? Looks can be deceiving. Most find Bitcoin less in the limelight right now. Do not underestimate Bitcoins’ explosive volatility! The weekly chart above shows Bitcoin at precisely the same week in July a year ago. A similar picture is presented. A ten-week congestion zone of price uncertainties and battles between bulls and bears. Then in less than a month, prices shot up by 36%. We were followed by a quick retracement, not even retesting breakout levels. The rest is history with a steep push to US$64,895, a 560% move.In other words, we saw from the week of the 13th of July last year a more than 6x move out of the blue.Who says this could not happen again this year around?BTC-USD, Weekly Chart, Anything is possible:Bitcoin in US-Dollar, weekly chart as of July 11th, 2021.No one knows the future, but we know that Bitcoin is a highly cyclical and seasonal trading vehicle. It would be nothing less than foolish to rule out Bitcoin moving quickly again.All it takes is a surprise news item, and the picture of the market can change.The chart above, again a weekly picture, shows a similar high volume fractal support zone (see histogram to the right side of the chart). Again, battles for seven weeks now between bears and bulls, with a likely high point of resolve within reach. When there is a trading zone with long candle wicks, there is a chance that both bears and bulls experienced losing trades getting stopped out. At this time, confidence can wane, and it is at this time, staying on course is critical. Plan your trades and trade your plan.S&P 500, Monthly Chart, Stock market blow-off top:S&P 500 in US-Dollar, monthly chart as of July 11th, 2021.But cyclical reasons aren’t the only edge considered. We stack a minimum of twelve edges before we consider a play and look for low-risk entry points. The monthly chart of the S&P 500 index shows staggering advances over the last twelve years. What is different in this final leg up over the previous fifteen months is its size. The price has nearly doubled. In addition, you can find the absence of a significant retracement. Also pointing towards a possible blow-off top is the steepness of the angel of price advancement (see while lines, the final stretch to the very right is much steeper versus the previous legs up).While prices have continuously revisited either the twenty simple moving average or the forty simple moving average (turquoise line), the recent price shoot-up has stretched far from these averages. What goes up must come down. Should the stock market surrender some of its profits, money could likely flow towards Bitcoin again.BTC-USD, Weekly Chart, Bitcoin, stay on course:Bitcoin in US-Dollar, monthly chart as of July 11th, 2021.A final look at Bitcoin from a monthly time frame perspective shows a possibility of a harmonious continuation pattern. Bitcoin seems to find support near the 50% Fibonacci retracement level. In addition, it gets fractal volume analysis supply support (green horizontal box). The candlestick wicks to the downside of the last three months indicate support, and prices get rejected from lower levels. So far, and this month’s candle isn’t finished printing yet, we have a smooth rollover turning point in the making.Bitcoin, stay on course:We recommend not to experiment with a different approach to the markets when you are in a rut. Never follow other people’s recommendations as a reason for making a trade. Use principles only as reasons to stack your edges. Follow as close as possible a prefabricated plan you made for executing your trades to be emotionally uninfluenced by surprising market behavior in real-time. When in doubt, stay out is also a term that comes to mind, and it is undoubtedly always a good decision to reduce position size when unexpected losing trades make you feel uneasy. Use any methods to keep your confidence and coolness to accept the risks when exposing your money to the market.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|July 12th, 2021|Tags: Bitcoin, bitcoin consolidation, Bitcoin mining, crypto analysis, Crypto Bull, crypto chartbook, crypto mining, low risk, quad exit, technical analysis, trading education|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Gold: High Time to Move Out of the Penthouse

Finance Press Release Finance Press Release 12.07.2021 14:29
Gold’s days in a glamorous apartment at the top of the PMs’ building are numbered. We’d better prepare for a rapid elevator ride to the first floor.The Gold MinersWith the gold miners essentially running laps on the treadmill, the HUI Index, the GDX ETF, and the GDXJ ETF are working extremely hard but making little progress. And with the gambit resulting in ‘one step forward, two steps back,’ frustrating exhaustion has mining stocks questioning their every move. To that point, even though the trio transitioned from the conveyor belt to the stairs in recent weeks, history shows that slow climbs often culminate with elevator rides lower. Should we expect a different outcome this time around?Gold ended the week in the green (up by $27.30), but the HUI Index was stuck in the red (down by 1.39). This is extremely noteworthy, as a similar divergence occurred at the end of May. For context, when the yellow metal rallied by $28.60 in a week back then, the HUI Index fell by 1.37 index points.In the following weeks, the HUI Index declined by about 50 index points, while gold declined by about $150.And with the ominous imbalance preceding the pair’s precipitous declines, again, should we expect a different outcome this time around?Please see below:To explain, with the HUI Index unable to muster any meaningful relief rallies, I warned that the recent plunge was weeks in the making:I wrote the following about the week beginning on May 24:What happened three weeks ago was that gold rallied by almost $30 ($28.60) and at the same time, the HUI – a flagship proxy for the gold stocks… Declined by 1.37. In other words, gold stocks completely ignored gold’s gains. That shows exceptional weakness on the weekly basis and is a very bearish sign for the following weeks.To that point, with the HUI Index’s ominous signals only increasing, if history rhymes (as it tends to), medium-term support will likely materialize in the 100-to-150 range. For context, high-end 2020 support implies a move back to 150, while low-end 2015 support implies a move back to 100. And yes, it could really happen, even though such predictions seem unthinkable.Furthermore, with the junior miners often suffering the most during medium-term drawdowns, short positions in the GDXJ ETF will likely offer the best risk-reward ratio. For context, if you held firm in 2008 and 2013 and maintained your short positions, you almost certainly realized substantial profits. And while there are instances when it’s wise to exit one’s short positions, the prospect of missing out on the forthcoming slide makes it quite risky.Even more bearish, a drastic underperformance by the HUI Index also preceded the bloodbath in 2008. To explain, right before the huge slide in late September and early October, gold was still moving to new intraday highs; the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market suffered materially. If stocks didn’t decline back then so profoundly, gold stocks’ underperformance relative to gold would have likely been present but more moderate.Nonetheless, the HUI Index’s bearish head-and-shoulders pattern is already sounding the alarm. When the HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02. Thus, three of the biggest declines in the mining stocks (I’m using the HUI Index as a proxy here), all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern.In addition, when the HUI Index peaked on Sep. 21, 2012, that was just the initial high in gold. At that time, the S&P 500 was moving back and forth with lower highs. And what was the eventual climax? Well, gold made a new high before peaking on Oct. 5. In conjunction, the S&P 500 almost (!) moved to new highs, and despite bullish tailwinds from both parties, the HUI Index didn’t reach new heights. The bottom line? The similarity to how the final counter-trend rally ended in 2012 (and to a smaller extent in 2008) remains uncanny.As a result, we’re confronted with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early-2020 low.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.Keep in mind though: scenario #2 most likely requires equities to participate. In 2008 and 2020, sharp drawdowns in the HUI Index coincided with significant drawdowns of the S&P 500. However, with the Fed turning hawkish and investors extremely allergic to higher interest rates, the likelihood of a three-peat remains relatively high.As further evidence, let’s analyze the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, the senior miners celebrated gold’s strength by falling to their previous lows on Jul. 8. If this is not a shocking proof of extreme underperformance, then I don’t know what would be one.Please see below:Regarding the latter, on Jun. 29 (the June low), the GDXJ ETF closed at $45.83. And on Jul. 8, it closed at $45.53. Ladies and gentlemen, we had a breakdown.Of course, we see that the breakdown was invalidated, but the fact that it moved to new lows while gold rallied is extremely bearish. It seems like the junior miners simply can’t wait to break to new lows.The bottom line?If gold repeats its June slide, it will decline by about $150. Taking the entire decline into account (since August 2020), for every $1 that gold fell, on average, the GDX was down by about 4 cents (3.945 cents) and GDXJ was down by about 6.5 cents (6.504 cents).This means that if gold was to fall by about $150 and miners declined just as they did so far in the past year (no special out- or underperformance), they would be likely to fall by $5.92 (GDX) and $9.76 (GDXJ). Given the Jul. 8 closing prices, this would imply price moves to $27.76 (GDX) and $35.78 (GDXJ). So, the profits on the current short position are likely to soar.In conclusion, while the HUI Index, the GDX ETF and the GDXJ ETF are likely to have some small breathers along the way, their sprints lower are likely far from finished. When we combine their extreme underperformance relative to gold with the bearish 2008 and 2012 analogues, the gold miners might just huff and puff and blow their own houses down. As a result, while 2021 has already delivered two desperate pleas for more oxygen, the trio will likely require a third ventilator in the coming months. The outlook for the following weeks remains very bearish.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Silver, a new way to think

Korbinian Koller Korbinian Koller 15.07.2021 15:33
For example, let us assume grocery prices have increased by 33% within the last twelve months. This would mean that if you had US$150,000 in your bank account, they would now only be worth US$100,000. But you rarely think this way. Usually, you always take your currency as the base and instead think that grocery prices went up.What is required is to compare values. This is especially essential when it comes to wealth preservation. Let us assume you have a 401k. What this means is you have your value stored in the stock market. The stock market is highly overvalued. And you get for your stocks and bonds dollars at maturity. Hence, you own something expensive, but you receive possibly little purchasing value in exchange. In other words, you are exposed to risk.If you would like to add something to your long-term investment plan, you should look for value compared to what you already own. You should purchase cheap value. And Silver is a good bet.S&P 500 versus Gold in US-Dollar, Monthly Chart, History repeats itself:S&P 500 versus Gold in US-Dollar, monthly chart as of July 15th, 2021.Starting from the left on the above monthly chart comparing the S&P 500 versus Gold, the stock market began to explode in 1995. While the stock market had a bubble build up tripling in price in the following six years, Gold lost 33% of its luster. Eight years later, the picture was reversed. Now Gold had run up three hundred percent, and the stock market was cut in half.As of late, we see a similar picture. While the Gold market is trading sideways to down, the stock market had another substantial seventy percent run-up. From a technical perspective view, this run-up has characteristics of a blow-off top. We expect a reversal and would not be surprised to see the stock market losing 40% or more and, in turn, Gold nearly doubling.Weekly Chart, Silver in US-Dollar, Bet on the strong horse:Silver versus Gold in US-Dollar, weekly chart as of July 15th, 2021.Gold is the leader in the precious metal sector and enjoys popularity in wealth preservation, but we find Silver’s price development to be the more aggressive one. If you look at the weekly chart above, you will find Silver pushing stronger towards another leg up than Gold has over the last eleven months. Hence, we suspect Silver to outpace Gold by percentage in the next leg up. Silver in US-Dollar, Monthly Chart, Fifty/fifty and rising:Silver in US-Dollar, monthly chart as of July 15th, 2021.We can make out that Silver broke out of a multi-year sideways range on the monthly chart above. It moved substantially, building the first leg last year and building a one-year-long bull flag, which is about to resolve itself.As of right now, the odds are only 50/50 for Silver monthly prices to rise, but if prices hold current levels, these odds can change dramatically within the next two weeks. A price close above US$26.07 by the end of this monthly candle will make us an aggressive buyer in August.Silver, a new way to think:One way to illustrate how deep the thinking in currency reaches is the phenomenon of the 99-cent store. The illusion that anything below a dollar is cheap created an empire (99only).Another one is the abnormal behavior of the markets in the denomination units of the currency at 1, 5, 10, 20, 50 and 100 dollars, for example. Below each of these units, value is perceived cheap, and above these increments, value is expensive. Consequently, stops are placed closely near these figures. Meaning it shouldn’t be underestimated how deeply these behaviors in relationship to currency are rooted. It requires proactive reconditioning, training, if you will, to think, in other units as a benchmark. You can use ounces of Gold or Silver and even Bitcoin. Practice this new way of translating cost and value to you, and you will have a heads-up to procrastinators who hang on to an old paradigm that does not actively reflect a measurement tool translating their wealth.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.By Korbinian Koller|July 15th, 2021|Tags: Gold/Silver-Ratio, low risk, S&P500/Gold-Ratio, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Bond Yields Slipping, How Long Can Inflation Be Transitory?

Finance Press Release Finance Press Release 15.07.2021 20:28
Since the big CPI and PPI prints earlier this week, markets have been trying to figure out direction and sentiment. What will be the outcome of continued higher inflation prints?Capital markets seem to be a bit confused as to what to do next. As Federal Reserve Chair Powell testified in front of House and Senate committees over the last two days, there doesn’t seem to be any additional clarity in my eyes.I wanted to wait until the Fed’s 2-day testimony concluded before publishing today’s opinion piece to gain any additional clarity on the markets.There is a conundrum that exists right now. We keep getting higher inflation readings, and the Fed has already telecasted that higher rates are in the cards in 2023 (maybe 2022). Inflation is a problem and needs to be tamed. One way of taming it is to raise interest rates. There are other tools at the Fed’s disposal to tame interest rates like tapering and more. The question becomes, at what point is action going to be taken?As the Fed testified in Congress yesterday and today, interest rates fell and the price action seemed anything but typical following Wednesday’s poor 30-year bond auction. We get it, the markets are addicted to low interest rates, but unless hyperinflation is the goal, it feels like something needs to change soon. When will the Fed begin tapering bond buying? How about some incremental tapering or very fractional interest rate increases such as an eighth of a percentage point or something? If something doesn’t change soon, we could be heading for a 1981 style inflationary environment. Rates are going to have to rise, and the stock market is not going to like it. However, action needs to be taken.Will the US equity markets be able to maintain their upward trajectory?All of this stimulus, decade-plus near-zero interest rates, bond buying, and market addiction to easy monetary policy will have repercussions eventually.Since we have been analyzing TLT, let’s take a look at the 30 Year Bond Futures:Figure 1 - U.S. Treasury Bond Futures July 8, 2021 - July 15, 2021, 1 Hour Candles Source stooq.comThe puzzling price action (or perhaps not so puzzling in retrospect given the 2-day Fed testimony) is the creep higher after the weak demand shown in Wednesday’s 30-year bond auction. If you were short bonds at this time via TLT or any product, things were looking good. Since that auction, we had the Fed testimony, which showed many select congress members pleading for interest rates to be kept low. Unfortunately, if rates remain at rock bottom levels, it seems like inflation could spiral out of control. This continued inflation would be bad for the American people.It is unusual price action; to say the least. The 30-year bond auction was priced at 2%, and demand was extraordinarily weak. There is a solid explanation of this most recent bond auction on Barrons.However, today, we have 30-year bonds catching a bid near 1.94%. Yes, it is illogical. Yes, markets can be illogical for extended periods.Looking at the 30-year bond from a perspective of yield:Figure 2 - U.S. 30 Year Treasury Bond Yield July 7, 2021 - July 15, 2021, 1 Hour Candles Source stooq.comFed’s James Bullard, Federal Reserve Bank of St. Louis President urged for tapering of bonds earlier today.At the time of writing, we have the bonds continuing to be bid with the $SPX moving lower. The message of the market is exhibiting signs of change in my eyes. I don’t want to sound any overall warning bells just yet, but I am tuned in all day, every business day.Now, let’s review the markets we are monitoring along with analyses on the other seven markets we are covering for Premium Subscribers.Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael ZorabedianStock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Trading, including technical trading, is speculative and high-risk. There is a substantial risk of loss involved in trading, and it is not suitable for everyone. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment when trading futures, foreign currencies, margined securities, shorting securities, and trading options. Risk capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Rafael Zorabedian, Sunshine Profits' employees, affiliates, as well as members of their families may have a short or long position in any securities, futures contracts, options or other financial instruments including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice. Past performance is not indicative of future results. There is a risk of loss in trading.
Boosting Stimulus: A Look at Recent Developments and Market Impact

USDX: A Crocodile Just About To Strike

Finance Press Release Finance Press Release 19.07.2021 15:06
Taking a sip from a crocodile pond is risky, but some animals try anyway. And die. Beware, as trying to profit from the PM’s pool now could end alike.Just as ignoring a crocodile hiding in plain sight, ignoring the USD Index is a dangerous activity. And while investors continue to drink from the pond, the greenback’s nose is literally perched at the water’s surface. The USD Index is currently consolidating below the neckline of its inverse (bullish) head & shoulders pattern, so its wide eyes are also glaringly visible. And with a strike liable to happen at any moment, a leap above 93 could make the USD Index devour gold, silver and mining stocks.To explain, the USD Index often soars during the summer months (major USDX rallies often start during the middle of the year), and while the greenback’s back-and-forth movement has uplifted the PMs, once the USDX resumes its likely uptrend, the former’s optimism could dissipate rather quickly. As a result, if the ambush ushers the USD Index above 93, the next stop is likely 98.Please see below:Furthermore, the seasonal thesis remains intact: I mentioned above that the USD Index often records material upswings during the middle of the year. And with the hunter’s disguise nearly always catching overzealous investors by surprise, will the next trap be any different?In fact, the USD index seems to be breaking above the neck level of its inverse head-and-shoulders formation at the moment of writing these words.The week started with a breakout, so there’s plenty of time for the markets to react before the next bigger break takes place (the next weekend). In other words, this week could be quite volatile and nothing like the previous weeks’ boredom. Gold, silver, and mining stocks might slide quite profoundly before we hear Friday’s closing bell.If you analyze the chart below, you can see that summertime surges have been mainstays on the USD Index’s historical record and double bottoms often signal the end of major declines or ignite significant rallies. For example, in 2004, 2005, 2008, 2011, 2014 and 2018, a retest of the lows (or close to them) occurred before the USD Index began its upward flights. In addition, back in 2008, U.S. equities’ plight added even more wind to the USD Index’s sails. And if the general stock market suffers another profound decline (along with gold miners and silver), a sharp re-rating of the USDX is likely in the cards.Please see below (quick reminder: you can click on the chart to enlarge it):On top of that, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, a profound uptrend is already in place.Please see below:As another important variable, the Euro Index’s recent symmetrical decline mirrors the drawdown that we witnessed in mid-2020. And if the Euro Index breaks below the neckline of its bearish head & shoulders pattern, the steep decline could usher the index back to the June 2020 lows or even lower. For context, the EUR/USD accounts for nearly 58% of the movement of the USD Index.In addition, when the Euro Index reached the neckline of its bearish H&S pattern in early April 2021, late September 2020, and late October 2020, a fierce rally ensued. However, this time around, the corrective upswing has been extremely weak. As a result, with lower highs and lower lows plaguing the Euro Index in recent weeks, it’s likely only a matter of time before the neckline breaks.Please see below:Even more relevant, the completion of the masterpiece could have a profound impact on gold, silver and mining stocks. To explain, gold continues to underperform the euro. If you analyze the bottom half of the chart above, you can see that material upswings in the Euro Index have resulted in diminishing marginal returns for the yellow metal. Thus, the relative weakness is an ominous sign. That’s another point for the bearish price prediction for gold.The bottom line?Once the momentum unfolds, ~94.5 is likely the USD Index’s first stop, ~98 is likely the next stop, and the USDX will likely exceed 100 at some point over the medium or long term. Keep in mind though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, and the relative performance is what really matters.In conclusion, while gold, silver and mining stocks are increasingly treading water, the USD Index’s jaws are expanding. And with the greenback poised to take a bite out of the trio’s performance over the medium term, the precious metals could be in for a long and arduous recovery. However, after the drama unfolds, gold, silver and mining stocks are poised to continue their long-term secular uptrends.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Coca-Cola Reports Q2 Earnings Soon

Kseniya Medik Kseniya Medik 21.07.2021 10:24
What will happen?Coca-Cola, the US beverage giant, will reveal its earnings results for the second quarter on July 21 before the stock market opens (16:30 GMT+3). There is no exact time on the official website, but it’s said that the release will be followed by an investor conference call at 15:30 GMT+3.What to expect?Investors have optimistic forecasts over Coca-Cola’s earnings results, that’s why traders can consider buying the stock now! The soda titan claimed their sales came back to a positive area at the end of the first quarter signaling the company is on the way to a steady recovery after the pandemic. Thus, we might expect to see encouraging results this time. Actually, the stock price rose due to the positive expectations but dropped at the start of this week amid the risk-off sentiment and the overall stock sell-off.Main rival: PepsiCoIts main rival, PepsiCo, has already published its Q2 earnings results, which were better than expected. PepsiCo claimed that its soda sales spiked by 21% due to higher prices and increasing demand compared to 2020 when the Covid-19 lockdowns were widespread. As a result, the stock price surged significantly after the data was announced.Will Coca-Cola follow its main competitor?Very likely! Coke is sold more than Pepsi in restaurants and sports events, so maybe we will see a huge rebound of Coca-Cola’s sales now when social-distancing restrictions have been eased. Tech analysisLook at the daily chart. Isn’t it look like a cup-and-handle pattern to you? If Coke breaks above the $56.50 resistance level, it may rocket to the psychological mark of $60.00. Even if the stock reverses down, the 50- and 100-day moving averages of $55.00 and $53.50 will support the asset from falling further.Download the FBS Trader app to trade anytime anywhere! For personal computer or laptop, use MetaTrader 5!
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Junior Miners: New Yearly Lows! Will We See a Further Drop?

Finance Press Release Finance Press Release 21.07.2021 13:38
It seems that choosing GDXJ to short the PMs was a good decision – juniors closed the day at new 2021 lows. Will our profits only grow from now on?Gold’s yesterday’s intraday attempt to rally was not bullish. On the contrary, it was what usually happens right before a big slide. Especially given the USDX’s breakout.Let’s start with the latter.Yesterday there was a second session in a row when the USD Index closed above the neck level of the broad (~yearly) inverse head-and-shoulders pattern. Furthermore, it’s been moving slightly higher in today’s session, at least so far.This is a very bullish price action – the USDX’s breakout was not accidental, nor was it based on geopolitical news (the latter tends to trigger temporary moves that are then reversed). Additionally, it was preceded by a consolidation. Consequently, it seems that this breakout has a huge chance of being confirmed (we need just one more – today’s – daily close) and followed by another sharp rally. The previous highs at about 94.5 are the initial upside target, but based on the inverse H&S pattern, the USDX is likely to rally to about 98.Therefore, what just happened (the breakout above the formation’s neckline) has really bullish implications for the U.S. currency. And since the latter tends to move in the opposite direction to gold, silver, and mining stocks, it’s also very bearish for them.Gold and Its StocksThat would be enough on its own to make the outlook for the PMs bearish, but we have many more bearish indications, and some of them are truly profound. The most bearish confirmation of the bearish price prediction for gold doesn’t come from the USD Index but from the extreme underperformance of gold stocks relative to gold.The GDX ETF (senior gold miners) moved below the recent lows, and it closed the day below the neck level of a head-and-shoulders pattern based on the 4-hour candlestick chart. At the same time, the GLD ETF is still relatively close to the middle of its previous decline. If the comparison is still unclear, please consider the mid-May bottom. The GLD ETF closed just slightly below it, while the GDX a few dollars below it.And if you think this kind of relative weakness is bearish, just wait until you see what the junior mining stocks did.Junior miners declined not only below the neck level of the recent head-and-shoulders pattern (very clearly in both: intraday and closing price terms), but they actually closed the day at new 2021 lows! And they didn’t invalidate this breakdown yesterday, despite the intraday attempt!There are two markets that primarily impact the performance of the junior mining stocks. One is gold, and the other is the general stock market. Gold is now about $140 above its 2021 lows, while the S&P 500 is over 16% above its 2021 highs. And yet, the GDXJ is below its previous 2021 lows. It seems that choosing junior miners as a proxy for shorting the precious metals sector was a good decision – our profits are rising rapidly, and it seems that they are going to soar much more in the following weeks.What’s more, juniors are underperforming senior gold miners too. You can see that by comparing the two previous charts and by examining their ratio.The ratio declines when junior miners underperform seniors. This happens often when the general stock market declines – juniors are more correlated with the latter than the seniors. Interestingly, juniors underperformed recently, even while stocks were strong. If the general stock market declines from here, the underperformance is likely to take an epic form – just as it did in early 2020.This level of underperformance and weakness is truly breathtaking.If miners – in particular, juniors – were able to decline so much without meaningful help from gold and the general stock market, just imagine the carnage they will suffer once this “help” finally arrives.And given the breakout above the neck level of the inverse head-and-shoulders pattern in the USD Index, it seems like the key trigger to set the wheels in motion is already here.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

The Delta Variant Spreads. Will It Mutate Gold?

Finance Press Release Finance Press Release 22.07.2021 14:35
The coronavirus strikes back! It’s bad news for almost everyone and everything… except for merciless gold.So, were you hoping that the epidemic was over? After all, millions of people got vaccinated, and the economy is booming. Restrictions have been generally lifted, the Fed removed the parts related to the pandemic from its monetary policy statement… why bother then?The answer is: Delta. And I’m referring to the Sars-Cov-2 variant that causes Covid-19. As you know, viruses mutate from time to time as they spread and replicate. Delta is one of such mutations. Most mutations are not dangerous or even dumb (they weaken the viruses). But the problem with Delta is that it’s “the fastest and fittest” of all coronavirus variants, as the WHO described it. Just think about Rambo on steroids or a witcher that has just taken all his potions. Oh… Anyway, you got the point.In particular, Delta is much more contagious than the original strain, and is spreading about twice as fast. A person infected with the classic version of the coronavirus can spread it to 2.5 other people, while a person with Delta can infect 3.5-4 other people. Delta might also be more severe and more lethal than the original strain.The good news is that many people have been vaccinated and the vaccines (especially the mRNA-type) protect nicely against Delta. However, the bad news is that many people still haven’t gotten the shots, for many reasons. The tricky part here is that, given the high transmission rate of Delta, we would need 90% or even more people to be vaccinated to reach herd immunity, which is still a song of the future.High transmissibility is the reason why Delta has become the dominant strain in the globe. It also increases the risk of further, potentially even more dangerous, mutations (more transmissions, more chances to evolve into Terminator). In other words, Delta’s fast transmission could reignite the pandemic. As the chart below shows, this is actually already happening.As one can see, Delta reversed the trend of the declining number of new cases, spreading particularly quickly in the United Kingdom. But the U.S. Covid-19 cases also soared, surging 70% last week, while deaths went up 26%.Implications for GoldWhat do rising cases of Delta mean for gold? Well, I would say that Delta is fundamentally positive for gold and could mutate it into a more bullish strain. If the pandemic accelerates, governments may reintroduce some of the sanitary restrictions or even lockdowns. A new wave of the epidemic would also increase the chances of a big infrastructure bill in the US and other fiscal stimuli, while the Fed would likely remain dovish for longer than it would without Delta. So, inflation could intensify even further, while the real interest rates would drop. Therefore, concerned investors would turn to inflation hedges and safe havens such as gold.However, what’s described above is the medium-term effects that Delta would cause if it triggered a new wave of cases and restrictions. In the short run, however, gold may decline, as worried investors would sell the assets and turn to the US dollar. This is what we saw in March 2020 but also on Monday (July 19, 2021). As the chart below shows, the London price of gold has declined, as the stronger greenback counterweighted the decline in the equities (Dow plunged more than 2%) and bond yields.Furthermore, the next Great Lockdown is unlikely. Even if the government reintroduces some restrictions, their economic impact will be much smaller than during the earlier waves, as economies have adapted to operating under the epidemiological regime. Importantly, a new wave would be mainly limited to unvaccinated people, which would reduce the burden of health care systems and chances of hard lockdowns.However, Monday’s equity selloff suggests a change in the market narrative. Investors have possibly realized that they had too optimistic expectations – economic growth may actually be slower than they thought. They have priced in a very strong recovery, which doesn’t have to materialize if a new pandemic wave hits the economy. Slower growth plus high inflation equals stagflation, gold’s favorite environment.Having said that, it may take a while until gold rallies, as the end of reflation trade may also imply that some investors will sell commodities, including, to some extent, gold. Also, please note that the optimism and gains have quickly returned to the stock market, so the economic impact of Delta may be limited.If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

USDX Defends Its Growth Thesis - Will It Pass With Honors?

Finance Press Release Finance Press Release 26.07.2021 16:10
The USDX rose above its inverse H&S pattern neckline. After months-long preparation, is it ready to take its final test… and shine?The USD Index (USDX)With investors putting the USD Index through a rigorous exam last week (ending Jul. 23), months of study helped the greenback pass the test with flying colors. Case in point: with the USD Index rising above the neckline of its inverse (bullish) head & shoulders pattern, the head implies a medium-term target of roughly 98. On top of that, with the USD Index’s textbook validation adding to the bullish momentum last week – with the greenback verifying its recent breakout and responding with further strength – the U.S. dollar is likely to graduate with honors in the coming months.What’s more, the bullish breakout was further validated when the USD Index closed the week above the neck level of its H&S pattern, and it’s difficult to imagine a more sanguine sign for the U.S. dollar. Thus, with the greenback poised to move sharply higher in the coming weeks, gold, silver and mining stocks are likely to head in the opposite direction.In addition, the USD Index often sizzles in the summer sun. To explain, major USDX rallies often start during the middle of the year, and with the dollar’s bullish IQ often rising with the temperature, gold, silver and mining stocks will likely feel the heat over the medium term.If you analyze the chart below, you can see that summertime surges have been mainstays on the USD Index’s historical record and double bottoms often signal the end of major declines or ignite significant rallies. For example, in 2004, 2005, 2008, 2011, 2014 and 2018, a retest of the lows (or close to them) occurred before the USD Index began its upward flights. In addition, back in 2008, U.S. equities’ plight added even more wind to the USD Index’s sails. And if the general stock market suffers another profound decline (along with gold miners and silver), a sharp re-rating of the USDX is likely in the cards.Please see below (quick reminder: you can click on the chart to enlarge it):On top of that, the eye in the sky doesn’t lie. And with the USDX’s long-term breakout clearly visible, the smart money is already backing the greenback.Please see below:As further evidence, the latest Commitments of Traders (COT) report shows that non-commercial (speculative) futures traders have increased their long exposure to the U.S. dollar (the light blue line below). More importantly, though, with longs bouncing off a roughly 10-year low and the current positioning still well below the highs set in previous years, the U.S. dollar still has plenty of room to run.Source: COTFinally, as the polar opposite of the USD Index, the Euro Index’s recent symmetrical decline mirrors the drawdown that we witnessed in mid-2020. And while the breakdown below the neckline of its bearish head & shoulders pattern still requires further verification, a continuation of the trend could usher the index back to the June 2020 lows or even lower. For context, the EUR/USD accounts for nearly 58% of the movement of the USD Index.In addition, when the Euro Index reached the neckline of its bearish H&S pattern in early April 2021, late September 2020, and late October 2020, a fierce rally ensued. However, this time around, the corrective upswing has been extremely weak. As a result, with lower highs and lower lows plaguing the Euro Index in recent weeks, it’s likely only a matter of time before the neckline officially breaks.Please see below:Even more relevant, the completion of the masterpiece could have a profound impact on gold, silver and mining stocks. To explain, gold continues to underperform the euro. If you analyze the bottom half of the chart above, you can see that material upswings in the Euro Index have resulted in diminishing marginal returns for the yellow metal. Thus, the relative weakness is an ominous sign. That’s another point for the bearish price prediction for gold.The bottom line?Once the momentum unfolds, ~94.5 is likely the USD Index’s first stop, ~98 is likely the next stop, and the USDX will likely exceed 100 at some point over the medium or long term. Keep in mind though: we’re not bullish on the greenback because of the U.S.’ absolute outperformance. It’s because the region is fundamentally outperforming the Eurozone, and the relative performance is what really matters.In conclusion, the USD Index will likely emerge victorious in this epic battle of wits. Moreover, with the GDXJ ETF (our short position) avoiding mirroring gold’s recent strength, it seems that when the USDX finally does rally profoundly, junior mining stocks will fall substantially. However, following a profound climax, gold, silver and mining stocks will likely resume their secular uptrends.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Gold Jumps for Joy Only to Hit the Ceiling… Hard

Finance Press Release Finance Press Release 02.08.2021 16:19
Powell’s recent dovish remarks started a sugar high among investors. However, it seems like the hangover has already begun.The Gold MinersWhile gold, silver and mining stocks jumped for joy following Fed Chairman Jerome Powell’s dovish remarks on Jul. 28, their sugar high ended on Jul. 30. And while I warned that FOMC press conferences often elicit short-term bursts of optimism, it was likely another case of ‘been there, done that.’I wrote prior to the announcement:While the PMs may record a short-term bounce – which often occurs following Powell’s pressers – lower lows are still likely to materialize in the coming months.In the meantime, though, did you notice the tiny buy signal from the HUI Index’s stochastic indicator? And taking that into consideration, is it time to shift to the long side of the trade? Well, for one, it seems very likely that gold miners are declining similarly to how they declined in 2008 and 2012-2013. In both cases, there were local corrections within the decline. As a result, the recent strength does not justify adjusting our short positions in the junior mining stocks, and I continue to view them as prudent from the risk to reward point of view.Second, after the HUI Index recorded an identical short-term buy signal in late 2012 – when the index’s stochastic indicator was already below the 20 level (around 10) and the index was in the process of forming the right shoulder of a huge, medium-term head-and-shoulders pattern – the HUI Index moved slightly higher, consolidated, and then fell off a cliff.Please see below:Can you see the HUI’s rally at the end of 2012 that followed a small buy signal from the stochastic indicator? I marked it with a purple, dashed line.No? That’s because it’s been practically nonexistent. The HUI Index moved higher by so little that it’s impossible to see it from the long-term point of view.With the shape of gold’s recent price action, its RSI, and its MACD indicators all mirroring the bearish signals that we witnessed back in December 2012, the current setup signals that we’re likely headed for a similar swoon. Thus, with both gold and the HUI Index sounding the alarm, if the bullish momentum continues, it’s likely to be very limited in terms of size and duration. Conversely, the following slide is likely to be truly profound.For context, I warned previously that the miners’ drastic underperformance of gold was an extremely bearish sign. I wrote the following about the week beginning on May 24:(…) gold rallied by almost $30 ($28.60) and at the same time, the HUI – a flagship proxy for the gold stocks… Declined by 1.37. In other words, gold stocks completely ignored gold’s gains. That shows exceptional weakness on the weekly basis and is a very bearish sign for the following weeks.If it wasn’t extreme enough, we saw this one more time. Precisely, something similar happened during the week beginning on July 6. The gold price rallied by $27.40, and the HUI Index declined by 1.39.Likewise, with the HUI Index’s ominous signals still present, if history rhymes (as it tends to), medium-term support will likely materialize in the 100-to-150 range. For context, high-end 2020 support implies a move back to 150, while low-end 2015 support implies a move back to 100. And yes, it could really happen, even though such predictions seem unthinkable.In addition, the drastic underperformance of the HUI Index also preceded the bloodbath in 2008. To explain, right before the huge slide in late September and early October, gold was still moving to new intraday highs; the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market suffered materially. If stocks didn’t decline back then so profoundly, gold stocks’ underperformance relative to gold would have likely been present but more moderate.Nonetheless, bearish head & shoulders patterns have often been precursors to monumental collapses. For example, when the HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02. Thus, three of the biggest declines in the gold mining stocks (I’m using the HUI Index as a proxy here) all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern.Furthermore, when the HUI Index peaked on Sep. 21, 2012, that was just the initial high in gold. At that time, the S&P 500 was moving back and forth with lower highs. And what was the eventual climax? Well, gold made a new high before peaking on Oct. 5. In conjunction, the S&P 500 almost (!) moved to new highs, and despite bullish tailwinds from both parties, the HUI Index didn’t reach new heights. The bottom line? The similarity to how the final counter-trend rally ended in 2012 (and to a smaller extent in 2008) remains uncanny.As a result, we’re confronted with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early-2020 low.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.In both cases, the forecast for silver, gold, and mining stocks is extremely bearish for the next several months.As further evidence, let’s compare the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, the senior miners’ (GDX) RSI rose above 50 last week. However, the milestone preceded several corrective tops in 2020 and 2021. Thus, last week’s Fed-induced strength has only broadened the right shoulder of its bearish H&S pattern, and if completed, the size of the head implies a drawdown to roughly $28.Please see below:Meanwhile, the GDXJ ETF invalidated the breakdown below the neckline of its bearish H&S pattern last week. However, with the milestone likely a speed bump along the junior miners’ bearish journey, a mosaic of indications signal that their medium-term outlook remains quite somber. For context, with the junior miners’ RSI at 48.35, several flirtations with 50 coincided with the short-term peaks in 2021 and were followed by material declines. I marked these cases with red ellipses. And yes, it was also the case during the final corrective pre-slide upswing in March 2020.The bottom line?If gold repeats its June slide, it will decline by about $150. Taking the entire decline into account (since August 2020), for every $1 that gold fell, on average, the GDX was down by about 4 cents (3.945 cents) and GDXJ was down by about 6.5 cents (6.504 cents).This means that if gold was to fall by about $150 and miners declined just as they did in the past year (no special out- or underperformance), they would be likely to fall by $5.92 (GDX) and $9.76 (GDXJ). This would imply price moves to $27.76 (GDX) and $35.78 (GDXJ).In conclusion, gold, silver, and mining stocks received a helping hand from the Fed last week, as the charitable contribution uplifted the precious metals. However, while the central bank achieved its objective and talked down the U.S. dollar, prior bouts of short-term optimism faded once reality reemerged. As a result, with the USD Index now in season and the 2012 analogue looking more prescient by the day, gold, silver, and mining stocks will likely suffer profound declines in the coming months. However, with their long-term fundamentals still extremely bullish, new highs will likely dominate the headlines in the coming years.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
New York Climate Week: A Call for Urgent and Collective Climate Action

Intraday Market Analysis – USD Breaks Lower

John Benjamin John Benjamin 03.08.2021 08:26
USDJPY struggles for supportThe Japanese yen strengthened on better-than-expected Tokyo CPI in July. The bearish MA cross from the daily timeframe may have put the bulls on the defensive.The dollar’s struggle to keep its head above 109.60 suggests a lack of commitment from the long side. 109.90 has established itself as a fresh resistance.The RSI has risen back into the neutrality area, giving sellers room to push lower. 109.00 is the closest support and its breach could deepen the correction for the days to come.USDCHF falls towards daily supportThe US dollar inches lower as July’s ISM Manufacturing PMI fell short of expectations.The pair dipped further in the bearish territory after 0.9070 failed to keep the price afloat. An oversold RSI has helped the greenback to claw back some lost ground.However, the rebound may be short-lived as sentiment favors selling into strength. 0.9090 is the hurdle where sellers could be waiting to jump in at a better price0.8980 at the origin of the June rebound is a critical demand zone on the daily chart.NAS 100 extends consolidationUS stock markets remain supported thanks to strength among corporate earnings.The Nasdaq 100 has slowly ground its way up from the 20-day moving average. The price action has once again bounced off the demand zone above 14800.As the index recoups its previous losses, there is high hope that the rally could resume to new all-time highs. For this, the bulls will need to lift offers around the peak at 15140. Failing that, a pullback towards 14550, a key level on the daily chart would be the path of least resistance.
Risk-Off Moves Returning

Risk-Off Moves Returning

Monica Kingsley Monica Kingsley 04.08.2021 16:31
In line with the pressing circumstances I told you about on Jul 29 at my site, today's report will again have to be way shorter than usual, and focus only on select charts so as to drive position details of all the five publications.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookIn spite of yesterday‘s upswing, S&P 500 keeps going sideways, and the indicators aren‘t all clear on the bulls‘ great prospects. The vulnerability to a bear raid is still very much there.Credit MarketsCredit markets didn‘t really reverse yesterday – the risk-off sentiment remains very much on in spite of HYG erasing intraday losses. The stock market bulls aren‘t out of the woods in spite of the improving market breadth.Gold, Silver and MinersMiners‘ strong showing yesterday bodes well for both precious metals, and I‘m looking for more gains in the sector. Remember that declining real rates on account of the risk-off bond moves, increase gold‘s appeal just as much as any worries about a decelerating economy or external shocks.Crude OilYesterday‘s downswing was partially bought, and the energy sector increase (great performance within the S&P 500) would point to a reversal soon. I‘m though not convinced that the bottom is in and that the bears have said their last word. CopperCopper has traded on a weak note yesterday, and hasn‘t convincingly stabilized just yet. The volume indicating buying interest isn‘t there.Bitcoin and EthereumTrading little changed, both cryptos are more than likely to go higher next, even if the indicators aren‘t yet hinting at that possibility strongly. Should they turn from here (likely in the current atmosphere, alongside with PMs), that would be a promising sign for the bulls.SummaryIn place of summary today, please see the above chart descriptions for my take.Thank you for having read today‘s free analysis, which is available in full here at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

CPI Fuel and the Smoldering Inflation Fire

Monica Kingsley Monica Kingsley 11.08.2021 16:04
For all the CPI hoopla, remember that this is a monthly figure – all data tend to fluctuate, especially those heavily massaged ones (substitution, hedonistic adjustments, owners‘equivalent rent coupled with exclusion of certain essentials for their prices are deemed too volatile).The Fed keeps walking a very fine line, and it‘s a success that the market isn‘t revolting – given the infrastructure bill passing Senate, calls on OPEC+ to increase production, it‘s clear to me that whatever today‘s figure, inflation will keep being a thorn in its side for a long time – as simple as putting 2 + 2 together. Again, today’s report will be shorter than usual, and focus on select charts so as to drive position details of all the five publications.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 keeps holding up but Nasdaq not very much so – quoting from yesterday‘s analysis:(…) Yes, Nasdaq is in as precarious short-term position as the 500-strong index – about to fall steeply just as gold did? Probably not, but vulnerable to a corrective move that could easily reach a few percent. The infrastructure bill is rather factored into the expectations, and similarly to Fed taper looming, any surprise could serve as a selling catalyst. The drying up volume may not be a sign of no more sellers here, but rather of combination of timid sellers and drying up pool of buyers. With the strong CPI data likely to be announced tomorrow, the bears would likely try their luck.Credit MarketsCredit market weakness is catching up ever more with high yield corporate bonds as they are getting under the same kind of pressure as quality debt instruments. Credit spreads are likely to start widening again as we‘re still in an economic expansion, and that would lift stock market spreads such as financials to utilities. Anyway, with rising yields look for the ride in equities to get rockier, and for tech to be diverging – yesterday was a preview of things to come. Gold, Silver and MinersYesterday, I made a case for why we‘re at an interesting valuation point in gold and silver. The daily chart view though still looks as bleak as ever – merely price stabilization while miners continue leading lower. The dust hasn‘t indeed settled and the success of Fed‘s June actions is still with us as inflation expectations and TIPS are being ignored:(...) Does the market seriously believe that the Fed would turn into an inflation fighter? That they wouldn‘t lag behind both the incoming forward looking and lagging inflation metrics? Make no mistake, the June ISM services PMIs were the highest ever – there is plenty of inflation in the pipeline, and you‘re in essence making a bet whether the central bank will duly mop up the excesses, or not. I‘m in the latter camp, and that means the current gold and silver values are highly interesting to the medium-term investor and trader.Crude OilOil has rebounded off Monday‘s premarket lows, but has met selling pressure even before today‘s message to OPEC+ was announced. I‘m counting on the oil sector continued resilience, but am not looking for similarly smooth sailing in black gold all that fast. Not at all.CopperCopper paints a brighter picture by quite a few hues, and the commodity index has likewise sprang to life vigorously. The 4.20s support zone is likely to hold unless a game changer strikes, which has gotten a little more unlikely compared to yesterday (watching the news tape). The inflation data are more than likely to support real assets, even if they enable the Fed to declare improving economy conditions in Jackson Hole, and announce (watered down) taper (with strings attached) in September. Look for commodities to recover then fast, faster than precious metals.Bitcoin and EthereumThe slow motion crypto upswing goes on, without respite – consolidating and likely to continue. More fighting is expected around $48-50K in Bitcoin, but shouldn‘t affect Ethereum all that much. SummaryIn place of summary today, please see the above chart descriptions for my take.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Gold: The General Left Alone

Finance Press Release Finance Press Release 16.08.2021 15:15
Gold commanded its unit to make another raid only to find itself stranded. The gold miners had already fled as fugitives, retreating without orders.The Gold MinersWhile gold shrugged off the Aug. 8 ‘flash crash’ and bounced back above its June lows, the yellow metal’s renewed sense of swagger hasn’t been mimicked by its precious metals peers. For example, while gold ended the week up by 0.86%, the GDXJ ETF (our short position) ended the week down by 1.72%.Please see below:Furthermore, while gold jumped by roughly $15 last week, the HUI Index declined by five index points. And with the bearish underperformance often a precursor to profound medium-term drawdowns, the precious metals are behaving like its 2012-2013. Last week is yet another confirmation of the analogy.Case in point: after the HUI Index recorded a short-term buy signal in late 2012 – when the index’s stochastic indicator was already below the 20 level (around 10) and the index was in the process of forming the right shoulder of a huge, medium-term head-and-shoulders pattern – the index moved slightly higher, consolidated, and then fell off a cliff.Please see below:To explain, can you see the HUI’s rally at the end of 2012 that followed a small buy signal from the stochastic indicator? I marked it with a purple, dashed line. No? That’s because it’s been practically nonexistent. The HUI Index moved higher by so little that it’s impossible to see it from the long-term point of view. On top of that, with the shape of gold’s recent price action, its RSI, and its MACD indicators all mirroring the bearish signals that we witnessed back in December 2012, the current setup signals that we’re likely headed for a similar swoon.For context, I warned previously that the miners’ drastic underperformance of gold was an extremely bearish sign. I wrote the following about the week beginning on May 24:(…) gold rallied by almost $30 ($28.60) and at the same time, the HUI – a flagship proxy for the gold stocks… Declined by 1.37. In other words, gold stocks completely ignored gold’s gains. That shows exceptional weakness on the weekly basis and is a very bearish sign for the following weeks.And why is this quote so important? Well, because the bearish phenomenon still remains intact. As mentioned, with gold rising by roughly $15 and the HUI Index declining by about five index points, the bearish underperformance is accelerating. Precisely, something similar happened during the week beginning on July 6. The gold price rallied by $27.40, and the HUI Index declined by 1.39. As a result, with the HUI Index’s ominous signals still present, if history rhymes (as it tends to), medium-term support will likely materialize in the 100-to-150 range. For context, high-end 2020 support implies a move back to 150, while low-end 2015 support implies a move back to 100. And yes, it could really happen, even though such predictions seem unthinkable.In addition, the drastic underperformance of the HUI Index also preceded the bloodbath in 2008. To explain, right before the huge slide in late September and early October, gold was still moving to new intraday highs; the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market suffered materially. If stocks didn’t decline back then so profoundly, gold stocks’ underperformance relative to gold would have likely been present but more moderate.Nonetheless, bearish head & shoulders patterns have often been precursors to monumental collapses. For example, when the HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02. Thus, three of the biggest declines in the gold mining stocks (I’m using the HUI Index as a proxy here) all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern.Furthermore, when the HUI Index peaked on Sep. 21, 2012, that was just the initial high in gold. At that time, the S&P 500 was moving back and forth with lower highs. And what was the eventual climax? Well, gold made a new high before peaking on Oct. 5. In conjunction, the S&P 500 almost (!) moved to new highs, and despite bullish tailwinds from both parties, the HUI Index didn’t reach new heights. The bottom line? The similarity to how the final counter-trend rally ended in 2012 (and to a smaller extent in 2008) remains uncanny.As a result, we’re confronted with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early-2020 low.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.In both cases, the forecast for silver, gold, and mining stocks is extremely bearish for the next several months.As further evidence, let’s compare the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, the senior miners (GDX) are in the midst of forming an ominous bear flag and the volume that accompanied Friday’s (Aug. 13) corrective upswing was relatively weak and it declined while the flag pattern was formed – just as it should if the formation was valid.Conversely, the GDX ETF did invalidate the breakdown below the neckline of its bearish H&S pattern (which is a bullish sign). However, the GDXJ ETF did not. And with the junior miners’ initial plunge (the pole) implying a continuation of the downtrend (following a consolidation that forms the flag), there are more indicators weighing down the gold miners than lifting them up.Please see below:Wave the Flag! The Bear Flag!Speaking of the GDXJ ETF, not only are the junior miners lagging behind their senior counterparts, but the four-hour chart provides a clear visual of the initial breakdown and the formation of the current bear flag.Please see below:The flag is perfect, and it took place on relatively declining volume, suggesting that another move will also be to the downside. After all, the moves that follow flags tend to be similar to the ones that preceded them.The price levels at which the flag was formed are also very important, and it’s clearer on the daily chart.Junior miners broke below the previous 2021 lows, and they held this breakdown, even though gold rallied quite visibly last week. This serves as a great confirmation that the move lower is about to take place.And how should we expect the climax to unfold? Last week, I wrote the following:Well, the GDXJ ETF may consolidate in the short term, but lower lows are still likely, and initial support should materialize at roughly $37 (the 61.8% Fibonacci retracement level). Thereafter, a short-term corrective upswing should follow before the GDXJ ETF reverses course once again and records its final bottom near the end of the year – at much, much lower price levels. All in all, it seems that our profits on the GDXJ (short position in it) are going to become MUCH bigger before this decline is over.The above remains up-to-date. In fact, we already saw the short-term consolidation last week, so the decline could resume any day now.In conclusion, the gold miners’ continued underperformance of the yellow metal is akin to a fire alarm signaling an impending blaze. And while many investors have forged through the smoke in 2021 and suffered a loss of breath in the process, our medium-term forecast does not change our outlook for gold, silver and mining stocks over the long term. With the trio underpinned by robust long-term fundamentals and their medium-term drawdowns likely to elicit secular buying opportunities, we’re confident that the precious metals will remain atop investors’ wish lists for years to come.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Between a Rock and a Hard Place

Monica Kingsley Monica Kingsley 17.08.2021 15:45
No, it‘s not about stocks, however well they hang on to recent gains. ATHs hit again amid recovering corporate credit markets, with both tech and value contributing. Value though was looking more vulnerable going into yesterday‘s session, and just one look at financials or energy confirms that – in the world of question marks over high pace of economic growth, it‘s the Fed that‘s between a rock and hard place.On one hand, they have stubborn and quickening inflation to deal with (or pretend to deal with through the FOMC, the federal open mouth committee) – getting ahead of the curve means serious tightening (okay, first getting less loose monetarily, which is what taper is about). Given China‘s slowdown and corresponding U.S. figures projected, it would be a tall order to turn off the spigot into a weakening (but still growing) economy – that has potential to trigger quite a correction in stocks and risk-on assets. Note copper and oil paring recent gains, and going largely sideways for weeks – not rolling over, but the light is amber, irrespective of the infrastructure bill.On the other hand, if the central bank does nothing, inflation would grow even more entrenched, sinking the stock market and economy over time, anyway. Don‘t forget about the massive spending – the Fed turning restrictive isn‘t the math favored outcome here.Bond yields aren‘t squeezing the Fed‘s hand – the market is paying more attention to growth than inflation at the moment. And that means headwinds for the reflation and commodity trades as these would find rising rates more conducive. Copper to gold ratio is seeing every spike sold since June, underlining the tug of war between the prospects of economy roaring ahead vs. hunkering down.In such an environment of uncertainty, gold is the winner – just as I summarized it yesterday:(…) Regarding the taper noises many Fed speakers made during the week (it isn‘t just about Dallas), some form of taper looks indeed coming, even though they would have a hard time pulling it off against decelerating economy and massive fresh spending. Mission impossible if you will. Still, they make the appearance of wanting to try – wouldn‘t tanking markets and fresh calls to do something be a perfect excuse to expanding balance sheet solidly again? But they must at least internally in the Eccles building understand that a move against inflation is long overdue, and perhaps a repetition of June FOMC wouldn‘t do the trick this time.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookAgainst all odds euphemistically said, the slow grind higher in stocks continues, with tech getting momentarily a little stronger than value. Volume is so far still behind the upswing – regardless of what the VIX and put/call ratio look like, the bulls aren‘t yet challenged.Credit MarketsCredit markets upturn continues, but not before having to repel heavy selling at the open. The chart offers no warning signs for the bulls at the moment, with the exception of risk-on optimism being vulnerable to a suddent souring that would hit many advancing stocks hard. Financials weakness yesterday is a watchout reflective of Treasury yields path.Gold, Silver and MinersGiven the growth fears sentiment of the moment, miners‘ underperformance is more understandable – the yellow metal is set to do well in such circumstances. Silver weakness reflects select commodities such as copper getting under pressure, which equals risk-off undercurrents.Crude OilEnergy stocks do a little worse in such an environment, making the daily oil resilience a temporarily good sign – one that I wouldn‘t read too much into for now as the volume isn‘t consistent with a budding reversal.CopperLikewise in copper, the modest rebound off the lows isn‘t convincing – there are no signs of heavy buying thus far, making the local bottom still elusive.Bitcoin and EthereumCrypto base building goes on, and the recent price action remains positive for the bulls.SummaryWhile the risk of a correction in stocks grows, in many commodities it‘s already here. The decelerating economy as evidenced by today‘s retail sales, is lifting primarily gold, and isn‘t any obstacle to cryptos just yet – the dollar isn‘t biting and yields remain range bound, therefore I look for inflation trades to eventually return to strength.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Gold Rallies on Softening Inflation. What’s Going On?

Finance Press Release Finance Press Release 17.08.2021 17:17
Inflation softened slightly in July and gold prices rose, but the bullish joy may be premature. How should we respond?Inflation eased a bit in July, but it remained disturbingly high. According to the latest BLS report on inflation, the CPI increased 0.5% in July after rising 0.9% in June. The core CPI, which excludes food and energy, also softened, as it rose 0.3% in July after increasing 0.9% in June. The deceleration was mainly caused by a much smaller advance in the index for used cars, which increased only 0.2% (it was 10.5% in June).However, on an annual basis, inflation practically stayed unchanged since June, as the chart below shows. The overall index surged 5.4% for the second month in a row (on a seasonally unadjusted basis), while the core CPI soared 4.3%, following a 4.5% jump in the previous month.So, at first glance, it seems that inflation has peaked. This might be true, but please notice that it remained disturbingly high despite the deceleration in several subindexes, including the index for used cars. I dread to think what would be if these categories didn’t moderate!What’s more, the producer price index for final demand rose 1% in July (MoM) and 7.8% over the past 12 months, as one can see in the chart below. It was the largest advance since the 12-month data was first calculated in November 2010. Part of this increase could be passed on to consumers later, as companies have recently gained more ability to lift prices seeing weak resistance to price increases.Additionally, the index for shelter – the biggest component of the CPI, not hit by the pandemic as strongly as restaurants and hotels industries – has been rising gradually since February 2021, and it has accelerated to 2.8% in July. Last but not least, the US Senate passed Biden’s infrastructure plan, which could also add something to the inflationary pressure by an increase in the money supply. All these developments suggest that inflation isn’t going away just yet.Implications for GoldWhat does the recent inflation report imply for the gold market? Well, theoretically, softer inflation should be negative for gold, which is seen as an inflation hedge and which historically shined during periods of high and accelerating inflation.However, as the chart below shows, the price of gold has rebounded somewhat from last week’s low, gaining about $50 from Tuesday to Friday. It seems that steady (and partially below expectations) inflation gives the Fed room to maintain its ultra-dovish monetary policy. Indeed, according to the CME FedWatch Tool, the expectations for the Fed’s tightening cycle have diminished slightly from the previous week, which supported gold prices.However, a bullish hurray might be premature. Inflation is still high and significantly above the Fed’s target. Inflation expectations remain elevated, and some measures even increased slightly in July. Unfortunately, markets seem not to worry significantly about inflation any longer, and the stock market continues its rally.Even if inflation really softens later this year, which is likely given that some supply disruptions will probably resolve, it shouldn’t suddenly dive below 2%. So, the July report shouldn’t materially change the Fed’s stance, especially that the US central bank focuses more on the labor market now. Hence, gold investors should brace themselves for the upcoming tapering of quantitative easing.However, just as day comes after night, upward waves come after bearish trends. The most likely macroeconomic scenario is that inflation will remain high, while the economic growth will slow down, which means stagflation. Indeed, the downward trend in the bond yields – despite high inflation – could signal weak growth, requiring dovish monetary policies. If history is any guide, gold will shine during stagflation.If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Taper Squeeze Is On!

Monica Kingsley Monica Kingsley 19.08.2021 15:44
Fed minutes as the straw to break the camel‘s back? This time, they weren‘t as uneventful as so often before, making the markets look for taper to indeed come – and sooner than expected. Quite a courageous proposition given that commercial bank credit creation isn‘t ready to take up the slack, and then some. The markets thus reassessed the short-term prospects, reacting with a modest degree of panic not only in select commodities, but finally also in stocks. Seems like the few percent correction I warned about on Tuesday as approaching, is finally here and unfolding:(…) in the world of question marks over high pace of economic growth, it‘s the Fed that‘s between a rock and hard place.On one hand, they have stubborn and quickening inflation to deal with (or pretend to deal with through the FOMC, the federal open mouth committee) – getting ahead of the curve means serious tightening (okay, first getting less loose monetarily, which is what taper is about). Given China‘s slowdown and corresponding U.S. figures projected, it would be a tall order to turn off the spigot into a weakening (but still growing) economy – that has potential to trigger quite a correction in stocks and risk-on assets. Note copper and oil paring recent gains, and going largely sideways for weeks – not rolling over, but the light is amber, irrespective of the infrastructure bill.On the other hand, if the central bank does nothing, inflation would grow even more entrenched, sinking the stock market and economy over time, anyway. Don‘t forget about the massive spending – the Fed turning restrictive isn‘t the math favored outcome here.Bond yields aren‘t squeezing the Fed‘s hand – the market is paying more attention to growth than inflation at the moment. And that means headwinds for the reflation and commodity trades as these would find rising rates more conducive. Copper to gold ratio is seeing every spike sold since June, underlining the tug of war between the prospects of economy roaring ahead vs. hunkering down.Looking at market reaction to the approaching taper (no mention of tightening – Powell learned his 2018 lesson though I still say that the Fed would have a much harder time withdrawing liquidity now), quite universal selling followed next – with the exception of the dollar, gold and to a degree Treasuries.Taking on inflation through the dollar doesn‘t come without its own risks, though – while taking down commodities a notch or two, global growth would face headwinds too. Treasury yield spreads aren‘t yet thankfully signalling more slowdown ahead – yields look ready to keep chopping, and only very gradually to start rising again. Rising greenback though isn‘t a silver bullet in extinguishing inflation given still stubborn rent prospects (it‘s one third of CPI) and wage pressures, let alone mounting supply chain issues when it comes to smooth international shipping (yes, China terminals restrictions etc). And I‘m not even raising corona anymore but look for the official start of flu season (Sep 15) to get interesting, if you know what I mean.This is the time to be picky about where to be exposed to risks, which asset classes are likely to ride the taper and growth storms best. I think it would be copper over oil, and gold over silver. The stock market correction appears in its opening stages indeed, and cryptos still chopping around would be a great result. It‘ll take a while for the dollar to roll over to the downside, but look for it to do so over the medium to longer term, and keep an eye on Treasuries – would be great if they confirmed my midpoint economic cycle hypothesis and didn‘t spike. Finally, I expect the Fed to come to its senses as not enough of what‘s left of the free market, would step up to the plate and finance growing „building back better“ deficits. So far, so good.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookVolume hasn‘t increased all that much, but look for it to change as we approach a fresh buying opportunity. For now, look for the downside risks to continue.Credit MarketsPowerful reversal in credit markets, spelling more trouble for the riskier parts of the spectrum. Indeed as I wrote yesterday, the risk-on optimism was vulnerable to a suddent souring that would hit many advancing stocks hard. Gold, Silver and MinersGold resilience in the face of weakening miners, is a good sign – look for the yellow metal to lead precious metals sector higher. Miners‘ weakness reminds me of the setup before 2016, and we know what happened over the coming months back then. Silver together with copper would improve, and the same is true about nickel – all three are a must for green economy.Crude OilEnergy stocks keep doing worse in such an environment, and while a solid support in oil is approaching, we aren‘t there yet – the selling pressure hasn‘t really decreased.CopperCopper is closer to its support than oil, but the knife didn‘t stop falling yet. The volume examination is though more encouraging than in the case of black gold.Bitcoin and EthereumCryptos have pared gains, and are treading water at the moment – look for vulnerabilities to likely manifest here over the coming days too. It would be very premature and unreasonable to talk about shift to bearish outlook, though.SummaryThe Fed looks decided to try walking the fine line and taper, but that wouldn‘t come without its own set of consequences as described in the opening part of today‘s extensive report. Continuing with the paragraph right before the chart section…Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Making the Fed Blink

Monica Kingsley Monica Kingsley 20.08.2021 15:51
Sea of red in stocks, reversed shortly after the open – is the worst behind? Remembering my Tuesday‘s words bringing up again downside risk (these have been growing for quite a few days before already), I don‘t think so – I consider yesterday‘s volatility as likely not to have yet peaked, and the VIX close above 21 could be overcome perhaps as early as Tuesday.It‘s that the shift in sentiment to risk off is everywhere to be seen – surging dollar, declining yields, value doing way worse than tech, gold outperforming silver, gold holding up very well, copper and oil striving to bottom, inflation expectations approaching the lower end of its recent range, and quite a few more signs including from select currency pairs – pretty consistent with the takeaways from yesterday‘s extensive analysis. If you hadn‘t read this taper navigation game plan already, have a look, as the feedback was very positive:(…) This is the time to be picky about where to be exposed to risks, which asset classes are likely to ride the taper and growth storms best. I think it would be copper over oil, and gold over silver. The stock market correction appears in its opening stages indeed, and cryptos still chopping around would be a great result. It‘ll take a while for the dollar to roll over to the downside, but look for it to do so over the medium to longer term, and keep an eye on Treasuries – would be great if they confirmed my midpoint economic cycle hypothesis and didn‘t spike. Finally, I expect the Fed to come to its senses as not enough of what‘s left of the free market, would step up to the plate and finance growing „building back better“ deficits. So far, so good.Today’s report will be shorter than usual, and focus on select charts so as to drive position details of all the five publications.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookRising volume isn‘t yet strong enough, and the rally‘s internals spell caution still. The overhead resistance above 4,425 would likely stop any advance on first encounter, and the bulls better think about convincingly defending (equals not letting price action anywhere near) 4,370s already today, and especially on Monday.Credit MarketsHigh yield corporate bonds haven‘t reversed powerfully, not nearly enough. The selling pressure isn‘t likely over even as Treasury yields are reaching for thin air again. The next two sessions will be particularly enlightening.Gold, Silver and MinersAs said yesterday, gold resilience in the face of weakening miners, is a good sign – look for the yellow metal to lead precious metals sector higher. The parallels to early 2016 are hard to miss. Given that we‘re near Mar lows in the miners, capitulation is approaching – perhaps as soon as it becomes apparent what would come out of Jackson Hole.Crude OilEnergy stocks keep plunging, and attracted high volume yesterday, which means an oil bottom could be approaching. That‘s not yet my leading scenario as I look for price declines to slow down a little first – and it‘s an open question whether that happens above or below $60.CopperCopper erasing half of the intraday slide, is a good intial sign, but the road to flip the very short-term outlook bullish is more than a few days away still. The steadily rising volume spells accumulation, but FCX also says we aren‘t out of the woods in the red metal yet.Bitcoin and EthereumCrypto bulls replied solidly yesterday, but prices are still rangebound for now, and are likely to chop a little more before another upleg develops.SummaryFed taper prospects are being reassessed, and the decreasing liquidity is putting pressure on quite a few markets. With margin debt standing first in the line, the risks are skewed mostly to the downside as safe haven assets don‘t look to have topped just yet – I mean the deepest ones such as USD and Treasuries. We‘re getting there, and all it takes is for the Fed to blink.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

U-Turn and Quite for Real

Monica Kingsley Monica Kingsley 23.08.2021 13:38
What doesn‘t go down, must go up? With a little Kaplan help, sideways S&P 500 trading well above 4,370 – 4,375 area spurted higher as the taper prospects rebalancing worked its magic. As I had been writing thoughout the week and well before, mathematics of growing deficits doesn‘t favor decreasing asset purchases. On top, the economy appears a little slowing down – while no recession this year or next is likely – we‘re midpoint in the expansion cycle as per my credit spread indicators – the slowdown looks inevitable, and the only question is the extent and seriousness of any Fed tapering.The talking has thus far lifted the dollar, enabling the central bank to take on inflation through the back door. Combined with the decreasing margin debt (first sign that something with the M2 rate of growth is amiss), the reflation and commodity trades have suffered, and all it took was a mere 2.5% from S&P 500 ATHs to make the Fed blink as per the title of my prescient Friday article.Treasuries though aren‘t yet convinced, having merely wavered – they‘re overestimating the odds of economic growth turning negative. The same trading action describes the dollar, and inflation expectations dipped on the day as well. As a result, expect the turn to risk on beyond stocks, to continue in fits and starts – Friday was but a first swallow revealing that the Fed is ready to step in when things start to look bleak for the „generally accepted metric of economic success“, the stock market.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookReversal continuation on not outstanding but still good volume – it‘s the high beta internals that bode well for the coming week, as it‘s about the degree of value and tech outside $NYFANG performance.Credit MarketsHigh yield corporate bonds have led the reversal in credit markets, while the quality debt instruments remain elevated, with especially Treasuries still doubting the stock market rebound. That‘s but one of the signs of caution for the S&P 500 bulls.Gold, Silver and MinersMiners finally stopped falling, but much more needs to happen so as to brighten the PMs outlook considerably. Thus far, just gold can be counted on to be resilient while silver is being challenged alongside commodities during any selloffs.Crude OilEnergy stocks stopped their daily decline, and the sellers might be getting exhausted here – anyway, the local bottom appears approaching, and today‘s premarket trading taking black gold over $64, highlights that.CopperCopper rebounded, and very strongly. The volume didn‘t disappoint either – some trading between the two moving averages appears likely next. I‘m not counting on a steep and immediate rebound above the 50-day moving average in spite of the positive fundamentals behind copper and other base metals just yet.Bitcoin and EthereumMore base building over the weekend gave way to upswing continuation – the path of least resistance is still up.SummaryMonday‘s trading shows the markets are taking the dialing back of Fed‘s taper seriously, and risk-on assets are surging, accompanied by the dollar retreating. And that bodes well for value stocks today as opposed to tech behemoths. Thus far, it‘s only precious metals where the upswings are much tamer, compared to copper or oil.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Best Real Assets to Catch Fire Now

Monica Kingsley Monica Kingsley 24.08.2021 16:37
Friday‘s optimism carried over to Monday, and far from only in stocks. Pendulum swinging the taper tough talk being just talk, worked powerfully to lift the beaten commodities – and unlike on Friday, oil joined in. The celebrations were a little too powerful, and I‘m looking for at least a modest daily consolidation in yesterday‘s star performers today.What was most powerful though, was the daily reversal in the dollar while yields remained pretty much unchanged. The dialing back of taper didn‘t lift the dollar exactly – the repo market being fixed through meager 5 basis points rate, served it better. Anyway:(…) As I had been writing thoughout the week and well before, mathematics of growing deficits doesn‘t favor decreasing asset purchases. On top, the economy appears a little slowing down – while no recession this year or next is likely – we‘re midpoint in the expansion cycle as per my credit spread indicators – the slowdown looks inevitable, and the only question is the extent and seriousness of any Fed tapering.And with much of the tapering done through the repo market in a way already, the focus will shift to the balooning deficits and debt ceiling so as to confront the disappointment creeping in through Monday‘s PMIs and more. I‘m not looking though for a deterioration strong enough to derail the stock market and commodities bull runs. Let alone the precious metals one. A good signal thereof would be widening credit spreads on the long end as the short end has been flattened already.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookReversal continuation on still strong volume – the 500-strong index is likely to consolidate the sharp 2-day gains, and so is Nasdaq, the more so if a slight risk-off whiff appears again. All it takes is one less than dovish Fed pronouncement.Credit MarketsHigh yield corporate bonds gapped higher, and closed on a strong note – daily consolidation wouldn‘t be out of the question. Overall positive turn in credit markets – one that is able to carry the stock indices during the coming days.Gold, Silver and MinersMiners joined in the gold upswing, in what reflects more than a daily weakness in the dollar. Silver is catching fire too, and yesterday‘s summary about the PMs upswing being the tamest thus far, might need revisiting once the fiscal and monetary realities sink in.Crude OilEnergy stocks stabilization facilitated the oil rebound, and black gold mustered strength seen last in mid Jul. The local bottom is in, and too much of a retracement would be a gift to the bulls.CopperCopper rebound continues, and stabilization at around 4.25 would be very constructive for the bulls so as to take on the 50-day moving average next. The copper chart retains strongly bullish flavor even if we might go a little sideways first still.Bitcoin and EthereumCryptos are still short-term undecided – backing and filling before another upswing wouldn‘t be at all surprising.SummaryFollowing Monday‘s gains, consolidation in the risk-on sentiment is likely for today, except for the most beaten down commodities and precious metals (these can continue extending gains). Thereafter, look for more short-term trigger happiness as the markets strive to decipher the upcoming Jackson Hole statements, and preposition themselves accordingly.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Jackson Hole Positioning

Monica Kingsley Monica Kingsley 25.08.2021 16:04
More optimistic follow through yesterday brought additional gains to commodities while stocks and gold treaded water. Just as I wrote yesterday, the celebrations of the taper tough talk being just talk, were a little too powerful, and at least a modest daily consolidation arrived.Credit markets point to the risk-on moves to continue, favoring the reflation trades as yields and inflation expectations would slowly but surely pick up. The dollar has gone on the defensive again but look for it to recover some ground as metals and cryptos are gently hinting at today. Are the commodities and precious metals bull runs in jeopardy though? Not in the least as the conditions haven‘t and won‘t change with the Fed taper plays that have rocked the boat last week quite well.As stated yesterday:(…) And with much of the tapering done through the repo market in a way already, the focus will shift to the balooning deficits and debt ceiling so as to confront the disappointment creeping in through Monday‘s PMIs and more. I‘m not looking though for a deterioration strong enough to derail the stock market and commodities bull runs. Let alone the precious metals one. A good signal thereof would be widening credit spreads on the long end as the short end has been flattened already.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookDaily pause is all we‘ve seen in stocks yesterday, with Nasdaq hit a little on account of the rising nominal yields. As even value found it hard to sustain gains, we‘re likely to see the consolidation to continue next as big moves before the Jackson Hole is over, are unlikely.Credit MarketsHigh yield corporate bonds continued the march higher, closing on a strong note again – the daily consolidation hasn‘t thus far arrived there. Overall positive turn in credit markets that‘s however leaving it a little extended for today and tomorrow unless the quality instruments rise modestly.Gold, Silver and MinersNot too much interesting has happened in the gold sector – only silver joined in the copper and oil upswings. Look for the sensitivity to the dollar moves to continue to a modest, yet decreasing degree as the taper suspense gets resolved – I say temporarily resolved as I don‘t believe in crystal clarity after Jackson Hole.Crude OilCrude oil rebound continues, and a little breather next wouldn‘t be unexpected. Reasonable prices have been reached, and the local bottom is in.CopperCopper rebound continues, and stabilization at around 4.25 is very constructive for the bulls – bullish chart and fundamentals even if we might go a little sideways first still (the red metal is slowing down a little vs. the CRB).Bitcoin and EthereumCryptos are bidding their time – haven‘t breached any important support just yet. As stated yesterday, backing and filling before another upswing wouldn‘t be at all surprising.SummaryBefore the Jackson Hole, I‘m not looking for extensive and sustainable moves one or the other way. Return of the risk-on trades should be the lens to watch the markets through even though a discreet liquidity tightening is going on under the surface as e.g. margin debt data show. And don‘t look for M2 movements to put a stop to inflation.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Excited About Market Highs? Don’t Be – Looks Like a Topping Pattern

Finance Press Release Finance Press Release 25.08.2021 17:02
Stocks changed little on Tuesday, but the S&P 500 reached a new record high. Is the market able to break above 4,500, or is it running low on fuel?The S&P 500 index gained 0.15% on Tuesday (Aug. 24) and it reached yet another new record high of 4,492.81. The market is getting closer to the 4,500 price level as investors await the Jackson Hole Symposium that begins tomorrow. And on Friday we will get a speech from Fed Chair Powell.The nearest important support level of the broad stock market index is now at 4,450. On the other hand, the resistance level is at 4,490-4,500. The S&P 500 bounced from its four-month-long upward trend line last week, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones in a Topping Pattern?Let’s take a look at the Dow Jones Industrial Average chart. The blue-chip index is trading within a potential rising wedge downward reversal pattern. Recently it was relatively weaker, as it didn’t reach new record high like the S&P 500 and Nasdaq. The support level remains at around 35,000, as we can see on the daily chart:Apple Struggles at $150 Price LevelApple stock got back to the resistance level of $150-152, marked by an August 17 record high of $151.68. We can still see negative technical divergences between the price and indicators. Overall, it looks like a medium-term topping pattern. The two-month-long upward trend line is now at around $145.Short Position is Still JustifiedLet’s take a look at the hourly chart of the S&P 500 futures contract. We opened a short position on Thursday, August 12 at the level of 4,435. The position was profitable before the recent run-up. We still think that a speculative short position is justified from the risk/reward perspective. (chart by courtesy of http://tradingview.com):ConclusionThe S&P 500 index reached new record high yesterday, but it gained just 0.15%. The market will most likely turn south again and extend its weeks-long consolidation. Therefore, we think that the short position is justified from the risk/reward perspective.Here’s the breakdown:The market reached a new record high as it got closer to the 4,500 mark.Our speculative short position is still justified from the risk/reward perspective.We are expecting a 5% or bigger correction from the new record high.As always, we’ll keep you, our subscribers, well-informed.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

S&P 500 On a Win Streak – More Guns Aim to Take it Down

Finance Press Release Finance Press Release 27.08.2021 14:58
The best gamer always emerges victorious from a duel, racking up his win streak. However, being this conspicuous – who doesn’t want to take him down?The same is the case with the S&P 500, which hasn’t recorded a two-month decline in nearly 10 months. It’s the fourth-longest streak on record! What’s more, the general stock market suffered another bout of volatility recently — with everyone teamed up to take the index lower, the only remaining question is: when?Fuel to the FireWith Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), scheduled to speak at the annual Jackson Hole Economic Symposium on Aug. 27, the Delta variant has clearly paved a dovish pathway. However, could the magician actually reveal his secret? Well, as a not-so-subtle hint of what’s to come (whether today or over the next few months), Fed hawks were out in full force on Aug. 26. Speaking with CNBC, Dallas Fed President Robert Kaplan said that “what we’re seeing in these [lower-income] communities is inflation affects them disproportionately. I think at the Fed we have to take that very seriously.”And what does this mean for his taper timeline?Source: CNBCLikewise, Kansas City Fed President Esther George also told CNBC on Aug. 26 that “I would be ready to talk about taper sooner rather than later.”“When you look at the job gains we saw last month, the month before, you look at the level of inflation right now, I think it would suggest that the level of accommodation we’re providing right now is probably not needed in this scenario.”Even more hawkish, she actually downplayed the economic impact of the Delta variant:“Both the anecdotes I hear from our contacts in the region and the data so far do not show a material change in the outlook.”Upping the ante, St. Louis Fed President James Bullard led the hawkish brigade on Aug. 26. Also, speaking with CNBC, Bullard said that “we do have a new framework we did say that we would allow inflation to run above target for some time, but not this much above target.”“I think that there is worry that we’re doing more damage than helping with the asset purchases because there is an incipient housing bubble in the U.S. The median house price, at least the number I saw, was approaching $400,000,” he said. “We got into a lot of trouble in the mid-2000s by being too complacent about housing prices, so I think we want to be very careful on that this time around.”And not only does Bullard want the taper to begin immediately, but he’s advocating for net-zero asset purchases by the end of Q1 2022.Please see below:Source: CNBCS&P 500 – A Correction Coming?Furthermore, as the taper drama unfolded on Aug. 26, equity investors responded with expected disdain and the negativity ushered the USD Index back above 93. More importantly, though, with the gold price exhibiting strong negative correlations with the U.S. dollar, a profound correction of the S&P 500 could capsize the PMs. To explain, while the general stock market suffered another bout of volatility, the S&P 500 hasn’t recorded a two-month decline in nearly 10 months. For context, it’s the fourth-longest streak on record.Please see below:Moreover, the Institute for Supply Management’s (ISM) manufacturing PMI is highly correlated with the S&P 500. And with the former falling from its recent high and poised to turn lower in the coming months, the S&P 500 may find itself running out of upside catalysts.Please see below:To explain, the dark blue line above tracks the year-over-year (YoY) percentage change in the ISM’s manufacturing PMI, while the light blue line above tracks the YoY percentage change in the S&P 500. If you analyze the right side of the chart, you can see that the former’s decline has already outpaced the latter’s. And with Bank of America predicting that the ISM’s manufacturing PMI (in YoY terms) will turn negative by October, the S&P 500 may follow in its footsteps.Adding to Wall Street’s trepidation, Morgan Stanley also expects a profound correction. Chief equity strategist Michael Wilson told clients on Aug. 20 that unprecedented fiscal spending fueled “a hotter but shorter cycle” and that a reversion to the mean could hammer the S&P 500 in the coming months.He wrote:“With Congress expeditiously providing record amounts of fiscal stimulus last year, the table was set for a major consumer stand against the downturn. Fast forward 16 months and it's fair to say the US consumer has not disappointed. But, after a year of remarkable resilience from the US consumer, it begs the question: ‘Is it sustainable?’ While there is little doubt about the US consumers' willingness to spend, the other key variable to consider is their ability to spend.”Please see below:To explain, the dark blue line above tracks the University of Michigan’s Consumer Sentiment Index (CSI), while the light blue line above tracks the S&P 500’s consumer discretionary/consumer staples ratio. When the light blue line is rising, it means that consumer discretionary companies (cyclicals) are outperforming staples (risk on). Conversely, when the light blue line is falling, it means that consumer staples companies (defensives) are outperforming consumer discretionary (risk off). If you analyze the right side of the chart, you can see that the light blue line has already rolled over. And with the dark blue line now at a 2021 low, the ratio has plenty of catching up to do. Moreover, with the cyclical basket home to some of the S&P 500’s most expensive stocks outside of the technology sector, an unwinding of the excess could have a profound impact on the USD Index, and therefore, the performance of the PMs.As further evidence, with investors throwing caution to the wind, the S&P 500 is running low on capital.Please see below:Source: Bank of AmericaTo explain, the dark blue line above tracks the S&P 500, while the gold line above tracks the net free credit balances held in investors’ cash and margin accounts (data from FINRA). In a nutshell: it’s the amount of purchasing power (cash and debt) that investors can use to buy more stocks. If you analyze the relationship, you can see that historical lows in investors’ net free credit balances often coincide with historical peaks in the S&P 500. More importantly, though, if you analyze the right side of the chart, you can see that investors’ net free credit balances are easily at an all-time low. As a result, with the bulls all in and little dry powder available to accelerate the momentum, the S&P 500’s pain could turn into the USD Index’s gain.Volatile Times AheadFinally, with the Cboe Volatility Index (VIX) – which measures the expected volatility in the S&P 500 over the next 30 days – surging by more than 12% on Aug. 26, seasonal signals imply that uncertainty could reign supreme over the next few months.Please see below:To explain, the blue bars above track the average value for the VIX during each month of the year. If you analyze the arrow in the middle, you can see that VIX spikes often occur in August, September and October. And with this year’s edition coinciding with the Fed’s taper timeline and investors’ all-time high exposure to stocks, the U.S. dollar could be in high demand if (when) volatility erupts.In conclusion, the PMs suffered another pullback on Aug. 26 and their medium-term downtrends remain intact. And while Powell’s presser may result in ‘PMs up, USD Index down’, the short-term sugars highs often have very short shelf lives. Moreover, with the Fed’s taper timeline poised to reach its climax in the coming months and the uproar likely to upend the S&P 500, the USD Index’s medium-term fundamentals remain robust. As a result, the PMs are unlikely to find a true bottom until these developments subside.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Taper Shock That Never Was

Monica Kingsley Monica Kingsley 27.08.2021 16:42
Yes, more paring the risk-on bets came yesterday, indiscriminately taking down stocks (tech and value alike), oil and copper. The overall shape of the consolidation in real assets (commodities and precious metals) remains bullish though – it‘s mainly in the S&P 500 that the hanging man candle is giving me a pause – temporarily lower stock prices would be favored by the VIX too.Regardless of that:(…) Margin debt is contracting, M2 not exactly at the prior rates of growth, but celebrations in the paper and real asset markets largely go on. Gold and silver are understandably lagging in the drummed up taper expectations, but I‘m not looking for any kind of dramatic statement from the Fed. The two steps forward, one step backwards melodrama is likely to continue into the September FOMC, and even that may very well leave the markets guessing. The Fed is in no position to tighten, the economic recovery is likely to continue, and the central bank won‘t kill it – which means continuous noises, and data dependecy as they like to call it.What we have seen thus far, and are likely to see next, are stealth real attempts to test the markets‘ tolerance to the continuing monetary largesse to the extent permitted by actual fiscal realities (nice qualifier to say „don‘t expect too much“), verbal interventions projecting the (sooner than anticipated, and most importantly, actually viable in the marketplace) taper (and later tightening) images while seeing the dollar hovering in a position of relative strength (useful tool to take on cost inflation). Make no mistake, Powell is keen to cement his legacy, and that doesn‘t involve succumbing to the hawkish (ehm, considered as hawkish in our loose monetary era) calls during a slowdown in the real economy growth.As I wrote in the extensive daily analysis a week ago:(…) Taking on inflation through the dollar doesn‘t come without its own risks, though – while taking down commodities a notch or two, global growth would face headwinds too. Treasury yield spreads aren‘t yet thankfully signalling more slowdown ahead – yields look ready to keep chopping, and only very gradually to start rising again. Rising greenback though isn‘t a silver bullet in extinguishing inflation given still stubborn rent prospects (it‘s one third of CPI) and wage pressures, let alone mounting supply chain issues when it comes to smooth international shipping (yes, China terminals restrictions etc). And I‘m not even raising corona anymore but look for the official start of flu season (Sep 15) to get interesting, if you know what I mean.As you can see, there are plenty of potential headwinds, and Monday‘s slowdown in PMIs illustrates that perfectly. The Fed will continue walking a fine line, not willing to rock the (stock market namely) boat too much. They‘ve done a good job in preparing the markets for the taper, and should they decide to actually start it in Sep or Oct, it wouldn‘t make for a smooth market experience.The risks of a policy mistake are still with us, and that‘s why I‘m not looking for overly courageous and ambitious taper path taken. Whenever taper comes, it‘s going to momentarily shock, but a keen eye would be cast so that it doesn‘t derail the status quo.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookStocks aren‘t willing to move too much, but their current position is perilous. Short-term perilous as the willingness to rebound off last week‘s lows shows.Credit MarketsCredit markets are sending conflicting signals, highlighting risk-on trades‘ vulnerability, but an actual downswing in these hasn‘t happened yet. A taper surprise would do the job, and close the shears wide open between HYG and the rest of the crowd.Gold, Silver and MinersQuite some bullish consolidations going on in gold and silver – their bullish flag approximations are ready to spring higher once the taper uncertainty gets removed to a degree. As I wrote yesterday, my bet was still on not too much downside followed by shaking off whatever little clarity is introduced by the Fed. Crude OilSo far so good for the bulls – the brief time for a short in oil came and went. The rebound is unlikely to roll over to the downside hard and fast.CopperCopper consolidates even more bullishly than oil does – the 50-day moving average resistance will be challenged soon again.Bitcoin and EthereumCryptos keep on consolidating, and just as precious metals, aren‘t rolling over to the downside in the least. Fresh upleg looks approaching.SummaryI‘m looking for the risk-on trades to continue performing well, in spite of any Jackson Hole curveballs introduced. The thinning monetary fuel air at markets‘ disposal would power different assets more selectively than was the case in first half of 2021, though.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Silver is a real purchasing power

Korbinian Koller Korbinian Koller 29.08.2021 17:24
You get bombarded with financial terms and economic and historical theories that make the mysteries of the market even harder to decipher. In effect, market workings aren’t as difficult to understand. They are psychological in nature and, when left alone, regulate themselves quite efficiently. We mean to say that without outside interference, the market is like a breath, and prices go up, sideways, down, sideways, and up again. It is a pendulum from averages to extremes and again returns to the mean. Once interfered, things get out of whack. One such interference was the abandonment of the gold standard. It served as a limitation to the discretionary monetary policy. It prevented extremes, prevented the economy from running out of breath. Now, silver is a real purchasing power.What do we mean by that? When fiat currency gets a regulating hand not by a free market but the meddling of politics trying to micromanage a market mainly through narrative, manipulation of the psyche of market participants, restraints are out the door. Human greed is taking over and worse, the ego suggesting that we can control an entity like the market with a degree of variables so high that any intervention is speculation at best. Such failing efforts typically turn markets sour..What this means for you is that unnatural extremes are at work, affecting your portfolio disproportional.Easily, an illusion is created to be fooled that one’s monetary gains in the market are plentiful. However, the reality is that when comparing your percentage gains to the actual purchasing power of what this money buys you, a rude awakening is guaranteed.When looking at your monthly expenditures for basic needs like living costs and food, it is astounding why that narrative has not found its way into the news yet. What is real is what precious metals like gold and silver are buying you now and in the future. A change of thinking is necessary to think in real purchasing power and not in percentage gains on fiat currency advancements.S&P 500 in US-Dollar, Weekly Chart, Too clean:S&P 500 Index in US-Dollar, weekly chart as of August 28th, 2021.The weekly chart of the S&P 500 above shows how unnatural the growth of the stock market is. Typically, in a self-regulating market, you will find no such clean up-drift. Why would all these companies have doubled in value in a time of economic crisis? Printed money flowing directly into the market has more than doubled the index value in less than 18 months? We would call this rather an upward market crash, where your purchasing power loses value. We are watching the lower green line of the linear regression channel for a price violation. It would indicate a confirmation that exuberance has come to an end and an early indication for watching larger time frame silver entries after a brief steep decline.Monthly Chart, Gold/Silver-Ratio, Ready for an extra boost:Gold/Silver-Ratio, monthly chart as of August 28th, 2021.Another indicator we have an eye on is the gold/silver ratio. We entered the early stages (orange line) of a ratio level where silver might be turning. Consequently, silver could be gaining momentum towards gold. Should prices reach the red box, we aggressively look for a smaller time frame, low-risk silver entry spots.  Silver in US-Dollar, Monthly Chart, Bullish between the lines:Silver in US-Dollar, monthly chart as of August 28th, 2021.A monthly look at silver shows a decisive breakout from a multiyear sideways range. Exhausted after a 159% advance, silver is trading within a range again for more than a year. We first had a double bottom, followed by a double top to define the range, and right now, a triple bottom showed strength. This strength could prove to be very significant if held through this month. We identified two essential details as well. For one, the white dotted line shows higher lows on the range lows, indicating strength. And secondly, prices did not return towards the mean(blue line), indicating directional strength as well.Silver in US-Dollar, Daily Chart, A bullish tone:Silver in US-Dollar, daily chart as of August 28th, 2021.Zooming into the daily time frame, we can see that we have entered into a short-term, low-risk advancement window after Friday’s strong close. For one between US$24 and US$24.50, the price finds itself not obstructed by a support/ resistance zone. Secondly, from a fractal volume analysis point (green histogram to the right of the chart), prices can also advance easier between the prices of US$23.90 and US$ 25.15. There are two edges derived from this data. A significant fending off the low range from US$23 to US$24 will make a strong point for higher timeframes if this month closes above US$24.25 and a bullish tone for the upcoming week.Silver is a real purchasing power:Precisely 50 years ago, Richard Nixon gave up the gold standard. And greed got yet again hold on to the market. We find these extremes in the stock market unsustainable and investments into the precious metal sector to be a prudent hedge for balancing your REAL purchasing power. Probabilities speak against a long-term outcome that human nature finds its way naturally back to the mean. More likely, we crash as we have in the past. A scenario that can result in a rude awakening for the many who trusted in narratives well-orchestrated. Most follow their intuitions to hold on to outdated paradigms at a time when buying insurance in the form of physical precious metal investments is one’s safest bet.Feel free to join us in our free Telegram channel for daily real time data and a great community.If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.By Korbinian Koller|August 29th, 2021|Tags: Crack-Up-Boom, Gold/Silver-Ratio, inflation, low risk, Russell 2000, Silver, silver bull, Silver Chartbook, silversqueeze, technical analysis, time frame, trading principles|0 CommentsAbout the Author: Korbinian KollerOutstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Profiting From Financial Stress Abating

Monica Kingsley Monica Kingsley 30.08.2021 14:57
Powell didn‘t disappoint… Wall Street, that is. The hazy taper silhouette remains just that, and his speech brought more implicit assurances that any dreaded hawkish turn, which was what the markets were clearly fearing given the jubilee thereafter. Practically everything caught a spark – tech, value, amazingly smallcaps, silver, gold, copper, a little lagging oil. It‘ll take a while for the currently undervalued emerging markets to catch up – look for that to happen once the dollar bids farewell to its trading range (it looks getting ready to test its lower border, in due time).Credit market spreads haven‘t yet decidedly turned, but it‘s my view they‘re in the process of doing so, in confirmation of the medium-term risk-on turn. The 10-year to 2-year, or to 3-month, all signal that the financial stress of recent weeks is abating. While stocks went sideways, commodities took it on the chin while precious metals and cryptos stood kind of in between. September taper surpise appears banished, so look for more of Friday‘s dynamic to have the upper hand.The leading indicators‘ slowdown, strained supply chains and need for replenishment of investories almost across the board, is though set to carry the bull markets ahead – as stated in Friday‘s extensive analysis, Fed isn‘t interested in pulling the rug from beneath. It‘s still more about sweet sugar than bitter medicine, so look for the reasonably loose monetary conditions to continue. Reasonably – what‘s that, is always in the eye of the beholder.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookStocks welcomed the pleasantly dovish tone with open arms – path of least resistance remains sideways to up no matter the distance from the 50-day moving average.Credit MarketsCredit markets got back behind the stock market upswing, and while the quality debt instruments are underperforming, the benefit of the doubt remains with the bulls.Gold, Silver and MinersGold, silver and miners are catching up in the risk-on moves, as immediate monetary policy uncertainty is removed, and remain primed for more gains.Crude OilCrude oil bulls dutifully stepped in, but the upswing wavered a little. Neither the volume was stellar, but prices are likely to trade up over the next few days. I‘m a bit on guard though as consolidation around $68 may continue beforehand.CopperCopper participated in the risk-on moves more vigorously than oil, and looks likely to leave the 50-day moving average in the dust before the week is over.Bitcoin and EthereumCryptos keep on consolidating, base building, making mostly higher highs and higher lows. It appears only a question of time before the fresh upleg comes. SummaryRisk-on traders had a field day on Friday, and are well positioned to extend gains over this week. Jackson Hole didn‘t bring any curveballs, and Powell made sure that smooth sailing ahead is in our immediate future.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bittersweet Truth for Gold Stocks: What You Need to Know

Bittersweet Truth for Gold Stocks: What You Need to Know

Finance Press Release Finance Press Release 30.08.2021 15:42
When the Fed entices grown up kids with sweet words, they hit the candy store and stock up on gold, silver, and stocks. A sugar hangover follows.Beware of the candyman!With Fed Chairman Jerome Powell performing his usual dovish dance on Aug. 27, gold, silver, and mining stocks were like kids in a candy store. However, with the short-term sugar highs often leaving investors with nasty stomach aches, the sweet-and-sour nature of the precious metals’ performances may lead to pre-Halloween hangovers.HUI Index: Harbinger of Things to ComeTo explain, while the HUI Index invalidated the breakdown below its previous lows, the bullish reversal may seem quite sanguine. However, an identical development occurred in 2013 right before the index continued its sharp decline. Moreover, I warned previously that the HUI Index could record a corrective upswing of 4% to 8% (that’s what happened after the breakdown in 2013) and that it would not change the medium-term implications. And after the index rallied by more than 6% last week, the bounce is nothing to write home about.Furthermore, after recording a similar breakdown below the neckline of its bearish H&S pattern in 2000, a short-term corrective upswing followed before the HUI Index resumed its swift decline. As a result, gold, silver, and mining stocks may not behave like Jolly Ranchers for much longer.Please see below:What’s more, the vertical, dashed lines above demonstrate how the HUI Index is mirroring its decline from 2012-2013. After a slight buy signal from the stochastic indicator in 2012, the short-term pause was followed by another sharp drawdown. For context, after the HUI Index recorded a short-term buy signal in late 2012 – when the index’s stochastic indicator was already below the 20 level (around 10) and the index was in the process of forming the right shoulder of a huge, medium-term head-and-shoulders pattern – the index moved slightly higher, consolidated, and then fell off a cliff. Thus, the HUI Index is quite likely to decline to its 200-week moving average (or so) before pausing and recording a corrective upswing. That’s close to the 220 level. Thereafter, the index will likely continue its bearish journey and record a final medium-term low some time in December.Furthermore, I warned previously that the miners’ drastic underperformance of gold was an extremely bearish sign. There were several weeks when gold rallied visibly and the HUI Index actually declined modestly. Last week, we finally saw gold miners moving back up along with gold. But just like one swallow doesn’t make a summer, this move up doesn’t change the fact, that in general, performance of gold stocks has been truly terrible.After all, gold stocks are trading close to their previous 2021 lows, while gold is almost right in the middle between its yearly high and its yearly low.And why is this quote so important? Well, because the bearish implications of gold stocks’ extreme underperformance still remain intact.Let’s keep in mind that the drastic underperformance of the HUI Index also preceded the bloodbath in 2008 as well as in 2012 and 2013. To explain, right before the huge slide in late September and early October 2008, gold was still moving to new intraday highs; the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market suffered materially. If stocks didn’t decline so profoundly back then, gold stocks’ underperformance relative to gold would have likely been present but more moderate.Nonetheless, broad head & shoulders patterns have often been precursors to monumental collapses. For example, when the HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02. Thus, three of the biggest declines in the gold mining stocks (I’m using the HUI Index as a proxy here) all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern. As a reminder, the HUI Index recently completed the same formation.Yes, the HUI Index moved back below the previous lows and the neck level of the formation, which – at face value – means that the formation was invalidated, but we saw a similar “invalidation” in 2000 and in 2013. And then, the decline followed anyway. Consequently, I don’t think that taking the recent move higher at its face value is appropriate. It seems to me that the analogies to the very similar situation from the past are more important.As a result, we’re confronted with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early-2020 low.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.In both cases, the forecast for silver, gold, and mining stocks is extremely bearish for the next several months.GDX and GDXJ ComparisonFor even more confirmation, let’s compare the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, the senior miners (GDX) also rallied above the neckline of their bearish H&S pattern. And while Friday’s (Aug. 27) euphoria occurred on high volume, prior volume spikes in buying sentiment actually marked four peaks (or close to) within the last 12 months. Thus, while the bullish bids may push the GDX ETF slightly higher in the near term, history implies that investors’ excitement often does more harm than good.Please see below:In all 4 out of previous 4 cases, the spike-high volume during GDX’s upswing meant a great shorting opportunity.Meanwhile, the junior miners (GDXJ) didn’t invalidate the breakdown below the neckline of their bearish H&S pattern; and Friday’s close still left the GDXJ ETF below its previous lows. Moreover, while the juniors’ future direction following volume spikes isn’t quite as clear as it is with the GDX ETF, more often than not, euphoric spikes are followed by medium-term declines.Please see below:As further evidence, if you analyze the GDXJ ETF’s four-hour chart below, you can see that historical volume spikes (marked by the red vertical dashed lines) nearly always coincide with short-term peaks. As a result, Friday’s rally was more of an event driven surge – courtesy of Powell – and it’s unlikely to disrupt the GDXJ ETF’s medium-term downtrend.Finally, while the GDXJ/GDX ratio moved slightly higher last week, its downtrend also remains intact. For one, when the ratio’s RSI jumped above 50 three times in 2021, it coincided with short-term peaks in gold. Second, the trend in the ratio this year has been clearly down, and there’s no sign of a reversal, especially when you consider that the ratio broke below its 2019 support (which served as resistance in mid-2020). When the same thing happened in 2020, the ratio then spiked even below 1.Please see below:The Bottom Line?If the ratio is likely to continue its decline, then on a short-term basis we can expect it to decline to 1.27 or so. If the general stock market plunges, the ratio could move even lower, but let’s assume that stocks decline moderately (just as they did in the last couple of days) or that they do nothing or rally slightly. They’ve done all the above recently, so it’s natural to expect that this will be the case. Consequently, the trend in the GDXJ to GDX ratio would also be likely to continue, and thus expecting a move to about 1.26 - 1.27 seems rational.If the GDX is about to decline to approximately $28 before correcting, then we might expect the GDXJ to decline to about $28 x 1.27 = $35.56 or $28 x 1.26 = $35.28. In other words, $28 in the GDX is likely to correspond to about $35 in the GDXJ.Is there any technical support around $35 that would be likely to stop the decline? Yes. It’s provided by the late-Feb. 2020 low ($34.70) and the late-March high ($34.84). There’s also the late-April low at $35.63. Conservatively, I’m going to place the profit-take level just above the latter.Consequently, it seems that expecting the GDXJ to decline to about $35 is justified from the technical point of view as well.In conclusion, investors showcased their sweet tooth for gold, silver, and mining stocks on Aug. 27. However, with the USD Index hovering near two key support levels and the yellow metal confronting its second triangle-vertex-based reversal point, the taste may turn bitter over the medium term. Moreover, with prior upswings underwritten by the Fed resulting in lower lows soon after, the precious metals’ bullish behavior is nothing new. As a result, their prior weakness will likely persist before reliable bottoms emerge later this year.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
New York Climate Week: A Call for Urgent and Collective Climate Action

Dialing Back the Euphoria

Monica Kingsley Monica Kingsley 31.08.2021 15:49
Fireworks largely continued yesterday. In stocks, it must be said – but the picture isn‘t one of universal strength as tech and value diverged again. As VIX is trading near the lower end of its recent spectrum, the bulls better wait for when Friday‘s Powell euphoria gets questioned in the markets. The most important turn of last week had been the removal of immediate and hard hitting taper (together with misplaced tightening notions) – now, we‘re enjoying the kiss of life this breathed into quality assets. Quality, that means those in strong, established bull uptrends, and those beaten down a bit too much in the prior whiff of fear.We‘ll have to be selective as the fuel supply powering the „practically everything“ statement below, is getting tighter:(…) The hazy taper silhouette remains just that, and his speech brough more implicit assurances that any dreaded hawkish turn, which was what the markets were clearly fearing given the jubilee thereafter. Practically everything caught a spark – tech, value, amazingly smallcaps, silver, gold, copper, a little lagging oil. It‘ll take a while for the currently undervalued emerging markets to catch up – look for that to happen once the dollar bids farewell to its trading range (it looks getting ready to test its lower border, in due time).Credit markets confirm the risk-on moves to continue – there is no immediate warning to the contrary. But as you‘ll read further on, daily gyrations are likely to come back, and that has implications for the daily rotations between tech and value. Crucially, the dollar isn‘t protesting, and remains subdued. Given the crosscurrent of real economy slowdown in incoming economic data, and inventories replenishment needs amid challenged supply chains, the USD price action hints at the world reserve currency getting ready to welcome lower values. Understandably, that has positive implications for emerging markets as these saw their valuations decline a bit too much.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookStrong upswing on the surface, but stocks look likely to consolidate the move next. By consolidate, I mean I am not looking for any kind of overly sharp a drop.Credit MarketsCredit markets are supporting the stock market upswing, but getting a little tired – a brief pause wouldn‘t be unimaginable.Gold, Silver and MinersGold, silver and miners got under modest pressure yesterday, but the silver downswing points to its temporary nature. Precious metals look primed to do better in the coming days.Crude OilCrude oil bulls barely closed the day unchanged, and a modest setback looks likely before higher prices reestablish themselves.CopperCopper is sending even more bullish signals than silver does – don‘t look at the red metal to escape the brief consolidation coming first though.Bitcoin and EthereumAs stated yesterday, cryptos keep on consolidating, base building, making mostly higher highs and higher lows. It appears only a question of time before the fresh upleg comes. SummaryRisk-on trades look to be questioned a little next – what else to expect followintg the Powell dovish speech. Look for it to be a temporary move only though as there isn‘t enought reasons or catalysts to derail the bull market runs.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
New York Climate Week: A Call for Urgent and Collective Climate Action

Bond Conundrum - Boom or Bust for Gold?

Finance Press Release Finance Press Release 03.09.2021 16:12
Inflation has risen, but bond yields have declined. Such a divergence is strange — beware gold bulls!Would you like to see something mysterious? If yes, please look at the chart below. It shows the yields on 10-year US Treasuries (red line) and CPI annual inflation rates (blue line) in recent years. As you can see, a huge divergence emerged this year: while inflation surged above 5%, nominal bond yields declined from 1.6% to 1.3%.Why is it so strange? Well, economic theory says that when inflation goes up, it erodes the purchasing power of bonds’ coupon payments. Thus, the price of bonds declines, and yields increase. In other words, when inflation accelerates, investors demand higher inflation premium to protect their real returns.But now we can observe rising inflation and declining bond yields at the same time. The yield on the 10-year Treasury is 1.3%, which is 4 percentage points below the inflation rate, so investors who buy bonds lose a lot of money in real terms. Something is clearly wrong here. Let’s solve this bond conundrum!The first potential explanation is that bond investors trust the Fed and believe that high inflation is mainly transitory. If so, the bond yields are more or less accurate and could stay around current low levels, and the inflation rates will adjust. The supply disruptions caused by the pandemic will eventually resolve, while the Fed is going to tighten its monetary policy, adding to disinflationary forces.At first glance, the scenario in which inflation is declining seems to be negative for the yellow metal, as it implies lower demand for gold as an inflation hedge. However, in this case, interest rates could stay at very low levels for a long time. And gold likes the environment of low yields.The second possible reason for the decline in interest rates is that bond investors expect slower economic growth than previously thought. Indeed, recent data suggests that the pace of GDP growth could be peaking. The spread of the delta variant of the coronavirus, smaller infrastructure plan than initially outlined, a slowdown in China’s economic growth and the Fed’s tightening cycle – all these factors could soften the US growth prospects, translating into lower yields.It goes without saying that this scenario would be very positive for gold prices. High inflation plus a slowdown in economic growth equals stagflation, a dream environment for gold. However, the stock market didn’t weaken, as one could expect after a downward revision of investors’ growth prospects. On the other hand, the spread between yields on 10-year and 2-year Treasuries has narrowed substantially since March, as the chart below shows. The flattening of the yield curve often indicates a slowdown in economic growth.But it’s also possible that technical factors or the central bank’s interventions trumped the fundamentals. Strong demand for the US Treasuries that pushed yields down despite rising inflation could be the case here. After all, the Fed has been purchasing $80 billion a month in Treasuries (and $40 billion in mortgage-backed bonds) since June 2020. In other words, quantitative easing could disrupt the functioning of the bond market.Indeed, the unprecedentedly easy monetary policy conditions with ultra-low interest rates and abundant liquidity could explain why both stock and bond prices are so high right now (and bond yields so low). In an environment of negative real interest rates created by Powell and his colleagues, asset managers search for yield in every possible asset, even if it is not economically viable — including cryptocurrencies that are just memes (like Dogecoin) or bonds with yields lower than inflation rates.What does it all imply for the gold market? Well, I have good and bad news. So, the bad news is that the real interest rates seem to be excessively low (see the chart below) and they are likely to move up over the economic expansion (especially when the Fed tightens its monetary stance), whereas inflation expectations could ease somewhat later this year. Unfortunately for gold bulls, the increase in the real interest rates would likely push gold prices lower.The good news is that that an increase in interest rates would put the governments and other debtors in a very difficult position, potentially leading to a debt crisis. Asset valuations could decline and financial crisis could follow suit. In other words, the Fed’s tightening cycle could sow the seeds of another recession and rally in gold.Having said that, we have just recovered from one economic crisis, and it will take some time for another to unfold. Until that happens, real interest rates may normalize somewhat without entailing substantial perturbations, which would be negative for gold prices.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Partying On Meets USD Upswing

Monica Kingsley Monica Kingsley 07.09.2021 16:28
S&P 500 didn‘t get hammered on the NFPs miss – stocks did reasonably well, saved by the daily rush into tech. Volatility didn‘t spike throughout the week at all, and credit markets maintain their risk-on posture. Still, the real economy deceleration made itself heard, pushing back Fed taper speculations even further from September. Jerome Powell wanted to see more jobs data, and would want even more so now. I wouldn‘t be really surprised if no taper was announced in November.Markets are thus far unconcerned about a policy mistake in letting inflation get entrenched even more – Treasury yields moved up, but don‘t expect to see them gallop just yet. Slow and steady, orderly grind higher is the most likely trajectory ahead, and even that won‘t propel the dollar higher, or keep it really afloat. Greenback‘s support is at 91.70, and I‘m looking for it to give in over the nearest weeks, which carries tremendous implications for commodity and precious metals trades. And for risk assets in general.Precious metals thus far remain tame, and should continue chugging along just fine. Commodities such as copper and oil won‘t be derailed, but might panic temporarily in case of really bad incoming data. Copper‘s continued underperformance of the commodity index highlights the growth woes of the day, and even if the red metal might look to some as ready to roll over, the positive stockpile situation should cushion potential downside. In short, I‘m not looking for a meaningful disturbance to the commodities bull, as the inventory replenishment cycle has far from run its course, and inflation is bound to get hotter this year still.As written on Friday:(…) In short, forget about tapering into a weakening economy that doesn‘t see labor participation or hours worked rising. The Fed won‘t take that gamble soon, and we know what that means for real assets (and stocks too as inflation and yields aren‘t yet breaking the bull) – fresh money finding its way into financial markets, lifting prices.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookFriday‘s result could have been worse, way worse – and shows stocks still remain focused on money printing more than anything else.Credit MarketsCredit markets posture remains risk-on, and the inflation worries are reflected in the quality instruments. High yield corporate bonds remain in an uptrend, supportive of risk taking.Gold, Silver and MinersPrecious metals benefited strongly on the assumption of Fed erring on the side of tardiness in announcing taper – inflation expectations are remaining tame thus far. Gold and silver ascent is though getting increasingly more confirmed by the miners turning higher too.Crude OilCrude oil ran into a setback, but didn‘t roll over decisively – some more sideways trading before higher prices emerge, is likely. Look to the dollar for direction.CopperCRB Index continues its strong recovery, and copper is taking a brief rest at the 50-day moving average. While weakening real economy would hurt it, the red metal‘s supply/demand situation would cushion temporarily lower prices. Technically, the bulls better step in fast and take prices solidly above 4.40 in order to steer clear of the danger zone.Bitcoin and EthereumFollowing long weekend gains, cryptos are under pressure today – it looks like a daily setback and not a reversal. Golden cross is approaching.SummaryNFPs disappointment isn‘t likely to derail the risk-on trades, and would actually work in pushing the taper timing further into the future, which would likely result in further stock market and other asset gains. The alternative to taper earlier would force a correction, for which I am afraid there‘s no appetite.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

September Smackdown Coming Next?

Monica Kingsley Monica Kingsley 08.09.2021 15:47
S&P 500 declined, with tech holding up best – the volatility spike is here as real economy deceleration is joined by Evergrande fears. Both paper and real assets took it on the chin, and yields together with the dollar rose. As for greenback and Treasuries upcoming price path:(…) Treasury yields moved up, but don‘t expect to see them gallop just yet. Slow and steady, orderly grind higher is the most likely trajectory ahead, and even that won‘t propel the dollar higher, or keep it really afloat. Greenback‘s support is at 91.70, and I‘m looking for it to give in over the nearest weeks, which carries tremendous implications for commodity and precious metals trades. And for risk assets in general.Precious metals, copper and oil bore the brunt of souring sentiment, with cryptocurrencies joining in the slide later through the day. But have the material facts changed, or all we got was a whiff of risk-off? September is likely to be volatile, it seasonally is, and August had been a surprisingly calm month. You know what they say about periods of lower volatility giving way to those of higher readings… Time to buckle up.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThe S&P 500 downswing was a value driven one. Risk-on has to wait for now.Credit MarketsCredit market slide would have to stop before the stock market bulls can think about recovery – yesterday‘s picture gives a daily scare impression.Gold, Silver and MinersHigher yields and rush into the dollar did hurt precious metals, but I‘m not looking for a fresh and steep downleg to be starting here. When the momentary sense of panic calms down (it can happen relatively fast), precious metals would have an easier time rising on the monetary policy and inflation projections.Crude OilCrude oil ran into another setback, but the buying interest bodes well – I‘m looking for a gradual price recovery to continue.CopperWhile copper is hurt by the weakening real economy and underperforming the CRB Index, commodities haven‘t rolled over to the downside – the commodities superbull remains intact. Copper bulls are bidding their time, and would likely step in on the heels of positive news out of China.Bitcoin and EthereumBitcoin looks to have found a temporary floor, but it would be very premature to declare a fresh upswing to be about to start – medium-term chart damage has been done.SummaryYesterday‘s risk-off day is likely to get at least partially reversed today, and I‘m not looking for it to break the stock market and commodity bull runs. As for precious metals and cryptos, I‘m looking for their recovery to start in earnest once the dollar and yields once again paint a favorable picture.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
New York Climate Week: A Call for Urgent and Collective Climate Action

S&P 500: More Short-Term Weakness Despite Tech Rally?

Finance Press Release Finance Press Release 08.09.2021 16:03
Stocks backed off from last week’s high yesterday, as investor sentiment worsened following Friday’s jobs data. But more downside may be coming.The broad stock market index lost 0.34% on Tuesday (Sep. 7), as it bounced from the resistance level of around 4,550. Last Thursday (Sept. 2) saw the index reach a new record high of 4,545.85. This morning the market is expected to open virtually flat. However, it retraced the overnight decline.The index remains elevated after the recent run-up, so we may see some more profound profit-taking action at some point.The nearest important support level of the broad stock market index remains at 4,500, and the next support level is at 4,465-4,470, marked by the previous Thursday’s low. On the other hand, the nearest important resistance level is at 4,550. The S&P 500 bounced from its four-month-long upward trend line recently, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):S&P 500 Continues to Climb Along the Trend LineThe S&P 500 index remains close to its almost year-long upward trend line. The nearest important medium-term support level remains at 4,300, as we can see on the weekly chart:Dow Jones Broke DownLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index broke below a potential two-month-long rising wedge downward reversal pattern yesterday. It remains relatively weaker, as it didn’t reach a new record high like the S&P 500 and the Nasdaq. The support level remains at around 35,000, as we can see on the daily chart:Apple Reached Yet Another Record HighApple stock weighs around 6.3% in the S&P 500 index, so it is important for the whole broad stock market picture. Yesterday it reached a new record high of $157.26. We can still see negative technical divergences between the price and indicators and a potential topping pattern. The two-month-long upward trend line remains at around $145, and the nearest important support level is now at $150-152.Is Short Position Still Justified?Let’s take a look at the hourly chart of the S&P 500 futures contract. We opened a short position on August 12 at the level of 4,435. The position was profitable before the recent run-up. We still think that a speculative short position is justified from the risk/reward perspective. (chart by courtesy of http://tradingview.com):ConclusionThe S&P 500 index remains relatively close to its last week’s record high of 4,545.85. However, we can see some short-term profit-taking action, although yesterday’s decline has been stopped by the relatively strong tech sector. Today we will most likely see a neutral opening of the trading session followed by another profit-taking action.The market seems short-term overbought, and we may see some profit-taking action soon. Therefore, we think that the short position is justified from the risk/reward perspective.Here’s the breakdown:The market extended its advance last week, as the S&P 500 index broke above the 4,500 level.Our speculative short position is still justified from the risk/reward perspective.We are expecting a 5% or bigger correction from the new record high.As always, we’ll keep you, our subscribers, well-informed.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and CareLike what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Retreating Bears and Dollar Struggles

Monica Kingsley Monica Kingsley 09.09.2021 16:15
S&P 500 decline leaves something to be desired – conviction of the bears. Credit markets and the dollar have sent not so subtle signs that we‘re in the latter innings of this week‘s corrective move, and a snapback attempt in stocks is likely. That‘s even more so true in commodities – these didn‘t wait (with the exception of copper). Stocks though remain wavering, without a clear tech or value leader. But did you notice the degree of bearishness that such a measly downswing elicited? Given where the Fed and Treasury are in monetary and spending plans, nothing has changed – the debt ceiling drama is still out of the markets‘ focus alongside pretty much everything else including Evergrande and similar fears. Who could have forgotten the late Jan GameStop, or then Archegos? And the markets keep rising on the staircase liquidity wave interrupted by a fresh stimulus here and there:That‘s why I‘m not concerned that the day before yesterday:(…) Precious metals, copper and oil bore the brunt of souring sentiment, with cryptocurrencies joining in the slide later through the day. But have the material facts changed, or all we got was a whiff of risk-off? September is likely to be volatile, it seasonally is, and August had been a surprisingly calm month. You know what they say about periods of lower volatility giving way to those of higher readings… Time to buckle up.Time to buckle up indeed, as a brief ambush of the generally rising markets, is likely to come in autumn. Either the Fed tapers before Dec, forcing it effectively to happen now, or its inaction would defer it to 2022 (the downswing catalyst would then be inflation).Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThe S&P 500 downswing was stopped in its tracks by the intraday reversal – the bulls are likely to attempt to take prices higher still.Credit MarketsCredit market slide had been arrested, and the uptick across the board is a positive sign. The bulls have something to build on.Gold, Silver and MinersGold and silver are stable in the very short run, and can surprise on the upside – the dual spike in the dollar and yields hasn‘t helped, but these headwinds won‘t last.Crude OilCrude oil had a positive day in spite of the energy sector weakness – its volatile trading is likely to continue as the 50-day moving average presents an obstacle still.CopperCopper declined in spite of the rising CRB Index – its relative weakness continues even if the red metal is likely to score gains today, making up for yesterday‘s excessive weakness.Bitcoin and EthereumBitcoin and Ethereum still looks to have found a temporary floor, and the selling pressure appears abating. The bulls‘ chance is approaching.SummaryRisk-off appears getting long in the tooth as those who have gotten used to two day corrections could say. Time for a pause in selling is at hand, but the volatile September is far from over. In the big picture, the stock market, PMs and commodity bull runs remain intact, and their upcoming trajectory will be dictated by the dollar and yields.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

S&P 500: Does It Have the Strength to Run Higher?

Finance Press Release Finance Press Release 10.09.2021 16:13
Stocks closed at a local low yesterday, but today the market will likely be trying to retrace the decline. So, is the S&P 500 heading lower soon?The broad stock market index lost 0.46% yesterday as it got back to Wednesday’s local low. It even went below the 4,500 level! Last Thursday (Sept. 2) the index reached a new record high of 4,545.85. This morning it is expected to open higher. The index remains elevated after the recent run-up, so we may see some more profound profit-taking action at some point.The nearest important support level of the broad stock market index remains at 4,490-4,500, and the next support level is at 4,465-4,470, marked by the previous Thursday’s low. On the other hand, the nearest important resistance level is at 4,550. The S&P 500 bounced from its four-month-long upward trend line recently, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones Extended Its Short-term DowntrendLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index broke below a potential two-month-long rising wedge downward reversal pattern this week. It remains relatively weaker, as it didn’t reach a new record high like the S&P 500 and the Nasdaq. The support level is now at around 34,750 and the near resistance level is at 35,000, as we can see on the daily chart:Apple Retraced the Recent AdvanceApple stock weighs around 6.3% in the S&P 500 index, so it is important for the whole broad stock market picture. On Tuesday it reached a new record high of $157.26. Since then it has been declining. We can still see negative technical divergences between the price and indicators and a potential topping pattern. The two-month-long upward trend line remains at around $145, and the nearest important support level is now at $150-152.AAII’s Sentiment Is Less BearishOn Wednesday we’ve got the latest reading of the American Association of Individual Investors Sentiment Survey. There was a relatively big decline in bearish sentiment last week and an accompanying drop of neutral votes. So, individual investors are clearly less bearish right now, and that may be another sign of a topping action of the stock market. (chart by courtesy of http://www.aaii.com)ConclusionYesterday, the S&P 500 index went below the 4,500 level again. For now, it looks like a correction within an uptrend. Today we will most likely see a higher opening of the trading session – we may see another profit-taking action later in the day though.The market seems short-term overbought, and we may see some downward correction soon. Therefore, we think that the short position is justified from the risk/reward perspective. As always, we’ll keep you, our subscribers, well-informed.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Intraday Market Analysis – Dax Extends Consolidation

John Benjamin John Benjamin 13.09.2021 08:56
GER 30 tests key supportThe stock markets recover as a discussion between Biden and Xi raises hopes of a thaw in US-China relations.The Dax 30 has found buying interest on the daily support (15450).A bullish RSI divergence suggests a loss in the sell-off momentum. Traders were eager to buy the dip in this area of congestion when the RSI showed an oversold situation.A rally above 15740 would confirm the rebound. 16000 would be the target when buyers regain confidence. Otherwise, a slide below 15450 may trigger an extended correction.CADJPY hits key resistanceThe loonie stalled after Canada’s mixed employment data in August. The pair has previously broken below the demand zone at 86.60, putting buyers on the defensive.The latest rebound has turned out to be a dead cat bounce after the price saw strong selling pressure at 87.35. An overbought RSI was an opportunity for sellers to step in.Sentiment remains bearish in line with the downtrend initiated in early June. 86.40 is the last line of defense for the bulls and a fall below may trigger a sell-off to 85.50.XAGUSD sees bearish breakoutBullions weakened after the US dollar advanced on better-than-expected producer prices.The break below the rising trendline has put silver’s recovery at risk. Then the bears’ push below the critical support at 23.80 was an indication that they have gained the upper hand.An oversold RSI may cause a limited bounce.The bulls have the daunting task of lifting offers around 24.40 to turn the downbeat bias around. If momentum traders join in, a cascade of sell-offs may target 23.40 and then the psychological tag at 23.00.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Friday’s Decline May Be Retraced, but Will S&P 500 Get Back Above 4,500?

Finance Press Release Finance Press Release 13.09.2021 15:36
On Friday stocks were the lowest since the end of August. We may see a rebound today, but is the market poised to go even lower then?The broad stock market index lost 0.77% on Friday after falling almost 0.5% on Thursday. It went much below the 4,500 level. On September 2 the index reached a new record high of 4,545.85. Since then it has lost almost 90 points (around 2%). This morning stocks are expected to open higher and retrace some of the recent decline.The index remains elevated after the recent run-up, so we may see some more profound profit-taking action at some point.The nearest important support level of the broad stock market index is at 4,465-4,470, marked by the previous local low. The next support level is at 4,445-4,450. On the other hand, the nearest important resistance level is at 4,490-4,500, marked by the previous support level. The S&P 500 got back close to its over four-month-long upward trend line on Friday, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):S&P 500 Remains Below Medium-Term Trend LineThe S&P 500 index broke below its medium-term upward trend line. However, it is still relatively close to that trend line. The nearest important support level is at 4,300, as we can see on the weekly chart:Dow Jones Went Lower – As ExpectedLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index broke below a potential two-month-long rising wedge downward reversal pattern last week. It remained relatively weaker, as it didn’t reach a new record high like the S&P 500 and the Nasdaq. The support level is now at around 34,500 and the near resistance level is at 34,750, marked by the recent support level, as we can see on the daily chart:Apple’s Bull TrapApple stock weighs around 6.3% in the S&P 500 index, so it is important for the whole broad stock market picture. Almost a week ago on Tuesday it reached a new record high of $157.26. Since then it has been declining. So it looks like a bull trap trading action. On Friday the stock accelerated its downtrend following an unfavorable federal judge's ruling. We can still see negative technical divergences between the price and indicators and a potential topping pattern. The two-month-long upward trend line remains at around $145.0-147.5.Our Short Position – Closer to Break-Even PointLet’s take a look at the hourly chart of the S&P 500 futures contract. We opened a short position on August 12 at the level of 4,435. The position was profitable before the recent run-up. We still think that a speculative short position is justified from the risk/reward perspective. (chart by courtesy of http://tradingview.com):ConclusionOn Friday, the S&P 500 index accelerated its short-term downtrend after breaking below 4,500 level again. For now, it still looks like a correction within an uptrend. Today we will most likely see a higher opening of the trading session – we may see another profit-taking action later in the day though.The market seems short-term overbought, and we may see some downward correction soon. Therefore, we think that the short position is justified from the risk/reward perspective.Here’s the breakdown:The market retraced more of its recent advances on Friday, as the S&P 500 index extended its decline below 4,500 level.Our speculative short position is still justified from the risk/reward perspective.We are expecting a 5% or bigger correction from the record high.Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care
Gold Miners: Last of the Summer Wine

Gold Miners: Last of the Summer Wine

Finance Press Release Finance Press Release 13.09.2021 16:00
Autumn is just around the corner, and while the precious metals tasted some success most recently, the medium-term is still set for a downtrend.With Fed Chairman Jerome Powell sticking to his dovish guns and U.S. nonfarm payrolls elongating the central bank’s perceived taper timeline, gold, silver, and mining stocks were extremely happy campers. However, with event-driven rallies much more semblance than substance, I warned on Sep. 7 that the rollercoaster of emotions would likely end in tears.I wrote:With the 2013 analogue leading the gold miners down an ominous path, the HUI Index and the GDX ETF have rallied by roughly 8% off their recent lows. However, identical developments occurred in 2013, and neither bout of optimism invalided their bearish medium-term outlooks.And after the GDX ETF and the GDXJ ETF (our profitable short position) plunged by 5.35% and 6.98% respectively last week, summertime sadness confronted the precious metals. Likewise, with more melancholy moves likely to materialize over the medium term, gold, silver, and mining stocks should hit lower lows during the autumn months.To explain, the HUI Index also plunged by nearly 6% last week, and the reversal of the previous corrective upswing mirrors its behavior from 2013. In addition, with its stochastic oscillator and its RSI (Relative Strength Index) also a spitting image, an ominous re-enactment of 2013 implies significantly lower prices over the medium term.Please see below:What’s more, the vertical, dashed lines above demonstrate how the HUI Index is following its 2012-2013 playbook. For example, after a slight buy signal from the stochastic indicator in 2012, the short-term pause was followed by another sharp drawdown. For context, after the HUI Index recorded a short-term buy signal in late 2012 – when the index’s stochastic indicator was already below the 20 level (around 10) and the index was in the process of forming the right shoulder of a huge, medium-term head-and-shoulders pattern – the index moved slightly higher, consolidated, and then fell off a cliff. Thus, the HUI Index is quite likely to decline to its 200-week moving average (or so) before pausing and recording a corrective upswing. That’s close to the 220 level. Thereafter, the index will likely continue its bearish journey and record a final medium-term low some time in December.Furthermore, I warned previously that the miners’ drastic underperformance of gold was an extremely bearish sign. There were several weeks when gold rallied visibly and the HUI Index actually declined modestly. And now, gold stocks are trading close to their previous 2021 lows, while gold is almost right in the middle between its yearly high and its yearly low.And why is this so important? Well, because the bearish implications of gold stocks’ extreme underperformance still remain intact.Let’s keep in mind that the drastic underperformance of the HUI Index also preceded the bloodbath in 2008 as well as in 2012 and 2013. To explain, right before the huge slide in late September and early October 2008, gold was still moving to new intraday highs; the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market suffered materially. If stocks didn’t decline so profoundly back then, gold stocks’ underperformance relative to gold would have likely been present but more moderate.Nonetheless, broad head & shoulders patterns have often been precursors to monumental collapses. For example, when the HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02. Thus, three of the biggest declines in the gold mining stocks (I’m using the HUI Index as a proxy here) all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern. As a reminder, the HUI Index recently completed the same formation.Yes, the HUI Index moved back below the previous lows and the neck level of the formation, which – at face value – means that the formation was invalidated, but we saw a similar “invalidation” in 2000 and in 2013. And then, the decline followed anyway. Consequently, I don’t think that taking the recent move higher at its face value is appropriate. It seems to me that the analogies to the very similar situation from the past are more important.As a result, we’re confronted with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early-2020 low.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.In both cases, the forecast for silver, gold, and mining stocks is extremely bearish for the next several months.For even more confirmation, let’s compare the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, investors rejected the senior miners (GDX) attempt to recapture their 50-day moving average and the failure was perfectly in tune with what I wrote on Sep. 7:Large spikes in daily volume are often bearish, not bullish. To explain, three of the last four volume outliers preceded an immediate top (or near) for the GDX ETF, while the one that preceded the late July rally was soon followed by the GDX ETF’s 2020 peak. Thus, when investors go ‘all in,’ material declines often follow. And with that, spike-high volume during the GDX ETF’s upswings often presents us with great shorting opportunities.Please see below:Even more bearish, not only did last week’s plunge usher the GDX ETF back below the neckline of its bearish head & shoulders pattern (the horizontal red line on the right side of the chart above), but the sell signal from the stochastic oscillator remains firmly intact. As a result, ominous clouds continue to form.And with the GDXJ ETF stuck in a similar rut, I wrote on Sep. 7 that overzealous investors would likely end the week disappointed:With the current move quite similar to the corrective upswing recorded in mid-May, the springtime bounce was also followed by a sharp drawdown. As a result, the GDXJ ETF could be near its precipice, as its 50-day moving average is right ahead. And with the key level now acting as resistance, investors’ rejection on Sep. 3 could indicate that the top is already here.Moreover, while the junior miners followed the roadmap to perfection, the GDXJ ETF still remains ripe for lower lows over the medium term.Please see below:Finally, while I’ve been warning for months that the GDXJ/GDX ratio was destined for devaluation, after another sharp move lower last week, the downtrend remains intact. For example, when the ratio’s RSI jumped above 50 three times in 2021, it coincided with short-term peaks in gold. Second, the trend in the ratio this year has been clearly down, and there’s no sign of a reversal, especially when you consider that the ratio broke below its 2019 support (which served as resistance in mid-2020). When the same thing happened in 2020, the ratio then spiked even below 1.More importantly, though, with the relative weakness likely to persist, the profits from our short position in the GDXJ ETF should accelerate during the autumn months.The bottom line?If the ratio is likely to continue its decline, then on a short-term basis we can expect it to decline to 1.27 or so. If the general stock market plunges, the ratio could move even lower, but let’s assume that stocks decline moderately (just as they did in the last couple of days) or that they do nothing or rally slightly. They’ve done all the above recently, so it’s natural to expect that this will be the case. Consequently, the trend in the GDXJ to GDX ratio would also be likely to continue, and thus expecting a move to about 1.26 - 1.27 seems rational.If the GDX is about to decline to approximately $28 before correcting, then we might expect the GDXJ to decline to about $28 x 1.27 = $35.56 or $28 x 1.26 = $35.28. In other words, $28 in the GDX is likely to correspond to about $35 in the GDXJ.Is there any technical support around $35 that would be likely to stop the decline? Yes. It’s provided by the late-Feb. 2020 low ($34.70) and the late-March high ($34.84). There’s also the late-April low at $35.63. Conservatively, I’m going to place the profit-take level just above the latter.Consequently, it seems that expecting the GDXJ to decline to about $35 is justified from the technical point of view as well.In conclusion, gold, silver, and mining stocks went from delighted to despondent, as the technical downpour continues to rain on their parade. And while a major buying opportunity may present itself in December, the next few months will likely elicit more tears than cheers. As a result, while we eagerly await the opportunity to go long the precious metals and participate in their secular uptrends, bearish breakdowns, stock market struggles, and the Fed’s taper timeline will likely dampen their moods over the medium term.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Where Are the Fireworks?

Monica Kingsley Monica Kingsley 13.09.2021 16:18
Stocks and credit markets gave up promising opening gains, and it was only commodities that had a really good day. Seems like the beneficiary of inflation would be indeed real assets as I had been harping about so often, and that the S&P 500 is starting to run into headwinds. Not on account of taper expectations, which appear to have been indeed pushed to the Nov-Dec time window, but thanks to inflation. Whenever you start seeing heavyweights roll over to the downside, it‘s time to pay attention.Yes, enter tech behemoths – worthwhile to watch. Stagflation would be a powerful environment to facilitate stock market declines – who could forget the 1974-5 slump? Real assets stand positioned to reap the rewards as the cost push inflation that I‘ve been discussing since early this year, is very much intact. Throw in some serious supply chain disruptions that won‘t be resolved this year, and all you end up with, is waiting for precious metals to catch up in the commodities appreciation – bringing in very nice profits in oil and copper… My total portfolio performance chart is at a fresh high!Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookBears took the opportunity, and managed to close quite a few opening gaps on Friday. Would the 50-day moving average again cushion the downswing?Credit MarketsCredit market turned sharply lower, and the only encouraging sign, is the lack of volume when compared to the prior upswing.Gold, Silver and MinersGold and silver are stable in the very short run, and can stillsurprise on the upside. However bleak the miners to gold ratio looks like, precious metals are approaching Sep FOMC disappointment as the Fed won‘t taper then – and that equals celebrations in the metals. Meanwhile, inflation keeps biting, and real rates are going ever more negative.Crude OilCrude oil predictably rose, erasing the poor U.S. inventories‘ effect. Oil stocks performance is actually reasonably strong given the broad stock market slide – black gold can keep on surprising on the upside.CopperCopper played strong catch up to the CRB Index, and on heavy volume. This is as bullish short-term as it gets.Bitcoin and EthereumBitcoin and Ethereum downswing is approaching juncture – will it break below the Sep lows? The 44,000 level is once again key, but I‘m looking for any bearish move to be invalidated, and for the golden cross to happen.SummaryRisk-on was in the end selective on Friday, with real assets outperforming paper ones strongly. Such a dynamic is likely is likely to carry over to the week just starting as a crucial test awaits S&P 500 – and it appears the stock market dip would be bought once again.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Tame Inflation and the Risk-On Fuse

Monica Kingsley Monica Kingsley 14.09.2021 16:01
Stocks and credit markets sent conflicting messages – weakness in the S&P 500 wasn‘t matched by bonds losing ground. Though elevated by recent standards, VIX doesn‘t look to be in the appetite for further sustained gains, which would speak for gradual stabilization in stocks before these decide to move again.CPI coming in neither too hot, nor too cold, would be in line with my recent expectations of inflation becoming entrenched and elevated. Still, the figures support the transitory notion to a degree – the markets are obviously afraid of high inflation forcing Fed‘s mistake, and any reading that won‘t light the immediate inflation fires, would be considered good for the risk-on assets. More so probably for real ones as opposed to stocks. Finally, more time for the Fed to act implies better possibilities for precious metals bulls.As stated yesterday:(…) tech behemoths – worthwhile to watch. Stagflation would be a powerful environment to facilitate stock market declines – who could forget the 1974-5 slump? Real assets stand positioned to reap the rewards as the cost push inflation that I‘ve been discussing since early this year, is very much intact. Throw in some serious supply chain disruptions that won‘t be resolved this year, and all you end up with, is waiting for precious metals to catch up in the commodities appreciation – bringing in very nice profits in oil and copper…Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookWhile the bears fumbled, the bulls didn‘t take the opportunity convincingly. The 50-day moving average looks to be holding for now still, especially when credit markets are considered.Credit MarketsCredit markets turned noticeably higher, and that‘s positive for the stock market bulls.Gold, Silver and MinersGold and silver are rather stable in the very short run, and can still surprise on the upside – the miners to gold ratio is already turning up in preparation for the Sep FOMC disappointment as the Fed won‘t announce taper then. Meanwhile, inflation isn‘t disappearing, and real rates are going increasingly more negative.Crude OilCrude oil rise was associated with energy sector moving up as well, and the upswing outlook is slowly but surely improving. Black gold stands to benefit from the return of risk appetite and the dollar stalling – just as copper would.CopperCopper reversal has the power to reach a bit further still, but I‘m not looking for the 50-day moving average to fold like a cheap suit.Bitcoin and EthereumBitcoin keeps up the odds of golden cross happening, and Ethereum isn‘t at its weakest either. The crypto bulls can gather strength over the coming sessions.SummaryPerceptions of cooling down inflation stand ready to support risk taking, and both real assets (including precious metals of course) and stocks, stand to benefit. The dollar would get under renewed pressure, and not even yields moving up, would help reverse its slow but steady decline.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

S&P 500: Striking Similarity to the September Last Year

Finance Press Release Finance Press Release 15.09.2021 15:06
Stocks extended their short-term downtrend as the S&P 500 index fell slightly below its Monday’s daily low. Is more downside trading action coming?The broad stock market index fell to the daily low of 4,435.46 on Tuesday and it was the lowest since August 20. On September 2 the index reached a new record high of 4,545.85. Since then it has lost over 110 points. This morning stocks are expected to open virtually flat.The index remains elevated after the recent run-up, so we may see some more profound profit-taking action at some point.The nearest important support level of the broad stock market index is at 4,435 and the next support level is at 4,400-4,410. On the other hand, the nearest important resistance level is now at 4,465-4.475, marked by the recent support level. The S&P 500 got back close to its over four-month-long upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones – Short-term ConsolidationLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index broke below a potential two-month-long rising wedge downward reversal pattern last week. It remained relatively weaker, as it didn’t reach a new record high like the S&P 500 and the Nasdaq. The support level is now at around 34,500 and the near resistance level is at 34,750, marked by the recent support level, as we can see on the daily chart:September Last Year – S&P 500 Fell Almost 11%In 2020, the S&P 500 index reached a local high of 3,588.11 on September 2 and in just three weeks it fell 10.6% to local low of 3,209.45 on September 24. This year, September’s downward correction has started at the new record high of 4,545.85 on September 3, so there is a striking similarity between those two trading actions. However, the index is just 2.4% down this time.Apple Stock at Trend LineApple stock weighs around 6.3% in the S&P 500 index, so it is important for the whole broad stock market picture. Last week it reached a new record high of $157.26. Since then it has been declining. So it looks like a bull trap trading action. On Friday the stock accelerated its downtrend following an unfavorable federal judge's ruling. We can still see negative technical divergences between the price and indicators and a potential topping pattern. The two-month-long upward trend line remains at around $147.ConclusionYesterday, the S&P 500 index extended its short-term downtrend following breaking below 4,500 level on Friday. For now, it still looks like a correction within an uptrend. Today we will most likely see a flat opening of the trading session – we may see some more short-term consolidation.The market seems overbought, and we may see some more profound downward correction soon. Therefore, we think that the short position is justified from the risk/reward perspective.Here’s the breakdown:The market retraced more of its recent advances this week, as the S&P 500 index extended its decline below 4,450 level.Our speculative short position is still justified from the risk/reward perspective.We are expecting a 5% or bigger correction from the record high.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Fabled September Storms

Monica Kingsley Monica Kingsley 15.09.2021 16:03
S&P 500 faded the opening upswing, breaking below Monday‘s lows. High yield corporate bonds didn‘t surprise by at least closing unchanged, and neither did the quality debt instrument facilitate an upswing within tech or interest rate sensitive sectors such as utilities. In spite of the solid potential for an intraday rally attempt that could take stocks closer to 4500 again, none materialized.The bears are taking a breather as evidenced by the VIX rejecting the upside move – but the volatility metric doesn‘t appear yet ready to roll over to the downside either. While the (mistaken) notion of cooling down CPI could have pushed stocks a little higher, markets appear more focused on the decelerating real economy, on the almost stagflationary atmosphere that‘s going to have stocks in its grip for the remainder of 2021: (…) CPI coming in neither too hot, nor too cold, would be in line with my recent expectations of inflation becoming entrenched and elevated. Still, the figures support the transitory notion to a degree – the markets are obviously afraid of high inflation forcing Fed‘s mistake, and any reading that won‘t light the immediate inflation fires, would be considered good for the risk-on assets. More so probably for real ones as opposed to stocks. Finally, more time for the Fed to act implies better possibilities for precious metals bulls.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThe bears retook initiative, making quite a progress when sectoral view is engaged. It doesn‘t mean though the sentiment can‘t flip bullish at short notice, except that there is none at the moment.Credit MarketsCredit markets turned risk-off, and unless HYG kicks in again, the stock market bulls can‘t think about crossing back above 4,500.Gold, Silver and MinersGold embraced the retreating yields and wavering dollar, followed by miners and silver. The heavier than usual volume shows accumulation, but the bulls better arm themselves with patience.Crude OilCrude oil hesitated yesterday, and oil stocks likely declined merely in sympathy with the stock market. Black gold‘s daily resilience can very well mean a broader commodity upswing is at hand.CopperCopper had been trading a bit too much at odds with the CRB, and remains prone to an upside reversal. I‘m not looking for the 50-day moving average to give in.Bitcoin and EthereumBitcoin golden cross is here, and cryptos are likely to continue their measured rise. Crucially, Ethereum outperformance is still with us.SummaryRisk taking – or should it be properly called „hedging“ – lit the fuse behind real assets as paper ones lag. While the dollar hasn‘t experienced much selling pressure yet in spite of retreating Treasury yields, its any modest decline is likely to be more than mirrored by the rising commodities, fitting well what one would look for in a slowing down economy with still rampant money printing.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Intraday Market Analysis – Dax Extends Consolidation

Jing Ren Jing Ren 13.09.2021 10:49
GER 30 tests key support The stock markets recover as a discussion between Biden and Xi raises hopes of a thaw in US-China relations. The Dax 30 has found buying interest on the daily support (15450). A bullish RSI divergence suggests a loss in the sell-off momentum. Traders were eager to buy the dip in this area of congestion when the RSI showed an oversold situation. A rally above 15740 would confirm the rebound. 16000 would be the target when buyers regain confidence. Otherwise, a slide below 15450 may trigger an extended correction. CADJPY hits key resistance The loonie stalled after Canada’s mixed employment data in August. The pair has previously broken below the demand zone at 86.60, putting buyers on the defensive. The latest rebound has turned out to be a dead cat bounce after the price saw strong selling pressure at 87.35. An overbought RSI was an opportunity for sellers to step in. Sentiment remains bearish in line with the downtrend initiated in early June. 86.40 is the last line of defense for the bulls and a fall below may trigger a sell-off to 85.50. XAGUSD sees bearish breakout Bullions weakened after the US dollar advanced on better-than-expected producer prices. The break below the rising trendline has put silver’s recovery at risk. Then the bears’ push below the critical support at 23.80 was an indication that they have gained the upper hand. An oversold RSI may cause a limited bounce. The bulls have the daunting task of lifting offers around 24.40 to turn the downbeat bias around. If momentum traders join in, a cascade of sell-offs may target 23.40 and then the psychological tag at 23.00.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher?

Finance Press Release Finance Press Release 17.09.2021 15:54
August marked the 50th anniversary of Nixon’s abandonment of the gold standard. It caused so many problems for the economy…and gold didn’t take over?Last month marked the 50th anniversary of President Nixon’s suspension of the convertibility of US dollars into gold. This move broke the last, thin link between world currencies and the yellow metal, effectively ending the ersatz of the gold standard that we still had back then (the official end came in March 1973, marking the start of an era of freely-floating fiat currencies).I wrote about the collapse of the Bretton Woods in the last edition of the Gold Market Overview, but as it was a truly revolutionary event that paved the way for today’s monetary conditions, it’s worth mentioning the topic again.You see, as weak the diluted post-war version of the gold standard was, it limited the US central bank’s ability to increase the money supply, as there was still a possibility that other participants of the system would redeem their dollars for gold. But Nixon “suspended temporarily” the convertibility of the dollar into gold, and while gold is away, the mice will play. Without any true constraints, the pace of annual money growth hit double digits. The CPI inflation rates followed, and the great stagflation of 1970s emerged, as the chart below shows.What’s more, without the discipline imposed by the gold standard, the central bank could much easier monetize the public debt. The governments could spend more, maintain fiscal deficits and increase their indebtedness. In short, without gold as an anchor for monetary policy, we got more money printing, more debt, higher inflation, and more severe financial crises.Now, one could ask: if the current monetary system, or – as some analysts prefer to call it – non-system is so bad, why isn’t the price of gold higher? Shouldn’t it be rallying, indicating how rotten our fiat-money-debt-fueled economy is?Well, there are many answers to this questions. First of all, let’s note that the price of gold has already surged about 4100%, or more than 7.7% annually, on average, since 1971 (see the chart below), which is really something!Second, financial markets are great supporters of the current monetary system, as they love loose monetary policy and liquidity drips from the central banks. Please remember that the US stock market welcomed the closure of the gold window by increasing 3% the next day after Nixon’s infamous speech.Third, even poor systems can work for a while. Communist economies didn’t collapse immediately, despite their obvious inefficiency. The Breton Woods worked for almost 30 years despite its evident flaws. Furthermore, there were some institutional changes implemented in order to strengthen the current system, such as central banks’ independence, inflation targeting, prohibition of direct monetization of public debt, etc.However, probably the most important reason is that the gold standard was in a way replaced by the US dollar standard, as the greenback substituted gold as the world’s reserve currency. In such a system, there is simply no alternative to the US dollar as a global reserve. This is because America became even more central to global finance than it was in 1971 and because practically all countries conduct similarly unsound monetary and fiscal policies (and some central banks like the ECB or BoJ are even more radical than the Fed). The greenback’s strength limits dollar-denominated gold prices.However, it’s worth remembering that unlike the gold standard, under which currencies were backed by gold (or: they were actually defined as units of gold’s weight), today’s currencies are backed only by the reputation of their issuers, which is not set in stone. This is actually why the Breton Woods eventually collapsed. Initially, the US enjoyed a great reputation, and no one even dared to question Uncle Sam’s ability to convert dollars to gold. But the prolonged war in Vietnam, Johnson’s great social programs, increased government spending and growing deficits undermined this reputation, and other countries started to demand gold for their dollars.The same may happen in the future, especially given that Trump has left some scratches on America’s reputation. With Biden continuing his predecessor’s populist economic doctrine, the greenback should face further headwinds. What’s more, with ultra-low interest rates and a mammoth pile of debt, the room for inflating the economic bubble is limited. Although the return to the gold standard seems unlikely, the recurring business cycles and economic crises are more than certain. That’s great news for gold.In other words, the current system persists mainly thanks to the faith in the central banks’ ability to control inflation, even without the discipline of the gold standard. However, this belief can break down one day. The Fed might be right that the current high inflation is temporary. But if not, we could have “Powell’s shock”, which could strengthen gold, just as Nixon’s shock did.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Will Quadruple Witch Send Stock Prices Lower?

Will Quadruple Witch Send Stock Prices Lower?

Finance Press Release Finance Press Release 17.09.2021 15:57
Stocks are going sideways since last Friday. Will they break higher and go back to the record high? Or the opposite? It still doesn’t look bullish.The broad stock market index lost 0.16% on Thursday as it fluctuated within a short-term consolidation following last week’s declines. On September 2 the index reached a new record high of 4,545.85. Since then it has lost over 110 points. This morning stocks are expected to open virtually flat again following a pre-session rebound from overnight lows.The index remains elevated after the recent run-up, so we may see more profound profit-taking action at some point.The nearest important support level of the broad stock market index is now at 4,435-4,450 and the next support level is at 4,400-4,410. On the other hand, the nearest important resistance level is now at 4,490-4,500, marked by the previous support level. The S&P 500 bounced off its over four-month-long upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):S&P 500’s Medium-Term Downward Reversal?The S&P 500 index broke below its medium-term upward trend line a few weeks ago. However, it is still relatively close to the record high. The nearest important support level is at 4,300, as we can see on the weekly chart:Dow Jones Trades Within a ConsolidationLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index broke below a potential two-month-long rising wedge downward reversal pattern recently. It remained relatively weaker in August - September, as it didn’t reach a new record high like the S&P 500 and the Nasdaq. The support level is now at around 34,500 and the near resistance level is at 35,000, marked by the recent support level, as we can see on the daily chart:Apple at Support LevelApple stock weighs around 6.3% in the S&P 500 index, so it is important for the whole broad stock market picture. Last week it reached a new record high of $157.26. And since then it has been declining. So it looked like a bull trap trading action. On Friday the stock accelerated its downtrend following an unfavorable federal judge's ruling. We can still see negative technical divergences between the price and indicators and a potential topping pattern. The stock is at an over two-month-long upward trend line – it’s a ‘make or break’ situation.ConclusionThe S&P 500 index continued to trade within a short-term consolidation yesterday. It’s been a week since the market reached the current price levels. So is this a flat correction within a downtrend or some bottoming pattern? Today we will most likely see another flat opening of the trading session – later in the day we may see some more volatility because of a quarterly derivatives expiration known as ‘quadruple witching Friday’.The market seems overbought, and we may see some more profound downward correction soon. Therefore, we think that the short position is justified from the risk/reward perspective.Here’s the breakdown:The market retraced more of its recent advances this week, as the S&P 500 index extended its decline below 4,450 level.Our speculative short position is still justified from the risk/reward perspective.We are expecting a 5% or bigger correction from the record high.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Stock Market Drops. Will Correction Continues?

Kseniya Medik Kseniya Medik 20.09.2021 13:22
The US broad-market index, S&P 500, has been pressed below the 50-day moving average for the first time since March! Why?Investors are waiting for the Federal Reserve to hold a meeting on Wednesday. The central bank isn’t likely to take some hawkish actions, but it may hint at tapering this year. This will be good news for the US dollar and negative for the stock market. The anticipation of this decision is already setting the market in motion. The overall sentiment is pressing not only the US stock indices but also the Hang Seng index and an Australian one. Besides, most of the risk-on assets are losing their value while the US dollar is getting stronger. Quadruple witching is adding to the increased volatility as well. It is the simultaneous expiration of four kinds of options and futures contracts.Tech outlookThe S&P 500 index (US500) has dropped below the lower line of Bollinger Bands, which means that the price is at extreme lows and it’s going to reverse up soon. However, the correction may continue if the index breaks below the support line of 4380. The stock index may reach the 100-day moving average of 4335. Not to miss the reversal, we highly recommend you add the MACD indicator to your chart and monitor the breakout above the zero line. When it occurs, it would signal the upcoming reversal up. Resistance levels are the 50-day moving average of 4430 and the middle line of Bollinger Bands at 4500. Download the FBS Trader app to trade anytime anywhere! For personal computer or laptop, use MetaTrader 5!
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

S&P 500 Is Poised to Open Much Lower, Is This a Dip-buying Opportunity?

Finance Press Release Finance Press Release 20.09.2021 15:09
Stocks are breaking down! The S&P 500 index fell almost 1% on Friday and today it is poised to open 1.8% lower. Are we getting close to a local low?The broad stock market index broke below its short-term consolidation on Friday, as the S&P 500 index fell below its recent local lows along 4,450 price level. On September 2 the index reached a new record high of 4,545.85. Since then it has lost almost 120 points. This morning stocks are expected to open much lower following big declines in Asia and Europe after news about Evergrande Real Estate Group crisis in China.The nearest important support level of the broad stock market index is now at 4,300-4,350 and the next support level is at 4,200. On the other hand, the nearest important resistance level is now at 4,400-4,450, marked by the previous support level. The S&P 500 broke below its over four-month-long upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones Is Leading LowerLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index broke below a potential two-month-long rising wedge downward reversal pattern recently. It remained relatively weaker in August - September, as it didn’t reach a new record high like the S&P 500 and the Nasdaq. Today it may sell off to 34,000 level or lower. The next support level is at around 33,250-33,500 and the resistance level is at 34,500, marked by the recent support level, as we can see on the daily chart:Apple Breaks Below Upward Trend LineApple stock weighs around 6.3% in the S&P 500 index, so it is important for the whole broad stock market picture. In early September it reached a new record high of $157.26. And since then it has been declining. So it looked like a bull trap trading action. We can still see negative technical divergences between the price and indicators and a potential topping pattern. The stock is breaking below an over two-month-long upward trend line.September Last Year – S&P 500 Fell Almost 11%In 2020, the S&P 500 index reached a local high of 3,588.11 on September 2 and in just three weeks it fell 10.6% to local low of 3,209.45 on September 24. This year, September’s downward correction has started from the new record high of 4,545.85 on September 3, so there is a striking similarity between those two trading actions.ConclusionThe S&P 500 index broke below its short-term consolidation on Friday and today it will most likely accelerate the downtrend from the early September record high. However, later in the day we may see some short-term/ intraday bottoming trading action.The market seems overbought, and we may see some more profound downward correction soon. Therefore, we think that the short position is justified from the risk/reward perspective.Here’s the breakdown:The market is extending its downtrend today, as the S&P 500 index is likely to open much below 4,400 level.Our speculative short position is still justified from the risk/reward perspective.We are expecting a 5% or bigger correction from the record high.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
US Industry Shows Strength as Inflation Expectations Decline

September 20-25 Trade Ideas

Kseniya Medik Kseniya Medik 21.09.2021 11:55
US stock market corrects, gold recovers and the crypto market drops hard! Best trade opportunities during this week in the article! Let’s check the charts and set some goals!NASDAQ (US100)The US100 index plunges as the US dollar strengthens. The US stock market will face a big correction at the end of September!Daily chartNASDAQ faces the correction everybody has been waiting several months. US stock index gained by more than 120% since March 2020 drop. Targets are 14600 (2,7%) and 14000 (7,1%).GOLD (XAU/USD)Gold has always been the best safe-haven asset. This market turbulence period will not be an exception. XAU/USD already shows strength against the whole market, and we suppose this trend to continue. Targets are $1777 and $1783.Bitcoin (BTC/USD)Bitcoin price demonstrates that the community does not recognize crypto as a safe haven. Bitcoin plunges by 8% on Monday. Despite this, we expect the pullback to happen during this week if Bitcoin steaks above $44 200 by the end of Monday's trading session. Target is $47 000. If it breaks, $42 850 support level and holds below it, we will see a drop with the target at $40 500.Download the FBS Trader app to trade anytime anywhere! For personal computer or laptop, use MetaTrader 5!
Boosting Stimulus: A Look at Recent Developments and Market Impact

How Do You Get Inflation Under Control?

Finance Press Release Finance Press Release 22.09.2021 16:20
Raise the dollar, drop the metals. Under most possible scenarios, things don’t look good for gold, silver, and mining stocks – for the medium-term.With the USD Index and U.S. Treasury yields the main fundamental drivers of the PMs’ performance, some confusion has arisen due to their parallel and divergent moves. For example, sometimes the USD Index rises while U.S. Treasury yields fall, or vice-versa, and sometimes the pair move higher/lower in unison. However, it’s important to remember that different economic environments have different impacts on the USD Index and U.S. Treasury yields.To explain, the USD Index benefits from both the safe-haven bid (stock market volatility) and economic outperformance relative to its FX peers. Conversely, U.S. Treasury yields only benefit from the latter. Thus, when economic risks intensify (like what we witnessed with Evergrande on Sep. 20), the USD Index often rallies while U.S. Treasury yields often fall. Thus, the economic climate is often the fundamental determinant of the pairs’ future paths.For context, I wrote on Apr.16:The PMs suffer during three of four possible scenarios:When the bond market and the stock market price in risk, it’s bearish for the PMsWhen the bond market and the stock market don’t price in risk, it’s bearish for the PMsWhen the bond market doesn’t price in risk, but the stock market does, it’s bearish for the PMsWhen the bond market prices in risk and the stock market doesn’t, it’s bullish for the PMsRegarding scenario #1, when the bond market and the stock market price in risk (economic stress), the USD Index often rallies and its strong negative correlation with the PMs upends their performance. Regarding scenario #2, when the bond market and the stock market don’t price in risk, U.S. economic strength supports a stronger U.S. dollar and rising U.S, Treasury yields reduce the fundamental attractiveness of gold. For context, the PMs are non-yielding assets, and when interest rates rise, bonds become more attractive relative to gold (for some investors). Regarding scenario #3, when the stock market suffers and U.S. Treasury yields are indifferent, the usual uptick in the USD Index is a bearish development for the PMs (for the same reasons outlined in scenario #1). Regarding scenario #4, when the bond market prices in risk (lower yields) and the stock market doesn’t, inflation-adjusted (real) interest rates often decline, and risk-on sentiment can hurt the USD Index. As a result, the cocktail often uplifts the PMs due to lower real interest rates and a weaker U.S. dollar.The bottom line? The USD Index and U.S. Treasury yields can move in the same direction or forge different paths. However, while a stock market crash is likely the most bearish fundamental outcome that could confront the PMs, scenario #2 is next in line. While it may (or may not) seem counterintuitive, a strong U.S. economy is bearish for the PMs. When U.S. economic strength provides a fundamental thesis for both the USD Index and U.S. Treasury yields to rise (along with real interest rates), the double-edged sword often leaves gold and silver with deep lacerations.In the meantime, though, with investors eagerly awaiting the Fed’s monetary policy decision today, QE is already dying a slow death. Case in point: not only has the USD Index recaptured 93 and surged above the neckline of its inverse (bullish) head & shoulders pattern, but the greenback’s fundamentals remain robust. With 78 counterparties draining more than $1.240 trillion out of the U.S. financial system on Sep. 21, the Fed’s daily reverse repurchase agreements hit another all-time high.Please see below:Source: New York FedTo explain, a reverse repurchase agreement (repo) occurs when an institution offloads cash to the Fed in exchange for a Treasury security (on an overnight or short-term basis). And with U.S. financial institutions currently flooded with excess liquidity, they’re shipping cash to the Fed at an alarming rate. And while I’ve been warning for months that the activity is the fundamental equivalent of a taper – due to the lower supply of U.S. dollars (which is bullish for the USD Index) – the psychological effect is not the same. However, as we await a formal taper announcement from the Fed, the U.S. dollar’s fundamental foundation remains quite strong.Furthermore, with the Wall Street Journal (WSJ) publishing a rather cryptic article on Sep. 10 titled “Fed Officials Prepare for November Reduction in Bond Buying,” messaging from the central bank’s unofficial mouthpiece implies that something is brewing. And while the Delta variant and Evergrande provide the Fed with an excuse to elongate its taper timeline, surging inflation has the Fed increasingly handcuffed.As a result, Goldman Sachs Chief U.S. Economist David Mericle expects the Fed to provide “advance notice” today and set the stage for an official taper announcement in November. He wrote:“While the start date now appears set, the pace of tapering is an open question. Our standing forecast is that the FOMC will taper at a pace of $15bn per meeting, split between $10bn in UST and $5bn in MBS, ending in September 2022. But a number of FOMC participants have called instead for a faster pace that would end by mid-2022, and we now see $15bn per meeting vs. $15bn per month as a close call.”On top of that, with stagflation bubbling beneath the surface, another hawkish shift could materialize.To explain, I wrote on Jun. 17:On Apr. 30, I warned that Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), was materially behind the inflation curve.I wrote:With Powell changing his tune from not seeing any “unwelcome” inflation on Jan. 14 to “we are likely to see upward pressure on prices, but [it] will be temporary” on Apr. 28, can you guess where this story is headed next?And with the Fed Chair revealing on Jun. 16 what many of us already knew, he conceded:Source: CNBCMoreover, while Powell added that “our expectation is these high inflation readings now will abate,” he also conceded that “you can think of this meeting that we had as the ‘talking about talking about’ [tapering] meeting, if you’d like.”However, because actions speak louder than words, notice the monumental shift below?Source: U.S. FedTo explain, if you analyze the red box, you can see that the Fed increased its 2021 Personal Consumption Expenditures (PCE) Index projection from a 2.4% year-over-year (YoY) rise to a 3.4% YoY rise. But even more revealing, the original projection was made only three months ago. Thus, the about face screams of inflationary anxiety.What’s more, I highlighted on Aug. 5 that the hawkish upward revision increased investors’ fears of a faster rate-hike cycle and contributed to the rise in the USD Index and the fall in the GDXJ ETF (our short position).Please see below:And why is all of this so important? Well, with Mericle expecting the Fed to increase its 2021 PCE Index projection from 3.4% to 4.3% today (the red box below), if the Fed’s message shifts from we’re adamant that inflation is “transitory” to “suddenly, we’re not so sure,” a re-enactment of the June FOMC meeting could uplift the USD Index and upend the PMs once again. For context, the FOMC’s July meeting did not include a summary of its economic projections and today’s ‘dot plot’ will provide the most important clues.Please see below:Finally, with CNBC proclaiming on Sep. 21 that the Fed is “widely expected to indicate it is getting ready to announce it will start paring back its $120 billion in monthly purchases of Treasuries and mortgage-backed securities,” even the financial media expects some form of “advance notice.”Source: CNBCThe bottom line? While the Delta variant and Evergrande have provided the Fed with dovish cover, neither addresses the underlying problem. With inflation surging and the Fed’s 2% annual target looking more and more like wishful thinking, reducing its bond-buying program, increasing the value of the U.S. dollar, and decreasing commodity prices is the only way to get inflation under control. In absence, the Producer Price Index (PPI) will likely continue its upward momentum and the cost-push inflationary spiral will likely continue as well.In conclusion, the gold miners underperformed gold once again on Sep. 21 and the relative weakness is profoundly bearish. Moreover, while the USD Index was roughly flat, Treasury yields rallied across the curve. And while Powell will do his best to thread the dovish needle today, he’s stuck between a rock and a hard place: if he talks down the U.S. dollar (like he normally does), commodity prices will likely rise, and inflation will likely remain elevated. If he acknowledges reality and prioritizes controlling inflation, the U.S. dollar will likely surge, and the general stock market should suffer. As a result, with the conundrum poised to come to a head over the next few months (maybe even today), the PMs are caught in the crossfire and lower lows will likely materialize over the medium term.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

S&P500 - Expect Volatility Upon FOMC Release

Finance Press Release Finance Press Release 22.09.2021 16:46
The S&P 500 index closed virtually flat on Tuesday following Monday’s sell-off and late-day rebound off the 4,300 price level. Is the correction over?The S&P 500 index fell the lowest since July 20 on Monday, as it reached the daily low of 4,305.91. It was 239.9 points or 5.28% below the September 2 record high of 4,545.85. We’ve witnessed an intraday rebound as the market closed around 52 points above the daily low. And on Tuesday it got back to the 4,400 price level before closing 0.08% lower, at 4,354.19.The nearest important support level of the broad stock market index is now at 4,300-4,330 and the next support level is at 4,200. On the other hand, the nearest important resistance level is now at 4,400-4,450, marked by the previous support level. The S&P 500 broke below its over four-month-long upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Medium-Term Downward Reversal or Just a Correction?The S&P 500 index broke below its medium-term upward trend line a few weeks ago. On Monday it fell to the nearest important support level is of 4,300, as we can see on the weekly chart:Dow Jones Remains Relatively WeakLet’s take a look at the Dow Jones Industrial Average chart. In early September the blue-chip index broke below a two-month-long rising wedge downward reversal pattern. It remained relatively weaker in August - September, as it didn’t reach new record high like the S&P 500 and the Nasdaq. And on Monday it fell below its July local low of around 33,740 before bouncing back to the 34,000 mark. The resistance level is now at 34,000-34,500, and the support level remains at around 33,500, as we can see on the daily chart:Apple Is At the Previous Local lowsApple stock weighs around 6.3% in the S&P 500 index, so it is important for the whole broad stock market picture. In early September it reached a new record high of $157.26. And since then it has been declining. So it looked like a bull trap trading action. On Monday the stock sold off to the previous local lows along $142 price level. They act as a support level. On the other hand, the resistance level is at around $145-146, marked by the recent local lows.ConclusionOn Monday, the S&P 500 index accelerated the downtrend from the early September record high and yesterday it bounced to the 4,400 price level before closing virtually flat. It looked like a short-covering rally and a short-term upward correction. Today, we will have the important FOMC release at 2:00 p.m. We will likely see an increased volatility and the index may fluctuate within its Monday’s daily trading range.There have been no confirmed positive signals so far. Therefore, we think that the short position is justified from the risk/reward perspective.Here’s the breakdown:The market accelerated its downtrend on Monday, as the S&P 500 index got close to 4,300 level.Our speculative short position is still justified from the risk/reward perspective.We are expecting some more downward pressure and a correction to 4,200-4,250 level.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Reflation vs. Stagflation

Monica Kingsley Monica Kingsley 27.09.2021 13:17
S&P 500 didn‘t give in to the opening weakness, and eked out minor gains. There was no selling into the close either – the table looks set for the muddle through to continue on Monday. Tech and value – uninspiring on the day, and the same could be said of the credit markets. Rising yields (the market believes in taper, it appears) across the board, with high yield corporate bonds holding up much better than quality debt instruments – I have seen stronger risk-on constellations really.Importantly, the huge weekly jump in Treasury yields (the 10-year yield jumped over 20 basis points to 1.47%) failed to lift the dollar, which says a lot given the risk-off entry to the week. Meanwhile, the Fed jawboning continues, and the bigger picture leaves the ambitious Nov tapering suspect.At the same time, the Fed‘s foot is to a large degree off the gas pedal, and even global liquidity is shrinking. New taxes are kicking in, job market woes are persisting, inflation isn‘t going away any time soon, challenged supply chains are forcing globalization into reverse, workforce is shrinking, GDP growth is decelerating, and no fresh fiscal initiatives are on the horizon – sounds like a recipe for stagflation.As I wrote on Friday:(…) The post-Fed relief simply took the bears for a little ride, and the Evergrande yuan bond repayment calmed the nerves. As if though the real estate sector was universally healthy – I think copper prices and the BHP stock price tell a different story. Things will still get interested in spite of PBOC moving in. The current macroeconomic environment will be very hard (economically and politically) to tighten into – have you noticed that the Turkish central bank unexpectedly cut rates?Precious metals should love the ever more negative real rates, and the financial repression that does accompany them. Commodities and real assets are bound to do great long-term, and stocks would enjoy the most the reflationary stage, the early stage of inflation where everyone benefits and no one pays. In spite of all the real world inflation, we‘ve not yet entered its nasty, late phase.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookFriday brought a daily pause in the upswing – the bulls however didn‘t yield to the sellers through the day.Credit MarketsHigh yield corporate bonds gave up less ground than quality debt instruments, whose downswing was arguably a bit too steep. The non-confirmation of the stock market advance though is barely visible.Gold, Silver and MinersGold managed to hold ground in spite of the steep rise in yields, but miners keep on being more and more undervalued – if you‘re a long-term investor, these are very interesting prices throughout the PMs sector. Silver keeps trading at odds with copper, and both metals (including a couple more), are required for the green economy shift.Crude OilOil stocks paused on Friday, and so will the oil upswing likely too next. Energies though remain bullish, and dips are to be bought.CopperCopper closed at weekly highs, but hesitated still when compared to the CRB Index. All isn‘t well if you look at BHP (or FCX), which is a proxy for both copper and China.Bitcoin and EthereumBitcoin and Ethereum have recovered from the China crypto trading crackdown notice, and keep repelling the bears successfully.SummaryRisk-on wasn‘t dethroned on Friday, but didn‘t convince either. Apart from select commodities, strong gains were absent. Wait and see on low volume day – one that is likely to carry over into Monday. Risk-on assets still haven‘t cut the corner (no recapturing of the 50-day moving average), and the VIX below 19 is slowly approaching the lower border of its recent range, meaning that volatility can surprise us shortly again.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
US Industry Shows Strength as Inflation Expectations Decline

Stocks Bounced Back, but Investors Should Be Wary Now

Finance Press Release Finance Press Release 27.09.2021 15:48
The S&P 500 index remained above 4,400 level on Friday. Will it get back to its early September record high? Or was it just a short-term upward correction?The S&P 500 index fell the lowest since July 20 on Monday a week ago, as it reached the local low of 4,305.91. It was 239.9 points or 5.28% below the September 2 record high of 4,545.85. Since Tuesday it has been bouncing and on Thursday it reached a local high of 4,465.40.The nearest important support level of the broad stock market index is now at 4,400-4,430, marked by last Monday’s daily gap down of 4,402.95-4,427.76. On the other hand, the nearest important resistance level is now at 4,470-4,500. The S&P 500 broke below its over four-month-long upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):S&P 500 Index Bounced From 4,300 Support LevelThe S&P 500 index broke below its medium-term upward trend line a few weeks ago. On Monday it fell to the 4,300 level. In the following days it has been bouncing from that support level, as we can see on the weekly chart:Dow Jones Broke Above Downward Trend LineLet’s take a look at the Dow Jones Industrial Average chart. In early September the blue-chip index broke below a two-month-long rising wedge downward reversal pattern. Last week it has bounced from the 33,600 price level. On Thursday it broke above the short-term downward trend line. The nearest important resistance level is now at 34,800-35,000 and the support level is at around 34,400, as we can see on the daily chart:Apple Got Back to Broken Trend LineApple stock weighs around 6.3% in the S&P 500 index, so it is important for the whole broad stock market picture. In early September it reached a new record high of $157.26. And since then it has been declining. So it looked like a bull trap trading action. On Monday a week ago the stock sold off to the previous local lows along $142 price level. They act as a support level. And the stock bounced to around $147 and to the broken upward trend line.ConclusionSince last Tuesday we’ve witnessed a short-covering rally fueled by the Wednesday’s FOMC Monetary Policy release. Most likely it’s just an upward correction within a downtrend. The S&P 500 index got back to the mid-September short-term consolidation and it may act as a short-term resistance level.There have been no confirmed positive signals so far. Therefore, we think that the short position is justified from the risk/reward perspective.Here’s the breakdown:The market accelerated its downtrend a week ago, as the S&P 500 index got close to 4,300 level.Our speculative short position is still justified from the risk/reward perspective.We are expecting some more downward pressure and a correction to 4,200-4,250 level.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Decarbonizing Hard-to-Abate Sectors: Key Challenges and Pathways Forward

Medium-Term Downtrend: Gold Miners in the Lead

Finance Press Release Finance Press Release 27.09.2021 16:08
Gold, silver, and mining stocks don’t need any help from the USDX or the stock market; they can decline all on their own – the miners in particular.Last week, mining stocks declined quite visibly, and it happened without significant help from the USD Index and from the general stock market. Silver and gold were practically flat week-over-week, so was the USD Index, and the general stock market (S&P 500) was up by 0.51%. This means that gold stocks and silver stocks should have closed the week relatively unchanged (as gold and silver did), or move somewhat higher (similarly to other stocks, as sometimes miners take their lead).Instead, all important proxies for the mining stocks moved lower and closed the week at new daily and weekly 2021 lows. The HUI Index and the GDX ETF were down by about 3%, the silver stocks (SIL ETF) were down by 3.6%, and the GDXJ ETF (proxy for junior miners) was down by 3.83%, which means that our short position in the latter just became even more profitable.Most importantly, it means that mining stocks continue to show weakness relative to gold, which tells us that the medium-term downtrend remains well intact. It also tells us that what I wrote previously about the medium-term link between the general stock market and mining stocks was most likely correct. Namely, that miners can decline without a decline in other stocks. A decline in the latter, will (as I still expect to see it sooner or later) simply exacerbate the decline’s volatility.Let’s take a look at the charts, starting with the long-term HUI Index chart – the flagship proxy for gold stocks.The clearest and most important thing that you can see on this chart is that gold miners continued their decline after completing – and verifying – the breakdown below the broad head and shoulders pattern (marked in green). Just like in the case of the previous similar patterns (also marked in green), mining stocks are likely to now decline profoundly. The 3% decline that we saw last week is likely just a small beginning of the entire slide.Yes, the Stochastic indicator is very oversold, but please note that it was the same in 2013 during the powerful post-head-and-shoulders-breakdown slide. And it didn’t cause the decline to end or reverse.The breakdown to yearly lows is also crystal-clear in case of the GDX ETF. The weekly close below the previous 2021 lows is critical, but it’s worth noting that it was also a close below the psychologically important (as its round) $30 level.The next target for the GDX ETF is based mainly on the 61.8% Fibonacci retracement level based on the entire 2020 rally. The previous retracements worked quite well, so it seems that this technique shouldn’t be ignored.The 38.2% retracement served as support in November 2020. The decline below this level triggered a short-term rebound.The 50% retracement served as support in March and August 2021. This level was particularly strong as it corresponded to the previous – May and June 2020 – lows. Reaching this level triggered rebounds. The first one was quite significant, and the second one was of only short-term importance.When the GDX ETF moves to its 61.8% it’s likely to rebound in the short term (and probably in the short term only), not only because of the retracement itself, but also because two additional techniques confirm this level as a short-term target. One is the support provided by the late-March 2020 high, and the other is the previous head and shoulders pattern that formed between April and early August 2021. Based on the size of the head (red, dashed lines), GDX is likely to decline to about $28.And while the GDX is likely to decline, so is its counterpart focused on junior mining stocks – the GDXJ ETF.In the case of the GDXJ, the downside target is broader, as the 61.8% Fibonacci retracement, the late-March 2020 high, and the head-and-shoulders-based target are not so aligned.A decline to the 61.8% Fibonacci retracement here would more or less correspond to the analogous move in the GDX in percentage terms. However, if the junior miners underperform (as they’ve been underperforming seniors for months), they could move even lower before rebounding.On a different note, let’s take a look at what’s happening in a less popular part of the precious metals sector – palladium.On Sep. 7, I wrote the following:Also adding credibility to the conclusions drawn from the volume spikes in the GDX ETF and the GDXJ ETF, last week, the Aberdeen Standard Physical Palladium Shares (PALL) ETF recorded a new 2021 high for weekly volume. And with abnormal volume offering a window into investor sentiment, historical euphoria preceded minor-to-massive declines in gold and silver (the red vertical dashed lines below). As a result, several areas of the precious metals market are sounding the alarm.Last week’s volume spike was an anomaly, and whenever we see one on a given market, it’s useful to check what happened when we saw it previously. At times, you can notice some regularities – a pattern. And such a pattern could have important trading implications. That’s the case with palladium volume spikes, which – while rather inconsequential for palladium itself – were practically always followed by lower gold, silver, and mining stock prices. The implications for the said markets for the following weeks are thus bearish.And indeed, the precious metals sector declined right after that volume spike. So far, the decline was only modest from the long-term point of view. Since some of the declines that followed the previous huge-volume signals from palladium were much bigger (especially the one following the 2020 top), we might see even lower prices of PMs and miners in the next weeks and months as well.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and silver that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Gauntlet to the Fed

Monica Kingsley Monica Kingsley 28.09.2021 15:49
S&P 500 was unable to sustain intraday gains, and both VIX and volume show the bears want to move. Arguably, the key market to watch, are the Treasuries – the 10-year yield continues rising, knocking on the 1.50% door again. On the day of Powell‘s testimony, that‘s quite a message to the central bank.As I wrote yesterday:(…) Rising yields (the market believes in taper, it appears) across the board, with high yield corporate bonds holding up much better than quality debt instruments – I have seen stronger risk-on constellations really.Importantly, the huge weekly jump in Treasury yields (the 10-year yield jumped over 20 basis points to 1.47%) failed to lift the dollar, which says a lot given the risk-off entry to the week. Meanwhile, the Fed jawboning continues, and the bigger picture leaves the ambitious Nov tapering suspect.At the same time, the Fed‘s foot is to a large degree off the gas pedal, and even global liquidity is shrinking. New taxes are kicking in, job market woes are persisting, inflation isn‘t going away any time soon, challenged supply chains are forcing globalization into reverse, workforce is shrinking, GDP growth is decelerating, and no fresh fiscal initiatives are on the horizon – sounds like a recipe for stagflation.The Fed can adjust (and even reverse) the tapering projections any time it pleases – it has played the job market card already. The dollar failing to gain traction though, is telling. Not even commodities as such are rolling over to the downside – actually, energies (oil, natural gas) have been the star performers (even within the S&P 500 sectors), and agrifoods are well positioned to do great as well. Copper and precious metals are feeling the short-term heat (still, the red metal offered a great entry point earlier today, making the open position profitable from the get-go), but the metals would stop reacting to the bad news while ignoring negative real rates (yes, transitory inflation is another myth the market place believes in) at some point. All roads lead to gold – inflationary and deflationary ones alike.What can the Fed do? Underestimate inflation, be behind the curve, carefully play expectations while real world inflation coupled with shattered supply chains wreck the stock market bull over the quarters ahead? Or throughtfully slam on the brakes (which is what the markets think it‘s doing now), which would force a long overdue S&P 500 correction that could reach even 10-15% from the ATHs? Remember that the debt ceiling hasn‘t been resolved yet, so an interesting entry to the month of October awaits.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookThe real question mark is where the bulls step in next, and whether they could carry prices over Monday‘s highs (4,470s) – this question is a bit too early to ask.Credit MarketsCredit markets haven‘t moderated their pace of decline, but the yield spreads show we have higher to go once the current dust settles.Gold, Silver and MinersGold managed to hold ground yesterday, but further yields pressure is likely to affect it, whether or not it translates to (marginally) higher USD Index.The bears have the short-term initiative till bonds turn.Crude OilCrude oil didn‘t treat us to much of an intraday dip, and the oil sector shows the rush into energies is on – no matter how short-term extended and approaching the late Jun highs black gold is.CopperCopper hesitation goes on, with the red metal failing to gain traction the CRB Index way. Still, it‘s range bound, and FCX (which is important for gold too) is showing signs of life.Bitcoin and EthereumBitcoin and Ethereum bears have reasserted themselves, and would confirm the initiative with a break below $44K in BTC. For now, it‘s too early to declare the end of the trading range.SummarySeptember storms aren‘t over yet, and declining bonds are a warning sign. Commodities are the most resilient, and will likely remain so, until precious metals sniff out the room for Fed‘s hawkishness as radically decreasing. The question marks over the timing and actual pace of taper, are persisting.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
New York Climate Week: A Call for Urgent and Collective Climate Action

Wishing Away Inflation

Monica Kingsley Monica Kingsley 29.09.2021 15:44
S&P 500 bears did indeed move, and the dip wasn‘t much bought. VIX with its prominent upper knot may not have said the last word yet, but a brief consolidation of the key volatility metrics is favored next. Even the overnight rebound (dead cat bounce, better said), is losing traction, prompting me to issue a stock market update to subscribers hours ago – fresh short profits can keep growing:(…) Following yesterday’s slide, the S&P 500 upswing appears running into headwinds as credit markets keep putting pressure on the Fed. Rising dollar is thus far having little effect on commodities, and precious metals have retraced a sizable part of the intraday downswing. Tech remains more vulnerable than value, and this correction appears as not (at all) yet over.While the dollar upswing hasn‘t been strongest over the prior week, higher yields are causing it to rise somewhat still. The commodity complex is remarkably resilient – the open long positions are likely to keep doing well – and I don‘t mean only energies. Copper is holding up in the mid 4.20s while precious metals are giving the bears a break – a tentative one, but nonetheless encouraging – as I have written yesterday:(…) the metals would stop reacting to the bad news while ignoring negative real rates (yes, transitory inflation is another myth the market place believes in) at some point. All roads lead to gold – inflationary and deflationary ones alike.What can the Fed do? Underestimate inflation, be behind the curve, carefully play expectations while real world inflation coupled with shattered supply chains wreck the stock market bull over the quarters ahead? Or throughtfully slam on the brakes (which is what the markets think it‘s doing now), which would force a long overdue S&P 500 correction that could reach even 10-15% from the ATHs? Remember that the debt ceiling hasn‘t been resolved yet, so an interesting entry to the month of October awaits.Bonds are signalling that the Fed‘s image of inflation fighter (right or wrong, have your pick) is losing the benefit of the doubt it was given with the Jun FOMC – bond yields have abruptly ended their descent and subsequent trading range. This spells not only inflation (the risk of Fed‘s policy mistake – warnings it would take longer with us than originally anticipated coupled with the professed faith it would just naturally subside all by itself), but smacks of stagflation.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookRising volume and some lower knot hint at the possibility of overnight rebound, but the real question is whether that would stick. So far, it doesn‘t seem so.Credit MarketsCredit markets haven‘t moderated their pace of decline, but TLT attempted to find bottom intraday, which would coincide with tech temporarily pausing as well. The dust hasn‘t yet settled.Gold, Silver and MinersGold is having harder and harder time declining, and the miners pause makes yesterday‘s modest downswing suspect. When silver joins in showing some relative strength, we would know the focus is shifting to inflation again, in precious metals as much as in Treasuries – this hasn‘t happened thus far.Crude OilCrude oil finally paused, and its candlestick favors consolidation – oil stocks have remained well performing, pointing out still more upside in the current black gold upleg.CopperCopper hesitation goes on, with the red metal once again trading at odds with the CRB Index, which makes further downside rather limited. Bitcoin and EthereumBitcoin and Ethereum bears haven‘t confirmed the initiative with a break below $40K in BTC (sorry for yesterday‘s typo stating $44K – corrected on my site). It‘s too early to declare the end of the trading range – similarly to gold, cryptos have a hard time falling, and that means something.SummaryStocks aren‘t out of the woods yet, and monetary policy has turned into a headwind. Damned if you do, damned if you don‘t – the Fed is having a hard time walking the fine taper line. Rising Treasury yields are a warning sign – commodities are likely to remain the most resilient, and precious metals would join just like cryptos. The question marks over the debt ceiling, the timing and actual pace of taper, keep persisting.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

S&P 500 Index: Bearish Price Action Again

Finance Press Release Finance Press Release 29.09.2021 15:57
Stocks went lower yesterday following the failed attempt at extending their last week’s rebound. Is the market poised to break below the recent low?The S&P 500 index retraced most of its recent advance on Tuesday, as it lost 2.04%. It followed the strengthening U.S. dollar and rising bond yields. One and a half week ago, it fell the lowest since July 20, as it reached the local low of 4,305.91. It was 239.9 points or 5.28% below the September 2 record high of 4,545.85. Then it has been bouncing and on Thursday it reached a local high of 4,465.40. So yesterday’s decline may look like resuming of the downtrend. However, this morning the market is expected to open slightly higher and we may see an intraday consolidation.The nearest important support level of the broad stock market index is now at 4,440-4,450, marked by the recent local low. The next support level is at around 4,300. On the other hand, the resistance level is at 4,400 again. The S&P 500 got back below its month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones Failed to Break Above 35,000Let’s take a look at the Dow Jones Industrial Average chart. In early September the blue-chip index broke below a two-month-long rising wedge downward reversal pattern. Last week it has bounced from the 33,600 price level up to around 35,000. But yesterday it got back below 34,500 level again, as we can see on the daily chart:Apple Is Back at LowsApple stock weighs around 6.3% in the S&P 500 index, so it is important for the whole broad stock market picture. In early September it reached a new record high of $157.26. And since then it has been declining. So it looked like a bull trap trading action. On Monday a week ago the stock sold off to the previous local lows along $142 price level. It acted as a support level and the stock bounced to the broken upward trend line. Yesterday Apple led the broad stock market lower, as it fell 2.4%. Right now the price is sitting at the support level of its previous lows. So it is another “make or break” situation.ConclusionSince last Tuesday we’ve witnessed a short-covering rally fueled by the Wednesday’s FOMC Monetary Policy release. But it was just an upward correction within a downtrend and the S&P 500 index’ mid-September short-term consolidation acted as a short-term resistance level.There have been no confirmed positive signals so far. Therefore, we think that the short position is justified from the risk/reward perspective.Here’s the breakdown:The S&P 500 accelerated its downtrend a week ago, as it got close to 4,300 level. It retraced some of the decline last week, but yesterday’s price action was very bearish again.Our speculative short position is still justified from the risk/reward perspective.We are expecting more downward pressure and a correction to 4,200-4,250 level.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
GBP: ECB's Dovish Stance Keeps BoE Expectations in Check

Dovish to Hawkish Fed: Sounds Bearish for Gold

Finance Press Release Finance Press Release 29.09.2021 16:31
With a more hawkish Fed disposition, non-commercial traders remaining dollar-strong, and the EUR/USD sinking, it doesn’t bode well for the metals.With U.S. Treasury yields continuing their ascent on Sep. 28, the mini taper tantrum pushed the NASDAQ 100 over a cliff. And with the USD Index loving the surge in volatility, the greenback further cemented its breakout above the neckline of its inverse (bullish) head & shoulders pattern. And looking ahead, the momentum should continue. Case in point: Fed Chairman Jerome Powell testified before the U.S. Senate Banking Committee on Sep. 28. In his prepared remarks, he said:“Inflation is elevated and will likely remain so in coming months before moderating. As the economy continues to reopen and spending rebounds, we are seeing upward pressure on prices, particularly due to supply bottlenecks in some sectors. These effects have been larger and longer lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2 percent goal.”Furthermore, while I’ve been warning for months that Powell remains materially behind the inflation curve, his prepared remarks didn’t have a single mention of “base effects” or “transitory.” Instead, the Fed chief’s new favorite buzz word is “moderating.”In any event, while I warned on several occasions that the composite container rate has gone from $6.5K to $8.1K to $8.4K to 9.4K, Powell finally admitted that the supply chain disruptions have “gotten worse:”“Look at the car companies, look at the ships with the anchors down outside of Los Angeles,” he said. “This is really a mismatch between demand and supply, we need those supply blockages to alleviate, to abate, before inflation can come down.”For context, the composite container rate is now at $10.4K (the blue line below):To that point, with inflation surging and the Fed materially behind the eight ball, even the doves have turned hawkish since Powell unveiled his accelerated taper timeline on Sep. 22.New York Fed President John Williams told the Economic Club of New York on Sep. 27:“I think it’s clear that we have made substantial further progress on achieving our inflation goal. There has also been very good progress toward maximum employment. Assuming the economy continues to improve as I anticipate, a moderation in the pace of asset purchases may soon be warranted.”Likewise, Fed Governor Lael Brainard added that labor-market conditions may “soon” warrant a reduction in the Fed’s bond-buying program:“The forward guidance on maximum employment and average inflation sets a much higher bar for the liftoff of the policy rate than for slowing the pace of asset purchases,” Brainard told the National Association for Business Economics on Sep. 27. “I would emphasize that no signal about the timing of liftoff should be taken from any decision to announce a slowing of asset purchases.”For context, she tried to calm investors’ nerves by separating rate hikes from tapering. However, with “a much higher bar” for “liftoff” implying a much lower bar for tapering, QE is likely on its deathbed.Rounding out the hawkish rhetoric, Chicago Fed President Charles Evans also told the National Association for Business Economics on Sep. 27 that “I see the economy as being close to meeting the 'substantial further progress' standard we laid out last December. If the flow of employment improvements continues, it seems likely that those conditions will be met soon and tapering can commence.”And why are these three voices so important?Well, with Powell ramping up the hawkish rhetoric on Sep. 22 and his dovish minions following suit, their messaging is much different than the hawk talk that we normally hear from Bullard, Kaplan and Rosengren. For context, the latter two actually resigned for ethical reasons after their questionable day trading activity became public.Please see below:To explain, the graphic above depicts Bank of America’s FOMC dove-hawk spectrum. From left to right, the blue areas categorize the doves, while the red areas categorize the hawks. If you analyze the third, fourth and fifth columns from the left, you can see that Evans, Powell, Brainard and Williams are known for their dovish dispositions. However, with all four materially shifting their stances in the last week, the hawkish realignments are bullish for U.S. Treasury yields, bullish for the USD Index and bearish for the PMs.For example, the U.S. 10-Year Treasury yield has risen by 19% over the last five trading days. What’s more, the U.S. 5-Year Treasury yield has risen by 24% over the last seven trading days and ended the Sep. 28 session at a new 2021 high. For context, the last time the U.S. 5-Year Treasury yield closed above 1% was Feb. 27, 2020.Please see below:Source: Investing.comOn the opposite end of the double-edged sword slashing the gold price, the USD index is also reasserting its dominance. And with the greenback’s fundamentals also uplifted by higher U.S. Treasury yields, the current (and future) liquidity drains support a stronger U.S. dollar. For one, after 83 counterparties drained more than $1.365 trillion out of the U.S. financial system on Sep. 28, the Fed’s daily reverse repurchase agreements hit another all-time high.Please see below:Source: New York FedTo explain, a reverse repurchase agreement (repo) occurs when an institution offloads cash to the Fed in exchange for a Treasury security (on an overnight or short-term basis). And with U.S. financial institutions currently flooded with excess liquidity, they’re shipping cash to the Fed at an alarming rate. And while I’ve been warning for months that the activity is the fundamental equivalent of a taper – due to the lower supply of U.S. dollars (which is bullish for the USD Index) – as we await a formal announcement from the Fed, the U.S. dollar’s fundamental foundation remains robust.Second, non-commercial (speculative) futures traders, asset managers and leveraged funds’ allocations to the U.S. dollar remain strong.Please see below:To explain, the dark blue, gray, and light blue lines above represent net-long positions of non-commercial (speculative) futures traders, asset managers and leveraged funds. When the lines are falling, it means that the trio have reduced their net-long positions and are expecting a weaker U.S. dollar. Conversely, when the lines are rising, it means that the trio have increased their net-long positions and are expecting a stronger U.S. dollar. And while asset managers and leveraged funds’ allocations (the gray and light blue lines) remain slightly below their 2021 highs, non-commercial (speculative) futures traders’ allocation to the U.S. dollar has now hit a new 2021 high. As a result, a continuation of the theme should uplift the U.S. dollar and negatively impact the performance of the gold and silver prices.Finally, with the EUR/USD accounting for nearly 58% of the movement of the USD Index, the currency pair has sunk below 1.1700 once again. And with the Fed’s inflationary conundrum dwarfing Europe’s predicament, I warned on Jul. 20 that the dichotomy is bullish for the U.S. dollar.I wrote:Not only is the U.S. economy outperforming the Eurozone, but the Fed and the ECB are worlds apart.Please see below:To explain, the green line above tracks the year-over-year (YoY) percentage change in the Eurozone Harmonized Index of Consumer Prices (HICP), while the red line above tracks the YoY percentage change in the U.S. HICP. If you analyze the right side of the chart, it’s not even close. And with the U.S. HICP rising by 6.41% YoY in June and the Eurozone HICP rising by 1.90%, the Fed is likely to taper well in advance of the ECB.To that point, with the rhetoric above guiding the Fed down a hawkish path, the ECB is heading in the opposite direction. For example, ECB President Christine Lagarde said on Sep. 28 that there are “no signs that this increase in [Eurozone] inflation is becoming broad-based. The key challenge is to ensure that we do not overreact to transitory supply shocks that have no bearing on the medium term…. Monetary policy should normally ‘look through’ temporary supply-driven inflation, so long as inflation expectations remain anchored.”As a result:Source: the Financial TimesThe bottom line? With U.S. Treasury yields and the USD Index firing on all cylinders, the PMs remain caught in the crossfire. And with both variables still having the fundamental wind at their backs, the Fed’s hawkish shift should help underwrite further gains over the medium term.In conclusion, the PMs declined on Sep. 28 and the gold miners continued their underperformance. And with the Fed’s inflationary anxiety sparking a mini taper tantrum, the PMs remain stuck in no man’s land. Furthermore, with the general stock market also feeling the heat, a sharp correction could accelerate the ferocity of the PMs’ current downtrend. As a result, their medium-term outlooks remain quite bearish.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and silver that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Inflation Waking Up Bonds

Monica Kingsley Monica Kingsley 30.09.2021 15:52
S&P 500 bulls didn‘t make much progress even though the credit markets initially favored the daily rebound to stick. Bouncing between the daily highs and lows, the 500-strong index gave up a few moderately good opportunities to take on 4,390 again. VIX understandably calmed down on the day, but doesn‘t give impression of yielding too much to the downside – on the contrary, it seems to be on a general uptrend since early Jul. Volatility is returning, and that‘s characteristic of the unfolding correction.How far lower would it reach? The 4,340 followed by 4,300 and lower to mid 4,250 are the key supports. The bulls haven‘t (and face quite many headwinds from related markets, including the dollar) stepped in to close Tuesday‘s gap, which would be a game changer. For now, we‘re in a trading range where the bears have the advantage. The stock market bull hasn‘t topped, we‘re merely in an unpleasant correction, of which the daily upswing in utilities or consumer staples is a testament.Yields and the dollar are taking turns at pressuring inflation plays, and precious metals are feeling the heat especially, ignoring the debt ceiling being still unresolved. Treasury yields are returning to more reasonable levels in order to reflect the Fed‘s dillydallying:(…) Bonds are signalling that the Fed‘s image of inflation fighter (right or wrong, have your pick) is losing the benefit of the doubt it was given with the Jun FOMC – bond yields have abruptly ended their descent and subsequent trading range. This spells not only inflation (the risk of Fed‘s policy mistake – warnings it would take longer with us than originally anticipated coupled with the professed faith it would just naturally subside all by itself), but smacks of stagflation.The slowly but surely acknowledged inflation surprise will come back to bite the central bank as inflation expectations are finally surging again, reflecting the cost-push inflation (hello commodities superbull), job market challenges and increasingly strained supply chains characterized by order cuts, delays, shortages and general issues in getting merchandise where it‘s awaited (hello port congestion, docking plus trucking staff shortages and full container ships anchored and awaiting unloading). And I‘m not even talking record drought through the West Coast stretching into Rockies and Midwest, or China electricity rationing. Precious metals seem to be the most undervalued asset class these weeks really.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 paused for a day, and the bulls wasted a few chances to move higher.Credit MarketsCredit markets opened on a strong note (HYG did), but gave up the advantage – lower values still seem a question of (relatively short) time.Gold, Silver and MinersPrecious metals remain under pressure, and silver was hammered by the daily upswing in the dollar. Gold volume didn‘t correspondingly jump higher, indicating that the selling pressure taking gold to silver ratio to 80, is a tad overdone. As stated days ago, look to copper to show signs of life first – outperformance of CRB Index would be a first welcome sign.Crude OilCrude oil consolidation continues, and the volume behind last two days, shows healthy accumulation.CopperCopper couldn‘t keep the unfolding flag intact – the hesitation goes on, and the red metal is increasingly trading in the rather undervalued end of its spectrum. Overall, it remains range bound for now.Bitcoin and EthereumBitcoin and Ethereum bulls are on the move, and the $40K in BTC held up – the daily indicator posture is improving, and we can look for the upswing to continue – remarkable in the face of rising dollar, which is in my view closer to a top than generally appreciated.SummaryStocks aren‘t out of the woods yet, and the yields are putting pressure on tech. Commodities are largely ignoring the taper timing and pace speculation, which can‘t be said about precious metals reacting once to the dollar, then to yields – but not to rising inflation, inflation expectations, or deeply negative real rates.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

S&P 500 Fell To Previous Low: When in Doubt Get Out!

Finance Press Release Finance Press Release 01.10.2021 15:54
The S&P 500 index fell very close to its recent local low yesterday. Will the market break below the 4,300 level? It may fluctuate for some time.The S&P 500 index retraced almost all of its recent advance yesterday, as it extended its short-term downtrend. The index fell 1.2% vs. its Wednesday’s closing price and it got back closer to the 4,300 price level. In the previous week, the market fell the lowest since July 20, as it reached the local low of 4,305.91. The S&P 500 was 239.9 points or 5.28% below the September 2 record high of 4,545.85. And yesterday’s daily low was at 4,306.24. This morning the market is expected to open 0.3-0.4% higher and we may see a short-term consolidation.The nearest important support level of the broad stock market index is now at 4,300, marked by the mentioned local low. The next support level is at around 4,250. On the other hand, the resistance level is at 4,445-4,455, marked by the recent local lows. The S&P 500 continues to trade below its month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):S&P 500 Below Medium-Term Upward Trend LineThe S&P 500 index is trading below its almost year-long upward trend line. The nearest important medium-term support level is at 4,200-4,300, as we can see on the weekly chart:Dow Jones Is Also Closer to the Previous Local lowsLet’s take a look at the Dow Jones Industrial Average chart. In early September the blue-chip index broke below a two-month-long rising wedge downward reversal pattern. Last week it has bounced from the 33,600 price level up to around 35,000. But since Monday it has been declining towards the local low again, as we can see on the daily chart:Apple Remains at Support LevelApple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. Since early September it has been declining from the record high. Recently the stock sold off to the previous local lows along $142 price level. It is acting as a support level, so it is still a “make or break” situation.ConclusionSince last Tuesday we’ve witnessed a short-covering rally fueled by the Wednesday’s FOMC Monetary Policy release. But it was just an upward correction within a downtrend and the S&P 500 index’ mid-September short-term consolidation acted as a short-term resistance level. The market fell close to its recent local low. We may see a short-term consolidation at that support level.There have been no confirmed positive signals so far. However, the risk/reward perspective seems less favorable right now and no positions are currently justified.Here’s the breakdown:The S&P 500 got back to its previous low yesterday and it may act as a short-term support level.Our speculative short position has been close right before the opening of today’s cash market’s trading session.However, we are still expecting more downward pressure and a correction to 4,200-4,250 level.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
New York Climate Week: A Call for Urgent and Collective Climate Action

Stock Market Correction: One More Spark to Light the Fire?

Finance Press Release Finance Press Release 01.10.2021 15:55
With earnings season beginning in October, a profound correction of the S&P 500 could add fuel to the fire of the already well-supported U.S. dollar.While the USD Index was largely flat on Sep. 30, the EUR/USD closed at a new 2021 low. And because the currency pair accounts for nearly 58% of the movement of the USD Index, its performance is material. Moreover, while I’ve been warning for months that the Fed and the ECB are worlds apart, the EUR/USD still hasn’t priced in the magnitude of the divergence.Please see below:To explain, the chart on the right is where you should focus your attention: the purple bars above depict the change in investors’ hawkish central bank bets since Sep. 20, while the pink diamonds above depict the performance of various currencies during that same timeframe. If you analyze the column labeled “USD,” you can see that the Fed’s hawkish rhetoric has ramped up bets on further tightening. However, if you analyze the pink diamond near the bottom of the purple bar, you can see that the U.S. dollar’s performance hasn’t matched the fervor. Conversely, if you analyze the column labeled “EUR,” you can see that investors’ expectations of lower-for-longer Eurozone interest rates haven’t budged, and the euro has held up quite well. For context, the GBP (11.9% of the USD Index’s movement) and the CAD (9.1% of the USD Index’s movement) have largely offset one another. With the former not pricing in any of investors’ hawkish bets and the latter pricing in nearly all of investors’ hawkish bets, the divergence is largely a wash. However, with the U.S. dollar still underpriced and few upside catalysts available for the euro, more EUR/USD downside should commence over the medium term.Supporting that argument, Jeremy Stretch, Head of G10 FX Strategy at CIBC Capital Markets, told clients that “the ECB is intent upon maintaining favorable financing conditions to perpetuate the recovery narrative. As a consequence, we expect the central bank to consider PEPP transitioning into the Asset Purchase Programme [APP].” And with that, “slower growth into 2023 will help limit medium-term price gains. Although headline HICP risks testing 13-year highs, the ECB’s adjusted inflation remit will allow the bank to look through short-term price spikes, especially as core prices are expected to remain relatively well-contained. Alongside fiscal policy developments, that will promote a lower-for-longer trajectory for interest rates, and as a result, a weaker EUR in 2022.”And advocating for just that, ECB Governing Council Member Mario Centeno told CNBC on Sep. 27 that “we were fooled by some news on inflation in the past, which prompted us to act in the wrong way, so we don’t want, definitely, to commit the same sort of errors this time.... We need to guarantee favorable financing conditions to all sectors in our economy as we go out of [the] crisis, and we are not yet there, we are not yet out of the woods.”And how does all of this impact Centeno’s taper timeline?Source: CNBCIn addition, while the ECB’s PEPP program should conclude at the end of March 2022, its APP program isn’t going anywhere. And when the central bank announced its PEPP “recalibration” on Sep. 9, I warned that the ECB’s liquidity spigot should remain on full blast much longer than the Fed’s.I wrote:While the deceleration may seem like a monumental shift, the move is much more semblance than substance: net APP purchases will still be reinvested “for an extended period of time past the date when [the ECB] starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favorable liquidity conditions and an ample degree of monetary accommodation.”Likewise, with many ECB officials aiming to avoid a “cliff effect” when the PEPP program unwinds, Reuters reported that the central bank could expand its APP program to offset the damage. The bottom line? Tapering in Europe is nothing like tapering in the U.S.Please see below: Source: ReutersReverse Repos Strike AgainAlso supporting a stronger U.S. dollar, the Fed’s waterfall of QE is running out of reservoirs. And after 92 counterparties drained nearly $1.605 trillion out of the U.S. financial system on Sep. 30, the Fed’s daily reverse repurchase agreements hit another all-time high.Please see below:Source: New York FedTo explain, a reverse repurchase agreement (repo) occurs when an institution offloads cash to the Fed in exchange for a Treasury security (on an overnight or short-term basis). And with U.S. financial institutions currently flooded with excess liquidity, they’re shipping cash to the Fed at an alarming rate. And while I’ve been warning for months that the activity is the fundamental equivalent of a taper – due to the lower supply of U.S. dollars (which is bullish for the USD Index) – as we await a formal announcement from the Fed, the U.S. dollar’s fundamental foundation remains robust.Furthermore, with the Fed’s daily reverse repos averaging $642 billion in June, $848 billion in July, $1.053 trillion in August, and $1.211 trillion in September, the accelerated liquidity drain further supports a stronger U.S. dollar.Stock Market On Its Last Legs?What’s more, with the safe-haven bid also an important piece of the USD Index’s puzzle, the stock market’s recent struggles still haven’t manifested into a full-blown correction. However, with seasonal factors signaling more weakness ahead, a profound drawdown of the S&P 500 could accelerate the pace of the USD Index’s uprising.Please see below:To explain, the blue and green bars above track the average monthly performance of the S&P 500 after a new U.S. President takes office. If you analyze the columns labeled “Sep” and “Oct,” you can see that the end of summer often elicits the worst monthly performances. And while the S&P 500 capped off September with a 1.19% decline, the weakness should continue in October.As evidence, Bed Bath & Beyond’s stock plunged by more than 22% on Sep. 30. And with supply chain disruptions and weak demand clashing with U.S. policy uncertainty, optimism is on shaky ground. For example, the retailer’s second-quarter adjusted EPS came in at $0.04 vs. $0.52 expected, while revenue came in at $1.99 billion vs. $2.06 billion expected. Moreover, the company slashed its third-quarter adjusted EPS guidance to between flat and $0.05, with revenue ranging from $1.96 billion to $2 billion. Analysts were expecting figures of $0.28 and $2.02 billion respectively.And while I’ve highlighted the issue on several occasions, CFO Gustavo Arnal lamented the fervor of surging freight costs. He said during the company’s Q2 earnings call:“What we're seeing now in the second quarter is, look, significant freight cost increases well above what we had anticipated. We had anticipated 240 basis points. We got 360 basis points. We're still projecting some sequential increase in freight costs as we go from Q2 to Q3.”Furthermore, CEO Mark Tritton said that the Delta variant has also “created a challenging and volatile environment:”“In August, the final and largest sales month of Q2, traffic unexpectedly slowed, and, therefore, sales did not materialize as we had anticipated. External disruptive forces such as the resurgence of COVID-19 cases and growing Delta fears created a challenging and volatile environment. This is particularly evident in large southern states, such as Florida and Texas, as well as California, which, in aggregate, represent approximately 30% of our total sales. From July to August, traffic trends evolved in this state and worsened by double-digit percentages.”As a result:“As the quarter progressed, particularly in August, conditions worsened relative to our thoughtful preparations. The speed of industry inflation and lead time pressures outpaced our plans to offset these headwinds, and as a result, we did not pivot fast enough, especially on price and margin recovery.”The bottom line? With the U.S. dollar already supported by a strong technical and fundamental foundation, a profound correction of the S&P 500 could be the next spark that lights the bullish fire. And with earnings season beginning in early/mid-October, more disappointments like what we witnessed with Bed Bath & Beyond could encourage the next correction. More importantly, though, given the PMs’ strong negative correlations with the U.S. dollar, a sharp move higher in the greenback could coincide with a sharp move lower in the PMs.In conclusion, the PMs rallied on Sep. 30, but the bearish thesis remains unchanged: the USD Index is poised for an upward re-rating and U.S. Treasury yields still have the medium-term wind at their backs. Moreover, with the general stock market showing signs of stress, a real bout of panic could also uplift the USD Index and upend the PMs. As a result, lower precious metals prices should materialize over the next few months.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and silver that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
California Leads the Way: New Climate Disclosure Laws Set the Standard for Sustainability Reporting

Sharp Market Turns Not To Miss

Monica Kingsley Monica Kingsley 01.10.2021 15:58
S&P 500 steeply declined, yet the credit markets offered a glimmer of hope to suck in the bulls – and thus far, the premarket bounce is sticking. The fact that buying the dip didn‘t work in the 4,350s area, needs some digesting today – the overnight stampede didn‘t develop. The sectoral view though doesn‘t allow to declare the bottom to be in just yet. The technical bounce would be probably led by value, with tech lagging behind regardless of the anticipated daily stabilization / retreat in yields.Neither the VIX has calmed down considerably yet. The bulls must be perplexed why buying the dip hasn‘t worked this time around (and before). The sizable open short profits can keep growing. As stated yesterday:(…) VIX understandably calmed down [Wednesday], but doesn‘t give impression of yielding too much to the downside – on the contrary, it seems to be on a general uptrend since early Jul. Volatility is returning, and that‘s characteristic of the unfolding correction.How far lower would it reach? The 4,340 followed by 4,300 and lower to mid 4,250 are the key supports. The bulls haven‘t (and face quite many headwinds from related markets, including the dollar) stepped in to close Tuesday‘s gap, which would be a game changer. For now, we‘re in a trading range where the bears have the advantage. The stock market bull hasn‘t topped, we‘re merely in an unpleasant correction, of which the daily upswing in utilities or consumer staples is a testament.The key fundamental events Thursday were Powell acknowledging that pesky inflation and China ordering its state-owned enterprises to secure oil supplies for the coming winter at any cost. The former finally lit the fuse behind precious metals (did you see how profoundly silver recovered from that $8bn futures contract drop representing 40% of worldwide mining output before Powell spoke on Wednesday?), the latter keeps crude oil prices underpinned.That‘s why I wasn‘t spooked by the copper plunge yesterday (really out of tune with the commodities sentiment and CRB Index performance) – the commodities superbull is merely getting started. Bringing up the key inflation thoughts of yesterday:(…) The slowly but surely acknowledged inflation surprise will come back to bite the central bank as inflation expectations are finally surging again, reflecting the cost-push inflation (hello commodities superbull), job market challenges and increasingly strained supply chains characterized by order cuts, delays, shortages and general issues in getting merchandise where it‘s awaited (hello port congestion, docking plus trucking staff shortages and full container ships anchored and awaiting unloading). And I‘m not even talking record drought through the West Coast stretching into Rockies and Midwest, or China electricity rationing. Precious metals seem to be the most undervalued asset class these weeks really.Once we look back at autumn 2021 a few short years down the road, we would all say that precious metals have been outrageously undervalued indeed. And have you seen the great crypto breakout that‘s making bulls such as myself very happy... Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 pause is very clearly over, and the bears keep having the upper hand.Credit MarketsCredit markets let the bulls have second thoughts, and the high HYG volume indicates a brief pause in the stock market selling.Gold, Silver and MinersPrecious metals sprang to life – first swallow of a turnaround. The bottom looks to be in, and would be confirmed by silver increasing in price faster than gold in order to bring the gold to silver ratio back down from its 80 local top. Reinforcing that move would be copper catching up and outperforming the CRB Index too.Crude OilCrude oil consolidation continues, and every dip is being bought. Upswing continuation appears a question of time only.CopperCopper downswing could have attracted higher volume but that doesn‘t detract from a vigorous response of the bulls coming most likely next. The pattern of lower highs is likely to be broken to the upside the cryptos way (discussed next), in due time.Bitcoin and EthereumBitcoin and Ethereum bulls confirmed they were on the move, and the early Sep highs are next in their sights. The chart is very bullish, and the daily indicators have plenty of room to go before reaching overbought levels.SummaryStocks aren‘t out of the woods yet, but the bears are likely to take a daily pause today. Inflation is coming back into focus, today‘s core PCE price index confirms it isn‘t going away any time soon, and Treasury yield spreads (10-year over 2-year) are coming back from the false breakdown earlier in Sep, which would feed into the hunger for commodities.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Singapore Industrial Production and Global Market Updates

Waiting For Inflation to Hit

Monica Kingsley Monica Kingsley 04.10.2021 15:48
S&P 500 didn‘t make it to the overnight lows during the regular session, and almost fully reversed Thursday‘s slide. After an intraday tug of war, the credit markets leaned the bullish way, and VIX looks like it would try to move a little lower next. Coupled with the put/call ratio, that means a slight advantage for the bulls.The daily retreat in yields spurred a strong tech upswing – stronger one than in value. Given that yields are likely to keep rising due to the red hot inflation and in order to force Fed‘s hand on taper, that‘s a watchout for the bulls not to get carried away with Friday‘s upswing.Forget for a moment about the debt ceiling drama or the postponed vote on the $3.5T infrastructure bill. As I wrote on Thursday regarding inflation, commodities and supply chains, add in the question marks over economic growth and job market strength, and you‘ll get the stagflationary picture. Should this theme gather steam, it would lit the fuse under precious metals and commodities – just as it did in the 1970s,, and that‘s why rising interest rates needn‘t be gold‘s death knell, and why silver would rise in price and popularity. Such a time would correspond with a certain malaise in the stock market, to put it mildly. Real assets stand to gain much – and this time, cryptos as a then non-existent asset class, would benefit too. Earliest, I‘m looking for profits in energy, base metals, agrifoods and the other real assets – indeed, the open long oil and copper positions are solidly profitable again.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 rebound holds more than one day‘s promise, but a fair observation is that the bullish – bearish forces are roughly even early this week.Credit MarketsCredit markets lack the strength of stock market conviction, and look to need a bit more time to confirm. If they don‘t, erasure of Friday‘s bullish uptick comes next – and as the bond guys usually get it right...Gold, Silver and MinersGold consolidated while silver dealt with that daily slide. Gold volume could have been higher really, to lend more credibility to the nascent upswing. Once silver starts outperforming gold, we would know the focus is turning back to inflation consistently – we aren‘t there yet.Crude OilThere is no stopping crude oil, and oil stocks confirm – in spite of the lower volume on Friday, the path of least resistance is higher.CopperCopper recovered from that odd Thursday weakness, yet still continues woefully underperforming the CRB Index. I remain optimistic the red metal would rise next into the mid 4.20s at least.Bitcoin and EthereumBitcoin and Ethereum confirmed the upswing by not retreating, and the early Sep highs are next in sight. The daily indicators have reached consolidation levels, which means the upswing may take a while to develop.SummaryStock market bears have taken a daily pause, and credit markets point to a tight range entry to the week. Rising yields is no fluke – inflation is coming back into focus, which would be a boon to precious metals and commodities well beyond energy. Cryptos stand to do great, too.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Stocks Bounced, but Bulls Are Not Out of the Woods Yet

Finance Press Release Finance Press Release 04.10.2021 15:54
Stocks bounced from the new local low on Friday. Is this the end of a downward correction or just some consolidation before another leg down?The S&P 500 index slightly extended its short-term downtrend on Friday, as it reached the local low of 4,288.52 right after the opening. But bulls took over and the market gained 1.15% on a daily basis. It came back above 4,350. This morning the market is expected to open slightly lower and we may see more short-term consolidation.The nearest important support level of the broad stock market index is now at 4,300-4,320, marked by the recent local lows. The next support level is at around 4,250. On the other hand, the resistance level is at 4,380-4,400. The S&P 500 continues to trade below its month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones Didn’t Reach a New LowLet’s take a look at the Dow Jones Industrial Average chart. In early September the blue-chip index broke below a two-month-long rising wedge downward reversal pattern. Last week it got back closer to its mid-September local low. However, unlike the broad stock market’s gauge, it managed to stay above that support level. The nearest important resistance level is at around 34,500, as we can see on the daily chart:Apple is Still at Support LevelApple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. Since early September it has been declining from the record high. Recently the stock sold off to the previous local lows and on Friday it sold off to around $139 before going back up. The $142 price level is acting as a support level, so it is still a “make or break” situation.We Closed Our Profitable Short Position on FridayLet’s take a look at the hourly chart of the S&P 500 futures contract. We opened a short position on August 12 at the level of 4,435 and closed it on Friday at the level of 4,315 with a gain of 120 points because the risk/reward perspective seemed less favorable (chart by courtesy of http://tradingview.com):ConclusionLast week the broad stock market got back to its mid-September local low and the S&P 500 index fell briefly below 4,300 level. Then we’ve witnessed a short-covering rally. Most likely it was just an upward correction within a downtrend. There have been no confirmed positive signals so far. However, the risk/reward perspective seems less favorable right now and no positions are currently justified.Here’s the breakdown:The S&P 500 bounced from 4,300 support level on Friday, but for now it looks like a short-term upward correction.Our speculative short position has been closed right before the opening of Friday’s cash market’s trading session.However, we are still expecting more downward pressure and a correction to 4,200-4,250 level.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Miners: What the HUI Index Says About the Medium-Term

Miners: What the HUI Index Says About the Medium-Term

Finance Press Release Finance Press Release 04.10.2021 16:34
Ignoring cycles, trends, and technical patterns is a potential recipe for disaster. The HUI index can tell us a lot about the near future.After the HUI Index sunk to a new 2021 low last week, the index further validated the breakdown below the neckline of its bearish head & shoulders pattern. For context, H&S’ breakdowns have coincided with the largest declines in the HUI Index in recent decades. And while gold’s triangle-vertex-based reversal point may stop the bleeding in the very short-term, the HUI Index’s wounds are far from healed. To explain, I’ve been sounding the alarm on the HUI Index since the New Year (the index has declined by more than 29% YTD) and I wrote the following on Sep. 13:The HUI Index plunged by nearly 6% last week, and the reversal of the previous corrective upswing mirrors its behavior from 2013. In addition, with its stochastic oscillator and its RSI (Relative Strength Index) also a spitting image, an ominous re-enactment of 2013 implies significantly lower prices over the medium term.Please see below:Furthermore, while I’ve also been warning about the ominous similarity to 2012-2013, the HUI Index continues to hop into the time machine. To explain, the vertical, dashed lines above demonstrate how the HUI Index is following its 2012-2013 playbook. For example, after a slight buy signal from the stochastic indicator in 2012, the short-term pause was followed by another sharp drawdown. For context, after the HUI Index recorded a short-term buy signal in late 2012 – when the index’s stochastic indicator was already below the 20 level (around 10) and the index was in the process of forming the right shoulder of a huge, medium-term head-and-shoulders pattern – the index moved slightly higher, consolidated, and then fell off a cliff. Thus, the HUI Index is quite likely to decline to its 200-week moving average (or so) before pausing and recording a corrective upswing. That’s close to the 220 level. Thereafter, the index will likely continue its bearish journey and record a final medium-term low some time in December.Furthermore, I warned previously that the miners’ drastic underperformance of gold was an extremely bearish sign. There were several weeks when gold rallied visibly, and the HUI Index actually declined modestly. And now, gold stocks are trading close to their previous 2021 lows, while gold is almost right in the middle between its yearly high and its yearly low.And why is this so important? Well, because the bearish implications of gold stocks’ extreme underperformance still remain intact.Let’s keep in mind that the drastic underperformance of the HUI Index also preceded the bloodbath in 2008 as well as in 2012 and 2013. To explain, right before the huge slide in late September and early October 2008, gold was still moving to new intraday highs; the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market suffered materially. If stocks didn’t decline so profoundly back then, gold stocks’ underperformance relative to gold would have likely been present but more moderate.Nonetheless, broad head & shoulders patterns have often been precursors to monumental collapses. For example, when the HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02. Thus, three of the biggest declines in the gold mining stocks (I’m using the HUI Index as a proxy here) all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern. As a reminder, the HUI Index recently completed the same formation.Yes, the HUI Index moved back below the previous lows and the neck level of the formation, which – at face value – means that the formation was invalidated, but we saw a similar “invalidation” in 2000 and in 2013. Afterwards, the decline followed anyway. Consequently, I don’t think that taking the recent move higher at its face value is appropriate. It seems to me that the analogies to the very similar situation from the past are more important.As a result, we’re confronted with two bearish scenarios:If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early-2020 low.If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.In both cases, the forecast for silver, gold, and mining stocks is extremely bearish for the next several months.For even more confirmation, let’s compare the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, the GDX ETF closed at a new 2021 low last week and sunk below $30 for the first time since April 2020. For context, I warned of a forthcoming calamity on Sep. 7:I wrote:Large spikes in daily volume are often bearish, not bullish. To explain, three of the last four volume outliers preceded an immediate top (or near) for the GDX ETF, while the one that preceded the late July rally was soon followed by the GDX ETF’s 2020 peak. Thus, when investors go ‘all in,’ material declines often follow. And with that, spike-high volume during the GDX ETF’s upswings often presents us with great shorting opportunities.Moreover, even after the forecast became reality, the GDX ETF’s medium-term outlook remains quite bearish. For example, while gold bounced late last week and recouped its losses, the GDX ETF’s tepid rise further validated the senior miners’ underperformance.As a result, the relative weakness implies lower lows over the next few months.Please see below:As for the GDXJ ETF, I wrote on Sep. 7 that overzealous investors would likely end the week disappointed:With the current move quite similar to the corrective upswing recorded in mid-May, the springtime bounce was also followed by a sharp drawdown. As a result, the GDXJ ETF could be near its precipice, as its 50-day moving average is right ahead. And with the key level now acting as resistance, investors’ rejection on Sep. 3 could indicate that the top is already here.And while the junior miners followed the roadmap to perfection, the GDXJ ETF still elicits material weakness. As a result, the GDXJ ETF remains poised to reach the ~$35 level over the medium term.Please see below:Finally, while I’ve been warning for months that the GDXJ/GDX ratio was destined for devaluation, the downtrend remains intact. And with the ratio reversing lower after reaching its declining resistance line, the medium-term implications remain unchanged. On top of that, if a stock-market swoon enters the equation, the ratio’s drawdown could be fast and furious (like what happened during the March 2020 crash).To explain, when the ratio’s RSI jumped above 50 three times in 2021, it coincided with short-term peaks in gold. Second, the trend in the ratio this year has been clearly down, and there’s no sign of a reversal, especially when you consider that the ratio broke below its 2019 support (which served as resistance in mid-2020). When the same thing happened in 2020, the ratio then spiked even below 1.The bottom line?If the ratio is likely to continue its decline, then on a short-term basis we can expect it to decline to 1.27 or so. If the general stock market plunges, the ratio could move even lower, but let’s assume that stocks decline moderately (just as they did in the last couple of days) or that they do nothing or rally slightly. They’ve done all the above recently, so it’s natural to expect that this will be the case. Consequently, the trend in the GDXJ to GDX ratio would also be likely to continue, and thus expecting a move to about 1.26 - 1.27 seems rational.If the GDX is about to decline to approximately $28 before correcting, then we might expect the GDXJ to decline to about $28 x 1.27 = $35.56 or $28 x 1.26 = $35.28. In other words, ~$28 in the GDX is likely to correspond to about $35 in the GDXJ.Is there any technical support around $35 that would be likely to stop the decline? Yes. It’s provided by the late-Feb. 2020 low ($34.70) and the late-March high ($34.84). There’s also the late-April low at $35.63. Conservatively, I’m going to place the profit-take level just above the latter.Consequently, it seems that expecting the GDXJ to decline to about $35 is justified from the technical point of view as well.Speaking of ratios, there was also a major breakdown in the gold to gold stocks ratio which most likely heralds severe declines in the following weeks/months, and if you’re interested in it, I recorded a (or search for “Sunshine Profits” on YouTube – it’s the Oct. 2 video).In conclusion, gold, silver, and mining stocks have all broken down technically, and their fundamental outlooks also remain quite treacherous over the next few months. With the USD Index hitting a new 2021 high last week and U.S. Treasury yields also rallying, the pairs’ upward momentum should continue over the medium term. Moreover, with the general stock market also showing signs of stress, a profound decline could add to the precious metals’ ills. As a result, gold, silver, and mining stocks’ weakness should continue before lasting bottoms likely form near the end of the year.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Stocks Extend Their Consolidation Ahead of Friday’s NFP Data

Finance Press Release Finance Press Release 06.10.2021 15:55
Stocks extended their consolidation yesterday as the index gained over 1%. But today it is expected to open lower again. Is this a bottoming pattern?The S&P 500 index gained 1.05% on Tuesday, as it bounced from the 4,300 level again. For now, it looks like a consolidation following a month-long decline. The market will be waiting for Friday’s Nonfarm Payrolls number release and the coming quarterly corporate earnings season. Today’s ADP Non-Farm Employment Change release has been better than expected at +568,000, but it only brought more uncertainty ahead of the Friday’s data. And we will likely see some further short-term fluctuations. The main indices are expected to open around 0.8% lower this morning.The support level remains at 4,290-4,300. On the other hand, the resistance level is at 4,375-4,400, marked by the recent local highs. The S&P 500 continues to trade below its month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones Is Also Going SidewaysLet’s take a look at the Dow Jones Industrial Average chart. In early September the blue-chip index broke below a two-month-long rising wedge downward reversal pattern. Last week it got back closer to the mid-September local low. However, unlike the broad stock market’s gauge, it managed to stay above that support level. The nearest important resistance level remains at around 34,500, as we can see on the daily chart:Apple Broke Below Its Support LevelApple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. Since early September it has been declining from the record high. Recently the stock broke below the support level of around $142, marked by the previous local lows. The $142 price level is acting as a resistance level right now.ConclusionThe S&P 500 index has been trading within a short-term consolidation since last Thursday. On Monday the broad stock market retraced its Friday’s advance and the S&P 500 index fell to the 4,300 level again but yesterday it came back higher. There have been no confirmed positive signals so far. However, the risk/reward perspective seems less favorable right now and no positions are currently justified.Here’s the breakdown:The S&P 500 trades within a short-term consolidation that looks like a flat correction within a month-long downtrend.Our speculative short position has been closed right before the opening of Friday’s cash market’s trading session.However, we are still expecting more downward pressure and a correction to 4,200-4,250 level.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Fed: Singing the Inflation Blues

Fed: Singing the Inflation Blues

Finance Press Release Finance Press Release 06.10.2021 16:49
With inflation surging and Powell praying for a “transitory” miracle, the troubles confronting the Fed are accelerating, not decelerating.“I got the blues, Got those inflation blues”-- B.B. KingTo explain, I wrote on Sep. 24:I’ve warned on several occasions that the only way for the Fed to control inflation is to increase the value of the U.S. dollar and decrease the value of commodities. However, with commodities’ fervor accelerating on Sep. 23 – a day when the USD Index declined – the price action should concern Chairman Jerome Powell. As a result, FOMC participants’ 2022 inflation forecast is likely wishful thinking and they may find that a faster liquidity drain (which is bullish for the U.S. dollar) is their only option to control the pricing pressures.To that point, with energy prices increasingly unhinged and WTI on pace for its seventh-straight week of weekly gains, the S&P Goldman Sachs Commodity Index (S&P GSCI) has been on fire recently. For context, the S&P GSCI contains 24 commodities from all sectors: six energy products, five industrial metals, eight agricultural products, three livestock products and two precious metals. However, energy accounts for roughly 54% of the index’s movement.Please see below:To explain, the green line above tracks the S&P GSCI’s current rally off of the bottom, while the red line above tracks the S&P GSCI’s rally off of the bottom in 2009-2010 (following the global financial crisis). If you analyze the middle of the chart, you can see that the S&P GSCI has completely run away from the 2009-2010 analogue. For context, at this point in 2009-2010, the S&P GSCI had rallied by 77% off of the bottom. However, as of the Oct. 5 close, the S&P GSCI has now rallied by 154% off of the April 2020 bottom.Furthermore, with higher energy and materials prices exacerbating the cost-push inflationary spiral, signs of stress remain abundant. For example, IHS Markit released its U.S. Manufacturing PMI on Oct. 1. And while the headline index declined from 61.1 in August to 60.7 in September, Chris Williamson, Chief Business Economist at IHS Markit, said that “prices charged for those goods leaving the factory gate also surged higher again in September, rising at a rate exceeding anything seen in nearly 15 years of survey history.”Please see below:Source: IHS MarkitSinging a similar tune, the Institute for Supply Management (ISI) released its Services PMI on Oct. 5. For context, the U.S. service sector has suffered the brunt of the Delta variant’s wrath. And though pricing pressures aren’t as feverish as they are in the U.S. manufacturing sector, the report revealed that inflation increased at a “faster” pace and that “all 18 services industries reported an increase in prices paid during the month of September.”In addition, PepsiCo released its third-quarter earnings on Oct. 5. And after beating analysts’ estimates on both the top and bottom lines, the beverage giant raised its full-year guidance. However, while demand remains resilient, 11.6% year-over-year (YoY) consolidated net revenue growth coincided with a 3% decline in diluted earnings per share (EPS).Despite that though, CEO Ramon Laguarta told analysts during the company’s Q3 earnings call that “what we're seeing across the world is much lower elasticity on the pricing that we've seen historically,” and as a result, price hikes are scheduled to commence in the coming months. For context, ‘elasticity’ attempts to quantify the change in demand that results from a change in price. And with CFO Hugh Johnston expecting charge inflation to outpace cost inflation going forward, “lower elasticity” is materially problematic for the Fed.Please see below:Source: PepsiCo/The Motley FoolIf that wasn’t enough, BMO Harris Bank announced on Oct. 5 that it will increase its minimum hourly wage for all branch and call-center employees by a “20 Percent Minimum” to $18 an hour. For context, BMO Harris Bank has more than 500 branches and more than 12,000 employees in the U.S.Please see below:Source: BMO Harris BankMore importantly, though, with Powell’s inflationary conundrum helping swing the double-edged sword that’s been fundamentally slashing the PMs, the USD Index rallied by 0.20% on Oct. 5 and U.S. Treasury yields strengthened across the board.Please see below:Source: Investing.comAs it relates to the dollar story, the USD Index’s fundamental strength is underwritten by the ‘dollar smile.’ To explain, when the U.S. economy is trudging along, the U.S. dollar tends to underperform. However, when the U.S. economy craters and a safe-haven bid emerges, the U.S. dollar often outperforms. Conversely (and similarly), when the U.S. economy is booming and higher interest rates materialize, the U.S. dollar also outperforms.By the way, I’ve discussed the situation in the USD Index at length in today’s video.For context, I indicated on Sep. 22:The USD Index and U.S. Treasury yields can move in the same direction or forge different paths. However, while a stock market crash is likely the most bearish fundamental outcome that could confront the PMs, scenario #2 is next in line. When U.S. economic strength provides a fundamental thesis for both the USD Index and U.S. Treasury yields to rise (along with real interest rates), the double-edged sword often leaves the PMs with deep lacerations.To that point, with a mix of both playing out in the present, Sebastien Galy, senior macro strategist at Nordea, signalled clients that the dollar smile remains alive and well:“The dollar should continue to be supported by expectations of an eventual series of Fed rate hikes and the value of the dollar as a safe haven against a potential equity correction…. The downward trend in EUR/USD is likely to return in the coming weeks and months, suggesting EUR/USD around the 1.10 handle and potentially below that before moving higher.”As for the yield story, Lindsey Piegza, chief economist at Stifel Financial, told clients that “markets appear increasingly jittery as the realization of a higher sustained level of inflation eventually resulting in a higher level of rates appears to be finally sinking in.... Against the backdrop of elevated inflation and rapidly rising energy costs, many market participants are skeptical the FOMC will be able to maintain these low rates for another year, let alone two.”The bottom line? With inflation running away from the Fed, suppressing commodity prices (by strengthening the U.S. dollar and/or raising interest rates) is the only way to calm the inflationary pressures. If not, surging commodity prices will likely further suppress consumer confidence, upend corporate profit margins, culminate with demand destruction and the stock market should suffer mightily (which is also bullish for the U.S. dollar). As a result, with Powell creating an even larger inflationary wildfire the longer he waits, the PMs could confront immense volatility over the medium term.In conclusion, the PMs were mixed on Oct. 5, though trouble looms large in the months ahead. With the USD Index and U.S. Treasury yields ripe for upward re-ratings, the Fed’s “transitory” narrative hasn’t aged well. And with the PMs’ main villains doing a lot of their fundamental damage since Powell turned hawkish, more upside catalysts should emerge over the medium term. As a result, the PMs’ outlook remains profoundly bearish over the next few months.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and silver that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
European Central Bank's Potential Minimum Reserve Increase Sparks Concerns

Risk-On Turnaround

Monica Kingsley Monica Kingsley 07.10.2021 15:48
S&P 500 – done declining, not spooked by bearish credit market open, stocks reversed and rallied into the finishing line. HYG almost managed to close the opening, exhaustion gap. On such days, it‘s extremely important to be subscribed, and catch the benefits of fresh trading decisions – here, going long stocks, as early as possible. So, I hope you were served by the intraday stock market update, which I issued right away after that long white candle on 5min TF, 50min into the regular session. The open long positions is going great, thank you very much.Today‘s rally is powered by debt ceiling relief, postponing the drama. Declining oil and natural gas prices are also taken (correctly) as risk-on confirmations as crude oil tends to serve as a kind of shaddow Fed funds rate in regulating economic activity. Make no mistake, this respite is temporary as we‘ll have to live with triple digit oil next year. Bottom line, risk-on is back, and the dollar is likely to get under pressure here, and Treasuy yields should continue their rise. Powerful implication for the antidollar plays, including precious metals turning around, and cryptos dealing further profits.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 rose on respectable volume and improving market breadth – looking for follow through buying.Credit MarketsHYG was the key mover yesterday, bought on solid volume – the exhaustion gap would soon be history.Gold, Silver and MinersGold and silver are getting ready for an upswing, led by silver. The upper knots and failed silver‘s breakdown are the clues as much as the daily miners revival.Crude OilCrude oil fever calmed down yesterday, but the volume says correction, not a reversal. Let‘s see when the bulls can jump back in.CopperCopper seems done declining for now, yet solid buying interest isn‘t there yet. Still looking range bound to me.Bitcoin and EthereumBitcoin and Ethereum keep consolidating yesterday‘s sharp gains, and the bears look to have made the yesterday discussed very temporary appearance already.SummaryStocks have turned, and the oil prices respite and debt ceiling relief are helping to extend the rally. The bottom is in as the bears couldn‘t push S&P 500 down anymore. It‘s back to risk-on again, even though the macro picture of increasing stagflationary risks hasn‘t changed – that would be an environment where commodities do much better than stocks or bonds, and precious metals are ready to join once the Fed wobbles again, sees its bluff called, or confronted with reality.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
US Industry Shows Strength as Inflation Expectations Decline

Stocks’ Breakout May Be Short-Lived, NFP Release Leaves Question Marks

Finance Press Release Finance Press Release 08.10.2021 15:51
Stocks broke above their consolidation yesterday. Is this an upward reversal or just another upward correction? The NFP release leaves question marks.The S&P 500 index gained 0.83% on Thursday following breaking above the recent local highs and the 4,400 price level. The market retraced most of its late September’s decline yesterday as investors awaited today’s monthly jobs data release, among other factors. The Nonfarm Payrolls release has been worse than expected at +194,000. However, the main indices are expected to open 0.1-0.5% higher this morning.The support level is now at 4,365-4,385, marked by yesterday’s daily gap up of 4,365.57-4,383.73. On the other hand, the resistance level is at 4,430-4,450. The S&P 500 broke above its month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):S&P 500 Remains Above Medium-Term Support LevelThe S&P 500 index is trading below its almost year-long upward trend line. The nearest important medium-term support level remains at 4,200-4,300, as we can see on the weekly chart:Dow Jones Got Back to Its Downward Trend LineLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index also broke above its short-term consolidation yesterday. However, it remained below a month-long downward trend line. The nearest important resistance level is at 35,000, as we can see on the daily chart:Apple Is Back Above $142 Price Level AgainApple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. The stock broke above $142 price level yesterday but for now it looks like a correction within a downtrend or a consolidation following the September’s decline. The resistance level is now at $144, marked by the previous local highs.ConclusionThe S&P 500 index has been trading within a short-term consolidation since last Thursday. Yesterday the index broke above that consolidation and it got back above the 4,400 level. For now it looks like an upward correction following the late September’s declines.The risk/reward perspective seems less favorable right now and no positions are currently justified.Here’s the breakdown:The S&P 500 broke above its week-long consolidation, but bulls are not out of the woods yet, as the worse-than-expected jobs data release may lead to some more uncertainty.Our speculative short position has been closed last Friday at a much lower level.We are still expecting more downward pressure and a correction to 4,200-4,250 level.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Asia Morning Bites: Trade Data from Australia, Taiwan Inflation, and US Fed Minutes Highlighted

Stocks Are Going Sideways, Is This a Month-Long Bear Flag Pattern?

Finance Press Release Finance Press Release 13.10.2021 15:55
The S&P 500 index extended its short-term decline yesterday. Is this a new downtrend or still just a correction following last week’s breakout?Stocks went slightly lower yesterday, as the S&P 500 index lost 0.24%. The broad stock market index got back to the 4,350 level. Investors were taking short-term profits off the table following last Thursday’s rally. It looks like a downward correction so far, as the index remains above the late Sep. - early Oct. consolidation. This morning the main indices are expected to open between -0.1% and +0.2% vs. their yesterday’s closing prices. So we may see a consolidation along the mentioned support level of 4,350 following today’s mixed Consumer Price Index number release.The support level is now at around 4,350 and the next support level is at 4,300-4,320, marked by the recent local lows. On the other hand, the resistance level is at 4,400-4,420. The S&P 500 remains slightly above its month-long downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Dow Jones Remains Relatively WeakerLet’s take a look at the Dow Jones Industrial Average chart. The blue-chip index remains below its month-long downward trend line. So it is relatively weaker than the broad stock market. The nearest important resistance level is at 35,000 and the support level is at 33,800, among others, as we can see on the daily chart:Apple Is Still At the Crucial $142 Price LevelApple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. The stock continues to trade along the $142 price level. And on Monday it bounced from the resistance level of $144.Is It Better to Stay Out Of the Market Right Now?Let’s take a look at the hourly chart of the S&P 500 futures contract. The market bounced back from the 4,400 level on Monday and now it is trading within a consolidation along the 4,350 level. The support level is at 4,260-4,300, and the downward trend line is at 4,400. In our opinion no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):ConclusionThe S&P 500 index slightly extended its short-term downtrend on Tuesday, as investors awaited today’s CPI number release, among other factors. It came back to the 4,350 level after bouncing from the 4,400 level once again on Monday. We may see some more short-term uncertainty and the market will most likely extend its almost a month-long consolidation here.The risk/reward perspective seems less favorable right now and no positions are currently justified.Here’s the breakdown:The S&P 500 broke above its consolidation last week, but for now it looks like an upward correction within an over month-long downtrend.We are still expecting more downward pressure and a correction to 4,200-4,250 level.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Boosting Stimulus: A Look at Recent Developments and Market Impact

Folks, Inflation Ain’t Transitory

Finance Press Release Finance Press Release 13.10.2021 16:30
With inflation getting worse, has the Fed woken up? And with the USD looking bright, gold, silver, and mining stocks continue to feel the pinch.By the way, I most recently discussed the short and medium-term outlook for silver in both charts and a Please check them out.With U.S. nonfarm payrolls coming in weaker than expected on Oct. 8, the Fed’s taper timeline was once again in the spotlight. However, with the U.S. unemployment rate falling to 4.8% (versus 5.1% expected) and the weakness mainly driven by a decline in government payrolls (private payrolls increased by 317,000), the lukewarm print should still meet Chairman Jerome Powell’s taper threshold.To explain, July’s data was revised upward by 38,000 (increased for the second time), while August’s data was revised upward by 131,000. As a result, 169,000 more jobs were added than previously reported.Please see below:Source: U.S. Bureau of Labor Statistics (BLS)What’s more, with inflation surging and the “transitory” narrative suffering a slow and painful death, the Fed is having its ‘come-to-Jesus’ moment. For context, I’ve been warning for months that the central bank remains materially behind the inflation curve.I wrote on Apr. 30:With Powell changing his tune from not seeing any “unwelcome” inflation on Jan. 14 to “we are likely to see upward pressure on prices, but [it] will be temporary” on Apr. 28, can you guess where this story is headed next?To that point, Atlanta Fed President Raphael Bostic said on Oct. 12:“I believe evidence is mounting that price pressures have broadened beyond the handful of items most directly connected to supply chain issues or the reopening of the services sector.... Up to now, indicators do not suggest that long-run inflation expectations are dangerously untethered. But the episodic pressures could grind on long enough to unanchor expectations.”More importantly, though, he admitted:“Transitory is a dirty word…. It is becoming increasingly clear that the feature of this episode that has animated price pressures – mainly the intense and widespread supply chain disruptions – will not be brief. By this definition, then, the forces are not transitory.”And how does this impact his taper timeline?Source: the Financial TimesAlso making the rounds, Fed Vice Chairman Richard Clarida supported the hawkish rhetoric on Oct. 12. Speaking at the Institute of International Finance’s virtual annual meeting, he said that “the risks to inflation are to the upside.” And after conceding that “the big unknown right now is how long it will take for these bottleneck effects to work their way through,” he admitted:Source: ReutersFor context, if the Fed concludes the taper by the “middle of next year,” the timeline is extremely hawkish. To explain why, I wrote on Sep. 23:With ~$120 billion worth of bond purchases poised to hit zero in roughly nine months, the accelerated liquidity drain is extremely bullish for the USD Index.Please see below:To explain, the dark blue line above tracks the pace of the Fed’s taper following its announcement in December 2013, while the orange line above tracks the consensus estimate this time around. However, if you focus your attention on the light blue line, you can see that Powell’s taper timeline pushes QE to zero in advance of both the precedent set in 2014 and the current consensus estimate.On top of that, while the Fed has finally opened its eyes to persistent inflation, the central bank is still operating in the rearview. To explain, while Fed officials seem to agree that tapering is necessary to calm inflation (which we also agree on), at the current rate, the hawkish shift isn’t nearly hawkish enough.For example, while I’ve been sounding the alarm on the cost-push inflationary spiral for months, Brent and WTI prices are now trading north of $80 per barrel and Citigroup said that winter weather could uplift the former to $90 per barrel in the fourth quarter. For context, Citigroup, Goldman Sachs and Bank of America are all forecasting $90+ per barrel Brent this year. And while The White House called on OPEC (for the second time) to “do more” (increase supply to reduce oil prices), the cartel has ignored the pleas. As a result, if oil’s upward momentum persists, the Fed is materially underestimating the inflationary impact.Second, while commodity prices remain the most important driver of inflation, even “transitory” factors have leaped to new highs. For context, I wrote on Apr. 16:The Manheim Used Vehicle Index – compiled from a database of more than five million annual used vehicle transactions – increased by 5.87% month-over-month to a record high 179.2 in March. What’s more, the pace of the surge is unlike anything that we’ve ever witnessed before.And after a brief pause – which even we conceded given that abnormally high used car prices should be “transitory” – Manheim revealed that wholesale used vehicle prices “increased 5.3% month-over-month in September” and “brought the Manheim Used Vehicle Index to [a record high] 204.8.”Please see below:In addition, Oshkosh Corporation – an American manufacturer of specialty trucks, military vehicles, truck bodies, airport fire apparatus and access equipment – reduced its full-year revenue and earnings guidance on Oct. 8. The company cited “significant supply chain and logistics disruptions as well as material and freight cost inflation similar to other companies that are beyond the company’s prior expectations.”CEO John C. Pfeifer added:“We implemented multiple price increases in our non-defense segments over the past six to nine months to combat unprecedented raw material inflation and freight cost escalation. Based on current conditions, we expect that our pricing actions will cover our higher input costs. However, due to our backlogs, we do not believe this price catch-up will occur until the end of the second quarter of Calendar 2022. If cost escalation persists, we will take additional pricing actions.”On the other side of the inflationary coin, the NFIB released its Small Business Optimism Index on Oct. 12. And while the headline index declined from 100.1 in August to 99.1 in September, wage inflation rose to levels unseen since the 1970s.Please see below:Source: NFIBFurthermore, while “the net percent of owners raising average selling prices decreased 3 points to a net 46 percent,” output inflation still remains at a more than 30-year high.Please see below:Source: NFIBFinally, I’ve mentioned on several occasions that the commodity Producer Price Index (PPI) will likely determine when/if the inflationary momentum subsides. For context, its relationship with the headline Consumer Price Index (CPI) remains right on trend (follow the black arrow below):And with the headline CPI the most important fundamental data point released today, I wrote on Sep. 15 that “another headline CPI print of roughly 5.25% to 5.75% should hit the wire when the data is released on Oct. 13.Please see below:To explain, the green line above tracks the YoY percentage change in the commodity PPI, while the red line above tracks the YoY percentage change in the headline CPI. If you analyze the relationship, you can see that the pair have a close connection.The bottom line? While the headline CPI remains pinned in the 5%+ range (expected) for now, the metric is still well above the Fed’s 2% annual target. What’s more, with the S&P Goldman Sachs Commodity Index (S&P GSCI) making new highs alongside Brent and WTI, the future impact on the commodity PPI should be material. And if the Fed doesn’t accelerate the liquidity drain and calm commodities’ fervor, we may see a 6% headline CPI print before we see 4%. Conversely, if companies can’t pass through the higher input inflation, the impact on corporate profit margins could upend the general stock market and leave the Fed handcuffed.As a result, whether the Fed accelerates its taper timeline or margin pressures lead to a stock market correction, both outcomes are profoundly bullish for the U.S. dollar. And with the PMs exhibiting strong negative correlations with the greenback, they could suffer materially as the events unfold.In conclusion, the PMs were mixed on Oct. 12. However, with the EUR/USD hitting a new 2021 low and the USD Index hitting a new 2021 high, the dollar’s medium-term outlook remains quite bright. Moreover, with the Fed upping the hawkish ante and an accelerated liquidity drain poised to chip away at the PMs, new lows should materialize over the next few months.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Wild Choppy Moves

Wild Choppy Moves

Monica Kingsley Monica Kingsley 29.10.2021 15:27
One-sided S&P 500 session, perhaps a bit too much – the bulls are likely to face issues extending gains when VIX is examined. The stock market sentiment remains mixed, and one could easily be pardoned for expecting larger gains on yesterday‘s magnitute of the dollar slump. And long-dated Treasuries barely moved – their daily candle approximates nicely the volatility one as both give the impression of wanting to move a bit higher while their Thursday‘s move was a countertrend one.Not even value was able to surge past its Wednesday‘s setback, which makes me think the bears can return easily. At the same time, tech stepped into the void, and had a positive day, balancing the dowwnside S&P 500 risks significantly. The very short-term outlook in stocks is unclear, and choppy trading between yesterday‘s highs and 4,550 shouldn‘t be surprising today.At the same time, precious metals could have had a much stronger day – but the sentiment was risk-off in spite of the tanking dollar and doubted yields as the rising tech and gold at the expense of silver illustrate. Miners recent outperformance was absent just as much as commodities vigor with the exception of copper. And it‘s more celebrations in the red metal following its steep and far reaching correction, that‘s the part of missing ingredients as much as fresh inflation fears (yes, adding to risk-off mood, inflation expectations declined yesterday).All in all, it looks like a case of abundance of caution prior to next week‘s Fed, compounded by sluggish incoming data, where just cryptos are ready to move first.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 decisively reversed upwards, but the daily indicators barely moved – the consolidation doesn‘t look to be over.Credit MarketsHYG entirely reversed Wednesday‘s plunge but the low volume flashes amber light at least – the bulls are likely to stop for a moment.Gold, Silver and MinersGold upper knot doesn‘t bode as well as it did the prior Friday, and the same goes for miners. The yellow metal‘s strength was sold into, making it short-term problematic for the bulls.Crude OilCrude oil held $81 on not too shabby volume but the bulls are still on the defensive until $84 is overcome. When XLE starts outperforming VTV again, the outlook for black oil would improve considerably. Natgas falling this steeply yesterday isn‘t inspiring confidence either.CopperCopper finally reversed, and the upswing is a promising sign even though I would like to have seen higher volume. Again, the red metal remains well positioned to join in the commodities upswing once the taper announcement is absorbed.Bitcoin and EthereumBitcoin bulls are pausing while Ethereum ones keep running – cryptos are providing an encouraging sign (to be taken up by real assets) going into the Fed next week.SummaryChoppy trading in stocks is likely to continue even though 4,610s are closer than a break below 4,550s at the moment. Much nervousness in the markets before the coming Wednesday – cash is being raised while the dollar suffered in spite of daily move up in yields. Risk-off hasn‘t clearly retreated as seen in sectoral performance and VIX – time to be cautious while waiting out this soft patch in commodities that are most likely to return to scoring gains, accompanied by the retreating dollar.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Profit-Taking After Earnings May Send Stock Prices Lower

Profit-Taking After Earnings May Send Stock Prices Lower

Paul Rejczak Paul Rejczak 29.10.2021 15:30
  Stocks retraced their short-term decline yesterday, but today we may see a lower opening following the earnings releases. Is this a topping pattern? The S&P 500 index gained 0.98% on Thursday, Oct. 28, as it retraced its whole Tuesday’s-Wednesday’s decline to the support level of 4,550. It got back to the Tuesday’s record high of 4,598.53 yesterday. The daily close was just 2 points below that level. The stock market is still reacting to quarterly corporate earnings releases. Yesterday we got the releases from AAPL and AMZN, among others. But the first reaction to their numbers was negative. The market seems overbought in the short-term it is most likely fluctuating within a topping pattern. The nearest important support level is at 4,550, and the next support level is at 4,520-4,525, marked by the previous Wednesday’s daily gap up of 4,520.40-4,524.40. On the other hand, the resistance level is at around 4,600, marked by the new record high. Despite reaching new record highs, the S&P 500 remained below a very steep week-long upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Reached New Record! Let’s take a look at the Nasdaq 100 chart. The technology index was relatively weaker than the broad stock market recently, as it was still trading below the early September record high of around 15,700. But this week it rallied to the new record highs. The nearest important support level is now at 15,700, marked by the recent resistance level, as we can see on the daily chart: Dow Jones Is Relatively Weaker Again The Dow Jones Industrial Average reached the new record high of 35,892.92 on Tuesday and on Wednesday it sold off to around 35,500. Yesterday the blue-chip index didn’t retrace that decline. The support level remains at around 35,500-35,600, marked by the previous local highs, as we can see on the daily chart: Apple Rallied Before Earnings, and Microsoft Went Hyperbolic Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple released its earnings after yesterday’s close and the first reaction was negative. But the stock gained 2.50% at yesterday in regular trading hours. The resistance level remains at $154-156. It is still trading below the record highs, as we can see on the daily chart: Now let’s take a look at the MSFT. It rallied after Tuesday’s quarterly earnings release and on Wednesday it reached the record high price of $326.10. The market remained above its month-long upward trend line. Microsoft extends its long-term hyperbolic move higher. This week it got close to the $2.5 trillion dollar market cap! So the question is how much higher can it get? And it’s already not that cheap at all with its price to earnings ratio of around 40. Conclusion The S&P 500 index retraced its Tuesday’s-Wednesday’s decline yesterday and it got close to the Tuesday’s record high of 4,598.53. For now, it looks like a consolidation following an uptrend. However, the market is still overbought and we may see a bigger downward correction. There may be a profit-taking action following quarterly earnings releases. Today the main indices are expected to open 0.2-0.8% lower after yesterday’s earnings releases from AAPL and AMZN, and we will likely see an intraday correction. Here’s the breakdown: The S&P 500 got close to the record high yesterday but today it may retrace some of the advance. A speculative short position is justified from the risk/reward perspective. We are expecting a 3% or higher correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Don‘t Fear Risk-Off

Don‘t Fear Risk-Off

Monica Kingsley Monica Kingsley 01.11.2021 13:50
Not confirmed by bonds, the S&P 500 advances regardless – the daily yields retreat is powering tech while value goes nowhere. Higher beta sectors such as financials are sputtering, revealing the defensive nature of the stock market advance – at least to this degree, stocks and bonds are in tune. Yes, risk-off is winning these days, and it would be only up to VIX to join the fray, but the key volatility measure is likely to keep complacently trading around the 17 level. In other words, not too far from the bottom of its recent range, and not indicating imminent change of the bull market character.While we have seen much better market breadth readings in the years gone by (the narrow leadership is reminiscent perhaps of the late 1990s), there‘s no chart proof of the behemoths being in kind of getting really serious trouble (with the possible exception of Facebook). True, smallcaps have largely gone sideways over the many months, but midcaps are already breaking higher, and that won‘t be unnoticed by the Russell 2000 (soon to follow).The bears haven‘t thus far made any serious appearance, and 4,550s held with ease in spite of the dollar reversing Thursday‘s losses. All the more encouraging is the relative strength of both gold and silver when faced with one more daily decline in inflation expectations – as if balancing before the Fed act changes anything.I ask, how serious can they be about delivering on taper promises when prices increase relentlessly (look at Europe too), these are being blamed on supply chain bottlenecks without acknowledging their persistent and not transitory nature, and the real economy is markedly slowing down (not in a recession territory, but still)?Looking at commodities, we‘re reliving the 1970s, and cryptos are still the key beneficiary of monetary largesse – precious metals aren‘t a dead asset class in the least, they just frontrunned it all and peaked in August 2020 as I alerted you to back then. Fresh upswing is in the making.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 once again decisively reversed upwards, and even though the daily indicators are weakening, the rally can easily go on. Dips are to be bought.Credit MarketsHYG keeps acting weak, but this is being overlooked by stocks as tech remains driven by NYFANG.Gold, Silver and MinersGold‘s lower knot indicates accumulation, and miners reversing higher would be a great confirmation. Regardless, such a result when dollar rose steeply and yields with inflation expectations retreated, is encouraging.Crude OilCrude oil again held $81, looks set to return above $84 again. XOI and XLE weakness has to be understood in terms of the challenged VTV, and isn‘t here to stay.CopperCopper is providing a buying opportunity, and looks likely to join other base metals (especially alluminum) and broader commodity index strength as agrifoods wake up too.Bitcoin and EthereumThe Bitcoin and Ethereum upswings can go on – it looks to be a question of a relatively short time when cryptos are done with the sideways correction.SummaryS&P 500 indeed got at 4,610s instead of suffering setbacks, and the same holds true for real assets next. Across the board, these have performed well in spite of the USD upswing and decreasing inflation expectations, which I chalk down to pre-Wednesday positioning. Therefore, I‘m taking the high beta weakness with a pinch of salt, and the same goes for precious metals or the economic cycle sensitive copper. As for oil, the U.S. economy can (and will have to) withstand prices higher than $90 as 2022 arrives.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
What Does November Hold for the Miners?

What Does November Hold for the Miners?

Paul Rejczak Paul Rejczak 01.11.2021 16:20
  As a new month begins, the downtrend in the GDX and GDXJ should resume. When will a new buying opportunity finally present itself? Let’s compare the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, the GDX ETF reversed sharply after reaching its 200-day moving average and a confluence of bearish indicators signaled a similar outcome. For context, I wrote on Oct. 25: Small breakout mirrors what we witnessed during the senior miners’ downtrend in late 2020/early 2021. Moreover, when the GDX ETF’s RSI (Relative Strength Index) approached 70 (overbought conditions) back then, the highs were in (or near) and sharp reversals followed. Furthermore, after a sharp intraday reversal materialized on Oct. 22, the about-face is similar to the major reversal that we witnessed in early August. On top of that, with the GDX ETF’s stochastic indicator also screaming overbought conditions, the senior miners are likely to move lower sooner rather than later. Also, please note that the GDX ETF reversed right after moving close to its 200-day moving average, which is exactly what stopped it in early August. Yes – that’s another link between now and early August. And after declining sharply on Oct. 28 and Oct. 29, the senior miners further cemented their underperformance of gold. Moreover, with relative underperformance often a precursor to much larger declines, the outlook for the GDX ETF remains quite bearish. Please see below: As further evidence, the GDX ETF’s four-hour chart offers some important insights. To explain, the senior miners failed to hold their early September highs and last week’s plunge removed any and all doubt. Likewise, the GLD ETF suffered a sharp drawdown and its recent breakout was also invalidated. Furthermore, my three-day rule for confirming breakouts/breakdowns proved prescient once again. Conversely, investors that piled into mining stocks are likely regretting their decision to act on unconfirmed signals. And as we look ahead, the technicals imply that caution is warranted and more downside is likely for the GDX ETF. As for the GDXJ ETF, the gold junior miners suffered a similar swoon last week. For context, I warned of the prospective reversal on Oct. 25. I wrote: The junior miners’ RSI also signals overbought conditions and history has been unkind when similar developments have occurred. Moreover, the GDXJ ETF’s recent rally follows the bearish patterns that we witnessed in late May and in early 2021. Likewise, the intraday reversal on Oct. 22 mirrors the bearish reversal from early August and a confluence of indicators support a continuation of the downtrend over the coming weeks. And as we begin a new month, the GDXJ ETF’s downtrend should resume and a retracement to the ~35 level will likely materialize in the coming months. Please see below: Finally, while I’ve been warning for months that the GDXJ/GDX ratio was destined for devaluation, the ratio has fallen precipitously in 2021. And after the recent short-term rally, the ratio’s RSI has reached extremely elevated levels (nearly 73) and similar periods of euphoria have preceded major drawdowns (marked with the black vertical dashed lines below). To that point, the ratio showcased a similar overbought reading in early 2020 – right before the S&P 500 plunged. On top of that, the ratio is still below its mid-to-late 2020 lows and its mid-2021 lows. As a result, the GDXJ ETF will likely underperform the GDX ETF over the next few months. It’s likely to underperform silver in the near term as well. The bottom line? If the ratio is likely to continue its decline, then on a short-term basis we can expect it to trade at 1.27 or so. If the general stock market plunges, the ratio could move much lower, but let’s assume that stocks decline moderately or that they do nothing or rally slightly. They’ve done all the above recently, so it’s natural to expect that this will be the case. Consequently, the trend in the GDXJ to GDX ratio would also be likely to continue, and thus expecting a move to about 1.26 - 1.27 seems rational. If the GDX is about to decline to approximately $28 before correcting, then we might expect the GDXJ to decline to about $28 x 1.27 = $35.56 or $28 x 1.26 = $35.28. In other words, ~$28 in the GDX is likely to correspond to about $35 in the GDXJ. Is there any technical support around $35 that would be likely to stop the decline? Yes. It’s provided by the late-Feb. 2020 low ($34.70) and the late-March high ($34.84). There’s also the late-April low at $35.63. Consequently, it seems that expecting the GDXJ to decline to about $35 is justified from the technical point of view as well. In conclusion, mining stocks reprised their role as ‘The Boy Who Cried Wolf.’ And after overzealous investors rushed to their defense last week, another false alarm led to another bout of disappointment. Moreover, with the technical and fundamental backdrops for gold, silver and mining stocks continuing to deteriorate, lower lows should materialize over the medium term. As a result, we may have to wait until 2022 before reliable buying opportunities emerge once again. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Silver’s fuse is about to be lit

Silver’s fuse is about to be lit

Korbinian Koller Korbinian Koller 30.10.2021 16:45
The average investor is news-driven. As much as the Federals Reserve  (the Fed) might be criticized, this large investor group is not commonly doubting news. In other words, it has generally believed the Fed’s narrative that inflation is transitory. The bad news is rarely released shortly before Christmas. However, it would not surprise if tapering started in early 2022. And maybe not just begin but be more aggressive throughout the year as expected. With this, the narrative will change from a “we are not worried, it is transitory” to a “we need to deal with” regarding inflation. Therefore, this could easily be the fire to the fuse of the Silver rocket. We now see early signs of such a lift-off in price in recent silver price movements. Silver’s fuse is about to be lit. Silver in US-Dollar, daily chart, low-risk entry points: Silver in US-Dollar, daily chart as of October 30th, 2021. It isn’t only that the overall narrative on transitory inflation is starting to get holes. We like the silver play, for instance because gold is somewhat in the limelight in battle with bitcoin. Consequently, allowing for silver to shine while it is typically in the shadow. On top of it all, we find clear evidence that commodities with industrial use are likely in a long term bull market. This is a play where everything is coming together. A multi stream both in fundamental and technical edges stack upon each other. As of right now, we have identified four low-risk entry points on the daily silver chart, which are marked in bright green horizontal lines. We would take off 50% of the position near the US$26 mark to mitigate risk (see our quad exit strategy). Silver in US-Dollar, weekly chart, good risk reward ratio: Silver in US-Dollar, weekly chart as of October 30th, 2021. The weekly chart offers a low-risk opportunity as well. We illustrated above a play that assumes an entry point in the lower third quadrant of the yellow marked sideways zone. It would provide for a risk/reward-ratio between 1:1 and 1:2 towards the financing point. As well we assume an exit of half of the position at the top near US$28 of the yellow sideways channel (see our quad exit strategy). With two more exits of each 25% of total trade equity at targets US$34.83 and US$48.72, we find the weekly play to be conducive to our low-risk policy.  Silver in US-Dollar, monthly chart, favorable probabilities: Silver in US-Dollar, monthly chart as of October 30th, 2021. With its most considerable weight, the monthly chart provides the necessary overview. It shows how likely a success rate to a long-term play outcome is. We find three dominant aspects supporting our aim for a bullish long-term play. Trend: The linear regression channel is marked in diagonal lines (red, blue, green). It shows a clearly bullish trend with a high likelihood of continuation. Support: The Ichimoku cloud analysis provides solid evidence of support to the recently established bullish tone in silver. Probabilities: Price highs from 1980 to 2011 built a double top price formation. As a result, it prevented prices from getting higher than the price zone marked with a white box. The third attempt of price reaching this price zone nevertheless has a much higher statistical probability of penetrating this distribution zone and allowing the price to go higher. Silver’s fuse is about to be lit: We find ourselves in challenging times. Certainly, not only in market play. One of the essential pillars to come out ahead is bending in the wind and staying flexible. Should the FED indeed raise interest rates to a degree non-reflected in the anticipated market price of speculators and come as a surprise, we might see a stock market decline next year of a substantial percentage. Consequently, this would temporarily drag silver prices down as well. We share methods in our free Telegram channel to build low-risk positions within the market that reduce risk through partial profit-taking. Our quad exit strategy allows us to hedge physical acquisitions by trading around these positions on smaller time frames in the silver paper market. Our approach provides a way to maneuver through a delicate environment to hedge against inflation and preserve wealth. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.
S&P 500’s Advance Isn’t Broad-Based, a Topping Pattern?

S&P 500’s Advance Isn’t Broad-Based, a Topping Pattern?

Paul Rejczak Paul Rejczak 01.11.2021 13:36
  The S&P 500 extended its bull market on Friday as it reached the new record high above the 4,600 level. Is this still a topping pattern? The S&P 500 index gained 0.19% on Friday, Oct. 29, as it extended its recent advance following a lower opening of the trading session. It reached yet another new record high of 4,608.08. The stock market was reacting to worse-than-expected quarterly corporate earnings releases from the AAPL and AMZN. However, the MSFT and TSLA stocks drove the index higher again on Friday. The market seems overbought in the short-term most likely it’s still trading within a topping pattern. The nearest important support level is at 4,550-4,570, and the next support level is at 4,520-4,525, marked by the previous daily gap up of 4,520.40-4,524.40. On the other hand, the resistance level is now at around 4,650. The S&P 500 trades along a short-term upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Apple Is Volatile While Microsoft Keeps Rallying Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple released its earnings after the Thursday’s close and the first reaction was negative. But on Friday the stock retraced some of its intraday decline. Nevertheless it lost 1.8%. The resistance level remains at $154-156. It is still trading well below the record highs, as we can see on the daily chart: Now let’s take a look at MSFT. It keeps rallying and reaching new record highs after its last week’s Tuesday’s quarterly earnings release. The market remains above a month-long upward trend line. We can see that in the short-term it’s getting more and more technically overbought. The stock may enter a consolidation or a correction just like in the middle of August when it rallied above $300 level. Conclusion The S&P 500 index reached the news record high on Friday, however it closed with a gain of just 0.2%. It still looks like a topping pattern and we may see a consolidation or a downward correction at some point. There may be a profit-taking action following quarterly earnings releases. Today the main indices are expected to open 0.4% higher, but we will likely see an intraday correction later in the day. Here’s the breakdown: The S&P 500 reached new record high on Friday, as it broke slightly above the 4,600 level. A speculative short position is still justified from the risk/reward perspective. We are expecting a 3% or higher correction from the new record highs. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Gold FINALLY Breaks Free Amidst S&P INSANITY

Gold FINALLY Breaks Free Amidst S&P INSANITY

Mark Mead Baillie Mark Mead Baillie 08.11.2021 08:13
Gold, after 18 weeks of being stuck in a maniacal Short trend without price really going anywhere, FINALLY broke the bonds of the M word crowd by flipping to Long -- but not without a mid-week scare: more later on that affair. But we begin by assessing the stark INSANITY besetting the parabolic performance of the S&P 500, +25% year-to-date. It settled yesterday (Friday) at 4698 (reaching 4718 intra-day), a record closing high for the seventh consecutive session. Such phenomenon has occurred but five other times in the past 41 years! So here's a multiple choice question for you: Ready? Across all those years (i.e. from 1980-to-date), what is the longest stretch of time between all-time highs for the S&P 500? â–  a) eight monthsâ–  b) just over three yearsâ–  c) slightly less than six yearsâ–  d) all of the above (for you WestPalmBeachers down there)â–  e) none of the above If having answered "e)", you are correct: the longest stint was almost seven-and-one-quarter years from 24 March 2000 through the DotComBomb up to 13 Jul 2007. 'Twas the complete antithesis of the current paradigm of an all-time high every single trading day. But wait, there's more: those of you who were with us way back in the days at AvidTrader may recall our technically having "mild", "moderate" and "extreme" readings of both oversold and overbought conditions for the S&P. Well, get a load of this: yesterday was the S&P's 12th consecutive day with an "extremely overbought" reading. During these 41 years, that has only happened once before, 36 years ago in 1985. And the price/earnings ratio then was a respectable 10.5x: today 'tis five times that much at 54.4x (!!!) easily more than double the S&P's lifetime median P/E (since 1957) of 20.4x. And still more: Every time the S&P moves from one 100-point milestone to the next, 'tis a FinMedia "big headline deal", albeit the percentage increase comparably narrows. Nonetheless, trading gains and losses are measured by the point, not the percentage. And from 1980-to-date, the S&P has gone from 100 to now 4700, (i.e. through 46 milestones. Upon having just achieved the 4600 level on 29 October, the average number of trading days over these past 41 years to reach each 100-point milestone is 236 (just about a year's worth). But now from 4600-4700 took just five days! Cue John McEnroe: "You canNOT be SERious!!" 'Course, every trend reaches a bend, if not its end. And whilst the market is never wrong, something will the S&P upend. You regular readers already know the "earnings are not there" to support even one-half the S&P's current level. Moreover, 'tis said when the Federal Open Market Committee does nudge up its Bank's Funds rate, 'twill be "Game Over" for the S&P, (something of which the Fed is very fearful). "But mmb, even a rise from just 0.25% to only 0.50% maintains a really low rate..." Nominally still low, yes Squire: but upon it occurring, the Fed shall have doubled the cost for every bank that comes to the borrowing window, from which one can then ask banking clientele: "How's that variable rate loan workin' out for ya?" And thus falleth the first domino. And the S&P. Have a great day. Gold had a great day yesterday in settling out the week at 1820. But as noted, 'twas not before a mid-week scare. With Gold wallowing on "The Taper of Paper" Wednesday -- down at 1758 (a three-week low) -- the tried-and-true, widely followed daily moving average convergence divergence (MACD) crossed to negative. Such previous 11 negative crossings had averaged downside follow-through of 86 points. Thus within that technical vacuum, another run sub-1700 was placed on Gold's table. What instead followed was a one-day whipsaw, Gold's MACD finishing the week with a positive cross, and even better, the weekly parabolic Short trend FINALLY being bust per the first Gold-encircled dot in our weekly bars graphic: FINALLY too Gold had its first Friday in five of not being flogged ostensibly by the M word crowd. Should they thus have left the building, in concert with both the daily MACD back on the positive side and the weekly parabolic again Long, the door is open for Gold to glide up into the 1900s toward concluding 2021. As for the five primary BEGOS Markets, here are their respective percentage tracks from one month ago (21 trading days)-to-date, the S&P having swiftly replaced Oil as the leader of the pack. Of more import, note the rightmost bounce for Gold and the Bond. Why are those two stalwart safe havens suddenly getting the bid? (See our opening commentary on S&P INSANITY): Meanwhile as we waltz into the waning two weeks of Q3 Earnings Season, of the S&P's 505 constituents, 426 have reported (450 is typically the total within the seasonal calendar), of which 340 (80%) have bettered their bottom lines from Q3 of a year ago when much of the world purportedly was "shut down". Thus such significant improvement was expected: "They better have bettered!" Yet as noted, our "live" P/E is at present 54.4x. Thus to bring earnings up to snuff such as to reduce the P/E to its lifetime median of 20.4x, bottom lines need increase by 167%: but the median year-over-year increase (for those 396 constituents with positive earnings from both a year ago and now) is only 19%. Thus for those of you scoring at home, a 19% increase is nowhere near the "requisite" 167%. "Look Ma! Still no earnings!" (Crash). Still earning to grasp good grace is the track of the Economic Barometer, which bopped up a bit on the week's headline numbers. To be sure, October's Payrolls improved with a decline in the Unemployment Rate and a jump in the Institute for Supply Management's Services Index. But with a return of folks to the workplace (excluding those who've post-COVID decided they don't need to work) came a plunge in Q3's Productivity combined with a spike in Unit Labor Costs. As well, October's growth in Hourly Earnings slowed and the Average Workweek shortened, such combination suggesting temporary jobs materially lifted the overall Payrolls number. Also less highlighted was September's slowing in Factory Orders, shrinkage in Construction Spending, and the largest Trade Deficit recorded in the Baro's 24-year history. Here's the whole picture from one year ago-to-date with the S&P standing up straight: To our proprietary Gold technicals we go, the two-panel graphic featuring price's daily bars from three months ago-to-date on the left with the 10-day Market Profile on the right. And note the "Baby Blues" of linear regression trend consistency being abruptly stopped in their downward path thanks to Friday's "super-bar" -- Gold's best intra-day low-to-high run in nearly four weeks -- and the highest closing price since 04 September. As well in the Profile, price sits atop the entire stack, which you'll recall for the prior two weeks was at best a congestive mess. But to quote Inspecteur Clouseau, "Not any moooure...": As for Silver, she's not as yet generating as much comparable excitement. At left, her "Baby Blues" continue to slip even as price gained ground into week's end. At right, the price of 24 clearly is her near-term "line in the sand". Still, our concern a week ago of her falling into the low 22s has somewhat abated, albeit the daily parabolic trend remains Short; however a quick move to 24.700 ought nix that condition. "C'mon, Sister Silver!": So there it all is. We see Gold as poised to FINALLY move higher toward year-end, (barring a resurgence of the M word crowd). And we see the S&P as poised for its off-the-edge-of-the-Bell-curve INSANITY to cease, (barring an economic erosion that instead furthers the flow of free dough). After all, bad is good, just as Gold is always good. In that spirit to conclude for this week, here are three good bits from a few of the smartest (so we're told) people in the world: Betsey "With an e" Stevenson says with respect to folks not returning to the workforce post-COVID that "...It’s like the whole country is in some kind of union renegotiation..." That is True Blue Michigan-speak right there. But think about it: when you've got a) the upper labor hand, and b) the aforementioned free dough that you popped into the stock market to thus gain some 38% since the economy first shutdown, why work, eh? Besides, the feeling of marked-to-market wealth is a beautiful thing. Elon "Spacey" Musk now notes that Tesla has not contracted with Hertz to sell 100,000 four-wheel batteries. Recall when that deal first was announced, the price of TSLA went up many times more than the additional incremental return of the transaction. But hardly has it since retracted. 'Course, the company's Q3 earnings were "fantastic", in turn nicely bringing down the stock's P/E to just now 345.8x. And comparably as you already know, the only other two S&P 500 constituents classified as being in the sub-industry category of "Automobile Manufacturers" are Ford (P/E now 26.1x) and General Motors (P/E now 7.7x). But a shiny object that rolls, too, is a beautiful thing. Peter "Techie" Thiel has just opined that the soaring price of bits**t is indicative of inflation being at a "crisis moment" for the economy. 'Tis not ours to question this notion; rather 'tis beyond our pay grade to understand it. What we do understand is that THE time-tested (understatement) indicator and mitigator of inflation -- i.e. Gold -- is priced at such an attractively low level versus where it "ought" be (i.e. 3981 per our opening graphic's decree), that never again such a beautiful opportunity shall we see! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
US tech stocks under pressure ahead of FED speeches

US tech stocks under pressure ahead of FED speeches

Walid Koudmani Walid Koudmani 08.11.2021 12:53
US tech stocks under pressure ahead of FED speeches While US stock markets continued to reach new all time highs and after the FED announced it would be starting its QE tapering in last week's meeting, we are seeing some increased selling pressure at the start of the week with US futures slightly down. This comes after Elon Musk announced over the weekend that he would be selling 10% of his Tesla shares (worth around $21 billion) depending on the results of a poll he held on Twitter, this in turn worried some investors who noted that selling such a significant stake could create significant downward pressure on the share price. On the other hand, it is worth noting that due to the elevated trading volume that Tesla shares experience, any potential impact could be significantly mitigated if the CEO were to spread that sale across several weeks. Finally, today's FED speeches could shed some light on the central bank's outlook heading into the final part of the year and could further elaborate on last week's decision to begin tapering and how that may impact stocks in the near future as the central bank attempts to not worry investors.  Bitcoin approaches all time high as cryptos climb higher After some time spent consolidating in the $60,000 range, Bitcoin has managed to break through the upper limit of the trading range and resume the upward move with the main crypto currency approaching it's recently reached all time high as it trades around $66,000. This positive sentiment is echoed across the majority of other coins with the total market cap once again nearing the $3 trillion mark and with Ethereum once again reaching a new high. While we have seen Bitcoin impact other crypto currencies in the past, a break past the previous all time high could lead to a significant increase in volatility and a potential domino effect as more investors enter the market or reallocate their funds. Download our Mobile Trading App:   Google Play   App Store  
DXCM Stock: Is DexCom investor sentiment turning bearish?

DXCM Stock: Is DexCom investor sentiment turning bearish?

Wall Street Harold Wall Street Harold 12.02.2021 09:02
Despite the DexCom (DXCM) Nick Jonas Super Bowl ad, investors seem to be turning bearish. It is very important to watch insiders of the company you’re invested in and it seems insider faith is dwindling. According to a recent press release, the company stated that it has partnered with Nick Jonas to bring more awareness to DexCom’s continuous glucose monitoring system for diabetes. The ad is expected to run Sunday, February 7th. Despite this partnership, DexCom insiders are selling their stake. This could be a sign that helps investors acknowledge that insider faith is dwindling. There are many reasons as to why these insiders are selling stock, however the most common reasons are that they could believe that the company is heading in the wrong direction. They do this in order to sell before the stock price takes notice which may lead other investors to sell their positions. It’s fair to note that these insiders has been selling all of their shares with no buying positions since February 2020. Another company which may take major market share Another soon to be major player in the diabetes device market is Senseonics (SENS), this company has a new innovative approach. Instead of creating a device that pokes into the skin and limits movement, they created an implantable sensor that goes under the skin and a transmitter which sits atop above the skin. According to recent reviews, the implant procedure is painless and takes less than 10 minutes. In a few years I predict that this company will take major market share from its competitors like DexCom therefore reaching a price target of $20+ after the FDA approves the 180-day CGM device.
Great Profitable Runs

Great Profitable Runs

Monica Kingsley Monica Kingsley 09.11.2021 15:04
S&P 500 pause goes on, and bonds support more of it to come. Tech keeps thus far the high ground gained, but value is showing signs of very short-term weakness – and yields haven‘t retreated yesterday really. The correct view of the stock market action is one of microrotations unfolding in a weakening environment – one increasingly fraught with downside risks. To be clear, I‘m not looking for a sizable correction, but a very modest one both in time and price. It‘s a question of time, and I think it would be driven by tech weakness as the sector has reached lofty levels. It‘ll go higher over time still, but this is the time for value and smallcaps in the medium term.The dollar though isn‘t putting much pressure on stock, commodity or precious metals prices at the moment – such were my yesterday‘s words:(…) when the dollar starts rolling over to the downside (I‘m looking at the early Dec debt ceiling drama to trigger it off), emerging markets would love that. And commodities with precious metals too, of course – sensing the upcoming greenback weakness has been part and parcel of the gold and silver resilience of late. Precious metals are only getting started, but the greatest fireworks would come early spring 2022 when the Fed‘s failure to act on inflation becomes broadly acknowledged.For now, they‘re still getting away with the transitory talking points, and chalking it down to supply chain issues. As if these could solve the balance sheet expansion or fresh (most probably again short-dated) Treasuries issuance (come Dec) – the Fed is also way behind other central banks in raising rates. Canada, Mexico and many others have already moved while UK and Australia are signalling readiness – the U.S. central bank is joined by ECB in hesitating.And that‘s what precious metals would be increasingly sniffing out. Commodities are joining in the post-taper celebrations, and my prior Tuesday‘s market assessments are coming to fruition one by one. Oil is swinging higher and hasn‘t topped, copper is coming back to life, and cryptos aren‘t in a waiting mood either.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 pause is here, and all that‘s missing, is emboldened bears. They may or may not arrive given that VIX keeps looking lazy these days – either way, the risks to the downside are persisting for a couple of days at least still.Credit MarketsHYG strength evaporated, but it‘s on a short-term basis only. The broader credit market weakness would get reversed, but it‘s my view that quality debt instruments would be lagging.Gold, Silver and MinersGold and silver continue reversing the pre-taper weakness – the upswing goes on, but is likely to temporarily pause as the miners‘ daily weakness foretells. Still, I‘m looking for more gains with every dip being bought.Crude OilCrude oil bulls continue having the upper hand, no matter the relative momentary stumble in maintaining gains – the energy sector hasn‘t peaked by a long shot.CopperCopper is participating in the commodities upswing – not too hot, not too cold. Just right, and it‘s a question of time when the red metal would start visibly outperforming the CRB Index again.Bitcoin and EthereumBitcoin and Ethereum consolidation has indeed come to an end, and both leading (by volume traded) cryptos are primed for further gains. SummaryS&P 500 breather remains a question of time, but shouldn‘t reach far on the downside – the bears are having an opportunity to strike as credit markets have weakened, and there isn‘t enough short-term will in tech to go higher still. The very short-term picture in stocks is mixed, but downside risks are growing. The dollar is already weakening, much to the liking of commodities and precious metals – there is still enough liquidity in the markets as any taper can be easily offset by withdrawing repo money sitting on the Fed‘s balance sheet.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Profiting on Hot Inflation

Profiting on Hot Inflation

Monica Kingsley Monica Kingsley 10.11.2021 16:08
S&P 500 pause finally went from sideways to down, and might not be over yet. Credit markets aren‘t nearly totally weak – tech simply had to pause, so did semiconductors, and the Tesla downswing took its toll. Value though recovered the intraday downside, and VIX retreated from its daily highs – that may be all it can muster. I‘m looking primarily at bond markets for clues, and these reacted to the PPI figures with further decline in yields.At the same, inflation expectations are moving higher – the more you shorten the maturity, the higher they go, let alone RINF, their key ETF. Markets will be proven very wrong about the transitory inflation complacency – inflation rates aren‘t going to decline if you just leave them alone. And taper coupled with rate hikes hesitancy won‘t do the trick either.S&P 500 is still primed to go higher – the only question is the shape of the current consolidation. Liquidity is still ample, the banking sector is strong, and the Russell 2000 isn‘t really retreating. As stated yesterday:(…) The correct view of the stock market action is one of microrotations unfolding in a weakening environment – one increasingly fraught with downside risks. To be clear, I‘m not looking for a sizable correction, but a very modest one both in time and price. It‘s a question of time, and I think it would be driven by tech weakness as the sector has reached lofty levels. It‘ll go higher over time still, but this is the time for value and smallcaps in the medium term.Precious metals are consolidating – it‘s almost a pre-CPI ritual, but under the surface, the pressure to go higher keeps building. I‘m looking for a strong Dec in gold and silver, with unyielding oil and copper gradually waking up. Cryptos aren‘t taking prisoners either.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 finally declined, and the very short-term picture is unclear – is the dip about to continue, or more sideways trading before taking on prior highs? It‘s a coin toss.Credit MarketsHYG recouped some of the prior downside, but the LQD and TLT upswings give an impression of risk-off environment. Sharply declining yields aren‘t necessarily positive for stocks, and such is the case today.Gold, Silver and MinersGold and silver look like briefly pausing before the upswing continues – miners are pulling ahead, and the ever more negative real rates are powering it all.Crude OilCrude oil bulls continue having the upper hand, and oil sector is also pointing at higher black gold prices to come. Energy hasn‘t peaked by a long shot.CopperCopper went at odds with the CRB Index, but that‘s not a cause for concern. It‘ll take a while, but the red metal would swing upwards again.Bitcoin and EthereumBitcoin and Ethereum are briefly consolidating, and a fresh upswing is a question of shortening time. SummaryS&P 500 remains momentarily undecided, but the pullback shouldn‘t reach far on the downside – the bears are having an opportunity to strike on yet another hot inflation numbers. This isn‘t transitory really as I‘ve been telling you for almost 3 quarters already. Needless to say, the fire under real assets is being increasingly lit – more gains in commodities, precious metals and cryptos are ahead as inflations runs rampant on the Fed‘s watch.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Half a Dozen Things You Should Know about FX

Half a Dozen Things You Should Know about FX

Marc Chandler Marc Chandler 12.11.2021 13:11
1.  The market is still digesting the implications of Wednesday's CPI shock. The dollar has strengthened, yields have risen, the stock market wobbled after a long advancing streak, and in any event, stabilized in light trading during the US and Canadian holidays. However, given the low year-ago reading, there is a significant risk that inflation (including the core rate) will accelerate over the next few months. As a result, the Federal Reserve needs greater flexibility to raise rates sooner than it has envisioned.   The main restraint now is the pace of tapering.  The FOMC committed to reducing its bond-buying by $15 bln in November and December.  Its statement indicated that it anticipated maintaining the rate afterward, but the FOMC also reserved the right to adjust the pace if necessary. Thus, accelerating the tapering is the most likely course of action.  Bullard had suggested completing the tapering by the end of Q1.  If this is to become the majority view, there may be some effort to prepare the market.   Recently a rally in US bonds was attributed to talk that Governor Brainard could replace Powell as Fed chair.  The argument was that Brainard was more dovish.  Is this really relevant now?  Does it count as a strike against her?  With Yellen's apparent support, Powell is most likely to get re-appointed, and given that CPI is at 30-year highs, conventional thinking favors maintaining a stable hand at the helm. 2.    The dollar's gains accelerated since the higher than expected CPI report.  The euro was in a $1.15-$1.17 range last month and broke out on Wednesday.  Follow-through selling Thursday brought to about $1.1445.  We have suggested the next target is a little below $1.1300.   The jump in yields helped lift the greenback from below JPY112.80 above JPY114.00.  The five-year high set on October 20 was around JPY114.70, while we project the upper end of the likely range closer to JPY115.00. 3.  Disappointing economic data contributed to the losses of sterling and the Australian dollar.   Economists (Bloomberg survey) expected Australia to have created 50k jobs in October, but, instead, it lost 46.3k jobs for the third consecutive monthly decline.  The bulk of the loss (40.4k) were full-time positions, which reversed the 26.7k increase reported in September.  The unemployment rate jumped to 5.2% from 4.6%, the highest since April.  The Australian dollar peaked near $0.7550 in late October and fell below $0.7300 on Thursday, for the first time in a month.  The next target is around $0.7240-$0.7260.   The UK reported a significant slow down in Q3 GDP to 1.3% from 5.5% in Q2. Expectations for a 1.5% quarter-over-quarter expansion  (Bloomberg survey) seemed on the high side.  However, the September monthly GDP rose 0.6%, and the better than expected rise was offset but a reduction in the August GDP to 0.2% from 0.4%. The industrial output contracted in September. The trade deficit deteriorated after a dramatic revision in the August balance (to -GBP1.880 bln from -GBP3.716 bln, while services accelerated (0.7% from a revised 0.1% gain that had initially reported at 0.3%).  Sterling, which had been pushing near $1.36 before the Bank of England's meeting and slipped to a marginal new low for the year on Wednesday but still held above $1.34 (barely).  It fell to $1.3360 on Thursday. The next chart support area is seen around $1.3165-$1.3185. 4.  The joint US-China statement at COP-26 is promising.  It was the key to the Paris Agreement in 2015.  There was a commitment to boost efforts to cut emissions and illegal deforestation.  The gap between current policies and what is necessary was acknowledged, and there appeared to be an agreement in principle to reach an agreement on climate finances and rules for a carbon market.  The joint statement must have been in the works even as Biden criticized Xi for the lack of commitment for not attending COP-26.  There is still much speculation about a "virtual summit," which is supposed to signal something more than two phone calls the leaders have held this year.  The environment was also recognized where cooperation was possible.  Still, Beijing refused to join the US-EU commitment to cut methane admissions and opted for its own plan.   The geopolitical competition is unaffected by the joint statement. Meanwhile, the more pressing geopolitical threat is coming from the movement of Russian forces to the Ukraine border.  Reports suggest the US has briefed Europe on a possible Russian invasion of Ukraine.  Hostilities are said to have escalated recently.  Recall that Russia had amassed forces (~100k soldiers, tanks, and aircraft) in the Spring too.  It triggered a flurry of talks, and Moscow removed (redeployed) its forces.  Russia defended the troop movement within the country as an internal affair but has accused the US of provocation for sailing warships into the Black Sea, close to its territory last week.  Putin also reportedly was critical of Ukraine's alleged use of drones, which violated a previous agreement.  Meanwhile, tensions on the Polish-Belarus border remain tense.  Merkel sought Putin's help recently to defuse the situation, but he refused.   Belarus is thought to be instigating a migration crisis and has threatened to shut down a critical gas pipeline to the EU if Poland keeps its border closed.  These developments may have contributed to some pressure on the euro.   5.  The Mexican peso fell by around 0.5% after the central bank lifted the overnight rate to 5.00%. It is the third quarter-point move in the cycle that began in June.   The swaps market has nearly 90 bp of tightening discounted over the next three months and almost 220 bp in the next 12 months.  Banxico lifted its Q4 inflation forecast to 6.8% from 6.2%.  The one dissent (Esquivel, again) was to stand pat.  There was no vote for a 50 bp move, which contributed to the dovish read of the rate hike.  October CPI, reported earlier this week, is at 6.24% year-over-year,  6.   Friday's economic calendar is light.  Little new data from the large Asia Pacific and European countries.  The North American calendar is minimal.  The US JOLTS report on job openings and the University of Michigan's preliminary estimate of November sentiment and inflation expectations.   NY Fed's Williams is the lone speaker from the central bank and may not address monetary policy directly.  There are three sets of chunky options that expire tomorrow that may be relevant:  1.23 bln euros at $1.1460, $1.75 bln at JPY114.00, and GBP690 mln at $1.3320.   Disclaimer
S&P 500: Inflation Fears May Push Stock Prices Lower

S&P 500: Inflation Fears May Push Stock Prices Lower

Paul Rejczak Paul Rejczak 10.11.2021 15:55
  Stocks’ short-term rally came to an end this week and the S&P 500 index entered a consolidation along the 4,700 level. Is this a topping pattern? The S&P 500 index lost 0.35% yesterday, as it fell below the 4,700 price mark following two-day-long consolidation along the Friday’s record high of 4,718.50. The recent rally was not broad-based and it was driven by a handful of tech stocks like MSFT, NVDA, TSLA. The market seems overbought in the short-term and most likely it’s trading within a topping pattern. Today we may see another consolidation or a profit taking action following worse than expected inflation data release (the CPI monthly number came at +0.9% vs. the expected +0.6%). The nearest important support level is at 4,650-4,675 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 broke below its steep short-term upward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Lost 0.7% on Tuesday Let’s take a look at the Nasdaq 100 chart. The technology index broke above the 16,000 level recently and it was trading at the new record high. The market accelerated parabolically above its short-term upward trend line. But yesterday it lost 0.7% and closed below that trend line. The resistance level remains at 16,400, and the short-term support level is at 16,000, among others, as we can see on the daily chart: Apple’s Further Consolidation and Microsoft’s Potential Topping Pattern Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple continues to trade within a consolidation along the $150 level and it is still well below the record highs, and the Microsoft is close to breaking below its over month-long upward trend line. So the tech “megacaps” may be turning lower, as we can see on their daily charts: Conclusion The broad stock market went slightly lower on Tuesday and we may see a downward continuation this morning. The main indices are expected to open 0.2-0.5% lower following worse (higher) than expected consumer inflation number release. It looks like a topping pattern and we may see a downward correction at some point. There may be a profit-taking action following quarterly earnings releases. Here’s the breakdown: The S&P 500 extended its uptrend last week, but since Friday it is trading within a short-term downtrend. But still no positions are justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Getting Real on PMs and Inflation

Getting Real on PMs and Inflation

Monica Kingsley Monica Kingsley 15.11.2021 15:47
S&P 500 indeed rose but bond markets couldn‘t keep the encouraging opening gains. Can stocks still continue rallying? They look to be setting up for one more downleg of maximum the immediately predecing magnitude, which means not a huge setback. The medium-term path of least resistance remains up – the Fed is still printing a huge amount of money on a monthly basis, and it remains questionable how far in tapering plans execution they would actually get – I see the risks to the real economy coupled with persistently high inflation as rising since the 2Q 2022 (if not since Mar already, but most pronounced in 2H 2022).Stocks are still set for a good Dec and beyond performance – just look at VIX calming down again. It‘s that the debt ceiling drama resolution would allow the Treasury to start issuing fresh debt, and that would weigh heavily on the dollar. That‘s a good part of what gold and silver are sniffing out, and if you look at the great white metal‘s performance, it‘s the result of inflation coming back to the fore as the Fed itself is now admitting to high inflation rates through the mid-2022, putting blame on supply chain bottlenecks. Oh, sure. The real trouble is that inflation expectations are starting to get anchored – people are expecting these rates to be not going away any time soon.Precious metals are going to do great, and keep scoring excellent gains. Surpassing $1,950 isn‘t out of the realm of possibilities, but I prefer to be possitioned aggressively while having more conservative expectations. Not missing a dime this way. Copper is awakening too, and commodities including oil would be doing marvels. If in doubt, look at cryptos, how shallow the corrections there are.A few more words on yields – as more fresh Treasury issued debt enters the markets, look for yields to rise. Coming full circle to stocks and my Friday‘s expectations:(…) TLT though is having trouble declining further, and that means a brief upswing carrying over into stocks, is likely.TLT downswings would be less and less conducive to growth, so if you‘re still heavily in tech, I would start eyeing more value.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls are on the move, and let‘s see how far they make it before running into another (mild, again I say) setback.Credit MarketsCredit markets opening strength fizzled out, but the weakness is getting long in the tooth kind of. I view it as a short-term non-confirmation of the S&P 500 upswing only.Gold, Silver and MinersGold and silver are on a tear, and rightfully so – I am looking for further gains as both gold and silver miners confirm, and the macroeconomic environment is superb for PMs.Crude OilCrude oil bulls keep defending the $80 level, with $78 serving as the next stop if need be – after Friday, its test is looking as an increasingly remote possibility – the two lower knots in a series say. Anyway, black gold will overcome $85 before too long.CopperCopper ran while commodities paused – that‘s a very bullish sign, for both base and precious metals. The lower volume isn‘t necessarily a warning sign.Bitcoin and EthereumBitcoin and Ethereum are still consolidating, and the relatively tight price range keeps favoring the bulls – and they‘re peeking higher already.SummaryS&P 500 bulls are holding the short-term upper hand, but the rally may run into headwinds shortly. Still, we‘re looking at a trading range followed by fresh highs as a worst case scenario. Yes, I remain a stock market bull, not expecting a serious setback till probably the third month of 2022. Precious metals are my top pick, followed by copper – and I am definitely not writing off oil, let alone cryptos. Inflation trades are simply back!Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Technical Analysis - Support And Resistance - Terms You Should Know

Key event risk and front of mind this week...

Chris Weston Chris Weston 16.11.2021 12:15
UK jobless claims (Tuesday 18:00 AEDT) and Oct CPI (Wed 18:00 AEDT) New home prices (today at 12:30 AEDT), Retail sales, industrial production, fixed-asset investment, property investment (all today 13:00 aedt) Aussie Q3 wage data (Wed 11:30 AEDT) RBA gov Lowe speaks (Tues 13:30 AEDT) US retail sales (Wed 00:30 AEDT), Fed speeches all week with the highlight vice-chair Clarida (Sat 04:15 AEDT) The inflation debate is still the hottest ticket in town – it is promoting higher volatility (vol) in rates markets and bonds, with a small pick-up seen in FX volatility (vol). Equity markets are still, however, calm, with the VIX at 16.3% with falling demand to hedge potential drawdown. This divergence in implied vol across asset class remains a key talking point, but there is no doubt that the boat is not yet tipping with correlations among stocks almost at zero, and cyclical sectors (of the S&P500) still holding up well vs defensives. If the US high yield credit spread accelerated above 273bp above the US 10yr Treasury (currently 267bp), then again, I think equities would be a better sell.  Now this dynamic may change, especially if the debt ceiling comes into play in mid-Dec…but what are the signs to look for over a medium-term?  A higher vol regime will make conditions far more prosperous for equity short-sellers and change the dynamics in FX markets, with renewed downside demand for high beta FX (AUD, NZD, CAD, and MXN). The USD will turn from one being driven by pro-cyclical forces – i.e. relative economics and rate settings - to one sought for safe-haven demand, with the JPY also benefiting.  (Implied volatility benchmarks across asset class) Firstly, I would start with the rates markets – we can see a bit over 2 hikes priced into US fed funds future by the end-2022, with rates ‘lift off’ starting in July. I think if we priced in over 3 hikes in 2022 it could become more problematic for risk assets. Looking out the Eurodollar rates curve, we see a reasonably aggressive pace of hikes in 2022 and 2023, but then the pace markedly declines with barely anything priced for 2024 and 2025. In essence, the market sees hikes as front-loaded suggesting the Fed are in fact not dramatically behind the curve – a factor that is one of the core debates in macro.  We see an 89bp differential between the Eurodollar Dec 2025 and Dec 2022 futures contracts – if this moves back to say 140bp then this could be the market feeling that inflation is going to be a far greater problem and rate hikes are being more aggressively priced throughout the next four years. (Orange – US 5y5y forward rate, white – Fed’s long-term dot plot projection) Also, if the US 5y5y forward rate (the markets view on the ‘terminal’ fed funds rate – now 1.94%) pushed above 2.50% (the Fed’s long-term dot plot projection), again, I think this would be a trigger for far higher volatility and risk aversion.  A move to 2.50% won't play out overnight, if at all, and we’ll need to see real evidence that the US labour force participation rate is not going above 62%, while unit labour costs stay elevated and supply chains heal at a glacial pace. However, if the forward rate was eyeing 2.5% I think this could be a factor many strategists will point to for the VIX to sustain a move above 20%. The gold market is perhaps one of the more classic signs of inflationary concerns – this is a play on US ‘real’ (adjusted for inflation expectations) rates though, where the combination of a better economy in Q4, record negative US real rates and rising inflation is one the gold bulls will seek out precious metals. The Fed may need to promote a move higher in real rates, but the knock-on effect is they risk the stock market finding sellers – notably in growth stocks. A downside break of -2% in 5yr US real Treasury’s could be the trigger for gold to push into and above $1900.  Many debate the linkage between inflation expectations and the real economy. I’m not sure it matters when people are feeling the effects for themselves, and much has been made of the recent NFIB small business survey and Friday’s University of Michigan consumer sentiment survey, which hit the lowest levels since August 2011.  Clearly inflation is not popular and is increasingly the key political issue – I’d argue if real rates break to new lows this could accelerate inflation hedges, while a move through 2.7% in US 5y5y inflation swaps (currently 2.55%) would also play into the idea that perhaps the Fed, at the very least, need to radically reduce the pace of QE in the December FOMC meeting.  Clearly, the US Nov CPI (released 11 Dec) is going to be a big event for markets to digest and the signs are price pressures will continue to build from the current 6.2% YoY pace.  Crude and gasoline also play a key role in shaping sentiment – Senate Majority Leader Schumer has called on President Biden to release an element of the US’s Strategic Petroleum Reserves (SPR). This is a factor that has been talked up since OPEC rejected the US’s calls to increase output by more than 400k barrels. However, the introduction of Schumer into the mix just adds fuel to the fire and this may weigh on crude. So, a few indictors I am watching that could spur the market into a belief the Fed are genuinely behind the curve – I’d argue the market isn’t there yet, but if the factors I mention don’t show evidence of dissipating then we could see forward rates move to levels that could highlight the Fed need to act far more intently – that is where risk dynamics could markedly change.
The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

Invest Macro Invest Macro 16.11.2021 12:10
https://investmacro.com/2021/11/the-top-5-companies-added-to-our-stock-market-watchlist-this-quarter/ Body: By InvestMacro The fourth quarter of 2021 is approximately halfway over and we wanted to highlight some of the top companies that have been analyzed by our QuantStock system so far. The QuantStock system is an algorithm that examines each company’s fundamental metrics, earnings trends and overall strength trends to pinpoint quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. However, be aware the QuantStock system does not take into consideration the stock price so one must compare each idea with their current stock prices. Many studies are consistently showing overvalued markets and that has to be taken into consideration with any stock market idea. As with all investment ideas, past performance does not guarantee future results. Here we go with 5 of our Top Stocks halfway through Quarter 4 of 2021: Gilead Sciences Inc. Health Care, Large Cap, 4.29% Dividend, Our Grade = A Gilead Sciences Inc. (NASDAQ: GILD) is first up and is a company engaged in developing innovative therapies for life-threatening diseases. Its medicine portfolio includes treatment for conditions ranging from HIV and hepatitis to coronavirus and cardiovascular disorders. If we talk about its financial performance, the bio-pharmaceutical company recently crushed expectations for the third quarter. It posted adjusted earnings of $2.65 per share on revenue of $7.42 billion for the quarter ended September 30. The results easily beat the consensus forecast of $1.76 per share for earnings and $6.29 billion for revenue. If we look at its key financial metrics, Gilead stock is currently trading around $67.48 against its 52-week range of $56.56 – $73.34. Moreover, its P/E value is 11.55, while the company’s total market value is just over $84 billion.   US Steel Materials, Small Cap, 0.77% Dividend, Our Grade = A- United States Steel Corporation (NYSE: X), founded in 1901, is one of the leading steel producers in the U.S. The strong demand for steel helped the company post better-than-expected financial results for the third quarter. United States Steel reported adjusted earnings of $5.36 per share for the three months ended September 30, beating expectations of $4.85 per share. Quarterly revenue of $5.96 billion also surpassed the consensus forecast of $5.79 billion. If we look at the recent price movement, United States Steel stock has gained more than 50 percent value so far in 2021. The 52-week range of the stock is $10.72 – $30.57, while the total market value of the company is approx. $7 billion.   Seagate Technology Information Technology, Medium Cap, 3.18% Dividend, Our Grade = A- Seagate Technology Holdings plc (NASDAQ: STX) is one of the world’s biggest hard disk drives (HDDs) makers. It still generates a large portion of its revenue by selling traditional HDDs. The company last month announced better-than-expected financial results for its fiscal first quarter, driven by solid demand from cloud data center clients. Seagate reported adjusted earnings of $2.35 per share on revenue of $3.12 billion for the three months ended October 1, while analysts were looking for earnings of $2.21 per share on revenue of $3.11 billion. The impressive financial performance drove Seagate stock higher in recent weeks. Seagate stock is now up nearly 80 percent on a year-to-date basis.   Synchrony Financial Financials, Medium Cap, 1.68% Dividend, Our Grade = A- Synchrony Financial (NYSE: SYF) has vast experience in the financial sector. It is one of the biggest credit card issuers in the U.S., working with hundreds of retailers to support their credit card plans. The company last month announced a solid profit for the third quarter. Synchrony reported earnings of $2 per share, significantly higher than 52 cents per share in the comparable period of 2020 and better than the consensus forecast of $1.52 per share. If we see its recent price trend, Synchrony has grown its value at a decent pace so far in 2021. The company’s share price has increased about 47 percent on a year-to-date basis. The 52-week range of the stock is $29.32 – $52.49, while its P/E ratio stands at 7.10.   Lazard Ltd Financials, Small Cap, 3.98% Dividend, Our Grade = A- Lazard Ltd (NYSE: LAZ) specializes in financial advisory and asset management services. It mainly advises clients on mergers and acquisitions (M&A), capital structure, and restructuring plans. It has advised on some of the biggest and most complicated M&A deals of the last century. If we look at its financial performance, Lazard posted mixed results for the third quarter. Its earnings of 98 cents per share exceeded the expectations of 95 cents per share. However, the quarterly revenue of $702 million missed analysts’ average estimate of $715 million. Lazard stock traded mostly lower following the results. Nevertheless, the company’s share price is still up nearly 15 percent on a year-to-date basis. -------------------------------------------------------------------------------------------------- By InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies. All information, stock ideas and opinions on this website are for general informational purposes only and do not constitute investment advice.
The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

The Top 5 Companies Added to Our Stock Market Watchlist this Quarter

Invest Macro Invest Macro 18.11.2021 10:56
By InvestMacro The fourth quarter of 2021 is approximately halfway over and we wanted to highlight some of the top companies that have been analyzed by our QuantStock system so far. The QuantStock system is an algorithm that examines each company’s fundamental metrics, earnings trends and overall strength trends to pinpoint quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. However, be aware the QuantStock system does not take into consideration the stock price so one must compare each idea with their current stock prices. Many studies are consistently showing overvalued markets and that has to be taken into consideration with any stock market idea. As with all investment ideas, past performance does not guarantee future results. Here we go with 5 of our Top Stocks halfway through Quarter 4 of 2021: Gilead Sciences Inc. Health Care, Large Cap, 4.29% Dividend, Our Grade = A Gilead Sciences Inc. (NASDAQ: GILD) is first up and is a company engaged in developing innovative therapies for life-threatening diseases. Its medicine portfolio includes treatment for conditions ranging from HIV and hepatitis to coronavirus and cardiovascular disorders. If we talk about its financial performance, the bio-pharmaceutical company recently crushed expectations for the third quarter. It posted adjusted earnings of $2.65 per share on revenue of $7.42 billion for the quarter ended September 30. The results easily beat the consensus forecast of $1.76 per share for earnings and $6.29 billion for revenue. If we look at its key financial metrics, Gilead stock is currently trading around $67.48 against its 52-week range of $56.56 – $73.34. Moreover, its P/E value is 11.55, while the company’s total market value is just over $84 billion. US Steel Materials, Small Cap, 0.77% Dividend, Our Grade = A- Free Reports: Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis. United States Steel Corporation (NYSE: X), founded in 1901, is one of the leading steel producers in the U.S. The strong demand for steel helped the company post better-than-expected financial results for the third quarter. United States Steel reported adjusted earnings of $5.36 per share for the three months ended September 30, beating expectations of $4.85 per share. Quarterly revenue of $5.96 billion also surpassed the consensus forecast of $5.79 billion. If we look at the recent price movement, United States Steel stock has gained more than 50 percent value so far in 2021. The 52-week range of the stock is $10.72 – $30.57, while the total market value of the company is approx. $7 billion. Seagate Technology Information Technology, Medium Cap, 3.18% Dividend, Our Grade = A- Seagate Technology Holdings plc (NASDAQ: STX) is one of the world’s biggest hard disk drives (HDDs) makers. It still generates a large portion of its revenue by selling traditional HDDs. The company last month announced better-than-expected financial results for its fiscal first quarter, driven by solid demand from cloud data center clients. Seagate reported adjusted earnings of $2.35 per share on revenue of $3.12 billion for the three months ended October 1, while analysts were looking for earnings of $2.21 per share on revenue of $3.11 billion. The impressive financial performance drove Seagate stock higher in recent weeks. Seagate stock is now up nearly 80 percent on a year-to-date basis. Synchrony Financial Financials, Medium Cap, 1.68% Dividend, Our Grade = A- Synchrony Financial (NYSE: SYF) has vast experience in the financial sector. It is one of the biggest credit card issuers in the U.S., working with hundreds of retailers to support their credit card plans. The company last month announced a solid profit for the third quarter. Synchrony reported earnings of $2 per share, significantly higher than 52 cents per share in the comparable period of 2020 and better than the consensus forecast of $1.52 per share. If we see its recent price trend, Synchrony has grown its value at a decent pace so far in 2021. The company’s share price has increased about 47 percent on a year-to-date basis. The 52-week range of the stock is $29.32 – $52.49, while its P/E ratio stands at 7.10. Lazard Ltd Financials, Small Cap, 3.98% Dividend, Our Grade = A- Lazard Ltd (NYSE: LAZ) specializes in financial advisory and asset management services. It mainly advises clients on mergers and acquisitions (M&A), capital structure, and restructuring plans. It has advised on some of the biggest and most complicated M&A deals of the last century. If we look at its financial performance, Lazard posted mixed results for the third quarter. Its earnings of 98 cents per share exceeded the expectations of 95 cents per share. However, the quarterly revenue of $702 million missed analysts’ average estimate of $715 million. Lazard stock traded mostly lower following the results. Nevertheless, the company’s share price is still up nearly 15 percent on a year-to-date basis. By InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies. All information, stock ideas and opinions on this website are for general informational purposes only and do not constitute investment advice.
Like Clockwork

Like Clockwork

Monica Kingsley Monica Kingsley 18.11.2021 15:44
S&P 500 took a little breather, and sideways trading with a bullish slant goes on unchecked. Credit markets have partially turned, and I‘m looking for some risk appetite returning to HYG and VTV. Any modest improvement in market breadth would thus underpin stocks, and not even my narrow overnight downswing target of yesterday may be triggered. The banking sector is internally strong and resilient, which makes the bulls the more favored party than if judged by looking at the index price action only. Consumer discretionaries outperformance of staples confirms that too. When it comes to gold and silver: (…) Faced with the dog and pony debt ceiling show, precious metals dips are being bought – and relatively swiftly. What I‘m still looking for to kick in to a greater degree than resilience to selling attempts, is the commodities upswing that would help base metals and energy higher. These bull runs are far from over – it ain‘t frothy at the moment as the comparison of several oil stocks reveals. Precious metals dip has been swiftly reversed, and it‘s just oil and copper that can cause short-term wrinkles. Both downswings look as seriously overdone, and more of a reaction to resilient dollar than anything else. In this light, gold and silver surge is presaging renewed commodities run, which is waiting for the greenback to roll over (first). And that looks tied to fresh debt issuance and debt ceiling resolution – Dec is almost knocking on the door while inflation expectations are about to remain very elevated. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls continue holding the upper hand, and yesterday‘s rising volume isn‘t a problem in the least. Dips remain to be bought, and it‘s all a question of entry point and holding period. Credit Markets Credit markets stabilization is approaching, and yields don‘t look to be holding S&P 500, Russell 2000 or emerging markets down for too long. Especially the EEM performance highlights upcoming dollar woes. Gold, Silver and Miners Gold and silver decline was promptly reversed, and the lower volume isn‘t an immediate problem – it merely warns of a little more, mostly sideways consolidation before another push higher. PMs bull run is on! Crude Oil Crude oil bulls could very well be capitulating here – yesterday‘s downswing was exaggerated any way examined. Better days in oil are closer than generally appreciated. Copper The copper setback got likewise extended, and the underperformance of both CRB Index and other base metals is a warning sign. One that I‘m not taking as seriously – the red metal is likely to reverse higher, and start performing along the lines of other commodities. Bitcoin and Ethereum Bitcoin and Ethereum bears may be slowing down here, but I wouldn‘t be surprised if the selling wasn‘t yet over. We‘re pausing at the moment, and in no way topping out. Summary S&P 500 bulls keep banishing the shallow correction risks, leveling the very short-term playing field. The credit markets non-confirmation is probably in its latter stages, and stock market internals favor the slow grind higher to continue. Precious metals remain my top pick over the coming weeks, and these would be followed by commodities once the dollar truly stalls. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Covid Wave Knocks Euro Down and to new 6-year Lows Against the Swiss Franc

Covid Wave Knocks Euro Down and to new 6-year Lows Against the Swiss Franc

Marc Chandler Marc Chandler 19.11.2021 13:58
Overview:  Concerns about the virus surge in Europe cut short the euro's bounce and sent it back below $1.1300 and are also weighing on central European currencies, including the Hungarian forint, despite yesterday's aggressive hike of the one-week deposit rate.  Austria has reintroduced a hard 20-day lockdown.  Germany's health minister warned that the situation deteriorated and vaccines were not enough to break the wave.  He was explicit that a lockdown cannot be ruled out.  The US dollar is trading broadly higher.  Only the yen is resilient on the day, but sterling is the only major currency that has edged higher this week.  The Scandis and euro are off more than 1%.  Speculation that Turkey may announce measures over the weekend to stabilize the lira may be helping to deter new sales today after yesterday's rout.  In the nine-day drop through today, it is depreciated by almost 15%.  The JP Morgan Emerging Market Currency Index is off for the fourth consecutive session to bring this week's loss to more than 2%, the most in five months.  Equities do not know of the consternation in the foreign exchange market.  Disappointing Alibaba results weighed on the Hang Seng (~-1%), while most other large regional bourses but Taiwan and India closed the week on an up note.   Europe's Stoxx 600 snapped a six-day advance yesterday. It was only the second loss since October.  It began firmer today but has reversed lower, putting at risk the six-week rally.   US futures are mixed, with the NASDAQ outperforming.  Bond markets are in rally mode as well.   The US 10-year yield is off three basis points to approach the week's low near 1.53%.  European bonds are off mostly 3-5 basis points, even in the UK, where retail sales surprised on the upside.  Gold is steady, finding support near $1850.  Oil initially extended yesterday's recovery but is reversing lower, leaving the January WTI contract set to test yesterday's low near $76.45.  This is the fourth consecutive weekly fall in crude oil.  European natural gas (Netherlands benchmark) is off 4.4% today, the third drop in a row, and pares the week's gain to almost 19%.  In Singapore, iron ore prices jumped 5.7% to break a five-week slide that saw prices tumble by about 28%.   Copper is firmer and paring this week's loss to around 2%.   Asia Pacific There were two developments in Japan to note.  First, October CPI was largely in line with expectations.  Surging gasoline prices (seven-year highs) helped keep the headline rate positive for the second month (0.1% year-over-year).  Excluding fresh food, the core rate was steady at 0.1%.  However, the deflationary forces are evident when fresh food and energy are removed.  The measure deteriorated to -0.7% from -0.5%, the most since June (-0.9%).    Second, Prime Minister Kishida unveiled an overall package of JPY78.9 trillion (~$690 bln). It is larger than the previous two pandemic packages. "Fiscal measures" refer to spending, investment, and loans, and this is seen worth about JPY55.7 trillion.  It is not clear yet, how much represents new spending as opposed to the reallocation of funds from earlier budgets that were not used. However, it appears to be about JPY32 trillion of new spending.   The Chinese yuan, up a modest 2.1% for the year, is the strongest currency.   Against a trade-weighted basket (CFETS), the yuan is pulling back from a six-year high set earlier this week as the euro recovers a cent.  Consider that the yuan has appreciated by more than 9% against the euro and 11.5% against the yen this year.  That means that investment in China has the same tailwind as the dollar and is compensated a bit for the relative lack of transparency and liquidity.  The Financial Times estimates that foreign holdings of Chinese bonds and stocks rose to around $1.1 trillion at the end of September, about a 13% increase this year.  China's stock market has underperformed this year, and the CSI 300 is off around 7% this year.  On the other hand, China's bonds have fared well.  It is the only 10-year bond that has not weakened this year.  China's figures show foreign direct investment has risen by almost 18% this year through October to nearly $142 bln.   The dollar is posting an outside down day against the Japanese yen by first rising above yesterday's high before reversing and taking out yesterday's low. It is approaching the week's low near JPY113.75 in the European morning.  Below there, support is seen around JPY113.60.  A break would warn of a return to JPY113.00.  The Australian dollar has been sold to its lowest level since October 6, when it recorded a low of almost $0.7225.   It has broken the trendline that connected the August and September lows (~$0.7250).  The September low was around $0.7170 and maybe the next important technical target.  The dollar is trading with a firmer bias against the Chinese yuan, but the greenback remains in the range set on Tuesday (~CNY6.3670-CNY6.3965).  The dollar gained on the yuan four sessions this week, the most since July, but the net gain of less than 0.2% still shows an extraordinarily steady exchange rate.   With the yuan near six-year highs against its trade-weighted basket (CFETS), the PBOC warned against one-way moves and encouraged financial institutions to bolster fx risk management.  It set the dollar's reference rate at CNY6.3825, slightly above expectations (Bloomberg survey) for CNY6.3822.   Europe The stronger than expected October retail sales capped the week's data that points to a rebounding economy and boosts the chances of a rate hike next month.  A strong jobs report was followed by a larger than expected rise in CPI and PPI.  Retail sales jumped 0.8% in October, and the September series was revised to flat from -0.2%. It was the first increase since April.  Pre-Xmas sales were reported.  Separately, the UK government reported that the cost of servicing the national debt has risen more than three-fold over the past year, leaving the budget deficit higher than anticipated.  It appears that the swaps market is pricing in a 15 bp hike at the December 16 BOE meeting, though some are talking about a bigger move.    Several ECB officials, including President Lagarde, have successfully pushed back against expectations of a 20 bp rate hike next year that had appeared discounted by the swaps market earlier this month. The market has pushed it into early 2023.  The implied yield of the December 2022 Euribor futures contract has fallen 20 bp this month.  The December 2022 Eurodollar futures contract is moving in the opposite direction.  The implied yield has risen by about 4.5 bp this month.  The net result is the US premium has increased to over 125 bp, the highest since last March.  In late 2019, the premium was around 180 bp.  This is recognized as a factor helping lift the dollar against the euro, and it appears to have become more salient recently.   The euro's bounce yesterday, its first gain in seven sessions (since the US CPI shocker), stalled near $1.1375, where a 780 mln euro option expires today.   The euro traded quietly in Asia before being sold aggressively as news of the virus hit the wires.  The euro traded through $1.1285 before catching a bid.  Resistance now will likely be encountered around $1.1320.  The euro is posting its first back-to-back weekly of more than 1% since March 2020.  Sterling is also sliding back toward the week's lows, just above $1.3400.  A break could signal a test on the $1.3350 area, but it appears stretched on an intraday basis.  While the euro-sterling cross is practically flat, the euro has punched below CHF1.05 for the first time in six years.  It would not be surprising to learn that the SNB has been intervening.  There appears to be little chart support until closer to CHF1.0250. America The nonpartisan Congressional Budget Office offered its evaluation of the Biden administration's Build Back Better initiative.  It sees $1.636 trillion in spending over the next decade and almost $1.27 trillion in revenue.  That leaves a deficit of $367 bln.  A notable difference between it and the administration is how much more revenue will be generated by increasing the number of IRS agents.  Even if it passes the House of Representatives, it will likely be marked up in the Senate.  The jockeying for position and spin around it will likely dominate the session, which sees no US economic reports outside of the rig count later today.  The Fed's Clarida and Waller speaker today.  It seems that most market participants still see the Fed behind the curve and disagree with our idea that to secure the ability to respond to a wide range of possible outcomes, the Federal Reserve may accelerate its tapering starting in January.   It is not clear exactly when the debt ceiling will be reached, but it is being played.  The Democrats do not want to lift it through the reconciliation process, though they have forced the Republicans to do so in the past.  The Republicans appear to have the discipline and will to oppose.  No one seems to think the US will really default, and getting even this close seems undignified.  Yet, the desire to avoid being caught out encouraged investors to demand a high yield on the four-week bill sold.  Yesterday's auction saw the yield more than double to 11 bp (annualized).  It is the highest yield since July 2020.  In contrast, the eight-week bill, which is thought to be beyond the shenanigans, yield slipped to 4.5 bp from six previously and a higher bid-cover ratio.   Canada reports September retail sales figures today.  After a 2.1% rise in August, some weakness is expected.  Ahead of it, the Canadian dollar is trading at new lows for the week, though it is faring better than the other dollar-bloc currencies.  The US dollar is approaching the (61.8%) retracement objective of the decline since the CAD1.29 level was tested on September 20.  The retracement level is near CAD1.2665, and a break would target CAD1.2700-CAD1.2750.  The upper  Bollinger Band is found near CAD1.2655 today.   The Mexican peso is also under pressure.  It, too, has fallen to a new low for the week today.  The greenback looks set to test the eight-month high set earlier this month near MXN20.98.  Note that the central bank's Deputy Governor warned that inflation was accelerating, and it could rise to 7% this month and 7.1%-7.3% next month.  In October, the CPI stood at 6.24% year-over-year.  Banxico meets next on December 16, the day after the FOMC meeting.  Lastly, we note that the Brazilian real is off for four consecutive sessions coming into today.  The dollar closed above its 20-day moving average against it yesterday and looks poised to probe above BRL5.60 today. The high for the month was closer to BRL5.70.   Disclaimer
The Telegraph Publishes Misleading Story about Omicron

Covid Surge Compounds Monetary Divergence to give the Euro its Biggest Weekly Loss in Five Months

Marc Chandler Marc Chandler 22.11.2021 09:39
Strong US consumption and production figures kept the greenback well supported last week on the heels of the jump in CPI to 6.2%.  Meanwhile, the surge of Covid cases in Europe underscores the divergences with the US, sending the euro to new lows for the year.   At the same time, oil prices headed south for the fourth consecutive week, matching the longest decline in more than two years.  It did not favor the Norwegian krone, the weakest of the majors, with a 2.15% drop.  It brought this year's loss to almost 3.5%, despite it being the first G10 central bank to hike rate, with another likely next month.   The prospects of a Bank of England rate hike next month were lifted by the strong inflation and retail sales figures.  Sterling was the best performing major currency, rising a little more than 0.25% against the dollar.  It also traded at its best level against the euro since March 2020.  At the end of the week, the euro also broke down against the Swiss franc, trading below CHF1.05 for the first time since July 2015.   Japan's October CPI showed that excluding fresh food and energy, the world's third-largest economy has still not broken free of deflation's grip (-0.7% year-over-year).  A weaker yen is not a problem for Japanese policymakers or corporates.  Japan has averaged a monthly trade surplus this year through October of about JPY7.8 bln a month, hardly the stuff that should excite protectionists.  The BIS estimates that eurozone inflation would be closer to 1.5% than the 4.1% reported in October without the supply chain disruptions. The weakness of the euro does not appear problematic for the ECB either.  With the Fed already slowing the pace of its monetary accommodation, a stronger dollar reinforces the policy thrust. Even though net exports shaved Q3 growth by about 1.1 percentage points, it has yet to spur criticism, and September was a record shortfall.   Dollar Index:  The Dollar Index rose for the fourth consecutive week.  It met the (50%) retracement objective of its slide from March 2020 (~103.00) to the January 6 low (~89.20), which is found near 96.10.  DXY stalled ahead of the weekend, just shy of the high set in the middle of the week near 96.25. A move above there targets the next retracement (61.8%), which is close to 97.75.    The MACD is over-extended but still headed higher, while the Slow Stochastic appears to be turning lower.  Support is seen around 95.50.  The market seems to have discounted much of the good news for the dollar and Fed policy.  We note that the US 2-year yield fell almost six basis points last week.  That leaves it off about 4.5 bp this month, despite the strong CPI reading, robust retail sales, and industrial output figures. Euro: The divergence of monetary policy has been the critical weight on the euro, but at the end of last week, it seemed that surge in Covid cases in Europe helped drive the single currency to new lows. It fell to $1.1250 ahead of the weekend to take out the mid-week low near $1.1265.  The weekly loss of about 1.3% is the biggest in five months.  Recall that the $1.1290 area represented the (61.8%) retracement of the rally that began in March 2020.  The momentum indicators are stretched, but a possible bullish divergence is appearing in the Slow Stochastic. A cap seems to be forming around $1.1375.  After repeated tests, and much to the chagrin of the Swiss National Bank, the euro was sold through CHF1.05 ahead of the weekend for the first time since July 2015.  Given its modus operandi, the SNB is likely resisting.  There is little on the charts ahead of CHF1.0250.  In the second half of last week, the euro found support near GBP0.8385, its lowest level since March 2020.  Support is seen close to GBP0.8275-GBP0.8300.  Lastly,  the euro found support near JPY128.00, which has more or less withstood several tests since moving above there in February.   Japanese Yen:  The greenback recorded a new four-year high against the yen, less than a handful of pipis from JPY115 in the middle of last week.  It reversed lower and settled ever so slightly below the previous session's low to leave a key reversal in its wake.  It recorded the week's low ahead of the weekend near JPY113.60.  Since the dollar pushed above JPY112 early last month, we have suggested a JPY113-JPY115 trading range.  It did trade to about JPY112.75 on November 10 and 11 but snapped back into the range.  The US 10-year note futures (December contract) posted a key reversal in the middle of last week, too, and also ended the week at eight-session highs, which, of course, means lower yields.  The dollar-yen exchange rate still seems to be a range-bound creature, more the most part, and heavily influenced by external factors, like US 10-year yield and broader risk appetites.  British Pound:  Sterling outperformed the other major currencies last week, but the 0.3% gain is nothing to write home about.  It remained within the previous week's range. It was unable to sustain the upside momentum after approaching the (50%) retracement objective of the decline since the month's high and outside down day on November 4 (BOE meeting).  That retracement stands at $1.3525.  The strong CPI report on November 17 helped lift sterling to the week's high near $1.3515.  However, the underlying strength of the dollar proved too much, and ahead of the weekend, sterling traded a little below $1.3410.  The momentum indicators have turned higher, and as long as $1.3400 holds, sterling looks attractive.  However, the market appears to have a 15 bp hike at next month's meeting fully discounted.  While it remains a distinct possibility, if not a likelihood, but 100% confidence may leave sterling vulnerable to a reassessment.  Canadian Dollar:  The US dollar rose for the fourth consecutive week against the Canadian dollar, matching the longest advance since early last year.  With the pre-weekend gain, the greenback met the  (61.8%) retracement objective of decline since CAD1.29 was approached on September 20, found near CAD1.2665. The US dollar's broad strength, coupled with the stock market wobble (a proxy for risk), and the drop in crude prices by around 4.25%, the fourth consecutive weekly decline shaved about 0.75% off the Canadian dollar.  The implied yield of the June 2022 Banker Acceptances fell last week and is now about 10 bp lower than at the end of last month.  The MACD is headed up though over-extended, while the Slow Stochastic has flatlined at extreme levels and has not yet confirmed the new highs.  The US dollar continues to hug the upper Bollinger Band, which will begin the new week near CAD1.2650. Australian Dollar:   The Aussie fell for the third straight week, and ahead of the weekend, approached $0.7225, last seen in early October.  As seen with some of the other currency pairs, the MACD is still warning of currency weakness, while the Slow Stochastic is flatlining but over-extended.  The trendline connecting the August and September lows initially held last week. It (~$0.7240) yielded ahead of the weekend, but the Aussie managed to close back above it.   It needs to resurface above $0.7300 to be anything meaningful.  Softer than expected, wage growth may have reinforced the RBA's message to the markets, and the yield of the June 2022 T-bill futures fell seven basis points last week and is now down 31 bp on the month.   Mexican Peso:  Emerging markets currencies remain out of favor in a strong dollar environment.  The JP Morgan Emerging Market Currency Index slumped by more than 2% last week, the most since June.  The Turkish lira collapsed by nearly 11%.  The Indian rupee rose by 0.3%, the strongest in the EM space.  The greenback made a new marginal high in two-and-a-half weeks before the weekend, slightly below MXN20.89.  The momentum indicators are constructive for the dollar, but it is at the upper end of its recent range (~MXN20.12-MXN21.00).  The high for the year was set in March near MXN21.64, and it will come into view when the greenback rises above MXN21.15.   Chinese Yuan:   By shadowing the dollar so tightly, the yuan is dragged higher on a trade-weighted basis in the stronger greenback environment. The yuan is at six-year highs on the basket the PBOC tracks (CFETS).  The PBOC reportedly stressed the importance of exchange risk management ahead of the weekend, and it may be a warning that its willingness to tolerate a stronger yuan is limited.  The yuan slipped an inconsequential 0.12% against the dollar last week.  For nearly the past five weeks, the exchange rate has been mostly confined to a CNY6.38-CNY6.40 range.  It is a fuzzy range and allows for around a big figure in both directions. The index of Chinese companies listed in the US (NASDAQ Golden Dragon Index) fell about 5.7% last week.  The major benchmarks in China, including the CSI 300, posted small gains.  The Hang Seng fell 1.1% last week, and most of that was before the weekend on disappointing earnings from Alibaba (-10.3% in HK).     Disclaimer
Oil attempts to recover amid rising demand concerns

Oil attempts to recover amid rising demand concerns

Walid Koudmani Walid Koudmani 22.11.2021 11:24
Oil attempts to recover amid rising demand concerns Despite oil prices making significant gains recently, with WTI reaching a multi year high of $85.42 before pulling back, we have seen an increase in volatility as different viewpoints appear to be facing off. On one hand, we have OPEC and Russia who have advised against an increase in oil production as they foresee a fall in demand towards the end of the year despite the ongoing pressure, which has been caused by a faster than expected post pandemic economic recovery. On the other hand, we have the US and Japan who have been pushing for an increase in production and even announced they may be tapping into strategic reserves in order to cool off energy prices which have further contributed to the ongoing inflation concerns. At the moment, the market is in a difficult position as current supply concerns and price increases are being downplayed by a potential future deficit while it seems that traders are starting to agree with the latter viewpoint as we see the introduction of stricter measures to combat a rise in covid-19 cases keeping oil prices at the lowest level in over a month.  European stock markets start the week slightly higher After pulling back from the recent all time high at the end of last week, the DAX started the week trading slightly higher and is currently hovering around last week's close of 16160 points. While this will be a shorter week for US stock markets due to the Thanksgiving holiday on Thursday, traders will be keeping an eye out for the new FED chair announcement from president Biden along with the ongoing lockdown situation which appears to be escalating across Europe and could lead to further uncertainty along with potentially causing market major corrections if it were to worsen. Download our Mobile Trading App:   Google Play   App Store  
With Gold and the Buck, as Told, You're in Luck

With Gold and the Buck, as Told, You're in Luck

Mark Mead Baillie Mark Mead Baillie 22.11.2021 08:17
The Gold Update by Mark Mead Baillie --- 627th Edition --- Monte-Carlo --- 20 November 2021 (published each Saturday) --- www.deMeadville.com As time is at a bit of a premium for penning this week's missive, (even as Gold is priced at a massive discount by valuation), let's jump right in. The macro question at large we oft receive is: â–  "How come Gold isn't much higher with all the money printing?" Macro indeed per the above Gold Scoreboard, price having settled yesterday (Friday) at $1847, just 46% of our valuation level of $3993. To be sure per the right-hand panel Gold is, on balance, in ascent toward chasing the unconscionable rise in the U.S. "M2" money supply; yet the gap from here to up there remains HUGE! The micro question of late we oft receive is: â–  "How come Gold is going up even if the Dollar is also going up?" Micro indeed as such phenomenon does on occasion occur given (for the ad nauseath time) Gold plays no currency favourites. To be sure, both Gold and the Buck have been on the rise per their percentage tracks for the 15 trading days thus far in November. Here as shown, Gold is +3.5% and the Dollar Index is +2.1%. Yes, Gomer, it really can happen: In fact "surprise, surprise, surprise" if measuring from mid-year 2014, (albeit their respective routes hardly are in linear harmony), Gold is +39.7% and yet the Dollar Index is +20.4%. So even more broadly there, no directional favoritism. And yet from that date some seven years ago, the supply of Gold is only +10.7% whereas the U.S. "M2" money supply is +88.4%. Further with specific respect (or lack thereof) to the Dollar, recall from Econ 101 class that more of something (in this case much more) makes it worth less, arguably in the Dollar's case worthless. And yet an inevitable -- some say forcibly imminent -- Federal Reserve interest rate increase (versus, for example, sovereign bank rates in Europe still seen as staying essentially negative for the foreseeable future), is therefore getting the Dollar a bid such as to push the Buck into the lead of the currencies' so-called Ugly Dog Contest. 'Course, attempting to explain irrationality is an exercise in same, in this case more Dollars nonetheless being worth more whatevers. And even irrespective of inflation, we read speculation this past week of the €uro ultimately collapsing ... and being replaced by the Dollar. "What?" But then, could such dual-continent currency still be deemed a "Federal Reserve Note"? Either way, we wouldn't recommend your losing sleep over this whimsy. For if you've Gold, you're fine. And looking .9999 fine is our chart of Gold's weekly bars with their parabolic long trend, now neatly in place these past three weeks. Yes, Gold put in an acceptable net loss for this recent week after having been up for five of the prior seven. However, the daily table therein of our BEGOS Markets "Breakout?" suggestions popped up last evening with "Sell" for both precious metals. So some further slipping may be seen into the ensuing week; yet on balance by the bars' structure in the chart, the 1800s not only appear safe, but the dashed regression trend line is now more perceptively rotating from negative toward positive. And that would tie in well (as historically noted last week) with Gold reaching 1971 during this new parabolic Long run: Thus having awakened the dip buyers, let's turn to the StateSide economy, by which our Economic Barometer had a sound week and sufficiently so as to put it on pace toward recording its second best month year-to-date. For the week's 14 incoming metrics, 12 were improvements over the prior period, the only two negatives being inflationary October Import Prices (even ex-Oil) and a slight slowing in that month's Housing Starts. But the latter was mitigated by growth in Building Permits, plus a firm increase in November's National Association of Home Builders Index. November also scored marked increases for both the New York State Empire and Philly Fed Indexes. Other positives included October's Retail Sales, Industrial Production, Capacity Utilization, and the Conference Board's lagging read of Leading Indicators. "'Tis all good, right?" Well, just bear in mind there, Bunky, that much of Q3's Gross Domestic Product "growth" was mitigated by a very high Chain Deflator, (i.e. inflationary rather than real growth): And as to Q3 Earnings Season, it just ended as follows: for the S&P 500, 80% of reporting constituents beat both estimates and prior period results. 'Tis rare when the latter keeps up with the former. However more broadly, 1,440 other mid-cap and smaller companies by our tabulation found just 56% having actually improved over 2020's Q3 shutdown period. That's an uh-oh... But in toto, great economics (arguably inflationarily but not really) + great earnings (by estimates but not always actual growth) = S&P 500 all-time highs. Moreover, money is pouring into the stock market per the website's S&P Moneyflow page: "Let's all buy high!" 'Tis quite extraordinary. "So then maybe this a blow-off top, mmb..." Squire, we long ago stopped counting the number of would-be S&P blow-off tops. Remember: as we've herein put forth for many-a-year, this is now the age of the stock market being the Great American Savings Account. "You have to be IN!" they say. "Gold's for the BIN!" they say. And then there's the ever-annoying individual blurter: "I bought X back at blah and am now making BLAH!" For whom we have this important reminder: the market capitalization of the S&P 500 as of Friday night is $41.4 trillion; yet the liquid M2 money supply of the U.S. is but half that at $21.4 trillion. So when it all goes wrong, good luck in getting out with something. Meanwhile amongst it all going good, we read that a record number of StateSide workers are quitting their jobs, the notion being they can do better doing something else. Watch for this great mania of "There's a better way!" and "My stocks are so up!" ultimately ending with "What was I thinking?" Then from the "We Knew This Was Coming Dept." it seems just mere weeks go by before yet again U.S. Treasury Secretary Janet "Old Yeller" Yellen has to chase down the Legislature 'cause she's run out of dough to make the country go. For sanity's sakes: "Got Gold?" Hopefully as the Fed Chair passes to Lael "The Brain" Brainard, she and the Treasury Secretary can sort it all out. (See too: "In Like Flint", 20th Century Fox, '67). From steely flint to a wee loss of glint describes at present our precious metals. Per the two-panel graphic below, we see on the left a bit of a topping pattern in the daily bars, but again with structural support still well within the 1800s. Then on the right in Gold's 10-day Market Profile, 1864 clearly is the dominant price traded across these past two weeks: Silver, too, shows similar toppiness per her daily bars (at left) with the low 24s/high 23s as supportive; then in her Profile (at right), 25.15 is where the bulk of Sister Silver's action has been: In sum, we see a bit of near-term pullback for Gold and Silver, but nothing really materially daunting, especially given the notion of 1971 during Gold's current parabolic up run; (you'll recall from a week ago, arriving at that level equates to the median gain of the 43 prior parabolic Long trends since the year 2001). And at some point -- you know, and we know, and everyone from Bangor, Maine to Honolulu and right 'round the word knows that -- the Buck ultimately shall run out of luck. Indeed to that end (and so much more), in having opened with a couple of questions, let's close with one that came in this past week from a highly-valued publisher of The Gold Update: "Do you think $1900 is nigh?" Our response in kind: "$4000 is nigh." Cheers! ...m... www.deMeadville.com www.deMeadville.com
Betting on Hawkish Fed

Betting on Hawkish Fed

Monica Kingsley Monica Kingsley 23.11.2021 15:46
S&P 500 reversed from fresh ATHs as spiking yields sent tech packing. Value didn‘t soar, but held up considerably better – still, stock bulls are getting on the defensive. Markets have interpreted the Powell nomination as a hawkish choice. I‘ve written the prior Monday:(…) the Fed is still printing a huge amount of money on a monthly basis, and it remains questionable how far in tapering plans execution they would actually get – I see the risks to the real economy coupled with persistently high inflation as rising since the 2Q 2022 (if not since Mar already, but most pronounced in 2H 2022.Inflation hasn‘t moved to the Fed‘s sights, and yesterday‘s rection in yields and precious metals is a bit too harsh. While rates are on a rising path as I‘ve written yesterday, precious metals overreacted. True, the bullish argument for the dollar stepped to the fore as yields differential between the U.S. and the rest of the world got more positive, and at the same time, various yield spreads keep compressing. That‘s a reflection of less favorable incoming economic data. Just as much as Friday‘s reaction was about corona economic impact projections, yesterday‘s one was about monetary policy anticipation.Inflation expectations though barely budged – the decline doesn‘t count as trend reversal. CPI isn‘t done rising, and the more forward looking incoming data (e.g. producer prices) would confirm there is more to come. All in all, it looks like precious metals (and to a smaller degree commodities), are giving Powell benefit of the doubt, which I view to be leading to disappointment over the coming months. Should Powell heed the markets‘ will, the real economy would weaken dramatically, forcing him to make a sharp dovish turn – and he would, faster than he flipped since getting challenged in Dec 2018.We‘re experiencing an overreaction in real assets – as stated yesterday:(…) the Fed would have to reverse course once the tapering effects start biting some more – not now, with still more than $100bn monthly addition. Cyclicals and commodities that had massively appreciated vs. year ago (oil doubled), are feeling the pinch of fresh economic activity curbs speculation in spite of the polar shift of U.S. strength in energy of 2019 and before. Begging the OPEC+ to increase production might not do the trick, and with so much inflation already in (and still to come), the key investment theme is of real assets strength.Precious metals have broken out, are no longer an underdog, and the inflation data will not decelerate for quite a few months still. And even as they would, it would come at a palpable cost to the real economy, and the resolute fresh stimulus action wouldn‘t be then far off. As I wrote in Apr 2020, it‘s about the continuous stimulus that‘s the go-to response anytime the horizon darkens, for whatever reason. Wash, rinse, repeat.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls lost the momentary upper hand, and value recovery isn‘t yet strong enough to carry it forward. A less heavy move in bonds – temporary yields stabilization – would be needed to calm down stock market nerves.Credit MarketsTreasuries held up best, and that‘s characteristic of a very risk-off sentiment. The low volume in HYG isn‘t a promise of much strength soon returning.Gold, Silver and MinersPrecious metals turned sharply lower, and haven‘t stabilized yet. Bond market pressures are keenly felt even though inflation expectations didn‘t follow with the same veracity. The next few days will be really telling.Crude OilCrude oil bulls have made a good move, and more strength needs to follow. The fact that it would be happening when the dollar is strengthening, and many countries are tapping their strategic reserves, bodes well for black gold‘s recovery.CopperCopper springboard bulding goes on, and the CRB Index isn‘t tellingly yielding – the hawkish Fed bets better be taken with a (at least short-term) pinch of salt.Bitcoin and EthereumBitcoin and Ethereum are still going sideways, and today‘s resilience is a good omen – across the board for risk assets.SummaryS&P 500 bulls need tech to come alive again, and odds are it would with a reprieve in spiking yields. While bond markets are getting it right, yesterday‘s fear in corporate bonds was a bit too much – the Fed isn‘t yet in a position to choke off the real economy through slamming on the breaks. Markets are prematurely speculating on that outcome, which would be a question of second or third quarter next year. Treasuries have though clearly topped, and stocks do top with quite a few months‘ lag – we aren‘t there yet. Enjoy the commodities ride, and confidence gradually returning to precious metals.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks

S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks

Paul Rejczak Paul Rejczak 22.11.2021 16:46
The S&P 500 index nearly topped its record high on Friday, but it closed lower following an intraday decline. Is this a topping pattern? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch . The S&P 500 index lost 0.14% on Friday, Nov. 19, as it extended its short-term consolidation along the 4,700 level. The broad stock market went sideways despite record-breaking rallies in large tech stocks like AAPL, MSFT and NVDA. It still looks like a short-term topping pattern, as the S&P 500 index keeps bouncing from the Nov. 5 record high of 4,718.50. The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,720. The S&P 500 continues to trade along the 4,700 level, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Reached the New Record High Let’s take a look at the Nasdaq 100 chart. The technology index reached the new record high of 16,625.86 on Friday, led by megacap tech stock rallies. It accelerated above its short-term upward trend line after breaking above the resistance level of 16,400 on Thursday. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions. Apple and Microsoft at New Record Highs Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple accelerated its uptrend after breaking above the resistance level of around $152-154. It reached the new record high on Friday at $161.02. Microsoft slightly extended its recent advance, as it reached the new record high of $345.10. The two biggest megacap tech stocks reached new record highs, as we can see on their daily charts: Conclusion The S&P 500 index is expected to open 0.4% higher this morning. We will likely see some more short-term fluctuations along the record high level. For now, it looks like a short-term consolidation and a flat correction within an uptrend. Here’s the breakdown: The S&P 500 is fluctuating along the 4,700 level. For now, it looks like a short-term consolidation following the October-November rally. Still no positions are justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak, Stock Trading Strategist Sunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
COT Speculator Extremes: Brent Oil, Coffee, Mexican Peso & Palladium lead Bullish & Bearish Positions

COT Speculator Extremes: Brent Oil, Coffee, Mexican Peso & Palladium lead Bullish & Bearish Positions

Invest Macro Invest Macro 24.11.2021 08:11
November 23, 2021 By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter The latest update for the weekly Commitment of Traders (COT) report was released by the Commodity Futures Trading Commission (CFTC) on Friday for data ending on November 16th 2021. This weekly Extreme Positions report highlights the Top 5 Most Bullish and Top 5 Most Bearish Positions for the speculator category. Extreme positioning in these markets can foreshadow strong moves in the underlying market. To signify an extreme position, we use the Strength Index (also known as the COT Index) of each instrument, a common method of measuring COT data. The Strength Index is simply a comparison of current trader positions against the range of positions over the previous 3 years. We use over 80 percent as extremely bullish and under 20 percent as extremely bearish. (Compare Strength Index scores across all markets in the data table or cot leaders table) Speculators or Non-Commercials Notes: Speculators, classified as non-commercial traders by the CFTC, are made up of large commodity funds, hedge funds and other significant for-profit participants. The Specs are generally regarded as trend-followers in their behavior towards price action – net speculator bets and prices tend to go in the same directions. These traders often look to buy when prices are rising and sell when prices are falling. To illustrate this point, many times speculator contracts can be found at their most extremes (bullish or bearish) when prices are also close to their highest or lowest levels. These extreme levels can be dangerous for the large speculators as the trade is most crowded, there is less trading ammunition still sitting on the sidelines to push the trend further and prices have moved a significant distance. When the trend becomes exhausted, some speculators take profits while others look to also exit positions when prices fail to continue in the same direction. This process usually plays out over many months to years and can ultimately create a reverse effect where prices start to fall and speculators start a process of selling when prices are falling.   Here Are This Week’s Most Bullish Speculator Positions: Brent Oil The Brent Oil speculator trader’s futures position comes in as the most bullish extreme standing this week. The Brent speculator level is currently at a 98 percent score of its 3-year range. The speculator position totaled -12,900 net contracts this week which was a change by -1,049 contracts from last week. The speculator long position was a total of 45,201 contracts compared to the total spec short position of 58,101 contracts. Free Reports: Top 5 Companies Added to Our Stock Watch List this Quarter - Here are the Stock Symbols that stood out so far in the fourth quarter of 2021. Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.   Coffee Futures The Coffee Futures speculator trader’s futures position comes next in the extreme standings this week. The Coffee speculator level is now at a 97 percent score of its 3-year range. The speculator position was 66,081 net contracts this week, a change by 5,261 contracts from last week. The speculator long position was a total of 79,550 contracts versus the total speculator short position of 13,469 contracts. New Zealand Dollar The New Zealand Dollar speculator trader’s futures position comes in third this week in the extreme standings. The NZD speculator level resides at a 95 percent score of its 3-year range. The speculator position was 13,965 net contracts this week which marked a change by 1,083 contracts from last week. The speculator long position was a total of 26,388 contracts versus the total speculator short position of 12,423 contracts. 2-Year Bond The 2-Year Bond speculator trader’s futures position comes up number four in the extreme standings this week. The 2-Year speculator level is at a 91 percent score of its 3-year range. The speculator position was -5,445 net contracts this week and changed by 11,292 contracts from last week. The speculator long position was a total of 345,245 contracts against the total spec short position of 350,690 contracts. US Treasury Bond The US Treasury Bond speculator trader’s futures position rounds out the top five in this week’s bullish extreme standings. The Long T-Bond speculator level sits at a 88 percent score of its 3-year range. The speculator position was -16,368 net contracts this week which was a move of 11,704 contracts from last week. The speculator long position was a total of 144,973 contracts in comparison to the total speculator short position of 161,341 contracts. This Week’s Most Bearish Speculator Positions: Mexican Peso The Mexican Peso speculator trader’s futures position comes in as the most bearish extreme standing this week. The MXN speculator level is at a 2 percent score of its 3-year range. The speculator position was -47,655 net contracts this week, a weekly change of 752 contracts from last week. The speculator long position was a total of 69,984 contracts versus the total spec short position of 117,639 contracts. Palladium The Palladium speculator trader’s futures position comes in next for the most bearish extreme standing on the week. The Palladium speculator level is at a 7 percent score of its 3-year range. The speculator position was -2,038 net contracts this week which was a change by 916 contracts from last week. The speculator long position was a total of 3,108 contracts compared to the total speculator short position of 5,146 contracts. Japanese Yen The Japanese Yen speculator trader’s futures position comes in as third most bearish extreme standing of the week. The JPY speculator level resides at a 10 percent score of its 3-year range. The speculator position was -93,126 net contracts this week saw movement by 12,225 contracts from last week. The speculator long position was a total of 24,635 contracts against the total spec short position of 117,761 contracts. Nikkei 225 Yen The Nikkei 225 Yen (Japanese stock market) speculator trader’s futures position comes in as this week’s fourth most bearish extreme standing. The Nikkei 225 Yen speculator level is at a 11 percent score of its 3-year range. The speculator position was -4,195 net contracts this week which was a change by -3,892 contracts on the week. The speculator long position was a total of 9,075 contracts versus the total speculator short position of 13,270 contracts. 5-Year Bond Finally, the 5-Year Bond speculator trader’s futures position comes in as the fifth most bearish extreme standing for this week. The 5-Year speculator level is at a 20 percent score of its 3-year range. The speculator position was -344,595 net contracts this week and changed by 62,890 contracts from last week. The speculator long position was a total of 300,750 contracts compared to the total spec short position of 645,345 contracts. Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Why Consider Dividend Growth Investing?

Why Consider Dividend Growth Investing?

Dividend Power Dividend Power 22.11.2021 08:31
Why Consider Dividend Growth Investing? Dividend growth investing is increasingly popular in the US and worldwide. The concept is simple and easy to understand. An investor buys a basket of stocks that annually increases the dividend. This strategy is a long-term buy-and-hold strategy. In contrast, it is the opposite of a trading strategy where an investor rapidly buys and sells stocks. Some investors think of dividend stocks as something that only retirees buy for income. However, some of the largest tech companies pay dividends, including Apple (APPL) and Microsoft (MSFT). Hence, investors can buy growth stocks that also pay a growing dividend. Why Dividends? Do dividends matter to investors? The short answer is yes for a few reasons. First, over time, stocks that pay dividends tend to outperform ones that don't pay dividends with lower volatility as measured by beta. The difference in total return is even more significant for comparing stocks that pay growing dividends and stocks that don’t pay dividends. Furthermore, research has shown that dividend and dividend growth stocks significantly outperform stocks that cut or eliminate dividends. The reason for this is that companies that cut or eliminate dividends are often performing poorly. In some cases, this poor performance is due to changing economic conditions. For instance, energy companies performed poorly in 2020 due to the COVID-19 pandemic. Lower revenue and earnings caused many energy companies to stop paying a dividend. However, in many cases, it is because the company is facing increasing competition or changing technology. For example, Kodak's core technology was film, and digital cameras and smartphones made film obsolete. Another reason why dividends matter is dividends can be used to determine valuation. An estimate of a fair value can be calculated using the dividend per share and the expected constant growth rate. Dividends also indicate if the company is doing poorly or well since cash must be used to pay the dividend. Research has also shown that dividend stocks perform better than non-dividend-paying stocks in down markets. Types of Companies Not all companies pay a dividend or a growing dividend. In the US, there are over 6,000 stocks listed on stock market exchanges. Of these, more than 3,500 pay a dividend, and only about several hundred pay a growing dividend for 5+ years. The fact points to the difficulty a company has for growing the dividend over a more extended period. There are lists of companies that pay a dividend for extended periods. One group of stocks that are well known as dividend growth stocks are the Dividend Aristocrats. The stocks on this list have raised the dividend for 25+ years. In addition, the stocks must meet other criteria, including being a member of the S&P 500 Index and having a market capitalization of $3 billion or more. Currently, there are 65 stocks on the Dividend Aristocrats list. Investors can buy the individual stocks or buy an exchange-traded fund (ETF) that owns the entire list. A Top Dividend King Today An even more exclusive club of dividend growth stocks is the Dividend Kings 2021 list. These are stocks that have paid a growing dividend for 50+ years. There are only 32 stocks on this list. It is challenging for a company to raise the dividend for 50 or more years. Typically, a company must have a substantial competitive advantage to overcome economic cycles and competition. One top Dividend King today is Johnson & Johnson (JNJ). The company is a global healthcare company with three primary business segments: Consumer Health, Pharmaceutical, and Medical Devices. Most investors know the company through its consumer health business. Major brands include Band-Aid, Neosporin, Tylenol, Zyrtec, Sudafed, Motrin, Benadryl, Pepcid, Listerine, Aveeno, Neutrogena, Stayfree, Carefree, o.b., and Clean & Clear. However, Johnson & Johnson's other two segments are much larger. For example, some of the drugs that Johnson & Johnson sells are blockbusters, with over $1 billion annually in sales. Johnson & Johnson’s stock price is relatively flat for the year, with a gain of ~3.5% year-to-date. However, results impacted by COVID-19 have pressured the stock price. In addition, Johnson & Johnson is faced with lawsuit risks from opioids and talcum powder that are also pressuring the stock price. The current quarterly dividend rate is $1.06 per share for an annual rate of $4.24 per share. The forward dividend yield is about 2.6%. The company’s dividend is relatively safe. The forward payout ratio is approximately 43%, a good value. Furthermore, Johnson & Johnson is one of two triple-AAA-rated companies from credit agencies. For this reason, Johnson & Johnson is often considered one of the best dividend growth stocks. Johnson & Johnson recently announced that it would split into two companies. The Consumer Health business will be divested, leaving the Pharmaceutical and Medical Device business. Johnson & Johnson will continue to grow organically through R&D and approvals for new medications and indications. The company will also probably buy smaller companies adding to its growing portfolio of products. Market Capitalization: $428.82 billion Stock Price: $162.89 Dividend Yield: 2.6% Payout Ratio: 43.3% Summary Dividend growth stocks should be considered by all investors, not just those in retirement. The reason is that they can provide excellent long-term returns with lower volatility. There are hundreds of stocks to pick from using this investment strategy, including many well-known ones. Author Bio: Dividend Power is a self-taught investor and blogger on dividend growth stocks and financial independence. Some of his writings can be found on Seeking Alpha, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial blogs. He also works as a part-time freelance equity analyst with a leading newsletter on dividend stocks. He was recently in the top 3% out of over 8,116 financial bloggers as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha. Disclaimer: Dividend Power is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money. 
Is the S&P 500 Topping or Just Consolidating?

Is the S&P 500 Topping or Just Consolidating?

Paul Rejczak Paul Rejczak 24.11.2021 15:44
The S&P 500 continues to fluctuate along the 4,700 level. So is this a topping pattern or just a flat correction before another leg up? The S&P 500 index extended its Monday’s decline yesterday, as it fell to the daily low of 4,652.66. But it closed 0.17% higher following an intraday rebound. The market rebounded to the 4,700 level again. The broad stock market keeps trading within an over two-week-long consolidation. For now, it looks like a flat correction within an uptrend. However, it may also be a topping pattern before some more meaningful downward reversal. The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,750. The S&P 500 continues to trade along the 4,700 level, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq Broke Below the Trend Line Let’s take a look at the Nasdaq 100 chart. The technology index reached the new record high on Monday, led by the megacap tech stock rallies, but it reversed its intraday course and yesterday it fell below the 16,200 level. The index broke below its short-term upward trend line, as we can see on the daily chart: Apple and Microsoft – a Potential Reversal Let’s take a look at the two biggest stocks in the S&P 500 index, AAPL and MSFT. Apple accelerated its uptrend on Monday and Microsoft slightly extended its recent advance. Both reached the record highs before reversing lower. Yesterday they were mixed, and today we may see some more short-term uncertainty. Conclusion The S&P 500 index is expected to open 0.4% lower this morning following a series of economic data releases. The market will wait for some more economic data releases - the Core PCE Price Index, Personal Income/ Personal Spending at 10:00 a.m., and the FOMC Meeting Minutes at 2:00 p.m. We may see a short-term consolidation ahead of tomorrow’s holiday break and the long holiday weekend. So overall, the broad stock market may be trading within a topping pattern. However there have been no confirmed negative signals so far. Nevertheless, we decided to open a speculative short position yesterday, and we are expecting a 5% correction from the current levels. Here’s the breakdown: The S&P 500 backed from the new record high on Monday and it looked like a short-term or medium-term topping pattern. A speculative short position is justified from the risk/reward perspective. We are expecting a 5% correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
European markets start the day higher ahead of ECB minutes

European markets start the day higher ahead of ECB minutes

Walid Koudmani Walid Koudmani 25.11.2021 13:34
While US markets remain closed today as traders celebrate thanksgiving holiday, we are seeing a positive performance from European indices across the board as they attempt to return to their recent highs. The German Dax is hovering in the 15880 points area after several major companies in the index reacted favourably to the plans announced by the new coalition and are driving general sentiment higher. Despite the lack of events from the US and limited trading hours, traders will be keeping an eye on ECB meeting minutes as there are expectations that it will announce the winding down of the PEPP programme in March 2022 along with clarifying the central bank's outlook moving forward and hint to any upcoming fiscal and monetary policy changes as inflation continues to be a significant issue economies contend with. Gold attempts to rebound after tumbling below $1800 Despite a solid performance seen from gold for about a week, the precious metal experienced some increased volatility and dropped significantly after the nomination of Jerome Powell as head of the Federal reserve for a second term by president Biden. While gold continues to be considered a hedge against inflation by many, some have opted to look for alternatives which has also increased pressure on the price as it hovers in a key reaction area of $1790 after dropping around 5% from recent highs. A key thing to keep in mind is that while central banks have played a large role in the performance of this asset, stock markets have experienced a somewhat significant correction and a change in the current trend could have a noticeable effect on precious metal prices.  
Bitcoin retreats, but interest in meta-currencies and ether persists

Bitcoin retreats, but interest in meta-currencies and ether persists

Alex Kuptsikevich Alex Kuptsikevich 30.11.2021 15:28
The cryptocurrency market remains in a state of apprehension, although the degree of it continues to weaken, as reflected in the rise in the relevant index from 33 yesterday to 40. The overall capitalisation of the cryptocurrency market, according to CoinMarketCap estimates, has fallen by 0.7% in the past 24 hours. However, the situation in the financial markets is firmly tied to the news of a new strain and therefore things could change very quickly. The main pressure during the last 24 hours was in the last hours, so it is worth being prepared for higher volatility later in the day. Fear in the financial markets, if entrenched, promises to seriously push down the price of bitcoin and ether, and through them spread negativity across the entire cryptocurrency market. Bitcoin is currently clinging to $56K. At 5% below, at 54 there is a signal support level, the capture of which could signal an acceleration of the sell-off. The opposite is also true, at 5% above the current price, at 59 lies an area of local highs. An ability to consolidate above this level would indicate strong buying demand. Despite Bitcoin's weak performance, which has been hovering around current levels for the past week and a half, the Ether remains up-trending. It has added 1.5% in the last 24 hours and over 6% in the last seven days. On the intraday charts, there is still a buying trend on the downtrends. In our view, this looks like a good trend. Bitcoin is often seen to preserve capital, while Ether and several other coins are working projects. In recent weeks, there has been an influx of interest in meta-currency projects, as crypto enthusiasts see a real business model behind them. All of this is bringing the crypto market closer to the stock market, only taking it to a new, less centralised, and regulated level. Everyone has their answer for good or bad. But it is almost certainly temporary.
Stocks Will Rebound After Friday’s Rout, but Is the Correction Over?

Stocks Will Rebound After Friday’s Rout, but Is the Correction Over?

Paul Rejczak Paul Rejczak 29.11.2021 15:50
  The S&P 500 sold off on Friday after news about the new Covid variant. Today we will likely see a rebound but the short-term picture remains bearish. For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The S&P 500 index lost 2.27% on Friday, Nov. 26, as investors reacted to the news about new Covid variant detected in South Africa. The market broke below its recent local lows and it got away from the 4,700 level. The Friday’s trading action looked like a meaningful downward reversal. The nearest important support level is now at 4,550-4,580. On the other hand, the resistance level is at 4,650, marked by the recent local lows. The S&P 500 retraced most of its early November advance, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Fell Closer to 16,000 Let’s take a look at the Nasdaq 100 chart. The technology index remained relatively stronger than the broad stock market on Friday, as it didn’t break below the early November local low. However, it got close to the 16,000 level and it retraced almost 800 points from its last Monday’s new record high of 16,764.85. The index closed above the 16,000 mark on Friday, as we can see on the daily chart: Apple Is At the Previous High Let’s take a look at biggest stock in the S&P 500 index: AAPL. Apple accelerated its uptrend a week ago on Monday and it reached the new record high of $165.70. However, it retraced almost all of its intraday advance that day. On Friday it got back to a potential support level of around $157. For now, it looks like a downward correction. Conclusion The S&P 500 index is expected to open 1.0% higher this morning, as global markets are shrugging off the new Covid fears. We will likely see an intraday consolidation following higher opening. The broad stock market index may enter a flat correction within a short-term downtrend. Here’s the breakdown: The S&P 500 traded within a short-term topping pattern last week and on Friday it suffered an over 2% sell-off. A speculative short position is still justified from the risk/reward perspective. We are expecting a 5% correction. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Can You Hear It? That’s the Crowd Booing Gold’s Downturn

Can You Hear It? That’s the Crowd Booing Gold’s Downturn

Przemysław Radomski Przemysław Radomski 29.11.2021 15:46
Even though the technicals have been predicting this for several months, people were still taken aback by gold’s fall — that’s why they are booing. While the precious metals received a round of applause for their performances in October, I warned on several occasions that the celebration was premature. And with gold, silver, and mining stocks resuming their 2021 downtrends, investors’ cheers have turned into jeers in short order. To explain, I warned previously that the GDX ETF could rally to or slightly above $35 (the senior miners reached this level intraday on Nov. 12, moving one cent above it). However, with the GDX ETF’s RSI (Relative Strength Index) signaling overbought conditions, I highlighted just how quickly the air often comes out of the balloon. For context, the blue vertical dashed lines below depict the sharp reversals that followed after the GDX ETF’s RSI approached or superseded 70. Why am I telling you this? To emphasize that what happened recently was neither random nor accidental. What you see is a true, short-term top that formed in tune with previous patterns. You also see a fake inverse head-and-shoulders formation that was invalidated. This means that the implications of what happened really are bearish. Let’s check why and how, in tune with the past patterns, the previous broad top really was. Please see below: The GDX ETF rallied on huge volume on Nov. 11 and there were only 4 cases in the recent past when we saw something like that after a visible short-term rally. In EACH of those 4 cases, GDX was after a sharp daily rally. In EACH of those 4 cases, GDX-based RSI indicator (upper part of the chart above) was trading close to 70. The rallies that immediately preceded these 4 cases: The July 27, 2020 session was immediately preceded by a 29-trading-day rally that took the GDX about 42% higher. It was 7 trading days before the final top (about 24% of time). The November 5, 2020 session was immediately preceded by a 5-trading-day rally that took the GDX about 14%-15% higher (the high-volume day / the top). It was 1 trading day before the final top (20% of time). The January 4, 2021 session was immediately preceded by a 26-trading-day rally that took the GDX about 17%-18% higher (the high-volume day / the top). It was 1 trading day before the final top (about 4% of time). The May 17, 2021 session was immediately preceded by a 52-trading-day rally that took the GDX about 30% higher. It was 7 trading days before the final top (about 13% of time). So, as you can see these sessions have even more in common than it seemed at the first sight. The sessions formed soon before the final tops (4% - 24% of time of the preceding rally before the final top), but the prices didn’t move much higher compared to how much they had already rallied before the high-volume sessions. Consequently, since history tends to rhyme, it would have been only natural for one to expect the GDX ETF to move a bit higher here (but not significantly so) and for one to assume that this move higher would take between additional 0 to 7 trading days (based on the Nov. 12 session). That’s what is wrote to my subscribers – to expect this kind of performance. The final top formed on Nov. 16 - 4 trading days after the huge-volume session, practically right in the middle of the expected 0-7 trading day range. Moreover, since the GDX topped very close to its 38.2% Fibonacci retracement, it seems that miners corrected “enough” for another huge downswing to materialize. Having said that, let’s move on to more recent developments. Gold price declined heavily recently and the same goes for the silver price. What’s more, the proxy for junior mining stocks - the GDXJ ETF (our short position) materially underperformed on Nov. 26 – after it declined by nearly 3x the percentage of the GDX ETF – and, in my opinion, more downside is likely to materialize over the medium term. The GDXJ ETF ended the Nov. 26 session slightly below its 50-day moving average, and the milestone is often a precursor to sharp drawdowns. That’s what happened in late February 2020 and also in mid-June 2021. Big declines followed in both cases. Moreover, with the S&P 500’s weakness on Nov. 26 mirroring the onslaught that unfolded in early 2020, the GDXJ ETF’s underperformance follows a familiar script. As a result, another ‘flash crash’ for the pair may unfold once again. Keep in mind, though: while asset prices often don’t move in a straight line, a bullish pause may ensue if/once gold reaches its previous lows. All in all, though, lower lows should confront the GDXJ ETF over the short term and my $35 price target remains up to date. As a reminder, that’s only an interim target, analogous to the late-Feb. 2020 low. Interestingly, it is the February 2020 low along with its late-March 2020 high that created this target. Also, the GDXJ/GDX ratio is falling once again. And with the price action implying that the GDXJ ETF is underperforming the GDX ETF, a drop below 1 isn’t beyond the realms of possibility. In fact, it’s quite likely. As such, this is why I’m shorting the junior mining stocks. For context, I think that gold, silver and the GDX ETF are all ripe for sharp re-ratings over the medium term. However, I think that the GDXJ ETF offers the best risk-reward proposition due to its propensity to materially underperform during bear markets in the general stock market. Finally, the HUI Index/gold ratio is also eliciting bearish signals. For example, I marked (with the shaded red boxes below) just how similar the current price action is to 2013. And back then, after a sharp decline was followed by a small corrective upswing before the plunge, the ratio’s current behavior mirrors its historical counterpart. What’s more, the end of the corrective upswing in 2013 occurred right before gold sunk to its previous lows (marked with red vertical dashed lines in the middle of the chart below). Thus, the ratio is already sending ominous warnings about the PMs’ future path. In addition, with the S&P 500 acting as the bearish canary in the coal mine, the ratio plunged in 2008 and 2020 when the general stock market tanked. Thus, if a similar event unfolds this time around, the gold miners’ sell-off could occur at a rapid pace. For more context, I wrote previously: A major breakdown occurred after the HUI Index/gold ratio sunk below its rising support line (the upward sloping black line on the right side of the chart above). Moreover, with the bearish milestone only achieved prior to gold’s crash in 2012-2013, the ratio’s breakdown in 2013 was the last chance to short the yellow metal at favorable prices. And while I’ve been warning about the ratio’s potential breakdown for weeks, the majority of precious metals investors are unaware of the metric and its implications. As a result, investors’ propensity to ‘buy the dip’ in gold will likely backfire over the medium term. In conclusion, the crowd has turned on the precious metals, and the narrative has shifted once again. However, despite all of the drama and the volatility that came with it, the technicals have been predicting this outcome for several months. And with the GDXJ ETF down by more than 20% YTD (as of the Nov. 26 close), the junior miners’ 2021 performance is far from critically-acclaimed. As a result, the chorus of boos will likely continue over the short- and/or medium term. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Stocks - More Volatility Following Hawkish Powell

Stocks - More Volatility Following Hawkish Powell

Paul Rejczak Paul Rejczak 01.12.2021 15:12
  Stock prices were volatile on Tuesday, as the S&P 500 fell to the new local low. But today it may rebound again. but will the downtrend continue? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The S&P 500 index lost 1.90% on Tuesday, Nov. 30. The market went lower following testimonies from the Fed Chair Powell and the Treasury Secretary Yellen. On Monday the broad stock market retraced more than a half of its Friday’s sell-off, but yesterday it fell to the new local low of 4,560.00. Today it is expected to open 1.0% higher again, so we will see more short-term volatility. The nearest important support level is at 4,560-4,600. On the other hand, the resistance level is at 4,650, marked by the recent local lows. The S&P 500 retraced most of its early November advance, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Remains Relatively Stronger Let’s take a look at the Nasdaq 100 chart. The technology index remained relatively stronger than the broad stock market yesterday, as it didn’t extend a short-term downtrend. It remained above its Friday’s local low and above the 16,000 mark, as we can see on the daily chart: Apple Got Close to the Record High Again Let’s take a look at biggest stock in the S&P 500 index: AAPL. Apple accelerated its uptrend a week ago and it reached the new record high of $165.70. However, it retraced almost all of its intraday advance that day. On Friday it got back to a support level of around $157. And yesterday it got back to the all-time high, as it closed slightly above the $165 price level. Conclusion The S&P 500 index is expected to open 1.0% higher this morning following an overnight rebound from the yesterday’s new short-term low. We will likely see an intraday consolidation following a higher opening. And for now, it looks like a consolidation within a short-term downtrend. Here’s the breakdown: The S&P 500 extended its short-term downtrend yesterday, but today it is expected to open higher again. A speculative short position is still justified from the risk/reward perspective. We are expecting a 5% correction. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
It‘s the Fed, Not Omicron

It‘s the Fed, Not Omicron

Monica Kingsley Monica Kingsley 01.12.2021 15:51
S&P 500 plunged on accelerated tapering intentions, and much of the risk-on sectors and commodities followed – even precious metals declined a little in sympathy. But where is the larger reasoning? If the Fed truly intends to taper faster in its belated fight against inflation, it‘s a question of not only markets throwing a tantrum, but of the real economy keeling over. Inflation is a serious problem, including a political one, and here come the Omicron demand-choking effects if the fear card gets played too hard. Thankfully, reports indicate that the alleged variant is merely more contagious and having comparatively milder effects. That‘s how it is usually turns out with mutations by the way – remember that before the number 30 frequently thrown around, shuts off thinking including in the markets. The world‘s economic activity didn‘t come to a standstill with Delta, and it appears such a policy route won‘t be taken with Omicron either. That‘s why I was telling you on Monday that any inflation reprieve the scary news buys, would likely turn out only temporary. Unless the Fed decides to make it permanent, which is what I am doubting based on its track record and the more rocky landscape ahead that I talked in mid Nov extensive article. For now, the Fed‘s pressure is real, and premarket rallies that are sold into during regular sessions, must be viewed with suspicion. It‘s not that we‘ve flipped into a (secular) bear market, but the correction is palpable and real – I‘m not looking for the habitual Santa Claus rally this year. Big picture, the precious metals resilience is a good sign, and return of cyclicals with commodities is the all-clear signal that I‘m however not expecting this or next week. Cryptos resilience is encouraging as much as various stock market ratios (XLY:XLP offers a more bullish view than XLF:XLU – I‘ve been covering these helpful metrics quite often through 2020), which makes me think we‘re in mostly sideways markets for now. At least as I told you on Monday, the (rational / irrational) fears started getting ignored by the markets, meaning we‘re on a gradually improving track. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 isn‘t out of the hot water, and it‘s still just a close in the 4670s that would mark the end of peril to me. The financial sector has to turn, strength has to come to smallcaps simultaneously – the 500-strong index is still performing in a too risk-off way. Credit Markets Positive HYG divergence isn‘t enough – the broad underperformance of S&P 500 must be reversed to establish stronger stock market foundations. Powell just added to the risk-off posture in bonds, and I‘m looking keenly at the expected, ensuing (in)ability to absorb less loose monetary conditions. Gold, Silver and Miners Precious metals are acting weak, but not overly weak. When the markets get fed up with having to bear the tapering / tightening (real and verbal) interventions, it would be gold and silver that rise first. Crude Oil Crude oil turned out indeed weakest of the weak when fear overruled everything. Capitulation is a process, and it‘s quite underway already in my view. The way black gold crashed, the way it would rise once the sky meaningfully clears. Copper Copper weakness is what I don‘t trust here as other base metals did quite better. But again, yesterday was an overreaction to the Fed news that it would discuss speeding up taper. Just discuss. Bitcoin and Ethereum Bitcoin and Ethereum holding relatively high ground, is a reason to think the risk-on scales would tip positive. While BTC is still correcting, I‘m looking for it to join Ethereum. Summary S&P 500, risk-on and commodities aren‘t yet on solid footing as Powell pronouncements outweighed the dissipating corona uncertainty. Either way, the effects on inflation would be rather temporary – inflation indicators clearly haven‘t topped yet as the implicit Fed admission of dropping the word temporary confirms. Once the tightening mirage gets a reality check in the economy and markets, look for precious metals to truly shine. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Saxo Bank 2022 Outrageous Predictions: Here comes a revolution!

Saxo Bank 2022 Outrageous Predictions: Here comes a revolution!

Saxo Bank Saxo Bank 02.12.2021 14:35
Saxo Bank has today released its 10 Outrageous Predictions for 2022. The predictions focus on a series of unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets: The plan to end fossil fuels gets a rain check Facebook faceplants on youth exodus The US mid-term election brings constitutional crisis US inflation reaches above 15% on wage-price spiral EU Superfund for climate, energy and defence announced, to be funded by private pensions Women’s Reddit Army takes on the corporate patriarchy India joins the Gulf Cooperation Council as a non-voting member Spotify disrupted due to NFT-based digital rights platform New hypersonic tech drives space race and new cold war Medical breakthrough extends average life expectancy 25 years While these predictions do not constitute Saxo’s official market forecasts for 2022, they represent a warning against the potential misallocation of risk among investors who might typically assign just a one percent chance of these events materialising.  It’s an exercise in considering the full extent of what is possible, even if not necessarily probable, and particularly relevant in the context of this year’s unexpected Covid-19 crisis. Inevitably the outcomes that prove the most disruptive (and therefore outrageous) are those that are a surprise to consensus. Commenting on this year’s Outrageous Predictions, Chief Investment Officer at Saxo Bank, Steen Jakobsen said:   “The theme for 2022 Outrageous Predictions is Revolution. There is so much energy building up in our inequality-plagued society and economy. Add to that the inability of the current system to address the issue and we need to look into the future with a fundamental view that it’s not a question of whether we get a revolution but a more a question of when and how. With every revolution, some win and some lose, but that’s not the point—if the current system can’t change but must, a revolution is the only path forward. A culture war is raging across the globe and the divide is no longer simply between the rich and the poor. It’s also the young versus the old, the educated class versus the less educated working class, real markets with price discovery versus government intervention, stock market buy-backs versus R&D spending, inflation versus deflation, women versus men, the progressive left versus the centrist left, virtual signalling on social media versus real changes to society, the rentier class versus labour, fossil fuels versus green energy, ESG initiatives versus the need to supply the world with reliable energy—the list go on. We collaborated globally on Covid vaccines in 2020 and 2021. Now we need a new Manhattan Project–-type endeavour to set the marginal cost of energy, adjusted for productivity, on the path to much lower levels while eliminating the impact of our energy generation on the environment. Such a move would unleash the most significant productivity cycle in history: we could desalinate water, make vertical farms feasible almost anywhere, increase computer powers to quantum states, and continue to explore new boundaries in biology and physics.” Remember that the world is forever evolving if at varying speeds, while business and political cycles are always finite.” The Outrageous Predictions 2022 publication is available here with headline summaries below: 1. The plan to end fossil fuels gets a rain check Summary: Policymakers kick climate targets down the road and support fossil fuel investment to fight inflation and the risk of social unrest while rethinking the path to a low-carbon future. Realising the inflationary threat from surging commodities prices and the risk of an economic train wreck due to the unrealistic timeline for the green energy transition, policymakers kick climate targets down the road. They relax investment red tape for five years for oil production and ten years for natural gas production, to encourage producers to ensure adequate and reasonably priced supplies that bridge the gap from the energy present to the low-carbon energy future. This development has already jacked up prices and price volatility, not only for energy, but also for industrial metals, most of which are needed in greater quantities for the green transformation push. On top of this, surging energy prices have spiked prices for diesel and especially fertiliser, important farming costs that raise concerns about the production of key food crops. Market impact: The iShares Stoxx EU 600 Oil & Gas ETF (Ticker: EXH1:xetr) surges 50 percent as the whole energy sector gets a new lease on life 2. Facebook faceplants on youth exodus Summary: The young abandon Facebook’s platforms in protest at the mining of personal information for profit; the attempt by Facebook parent Meta to reel them back in with the Metaverse stumbles. Facebook has gone from being a vibrant hub of young people, to a platform for older “boomers” as young people would say. Young people are increasingly turned off by Facebook’s algorithms turning their social media experiences into that of homogenous feedback loops of identical content, or even worse, hateful and disinforming content. Facebook’s own research suggests that teens spend 2 to 3 times longer on TikTok than on Instagram (which is Facebook’s youngest social media asset), and that Snapchat is the preferred way to communicate with friends. A new company name (Facebook is now called Meta) and brand identity to separate and shield Instagram (its most valuable current asset), together with creating a new product tailored towards young people, is the exact same playbook tobacco companies have used for years. But in 2022, investors will realise that Meta is rapidly losing the young generation and thus the future potential and profitability of the company. In a desperate move, Meta tries to acquire Snapchat or TikTok while throwing billions of dollars into building the creepy Metaverse, which is aimed at surveilling users more directly than ever before and getting young people back into Meta’s universe of social media platforms, in the perceived wisdom that being a first mover is always best in technology. The plan struggles to take off as the young generation fails to sign up. Market impact: Facebook parent company Meta struggles, down 30 percent versus the broader market and is urged to spin off its components as separate entities, shattering Zuckerberg’s monopolistic dreams. 3. The US mid-term election brings constitutional crisis Summary: The US mid-term election sees a stand-off over the certification of close Senate and/or House election results, leading to a scenario where the 118th Congress is unable to sit on schedule in early 2023. The chaotic 2020 US Presidential Election was a scary moment for many US institutions. The sitting president Donald J. Trump initially refused to conceded defeat in the election and complained that the election was stolen, a claim that was never seriously challenged in a court of law but one which had widespread sympathy among the Trump base. A crowd of hard-core believers in the stolen election conspiracy was encouraged by the President’s rhetoric to a sufficient degree to storm Capitol Hill and “stop the steal”, i.e., to prevent the election result from being made official on January 6, 2021, in a scene unprecedented in US history. Prior to this, and then again later in the hotly contested Senate run-off elections in Georgia, dedicated election officials—many of them Republican—were doing their duty to tally the real results while risking their life amidst threats—even death threats—from extremists. In 2022, the Republicans ensure that no such traditional duty-bound officials are in the “wrong” place, with all election-related positions filled by toe-the-line partisans ready to do anything to tilt the results to suppressing voter turnout. In the wake of the 2022 election, a handful of key Senate and House races come down to the wire and one or both sides move against certifying the vote, making it impossible for the new Congress to form and sit on its scheduled first day of January 3, 2023. Joe Biden rules by decree and US democracy is suspended as even Democrats also dig in against the Supreme Court that was tilted heavily by Trump. A full-blown constitutional crisis stretches over the horizon over the stand-off as 2023 gets under way. Market impact: extreme volatility in US assets, as US treasury yields rise and the USD drops on hedging against the existential crisis in the world’s largest economy and issuer of the world’s reserve currency of choice. 4. US inflation reaches above 15% on wage-price spiral Summary: By the fourth quarter of 2022, the wages for the lower half of US incomes are rising at an annualised 15% clip as companies scramble to find willing and qualified workers who are increasingly selective due to a rising sense of entitlement as jobs are plentiful relative to the meagre availability of workers at all skill levels. The official US CPI reached a peak at 11.8% in February 1975. It wasn’t until the recession of 1980-82 and brutal policy rate increases to levels as high as 20% that inflation was finally killed. In 2022, the Federal Reserve and Fed chair Jerome Powell repeats the same mistake all over again as the post-Covid outbreak economy and especially the labour market are severely supply constrained, making a mockery of the Fed’s traditional models. Powell believes millions of Americans will return to work and fill some of the 10.4 million open job positions as Covid-19 fades. But this is plain wrong. Some have retired early due to the crisis and thus have permanently left the US workforce. The big difference between today and yesterday is that the pandemic has fuelled a great awakening of workers. Across sectors and income classes they realise they are now more empowered than ever. They demand a better experience: better job conditions, higher wages, more flexibility and a sense of purpose from work. Coupled with persistent inflationary pressures coming from the production side, the energy crisis and labour shortage, this results in unprecedented broad-based double-digit annualised wage increases by Q4. As a consequence, US inflation reaches an annualised pace above 15% before the start of 2023, for the first time since WWII. This prompts the Federal Reserve into a too-little, too-late move to tighten monetary policy faster in a desperate effort to tame inflation. But the central bank has lost credibility; it will take time to regain it. Market impact: extreme volatility in US equity and credit markets. The JNK high-yield ETF falls as much as 20% and the VIXM mid-curve volatility ETF soars as much as 70%. 5. EU Superfund for climate, energy and defence announced, to be funded by private pensions Summary: To defend against the rise of populism, deepen the commitment to slowing climate change, and defend its borders as the US security umbrella recedes, the EU launches a bold $3 trillion Superfund to be funded by pension allocations rather than new taxes. The security umbrella provided by the US during the Cold War and afterwards over much of Eastern Europe is rapidly fading and threatens to fail entirely in the years ahead as the US looks east at far more serious economic and military rivals. French President Macron, backed by a Draghi moving to stave off Italy’s own rise of the populists, rolls out a vision for an “EU Superfund” that will address the three-fold priorities of defence, climate and the related clean energy transition. Given the EU’s aging population and heavy tax burdens, policymakers know that it will be impossible to finance the Superfund with higher taxes on incomes or other traditional tax revenues. Instead, France has a light-bulb moment as it seeks to overhaul its pension system and looks at Europe’s enormous pensions. It decides that all pensions for all workers above the age of 40 must allocate a progressively larger portion of their pension assets into Superfund bonds as they age. This allows new levels of fiscal stimulus in the EU even with the sleight-of-hand trick of hiding the spending in inflation and negative real returns on low-yielding Superfund bonds that are actually EU bonds in disguise. At the same the younger generation enjoys a stronger job market and less unfair tax burdens as the system proves such a success that income taxes are lowered progressively. Market impact: Bond yields harmonise across Europe, leading to German Bunds underperforming. EU defence, construction and new energy companies are some of the best performers. 6. Women’s Reddit Army takes on the corporate patriarchy Summary: Mimicking the meme stock Reddit Army tactics of 2020-21, a group of women traders launch a coordinated assault on companies with weak records on gender equality, leading to huge swings in equity prices for targeted companies. Women are not willing to wait any longer. Tired of the lack of progress, 2022 sees a massive grass-roots effort based on social media platforms to force companies that break civil rights laws to address unfair and sexist, racist, ageist and ableist practices. Although women have been struggling with lower salaries, they have higher saving rates than men. Those savings will now come in handy as they decide to take the situation into their own hands and throw their considerable influence around in a #metoo movement in financial markets. In contrast to the often-nihilistic original Reddit Army, the Women’s Reddit Army will be more sophisticated, with women traders coordinating a long squeeze by shorting stocks of selected patriarch companies. At the same time, they will direct funds to companies with the best metrics on female representation in middle management and among executives. Instead of condemning the development, politicians worldwide welcome and support their cause, putting even more pressure on companies with outdated patriarchal attitudes, poor gender equality in pay, and under-representation of women on boards and in management to address the errors of their ways. Market impact: The movement gets real results as the broader market catches on to the theme and joins in, forcing targeted company prices sharply lower, which sees companies scrambling to change their ways. It marks the beginning of a gender parity renaissance in markets. 7. India joins the Gulf Cooperation Council as a non-voting member Summary: The world’s geopolitical alliances will lurch into a phase of drastic realignment as we have an ugly cocktail of new deglobalising geopolitics and much higher energy prices. Countries reliant on imports for the majority of their energy inputs in a rapidly deglobalising world will need to move fast to strategically reorientate strategic alliances and secure long-term energy supplies. One such alliance could involve India, with its mighty technology sector, joining the Gulf Cooperation Council (GCC) as non-voting member, or in some sort of free trade zone. This alliance would see a reduction in India’s energy insecurity as it secures long-term import commitments. Interregional trading zones will secure “closer to home” production and investment, combined with the security of reliable supplies from India’s point of view, and a reliable destination market from the GCC’s point of view. The alliance helps lay the groundwork for the GCC countries to plan for their future beyond oil and gas and for India to accelerate its development via huge new investments in infrastructure and improvements in agricultural productivity together with fossil fuel imports, bridging the way to a post-carbon longer-term future. Market impact: The Indian rupee proves far more resilient than its EM peers in a volatile year for markets. The bubbly Indian stock market corrects with other equity markets in early 2022 but proves a strong relative performer from the intra-year lows. 8. Spotify disrupted due to NFT-based digital rights platform Summary: Musicians are ready for change as the current music streaming paradigm means that labels and streaming platforms capture 75-95 percent of revenue paid for listening to streamed music. In 2022, new blockchain-based technology will help them grab back their fair share of industry revenues. While the early days of NFTs have looked chaotic and dangerous for asset buyers, the outlook is bright for NFT technology. Not only does an NFT-based platform offer a new way to verify the ownership of rights, but also a way to distribute rights without intermediaries, i.e., a completely decentralised system obviating the need for a centralised platform. The use case for NFTs could prove particularly compelling in the next step for the technology for content generators in the music industry as musicians feel unfairly treated by the revenue sharing models of the current streaming platforms like Spotify and Apple Music. These models don’t guide individual subscribers’ fees to the actual music an individual subscriber listens to. Rather, all subscription fee revenues are aggregated and distributed based on every artist’s share of total streams. In addition, the platforms take a substantial cut, which together with the cut paid to labels is some 75 percent or more of the total revenue. In 2022, an NFT-based service takes hold and begins offering music from notable stars – perhaps the likes of Katy Perry, The Chainsmokers and Jason Derulo, all of whom have recently backed an effort to create a new blockchain-powered streaming platform. Other well-known artists begin pulling their music from the now “traditional” streaming platforms, which suddenly find themselves terminally disrupted. Investors see the eventual writing on the wall for podcasts, movies and other forms of digitisable contents as well. Market impact: Investors recognise that Spotify’s future is bleak, sending its shares down 33 percent in 2022. 9. New hypersonic tech drives space race and new cold war Summary: The latest hypersonic missile tests are driving a widening sense of insecurity as this tech renders legacy conventional and even nuclear military hardware obsolete. In 2022 a massive hypersonic arms race develops among major militaries as no country wants to feel left behind. In 2022, it is clear from funding priorities that hypersonics and space are the heart of a new phase of the deepening rivalry between the US and China on all fronts—economic and military. Other major powers with advanced military tech join in as well, likely including Russia, India, Israel and the EU. Hypersonic capabilities represent a game-changing threat to the long-standing military strategic status quo, as the technology brings asymmetric new defensive and offensive capabilities that upset the two massive pillars of military strategy of recent decades. The first is the potential for devastating hypersonic tech defence against the conventional attack capabilities of long-range bombing aircraft, as well as the so-called “deep water” navy of ships that can bring the fight to any corner of the globe without refuelling. The second pillar of the old Cold War era was the principle of mutually assured destruction (MAD) in the event of nuclear war, under which it was pointless to launch a nuclear war as long as there was still time for the opponent to launch an equally destructive ICBM counterattack from land- and submarine-based ballistic missiles. But the speed and agility of hypersonic tech introduces the belief that superior defence could thwart an attack entirely and even allow for new first-strike capabilities. Market impact: massive funding for companies like Raytheon that build hypersonic tech with space delivery capabilities and underperformance of “expensive conventional hardware” companies in the aircraft and ship-building side of the military hardware equation. 10. Medical breakthrough extends average life expectancy 25 years Summary: Young forever, or for at least a lot longer. In 2022, a key breakthrough in biomedicine brings the prospect of extending productive adulthood and the average life expectancy by up to 25 years, prompting projected ethical, environmental and fiscal crises of epic proportions. The year 2022 sees a breakthrough from a multi-factor approach, as a cocktail of treatments is put together that tweaks cell-level processes in order to extend their life and thus the life of the organism composed of those cells. It’s not cheap, but it’s effective and has already been demonstrated on laboratory mice containing human DNA, extending their lives some 30% and more. The prospect of a massive leap in human quality of life and life expectancy are huge wins for mankind but bring an enormous ethical and financial quandary. Imagine that almost everyone can look forward to living to an average age of 115 and more healthily. What would this mean for private and government pensions, or even the ability or desire to retire? And what about the cost to the planet if it is set to support billions more people, not to mention whether or not there is enough food to go around? And then there is the ethical question of whether it is humane to not make the cocktail available to everyone. In short, how would our value systems, political systems and planet cope?
Bitcoin's downtrend is a sign of market maturity

Bitcoin's downtrend is a sign of market maturity

Alex Kuptsikevich Alex Kuptsikevich 02.12.2021 10:19
Over the past 24 hours, cryptocurrency market capitalisation has fallen by 1.8% to $2.59 trillion, with bitcoin losing only 0.5% to $56.7K. On bitcoin's daily charts, the RSI index remains in the lower half of the scale, at 45. The 50-day moving average is now at $60.7K and the 200-day at $48.2K, both moving horizontally. On balance, this means that Bitcoin is in a medium-term decline phase but is still on a long-term bull phase. Locally, a steady sequence of lower highs and lower lows has been forming in Bitcoin since the 17th of November. The intraday charts clearly show BTCUSD bouncing back from increasingly lower levels. And this is a serious reason to think about selling by the big players. The cryptocurrency Fear and Greed Index lost one point, declining to 32. The market failed to pick up the pace of the recovery and use fear as a reason to buy because of the negative stock market dynamics. Players rushed to lock in some of the profits in those coins that had been rising ahead of the recent gains. As a result, ETHUSD lost 4% over 24 hours, Binance Coin -1.4% and Polkadot -5.6%. Despite the latest downtick, the cryptocurrency market continues to distance itself from the situation in traditional financials without going into a deeper profit correction mode. The local downtrend in BTCUSD, if not accelerated in the coming days, promises to be a sign of a healthy maturity of the market without hurting it. Cryptocurrency investors are becoming more sophisticated, viewing the sector as a business rather than a capital-savings vehicle or casino, where a bet played can multiply an investment.
Bridge Too Far

Bridge Too Far

Monica Kingsley Monica Kingsley 02.12.2021 16:36
S&P 500 gave up sharp intraday gains on the first Omicron patient in CA. Corona packing punch still, and sending TLT far above yesterday‘s highs while the dollar remained unchanged. That‘s as risk-off as can be on a little surprising headline – the key difference is though that the Fed doesn‘t have the back of buy the dippers this time. The accelerated taper noises coupled with demand destruction thanks to Omicron, is delivering an inflation repreive. Make no mistake though, should demand be choked off too hard, fresh stimulus would have to come – for now in the heat increasingly being turned on, practically all asset classes suffer to varying degrees. The market isn‘t yet at a stage of sniffing out fresh stimulus countering the destructive policy effects which are being felt currently. Economic activity around the world hasn‘t been hampered, but markets are willing to err on the pessimistic side. For now and still – only when the riskier debt instruments such as HYG turn up to deal with the prior downswing, would be a reason to cheer for animal spirits returning. That idea sounds though hollow at this time. The bears have the upper hand unless proven otherwise – that is, by a close in the 4670s. Which is what the title says... Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 breaking below the 50-day moving average, and taking time consolidating below, isn‘t bullish at all. The reversal was broad based, arguably hitting value more. Yes, market breadth is dismal. Credit Markets Positive HYG divergence is gone – the broad underperformance of S&P 500 must be reversed first to make stock market upswings trustworthy. It remains unclear how much would HYG be able to rebound when quality debt instruments cool off. Gold, Silver and Miners Precious metals weakness remains, but isn‘t convincing enough to short the market, no. The coming reversal to the upside would be ferocious, but we aren‘t there yet. Crude Oil Crude oil plunge is slowing down, and it‘s more than black gold that‘s looking for direction here – this concerns the commodities complex as such. I‘m looking for copper to show the way, and oil to follow. Copper Copper is sitting at a rising support line, undecided yet whether to take the Fed and Omicron threats seriously or not. It‘s wait and see for now, but the bullish side has the medium-term upper hand. Bitcoin and Ethereum Bitcoin and Ethereum are cautious as well, but the bears are looking for an ambush – let‘s see how far they can get. Summary The ugly S&P 500 close concerns both value and tech – and there was no premarket upswing to speak of. The bears have the upper hand for today as markets look to be in the phase of sell first, ask questions later. Any reversal (in stocks or commodities) has to be accompanied by a credible upswing in riskier bonds, ideally with money coming out of the dollar as well. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Stock markets uncertain ahead of US unemployment figures

Stock markets uncertain ahead of US unemployment figures

Walid Koudmani Walid Koudmani 18.11.2021 12:36
Stock markets uncertain ahead of US unemployment figures European stock markets started today's session mixed after a mostly negative asian trading session which saw Nikkei, Kospi and Chinese indices trade lower. Sentiment was also impacted in Europe after new data showed a 29% YoY drop in European new car registrations in October, to 798,693 vehicles, a record low reading for the month. Sales of Volkswagen (VOW1.DE) dropped almost 42% YoY, sales of BMW (BMW.DE) dropped 22% YoY while sales of Daimler (DAI.DE) were 34% YoY lower. Furthermore, rising inflation continues to be a key topic of discussion and investors await more information from central bank members who have mostly downplayed the matter as "transitory" despite data showing a sustained increase. Finally, today's US unemployment figures could be significant since the Fed has stressed the importance of the job market and said it would predominantly use it as a measure of when to potentially implement monetary and fiscal policy changes.  Jet2 mixed results highlight struggles of travel sector Jet2 posted mixed results today, highlighting the somewhat improving conditions of the travel sector after what has been a very challenging time due to lockdowns, restrictions and overall economic instability. While the company managed to increase its liquidity, the group's operating loss also increased and despite some reassurance from the board, rising fuel prices and the competitive pricing environment continue to be worrying factors for the company and industry as a whole heading into the final part of 2021. Download our Mobile Trading App:   Google Play   App Store  
Bonds Didn‘t Disappoint

Bonds Didn‘t Disappoint

Monica Kingsley Monica Kingsley 03.12.2021 15:57
S&P 500 sharply rebounded, and signs are it has legs. My key risk-on indicator to watch yesterday, HYG, turned up really strongly. No problem that the dollar didn‘t decline, it‘s enough that financials and energy caught some breath. We‘re turning to risk-on as Omicron didn‘t cause the sky to fall. What a relief! Seriously, it doesn‘t look that hard lockdowns would be employed, which means the market bulls can probe to go higher again. What I told you on Wednesday already in the title It‘s the Fed, Not Omicron, today‘s non-farm payrolls illustrate. Such was the game plan before the data release, and this refrain of bad is the new good, is what followed. The Fed is desperately behind the curve in taming inflation, and its late acknowledgment thereof, doesn‘t change the bleak prospects of tapering (let alone accelerated one) into a sputtering economy. What we‘re experiencing currently in the stock market, is a mere preview of trouble to strike in 2022. We‘re in the topping process, and HYG holds the key as stated yesterday. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 returned above the 50-day moving average, the volume wasn‘t suspicious – the bulls have regained the benefit of the doubt, and need to extend gains convincingly and sectorally broadly next. Credit Markets HYG successfully defending gained ground, would be a key signal of strength returning to risk-on assets and lifting up S&P 500. There is still much to go – remember that the sharpest rallies happen in bear markets, so all eyes on HYG proving us either way. Gold, Silver and Miners Precious metals weakness looks deceptive and prone to reversal to me – the real fireworks though still have to wait till the Fed gets doubted with bets placed against its narratives. Crude Oil Crude oil plunge is getting slowly reversed, about to. Beaten down the most lately, black gold is readying an upside surprise. Copper Copper is turning higher, taking time, but turning up – it‘s positive, but still more of paring back recent setback than leading higher. I‘m reasonably optimistic, and acknowledge much time is needed to reach fresh highs. Bitcoin and Ethereum The bearish ambush of Bitcoin and Ethereum didn‘t get too far – crypto consolidation goes on, no need to panic or get excited yet. Summary S&P 500 is in a recovery mode, and the bulls look ready to prove themselves. The keenly watched HYG close presaged the odds broadly tipping the risk-on way, just as much as cyclicals did. It‘s a good omen that commodities are reacting – not too hot, not too cold – with precious metals in tow. In tow, as the Fed isn‘t yet being doubted – the NFPs are a first swallow of its inability to carry out tapering plans till the (accelerated or not) end. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
S&P 500 – Is a 5% Correction Enough?

S&P 500 – Is a 5% Correction Enough?

Paul Rejczak Paul Rejczak 03.12.2021 15:57
  The S&P 500 bounced from the 4,500 level on Thursday, as it retraced most of its Wednesday’s sell-off. Was it a reversal or just another upward correction? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The broad stock market index gained 1.42% on Thursday after opening slightly lower and bouncing from the new local low of 4,504.73. The index fell the lowest since the October 19 and it went below its early September local high of around 4,546. Overall, it lost 5.04% from the Nov. 22 record high of 4,743.83. But Thursday’s trading session was bullish and stocks were gaining. Was it an upward reversal? This morning stocks are expected to open 0.3% higher after the mixed monthly jobs data release. For now, it looks like a correction within a downtrend. We may see a short-term consolidation following the recent declines. The nearest important support level is now at 4,500. On the other hand, the resistance level is at 4,580-4,600, marked by the recent local lows. The S&P 500 remains below its short-term downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Remains Close to the 16,000 Level Let’s take a look at the Nasdaq 100 chart. The technology index remains relatively stronger than the broad stock market, as it is still trading above the early September local highs of around 15,700. However, the technology index gained just 0.7% yesterday, as we can see on the daily chart: Apple Remains Volatile After Reaching New Record High Let’s take a look at biggest stock in the S&P 500 index: AAPL. Apple accelerated its uptrend once again and on Wednesday it reached the new record high of $170.30. Apple’s market cap reached almost 2.8 trillion dollars! But on Thursday, the stock was 7.3% below its Wednesday’s high, before bouncing back above the $160 level. So the stock priceremains very volatile and we may see a medium-term topping pattern. Conclusion The S&P 500 index is expected to open 0.3% higher this morning after the mixed monthly jobs data release. We may see a consolidation and some more volatility following the recent declines. There have been no confirmed positive signals so far. Here’s the breakdown: The S&P 500 slightly extended its short-term downtrend yesterday before bouncing from the 4,500 level. A speculative short position is still justified from the risk/reward perspective. We are expecting an over 5% correction. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Gold's 1780s Are Driving Us Crazy!

Gold's 1780s Are Driving Us Crazy!

Mark Mead Baillie Mark Mead Baillie 06.12.2021 08:31
The Gold Update by Mark Mead Baillie --- 629th Edition --- Monte-Carlo --- 04 December 2021 (published each Saturday) --- www.deMeadville.com In completing its 48th trading week of 2021, Gold settled yesterday (Friday) at 1784. 'Twas the eighth week this year that Gold has settled in the 1780s (the first occurrence being on 19 February). Indeed, Gold's median weekly settle price year-to-date is 1788. Yet as anybody engaged in the Gold Story knows, Gold first traded in the 1780s a decade ago on 09 August 2011, the U.S "M2" money supply that day at $9.5 trillion; (today 'tis $21.5 trillion). So to reprise that from the "You Cannot Be Wrong Dept.": should anyone ask you "off the cuff" what is the price of Gold, your instantaneous response of "1780" shall (so 'twould seem for the foreseeable future) not only be correct, but enhance your dazzling intellectual image. To reprise as well "The M Word" crowd, clearly their parking place of preference is Gold's 1780s. Of the 233 trading days year to date, 27 of Gold's closures exceeding 1800 have -- within the five ensuing trading days -- found price settle in the 1780s, or lower. "1800? SELL!" Sheesh... Gold's 1780s are driving us crazy! Regardless, Gold -- and moreover Silver -- are doing what markets do when their technicals turn negative: price goes down. Per our Market Magnets page, Gold from 1861 on 18 November found price then pierce down through its Magnet: "SELL!" From our Market Trends page, Gold from 1847 on 19 November found the "Baby Blues" of trend consistency begin to plummet: "SELL!" From our Market Values page, Gold from 1805 on 22 November crossed below its smooth valuation line: "SELL!" More mainstream technical signals have since followed to "SELL!" And recall -- just prior to it all in our anticipating near-term selling -- we nonetheless deemed the 1800s as "safe": "WRONG!" Having thus now driven you crazy, we obviously deem holding and buying Gold as "RIGHT!" especially as the stock market -- be this another false signal or otherwise -- finds the S&P 500 doing its dance of a snake in death throes. To be sure we've seen such before, only to see the Index magically survive, indeed thrive. You veteran readers of The Gold Update may recall some six years ago (on 23 January 2016) our characterizing the S&P as being in such "death throes", the ensuing three weeks then finding the Index fall 5% from a "live" price/earnings ratio of 43x; (today 'tis 47x). "But don't forget it's now time for the Santa Claus Rally, mmb..." Yet another conventional wisdom notion there, Squire, via your appreciated "leading comment". Irrespective of what "everybody says" and expects, Santa Claus doesn't always come to Wall Street. Since 1980, as measured yearly from 01-to-24 December, Santa has skipped gifting the stock market 11 times. "WHAT?" 'Tis true. For those of you scoring at home, the S&P recorded net losses across that festive stint in '80, '81, '83, '86, '96, '97, '00, '02, '08, '15 and '18, the latter being a 409-point (-14.8%) loss. (Advice to the stocking stuffer: buy coal ... nudge-nudge, wink-wink, elbow-elbow). Moreover, have you been monitoring the major market dislocations of late? Talk about the maligning of conventional wisdom! In yesterday's session, the €uro, Swiss Franc, ¥en -- and yes the Dollar Index too -- all closed higher. "WHAT?" 'Tis true. Still, even as there is Dollar demand given the prospect of it paying a positive interest rate, the yield on the U.S. Treasury Bond continues to fall: 'twas 2.177% on 08 October, but is down now to 1.678%. In fact across our BEGOS Markets (Bond, Euro/Swiss, Gold/Silver/Copper, Oil, S&P 500), the price of the Bond is the only component with a positive 21-day linear regression trend. "WHAT?" 'Tis true. And then there's Oil: by our Market Values page, Black Gold settled yesterday 15 points below its smooth valuation line (66.22 vs. 81.51), even as Oil Inventories fell. "WHAT?" 'Tis true, (albeit OPEC is gonna keep a-pumpin'). Still, by that measure, Oil's price is massively, -- indeed deflationarily -- dislocated near-term from value. Too as noted, the Price of the S&P continues to be ridicously dislocated from the support of its Earnings; but if you get your dumbed-down P/E of 28.1x from the media, when 'tis honestly 47.4x, go ahead and say it: "WHAT?" 'Tis true. 'Course, the ongoing and most overwhelming dislocation is the price of Gold vis-à-vis our Scoreboard Dollar-debasement valuation (1784 vs. 4008). Say no more, Igor. A December to remember? Early on, 'tis the season to be dislocated. To which naturally (as subtly stated) we find Gold located in the 1780s. Why expect it to be anywhere else? So spot-on is Gold in the 1780s that per the following graphic of weekly price, the rightmost close is right on the dashed regression trendline. So are the 1780s driving you crazy, too? At least Gold's parabolic trend still is Long, although the aforementioned negative technicals have kept on the lid, (to say nothing of "The M Word" crowd?). Note as well the 79.1x reading of the Gold/Silver, ratio, essentially at a two-month high, the white metal having been terribly on the skids of late: Anything but skidding these last couple of months has been our Economic Barometer, it now having reached its highest oscillative level in better than three years. Whilst nominally last week's 13 incoming metrics were quite mixed, their overall effect net of prior period revisions and consensus expectations was to launch the Baro higher still as we here see: Amongst the improvers were November's Unemployment Rate and Average Workweek, plus both the Manufacturing and Services readings from the Institute for Supply Management, along with October's Construction Spending, Factory Orders and Pending Home Sales. However: November's ADP Employment data, Labor's Non-farm Payrolls and Hourly Earnings, the Chicago Purchasing Managers' Index and the Conference Board's read on Consumer Confidence were all weaker. Therein, too, is the red line of the S&P 500, its aforementioned snaky death throes throwing the Index all over the place this past week. The S&P's intra-day runs were as follows: Mon +48, Tue -86, Wed -143, Thu +91, Fri -113. Want some perspective for that? The entire trading range of the S&P 500 for the year 2004 was less than this past Wednesday's session alone. "WHAT?" 'Tis true. 'Course, back in 2004, 'twas a greater percentage range, but at least the average P/E for that year was a "reasonable" (vs. today) 26.4x. Thus again is begged the question: "Has the S&P crashed yet?" Obviously not, but we're feelin' very leery 'bout January. "As goes January..."(although you regular readers know we've demonstrably debunked that conventional notion as well). BUT... As for the Federal Reserve's removing of the punch bowl, Atlanta FedPrez Raphael "Ready to Raise" Bostic again says its time to step up the Taper of Paper Caper, whilst FedGov Randal "Have No" Quarles says 'tis time for The Bank to prepare to raise. And as noted in last week's missive: were it not for the "Oh my! Omicron!" scare, we could well see a FedFunds rate hike in the FOMC's 26 January Policy Statement. So just keep wearing your masque such that everything's great, and in turn let the Fed increase its rate! Here's another positive from the "Good Is Bad Dept.": the StateSide government shan't run out of money this time 'round until 18 February. Low on dough? To Congress you go! Just ask TreaSec Yellen, for she's in the know! Ho-ho-ho... Either way, west of The Pond "inflation" remains the watchword -- or if you prefer the real word -- as the word "transitory" is being transited away. East of The Pond, the EuroZone (just 23 years young) sees its inflation level hitting record high levels; but should it be peaking, 'tis thought any European Central Bank rate rise shan't next year materialize. And lacking any upside mobility of late (duh) are our precious metals, the following two-panel graphic bearing along as butt ugly. On the left we've Gold's daily bars from three months ago-to-date, their cascading "Baby Blues" reinforcing price's downtrend, (although price never really departs the 1780s, right?). On the right similarly is the same story for Sister Silver, who clearly is suffering the ravages of DDS ("Dangerfield Disrespect Syndrome"), by which she's none too happy. For from the precious metals' respective highs of just three weeks back, Gold has dropped as much as -5.8% ... but Silver more than double that at -12.6%! "WHAT?" 'Tis true: Meanwhile, still dwellers in their Profile cellars are Gold (below left) and Silver (below right). Here is the entirety of their trading across the last two weeks, the high volume price apices as labeled. And that is a lot of overhead work to do: So after all of that, are you ready to tune out? You can't be so blamed. Gold's 1780s have got us all crazy! Puts us in mind of that iconic glamour rock hit by Sparks from back in '83 -- supportive of the film by the same name -- "Get Crazy"Tune it in on your radio dial: sure to bring a you a Golden Smile! Cheers! ...m... www.deMeadville.com
Cryptocurrency survived key levels after Saturday's shake-up

Cryptocurrency survived key levels after Saturday's shake-up

Alex Kuptsikevich Alex Kuptsikevich 06.12.2021 10:54
The cryptocurrency market experienced a shock shakeout on Saturday morning. Low trading activity and the relatively narrow previous trading range created a situation where stop orders were placed close to the market price. Outside forces, such as the stock market pressure on Friday, triggered a snowball. On Saturday morning, the fall below the previous day's low at $52K triggered a sharp liquidation of positions, with the price falling to $42K at one point. Other altcoins also fell 10-25% as investors could not stay away from such a drop. By the end of the day, buyers brought BTCUSD back to $48K, but they still lacked the strength to push it above $50K. Over the weekend, news came in that MicroStrategy and El Salvador were again using this drawdown to build up their bitcoin holdings. We wonder if these big buyers are ready for a change of trend from bullish to bearish, which happens quite regularly. Will corporate and government finances be able to withstand the new crypto winter? If not, it will only increase the blow to the market when it runs the risk of being flooded with forced sell orders, a kind of margin call and subsequent depression. From the tech analysis perspective, Bitcoin is experiencing a crucial moment. The bulls managed to get the quotes back neatly above the 200-day moving average, and the RSI index touched level 20, an oversold territory. A stabilisation and even a slight pullback would form a positive picture of how the bulls defended the global upside trend. If the rate is below $48K by the end of Monday, it will signal that the bears didn't finish their play, and we should expect a further decline, potentially to the $40K area. ETHUSD, which at one point on Saturday was losing more than 17% to $3500, also managed to defend its significant $4000 level. But still, on Sunday and Monday morning, there is evident caution. A mutual ability for Ether to stay above $4000 and for Bitcoin to stay above its 200-day average (now $48K) would be a serious sign of staying within the bullish trend. A failure of these levels promises to escalate very quickly into a new liquidation of long positions. It will move the timing and levels of the local bottom in cryptocurrencies further down. Overall, the market remains under pressure, and its total capitalisation has lost 2.8% to 2.26 trillion in the last 24 hours, down 14% from Friday morning's levels. The cryptocurrency Fear and Greed Index has fallen to 16, its lowest level since July. These levels can safely be called attractive buying on a downturn, but cautious traders should still wait first for solid indications that the Greed and Fear Index has formed a bottom and is headed for growth.
Crypto market shaken as market cap approaches drops below $2.2T

Crypto market shaken as market cap approaches drops below $2.2T

Walid Koudmani Walid Koudmani 06.12.2021 12:19
While the cryptocurrency market is known for its volatility and potential price spikes, the correction experienced this weekend appeared to shake confidence in the market as a whole. Prices were under increasing pressure following news of the new Omicron variant and the reaction seen in stock markets as many of them retreated below previous support levels, and over the weekend we saw a 20-30% drop in most major coins, including Bitcoin. Today the situation appears quite uncertain as BTC trades around $47,000 and as investors focus on headlines to ascertain the severity of the matter. One thing to note is that although prices dropped across the board, a look at the ETH/BTC chart indicates that a significant part of the money flowed into Ethereum rather than into the main crypto and we actually saw BTC dominance drop to the lowest level in several months. While this could point to the beginning of a new cycle in the crypto market, it remains unclear how investors will react to future price swings in this already puzzling environment. UK Construction PMI and Car sales point to improving conditions Today's IHS construction data showed the fastest increase in construction output for four months, driven partly by robust and accelerated rise in commercial work along with a drop in the number of firms reporting supplier delays and as input cost inflation dips to seven-month low. While these are all positive signs for the economy, pressure remains on the BoE to keep monetary and fiscal policy under control and to facilitate the continuation of the post pandemic recovery despite potential unexpected events. Today’s car registration figures paint a slightly different picture of the current situation in the UK economy with figures showing an increase of around 1.7% on a monthly basis and a return to the level seen last november. However, as inflation pressures continue and as uncertainty related to the new variant increases, we could be seeing an impact on multiple sectors of the economy, including car sales and registrations as consumers worry about rising costs.    
Topping Process Roadmap

Topping Process Roadmap

Monica Kingsley Monica Kingsley 06.12.2021 15:43
S&P 500 bulls missed a good opportunity to take prices higher in spite of the sharp medim-term deterioration essentially since the taper announcement. It‘s the Fed and not Omicron as I told you on Wednesday, but the corona uncertainty is reflected in more downgrades of real economy growth. There are however conflicting indicators that make me think we‘re still midway in the S&P 500 topping process and in for a rough Dec (no Santa Claus rally) at the same time, and these indicators feature still robust manufacturing and APT (hazmat manufacturer) turning noticeably down.Still, it‘s all eyes on the Fed, and its accelerated tapering intentions (to be discussed at their next meeting) as they finally admitted to seeing the light of inflation not being transitory. The ever more compressing yield curve is arguably the biggest watchout and danger to inflation and commodity trades – one that would put question mark to the point of answering in the negative whether we are really midway in the topping process. Another indicator I would prefer turning up, would be the advance-decline line of broader indices such as Russell 3000. And of course, HYG erasing a good deal of its prior sharp decline, which I had been talking often last week – until that happens, we‘re in danger of things turning ugly and fast, and not only for stocks should 4530s decisively give.In spite of decreasing yields, the dollar continues acting on the bullish argument introduced 2 weeks ago. Seeing antidollar plays struggle (part of which is the function of inflation expectations drifting lower on the Fed‘s turn – let‘s see when the central bank breaks something, which is a story for another day), is truly a warning of downside risks having sharply increased since Thanksgiving. Not only for stocks, where we might not be making THE correction‘s low, but also for commodities, cryptos and precious metals. In a series of two tweets yesterday, the warning is in regardless of a smooth Monday ahead.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bears are looking a bit tired here, and the room for an upswing is getting evident. The surge late on Friday concerned both tech and value, thankfully – overall, the market breadth isn‘t though much encouraging.Credit MarketsHYG did successfully defend gained ground, and strength appears very slowly returning – the gains have to continue to sound the all clear, for considerably longer. As said on Friday, the sharpest rallies happen in bear markets, so all eyes on HYG proving us either way.Gold, Silver and MinersPrecious metals are looking fairly stable at the moment – not ready to decline, and still taking time to rebound. The accelerated taper idea didn‘t take them to the cleaners – the real fireworks though still have to wait till the Fed gets really close to choking off growth.Crude OilCrude oil could keep the intraday gains, but appears base building here – similarly to natgas, this is a medium-term buying opportunity as prices would inevitably recover.CopperCopper prices reflect the combined Fed and (to a lesser degree) Omicron uncertainty – it‘s casting a verdict about upcoming real economy growth, and the red metal is still looking undecided, and merely gently leaning towards the bulls.Bitcoin and EthereumThe bearish ambush of Bitcoin and Ethereum was reserved for the weekend, and the bleeding hasn‘t stopped so far.SummaryS&P 500 looks to have reached the low, but the jury remains out as to whether that‘s THE low. I highly recommend reading today‘s analysis for it lays out the key metrics to watch in its opening part. The nearest days and weeks will be of crucial importance in determining whether the worst in the stock market and commodities correction is behind us, or whether we still have some more to go.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
S&P 500 Still Above 4,500 – Have Stocks Bottomed?

S&P 500 Still Above 4,500 – Have Stocks Bottomed?

Paul Rejczak Paul Rejczak 06.12.2021 15:31
  The S&P 500 index broke slightly below the 4,500 mark on Friday, but it bounced from that support level again. Is this a bottoming pattern? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The broad stock market index lost 0.84% on Friday following Thursday’s advance of 1.4%. On Friday the index fell the lowest since the October 19 and it went below its early September local high of around 4,546 again. Overall, it lost 5.24% from the Nov. 22 record high of 4,743.83. Stocks fluctuate since last week’s Wednesday, so is this a bottoming pattern? For now, it looks like a flat correction or a consolidation within a downtrend. This morning the broad stock market is expected to open 0.4% higher and we may see some more short-term consolidation following the recent declines. The nearest important support level is still at 4,500. On the other hand, the resistance level is at 4,580-4,600, marked by the recent local lows. The S&P 500 remains below its short-term downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Broke Below the 16,000 Level Let’s take a look at the Nasdaq 100 chart. The technology index remained relatively stronger than the broad stock market recently but on Friday it broke below the support level of 16,000 and it was relatively weaker than the S&P 500 index that day. The tech stocks’ gauge fell below the early September local highs, as we can see on the daily chart: Conclusion The S&P 500 index slightly extended its downtrend on Friday and it was 5.24% below the November 22 record high. So it is still just a downward correction and not a new bear market. But we may see some more downside. For now, it looks like a consolidation within a downtrend, as there have been no confirmed positive signals so far. Here’s the breakdown: The S&P 500 slightly extended its short-term downtrend on Friday. A speculative short position is still justified from the risk/reward perspective. We are expecting an over 5% correction. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Bitcoin’s dominance went below 40%: crypto winter or maturity?

Bitcoin’s dominance went below 40%: crypto winter or maturity?

Alex Kuptsikevich Alex Kuptsikevich 09.12.2021 08:46
The cryptocurrency market capitalisation rose slightly, by 0.4%, to 2.36 trillion in the past 24 hours. The cryptocurrency Fear & Greed Index added another 1 point overnight to 29, a significant retreat from the December 6 lows of 16 points, but still in the fear zone. Binance Coin, XRP and Luna have added between 4% and 10% over the past 24 hours, leading the gains among the top altcoins. Growth has been held back by the negative dynamics of the first cryptocurrency, which is losing more than any other of the top-20 coins. The pressure intensified on exceeding the $50K level, pushing it down 1.7% in a day and 12% in seven days. As another result, bitcoin’s overall crypto market share fell below 40%. Approaching this mark in May was a manifestation of sharp profit-taking in Bitcoin after a dizzying rally. Any sustained period when the share of the first cryptocurrency fell below 40% was in January -March and April-June periods in 2018. After that, the BTC domination has recovered with altcoins’ deeper crash, called later the crypto winter. But there is another crucial point: Bitcoin’s peak share declines from cycle to cycle as more new players emerge. At the beginning of 2017, it was 87%, then in 2019, it is already less than 70%. Many other projects have appeared in place of XRP, which has lost its former strength, like a hydra with several new ones growing in an area of its severed head. That said, neither the mechanics (BTCUSD above its 200-day average and retreating from an oversold area on the daily charts) nor the sentiment in the stock markets are pessimistic, indicating that we see purely local momentum in Bitcoin. Ether continues to pivot around its 50-day moving average, sticking to local bullish momentum. As always, it should be stated that a sustained negative on Bitcoin has the power to affect the entire crypto market, but the smooth slide in price suggests that enthusiasts are looking for other ideas in the sector, but not a general flight out of it. Perhaps capital flowing from one cryptocurrency to another is the best scenario for the entire market. However, as Saturday showed, it is easy to scare the whole market with solid moves in BTCUSD.
What Happens After a Bullish Stampede?

What Happens After a Bullish Stampede?

Przemysław Radomski Przemysław Radomski 08.12.2021 15:14
  The bulls pumped up the market, but with fundamentals deteriorating and corporations largely responsible for the spike, regular investors will be left holding the bag. With investors betting on a Santa Clause rally despite the deteriorating fundamentals, the S&P 500 helped the GDXJ ETF (proxy for junior mining stocks) outperform on Dec. 7. However, with short-covering and corporate buybacks primarily responsible for the daily spike, another ‘Minsky Moment’ could be on the horizon. To explain, I wrote on Nov. 19: While European markets have largely ignored the recent coronavirus spikes, a sharp sell-off could be the spark that lights the S&P 500’s correction. To explain, the DAX 30 Index (Germany) and the CAC 40 Index (France) both closed slightly lower on Nov. 18. However, prior to Nov. 18, the DAX 30 had closed in the green for 13 of the last 15 trading days, and one-upping its European counterpart, the CAC 40 had closed in the green for 15 of the last 16 trading days. On top of that, the CAC 40 had an RSI (Relative Strength Index) north of 80, while the DAX 30 had an RSI north of 75. As a result, both indices are materially overbought at a time when Germany is implementing new restrictions. Thus, if a Minsky Moment strikes in Europe, don’t be surprised if the negativity cascades across the Atlantic. To that point, after volatility erupted on cue, the DAX 30 suffered an intraday peak-to-trough decline of 7.8%, the CAC 40 dropped by 7.3%, and the S&P 500 dropped by 5.2%. Please see below: However, with overzealous equity bulls back at it again on Dec. 7, the PMs benefited from the risk-on sentiment. However, with the fundamental problems still present, investors may have set themselves up for more disappointment. To explain, with hedge funds increasing their short bets a little too late, Goldman Sachs Prime Brokerage reported that last week, “US equities on the GS Prime book made up more than 85% of the global $ net selling (-1.4 SDs), driven by short sales and to a lesser extent long sales (9 to 1).”  In a nutshell: hedge funds increased their short bets at the worst possible time. Please see below: Thus, with the Dec. 7 rally driven mainly by a reversal of these positions, the profound short squeeze helped uplift the PMs. For example, Bank of America data shows that last week’s corporate buybacks were the highest weekly total since March. And by repurchasing nearly $3.4 billion of their own stock (focus on the first blue column from the left), their bids helped calm the S&P 500’s selling pressure. Please see below: What’s more, while Bank of America said that hedge funds and retail investors somewhat bought the dip last week (though, they’re still net-sellers over the last four weeks), corporations did much of the heavy lifting.  As a result, with retail investors running out of gas and hedge funds mainly closing out their shorts on Dec. 7, the S&P 500 should resume its correction. More importantly, though, mining stocks’ recent strength should wilt away as the drama unfolds.  Please see below: And now for the grand reveal: corporations' buyback blackout period begins on Dec. 10. And since they can't repurchase more shares until the New Year, the elephant in the room won't be able to support the S&P 500. Likewise, after hedge funds covered their shorts on Dec. 7, short-covering won't be able to support the S&P 500 either. As a result, mining stocks should suffer if the negativity resurfaces over the next few weeks. Please see below: To explain, the red line above tracks the hourly movement of the S&P 500, while the gold line above tracks the hourly movement of the GDXJ ETF. As you can see, the junior miners often follow in the S&P 500’s footsteps. And with the S&P 500 setting itself up for another drop, the GDXJ ETF likely won’t be far behind. To that point, with the headline Consumer Price Index (CPI) scheduled for release on Dec. 10 and the Fed’s next monetary policy meeting scheduled for Dec. 14/15, sources of volatility will arrive at a time when corporations are stuck on the sidelines.  For context, I wrote on Nov. 12: I’ve highlighted on several occasions how the Commodity Producer Price Index (PPI) often leads the following month’s headline CPI. And after the former increased by 2% month-over-month (MoM) on Nov. 9 – which is a material MoM increase – and by 22.2% YoY (a new 2021 high), it implies a headline CPI print of roughly 5.75% to 6.25% when the data is released on Dec. 10. Please see below: To explain, the green line above tracks the YoY percentage change in the commodity PPI, while the red line above tracks the YoY percentage change in the headline CPI. If you analyze the relationship, you can see that the pair have a close connection. In addition, after expectations for September were pulled forward to July, and then expectations for July were pulled forward to June, now, the probability of a Fed rate hike in May 2022 has reached ~69%. Please see below: Also noteworthy, St. Louis Fed President James Bullard said on Dec. 3 that “the danger now is that we get too much inflation.... It's time for the [Fed] to react at upcoming meetings.” He added: “the inflation numbers are high enough that I think [ending the taper by March] would really help us to create the optionality to do more if we had to, if inflation doesn't dissipate as expected in the next couple of months.” For context, Bullard reiterated that he expects two Fed rate hikes in 2022. The bottom line? While the bulls stampeded through Wall Street on Dec. 7, things aren’t as rosy as they appear. And while the PMs benefited from the renewed optimism, their tepid rallies are even more fragile. Moreover, with another inflation print on the horizon and the FOMC’s Dec. 15 decision including its Summary of Economic Projections, the hawkish revelations could rattle the financial markets. And with corporate buybacks starting their holiday vacation on Dec. 10, stock market investors are on their own to navigate what comes next. In conclusion, the PMs rallied on Dec. 7, as risk-on sentiment reigned supreme. However, with the S&P 500 rallying by more than 2% and WTI rallying by nearly 4%, the PMs’ daily upswings were relatively muted. As a result, precious metals investors sense that caution is warranted. And with their trepidation a sign of heightened anxiety, they likely realize that going long the PMs involves much more risk than reward. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Frontrunning CPI

Frontrunning CPI

Monica Kingsley Monica Kingsley 09.12.2021 15:50
S&P 500 rose as VIX retraced over half of its recent spike, but tech and value have a short-term tired look. Cyclicals turning down while utilities with staples barely budge in spite of a surge in yields? That looks really risk-off to me, and together with commodities and precious metals going nowhere, represents your usual setup before tomorrow‘s CPI announcement. So, count on some headwinds today.A reasonably hot inflation figure is expected tomorrow – inflation expectations have risen already yesterday. The fears are that a higher than what used to be called transitory figure, would cut into profit margins and send value lower. Even if inflation (which certainly hasn‘t peaked yet as I‘m on the record for having said already) isn‘t yet strong enough to sink stocks, the Fed‘s reaction to it is. The dynamic of tapering response messing up with the economy would take months to play out – so, the bumpy ride ahead can continue. If only the yield curve stopped from getting ever more inverted...Markets keep chugging along for the time being, and the warning signs to watch for talked in Monday‘s extensive analysis, aren‘t flashing red. While I would prefer to see more copper strength for confirmation (almost as much as no question marks creeping into the crypto land), this is what we have – and it indicates that the path higher won‘t be steep. Neither in stocks, commodities or precious metals – as I wrote yesterday:(…) The copper weakness remains the only watchout in the short term, and silver sluggishness reflects lack of imminent inflation fears. As if the current prices accurately reflected above ground stockpiles and yearly mining output minus consumption. It‘s the same story in the red metal, by the way.Patience in the precious metals – it‘s about Fed either relenting, or placing inordinate amount of stress on the real economy, which would take time. Spring 2022 most probably would bring greater PMs gains than 2021 with its fits and starts – aka when inflation starts to bite the mainstream narratives and stocks, some more.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 upswing looks ripe for a brief breather – the volume is drying up, and consolidation in the vicinity of ATHs shouldn‘t be unexpected.Credit MarketsHYG held up quite well on the day, but the stock market mood it translated into, was risk-off one as rising yields couldn‘t help cyclicals.Gold, Silver and MinersPrecious metals are still basing, positioned for the coming brief decline that has pretty good chances of being reversed right next. The countdown to higher prices and Fed mistake is firmly on, and the risks of being out of the market outweigh the patience now required.Crude OilCrude oil upswing is running into predictable headwinds, which I look to be resolved to the upside perhaps as early as tomorrow‘s regular session (I‘m not looking for CPI to send real assets down).CopperCopper is still quite lukewarm, and doesn‘t indicate a commodities surge right ahead. Some consolidation wouldn‘t be surprising now that half of the CRB Index downswing has been erased. Bitcoin and EthereumBitcoin and Ethereum keep looking vulnerable – the yesterday discussed downswing possibility looks to be progressing, unfortunately for the bulls.SummaryS&P 500 is still likely to consolidate recent strong gain, and at the same time not to tank on tomorrow‘s inflation data. The (almost classical, cynics might say) anticipation is playing out in commodities and precious metals today, but I‘m looking for the downside to be reversed tomorrow as the yields vs. inflation expectations duo hint at. Fed fears this early in the tapering cycle will likely look to be a blip on the screen in the topping process hindsight.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Eyes on US consumer data and CPI inflation

Eyes on US consumer data and CPI inflation

Walid Koudmani Walid Koudmani 10.12.2021 12:17
While stock markets started the day trading lower, with several indices down between 1-2%, many traders will be awaiting today’s key data releases from the US which include preliminary university of michigan consumer confidence as well as CPI inflation. Both these reports could have a noticeable impact on stocks, particularly in the US, as fears of rising inflation have pushed the FED to announce it’s tapering recently and could lead to further action taken by the US central bank while consumer sentiment has been on a steady decline for several months. A better than expected outcome from today’s data could reassure markets that despite growing fears related to the new variant the economy continues to recover which in turn could encourage the FED to change its approach in the near term. On the other hand, worse than expected reports could further incentivize the central bank to take action, something which may be closely followed by its peers around the world. UK GDP report leaves investors concerned Today’s GDP report showed an estimated growth of 0.1% in October 2021 and a return to 0.5% below its pre-pandemic levels. Services seem to be outperforming with an increase of 0.4% and a return to pre-covid levels while production output decreased by 0.6% in October 2021 and construction contracted output dropped by 1.8%, the largest fall since April 2020, partly due to rising costs and supply concerns. Overall today’s report could be considered positive by some, while on the other hand it may raise some concerns regarding the state of the economic recovery as we await the upcoming Bank of England decision.
Catching More Than a Decent Bid

Catching More Than a Decent Bid

Monica Kingsley Monica Kingsley 10.12.2021 15:48
S&P 500 predictably relented, but the resilience of value provides a glimmer of hope. Quite a solid one as the HYG spurt to the downside didn‘t inspire a broader selloff, including in tech. Yesterday was your regular wait-and-see session of prepositioning to today‘s CPI data. This not exactly a leading indicator of inflation clearly hasn‘t peaked, and inflation around the world either. The difference between the U.S. with eurozone, and the rest of the world, is that many other central banks are already on a tightening path.I count on such a CPI reading that wouldn‘t cause a rush to the exit door and liquidation in fears of Fed going even more hawkish (in rhetoric, it must be said). My series of pre-CPI release tweets have worked out to the letter – and now, it‘s back to the inflation trades.I already told you in yesterday‘s report:(…) A reasonably hot inflation figure is expected tomorrow – inflation expectations have risen already yesterday. The fears are that a higher than what used to be called transitory figure, would cut into profit margins and send value lower. Even if inflation (which certainly hasn‘t peaked yet as I‘m on the record for having said already) isn‘t yet strong enough to sink stocks, the Fed‘s reaction to it is. The dynamic of tapering response messing up with the economy would take months to play out – so, the bumpy ride ahead can continue. If only the yield curve stopped from getting ever more inverted...Markets keep chugging along for the time being, and the warning signs to watch for talked in Monday‘s extensive analysis, aren‘t flashing red.The pieces of the stock market and commodities rally continuation are in place, and the same goes for precious metals reversing the prior cautious stance. Even cryptos are warming up to the data release.Looking further ahead in time to 2022, I can‘t understate the bright prospects of agrifoods (DBA) – and it‘s in no way just about the turmoil in fertilizer land.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 downswing looks ready to be reversed soon – in spite of the drying up volume which often accompanies bull markets. The daily indicators remain positioned favorably to the bulls.Credit MarketsHYG weakness looks somewhat overdone to me – the prior upswing is still getting the benefit of my doubt. The coming sessions just shouldn‘t bring a steep HYG decline in my view.Gold, Silver and MinersPrecious metals are still basing, and I‘m looking for the hesitation to be reversed to the upside. Just see the tough headwinds in comparing silver being almost at its Sep lows while gold is trading much higher. Once the inflation narratives get a renewed boost, silver would play catch up.Crude OilCrude oil upswing is running into predictable headwinds, but I‘m looking at the next attempt at $72 to succeed, and for $74 to be broken to the upside later on.CopperCopper is still lukewarm, and waiting for the broader commodity fires to reignite. The red metal isn‘t in an anticipatory, frontrunning mood – its prolonged consolidation means though it‘s prefectly prepared to rise decisively again.Bitcoin and EthereumBitcoin and Ethereum are finding buying interest, but the Ethereum underperformance has me still cautious after taking sizable ETH profits off the table yesterday.SummaryS&P 500 rally is likely to continue today, and the same goes for risk-on and real assets. The Fed evidently won‘t be forced into a more hawkish position in Dec, and the markets are starting to celebrate. Silently celebrate as it‘s not about fireworks, but a reasonable and well bid advance across the board. I hope you‘re likewise positioned!Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Stocks To Advance After Neutral Inflation Data?

Stocks To Advance After Neutral Inflation Data?

Paul Rejczak Paul Rejczak 10.12.2021 15:46
  Stocks retraced some of their recent rally yesterday – was it just a quick downward correction before another leg up? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch today's video. today's video." frameborder="0" allowfullscreen> The nearest important resistance level remains at 4,700-4,750, marked by the record high, among others. On the other hand, the support level is at around 4,610-4,630, marked by Tuesday’s daily gap up of 4,612.60-4,631.97. The S&P 500 is at its previous consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Bounced From the 16,400 Level Let’s take a look at the Nasdaq 100 chart. The technology index got back to the 16,400 level on Wednesday and yesterday it retraced some of its recent advance, just like the broad stock market. However, tech stocks are relatively weaker, as the Nasdaq 100 is still well below the Nov. 22 record high of 16,764.85. Conclusion The S&P 500 index will likely retrace its yesterday’s decline this morning. So the broad stock market may extend a short-term consolidation following the recent rally. There have been no confirmed short-term negative signals so far and we may see an attempt at breaking above the 4,700 level following neutral CPI data release. Here’s the breakdown: The S&P 500 is expected to open higher this morning and we may see a consolidation along the 4,700 level. We are still maintaining our short position from the 4,678 level. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Gold Stays Sedentary Whilst Silver (a Steal!) Skids Senselessly

Gold Stays Sedentary Whilst Silver (a Steal!) Skids Senselessly

Mark Mead Baillie Mark Mead Baillie 13.12.2021 09:18
The Gold Update by Mark Mead Baillie --- 630th Edition --- Monte-Carlo --- 11 December 2021 (published each Saturday) --- www.deMeadville.com Without looking... Think quick! What is the price of Gold right now? (HINT: If you read last week's missive, you already know the answer). "Uhh gee, mmb... in the 1780s?" Spot-on there, Squire, for the simplest reason that the price of Gold is always in the 1780s. Don't believe it? Feel free to verify the following, (you cannot make this stuff up): 'Twas in the 1780s ten years ago; 'twas in the 1780s ten months ago; 'twas in the 1780s ten weeks ago; 'twas in the 1780s ten days ago; and 'tis today in the 1780s -- 1783 to be precise -- as portrayed in the above Gold Scoreboard. That is just 44% of Gold's Dollar-debased value of 4015, even as honestly-adjusted for the increase in the supply of Gold itself. No kiddin'. Indeed should Gold have just died, an epitaph of solely "1780" is perfectly apt. "Charles, is this Gold's gravestone?" ... "That, my dear Dysphasia, is a rhetorical question." For just as the price of Gold was relatively "fixed" post-Issac Newton in the $18-to-$20 range, then again relatively "fixed" post-Bretton Woods in the $34-to-$35 range -- until 1971 upon Richard Nixon nixing such Gold Standard -- today we might say Gold is relatively "fixed" in the 1780s by "The M Word" crowd. Indeed, the "manipulation" motif is gaining more and more mainstream mention of late, the market depth of bids and offers rotating marvelously around 1780 as a centerpiece price. And it never being wrong, the market is what 'tis today: 1780. But broad buying sway can this allay: for Gold remains extraordinarily under-owned, an understatement at that. 'Course, the day to sell your Gold is the day everybody wants it, even at a five-figure price. But for now, why own a dense, ductile lump of rather incongruous rock when with a mere tap of the mouse one benefits many times over from an increasing array of shiny objects permeating the markets, be they earningless stocks or cryptocrap or even non-fungible tokens? Certainly they make one and all cocksure and feeling fine! (Until suddenly the objects vanish, but we're not supposed to say that). And how about Sister Silver of late? Hardly does she feel very great. Whilst Gold has been ad nausea sedentary in forever wallowing 'round the 1780s, and more accurately being -3.0% month-over-month, Silver senselessly has skidded -10.9%! Quite obviously, Silver has not been adorned in her precious metals pinstripes. So it must instead be that she is sporting her industrial metal jacket, right? For Cousin Copper clearly must be going over the cliff. But no, 'tisn't. Rather for the same stint, Copper is off but a mere -0.5%. What To Figure, eh? Last week we wrote of market dislocation: Silver has become so dislocated as to have been left naked! Here are the percentage tracks of our BEGOS Markets' metals triumvirate from one month ago-to-date (21 trading days): Further, guess what just crossed above 80x for its first occurrence since 29 September? Exactly right: the Gold/Silver ratio, which now is 80.3x. Its millennium-to-date average is 66.4x. Thus were Silver today (22.215) priced at the average, she'd in fact be +24.6% higher at 27.690. (Think means regression). Either way, by our math, Silver right now is a steal (!!!) So as Silver sinks even as Copper remains buoyant -- which makes no sense -- Gold sedentarily sits. In settling out the week yesterday at the aforementioned 1783, price on a points basis traced its narrowest week (since that ending on Valentine's Day 2020) in the last 22 months, and the narrowest week on a percentage basis since that ending nearly two years ago on 22 December 2019. So narrow was last week's trading range that it barely shows as the rightmost nub on the graphic of Gold's weekly bars from one year ago-to-date: Economically, the past week of incoming metrics were inflation-persistent. There was an upward revision to Q3's Unit Labor Costs along with a downward revision for the quarter's Productivity: that's Classic Stagflation, right there! Too, November's CPI remained stubbornly high with an +0.8% reading, (which for those of you scoring at home is an annualized pace of +9.6% ... are ya gettin' that with all the dough you've got sitting in the bank? Oh right, you put it all in the stock market). October's Trade Deficit backed off from that for September, whilst Consumer Credit eroded and Wholesale Inventories somewhat bloated. December's University of Michigan Sentiment Survey regained the 70 level, but remains below the COVID-era average of 77. Put it all together and the Economic Barometer lost of bit of tether: With further respect to rising everything ('cept the metals), Dow Jones Newswires during the week ran with "This Inflation Defies the Old Models. Neither supply or demand by itself is increasing prices; it’s an unusual combination of both." True enough: we've tons of money chasing not enough stuff, the cost of which to produce and supply is ever-increasing. This is what happens when the system is flooded with money. Everybody's loaded, so why the heck seek work? Especially given your shiny object investments see you retiring at 35. (Or as a French friend oft texts to us: "So gréat!") Meanwhile come 21 December (that's Tuesday a week), some 40% of StateSide obligations shan't be payable (per analysis from the Bipartisan Policy Center) given the debt ceiling then being reached. "Hey Shinzō, that you? Joe here. Hey listen: we may have to skip that next interest payment. My Janet who? Hello Shinzō? Hey! Are you still there, buddy?" Or something like that. Which leads us to three critical, succinct questions: â–  "Got Gold?" â–  "Got Silver?" â–  "Has the S&P crashed yet?" Just askin'. In fact speaking of the latter, our "live" S&P 500 price/earnings ratio is now 48.6x, (another of our honest calculations that the FinWorld elects not to perform). In fact, the "in" thing these days is to value a company -- should they not have earnings -- by revenues. (This is referred to as "Dumbing-down beyond stoopid"). For example, we read this past week that such valuation method is apparently touted for a shiny object called "Snowflake". Last year this object's top line was +$592M and its bottom line -$539M, a truly symmetrical snowflake swing of -$1.1B. Moreover, we read (courtesy of NASDAQ) that negative swings are to be again seen in '22, '23 and '24. And snowflakes do melt. (See 2000-2002). Just sayin'. 'Course to be fair, Gold's price as a function of valuation continues to melt. The U.S. money supply continues to rise, yet Gold's price remains hardly wise, (except in the guise to load up on this prize). To wit, our two-panel graphic featuring on the left Gold's daily bars from three months ago-to-date and on the right price's 10-Market Profile. The good news per the "Baby Blues" having just ceased their fall right at the -80% axis is that price's recent freeze in the 1780s may be the consolidative haunch from which to launch. And obviously, those incessant 1780s clearly dominate the Profile: Silver's like graphic shows both price and the "Baby Blues" (below left) clearly more skittish than Gold, whilst her Profile (below right) sees her singin' the blues. (But grab some Silver whilst you've nuthin' to lose!) Grab a glimpse too at The Gold Stack: The Gold StackGold's Value per Dollar Debasement, (from our opening "Scoreboard"): 4015Gold’s All-Time Intra-Day High: 2089 (07 August 2020)Gold’s All-Time Closing High: 2075 (06 August 2020)2021's High: 1963 (06 January)The Gateway to 2000: 1900+The 300-Day Moving Average: 1815 and fallingThe Final Frontier: 1800-1900The Northern Front: 1800-1750Trading Resistance: 1785 / 179510-Session “volume-weighted” average price magnet: 1783Gold Currently: 1783, (expected daily trading range ["EDTR"]: 22 points)Trading Support: 1777 / 177310-Session directional range: down to 1762 (from 1811) = -49 points or -2.7%On Maneuvers: 1750-1579The Weekly Parabolic Price to flip Short: 17282021's Low: 1673 (08 March) The Floor: 1579-1466Le Sous-sol: Sub-1466The Support Shelf: 1454-1434Base Camp: 1377The 1360s Double-Top: 1369 in Apr '18 preceded by 1362 in Sep '17Neverland: The Whiny 1290sThe Box: 1280-1240 And then there's next week. 15 metrics are scheduled for the Econ Baro. And the mid-week cherry? A policy statement from the Federal Open Market Committee. "Oh no, not again!" Kinda like those radio hits: good or bad, they just keep on comin'! So c'mon and get yourself some Gold, and don't forget the Silver too! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
On a Knife-Edge

On a Knife-Edge

Monica Kingsley Monica Kingsley 13.12.2021 15:04
S&P 500 recaptured 4,700s on little change in market breadth and ever so slowly coming back to life HYG. Credit markets made a risk-on move, but HYG isn‘t leading the charge on a medium-term basis in the least – it‘s improving, but the stiff headwinds in bonds are being felt. Given the CPI discussed at length on Friday, it‘s still a relative success. Make no mistake though, time is running short in this topping process, and trouble is going to strike earliest after the winter Olympics. Global economic activity might be peaking here, and liquidity around the world is shrinking already – copper isn‘t too fond of that. The Fed might attempt to double the monthly pace of tapering to $30bn next, but I doubt how far they would be able to get at such a pace. Inflation and contraction in economic growth are going to be midterms‘ hot potatoes, and monetary policy change might be attempted. Tough choices for the Fed missed the boat in tapering by more than a few months. 2022 is going to be tough as we‘ll see more tapering, market-forced rate hikes (perhaps as many as 2-3 – how much closer would yield curve control get then?), higher taxes and higher oil prices. Stocks are still likely to deliver more gains in spite of all the negative divergences to bonds or other indices (hello, Russell 2000). Copper would be my indicator as to how far further we have to go before GDP growth around the world peaks. Oil is ready for strong medium-term gains, and I‘m not looking for precious metals to yield much ground. Silver though is more vulnerable unless inflation returns to the spotlight. Cryptos do likewise have issues extending gains sharply. All in all, volatility is making a return, and it isn‘t a good news for the bulls. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 advance continues, and I‘m looking for ATHs to give in. It will take a while, but the balancing on a tightrope act continues. Credit Markets HYG strength didn‘t convince, but it didn‘t disappoint either – the constellation remains conducive to further stock market gains. So far and still conducive. Gold, Silver and Miners Precious metals are stronger than miners, and the lackluster, sideways performance is likely to continue for now – fresh Fed policy mistake is awaited, and it‘s actually bullish that gold and silver aren‘t facing more trouble when the consensus expectation is faster taper. Crude Oil Crude oil upswing is still struggligh at $72, and remains favored to go higher with passage of time as excess production capacity keeps shrinking while demand isn‘t being hit (no, the world isn‘t going the lockdowns route this time). Copper High time copper stopped hesitating, for its sideways trading is sending a signal about future GDP growth. The jury is still out in the red metal‘s long basing pattern – a battle of positive fundamentals against shrinking liquidity and possibly slowing growth. Bitcoin and Ethereum Bitcoin and Ethereum bottom searching goes on, and I suspect at least a test of Friday‘s lows is coming. I don‘t see too many signs of exuberance returning right away as Ethereum hasn‘t yet started to outperform. Summary S&P 500 bulls continue climbing a wall of worry even if credit markets don‘t confirm entirely. Risk-on and real assets rally is likely to continue, and the road would be getting bumpier over time. The Fed won‘t overcome market expectations, and the last week of Nov (first week of balance sheet contraction) pace wouldn‘t be consistently beaten without consequences down the road. Select commodities and precious metals are already feeling the pinch, but there is no sending them to bear markets. Get ready for the twin scourge of persistent inflation and slowdown in growth to start biting increasingly more. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
We Might Say Next FED Moves Are Not Obvious As Some Factors Differentiate Circumstances

Will Inflation Look Different in 2022?

Przemysław Radomski Przemysław Radomski 13.12.2021 17:04
One swallow doesn't make a summer, but when it comes to slower inflation pressure, there have been several. Will the narrative change soon? While Fed Chairman Jerome Powell had been preaching his “transitory” doctrine for months, the thesis was obliterated once again after the headline Consumer Price Index (CPI) surged by 6.8% year-over-year (YoY) on Dec. 10. Additionally, while the Commodity Producer Price Index (PPI) – which will be released on Dec. 14 – is likely provide a roadmap for inflation’s next move, signs of deceleration are already upon us.  For example, supply bottlenecks, port congestion, and rapidly rising commodity prices helped underwrite inflation’s ascent. However, with those factors now stagnant or reversing, inflationary pressures should decelerate in 2022. To explain, Deutsche Bank presented several charts that highlight 2021’s inflationary problems. However, whether it’s suppliers’ delivery times, backlogs of work, port congestion, bottleneck indices, or the cost of shipping and trucking, several inflationary indicators (excluding air cargo rates) have already peaked and rolled over.  Please see below: To that point, global manufacturing PMIs also signal a deceleration in input price pressures. With input prices leading output prices (like the headline CPI), the latter will likely showcase a similar slowdown if the former’s downtrend holds. Please see below: Source: IIF/Robin Brooks To explain, the colored lines above track the z-scores for prices paid within global manufacturing PMI reports. In a nutshell: regions were experiencing input inflation that was ~2 and ~4 standard deviations above their historical averages. However, if you analyze the right side of the chart, you can see that all of them have consolidated or come down (the U.S. is in light blue). As a result, it’s another sign that peak input inflation could elicit peak output inflation. As mentioned, though, the commodity PPI is the most important indicator and if the data comes in hot on Dec. 14, all bets are off. However, the monthly weakness should be present since the S&P Goldman Sachs Commodity Index (S&P GSCI) declined by 11.2% in November.   Also noteworthy, Morgan Stanley’s Chief U.S. Economist, Ellen Zentner, also sees signs of a deceleration. She wrote: “We are seeing nascent signs that pipeline inflation pressures are easing – based on evidence from company earnings transcripts, ISM comments, Korea trade data, China's inflation data, the Fed's Beige Book, a department huddle with our equity analysts, and our own survey.” To explain, the green, gold, and blue lines above track Morgan Stanley’s core inflation estimates for emerging markets, developed markets, and global markets. If the predictions prove prescient, the 2022 inflation narrative could look a lot different than in 2021. However, please remember that inflation doesn’t abate without direct action from the Fed, and with a hawkish Fed known to upend the PMs (at least in the short- or medium run), the fundamental environment has turned against them. For example, when the Fed turns hawkish, commodities retreat, and with U.S. President Joe Biden showcasing heightened anxiety over inflation, more of the same should materialize over the medium term. To explain, Morgan Stanley initially projected no rate hikes in 2022. Now, Zentner expects “2 hikes in 2022, followed by 3 hikes plus a halt in reinvestments in 2023.” She wrote: “Before investors close out the year, we need to get past the FOMC's final meeting next week, and it comes with every opportunity for surprise. On Wednesday, we expect the Fed to move to a hawkish stance by announcing that it is doubling the pace of taper, highlighting continued inflation risks and no longer labeling high inflation as transitory, and showing a hawkish shift in the dot plot. We think this shift will shake out in a 2-hike median in 2022, followed by 3.5 hikes in 2023 and 3 hikes in 2024.” Furthermore, upping the hawkish ante, Goldman Sachs initially projected no rate hikes in 2022. Then, the team moved to three rate hikes in 2022 (June, September, and December 2022). Now, Goldman Sachs expects the FOMC to hike rates in May, July, and November 2022 – with another four hikes per year in 2023 and 2024.   The Fed’s Time to Shine “The FOMC is very likely to double the pace of tapering to $30bn per month at its December meeting next week, putting it on track to announce the last two tapers at the January FOMC meeting and to implement the last taper in March,” wrote Chief Economist Jan Hatzius. “We expect the Summary of Economic Projections to show somewhat higher inflation and lower unemployment. Our best guess is that the dots will show 2 hikes in 2022, 3 in 2023, and 4 in 2024, for a total of 9 (vs. 0.5 / 3 / 3 and a total of 6.5 in September). We think the leadership will prefer to show only 2 hikes in 2022 for now to avoid making a more dramatic change in one step, especially at a meeting when the FOMC is already doubling the taper pace. But if Powell is comfortable showing 3 hikes next year, then we would expect others to join him in a decisive shift in the dots in that direction.” Speaking of three hikes, the market-implied probability of three FOMC rate hikes in 2022 has risen to 96%. Please see below: For context, I’ve been warning for months that surging inflation would force the Fed’s hand. I wrote on Oct. 26: Originally, the Fed forecasted that it wouldn’t have to taper its asset purchases until well into 2022. However, surging inflation pulled that forecast forward. Now, the Fed forecasts that it won’t have to raise interest rates until well into 2023. However, surging inflation will likely pull that forecast forward as well. More importantly, though, while the PMs have remained upbeat in recent weeks, the forthcoming liquidity drain will likely shift the narrative over the medium term. The bottom line? While inflation shows signs of peaking, there is a vast difference between peak inflation and the Fed’s 2% annual target. As a result, even if a 6.8% YoY headline CPI was the precipice, it’s nothing to celebrate. Thus, the Fed needs to tighten monetary policy to control inflation, and anything less will likely re-accelerate the cost-push inflationary spiral.  To that point, with the precious metals extremely allergic to a hawkish Fed, I’ve highlighted on numerous occasions how the GDXJ ETF suffered following the 2013 taper. With 2022 Fed policy looking even more hawkish than in mid-2014, the latter’s downtrend should have plenty of room to run. In conclusion, the PMs were mixed on Nov. 10, and the scorching inflation print was largely ignored by investors. However, with the Fed poised to provide another dose of reality on Dec. 15, the recent volatility should persist. To that point, it’s important to remember that the S&P 500’s volatility increased materially after the Fed tapered in 2013. With stock market drawdowns bullish for the USD Index and bearish for the PMs, there are plenty of technical, fundamental, and sentiment factors brewing that favor the theme of ‘USD Index up, PMs down’ over the medium term. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Gold – Recovery ahead

Gold – Recovery ahead

Florian Grummes Florian Grummes 14.12.2021 13:26
https://www.midastouch-consulting.com/13122021-gold-recovery-ahead December 13th, 2021: The gold market is nearing the end of a difficult and very challenging year. Most precious metal investors must have been severely disappointed. Gold – Recovery ahead. Review 2021 started quite bullish, as the gold price climbed rapidly towards US$1,960 at the beginning of the year. In retrospect, however, this peak on January 6th also represented the high for the year! In the following 11.5 months, gold did not even come close to reaching these prices again. Instead, prices came under considerable pressure and only bottomed out at the beginning and then again at the end of March around US$1,680 with a double low. Interestingly, the low on March 8th at US$1,676 did hold until today. The subsequent recovery brought gold prices back above the round mark of US$1,900 within two months. But already on June 1st, another violent wave of selling started, which pushed gold prices down by US$150 within just four weeks. Subsequently, gold bulls attempted a major recovery in the seasonally favorable early summer phase. However, they failed three times in this endeavor at the strong resistance zone around US$1,830 to US$1,835. As a result, sufficient bearish pressure had built up again, which was then unleashed in the flash crash on August 9th with a brutal sell-off within a few minutes and a renewed test of the US$1,677 mark. Despite this complete washout, gold bulls were only able to recover from this shock with difficulty. Hence, gold traded sideways mainly between US$1,760 and US$1,815 for the following three months. It was not until the beginning of November that prices quickly broke out of this tenacious sideways phase and thus also broke above the 15-month downtrend-line. This was quickly followed by another rise towards US$1,877. However, and this is quite indicative of the ongoing corrective cycle since the all-time high in August 2020, gold prices made another hard U-turn within a few days and sold off even faster than they had risen before. Since this last sell-off from US$1,877 down to US$1,762, gold has been stuck and kind of paralyzed for three weeks, primarily trading in a narrow range between US$1,775 and US$1,785. Obviously, the market seems to be waiting for the upcoming FOMC meeting. Overall, gold has not been able to do much in 2021. Most of the time it has gone sideways and did everything to confuse participants. These treacherous market phases are the very most dangerous ones. Physical investors can easily sit through such a sideways shuffling. But leveraged traders had nothing to laugh about. Either the movements in gold changed quickly and abruptly or almost nothing happened for days and sometimes even weeks while the trading ranges were shrinking. Technical Analysis: Gold in US-Dollar Weekly Chart – Bottoming out around US$1,780? Gold in US-Dollars, weekly chart as of December 13th, 2021. Source: Tradingview Despite the 15-month correction, gold has been able to easily hold above the uptrend channel, which goes back to December 2015. The steeper uptrend channel that began in the summer of 2018 is also still intact and would only be broken if prices would fall below US$1,700. Support between US$1,760 and US$1,780 has held over the last three weeks too. The weekly stochastic oscillator is currently neutral but has been slowly tightening for months. Overall, gold is currently trading right in the middle of its two Bollinger bands on the weekly chart. Thus, the setup is neutral. However, bottoming out around US$1,780 has a slightly increased probability. Daily Chart – New buying signal Gold in US-Dollars, daily chart as of December 13th, 2021. Source: Tradingview On the daily chart, gold has been searching for support around its slightly rising 200-day moving average (US$1,793) over the last three weeks. However, eye contact has been maintained, hence a recapturing of this important moving average is still quite possible. Despite the failed breakout in November, the current price action has not moved away from the downtrend-line. A further attack on this resistance thus appears likely. Encouragingly, the daily stochastic has turned up from its oversold zone and provides a new buy signal. In summary, the chances of a renewed recovery starting in the near future predominate on the daily chart. In the first step, such a bounce could run to around US$1,815. Secondly, the bulls would then have to clear the downtrend-line, which would release further upward potential towards US$1,830 and US$1,870. The very best case scenario might see gold being able to rise to the psychological number of US$1,900 in the next two to four months. On the downside however, the support between US$1,760 and US$1,780 must be held at all costs. Otherwise, the threat of further downward pressure towards US$1,720 and US$1,680 intensifies. Commitments of Traders for Gold – Recovery ahead Commitments of Traders for Gold as of December 12th, 2021. Source: Sentimentrader The commercial net short position in the gold futures market was last reported at 245,623 contracts sold short. Although the setup has somewhat improved due to the significant price decline in recent weeks, the overall constellation continues to move in neutral waters. There is still no clear contrarian bottleneck in the futures market, where professional traders should have reduced their net short positions to below 100,000 contracts at least. Until then, it would still be a long way from current levels, which could probably only happen with a price drop towards US$1,625. As long as this does not happen, any larger move up will probably have a hard time. In summary, the CoT report provides a neutral signal and thus stands in the way of a sustainable new uptrend. However, given the current futures market data, temporary recoveries over a period of about one to three months are currently possible. Sentiment for Gold – Recovery ahead Sentiment Optix for Gold as of December 12th, 2021. Source: Sentimentrader Sentiment for gold has been meandering in the neutral and not very meaningful middle zone for more than a year. Furthermore, a complete capitulation or at least very high pessimism levels are still missing to end the ongoing correction. Such a high pessimism was last seen in spring of 2019, whereupon gold was able to rise more than US$800 from the lows at US$1,265 to US$2,075 within 15 months. This means that in the big picture, sentiment analysis continues to lack total capitulation. This can only be achieved with deeply fallen prices. In the short term, however, the Optix for gold has almost reached its lows for the year. At the same time, german mainstream press is currently asking, appropriately enough, “Why doesn’t gold protect against inflation? This gives us a short-term contrarian buy signal, which should enable a recovery rally over coming one to three months. Seasonality for Gold – Recovery ahead Seasonality for Gold over the last 53-years as of December 12th, 2021. Source: Sentimentrader As so often in recent years, precious metal investors are being put to the test in the fourth quarter of 2021. In the past, however, there was almost always a final sell-off around the last FOMC meeting between mid-November and mid-December. And this was always followed by an important low and a trend reversal. This year, everything points to December 15th or 16th. Following the FOMC interest rate decision and the FOMC press conference, the start of a recovery would be extremely typical. Statistically, gold prices usually finish the last two weeks of the year with higher prices, because trading volume in the west world is very low over the holidays, while in Asia, and especially in China and India, trading is more or less normal. Also, the “tax loss selling” in mining stocks should be over by now. Overall, the seasonal component turns “very bullish” in a few days, supporting precious metal prices from mid-December onwards. Typically, January in particular is a very positive month for gold, but the favorable seasonal period lasts until the end of February. Macro update and Crack-up-Boom: US-Inflation as of November 30th, 2021. ©Holger Zschaepitz Last Friday, inflation in the U.S. was reported to have risen to 6.8% for the month of November. This is the fastest price increase since 1982, when Ronald Reagan was US president, and the US stock markets had started a new bull market after a 16-year consolidation phase. Today, by contrast, the financial markets have been on the central banks’ drip for more than a decade, if not more than two. The dependence is enormous and a turn away from the money glut is unthinkable. Nevertheless, the vast majority of market participants still allow themselves to be bluffed by the Fed and the other central banks and blindly believe the fairy tales of these clowns. The Global US-Dollar Short Squeeze However, while inflation figures worldwide are going through the roof due to the gigantic expansion of the money supply and the supply bottlenecks, the US-Dollar continues to rise at the same time. A nasty US-Dollar short squeeze has been building up since early summer. The mechanism behind this is not easy to understand and gold bugs in particular often have a hard time with it. From a global perspective, the US-Dollar is still the most important reserve currency and thus also the most important international medium of exchange as well as the most important store of value for almost all major countries. Completely independently of this, many of these countries still use their own currency domestically. International oil trade and numerous other commodities are also invoiced and settled in US-Dollar. For example, when France buys oil from Saudi Arabia, it does not pay in its own currency, EUR, but in USD. Through this mechanism, there has been a solid demand for US-Dollar practically non-stop for decades. The US-Dollar system The big risk of this “US-Dollar system”, however, is that many foreign governments and companies borrow in US-Dollar, even though most of their revenue is generated in the respective national currency. The lenders of these US-Dollar are often not even US institutions. Foreign lenders also often lend to foreign borrowers in dollars. This creates a currency risk for the borrower, a mismatch between the currency of their income and the currency of their debt. Borrowers do this because they have to pay lower interest rates for a loan in US-Dollar than in their own national currency. Sometimes dollar-denominated bonds and loans are also the only way to get liquidity at all. Thus, it is not the lender who bears the currency risk, but the borrower. In this way, the borrower is basically taking a short position against the US-Dollar, whether he wants to or not. Now, if the dollar strengthens, this becomes a disadvantage for him, because his debt increases in relation to his income in the local currency. If, on the other hand, the US-Dollar weakens, the borrower is partially relieved of debt because his debt falls in relation to his income in the local currency. Turkish lira since December 2020 as of December 13th, 2021.©Holger Zschaepitz Looking, for example, at the dramatic fall of the Turkish lira, one can well imagine the escalating flight from emerging market currencies into the US-Dollar. Since the beginning of the year, Turks have lost almost 50% of their purchasing power against the US-Dollar. A true nightmare. Other emerging market currencies such as the Argentine peso, the Thai baht or even the Hungarian forint have also come under significant pressure this year. On top, the Evergrande bankruptcy and the collapse of the real estate bubble in China may also have contributed significantly to this smoldering wildfire. All in all, the “US-Dollar short squeeze” may well continue despite a technically heavily overbought situation. Sooner or later, however, the Federal Reserve will have to react and row back again. Otherwise, the strength of the US-Dollar will suddenly threaten a deflationary implosion in worldwide stock markets and in the entire financial system. The global house of cards would not survive such shock waves. The tapering is “nearish” It is therefore highly likely that the Fed will soon postpone the so-called “tapering” and the “interest rate hikes” until further notice. To explain this, they will surely come up with some gibberish with complicated-sounding words. All in all, an end to loose monetary policy is completely unthinkable. Likewise, the supply bottlenecks will remain for the time being. This means that inflation will continue to be fueled by both monetary and scarcity factors and, on top of that, by the psychological inflationary spiral. In these crazy times, investors in all sectors will have to patiently endure temporary volatility and the accompanying sharp pullbacks. Conclusion: Gold – Recovery ahead With gold and silver, you can protect yourself well against any scenario. In the medium and long term, however, this does not necessarily mean that precious metal prices will always track inflation one-to-one and go through the roof in the coming years. Most likely, the exponential expansion of the money supply will continue and accelerate. Hence, significantly higher gold and silver prices can then be expected. If, on the other hand, the system should implode, gold and silver will be able to play out their monetary function to the fullest and one will be glad to own them when almost everything else must be written down to zero. In the bigger picture, however, gold and silver fans will have to remain patient for the time being, because the clear end of the months-long correction has not yet been sealed. Rather, the most important cycle in the gold market should deliver an important low approximately every 8 years. The last time this happened was in December 2015 at US$1,045. This means that the correction in the gold market could continue over the next one or even two years until the trend reverses and the secular bull market finally continues. In the short term, however, the chances of a recovery in the coming weeks into the new year and possibly even into spring are quite good. But it should only gradually become clearer after the Fed’s interest rate decision on Wednesday what will happen next. A rally towards US$1,815 and US$1,830 has a clearly increased probability. Beyond that, US$1,870 and in the best case even US$1,910 could possibly be reached in February or March. For this to happen, however, the bulls would have to do a lot of work. Analysis initially written and published on on December 13th, 2021, by www.celticgold.eu. Translated into English and partially updated on December 13th, 2021. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can subscribe to our free newsletter. By Florian Grummes|December 13th, 2021|Tags: Gold, Gold Analysis, Gold bullish, Gold Cot-Report, gold fundamentals, gold mining, Gold neutral, Silver, The bottom is in|0 Comments About the Author: Florian Grummes Florian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets.
US PPI hits forecasts, feeding an appetite for the USD ahead of FOMC

US PPI hits forecasts, feeding an appetite for the USD ahead of FOMC

Alex Kuptsikevich Alex Kuptsikevich 14.12.2021 16:01
The start of the Fed’s two-day meeting gave new signs of the strength of inflationary pressures in the market, adding to speculation about a tightening of the monetary policy tone. In November, the PPI index was 9.6% y/y, markedly higher than the expected 9.2% and 8.6% a month earlier. The PPI ex-energy and food accelerated to 7.7% y/y last month from 6.8% in October. The latest data shows that inflationary pressures are no longer a problem of Oil and agriculture price spikes. It has spread across the economy, forcing the Fed to step up. This bad news increased pressure on the US stock market before the opening of the regular session. However, it is positive news for the dollar, which managed to retreat from intraday lows against the euro, yen and franc. The dollar index has been consolidating in a converging triangle since late November. The latest inflation data has a high chance of pushing it beyond consolidation without waiting for the official comments from the Fed tomorrow evening.
GameStop Stock News and Forecast: Why did GME stock fall so much on Monday?

GameStop Stock News and Forecast: Why did GME stock fall so much on Monday?

FXStreet News FXStreet News 14.12.2021 16:01
GameStop stock fell nearly 14% on Monday to $136.88. Retail and meme stocks suffered quite sharp falls on Monday. AMC followed GME by falling to $23.24 for a 15% loss. The rise of the meme stock has been a unique feature of this investing year over any others with a special set of once-in-a-generation circumstances elevating many ordinary joes into stock trading stars. The first was GameStop (GME), which made possibly more headlines than any other stock in history. I confess to not doing a lot of research on this, but when you overhear numerous discussions in the local pub about the phenomenon, you know it must be serious. AMC then joined the party, and together the pair became the poster child stocks for the meme stock revolution. We even had the perfect pantomime villain in the Robinhood saga. Regardless, the retail investor is now a powerful force in the stock market, but that power has begun to wane as we approach the final finishing straight of the year. Now retail investors who got in early and held their nerve are being rewarded with yearly gains of 626% for GameStop (GME) and 996% for AMC. So any discussion of a collapse needs to be put into context. The fact does remain though that both stocks are actually well off their 2021 peaks. GameStop shed nearly 14% on Monday, closing at $136.88. There is a slight contradiction to the underlying trend with in-store attendance surely surging, definitely in my local store ahead of the holidays. GameStop (GME) chart, 15 minute GameStop (GME) stock news There was no underlying fundamental news. Rather a catalyst of market weakness and general risk aversion hurt this one. GME and AMC are both momentum names, and when that slows the results can be shocking. GameStop (GME) stock forecast The big catalyst was more technical in our view. In the absence of fundamental news flow, GameStop has been going through support levels like a knife through butter. $167 was a big level, marking the lows going back to September. Cracking below that level was the direct result of breaking the 200-day moving average. Monday saw a move to break $146, marking new six-month lows. GameStop now sits on the last key support before $118. GME shares closed at $136.88, though the volume-weighted average price for the year is $138. Below, the volume begins to strongly lighten, meaning less price discovery, meaning a likely move to $118. This amounts to a low volume fall. I know most readers do not like to hear bearish arguments, especially in some favourite name like GameStop and AMC, but we can only comment on the price action and trends we see. For now, bears are definitely in control. A break of $167 resistance would change the picture. GME 1-day chart
Stocks Fell Ahead of Today’s Fed – a New Downtrend?

Stocks Fell Ahead of Today’s Fed – a New Downtrend?

Paul Rejczak Paul Rejczak 15.12.2021 15:48
  Stocks went lower yesterday, as investors took profits off the table ahead of today’s FOMC release. Was it a reversal or just correction? For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch   The S&P 500 index lost 0.75% on Tuesday, as it broke below its recent trading range. The broad stock market’s gauge retraced some of its rally and it got back below the 4,650 level. On the previous Friday the index fell to the local low of 4,495.12 and it was 5.24% below the Nov. 22 record high of 4,743.83. Then we saw another attempt at getting back to the all-time high and on Friday the index closed the highest in history. So was yesterday’s decline only a correction? For now, it looks like a downward correction, but we may see some more volatility following today’s FOMC release and tomorrow’s ECB and the BOE release. Today the index is expected to open virtually flat and it will likely trade within a consolidation before the Fed release at 2:00 p.m. The nearest important resistance level is now at 4,665-4,670, marked by the recent local lows and the next resistance level is at 4,700. On the other hand, the support level is at 4,610-4,630, marked by the previous Tuesday’s daily gap up of 4,612.60-4,631.97. The support level is also at 4,600. The S&P 500 is close to the early November local low, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Tech Stocks Are Relatively Weaker Let’s take a look at the Nasdaq 100 chart. The technology index bounced to the resistance level of 16,400. Tech stocks remain relatively weaker, as the Nasdaq 100 is closer to the early December local lows. Conclusion The S&P 500 index will likely trade within an intraday consolidation before the Fed release today. Then we may see an increased volatility in stocks, currencies and commodities. The S&P 500 index trades within a downward correction and we may see more profit-taking action in the near term. Here’s the breakdown: The S&P 500 is expected to open virtually flat ahead of today’s FOMC release. We are maintaining our short position from the 4,678 level. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
A quick story before we start

A quick story before we start

Brent Donnelly Brent Donnelly 16.12.2021 15:18
FAIRFIELD COUNTY, CONNECTICUT May 6, 2010 4:55AM The Connecticut air is cold and damp. The trader moves in silence. He steps quietly through the pitch-black darkness of his Victorian McMansion and toward the door. As he disarms the home security system, the BEEP BEEP BEEP of the keypad code he enters is impossibly loud in the quiet of the pre-dawn morning. He steps out of the house, closes and locks the door, and hops into his car. As he rolls down the driveway and into the foggy morning, he inserts a Deadmau5 CD and blasts it at high volume in an effort to wake up and get pumped for another day of trading. But this will not just be another day of trading. This will be one of the most insane trading days of his career. It has been a frustrating year so far. The Eurozone Crisis has been smoldering for months but the trader’s attempts to sell the euro have been met with massive countertrend rallies as the Fed embarks on another round of USD-negative quantitative easing (QE). They call EURUSD a collision of two garbage trucks. The trader struggles to steer clear of the wreckage. His strongest view recently has been lower USDJPY. There is risk aversion popping up all over the place as markets worry about a domino effect where Greece crashes out of the Eurozone, followed by Spain, Portugal, Ireland and then finally Italy. Everyone is bearish stocks as the S&P 500 rally from 666 in March 2009 to 1050 now is seen as a mirage; the side effect of a money printing magic trick performed by central bankers. Totally unsustainable. EURUSD opened the year at 1.4500 and now trades sub-1.25 so the short trade is hard to stomach. Even when you know it’s the right thing to do, it takes a lot of courage to sell something down >15%. So the trader has shifted his attention to USDJPY and he expects it to go substantially lower as global risk aversion remains elevated and safe haven currencies like the yen should find demand. USDJPY has been inexplicably well-bid given recent risk aversion and the Fed “money printing”. It just rallied from 90 to 94 on air over the last two weeks. Meanwhile, the best leading indicator for USDJPY is always US bond yields and they have been plummeting for a month. USDJPY looks completely wrong. The trader stares at the following chart, which shows US 10-year bond yields and USDJPY. The black bars are USDJPY and the dotted line shows US bond yields. Note they usually follow in lockstep. The divergence is a strong signal to the trader that he should be short USDJPY. USDJPY vs. US 10-year rates November 2009 to May 5, 2010 The chart covers the period up to May 5. This story takes place May 6. Chart courtesy of Refinitiv. If you look in the top right corner, you can see that USDJPY is a bit off the highs, but not much. Two days in a row, the high has been 94.99 and USDJPY is now bouncing aimlessly around 93.80 as he rolls into the hedge fund parking lot. It is still early so there are only three Porsche 911s in the lot right now. More will arrive later. This USDJPY trade has been tiring and painful as the trader got short at 94.00 with a stop loss at 95.05 and those two daily highs mean he has come within a hair (6 pips, or 0.064%) of getting stopped out, two days in a row. Holding on to a trade like this is exhausting as his fight-or-flight stress system remains activated for long stretches. Cortisol overload. Now, he can relax a bit and let things play out. His target is 91.00. Average daily range has been about 1 yen (100 pips) lately so he figures we might get there in the next week or so. 10:45 AM It has been a boring morning with USDJPY in a tight range. The sun comes out and it’s almost shorts weather outside so the trader decides to go for a run before lunch. Less than a mile into his run, he gets his first indication that this is not a random, ordinary day. His Blackberry rings. Bank sales on the line to tell him that USDJPY has just dumped 100 points in 15 minutes. Trading 92.80 now… Odd. He turns around and sprints back to the office, Spidey-sense tingling. By the time he grabs a quick shower and returns to the desk, USDJPY is 91.50. He is short $100 million USDJPY so that puts his profit (aka P&L or profit and loss) around +$2.8 million on the day. That’s more P&L than this trader typically makes in an excellent month. A huge haul. He scans the headlines and Bloomberg chats and finds no good explanation for what is going on. The stock market is down, but not enough to explain the move in USDJPY. This makes no sense. When a trade shows a big profit that makes no sense, he likes to cover it and move on. The trader buys 100 million USDJPY at 91.50. He is back to flat with no position and nearly 3 bucks of P&L in the bank. He sits there calmly and processes what has happened. He allows himself to feel happy, just for a second. He stuck to his plan and had the patience to sit with a decent-sized position for three days. He relaxes and basks in the satisfaction of a job well done. Then… Some dumb voice in his brain says: 2.8 million dollars is an amazing day. But... Maybe I can make 5 million today? And his hands, as if possessed by some mischievous or evil force, move slowly toward the BUY and SELL buttons. For no reason. And like a moron… He goes long USDJPY. First, he buys $50 million at 91.50 and then another $50 million at 91.25. These are impulsive trades with no rationale. His planned stop loss is 90.85 but before he has time to input a stop loss order, he notices S&Ps lurch lower on a huge volume surge. He puts on his headset and fires up the S&P squawk to see what’s going on. [If you want to hear the soundtrack to what happens next, Google “Flash crash stock market 2010 squawk” and select one of the YouTube replay videos] The announcer’s voice is strained as he narrates an unexplained fall in stocks from 1150 to 1120. USDJPY skips through 91.00 and the trader’s P&L shrinks to $2.0 million. He tries to sell at 90.80 and whiffs. USDJPY is suddenly in freefall. 90.10 trades. 90.00 breaks. USDJPY has just dropped more than four percent in a few hours. A monster move. The trader’s eyes flick over to his P&L which has now shrunk back to six digits. Two-thirds of three days’ work, gone in 60 seconds. And then… Stocks sell off hard out of nowhere. Like… REALLY HARD. The S&P squawk guy is losing it. Screaming. 1100 breaks in the S&P. 1080, 1070, 1060. USDJPY is a waterfall. The squawk loses his mind as he yells: “We have some BIG paper sellers here… 7 evens are trading. 6 evens are trading! 5 EVENS ARE TRADING!!! New lows here…” USDJPY breaks 89.00 and the trader has still sold only 23 million USD, leaving him stuck with a position of 77 million USD. It is a fast market, nearly impossible to transact. He picks up a phone to two different banks and neither one answers. He tries to hit the 88.60 and gets a reject notice from the aggregator. The price feed is stale and crossed now; it shows 89.00 / 88.10, which is not possible. The trader is now down on the day. In the red. His face is hot and feels red like his P&L. Urge to slam fist on desk is rising. The trader feels like he is falling, falling::::::::::::::::::::in cinematic slow-mo. USDJPY stabilizes a bit even as the S&P squawk continues to go nuts. “65 even offered! 60 trades… 60 even bid, this is the widest we have seen in years,” his voice cracks, he’s yelling like the announcer at Churchill Downs as the horses turn for the stretch. “60s trading! 50s trading! 50 at 70 now! We are twenty wide!” 1060 trades in S&Ps now, down just about 10% today, on zero news. Nobody knows what the hell is going on and there is panic in the air. The squawk dude continues to scream. He is pouring gasoline on the trader’s agitation. The trader’s P&L is now six figures in the red. Sadness. Anger. He is furious with himself because he had the right trade, waited patiently for almost three days for it to work, caught the move perfectly according to plan … And then flipped the other way on a whim, for no reason and gave everything and more back in half an hour. $2.8 million is a good month for this trader. He just made and lost that much in less than two hours. I am an idiot. How did I get into this mess? He needs to make a decision here and quick but he realizes that he is flooded. It is impossible to make a good trading decision when you’re flooded. He needs a second to clear his mind. He tears off the headphones, drops them on his desk, and stands up. He walks over to the window and tries to find a moment of lucid calm. He has been through these emotional storms before and knows how to get back to shore. He stares over the waters of the Long Island Sound. Gradually, his heart rate lowers. Clarity slowly, slowwwwly returns. His lizard brain retreats and his rational mind takes over. He talks to himself: It doesn’t matter how you got here. What are you going to do about it? 88.00 was the low in March. It’s a massive level. The panic is fading. USDJPY is down 700 points in two days and now bonds are reversing lower. This is the place to buy USDJPY, not sell. He returns to his keyboard, puts his headphones back on. The squawk guy has stopped screaming. He is noticeably more composed. S&P futures have bottomed within a whisker of limit down. They are stable but have not rebounded significantly. The bid/offer is super wide so it’s hard to tell whether they are moving higher or just bouncing along the bottom. The trader looks around the room and sees the panic and electricity levels have dropped. Not as many phones are ringing. Voices in the room are no longer frantic. He buys 50 million USDJPY at 88.85. And another 73 million at 88.95. Max long now, long $200 million USDJPY. But this time it’s thought out, not random, and he feels good about what he is doing. He feels confident but fully in control. He calmly thinks forward: USDJPY could easily rally to 92.50 from here. When you catch a turn like this, you can be greedy. He leaves a stop loss for half his position (sell 100 million USDJPY at 87.94) and then sits back to let things play out. He has his plan and now he knows all he can do is watch and see if it works. There is one more frenetic whipsaw and USDJPY briefly prints to a low of 87.95. One pip from his 100 million USD stop loss. Amazing luck. Seconds later, stocks stabilize, and then it’s like everyone realizes all at once that whatever the heck just happened… It’s over. USDJPY is paid at 88.70, then up through 89.50. It breaks 90.00 and as it hits 90.40, the trader flicks his eyes to the P&L. It is almost exactly back to the level where it peaked earlier: $2.8 million. He praises the trading gods and squares up. NICE! Too bad he didn’t stick with his plan on the way back up, either. A few hours later, USDJPY hit the trader’s original target of 92.50. Here’s the chart of USDJPY that day: USDJPY May 3-7, 2010 (US stock market Flash Crash was May 6) The trader made a multitude of both good and bad decisions in the three hours around the 2010 Flash Crash. The trading described in this story is a microcosm of everything that can go right and wrong in trading. Traders make good, careful decisions and get rewarded, they make bad decisions and get punished … but then sometimes a good decision leads to a bad outcome … or a bad decision is rescued by good luck. Every trader is a steaming hot bowl of bias stew and must maintain self-awareness and lucidity behind the screens as the trading day oscillates between boredom and terror. That story of the 2010 Flash Crash, just like this book, is all about the razor thin line that separates success and failure in trading. Alpha Trader is written to help you understand markets but also, more importantly, to help you better understand yourself as a trader. It is about great decisions and dumb mistakes. It is about how to be rational and why smart people do stupid things. All the time. The book is written for traders at every skill level. I wrote it to be understood by noobs, but I also aimed to write something that will resonate with experienced trading professionals. Alpha Traders are smart, rational, disciplined, flexible, patient, and aggressive… They have the endurance to handle unending ups, downs, hills, and valleys. They come in fired up each day to solve the ultimate puzzle and they get paid incredibly well if they succeed. Alpha Traders work hard (even when they don’t feel like it), seek to continuously improve, and love markets more than they love money. Thank you for taking the time to read my book. I hope you find it entertaining and useful. I hope it helps you unlock your maximum trading potential. By the way, I plan to publish future updates, fresh trading stories and new lessons, tactics and strategies, exclusively for readers of Alpha Trader. If you are interested, please sign up at brentdonnelly.com. Enjoy. /Brent
US Fed Actions 1999 to Present – What's Next? - Part II - 15.12.2021

US Fed Actions 1999 to Present – What's Next? - Part II - 15.12.2021

Chris Vermeulen Chris Vermeulen 16.12.2021 08:53
Part II Let's continue to explore the past 20 years of US Fed actions. I believe the US Fed has created a global expansion of both economies and debts/liabilities that may become somewhat painful for foreign nations – and possibly the US. Reading The Data & What To Expect in 2022 And Beyond In the first part of this research article, I highlighted the past 25 years of US Fed actions related to the DOT COM bubble, the 9/11 terrorist attack, the 2008-09 US Housing/Credit crisis, and the recent COVID-19 virus event. Each time, the US Federal reserve had attempted to raise interest rates before these crisis events – only to be forced to lower interest rates as the US economy contracted with each unique disruption. The US Fed was taking what it believed were necessary steps to protect the US economy and support the global economy into a recovery period. Sign up for my free trading newsletter so you don’t miss the next opportunity! The following few charts highlight the results of the US Fed's actions to keep interest rates extremely low for most of the past 20 years. I want to highlight what I believe is an excessive credit/debt growth process that has taken place throughout most of the developing world (China, Asia, Africa, Europe, South America, and other nations). At the same time, the US has struggled to regain a functioning growth-based economy absent of US Federal Reserve ZERO interest policies and stimulus. Extreme Growth Of World Debt (excluding the US) This Rest Of The World; Debt Securities & Loans; Liabilities chart highlights the extreme, almost parabolic, growth in debt and liabilities that have accumulated since 2005-06. If you look closely at this chart, the real increase in debt and leverage related to global growth started to trend higher in 2004-05. During this time, the US housing market was on fire, which likely pushed foreign investors and foreign housing markets to take advantage of this growing trend in US and foreign real estate. This rally in speculative investments, infrastructure, and personal/corporate debt created a huge liability issue throughout many developing nations. Personal and Corporate debt levels are at their highest levels in decades. A recent Reuters article suggests global debt levels have risen in tandem with real estate price levels and is closing in on $300 Trillion in total debt. (Source: fred.stlouisfed.org) GDP Implicit Price Deflator Rallies To Levels Not Seen Since 1982~83 The rally in the US markets and the incredible rise of inflation over the past 24 months have moved the consumer price levels higher faster than anything we've seen over the past 50+ years. We've only seen price levels rise at this pace in the 1970s and the early 1980s. These periods reflected a stagflation-like economic period, shortly after the US Fed ended the Gold Standard. This was also a time when the US Federal Reserve moved the Fed Funds Rate up into the 12% to 16% range to combat inflationary trends. If the GDP Implicit Price Deflator moves above 5.5% over the next few months, the US Fed may be forced to take stronger action to combat these pricing issues and inflationary trends. They have to be cautious not to burst the growth phase of the markets in the process – which could lead to a very large deflationary/deleveraging price trend. (Source: fred.stlouisfed.org) We need to focus on how the markets are reacting to these extreme debt/liability trends and extreme price trends. The markets have a natural way of addressing imbalances in supply/demand/pricing functions. The COVID-19 virus event certainly amplified many of these issues throughout the globe by disrupting labor, supply, shipping, and manufacturing for a little more than 12+ months. The future decisions of the US Federal Reserve will either lead to a much more orderly deleveraging/devaluation process for the US and global markets – supporting the natural economic functions that help to process and remove these excesses. Or, the US Federal Reserve will push interest rates too high, too fast, and topple the fragile balance that is struggling to process the excesses throughout the global markets. What does this mean? I believe this data, and all the charts I've shared with you in this research article, suggest the US Fed is trapped in a very strenuous position right now. I'll share more information with you regarding my predictions for December 2021 and 2022 in the third part of this article. I will also share my proprietary Fed Rate Modeling System's results in Part III of this article and tell you what I expect from the US Federal Reserve and US stock markets. WANT TO LEARN MORE ABOUT HOW I TRADE AND INVEST IN THE MARKETS? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP – Total ETF Portfolio. Have a great day! Chris VermeulenChief Market Strategist
Dollar‘s Warning Signal

Dollar‘s Warning Signal

Monica Kingsley Monica Kingsley 20.12.2021 15:57
S&P 500 fading the FOMC rally went a bit too far – credit markets aren‘t panicking, so I doubt a fresh lasting downtrend is starting here. Chop, yes – the 4,720 area is proving a tough nut to crack, but it would be overcome. If there are two arguments in favor, it‘s the financials and HYG – the likely rebound in the former, and Friday‘s resilience in the latter. Given that Thursday‘s spurt to 4,750 evaporated so fast, I‘m not looking for a stellar year end. Positive given where we‘re trading currently, sure. Markets are now grappling with faster Fed tapering (which has opened the way to a rate hike in Q2 2022), getting slowly more afraid of fresh corona restrictions, and dealing with inflation that‘s not going anywhere. Outpacing wage growth, with real yields being deeply negative (no, 10-year Treasury yield at even 2% doesn‘t cut it – that‘s my 2022 target, by the way), the administration would be hard pressed in the year of midterms to counter the corrosive inflation effects on poll numbers. And the Fed expects to keep tightening when the real economy is already suffering from contracting liquidity as seen also in strengthening dollar? The central bank will have a hard time taming inflation, and in my view won‘t succeed – the persistently high inflation rates are going to be with us for years to come, and outpacing wages. Corona response is another uncertainty, and given the APT performance, the odds of seeing economic activity (just at a time when supply chains would need to keep working off prior setbacks) restricted, have increased. Similar to the recent high PPI reading, this is one more argument for why inflation isn‘t receding in the short run – not when demand isn‘t likewise being destroyed. As if consumer sentiment weren‘t struggling already... Still, equities are poised to extend gains in 2022, and I‘m looking for a volatile but positive year. 5,200 in Dec 2022 isn‘t out of the question – with large cap tech, financials and energy doing particularly fine. Real rates would remain negative, and precious metals would love the Fed slamming on the tightening breaks, and bringing back the punch bowl somewhat. If you look at the flattening yield curve, it‘s clear evidence of market fears (I call that certainty as that‘s what they excel at – the 1995 soft landing was a notable exception) of the Fed overdoing the tapering & rate hikes. Given all the inflation still ahead, and the expected fiscal-monetary policies working against each other (yes, more handouts), commodities would have another great year. So much for the big picture 2022 predictions. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 on the defensive, but the bullish case isn‘t lost. Some sideways trading of today‘s volatility is likely to preceed the upswing – we aren‘t rolling over to a 5-10% correction now. Credit Markets HYG retreat could have been a lot worse, and it‘s a good sign bonds aren‘t panicking. Just the junk ones would need to outperform the quality ones to drive a good stock market day. For now, bonds remains on guard. Gold, Silver and Miners Precious metals decided to make a measured upswing – this isn‘t a real reversal. Pressure to go higher is building up, and rates rising a little before the Fed moves, won‘t cut it. When liquidity conditions and corona fears ease a little, look for a much steeper upswing. Crude Oil Crude oil is trapped in the omicron uncertainty – quite resilient, which is a testament to the overwhelming pressure for prices to keep rising. Waiting for some fears to be removed before the fundamentals sink in again. Copper Copper is leaning to the bullish side of the spectrum – it certainly isn‘t disappointing. The low volume hints at little willingness to sell – an attempt to spike shouldn‘t be surprising next. Bitcoin and Ethereum Bitcoin and Ethereum weakness today is there, mirroring commodities – but the decline isn‘t in the disastrous category. Wait and see with a whiff of preliminary caution – that‘s all. Summary S&P 500 and oil are feeling the omicron response pinch – the worries boosted by Netherlands lockdown Sunday. Corona remains the wildcard, and markets are ignoring its relatively mild symptoms while focusing on case count. Tech is likely to do better than most of value while yields aren‘t pressured to rise fast. For a moment, inflation is receding from the spotlight, but I‘m looking for it to come back. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Lira’s fall reached Erdogan’s pain point

Lira’s fall reached Erdogan’s pain point

Alex Kuptsikevich Alex Kuptsikevich 21.12.2021 09:07
The Turkish lira gained 40% in the past 13 hours, sending USDTRY from 18.3 to 11. Despite the impressive amplitude, the exchange rate is only back to levels of a month ago. There is no doubt that behind such a sharp strengthening were interventions by the central bank, which decided to spend a significant portion of its already meagre reserves to stem the chaos in the financial market. Interventions alone won’t solve the situation, so to make a move looking bold, the Turkish president has announced compensating lira deposit holders if the currency’s fall exceeds the return on dollar deposits. Exporting companies will get the lira forward rate directly from the central bank as lira buyers have disappeared on the open market. There is a lack of important details, but it most likely means that more national currency will be printed, increasing the pressure on its value. In our view, this is a sure step towards hyperinflation. Since the end of last week, the currency crisis has taken on more and more signs of a financial crisis, as the fall in the lira began to pull the stock markets, bringing trading to a halt. The surge in the lira promises to hurt the market even more in the short term today and in the next few days. It seems that the lira’s fall has reached the pain point of the Turkish president and government. Although we and the markets, in general, have doubts about the correctness of the announced measures, still, the very appearance of these steps should signal an exit for speculators who have been betting on a collapse of the lira in recent months.
Silver: Strong and Weak at Once. How Is That Even Possible?

Silver: Strong and Weak at Once. How Is That Even Possible?

Przemysław Radomski Przemysław Radomski 21.12.2021 16:01
  Gold is barely crawling up, while silver is boldly climbing the market ladder. When will its rungs turn slippery, causing the precious metal to fall?  Yesterday’s session was particularly uneventful in the case of the precious metals market, as crude oil and the general stock market stole the spotlight. Consequently, today’s analysis will focus on what’s happening in pre-market trading, as that’s what appears to be more important. At the moment of writing these words, gold is up very modestly – less than 0.2%. Consequently, after rallying to about $1,815 (in tune with my Thursday’s analysis) and invalidating the breakout above the rising resistance line, gold appears to be making another attempt to rally, but the strength of the move is very limited. Predicting higher gold prices might not be the best idea here, as the yellow metal was not able to even get to the red line, let alone to its previous monthly high. Silver, on the other hand, has moved quite visibly higher so far today. While gold moved higher by less than 0.2%, silver rallied by about 1.5% and is now trading very close to its previous monthly highs. This is very interesting, because silver is showing strength and weakness at once. How is that possible – one might ask. It’s the same as with trends or forecasts for silver. They can be bearish and bullish simultaneously, depending on the time frame that one focuses on. For example, I think that the very long-term outlook for silver is extremely bullish, but I also think that the medium-term trend is bearish. The short-term trend is also bearish, but the immediate-term trend is bullish. So, am I bullish or bearish on silver? Answering this without specifying the time frame is bound to create misunderstandings. Getting back to silver’s relative performance, it’s been weak when taking into account the last couple of weeks – please note how little of the recent monthly decline silver has corrected compared to gold. Gold recently moved to its October highs, but silver topped a few dollars below its October high. What does it tell us? Silver is likely to fall hard, also compared to gold, probably in tune with the general stock market – similarly to what happened in 2008 and 2020. That’s the same kind of performance that we saw in the very early parts of the huge declines. At the same time, silver is strong compared to gold on an immediate-term basis. This means that we’re likely at or close to a short-term top. Why? Because that’s what the precious metals market tends to do when it’s topping, and it’s one of the great gold trading tips to monitor the PM market for these situations. One could debate why this is really the case, and there are quite a few theories (the silver market is smaller, so more prone to sudden moves, etc.), but the point is that it simply works. Please note that some things – like the Pareto principle (a.k.a. the 20:80 rule) – can work and be very useful, even if it’s not clear why they work. Consequently, it seems that the days of this short-term corrective upswing are either over or about to be over, and that the precious metals sector will return to its medium-term decline any day now. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Apple’s Near a $3 Trillion Market Cap: Is it Right for You?

Apple’s Near a $3 Trillion Market Cap: Is it Right for You?

Dividend Power Dividend Power 22.12.2021 12:55
Apple’s Near a $3 Trillion Market Cap: Is it Right for You?   Apple (AAPL) is one of the best innovative tech companies around. However, its market cap is getting close to the $3 Trillion mark, and people must wonder if this is the right stock to invest in for your future.   Having a slice of the Apple company may do wonders to you. A couple of days ago, Warren Buffett’s stock holdings hit a record of $152 Billion in Apple stock. His investment of $31 billion continues to grow and surpass all his other companies.   Right now, Apple has the largest company by market cap in the world. When Apple’s stock price (AAPL) hits $182.86 per share, the company will have a market cap of $3 trillion. The next largest company would be Microsoft (MSFT), with a market cap of $2.43 billion.   Why Would Investors invest with Apple?   Since November 11th, Apple’s stock price has soared, and investors are trying to get a piece of the pie. This company is no ordinary company. It is a company that runs on innovation and excellence.   During the 4th Quarter, iPhone has increased in revenue 47% year over year to almost $39 Billion. The revenue has increased 29%, up to $83.9 billion. In addition, sales of the services Apple offers like Apple Music, Apple Pay, Apple TV+, and others have increased by over 25%.   For yearly revenue, Apple has reported combined sales of $365.8 billion, which is 33% higher than they took in 2020 at $274.5 Billion with gross margins up to 45%.   Most people think Apple is a company that has the iPhone and Macbook computers. However, this company always creates excellent products for its users that surpass most other companies.   A couple of years ago, Apple created the AirPods. AirPods are a simple Bluetooth earbud that can connect with your device. As of 2020, AirPods brought over $10 billion of revenue. That amount of revenue is more considerable than most tech companies. If you compare this with companies like Twitter (TWTR) or even Netflix (NFLX), you will see AirPods itself can bring in more sales. For instance, Twitter had revenue of $3.74 billion in 2020.   AirPods could be its own stand-alone sound company that brings in more revenue than Bose and JBL combined. That speaks volumes to Apple's products and how each product could be divested as its own company.   Apple is innovating, and you can see this through the new products they are getting ready to launch, such as the Apple Car and an augmented reality/VR set. These innovations give investors confidence that Apple is not just a phone company or computer software. Instead, they create and make more products that will dominate the new sectors.   Is Apple a Risky Investment?   With an almost $3 Trillion market cap and being the largest company in the world, you must wonder if it could all fall apart. That is not something you should worry about. Go to a coffee shop, gym, or mall and look at which devices people use.   Consumers usually use iPhones; they have AirPods in their ears and use MacBooks for business and work. So, it is hard not to see why the company brings in more revenue each year.   In the 4th Quarter of 2021, earnings have gone from $0.73 to $1.24 per share compared to the prior year. This company is working to bring in more revenue while creating value for its customers and shareholders.   If you think Apple is a bit riskier, there are ways to minimize the risk. You could invest in Microsoft (MSFT) as a less risky company. They have a stable subscription style business bringing them up as the second-largest company in the world. It is hard not to put these two companies together.   The other option is to find a nice index fund you can invest in, like VTSAX or VFIAX or another suitable Vanguard Index Fund. They can capture the stock market with less risk associated with owning a more significant portion of a single stock. Often, Apple stock is the number one investment for these index funds since they invest based on market capitalization. In this way, an investor can own Apple as part of a more diversified portfolio.   Is Apple Right for You?   Looking at the finances, you must wonder, is Apple right for me? The company continues to innovate and grow. Apple’s market cap is nearing $3 Trillion, and no one could have thought this was possible even a few years ago. Apple stock is not just a 10 bagger meaning that it is increased ten times but a rare 100 bagger twice over. If an investor had bought Apple stock in 2001 and reinvested the dividends, $10,000 would have turned into over $3.6 million.   In 2018, Apple hit a $1 Trillion market cap. It took two more years to double it. So far this year, the stock price has risen over 30% on top of the 80% the stock price rose in 2020. Now compare that to the S&P500, which has only increased 25%. In 2021.   Apple is a company to invest in at the right price. The company is innovative, has a solid balance sheet, and grows the top and bottom lines. Apple continues to grow behind a brand that means excellence and perfection. People may not always enjoy the price of the products, but you cannot deny they are built with quality and are in high demand.   Author Bio: Dividend Power is a self-taught investor and blogger on dividend growth stocks and financial independence. Some of his writings can be found on Seeking Alpha, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial blogs. He also works as a part-time freelance equity analyst with a leading newsletter on dividend stocks. He was recently in the top 1.7% out of over 8,182 financial bloggers as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.   Disclaimer: Dividend Power is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money.   
When All Is Said and Done

When All Is Said and Done

Monica Kingsley Monica Kingsley 22.12.2021 15:56
S&P 500 duly rallied on broad strength, and credit markets performance bodes well for all risk-on assets. Now a little consolidation after yesterday‘s steep gains is ahead, but I don‘t see it as derailing future gains. The stock bull run isn‘t over, and doesn‘t need the infrastructure bill for its further advance, price action shows. The VIX is calming down, now around 21 with further room to decline still – at least as far as the remainder of 2021 is concerned. Commodities remain in rally mode after the recent correction, and crude oil sending a bullish message (and not one of fear) is a welcome sign. The same goes for copper moving in sync with the rest of the commodities – and that has positive implications for silver too. Precious metals though still remain a patience trade, where the risks of being out of the markets outweight those of being in – it‘s a bet on the Fed making a wrong tapering / tightening move – with the market figuring out so beforehand. It sure would come as the compressing yield spreads reveal that is the greatest fear, but we aren‘t there yet. Finally, cryptos cautious mood today illustrates the certainly less exciting session just ahead than was the case yesterday. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 has woken up, and indeed surpassed the 50-day moving average. The lower volume isn‘t an issue, but a little consolidation is ahead today – not a steep rally continuation. Credit Markets HYG jumped higher in a giant risk-on nod that is further confirmed by the quality bonds performance. Again, I‘m looking for a little consolidation here today as well. Gold, Silver and Miners Gold downswing isn‘t to be taken at all seriously – I‘m looking for more gains in both the yellow and white metals, at their own and relatively slow pace. The countdown to Fed policy mistake and inflation returning to the limelight, is on. Crude Oil Crude oil scored a nice upswing, oil stocks confirmed as well the return of strength into the stock market, and both black gold and S&P 500 can keep rising together over the next days. Chances are the $72 area setback could be coming back into play still this week. Copper Copper keeps agreeing with the risk-on turn, and is certainly primed to go much higher over the nearest weeks and months. Similarly to uranium, I remain bullish on the sector, especially since copper, silver, nickel and lithium are all green economy preconditions. Bitcoin and Ethereum Bitcoin and Ethereum time to consolidate yesterday‘s gains, is here – and I‘m not looking for a bullish picture based on Ethereum performance. Sideways to a little down, that‘s the most likely outcome before the bulls move again. Summary Consolidation of yesterday‘s steep S&P 500 and commodity gains is ahead for today, but the Santa Claus rally is by no means over. Even if oil and cryptos hesitate a little, the constructive message from bonds and copper is overpowering that in my view. As explained in detail within the opening part of today‘s analysis, the bulls have to odds to keep moving – and will likely take advantage thereof before the year is over. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Estimating Future Stock Returns, September 2021 Update

Estimating Future Stock Returns, September 2021 Update

David Merkel David Merkel 16.12.2021 04:35
Image credit: All images belong to Aleph Blog This should be a brief post. At the end of the third quarter, the S&P 500 was poised to nominally return -0.64%/year over the next 10 years. As of the close today, that figure was -1.83%/year, slightly more than the -1.84%/year at the record high last Friday. The only period compares with this valuation-wise is the dot-com bubble. We are above dot-com level valuations. And if you view the 10-year returns from the worst time of the dot-com bubble to now, you can see that the results they obtained are milder than what I forecast here. Of course, a lot of what will happen in nominal terms will rely on the actions of the Fed. Will the Fed: Allow a real recession to clear away dud assets that are on life support from low rates? (Collapsing the current asset bubble)Change the terms of monetary policy, and start directly monetizing US Treasury debt? (Risking high inflation)Continue to dither with financial repression, leaving rates low, not caring about moderate inflation, with real growth zero-like. (Zombie economy — this is the most likely outcome for now) In some ways the markets are playing around with something I call “the last arbitrage.” Bonds versus Stocks. The concept of TINA (There is no alternative [to stocks]) relies on the idea that the Fed will be the lapdog of the equity markets. If stocks are high, the Fed is happy. Phrased another way, if the Fed maximizes wealth inequality, it is happy. And the Fed will be happy. They live to employ thousands of macroeconomists who would have a hard time finding real employment. These economists live to corrupt our understanding f the macroeconomy, justifying the actions of the Fed. The Fed just wants to scrape enough seigniorage to pay the staff, and keep Congress and the Administration mollified. All taken out of the hides of those who save. So with the last arbitrage… interest rates have to stay low to keep the stock market high, even if it means slow growth, and moderate and growing inflation. The likely change promulgated by the Fed today, raising the short rate by 0.75% in 2022 will likely flatten the yield curve, leading to a crisis of some sort, and push them back into QE and near-zero short rates. The stock market will have a pullback and a rally, but what of inflation? How will people act when there is no way to save for the short-run, without inflation eating away value? Brave new world. The Fed is stuck, and we are stuck with them. Gold does nothing, and would be a kinder mistress than the Fed. Better to live within strict limits, than the folly of an elastic currency. But as is true with all things in America, we are going to have to learn this the hard way. PS — As for me, I am living with value stocks, small stocks, and international stocks. Very little in the S&P 500 here.
Still More to Come

Still More to Come

Monica Kingsley Monica Kingsley 23.12.2021 15:34
S&P 500 Santa rally goes on, and risk-on markets rejoice. What a nice sight of market breadth improvement, and confirmation from bonds. Financials and industrials are lagging, but real estate, healthcare and tech are humming smoothly. As I told you yesterday about volatility: (…) The VIX is calming down, now around 21 with further room to decline still – at least as far as the remainder of 2021 is concerned. We got the lower values, and today is shaping up to look likewise constructively for the bulls across both paper and real assets. Yesterday‘s dollar decline has helped as much as well bid bonds. Inflation expectations aren‘t yet doubting the Fed, there is no more compressing the yield curve at the moment, so it‘s all quiet on the central bank front. That‘s good, the Santa rally can go on unimpeded. Precious metals are peeking higher in what looks to be adjustment to the lower yields and dollar, and commodities upswing remains driven by energy, base metals and agrifoods. Cryptos hesitation may hint at slimmer gains today than was the case yesterday when instead of a brief consolidation, we were treated to improving returns. Merry Christmas if you‘re celebrating – and if not, happy holidays spent with your closest ones. Let the festive season and message of the Prince of Peace permeate our hearts and inspire the best in mankind. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 rally goes on, and the 4,720s are again approaching. Market breadth isn‘t miserable in the least, and the riskier end of the bond spectrum looks positive even if larger time frame worries haven‘t gone away. Classic Santa Claus rally. Credit Markets HYG keeps jumping higher – the risk-on sentiment is winning this week. A bit more strength from LQD would be welcome, but isn‘t an obstacle to further stock market gains. Gold, Silver and Miners Gold downswing indeed weren‘t to be taken at all seriously – solid gains across precious metals followed. I‘m expecting a not too rickety ride ahead as the metals keep appreciating at relatively slow pace. Crude Oil Crude oil extended gains, and even if oil stocks paused, downswing in black gold isn‘t looming. Importantly, the $72 area has been overcome – the bulls should be able to hold ground gained. Copper Copper keeps tracking the broader commodities rally, and isn‘t outperforming yet. The red metal‘s long consolidation goes on, and a breakout attempt on par with early Oct seems to be a question of quite a few weeks (not days) ahead. Bitcoin and Ethereum Bitcoin and Ethereum are still consolidating Tuesday‘s gains – the performance is neither disappointing nor stellar. Both cryptos don‘t look to be in the mood for a break below Dec lows. Summary If not yesterday, then probably today we‘ll get a little consolidation of prior two day‘s steep S&P 500 and commodity gains (copper says) – the positive seasonality hasn‘t spoken its last word. HYG posture has significantly improved, and that bodes well for short-term gains still ahead before we dive into market circumstances turning increasingly volatile towards the end of Q1 2022. For now, let‘s keep celebrating – Merry Christmas once again – and enjoying the relatively smooth ride. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold along the year

Gold along the year

Mark Mead Baillie Mark Mead Baillie 27.12.2021 09:49
The Gold Update by Mark Mead Baillie --- 632nd Edition --- Monte-Carlo --- 25 December 2021 (published each Saturday) --- www.deMeadville.com Christmas Greetings to Everyone Everywhere. With but five trading days remaining in 2021, Gold -- as we'll show -- traditionally is the gift that keeps on giving into year-end. But first, we've this: The last time 25 December arrived on a Saturday was 11 years ago in 2010: â–  'Twas the date of Gold Update No. 58; today we're penning No. 632; â–  The price of Gold then was 1379; today 'tis 1810, (+31%) â–  The U.S. money supply ("M2" basis) then was $8.9 trillion; today 'tis $21.6 trillion, (+2.4x) â–  The supply of Gold then was 173.7 tonnes; today 'tis 202.8 tonnes, (+17%). Query, (courtesy of the "Fun With Numbers Dept."): Given across these past 11 years the +2.4x increase in the U.S. money supply, even as tempered for the duly noted +17% increase in the supply of Gold itself, ought its price nonetheless now be 2747? After all, currency debasement is the ultimate, primary driver of price, lagging as 'tis been. Further by the above opening Gold Scoreboard which comprehensively accounts for 41 years of currency debasement, more than double present price is Gold's valuation today of 4030! Thus analogous in reprising the infamous query of immortal football coach Vince Lombardi: "What da hell's goin' on out dere??" 'Course, you regular readers of The Gold Update know exactly what's goin' on out dere. 'Tis "The Age of the Shiny Object". Why purchase Gold -- as stated just +31% from this day of days 11 years ago -- when by merely owning the S&P 500 itself you've recorded a gain over same of +276%? Better still, how about your cryptocrap with its gains of +∞%? But wait, there's more: How are those NFTs workin' out for ya? (We think of them ultimately as "non-fundable tokens"). Then, too, is "The M Word" crowd: "Churn it and burn it, baby!" Or as Carly Simon might have sung it from back in '71: "Manipulation..." Regardless, with the S&P now at an all-time "Santa Claus Rally" closing high of 4726 (thank you record level of stock buybacks), Stoopid is sleeping securely because should the market dip from here, it always comes back, right? Arithmetically that's been undeniably true. Undeniably true as well by its historical track is the S&P's price/earnings ratio (our "live" read now 49.5x) having always returned to its median (at present 20.4x since the Index's inception nearly 65 years ago on 04 March 1957). So here's the crux: we've already accounted that year-over-year earnings' increases from a "shutdown 2020" to an "open 2021" were not sufficient enough to materially boost the "E" of the P/E such as to mitigate the ever-rocket-boosted "P". Therefore: the next reversion of the P/E to its 20.4x median essentially requires a move of the S&P from today's 4726 level down to 1948, (i.e. a -58.8% "dip"). But Stoopid worries not: "Been there, done that, it always comes back." Even as this time 'round rates rise, in turn ramping up that variably-priced interest on Stoopid's fully drawn credit cards. "Got Gold?" For which there is some good news, both aft and ahead. â–  Aft - Whilst during each of this past Monday, Tuesday and Wednesday Gold dealt with dilly-dallying 'round as usual in the 1780s, price finally saw its way clear to close on Thursday above 1800, its first weekly settle north of said number since that ending 19 November. â–  Ahead - Per this missive's title, 'tis time for Gold's annual finale rally, (our now pointing that out meaning it shan't occur). But it being a festive day, let's stay positive as traditionally is Gold's wont through the final five trading days of the year. For as the following table displays, Gold during this stint has risen in 17 of the 20 completed years thus far this millennium. We thus anticipate that for this 21st year of the 21st century, Gold shall be higher in a week's time than today's 1810 level: That is a statistical gift. Now here's one that is technical: The above graphic depicts Gold's daily "price oscillator" (a mainstay of the website's Market Rhythms page) during 2021's fourth quarter-to-date. The rightmost wee blue nub just crossed to positive, the trader's signal thus being to get Long Gold. The prior 12 such Long signals (dating back to 27 March 2020) saw upside price follow-throughs averaging as much as +77 points which in that vacuum from 1810 would be to 1887, the more conservative median being +31 points to 1841. No guarantees 'natch, but nicely on time to synch with Gold's annual finale rally should it come to pass. Meanwhile, unsurpassed for better than three years until just now is the current level of the Economic Barometer, which with but a week to run in 2021 saw this past week's set of 13 incoming metrics move the Baro to its highest oscillative level since 31 July 2018. Yes, there were a few weak links in the data: Q3's Current Account Deficit sagged to its worst level since Q3 2006; and although the quarter's final read on Gross Domestic Product increased to an annualized "growth" rate of +2.3%, that was more than double-mitigated by the party-pooper Chain Deflator being finalized at a +6.0% "growth" rate. (For you WestPalmBeachers down there, that basically means there is no real GDP "growth", but rather "stagflation"; look it up). Too, increases slowed in November's Personal Income and Spending. But highlighted were improvements in November's New and Existing Home Sales, Durable Orders and (not surprising should you follow the Baro) the Conference Board's Leading (i.e. lagging) Indicators. 'Course the real stinker was the Fed's favoured inflation read of Core Personal Consumption Expenditures coming in at an annualized pace of +6.0%. But, perhaps folks "just don't get it yet" given the level of Consumer Confidence (also per the Conference Board) rising in December to a five-month high. Here's the whole view: With respect to the Baro's having re-attained the noted 2018 level, 'twas after that the S&P 500 then declined into the year's Christmas Eve by -16.5%. Not that history shall repeat same going into next year: we anticipate worse -- far worse -- either by our "Look Ma, No Earnings!" crash (per the aforementioned P/E assessment), and/or by Federal Reserve Vice Chair Nominee Lael "The Brain" Brainard's "Climate Change!" crash. Also there's now ever-increasing amount of "Oh My! Omicron!" Still, upward economic gains along with increasing inflation strains both serve justice for the Fed to commence raising its Bank's Funds rate as early as 26 Jan. Which in turn means you'll have somewhere else to park your dough when the stock market doth over the cliff go. Get ready for "The Return of the Savings Account!" In theatres next Spring. 'Course far better than that, again: "Got Gold?" And don't forget Silver too! All so stated, New York FedPrez John "It's All Good" Williams looks to the Fed's rate rises as an economic positive -- which to his credit -- has historically synched with the beginning of higher interest rates. And perhaps more costly money can be withstood, Dow Jones Newswires this past week having referred to U.S. household wealth as "vast". Indeed per a year-old survey from the Fed, the median StateSide household wealth level is $122,000. (Admittedly, we did not dig sufficiently deep into the data to divulge if that includes proceeds from the aforementioned fully-drawn credit cards). Next let's fully draw our two-panel graphic of Gold's daily bars from three months ago-to-date on the left and the 10-day Market Profile on the right. Especially encouraging therein are Gold's "Baby Blues" penetrating up through their 0% axis in confirming the regression trend having rotated to positive. And the Profile shows the most dominant trading level of the past two weeks as (no surprise) 1787: With the same drill for Silver, we see her "Baby Blues" (below left) in accelerating ascent, albeit the low 23s may be a sticky wicket there. Still, her Profile (below right) appears supportive for the mid-to-lower 22s, (and happy winkies to you too there, Sister Silver): Time to wrap it up from here with this note: it again appears The World Elites' Economic Forum in Davos is being "deferred", the great convening over The Great Reset to instead take place toward early summer. Bit of an economic inflow delay there for little ole Switzerland, but we have it on well-vetted authority they'll manage. The small alpine nation may rank just 135th by size and 101st by population. But it ranks seventh in total Gold holdings and far and away first in per capita Gold wealth: there is one tonne of Gold for every 8,322 people which (in sparing you the math) is $7,672 per Swiss resident. (Italy is a distant second at $2,589). "And Season's Greetings to you, mmb!" Thank you, Squire, and our very best to you 'n yours, all the little Squires down the line, and absolutely as well to our star readers right 'round the world! Everyone take care, and don't forget the real star: Gold! Cheers! ...m... www.deMeadville.com www.TheGoldUpdate.com
Christmas rise in crypto could be a trap

Christmas rise in crypto could be a trap

Alex Kuptsikevich Alex Kuptsikevich 24.12.2021 08:33
Cryptocurrencies have joined the rise in the stock market, albeit with a slight delay. The total capitalisation of all coins rose 4.5% in the past 24 hours to $2.38 trillion. The Crypto Fear & Greed Index has risen to 41 today after 34 yesterday but has room to grow thanks to the continued positive momentum since yesterday night. Bitcoin enjoyed impressive demand, adding 5.4% overnight. The return of risk demand in traditional financial markets pushed the rate above $50K, which attracted new buyers and quickly took the price to $51K. On the data analysis side, we get a strong bullish signal in the form of a pullback from the 200-day moving average and recovery of the RSI from an oversold area on the daily charts. Ether has had a more challenging time and has been lagging the crypto market for the past few days, struggling to cling to $4100. Signs of a local reversal to growth are becoming more evident. The coin being bought on intraday declines and forms an uptrend similar to the one in October-November. At the same time, traders should increase caution in the coming days, as lower liquidity often spurs volatility. In addition, it is common for the market to give false signals during low liquidity holiday trading. So it is better to let the current positive signals of tech analysis pass the test of time and liquidity.
S&P 500, Nasdaq and more...

S&P 500, Nasdaq and more...

Monica Kingsley Monica Kingsley 27.12.2021 15:56
S&P 500 and risk-on assets continued rallying, pausing only before the close. Santa Claus delivered, and the final trading week of 2021 is here. With the dollar pausing and VIX at 18 again, we‘re certainly enjoying better days while clouds gather on the horizon – Thursday‘s inability of financials to keep intraday gains while yields rose, is but one albeit short-term sign. The Fed is still accomodative (just see the balance sheet expansion for Dec – this is really tapering), didn‘t get into the headlines with fresh hawkish statements, and inflation expectations keep rising from subdued levels. Importantly, bonds prices aren‘t taking it on the chin, and the dollar hasn‘t made much progress since late Nov. Both tech and value are challenging their recent highs, and the ratio of stocks trading above their 200-day moving average, is improving. The same for new highs new lows – the market breadth indicators are picking up. We haven‘t seen the stock market top yet – the rickety ride higher isn‘t over, Santa Claus rally goes on, and my 2022 outlook with targets discussed that a week ago. Precious metals are extending gains, and aren‘t yet raging ahead – the picture is one of welcome strength returning across the board. The same goes for crude oil finally rising solidly above $72 as the omicron fears are receding in light of fresh incoming data including South African policies. It‘s only copper that‘s now reflecting the prospects of real economy slowdown. At the same time, the crypto rebound last week served as a confirmation of broad risk-on advance. Still more to come, as per Thursday‘s article title. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 is within spitting distance of ATHs, and the bulls haven‘t said the last word in spite of the approaching need to take a rest. It‘s rally on, for now. Credit Markets HYG has finally overcome the Sep highs, but its vulnerability at current levels is best viewed from the point of view of LQD underperformance. Investment grade corporate bonds could have been trading higher compared to the progress made by TLT. Gold, Silver and Miners Gold and silver are looking up, and so are miners – the upswing isn‘t overheated one bit, and can go on as we keep consolidating with an increasingly bullish bias. Crude Oil Crude oil once again extended gains, and even if oil stocks are a little lagging, the medium-term bullish bias in black gold remains. The path of least resistance is once again up. Copper Copper at least closed unchanged – the fresh steep rally indeed seems more than quite a few weeks ahead. But the table for further gains is set. Bitcoin and Ethereum Bitcoin and Ethereum are entering the final trading week of 2021 in good shape. The rising tide of liquidity is still lifting all boats in a rather orderly way. Summary Thursday brought a proper finish to the Christmas week, and we‘re not staring at a disastrous finish to 2021 across the board. Short-term extended, but overall very positive bond market performance is aligned, and we can look for positive entry to 2022 in stocks, precious metals, oil, copper and cryptos alike. Shrinking global liquidity, no infrastructure bill, and consolidating dollar complete the backdrop of challenges that would make themselves heard well before Q2 2022 arrives. I hope you had Merry Christmas once again, and will also enjoy the relatively smooth ride while it lasts – 2022 will be still a good year, but with its fair share of corrections. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Article by Decrypt Media

S&P 500 rally, comodities and precious metals

Monica Kingsley Monica Kingsley 28.12.2021 15:49
Broad S&P 500 rally is spilling over to precious metals and commodities – Santa Claus leaves no stone unturned, apparently. Not that yields or the dollar would move much yesterday – it‘s the omicron response relief (thus far. yet APT has risen sharply to counter the bullish and wildly profitable oil message) coupled with the yesterday mentioned market friendly Fed: (…) The Fed is still accomodative (just see the balance sheet expansion for Dec – this is really tapering), didn‘t get into the headlines with fresh hawkish statements, and inflation expectations keep rising from subdued levels. Even though junk bonds retreated from intraday highs, the rally isn‘t over yet – VIX remaining around 18 is the best that the stock bulls can hope for today (i.e. a sluggish day still retaining bullish bias). Financials and industrials had a good day, but consumer discretionaries to staples ratio leaves more than a bit to be desired. The same goes for the financials to utilities ratio. Yes, the horizon is darkening, but further gains for weeks to months to come, still lie ahead. Remember, the topping process is about fewer and fewer sectors pulling their weight, about the market generals not being followed by the troops in the coming advance. We‘re not quite there yet. The Fed didn‘t really taper much in Dec, thus the jubilant close to 2021 across the board. The compressed yield curve would eventually invert – regardless of the current levels of inflation, the GDP growth can still support higher stock prices. Precious metals and commodities would though become an increasingly appealing proposition as I‘m not looking for the Fed to be able to break inflation. The tightening risks are clearly seen in market bets via compressed yields, so they‘ll attempt to not only talk a good game – they will act, and the risks of breaking something (real economy) would grow. That‘s the message from Treasuries – hawkish monetary policy mistake is feared and increasingly expected. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 market breadth again improved – the increasing participation shows that the bull run isn‘t clearly over. And it also reveals that this isn‘t yet the time to expect a new correction. Credit Markets HYG stalled a little, but doesn‘t look to have definitely peaked. One look at LQD reveals the nuanced risk-off turn yesterday, which might not interfere with further stock market gains today though). Gold, Silver and Miners Gold and silver paused, but I‘m treating it as a daily pause in an otherwise developing uptrend. Once the inflation expectations stop being as steady as they had been yesterday, the metals will like that. Crude Oil Crude oil is strongly up, and oil stocks confirm. The $78 zone comes next, and could take a few days to be reached. Copper Copper still hasn‘t arrived at true fireworks – but the long consolidation is being resolved in a bullish way (of course). Broader commodities are showing that the path of least resistance is higher in the red metal as well. Bitcoin and Ethereum Bitcoin and Ethereum are foretelling stiffer headwinds than had been the case recently. I don‘t think this is a start of a genuine downtrend. Summary Santa Claus rally naturally goes on, and yesterday‘s steep gains are likely to be followed with deceleration today – at least in stocks. Precious metals and commodities are catching up, and we‘re looking at a very positive close to 2021 across the board. The same goes for optimistic entry to 2022 in stocks, precious metals, oil, copper and cryptos alike – in Bitcoin though, I would like to see today‘s lows hold, and Ethereum to spring higher faster than Bitcoin. On a very short-term basis, S&P 500 and oil are extended today, and some trepidation shouldn‘t be surprising. The medium-term trends remain unchanged, and lead higher. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Negative balance - how much you can actually lose while trading

Negative balance - how much you can actually lose while trading

Finance Press Release Finance Press Release 29.12.2021 10:16
If traders do not properly set stop losses (as some do), their forex trading accounts may wind up with negative balances. Using Stop Loss and Margin Call levels, a forex trader may often avoid a negative balance. Stop losses may be triggered fast during periods of high volatility, resulting in a negative balance. Making a new deposit may help you recover your overdraft.   Negative balance FX protection is a safeguard that brokers use to protect their customers. Negative balance protection is provided when a trader's account balance becomes negative as a result of their trading activity, preventing them from losing more money than they deposited.   On January 15, 2015, the USDCHF plummeted 2780 pips in 30 minutes, putting my account in the red. When the Swiss National Bank removed the euro limit, the franc increased by 30%. Because my broker was unable to alter currency pairings, I used stop losses on all of my transactions. My trading account was losing money.   Foreign currency trading (Forex) is a risky endeavor since the value of various currencies fluctuates drastically owing to a number of factors. Despite the fact that most forex traders only trade with what they have, a negative balance in one's Forex account is not uncommon. On January 15, 2015, the Swiss National Bank (SNB) made an unexpected decision to remove the floor from the EUR/CHF currency pair. When the floor was raised, hundreds of live forex account balances turned negative, much to their amazement.   Many forex accounts had negative balances as a result of the SNB's decision to remove the floor. Changes in the volatility of a certain currency pair may have an impact on some trading systems. As long as there is a significant difference in the values of various currencies, the balance may go below zero. As a consequence, the phrase "negative balance" has become synonymous with currency trading. Despite the use of stop-out levels and margin calls, it is a difficulty that many forex traders face. Negative Balance Protection In Forex Is it possible to lose money while trading currencies? Because traders utilizing leverage may owe more than they have access to in their accounts, the likelihood of a negative balance grows. It's easy to be concerned about a currency account's negative balance from this vantage point.   If you want to avoid your forex trading account from sliding into the red, you must use a stop-loss order. Stop-Loss (SL) and Margin Call (MC) stops may be employed. Furthermore, certain brokerages, such as XM broker, give their clients accounts with negative balance protection. One example is the XM ultra low account, which does not charge traders commission costs. Aside from that, traders are permitted to employ the previously stated stop-loss order, which is often used by investors, to prevent negative balances on their accounts. In certain situations, brokers imposed a Margin Call limit, which meant that floating positions would be terminated at a loss if their expected losses exceeded a predefined limit.   Many forex traders ignore the MC limit for fear of losing their whole account. Even if you have Margin Call activated in your account settings, your account balance might still fall negative or be totally wiped out. Traders tend to ignore Stop Loss orders, despite the fact that they are a crucial risk-reduction instrument.   Traders may be certain that they will not go bankrupt if their forex trading account has a negative balance. If a margin call is made, a trader who is fast losing money may be able to avoid bankruptcy. When you get a margin call, you immediately close all of your open investments that are fast losing value. How To Prevent Negative Balance? A negative balance may be prevented in the first place, and it is possible to avoid it. You will not be asked to pay the negative amount if you have Negative Amount Protection, but your account will be reset to $0. To put it another way, you'll lose all you invested. In other words, why wait for the NBP to kick in when you can halt the loss immediately?   Consider the number of your holdings as well as the number of orders you make when making transactions. Because not all transactions are successful, the more you trade, the more likely you are to lose money. What's the harm in doing so if it allows you to better regulate your transaction and reduce your risk? In this instance, forex brokers' micro accounts, which often contain smaller bets, might be a viable option.   To keep your money in your account, you must create a reasonable stop loss barrier. As a result, the danger of market and price volatility is reduced.   The more leverage you have, the more money you will be able to get. You are, however, put at greater danger as a consequence of it. There are various techniques to reduce your stock market risk.   When the market is volatile, stop losses, margin calls, and stop-outs all fail. This tendency is typically triggered when news or events with a big influence on the market cause fear. Keep an eye on the economic calendar and avoid trading at particular times of the year.   Most forex brokers will announce and change leverage and margin requirements for certain instruments when a major event or news release is near. You should either stay out of the market or adjust your position as a consequence of this warning.
Fear May Drive Silver More Than 60% Higher In 2022

Fear May Drive Silver More Than 60% Higher In 2022

Chris Vermeulen Chris Vermeulen 22.12.2021 23:17
As the US and global markets rattle around over the past 60+ days, many traders have failed to identify an incredible opportunity setting up in both Gold and Silver. Historically, Silver is extremely undervalued compared to Gold right now. In fact, Gold has continued to stay above $1675 over the past 12+ months while Silver has collapsed from highs near $30 to a current price low near $22 – a -26% decline. Many traders use the Gold/Silver Ratio as a measure of price comparison between these two metals. Both Gold and Silver act as a hedge at times when market fear rises. But Gold is typically a better long-term store of value compared to Silver. Silver often reacts more aggressively at times of great fear or uncertainty in the global markets and often rises much faster than Gold in percentage terms when fear peaks. Understanding the Gold/Silver ratio The Gold/Silver ratio is simply the price of Gold divided by the price of Silver. This creates a ratio of the price action (like a spread) that allows us to measure if Gold is holding its value better than Silver or not. If the ratio falls, then the price of Silver is advancing faster than the price of Gold. If the ratio rises, then the price of Gold is advancing faster than the price of Silver. Right now, the Gold/Silver ratio is above 0.80 – well above a historically normal level, which is usually closer to 0.64. I believe the current ratio level suggests both Gold and Silver are poised for a fairly big upward price trend in 2022 and beyond. This may become an exaggerated upward price trend if the global market deleveraging and revaluation events rattle the markets in early 2022. Sign up for my free trading newsletter so you don't miss the next opportunity! I expect to see the Gold/Silver ratio fall to levels below 0.75 before July/August 2022 as both Gold and Silver begin to move higher in Q1:2022. Some event will likely shake investor confidence in early 2022, causing precious metals to move 15% to 25% higher initially. After that initial move is complete, further fallout related to the deleveraging throughout the globe, post-COVID, may prompt an even bigger move in metals later on in 2022 and into 2023. COVID Disrupted The 8~9 Year Appreciation/Depreciation Cycle Trends In May 2021, I published an article suggesting the US Dollar may slip below 90 while the US and global markets shift into a Deflationary cycle that lasts until 2028~29 (Source: The Technical Traders). I still believe the markets will enter this longer-term cycle and shift away from the broad reflation trade that has taken place over the past 24+ months – it is just a matter of time. If my research is correct, the disruption created by the COVID virus may result in a violent reversion event that could alter how the global markets react to the deleveraging and revaluation process that is likely to take place. I suggest the COVID virus event may have disrupted global market trends because the excess capital poured into the global markets prompted a very strong rise in price levels throughout the world in real estate, commodities, food, technology, and many other everyday products. The opposite type of trend would have likely happened if the COVID event had taken place without the excessive capital deployed into the global markets. Demand would have diminished. Price levels would have fallen. Demand for commodities and other technology would have fallen too. That didn't happen. The opposite type of global market trend took place, and prices rose faster than anyone expected. Markets Tend To Revert After Extreme Events As much as we may want to see these trends continue forever, any trader knows that markets tend to revert after extreme market trends or events. In fact, there are a whole set of traders that focus on these “reversion events.” They wait for extreme events to occur, then attempt to trade the “reversion to a mean” event in price action. My research suggests the COVID virus event may have created a hyper-cycle event between early 2020 and December 2021 (roughly 24 months). My research also suggests a global market deleveraging/revaluation event may be starting in early 2022. If my research is correct, the recent lows in Gold and Silver will continue to be tested in early 2022, but Gold and Silver will start to move much higher as fear and concern start to rattle the markets. As asset prices revert and continue to search for proper valuation levels, Gold and Silver may continue to rally in various phases through 2028~2030. Initially, I expect a 50% to 60% rally in Silver, targeting the $33.50 to $36.00 price level. For SILJ, Junior Silver Miners, I expect an initial move above $20 (representing a 60%+ rally), followed by a follow-through rally targeting the $25.00 level (more than 215% from recent lows). I believe the lack of focus on precious metals over the past 12+ months may have created a very unusual and efficient dislocation in the price for Silver compared to Gold. This setup may present very real opportunities for Silver to rally much faster than Gold over the next 24+ months – possibly longer. If my research is correct, the Junior Silver Miners ETF, SILJ, presents a very good opportunity for profits. Want to learn more about the movements of Gold, Silver, and their Miners? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP – Total ETF Portfolio. Pay particular attention to what is quickly becoming my favorite strategy for income, growth, and retirement - The Technical Index & Bond Trader. Have a great day!
Awaiting US CPI And Speaking Of Disney and Uber. SEK And PLN As Central Banks Moves

US Fed Actions 1999 to Present – What's Next?

Chris Vermeulen Chris Vermeulen 15.12.2021 09:48
I find it interesting that so much speculation related to the US Federal Reserve drives investor concern and trends. In my opinion, the US Federal Reserve has been much more accommodating for the global economy after the 2008-09 US Housing Market crash. The new US Bank Stress Tests and Capital Requirements have allowed the US to move away from risk factors that may currently plague the global markets. What do I mean by this statement? US Fed Continues To Maintain Extremely Accommodative Monetary Policy Over the past 12+ years, after the 2008-09 US Housing Market collapse, the US Federal Reserve has acted to support the US and global economy while the US Congress and US Federal Reserve have acted to build a stronger foundation for US banking and financial institutions. The most important aspect of this is the Capital Requirements that require an operating US bank to hold a minimum amount of reserve capital (Source: Federal Reserve). The US Federal Reserve installed this program to prevent US banks from over-leveraging their liabilities based on the 2008-09 Housing Market Crisis lessons. Sign up for my free trading newsletter so you don’t miss the next opportunity! There are still risks associated with a complete global economic collapse – where consumers, banking institutions, and economic activity grinds to a halt because of some external or unknown factor. Yet, the risks of a US-based collapse based on excessive Banking or other financial institution liabilities are somewhat limited in today's US Economy. Although, globally, the risks have accelerated over the past 12+ years while the US Federal Reserve maintained a very accommodative monetary policy. Historical US Federal Reserve Actions Let's review some of the most significant US Federal Reserve actions over the past 25 years. Early/Mid-1990s: The Fed raised the FFR from 3.0% to 6.5% to 7.0% as the DOT COM Rally continued to build strength. 1998/1999: The Fed dropped the FFR to 4.0% as the DOT COM bubble became frothy and started to fracture/burst. Early 2000: The Fed raised the FFR from 4.0% to 6.86% over just five months, pushing the cost of borrowing above 7.5%~8.5% in the open market. Late 2000/Early 2001: The September 2001 Terrorist Attack on the US pushed the Fed to lower the FFR to 1.0% by December 2002. Before the 9/11 attack, the Fed lowered the FFR after the DOT COM bubble burst rattled the US economy and output. 2004/2006: The Fed raised the FFR from 1.0% to 5.5% (more than 550%) while the US Housing Market boom cycle pushed the US economy into overdrive. This was the biggest FFR rate increase since the 1958-1960 rate increase (from 0.25% to 4.0% - more than 1600%) or the 1961-1969 rate increase (from 0.50% to 9.75% - more than 1950%). 2007/2008: The Fed decreased the FFR from 5.5% to 0.05 (Dec 2009), effectively setting up a 0% interest rate while the US attempted to recover from the 2008-09 Housing Market Crisis. 2015/2020: the Fed attempted to raise the FFR from 0.08% to 2.40% as the US economy transitioned into a strong bullish breakout trend. When the US markets collapsed in early 2020 because of the COVID-19 virus, the Fed moved interest rates back to near 0% and have kept them there ever since. The deep FFR discounts/rates that started after the 1999/2000 DOT COM/9-11 events pushed foreign markets to borrow cheap US Dollars as a disconnect of capital costs and a growing foreign market economy allowed certain economic functions to continue. Borrowing cheap US Dollars while deploying that capital in foreign economies returning 4x to 10x profits allowed many foreign companies, individuals, and governments to build extremely dangerous debt levels – very quickly. (Source: ST Louis FED) Now, let's get down to the core differences between pre-1990 and post-1990 US Fed actions and global economy functions. US Fed Added Rocket Fuel To An Already Accelerating Global Economy Before 1985, foreign markets were struggling to gain their footing in the global economy. Larger global economies, like the US, Japan, Europe, and Canada, could outsource manufacturing, supplies, and labor into foreign nations that provided a strategic cost advantage. After 1994 or so, after the Asian Currency Crisis settled, the growth of manufacturing and labor in China/Asia started booming at an exponential rate. This prompted a 2x to 5x growth factor in many Asian nations over 10+ years. The 9-11 terrorist attacks briefly disrupted this trend, but it restarted quickly after 1994~1995. This high-speed growth phase in China/Asia after 1999 created a massive demand for credit and expansion as Asian consumers and economies grew at exponential rates from 1997 to now. The US Fed inadvertently promoted a global growth phase that resulted in the fastest global economic increase in history. Multiple foreign nations were able to take advantage of cheap US Dollars. At the same time, the US Fed acted to support the recovery of the US economy after 9-11 and the 2008-09 Housing/Credit crisis. Those cheap US Dollars continued after the COVID-19 turmoil in early 2020 and likely pushed already at-risk debtors over the edge as bond rates have started to price extensive risk factors. The result of these crisis events and the US Federal Reserve's continued easy monetary policy has been the fastest growth of assets the planet has seen in over 80 years. Not only have global economies grown in a parabolic phase, but the US stock market has also moved higher and higher after the 2010 bottom and the 2015-2016 shift towards higher US corporation earnings/revenues. Once the COVID-19 virus event hit in early 2020, the US Fed moved rates back to near 0% - supplying a nearly unlimited amount of rocket fuel for the global markets (again). The problem this time was the global COVID shutdowns essentially took the spark away from the fuel (capital). Now, we are waiting for the US Fed statements to close out 2021. I'll offer this simple hint to help you prepare for what's next – more volatility, more big trends, and more deleveraging throughout the global markets. In Part II of this research article, I'll share my thoughts on what I expect from the US Fed and what I hope for in 2022 and beyond. Want to learn more about how I trade and invest in the markets? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP - Total ETF Portfolio. Have a great day! Chris VermeulenChief Market Strategist
AM Market Digest: December 1, 2021

AM Market Digest: December 1, 2021

Jessica Amir Jessica Amir 01.12.2021 08:33
Equities 2021-12-01 00:00 7 minutes to read Summary:  Hello December...Traditionally the second most bullish month for equites with the ASX200 rising 1.7% on average in December (since 1993/inception), while the S&P500 index has risen 1.5% on average (since 1950). Now the question is, will this December be different? Probably yes, as there is much uncertainty; markets are weary of Omicron (awaiting vaccine makers to develop a new vaccine), while retail sales are growing slower than expected (going against the grain as sales generally ramp up this time of year). So what’s next? We cover what to watch today and potential trading considerations. So volatility is indeed picking up right? And add in the fact that US Fed Chair said overnight, that the bond-buying taper process could wrap up “few months sooner than expected”…which opens the door to interest rates hikes thereafter. Powell also said “it’s probably a good time to retire” the world “transitory” to describe inflation. While global equities remain on tender hooks, keep an eye on volatility, and consider possible hedges. Iron ore breaks above its 30-DMA for the first time since 26 October. Watch the Aussie dollar with GPD data ahead. Markets and what you need to know    Equites: In the US: The Dow Jones fell 1.8%, the S&P500 lost 1.9%. Apple rose 3.1%. Pfizer rose 2.5% Salesfore.com fell 4%. Travellers fell 3.6% In Europe: the Euro Stoxx 50 fell 1.1%, the FTSE 100 down 0.7%. Yesterday most Asian markets fell, with the Australian market being the exception, rising 0.2% Commodities: Gold spot down 0.5% to $1,775.45, erasing gains after Powell’s comments on Taper, Inflation Keep an eye on Newcrest (NCM AU), Northern Star (NST AU), Evolution (EVN AU), Regis Resources (RRL AU), Resolute Mining (RSG AU), OZ Minerals (OZL AU):  WTI crude down 5.4% Oil Falls Below $65 With Powell signaling faster end to tapering Keep an eye on Woodside (WPL AU), WorleyParsons (WOR AU), Oil Search (OSH AU), Beach Energy (BPT AU), Karoon (KAR AU), Origin Energy (ORG AU), Santos (STO AU):  Copper down 1.4% Iron ore fell 0.4% after rising 6.8% the prior day Keep an eye on BHP (BHP AU), Rio Tinto (RIO AU) and Fortescue (FMG AU) Currencies: Aussie down 0.4% to 0.7118 per US dollar (Australia, NZ dollars record biggest monthly drops since pandemic) Kiwi down 0.1% to 0.6817 per US dollar Bonds: U.S. 10-year yield fell 6.2bps to 1.4375% Company News: Volvo Cars shares rose 13.6%; The company released first quarterly property since listing on the stock market a year ago and confirm a dip in revenue and profit. Volvo also flagged the sector-wide semiconductor shortage would continue into next year Apple shares +3.1% after reported Best Apple Cyber Monday. The tech giant is also working on a charger that powers multiple devices, an iPhone, AirPods, and Watch simultaneously. Orocobre shares rose 6% to a record high. Trading volume quadruped. The company expects lithium demand to grow materially through to 2040 due to electric vehicle adoption amid the global transition to carbon neutrality. This is expected to lead to a widening deficit over the next two decades, with demand predicted to be more than twice as great as supply by 2040. Major news, in case you missed it; Australian borders won’t reopen today (1 December), they’ll reopen 15 December Moderna CEO says current vaccines are less effective against new variant and it may take months before a new variant-specific jab is at scale. The World Health Organization said Omicron presents as ‘very high global risk’. Latest economic news: In Australia: The Australian economy is slowing: Private credit grew less than expected; showing Aussies are businesses borrowing less (credit grew 0.5% in October, vs 0.6% expected). Consumer confidence fell on a weekly basis In Asia – China’s manufacturing unexpected grew in November. First rise in activity since Aug. Japan industrial output rose for first time in four months, auto production rebounds on an easing of supply constraints Considerations for today and what to watch Volatility: New information is driving the markets short term direction, so keep an eye out. We’re in an illiquid part of the season, so volatility is high at the moment with news dictating the market moves. Some fund managers are taking money off the table and increasing their hedging To minimise volatility you could consider hedging for the next couple of weeks; perhaps consider currency options which is what we are seeing some clients trade at the moment, they are Buying dollar yen. Iron ore:  The Iron ore price to surged to a one month high, rising back above $100. Also of note, we are seeing clients increasing buy iron ore stocks (Fortescue, BHP and Rio Tinto). What’s new: Brazilian iron ore giant, Vale lowered its production outlook for year, while Rio Tinto announced it sees demand stabilizing is 2022 and underlying demand remaining robust expecting, China to take action to avoid a property hard land. Basically it seems iron ore supply will be coming out of market (from Vale), and demand is picking up in China. From a technical perspective, the iron ore price has held above its 15 and 30 day average, while the MACD technical indicator suggest that buying could pick up again in iron ore. This is definitely something to watch. It appears the 15 day moving average could also cross above the 30 day moving average, which would trigger a gold cross event, a technical event that often results in a bull run forming/continuing as quant traders/investors typically buy into positions when such an event occurs.   Source: TradingView, Saxo Markets Events to watch today: Local: Australian GPD data out 11:30am - expected to show Australian GPD slowed YoY, est. 3.0%, prior 9.6%. QoQ, est. -2.7%, prior 0.7%. So keep an eye on the Australian dollar. If the data is weaker than expected the Aussie dollar would likely fall US tonight: November ADP employment, November MBA purchase index, November ISM manufacturing PMI, crude oil inventories, Federal Chair Jerome Powell testimony What else? OPEC meets on Thursday - we could see production cuts, which could cause a rally in oil   Australian analyst rating changes to consider: CKF: Collins Foods Cut to Neutral at Jarden Securities; PT A$14.16 FMG: Fortescue Cut to Neutral at Citi GNC: GrainCorp Cut to Sell at Bell Potter; PT A$6.15 HPG: Hipages Group Rated New Overweight at Barrenjoey; PT A$4.65 JHX: James Hardie GDRs Rated New Overweight at Barrenjoey; PT A$63 TPG: TPG Telecom Rated New Overweight at Barrenjoey; PT A$7.50 TSI: Top Shelf International Rated New Speculative Buy at Canaccord   Ex-Dividends today on ASX:  Incitec Pivot, United Malt, Aristocrat Leisure
Financial Sector May Rally 11% - 15% Higher Before End Of January 2022

Financial Sector May Rally 11% - 15% Higher Before End Of January 2022

Chris Vermeulen Chris Vermeulen 11.12.2021 10:25
The financial sector is poised for a very strong rally into the end of 2021, and early 2022 as revenues and earnings for Q4:2021 should continue to drive an upward price trend. The US Federal Reserve is keeping interest rates low. At the same time, the US consumer continues to drive home purchases and holiday shopping. Strong economic data should drive Q4 results for the financial sector close to levels we saw in Q3:2021. If that happens, we may see a robust rally in the US Financial sector over the next 45 to 60+ days. The strength of the recent rally in the US major indexes shows just how powerful the bullish trend bias is right now. Some traders focus on the downside risks associated with the US Federal Reserve actions and/or the concerns related to inflation and global markets. I, however, continue to focus on the strength in the US major indexes and various sector trends that show real opportunities for profits. Comparing Sector Strength The following two US market sector charts highlight the performance over the last 12 vs. 24 months. I want readers to pay attention to how flat the Financial Sector has stayed since just before the 2020 COVID event and how the Financial Sector has started to trend higher over the past 12 months. This is because the shock of COVID briefly disrupted consumer activity. Yet, consumers are coming back strong, driving retail sales, home sales, and the continued strong US economic data. Therefore, it makes sense that the Financial sector should continue to show firm revenue and earnings growth while the US consumer is active and spending. Sign up for my free trading newsletter so you don’t miss the next opportunity! Over the past two years, Discretionary, Technology, and Materials drove market growth compared to other sectors. Remember, the initial COVID virus event disrupted market sector trends over the last 24+ months. (Source: StockChart.com) Taking a look at this 1 Year US Market Sector chart shows how various sectors have rebounded and how the Discretionary and Materials sectors have flattened/weakened. Pay attention to how the Energy and Real Estate sectors have been over the past 12 months. Also, pay attention to how the Financial sector is strengthening. I believe that the continued deflation/deleveraging that is taking place throughout most of the world will continue to drive global central banks to stay relatively neutral regarding rising interest rates. This will likely prompt an easy money policy throughout most of 2022 and drive continued revenues/earnings for sectors associated with consumers' engagement with the economy. If inflation weakens into 2022 while wage and jobs data stays strong, we may see more moderate strength in the Financial, Healthcare, Discretionary, and Technology sectors over the next 6 to 12+ months. Read more about Global Deleveraging Here: Delivering Covid Bubble Possible Volatility Risks In Foreign Markets (Source: StockChart.com) Financials May Pop 11% Or More Over The Next 6+ Months This Weekly IYG, IShares US Financial Service ETF, highlights the recent sideways price trend in the Financial sector and the potential for a 9% to 13% rally that may take place as the markets shift into focus for the Q4:2021 earnings. Yes, inflation is still a concern, but as long as the US consumer continues spending and engaging in the economy, the Financial Services and US Banks should show strong returns. If the US markets rally into the end of 2021, possibly reaching new all-time highs again, this trend may carry well into 2022 and drive Q4:2021 and Q1:2022 revenues and earnings for the Financial sector even higher. This Weekly XLF chart shows a very similar setup to IYG. I firmly believe the recent fear in the markets related to the US Federal Reserve, the new COVID variants, and the global markets deleveraging process is missing one critical component – the strength of the US markets and the strength of the US Dollar. As the rest of the world struggles to find support and economic strength, the US markets continue to rebound on the strength of the US consumer, the recovering economy, and the growth of these sectors. As long as the US Federal Reserve does not disrupt this trend, I believe Q1:2022 could be much more robust than many people consider. I also think the deflation/deleveraging process will work to take the pressures away from recent inflation trends. What could this mean for 2022? Early 2022 may well work as a "rebalancing" process for the global markets – possibly taking the pressures away from the strength in energy, commodities, and staple products/materials. This means pricing pressures will decrease while consumers are still earning and spending. The Financial sector should benefit from these trends over the next 6+ months. Watch for the Financials to start to increase throughout the end of 2021 and into early 2022. There are many ways to consider trading this move, but ideally, I think the rally will take place before the end of February 2022. Q1 is usually relatively strong, so that this trend may last well into April/May 2022. It all depends on what happens that could disrupt the current market sector trends. If nothing happens to disrupt the strength of the US Dollar and the strength of the US markets, then I believe the Financial Sector has a very strong opportunity for at least 10% to 11% growth. Want to learn more about the potential for a financial sector rally? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. If you need technically proven trading and investing strategies using ETFs to profit during market rallies and to avoid/profit from market declines, be sure to join me at TEP - Total ETF Portfolio. Have a great day! Chris VermeulenChief Market Strategist
S&P 500's rally to be continued?

S&P 500's rally to be continued?

Arkadiusz Sieron Arkadiusz Sieron 29.12.2021 15:31
  Stocks slightly extended their rally yesterday and the S&P 500 reached new all-time high above the 4,800 level. But will the uptrend continue? The broad stock market index lost 0.10% on Tuesday, Dec. 28, as it fluctuated following the recent record-breaking rally. The broad stock market is now way above its local highs from November and December. Stocks broke above the consolidation and we had a Santa Claus rally. The new record high is at 4,807.02. Now we may see a consolidation or a downward correction. The S&P 500 index is expected to open 0.1% lower this morning. On Dec. 3 the index fell to the local low of 4,495.12 and it was 5.24% below the previous record high. So it was a pretty mild downward correction or just a consolidation following this year’s advances. The nearest important resistance level remains at around 4,800. On the other hand, the support level is now at 4,740-4,750, marked by the previous highs. The S&P 500 broke above its two-month long consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Remains Below the November High Let’s take a look at the Nasdaq 100 chart. The technology index is relatively weaker than the broad stock market’s gauge as it is still trading below the Nov. 22 record high of 16,764.85. The recent rally in stocks was driven by a handful of stocks and the technology stocks were just retracing their recent declines. However, the Nasdaq 100 broke above the resistance level of 16,400. Apple’s Market Cap Gets Close to $3 Trillion Again Apple stock got back close to its Dec. 13 record high of $182.13. The nearest important resistance level is at $180-182. The stock remains above its two-month long upward trend line. There have been no confirmed negative signals so far, however, the market may be trading within a medium-term topping pattern. It’s getting very hard to fundamentally justify the Apple’s current market capitalization of around $3 trillion. Conclusion The S&P 500 index will most likely fluctuate following the recent record-breaking rally. We may see some profit trading action and a consolidation along the 4,800 level. There have been no confirmed negative signals so far. However, there are some short-term overbought conditions. Here’s the breakdown: The S&P 500 will likely fluctuate following the recent rally. We may see a consolidation or a downward correction at some point. In our opinion no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Sector Themes In Play In The Markets For 2022

Sector Themes In Play In The Markets For 2022

Chris Vermeulen Chris Vermeulen 31.12.2021 16:45
As 2021 closes, it’s time to consider how sector themes in the markets are likely to perform in 2022. Years like 2021 saw a solid broad-based performance in many stock market sectors. Relatively simple approaches such as Indexing and Sector Rotation did well. But with macro changes in play and many uncertainties for 2022, we may very well see broad indexes underperforming while individual sectors dominated by a few stocks really shine. Dips will continue to be bought unless something significant changes. But let’s not forget that we’re long overdue for a substantial correction. Significant risk catalysts are:Fed actions.International conflicts (i.e., Russia and China).Pandemic developments that are not currently known.There’s always the risk of the unknown – the literal definition of a “Black Swan” event. We shouldn’t get too complacent, knowing that we may need to get defensive to protect capital suddenly. When it’s time to be defensive, let’s not forget that CASH IS A POSITION!sector theme DRIVERS FOR 2022Many uncertainties about Covid and the lingering effects on the economy remain. Inflation has roared back to 30-year highs. Strong employment numbers and consumer spending are fueling significant growth in corporate earnings. We also have a shift in bias at the Fed on interest rates and quantitative easing. These are the “knowns” and are theoretically priced in.For these reasons and more, we should expect more of a “Stockpicker’s Market” in 2022. Certain sectors will do well and weather corrections better than the broader markets.Sign up for my free trading newsletter so you don’t miss the next opportunity! Even short-term traders can gain an edge by paying attention to what sectors are strongest. Traders tend to benefit most from playing the strongest stocks in the strongest sectors for bullish trades and choosing the weakest stocks in weaker sectors for bearish trades. That “tailwind” can make a significant difference in results.Let’s look at some sector themes and individual names to keep an eye on in 2022.ECONOMIC NORMALIZATIONA long-anticipated return to a “normal” economy will continue to be a theme -- we just don’t know if that will be Post-Covid or Co-Covid. Or when. Air travel, theme parks, hotels, cruise lines, etc., have all suffered in the persistent Pandemic. What does seem to be changing is the idea of a “new normal” where virus variants may be with us for years to come. We will adjust socially and economically to that for the foreseeable future. DAL, UAL, LUV, AAL are airlines to watch, and the JETS ETF may be a good way to play a general recovery in this sector.5G INTERNETThe much-hyped rollout of 5G network technology had its share of setbacks and technology disappointments. But 2022 should see the 5G deployment start to take off as technical issues are worked out, and the promise of widespread coverage with transformational performance becomes real. In the background supplying the 5G infrastructure are AMD, QCOM, ADI, MRVL, AMT, XLNX, and KEYS. Along with infrastructure and testing companies, shares of major carriers T, TMUS, and VZ languished for much of the second half of 2021 and looked poised for recovery in the coming year.ARTIFICIAL INTELLIGENCEIn all its various forms (including autonomous vehicles), AI will remain a developing trend. Big players in the space to watch include MSFT, AMAT, GOOGL, NVDA, AAPL, and QCOM. EVs and AUTONOMOUS VEHICLESElectric Vehicles (EVs) are nearing an inflection point where widespread adoption is poised to take off. Technology and cost competitiveness has improved where some EVs will reach price parity with their traditional internal combustion counterparts.While there are many smaller players in the EV space, automotive stalwarts F, GM, and TM are investing very heavily. TSLA has been grabbing the headlines, but many others want to stake out their territory in the space, including whole tiers of manufacturers and infrastructure enablers like WKHS, XPEV, NKLA, and CHPT.MATERIALS and MININGGold, silver, and related miners underperformed for much of 2021 and now look poised for a recovery year as inflation, and monetary concerns grow. GLD, SLV, GDX, GDXJ, SIL, SILJ look good as both longer and mid-term plays. Metals and miners may get hit initially with a significant downturn in stocks but could ultimately demonstrate their safe-haven potential. Specific to the growth in EVs, battery technology, etc., copper, lithium, and related basic materials should see stronger demand ahead. FCX looks particularly interesting as a dual play on gold and copper. LIT may be a good ETF play on lithium battery technology.SEMICONDUCTORSThe market for chips is primed for exponential growth. EV’s have about ten times the number of specialty semiconductors as conventional vehicles. AI, crypto, 5G, mobile devices, and ubiquitous computing should drive growth in the semiconductor sector for some time to come.REAL ESTATEReal Estate and Homebuilders should continue to do well while employment numbers remain strong and if interest rates don’t rise too quickly. The inventory shortage in most real estate markets will likely persist well into the new year.Storage REITs like PSA, LSI, and CUBE have been big winners in the Covid economy and still have room to run.SUMMARYMany sectors still look bullish after gains in 2021. But there are “storm clouds” on the horizon, and we must not take future performance for granted.Lastly, one of the simplest ways to assess how sectors are measuring up is to watch the charts for the S&P SPDR series sector ETFs and a few others. Here are some notable ones to watch:These can give us a good starting place to look for leading stocks in winning sectors as the year unfolds.Let’s remain vigilant for possible market corrections and may the wind be at our backs!Want to learn more about our Options Trading Service?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to check it out, click here: TheTechnicalTraders.com.Enjoy your day!
Bitcoin and Ethereum are staging a daily comeback

Bitcoin and Ethereum are staging a daily comeback

Monica Kingsley Monica Kingsley 30.12.2021 15:49
S&P 500 bulls stood their ground nicely, and the key sectors confirmed little willingness to turn the very short-term outlook more bearish than fits the little flag we‘re trading in currently – it‘s a bullish flag. Given the continued risk-off turn in bonds, the stock market setback could have been more than a tad deeper – that would be the conclusion at first glance. However, high yield corporate bonds held up much better than quality debt instruments, and that means the superficial look would have been misleading. Likewise as regards my other 2 signs out of the 3 yesterday presented ones – tech held up fine, and cryptos have practically erased yesterday‘s hesitation during today‘s premarket. The Santa Claus rally indeed hasn‘t yet run its course, and the slighly better than a coin toss odds of us not facing more than a very shallow correction, look to be materializing. As I wrote 2 days ago – What‘s Not to Love Here – we‘re entering 2022 with great open profits in both S&P 500 (entered aggressively at 4,672) and crude oil (entered with full force at $67.60). Both rides aren‘t yet over, copper is primed to catch up in the short run to the other commodities, gold is well bid at current levels, and together with silver waiting for a Fed misstep (market risk reappreciation) and inflation to start biting still some more while the real economy undergoes a soft patch (note however the very solid manufacturing data) with global liquidity remaining constrained even though the Fed didn‘t exactly taper much in Dec, and nominal yields taking a cautious and slow path towards my 2022 year end target of 1.80-2.00% on the 10-year Treasury. As I wrote prior Monday, we‘re looking at still positive 2022 returns in stocks – of course joined by commodities and precious metals. The path would be though probably a more turbulent one than was the case in 2021. We had a good year of strong gains, and I hope you have benefited. Thank you for all your appreciation and best wishes sent my way throughout all of 2021 and now by email or via Twitter – I would love to wish you a very Happy New Year – may 2022 keep bringing you happiness, success and good health. Enjoy the New Year‘s Eve celebrations, and see you again on Jan 03, 2022! Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 consolidation is still shaping up finely – and does so on solid internals. Particularly the tech resilience is a good omen. Credit Markets HYG could have indeed declined some more, but didn‘t. While I‘m not reading all too much into this signal individually, it fits the (still bullish) mozaic completed by other markets on my watch. That‘s the strength of intermarket analysis. Gold, Silver and Miners Gold and silver got on the defensive, but the bears didn‘t get too far – and the chance they could have, wasn‘t too bad. Rising yields were though countered by the declining dollar. Crude Oil Crude oil is likely to pause today, and will rally again once risk-on returns broadly, including into credit markets. For now, backing and filling above $76 is my leading very short-term scenario – Monday though will be a fresh day. Copper Copper is pausing, but the downswing didn‘t reach far, and was bought relatively fast. More consolidation above $4.40 looks likely, and it would come with a generally bullish bias that‘s apt to surprise on the upside. Similarly to precious metals though, patience. Bitcoin and Ethereum Bitcoin and Ethereum are staging a daily comeback, and as long as mid-Dec lows don‘t come in sight again, crypto prices can muddle through with a gently bullish bias. Summary Santa Claus isn‘t willing to give much ground, and the table is set for this nice rally to modestly continue today – somewhere more pronouncedly (S&P 500, cryptos) than elsewhere (commodities and precious metals). I‘m still looking for a positive first day of 2022 trading to help make up for end of this week‘s headwinds – it has been great that the bears couldn‘t find more strength yesterday. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
It's not sure where S&P 500 will go. Apple (APPL) with a new record high yesterday

It's not sure where S&P 500 will go. Apple (APPL) with a new record high yesterday

Paul Rejczak Paul Rejczak 04.01.2022 15:25
  The S&P 500 retraced its late last week’s declines yesterday and it went closer to the 4,800 level again. Will it reach the new record high today? The broad stock market index gained 0.64% on Monday, Jan. 3, as it retraced most of the recent decline from last Thursday’s record high of 4,808.93. Yesterday the index fell to the local low of 4,758.17, before advancing almost 40 points. The S&P 500 index remains way above the local highs from November and December. Stocks broke above the consolidation and we had a quick Santa Claus rally. The broad stock market’s gauge continues to trade within a short-term consolidation. For now, it looks like a relatively flat correction within an uptrend. On Dec. 3 the index fell to the local low of 4,495.12 and it was 5.24% below the previous record high. So it was a pretty mild downward correction or just a consolidation following last year’s advances. The nearest important resistance level remains at around 4,800-4,810. On the other hand, the support level is at 4,740-4,750, marked by the previous highs. Recently the S&P 500 broke above its two-month long consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Apple’s Market Cap Tops $3 Trillion Apple stock reached the new record high of $182.88 yesterday, as it broke slightly above the Dec. 13 high of $182.13. The stock remains above its two-month long upward trend line. There have been no confirmed negative signals so far, however, the market may be trading within a medium-term topping pattern. It’s getting very hard to fundamentally justify the Apple’s current market capitalization of around $3 trillion. Conclusion The S&P 500 index is expected to open 0.3% higher this morning, but we may see some short-term uncertainty and a further consolidation along the 4,800 level. There have been no confirmed negative signals so far. Here’s the breakdown: The S&P 500 will likely extend its short-term consolidation along the 4,800 level. In our opinion no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Can't skip S&P 500 (SPX) and Nasdaq

Can't skip S&P 500 (SPX) and Nasdaq

Monica Kingsley Monica Kingsley 04.01.2022 15:53
Very good S&P 500 entry to 2022, and the HYG intraday reversal is the sight to rejoice. In the sea of rising yields, both tech and value managed to do well – the market breadth keeps improving as not only the ratio of stocks trading above their 200-day moving averages shows. Likewise VIX refused to reach even 19, and instead is attacking 16.50. This is not complacency – the bulls were thoroughly shaken at the entry to the session yesterday – but a buying interest that convincingly turned the tide during the day. As I wrote yesterday: (…) thanks to the credit markets message, I‘m not reading into Friday‘s weakness much. There is still more in this rally – value held better than tech, and high yield corporate bonds didn‘t really slide. The year end rebalancing will likely give way to solid Monday‘s performance. While VIX appears to want to move up from the 17 level, it would probably take more than one day to play out. As the Santa Claus rally draws to its close, the nearest data point worth looking forward for, is Tuesday‘s ISM Manufacturing PMI. It‘ll likely show still expanding manufacturing (however challenged GDP growth is on a quarterly basis), and that would help commodities deal with the preceding downswing driven by energy and agrifoods. Both of these sectors are likely to return to gains, and especially oil is. The only sector taking a beating yesterday, were precious metals. While inflation expectations were little changed (don‘t look for inflation to go away any time soon as I‘ve been making the case repeatedly), the daily rise in yields propelled the dollar to reverse Friday‘s decline, and that knocked both gold and silver off the high perch they closed at last week. Still, none of the fundamental or monetary with fiscal policy originating reasoning has been invalidated – not even the charts were damaged badly by Monday‘s weakness. As economic growth gets questioned while fiscal policy remains expansive unlike the monetary one, volatily in the stock market together with persistent inflation would be putting a nice floor beneath the metals. Even cryptos are refusing to yield much ground, the Ethereum to Bitcoin ratio keeps trading positively, and I‘m not even talking the rubber band that commodities (crude oil and copper) are. Very good for our open positions there, as much as in the S&P 500 – let them keep bringing profits. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Really bullish price action in both S&P 500 and Nasdaq – that was the entry to 2022 I was looking for. Embellished with prior downswing that lends more credibility to the intraday reversal. Credit Markets HYG refusing to decline more, is the most bullish sign for today imaginable – let it hold, for junk bonds now hold the key, especially if quality debt instruments keep declining steeply. Gold, Silver and Miners Gold and silver look to have reversed, but reaching such a conclusion would be premature. The long basing pattern goes on, and breakout higher would follow once the Fed‘s attempting to take the punch bowl away inflicts damage on the real economy (and markets), which is what the yield curve compression depicts. Crude Oil Crude oil is about to launch higher – and it‘s not a matter of solid oil stocks performance only. Just look at the volume – it didn‘t disappoint, and in the risk-on revival that I expect for today, black gold would benefit. Copper Copper swooned, but regained composure – the stop run is over, and we‘re back to base building for the coming upswing. Broader commodities certainly agree. Bitcoin and Ethereum Bitcoin and Ethereum are very gently leaning bullish, but I‘m not sounding the all clear there yet thanks to how long Bitcoin is dillydallying. Cryptos aren‘t yet out of the woods, but their posture has improved thus far noticeably. Summary First trading day of 2022 extended prior S&P 500 gains, and the risk-on appetite is improving as we speak. Commodities are reaping the rewards, and we‘re looking at another good day ahead, including in precious metals taking a bite at yesterday‘s inordinately large downswing. Nothing of the big factors ahead for Q1 2022 as described in today‘s analysis (I wholeheartedly recommend reading it in full for the greatest benefits – there is only so much / little that I can fit into a one paragraph summary), and that means we‘re looking at further stock market gains as the bull runs (including in commodities and precious metals, yes precious metals), aren‘t over in the least. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold and silver - The beginning of the year 2022 may not satisfy

Gold and silver - The beginning of the year 2022 may not satisfy

Przemysław Radomski Przemysław Radomski 04.01.2022 16:10
  Gold, silver, and mining stocks started 2022 with a bang. However, this wasn’t the kind of fireworks investors were hoping for. While gold, silver, and mining stocks partied hard into year-end, the trio woke up to massive hangovers on Jan. 3. Although I’ve been warning for some time that mining stocks would stumble in 2021, the New Year is still filled with old problems. For example, the GDX ETF has been making lower lows and lower highs for months, and when its RSI (Relative Strength Index) approaches 70, the senior miners often run out of gas. For context, I highlighted the events with the blue vertical dashed lines below. Moreover, with the senior miners’ current price action following the ominous paths of 2000, 2008, and 2013, and their stochastic indicator still signaling overbought conditions, Monday’s weakness may be a sign of things to come. Please see below: Please also consider the implications of year-end tax-loss harvesting. With the general stock market rallying to start the New Year, losing positions that were sold to offset capital gains near the end of 2021 were likely repurchased on Jan. 3. However, gold, silver, and mining stocks didn’t benefit from the phenomenon. As a result, while the GDX ETF may have outperformed gold, the relative strength was immaterial within the overall picture. Turning to the HUI Index’s long-term chart, the same bearish forecast is present. For example, I marked the specific tops with red and black arrows. In the current situation, we saw yet another small move up, but that’s most likely because price moves are now less volatile. The areas marked with red ellipses remain similar and show back-and-forth movement before the big decline. As a result, we’ve entered a consolidation phase, and the implications are not bullish, but bearish. Making three of a kind, the GDXJ ETF’s corrective upswing has likely run its course. Interestingly, the junior miners’ current rally mirrors the small correction that materialized in mid-2021. Back then, the GDXJ ETF rallied on low volume and didn’t recapture its 50-day moving average. With the same tepid strength present today, the drawdown that followed in mid-2021 will likely commence once again. On top of that, the behavior of the GDXJ ETF’s RSI is also similar – with the indicator moving from roughly 30 to 50. For context, I highlighted the similarities with green and purple ellipses below. Also noteworthy, similar developments occurred in February/March 2020, before the profound plunge unfolded. As a result, the GDXJ ETF looks set for another sharp drawdown over the medium term and predicting higher prices might be misleading. Finally, while my short position in the GDXJ ETF proved quite prescient in 2021, the junior miners continue to underperform the senior miners. With the GDX/GDXJ ratio likely to confront new lows in the coming months, the GDXJ ETF should remain a material laggard in 2022. In conclusion, gold, silver, and mining stocks started off 2022 with a bang. However, it wasn’t the kind of fireworks that investors were hoping for. With each new celebration shorter in magnitude, it’s likely only a matter of time before their parties are canceled. As a result, the precious metals still confront the same bearish technical outlooks that plagued them in 2021. While mean reversion remains undefeated over the long term, the wait may prove longer than many expect. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Will 2022~23 Require A Different Strategy For TradersInvestors?

Will 2022~23 Require A Different Strategy For TradersInvestors?

Chris Vermeulen Chris Vermeulen 05.01.2022 16:33
Is The Lazy-Bull Strategy Worth Considering? - Part IMany traders struggled in 2021 with the extended price volatility and sideways price trends. Recently, news that Bridgewater's 2021 results were saved by December's +7.8% gain (Source: Yahoo! Finance) leads me to believe a number of independent funds and investors are going to have a tough end-of-year return for 2021.Average Hedge Fund Returns Less Than 25% Of The 2021 S&P500 GainsThe volatility in the US and global markets throughout most of 2021 took a toll on traditional trading strategies. With the VIX trading above 12 on average throughout almost all of 2021, traditional trading strategies may not have been able to adjust to this increased volatility in the US markets – getting chewed up along the way. I wrote an article series about how computerized trading strategies can fail when volatility levels increase beyond traditional boundaries a few weeks ago. You can read the first of the three part series, US Federal Reserve Actions 1999 to Present - What's Next?, and then link to the other two.(source: Aurum.com)Many of the best Hedge Funds could barely squeeze out a profit in 2021. While the S&P500 rallied more than 27% in 2021, you can see from the graphic above that the average returns for Hedge Funds in 2021 were a paltry +6.24%.Sign up for my free trading newsletter so you don’t miss the next opportunity! I expect that the US and global markets will continue to stay in extended price volatility ranges throughout all of 2022 and into 2023 as broad global market transitioning continues to take place. This expectation leads me to conclude that the “Lazy-Bull” strategy may be better suited for traders/investors over the next 24+ months than more active trading strategies.What Is The “Lazy-Bull” Strategy?The Lazy-Bull strategy is a term I use for my proprietary strategies – The Technical Investor and the Technical Index & Bond Trader. I call it the Lazy-Bull strategy because it is straightforward and only generates about 3 to 10 trades per year (on average). Many traders dislike this type of strategy because it it does not require many trades and does not provide the rush/roller coaster ride that many think they should feel while trading, which is not how it should be. Having said that, overall, this strategy has consistently produced positive annual results (CGAR average ROI 15% - 51% depending on ETF leverage, and only 7 - 21% drawdown) – beating the SPY almost every year. If you traded with the 1x, 2x, or 3x ETFs then you would have crushed the S&P 500 every year, and experienced that positive rush feeling that leverage/volatility provides.My trading style is a bit different than most other traders. My objectives consist of three very important concepts:Protect Capital At All TimesTrade Only When Strategically Opportunistic (probabilities are favorable)Trade Efficiently Using Bonds As Trade When Fear Rises among traders and investors.Through the Technical Investor and Technical Index and Bond Trading strategies, I help individuals and advisors learn how trading more efficiently using the Lazy-Bull strategies is for generating large compounded returns as shown in the SP500 chart below.I'll go further into detail regarding my strategies as we continue this multi-part article.Reading Into Q1:2022 – What To Expect?Right now, the world is waiting on Q4:2021 earnings and economic data. The first Quarter of 2022 should be very exciting for US traders as the year-end momentum of 2021 may carry forward into Q1:2022 with solid revenues and earnings. After that, we move into Q2:2022, which may be much more volatile overall.Let's look at our proprietary data mining utility to see what we might expect from the markets in the first Quarter of 2022.January 2022 has more than a 1.41:1 probability ratio of staying positive based on the past 29 years of historical data. Ideally, the average positive and negative monthly ranges are about equal – nearly $5.00. The accumulated monthly data shows that January is usually overall positive by at least $2.50 to $5.00.February 2022 has a much higher chance of extreme volatility. February 2022 shows a much greater positive to negative ratio while the possibility of a bullish February drops to a 1.33:1 probability ratio. Overall, I would suspect larger price volatility in mid to late February 2022 as the markets attempt to transition into late Q1 expectations.March 2022 has the same 1.41:1 probability ratio as January, yet the overall likelihood of extended downside price trends is about 20% greater than January.My analysis of this data suggests January and March of 2022 may surprise traders with a potential for a significant upward price move headed into Q2:2022. I believe Q4:2021 will also surprise traders as US consumers continue to engage and spend. This will lead to higher expectations for Q1:2022, which may set up a bit of a rally ahead of April/May 2022.Q1 and Q2, historically, seem to be strong in terms of traditional market growth and expectations. Yes, there have been instances when unexpected volatility disrupts the more customary types of trends – and 2022 may be one of those years. Our research shows the US Fed may make early efforts to move away from extreme easy money policies – which may shock the markets.Our research suggests the possibility of a 7% to 10% rally in the SPY in the First Quarter of 2022. If our extended research is accurate, our predictive modeling suggests more extreme price volatility may also play a significant role in how price trends/moves in 2022. Is The Lazy-Bull Strategy Worth Considering?In Part II of this article, we'll review the entire year of 2022 Quarterly Data Mining results and present more evidence that 2022 and 2023 may be years where a shift in strategy plays an important role for traders/investors. With the VIX trading above 15 more consistently, many strategies will get chewed up and spit out as the markets roll 9% - 15% up and down while attempting to transition away from the post-COVID stimulus.Get ready; 2022 will be an excellent year for traders with significant trends and bigger volatility. We just have to stay ahead of these trends to protect our capital and allow it to grow more efficiently. The risks of more traditionally moderate volatility systems getting chewed up in this extreme environment will continue. So be prepared to move towards a more protective trading style to survive the next 12 to 24 months.Want To Learn More About The Technical Investor and The Technical Index & Bond Trading Strategies?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to take a few minutes to visit the Technical Traders website to learn about our Technical Investor and Technical Index and Bond Trading strategies and how they can help you protect and grow your wealth. Have a great day!
Bitcoin (BTC), Ethereum (ETH) and Crude Oil are ones you're likely to watch

Bitcoin (BTC), Ethereum (ETH) and Crude Oil are ones you're likely to watch

Monica Kingsley Monica Kingsley 05.01.2022 15:55
Another daily rise in yields forced S&P 500 down through tech weakness – the excessive selloff in growth didn‘t lead buyers to step in strongly. More base building in tech looks likely, but its top isn‘t in, and similarly to the late session HYG rebound, spells a day of stabization and rebalancing just ahead. I‘m not looking for an overly sharp move, even if the very good non-farm employment change of 807K vs. 405K expected could have facilitated one. Friday though is the day of the key figure release – till then a continued bullish positioning where every S&P 500 dip is being bought, would be most welcome. The same goes for high yield corporate bonds not standing in the way, and for credit markets to reverse yesterday‘s risk-off slant. Likewise the compressed yield curve could provide more relief by building on last few days‘ upswings in the 10- to 2-year Treasury ratio. VIX has been repelled above 17 again, and keeps looking ready to meander near its recent values‘ lower end. That‘s all constructive for stock market bulls, and coupled with the fresh surge in commodities (and precious metals), bodes well for the S&P 500 not to crater soon again. Another positive sign comes from the dollar, which wasn‘t really able to keep intraday gains in spite of the rising Treasury yields. Cryptos though remain cautious (unlike precious metals which moved nicely off Monday‘s oversold levels – on a daily basis oversold), so we‘re in for a muddle through with a generally and gently bullish bias this week… until non-farrm payrolls surprise on Friday (and markets would probably interpret it as a reason to rise). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 keeps respectably treading water, waiting for Nasdaq to kick in – odds are we won‘t have to wait for a modest upswing in both for too long. Credit Markets HYG is the key next – holding above yesterday‘s lows would give stocks enough breathing room, and so would however modest quality debt instruments upswing. Gold, Silver and Miners Gold and silver are leading miners, but the respectable daily volume makes up for this non-confirmation. The table is set for the floor below gold and silver to hold, while a very convincing miners move has to still wait. Crude Oil Everything is ready for the crude oil upswing – even if oil stocks pause next, which can be expected if tech stages a good rally. Until then, it‘s bullish for both $WTIC and $XOI. Copper Copper is keeping the upswing alive, and any pullbacks don‘t have good odds of taking the red metal below 4.39 lastingly. Still, copper remains range bound for now, and the pressure to go higher, is building up. Bitcoin and Ethereum Bitcoin and Ethereum lost the bullish slant, but didn‘t turn bearish yet – this hesitation is disconcerting, but it would be premature to jump the gun. It‘s still more likely that cryptos would defy the shrinking global liquidity, and try to stage a modest rally. Summary S&P 500 internals reveal tech getting hurt yesterday, and at the same time getting ready for a brief upswing of the dead cat bounce flavor. And if HYG kicks back in, odds increase dramatically that the tech (and by extension S&P 500) upswing won‘t be a dead cat bounce (please note that I‘m not implying vulnerability to a large downswing) – that‘s my leading scenario, which should materialize by Friday‘s market open. Yes, I‘m looking for non-farm payrolls to be well received once the dust settles. Till then, commodities are paving the way for further stock market gains, with precious metals turning out not too shabby either. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Will 2022~23 Require Different Strategies For TradersInvestors Part II

Will 2022~23 Require Different Strategies For TradersInvestors Part II

Chris Vermeulen Chris Vermeulen 06.01.2022 00:19
Is The Lazy-Bull Strategy Worth Considering? Part III started this article by highlighting how difficult some 2021 strategies seemed for many Hedge Funds and Professional Traders. It appears the extreme market volatility throughout 2021 took a toll on many systems and strategies. I wouldn't be surprised to see various sector ETFs and Sector Mutual Funds up 15% to 20% or more for 2021 while various Hedge Funds struggle with annual returns between 7% and -5% for 2021.After many years in this industry and having built many of my own strategies over the past decade, I've learned one very important facet of trading strategy development – expect the unexpected. A friend always told me to "focus on failure" when we developed strategies together. His approach to strategy design was "you develop it do too well in certain types of market trends and volatility. By focusing on where it fails, you'll learn more about the potential draw-downs and risks of a strategy than ignoring these points of failure". I tend to agree with him.In the first part of this research article, the other concept I started discussing was how traders/investors might consider moving away from strategies that struggled in 2022. What if the markets continue trending with extreme volatility throughout 2022 and into 2023? Suppose your system or strategy has taken some losses in 2022, and you have not stopped to consider volatility or other system boundaries as a potential issue. In that case, you may be looking forward to a very difficult 12 to 14+ months of trading in 2022 and 2023.Volatility Explodes After 2017Current market volatility/ATR levels are 300% to 500% above those of 2014/2015. These are the highest volatility levels the US markets have ever experienced in the past 20+ years. The current ATR level is above 23.20 – more than 35% higher than the DOT COM Peak volatility of 17.15.As long as the Volatility/ATR levels stay near these elevated levels, traders and investors will likely find the markets very difficult to trade with strategies that cannot properly adapt to the increased risks and price rotations in trends. Simply put, these huge increases in price volatility may chew up profits by getting stopped out on pullbacks or by risking too much in terms of price range/volatility.Sign up for my free trading newsletter so you don’t miss the next opportunity!The increased volatility over the past 5+ years directly reflects global monetary policies and the COVID-19 global response to the crisis. Not only have we attempted to keep easy money policies for far too long in the US and foreign markets, but we've also been pushed into a hyperbolic price trend that started after 2017/18, which has increased global debt consumption/levels to the extreme.2022 and 2023 will likely reflect a very strong revaluation trend which I continue to call a longer-term "transition" within the global markets. This transition will probably take many forms over the next 24+ months – but mostly, it will be about deleveraging debt levels and the destruction of excess risk in the markets. In my opinion, that means the strongest global economies may see some strength over the next 24+ months – but may also see extreme price volatility and extreme price rotation as this transition takes place.Expect The Unexpected in 2022 & 2023The US major indexes had an incredible 2021 – rallying across all fears and COVID variants. The NASDAQ and S&P500 saw the biggest gains in 2021 – which may continue into early 2022. Yet I feel the US markets will continue to transition as the global markets continue to navigate the process of unwinding excess debt levels and potentially deleveraging at a more severe rate than many people expect.Because of this, I feel the US markets may continue to strengthen as global traders pile into the US Dollar based assets in early 2022. Until global pressures of deleveraging and transitioning away from excesses put enough pressure on the US stock market, the perceived safety of US assets and the US Dollar will continue as it is now.(Source: www.StockCharts.com)Watch For Sector Strength In Early 2022 As Price-Pressure & Supply-Side Issues Create A Unique Opportunity For Extended Revenues/ProfitsI believe the US markets will see a continued rally phase in early 2022 as Q4:2021 revenues, earnings, and economic data pour in. I can't see how any global economic concerns will disrupt the US markets if Q4:2021 data stays stronger than expected for US stocks and the US economy.That being said, I do believe certain sectors will be high-fliers in Q1:2022 and Q2:2022 – at least until the supply-side issues across the globe settle down and return to more normal delivery expectations. This means sectors like Automakers, Healthcare, Real Estate, Consumer Staples & Discretionary, Technology, Chip manufacturers, and some Retail segments (Construction, Raw Materials, certain consumer products sellers, and specialty sellers) will drive a new bullish trend in 2022.The US major indexes may continue to move higher in 2022. They may also be hampered by sectors struggling to find support or over-weighted in symbols that were over-hyped through the end of 2020 and in early 2021.I have been concerned about this type of transition throughout most of 2021 (particularly after the MEME/Reddit rally phase in early 2021). That type of extreme trending usually leads to an unwinding process. I still don't believe the US and global markets have completed the unwinding process after the post-COVID extreme rally phase.(Source: www.StockCharts.com)Will The Lazy-Bull Strategy Continue To Outperform In 2022 & 2023?This is a tricky question to answer simply because I can't predict the future any better than you can. But I do believe moving towards a higher-level analysis of global market trends when the proposed "transitioning" is starting to take place allows traders to move away from "chasing price spikes." It also allows them to position for momentum strength in various broader market sectors and indexes.I suspect we'll start to see annual reports from some of the biggest institutional trading firms on the planet that show feeble performance in 2021. This recent article caught my attention related to Quant Funds in China.I believe we will see 2022 and 2023 stay equally distressing for certain styles of trading strategies while price volatility and an extreme deleveraging/transitioning trend occur. Trying to navigate this type of choppy global market trending on a short-term basis can be very dangerous. I believe it is better to move above all this global market chop and trade the bigger momentum trends in various sectors and indexes.Part III of this research article will focus on Q1 through Q4 expectations for 2022 and 2023. I will highlight broader sector/index trends that may play out well for investors and traders who can move above the low-level choppiness in the US and global markets.WANT TO LEARN MORE ABOUT THE TECHNICAL INVESTOR AND THE TECHNICAL INDEX & BOND TRADING STRATEGIES?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may begin a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to take a few minutes to visit the Technical Traders website to learn about our Technical Investor and Technical Index and Bond Trading strategies and how they can help you protect and grow your wealth.Have a great day!
Why Successful Traders Make More By Trading Less

Why Successful Traders Make More By Trading Less

Chris Vermeulen Chris Vermeulen 06.01.2022 18:20
During my 25 years of trading and mentoring others, I have been dragged through the coals a few times. And by that, I mean I have; blown up a few trading accounts; had some massive gains only to watch them turn into worthless penny stocks, and; I even had one trade based around the volatility index blow up and become worthless the day after I bought it. I've had many other painful and costly trading experiences between those as well, and I know there will be more in the future. This leads me to the first topic I would like to talk about – learning through experience.#1 - Learned Through Expensive ExperiencesI help a lot of traders each year from all walks of life. They range from 18 to 85+ years of age. Some are total newbies, financial advisors, money managers, all the way up to billionaires. What is apparent is that the most successful traders (those who make money year after year) have the same things in common with how they trade. They all: walk a straight and somewhat unemotional line outside of learning from losses and trading mistakes.  focus on managing their capital because they understand just how quick and easy it is to lose money, which is why they focus and follow strict rules. follow very specific trading strategies/rules and do not trade on emotions. protect their capital ALWAYS with stops and position management only trade specific trade setups that put the probabilities in their favor focus heavily on index and bond positions say their trading feels slow/boring most of the time trade multiple strategies#2 - Ignore High Flying, News, Manipulated, and Hype Based MovesIt's hard not to participate in some of these wild rallies and stock crashes we have seen over the last couple of years. It's a natural tendency to want to take part in what everyone else is doing, and the lure of instant oversized gains is powerful. But, unfortunately, most individuals who get involved in these trades lose money for a good reason. They are trading based on greed/emotions with no real measured trading plan.Don't get me wrong; I'm not saying, "don't trade these stocks." In fact, many of these are incredible opportunities for experienced traders. These types of stocks generally become ideal for day traders and even momentum and aggressive swing traders. They can provide some quick extra cash. But that's what these types of trades are - small, fast, higher risk trades that only a seasoned trader should trade.Sign up for my free trading newsletter so you don’t miss the next opportunity!For some reason, traders come into this business thinking it's a game and believes these are the types of trades that should always be traded. They take oversized positions only to experience significant damaging losses to their account.I conducted a survey a little while back, and the survey results blew my mind. Most people want to trade the volatile media-driven hype stocks and commodities. People fall in love with specific assets and want to trade only those, even if there are better assets and more efficient ways to pull money out of the market.The results below frustrate the heck out of me because, to me, it makes no logical sense if you are in the market to make money.Trader Survey Results Confirm Why it is Hard To Make MoneyThe above results make sense as studies have proven that humans react seven times more based on emotions versus logic. This is why the stock market has such wild price swings with Euphoric blowoff tops and Panic washout lows.People are highly addicted to riding their emotions (adrenaline/dopamine), and they love the rush of fast-moving stocks and gambling, which is why the markets are regulated, along with casinos, for that matter. Simply put, people lose control of common sense and logic when they are on tilt with emotion.Fast-moving assets with extreme volatility act as a bug-zapper light, which attracts bugs, only to kill anything that gets too close. In this case, new traders think they can make quick and easy money from hot stock in the news.Trading is a numbers game, and it requires logic, rules,and a proven strategy to win long-term.Based on the survey we did with thousands of traders, you can see that making the same amount of money with fewer trades and lower risk is not that exciting. Instead, traders prefer high volatility assets like metals, and natural gas, which are manipulated and have large wild price swings.Also, from a trading statics point of view, those two are among the most difficult to trade.As a pilot, I know the importance of keeping calm, having checklists/rules, and systems in place. Without them, you will eventually crash and burn; it is just a matter of time. The same holds true for trading and investing in that you need to trade what makes the most money, trade only the best setups, and have the lowest risk.Hottest Symbols vs Biggest TrendsBottom line, I don't care about trading every day or trying to catch the hottest symbols everyone is talking about. Instead, I care about catching and riding the biggest trends in the US stock index and the Treasury Bond ETFs. These are highly liquid sentiment trends that produce oversized gains each year. This is also the reason ETFs have taken over the mutual fund market and why financial advisors and hedge funds primarily trade/own stock index funds and bonds.Through the Technical Index and Bond ETF Trading strategy, I help individuals and advisors trade more efficiently. This strategy trades SPY, SSO, SPXL, QQQ, QLD, TQQQ and TLT, TBT, TMF, which generate large, compounded returns as shown in the chart below:This proprietary ETF trading strategy is straightforward and only generates about 3 to 10 trades per year. Most traders dislike this type of strategy because it lacks lots of action and volatility. If you noticed, you won't find many professional advisors telling you to jump into the fast-moving hype stocks, and for a good reason - they know better and want to protect your hard-earned capital. #3 - The Power Of Slow & Steady Gains Are Mind-Bending!As I learned a long time ago (and this holds true for almost everything across the board), learning something new, like mastering how to trade slower, consistent strategies, can take some getting used to. Everything new will always be a challenge, but once you master something, it becomes simple, low stress, and you will experience more consistent results.Take a look at this data from an Atalanta Sosnoff report. This should get my point across about how powerful slow, boring, consistent returns pack a powerful punch and why thousands of traders from 82 countries follow my index and bond trading signals.Source: Eagle Asset Management.The Technical Index & Bond ETF trading strategy has consistently produced positive annual results (CGAR average ROI 15% - 51% depending on ETF leverage, only 7 - 21% max drawdown). If you traded with the 2x or 3x ETFs, you would have crushed the S&P 500 every year and experienced that rush feeling that leverage/volatility provides but within a safer/smarter way.Passive trading styles like this are a bit different from those you may have traded in the past. My objectives consist of four very important concepts:Protect Capital At All Times.Trade Only When Strategically Opportunistic (probabilities are favorable).Trade Efficiently Using Bonds As Trade When Fear Rises among traders and investors.Move to cash or money market fund when the index and bonds are both out of favor.Concluding Thoughts:In short, I hope this has helped confirm your thinking of trading less and focusing on more solid trade setups. Or maybe it has opened your eyes to the world of slow and steady gains wins the race, with much less stress and effort.If you are interested in learning more about TIBT – Technical Index & Bond Trader, I invite you to visit www.TheTechnicalTraders.com/twa 
Gold: No Cheer in the New Year

Gold: No Cheer in the New Year

Przemysław Radomski Przemysław Radomski 06.01.2022 12:22
  What a way to start a year! Gold just faked its comeback before moving to new yearly lows. That’s a very bearish way for a market to start the year. Given that miners underperformed gold and silver briefly outperformed it, we have a very bearish storm brewing for the next couple of weeks / months. On Jan 3, I wrote the following: The year 2021 is over, 2022 has finally arrived. However, why does the current price action look “sooo last year”? Because the patterns appear to be repeating and the clearest similarity is present in the key precious metal – gold itself. Gold prices moved higher in late December, and it happened on low volume. The rally caused the stochastic indicator to move above 80 and the RSI above 50. That’s exactly what happened in both: late 2021 and late 2020. What does it mean? Well, it means that we shouldn’t trust this rally, as it could end abruptly, just like the one that we saw a year ago. Besides, gold corrected 61.8% of the preceding decline (so it moved to its most classic Fibonacci retracement), which means that – technically – what we saw in the past two weeks was just a correction, not the beginning of a new rally. And what happened next? Gold declined, faked its comeback, and then declined again to new yearly lows. 2022 continues to be a down year for gold, and this is particularly revealing, because early January is the time when the buy-backs should – theoretically – happen. I’m referring to the tendency for investors to exit losing positions (and – in tune with my expectations and against expectations of almost everyone else – 2021 was a down year for gold, silver, and mining stocks, after all) close to the end of the year, in order to harvest the tax loss, and then to get back into the market in early January. Despite the above tendency, gold is down, silver is down, and mining stocks are down as well. This shows that the precious metals market is weak (which has been clear since gold invalidated its breakout above the 2011 high in 2020) and is unlikely to soar significantly (in terms of hundreds of dollars) unless it slides first. Besides, at the beginning of major rallies, gold stocks tend to lead the way up. And right now, it’s exactly the opposite. The upper part of the above chart features the GDXJ ETF – proxy for junior mining stocks, the middle part features the GLD ETF – proxy for gold, and the bottom part features the S&P 500 Index. The red lines compare the previous stock market highs to what happened in junior miners, and the dotted lines show what juniors did when gold formed its recent highs and lows. In short, junior gold mining stocks are underperforming both: gold, and other stocks. This is as bearish as it can get, given the current situation regarding the USD Index (which is in a medium-term uptrend) and the situation in the interest rates, which are not only about to go up, but the expectations of them going up are becoming more and more hawkish. And that’s no accident either, as it’s in tune with the current political narrative in the U.S. – inflation is currently presented as the major enemy that needs to be dealt with. In other words, as the situation in interest rates is likely to become even more hawkish and the USD Index is likely to move higher, gold is likely to go down, and so – eventually – will the general stock market. And since junior mining stocks have already proven over and over again that they magnify declines on both markets, they are likely to fall particularly hard, when the above markets decline. We gained quite a lot based on the decline in the juniors in 2021, but it seems that the gains that could be reaped in 2022 (of course, I can’t and I’m not promising any kind of specific performance for any market) based on junior miners’ decline (and then their revival) could be breathtaking – but as always, only if one is positioned correctly for both major moves. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
We might say interest rates became Topic #1

We might say interest rates became Topic #1

Przemysław Radomski Przemysław Radomski 11.01.2022 14:10
  The imminent interest rate hike by the Fed is almost certain. Are investors' concerns justified and will it mean trouble for the precious metals?  While the S&P 500 and the NASDAQ Composite recovered from sharp intraday losses on Jan. 10, investors’ mood swings signaled heightened anxiety. With the PMs whipsawing alongside the general stock market, more volatility should materialize in the weeks and months to come. To explain, with the Fed on a hawkish warpath to fight rampant inflation, JPMorgan CEO Jamie Dimon told CNBC on Jan. 10 that a resilient U.S. economy could prove problematic for the financial markets in 2022. “The consumer balance sheet has never been in better shape; they’re spending 25% more today than pre-COVID,” said Dimon. “Their debt-service ratio is better than it’s been since we’ve been keeping records for 50 years.” As for inflation and the Fed: “It’s possible that inflation is worse than they think and they raise rates more than people think. I personally would be surprised if it’s just four [interest rate] increases [in 2022],” he added. How would the financial markets react? Source: CNBC Singing a similar tune, the International Monetary Fund (IMF) warned on Jan. 10 that the Fed’s rate hike cycle could slaughter emerging markets. Its report revealed: “For most of last year, investors priced in a temporary rise in inflation in the United States given the unsteady economic recovery and a slow unravelling of supply bottlenecks. Now sentiment has shifted. Prices are rising at the fastest pace in almost four decades and the tight labor market has started to feed into wage increases.”   Volatile Days Ahead While I warned for all of 2021 that inflationary pressures were bullish for the U.S. dollar and U.S. Treasury yields and bearish for the PMs, the IMF stated: “Faster Fed rate increases in response could rattle financial markets and tighten financial conditions globally. These developments could come with a slowing of US demand and trade and may lead to capital outflows and currency depreciation in emerging markets.” As a result, even the IMF is anxiously bullish on the USD Index: For a good reason. With September, July, June, and May all gone by the wayside, now, the market-implied probability of a Fed rate hike in March has risen to nearly 83%. For context, the probability of a March liftoff was less than 10% in early November. Please see below: Likewise, the market-implied probability of four rate hikes by the Fed in 2022 has risen to nearly 87%. Again, the probability was less than 50% in early November. Please see below: Why the material shift? Well, while I’ve been warning for months that rampant inflation would elicit a hawkish about-face from the Fed, investors are finally coming around to this reality. With inflation still running hot, market participants understand that pricing pressures won’t subside without policy responses from the Fed. As a result, the “transitory” narrative is dead, and investors have lost one of their staunchest allies. This means that predicting silver and gold at higher levels in the medium term might not be the best idea. To that point, Bank of America’s dove-hawk spectrum shows that the dovish brigade has lost several soldiers. With the hawks now on the offensive, the officials preaching monetary patience are few and far between.  Please see below: For context, Bank of America still places San Francisco Fed President Mary Daly in the dovish bucket. However, I noted on Dec. 23 that she has materially shifted her stance in recent weeks: Source: The New York Times Furthermore, with inflationary pressures still bubbling, the Manheim Used Vehicle Value Index hit another all-time high of 236.2 in December, as “wholesale used vehicle prices (on a mix-, mileage-, and seasonally adjusted basis) increased 1.6% month-over-month.” Please see below: On top of that, the cost of shipping from Shanghai, China, is still increasing. With the U.S. importing more goods from China than any other nation, the inflationary impact on the U.S. economy is material. Please see below: Finally, while the GDXJ ETF benefited from the NASDAQ Composite’s intraday reversal on Jan. 10, I warned on Oct. 26 that monetary policy tightening would eventually upend the junior miners. I wrote: To explain, the green line above tracks the GDXJ ETF from the beginning of 2013 to the end of 2015. If you analyze the left side of the chart, you can see that when Fed Chairman Ben Bernanke hinted at tapering on May 22, 2013, the GDXJ ETF declined by 32% from May 22 until the taper began on Dec. 18. Moreover, the onslaught didn’t end there. Once the taper officially began, the GDXJ ETF enjoyed a relief rally (similar to what we’re witnessing now), as long-term interest rates declined and the PMs assumed that the worst was in the rearview. However, as the liquidity drain caught up to the junior miners over the medium term, the GDXJ ETF declined by another 36% from when the taper was announced on Dec. 18, 2013 until the end of 2015. To that point, with part one already on the books, the second act will likely unfold once the Fed formally begins its taper in “either mid-November or mid-December.” Thus, history implies that the GDXJ ETF still has plenty of downside left. While the junior miners' ETF has declined by more than 11% since Oct. 26, Goldman Sachs has come around to our way of thinking. Please see below: To explain, Goldman Sachs told its clients last week that the yellow metal has been following its ominous path since 2013/2014 (as you may recall, I’ve been writing about the 2013-now analogy for months). For context, the red line above tracks gold’s price action from July 2010 until December 2014, while the blue line above tracks gold’s price action from July 2019 until now. If you analyze the symmetrical overlay, you can see that the pair have been in sync for some time. Moreover, if you focus your attention on the red line’s plight as time passes, it’s clear why Goldman Sachs is warning its clients about “further downside risk”. To that point, with the investment bank forecasting a real (inflation-adjusted) interest rate regime change in 2022, gold is poised to suffer along the way. To explain, the various bars above track gold’s monthly returns when the real U.S. Federal Funds Rate (dark blue), the real U.S. 5-Year Treasury yield (green), and the real U.S. 10-Year Treasury yield (light blue) begin with positive/negative values and then increase/decrease. If you focus your attention on the bars furthest to the right, you can see that when the real U.S. 5-Year Treasury yield and the real U.S. 10-Year Treasury yield are negative and then rise, gold suffers its worst monthly performances. Moreover, with the current fundamental environment presenting us with precisely that, similar results will likely materialize over the medium term. The bottom line? While investors desperately bought the dip on Jan. 10, the more than 2% intraday swing in the NASDAQ Composite screamed of monetary policy anxiety. With another hot inflation print poised to hit the wire on Jan. 12, the reprieve will likely be short-lived. Furthermore, with the PMs suffering from a similar fundamental affliction – as both the PMs and technology stocks are extremely allergic to rising interest rates – volatility is likely here to stay. As a result, the Fed should continue to break investors’ hearts over the medium term. In conclusion, the PMs rallied on Jan. 10, though their fundamental outlooks remain profoundly bearish. With interest rates poised to rise and the USD Index still undervalued, more headwinds should confront gold, silver, and mining stocks in the coming months. As a result, long-term buying opportunities are likely still a ways away. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Ether (ETH), Bitcoin (BTC) and crypto market with some ups and downs. BTCUSD looks as if it follows Nasdaq (NDX)

Ether (ETH), Bitcoin (BTC) and crypto market with some ups and downs. BTCUSD looks as if it follows Nasdaq (NDX)

Alex Kuptsikevich Alex Kuptsikevich 11.01.2022 09:05
On Monday, we saw colourful confirmation of how much stock market dynamics are affecting Ether and Bitcoin. Following the intraday fall of more than 2% in the Nasdaq, the top two cryptocurrencies surrendered their psychologically important levels, retreating at $ 3K and $ 40K, respectively. However, in all cases, the fall was redeemed. The Nasdaq closed with a nominal decline, and Bitcoin very quickly returned to levels near $ 42K. Ether is currently trading at 3100, gaining over 1% since the start of the day. The broader technical picture has not changed, indicating locally oversold, which puts buyers on the run who have been waiting for a discount in recent days. The crypto market as a whole has been losing 0.6% over the past 24 hours, but since the beginning of the day, it has been adding 1.6% to $ 1.96 trillion against the dip to $ 1.86 trillion at the peak of the decline on Monday evening. The Cryptocurrency Fear and Greed Index lost 2 points in a day, dropping to 21. This is still in extreme fear, just like yesterday and a week ago. In our opinion, bitcoin and ether are bought locally by enthusiasts and a number of long-term strategic investors, while investment funds trade them based on bursts of demand or risk aversion. By and large, this puts cryptocurrencies on a par with growth stocks, sensitive to the dynamics of interest rates: the rise in profitability causes a sell-off of risks. At the same time, we must not forget that cryptocurrencies are more mobile, that is, they sometimes lose twice or three times more than Nasdaq. If so, then cryptocurrencies are far from the bottom, since the process of normalizing interest rates in financial markets is far from complete.
US Fed Playing With Fire - Bubbles May Burst While Bond Yields & Metals Rally

US Fed Playing With Fire - Bubbles May Burst While Bond Yields & Metals Rally

Chris Vermeulen Chris Vermeulen 12.01.2022 16:59
The US Federal Reserve's tightening monetary policy from a historically low-interest rate has slowed the US stock markets. As a result, traders quickly attempt to adjust their capital allocation levels as risk assets, technology, and US major indexes roll lower because of expected Fed Rate Hikes and other Hawkish activities.We will explore how the US Fed's comments and potential future actions may prompt significant market trends in 2022 and beyond. We'll also attempt to identify how and when the US Fed may disrupt the US markets. We know the actions of the US Fed will prompt some significant trends over the next 12 to 24 months. We know certain assets will likely rise in value as fear settles into the markets because of rising interest rates and deflating asset bubbles. It is just a matter of understanding how the speculative asset bubble of the past 8+ years and how the US Fed may move to pop these speculative bubbles soon.Asset Bubbles Everywhere, The Global Markets Continue To FrothAsset bubbles, such as those created in Cryptos, the US stock market, US Real Estate, and the art/collectible market over the past 5+ years, have visualized the US Fed's easy money results in terms of bubbles.Take a look at this chart showing the growth in certain asset classes since the start of 2019. It is incredible to think that these asset classes have rallied so far and so fast in just over 35 months: The Grayscale Bitcoin ETF rallied more than 1200%. The Technology sector rallied more than 200%. Real Estate rallied more than 85%. The S&P 500 rallied more than 94%. The US Federal Reserve's move to lower interest rates after the 2018 market collapse, which resulted in a December 24, 2018, Christmas Bottom, prompted an incredible rally phase where traders followed the US Fed in piling into assets. As long as the US Fed continued buying assets and kept interest rates near zero, global traders had no reason to fight the US Fed.(Source: StockCharts.com)Is The US Fed About To Pop The Bubble From The Stratosphere?Our research suggests the US Federal Reserve is changing its policy a little late into the game. However, it appears the US and global markets have already "rolled over" in terms of growth trends and expectations. This SPY to QQQ ratio chart highlights that the US markets entered a peaking phase in late July/August 2020 and reached an ultimate peak in February 2021.(Source: TradingView.com)S&P 500 PE Ratio Suggests Investors Are ALL-IN For The Next 90+ YearsIn other words, it appears traders have reached their ceiling in terms of what they believe the US Fed is capable of doing at this stage in the rally. For example, the PE Ratio of the US Stock market ending in 2021 ended just below 30, with a historical high for 2021 near 37. The historical mean is 15.96 – which is still relatively high for the US stock market.Remember, a PE level of 15.96 means any investor buying in at those levels would need a minimum of 15.96 years of a company handing over "every penny of revenue" to the investor (excluding all costs, payrolls, taxes, fees, and other operating expenses) to cover the PE multiple of the investment. So a PE level of 30, as we see at the end of 2021, suggests that stock price valuation levels are at least 60 to 90+ years ahead of real returns.The only thing that can change this historic level of speculation in the markets is a deleveraging/revaluation event.(Source: multpl.com)From the US Fed's Actions To How Traders Should Prepare For Shifting MarketsThis first part of our ongoing research into the US Fed's actions and where they are telegraphing their intents will continue. Part II of this article will investigate how traders should read into these shifting markets and where we're attempting to highlight what has taken place over the past 3 to 5+ years.We've managed to live through an incredible event in history. I can only think of one other time when a global superpower extended this type of credit and support for the worldwide economy. That was the Roman Empire many thousands of years ago.What we experience over the next 20 to 40+ years could be the biggest and most incredible opportunity of your lifetime. The process of deleveraging all this debt and working all this capital through the global markets over the next few decades may present one of the most incredible investment/trading opportunities anyone has ever seen in over 1500 years.Look for my Part II to this article, and we'll continue exploring the current shifts in the US and global stock and asset markets.Finding The Right Strategies That Will Help You Navigate Through Bulls & BearsIf you have struggled with finding opportunities over the past year or so and want to know which are the hottest sectors, or how to protect and grow your capital, then please take a minute to review my Total ETF Portfolio - Triple-Strategy Trading Plan to help you profit from these big market transitions.Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
If USD increases, will crypto go down?

If USD increases, will crypto go down?

Alex Kuptsikevich Alex Kuptsikevich 13.01.2022 08:49
The value of the cryptocurrency market rose almost 3% over the past 24 hours to 2.07 trillion. Exceeding the psychologically important circular mark pulled demand for coins outside the top 10. Separately, bitcoin enjoyed demand from the pull into risky assets in traditional financial markets and the weakening dollar. Bitcoin has fallen slightly short of the entire crypto market since the beginning of the week, pushing its share down to 40%. However, it is too early to say that a new rally in crypto has begun. The crypto market remains 30% below its peaks in early November, and capitalisation growth is uneven. Interestingly, the cryptocurrency fear and greed index lost 1 point to 21 overnight, despite increasing market cap. Yesterday's rise did not gain traction at the start of the day on Thursday. Fixing above $45K against $43.5K now would confirm the strength of the bulls. It is reasonable to talk about a rebound within the descending channel until that time. If the dollar goes back to growth in the nearest future, it will pressure stock markets. The cryptocurrency market, in these circumstances, risks reversing back to the downside, stopping the rebound and remaining in a prolonged downtrend channel. We should be wary of a smooth decline like this, as it drains optimists. We saw a similar descent in 2018 when the fall became uniformly smooth in the second half of the year, and a wide range of crypto-enthusiasts switched to standby mode until mid-2020.
S&P 500: Bulls Are Coming Back?

S&P 500: Bulls Are Coming Back?

Paul Rejczak Paul Rejczak 12.01.2022 15:42
  Stocks retraced some more of their recent declines on Tuesday. Will the market continue higher following today’s consumer inflation data? The S&P 500 index gained 0.92% yesterday, as it got back above the 4,700 level. The broad stock market’s gauge extended its advance following Monday’s upward reversal from the local low of 4,582.24. It was a dip-buying opportunity, however the short-term advance still looks like an upward correction within a new downtrend. The broad stock market continues to trade within an over two-month long consolidation. Late December – early January consolidation along the 4,800 level was a topping pattern and the index fell to its previous trading range. On Dec. 3 the index fell to the local low of 4,495.12 and it was 5.24% below the previous record high. So it was a pretty mild downward correction or just a consolidation following last year’s advances. The nearest important resistance level is at 4,700-4,720 and the next resistance level is at around 4,750. On the other hand, the support level is at 4,650. And the important support level is now at 4,580-4,600, marked by Monday’s daily low. The S&P 500 is close to its November-December local highs again, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Apple Bounced From the $170 Price Level Last week, Apple stock broke below its two-month long upward trend line after reaching the new record high of $182.94 on Tuesday. So far, it looks like a downward correction and the nearest important support level is at $165-170, marked by the previous highs and lows. The stock trades within an over month-long consolidation of around $170-180. Is this a medium-term topping pattern? It’s getting very hard to fundamentally justify the Apple’s current market capitalization of around $3 trillion. Conclusion The S&P 500 index is expected to open 0.4% higher this morning following the Consumer Price Index release which was slightly higher than expected at +0.5% m/m. So the broad stock market will retrace more of the recent declines. However, we may see a profit taking action later in the day. Here’s the breakdown: The S&P 500 extended its short-term uptrend yesterday. It may be still a correction within a downtrend or some further consolidation along the 4,700 level. In our opinion no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
US Federal Reserve - Playing With Fire Part II

US Federal Reserve - Playing With Fire Part II

Chris Vermeulen Chris Vermeulen 14.01.2022 22:49
The US Federal Reserve has recently taken steps to communicate a change in future policy – suggesting raising interest rates and acting more aggressively to combat inflation. Throughout the last few weeks of 2021 and early 2022, these comments and posturing by the US Fed have created some very big downside price moves in the US major indexes. As a result, the US markets' volatility levels (VIX) have moved to a recent average between 17~21 – nearly 3x historical normal levels.US Fed Likely To Move Very Slowly On RatesOne thing that I believe has become evident to many people is that we have moved past the COVID stimulus conversations of the past 24+ months. Inflation, rising prices, constricted supply-chains, and an excess of capital throughout many global markets appear to have shifted how the US Fed interprets future risks. The Fed is telegraphing these concerns to investors very clearly right now, which means traders/investors are shifting their focus away from high-flying Growth stocks.Even though traders are attempting to shift capital away from certain risky sectors in the US and global markets, I still believe we have about 60 to 120+ days before the bigger market shift takes place.The US Federal Reserve will likely start addressing inflationary concerns by reducing their balance sheet assets – not by aggressively raising interest rates. I feel the US Fed will navigate Q1:2022 and Q2:2022 by reducing balance sheet assets while allowing the global supply-chain issues to attempt to resolve themselves. By June/July 2022, or later, I believe the Fed may start to consider rate increases as a means to slow inflation.Fed Comments Shift Investor Sentiment – Metals In Focus For Later 2022This move away from Dovish/easy-money policies will push traders to consider more traditional hedge investments – like Gold and Silver. I'm sure you've read some comments over the past 24+ months about Gold being an extremely undervalued asset as the US Fed poured trillions of stimulus dollars into the economy? These comments were made concerning the fact that Gold rallied from $1450 in 2019 to almost $2100 in 2020 – over 12 months (over +43%). Could a big move in Gold/Silver happen again in 2022 or 2023?My research suggests a Double Pennant/Flag formation in Gold suggests the $1675 support level becomes critical soon. It also indicates a Breakout/Breakdown move may start to happen before March or April 2022 – near the APEX of the current Pennant/Flag formation.Sign up for my free trading newsletter so you don’t miss the next opportunity! The key APEX range is currently between $1785 and $1830. This represents a very tight price range where Gold may attempt to consolidate as we move towards the March/April Apex. My research suggests a move to levels near $1740 to $1750 may happen just before the Apex Breakout/Breakdown initiates. So, watch for a bit of downside price volatility in Gold before the end of February 2022.Junior Gold Miners May Rally +45%, Or More, On A Gold Price RallyThe Junior Gold Miners (GDXJ) Weekly Chart shows a firm support level near $37.35 that should act as a floor for price. My research suggests the next 45+ days will see GDXJ prices stay below $44 to $45 – trading in a reasonably tight range before starting to rally higher near the end of February 2022.I believe Metals and Miners are aligning for a late February 2022 or Q2:2022 rally. The reason is that I believe the positioning by the US Fed, and expectations related to later 2022 (a mid-term election year), may prompt quite a bit of concern for the US and global equities. This will likely push investors and traders into “old-school” hedge instruments – like Gold and Silver.That means Junior Gold and Silver Miners maybe about 55+ days away from an explosive upside price trend.SILJ May Rally +70% to +100%, Or More, On Fed ActionsNear the end of 2022, I published a research article highlighting the incredible opportunity in Silver – focusing on how the Gold/Silver ratio had recently reached another peak level and had started to decline: Fear May Drive Silver More Than 60% Higher In 2022. This move suggests the disparity between the price of Gold to the price of Silver shows Gold is appreciated (and holding greater value) than Silver over the past few years.The COVID virus event, and the subsequent Fed/Government stimulus, shifted investors/traders focus away from precious metals and into the equities market speculative rally. Now that the US Fed is starting to warn of more aggressive rate increases and other actions, precious metals are suddenly much more important as a hedge against future risks.This SILJ Weekly Chart highlights the incredible base level, near $12, that continues to offer traders a fantastic hedge against a sudden Fed move. Using a simple Fibonacci Price Extension, we can see a $20 target level (+61%) and a $25.64 target level (100%). If the $12 level holds as a base/support, SILJ may be one of the easiest and best hedges against a sudden Fed move right now.The US Federal Reserve is, in my opinion, playing with fireThe COVID Virus Event pushed global debt levels higher by more than $19.5 Trillion Dollars (Source: Bloomberg ). The rush to attempt to save the global economy has created a massive surge in global debt levels – pushing the global debt to GDP level to well above 356% (Source: Axios).Why is this so important right now? Because the US Federal Reserve is talking about an attempt to move interest rates and Fed decision-making back to near-normal levels. In my opinion, this was the one fault of Alan Greenspan in 2006-07. The thought that we can raise rates to “near normal level” at any time when we have grown debt levels excessively throughout the world is failed thinking and ignorant, in my opinion.The US Federal Reserve is trapped and almost backed into a corner. I believe the US Fed will find any rate increases above 1.00 before the end of 2023 will significantly disrupt the global speculative bubble. Any attempt to move rates to levels near or above 2.00 would represent a nearly +2000% rate increase in less than 12 to 24 months. If you want to see a shock to the global markets where global debt to GDP is closing in on 400%, try raising the FFR by more than 2000% over a short period of time. That is what I call “playing with FIRE.”.(Source: Axios)2022 and 2023 will be filled with significant market trends and increased volatility. Right now, traders and investors need to understand the global markets are attempting to quickly transition away from a speculative/growth phase as the US Federal Reserve attempts to telegraph future rate increases. So it's time to start thinking about how to prepare for unknowns and how to protect your capital more efficiently.Growth sectors and US major indexes may continue to move higher for the next 30 to 60+ days, but my research suggests Q2:2022 may represent a "change in thinking" related to a late-2022 Fed shift. We are starting to see the markets move away from the speculative bubble-type trending we saw in 2020 and early 2021. Keep your eyes open and learn how to prepare for the big trends over the next 3+ years. The Fed is playing with fire right now. One wrong move and the markets could start a drastic price correction/reversion.Finding The Right Trading StrategiesIf you have struggled with finding opportunities over the past year or so and want to know which are the hottest sectors, or how to protect and grow your capital, then please take a minute to review my Total ETF Portfolio – Triple-Strategy Trading Plan to help you profit from these big market transitions.Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
S&P 500 (SPX) Chart Looks Like An Interesting Mountain Trip. Oil keeps moving up

S&P 500 (SPX) Chart Looks Like An Interesting Mountain Trip. Oil keeps moving up

Monica Kingsley Monica Kingsley 17.01.2022 15:18
S&P 500 didn‘t like latest weak data releases, but finished well off intraday lows. This reversal though leaves quite something to be desired – and it‘s sectoral composition doesn‘t pass the smell test entirely either. Yields continued to rise while HYG barely closed where it opened – that‘s not really risk-on. Cyclicals, and riskier parts of tech weren‘t visibly outperforming – the S&P 500 rally felt like a defensive bounce off some oversold levels. That‘s why it won‘t likely hold for long – I don‘t think we have seen the end of selling – more downside awaits. It‘s still correction time, even if 2022 is likely to end up around 5,150 – we‘re still in a bull market, and Big Tech would do well. For now though, rising yields are putting pressure – and they would continue to rise. As liquidity would no longer be added by the Fed by Mar, the question remains how much would funds coming out of the repo facilities and the overnight account at the Fed (think $2t basically) offset the intended tightening. Commodities aren‘t at all shaken, and Wednesday‘s positive copper move doesn‘t look to be an outlier – unlike Friday‘s decline that didn‘t correspond with other base metals. Even though it might be soothing to the pension funds, inflation rates aren‘t likely to come down to the usual massaged 2% during the next 2-3 years, no matter whether the Fed hikes by 0.25% 6 or 8 times. The persistently and unpleasantly 4-5% high CPI is likely to break the mainstream narrative, and stay with us for much longer than generally anticipated, which is only part of the reason why I am looking for gold to leave $1,870s very convincingly in the dust this year. Both yellow and black gold would rise in tandem, and the rising open crude oil profits (heavy long positions opened at $78) are part of the reason behind permanently elevated inflation ahead. The commodities upswing is also no longer tempered by the rising dollar. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook The tech reversal could carry the daily weight of S&P 500 upswing – the daily weight only. I‘m not looking for this modest show of strength to hold. Credit Markets HYG didn‘t close strongly either – rising yields are taking their toll, and will continue doing so. Gold, Silver and Miners Gold and silver downswing needn‘t be feared – while the metals are still sideways, the pressure to go up is building, and the dollar woes would be but the first catalyst (challenged faith in the Fed taming inflation would be next). Crude Oil Crude oil still finds it easiest to keep rising, and black gold could pause a little on the approach to $90 – the technical and fundamental upswing conditions are in place, and oil stocks will continue to be among the best S&P 500 performers. Copper Copper catch up was postponed a little – that‘s all. The decline wasn‘t a true reversal, and the red metal would take on $4.60 before too long again. Bitcoin and Ethereum Bitcoin and Ethereum still can‘t convince on the upside, and with no dovish surprise on the horizon, the path of least resistance probably remains down for now – today‘s session definitely confirms that. Summary S&P 500 upswing isn‘t to be trusted, and its defensive nature out of tune with bonds, is part of the reason why. The stock market correction has further to go, and while tech overall would do well in 2022, it has to decline first – that would set the stage for a good 2H advance. The early phase of the Fed tightening cycle belongs to the bears, and it would continue to be commodities and precious metals to weather the storms best. Long live the inflation trades. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Another One Bites the Dust

Another One Bites the Dust

Monica Kingsley Monica Kingsley 20.01.2022 16:36
S&P 500 gave up opening gains that could have lasted longer – but the bear is still strong, and didn‘t pause even for a day or two. Defeated during the first hour, the sellers couldn‘t make much progress, and credit markets confirm the grim picture. There is a but, though – quality debt instruments turned higher, and maintained much of their intraday gains.And that could be a sign – in spite of the bearish onslaught driving the buyers back to the basement before the closing bell – that more buying would materialize to close this week, with consequences for S&P 500 as well. I would simply have preferred to see rising yields once again, that would be a great catalyst of further stock market selling. Now, the wisest course of action looks to be waiting for the upcoming upswing (one that didn‘t develop during the Asian session really), to get exhausted.Remember my yesterday‘s words:(…) The rising yields are all about betting on a really, really hawkish Fed – just how far are the calls for not 25, but 50bp hike this Mar? Inflation is still resilient (of course) but all it takes is some more hawkish statements that wouldn‘t venture out of the latest narrative line.Anyway, the markets aren‘t drinking the kool-aid – the yield curve continues flattening, which means the bets on Fed‘s misstep are on. True, the tightening moves have been quite finely telegraphed, but the markets didn‘t buy it, and were focused on the Santa Claus (liquidity-facilitated) rally instead – therefore, my Dec 20 warning is on. The clock to adding zero fresh liquidity, and potentially even not rolling over maturing securities (as early as Mar?) is ticking.And the run to commodities goes on, with $85 crude oil not even needing fresh conflict in Eastern Europe – the demand almost at pre-corona levels leaving supply and stockpiles in the dust, is fit for the job.With SPX short profits off the table, crude oil consolidating, and cryptos having second thoughts about the decline continuation, it‘s been precious metals that stole the spotlight yesterday – really great moves across the board to enjoy!Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 buyers are nowhere to be seen – what kind of reflexive rebound would we get next? The odds aren‘t arrayed for it to be reaching very high – yields are catching up even with financials...Credit MarketsHYG is likely to pause a little next, and the degree of its move relative to the quality debt instruments, would be telling. Rates are though going to keep rising, so keep looking for a temporary HYG stabilization only.Gold, Silver and MinersGold and silver keep catching fire, and are slowly breaking out of the unpleasantly long consolidation. The strongly bullish undertones are playing out nicely – these aren‘t yet the true celebrations.Crude OilCrude oil looks like it could pause a little here – the stellar run (by no means over yet) is attracting selling interest. The buyers are likely to pause for a moment over the next few days.CopperCopper is paring back on the missed opportunity to catch up – the red metal will be dragged higher alongside the other commodities, and isn‘t yet offering signs of true, outperforming strength.Bitcoin and EthereumBitcoin and Ethereum really are setting up a little breather, but I‘m not looking for bullish miracles to happen. Still, the buying interest was there yesterday, and that would influence the entry to the coming week (bullishly).SummaryS&P 500 upswing turned into a dead cat bounce pretty fast, and while we may see another attempt by the bulls, I think it would be rather short-lived. Think lasting a couple of days only. Not until there is a change in the credit markets, have the stock market bulls snowball‘s chance in hell. Commodities and especially precious metals, are well placed to keep reaping the rewards – just as I had written a week ago. For now, it‘s fun to be riding the short side in S&P 500 judiciously, and the time for another position opening, looks slowly but surely approaching. Let the great profits grow elsewhere in the meantime.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
S&P 500 – Should We Buy the Dip?

S&P 500 – Should We Buy the Dip?

Paul Rejczak Paul Rejczak 21.01.2022 15:38
  The S&P 500 index broke below its early December low. Are we in a new bear market or is this still just a downward correction? The broad stock market index lost 1.10% on Thursday following its Wednesday’s decline of around 1%. The S&P 500 index fell below the 4,500 level and it was the lowest since mid-October. Investors reacted to quarterly earnings releases and further Russia-Ukraine tensions. Late December – early January consolidation along the 4,800 level was a topping pattern and the index retraced all of its December’s record-breaking advance. This morning the market is expected to open 0.4% lower and it will most likely extend the downtrend. The nearest important resistance level is now at around 4,500-4,525, marked by the recent support level. On the other hand, the support level is now at around 4,450. The S&P 500 broke below an over month-long upward trend line this week, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract Broke Below its Previous Lows Let’s take a look at the hourly chart of the S&P 500 futures contract. The market broke below its previous local lows along the 4,520 level. There was a chance that entering a long position would be justified here, but any short-term bullish scenario seems invalidated now. On the other hand, it may be too late to enter a short position right now, because of some clear technical oversold conditions. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index is expected to open 0.4% lower this morning, so it will likely extend a short-term downtrend. We may see another intraday rebound, but there have been no confirmed positive signals so far. Yesterday we’ve seen a convincing rally, but it failed and the market sold off to new lows. The coming quarterly earnings releases (next week we’ll have MSFT, AAPL, TSLA among others) remain a bullish factor for stocks, but there is still a lot of uncertainty concerning Russia-Ukraine tensions. Here’s the breakdown: The S&P 500 reached yet another new low yesterday and it was the lowest since mid-October. Stocks will most likely bounce at some point, but any rally may be short-lived. In our opinion no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Still Pushing for More

Still Pushing for More

Monica Kingsley Monica Kingsley 21.01.2022 16:23
S&P 500 gave up yet again the opening gains – the bear didn‘t pause even for a day or two. Buyers defeated during the first hours, and credit markets are once again leaning the bearish way. Risk-off rules even if long-dated Treasuries rose for a day. Tech investors are selling first, and asking questions later, with consumer discretionaries, financials, and also energy hit. The washout S&P 500 bottom is approaching, and our fresh short profits are growing...Talking profits, after a one-day consolidation in precious metals, time has come to cash in on crude oil gains before the decline questioning $86 – that‘s second outsized gains trade in a row there. Black gold won‘t likely be held down for too long, and the same goes for copper knocking on $4.60 for the third time shortly. Excellent for the bottom line.This is the season of real assets (commodities and precious metals), and of the stock market correction still playing out, and driving open crypto short profits alike. Much to enjoy across the board as my fresh portfolio performance chart (check out my homesite) reached a solid new high yesterday – it‘s one year today since I launched my site. Tremendous journey building on prior own strength – thank you very much!Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 buyers still can‘t get their act together – the momentum remains to the downside until credit markets turn and tech bleeding stops. This can happen as early as Monday or Tuesday – I remain watching closely for signs of a high-confidence setup to perhaps take.Credit MarketsHYG pause didn‘t last long, and the volume keeps being elevated without credible signs of buying interest. What‘s more, the credit market posture is decidedly risk-off.Gold, Silver and MinersGold and silver are likely to pause a little, the miners say – but the propensity to rise is there, even this early in the tightening cycle. I‘m looking for dips to be eagerly bought.Crude OilCrude oil looks like seeing the bullish resolve tested soon, and odds are the dip would be relatively quickly bought. Still, the pace of steep upswings is likely to slow down next, I say so even as I continue being medium-term bullish ($90 is doable).CopperCopper is paring back on the missed opportunity to catch up, and it‘s good the red metal managed to rise even if quite a few other commodities stalled. Waking up alongside silver, finally?Bitcoin and EthereumBitcoin and Ethereum little breather is over, the bears did strike again – and it may not be over yet, really not.SummaryThe opening sentence of yesterday‘s summary proved very true, and even faster that I thought possible - „S&P 500 upswing turned into a dead cat bounce pretty fast, and while we may see another attempt by the bulls, I think it would be rather short-lived. Think lasting a couple of days only.“ With the bears in the driving seat overnight – on the heels of a risk-off turn in the credit markets – we‘re likely to witness today another selling attempt.Another yesterday mentioned conclusion remains true as well - „Commodities and especially precious metals, are well placed to keep reaping the rewards – just as I had written a week ago. For now, it‘s fun to be riding the short side in S&P 500 judiciously... Let the great profits grow elsewhere in the meantime.“ Let‘s just add that cryptos are making us smile today, too.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Shiba Inu price set to crash by 70% as critical support weakens

Shiba Inu price set to crash by 70% as critical support weakens

FXStreet News FXStreet News 21.01.2022 16:06
Shiba Inu price sees bears drilling down on an important area of support. SHIB price could see a nose dive reaction later today should the US session see accelerated selloffs. A break below the 200-day SMA could hold 70% of losses before plenty of support is found. Shiba Inu (SHIB) price continues to be controlled by bears after the dead-cat bounce in stock markets yesterday evening. With the Nasdaq closing sharply lower, giving up earlier gains, cryptocurrencies are being dragged into a selloff on its coattails, and bearish headwinds persist. Expect a further continuation of downside tests, with $0.00002576, up next, and a break below that opening up the possibility of SHIB price being decimated towards $0.00000655 – a 70% devaluation. Shiba Inu hanging by a thread before price action could collapse Shiba Inu price is in a vortex along with other financial market assets, after the US session saw a180 degree U-turn to the downside. The ASIA PAC and European sessions are also sharply lower and with risk assets being slashed across the board. This is being reflected in cryptocurrencies where a selloff is also taking place. At the moment, SHIB price is drilling down to $0.00002482, a level where the 200-day Simple Moving Average (SMA) and the monthly S1 support level intersect.This should offer plenty of support, but with current market sentiment so negative, it is not a given that investors will want to step in and support the trade. A break lower would see price next pause at $0.00001623, the S2 monthly support. The level of the S2 does not hold any historical relevance, however, making it relatively weak, and the only key level further down looks to be $0.00000607, just above the S3 monthly support, and the starting point of a Fibonacci retracement. Depending on how the US session will unfold, expect this to be on the cards in the days to come if markets enter into correction territory or even into a recession. The result would be SHIB shedding 70% of its market value from where it is currently trading. SHIB/USD daily chart Often enough, markets see an uptick after a gloomy negative day like yesterday. Investors start to come in and pick up interesting assets at a discount, and markets finally get to a point where a revaluation trade is made. This could be the same for Shiba Inu, with the 200-day SMA holding its ground, supporting price action, and a bullish candle starting to form with a test at the 55-day SMA around $0.00003395.
Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

Price Of Bitcoin Below $36k And Price Of Ether Below $2.5k

Alex Kuptsikevich Alex Kuptsikevich 24.01.2022 09:39
The cryptocurrency fear and greed index was down to 11 on Sunday and slightly up to 13 by early Monday. Crypto market capitalisation lost another 1.1% overnight to $1.61 trillion, the lowest since August. As is often the case with prolonged sell-offs, altcoins are falling with acceleration to the first cryptocurrency, causing BTC's share gains, which already stands at 41.3% against lows of 39.3% in mid-January. Bitcoin's share of 40% seems like a turning point, twice triggering a correction in the crypto market. This level stood like an informal threshold that optimism about altcoins had gone too far. However, the rise in bitcoin's share does little to help its price. We saw the sixth consecutive bearish daily candlestick on Monday morning, and the price rolled back to $35K. The bears may well be able to sell the price down to $32.5K, closing the gap of July and returning the rate to last summer's support area. Alarmingly, the sharp reversal on Friday was not followed by any meaningful bounce. Some observers point out that this is a worrying signal, suggesting further market declines, as we have not seen a final capitulation. Without capitulation, the markets will remain with an overhang of sellers. The price of ether has fallen to $2400, which is less than half of its peak price in November. Events are developing in a bearish scenario, so far broadly repeating what we saw in 2018 in terms of overall sentiment. Long-term buyers can avoid buying at prices above 30k for bitcoin and 2k for ether. We believe long-term investors will look out for purchases in the 20-30k per bitcoin area. Whether these purchases will be at the upper or lower boundary depends, among other things, on the situation in the stock markets. The return of buyers there will support the demand for risk among institutional investors. But as long as we see only steady selling from them, it is too early to talk about buying.
Price of Gold Hasn't Increased a Lot Since the Beginning of the Year

Price of Gold Hasn't Increased a Lot Since the Beginning of the Year

Przemysław Radomski Przemysław Radomski 24.01.2022 14:47
  You don't have to be a fortune teller to predict some of the precious metals’ behavior in the market. Any incoming signs take the shape of a bear. What a signal-rich week that was! At least if you’re interested in forecasting gold and predicting silver prices. The USD Index rallied, but that was the least interesting of the important developments, as it had already reversed during the preceding week. So, the fact that the USD Index continued its medium-term uptrend last week is not that noteworthy. It needs to be said, though, as that continues to be an important factor for the future of the precious metals market. To be clear – the implications for the PM sector are bearish. What about gold, the key precious metal? Gold is so far almost unchanged this year, despite the initial decline and the subsequent rally. Overall, gold is up by $3.20 so far in 2022, which is next to nothing. Gold rallied on a supposedly dangerous situation regarding Ukraine, but it failed to rally above the combination of resistance lines and very little changed technically. On a side note, I would like to remind you that, based on our own reliable source in Ukraine (one of our team members is located there), the risk of military conflict (in particular, a severe one) is low, and it seems that the market’s reaction was greatly exaggerated. Anyway, moving back to technicals, let’s keep this $3.20-up-this-year statistic in mind while we take a look at what’s going on in silver and mining stocks. Silver declined on Friday, but it’s still up by $0.97 so far in 2022. This means that on a short-term basis, silver greatly outperformed gold. What’s up with mining stocks? The GDX ETF – a proxy for generally senior mining stocks – is down this year by $0.38, which is 1.19%. At the same time, the GDXJ ETF is down by $0.87, which is 2.07%. In other words: While silver is outperforming gold on a short-term basis, gold mining stocks are underperforming it. Junior mining stocks (our short position) are declining more than senior miners, and in fact, they are declining the most out of the entire precious metals sector. Silver’s outperformance, accompanied by gold miners weakness, is a powerful bearish combination in the case of the entire precious metals sector. If the general stock market is going to slide, silver and mining stocks (in particular, junior mining stocks) are likely to decline in a rather extreme manner. The thing is… We just saw something in the general stock market that we haven’t seen since early 2020 – right before the massive decline that triggered the huge declines in the precious metals sector. The RSI Index just moved below 30 for the first time since pre-slide moments. Just like what we saw back then, the S&P 500 is now declining on increasing volume. Yes, RSI below 30 is generally considered oversold territory, but the direct analogies take precedence over the “usual” way in which things work in markets in general. In this case, the situation could get from oversold to extremely oversold. Let’s keep in mind that stocks declined very sharply in 2020. One could say that times were different, but were they really? The key difference is that the monetary authorities are now already after the bullish money-printing cycle and are handling inflation by aiming to increase interest rates, while they had been preparing to cut them in 2020. The situation regarding the pandemic is not that different either. Sure, back in 2020, it was all new, we had massive lockdowns and there was great uncertainty regarding… pretty much everything. Now, the situation is not entirely unexpected, but given the explosive nature of new COVID-19 cases (likely due to the Omicron variant), it’s still quite new and uncertain. The uncertainty is not as great as it was back in 2020, but then again, now we’re facing monetary tightening, not dramatic dovish actions. Thus, I wouldn’t exclude a situation in which we really see a repeat of the early-2020 performance, where the declines are sharp and huge. The technicals in the precious metals market have been pointing to that outcome for months anyway, especially the long-term HUI Index chart that I’ve been discussing previously. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Crypto Market News Sound "Less Negatively" This Time

Crypto Market News Sound "Less Negatively" This Time

Alex Kuptsikevich Alex Kuptsikevich 25.01.2022 09:05
The cryptocurrency market is adding 0.2% in the last 24 hours to $1.63 trillion, experiencing some pause or rebound after a prolonged drawdown. Buyer interest in cryptocurrencies came at the expense of a rebound in US equities, where selloff hunters thought their time had come. The cryptocurrency market capitalisation without Bitcoin became less than 1 trillion last Saturday, and this round level now acts as near-term resistance. At one point on Monday, Bitcoin was down to $33K, but at the late US session, and now trades near $36.4K. Yesterday's drawdown almost closed the gap in July and also came from the lower boundary of the downward channel. The latter indicates that despite the prevalence of bears, the market is not yet ready to accelerate the decline. Bitcoin is gaining 2.8% in 24 hours, but most altcoins are losing ground. So, yesterday's rebound in bitcoin and the positive dynamics of the crypto market are more correctly attributed to technical factors: crypto investors are exiting altcoins to more liquid BTC, forming temporary bounces, but nothing more. The nearest target for BTC downside is $32.3K to close the gap entirely. However, it is worth being prepared to retest the July lows of $29.5-30K. Without support from the stock markets, these levels may not hold for long either. Ether also saw a bounce yesterday towards the end of the day, making it clear that the market is far from surrendering. After seven days of collapse, the primary altcoin managed to close Monday with a tiny gain. Nevertheless, there are no signs of breaking the downtrend yet. Moreover, a death cross is also forming over the ether, as the 50-day moving average is now only a couple of days away from crossing the 200-day from the top down. This signal is often followed by a new bearish attack.
Everybody Talks About Stocks, In Fact, There's Much To Watch, As MSFT and Others Release Their Reports

Everybody Talks About Stocks, In Fact, There's Much To Watch, As MSFT and Others Release Their Reports

Paul Rejczak Paul Rejczak 25.01.2022 15:51
  The S&P 500 index was trading 4% lower yesterday before closing 0.3% higher. So was it an upward reversal or just another temporary bottom? The broad stock market index accelerated its sell-off on Monday, as it reached the new local low of 4,222.62. The market was 596 points or 12.4% below the Jan. 4 record high of 4,818.62. Investors reacted to further Russia-Ukraine tensions. We are also waiting for series of quarterly earnings releases, tomorrow’s FOMC Statement release and Thursday’s important U.S. Advance GDP release. Overall, we had a big increase in volatility yesterday. Late December – early January consolidation along the 4,800 level was a topping pattern and the index retraced all of its December’s record-breaking advance. This morning it is expected to open 1.6% lower and we may see more short-term volatility. Will it reach yesterday’s low again? Probably not – we’ll likely see a consolidation. The nearest important resistance level is now at 4,420-4,450, marked by yesterday’s daily high, among others. On the other hand, the support level is at 4,300-4,350. The support level is also at 4,220-4,250. The S&P 500 remains below a steep short-term downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Microsoft Stocks Ahead of the Earnings Release Microsoft (MSFT) will release its quarterly earnings today after the session’s close. It’s an important stock, as it weighs 6.0%, just after the Apple’s 6.7%. So, the S&P 500 traders will be watching that release very closely. Microsoft accelerated its sell-off yesterday and it fell to the local low of $276.05. It was 21% below the Nov. 22 record high of $349.67. The stock remains below the downward trend line, but we can see some clear short-term oversold conditions. Let’s take a look at the Microsoft’s monthly chart. The stock broke below its multi-year hyperbolic run marked by the thick blue curve. The chart is logarithmic, and we can see an enormous rally that took place since 2013. The breakdown may lead to a change in trend or some medium- or long-term consolidation. It looks like a multi-year bull run is over. Futures Contract Got Close to the 4,200 Level Yesterday The S&P 500 futures contract accelerated its downtrend yesterday, as it fell close to the 4,200 level. There have been no confirmed positive signals so far, however there are some downtrend exhaustion signals. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index accelerated its sell-off yesterday and at some point it was 4% lower! But the market rebounded sharply following a “V” pattern reversal and it closed 0.3% higher. This morning it is expected to open 1.6% lower and we may see some further volatility. The coming quarterly earnings releases (MSFT on Tuesday, TSLA on Wednesday and AAPL on Thursday, among others) remain a bullish factor for stocks, but there is still a lot of uncertainty concerning Russia-Ukraine tensions. Investors are also waiting for tomorrow’s Fed release and Thursday’s U.S. Advance GPD number release. If you want to be in the loop about any future market changes (with instant mail notifications!) sign up for the newsletter here. Here’s the breakdown: The S&P 500 is expected to open lower again; we may see a consolidation. Opening a speculative long position is justified from the risk/reward perspective. We are expecting a 5% upward correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Considering Portfolios In Times Of, Among Others, Inflation...

EUR To GBP and EURUSD Will Go Down If Dollar Strengthens?

Alex Kuptsikevich Alex Kuptsikevich 26.01.2022 09:39
The US dollar has been gaining steadily against the developed countries' currencies since the beginning of the year. By the way, the yen was an exception: it has been adding 1.8% over the past 11 days after the stock market entered the turbulence zone due to a reassessment of the monetary policy outlook. According to historical data, the Fed often finds itself at the forefront of the monetary policy cycle. That is used to be translating into a stronger USD in the months before and after the first tightening. So the question is in what currency pairs it is most profitable to buy the dollar now. Among the developed and liquid currencies, three scenarios can be considered. The first way is to sell EURUSD. The euro is weaker than the dollar due to the ECB being on several steps behind the Fed. That means that the EU rates will remain lower for a longer period of time, and the balance of bond yields will be shifted towards the dollar. Given the pace the Fed intends to take in tightening monetary policy, this yield gap promises to widen further. Another way is to bet that monetary tightening is stressing the declining markets drag the pound down. We should keep in mind that the Bank of England has already approved its first tightening policy step, and in this case it's not far behind the Fed. At the same time, it's closely correlated with falling market indices. Need to mention that GBPUSD is still far from being oversold with a wide room for further decline. The third way is often more obvious. Traders may consider selling the currencies of developing countries, which are much more sensitive to the Fed monetary policy changes. However, EMs have been raising rates for almost a year, so selling them now is a bet on market volatility in the near term. For the longer perspective, higher interest rates promise to level out short-term gains. In this case, the dollar's down turn may be faster than in the euro.
Crypto and FOMC As Always Interact, Waiting for FED Decision and Tesla (TSLA) Reports

Crypto and FOMC As Always Interact, Waiting for FED Decision and Tesla (TSLA) Reports

Walid Koudmani Walid Koudmani 26.01.2022 12:20
Today’s highly anticipated FED decision could have wide ranging implications across markets as it could alter the current state of economic policy and ultimately favour some markets over others. While there are several scenarios of what’s expected today from the US central bank, the most likely one seems to be a rate increase in March while maintaining QE for the time being , which many investors could see as a slight step back compared to the tone used by the FED recently. On the other hand, if the FOMC decides to surprise investors with a more hawkish than expected approach, it could lead to significant reactions across stock markets and cryptocurrencies even after the recent corrections we have already seen so far. The FED must be very cautious today as it appears to be stuck in a challenging situation, unable to ignore record inflation levels while also having a market that relies heavily on its fiscal policy and any misstep could have greater than expected consequences. Cryptocurrencies attempt to recover ahead of FOMC decision Cryptocurrencies and tech stocks have seen the majority of the volatility and pullbacks from recent uncertainty noticed across a wide range of markets to different extents. However, due to their exceedingly volatile nature, cryptocurrency prices moved significantly with the total market cap falling around $1 Trillion as the majority of top 100 tokens dropped around 20% reaching the lowest level in several months and shaking investor confidence in the sector. On the other hand, we are seeing an attempt to recover today with most tokens trading slightly higher ahead of the FOMC decision as some investors expect the US central bank to back off after seeing the massive reaction it’s recent announcements have had. While it remains to be seen whether the FED will go through with its plan, it is clear that a significant increase in volatility has the potential to scare many investors who may not be interested in projects for the long term and are mainly attempting to speculate on their prices for short term gains. Investors await Tesla earnings report While many investors will be focusing on the FED’s key decision today, earning season has also been a main topic of discussion with several major companies already publishing their reports. We have seen a variety of contrasting results with some exceeding expectations while others disappointed and ultimately reflected that in a significant share price drop. Tesla will be publishing it’s results today and investors will be looking closely to ascertain if the company is living up to the forecasts or if it also appears to be struggling with rising inflation and supply chain issues. A better than expected result could renew investor confidence in the company that has been able to impress many since being listed on the S&P 500 not long ago, while a disappointment could impact future prospects in addition to share price in the short term.  
Financial Sector ETF XLF $37.50 Continues To Present Opportunities

Financial Sector ETF XLF $37.50 Continues To Present Opportunities

Chris Vermeulen Chris Vermeulen 26.01.2022 23:16
Recent volatility in the US markets ahead of the Fed comments/actions have prompted a relatively big pullback in almost every sector. Many traders are concerned the Fed may take immediate action to raise rates. Yet, a small portion of traders believes the Fed may be trapped in a position to act more conservatively in addressing inflation going forward. I think the Fed will continue to talk firmly about potentially raising rates. The Fed is more interested in decreasing the assets on their balance sheet before they risk doing anything to disrupt support for the global markets.Suppose my analysis of the Fed predicament is correct. In that case, the recent collapse of the US markets represents a fear-based emotional selloff of many sectors that may still represent a strong opportunity for a recovery rally in 2022. One of those sectors is the Financial sector – particularly XLF.I wrote about this on January 7, 2022, in this article: FINANCIAL SECTOR STARTS TO RALLY TOWARDS THE $43.60 UPSIDE TARGETI also wrote how the US Fed might be playing with fire regarding their stern positioning and statements recently in this article on January 14, 2022: US FEDERAL RESERVE - PLAYING WITH FIRE PART 2Critical Components Of Recent Inflationary TrendsIf you attempt to follow my logic as I read into the Fed's intentions. There are three critical components to navigating the rise of inflationary trends recently.The COVID-19 virus event created several disparities in the global markets. First, the disruption to the labor and supply-side markets began an almost immediate inflationary aspect for the global economy. Secondly, the US's stimulus and easy money policies have stimulated demand for products, technology, houses, autos, and other real assets. These two factors combined have increased inflationary pressures on the global markets.Rising consumer demand for real and virtual assets such as Cryptos, NFTs, and others has pushed the speculative investing cycle into a hyper-active rally phase. This was clearly witnessed in early 2021, with the Reddit/Meme rallies became the hottest trades, then quickly dissipated after July 2021. This speculative rally has pushed the post-COVID rally well beyond reasonable expectations over the past 16+ months.Excessive debt levels push a deflationary process to the forefront. Consumers are now starting to pull away from the excesses of the past 16+ months. The Fed's tough talk and recent deeper declines in various sectors over the past 12+ months show that inflationary trends are subsiding. Despite the supply-side issues being resolved, consumers continue to pull away from hyper-speculative activities. The markets will naturally revalue to support more realistic price levels, deflating excessive P/E ratios and recent extreme price peaks in assets.Possible Next Steps for the US FedMy interpretation of the global markets is that excess speculative trending and rising commodity prices, combined with excess debt levels and consumers who have suddenly become very aware of global market risks, are already acting as a deflationary process. Because of these underlying factors, which I believe are currently in play throughout the globe, the US Federal Reserve may be forced to wait things out a bit. The Fed may have to navigate these natural deflationary processes while attempting to provide monetary support for what I believe will be a downside/deflationary trend over the next 3+ years.Sign up for my free trading newsletter so you don’t miss the next opportunity! The US Federal Reserve may not have to take any aggressive action right now. Instead, it may decide to watch how the global markets contract as consumers pull away from inflated price levels and higher risks and attempt to navigate these natural deflationary price trends. If the Fed were to act aggressively right now and raise rates, they could push the global markets into a steeper collapse. This process would likely burst numerous asset bubbles very quickly and push many foreign nations into some type of debt default.This presents a new problem for the US Fed – going from inflationary concerns to global economic collapse concerns very quickly. So when I suggested the Fed is playing with fire – maybe I should have said “playing with the nuclear economic football”?Financial Sector ResilienceStill, I believe the US Financial sector is showing tremendous resilience near $37.50. I think it has a powerful opportunity to rally back above $42 to $44 if the Fed takes a more measured approach to let the global markets deflate a bit before taking any aggressive actions.The US Financial sector will likely continue to benefit from price volatility and consumer demand as these deflationary trends prompt consumers to engage in more normal economic activities. The Financial sector also has continued to stay under moderate pricing pressure since the 2008 highs. XLF is only 25.46% higher than the 2008 highs, whereas the NASDAQ is more than 575% above the 2008 market highs.The Financial Sector may be one of the strongest market sectors over the next few years. Deflationary trends push consumers and global markets away from excess debt levels and towards more traditional economic activities/trends.Want To Learn More About Financial Sector ETFs?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Gold Plunged but Didn’t Knuckle Under to the Hawkish Fed

Gold Plunged but Didn’t Knuckle Under to the Hawkish Fed

Finance Press Release Finance Press Release 27.01.2022 14:17
The FOMC set the stage for a March interest rate hike, which was an aggressive signal. Gold got it and fell – but hasn't capitulated yet.The Battlecruiser Hawk is moving full steam ahead! The FOMC issued yesterday (January 26, 2022) its newest statement on monetary policy in which it strengthened its hawkish stance. First of all, the Fed admitted that it would start hiking interest rates “soon”:With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.Previously, the US central bank conditioned its tightening cycle on the situation in the labor market. The relevant part of the statement was as follows in December:With inflation having exceeded 2 percent for some time, the Committee expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment.The alteration implies that, in the Fed’s view, the US economy has reached maximum employment and is ready to lift the federal funds rate. Indeed, Powell reaffirmed it, saying:There’s quite a bit of room to raise interests without threatening the labor market. This is by so many measures a historically tight labor market — record levels of job openings, quits, wages are moving up at the highest pace they have in decades.Powell also clarified the timing, stating that “the Committee is of the mind to raise the federal funds rate at the March meeting.” This is not completely unexpected, but does mark a significant hawkish change in the Fed’s communication, which is negative for gold.Second, the FOMC reaffirmed its plan, announced in December, to end quantitative easing in early March. It means that in February, the Fed will buy only $20 billion of Treasuries and $10 billion of agency mortgage-backed securities, instead of the $40 and $20 purchased in January:The Committee decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March. Beginning in February, the Committee will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage‑backed securities by at least $10 billion per month.Third, the FOMC is preparing for quantitative tightening. Together with the statement on monetary policy, it published “Principles for Reducing the Size of the Federal Reserve's Balance Sheet”. The Fed hasn’t yet determined the timing and pace of reducing the size of its mammoth balance sheet. However, we know that it will happen after the first hike in interest rates, so probably as soon as May or June. After all, as Powell admitted during his press conference, “the balance sheet is substantially larger than it needs to be (...). There’s a substantial amount of shrinkage in the balance sheet to be done.”Implications for GoldWhat does the recent FOMC statement imply for the gold market? The end of QE, the start of the hiking cycle, and then of QT – all packed within just a few months – is a big hawkish wave that could sink the gold bulls. The Fed hasn’t been so aggressive for years.Of course, maybe it’s just a great bluff, and the Fed will retreat to its traditional dovish stance soon when tightening monetary and financial conditions hit Wall Street and the real economy. However, with CPI inflation above 7%, mounting political pressure, and public outrage at costs of living, the US central bank has no choice but to tighten monetary policy, at least for the time being.It seems that gold got the message. The price of the yellow metal plunged more than $30 yesterday, as the chart below shows. Interestingly, gold started its decline before the statement was published, which may indicate more structural weakness. What is also disturbing is that gold was hit even though the FOMC statement came largely as expected.On the other hand, gold didn’t collapse, but it dropped only by thirty-some dollars, or about 1.6%. Given the importance and hawkishness of the FOMC meeting, it could have been worse. Yes, the hawkish message was expected, and some analysts even forecasted more aggressive actions, but gold clearly didn’t capitulate. Thus, there is hope (and turbulence in the stock market can also help here), although the upcoming weeks may be challenging for gold, which would have to deal with rising bond yields.If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
One More Time

One More Time

Monica Kingsley Monica Kingsley 27.01.2022 15:53
Wild FOMC day is over, and markets are repricing the perceived fresh hawkishness when there was none really. It‘s nice to start counting with 5 rate hikes this year when taper hasn‘t truly progressed much since it was announced last year. The accelerated taper would though happen, and the following questions are as to hikes‘ number and frequency. I‘m not looking the current perceived hawkishness to be able to go all the way, and I question Mar 50bp rate hike fears. Not that it would even make a dent in inflation – as the Fed just stood pat, open oil profits are rising.But stocks took a dive before recovering, carving out a fourth in a row lower knot – the bulls are invited to participate, and open stock market profits are moving up again. Also note the divergence between HYG trading at its recent lows while S&P 500 clearly isn‘t. The immediate pressure would be to go higher, and that concerns also copper, and to a smaller degree cryptos. All that‘s needed, is for bonds to turn up, acknowledging a too hawkish interpretation of yesterday‘s FOMC – key factor that sent metals down and dollar up. While rates would continue rising, as the Fed overplays its tightening hand, we would see them retreat again – now with 1.85% in the 10-year Treasury, we would overshoot very well above 2% only to close the year in its (2%) vicinity.That just illustrates how much tolerance for rate hikes both the real economy and the markets have, and the degree to which the Fed can accomplish its overly ambitious yet behind the curve plans. Still time to be betting on commodities and precious metals in the coming stagflation.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookSetback and reversal of prior gains - S&P 500 is though still carving out a tradable bottom. I‘m looking for the index to return above 4,400 and then take on the 4,500 point of control next.Credit MarketsHYG reversed, the panic is there – higher yields across the board without a clear risk-on turn holding. Today is a time for reprieve.Gold, Silver and MinersGold and silver declined as yields moved sharply up and so did the dollar – but inflation or inflation expectations didn‘t really budge. The metals are anticipating the upcoming liquidity squeeze, which won‘t be pretty until the Fed changes course. Not that it truly started, for that matter.Crude OilCrude oil bulls have confirmed they were back, and are ready for more – clearly not daunted by the Fed messaging, and that has implications for inflation ahead. It would really be more persistent than generally appreciated, I‘m telling you.CopperCopper is still in the catching breath phase – not yielding, and that‘s still saying something about inflation and real economy.Bitcoin and EthereumBitcoin and Ethereum are on guard, and ready to move somewhat higher next – for now, lacking conviction, there is no Ethereum outperformance either.SummaryS&P 500 bulls are ready to come back, and prove that the first FOMC move, is the fake one – no, I don‘t mean the moonshot to 4,450 in the first moments. That would be the move I‘m looking for still, and it would be led by the coming tech upswing. Check the commodities resilience to the rising rates prospects – gold and silver need a reprieve in bonds badly to catch breath again, and it would come at the expense of the dollar. For now, markets are afraid of the looming liquidity crunch and Fed policy mistake as the yield curve continues compressing.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
XRP (-0.9%), LUNA (-8.3%), ETH (-2.5%). Bitcoin decrased by 0.4%

XRP (-0.9%), LUNA (-8.3%), ETH (-2.5%). Bitcoin decrased by 0.4%

Alex Kuptsikevich Alex Kuptsikevich 28.01.2022 09:07
On Thursday, Bitcoin lost 0.4%, ending the day around $36,200, and Ethereum fell 2.5%. The other leading altcoins in the top ten also mostly saw declines, from XRP down 0.9% to Terra with -8.3%. According to CoinGecko, the total capitalization of the crypto market sank by 2.3% per day, to $1.72 trillion. Bitcoin tried to strengthen on Thursday morning but began to decline in the American session along with US stock indices. The US stock market fell following the results of trading on Thursday, although it opened with growth. The high-tech Nasdaq suffered particularly heavy losses. Investors continue to withdraw from US stocks amid the expected tightening of the US Federal Reserve's monetary policy. The day before, the central bank, following its meeting, signalled that it would start raising interest rates in March, curtailing the entire stimulus program at the beginning of the month. In the future, the regulator will begin to reduce the Fed's balance sheet. In such circumstances, investors will continue to reduce their positions on risky assets, and Cryptocurrencies may be hit first. Meanwhile, bitcoin is trying to stay above the $35,000 mark, taking advantage of some slowdown in the fall of the stock markets. However, if the fall in stocks accelerates, the crypto market will also accelerate its decline. The US Securities and Exchange Commission (SEC) has rejected Fidelity's application to launch a bitcoin ETF. Fidelity itself warned investors that bitcoin was in a “liquidity storm” due to high volatility in the stock market.
NASDAQ, Non-Farm Payrolls, GBPAUD, Gold and More in The Next Episode of "The Trade Off"

Stock Market in 2022: Momentum on the Stocks in the Market Are In a Solid Footing

Finance Press Release Finance Press Release 28.01.2022 10:51
The year 2022 is seemingly a mixed bag, even as markets start reopening. The year looks promising, though, with issues like inflation and COVID to contemplate. Historic rallies in 2021 after lockdowns are looking to inspire trading in various industries, with some assets to look out for by investors. Growth will surely return at some point, but so will disappointing instances where tumbles will dominate trading desks. The S & P's historic gains of 30 percent dominated the press at the close of 2021, making investors using Naga and other optimistic platforms. The ended year had one of the longest bull markets. However, the Fed rate tightening and the direction the pandemic will take are some things to expect, notwithstanding that the stock market might grow by a whopping 10 percent in 2022. Trading Movements In Week One 2022 European markets have opened with a lot of optimism in 2022, the pan-European STOXX 600 closed at 489.99 points; this is 0.5 percent higher than the opening figure. The European benchmark was some percentage lower than the overall S&P 2021 performance, though with a surge of 22.4 percent. Record gains in the stock markets have relied on the positions taken by the governments during the pandemic. In the USA and Europe, increasing vaccination rates and economic stimulus measures have improved investor confidence. However, there are indications for more volatility in 2022, a situation investors must watch keenly. There has been little activity in London markets in the first week of 2022, while in Italy, France, and Spain gains of between 0.5-1.4 percent made notable highlights. European markets had diverse industries drive up the closing gains witnessed; the airline sector, in particular, has had a significant influence. Germany’s Lufthansa (LHAG.DE) had an impressive 8.8 percent jump while Air France KLM (AIRF.PA), a 4.9 percent gain. Factory activity is another factor to thank for the first week's gains all over Europe. Noteworthy, the Omicron variant influenced trading in the entirety of December, but the reports that it is milder than Delta has energized market activities coming into January. S&P and DOW Jones 2022 First Week Highs Across the Atlantic, the Dow Jones Industrial Average (DJI) and S&P 500 (SPX) closed at a record high, highlighting a similar aggressiveness as the European markets. While the jump was industrial-wide, Tech stocks continued to dominate, as Apple finally touched the $3 trillion valuation, though for a short time. Tesla Inc. (TSLA.O) posted a 13.5 percent jump thanks to increased production in China and an unprecedented goal to surpass its target. The US market, like the European market, is also in a fix; the Omicron variant of COVID-19 continues to cause concern with the wait-and-see approach, the only notable strategy. Currently, every country is reporting a jump in the number of Covid cases, with the UK going above 100K cases for the first time and the US recording some new records as well. School delays and increased isolation by key workers will surely debilitate the markets, with the global chip shortage another point to contemplate. However, markets can still ride on the increased development of therapies to help fight Covid. The U.S. Food and Drug Administration (CDC) has been quick, as now children can have their third doses as well. Industries to Look Out For In 2022 European automakers have seen early peaks, while the airline sector has also picked up fast. In the US, tech shares continue to dominate, and 2022 might witness new records never seen before. However, the energy sectors have also dominated the news in 2021, and in 2022; the confidence in them will continue to rise because of an anticipation of stabilization in energy prices. The same goes for crude oil prices. Regardless, shareholders will continue watching the decisions by the Federal Reserve, a review in the current interest rates will surely tame inflation. Conclusion 2022 will see its highs and lows in investments. Some assets will make the news and investors will be keen to use any information to make key decisions. Tech will continue to shine, but it is important to anticipate the direction of the pandemic, as it will be an important factor in investor decisions.
Fed Comments Help To Settle Global Market Expectations

Fed Comments Help To Settle Global Market Expectations

Chris Vermeulen Chris Vermeulen 28.01.2022 14:59
The recent Fed comments should have helped settle the global market expectations related to if and when the Fed will start raising rates and/or taking further steps to curb inflation trends. Additionally, the Fed has been telegraphing its intentions very clearly over the past few months, providing ample time for traders and investors to alter their approach to pending monetary tightening actions. Read the full Fed Statement here.In my opinion, foreign markets are more likely to see increased risks and declining price trends for two reasons. First, at-risk nations/borrowers struggle to reduce debt levels. Second, foreign market traders/investors struggle to adapt to the transition away from speculative “growth” trends. I think the US Dollar may continue to show strength over the next 4+ months as the foreign traders pile into US economic strength while the Fed initiates their tightening actions. So it makes sense to me that global markets would recoil from Fed tightening while debt-heavy corporations/nations seek relief from rising debt obligations.Foreign Markets Struggle For Support Before US Fed Monetary TighteningIn a continuing downward slide, global market equity indexes continue to move lower after the US Fed comments this week. In this article, I wrote about this dynamic on August 3, 2021: US Markets Stall Near End Of July As Global Markets Retreat - Are We Ready For An August Surprise? At that time, I suggested the US markets were stalling while the global markets continued to decline.Now, nearly five months later, we've seen the US market trend moderately higher, attempting to struggle to new highs and exhibit deep downward price trends, while the global markets have continued to trend lower. As we move closer to the US Fed pushing interest rates higher, I expect these trends to become even more volatile and pronounced.US Equities May Find Support After The Fed Raises RatesThe current dynamic in the global markets is that capital is seeking investments where safety and profitable returns dominate over risks. As the global markets transition ahead of the Fed rate increases, I believe the US markets will continue to dominate global assets in opportunities, safety, and returns. Once the Fed starts to raise interest rates, a brief period of volatility throughout the global markets may occur. Still, that volatility should quickly settle as traders chase a stronger US Dollar, US Dollar-based Dividends, and a potential “melt-up” of the US Equity market (particularly the Dow Jones, S&P500, and possibly the Russell 2000).Sign up for my free trading newsletter so you don’t miss the next opportunity!Unless the US Fed takes very aggressive action in raising rates too quickly, I believe, at least initially, the US equity markets will continue to benefit from perceived strengths compared to many global equities/indexes.This means there will be many opportunities for traders and investors in 2022 and 2023 – we have to be patient in waiting for the chance to profit from these big trends. Jumping ahead of this volatility could be dangerous if you are on the wrong side of the price trend. Instead, wait for the right opportunities while you protect your capital from extreme risks. Let the markets tell you when opportunities are perfect – don't try to force a trade to happen.On December 28, 2021, I published this research article showing how my Adaptive Dynamic Learning (ADL) Predictive Modeling system expects price to trend in 2022 and early 2023: Predictive Modeling Suggests 710 Rally In SPY And QQQ Before April 2022. I strongly suggest taking a look at the recent downside price trends in relation to the lower range of the ADL Predictive Modeling expectations. If my ADL Predictive Modeling system is accurate, we may see a relatively strong recovery in the US stock market throughout the rest of 2022 and beyond.Strategies To Help You Protect And Grow Your WealthLearn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Estimating Future Stock Returns, September 2021 Update - 31.01.2022

Estimating Future Stock Returns, September 2021 Update - 31.01.2022

David Merkel David Merkel 16.12.2021 04:35
Image credit: All images belong to Aleph Blog This should be a brief post. At the end of the third quarter, the S&P 500 was poised to nominally return -0.64%/year over the next 10 years. As of the close today, that figure was -1.83%/year, slightly more than the -1.84%/year at the record high last Friday. The only period compares with this valuation-wise is the dot-com bubble. We are above dot-com level valuations. And if you view the 10-year returns from the worst time of the dot-com bubble to now, you can see that the results they obtained are milder than what I forecast here. Of course, a lot of what will happen in nominal terms will rely on the actions of the Fed. Will the Fed: Allow a real recession to clear away dud assets that are on life support from low rates? (Collapsing the current asset bubble)Change the terms of monetary policy, and start directly monetizing US Treasury debt? (Risking high inflation)Continue to dither with financial repression, leaving rates low, not caring about moderate inflation, with real growth zero-like. (Zombie economy — this is the most likely outcome for now) In some ways the markets are playing around with something I call “the last arbitrage.” Bonds versus Stocks. The concept of TINA (There is no alternative [to stocks]) relies on the idea that the Fed will be the lapdog of the equity markets. If stocks are high, the Fed is happy. Phrased another way, if the Fed maximizes wealth inequality, it is happy. And the Fed will be happy. They live to employ thousands of macroeconomists who would have a hard time finding real employment. These economists live to corrupt our understanding f the macroeconomy, justifying the actions of the Fed. The Fed just wants to scrape enough seigniorage to pay the staff, and keep Congress and the Administration mollified. All taken out of the hides of those who save. So with the last arbitrage… interest rates have to stay low to keep the stock market high, even if it means slow growth, and moderate and growing inflation. The likely change promulgated by the Fed today, raising the short rate by 0.75% in 2022 will likely flatten the yield curve, leading to a crisis of some sort, and push them back into QE and near-zero short rates. The stock market will have a pullback and a rally, but what of inflation? How will people act when there is no way to save for the short-run, without inflation eating away value? Brave new world. The Fed is stuck, and we are stuck with them. Gold does nothing, and would be a kinder mistress than the Fed. Better to live within strict limits, than the folly of an elastic currency. But as is true with all things in America, we are going to have to learn this the hard way. PS — As for me, I am living with value stocks, small stocks, and international stocks. Very little in the S&P 500 here.
S&P 500 (SPX) A Very Tight Sequence of The Latest Candles In The Chart

S&P 500 (SPX) A Very Tight Sequence of The Latest Candles In The Chart

Monica Kingsley Monica Kingsley 31.01.2022 15:53
S&P 500 left the 4,270s - 4,330s range with an upside breakout – after bonds finally caught some bid. While in risk-on posture, divergencies to stocks abound – any stock market advance would leave S&P 500 in a more precarious position than when the break above 4,800 ATHs fizzled out. But a stock market advance we would have, targeting 4,500 followed by possibly 4,600. The sizable open long profits can keep growing. Only the market internals would be poor, so better don‘t look at the percentage of stocks trading above their 200-day moving averages, and similar metrics. Enough to say that Friday‘s advance was sparked by the Apple news. When it‘s only the generals that are advancing while much of the rest remains in shambles, Houston has a problem – we aren‘t there yet. Fed‘s Kashkari also helped mightily on Friday – that implicit rates backpedalling was more than helpful. Pity that precious metals haven‘t noticed (I would say yet) – but remember the big picture and don‘t despair, we‘re just going sideways before the inevitable breakout higher. Back to rates and the Fed, there is a key difference between the tightening of 2018 and now – the economy was quite robust with blood freely flowing, crucially without raging inflation. With the Fed sorely behind the curve by at least a year, it‘ll have to move faster and have lower sensibility to market selloffs caused. Stiff headwinds ahead as liquidity gets tighter. Couple that with resilient oil – more profits taken off the table Friday at $88.30 – and you‘ve got a pretty resilient inflation. Not that inflation expectations would be shaking in their boots, not that commodities would be cratering. It‘s only copper (influencing silver) that has to figure out just how overdone its Friday‘s move had been. Not that other base metals would be that pessimistic. Similarly to precious metals and the early tightening phase, commodities would be under temporary pressure as well, but outperforming as we officially enter stagflation. Not too tough to imagine given the GDP growth downgrades. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Great finish to the week, but S&P 500 bulls have quite a job ahead – it continues being choppy out there. I‘m still looking at bonds with tech for direction. Credit Markets HYG finally turned around, and Friday was a risk-on day. The question remains how far can the retracement (yes, it‘s retracement only) reach – can the pre-FOMC highs be approached? Could be, could be. Gold, Silver and Miners Gold and silver retreated, but no chart damage was done – things are still going sideways as the countdown is on for the Fed to either tighten too much and send markets crashing, or reverse course (again). Crude Oil Crude oil isn‘t broken by the Fed, and why should it be given that it can‘t be printed. Some backing and filling is ahead before the uptrend reasserts itself. Copper Copper is the only red flag, and seeing it rebound would call off the amber light. This is the greatest non-confirmation of the commodities direction in quite a while, and that‘s why I‘m taking it with more than a pinch of salt. Bitcoin and Ethereum Crypto bulls are putting up a little fight as the narrow range trading continues – I‘m not looking at the Bitcoin and Ethereum buyers to succeed convincingly. Summary S&P 500 bulls finally moved in an otherwise volatile and choppy week. For the days ahead, volatility is likely to calm down somewhat, but chop is likely to be with us still – only that I expect it to be of the bullish flavor. 10-year Treasury yield has calmed down, and that would be constructive for stocks – watch next for the 2-year to take notice likewise. The 2-year Treasury is quite sensitive to the anticipated Fed moves, and illustrates well the rate hike fears – coupled with the compressed 10-year to 2-year ratio, we‘re looking at rising expectation of the Fed policy mistake (in tightening too much, too fast). For now though, stocks can recover somewhat, and most of the commodities can keep on appreciating. Precious metals keep being in the waiting game, very resilient, and will turn out one of the great bullish surprises of 2022. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

BTC +7.3% (ca. $37k), ETH +7%, LUNA -25% - Last Week On Cryptomarket

Alex Kuptsikevich Alex Kuptsikevich 31.01.2022 09:48
Bitcoin gained 7.3% over the past week, ending last week near $37,700. Ethereum added 7%, while other leading altcoins in the top 10 showed mixed dynamics: from a decline of 25% over the week (Terra) to a rise of 4.6% (Binance Coin). Terra's collapse is linked to the scandal surrounding the Wonderland DeFi protocol. The total capitalisation of the crypto market, according to CoinGecko, rose 1.7% to $1.79 trillion for the week. The week didn't start encouragingly for bitcoin. The first cryptocurrency updated six-month lows below $33,000, but BTC sharply redeemed the short-term fall amid an equally sharp rebound in US stock indices. The US stock market interrupted last week's decline and rose for the first time after three weeks of decline. Apple's stock price jumped on Friday after a positive quarterly report and on Tim Cook's statements about the great potential of the metaverse. The rise in the stock market also contributed to the rebound in the cryptocurrency market, which again points to the strong correlation of stock and digital assets in recent times. This trend could continue at least until the end of this year. Despite stabilisation, the situation in the crypto market remains very fragile. Bitcoin could end up falling for the third month in a row. The decline in January is over 17%, and the first cryptocurrency has already lost 45% since the highs in November. The US Treasury Department plans to revisit the controversial FinCEN proposal for mandatory verification of bitcoin wallet users in 2022. If adopted, the proposal would require cryptocurrency exchanges to collect personal data from their users.
Bitcoin, Fed, Stocks and Bonds

Bitcoin, Fed, Stocks and Bonds

Korbinian Koller Korbinian Koller 01.02.2022 13:18
Bitcoin, the plan, and its execution The Plan: It is an election year when Democrats will project political pressure upon the Federal Reserve to not risk through aggressive policy changes a stock market collapse to keep their votes. As a result, more money printing expands inflation, which supports the interest for bitcoin as an inflation hedge. Should we see in opposition for whatever reason a rapid stock market decline, the investor would unlikely be interested in owning stock or bonds. While initially, bitcoin prices would likely fall alongside the markets, money will likely flow into bitcoin shortly afterward. The execution: With bitcoins prices suppressed from their recent decline (down 52% from its last all-time high at around US$69,000), we have another edge for minimizing exposure risk. BTC in US-Dollar, monthly chart, high likely turning points: Bitcoin in US-Dollar, monthly chart as of January 31st, 2022. The chart above depicts five supply zones we have our eye on. We will try identifying low-risk entry points on smaller time frames at or near these points and reduce risk further with our quad exit strategy. We already had entries near zone 1 and 2 and posted those live in our free Telegram channel. BTC in US-Dollar, weekly chart, bitcoin, the plan, and its execution, reload trading: Bitcoin in US-Dollar, weekly chart as of February 1st, 2022. Once the more significant time frame turning point is identified (white arrow), we will add what we call ‘reload’ trades (see chart above) on the smaller weekly time frame. We do so by identifying low-risk entries in congestion zones (yellow boxes) on the way up. We aim to arrive near the elections in November with a sizable position that is due to our exit strategy being risk-free. Playing with the market’s money will allow for positive execution psychology and ease us to observe our position through an expected volatility period, with further profit-taking into possible volatile upswings that are only temporary in nature. BTC in US-Dollar, Quarterly Chart, long-term profit potential: Bitcoin in US-Dollar, quarterly chart as of February 1st, 2022. While this year’s midterm trading on the long side of the bitcoin market could provide for substantial income from the 50% profit-taking of each individual trade and reload based on our quad exit strategy, the real goal is to have a remaining position size that could potentially go to unfathomable heights, since we see in the long term the inflation problem not going away but rather culminating in a bitcoin rise that could be substantially much larger in percentage than alternative inflation hedges like real estate, gold, silver and alike. Not to say that we find it also essential to hold these asset classes for wealth preservation. The quarterly chart above illustrates the potential of such a position. We illustrated both in time (six years) and price (US$ 134,000) our most conservative model in this chart. Bitcoin, the plan, and its execution: We see no scenario where inflation is just going away. The above narrative shows that a short-term fueling of inflation is likely. Furthermore, a high-risk scenario is fueling inflation even more. Should markets decline rapidly, it can be expected that money printing and buying up the market is the most predominant solution applied. Consequently, the average investor would wake up relieved that prices wouldn’t decline any further but liquidating their holdings in a further inflated fiat currency will have massively decreased purchasing power. Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on precious metals and cryptocurrencies, you can also subscribe to our free newsletter. Disclosure: This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting. By Korbinian Koller|February 1st, 2022|Tags: Bitcoin, Bitcoin bounce, Bitcoin bullish, bitcoin consolidation, crypto analysis, Crypto Bull, crypto chartbook, DeFi, low risk, quad exit, technical analysis, trading education|0 Comments About the Author: Korbinian Koller Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Crude Oil Consquently Goes Higher, S&P 500 Gains and Bitcoin Slowly Recovers

Crude Oil Consquently Goes Higher, S&P 500 Gains and Bitcoin Slowly Recovers

Monica Kingsley Monica Kingsley 01.02.2022 16:01
S&P 500 pushed sharply higher, squeezing not only tech bears even if yields didn‘t move much – bonds actually ran into headwinds before the closing bell. With my 4,500 target reached, the door has opened to consolidation of prior steep gains, and that would be accompanied by lower volatility days till before the positioning for Friday‘s non-farm payrolls is complete as talked on Sunday. So, we have an S&P 500 rally boosting our open profits while the credit market‘s risk-on posture is getting challenged, and divergencies to stocks abound – as I wrote yesterday: (…) any stock market advance would leave S&P 500 in a more precarious position than when the break above 4,800 ATHs fizzled out. But a stock market advance we would have, targeting 4,500 followed by possibly 4,600. We‘re getting there, the bulls haven‘t yet run out of steam, but it‘s time to move closer to the exit door while still dancing. But the key focus remains the Fed dynamic: (…) Fed‘s Kashkari ... helped mightily on Friday – that implicit rates backpedalling was more than helpful. Pity that precious metals haven‘t noticed (I would say yet) – but remember the big picture and don‘t despair, we‘re just going sideways before the inevitable breakout higher. Back to rates and the Fed, there is a key difference between the tightening of 2018 and now – the economy was quite robust with blood freely flowing, crucially without raging inflation. With the Fed sorely behind the curve by at least a year, it‘ll have to move faster and have lower sensibility to market selloffs caused. Stiff headwinds ahead as liquidity gets tighter. Suffice to say that precious metals did notice yesterday, and copper looks ready to work off its prior odd downswing. Remember that commodities keep rising (hello the much lauded agrifoods) while oil enteredd temporary sideways consolidation. Look for other base metals to help the red one higher – the outlook isn‘t pessimistic in the least as the recognition we have entered stagflation, would grow while the still compressing yield curve highlights growing conviction of Fed policy mistake. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls proved their upper hand yesterday, and the question is where would the upswing stall – or at least pause. Ahead soon, still this week. Credit Markets HYG caught a bid yesterday too, but the sellers have awakened – it appears the risk-on trades would be tested soon again. Bonds are certainly less optimistic than stocks at this point, but the S&P 500 rickety ride can still continue, and diverge from bonds. Gold, Silver and Miners Gold and silver retreat was indeed shallow, did you back up the truck? The chart hasn‘t flipped bearish, and I stand by the earlier call that PMs would be one of the great bullish surprises of 2022. Crude Oil Crude oil bulls rejected more downside, but I‘m not looking for that to last – however shallow the upcoming pullback, it would present a buying opportunity, and more profits on top of those taken recently. Copper Expect copper‘s recent red flag to be dealt with decisively, and for higher prices to prevail. Other base metals have likewise room to join in as $4.60 would be taken on once again. At the same time, the silver to copper ratio would move in the white metal‘s favor after having based since the Aug 2020 PMs top called. Bitcoin and Ethereum As stated yesterday, crypto bulls are putting up a little fight as the narrow range trading continues – I‘m not looking at the Bitcoin and Ethereum buyers to succeed convincingly. Time for a downside reversal is approaching. Summary S&P 500 bulls made a great run yesterday, and short covering was to a good deal responsible. Given the credit market action, I‘m looking for the pace of gains to definitely decelerate, and for the 500-strong index to consolidate briefly. VIX is likely to keep calming down before rising again on Friday. Should credit markets agree, the upcoming chop would be of the bullish flavor, especially if oil prices keep trading guardedly. And that looks to be the case, and the rotation into tech can go on – $NYFANG doing well is one of the themes for the environment of slowing GDP growth rates, alongside precious metals and commodities embracing inflation with both arms. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Has the Santa Rally arrived late this year? Are traders trying to position for a Q4 earnings blowout before the end of 2021?

Has the Santa Rally arrived late this year? Are traders trying to position for a Q4 earnings blowout before the end of 2021?

Chris Vermeulen Chris Vermeulen 28.12.2021 21:50
Predictive Modeling Suggests 7~10% Rally In SPY/QQQ Before April 2022 Has the Santa Rally arrived late this year? Are traders trying to position for a Q4:2021 earnings blowout before the end of 2021? Let’s take a look at what predictive modeling can help us understand. The recent rotation in the SPY/QQQ has shaken some traders’ confidence in the ability of any potential rally – blowing up expectations of a Santa Rally. Yet, here we are with only five trading days before the end of 2021, and the US major indexes are nearing all-time highs again. PREDICTIVE MODELING SHOWS A CONTINUED MELT-UP TREND THROUGH JAN/FEB 2022 Our Adaptive Dynamic Learning (ADL) Predictive Modeling system may hold the answers you are looking for. Let’s look at a few charts to prepare for what may unfold over the next 60+ days. First, this SPY Weekly ADL chart highlights the range of potential outcomes going forward into March/April 2022. The further out we attempt to predict using this technique, the more opportunity exists for outlier events (unusual price trends/activity). Yet, the SPY ADL predictive modeling system suggests a very strong upward price trend in January/February 2022, with a possible narrowing of price in late February – just before another big move higher in March/April 2022. There is an outlier trend that appears below the current price trend. So far, this outlier trend has not aligned with price action over the past 5+ weeks and shows an alternate support level near $430. Sign up for my free trading newsletter so you don’t miss the next opportunity! The ADL predictive modeling system suggests a broad market uptrend is likely in the SPY, with an initial target near $490 possibly being reached by early February. If Q4:2021 earnings come in strong and revenues continue to impress the markets, we may see a rally above the $490 level before the end of February 2022. After the tightening of price near the end of February 2022, it appears the SPY will consolidate near $480, then enter another rally phase and attempt to rally above $500. This type of price action aligns with solid Q4:2021 expectations and continued Q1:2022 economic growth. ADL PREDICTS QQQ WILL RALLY ABOVE $430 BY MARCH/APRIL 2022 This Weekly QQQ ADL Chart highlights a similar type of price trend compared to the SPY. The QQQ appears to have a more consistent upward trend bias with a fairly solid upward price channel trending through the first four months of 2022. It appears the QQQ will rally to levels above $420 by mid-February 2022, then stall for a few weeks, then resume a rally trend through most of March 2022 and into early April 2022. After mid-April 2022, it appears the QQQ will consolidate, again, near the $420~$425 level. This ADL prediction suggests Technology, Healthcare, Consumer stables/discretionary, Real Estate, and other sectors will continue to do well in Q1:2022 and beyond. A rally of 7% to 10% in the first few months of 2022 may send the US markets dramatically higher throughout the rest of 2022 if economic growth stays strong. The ADL predictive modeling system has proven to be a valuable tool in understanding what lies ahead for the markets. Not only does it show a range of potential outcomes and price targets, but it also helps us understand if and when price breaks beyond these ADL predictive ranges (which translates into a unique price anomaly). Price anomalies happen. The COVID-19 price collapse represented a unique price anomaly in 2020. This event, somewhat like a Black Swan event, hit the markets hard and quickly sent prices tumbling. It is important to understand that these events can still happen in the future and can dramatically disrupt expected price trends. Still, if the ADL predictive price trends continue to be accurate, it looks like Q1:2022 and Q2:2022 may continue to see moderate upward price trends with bouts of sideways volatility taking place. The range of the ADL predictive levels (the MAGENTA LINES) shows the type or expected volatility in the markets for Q1 and Q2. It appears volatility will stay elevated over the next 6+ months – so get ready for some big, explosive price trends. Watch for the markets to continue to melt higher over the next few weeks as traders prepare for Q4:2021 earnings to start hitting in early January 2022. We may see the US markets start another big upside price trend – possibly breaking to new all-time highs soon enough. WANT TO LEARN MORE ABOUT PREDICTIVE MODELING? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. Please take a minute to visit www.TheTechnicalTraders.com to learn about our Total ETF Portfolio (TEP) technology and how it can help you identify and trade better sector setups. We’ve built this technology to help us identify the strongest and best trade setups in any market sector. Every day, we deliver these setups to our subscribers along with the TEP system trades. You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results. Have a great day!
5 Interesting Energy Stocks added to our Watchlist this Quarter

5 Interesting Energy Stocks added to our Watchlist this Quarter

Invest Macro Invest Macro 02.12.2021 10:12
December 1, 2021 The fourth quarter of 2021 is approximately two-thirds over and we wanted to highlight some of the Top Energy Companies that have been analyzed by our QuantStock system so far. Our QuantStock system is a proprietary algorithm that takes into account key company fundamentals, earnings trends and other strength components to find quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. The QuantStock system does not take into consideration the stock price or technical price trends so one must compare each company idea against the current stock prices. There are a plethora of professional studies that continue to show stock markets are overvalued and this is always a key component to consider when researching any stock market idea. As with all investment ideas, past performance does not guarantee future results. Suncor Energy Energy Stock | Medium Cap | 5.42 percent dividend | 15.22 P/E | Our Grade = C+ Suncor Energy Inc. (NYSE: SU) is one of Canada’s biggest energy stocks. It is an integrated energy company engaged in producing synthetic crude from oil sands. Suncor last announced its financial results for the third quarter on October 27. It came up with earnings of 56 cents per share and revenue of $8.11 billion for the three months ended September 30. The results showed significant improvement from the comparable quarter of 2020 but missed the consensus forecast of 58 cents per share for profit and $8.5 billion for revenue. Despite missing expectations, Suncor Energy stock climbed to a new high of $26.97 earlier this month. Matador Resources Co. Energy Stock | Small Cap | 0.51 percent dividend | 16.78 P/E | Our Grade = C- Matador Resources Co. (NYSE: MTDR) is an energy company based in Texas, United States. The company last month announced impressive financial results for the third quarter. Matador earned $1.25 per share during the three months ended September 30, beating the consensus forecast of 96 cents per share. Moreover, it generated revenue of $472.351 million during the quarter, ahead of analysts’ average estimate of $387.950 million. In addition, Matador stock has also performed exceptionally well so far in 2021. The company’s share price has skyrocketed more than 200 percent on a year-to-date basis. The 52-week range of the stock is $10.16 – $47.23, while its total market value stands close to $4.5 billion. Magnolia Oil & Gas Corp. Energy Stock | Small Cap | 0.84 percent dividend | 11.29 P/E | Our Grade = C- Magnolia Oil & Gas Corp. (NYSE: MGY) is another Texas-based oil producer. The company posted solid financial results for the third quarter earlier this month. Magnolia reported adjusted earnings of 67 cents per share on revenue of $283.58 million. The results easily surpassed analysts’ average estimate of 61 cents per share for earnings and $274 million for revenue. If we quickly look at its key financial metrics, Magnolia stock is currently trading around $18.82, against its 52-week range of $18.38 – $19.07. Moreover, the company’s market value is just over $3.4 billion, while its P/E ratio stands at 11.03. China Petroleum & Chemical Corp. Energy Stock | Medium Cap | 10.26 percent dividend | 3.71 P/E | Our Grade = C China Petroleum & Chemical Corporation (NYSE: SNP), commonly known as Sinopec, is a leading oil and gas company based in China. Besides its listing in the New York Stock Exchange, it also trades in Hong Kong and Shanghai. Sinopec last month announced mixed results for the third quarter. Its reported earnings of $2.64 per share, representing a sharp decline from $5.54 per share in the comparable period of 2020. On the positive side, its revenue for the third quarter grew over 52 percent to $114.58 million. If we look at its share price, Sinopec stock has struggled to gain value so far in 2021. The stock has only increased nearly one percent on a year-to-date basis. Petróleo Brasileiro S.A. Energy Stock | Medium Cap | 19.49 percent dividend | 2.71 P/E | Our Grade = C Petróleo Brasileiro S.A. (NYSE: PBR) is one of the leading energy stocks based in Rio de Janeiro, Brazil. The company, also called Petrobras, is engaged in the exploration and production of oil and natural gas. Petrobras last released its quarterly financial results on October 28. The company reported earnings of $5.9 billion for the third quarter, down 26.9 percent from Q2 but significantly higher than the comparable period of 2020. In addition, its quarterly revenue of $23.3 billion was also well above $13.15 billion in the year-ago period. If we talk about its share price movement, Petrobras stock hasn’t performed well this year. The stock is still down nearly six percent on a year-to-date basis. Article by InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies we add to our stock watch list.
European Central Bank and Amazon (AMZN) And Its Earnings

European Central Bank and Amazon (AMZN) And Its Earnings

Walid Koudmani Walid Koudmani 03.02.2022 11:57
Central bank decisions tend to be significant events in normal circumstances, but today’s decision could prove to be quite interesting for markets as different decisions are expected from each of today’s banks. While the Bank of England is set to raise its rate for the second time and signal further unwinding of its pandemic stimulus, the European central bank is expected to maintain it’s wait and see approach despite record inflation of 5,1% announced in January. According to these predictions, we could be seeing a strengthening of the pound thanks to the 0,5% interest rate, while we could sese a mixed reaction of the Euro as markets remain uncertain about the fragile economic recovery, especially given recent escalations on the Russia-Ukraine border which could destabilize the entire continent. Despite this, any surprises in today’s decisions or announcements could have far reaching effects on both the FX market and equities across Europe and the UK as central bankers struggle to balance record inflation with the post pandemic recovery. Can Amazon’s earnings support US indices? While we have seen a noticeable recovery of global indices over the past several days, yesterday’s disappointing earnings report from Meta (Facebook) saw the stock price drop and weigh on US markets as well as general sentiment. Meta’s results came one day after Alphabet announced it’s positive results and optimistic outlook and despite this mixed sentiment, we are seeing a slight pullback of stock markets as they await another mega-cap report. Amazon’s results could prove to be a significant catalyst for potential movements in the markets as a better than expected result could further boost the recent recovery while a disappointing one could drag markets further down. The company benefited greatly from the recent global situation as demand for its products and services increased noticeably thanks to a solid strategy and cost optimization. On the other hand, like many other companies that benefited from the stay-at-home lifestyle, it remains to be seen if that positive performance has carried over into this new phase.  
Seasonality favors another wave up

Seasonality favors another wave up

Florian Grummes Florian Grummes 03.02.2022 21:05
However, these gains attracted some profit-taking at prices around US$1,850. And in the aftermath of last week’s FOMC meeting, gold sold off for three days in a row. This merciless sell-off only ended at US$1,780 wiping out nearly all gains since mid of December. It was some form of the classic “the bull walks up the stairs and the bear jumps out the window” pattern, which is a typical behavior within an uptrend.Hence and exactly for this reason, the deep pullback did not necessarily end the recovery in the gold market. Of course, in the bigger picture, the entire precious metals sector is still stuck in this tenacious correction which has been ongoing since August 2020. In the short-term, however, the pullback has created an oversold setup and once again proved that there is buying interest at prices below US$1,800.US-Dollar index, daily chart as of February 3rd, 2022. False breakout?US-Dollar index, daily chart as of February 3rd, 2022.It also seems that the US-Dollar might have hit an important top last Thursday and is now moving lower, which would be very supportive for gold, of course. Everyone is expecting the US-Dollar to go up as the FED is expected to raise interest rates. But the US-Dollar has been discounting this “hike and taper scenario” for several months already. Actually, the US-Dollar index has been rallying +8.8% since May 2021! During the recent FOMC meeting, however, big money might have used the seeming breakout to sell their dollar longs into a favorable high-volume setup. At the same time, stock market sentiment was extremely bearish. Hence, last week likely triggered a top in the US-Dollar and a violent back and forth bottoming pattern for the stock-market.US-Dollar index, monthly chart as of February 3rd, 2022. A series of lower highs!US-Dollar index, monthly chart as of February 3rd, 2022.In the big picture, a top in the US-Dollar would continue the series of lower highs for the dollar. As well, the US-Dollar is moving within a huge triangle since 2001. After a series of three lower highs since December 2016, a test of the lower boundary of the triangle would give gold prices an extreme tailwind in the coming years. Hence, even if it´s hard to come up with any bearish arguments for the dollar at the moment, technically it looks like the dollar could roll over.Gold in US-Dollar, daily chart from February 3rd, 2020. Gold’s behavior is changing.Gold in US-Dollar, daily chart as of February 3rd, 2022.For gold, a weaker US-Dollar would be very helpful. In fact, since the beginning of this week, we perceive an ongoing change in gold’s behavior. We are getting impressed by its intraday strength! Every small pullback around and below US$1,800 was rather quickly bought again. So far, gold has only recovered 38.2% of last week’s nasty sell-off and currently sits pretty much exactly at its 200-day moving average (US$1,805).But the fresh buy signal from the slow stochastic oscillator on the daily chart promises more upside. Hence, we see gold fuming its way higher in the coming weeks. In the next step, gold will have to overcome the 38.2% resistance around US$1,808.50 and then continue its recovery towards US$1,830. In any case, the seasonal component is at least very favorable until the end of February. Therefore, even higher price targets are conceivable too. But gold needs to breakout above the triangle and clear US$1,850. Only then a more sustainable bullish momentum would emerge which could last further into spring.If, on the other hand, gold takes out US$1,780, the recovery since mid of December might be over already and the medium-term correction might likely pick up again.Conclusion: Seasonality favors another wave upOverall, we assume that seasonality favors another wave up in the gold market. Thus, another rally towards at least US$1,830 is realistic. We are short-term bullish, mid-term neutral to skeptic and long-term very bullish for gold.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter.Disclosure: Midas Touch Consulting and members of our team are invested in Reyna Gold Corp. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Florian Grummes|February 3rd, 2022|Tags: EUR/USD, Gold, Gold Analysis, Gold bullish, gold chartbook, Gold neutral, precious metals, Reyna Gold, US-Dollar|0 CommentsAbout the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running his own record label Cryon Music & Art Productions. His artist name is Florzinho.
Gold Ended January Glued to $1,800. Will It Ever Detach?

Gold Ended January Glued to $1,800. Will It Ever Detach?

Finance Press Release Finance Press Release 03.02.2022 16:57
  Gold didn’t shine in January. The struggle could continue, although the more distant future looks more optimistic for the yellow metal. That was quick! January has already ended. Welcome to February! I hope that this year has started well for you. For gold, the first month of 2022 wasn’t particularly good. As the chart below shows, the yellow metal lost about $11 of its value, or less than 1%, during January. This is the bad side of the story. The ugly side is that gold wasn’t able to maintain its position above $1,800, even though geopolitical risks intensified, while inflation soared to the highest level in 40 years! The yellow metal surpassed the key level in early January and stayed above this level for most of the time, even rallying above $1,840 in the second half of the month. But gold couldn’t hold out and plunged at the end of January, triggered by a hawkish FOMC meeting. However, there is also a good side. Gold is still hovering around $1,800 despite the upcoming Fed’s tightening cycle and all the hawkish expectations about the US monetary policy in 2022. The Fed signaled the end of tapering of quantitative easing by March, the first hike in the federal funds rate in the same month, and the start of quantitative tightening later this year. Meanwhile, in the last few weeks, the markets went from predicting two interest rate hikes to five. Even more intriguing, and perhaps encouraging as well, is that the real interest rates have increased last month, rising from -1% to -0.6%. Gold is usually negatively correlated with the TIPS yields, but this time it stayed afloat amid rising rates.   Implications for Gold What does gold’s behavior in January imply for its 2022 outlook? Well, I must admit that I expected gold’s performance to be worse. Last month showed that gold simply don’t want to either go down (or up), but it still prefers to go sideways, glued to the $1,800 level. The fact that strengthening expectations of the Fed’s tightening cycle and rising real interest rates didn’t plunge gold prices makes me somewhat more optimistic about gold’s future. However, I still see some important threats to gold. First of all, some investors are still underpricing how hawkish the Fed could become to combat inflation. Hence, the day of reckoning could still be ahead of us. You see, just today, the Bank of England hiked its policy rate by 25 basis points, although almost half of the policymakers wanted to raise interest rates by half a percentage point. Second, the market seems to be biased downward, with lower and lower peaks since August 2020. Having said that, investors should remember that what the Fed says it will do and what it ends up doing are often very different. When the Fed says it will be dovish, it will be dovish. But when the Fed says it will be hawkish, it says so. This is because a monetary tightening could be painful for asset valuations and all the debtors, including Uncle Sam. The US stock market already saw significant losses in January. As the chart below shows, the S&P 500 Index lost a few hundred points last month, marking the worst decline since the beginning of the pandemic. Thus, the Fed won’t risk recession in its fight with inflation, especially if it peaks this year, and would try to engineer a soft-landing. Hence, the Fed could reverse its stance relatively soon, especially that it’s terribly late with its tightening. However, as long as the focus is on monetary policy tightening, gold is likely to struggle within its tight range. Some policymakers and economists have argued that the emergence from the COVID-19 pandemic is more like a postwar demobilization and conversion to a civilian industry than a normal business cycle. White House economists have compared the current picture to the rapid increases in 1947, caused by the end of price controls in conjunction with supply chain problems and pent-up demand after the war (“Historical Parallels to Today’s Inflationary Episode”, Council of Economic Advisers, July 6, 2021). The problem with this analogy is that it is only one instance from more than 70 years ago. More recent and more frequent inflation episodes have generally been ended by a recession or a mid-cycle slowdown. Price pressures have an internal momentum of their own and tend to intensify rather than lessen as the business cycle becomes more mature and the margin of spare capacity shrinks in all markets. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Altcoins are climbing out of the pit

Altcoins are climbing out of the pit

Alex Kuptsikevich Alex Kuptsikevich 04.02.2022 10:54
Down the chain, US stock market dynamics now determine corporate investor sentiment towards Bitcoin and Ether. From the top-down, this sentiment then spreads down to altcoins. But since late last year, there has been a continuing trend that even bitcoin's calming is enough for altcoins to return to growth and outperform the first cryptocurrency. In the last 24 hours, the entire crypto market has added 3.3%, while Ether has gained 4.7% versus Bitcoin's 2.4%. Ether has strengthened by 15% in the last seven days, returning to this month's highs and trying to climb above the bottom levels at the end of September 2021. The cryptocurrency market capitalisation excluding Bitcoin has been hovering around the $1 trillion mark for over a week and approached the upper end of that range on Friday morning. The reduction in volatility in Bitcoin allows for an optimistic outlook on altcoins. At least in the short term. An essential boundary for Ether will be the $3K mark. A return in the price above this level could further encourage buyers and reject the idea of a crypto-winter following the example of 2018. Solana is showing signs of coming out of the hole it fell into at the end of January. The $90 mark has attracted sufficient buyer demand. However, it will be premature to discuss a sustained recovery to the upside, only a stabilisation after the collapse. A BTCUSD consolidation above $40k and Ethereum above $3k would shift the altcoin recovery to a new speed and restart the process of BTC share contraction in the entire market.
Price Of Gold Update By GoldViewFX

How the Fed Will Affect Gold? Let's Take A Look Back...

Arkadiusz Sieron Arkadiusz Sieron 04.02.2022 14:47
  Beware, the Fed’s tightening of monetary policy could lift real interest rates! For gold, this poses a risk of prices wildly rolling down. The first FOMC meeting in 2022 is behind us. What can we expect from the US central bank this year and how will it affect the price of gold? Well, this year’s episode of Fed Street will be sponsored by the letter “T”, which stands for “tightening”. It will consist of three elements. First, quantitative easing tapering. The asset purchases are going to end by early March. To be clear, during tapering, the Fed is still buying securities, so it remains accommodative, but less and less. Tapering has been very gradual and well-telegraphed to the markets, so it’s probably already priced in gold. Thus, the infamous taper tantrum shouldn’t replay. Second, quantitative tightening. Soon after the end of asset purchases, the Fed will begin shrinking its mammoth balance sheet. As the chart below shows, it has more than doubled since the start of the pandemic, reaching about $9 trillion, or about 36% of the country’s GDP. It’s so gigantic that even Powell admitted during his January press conference that “the balance sheet is substantially larger than it needs to be.” Captain Obvious attacked again! In contrast to tapering, which just reduces additions to the Fed’s holdings, quantitative tightening will shrink the balance sheet. How much? It’s hard to say. Last time, during QT from 2017 to 2019, the Fed started unloading $10 billion in assets per month, gradually lifting the cap to $50 billion. Given that inflation is now much higher, and the Fed has greater confidence in the economic recovery, the scale of reduction would probably be higher. The QT will create upward pressure on interest rates, which could be negative for the gold market. However, QT will be a very gradual and orderly process. Instead of selling assets directly, the US central bank will stop reinvestment of proceeds as securities run off. As we can read in “Principles for Reducing the Size of the Federal Reserve's Balance Sheet”, The Committee intends to reduce the Federal Reserve's securities holdings over time in a predictable manner primarily by adjusting the amounts reinvested of principal payments received from securities held in the System Open Market Account. What’s more, the previous case of QT wasn’t detrimental to gold, as the chart below shows. The price of gold started to rally in late 2018 and especially later in mid-2019. Third, the hiking cycle. In March, the Fed is going to start increasing the federal funds rate. According to the financial markets, the US central bank will enact five interest rate hikes this year, raising the federal funds rate to the range of 1.25-1.50%. Now, there are two narratives about American monetary policy in 2022. According to the first, we are witnessing a hawkish revolution within the Fed, as it would shift its monetary stance in a relatively short time. The central bank will “double tighten” (i.e., it will shrink its balance sheet at the same time as hiking rates), and it will do it in a much more aggressive way than after the Great Recession. Such decisive moves will significantly raise the bond yields, which will hit gold prices. However, in this scenario, the Fed’s aggressive actions will eventually lead to the inversion of the yield curve and later to recession, which should support the precious metals market. On the other hand, some analysts point out that central bankers are all talk and – given their dovish bias – act less aggressively than they promise, chickening out in the face of the first stock market turbulence. They also claim that all the Fed’s actions won’t be enough to combat inflation and that monetary conditions will remain relatively loose. For example, Stephen Roach argues that “the Fed is so far behind [the curve] that it can’t even see the curve.” Indeed, the real federal funds rate is deeply negative (around -7%), as the chart below shows; and even if inflation moderates to 3.5% while the Fed conducts four hikes, it will remain well below zero (about -2%), providing some support for gold prices. Which narrative is correct? Well, there are grains of truth in both of them. However, I would like to remind you that what really matters for the markets is the change or direction, not the level of a variable. Hence, the fact that real interest rates are to stay extremely low doesn’t guarantee that gold prices won’t decline in a response to the hiking cycle. Actually, as the chart above shows, the upward reversal in the real interest rates usually plunges gold prices. Given that real rates are at a record low, a normalization is still ahead of us. Hence, unless inflation continues to rise, bond yields are likely to move up, while gold – to move down. Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
Awaiting Non Farm Payrolls, Brent Increased And Hits Ca. $92

Awaiting Non Farm Payrolls, Brent Increased And Hits Ca. $92

Walid Koudmani Walid Koudmani 04.02.2022 11:36
As usual for the first Friday of the month, investors will be focusing on the highly anticipated Non Farm Payroll report from the US which will give an overview of the job market situation for January and which is expected to show an increase of only 150,000. However, this report will be even more highly focused on since Wednesday's ADP report surprised markets with a significantly below expectation reading of -301,000 and pointed to increasing difficulties in the world's largest economy caused in part by the Omicron variant. While rising costs and supply concerns continue to impact the economic recovery, the FED maintains its position that full employment has been reached and that it will adjust it’s policies when it deems necessary in order to stimulate further growth. A better than expected result could encourage the Fed to continue its approach, while a disappointing reading could cause further concerns and may shift focus slightly on wage figures and their relation to record level inflation in the world's largest economy. Either way, today could see a noticeable increase in volatility as investors assess the situation and as stock markets attempt to stabilize after several weeks of significant moves. UK Construction PMI sparks slight optimism The UK construction sector continued to gain momentum after a difficult end to 2021 thanks to an improvement in commercial activity which helped offset a weak rise in house building. Improvements were also helped by a drop in cost inflation which fell to a 10-month low thanks to an easing of supply issues, which have been affecting the sector for months. As a result, commercial work helped construction growth reach a six-month high but with supplier lead times continuing to lengthen in January as staff shortages and a lack of haulage availability hindered deliveries, the situation continues to be uncertain. Oil prices reach multi year high as global tensions rise As the situation on the Ukraine-Russia border continues to escalate with several countries sending military personnel in an attempt to mitigate the issue, we are seeing another record increase in the price of oil with Brent reaching the highest level since October 2014 and breaking above $92. While OPEC announced it will increase its production by 400,000 barrels per day in March, the market remains concerned for a potential undersupply and general destabilization which could have consequences for the vast majority of sectors in economies as they are tied to oil prices for transport, shipping and energy. We have already noticed increasing energy costs across the world and further tensions could see these increase even more as uncertainty may lead to stockpiling and difficulties in general trade. Despite this, an easing of tensions with a continued global recovery could see the price retreat as long as a balance is maintained with suppliers in the short and medium term.  
Bitcoin is gaining momentum

Bitcoin is gaining momentum

Alex Kuptsikevich Alex Kuptsikevich 07.02.2022 08:52
Bitcoin is up 9% over the past week, ending at around $41,700. Ethereum is up 15%. Altcoins also woke up from hibernation and grew stronger than the market: from 5.8% (Binance Coin) to 17.3% (Solana).Over the same period, the total capitalization of the crypto market, according to CoinGecko, grew by 11.2%, up to $1.99 trillion.The primary growth of the crypto market last week came on Friday when bitcoin at the end of the day soared by 10% in a few hours. The increase was not prevented even by strong data on the US labor market, which came out a couple of hours before the jump.It is worth noting that the Nonfarm Payrolls can force the Fed to move faster to tighten monetary policy. Against this background, the yield of 10-year Treasuries jumped above 1.93%, hitting new two-year highs, and this could soon lead to sales in the stock market. If cryptocurrencies manage to resist and continue to grow, this will be a serious trend reversal order. Just like on Friday, when investors decided to buy BTC in order to protect investments from inflation.Since then, Bitcoin has already added 17%, moving into a phase of an active uptrend. Technically, the first cryptocurrency broke the resistance of the descending corridor. Accelerating growth and steady buying throughout the weekend indicate a strong bullish momentum. Cautious investors are now looking at the test of the 50-day moving average. Previously, repeatedly fixing above this line preceded a multi-month uptrend.Potentially, this will also be lost now. Therefore, some players consider this impulse as an important first signal of a recovery in demand for risky assets, despite fears of a rate increase.Meanwhile, billionaire Ray Dalio has warned that a number of governments could outlaw cryptocurrencies. The government of the Russian Federation is considering introducing a tax on miners of at least 15%. According to the authorities, the tax on all participants in the crypto market can bring up to 1 trillion rubles to the treasury. In the meantime, the Fed has presented the Digital Dollar White Paper, but the issue of its future launch has not yet been resolved.
Rally Time

Rally Time

Monica Kingsley Monica Kingsley 07.02.2022 15:59
S&P 500 refused to break below 4,450s, and junk bonds took off the lows as well. The bottom isn‘t in, but I‘m looking for a little reprieve next. The degree to which bonds were sold off vs. stocks, hints that we would have lower to go still, ultimately bottoming around late Feb, perhaps even early Mar. Increasingly more Fed hikes are being priced in, and Friday‘s good non-farm payrolls figure is reinforcing these expectations.Treasuries are telling the story as well – the 10-year yield has been surging lately while the 30-year bond didn‘t move nearly as much. It means a lot of focus on Fed tightening, which is making the recent Amazon and Meta earnings ability to move stocks this much, all the better for the S&P 500 in the short run. The 10-year yield is likely to retrace a part of its prior increase, and that would give stocks some breathing room. At the same time though, I don‘t think that the tech selling is done, that tech is out of the woods now – the current rally is likely to run out of steam over the next 5-10 days, then go sideways to down.As for the immediate plan for Monday‘s session, I think the 4460s would hold on any retest, should we get there at all. The bulls have a very short-term advantage, then as mentioned above, selling would resume, and around May or June we could get the answer as to whether we‘ve been just consolidating or topping out. Before that, we‘re in a quite wide range where current stock market values aren‘t truly reflecting bond market sluggishness.Keeping in mind the key Friday‘s conclusion:(…) Precious metals are holding up relatively well, regardless of the miners‘ weakness. Commodities can go on enjoying their time in the limelight – crude oil is not even momentarily dipping, and copper stands ready to keep probing higher values within its still sideways range. Even cryptos are benefiting from what could almost be described as a daily flight to safety.As I wrote in extensive Monday‘s analysis and repeated since, stiff winds are still ahead in spite of the soothing verbal pause in tightening. As the 467K figure just in beats expectations, the Fed gets its justification to withdraw liquidity any way it pleases.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 bulls aren‘t yet winning, but have a good chance to suck in those who believe the tech bottom is in – tech bears would get another opportunity in the not too distant future.Credit MarketsHYG paused, and the heavy selling is catching a bid – reprieve is approaching even if Friday‘s highs didn‘t last.Gold, Silver and MinersPrecious metals aren‘t getting anywhere, and are likely to warmly embrace the upcoming pause in higher yields. But that‘s not yet the true fireworks we would get later in 2022, which would come on the Fed‘s abrupt U-turn.Crude OilCrude oil bulls aren‘t even remotely pausing – I wouldn‘t count on pullback towards $88 or lower really. There is still much strength in black gold regardless of the Iran sanctions waiver – triple digit oil I called for months ago, is getting near.CopperCopper is back to the middle of its recent range, and the downside looks fairly well defended. The upside breakout would take time, and precede the precious metals one. Rising commodities are still sending a clear message as to which way the wind is blowing.Bitcoin and EthereumThe crypto break higher attests to the return of strength underway, and it‘s supported by the volume. The buyers have the short-term upper hand.SummaryS&P 500 bulls withstood the prospect of hawkish Fed getting more job market leeway on Friday, and look to be entering the week with a slight advantage. Also the bond markets look nearning the moment of calming down as the longer durations are painting a different picture than the 10-year Treasury. S&P 500 would like that, but the tech rebound would get tested as we likely move lower to welcome Mar. Till then, stocks are likely to drift somewhat higher before the rally runs out of steam over the next 5-10 days. Full game plan with reasoning is introduced in the opening part of today‘s extensive analysis. Cryptos good performance on Friday is as promising as the commodities surge – enjoy the days ahead.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Are You Thinking the Dollar Will Collapse? That’s False Hope

Are You Thinking the Dollar Will Collapse? That’s False Hope

Przemysław Radomski Przemysław Radomski 07.02.2022 15:49
  Gold’s latest feats increased investors’ appetite. The outlook for the dollar, however, remains healthy. That can only mean one thing. As volatility erupts across the financial markets, gold and silver prices are being pulled in conflicting directions. For example, with the USD Index suffering a short-term decline, the outcome is fundamentally bullish for the precious metals. However, with U.S. Treasury yields rallying, the outcome is fundamentally bearish for gold and silver prices. Then, with panic selling and panic buying confronting the general stock market, the PMs are dealing with those crosscurrents. However, with QE on its deathbed and the Fed poised to raise the Federal Funds Rate in the coming months, the common denominator is rising real interest rates. To explain, the euro’s recent popularity has impacted the USD Index. For context, the EUR/USD accounts for nearly 58% of the dollar basket’s movement. Thus, if real interest rates rise and the U.S. dollar falls, what will happen to the PMs? Well, the reality is that rising real interest rates are bullish for the USD Index, and the euro’s recent ECB-induced rally is far from a surprise. With investors often buying the EUR/USD in anticipation of a hawkish shift from the ECB, another ‘hopeful’ upswing occurred. However, the central bank disappointed investors time and time again in 2021, and the currency pair continued to make new lows. As a result, we expect the downtrend to resume over the medium term.  Supporting our expectations, I wrote the following about financial conditions and the USD Index on Feb. 2: To explain, the blue line above tracks Goldman Sachs' Financial Conditions Index (FCI). For context, the index is calculated as a "weighted average of riskless interest rates, the exchange rate, equity valuations, and credit spreads, with weights that correspond to the direct impact of each variable on GDP." In a nutshell: when interest rates increase alongside credit spreads, it's more expensive to borrow money and financial conditions tighten. To that point, if you analyze the right side of the chart, you can see that the FCI has surpassed its pre-COVID-19 high (January 2020). Moreover, the FCI bottomed in January 2021 and has been seeking higher ground ever since. In the process, it's no coincidence that the PMs have suffered mightily since January 2021. To that point, with the Fed poised to raise interest rates at its March monetary policy meeting, the FCI should continue its ascent. As a result, the PMs' relief rallies should fall flat like in 2021.  Likewise, while the USD Index has come down from its recent high, it's no coincidence that the dollar basket bottomed with the FCI in January 2021 and hit a new high with the FCI in January 2022. Thus, while the recent consolidation may seem troubling, the medium-term fundamentals supporting the greenback remain robust. Furthermore, tighter financial conditions are often a function of rising real interest rates. As mentioned, the USD Index bottomed with the FCI and surged to new highs with the FCI. As a result, the fundamentals support a stronger, not weaker USD Index. As evidence, the U.S. 10-Year real yield, the FCI, and the USD Index have traveled similar paths since January 2020. Please see below: To explain, the green line above tracks the USD Index since January 2020, while the red line above tracks the U.S. 10-Year real yield. While the latter didn’t bottom in January 2021 like the USD Index and the FCI (though it was close), all three surged in late 2021 and hit new highs in 2022. Moreover, the U.S. 10-Year Treasury nominal and real yields hit new 2022 highs on Feb. 4.  In addition, if you compare the two charts, you can see that all three metrics spiked higher when the coronavirus crisis struck in March 2020. As such, the trio often follows in each other’s footsteps. Furthermore, with the Fed likely to raise interest rates at its March monetary policy meeting, this realization supports a higher U.S. 10-Year real yield, and a higher FCI. As a result, the fundamentals underpinning the USD Index remain robust, and short-term sentiment is likely to be responsible for the recent weakness.  Likewise, as the Omicron variant slows U.S. economic activity, the ‘bad news is good news’ camp has renewed hopes for a dovish Fed. However, the latest strain is unlikely to affect the Fed’s reaction function. A case in point: after ADP’s private payrolls declined by 301,000 in January (data released on Feb. 2), concern spread across Wall Street. However, after U.S. nonfarm payrolls (government data) came in at 467,000 versus 150,000 expected on Feb. 4, the U.S. labor market remains extremely healthy.  Please see below: Source: U.S. Bureau of Labor Statistics (BLS) On top of that, the BLS revealed that “the over-the-month employment change for November and December 2021 combined is 709,000 higher than previously reported, while the over-the-month employment change for June and July 2021 combined is 807,000 lower. Overall, the 2021 over-the-year change is 217,000 higher than previously reported.”  Thus, the U.S. added more than 700,000 combined jobs in November and December than previously reported, and the net gain in 2021 was more than 200,000. Please see below: Source: BLS As for wage inflation, the BLS also revealed: “In January, average hourly earnings for all employees on private nonfarm payrolls increased by 23 cents to $31.63. Over the past 12 months, average hourly earnings have increased by 5.7 percent.” As a reminder, while investors speculate on the prospect of a hawkish ECB, the latest release out of Europe shows that wage inflation is much weaker than in the U.S. To explain, I wrote on Feb. 1: Eurozone hourly labor costs rose by 2.5% YoY on Dec. 16 (the latest release). Moreover, the report revealed that “the costs of wages & salaries per hour worked increased by 2.3%, while the non-wage component rose by 3.0% in the third quarter of 2021, compared with the same quarter of the previous year.”  As a result, non-wage labor costs – like insurance, healthcare, unemployment premiums, etc. – did the bulk of the heavy lifting. In contrast, wage and salary inflation are nowhere near the ECB’s danger zone. Please see below: And why is wage inflation so critical? Well, ECB Chief Economist Philip Lane said on Jan. 25: Source: ECB As a result, when the ECB’s Chief Economist tells you that wage inflation needs to hit 3% YoY to be “consistent” with the ECB’s 2% overall annual inflation target, a wage print of 2.3% YoY is far from troublesome. Thus, while euro bulls hope that the ECB will mirror the Fed and perform a hawkish 180, the data suggests otherwise.  In addition, while U.S. nonfarm payrolls materially outperformed on Feb. 4, I noted on Feb. 2 that there are now 4.606 million more job openings in the U.S. than citizens unemployed. Please see below: To explain, the green line above subtracts the number of unemployed U.S. citizens from the number of U.S. job openings. If you analyze the right side of the chart, you can see that the epic collapse has completely reversed and the green line is now at an all-time high. Thus, with more jobs available than people looking for work, the economic environment supports normalization by the Fed. Thus, if we piece the puzzle together, the U.S. labor market remains healthy and U.S. inflation is materially outperforming the Eurozone. As a result, the Fed should stay ahead of the ECB, and the hawkish outperformance supports a weaker EUR/USD and a stronger USD Index. Moreover, the dynamic also supports a higher FCI and a higher U.S. 10-Year real yield. As we’ve seen since January 2021, these fundamental outcomes are extremely unkind to the PMs. Finally, while the Omicron variant has depressed economic sentiment, I noted previously that the disruptions should be short-lived. For example, with Americans’ anxiety about COVID-19 decelerating, renewed economic strength should keep the pressure on the Fed. Please see below: To explain, the light brown line above tracks the net percentage of Americans concerned about COVID-19, while the dark brown line above tracks the change in flight search trends on Kayak. In a nutshell: the more concern over COVID-19 (a high light brown line), the more Americans hunker down and avoid travel (a low dark brown line). However, if you analyze the right side of the chart, you can see that the light brown line has rolled over and the dark brown line has materially risen. Moreover, with the trend poised to persist as the warmer weather arrives, increased mobility should uplift sentiment, support economic growth, and keep the Fed’s rate hike cycle on schedule. The bottom line? The USD Index’s fundamentals remain extremely healthy, and while short-term sentiment has been unkind, rising real yields and a hawkish Fed should remain supportive over the medium term. Moreover, with the PMs often moving inversely to the U.S. dollar, more downside should confront gold, silver, and mining stocks over the next few months. In conclusion, the PMs rallied on Feb. 4, despite the spike in U.S. Treasury yields. However, with so much volatility confronting the general stock market recently, sentiment has pulled the PMs in many directions. However, the important point is that the medium-term thesis remains intact: the USD Index and U.S. Treasury yields should seek higher ground, and the realization is profoundly bearish for the precious metals sector. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Stocks: Is $4,500 The Current S&P 500's "Target"

Stocks: Is $4,500 The Current S&P 500's "Target"

Paul Rejczak Paul Rejczak 08.02.2022 15:33
  The S&P 500 index remains close to the 4,500 level following last week’s retreat. Was this just a downward correction? The broad stock market index lost 0.37% on Monday, as it continued to fluctuate within a short-term consolidation. The broad stock market’s gauge retraced some of its recent rally, as it fell to the local low of 4,451.50 on Friday. The market found a short-term bottom after reversing from last Wednesday’s local high of 4,595.31. This morning the S&P 500 index is expected to open 0.2% lower. We will likely see more consolidation along the 4,500 level. The nearest important resistance level remains at 4,540, market by the recent local highs. The resistance level is also at 4,600. On the other hand, the support level is at 4,400-4,450. The S&P 500 continues to trade below the November-January consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Nasdaq 100 Remains Relatively Weaker The technology Nasdaq 100 index followed a similar path last week, as it retraced some of the rally. It remains relatively weaker than the broad stock market. The support level is at 13,800-14,000, and the resistance level is at 15,000-15,200. Futures Contract – Short-Term Consolidation Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above the short-term downward trend line a week ago before rallying up to around the 4,600 level. It’s trading along the 4,500 level after backing from the Wednesday’s high of 4,586. The market remains close to the resistance level of its previous local lows, but there have been no confirmed negative signals so far. So in our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index trades within a short-term consolidation following the decline from last week’s Wednesday’s local high. The market will likely extend its consolidation, as investors will be waiting for the Thursday’s Consumer price index release. The quarterly earnings season is mostly over now, and there is still an uncertainty concerning Russia-Ukraine tensions. Here’s the breakdown: The S&P 500 index will likely trade within a consolidation ahead of the important Thursday’s consumer inflation number release. In our opinion, no positions are currently justified from the risk/reward point of view. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
DJI (Dow Jones) And SPX (S&P 500) Are Likely To Recover Slowly

DJI (Dow Jones) And SPX (S&P 500) Are Likely To Recover Slowly

Alex Kuptsikevich Alex Kuptsikevich 09.02.2022 09:26
Stock markets continue their shaky recovery. On Tuesday, intraday trading patterns in US equities point to a buying trend on declines. The S&P500 and Dow Jones indices rebounded from their 200-day simple moving average. Both indices were below those levels in the second half of January. Still, by the beginning of February, they managed to get back above them on the substantial buying activity of the retail investors. Yesterday's stock market dynamics slightly reduced the tension. Increased buying at the end of the session indicates a buying mood for professional market participants. There have been increasing reports from US investment banks that markets have already priced in a tight monetary policy scenario and will not press equity prices further. Moreover, BlackRock recently noted that markets had priced in overly hawkish expectations. The bond market also looks oversold, declining in previous weeks at the fastest pace since 2008. This is a good reason, at least for a technical rebound. In addition, buyers are supported by strong economic and wage growth, promising corporate earnings stability for the foreseeable future. The switch to a monetary tightening phase turns the market into a more frequent and deeper corrective pullback mode but does not trigger a bear market before a rate hike even begins. Strong fundamentals support a bullish technical picture, with a recovery from the strongest oversold S&P500 RSI and the ability to pop above the 200-day average. From this perspective, the January drawdown has cleared the way for growth, recharging buyers. On an equity level, we can see stabilisation and sharp upward moves in stocks that have been weak since June and shone in the pandemic before that: Peloton, Netflix, GameStop. In theory, this could be a dead cat bounce, but it reduces the selling pressure in blue-chip stocks such as Apple, Amazon, Microsoft, Google and straightens out the overall market sentiment.
Brent (Crude Oil) Has Gained 20% Since The Beginning Of The Year. The Brent Price For Today - The 7-year High

Brent (Crude Oil) Has Gained 20% Since The Beginning Of The Year. The Brent Price For Today - The 7-year High

Walid Koudmani Walid Koudmani 09.02.2022 12:30
While Oil prices have seen significant movements in recent times, with Brent gaining over 20% from the start of 2022 and reaching the highest level since october 2014, we are beginning to see a slight pullback despite an unexpected inventory drop shown in yesterday's API report. Talks surrounding the Iran nuclear deal, which could bring around 2 mpd supply into the markets, have helped prices retreat while easing of tensions surrounding the Russia-Ukraine situation have also boosted sentiment. On the other hand, while these are positive signs the situation remains uncertain as any further escalation could see supply significantly disrupted and as the Iran deal remains slightly out of reach for the time being. OPEC appears to be nearing production capacity and optimistic forecasts point to a rise in demand throughout the year so unless some progress is made among other producers, those supply concerns could translate into record prices and subsequent impacts on a variety of sectors. Today’s EIA inventory report could prove to be important for short term price action as a confirmation of the API report could potentially increase concerns regarding short term price stability.   Stock markets continue to recover as investors await earning reports from Uber and Disney European stock markets are extending the upward move after a positive Asian session and following a higher close of US indices despite some general uncertainty seen across markets. Stock prices have been increasingly volatile on the back of recent geopolitical tensions and some surprising earnings reports released during this earning season. Fiscal and monetary policy has also greatly impacted investor sentiment but many appear to be reassured for the time being as we see a continuation of the recent rebound across global markets while investors await today’s key earnings announcements from major companies like Uber technologies and Disney among others. While it remains to be seen whether these will manage to meet expectations, the situation remains quite fragile with many markets experiencing significant volatility and as several central bankers are also due to speak today.   Barratt Developments strong results boost investor confidence Barratt Developments report exceeded expectations and pointed to a stronger recovery from covid levels with over 18,000 home constructions and strong revenue figures. The company expects this positive performance to continue throughout 2022 and despite some uncertainty surrounding the global economic environment, the general market situation appears to favor such optimistic performance. It remains to be seen if the company will manage to successfully implement its strategy or if it will encounter issues driven by record inflation and potential supply chain disruptions.
STX, RJF and BX were added to our Stock Market Watchlist in January

STX, RJF and BX were added to our Stock Market Watchlist in January

Invest Macro Invest Macro 09.02.2022 22:39
The first quarter of 2022 is underway and it is time to highlight some of the top companies that have been analyzed by our QuantStock Fundamental system so far. Topping the list are three well-known companies, one in technology and two from the financial services side of the market with all three companies paying out dividends to investors. Our QuantStock Fundamental system is a proprietary algorithm that examines each company’s fundamental metrics, trends and overall strength to pinpoint quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. However, be aware the QuantStock Fundamental system does not take into consideration the stock price or technical price trends so one must compare each idea with their current stock prices. Many studies are consistently showing overvalued markets and that always has to be taken into consideration with any stock market idea. As with all investment ideas, past performance does not guarantee future results. Be sure to join our email newsletter for our system updates. Here we go with our 3 of our Top Stocks we added to our Watchlist from January 1st through January 31st of 2022: Seagate Technology Information Technology, Medium Cap, 13.8 P/E, 2.50+ Percent Dividend, Our Grade = B Seagate Technology (STX) has ascended our grading threshold to be included on the watchlist for the second consecutive quarter. STX is an information technology company headquartered in Ireland that specializes in technology hardware, storage devices and other cloud storage services. Highlighting their fundamental case over the past two quarters has been a rising earning per share (beating expectations three quarters in a row) as well as a rising dividend that is currently above 2.50 percent. On a technical basis, the STX price has been volatile since the beginning of the year like most other tech stocks. STX hit a low share price under $92.00 on January 25th but has rallied since to over $110.00 per share at time of writing. Raymond James Financial Inc Financials, Medium Cap, 15.84 P/E, 1.15+ Percent Dividend, Our Grade = B- Raymond James Financial INC (RJF) is next up and a well known financial company that has also made our watchlist for the second straight quarter. RJF, a medium-cap company ($28+ billion) is headquartered in Florida and provides financial services to investors and corporations throughout the US, Canada and Europe. RJF currently trades at an approximate 15.5 PE-Ratio and has had higher earnings per share for three straight quarters, beating earnings per share expectations in all three quarters as well. The dividend has continued on a growth path with the current quarterly dividend at approximately 1.15 percent at time of writing. Technically, the RJF share price has been surging higher recently and currently trading around the $115.00 price point at time of writing. In the short term, the stock is on the higher side of its trading range as evidenced by the ZScore of the 50-day moving average (2.38 standard deviations above the 50-day moving average currently). Blackstone Inc Financials, Large Cap, 15.8 P/E, 3.80+ Percent Dividend, Our Grade = C Blackstone Inc (BX) was added to our watchlist for the first time in January and is a financial large cap company ($154+ billion) located in New York, New York. BX provides global asset management services to investors, pension funds and institutional clients across a broad range of markets including real estate, bonds, equities and various credits. Blackstone’s stock is currently trading at a 15.8 Price/Earnings Ratio and the company has had earnings per share growth each of the past three quarters, beating expectations each time. The dividend has been on an upward trajectory with the current yield surpassing the 3.80 percent threshold at current prices. Technically, the BX share price has been on the rebound recently after dropping in late January to a low of $101.65. The stock has bounced back strong to a current price of above $130.00 per share and trading right above a support level. Article by InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies we add to our stock watch list. Disclaimer: I currently own STX, RJF and BX stock at this time in ETFs and/or Closed-End Funds. I do not own direct shares of these companies at time of writing. This article and our system grading are for informational and educational purposes only, not a recommendation to buy, sell or hold shares of any particular stock, ETF, company or security. All investors are always strongly advised to conduct their own independent research into any stock, ETF, closed-end fund or any other financial instrument before making an investment decision. Investmacro.com authors are not registered investment advisors, do not make stock market recommendations, do not offer legal advice, do not offer tax advice and cannot be held liable for any losses occurred. All data is thought to be accurate as of time of writing but can and will change over time due to changes in the underlying securities price and data.   
Considering Portfolios In Times Of, Among Others, Inflation...

More Profits Ahead

Monica Kingsley Monica Kingsley 09.02.2022 15:54
S&P 500 bulls took the opportunity yesterday amid mild credit market support. Looks like more fireworks are to come – the risk-on turn is merely starting. Not only financials, but also tech welcomed higher yields – it seems that the positive seasonality of 2nd to 3rd week of Feb, is working. We have quite a way to go still on the upside – 4,600s are waiting, and it remains to be seen how far in the 4,600 – 4,700 range stocks make it. Consumer discretionaries are outperforming staples, and energy isn‘t cratering – the brief commodities reprieve (don‘t look though at copper, which seems preparing a nice upside move, or crude oil‘s shallow dip) supports the stock market advance. Precious metals are rising strongly – both thanks to inflation expectations not budging much, and the expected copper upturn. Not even cryptos are plunging. The open S&P 500 and oil profits can keep on rising. Looks like the markets are slowly positioning for yet another hot inflation number tomorrow. How many times lately have there been expectations that high CPI data would sink stocks – but these rallied instead? Thursday is likely to turn out similarly – I‘m not looking for the stock market rally to top out tomorrow. The Mar FOMC is still quite a few weeks away, 50bp rate hike fears notwithstanding. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls have made the opening step, and look ready to extend gains. Even volume has returned a little, but importantly, sellers were nowhere to be seen – and that‘ll likely be the case today as well. Credit Markets HYG couldn‘t keep the opening gains, but junk bonds still did better than their quality counterparts. Anyway, the HYG weakness looks likely to be reversed (to some degree) today. Gold, Silver and Miners Precious metals are firmly on another upleg – and miners strength is confirming that. When inflation turns out more stubborn than generally appreciated, and bond yields don‘t catch up nearly enough, precious metals would like that. Love that. Crude Oil Now, crude oil bulls did pause, but the dip isn‘t likely to reach too far – I still wouldn‘t count on pullback towards $88 or lower really – this correction is more likely to be in time than in price. Copper Copper is clearly refusing to decline – its upswing looks to be a question of shortening time only. Likewise the commodities reprieve would be reversed shortly. The red metal‘s price action coupled with precious metals one, is very nice to see – for the fruits it would bring. Bitcoin and Ethereum Cryptos aren‘t weakening – they look to be pausing in the upswing only. How long would they need to consolidate before continuing the attempt to go higher? Summary S&P 500 bulls have a firm grip on higher prices – we‘re looking at another green day today. And if it‘s accompanied by the turning bonds, then all the better. Tech has risen, oil is a little down while sectoral breadth improves – the conditions are in place for S&P 500 to overcome 4,600. The risk-on rally hasn‘t yet run out of time, and the Mar FOMC is still far away. Upgraded rate hike prospects are being increasingly absorbed by the markets, and stocks don‘t look spooked at the moment. The bears‘ time would still come though, but let‘s first enjoy the gains our timely positioning is bringing. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Inflation: 5.9% Increase Of Year To Year US Core CPI?

Inflation: 5.9% Increase Of Year To Year US Core CPI?

Alex Kuptsikevich Alex Kuptsikevich 10.02.2022 13:21
US inflation data for January is in the spotlight in the markets today. The annual growth rate is expected to break 40-year records, reaching 7.3% compared with 7.0% in December. Higher oil prices in recent weeks will reinforce the general price index. But more important in this case may be the core CPI, where prices are expected to rise by 0.5% m/m and 5.9% y/y. Investors and traders expect this report to determine the Fed's next move in mid-March. Rising inflation above expectations and new signs that the inflation trend is taking root could reinforce dollar purchases as markets will immediately put into the price a higher chance of a 50 point rate hike in March and set up a determination for further hikes. And that promises to be bad news for the markets. Signs that inflation is close to its peak and on a downward path promises to be great news for stock markets and shift the balance towards dollar selling. Interest in equities increases when investors see signs of a sustained turnaround in inflation as they stop fearing the Fed's sharply hawkish stance on suppressing price growth.
Fed Acted, Now It's Markets' Turn. What's The Next Step Of Crude Oil?

Fed Acted, Now It's Markets' Turn. What's The Next Step Of Crude Oil?

Monica Kingsley Monica Kingsley 10.02.2022 15:58
S&P 500 upswing continued amid increasing credit market support. Risk-on, finally – and commodities are on fire again, with precious metals awaiting their time in the spotlight. That‘s the big picture view as markets keep digesting the recently upgraded hawkish talk of the Fed. Or more precisely in my view, they‘re sniffing out the inevitability of the Fed having to make a U-turn later this year. Meanwhile, any temporary hint of lower Treasury yields – the reprieve is arriving – is eagerly embraced by the tech while value is disregarding that. As a result, S&P 500 market breadth is improving, and as stated yesterday, the positive seasonality of 2nd to 3rd week of Feb, is working. Today‘s CPI data would show inflation isn‘t relenting – even White House warned about hot year on year figure coming. Coupled with the tightening job market, the question is now what remains of the budding S&P 500 upswing and bond market reprieve. It‘s becoming increasingly clear that the Fed would have to really move, and that inflation is biting and not exactly sinking input costs. That‘s where we have the cost-push inflation I talked relentlessly over many quarters last year, and wage pressures joining at the hip. It‘s really about letting copper and oil profits keep growing now, while taking off S&P 500 long ones off the table. Done, and PMs are to join next. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bulls had a great day, and need a solid close today against the poor inflation data. This isn‘t though likely to happen unless bonds hold up well during the regular session. Mission impossible, almost. Credit Markets HYG extended gains yesterday, and would need to defend them today. What remains of the risk-on posture, is key to determining the stock market rally longevity vs. waning power. Gold, Silver and Miners Precious metals are firmly on another upleg – I‘m not looking for setbacks during the opening selling pressure to last. The direction is firmly up. Crude Oil Crude oil is still pausing, but at the same time the bulls are readying a response. I‘m looking for continued trading in the recent range, followed by a break higher. Copper Copper is finally on the move, and the high volume speaks plenty about the buying pressure. I‘m looking for dips to be bought – I‘m not expecting a stampede of the bears taking advantage of a „shorting opportunity“. Bitcoin and Ethereum Cryptos aren‘t plunging, but the test of the bullish resolve is arriving today – let‘s see what kind of reversal it turns into. The volume looks solid, so I count on more than a daily setback as a minimum. Summary S&P 500 meets unpleasantly high inflation, which is forcing the hand of the Fed. Stocks are going to have a hard time recovering, and the bullish window of opportunity may be drastically shortened. Good to have taken profits off the table automatically through the trailing stop-loss – commodities would be more resilient. That‘s where real gains are – in real assets, as inflation is returning to the spotlight. Rightfully so as the Fed is desperately behind the curve, and precious metals need to fully get that. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Bear Came And Drove Out Gold Enthusiasts, Will Silver Decrease As Well?

Bear Came And Drove Out Gold Enthusiasts, Will Silver Decrease As Well?

Przemysław Radomski Przemysław Radomski 10.02.2022 15:14
  The market was up, but mining stocks chose to reverse. Meanwhile, gold sent a clear signal to investors. So, when everyone buys, what happens? The gold mining stocks and silver mining stocks have reversed, even though gold didn’t. The top for the former is likely in. Most developments regarding the precious metals and their immediate surroundings were a continuation of what we had seen in the previous days, but one thing was different. That one thing is particularly informative. It has trading implications, too. Without further ado, let’s jump into mining stocks. Gold miners fell. Even though they declined by just $0.06, it was profound. The miners were following gold higher during the early part of yesterday’s (Feb. 9) session, but they lost strength close to the middle thereof and were back down before the closing bell. If the gold price reversed and then declined during the day, that would have been normal. However, gold stayed up. It’s fairer to compare GDX to GLD than to compare GDX to gold continuous futures contracts, as the former have the same closing hours, so let’s take a look at what GLD did yesterday. There was no reversal. GLD simply stopped at its declining medium-term resistance line. Also, the general stock market was up yesterday. Consequently, gold mining stocks had no good reason to decline. In fact, they “should have” rallied. They didn’t – they reversed instead. This tells us that the buying power has either dried up or is drying up. When everyone who wanted to get into the market is already in it, the price can do only one thing (regardless of bullish factors) – fall. Those who are already in can then sell. Monitoring the markets for this kind of cross-sector performance is one of the more important gold trading tips. Look, I’m not saying that declines now are “guaranteed”. There are no guarantees in the markets. There might be buyers that haven’t considered mining stocks that would now enter the market, but history tells us that this is unlikely. Instead, declines are very likely to follow. Let’s focus on the GLD ETF chart one more time. As I wrote earlier, it approached its declining medium-term resistance line. Any small breakout here is likely to be invalidated just like what we saw previously in November 2021 and January 2022. This time, however, the volume is low, so gold might not have enough strength for a breakout, and it could decline right away. Junior mining stocks provide us with a perfect confirmation of the bearish narrative. I emphasized before that juniors hadn’t moved above their 50-day moving average, and that they stayed below their rising blue resistance line. Consequently – I wrote – the downtrend in them remained clearly intact. Yesterday’s reversal served as a perfect confirmation of the above. The previous breakdowns were verified in one of the most classic ways. The silver price has been quite strong recently, which is also something that we see close to the local tops. The reversals in mining stocks, the situation in gold, AND the situation in the USD Index together paint a very bearish picture for the precious metals market in the short and medium term. By “the situation in the USD Index”, I’m referring to the fact that it’s after its early-month reversal and right above its rising medium-term support line that was not successfully broken. Since the USD Index remains above its rising medium-term support line, the trend remains up. Therefore, higher – not lower – USD Index values are to be expected. All in all, it seems that gold, silver, and mining stocks are going to decline in the coming weeks (quite possibly days) and that we won’t have to wait too long for the next big decline to start. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Bank of America Doesn't Approve Bitcoin, Which By The Way Decreased By 1.3% Yesterday

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

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

Mining Stocks Don't Stay As Strong As Gold

Przemysław Radomski Przemysław Radomski 11.02.2022 15:41
  In line with bearish bets, miners have thrown a match. Gold, however, doesn’t want to leave the ring without a fight. How long will it stay high? While gold remains relatively firm despite stock market turbulence, rising real yields, and bearish technical indicators, even a confluence of headwinds hasn’t been able to knock the yellow metal off its lofty perch. However, mining stocks haven’t been so lucky. With my short position in the GDXJ ETF offering a great risk-reward proposition, the junior gold miners’ underperformance has played out exactly as I expected. Moreover, with major spikes in volume preceding predictable sell-offs (follow the vertical dashed lines below), I’ve warned on several occasions that the GDX ETF is prone to tipping its hand – we saw this volume spike in January, which was the 2022 top (as of today). In addition, with mining investors’ power drying up by the day, the medium-term looks equally unkind. Please see below: On Wednesday, gold miners fell. Even though they declined by just $0.06, it was profound. The miners were following gold higher during the early part of Wednesday’s (Feb. 9) session, but they lost strength close to the middle thereof and were back down before the closing bell. If the gold price reversed and then declined during the day, that would have been normal. However, gold stayed up. This tells us that the buying power has either dried up or is drying up. When everyone who wanted to get into the market is already in it, the price can do only one thing (regardless of bullish factors) – fall. Those who are already in can then sell. Monitoring the markets for this kind of cross-sector performance is one of the more important gold trading tips. Look, I’m not saying that declines now are “guaranteed”. There are no guarantees in the markets. There might be buyers that haven’t considered mining stocks that would now enter the market, but history tells us that this is unlikely. Instead, declines are very likely to follow. Yesterday’s big daily decline confirmed my above comments. Gold miners declined much more than gold did, and they did so at above-average volume. The latter indicates that “down” is the true direction in which the precious metals market is heading. To that point, the HUI Index provides clues from a longer-term perspective. When we analyze the weekly chart, it highlights investors’ anxiety. For example, after hitting an intraweek high of roughly 260, the HUI Index ended the Feb. 10 session at roughly 250 – just 3.99 up from last Friday – that’s an intraweek reversal. Furthermore, with the index still in a medium-term downtrend, shades of 2013 still profoundly bearish, and sharp declines often preceded by broad head and shoulders patterns (marked with green), there are several negatives confronting the HUI Index. As such, a sharp drawdown will likely materialize sooner rather than later. Please see below: Finally, the GDXJ ETF is the gift that keeps on giving. For example, with lower highs and lower lows being part of the junior miners’ roughly one-and-a-half-year journey, false breakouts have confused many investors. However, while I’ve been warning about the weakness for some time, more downside is likely on the horizon. To explain, I wrote on Feb. 10: I emphasized before that juniors hadn’t moved above their 50-day moving average, and that they stayed below their rising blue resistance line. Consequently – I wrote – the downtrend in them remained clearly intact. Yesterday’s reversal served as a perfect confirmation of the above. The previous breakdowns were verified in one of the most classic ways. The silver price has been quite strong recently, which is also something that we see close to the local tops. The reversals in mining stocks, the situation in gold, outperformance of silver, AND the situation in the USD Index (the medium-term support held) together paint a very bearish picture for the precious metals market in the short and medium term. All in all, if the weakness continues, I expect the GDXJ ETF to challenge the $32 to $34 range. However, please note that this is my expectation for a short-term bottom. While the GDXJ ETF may record a corrective upswing at this level, the downtrend should continue thereafter, and the junior miners should fall further over the medium term. In conclusion, gold showcased its steady hand throughout the recent volatility. However, mining stocks have cracked under the pressure. With the latter’s underperformance often a bearish omen for the former, the yellow metal’s mettle may be tested over the medium term. As such, while the long-term outlooks for gold, silver, and mining stocks remain profoundly bullish, a final climax will likely unfold before their secular uptrends continue. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Central Banks Diversifies Investors' Considerations

Central Banks Diversifies Investors' Considerations

Alex Kuptsikevich Alex Kuptsikevich 14.02.2022 08:42
It is widely believed that in March-April 2020, retail investors actively bought stock market declines while institutional investors sold. The market's rapid reversal to growth has formed a reflex for retail investors to buy stocks on downturns. However, we note a significant change in market fundamentals. With the onset of the pandemic, central banks were on the side of retail investors, dramatically easing monetary conditions, and governments handed out money and benefits but prohibited going out and spending money. It is correct to say that investors then did not fight institutions but followed a "don't fight the Central Bank" strategy. With the unprecedented injections into the financial system, the pendulum of the markets swung in the upward direction. But in recent weeks, the Fed, having received a surprise in the form of strong employment and rising wages and yesterday with accelerating inflation, must now move to the side of equity and bond sellers. Short-term traders should keep a close eye on how monetary policy expectations change. A month ago, the assumptions of 7 Fed rate hikes in 2022 or a 50-point step in March looked marginal. Yesterday the latter option was almost entirely in the price of rate futures. There is talk of a possible start of active selling from the Fed's balance sheet, and there is also talk of an extraordinary rate hike, possibly even today. Markets can hardly sustain this pace of tightening expectations for long. But while this is happening, it won't be a wise strategy to bet against the dollar and for the stock market.
Should Someone Tell The Price Of Gold It's Time To Review Its Incoming "Oponents"?

Should Someone Tell The Price Of Gold It's Time To Review Its Incoming "Oponents"?

Przemysław Radomski Przemysław Radomski 15.02.2022 16:00
  Gold continues to benefit from the market turmoil and has apparently forgotten about medium-term problems. Meanwhile, the rising USD and a hawkish Fed await confrontation. With financial markets whipsawing after every Russia-Ukraine headline, volatility has risen materially in recent days. With whispers of a Russian invasion on Feb. 16 (which I doubt will be realized), the game of hot potato has uplifted the precious metals market. However, as I noted on Feb. 14, while the developments are short-term bullish, the PMs’ medium-term fundamentals continue to decelerate. For example, while the general stock market remains concerned about a Russian invasion, U.S. Treasury yields rallied on Feb. 14. With risk-off sentiment often born in the bond market, the safety trade benefiting the PMs didn’t materialize in U.S. Treasuries. As a result, bond traders aren’t demonstrating the same level of fear. Please see below: Source: Investing.com Furthermore, while the potential conflict garners all of the attention, the fundamental issues that upended the PMs in 2021 remain unresolved. For example, with inflation surging, St. Louis Fed President James Bullard said on Feb. 14 that “the last four [Consumer Price Index] reports taken in tandem have indicated that inflation is broadening and possibly accelerating in the U.S. economy.” “The inflation that we’re seeing is very bad for low- and moderate-income households,” he said. “People are unhappy, consumer confidence is declining. This is not a good situation. We have to reassure people that we’re going to defend our inflation target and we’re going to get back to 2%.” As a result, Bullard wants a 50 basis point rate hike in March, and four rate hikes by July. Please see below: Source: CNBC Likewise, while San Francisco Fed President Mary Daly is much less hawkish than Bullard, she also supports a rate hike in March. Source: CNBC As a result, while the PMs can hide behind the Russia-Ukraine conflict in the short term, their medium-term fundamental outlooks are profoundly bearish. As mentioned, Bullard highlighted inflation’s impact on consumer confidence, and for a good reason. With the University of Michigan releasing its Consumer Sentiment Index on Feb. 11, the report revealed that Americans’ optimism sank to “its worst level in a decade, falling a stunning 8.2% from last month and 19.7% from last February.” Chief Economist, Richard Curtin said: “The recent declines have been driven by weakening personal financial prospects, largely due to rising inflation, less confidence in the government's economic policies, and the least favorable long term economic outlook in a decade.” “The impact of higher inflation on personal finances was spontaneously cited by one-third of all consumers, with nearly half of all consumers expecting declines in their inflation adjusted incomes during the year ahead.” Please see below: To that point, I’ve highlighted on numerous occasions that U.S. President Joe Biden’s re-election prospects often move inversely to inflation. With the dynamic still on full display, immediate action is needed to maintain his political survival. Please see below: To explain, the light blue line above tracks the year-over-year (YoY) percentage change in inflation, while the dark blue line above tracks Biden’s approval rating. If you analyze the right side of the chart, you can see that the U.S. President remains in a highly perilous position. Moreover, with U.S. midterm elections scheduled for Nov. 8, the Democrats can’t wait nine to 12 months for inflation to calm down. As a result, there is a lot at stake politically in the coming months. As further evidence, as inflation reduces real incomes and depresses consumer confidence, the Misery Index also hovers near crisis levels. Please see below: To explain, the blue line above tracks the Misery Index. For context, the index is calculated by subtracting the unemployment rate from the YoY percentage change in the headline CPI. In a nutshell, when inflation outperforms the unemployment rate (the blue line rises), it creates a stagflationary environment in America. To that point, if you analyze the right side of the chart, you can see that the Misery Index is approaching a level that coincided with the global financial crisis (GFC). As a result, reversing the trend is essential to avoid a U.S. recession. As such, with inflation still problematic and the writing largely on the wall, the market-implied probability of seven rate hikes by the Fed in 2022 is nearly 93% (as of Feb. 10). Please see below: Ironically, while consumers and the bond market fret over inflation, U.S. economic growth remains resilient. While I’ve been warning for months that a bullish U.S. economy is bearish for the PMs, continued strength should turn hawkish expectations into hawkish realities. To that point, the chart above shows that futures traders expect the U.S. Federal Funds Rate to hit 1.75% in 2022 (versus 0.08% now). However, Michael Darda, Chief Economist at MKM Partners, expects the Fed’s overnight lending rate to hit 3.5% before it’s all said and done. “We have this booming economy with high inflation and a rapid recovery in the labor market – much different relative to the last cycle,” he said. “The Fed is behind the curve this time. They are going to have to do more.”  Singing a similar tune, John Thorndike, co-head of asset allocation at GMO, told clients that “inflation is now here, [but] the narrative is that inflation goes away and markets tend to struggle with change. It is more likely than not that real yields and policy rates need to move above inflation during this cycle.” The bottom line? While the Russia-Ukraine drama distracts the PMs from the fundamental realities that confront them over the medium term, their outlooks remain profoundly bearish. Moreover, while I’ve noted on numerous occasions that the algorithms will enhance momentum in either direction, their influence wanes materially as time passes. As such, while headline risk is material in the short-term, history shows that technicals and fundamentals reign supreme over longer time horizons. Thus, while the recent flare-up is an unfortunate event that hurts our short position, the medium-term developments that led to our bearish outlook continue to strengthen. In conclusion, the PMs rallied on Feb. 14, as the Russia-Ukraine conflict is the primary driver moving the financial markets. However, while the PMs will ride the wave as far as it takes them, they ignored that the USD Index and U.S. Treasury yields also rallied. Moreover, with Fed officials ramping up the hawkish rhetoric, the PMs' fundamental outlook is more bearish now than it was in 2021 (if we exclude the Russia-Ukraine implications). As a result, while the timeline may have been delayed, lower lows should confront gold, silver, and mining stocks in the coming months. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
COT Currency Speculator Sentiment rising for Euro & British Pound Sterling

Mean Reversion

Monica Kingsley Monica Kingsley 15.02.2022 16:32
S&P 500 refused further downside yesterday, and while credit markets didn‘t move much, rebound looks approaching as stocks might lead bonds in the risk appetite. When the East European tensions get dialed down, S&P 500 can be counted on to lead, probably more so when it comes to value than tech. That‘s why the tech participation is key as it would make up for the evaporating risk premium in energy. Or precious metals – these are likely to rise once again when the spotlight shifts to the inadequacy of Fed‘s tightening in the inflation fight. For now, the war drums took the limelight away, but don‘t count on gold, silver or oil correcting significantly and lastingly. Cryptos are supporting the return of risk-on as the touted war just isn‘t happening either today or tomorrow, and market participants are dialing back the panicky bets. That‘s why Treasuries and tech movements are so key these days – copper trading shows that we‘re in for paring back of the fire sales. I can‘t call it a full fledged stock market reversal, not yet. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Pause but more likely a rebound, is what comes next for S&P 500. Closing above the 200-day moving average is possible, but more is needed for a trend reversal in this correction. Credit Markets Credit markets moderated their pace of decline, and there‘s no risk-on posture apparent yet. We may be though nearing the point of credit market reprieve – as much as that‘s compatible with rate raising cycle. Gold, Silver and Miners Miners and gold are benefiting from the tensions, but they‘ll just as easily give up some of these gains next. What‘s important though, is the continued trend of making higher highs and higher lows. Crude Oil Crude oil looks also likely to lose some of the prior safe haven bid, but similarly to precious metals, the trend is higher, and corrections are more or less eagerly bought. Only should the Fed‘s actions harm the real economy, would oil prices meaningfully decline. Copper Copper is rebounding, but still remains trading in a not too hot fashion – the red metal is still trailing behind other commodities significantly. Bitcoin and Ethereum Cryptos deciding to go higher, is a positive sign for stocks as well – the volume looks to be noticeable enough at the close later today to lend the upswing credibility. Summary S&P 500 bulls have the opportunity today, but the market remains as headline sensitive as everything else. Treasuries stabilizing or even moving higher while funds flow out of the dollar, that would be a bullish confirmation – and the same goes for precious metals not getting hammered, but finding a decent floor. The point is that war jitters calming down when Russia doesn‘t take the bait, makes assets to continue with their prior trends and focus, which is Fed and tightening. The bets on 50bp rate hike in Mar went down recently, and when they start rising again, it would make sense to deploy more capital – including into oil above $90, give or take a buck. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Stumbling Again

Stumbling Again

Monica Kingsley Monica Kingsley 16.02.2022 15:53
S&P 500 rebound goes on reflexively, but stormy clouds are gathering – I‘m looking for the bears to reassert themselves over the next couple of days latest. The credit markets posture is far from raging risk-on even though select commodities are recovering (what else to expect in a secular commodities bull) and precious metals suffered a modest setback (not a reversal though). Crypto recovery is nodding towards the risk-on upturn that is though likely to get checked soon.It‘s great that tech was the driver of yesterday‘s S&P 500 upswing, but for how long would it keep leadership now that attention is shifting back towards inflation. Yesterday I wrote that: (...) rebound looks approaching as stocks might lead bonds in the risk appetite. When the East European tensions get dialed down, S&P 500 can be counted on to lead, probably more so when it comes to value than tech. That‘s why the tech participation is key as it would make up for the evaporating risk premium in energy. Or precious metals – these are likely to rise once again when the spotlight shifts to the inadequacy of Fed‘s tightening in the inflation fight.So far the stock market advance hasn‘t met a brick wall, but value upswing has been sold into (unlike tech‘s). Energy stocks lost, but are likely to come back – and the next microrotation might not be powerful enough to carry S&P 500 higher. Anyway without a HYG upswing, stock bulls are facing stiff headwinds.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 rebounded on low volume but that wouldn‘t be an issue in a healthy bull market – the trouble is that this 2022 price action isn‘t very healthy.Credit MarketsHYG didn‘t trade on a strong note, and the rise in yields continues almost unabated. This is what I meant yesterday by saying that we may be though nearing the point of credit market reprieve – as much as that‘s compatible with rate raising cycle.Gold, Silver and MinersPrecious metals suffered a temporary setback – they easily gave up some of the safe haven gains, which isn‘t surprising. The bulls though haven‘t lost control, and that‘s key.Crude OilCrude oil dip was bought, and there wasn‘t much bearish conviction to start with. The general uptrend is likely to continue, and $90 appears likely to hold over the next few days definitely.CopperCopper is now in for some backing and filling, but managed to catch up with other commodities a little yesterday. The red metal remains range bound, but making good bullish progress.Bitcoin and EthereumCryptos are paring back yesterday‘s advance, and unless the mid Feb lows give, they‘re likely to muddle through with a modest bullish bias till the attention shifts to the Fed again.SummaryS&P 500 bulls‘ opportunity seems slipping away with each 1D or 4H candle, and I‘m not counting on the credit markets to ride to stocks‘ rescue. The commodities bull though is likely to carry on with little interference – and so does the precious metals bull as the yield curve keeps compressing. Slowdown in economic growth with rampant inflation and the realization that the Fed tightening hasn‘t had the effect, is awaiting, and would usher in strong gold and silver gains.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Tesla Stock News and Forecast: TSLA, RIVN or LCID stock, which is the best buy?

Tesla Stock News and Forecast: TSLA, RIVN or LCID stock, which is the best buy?

FXStreet News FXStreet News 16.02.2022 16:18
Tesla bounces strongly on Tuesday as risk assets surge. TSLA stock gains just over 5% on Tuesday. Geopolitical tensions falling help risk appetites return. Tesla (TSLA) shares bounced strongly on Tuesday, eventually closing up over 5% in a strong day for equities. The stock market was buoyed by news of some Russian deployments returning to their bases. Russia then appeared to confirm this as hopes grew for a diplomatic solution. This saw an obvious bounce in equities (https://www.fxstreet.com/markets/equities) with the strongest names being those that were previously the weakest. Understandable, but is this gain sustainable? NATO this morning has said it sees no sign of Russian troops pulling back from the Ukraine border. NATO has said it sees Russian troop numbers still growing along the Russian-Ukraine border. This news (https://www.fxstreet.com/news) still has legs. Volatility has been high as a result and will likely continue that way. Tesla Stock News The latest quarterly SEC filings have provided much information to pore over. In particular, Tesla, they do note some hedge fund selling. This is not too surprising given the record highs TSLA stock pushed on to before Elon Musk sold a stake. Benzinga reports that the latest filing shows Ray D'Alio's Bridgewater cutting its stake in Tesla. Cathie Wood of ARK Invest was regularly top-slicing her firm's stake in Tesla recently. CNBC also reported yesterday that hedge fund Greenlight Capital had made a bearish bet on Tesla shares. Greenlight, according to the report, has been a long time Tesla bear. Apart from those snippets though, macroeconomic factors are the main driver of the Tesla stock price currently. Electric vehicle stocks have not been a strong sector so far in 2022 as growth, in general, is out of favor with investors. This has led to steep falls in other names such as Rivian (RIVN) and Lucid (LCID). Both are at a much earlier stage of development than Tesla (TSLA) and on that basis, we would favor Tesla (TSLA) over them. But we must stress we would ideally avoid the sector entirely until perhaps the second quarter. Once markets have adjusted to the prospect of higher rates, some high-growth stocks may benefit. historical in a Fed (https://www.fxstreet.com/macroeconomics/central-banks/fed) hiking cycle the main indices do advance but growth sectors struggle. Rivian so far is down 36% year to date, Lucid is down 24% while Tesla is the outperformer, down 12% for 2022. Tesla Stock Forecast We remain in the chop zone between the two key levels of $945 and $886. Breaking $945 should lead to a move toward $1,063. That would still be consistent with the longer-term bearish trend. Nothing goes down or up in a straight line. TSLA is unlikely to be able to fight the current overpowering macroeconomic backdrop of rising rates (https://www.fxstreet.com/rates-charts/rates) hitting high growth stocks. But breaking $945 is still significant in the short term and should see some fresh momentum. While $886 is significant, the 200-day moving average at $826 should have our real attention on the downside. Tesla has not closed below this level in over 6 months, so that would be significant and again lead to a fresh influx of momentum. Just this time though, it would be selling momentum. Tesla (TSLA) chart, daily Short-term swing traders should note the volume momentum behind moves. Once volume dries up, Tesla tends to fall off intraday. From the 15-minute chart below, we have an opening gap from Tuesday down to $880. This is short-term support, but a break will see the bottom of Monday's range at $840 tested. Tesla (TSLA) 15-minute chart
Russia And Ukraine Are Still Interacting. Are Markets Likely To Await Next Geopolitical Events?

Russia And Ukraine Are Still Interacting. Are Markets Likely To Await Next Geopolitical Events?

Alex Kuptsikevich Alex Kuptsikevich 17.02.2022 09:43
The Ukrainian crisis is not likely to recede into the background anytime soon. Promising Russian statements about the withdrawal of troops are refuted by the West and Ukraine, near where the exercises are taking place. There was also a series of accusations and denials about the shootout in Donbas in the morning, which triggered impulsive selling of risky assets. The local momentum of the markets' decline was less than what we saw on Friday following Biden's statements about Russia's impending attack on Ukraine. Still, the latest news clearly shows that we should not hope for smooth and quick exhaustion of the conflict and a favourable resolution in the coming days. So far, however, there are more signals that Eastern European politicians still want a diplomatic, not forceful solution, which forms a modest reduction in the pull towards security. The Fed was also on the side of the stock market bulls yesterday. The published minutes of the January meeting were not as hawkish as investors had expected. The FOMC at the end of last month did not consider a 50-point rate hike in March and did not talk about the need for seven hikes this year. Then we had the labour market report, which showed strong growth in employment and wages, and even later came frightening figures about inflation accelerating to 40-year highs. Yesterday the retail sales figures were added to it. Americans bought harder than expected in January, and some observers attribute that to a rush of demand due to inflation fears and a spike in auto and apparel prices. The Fed might revise its view to a more hawkish one after bullish reports, but the markets did breathe a sigh of relief, managing to pull the S&P500 and Russell2000 into the green at the end of Wednesday. Meanwhile, the S&P500 and Dow Jones continue to struggle behind the 200-day moving average, with no victory signals for the bulls or the bears in this local battle. Investors and traders should pay close attention to this struggle, as a sharp pullback to one side or the other could set the direction for the days and weeks ahead.
Bearish Turn Coming

Bearish Turn Coming

Monica Kingsley Monica Kingsley 17.02.2022 15:57
Thanks to Fed minutes, the S&P 500 closed modestly up, but could have taken the stronger credit markets cue. Instead, the upswing was sold into – the selling pressure is there, and neither value nor tech took the opportunity to rise, even against the backdrop of a weakening dollar. That‘s quite telling – the stock market correction hasn‘t run its course yet, and whatever progress the bulls make, is being countered convincingly. Precious metals adored the combo of yields and dollar turning down – and reacted with the miners‘ outperformance. The silver to copper ratio is basing, and the white metal looks to have better short-term prospects than the red one. Still in the headline sensitive environment we‘re in, gold would be stronger than silver until inflation is recognized for what it is. If there‘s one thing that the aftermath of Fed minutes showed, it‘s that the commodities superbull is alive and well, and that precious metals likewise are acting very positively in this tightening cycle. Suffice to say that gold has a track record of turning up once the rate hikes finally start… Excellent, the portfolio is positioned accordingly. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 rebound is getting suspect, and should stocks close on a weak note today, it‘s clear that today‘s wobbling Philly Fed Manufacturing Index won‘t be balanced out by the succession of Fed speakers – the signs of real economy headwinds are here. Credit Markets HYG upswing could have had broader repercussions, and it‘s quite telling it didn‘t. The risk-on turn would likely be sold into, with consequences. Gold, Silver and Miners Precious metals suffered a temporary setback only indeed – I‘m looking for the gains to continue as the miners outperformance just can‘t be overlooked. Crude Oil Crude oil dipped some more, and the dip was again bought. Given the late session wavering, I‘m looking for some more sideways and volatile trading ahead before the upswing reasserts itself. Copper Copper continues trading sideways, but with bullish undertones. More consolidation before another upswing attempt is probable. Bitcoin and Ethereum Cryptos are turning down, but still haven‘t broken either way out of the current range. Both Bitcoin and Ethereum are sending a message of caution. Summary S&P 500 bulls‘ opportunity seems increasingly slipping away given that the buyers couldn‘t defend gains after Fed minutes release. The upturn in credit markets is likely to prove of fleeting shelf life, and would exert downward pressure upon stocks. As I wrote yesterday (and talked extensively within today‘s article chart captions), the commodities bull is likely to carry on with little interference – and so would the precious metals bull as the yield curve keeps compressing, and the beginning of rate hikes would mark further headwinds for the real economy at a time of persistent inflation that could be perhaps brought down to 4-5% official rate late this year (which would leave the mainstream wondering why it just isn‘t transitory somewhat more – what an irony). The Fed‘s tools to be employed are simply insufficient to break the inflation‘s back, that‘s it. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Is It Worth Adding Gold to Your Portfolio in 2022?

Is It Worth Adding Gold to Your Portfolio in 2022?

Arkadiusz Sieron Arkadiusz Sieron 17.02.2022 16:29
  Gold prices declined in 2021 and the prospects for 2022 are not impressive as well. However, the yellow metal’s strategic relevance remains high. Last month, the World Gold Council published two interesting reports about gold. The first one is the latest edition of Gold Demand Trends, which summarizes the entire last year. Gold supply decreased 1%, while gold demand rose 10% in 2021. Despite these trends, the price of gold declined by around 4%, which – for me – undermines the validity of the data presented by the WGC. I mean here that the relevance of some categories of gold demand (jewelry demand, technological demand, the central bank’s purchases) for the price formation is somewhat limited. The most important driver for gold prices is investment demand. Unsurprisingly, this category plunged 43% in 2021, driven by large ETF outlfows. According to the report, “gold drew direction chiefly from inflation and interest rate expectations in 2021,” although it seems that rising rates outweighed inflationary concerns. As the chart below shows, the interest rates increased significantly last year. For example, 10-year Treasury yields rose 60 basis points. As a result, the opportunity costs for holding gold moved up, triggering an outflow of gold holdings from the ETF. As the rise in interest rates is likely to continue in 2022 because of the hawkish stance of the Fed, gold investment may struggle this year as well. The end of quantitative easing and the start of quantitative tightening may add to the downward pressure on gold prices. However, there are some bullish caveats here. First, gold has remained resilient in January, despite the hawkish FOMC meeting. Second, the Fed’s tightening cycle could be detrimental to the US stock market and the overall, highly indebted economy, which could be supportive of gold prices. Third, as the report points out, “gold has historically outperformed in the months following the onset of a US Fed tightening cycle”. The second publication released by the WGC last month was “The Relevance of Gold as a Strategic Asset 2022”. The main thesis of the report is that gold is a strategic asset, complementary to equities and bonds, that enhances investment portfolios’ performance. This is because gold is “a store of wealth and a hedge against systemic risk, currency depreciation, and inflation.” It is also “highly liquid, no one’s liability, carries no credit risk, and is scarce, historically preserving its value over time.” Gold is believed to be a great source of return, as its price has increased by an average of nearly 11% per year since 1971, according to the WGC. Gold can also provide liquidity, as the gold market is highly liquid. As the report points out, “physical gold holdings by investors and central banks are worth approximately $4.9 trillion, with an additional $1.2 trillion in open interest through derivatives traded on exchanges or the over-the-counter (OTC) market.” Last but not least, gold is an excellent portfolio diversifier, as it is negatively correlated with risk assets, and – importantly – this negative correlation increases as these assets sell off. Hence, adding gold to a portfolio could diversify it, improving its risk-adjusted return, and also provide liquidity to meet liabilities in times of market stress. The WGC’s analysis suggests that investors should consider adding between 4% and 15% of gold to the portfolio, but personally, I would cap this share at 10%.   Implications for Gold What do the recent WGC reports imply for the gold market? Well, one thing is that adding some gold to the investment portfolio would probably be a smart move. After all, gold serves the role of both a safe-haven asset and an insurance against tail risks. It’s nice to be insured. However, investing in gold is something different, as gold may be either in a bullish or bearish trend. You should never confuse these two motives behind owning gold! Sometimes it’s good to own gold for both insurance and investment reasons, but not always. When it comes to 2022, investment demand for gold may continue to be under downward pressure amid rising interest rates. However, there are also some bullish forces at work, which could intensify later this year. If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today! Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Decentralized Autonomous Organisation - Another Addition To Our Personal Dictionaries

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Investors spooked by renewed geopolitical tensions

FXStreet News FXStreet News 17.02.2022 16:10
Bitcoin price gets caught in a bearish triangle as tensions in Ukraine flare up again. Ethereum price returns to pivotal support, money repatriation goes into the second day. XRP price in pennant ready for a bearish breakout under the current sentiment. Cryptocurrencies are on the back foot as investors are getting worried about the escalating situation between Ukraine and Russia, as more reports come in from shots in the Donbas region near Luhansk. As the situation does not seem to de-escalate, investors are pulling their money out of what was believed to be the start of a solid and longer-term relief rally that is stalling at the moment. With more downside pressure to come, expect all significant cryptocurrencies to fall back to supportive pivotal levels. Bitcoin price falls into a bearish triangle, set to dip back below $40,000 Bitcoin (BTC) price is getting battered on Thursday after a fade on Wednesday that could still be attributed to some short-term profit-taking. The extension of the falls seems to confirm that sentiment is yet again dipping below zero towards risk-off. Investors pulling out their funds preemptively is reflected with the sharp decline in the Relative Strength Index, where the sell-side demand is outpacing the buy-side demand. In this context, Bitcoin price will remain under pressure for the rest of the week and could be set to slip below $40,000 in the coming days as the situation in Ukraine is set to deteriorate again, potentially inflicting further damage to the market mood. BTC price sees bulls unable to hold price action above $44,088 and in the process is forming a descending trend line that, together with the base at $41,756, is forming a bearish triangle. Expect Bitcoin valuation to decline further as the tensions around Luhansk increase by the hour. Once the $41,756 support is broken, the road is open for a nosedive towards $39,780 with the $40,000 psychological level broken yet again to the downside. BTC/USD daily chart A hail mary could be provided by the 55-day Simple Moving Average at $42,340, which already provided support on February 9 and February 15. With that move, a sudden breakthrough in the peace talks could become the needed catalyst to improve the situation and dislocate Bitcoin price action from the drag of the geopolitical news that is weighing. Bitcoin would see the demand on the buy-side blow up and see a big pop above $44,088. Ethereum bulls are breaking their jaws on the 55-day SMA as the price fades further Ethereum (ETH) price is getting crushed against the 55-day Simple Moving Average (SMA) around $3,143, with bulls unfit to push and try to close price action above it. After three failed attempts in a row, it is becoming clear that the bullish support is wearing thin as, on Tuesday, the daily candle closed above there, and even if the next day ETH price opened above again, it closed below the 55-day SMA. On Wednesday, finally, both the open and the closing price were below the 55-day SMA. This proves that sentiment has shifted in just three trading days and looks set to fade further away from the 55-day SMA on Friday. Expect going forward in the next coming hours that bulls will get squeezed against the wall at $3,018 with both a pivotal level and the $3,000 marker a few dollars below there. As tensions mount, expect some more negative headlines, a breach in defense of the bulls with even the monthly pivot at $2,929 getting involved in the crosshairs. Depending on the severity and the further deterioration of the political situation in Ukraine and the correction in the stock markets, it is possible to see a nosedive towards $2,695. ETH/USD daily chart Global market sentiment is hanging on the lips of Ukraine and the geopolitical situation. With that, it is clear that once the situation gets resolved or de-escalates, markets can shift 180 degrees in a matter of seconds. That same rule applies to cryptocurrencies where Ethereum could pop back above the 55-day SMA and even set sail for $3,391, breaking the high of February and flirting with new highs for 2022. Bulls joining the rally will want to keep a close eye and be mindful of the RSI, as that would start to flirt with being overbought and, from there on, limiting any further big moves in the hours or next trading days to come. Ethereum short squeeze could trigger a spike to $4,000 XRP price set to lose 10% of market value as headline news breaks down relief rally Ripple (XRP) price is stuck in a pennant and is close to a breakout that looks set to be a bearish one. As global markets are continuing the fade from Wednesday, XRP price is breaking below the recent low and sees bears hammering down on the ascending side of the pennant. As more negative headlines cross the wires, expect this to add ammunition for bears to continue and start breaking the pennant to the downside. XRP price will look for support on the next support at hand, which comes in at $0.78, and depending on the severity of the news flow, that level should hold again as it did on February 14. If that is not the caseany further downside will be cut short by the double bottom around $0.75 from February 12 and 13 and the 55-day SMA coming in at or around that area. With that move, the RSI will be triggering some "oversold" red flags and see bears booking profit. XRP/USD daily chart A false bearish breakout could easily see bears trapped on entering on the break to the downside out of the pennant as bulls go in for the squeeze. That would mean that price shoots up towards $0.88 and takes out this week's high. Bears would be forced to change sides and join the buy-side demand to close their losing positions, adding to even more demand and possibly hitting $0.90 in the process. XRP set to explode towards $1.00, bulls hopeful over SEC vs Ripple case
Fed And BoE Ahead Of Interest Rates Decisions. Having A Look At Nasdaq, S&P 500 and Dow Jones Charts

Mid & Small Cap Indexes May Surge Higher

Chris Vermeulen Chris Vermeulen 16.02.2022 21:32
As the global markets move away from recent concerns of war and Fed rate hikes, I believe both Small and Mid Cap indexes are uniquely positioned to potentially surge 7% to 11%, or more, from recent lows. My analysis suggests both the Small and Mid Cap Indexes may have moved excessively lower over the past 30+ trading days. They may be poised for a unique opportunity and a substantial price rally if the global markets continue to move away from extreme risk events. As the US Fed and global central banks position to combat inflation while war tensions build near Ukraine, I believe the US Small and Mid Cap Indexes are uniquely undervalued and ready for a potential move higher. The recent recovery in the US major indexes may be evidence of strong bullish price momentum underlying the US Major Indexes. I believe that foreign capital is moving into various US assets to avoid foreign market/currency risks. The US Small and Mid Cap Indexes seem like perfect opportunities for this capital deployment. IWM May Rally 12 to 14% - Targeting $238 to $240 This Weekly IWM chart highlights a support level near $191.00 and a recent Three River Morning Star bottom reversal pattern near $194.40. It also highlights the previous range-based trading and dual Pennant/Flag setups using shaded BLUE and YELLOW Rectangles. I believe IWM has a solid potential to rally back to near the $220 level before finding resistance (+7.25%). If this bullish price momentum continues, IWM may rally to levels above $238 to $240. The global markets may have recently focused too much on the US Fed and Global Central Banks while missing the underlying strength of the US economy. Consumers are still spending, and the US Fed has yet to make any substantial adjustments to rates or balance sheets. These recent lows may provide an excellent opportunity for traders to capitalize on a “reversion price move” soon. The only way to navigate and capitalize on these price swings is to stay focused on Technical Analysis and strategic opportunities for trades when they occur. WHAT TRADING STRATEGIES WILL HELP YOU TO NAVIGATE CURRENT MARKET TRENDS? Learn how I use specific tools to help me understand price cycles, setups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase. This may start a revaluation phase as global traders identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern drive traders/investors into Metals. I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Our Attention Should Be Drawn To Fed As Well, An Increase Of Interest Rate Is Likely To Come

Our Attention Should Be Drawn To Fed As Well, An Increase Of Interest Rate Is Likely To Come

Chris Vermeulen Chris Vermeulen 15.02.2022 15:31
The FED has made it very clear that it will raise its benchmark interest rate, the federal funds rate. This could have severe consequences and even lead to a financial crisis. They are too far behind the curve and will be labeled a major policy error in the future, most likely. They have put themselves in a situation where they are now their own hostage. They need more leadership to describe what a soft landing is going to look like. They have been too slow to act, and now they are going too fast. The “Powell Put” has now been put out to pasture. We believe that the FED will make more rate hikes than they have announced. Goldman Sachs thinks there will be four 25-basis-point increases in the federal funds rate in 2022. Jamie Dimon, CEO of JPMorgan Chase, said, “he wouldn’t be surprised if there were even more interest rate hikes than that in 2022. There’s a pretty good chance there will be more than four. There could be six or seven. I grew up in a world where Paul Volcker raised his rates 200 basis points on a Saturday night.” Mr. James Bullard of the St. Louis FED spoke out in an arrogant tone that aggressive action is now required. The markets translated this to mean that the FED was going to call an emergency meeting as soon as this coming week to hike interest rates by no less than 50 basis points. This sent interest rates soaring and stock prices plummeting. WARNING: More Downside To Come Uncertainty abounds regarding the path of inflation and new FED policy. This has created a landscape of continued strong periods of distribution in the equity markets. If there are any bounces, they should be used to sell ‘risk assets’. This has been one of the worst starts to a calendar year in the history of the stock and bond markets. Chart Source: Zero Hedge Last Thursday, the reported inflation rate increased by 7.7 percent, the highest in forty years. Stocks tumble as red-hot inflation print pressures technology shares. Markets didn’t like this, which immediately moved them down. Bears are in control of the market, which can be observed from Friday’s trading session. The U.S. 10-year yield rose above 2% for the first time since August 2019 amid a broad Treasury-market selloff. It was driven by expectations for quicker FED interest-rate hikes to contain faster than predicted inflation. It takes at least two to three years to have any material impact on the economy. One sector is currently doing well, which is the oil sector. Cycle's analysis is applied to find the best stocks to invest in and the best sectors. The next sector we are monitoring is Gold/Silver. Crude oil prices are staying strong. There are a lot of geopolitical factors in play here. I think there's a risk premium on oil right now because of Russia. What The Heck is CPI? The Consumer Price Index, CPI, is the measure of changes in the price level of a basket of consumer goods and services. This is one of the most frequently used statistics for identifying periods of inflation in households. Consumer Price Index Summary. Last Thursday, the inflation figures were released, confirming that everything is getting more expensive. It is up 7.5 percent versus last year. Mortgage rates are starting to rise. If you plan to buy a new home, this is the time to do it. These historically low interest rates will not last long. Should I Invest In Gold Today? Owning gold acts as a hedge against inflation as well as a good portfolio diversifier as it is a great store of value. Gold also provides financial cover during geopolitical and macroeconomic uncertainty. Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost-of-living increases. Conclusion: It seems the stock market may be on its last leg here. Big money flow has been coming out of the large-cap stocks while commodities have been rising. Commodities are typically one of the last assets to rally before the stock market top and start a bear market. I see all the signs, but we must wait for the price to confirm before taking action. We have seen this setup before in 2015/2016, also in 2018, and the market recovered and rallied dramatically from those levels.  What Trading Strategies Will Help You To Navigate Current Market Trends? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Bonds Not Reflecting Risks Like They Usually Do – Where's The Beef?

Bonds Not Reflecting Risks Like They Usually Do – Where's The Beef?

Chris Vermeulen Chris Vermeulen 11.02.2022 21:46
I've been paying close attention to Bonds as the global markets react to rising inflation and global central bank moves recently. The US Federal Reserve has yet to take any actions to raise rates, but we all know it will come at some point. Longer-term bonds are acting as if these risks are much more subdued than many traders/investors believe – which has me questioning if global central banks have overplayed the stimulus game? Why would traditional safe-haven assets fail to act in a manner that reflects current market risks like they would typically do? Why have precious metals failed to reflect these risks also properly? Is there something brewing in traders' minds that are muting or mitigating these traditional safe-haven assets? Bonds Continue To Slide After COVID Rally This table, reflecting the recent downward trend in Bonds, highlights the weakened safe-haven tendencies. These assets would generally present with rampant inflation and the possibility of multiple Fed rate increases. (Source: SeekingAlpha.com) Increasing uncertainty throughout the globe, and as inflation climbs to the highest levels since the mid-1970s and 1980s, – “where's the beef?” (to reference a 1980s Wendy's commercial phrase). This TLT Weekly chart shows how risks climbed when COVID hit in February 2020. Yet, take a look at how price has consolidated below $156 and has continued to trend lower over the past six months. After a brief move higher, to levels near the $147 to $155 level, TLT has moved decidedly lower over the past 6+ months. This downward price trend illustrates the diminishing fear levels as traders piled into the post-COVID rally phase. This move suggests traders believe inflation may be temporary or that the US Federal Reserve has room to raise rates without disrupting the global economy. I think the current premise and price trend in TLT vastly underestimates the amount of disruption a series of Fed rate hikes would cause the international markets. The US Federal Reserve will likely consider all options before taking an aggressive move to raise rates. Additionally, the US Fed may decide to allow foreign central banks to move more aggressively to raise rates while it decides to take a more measured approach to inflation. The key to future rate increases is how supply chains open up and how consumers continue to engage in economic activities. Any sudden shift by consumers, or further disruptions in supply for manufacturing and consumer staples/discretionary items, could prompt the Fed into taking aggressive actions. From where the Fed Funds Rates currently are, a move above 0.50% would reflect a +500% rate increase. This may prompt some type of “pop” in certain asset bubbles. (Source: St. Louis Fed) Traders should stay keenly focused on market risks and Bond levels throughout 2022 into 2023 as any sudden shift away from current trends could spell trouble. Right now, Bonds are pricing in minimal risks – which may be a mistake. The market dynamics and trends are changing from what we have experienced over the past 40 years for stocks and bonds. The 60/40 portfolio is costing you money now, and bonds can’t keep up with inflation and are more or less yield-less. The only way to navigate the financial markets safely, no matter the direction, is through technical analysis. By following assets and money flows, we identify trend changes and move our capital into whatever index, sector, industry, bond, commodity, country, and even currency ETF. By following the money, you become part of new emerging trends and can profit during weak stock or bond conditions. What Trading Strategies Will Help You To Navigate Current Market Trends? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase. This may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals. I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Bullish momentum remains strong

Bullish momentum remains strong

Florian Grummes Florian Grummes 20.02.2022 17:36
Even at the last important low (US$$1,750) on December 15th, 2021, the sentiment was still awful as the sector had become the most hated asset class. Now fast-forward, gold has been successfully breaking out of its multi month triangle and keeps sprinting higher. The bulls currently are bending the daily and weekly Bollinger Bands to the upside, and seasonality is still supportive.Gold in US-Dollar, weekly chart as of February 20th, 2022.Gold in US-Dollar, weekly chart as of February 20th, 2022.Looking at the weekly chart, it appears that gold not only broke out of a triangle consolidation pattern, but also out of a large inverse head and shoulder pattern. It’s not a textbook head and shoulder, but worthwhile noting. A measured move projection could theoretically take gold towards US$2,125! However, the monthly Bollinger Band, sitting at around US$ 1,975, might be a much more realistic target for the ongoing move. As you might remember, the zone between US$1,950 to US$1,975 is very strong resistance. We would not rule out a short-lived overshoot towards US$,2000, though.Overall, the weekly chart is not yet overbought and looks bullish. Hence, the rally has very good chances to continue for a few more weeks.Gold in US-Dollar, daily chart as of February 20th, 2022.Gold in US-Dollar, daily chart as of February 20th, 2022.As expected, the breakout above US$1,840 to US$1,850 has unleashed enough energy to quickly push gold prices towards the round psychological number of US$1,900. Fortunately, the daily stochastic has transformed its overboughtness into the rare “embedded status”, where both signal lines are sitting above 80 for more than three days in a row. Hence, the uptrend is locked-in and shorting this market would be fighting the uptrend.Of course, given the uncertain and complex geopolitical situation, events can and likely will strongly influence gold over the coming days and weeks. Speaking from a technical point of you, any pullback towards the breakout zone around US$1,845 would be a buying opportunity. However, prices below US$1,875 would already be a surprise in the short-term. On the contrary, it’s much more likely that gold will continue its run to at least US$1,930 over the coming days.In summary, the daily chart is bullish. Especially the bullish embedded stochastic oscillator likely will not allow any larger pullback, but rather a consolidation around US$1,900. Watch those two signal lines. Only if one of them would be dropping below 80on a daily close, the bull run might be over!GDX (VanEck Gold Miners ETF) in US-Dollar, daily chart as of February 20th, 2022.GDX, daily chart as of February 20th, 2022.Gold & gold related mining stocks often stabilize your portfolio during uncertain times and do act as a hedge. While the stock market continued its dive due to the crisis in Ukraine and the potential interest rate turnaround in the US, the GDX VanEck Gold Miners ETF is up more than 21.5% since its low in mid of December. Over the last two weeks, the leading gold mining stocks recorded some of their best days in the last 12 months. Last week, Barrick Gold ($GOLD) jumped up more than 7% due to good earnings, a dividend increase, and a new share repurchase program. Some smaller gold stocks like Sabina Gold & Silver ($SGSVF) went up even more (+15% Friday, 11th).Now that gold is on the rise, it’s time for the beaten down and undervalued mining stocks to catch up. Usually, it starts with the big senior produces like Barrick Gold, Agnico Eagle Mines ($AEM) and Newmont Corporation ($NEM), then the juniors like for example Victoria Gold Corp. ($VITFF) join and finally, the explorer and developers literally explode higher.However, the GDX has nearly reached its downtrend line as well as the 38.2% retracement of the whole corrective wave since August 2020. Hence, the big miners are running into string resistance and might need to consolidate soon.At the same time, note, that silver has been lagging. Silver always lags most of the time, but in the final stage of sector wide rally it suddenly passes all the other metals and shots up nearly vertically. That also typically is the sign that the rally in the sector is coming to an end. Obviously, we have not yet seen any strong silver days. Therefore, silver actually confirms that the sector has more room and time to run higher!Conclusion: Bullish momentum remains strongOverall, gold continues to look promising here as the bullish momentum remains strong. Hence, Gold is probably on the way towards US$1,950 and US$1,975, with a slight chance for an overshot to US$2,000. But of course, given the rather overbought daily chart, the risk/reward is not that good anymore. Silver and many of the smaller mining stocks, however, might still offer a chance to play the ongoing rally over the next few weeks. Once gold tops out in spring, expect a big pullback. Maybe even back towards the higher trending 200-day moving average (currently at US$1,808) at some point in midsummer. But that is all somewhere in the future. For now, the bullish momentum remains strong.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter.Disclosure: Midas Touch Consulting and members of our team are invested in Reyna Gold Corp. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Florian Grummes|February 20th, 2022|Tags: $GDXJ, Barrick Gold, GDX, Gold, Gold Analysis, Gold bullish, gold chartbook, gold fundamentals, Newmont Corporation, precious metals, Reyna Gold, Sabina Gold & Silver, Silver, silver bull, US-Dollar, Victoria Gold|0 CommentsAbout the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running his own record label Cryon Music & Art Productions. His artist name is Florzinho.
Technical Analysis: Moving Averages - Did You Know This Tool?

S&P 500 Chart And Credit Markets Candles Nears Quite Low Levels

Monica Kingsley Monica Kingsley 21.02.2022 13:33
S&P 500 opening upswing gave way to more selling, but credit markets didn‘t lead to the downside on a daily basis. This tells me the plunge would likely be challenged shortly. As in facing a reversal attempt – it‘s that junk bonds for all the recent (and still to come) deterioration, will probably rebound a little next. Value already retraced part of Friday‘s decline – it‘s just tech that didn‘t yet react to the Treasuries reprieve. Good to have taken short profits off the table. The table is set for S&P 500 to rise, and for bonds to rally somewhat. And that wouldn‘t be the result of war tensions lifting up Treasuries, gold and oil. Red hot inflation, decelerating growth and compressing yield curve are a challenging environment, and the odds of a 50bp Mar rate hike are overwhelming, but the Fed‘s balance sheet is still rising – now within spitting distance of $9T. Sure they will take on inflation, but I continue to think that by autumn they would be forced to reverse course, and start easing. Fresh stimulus after markets protest during 1H 2022? Would be helpful for the midterms... The consumer isn‘t in a great shape as the confidence data reveal – and that‘s also reflected in the direction of discretionaries vs. staples. Inflation is pinching, and the pressure on the Fed to act, is on – its credibility is being challenged. Food inflation is high, and seeing food at home prices rising this much, is as surefire marker of coming recession as yield curve inversion is. And yield differentials are flattening around the world – quite a few central banks are more ahead in the tightening path than the Fed. Economy slowing down, stock market correction far from over (yes, in spite of the coming rebound, I‘m looking for lower lows still), and precious metals upleg underway – yes, underway, and especially our gold profits can keep rising - as I wrote on Friday: (…) With gold at $1,900 again and silver approaching $24, copper‘s fate is also brightening – the miners‘ continued outperformance is a very good sign. With crude oil taking a breather, the inflationary pressures aren‘t at least increasing, but don‘t look for the Bullard or other statements to defeat inflation – I‘m standing by the 4-5% official rate CPI data for 2022 (discussed in yesterday‘s summary). CPI might turn out even a full percentage point higher – depends upon the hedonics and substitution massaging. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 caught a little buying interest going into the long weekend – better days though look to be coming. Not a monstrous rally, but still an upswing. Credit Markets HYG is indeed basing, and will help stocks move higher next. LQD and TLT are already rising, and there is still somewhat more to come. Bonds have simply deteriorated too fast in 2022, and need a breather. Gold, Silver and Miners Precious metals fireworks continue – we‘re getting started, and $1,920 is the next stop. Kiss of life from the bond market reprieve comes next, on top of all the other factors I‘ve talked about recently. Crude Oil Crude oil is fairly well bid, but the war jitters are helping it out (as in staving off a bit deeper correction). As both oil and base metals are rising, inflation isn‘t likely to slow down (perhaps later in summer?) - black gold‘s uptrend isn‘t over really. Copper Copper keeps going sideways in a volatile fashion, and can be counted on to break higher – inflationary pressures aren‘t abating, and outweigh the slowing economy. Bitcoin and Ethereum Cryptos did break down over the weekend, but the anticipated risk-on rebound fizzled out a bit too fast – as said on Friday, the bears have the upper hand now. Summary S&P 500 appears on the verge of trying to swing higher, and credit markets would be leading the charge as tech finally turns. Value had trouble declining some more on Friday already. Stock market upswing though wouldn‘t throw the precious metals bulls off balance – not too many weeks have passed since I was at the turn of the year predicting that gold (and silver with miners implied) would be the bullish surprise of 2022 – and for all the talk and preemtive tightening in the credit markets, we haven‘t yet seen the Fed move. Anyway, such a lag in moving the Fed funds rate higher, is normal these decades – we are a long way from the early 1980s when the delay between say 2-year Treasury and Fed funds rate move was some 2 months. Crude oil is likewise going to keep rising, and the same goes naturally for copper following in the footsteps. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Credit Markets Trades Really Low, Oil Price Reaches High Levels At The Same Time

Credit Markets Trades Really Low, Oil Price Reaches High Levels At The Same Time

Monica Kingsley Monica Kingsley 22.02.2022 15:36
S&P 500 is waking up to fresh European news, and holds up well. There is no panic upswing in gold and silver, but crude oil and natural gas are up the most. As the U.S. markets are to open following yesterday‘s Washington‘s Birthday holiday, let‘s bring up the key details of yesterday‘s analysis: (…) S&P 500 opening upswing gave way to more selling, but credit markets didn‘t lead to the downside on a daily basis. This tells me the plunge would likely be challenged shortly. As in facing a reversal attempt – it‘s that junk bonds for all the recent (and still to come) deterioration, will probably rebound a little next. Value already retraced part of Friday‘s decline – it‘s just tech that didn‘t yet react to the Treasuries reprieve. Good to have taken short profits off the table. The table is set for S&P 500 to rise, and for bonds to rally somewhat. And that wouldn‘t be the result of war tensions lifting up Treasuries, gold and oil. Red hot inflation, decelerating growth and compressing yield curve are a challenging environment, and the odds of a 50bp Mar rate hike are overwhelming, but the Fed‘s balance sheet is still rising – now within spitting distance of $9T. Sure they will take on inflation, but I continue to think that by autumn they would be forced to reverse course, and start easing. Fresh stimulus after markets protest during 1H 2022? Would be helpful for the midterms... The consumer isn‘t in a great shape as the confidence data reveal – and that‘s also reflected in the direction of discretionaries vs. staples. Inflation is pinching, and the pressure on the Fed to act, is on – its credibility is being challenged. Food inflation is high, and seeing food at home prices rising this much, is as surefire marker of coming recession as yield curve inversion is. And yield differentials are flattening around the world – quite a few central banks are more ahead in the tightening path than the Fed. Economy slowing down, stock market correction far from over (yes, in spite of the coming rebound, I‘m looking for lower lows still), and precious metals upleg underway – yes, underway, and especially our gold profits can keep rising - as I wrote on Friday: (…) With gold at $1,900 again and silver approaching $24, copper‘s fate is also brightening – the miners‘ continued outperformance is a very good sign. With crude oil taking a breather, the inflationary pressures aren‘t at least increasing, but don‘t look for the Bullard or other statements to defeat inflation – I‘m standing by the 4-5% official rate CPI data for 2022 (discussed in yesterday‘s summary). CPI might turn out even a full percentage point higher – depends upon the hedonics and substitution massaging. What a long quote – let‘s update it with the premarket action. S&P 500 is still waiting with its potential upsing, dollar has gone nowhere really, and precious metals look like having a bright day today. The crude oil upswing shows that markets don‘t like the geopolitical news, and are likely to behave in a risk-off way of late (Treasuries, gold and oil up benefiting most). The internals of today‘s stock market action would be telling – I recently got an interesting question touching also upon rates and real estate: Q: I read your most recent newsletter with great interest: 1. You think the Fed would start to ease this fall? In your opinion, how long would that last?  Midterm would be done soon there after so would it be a quick few months then revert back to higher rates? 2. I’m asking question #1 as it would impact real estate. 3. You anticipate a “temporary” rise in the S&P this week? Are you thinking just a few days? I noticed 10 yr is going down. A: Thank you for asking. I'll take 1 & 2 in one go - I think they would change course latest autumn. So, now hawkish and raising, then turning to easing before midterms. Let's see first the damage this tightening does, and the degree to which they then turn dovish. As regards real estate, it's slowing down, homebuilders, XLRE... Headwinds would be stiffening, rates are eating into mortgages, but those ZIP codes where immigration into is high, would do best - but the overall, total real estate isn't an appealing proposition. When markets open, there is likely to be a little SPX rally off oversold readings. Sure, they can get more oversold - that's the way it goes during bearish episodes, which is why I'm not long. The trend for now is to the downside, so I would keep predominantly looking and taking opportunities to short. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 caught a little buying interest going into the long weekend – better days though look to be coming. Not a monstrous rally, but still an upswing. Credit Markets HYG is indeed basing, and will help stocks move higher next. LQD and TLT are already rising, and there is still somewhat more to come. Bonds have simply deteriorated too fast in 2022, and need a breather. Gold, Silver and Miners Precious metals fireworks continue – we‘re getting started, and $1,920 is the next stop. Kiss of life from the bond market reprieve comes next, on top of all the other factors I‘ve talked about recently. Crude Oil Crude oil is fairly well bid, but the war jitters are helping it out (as in staving off a bit deeper correction). As both oil and base metals are rising, inflation isn‘t likely to slow down (perhaps later in summer?) - black gold‘s uptrend isn‘t over really. Copper Copper keeps going sideways in a volatile fashion, and can be counted on to break higher – inflationary pressures aren‘t abating, and outweigh the slowing economy. Bitcoin and Ethereum Cryptos stopped breaking down today, and the price action smacks of joining in the modest risk-on upswing, as unbelievable as it sounds. Summary Yesterday‘s summary is valid also today – S&P 500 appears on the verge of trying to swing higher, and credit markets would be leading the charge as tech finally turns. Value had trouble declining some more on Friday already. Stock market upswing though wouldn‘t throw the precious metals bulls off balance – not too many weeks have passed since I was at the turn of the year predicting that gold (and silver with miners implied) would be the bullish surprise of 2022 – and for all the talk and preemtive tightening in the credit markets, we haven‘t yet seen the Fed move. Anyway, such a lag in moving the Fed funds rate higher, is normal these decades – we are a long way from the early 1980s when the delay between say 2-year Treasury and Fed funds rate move was some 2 months. Crude oil is likewise going to keep rising, and the same goes naturally for copper following in the footsteps. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Incredible Price Of Crude Oil, A Look At Cryptomarket, Dollar Index (DXY) And ECB

Porsche Stock? Volkswagen Working On IPO. Brent Trades Higher Than USOIL

Swissquote Bank Swissquote Bank 23.02.2022 10:48
Join Ipek Ozkardeskaya as he present the latest news in Swissquote's Daily MarketTalk!
Stocks Fell Again – a Dip Buying Opportunity?

Stocks Fell Again – a Dip Buying Opportunity?

Paul Rejczak Paul Rejczak 23.02.2022 15:35
  Stocks were volatile yesterday and the broad stock market fell by another 1%. Was it a final decline or just another leg within a downtrend? The S&P 500 index lost 1.01% on Tuesday, Feb. 22, as it extended its last week’s Thursday’s-Friday’s sell-off. The daily low was at 4,267.11, and the market closed slightly above the 4,300 mark. We’ve seen a lot of volatility following the U.S. President Biden’s speech on Russia-Ukraine conflict. This morning the S&P 500 index is expected to open 0.7% higher. We may see more volatility, however it looks like a short-term bottoming pattern. The nearest important resistance level is at 4,350-4,400, marked by the recent local low and some previous support levels. On the other hand, the support level is at 4,250-4,300, among others. The S&P 500 index trades within its late January consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract – Short-Term Consolidation Let’s take a look at the hourly chart of the S&P 500 futures contract. It extended the downtrend on Monday, but it managed to stay slightly above its late January local lows. For now, it looks like a short-term consolidation. It may be a bottoming pattern before an upward correction. Yesterday, we decided to open a speculative long position before the opening of the cash market. We are expecting an upward correction from the current levels (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index went below the 4,300 level yesterday, as investors reacted to the ongoing Russia-Ukraine crisis news. The market may be trading within a short-term consolidation and we may see an attempt at reversing the downtrend. Here’s the breakdown: The S&P 500 index will likely bounce or fluctuate following its late last week’s sell-off We are maintaining our yesterday’s long position. We are expecting an upward correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Miners for Breakfast, Gold for Dessert: Bearish Fundamentals Will Hurt

Miners for Breakfast, Gold for Dessert: Bearish Fundamentals Will Hurt

Przemysław Radomski Przemysław Radomski 23.02.2022 15:59
  To the disappointment of gold bulls, the yellow metal’s upward trend will not last long. Fundamentals have already taken their toll on gold miners.  While gold remains uplifted due to the Russia-Ukraine drama, the GDXJ ETF declined for the second-straight day on Feb. 22. Moreover, I warned on numerous occasions that the junior miners are more correlated with the general stock market than their precious metals peers. As a result, when the S&P 500 slides, the GDXJ ETF often follows suit. To that point, with shades of 2018 unfolding beneath the surface, the Russia-Ukraine headlines have covered up the implications of the current correction. However, the similarities should gain more traction in the coming weeks. For context, I wrote on Feb. 22: When the Fed’s rate hike cycle roiled the NASDAQ 100 in 2017-2018, the GDXJ ETF suffered too. Thus, while the Russia-Ukraine drama has provided a distraction, the fundamentals that impacted both asset classes back then are present now. Please see below: To explain, the green line above tracks the GDXJ ETF in 2018, while the black line above tracks the NASDAQ 100. If you analyze the performance, you can see that the Fed’s rate hike cycle initially rattled the former and the latter rolled over soon after. However, the negativity persisted until Fed Chairman Jerome Powell performed a dovish pivot and both assets rallied. As a result, with the Fed Chair unlikely to perform a dovish pivot this time around, the junior miners have some catching up to do. Furthermore, while the S&P 500 also reacts to the geopolitical risks, the Fed’s looming rate hike cycle is a much bigger story. With the U.S. equity benchmark also following its price path from 2018, a drawdown to new 2022 lows should help sink the GDXJ ETF. Please see below: Source: Morgan Stanley To explain, the yellow line above tracks the S&P 500 from March 2018 until February 2019, while the blue line above tracks the index's current movement. If you analyze the performance, it's a near-splitting image. Moreover, while Morgan Stanley Chief Equity Strategist Michael Wilson thinks a relief rally to ~4,600 is plausible, he told clients that "this correction looks incomplete." "Rarely have we witnessed such weak breadth and havoc under the surface when the S&P 500 is down less than 10%. In our experience, when such a divergence like this happens, it typically ends with the primary index catching down to the average stock," he added. As a result, while a short-term bounce off of oversold conditions may materialize, the S&P 500's downtrend should resume with accelerated fervor. In the process, the GDXJ ETF should suffer materially as the medium-term drama unfolds.  To that point, the Fed released the minutes from its discount rate meetings on Jan. 18 and Jan. 26. While the committee left interest rates unchanged, the report revealed: “Given ongoing inflation pressures and strong labor market conditions, a number of directors noted that it might soon become appropriate to begin a process of removing policy accommodation. The directors of three Reserve Banks favored increasing the primary credit rate to 0.50 percent, in response to elevated inflation or to help manage economic and financial stability risks over the longer term.” For context, the hawkish pleas came from the Cleveland, St. Louis, and Kansas City Feds. Moreover, the last time Fed officials couldn’t reach a unanimous decision was October 2019. As a result, the lack of agreement highlights the monetary policy uncertainty that should help upend financial assets in the coming months. As evidence, the report also revealed: Source: U.S. Fed Thus, while I’ve highlighted on numerous occasions that a bullish U.S. economy is bearish for the PMs, the Russia-Ukraine drama has been a short-term distraction. However, with Fed officials highlighting that growth and inflation meet their thresholds for tightening monetary policy, higher real interest rates and a stronger USD Index will have much more influence over the medium term. To that point, IHS Markit released its U.S. Composite PMI on Feb. 22. With the headline index increasing from 51.1 in January to 56.0 in February, an excerpt from the report read: “February data highlighted a sharp and accelerated increase in new business among private sector companies that was the fastest in seven months. Firms mentioned that sales were boosted by the retreat of the pandemic, improved underlying demand, expanded client bases, aggressive marketing campaigns and new partnerships. Customers reportedly made additional purchases to avoid future price hikes. Quicker increases in sales (trades) were evident among both manufacturers and service providers.” More importantly, though: Source: IHS Markit In addition, since the Fed’s dual mandate includes inflation and employment, the report revealed: Source: IHS Markit Likewise, Chris Williamson, Chief Business Economist at IHS Markit, added: “With demand rebounding and firms seeing a relatively modest impact on order books from the Omicron wave, future output expectations improved to the highest for 15 months, and jobs growth accelerated to the highest since last May, adding to the upbeat picture.” If that wasn't enough, the Richmond Fed released its Fifth District Survey of Manufacturing Activity on Feb. 22. While the headline index wasn't so optimistic, the report revealed that "the third component in the composite index, employment, increased to 20 from 4 in January" and that "firms continued to report increasing wages." For context, the dashed light blue line below tracks the month-over-month (MoM) change, while the dark blue line below tracks the three-month moving average. If you analyze the former's material increase, it's another data point supporting the Fed's hawkish crusade. Source: Richmond Fed Finally, the Richmond Fed also released its Fifth District Survey of Service Sector Activity on Feb. 22. For context, the U.S. service sector suffers the brunt of COVID-19 waves. However, the recent decline in cases has increased consumers’ appetite for in-person activities. The report revealed: “Fifth District service sector activity showed improvement in February, according to the most recent survey by the Federal Reserve Bank of Richmond. The revenues index increased from 4 in January to 11 in February. The demand index remained in expansionary territory at 23. Firms also reported increases in spending, as the index for capital expenditures, services expenditures, and equipment and software spending all increased.” Furthermore, with the employment index increasing from 12 to 14, the wages index increasing from 41 to 46, and the average workweek index increasing from 9 to 10, the labor market strengthened in February. Likewise, the index that tracks businesses’ ability to find skilled workers increased from -21 to -19. As a result, inflation, employment and economic growth create the perfect cocktail for the Fed to materially tighten monetary policy in the coming months.  Source: Richmond Fed The bottom line? While the Russia-Ukraine saga may dominate the headlines for some time, the bearish fundamentals that hurt gold and silver in 2021 remain intact: the U.S. economy is on solid footing, and demand is still fueling inflation. Moreover, with information technology and communication services’ stocks – which account for roughly 39% of the S&P 500 – highly allergic to higher interest rates, the volatility should continue to weigh on the GDXJ ETF. As such, while gold may have extended its shelf life, mining stocks may not be so lucky. In conclusion, the PMs were mixed on Feb. 22, as the news cycle continues to swing financial assets in either direction. However, while headlines may have a short-term impact, technicals and fundamentals often reign supreme over the medium term. As a result, lower lows should confront gold, silver, and mining stocks in the coming months. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Crypto Airdrop - Explanation - How Does It Work?

Bitcoin lower as expected of course after our latest sell signal was triggered.

Jason Sen Jason Sen 24.02.2022 08:05
(Because it has never been regarded as a safe haven in times of trouble & always goes down when stock markets panic. Also been proven to be no inflation hedge of course). Ripple reversed in between resistance at 7250/80 & 7610/30 & continues lower as expected. Ethereum breaks the 500 day moving average at 2450/2400 for yet another sell signal. Update daily at 07:00 GMT Today's Analysis Bitcoin breaks 40800/500 for a medium term sell signal in the 3 month bear trend initially targeting 38000/37500 then 36400/36000 & probably as far as 34000. Do not be surprised to see a test of the 100 week moving average at 32690/700 (today's value). Gains are likely to be limited in the bear trend with first resistance at 36300/400 then 39400/450. Further resistance at 40900/41000. Shorts need stops above 42200. Ripple lower again as expected to test very important 100 week moving average support at 6190/6160. Longs need stops below 6100. A break lower quickly targets 5800. If you are very brave & want to try longs at 6190/6160, look for targets of 6660/90, & perhaps as far as 6900 for profit taking. Ethereum breaks the 500 day moving average at 2450/2400 for yet another sell signal in the bear trend as we look for a retest of the January low at 2160/55. I would not rely on this holding the downside & if we continue lower look for a test of very strong support at 1900/1850. Longs need stops below 1750. If this breaks there is likely to be another very significant move to the downside. Bulls desperately need prices to hold above 2500 now to regain control. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk No representation or warranty is made as to the accuracy or completeness of this information and opinions expressed may be subject to change without notice. Estimates and projections set forth herein are based on assumptions that may not be correct or otherwise realised. All reports and information are designed for information purposes only and neither the information contained herein nor any opinion expressed is deemed to constitute an offer or invitation to make an offer, to buy or sell any security or any option, futures or other related derivatives.
Having A Look At The Markets Considering Tensions, COVID-19 And National Banks Decisions

How Did Markets Reacted To The Latest Events In The Eastern Europe?

Walid Koudmani Walid Koudmani 24.02.2022 14:22
The worst case scenario - Russian invasion of Ukraine - is materializing. We try to analyze its consequences for the economy and financial markets Oil price increases past $100 per barrel Russia is a key player on the energy commodities market, especially important for Europe. Situation on the oil market proves it - oil prices jumped above $100 per barrel for the first time since 2014. Russia is exporting around 5 million barrels of oil each day, around 5% of global demand. Around a half of that is exported to the European Union. If the West decides to cut Russia off the SWIFT settlements system, Russian exports to the European Union could be halted. In such a scenario oil prices could jump $20-30 per barrel. In our opinion, the war risk premium included in current oil barrel prices amounts to $15-20. Europe is the main recipient of Russian oil. Source: Bloomberg, XTB Research Gold and palladium rally Conflict is the main driver of moves on the gold market. It is not the first time when gold proves to be a good store of value at times of geopolitical conflicts. Ounce of gold trades over 3% higher today, near $1,970, and just slightly over $100 below its all-time highs. Russia is an important producer of palladium, an important metal for the automotive sector. Source: Bloomberg, XTB Research Russia is a significant producer of palladium, which is a key metal in production of catalytic converters for the automotive sector. Palladium prices rallied almost 8% today. Fear means sell-off on the market Global stock markets are taking a hit not seen since 2020. However, panic is not as big as it was in early-2020. Uncertainty is the most important driver for global stock markets now as investors do not know what will come next. Correction on Nasdaq-100 futures deepened past 20% today. A big part of this drop, however, was caused by expectations of Fed tightening. DAX futures dropped around 15% since mid-January and trade near pre-pandemic highs. DE30 trades to halt decline at pre-pandemic high. Source: xStation5 Business in Ukraine is in danger It should not come as a surprise that Russian companies and companies with big exposure to Russia are the ones taking the biggest hit. Russian RTS dropped over 60% off the October 2021 high and briefly traded below 2020 lows! Polymetal International is a company worth mentioning - stock is plunging over 30% on London Stock Exchange as market fears sanctions will hit Anglo-Russian companies. Renault is also taking a hit as Russia is the second biggest market for the company. Banks with large exposure to Russia - UniCredit and Societe Generale - are also dropping hard. Even higher inflation From an economic point of view the situation is clear - military conflict will generate a new inflationary impulse. Prices of almost all commodities are trading higher, especially energy commodities. However, in case of commodity markets, a lot will depend on how conflict impacts logistics. Keep in mind that global logistics have not recovered from Covid-19 hit yet and now another negative factor is surfacing. According to the New York Fed index, global supply chains are the most tight on record. Central bankers' headache Covid-19 panic has been very short-lived, thanks to an enormous support offered by central banks. However, such an action is unlikely now. As conflict is inflationary and has a bigger impact on supply and logistics rather than demand, inflation becomes an even bigger problem for major central banks. On the other hand, quick tightening monetary policy would only magnify market turmoil. In our opinion, major central banks will continue with announced policy tightening. Risk of a 50 basis point rate hike by the Fed in March dropped but a 25 bp rate hike looks like a done deal. What's next? A key question for global markets now is - how much will the conflict escalate? An answer to this question will be a key to calming the markets. Once it is answered, calculations of impact on sanctions and speculations over changes in economic policy will begin.
Will War Change How We Spend Or Invest Our Money?

Will War Change How We Spend Or Invest Our Money?

Chris Vermeulen Chris Vermeulen 24.02.2022 22:23
I discussed the potential for the invasion into Ukraine with a friend over the past few days and how this new war may change the global economy. We ended up discussing the Invasion of Kuwait that took place in August 1990. At that time, as soon as the Invasion of Kuwait started, consumers almost immediately changed their spending and financial habits.Suddenly, people stopped going out to dinner after work. They stopped going out for drinks. They also stopped playing computer games and spending money on most outside entertainment (movies and movie rentals – back in the Blockbuster days). In short, consumers became fascinated by the televised war and lost focus on almost everything else.Sign up for my free trading newsletter so you don’t miss the next opportunity! As the conversation progressed, we started talking about how the US Federal Reserve may suddenly find that consumers have begun pulling away from traditional spending habits and how quickly these consumer trends can alter the economic landscape. For example, nearly 60 days into the Invasion of Kuwait, my friend remembered the US economy shifted into a much slower gear, and consumers continued to stay away from more normal spending habits.If this happens in today's super-inflated world, we may see a sudden shift in inflation, retail, housing, and general consumer demand very quickly. Recently, I started receiving messages from friends and clients worldwide who are focused on the Invasion of Ukraine – a whole new generation of people who may become entranced in the televised war (again).Consumer Retail May Suffer A -60% CollapseThis XRT Weekly Chart highlights the pre-COVID support levels that may become future targets if consumer spending habits suddenly shift. XRT has already fallen nearly -32% from the recent highs. If consumers continue to move away from outside economic activities, or more common post-COVID economic activities, we may see the Retail sector continue to move lower.Housing May Contract Faster Than ExpectedReal Estate may contract to near the COVID lows if consumers shy away from chasing speculative price trends in housing. Flipping houses has become a very hot industry over the past 5+ years. Yet, suddenly larger firms like Zillow and OpenDoor started offloading their Real Estate inventory because consumer demand shifted ahead of the US Fed's proposed rate hikes in 2022. The double-whammy of rising rates and war may be similar to what happened in the US between 1993 and 1994 – a very stagnant housing market.IYR has already fallen -16.5% from the highs and may decline to levels closer to -30% (or more) before finding a bottom. Wars tend to shift economies and spending habits very quickly.What To Stay Focused On Amid All The NoiseTraders should stay keenly focused on market risks and weaknesses. I expected the conflict in Ukraine to have been priced into the US markets over the past 7+ days. However, I believe the markets were unprepared for this scale or invasion and will attempt to settle fair stock price valuation levels as the conflict continues. This is not the same US/Global market Bullish trend we've become used to trading over the past 5+ years. The market dynamics and trends are changing from what we have experienced over the past 40 years for stocks and bonds. The 60/40 portfolio is costing you money now. Traders need an edge to stay ahead of these markets trends and to protect and profit from big trends.The only way to navigate the financial markets safely, no matter the direction, is through technical analysis. By following assets and money flows, we identify trend changes and move our capital into whatever index, sector, industry, bond, commodity, country, and even currency ETF. By following the money, you become part of new emerging trends and can profit during weak stock or bond conditions.What Trading Strategies Will Help You To Navigate Current Market Trends?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
Crude Oil (WTI) Doesn't Hit THAT High Levels, SPX And Credit Markets Trade Quite Low

Crude Oil (WTI) Doesn't Hit THAT High Levels, SPX And Credit Markets Trade Quite Low

Monica Kingsley Monica Kingsley 25.02.2022 15:56
S&P 500 recovered the steep losses as the shock was replaced with relief over the international response. Safe haven bids largely disappeared, and can be counted on remaining pressured – this concerns precious metals and crude oil. Credit markets – for all their downswing and forcing the Fed‘s hand through higher yields – have turned risk-on yesterday, but that got reflected just in the tech upswing as value didn‘t close the opening gap. But that would happen today as money flows out of the dollar hiding, and VIX can be counted on to stay much calmer than it was yesterday, in the days to come – that‘s what I tweeted late yesterday. Today‘s inflation data (core PCE) is going to take a backseat to geopolitics as uncertainty about where these tensions could lead, is getting removed in the markets‘ mind – especially as regards the international ramifications. Good to have taken sizable gold and oil profits off the table yesterday, well before the risk premiums were gone – fresh portfolio high has been reached. Remember that in times of high volatility, dialing back your exposure, your risk, is essential to proper risk management. Please have a good look at my style of open trade and money management if you haven‘t already so as to make the most of what I‘m doing. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Now, this looks a lot more as an S&P 500 bottom – volatility appears to be staying elevated but headed down next. Neutral to bullish outlook for today but downswings are likely to be repelled. Credit Markets HYG is marking the risk-on turn clearly, and volume was also solid. Credit markets won‘t be standing in the way of stock market upswing today, I think. Gold, Silver and Miners Precious metals ominous lower knot would have consequences for the days to come – but we have seen upswing rejection only, not a downside reversal. When miners catch their breath again, the move higher can continue. Crude Oil Crude oil upswing has been rejected, but the long base building goes on, and black gold can be counted on to extend gains even when the dust settles down. Copper Copper upswing would take time to develop, especially now – but the breakout in base metals is on, the inflationary messaging is still there and thriving – yesterday‘s words are still true today, but I am looking for a longer base building here than in crude oil. Bitcoin and Ethereum Cryptos are turning the corner, and the worst looks to be in here as well – yesterday‘s attempt to put in a low was successful. Summary S&P 500 turned around, and the bottom appears to be in. Unless a fresh and entangling escalation materializes (not likely), the markets are willing to shake it off, and erase yesterday‘s downswing. As chips (and international response) fall where they may, the tense air is being removed as markets abhor uncertainty the most. Risk premiums are evaporating, and until the Fed and yields come back into the spotlight, the odds favor risk-on muddying through ahead in the days to follow. The inflation chickens haven‘t though come home to roost, and that has continued bullish implications for real assets. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
S&P 500 (SPX) And Credit Markets With Moves Up Finally, Bitcoin (BTC) Seems To Be Vigilant

S&P 500 (SPX) And Credit Markets With Moves Up Finally, Bitcoin (BTC) Seems To Be Vigilant

Monica Kingsley Monica Kingsley 28.02.2022 16:00
S&P 500 didn‘t correct much intraday, and the risk-on turn has continued unabated with value pulling ahead sharply – unlike the day before when the revesal came about because of tech. The dust is settling in the market‘s mind, VIX has indeed moved and the dollar weakened noticeably. That was the subject of Friday‘s analysis – the disappearing safe haven premium over many assets such as gold, crude oil and Treasuries (Treasuries though kept their cool the most, not losing the focus on Fed‘s tightening). Risk-on appetite returned to stocks with a vengeance, and market breadth has significantly improved – within the context of the ongoing correction, must be said. While we made local lows on Thursday after all, the upside momentum is likely to slow down next – this week would bring a consolidation within a very headline sensitive environment. It‘s looking good for the bulls at the moment – till the dynamic of events beyond markets changes. Inflation isn‘t wavering, and I‘m not looking for its meaningful deceleration given the events since Thursday, no. Friday is likely to mark a buying opportunity beyond oil and copper – these longs have very good prospects. Another part of the S&P 500 upswing explanation were the still fine fresh orders data – while the real economy has noticeably decelerated (and Q1 GDP growth would be underwhelming), solid figures would return in the latter quarters of 2022. That‘s also behind the gold downswing on Friday, which hadn‘t been confirmed by the miners – the very bright future ahead for precious metals is undisputable. And the same goes for crude oil as oil stocks foretell – the fresh long crude trade together with long S&P 500 one, are both solidly in the black already.. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Sharp S&P 500 upswing on solid volume – the gains can continue but their pace would slow down. Negative sentiment is departing stocks as the existing bad news has been priced in. The pendulum is swinging the other way now. Credit Markets HYG is confirming the stock market upswing, but bonds are remaining more cautious overall – it‘s that the focus would shift over the coming 2 weeks again to the Fed. The yield spread keeps compressing and the 2-year bond didn‘t stop pressuring the Fed. Gold, Silver and Miners Precious metals have corrected a little but the upswing goes on – GDX performance is a good omen. The decline in prices wasn‘t sold heavily into anyway – we‘re still moving higher next as the rate raising cycle start is soon here. Crude Oil Crude oil bears are totally unconvincing, proving that the prior price upswing was about way more than geopolitical uncertainty – the chart remains strongly bullish, and we have higher to run still. Copper Copper upswing is indeed taking time to develop, but commodities strength remains in spite of the daily setback, which just illustrates the risk-on euphoria in stocks. The commodities upleg hasn‘t run its course, and the red metal would join in. Bitcoin and Ethereum Cryptos are refusing to extend Sunday‘s decline – while the worst appears to be over, the short-term direction can turn out in both directions. I‘m though slightlly favoring the bulls. Summary S&P 500 turnaround continues, and price gains are frontrunning the events on the ground. The upswing is vulnerable – to a consolidation at most as a full reversal would require fresh setbacks, including in Asia. Risk-on trades have the momentum, and credit markets agree. It certainly looks like a good time to take advantage of the precious metals and commodities discounts as momentary optimism in the markets that has nothing to do with the progress on inflation. Further, we‘re still in the real economy slowdown phase, and the Fed hasn‘t even started hiking yet. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Will S&P 500 (SPX) Go Up? On Monday It Decreased By 0.24%

Will S&P 500 (SPX) Go Up? On Monday It Decreased By 0.24%

Paul Rejczak Paul Rejczak 01.03.2022 15:31
  The S&P 500 went sideways yesterday, as investors hesitated following the recent rally. Will the short-term uptrend resume? The broad stock market index lost 0.24% on Monday, after gaining 2.2% on Friday and 1.5% on Thursday. The sentiment improved following the Thursday’s rebound, but there’s still a lot of uncertainty following the ongoing Russia-Ukraine conflict news. On Thursday, the broad stock market reached the low of 4,114.65 and it was 704 points or 14.6% below the January 4 record high of 4,818.62. And yesterday it went closer to the 4,400 level. For now, it looks like an upward correction. However, it may also be a more meaningful reversal following a deep 15% correction from the early January record high. The market sharply reversed its short-term downtrend, but will it continue the advance? This morning the S&P 500 index is expected to open 0.2% lower and we may see some more volatility. The nearest important resistance level remains at 4,400 and the next resistance level is at 4,450-4,500. On the other hand, the support level is at 4,300-4,350, among others. The S&P 500 index broke slightly above the downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract Remains Above the 4,300 Level Let’s take a look at the hourly chart of the S&P 500 futures contract. On Thursday it sold off after breaking below the 4,200 level. Since Friday it is trading along the 4,300 mark. We are still expecting an upward correction from the current levels (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index fluctuated following the recent rally yesterday. This morning it is expected to open 0.2% lower and we may see some further volatility. Obviously, the markets will continue to react to the Russia-Ukraine conflict news. Here’s the breakdown: The S&P 500 index bounced from the new low on Thursday after falling almost 15% from the early January record high. We are maintaining our speculative long position. We are expecting an upward correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
S&P 500 (SPX) Increased By 7.1%, FTSE 100 (UK 100) Went Up As Well

S&P 500 (SPX) Increased By 7.1%, FTSE 100 (UK 100) Went Up As Well

Alex Kuptsikevich Alex Kuptsikevich 03.03.2022 10:15
  Why the S&P500 is rising now Events in Ukraine at the end of last month provoked chaos in the stock markets of all regions. However, the S&P500 and FTSE100 indexes already managed to find the support of buyers on the first day of hostilities. Since then, these indices have formed an upward trend. The S&P 500 is testing the 4400 mark, above which it last traded solidly before Feb 17th. At the same time, futures are now 7.1% higher than the minimum point at which they were a week earlier.  The FTSE100 is not gaining as much and is now up 3.4% from last week's lows. In both cases, we see an upward movement, albeit shaky. It is explained by the market's less dependence on the state of affairs in Eastern Europe since the companies represented in the S&P500 are significantly diversified and removed from the epicentre of events. In contrast, the European Euro50 on the 1st of March fell to lows for almost a year.  A similar pattern was observed for the German DAX. The charts of both indices have been dominated by sellers since the beginning of the year, and this trend has intensified sharply in the last two weeks.  The DAX and EURO50 have about 7% more downside potential in the next few days before finding support. In our opinion, central banks may now be on the side of buyers in Western Europe and the United States, which are likely to soften plans for tightening monetary policy, despite the rise in commodity prices. Worth mentioning that in times of crisis, the market quickly calculates the winners: both in February-March 2020 and last month, the market decline was general, but very soon the markets diverged in their dynamics.
Stocks Want to Go Higher Despite Ukraine News

Stocks Want to Go Higher Despite Ukraine News

Finance Press Release Finance Press Release 03.03.2022 15:34
The S&P 500 index topped the 4,400 level yesterday despite the ongoing Russia-Ukraine conflict news. Will the uptrend continue?The broad stock market index gained 1.86% on Wednesday following its Tuesday’s decline of 1.6%, as it fluctuated following last week’s rebound from the new medium-term low of 4,114.65. It was 704 points or 14.6% below the January 4 record high of 4,818.62. So the sentiment improved recently, but there’s still a lot of uncertainty concerning the ongoing Russia-Ukraine conflict news. Yesterday the index went slightly above the 4,400 level and it was the highest since Feb. 17.For now, it looks like an upward correction. However, it may also be a more meaningful reversal following a deep 15% correction from the early January record high. This morning the S&P 500 index is expected to open 0.6% higher following better-than-expected Unemployment Claims number release. However, we may see some more volatility.The nearest important resistance level remains at 4,400 and the next resistance level is at 4,450-4,500. On the other hand, the support level is at 4,300-4,350, among others. The S&P 500 index broke above the downward trend line recently, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):Futures Contract Trades Along the Local HighsLet’s take a look at the hourly chart of the S&P 500 futures contract. On Thursday it sold off after breaking below the 4,200 level. And since Friday it was trading along the 4,300 mark. This morning it is trading along the local highs.We are maintaining our profitable long position, as we are still expecting an upward correction from the current levels (chart by courtesy of http://tradingview.com):ConclusionThe S&P 500 index will likely open 0.6% higher this morning. We may see more short-term fluctuations and obviously, the markets will continue to react to the Russia-Ukraine conflict news.Here’s the breakdown:The S&P 500 index bounced from the new low on Thursday after falling almost 15% from the early January record high.We are maintaining our profitable long position.We are expecting an upward correction from the current levels.Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care* * * * *The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Gold Miners – Biggest Losers? That’s What Oil Says

Gold Miners – Biggest Losers? That’s What Oil Says

Finance Press Release Finance Press Release 03.03.2022 15:44
After the war-driven gold rally, oil is starting to outperform. History between these two has already shown that someone may suffer. Many suggest: gold miners.The precious metals corrected some of their gains yesterday, but overall, not much changed in them. However, quite a lot happened in crude oil, and in today’s analysis we’ll focus on what it implies for the precious metals market and, in particular – for mining stocks.As you may have noticed, crude oil shot up recently in a spectacular manner. This seems normal, as it’s a market with rather inflexible supply and demand, so disruptions in supply or threats thereof can impact the price in a substantial way. With Russia as one of the biggest crude oil producers, its invasion of Ukraine, and a number of sanctions imposed on the attacking country (some of them involving oil directly), it’s natural that crude oil reacts in a certain manner. The concern-based rally in gold is also understandable.However, the relationship between wars, concerns, and prices of assets is not as straightforward as “there’s a war, so gold and crude oil will go up.” In order to learn more about this relationship, let’s examine the most similar situation in recent history to the current one, when oil supplies were at stake.The war that I’m mentioning is the one between Iraq and the U.S. that started almost 20 years ago. Let’s see what happened in gold, oil, and gold stocks at that time.The most interesting thing is that when the war officially started, the above-mentioned markets were already after a decline. However, that’s not that odd, when one considers the fact that back then, the tensions were building for a long time, and it was relatively clear in advance that the U.S. attack was going to happen. This time, Russia claimed that it wouldn’t attack until the very last minute before the invasion.The point here, however, is that the markets rallied while the uncertainty and concerns were building up, and then declined when the situation was known and “stable.” I don’t mean that “war” was seen as stable, but rather that the outcome and how it affected the markets was rather obvious.The other point is the specific way in which all three markets reacted to the war and the timing thereof.Gold stocks rallied initially, but then were not that eager to follow gold higher, but that’s something that’s universal in the final stages of most rallies in the precious metals market. What’s most interesting here is that there was a time when crude oil rallied substantially, while gold was already declining.Let me emphasize that once again: gold topped first, and then it underperformed while crude oil continued to soar substantially.Fast forward to the current situation. What has happened recently?Gold moved above $1,970 (crude oil peaked at $100.54 at that time), and then it declined heavily. It’s now trying to move back to this intraday high, but it was not able to do so. At the moment of writing these words, gold is trading at about $1,930, while crude oil is trading at about $114.In other words, while gold declined by $30, crude oil rallied by about $14. That’s a repeat of what we saw in 2003!What happened next in 2003? Gold declined, and the moment when crude oil started to visibly outperform gold was also the beginning of a big decline in gold stocks.That makes perfect sense on the fundamental level too. Gold miners’ share prices depend on their profits (just like it’s the case with any other company). Crude oil at higher levels means higher costs for the miners (the machinery has to be fueled, the equipment has to be transported, etc.). When costs (crude oil could be viewed as a proxy for them) are rising faster than revenues (gold could be viewed as a proxy for them), miners’ profits appear to be in danger; and investors don’t like this kind of danger, so they sell shares. Of course, there are many more factors that need to be taken into account, but I just wanted to emphasize one way in which the above-mentioned technical phenomenon is justified. The above doesn’t apply to silver as it’s a commodity, but it does apply to silver stocks.Back in 2004, gold stocks wiped out their entire war-concern-based rally, and the biggest part of the decline took just a bit more than a month. Let’s remember that back then, gold stocks were in a very strong medium- and long-term uptrend. Right now, mining stocks remain in a medium-term downtrend, so their decline could be bigger – they could give away their war-concern-based gains and then decline much more.Mining stocks are not declining profoundly yet, but let’s keep in mind that history rhymes – it doesn’t repeat to the letter. As I emphasized previously today, back in 2003 and 2002, the tensions were building for a longer time and it was relatively clear in advance that the U.S. attack was going to happen. This time, Russia claimed that it wouldn’t attack until the very last minute before the invasion. Consequently, the “we have to act now” is still likely to be present, and the dust hasn’t settled yet – everything appears to be unclear, and thus the markets are not returning to their previous trends. Yet.However, as history shows, that is likely to happen. Either immediately, or shortly, as crude oil is already outperforming gold.Investing and trading are difficult. If it was easy, most people would be making money – and they’re not. Right now, it’s most difficult to ignore the urge to “run for cover” if you physically don’t have to. The markets move on “buy the rumor and sell the fact.” This repeats over and over again in many (all?) markets, and we have direct analogies to similar situations in gold itself. Junior miners are likely to decline the most, also based on the massive declines that are likely to take place (in fact, they have already started) in the stock markets.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
S&P 500 At Tipping Point To Start A Bear Market And What You Need To See

S&P 500 At Tipping Point To Start A Bear Market And What You Need To See

Chris Vermeulen Chris Vermeulen 03.03.2022 21:38
Is a bear market on the way? My research suggests the downward sloping trend line (LIGHT ORANGE in the Daily/Weekly SPY chart below) may continue to act as solid resistance – possibly prompting a further breakdown in the markets for US major indexes.As we've seen recently, news and other unexpected events prompt very large price volatility events in the US major indexes. For example, the VIX recently rose above 30 again, which shows volatility levels are currently 3x higher than normal levels.Increased Volatility & The Start Of An Excess Phase Peak Should Be A Clear WarningThis increased volatility in the markets, coupled with the increased fear of the US Fed and the global unknowns (Ukraine, China, Debt Levels, and others), may be just enough pressure to crush any upside price trends over the next few months. Technically, my research suggests the $445 to $450 level is critical resistance. The SPY must climb above these levels to have any chance of moving higher.Sign up for my free trading newsletter so you don’t miss the next opportunity! Unless the US markets find some new support and attempt to rally back towards recent highs, an “Excess Phase Peak” pattern will likely continue to unfold throughout 2022. This unique price pattern appears to have already reached a Phase 2 or Phase 3 setup. Please take a look at this Weekly GE example of an Excess Phase Peak pattern and how it transitions through Phase 1 through Phase 4 before entering an extended Bearish price trend.Read this research article about Excess Phase Peaks: HOW TO SPOT THEN END OF AN EXCESS PHASE - PART 2SPY May Already Be In A Phase 4 Excess Peak PhaseThis Daily SPY chart highlights my analysis, showing the major downward sloping trend line, the Middle Resistance Zone, and the lower Support Zone. Combined, these are acting as a “Wedge” for price over the past few weeks – tightening into an Apex near $435~440.If the US major indexes attempt to break this downward price trend, then the price must attempt to move solidly above this downward sloping price channel and try to rally back into the Resistance Zone (near $445~$450). Unless that happens, the price will likely transition into a deeper downward price move, attempting to break below recent lows, near $410, and possibly quickly moving down to the $360 level.SPY Weekly Chart Shows Consolidation Near $435 – Possibly Starting A Phase 4 Excess PeakTraders should stay keenly aware of the risks associated with the broad US and global market decline as the Ukraine war, and other unknowns continue to elevate fear and concerns related to the global economy. In my opinion, with the current excess global debt levels, extended speculative market bubbles, and the continued commodity price rally, we may be starting to transition away from an extended growth phase and into a deeper depreciation cycle phase.My research suggests we entered a new Depreciation cycle phase in late 2019 and are already more than 25 months into a potential 9.5-year global Depreciation cycle. What comes next should not surprise anyone.Read this article about Depreciation Cycle Phases: HOW TO INTERPRET & PROFIT FROM THE RISKS OF A DEPRECIATION CYCLE Traders should stay keenly focused on market risks and weaknesses. I expected the conflict in Ukraine to have been priced into the US markets over the past 7+ days. However, I believe the markets were unprepared for this scale or invasion and will attempt to settle fair stock price valuation levels as the conflict continues. This is not the same US/Global market Bullish trend we've become used to trading over the past 5+ years. Looking Forward - preparing for a possible Bear marketMarket dynamics and trends are changing from what we have experienced over the past 40 years for stocks and bonds. The 60/40 portfolio is costing you money now. Traders need an edge to stay ahead of these markets trends and to protect and profit from big trends.The only way to navigate the financial markets safely, no matter the direction, is through technical analysis. By following assets and money flows, we identify trend changes and move our capital into whatever index, sector, industry, bond, commodity, country, and even currency ETF. By following the money, you become part of new emerging trends and can profit during weak stock or bond conditions.Want Trading Strategies that Will Help You To Navigate Current Market Trends?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets are starting to transition away from the continued central bank support rally phase and may start a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into Metals.I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking the following link:   www.TheTechnicalTraders.com 
S&P 500 Is Likely Recovering, Gold (XAUUSD), Copper And Crude Oil (WTI) Close To Out Of The Park Play

S&P 500 Is Likely Recovering, Gold (XAUUSD), Copper And Crude Oil (WTI) Close To Out Of The Park Play

Monica Kingsley Monica Kingsley 07.03.2022 15:47
S&P 500 recovered most of the intraday downside, and in spite of value driving the upswing, there is something odd about it. Tech barely moved higher during the day, and the heavyweights continue being beaten similarly to biotech compared to the rest of healthcare. The key oddity though was in the risk-off posture in bonds, and the Treasuries upswing that Nasdaq failed to get inspired with. If TLT has a message to drive home after the latest Powell pronouncements, it‘s that the odds of a 50bp rate hike in Mar (virtual certainty less than two weeks ago, went down considerably) – it‘s almost a coin toss now, and as the FOMC time approaches, the Fed would probably grow more cautious (read dovish and not hawkish) in its assessments, no matter the commodities appreciation or supply chains status. Yes, neither of these, nor inflation is going away before the year‘s end – they are here to stay for a long time to come. Looking at the events of late, I have to dial back the stock market outlook when it comes to the degree of appreciation till 2022 is over – I wouldn‘t be surprised to see the S&P 500 to retreat slightly vs. the Jan 2022 open. Yes, not even the better 2H 2022 prospects would erase the preceding setback. Which stocks would do best then? Here are my key 4 tips – energy, materials, in general value, and smallcaps. But the true winners of the stagflationary period is of course going to be commodities and precious metals. And that‘s where the bulk of recent gains that I brought you, were concentrated in. More is to come, and it‘s gold and silver that are catching real fire here. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 setback was repelled on Friday, but I‘m looking for the subsequent upswing to fizzle out – we still have to go down in Mar, and that would be the low. Credit Markets HYG is clearly on the defensive, and TLT reassessing rate hike prospects. This doesn‘t bode well for the S&P 500 bulls. Gold, Silver and Miners Precious metals are doing great, and will likely continue rising no matter what the dollar does – my Friday‘s sentence is still fitting today. I‘m looking for further price gains – the upleg has been measured and orderly so far. Crude Oil Crude oil upswing still hasn‘t lost steam, and still can surprise on the upside. Slowdown in the pace of gains, or a sideways consolidation, would be the healthy move next. Jittery nerves can calm down a little today. Copper Copper isn‘t rising as fast as other base metals, which are one of the key engines of commodities appreciation. The run is respectable, and happening on quite healthy volume – if we don‘t see its meaningful consolidation soon, the red metal would be finally breaking out of its long range here. Bitcoin and Ethereum While I wasn‘t expecting miracles Friday or through the weekend, cryptos are stabilizing, and can extend very modest gains today and tomorrow. Summary S&P 500 is likely to rise next, only to crater lower still this month. It may even undershoot prior Thursday‘s lows, but I‘m not looking for that to happen. The sentiment is very negative already, the yield curve keeps compressing, commodities are rising relentlessly, and all we got is a great inflation excuse / smoke screen. Inflation is always a monetary phenomenon, and supply chain disruptions and other geopolitical events can and do exacerbate that. Just having a look at the rising dollar when rate hike prospects are getting dialed back, tells the full risk-off story of the moment, further highlighted by the powder keg that precious metals are. And silver isn‘t yet outperforming copper, which is something I am looking for to change as we go by. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Is It Too Late To Begin Adapting To Higher Volatility In The Market?

Is It Too Late To Begin Adapting To Higher Volatility In The Market?

Chris Vermeulen Chris Vermeulen 07.03.2022 22:18
Now is the time for traders to adapt to higher volatility and rapidly changing market conditions. One of the best ways to do this is to monitor different asset classes and track which investments are gaining and losing money flow. Knowing what the Best Asset Now is (BAN) is critical for consistent growth no matter the market condition.With that said, buyers (countries, investors, and traders) are panicking as the commodity Wheat, for example, gained more than 40% last week.‘Panic Commodity Buying’ in Wheat – Weekly ChartAccording to the US Dept. of Agriculture, China will hold 69% of the world’s corn reserves, 60% of rice and 51% of wheat by mid-2022.Commodity markets surged to their largest gains in years as Ukrainian ports were closed and sanctions against Russia sent buyers scrambling for replacement supplies. Global commodities, commodity funds, and commodity ETFs are attracting huge capital inflows as investors seek to cash in on the rally in oil, metals, and grains.How does the Russia – Ukraine war affect global food supplies?The conflict between major commodity producers Russia and Ukraine is causing countries that rely heavily on commodity imports to feed their citizens to enter into panic buying. The breadbaskets of Ukraine and Russia account for more than 25% of the global wheat trade and nearly 20% of the global corn trade.Last week, it was reported that many countries have dangerously low grain supplies. Nader Saad, an Egypt Cabinet spokesman, has raised the alarm that currently, Egypt has only nine months’ worth of wheat in silos. The supply includes five months of strategic reserves and four months of domestic production to cover the bread needs of 102 million Egyptians. Additionally, Avigdor Lieberman, Israel’s economic minister, said on Thursday (3/3/22) that his country should keep “a low profile” regarding the conflict in eastern Europe, given that Israel imports 50 percent of its wheat from Russia and 30 percent from Ukraine.Sign up for my free trading newsletter so you don’t miss the next opportunity!The longer-term potential for much higher grain prices exists, but it’s worth noting that Friday’s close of nearly $12.00 a bushel for wheat is not that far away from the all-time record high of $13.30, recorded 14-years ago. According to Trading Economics, wheat has gone up 75.08% year-to-date while other commodity markets like Oats are up a whopping 85.13%, Coffee 74.68%, and Corn 34.07%.How are other markets reacting to these global events?Year-to-date comparison returns as of 3/4/2022:-9.18% S&P 500 (index), -7.49% DJI (index), -15.21% Nasdaq (index), +37.44% Exxon Mobile (oil), +20.08% Freeport McMoran (copper & gold), -20.68% Tesla (alternative energy), -24.49% Microstrategy (bitcoin play), -40.51% Meta-Facebook (social media)As stock holdings and 401k’s are shrinking it may be time to re-evaluate your portfolio. There are ETFs available that can give you exposure to commodities, energy, and metals.Here is an example of a few of these ETFs:+53.81% WEAT Teucrium Wheat Fund+41.79% GSG iShares S&P TSCI Commodity -Indexed Trust+104.40 UCO ProShares Ultra Bloomberg Crude Oil+59.32% PALL Aberdeen Standard Physical Palladium SharesHow is the global investor reacting to rocketing commodity prices and increasing market volatility?We can track global money flow by monitoring the following 1-month currency graph (www.finviz.com). The Australian Dollar is up +4.25%, the New Zealand Dollar +3.72%, and the Canadian Dollar +0.30% vs. the US Dollar due to the rising commodity prices like metals and energy. These country currencies are known as commodity currencies.The Switzerland Franc +0.96%, the Japanese Yen +0.35%, and the US Dollar +0.00% are all benefiting from global capital seeking a safe haven. As volatility continues to spike, these country currencies will experience more inflows as capital comes out of depreciating assets and seeks stability.We also notice that capital outflow is occurring from the European Union-Eurodollar -4.55% and the British Pound -2.22% due to their close proximity (risk) to the Russia - Ukraine war.www.finviz.comGlobal central banks will need to begin raising their interest rates to combat high inflation!Due to the rapid acceleration of inflation, the US Federal Reserve may have been looking to raise interest rates by 50 basis points at its policy meeting two weeks from now. However, given Russia’s invasion of Ukraine, the FED may become more cautious and consider raising interest rates by only 25 basis points on March 15-16.What strategies can help you navigate current market trends?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals are starting to act as a proper hedge as caution and concern start to drive traders/investors into Metals and other safe-havens.Now is the time to keep your eye on the ball!I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Crude Oil Climbs High. Is It Enough to Enjoy a Better View?

Crude Oil Climbs High. Is It Enough to Enjoy a Better View?

Sebastian Bischeri Sebastian Bischeri 07.03.2022 16:45
  The threat of sanctions caused a stir in the markets: WTI spiked above $130 and Brent is nearing the $140 mark. Where is crude oil going next? A possible Western embargo on Russian oil caused oil prices to soar again on Monday, as stock markets feared persistent inflation and a consequent economic slowdown. On the US dollar side, the continued rally of the greenback has propelled the dollar index (DXY) towards higher levels, as it is now approaching the three-figure mark ($100), even though it has not had a huge impact on crude oil, other petroleum products, or any other commodities in general. What we rather witness here is the greenback’s safe haven effect attracting investors, much like gold would tend to act in a “store of value” role. US Dollar Index (DXY) CFD (daily chart) On the geopolitical scene, Russia-Ukraine peace talks will be resumed today in Brest (Belarus) at 14:00 GMT, while another meeting is already scheduled at the Antalya Diplomacy Forum on Thursday in Turkey. Russian Foreign Minister Sergei Lavrov and his Ukrainian counterpart Dmytro Kuleba will talk there in the presence of the Turkish foreign minister. We might therefore expect some de-escalation in the Black Sea basin this week if the two parties involved were able to reach an agreement after further negotiations. WTI Crude Oil (CLJ22) Futures (April contract, daily chart) Brent Crude Oil (BRNK22) Futures (May contract, daily chart) RBOB Gasoline (RBJ22) Futures (April contract, daily chart) Henry Hub Natural Gas (NGJ22) Futures (April contract, daily chart) Regarding natural gas, the U.S. Energy Information Administration (EIA) published its Annual Energy Outlook (AEO) 2022 report, suggesting that even with non-hydro renewable sources set to rapidly grow through 2050, oil and gas-derived sources should still remain the top energy sources to fuel most of the United States. The agency is forecasting a rise in the production of Liquefied Natural Gas (LNG) – which mainly comes from shale gas – by at least 35%! In summary, the threat of sanctions has already wiped out almost all Russian oil – at least 7% of global supply – from the world oil market. In the weeks or months to come, we can see sanctions on Russian oil exports create a boomerang effect on European economies, decreasing world market supply, increasing prices for industry, as well as even more rising expenses, and thus cost of living through a ripple effect. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Oil Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Sebastien BischeriOil & Gas Trading Strategist * * * * * The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
GBPUSD (Pound To US Dollar) Reaches Quite Old Levels

GBPUSD (Pound To US Dollar) Reaches Quite Old Levels

Alex Kuptsikevich Alex Kuptsikevich 08.03.2022 14:49
The British pound was down to a 16-month low at 1.3080 in the morning, having lost 2% last Thursday. The pressure on the British currency looks to be developing capital outflows from Europe on speculation that reduced energy and materials supplies from Russia will prove to be a shock to the region's economy in the near term. In addition, the British pound was probably influenced by technical factors yesterday and today. The single currency has been sharply oversold in recent days and the EURGBP approach of 0.8200 on Monday morning triggered a strong wave of buying, bringing the pair back above 0.8310. On Monday, the euro got visible support against a wide range of other currencies, from the Swiss franc to the New Zealand dollar. Interest in the euro was also supported on Tuesday by a rally in equities on EU plans to issue joint bonds. But these are also good fundamentals for the British currency, which often directly correlates to the stock market. Short-term, relatively strong oversold conditions in the British currency creates the potential for a technical bounce in the coming days and in the area of 1.30-1.31 to stop its decline, gaining strong buy support until the end of the week and further heading to 1.3350 by the end of the month.
S&P 500 (SPX) Plunges, Metals And Crude Oil Prices Go Up

S&P 500 (SPX) Plunges, Metals And Crude Oil Prices Go Up

Monica Kingsley Monica Kingsley 08.03.2022 15:41
S&P 500 indeed didn‘t reverse on Friday in earnest, and both tech and value sold off hard. Not much reason to be bullish thanks to credit markets performance either – the posture is very risk-off, and the rush to commodities goes on. With a little check yesterday on the high opening prices in crude oil and copper, but still. My favorite agrifoods picks of late, wheat and corn, are doing great, and the pressure within select base metals, is building up – such as (for understandable reasons) in nickel and aluminum. Look for more to come, especially there where supply is getting messed with (this doesn‘t concern copper to such a degree, explaining its tepid price gains). And I‘m not talking even the brightest spot, where I at the onset of 2022 announced that precious metals would be the great bullish surprise this year. Those who listened, are rocking and rolling – we‘re nowhere near the end of the profitable run! Crude oil is likely to consolidate prior steep gains, and could definitely continue spiking higher. Should it stay comfortably above $125 for months, that would lead to quite some demand destruction. Given that black gold acts as a „shadow Fed funds rate“, let‘s bring up yesterday‘s rate raising thoughts and other relevant snippets: (,,,) If TLT has a message to drive home after the latest Powell pronouncements, it‘s that the odds of a 50bp rate hike in Mar (virtual certainty less than two weeks ago, went down considerably) – it‘s almost a coin toss now, and as the FOMC time approaches, the Fed would probably grow more cautious (read dovish and not hawkish) in its assessments, no matter the commodities appreciation or supply chains status. Yes, neither of these, nor inflation is going away before the year‘s end – they are here to stay for a long time to come. Looking at the events of late, I have to dial back the stock market outlook when it comes to the degree of appreciation till 2022 is over – I wouldn‘t be surprised to see the S&P 500 to retreat slightly vs. the Jan 2022 open. Yes, not even the better 2H 2022 prospects would erase the preceding setback. Which stocks would do best then? Here are my key 4 tips – energy, materials, in general value, and smallcaps. But the true winners of the stagflationary period is of course going to be commodities and precious metals. And that‘s where the bulk of recent gains that I brought you, were concentrated in. More is to come, and it‘s gold and silver that are catching real fire here. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 didn‘t do at all well yesterday, and signs of a short-term bottom are absent. It‘s entirely possible that the brief upswing that I was looking to be selling into to start the week, has been not merely postponed. Credit Markets HYG is clearly on the defensive, and TLT reassessing rate hike prospects – yet, long-dated Treasuries still declined. There is no appetite to buy bonds, and that confirms my thesis of lower lows to be made still in Mar. Gold, Silver and Miners Precious metals keep doing great, and will likely continue rising no matter what the dollar does – last three days‘ experience confirms that. This is more than mere flight to safety - I‘m looking for further price gains as the upleg has been measured and orderly so far. Crude Oil Crude oil‘s opening gap had been sold into, but we haven‘t seen a reversal yesterday. The upswing can continue, and it would happen on high volatility. I don‘t think we have seen the real spike just yet. Copper For all the above reasons, copper isn‘t rising as fast as other base metals (one of the key engines of commodities appreciation). The run is respectable, and not overheated. $5.00 would remain quite a tough nut to crack – for the time being. Bitcoin and Ethereum Cryptos haven‘t made up their mind yet, but one thing is sure – they aren‘t acting as a safe haven. Given the extent of retreat from Mar highs, it means I‘m looking for not too spectacular performance in the days ahead. Summary S&P 500 missed an opportunity to rise (even if just to open the week on a positive note), and its prospects for today aren‘t way too much brighter. It‘s that practically nothing is giving bullish signals for paper assets, and the market breadth has understandably deteriorated. The rush into precious metals, dollar and commodities remains on – these are the pockets of strength, lifting to a very modest and hidden degree Treasuries as well (these are however reassessing the hawkish Fed prospects) at a time when global growth downgrades are starting to arrive. Pretty serious figures, let me tell you. As I wrote yesterday, stocks may even undershoot prior Thursday‘s lows, but I‘m not looking for that to happen. The sentiment is very negative already, the yield curve keeps compressing, commodities are rising relentlessly, and all we got is a great inflation excuse / smoke screen. Inflation is always a monetary phenomenon, and supply chain disruptions and other geopolitical events can and do exacerbate that. Just having a look at the rising dollar when rate hike prospects are getting dialed back, tells the full risk-off story of the moment, further highlighted by the powder keg that precious metals are. And silver isn‘t yet outperforming copper, which is something I am looking for to change as we go by. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold Tries to Hold Above $2000 - Hard Landing Ahead?

Gold Tries to Hold Above $2000 - Hard Landing Ahead?

Przemysław Radomski Przemysław Radomski 08.03.2022 16:02
  Gold has hit $2,000 but is still struggling to maintain that historical level. It has already tried 8 times - will the ninth attempt succeed? Many indications make this doubtful. Gold is attempting to break above the $2,000 milestone, and miners are trying to break above their declining resistance line. Will they manage to do so, and if so, how long will the rally last? Yesterday, gold didn’t manage to close above the $2,000 level and it’s making another attempt to rally above it in today’s pre-market trading. However, will it be successful? Given the RSI above 70 and the strength of the current resistance, it’s doubtful. In fact, nothing has changed with regard to this likelihood since yesterday, so what I wrote about it in the previous Gold & Silver Trading Alert remains up-to-date: Gold touched $2,000 in today’s pre-market trading, which is barely above its 2021 high and below its 2020 high. Crude oil is way above both analogous levels. In other words, gold underperforms crude oil to a significant extent, just like in 2003. Interestingly, back in 2003, gold topped when crude oil rallied about 40% from its short-term lows (the late-2002 low). What happened next in 2003? Gold declined, and the moment when crude oil started to visibly outperform gold was also the beginning of a big decline in gold stocks. That makes perfect sense on the fundamental level too. Gold miners’ share prices depend on their profits (just like it’s the case with any other company). Crude oil at higher levels means higher costs for the miners (the machinery has to be fueled, the equipment has to be transported, etc.). When costs (crude oil could be viewed as a proxy for them) are rising faster than revenues (gold could be viewed as a proxy for them), miners’ profits appear to be in danger; and investors don’t like this kind of danger, so they sell shares. Of course, there are many more factors that need to be taken into account, but I just wanted to emphasize one way in which the above-mentioned technical phenomenon is justified. Back in 2003, gold stocks wiped out their entire war-concern-based rally, and the biggest part of the decline took just a bit more than a month. Let’s remember that back then, gold stocks were in a very strong medium- and long-term uptrend. Right now, mining stocks remain in a medium-term downtrend, so their decline could be bigger – they could give away their war-concern-based gains and then decline much more. Mining stocks are not declining profoundly yet, but let’s keep in mind that history rhymes – it doesn’t repeat to the letter. As I emphasized previously today, back in 2003 and 2002, the tensions were building for a longer time, and it was relatively clear in advance that the U.S. attack was going to happen. This time, Russia claimed that it wouldn’t attack until the very last minute before the invasion. Consequently, the “we have to act now” is still likely to be present, and the dust hasn’t settled yet – everything appears to be unclear, and thus the markets are not returning to their previous trends. Yet. However, as history shows, that is likely to happen. Either immediately, or shortly, as crude oil is already outperforming gold. The above chart features the GDXJ ETF. As you can see, the junior miners moved to their very strong resistance provided by the declining resistance line. This resistance is further strengthened by the 38.2% Fibonacci retracement, and the previous (late-2021) high. This means that it’s particularly strong, and any breakout here would likely be invalidated shortly. Given the clear sell signal from the RSI indicator, a turnaround here is even more likely. I marked the previous such signals to emphasize their efficiency. When the RSI was above 70, a top was in 6 out of 7 of the recent cases, and the remaining case was shortly before the final top, anyway. This resistance seems to be analogous to the $2,000 level in gold. By the way, please note that gold tried to break above $2,000 several times: twice in August 2020; twice in September 2020 (once moving above it, once moving just near this level); once in November 2020 (moving near this level); once in January 2021 (moving near this level); once in February 2022 (moving near this level). These attempts failed in each of the 7 cases mentioned above. This is the eight attempt. Will this very strong resistance break this time? Given how much crude oil has already soared, and how both markets used to react to war tensions in the case of oil-producing countries, it seems that the days of the rally are numbered. Moving back to the GDXJ ETF, please note that while gold is moving close to its all-time highs, the junior miners are not doing anything like that. In fact, they barely moved slightly above their late-2021 high. They are not even close to their 2021 high, let alone their 2020 high. Instead, junior mining stocks are just a bit above their early-2020 high, from which their prices were more than cut in half in less than a month. In other words, junior miners strongly underperform gold, which is a bearish sign. When gold finally declines – and it’s likely to, as geopolitical events tend to have only a temporary effect on prices, even if they’re substantial – junior miners will probably slide much more than gold. One of the reasons is the likely decline in the general stock market. I recently received a question about the impact the general stock market has on mining stocks, as the latter moved higher despite stocks’ decline in recent weeks. So, let’s take a look at a chart that will feature junior mining stocks, the GLD ETF, and the S&P 500 Index. Before the Ukraine crisis, the link between junior miners and the stock market was clear. Now, it's not as clear, but it’s still present. Juniors only moved to their late-2021 highs, while gold is over $100 above those highs. Juniors underperform significantly, in tune with the stock market's weakness. The gold price is still the primary driver of mining stock prices – including junior mining stocks. After all, that’s what’s either being sold by the company (that produces gold) or in the properties that the company owns and explores (junior miners). As gold prices exploded in the last couple of weeks, junior miners practically had to follow. However, this doesn’t mean that the stock market’s influence is not present nor that it’s going to be unimportant going forward. Conversely, the weak performance of the general stock market likely contributed to junior miners’ weakness relative to gold – the former didn’t rally as much as the latter. Since the weakness in the general stock market is likely to continue, and gold’s rally is likely to be reversed (again, what happened in the case of other military conflicts is in tune with history, not against it), junior miners are likely to decline much more profoundly than gold. Speaking of the general stock market, it just closed at the lowest level since mid-2021. The key thing about the above chart is that what we’ve seen this year is the biggest decline since 2020, and the size of the recent slide is comparable to what we saw as the initial wave down in 2020 – along with the subsequent correction. If these moves are analogous, the recent rebound was perfectly normal – there was one in early 2020 too. This also means that a much bigger decline is likely in the cards in the coming weeks, and that it’s already underway. This would be likely to have a very negative impact on the precious metals market, in particular on junior mining stocks (initially) and silver (a bit later). All in all, it seems that due to the technical resistance in gold and mining stocks, the sizable – but likely temporary (like other geopolitical-event-based-ones) – rally is likely to be reversed shortly. Then, as the situation in the general stock market deteriorates, junior miners would be likely to plunge in a spectacular manner. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Russia-Ukraine is there any hope for the markets

Russia-Ukraine is there any hope for the markets

Alex Kuptsikevich Alex Kuptsikevich 09.03.2022 11:23
The Russian rouble remains under pressure, while all the new controls on currency transactions in Russia are alienating the exchange rate at home and on global FX. The 12% commission on currency purchases explains the difference between the external and domestic exchange rates. That said, one must realise that "catching the bottom" of the ruble is hardly wise when new sanctions are imposed almost on a daily basis. The economic landslide continues with extreme speed. Across the other EM markets, there is a concern or even pessimism about the medium-term outlook, and some relative easing of the fear level is striking in the stock markets today. Commodity markets, which continued their move towards new extremes yesterday, have encountered substantial selling, which continues today. Some reduction in the excitement can be attributed to hopes of progress towards a peaceful resolution of the conflict between Russia and Ukraine.Nevertheless, the conditions already prevailing in commodity markets are putting serious pressure on EM equities and currencies. EM populations are more vulnerable to soaring basic food and energy prices and currencies to capital outflows due to flight to safety. All of this is tightening financial conditions is undermining the economic recovery that investors had hoped for at the start of the year because of the retreat of the pandemic. While the end of last year and the beginning of this one were sentiments that growth momentum was shifting from the US to Europe and emerging markets, events in recent weeks have not only returned EM markets to the downward trend but again show that US markets are the best refuge for capital. For example, Chinese indices are losing 35% (Hang Seng) to 43% (China H-star) from their February 2021 peak. And this trend will not quickly reverse even if the military conflict in Eastern Europe ends right now because economic and reputational damage has already been done, which will take months or even years to undo.
Stocks rebound slightly as hopes of a Russia-Ukraine deal increase

Stocks rebound slightly as hopes of a Russia-Ukraine deal increase

Walid Koudmani Walid Koudmani 09.03.2022 11:54
European stock markets started the day trading higher following a mixed Asian session which saw Nikkei drop 0.3% while S&P/ASX 200 gained 1% and as indices from China plunged and finished 1.7-5.0% lower. Meanwhile, the United States announced a total ban on Russian oil, natural gas and coal with the United Kingdom announcing that it will phase out Russian oil in the coming months. In response, Putin signed a decree banning exports of certain commodities from Russia and investors await the announcement within days to determine the potential impact on markets. Furthemore, a growing number of companies have announced their withdrawal from or suspension of services in Russia with McDonald's, Starbucks and Coca-Cola being the latest to make such announcements and isolating the country economically even more. While this rebound may encourage investors and increase confidence in the market, it is essential to keep in mind that any major news related to the ongoing conflict could have wide repercussions and may shake the extremely fragile market sentiment. Crypto markets rebound as sentiment improves ahead of Biden executive orderCryptocurrencies appeared to show signs of strength in the Asian session which have continued at the start of the European trading session with Bitcoin gaining over 8% and trading around $42,000, the highest level in a week. The crypto market cap is up over 6% today and has returned to around $1.85 Trillion after several days of uncertainty which followed the surge in demand seen at the beginning of the Russia-Ukraine conflict that was sparked by significant interest from people of that region as they attempted to seek refuge from the collapsing economy and currency. As has been the case in the past, Bitcoin and Ethereum appear to be dragging the rest of the market with the majority of alt-coins also adding to their gains despite generally lagging slightly behind the majors. Furthermore, US president Biden is expected to make an announcement today regarding an executive order on cryptocurrencies that may pave the way for a broader adoption of digital assets and boost investor confidence in the relatively new asset class. While details of this announcement remain unclear, any sign of regulation or mainstream adoption could prove to be a catalyst for a major move across the crypto markets thanks to the influx of new money of both retail and institutional investors.
How You Can Minimize Trading Risk & Grow Capital During A Global Crisis

How You Can Minimize Trading Risk & Grow Capital During A Global Crisis

Chris Vermeulen Chris Vermeulen 09.03.2022 22:39
To minimize trading risk and grow capital during a global crisis is somewhat hinged on the answers to speculative questions. How long will the Russia – Ukraine war last? How high is the price of oil and gas going to go? How quickly will central banks raise interest rates to counter high inflation? What assets should I put my money into? Knowing what the Best Asset Now (BAN) is, is critical for risk management and consistent growth no matter the market condition!‘BUY THE DIP’ or ‘SELL THE RALLY’? - DJI Weekly ChartAs of 3/8/22, YTD returns are: DJIA -10.20%, S&P 500 -12.49%, Nasdaq 100 -18.70%The Dow Jones Industrial Average traded as high as 36952.65 on January 5, 2022The DJIA put in a Covid 2020 Low of 18213.65 on March 23, 2020. When you double the price of this significant low, you get a price of 36427.30, which the DJIA reached on November 4, 2021. This was precisely 591 calendar days from the 2020 low. The 200% level seems to have capped the bull rally. If, in fact, this is the top and the start of a bear market, we should experience high volatility both up and down. However, the highs and lows should be lower as the market begins to trend lower. The volatility will also continue to increase as the market deflates and continues to lose capital.Sign up for my free trading newsletter so you don’t miss the next opportunity! It appears this scenario may very well coincide with the fundamental current events of high inflation, central banks unable to add stimulus, having to raise their interest rates, and current/future geopolitical events.What-To-Do Before the Storm Hits“Have A Plan and Stick-To-Your-Plan”There are some basic strategies or practices that professional traders utilize to minimize trading risk and grow capital. Here are a few ideas:Bull/Bear Markets – In an upmarket, you should buy the dips. In a down market, you should do the opposite and sell the rallies. Rallies in a down 'bear' market tend to be very fast and short-lived.Diversification – Don't have your eggs in too many baskets. It is better to navigate thru a storm by focusing your resources specifically rather than generally.Leverage – Reduce leverage, position size, or know how you will respond to different percentage losses or gains. Understand what your investment objective is as well as your tolerance for risk. If you're having trouble sleeping at night, you should reduce your holdings to the place where you are comfortable.Leverage is a mathematical equation, and it does not have to be 1x, 2x, etc. It can also be 0.75x, 0.50x, etc. You get to decide what's best for you and your family. Leverage is also a double-edged sword! Be careful, especially when the markets are on edge and volatile.Where is the Institutional Money Going?The global currency market, otherwise known as Forex or FX, is the largest market in the world. According to the BIS Triennial Central Bank Survey, published on December 8, 2019, by the Bank for International Settlements, it has an average daily transactional volume of $6.6 trillion.By tracking global money flow, we can get a pretty good idea of where the smart money is going. For now, let’s see what has happened during the last 6-months.According to www.finviz.com, we notice that the US Dollar, despite its Covid stimulus spending spree, was the preferred currency. However, the Eurodollar has seen substantial outflows decreasing by -7.60%, which is entirely understandable with the Russia – Ukraine War at their doorstep.Global central banks ponder how quickly to raise interest rates in order to curb high inflation!According to TradingEconomics, the current global interest rates by major country are: United States 0.25%, Japan -0.10%, Switzerland -0.75%, Euro Region 0.00%, United Kingdom 0.50%, Canada 0.50%, and Australia 0.10%.The US Federal Reserve may have been looking to raise interest rates by as much as 50 basis points at its next policy meeting. However, given Russia’s invasion of Ukraine, the FED may become more cautious and consider raising interest rates by only 25 basis points on March 15-16. We need to pay close attention to this high-impact market event.What strategies can help you minimize trading risk and grow capital?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Minimizing risk in order to grow your capital must remain a primary focus for all investors and traders. Now is the time to keep your eye on the ball!I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
How the latest CPI affected Bitcoin

How the latest CPI affected Bitcoin

Alex Kuptsikevich Alex Kuptsikevich 10.03.2022 15:19
Consumer prices in the USA rose by 0.8% in February as expected. Inflation for the same month a year earlier was 7.9% compared to 7.5% a month earlier and in line with average forecasts.Over the last 12 months, the actual data has exceeded the forecast ten times, so the stabilisation seen in February is regarded as cautiously good news. Previously, market participants had assumed that inflation would peak in February, but the latest round of commodity prices makes these forecasts overly optimistic. In peacetime, markets would have priced in more decisive monetary policy tightening moves by the Fed. However, investors have recently discounted expectations of a rate hike by 50 points, contrary to a jump in commodity prices. The markets assume that the Fed will be much more cautious in tightening policy. This thesis is doubly true against the background of falling government bond yields and widening spreads between them and high-yield bonds.When the Fed has limited capacity to respond to inflation, this is bad news for the dollar because it undermines its long-term prospects for maintaining purchasing power. In this regard, the impulsive pressure on the US currency immediately after the release should not be surprising.Long term, this is also good news for bitcoin, which is not subject to inflation. However, the short-term reaction could well be mixed, as fears of a new stock market decline are also added to this cocktail, as stocks "don't like" accelerating inflation.
S&P 500 – Should We Buy the Dip? - 10.03.2022

S&P 500 – Should We Buy the Dip? - 10.03.2022

Arkadiusz Sieron Arkadiusz Sieron 10.03.2022 15:40
  Stock prices remain very volatile, as the Ukraine conflict keeps dominating headlines. Will the market reverse its downtrend? The S&P 500 index gained 2.57% on Wednesday, Mar. 9, as it retraced some of the recent decline. The broad stock market’s gauge got back to the 4,300 level after bouncing from its Tuesday’s low of 4,157.87. On Feb. 24 the index fell to the local low of 4,114.65 and it was 704 points or 14.6% below the January 4 record high of 4,818.62. There’s still a lot of uncertainty concerning the ongoing Ukraine conflict. This morning the S&P 500 index is expected to open 1.3% lower and we may see further consolidation. The nearest important resistance level is now at 4,300, and the next resistance level is at 4,350-4,400, among others. On the other hand, the support level remains at 4,150-4,200. The S&P 500 index continues to trade above the recently broken downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract – More Consolidation Let’s take a look at the hourly chart of the S&P 500 futures contract. Recently it broke below the short-term consolidation. On Tuesday it fell to around 4,150, before bouncing back to the 4,200-4,250 level. We are still maintaining our long position, as we are expecting an upward correction from the current levels (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index bounced yesterday, but this morning it is expected to open lower. We will likely see some more news-driven volatility. For now, it looks like an upward correction but it may also be a more meaningful upward reversal. Here’s the breakdown: The S&P 500 index retraced some of the recent decline, but we may see more volatility. We are maintaining our long position. We are expecting an upward correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Crypto Update: Bitcoin Price Has Decreased By 1%, ETH Hasn't Fluctuate Much. XRP Has Gone Up By 1.6%

Crypto Update: Bitcoin Price Has Decreased By 1%, ETH Hasn't Fluctuate Much. XRP Has Gone Up By 1.6%

Alex Kuptsikevich Alex Kuptsikevich 11.03.2022 08:37
Bitcoin fell 5.4% on Thursday, ending the day near $39.6K, and further to $38.9K on Friday morning, down 1% in 24 hours. Ethereum has remained almost unchanged over the same time (-0.3%), while other leading altcoins from the first are changing in different directions, from a 1.6% increase (XRP) to a 1% decrease (BNB). According to CoinMarketCap, the total capitalization of the crypto market sank by 0.2% over the day to $1.74 trillion. The bitcoin dominance index continues to decline, falling from 42.7% yesterday to 42.4% due to the greater stability of altcoins. The crypto-currency index of fear and greed lost 6 points in a day to 22, again entering the territory of "extreme fear". Bitcoin fully returned the growth of Wednesday, which was caused by the adoption in the United States of the first document on the regulation of cryptocurrencies. The decline in stock indices and the growth of the dollar also did not favour the purchases of the first cryptocurrency, which often moves in unison with the general demand for risks. The first decree on cryptocurrencies signed the day before can become the basis for future US legislation on regulating relations in the crypto sphere. Against this background, the shares of companies associated with cryptocurrencies have noticeably risen in price. One of the largest investment banks, Goldman Sachs, is going to expand its offering for trading digital assets. The bank is exploring the possibility of launching bilateral crypto-currency options. World-famous investor and writer Robert Kiyosaki has warned that the world economy is now on the verge of hyperinflation and advised to "stay away" from the stock market. Against the backdrop of a severe crisis in the financial system of the Russian Federation and restrictions imposed on the circulation of the dollar and the euro, the demand of the population for cryptocurrency has increased sharply. Now it is primarily used for the transfer of capital abroad or for parking in "hard" currency. Analysts believe that regulators are unlikely to be able to effectively prevent such transactions. But the state is helped by crypto-exchanges, which block the Russians on their own initiative. There remain the possibilities of p2p platforms, that is, transfers between individuals. However, there are significant risks of fraud associated with such transactions.
Now, That‘s Better

Now, That‘s Better

Monica Kingsley Monica Kingsley 11.03.2022 15:59
S&P 500 gave up the opening gains, but managed to close on a good note, in spite of credit markets not confirming. Given though the high volume characterizing HYG downswing and retreating crude oil, we may be in for a stock market led rebound today. It‘s that finally, value did much better yesterday than tech.CPI came red hot, but didn‘t beat expectations, yield curve remains flat as a pancake, and the commodity index didn‘t sell off too hard. It remains to be seen whether the miners‘ strength was for real or not – anyway, the yesterday discussed shallow $1,980 - $2,000 range consolidation still remains the most likely scenario. I just don‘t see PMs and commodities giving up a lion‘s share of the post Feb 24 gains next.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 can still turn around, and the odds of doing so successfully (till the closing bell today), have increased yesterday. The diminished volume points to no more sellers at this point while buyers are waiting on the sidelines.Credit MarketsHYG has only marginally closed below Tuesday‘s lows – corporate junk bonds can reverse higher without overcoming Wednesday‘s highs fast, which would still be constructive for a modest S&P 500 upswing.Gold, Silver and MinersPrecious metals are indeed refusing to swing lower too much – the sector remains excellently positioned for further gains. For now though, we‘re in a soft patch where the speculative fever is slowly coming out, including out of other commodities. Enter oil.Crude OilCrude oil still remains vulnerable, but would catch a bid quite fast here. Ideally, black gold wouldn‘t break down into the $105 - $100 zone next. I‘m looking for resilience kicking in soon.CopperCopper fake weakness is being reversed, and the red metal is well positioned not to break below Wednesday‘s lows. I‘m not looking for selloff continuation in the CRB Index either.Bitcoin and EthereumCryptos remain undecided, and erring on the side of caution – this highlights that the risk appetite‘s return is far from universal.SummaryS&P 500 missed a good opportunity yesterday, but the short-term bullish case isn‘t lost. Stocks actually outperformed credit markets, and given the commodities respite and value doing well, bonds may very well join in the upswing, with a notable hesitation though. That wouldn‘t be a short-term obstacle, take it as the bulls temporarily overpowering the bears – I still think that the selling isn‘t over, and that the downswing would return in the latter half of Mar if (and that‘s a big if) the Fed‘s response to inflation doesn‘t underwhelm the market expectations that have been dialed back considerably over the last two weeks. Token 25bp rate hike, anyone? That wouldn‘t sink stocks dramatically...Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Gold Likes Recessions - Could High Interest Rates Lead to One?

Gold Likes Recessions - Could High Interest Rates Lead to One?

Finance Press Release Finance Press Release 11.03.2022 16:52
We live in uncertain times, but one thing is (almost) certain: the Fed’s tightening cycle will be followed by an economic slowdown – if not worse.There are many regularities in nature. After winter comes spring. After night comes day. After the Fed’s tightening cycle comes a recession. This month, the Fed will probably end quantitative easing and lift the federal funds rate. Will it trigger the next economic crisis?It’s, of course, more nuanced, but the basic mechanism remains quite simple. Cuts in interest rates, maintaining them at very low levels for a prolonged time, and asset purchases – in other words, easy monetary policy and cheap money – lead to excessive risk-taking, investors’ complacency, periods of booms, and price bubbles. On the contrary, interest rate hikes and withdrawal of liquidity from the markets – i.e., tightening of monetary policy – tend to trigger economic busts, bursts of asset bubbles, and recessions. This happens because the amount of risk, debt, and bad investments becomes simply too high.Historians lie, but history – never does. The chart below clearly confirms the relationship between the Fed’s tightening cycle and the state of the US economy. As one can see, generally, all recessions were preceded by interest rate hikes. For instance, in 1999-2000, the Fed lifted the interest rates by 175 basis points, causing the burst of the dot-com bubble. Another example: in the period between 2004 and 2006, the US central bank raised rates by 425 basis points, which led to the burst of the housing bubble and the Great Recession.One could argue that the 2020 economic plunge was caused not by US monetary policy but by the pandemic. However, the yield curve inverted in 2019 and the repo crisis forced the Fed to cut interest rates. Thus, the recession would probably have occurred anyway, although without the Great Lockdown, it wouldn’t be so deep.However, not all tightening cycles lead to recessions. For example, interest rate hikes in the first half of the 1960s, 1983-1984, or 1994-1995 didn’t cause economic slumps. Hence, a soft landing is theoretically possible, although it has previously proved hard to achieve. The last three cases of monetary policy tightening did lead to economic havoc.It goes without saying that high inflation won’t help the Fed engineer a soft landing. The key problem here is that the US central bank is between an inflationary rock and a hard landing. The Fed has to fight inflation, but it would require aggressive hikes that could slow down the economy or even trigger a recession. Another issue is that high inflation wreaks havoc on its own. Thus, even if untamed, it would lead to a recession anyway, putting the economy into stagflation. Please take a look at the chart below, which shows the history of US inflation.As one can see, each time the CPI annul rate peaked above 5%, it was either accompanied by or followed by a recession. The last such case was in 2008 during the global financial crisis, but the same happened in 1990, 1980, 1974, and 1970. It doesn’t bode well for the upcoming years.Some analysts argue that we are not experiencing a normal business cycle right now. In this view, the recovery from a pandemic crisis is rather similar to the postwar demobilization, so high inflation doesn’t necessarily imply overheating of the economy and could subsidy without an immediate recession. Of course, supply shortages and pent-up demand contributed to the current inflationary episode, but we shouldn’t forget about the role of the money supply. Given its surge, the Fed has to tighten monetary policy to curb inflation. However, this is exactly what can trigger a recession, given the high indebtedness and Wall Street’s addiction to cheap liquidity.What does it mean for the gold market? Well, the possibility that the Fed’s tightening cycle will lead to a recession is good news for the yellow metal, which shines the most during economic crises. Actually, recent gold’s resilience to rising bond yields may be explained by demand for gold as a hedge against the Fed’s mistake or failure to engineer a soft landing.Another bullish implication is that the Fed will have to ease its stance at some point in time when the hikes in interest rates bring an economic slowdown or stock market turbulence. If history teaches us anything, it is that the Fed always chickens out and ends up less hawkish than it promised. In other words, the US central bank cares much more about Wall Street than it’s ready to admit and probably much more than it cares about inflation.Having said that, the recession won’t start the next day after the rate liftoff. Economic indicators don’t signal an economic slump. The yield curve has been flattening, but it’s comfortably above negative territory. I know that the pandemic has condensed the last recession and economic rebound, but I don’t expect it anytime soon (at least rather not in 2022). It implies that gold will have to live this year without the support of the recession or strong expectations of it.Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care.
DAX (GER 40) And FTSE100 (UK100) Has Increased, Crude Oil Price And Price Of Gold Declines

DAX (GER 40) And FTSE100 (UK100) Has Increased, Crude Oil Price And Price Of Gold Declines

Walid Koudmani Walid Koudmani 14.03.2022 11:53
European stock markets started the week trading higher following some positive news surrounding the talks between Russia and Ukraine as officials announced that some progress was being made and potential compromises were on the table. This positive sentiment carried over despite news of a major lockdown in a city in China caused by a surge in covid-19 cases over the weekend and as a meeting is expected today in Rome between US and Chinese officials to discuss the conflict. The German Dax is up around 3% and has managed to briefly break through a resistance area after sentiment was significantly impacted by the rising tension which threatened to severely disrupt European economies. Meanwhile the UK’s FTSE100 is also gaining as PM Boris Johnson is due to travel to Saudi Arabia to meet prince Mohammed bin Salman to discuss a potential increase in oil supplies to offset the foregone Russian supplies. While there is a lack of data releases today, markets remain extremely susceptible to volatility as any major news relating to the conflict could trigger major moves which would echo across asset classes and trigger investor panic. Oil and Gold retreat as hopes for peace talks spark optimism After the massive rally which took oil and gold prices near their all time highs, we have seen the situation improve slightly over the last few days as markets began to receive some encouraging news regarding the prospect for a potential deal between the russians and ukranians. Tensions and rising supply concerns took the prices of those commodities to the highest levels in years as investors looked for a safe haven amid rising uncertainty and as they anticipated significant disruption in the oil market due to the unavailability of Russian supplies. However, at the start of the week the situation appears to be improving even more with oil prices back towards $100 a barrel while gold dropped over $100 from its recent high and is trading around $1960. While this situation may not last very long, as any major event could trigger a spike in both once again, it does provide some encouraging signs that if the situation continues to show signs of resolution markets could adjust quite rapidly.
Credit Markets Keeps Downward Move, S&P 500 (SPX) Trades Lower Than Usual, Bitcoin (BTC) Price Is... Quite Stable (Sic!)

Credit Markets Keeps Downward Move, S&P 500 (SPX) Trades Lower Than Usual, Bitcoin (BTC) Price Is... Quite Stable (Sic!)

Monica Kingsley Monica Kingsley 14.03.2022 13:09
S&P 500 bulls again missed the opportunity, and credit markets likewise. Not even the virtual certainty of only 25bp hike in Mar is providing much relief to the credit markets. Given that the real economy is considerably slowing down and that recession looks arriving before Q2 ends, the markets continue forcing higher rates (reflecting inflation). In a risk-on environment, value and cyclicals such as financials would be reacting positively, but that‘s not the case right now. At the same time, equal weighted S&P 500 (that‘s RSP) hasn‘t yet broken below its horizontal support above $145, meaning its posture isn‘t as bad as in the S&P 500. Should it however give, we‘re going considerably below 4,000. That‘s why today‘s article is titled hanging by a thread. Precious metals and commodities continue consolidating, and the least volatile appreciation opportunity presents the red metal. And it‘s not only about copper – crude oil market is going through supply realignment, and demand is not yet being destroyed on a massive scale. Coupled with the long-term underinvestment in exploration and drilling (US is no longer such a key producer as was the case in 2019), crude oil prices would continue rising on fundamentals, meaning the appreciation pace of Feb-Mar would slow down. Precious metals would have it easy next as the Fed is bound to be forced to make a U-turn in this very short tightening cycle (they didn‘t get far at all, and inflation expectations have in my view become unanchored already). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bears won the day, and Nasdaq remains in a sorry state. 4,160s are the line in the sand, breaking which would accelerate the downswing. Inflation is cutting into the earnings, and stocks aren‘t going to like the coming Fed‘s message. Credit Markets HYG didn‘t keep at least stable – the pressure in the credit markets is ongoing, and the stock market bulls don‘t have much to rejoice over here. Gold, Silver and Miners Precious metals downswings are being bought, and are shallow. The sellers are running out of steam, and the opportunity to go somewhat higher next, is approaching. Crude Oil Crude oil is stabilizing, but it may take some time before the upswing continues with renewed vigor. As for modest extension of gains, we won‘t be disappointed. Copper Copper had one more day of fake weakness, but the lost gains of Friday would be made up for next – and given no speculative fever here to speak of, it would have as good lasting power as precious metals. Bitcoin and Ethereum Cryptos remain undecided, but indicate a little breathing room, at least for today. Still, I wouldn‘t call it as risk-on constellation throughout the markets. Summary S&P 500 is getting in a precarious position, but the internals aren‘t (yet) a screaming sell. Credit markets continue leading lower, and the risk-off positioning is impossible to miss. Not even financials are able to take the cue, and rise. It‘s that the rise in yields mirrors the ingrained inflation, and just how entrenched it‘s becoming. No surprise if you were listening to me one year ago – the Fed‘s manouevering room got progressively smaller, and the table is set for the 2H 2022 inflation respite (think 5-6% year end on account of recessionary undercurrents) to be superseded with even higher inflation in 2023, because the Fed would be forced later this year to turn back to easing. Long live the precious metals and commodities super bulls! Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
Are Current Market Cycles Similar To The GFC Of 2007–2009?

Are Current Market Cycles Similar To The GFC Of 2007–2009?

Chris Vermeulen Chris Vermeulen 14.03.2022 16:14
Soaring real estate, rising volatility, surging commodities and slumping stocks - Sound Familiar?This past week marked the 13th anniversary of the bottom of the Global Financial Crisis (GFC) of 2007-2009. The March 6, 2009 stock market low for the S&P 500 marked a staggering overall value loss of 51.9%.The GFC of 2007-09 resulted from excessive risk-taking by global financial institutions, which resulted in the bursting of the housing market bubble. This, in turn, led to a vast collapse of mortgage-back securities resulting in a dramatic worldwide financial reset.Sign up for my free trading newsletter so you don’t miss the next opportunity! IS HISTORY REPEATING ITSELF?The following graph shows us that precious metals and energy outperform the stock market as the ‘Bull’ cycle reaches its maturity. The stock market is always the first to lead, the second being the economy, and the third, being the commodity markets. But history has shown that commodity markets can move up substantially as the stock market ‘Bull’ runs out of steam.The current commodities rally in Gold began August 2021, Crude Oil April 2020, and Wheat in January 2022. Interestingly we started seeing capital outflows in the SPY-SPDR S&P 500 Trust ETF in early January 2022, and the DRN-Direxion Daily Real Estate Bull 3x Shares ETF starting back in late December 2021.LET’S SEE WHAT HAPPENED TO THE STOCK AND COMMODITY MARKETS IN 2007-2008SPY - SPDR S&P 500 TRUST ETFFrom August 17, 2007 to July 3, 2008: SPDR S&P 500 ETF Trust depreciated -20.12%The State Street Corporation designed SPY for investors who want a cost-effective and convenient way to invest in the price and yield performance of the S&P 500 Stock Index. According to State Street’s website www.ssga.com, the Benchmark, the S&P 500 Index, comprises selected stocks from five hundred (500) issuers, all of which are listed on national stock exchanges and span over approximately 24 separate industry groups.DBC – INVESCO DB COMMODITY INDEX TRACING FUND ETFFrom August 17 2007 to July 3, 2008: Invesco DB Commodity Index Tracking Fund appreciated +96.81%Invesco designed DBC for investors who want a cost-effective and convenient way to invest in commodity futures. According to Invesco’s website www.invesco.com, the Index is a rules-based index composed of futures contracts on 14 of the most heavily traded and important physical commodities in the world.BE ALERT: THE US FEDERAL RESERVE POLICY MEETING IS THIS WEEK!In February, the inflation rate rose to 7.9% as food and energy costs pushed prices to their highest level in more than 40 years. If we exclude food and energy, core inflation still rose 6.4%, which was the highest since August 1982. Gasoline, groceries, and housing were the most significant contributors to the CPI gain. The consumer price index is the price of a weighted average market basket of consumer goods and services purchased by households.The FED was expected to raise interest rates by as much as 50 basis points at its policy meeting this week, March 15-16. However, given the recent world events of the Russia – Ukraine war in Europe, the FED may decide to be more cautious and raise rates by only 25 basis points.HOW WILL RISING INTEREST RATES AFFECT THE STOCK MARKET?As interest rates rise, the cost of borrowing becomes more expensive. Rising interest rates tend to affect the market immediately, while it may take about 9-12 months for the rest of the economy to see any widespread impact. Higher interest rates are generally negative for stocks, with the exception of the financial sector.WILL RISING INTEREST RATES BURST OUR HOUSING BUBBLE?It is too soon to tell exactly what the impact of rising interest rates will be regarding housing. It is worth noting that in a thriving economy, consumers continue buying. However, in our current economy, where the consumers' monthly payment is not keeping up with the price of gasoline and food, it is more likely to experience a leveling off of residential prices or even the risk of a 2007-2009 repeat of price depreciation.THE POTENTIAL FOR OUTSIZED GAINS IN A BEAR MARKET ARE 7X GREATER THAN A BULL MARKET!The average bull market lasts 2.7 years. From the March low of 2009, the current bull market has established a new record as the longest-running bull market at 12 years and nine months. The average bear market lasts just under ten months, while a few have lasted for several years. It is worth noting that bear markets tend to fall 7x faster than bull markets go up. Bear markets also reflect elevated levels of volatility and investor emotions which contribute significantly to the velocity of the market drop.WHAT STRATEGIES CAN HELP YOU NAVIGATE CURRENT MARKET TRENDS?Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24 months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe we are seeing the markets beginning to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into metals, commodities, and other safe havens.IT'S TIME TO GET PREPARED FOR THE COMING STORM; UNDERSTAND HOW TO NAVIGATE THESE TYPES OF MARKETS!I invite you to learn more about how my three Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Have Stocks Reached the Bottom?

Have Stocks Reached the Bottom?

Paul Rejczak Paul Rejczak 15.03.2022 14:44
  The S&P 500 index extended its Friday’s decline yesterday, but it remained within a week-long volatile consolidation. Is this a medium-term bottoming pattern? The broad stock market index lost 0.74% on Monday, Mar. 14, after its Friday’s decline of 1.3%. The market bounced from the short-term resistance level of 4,300 and it extended a volatile consolidation following the early March sell-off from the 4,400 level. Last week on Tuesday it reached the local low of 4,157.87 and then we’ve seen a rebound to the 4,300 level. Yesterday the S&P 500 came back below the 4,200 level again. The market is closer to the Feb. 24 local low of 4,114.65. It was 704 points or 14.6% below the January 4 record high of 4,818.62 then. There’s still a lot of uncertainty concerning the ongoing Ukraine conflict. This morning the S&P 500 index is expected to open 0.5% higher following lower than expected Producer Price Index release. The market will be waiting for the important tomorrow’s FOMC Statement release, and we may see some further consolidation. The nearest important resistance level is now at around 4,200. On the other hand, the support level is at 4,100-4,150. The S&P 500 index continues to trade slightly above the recently broken downward trend line, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract Trades Along the Previous Lows Let’s take a look at the hourly chart of the S&P 500 futures contract. Today it is bouncing from the 4,140 level. It’s a support level marked by the previous local low. The support level is also at 4,100. We are still maintaining our long position, as we are expecting an upward correction from the current levels (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index will likely bounce this morning following better-than-expected producers’ inflation data release. The market may extend its volatile consolidation and we may see more uncertainty, as investors will be waiting for the Wednesday’s FOMC Statement release. Here’s the breakdown: The S&P 500 index will likely bounce this morning, but we may see some more short-term uncertainty. We are maintaining our long position (opened on Feb. 22). We are still expecting an upward correction from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
(XAUUSD) Price Of Gold And Price Of Silver (XAGUSD) Decreases...

(XAUUSD) Price Of Gold And Price Of Silver (XAGUSD) Decreases...

Przemysław Radomski Przemysław Radomski 15.03.2022 14:12
  In line with predictions, gold is ceasing to benefit from war-fueled uncertainty. Meanwhile, silver faked another breakout. Could it be more bearish?  Last week’s powerful, huge-volume reversal in gold was likely to be followed by declines. It was – but that’s just the beginning. Yesterday’s $24 decline might seem significant on a day-to-day basis, but compared to last week’s enormous reversal, it’s really tiny. The modest extent of yesterday’s decline is by no means bullish – my emphasis on the small size of the decline so far should be viewed as an indication that much more is likely on the horizon. Besides, gold was down by about $20 in today’s pre-market trading. As I wrote yesterday, gold’s breakout above $2,000 was officially invalidated, and given the weekly reversal, it seems that the war-uncertainty-based rally is over. The decisive move below 70 in the RSI indicator after it was trading above 70 clearly confirms that the top is already behind us. Just like it was in 2020 and 2021 when similar things happened, history appears to have rhymed. On Friday, I wrote the following: Gold’s move of $0.40 (yes, forty cents) above $2,000 is not important as the breakout above this level was just invalidated the previous day. Technically, this is another attempt to break above this level, which is likely to be invalidated based on what we see in today’s pre-market trading. The fact that I would like to emphasize today is that this kind of small rebound after the initial slide is common and perfectly normal for gold. We saw exactly the same thing right after gold’s 2020 top and after its 2021 top, and also two more times in 2021 (as marked on the above chart). This means that yesterday’s upswing is not particularly bullish. It’s a normal post-top reaction. Lower gold values are to be expected. Silver declined yesterday, and it closed the day below its late-2021 high. In other words, the breakout above this level was invalidated. This is a strong bearish confirmation from the white metal. The white metal just invalidated the move above its 61.8% Fibonacci retracement. That’s bearish on its own, but let’s keep in mind that it happened right after silver outperformed gold. Last Tuesday, the GDXJ ETF was up by less than 1%, gold was up by 2.37%, and silver was up by 4.57%. Silver’s outperformance and miners’ underperformance is what we tend to see right at the tops. That’s exactly what it was – a top. Silver declined profoundly, and the attempt to break above its 61.8% Fibonacci retracement level will soon be just a distant (in terms of price) memory. On a medium-term basis, silver was simply weak relative to gold, but we saw short-term outperformance. In short, that was and continues to be bearish. As far as silver’s big picture is concerned, please note that it also provides us with a confirmation of the analogy between 2012 and now. At the turn of the year in 2011/2012, there was a cyclical turning point in silver, and we saw a sizable decline in silver shortly thereafter. The same happened in 2021, after silver’s cyclical turning point. Back in 2012, silver declined more or less to its previous lows and then rallied back up, but it didn’t reach its previous top. It more or less rallied to its 50-week moving average and then by about the same amount before topping. Recently, we saw exactly the same thing. After the initial decline, silver bottomed close to its previous lows, and most recently it rallied to its 50-week moving average and then by about the same amount before topping – below the previous high. Thus, the situation is just like what it was during the 2012 top in all three key components of the precious metals sector: gold, silver, and mining stocks. We have a situation in the general stock market that points to an even quicker slide than what we saw in 2012-2013. If stocks slide sharply and significantly just like in 2008, then the same fate may await the precious metals sector – just like in 2008. In this case, silver and mining stocks (in particular, junior mining stocks) would be likely to fall in a spectacular manner. All the above was confirmed by silver’s invalidation of its breakout above the late-2021 high. Not only has the medium-term outlook been bearish, but now the short-term outlook for silver is bearish too. Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today. Przemyslaw Radomski, CFAFounder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care * * * * * All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)

Hang Seng Climbs And Adds 6%, China A50 Gains Ca. 6.5%

Alex Kuptsikevich Alex Kuptsikevich 16.03.2022 10:01
Chinese indices are experiencing their sharpest rally yet on Wednesday amid reassurances from officials that the stock market is going to be supported. Hong Kong’s Hang Seng is up 6%, China’s China A50 is gaining more than 6.5%, while China H-shar is soaring by 12%. These indices have been under increased pressure in recent weeks, getting maximum pressure this week.  On Tuesday, major Chinese indices fell fastest since March 2020, rewriting multi-year lows. Market support from officials came a day after the release of upbeat macro data, indicating a jump in retail sales and industrial production. At the same time, stock market dynamics fundamentally diverged from the economy, and there was a near point where stock volatility was already causing material disruption to the economy.  The China H-shar gained support today after sinking to the lows of late 2008, losing more than half of its price in just over a year of steady decline. The Hans Seng index touched lows since 2016 and areas of market support in 2012 at the peak of Tuesday’s decline. However, Chinese policymakers have worked hard to prevent the sell-off from turning into a self-sustaining spiral over the past two days. Yesterday’s China-US talks saw a positive reaction from the sides, forming a more than 4.5% bounce for the HangSeng during the European trading session.  This momentum was boosted on Wednesday morning after Vice Premier Liu He indicated that China is considering a package of measures to support the economy and financial markets. Soon the People’s Bank of China stated that it would help the stock market with other agencies.  Such words send a message to the market that the levels reached yesterday are a pain point for the Chinese authorities, from where they are ready to step up efforts to support the markets. Yesterday we likely saw the bottom of the Chinese indices for many months to come, despite potentially negative for stock prices rate hikes by the Fed and other major central banks for the equity market. There seems to be too much pessimism and wariness embedded in Chinese valuations after more than a year of declines.
Snowball‘s Chance in Hell

Snowball‘s Chance in Hell

Monica Kingsley Monica Kingsley 16.03.2022 15:40
S&P 500 is turning around, and odds are that would be so till the FOMC later today. The pressure on Powell to be really dovish, is on. I‘m looking for a lot of uncerrtainty and flexibility introduction, and much less concrete rate hikes talk that wasn‘t sufficient to crush inflation when the going was relatively good, by the way.As stated yesterday:(…) The rising tide of fundamentals constellation favoring higher real asset prices, would continue kicking in, especially when the markets sense a more profound Fed turn than we saw lately with the 50bp into 25bp for Mar FOMC. Make no mistake, the inflation horse has left the barn well over a year ago, and doesn‘t intend to come back or be tamed.Not that real assets including precious metals would be reversing on a lasting basis here – the markets are content that especially black gold keeps flowing at whatever price, to whatever buyer(s) willing to clinch the deal. Sure, it‘s exerting downward pressure on the commodity, but I‘m looking for the extraordinary weakness to be reversed.We‘re seeing such a reversal in commodities already, and precious metals have a „habit“ of joining around the press conference. Yesterday‘s performance of miners and copper, provides good enough a hint.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 upswing looks like it can go on for a while. Interestingly, it was accompanied by oil stocks declining – have we seen THE risk-on turn? This looks to be a temporary reprieve unless the Fed really overdelivers in dovishness.Credit MarketsHYG is catching some bid, and credit markets are somewhat supporting the risk-on turn. Yields though don‘t look to have put in a top just yet, which means the stock market bears would return over the coming days.Gold, Silver and MinersPrecious metals are looking very attractive, and the short-term bottom appears at hand – this is the way they often trade before the Fed. I‘m fully looking for gold and silver to regain initiative following the cautious and dovish Fed tone.Crude OilCrude oil didn‘t test the 50-day moving average, and I would expect the bulls to step in here – after all, the Fed can‘t print oil, and when they go dovish, the economy just doesn‘t crash immediately...CopperCopper is refusing to decline, and the odd short-term weakness would be reversed – and the same goes for broader commodities, which have been the subject of my recent tweet.Bitcoin and EthereumCryptos aren‘t fully risk-on, but cautiously giving the bulls benefit of the doubt. Not without a pinch of salt, though.SummaryS&P 500 bulls are on the (short-term) run, and definitely need more fuel from the Fed. Significant dovish turn – they would get some, but it wouldn‘t be probably enough to carry risk-on trades through the weekend. The upswing is likely to stall before that, and commodities with precious metals would catch a fresh bid already today. This would be coupled with the dollar not making any kind of upside progress to speak of. The true Fed turn towards easing is though far away still (more than a few months away) – the real asset trades are about patience and tide working in the buyers favor. The yield curve remains flat as a pancake, and more stagflation talk isn‘t too far...Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
The Commodities Feed: Anticipating LNG Strike Action and Market Dynamics

AMC Stock Price: AMC Entertainment spikes 8% on Wednesday

FXStreet News FXStreet News 17.03.2022 08:29
AMC stock gains on Tuesday as equities and growth stocks rally. More gains are likely on Wednesday for AMC shares as peace hopes rise for Ukraine. AMC Entertainment also saw increased attention from its investment in Hycroft Mining. AMC shares are up 8% to $15.65 as better prospects for peace in Ukraine seem to be lifting up the entire market. The Nasdaq has risen an optimistic 2.7% about one hour into Wednesday's session. Further positivity is in motion with the start of the Federal Reserve's Federal Open Market Committee two-day meeting that is expected to usher in a 25 basis point rise in the fed funds rate. The rise in interest rates should slow this year's hike in inflation. This price action is certainly exciting for AMC apes, who have witnessed AMC stock drop to the low $13s earlier this week. AMC Entertainment did benefit in Tuesday's afternoon session from its acquisition of Hycroft Mining, but it seems the stock is gaining more interest on Wednesday for this buy. Now its acquisition target, HYMC, has seen its shares go in the opposite direction on Wednesday. HYMC stock is trading down 9% at $1.37 at the time of writing. AMC stock closed higher on Tuesday as investors took comfort from the continued collapse in oil prices and hoped for some form of peace in Ukraine. It was oil that was the big driver for equity markets, and growth stock, in particular, bounced hard as this sector had seen the bigger losses since the year began. It is hard to see guess whether this movie can be sustained long term though as yields have once again moved up. This should stall growth stocks. A peace deal would see further gains for all sectors, but then these may be capped if yields keep rising. The Fed decision later on Wednesday will give us more clarity on this. AMC Stock News The big news yesterday though for AMC apes was the investment in Hycroft Mining by AMC. This was right out of left field and remains a puzzling one to say the least. Hycroft Mining is a gold and silver miner with one mine in Nevada. The company has not turned a profit since 2013 and last November said it may need to raise capital to meet future financial obligations. The company also laid off over half of its workforce at the mine last November. This is a pretty high-risk investment and perhaps AMC and AMC apes are used to that. It was only a small outlet as CEO adam Aron alluded to. Nevertheless, the Hycroft Mining (HYMC) stock price soared as retail investors piled into the name. By the opening of the regular session on Tuesday, HYMC stock was trading nearly 100% higher, but it closed only 9% higher at $1.52 having traded up to $2.97. The reason for the dramatic turnaround was probably a bit of reality set into investors once they had a look at Hycroft Mining and its financial condition. The main reason was a Bloomberg report saying that Hycroft Mining could do a $500 million share sale by as early as next Tuesday. We understand the sale is ongoing and being led by B.Riley Securities. AMC Stock Forecast We were quite negative on this deal on Tuesday and remain so. At least it is not a big investment for AMC, but it still reads poorly. This will not endear AMC stock to further credibility in our view. CNBC carried out a report yesterday about the surge in price and volume trading in HYMC stock before the AMC announcement: "Small mining firm with troubled history saw big spikes in stock price, trading volume ahead of AMC deal." Tuesday's move took AMC back up to our resistance level at $14.54, which was a key breakdown level. Below this and AMC remains bearish. Above $14.54 is neutral. We remain bearish on AMC with a target price of $8.95. AMC stock chart, daily Prior Update: AMC stock opened higher on Wednesday as the stock market remains on edge over the potential for some form of a peace deal in Ukraine. Oil prices falling sharply has also helped investor sentiment. AMC is currently trading at $14.77 for a gain of exactly 2% after 5 minutes of the regular session on Tuesday. Hycroft Mining (HYMC) stock is trading 4% lower at the same stage on Wednesday. Later we get the Fed interest rate decision which may hamper more progress from growth stocks but for now, it is full steam ahead. AMC is back among the top trending stocks on social media sites and interest seems high. $14.54 remains a key level for AMC to hold above if it wants to have put a bottom formation in place. Otherwise, it will return to the bearish trend and look to target $8.95 in our view.
The release of Chinese GDP, Bank of Canada interest rate decision and more - InstaForex talks the following week (part I)

Hang Seng Index (HSI) Has Increased Significantly Yesterday

Chris Vermeulen Chris Vermeulen 17.03.2022 13:08
THE SHANGHAI COMPOSITE INDEX HAS DROPPED MORE THAN 40% FROM ITS PEAK IN JUST 2 ½ MONTHS! China Stocks: This morning bottom pickers around the globe are snatching up what they believe to be “bargain basement priced stocks” as the Hang Seng Index gained 9.1% during today’s March 16, 2022 trading session. It was the best day for the HSI since the 2008 financial crisis as the Chinese government pledged to support markets. Tensions are running high as Chinese nickel giant Tsingshan Holding Group, the world’s biggest producer of nickel used in stainless steel and electric-vehicle batteries was sitting on $8 billion in trading losses. According to the Wall Street Journal on March 9, 2022 “The London Metal Exchange suspended the nickel market early last Tuesday, the first time it had paused trading in a metal contract since the collapse of an international tin cartel in 1985. The decision followed a near doubling in prices over a few hours.” ETFs CAN BE USED SPECIFICALLY FOR SEASONS AND DIRECTION! According to Statista www.statista.com on January 11, 2022, the assets managed by ETFs globally amounted to approximately 7.74 trillion U.S. dollars in 2020. With more than 8,000 ETFs to choose from, you can find just about any flavor you need or are looking for. A Kondratieff Wave is a long-term economic cycle that consists of four sub-cycles or phases that are also known as Kondratieff Seasons. This theory was founded by Nikolai D. Kondratieff 1892-1938 (also spelled “Kondratiev”), a communist Russia-era economist who noticed agricultural commodities and metals experienced long-term cycles. The following graph illustrates both the inflation cycle as well as the best investments for each season. The Kondratieff Seasons act as a general guide and each investment has their own specific bull or bear market cycle. ETFs CAN OFFER YOU PROTECTION AND AGILITY IN A BULL OR BEAR MARKET!  The following ETFs are not a recommendation to buy or sell but simply an illustration to emphasize the utilization of selecting an ETF for capital protection or potential appreciation in either a rising ‘BULL’ or falling ‘BEAR’ market. YINN – DIREXION DAILY FTSE CHINA STOCKS BULL 3X SHARES ETF From February 17, 2021, to March 14, 2022 the Direxion Daily FTSE China Bull 3x Shares ETF ‘YINN’ lost -90.78%. Target Index: The FTSE China 50 Index (TXINOUNU) consists of the 50 largest and most liquid public Chinese companies currently trading on the Hong Kong Stock Exchange as determined by the FTSE/Russell. Constituents in the Index are weighted based on total market value so that companies with larger total market values will generally have a greater weight in the Index. Index constituents are screened for liquidity, and weightings are capped to limit the concentration of any one stock in the Index. However, one cannot directly invest in an index. According to Direxion’s website www.direxion.com, Leveraged and Inverse ETFs pursue leveraged investment objectives, which means they are riskier than alternatives that do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. YANG – DIREXION DAILY FTSE CHINA STOCKS BEAR 3X SHARES ETF From February 17, 2021, to March 14, 2022, The Direxion Daily FTSE China Bear 3x Shares ETF gained +418.38%. The rates of return shown for the YINN and YANG ETFs are not precise in that they are an estimation as displayed on a chart utilizing the charts measurement tool to emphasize my talking point. Sign up for my free Trading Newsletter to navigate potential major market opportunities! ALERT: THE US FEDERAL RESERVE INTEREST RATE WAS RASIED A QUARTER POINT! In February, the inflation rate rose to 7.9% as food and energy costs pushed prices to their highest level in more than 40 years. If we exclude food and energy, core inflation still rose 6.4%, which was still the highest since August 1982. Gasoline, groceries, and housing were the biggest contributors to the CPI gain. The FED was expected to raise interest rates by as much as 50 basis points. However, investors are speculating that due to the Russia – Ukraine war, the FED may be more cautious and raise rates by only 25 basis points. WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS with US and CHINA STOCKS? Learn how I use specific tools to help me understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24 months, I expect very large price swings in the US stock market and other asset classes across the globe. I believe we are seeing the markets beginning to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern start to drive traders/investors into metals, commodities, and other safe-havens. UNDERSTAND HOW TO NAVIGATE OUR VOLATILE MARKETS! GET READY, GET SET, GO -I invite you to learn more about how my three ETF Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
UK: Interest Rate Is 25bps Higher, The GBPUSD Chart Shows A Big Decline

UK: Interest Rate Is 25bps Higher, The GBPUSD Chart Shows A Big Decline

Alex Kuptsikevich Alex Kuptsikevich 17.03.2022 15:02
The Bank of England raised the rate by 25 points to 0.75%. Such a move was, on average, predicted by market analysts. However, reports that one member of the Bank of England voted to maintain the rate was seen as less confidence in further hikes. The Bank’s deputy governor Jon Cunliffe voted against a rate hike, noting the risks of falling demand due to a jump in commodity prices. This vote against caused GBPUSD to immediately fall more than 120 pips, briefly sending GBPUSD below 1.3090. However, the weakening pound supported the stock market, bringing the FTSE100 back to its opening levels, in contrast to the declines in most foreign indices. Earlier, the FOMC made less harsh comments on interest rates than the market expected to see. The Bank of England, like the Fed yesterday, raised its inflation forecasts considerably and pushed back the forecast peak further, given the latest price hike. Like after the 2008 financial crisis, the Fed and the Bank of England are leaving the economy at the forefront in an attempt to tighten policy. The currency market was ready to see more determination in raising rates. The current measured approach forms a more favourable environment for financial markets than expected at the start of March.
S&P 500 (SPX) - It Looks Like Fed Decision Was Needed To Go Up

S&P 500 (SPX) - It Looks Like Fed Decision Was Needed To Go Up

Monica Kingsley Monica Kingsley 17.03.2022 15:57
S&P 500 reversed the pre-FOMC decline, and turned up. The upswing didn‘t fizzle out after the conference, quite to the contrary, the credit markets deepened their risk-on posture. I guess stocks are buying the story of 7 rate hikes and balance sheet reduction in 2022 a bit too enthusiastically. Not gonna happen, next quarter‘s GDP data would probably be already negative. Yet Powell says that the risk of recession into next year isn‘t elevated – given the projected tightening, I beg to differ. But of course, Powell is right – it‘s only that we won‘t see all those promised hikes, let alone balance sheet reduction starting in spring. Inflation would retreat a little towards year‘s end (on account of recessionary undercurrents and modest tightening), only to surprise once again in 2023 on the upside. I already wrote so weeks ago – before the East European events. There wouldn‘t enough time to celebrate the notion of vanquishing inflation. For now, stocks can continue the bullish turn – just as commodities and precious metals aren‘t asking permission. The FOMC is over, and real assets can rise, including the badly beaten crude oil. Made a good decision to keep adding to the commodities positions at much lower prices (or turning bullish stocks around the press conference). Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 upswing looks like it can go on for a while. It was driven by tech, participating more enthusiastically than value. The conditions are in place for the rally to continue, and it‘s likely that Friday would be a better day than Thursday for the bulls. Credit Markets HYG is catching quite some bid, and credit markets have turned decidedly risk-on. It also looks like a sigh of relief over no 50bp hike – the stock market rally got its hesitant ally. Gold, Silver and Miners Precious metals upswing can return – and this correction wasn‘t anyway sold heavily into. Needless to say how overdone it was if you look at the miners. $1950s would be reconquered easily. Crude Oil Crude oil bottom looks to be in, and $110s are waiting. Obviously it would take more than a couple of days to return there, but we‘re on the way. Copper Copper is rebounding, and even if other base metals aren‘t yet following too enthusiastically, $4.70 isn‘t far away. Coupled with precious metals returning to more reasonable values, the red metal would continue trending higher. Bitcoin and Ethereum Cryptos are leaning risk-on, and the bulls will close this weekend on a good note. Today‘s price action is merely a consolidation in a short-term upswing. Summary S&P 500 bulls got enough fuel from the Fed, and the run can continue – albeit at a slower pace. Importantly, credit markets aren‘t standing in the short-term way, but I think they would carve out a bearish divergence when this rally starts topping out. I‘m not looking for fresh ATHs, the headwinds are too stiff, but as stated within today‘s key analysis, the tech participation is a very encouraging sign for the short-term. The dollar indeed didn‘t make any kind of upside progress to speak of yesterday – and as I have also written at length in yesterday‘s report, the pre-FOMC trading pattern in real assets can be reversed now. Long live precious metals, oil and copper gains! Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
The (SPX) S&P 500 Price Way Up Likely To Make Many "WOW!"

The (SPX) S&P 500 Price Way Up Likely To Make Many "WOW!"

Paul Rejczak Paul Rejczak 21.03.2022 14:19
  The S&P 500 extended its short-term uptrend on Friday after breaking above the early March local high. Will we see some profit-taking action soon? The broad stock market index gained 1.17% on Friday following its Thursday’s advance of 1.2%. Stocks extended their rally and since last Monday’s low of around 4,162, the index has already gained over 300 points. The market accelerated higher after the Wednesday’s FOMC interest rate hike. There’s still a lot of uncertainty concerning the ongoing Ukraine conflict, however, investors were jumping back into stocks despite that geopolitical uncertainty. This morning the S&P 500 index is expected to open 0.1% lower. We may see a consolidation or some profit-taking action following the mentioned 300-point rebound from the last Monday’s low. The nearest important resistance level is at around 4,500. On the other hand, the support level is at 4,400-4,415, marked by the previous local high. The S&P 500 index trades just below its early February consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract Broke Above the Previous High Let’s take a look at the hourly chart of the S&P 500 futures contract. On Friday it broke above the early March local highs of around 4,400. It’s the nearest important support level right now. We may see a correction following the recent run-up. However, there have been no confirmed negative signals so far. We are maintaining our profitable long position from the 4,340 level, as we are still expecting a bullish price action in the near-term (our premium Stock Trading Alert includes details of our trading position along with the stop-loss and profit target levels) (chart by courtesy of http://tradingview.com): Conclusion Stocks extended their uptrend once again on Friday, as the S&P 500 index broke above the previous local high. It rallied over 300 points from its last Monday’s local low, so we may see a consolidation or some profit-taking action soon. This morning the broad stock market’s gauge is expected to open 0.1% lower. The war In Ukraine is still a negative factor for the markets. Here’s the breakdown: The S&P 500 index rallied over 300 points from the last Monday’s local low; we may see a correction at some point. We are maintaining our profitable long position. We are still expecting an advance from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Warren Buffett's Berkshire Hathaway Stock Tops $500,000

Warren Buffett's Berkshire Hathaway Stock Tops $500,000

Chris Vermeulen Chris Vermeulen 21.03.2022 21:44
A subscriber asked us recently where he should be putting his money and how to limit losses in his retirement portfolio. He expressed frustration as he watched Buffett’s Berkshire Hathaway stock going up, but at the same time, the stock indices going lower and many of his previously favored stocks experiencing substantial losses! This conversation naturally piqued our curiosity. We decided to look into this for him and, at the same time, share our findings with our subscribers.Berkshire Hathaway stock traded at an all-time record high price of $520,654.46. At a stock price of $512,991, Berkshire’s market capitalization is $756.23 billion. Last year, Berkshire generated a record $27.46 billion of operating profit, including gains at Geico car insurance, the BNSF railroad, and Berkshire Hathaway Energy.BERKSHIRE vs. S&P 500 BENCHMARKWarren Buffett, age 91 (known as the ‘Sage of Omaha’), is the chairman and CEO of Berkshire Hathaway. He is considered by many to be the most successful stock investor in the world and, according to Forbes Real-Time Billionaire List, has a personal net worth that exceeds $120 billion USD.Very few can compete with his long-term track record. Since 1965, Berkshire has provided +20% average annual returns, almost double the +10.2% average annual returns for the S&P 500 Stock Index benchmark. The 2022 year-to-date comparison is:BRK.A Berkshire Hathaway +14.53%; SPY SPDR ETF -6.36%; FB Facebook -35.64%However, according to Buffett’s own humility, he has endured years of underperformance and has had his share of bad stock picks. When Buffet was asked about drawdowns at one of Berkshire’s annual meetings, he stated, “Unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market.” According to www.finance.yahoo.com, the five biggest percentage losses for Berkshire have been:1974 -48.7%, 1990 -23.1%, 1999 -19.9%, 2008 -31.8%, and 2015 -12.5%.WHAT CAN WE LEARN FROM THE ‘BUFFETT INDICATOR’?The Buffett Indicator, as dubbed by Berkshire shareholders, is the ratio of the total United States stock market valuations (the Wilshire 5000 stock index) divided by the annual U.S. GDP. The indicator peaked at the beginning of 2022 and remains near all-time highs even though many stocks are well off their record levels.This historical chart of the Buffett Indicator was created by www.currentmarketvaluation.com. Doing quantitative analysis, we learn that the indicator is more than 1.6 standard deviations above the historical average, which suggests the market is over-valued and, in time, will fall back to its historical average.Berkshire Hathaway At Fibonacci Resistance!On March 18, 2022, Berkshire hit an all-time high price of $520,654. The Fibonacci resistance level of 2.618 or 261.8% of the March 23 low of $239,440 is $520,196. As shown on the daily chart, Berkshire also met resistance at the 2.618 standard deviations of the quarterly Bollinger Band.THE BENCHMARK: S&P 500 SPY ETFThe S&P 500 Index is the industry standard benchmark when comparing investment returns. It’s worth noting that as Berkshire reached the Fibonacci 2.618 resistance, the SPY found support at the Fibonacci 1.618 of the SPY March 23, 2020 low.Central banks have begun to tighten credit by raising interest rates for the first time since 2018, attempting to bring fast-rising energy, food, and housing prices under control. More time is needed to determine the full impact that rising global interest rates will have on current markets.However, on the chart below, we can see that the SPY put in a major top around 480 and, for the time being, has found support around 420 (the Fibonacci 1.618 level). Considering the increased market volatility and that we are now entering a cycle of higher interest rates, it would not surprise us to see the SPY eventually break below 420.It is worth noting that when a market makes a top after a prolonged bull-market, we usually experience distribution. Distribution with volatility results from large institutions beginning to liquidate their holdings while smaller retail investors are trying to buy stocks on sale. In other words, the retail investors are buying the dip hoping to get a bargain, while the institutional investors are selling the rally hoping to be liquidated and/or go short. It is a battle that retail investors will eventually lose!It is important to understand we are not saying the market has topped and is headed lower. This article sheds some light on some interesting analyses that you should be aware of. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades with subscribers to our newsletter, and surprisingly, we have just entered five new trades.Sign up for my free trading newsletter so you don’t miss the next opportunity!WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.GET READY, GET SET, GO - We invite you to learn more about how my three ETF Technical Trading Strategies can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
The Bitcoin Market Is Now Developing The Corrective Cycle To The Downside

On Monday (BTC) Bitcoin Price Reached The Level Of Ca. $41k

Alex Kuptsikevich Alex Kuptsikevich 22.03.2022 08:43
BTC changed a little on Monday, ending the day around $41.3K. However, in early trading on Tuesday, we saw a jump of more than 5% to $43.3K; then the first cryptocurrency sunk to $42K. Over the past 24 hours, Ethereum has gained 4%, and other leading altcoins from the top ten are not far behind: Solana and Avalanche are up 2%, Cardano is up 6%. Terra is out of the general outline, decreasing by 0.5%. According to CoinMarketCap, the total capitalization of the crypto market increased by 3% over the day, to $1.92 trillion. The Bitcoin Dominance Index added 0.1 percentage points to 42% due to the BTC surge. Cryptocurrency fear and greed index fell by 4 points in a day, to 26, as its estimates do not include the latest bitcoin spurt. This is not the first such jump in BTC since the beginning of March, in contrast to the neutral or even negative sentiment in the stock markets. All this indicates the readiness of the bulls for decisive action. However, until now, such impulses cannot be on a solid basis, because the fundamental demand for risks is under obvious pressure. The most that the bulls were capable of in this case was the formation of support at the lows of July last year (ie below $30K). In January, the level moved to $35K and further to $37K at the end of February. According to the FxPro analysts, institutional investors withdrew about $47 million from crypto funds over the past week. The outflow of funds has been observed for the second week in a row. Meanwhile, the largest Australian financial conglomerate Commonwealth Bank of Australia stated a sharp increase in interest in crypto assets among clients. The bank intends to double the department responsible for the crypto industry. Among the big news, it is worth noting the number of burned ETH tokens in the Ethereum network, which exceeded 2 million. The process of burning altcoins began on August 5 after the release of the London update, which changed the mechanism for calculating commissions for transactions. Deputy Prime Minister of the Russian Federation Alexander Novak called for the legalization of cryptocurrency mining, recognizing it as a taxable business. A number of observers believe that this could be a way for Russia to capitalize on its energy potential in the face of reduced demand for Russian oil and gas.
Hawkish Fed „Surprise“

Hawkish Fed „Surprise“

Monica Kingsley Monica Kingsley 22.03.2022 15:55
S&P 500 wavered but is bound to get its act together in the medium term. Powell‘s statements shouldn‘t have stunned the bulls, but they did – the mere reiteration of the tightening plans coupled with remarks on the need to stamp out aggressive inflation before it‘s too late (anchored inflation expectations, anyone? I talked that in the run up to the Sep 2021 P&G price hikes and how the competition would be following in a nod to high input costs, with heating job market on top of the commodities pressure pinching back then already), sent stocks and bonds down.Add the recession fears that were assuaged during the Wednesday‘s conference, and you get the S&P 500 bulls having to dust off after Monday‘s setback. Given how early we‘re in the tightening cycle, and that the real economy isn‘t yet breaking down no matter what‘s in the pipeline geopolitically as regards various consequences to commodities, goods, services and money flows, the stock market bulls are still likely to take on the 4,600 as discussed already.Only this time, the upswing would be accompanied by a more measured and balanced commodities upswing, joined in by precious metals. Great profits ahead and already in the making.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is consolidating above 4,400, and the relative strength in value as opposed to tech, is boding well – the bulls are pushing their luck a bit too hard as a further TLT decline would pressure growth stocks.Credit MarketsHYG is getting under pressure again, but its decline would be uneven in the short run – as in I‘m looking for quite some back and forth action. First, higher in taking on yesterday‘s selling.Gold, Silver and MinersPrecious metals aren‘t turning lower in earnest – the miners‘ leadership bodes well for further gains, and is actually a very good performance given the hawkish Fed „surprise“ (surprise that wasn‘t, shouldn‘t have been).Crude OilCrude oil strength returning is a very good omen for commodities bulls broadly, and the rising volume hints at return of bullish spirits. The upswing is far from over – look how far black gold got on relatively little conviction, and where oil stocks trade at the moment.CopperCopper is acting strongly, and the downswing didn‘t entice the bears much. The path of least resistance remains higher, and the red metal isn‘t yet outperforming the CRB Index. Great pick for portfolio gains with as little volatility as can be.Bitcoin and EthereumBitcoin went on to recover the weekend setback – Ethereum upswing presaged that. They‘re both a little stalling now, but entering today‘s regular session on a constructive note. I‘m looking for modest gains extension.SummaryS&P 500 is bound to recover from yesterday‘s intraday setback – the animal spirits and positive seasonality are there to overcome the brief realization that the Fed talks seriously about tightening and entrenched inflation. While not even the implied readiness to hike by 50bp here and there won‘t cut it and send inflation to the woodshed, let alone inflation expectations, the recession fears would be the next powerful ally of stock market bears. For now though, we‘re muddling through generally higher (I‘m still looking for a tradable consolidation of last week‘s sharp gains), and will do so over the coming several weeks. The real profits are to be had in commodities and precious metals, as I had been saying quite often lately… Enjoy!Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.
What Will Be The Impact Of Rising Rates On Stocks & Commodities?

What Will Be The Impact Of Rising Rates On Stocks & Commodities?

Chris Vermeulen Chris Vermeulen 23.03.2022 21:33
Investors and traders alike are concerned about what investments they should make on behalf of their portfolios and retirement accounts. We, at TheTechnicalTraders.com, continue to monitor stocks and commodities closely due to the Russia-Ukraine War, market volatility, surging inflation, and rising interest rates. Several of our subscribers have asked if changes in monitor policy may lead to a recession as higher rates take a bigger bite out of corporate profits.As technical traders, we look exclusively at the price action to provide specific clues as to the current trend or a potential change in trend. We review our charts for both stocks and commodities to see what we can learn from the most recent price action. Before we dive into that, let’s review the various stages of the market; with special attention given to expansion vs. contraction in a rising interest rate environment which you can see illustrated below.PAY ATTENTION TO YOUR STOCK PORTFOLIOWe are keeping an especially close eye on the price action of the SPY ETF. The current resistance for the SPY is the 475 top that happened around January 6, 2022. This top was 212.5% of the March 23, 2020, low that was put in at the height of the Covid global pandemic.The SPY found support in the 410 area at the end of February. If you recall (or didn't know), 410 was the Fibonacci 1.618 or 161.8% percent of the Covid 2020 price drop. Now, after experiencing a nice rally back, of a little over 50%, we are waiting to see if the rally can continue or if rotation will occur, sending the price back lower.COMMODITY MARKETS SURGEDThe commodity markets experienced a tremendous rally due to fast-rising inflation, especially energy, metals, and food prices.The GSG ETF price action shows that we recently touched 200%, or the doubling of the April 21, 2020, low. Immediately following, similar to the SPY, the GSCI commodity index promptly sold off only to then find substantial buying support at the Fibonacci 1.618 or 161.8 percent of the starting low price of the bull trend. Resistance for the GSG is at 26, and support is 21.A STRENGTHENING US DOLLARThe strengthening US dollar can be attributed to investors seeking a safe haven from geopolitical events, surging inflation, and the Fed beginning to raise rates. The US Dollar is still considered the primary reserve currency as the greatest portion of forex reserves held by central banks are in dollars. Furthermore, most commodities, including gold and crude oil, are also denominated in dollars.Consider the following statement from the Bank of International Settlements www.bis.org ‘Triennial Central Bank Survey’ published September 16, 2019: “The US dollar retained its dominant currency status, being on one side of 88% of all trades.” The report also highlighted, “Trading in FX markets reached $6.6 trillion per day in April 2019, up from $5.1 trillion three years earlier.” That’s a lot of dollars traded globally and confirms that we need to stay current on the dollars price action.Multinational companies are especially keeping a close eye on the dollar as any major shift in global money flows will seriously negatively impact their net profit and subsequent share value.The following chart by www.finviz.com provides us with a current snapshot of the relative performance of the US dollar vs. major global currencies over the past year:KNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and somewhat surprisingly, we entered five new trades earlier this week, two of which have now hit their first profit target levels. Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos on the front foot as rebound turns into new uptrend

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Cryptos on the front foot as rebound turns into new uptrend

FXStreet News FXStreet News 24.03.2022 16:22
Bitcoin price set to touch $45,000 by tomorrow if current tailwinds keep supporting price action. Ethereum price set to rally another 12%, with bulls targeting $3,500.00XRP price undergoes consolidation as the next profit level is $0.90.Bitcoin price, Ethereum and other cryptocurrencies are enjoying a calm week with tailwinds finally able to thrive without constant interruption from headlines about Ukraine or Russia. Markets are also starting to adjust to the situation, with no immediate or significant movements anymore triggered by headlines coming out. Expect to see more upside with several possible cryptocurrencies eking out the best week of the year thus far.Bitcoin price has a defined game plan with $44,088 as the target for today and $45,261 by the weekendBitcoin (BTC) price is on the front foot for a third consecutive day as the rally turns into a broader uptrend. The crucial thing will be to see where BTC price will close this week, as bears need to get weakened with several short squeezes and breakouts running stops from short-sellers. Despite being elevated, the Relative Strength Index (RSI) is still not near the 'overbought' level, providing enough incentive for bulls and investors to keep buying BTC price action.BTC price is set to hit $44,088.73 today, the level of the March 03 highs. If that is gained – and given the current tailwinds – markets will start to expect Bitcoin to eke out new highs for the month with still a week to go. This additional bullish element should help conclude a daily close above $44,088.73. A support test on that same level will trigger new inflows from investors and provide the needed juice to pump price action up to $45,261.84, topping $45,000.00.BTC/USD daily chartA tail risk comes from the big joint meeting today in Brussels, with Biden meeting NATO, the G7 and E.U. leaders. An embargo on gas is on the table and could roil markets if the E.U. decides to walk away from Russian gas supplies, opening up the possibility of further Russian retaliation in Ukraine. That would make global markets move back to risk-off mode, with Bitcoin price dropping back to support at $39,780.68, and intersecting with the green ascending trend line. Ethereum price targets $3,500 after bulls force a daily close above $3,018.55Ethereum (ETH) price is performing a 'classic long' trading plan today after bulls pushed a daily close above $3,018.55. With price action in ETH opening slightly above this level, this morning, the price has faded slightly back towards that same $3,018.55 level to find support and offer the opportunity for new bulls and investors to enter the market. Ethereum price will move back to the upside and continue its rally, which is currently looking more and more like an uptrend that could continue over a broader time frame.ETH price will therefore need to find support around $3,018.55 as the fade will need to be kept in check, as too large a fade could spook investors. Seeing as the current favourable tailwinds are quite broadly present in global markets, expect to see another uplift towards $3,200 and $3,391.52 depending on the number of new positive headlines acting as additional accelerators. With those moves, at least new highs for March will be printed and possibly for February, depending on how steep the rally can continue.ETH/USD daily chartThe risk for Ethereum price is that price action slips back below $3,018.55. That could open the door for bears to jump in again and run price action back to $2,835.83, which is the low of March 21 and the monthly pivot. An additional fail-safe system is the 55-day Simple Moving Average at $2,808.84 as an additional supportive factor to take into account.https://youtu.be/wgpCSH70SIQXRP price undergoes consolidation as the bullish breakout hits $0.90Ripple's (XRP) price has bears and bulls being pushed towards each other as the bodies of the candles from the past two sessions grow very thin. This points to bulls and bears fighting it out and neither yet having the upper hand. Bears are defending the area above $0.8390 from bulls running to $0.8791, and bulls are trying to defend their support at $0.7843. With lower highs and higher lows, the stage is set for a breakout that, seeing the current tailwinds, will probably favour bulls, and result in a quick move towards $0.8791.XRP price is thus set to print new highs for March. With the stock markets having their best performing week for this year, expect to see even more tailwinds spilling over to cryptocurrencies and bulls targeting $0.9110. At that level, bulls will run into the 200-day SMA which will possibly be the halting point of the current uptrend as investors will need to reassess the situation before they advance. Where global markets are at that point and how far off a peace treaty is between Russia and Ukraine will determine if bulls will advance towards $1.00 in XRP price.XRP/USD daily chartAlthough several statements suggest it is unlikely, should Putin be backed further into a corner, the use of nuclear weapons could cast a dark shadow on markets. Expect a massive drop in equities and cryptocurrencies with those headlines coming out, where XRP price will fall towards $0.7843 or even $0.7600. In the first case, the historic pivotal level will provide support and further down, the monthly pivot is set to intertwine with the 55-day SMA, which should be enough to catch any falling-knife action. https://youtu.be/ZWrKMd2CiL8
S&P500 tops 200-dayMA: the bottom is behind us

S&P500 tops 200-dayMA: the bottom is behind us

Alex Kuptsikevich Alex Kuptsikevich 25.03.2022 14:20
The S&P500 is consolidating above important technical and psychological levels, which could herald further gains in stock markets. The peak of fear in the markets due to the military action in Ukraine came on March 7-8. After that date, we saw strong recovery momentum in European equity indices over the next nine days, after which the DAX40 and EuroStoxx50 were stuck in a sideways.The US market did not fall as sharply as the European market at the outbreak of hostilities, but the recovery rally also came with a different delay. The S&P500 managed to bounce back from local lows only on March 15, after falling 15% from its peak at the beginning of the year. After that, we saw a rally of 9.5%.The powerful intraday movement of the S&P500 got its footing above the 50-day average last Friday. This week, buyers pushed the index above the 200-day average, a stronger bullish signal. On Wednesday, the sellers tried to lower the index, consolidating the bearish trend, but the market closed above that significant line again at the end of Thursday. S&P500 futures added 0.3% by early trading in New York, confirming the bullish sentiment.The index also closed Thursday above the round level 4500, which promises to attract attention for more buying in the coming days.
S&P 500 Has Been Moving Up For A While. What's Next?

S&P 500 Has Been Moving Up For A While. What's Next?

Paul Rejczak Paul Rejczak 28.03.2022 15:55
  Stocks extended their short-term uptrend on Friday, but this week we may see some more uncertainty and a possible profit-taking action. The S&P 500 index gained 0.53% on Friday following its Thursday’s advance of 1.4%. The broad stock market’s gauge extended its short-term uptrend after breaking above the 4,500 level. It gained over 380 points from the Mar. 14 local low of around 4,162. There have been no confirmed negative signals so far. However, we may see another correction and a profit-taking action at some point. There’s still a lot of uncertainty concerning the ongoing Ukraine conflict, but investors were recently jumping back into stocks despite that geopolitical uncertainty. This morning the index is expected to open virtually flat after an overnight advance followed by its retracement. The nearest important resistance level is at around 4,550-4,600, marked by the previous local highs. On the other hand, the support level is at 4,400-4,450. The S&P 500 index trades closer to its January-February local highs along the 4,600 level, as we can see on the daily chart (chart by courtesy of http://stockcharts.com): Futures Contract Remains Above the 4,500 Level Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading close to the new local high. Potential resistance level is at around 4,585, marked by the previous highs. There have been no confirmed negative signals so far. We are maintaining our profitable long position from the 4,340 level, as we are still expecting a bullish price action in the near-term. However, to protect our gain, we decided to move the stop-loss (take profit) and price target levels higher. (our premium Stock Trading Alert includes details of our trading position along with the stop-loss and profit target levels) (chart by courtesy of http://tradingview.com): Conclusion The S&P 500 index will likely open virtually flat this morning. However, the futures contract retraced its overnight advance, so we may see more uncertainty and a potential profit-taking action. The war In Ukraine remains a negative factor for the markets. The global markets will also be waiting for this Friday’s monthly jobs data release. Here’s the breakdown: The S&P 500 index extended its uptrend on Friday; this morning the futures contract retreated from its new local high. We are maintaining our profitable long position (opened on Feb. 22 at 4,340), but we moved stop-loss (take profit) and price target levels higher. We are still expecting an advance from the current levels. Like what you’ve read? Subscribe for our daily newsletter today, and you'll get 7 days of FREE access to our premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today! Thank you. Paul Rejczak,Stock Trading StrategistSunshine Profits: Effective Investments through Diligence and Care * * * * * The information above represents analyses and opinions of Paul Rejczak & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Paul Rejczak and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Rejczak is not a Registered Securities Advisor. By reading his reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Volatility Retreats As Stocks & Commodities Rally

Volatility Retreats As Stocks & Commodities Rally

Chris Vermeulen Chris Vermeulen 28.03.2022 21:32
The CBOE Volatility Index (VIX) is a real-time index. It is derived from the prices of SPX index options with near-term expiration dates that are utilized to generate a 30-day forward projection of volatility. The VIX allows us to gauge market sentiment or the degree of fear among market participants. As the Volatility Index VIX goes up, fear increases, and as it goes down, fear dissipates.Commodities and equities are both showing renewed strength on the heels of global interest rate increases. Inflation shows no sign of abating as energy, metals, food products, and housing continues their upward bias.During the last 18-months, the VIX has been trading between its upper resistance of 36.00 and its lower support of 16.00. As the Volatility Index VIX falls, fear subsides, and money flows back into stocks.VIX – VOLATILITY S&P 500 INDEX – CBOE – DAILY CHARTSPY RALLIES +10%The SPY has enjoyed a sharp rally back up after touching its Fibonacci 1.618% support based on its 2020 Covid price drop. Money has been flowing back into stocks as investors seem to be adapting to the current geopolitical environment and the change in global central bank lending rate policy.Resistance on the SPY is the early January high near 475, while support remains solidly in place at 414. March marks the 2nd anniversary of the 2020 Covid low that SPY made at 218.26 on March 23, 2020.SPY – SPDR S&P 500 ETF TRUST - ARCA – DAILY CHARTBERKSHIRE HATHAWAY RECORD-HIGH $538,949!Berkshire Hathaway is up +20.01% year to date compared to the S&P 500 -4.68%. Berkshire’s Warren Buffet has also been on a shopping spree, and investors seem to be comforted that he is buying stocks again. Buffet reached a deal to buy insurer Alleghany (y) for $11.6 billion and purchased nearly a 15% stake in Occidental Petroleum (OXY), worth $8 billion.These acquisitions seem to be well-timed as insurers and banks tend to benefit from rising interest rates, and Occidental generates the bulk of its cash flow from the production of crude oil.As technical traders, we look exclusively at the price action to provide specific clues as to the current trend or a potential change in trend. With that said, Berkshire is a classic example of not fighting the market. As Berkshire continues to make new highs, its’ trend is up!BRK.A – BERKSHIRE HATHAWAY INC. - NYSE – DAILY CHARTCOMMODITY DEMAND REMAINS STRONGInflation continues to run at 40-year highs, and it appears that it will take more than one FED rate hike to subdue prices. Since price is King, we definitely want to ride this trend and not fight it. It is always nice to buy on a pullback, but the energy markets at this point appear to be rising exponentially. The XOP ETF gave us some nice buying opportunities earlier at the Fibonacci 0.618% $71.78 and the 0.93% $93.13 of the COVID 2020 range high-low.Remember, the trend is your friend, as many a trader has gone broke trying to pick or sell a top before its time! Well-established uptrends like the XOP are perfect examples of how utilizing a trailing stop can keep a trader from getting out of the market too soon but still offer protection in case of a sudden trend reversal.XOP – SPDR S&P OIL & GAS EXPLORE & PRODUCT – ARCA – DAILY CHARTKNOWLEDGE, WISDOM, AND APPLICATION ARE NEEDEDIt is important to understand that we are not saying the market has topped and is headed lower. This article is to shed light on some interesting analyses of which you should be aware. As technical traders, we follow price only, and when a new trend has been confirmed, we will change our positions accordingly. We provide our ETF trades to our subscribers, and somewhat surprisingly, we entered five new trades last week, four of which have now hit their first profit target levels. Our models continually track price action in a multitude of markets, asset classes, and global money flow. As our models generate new information about trends or a change in trends, we will communicate these signals expeditiously to our subscribers and to those on our trading newsletter email list.Sign up for my free trading newsletter so you don’t miss the next opportunity! Furthermore, successfully trading is not limited to when to buy or sell stocks or commodities. Money and risk management play a critical role in becoming a consistently profitable trader. Correct position sizing utilizing stop-loss orders helps preserve your investment capital and allows traders to manage their portfolios according to their desired risk parameters. Additionally, scaling out of positions by taking profits and moving stop-loss orders to breakeven can complement ones’ success.WHAT STRATEGIES CAN HELP YOU NAVIGATE The CURRENT MARKET TRENDS? Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com
Bitcoin has become a leading indicator of investor sentiment

Bitcoin has become a leading indicator of investor sentiment

Alex Kuptsikevich Alex Kuptsikevich 29.03.2022 08:51
BTC is up 4% on Monday, ending the day around $48K, and corrected by about 1% to $47.5K on Tuesday morning. Ethereum was up 1.8% in the last 24 hours to $3.4K. Terra is a leader of the day According to CoinMarketCap, the total capitalization of the crypto market increased by 1% over the day, to $2.15 trillion. The Bitcoin dominance index fell by 0.1 points to 42.1%. The crypto-currency index of fear and greed rose by 11 points over the day, to 60, and moved from neutral level to the "greed" grade. On Tuesday, the index dropped to 56 points. Among the leading altcoins, Terra soared by 10%, Doge corrected by 2%. In most others, there is a slight correction in the growth of the last days, but they are in positive territory over the last day. Bitcoin continued to rise on Monday after it broke through the strong resistance of the February highs around $45K in the previous evening. By the end of the day, BTC has renewed the highs of early January above $48K, having won back the decline since the beginning of the year. Bitcoin is correlating with S&P500 The growth of the first cryptocurrency rested on the 200-day moving average ($48.2K). Confident consolidation above it promises to strengthen and expand the growth of the entire crypto market and breathe fresh impetus into the growth of bitcoin. In December, we saw a false break, but then the price levels were higher, and corrective sentiment intensified in the stock markets. Now Bitcoin is growing along with the rise of stock indices and often even acts as a leading indicator of investor sentiment. According to Arcane Research, BTC's correlation with the S&P 500 stock indicator recently hit a 17-month high. According to CoinShares, institutions invested $193 million in crypto funds last week, and it was the most significant amount in three months. Glassnode believes that the Bitcoin trend has already changed to bullish, as evidenced by the increase in the number of addresses accumulating BTC.
The Swing Overview - Week 13 2022

The Swing Overview - Week 13 2022

Purple Trading Purple Trading 11.04.2022 06:41
The Swing Overview - Week 13 Equity indices closed the first quarter of 2022 in a loss under the influence of geopolitical tensions. The Czech koruna strengthened as a result of the CNB raising interest rates to 5%, the highest since 2001. The US supports the oil market by releasing 180 million barrels from its strategic reserves. War in Ukraine   The war in Ukraine has been going on for more than a month and there is still no end in sight. Ongoing diplomatic negotiations have not led to a result yet. Meanwhile, Russian President Putin has decided that European countries will pay for Russian gas in rubles. This has been described as blackmailing from Europe's point of view and is not in line with the gas supply contracts that have been concluded. A way around this is to open an account with Gazprombank where the gas can be paid for in euros. Geopolitical tensions are therefore still ongoing and are having a negative effect on stock markets.   Equity indices have had their worst quarter since 2020 US and European equities posted their biggest quarterly loss since the beginning of 2020, when the COVID-19 pandemic broke out and the global economy was in crisis. Portfolio rebalancing at the end of the quarter boosted demand for bonds and kept yields lower.   On Tuesday, the yield curve briefly inverted, meaning that short-term bonds yields were higher than  long-term bonds. An inverted yield curve is a signal of a recession according to many economists. It means that future corporate profits should be rather behind expectations and stock prices might reflect it.    On Thursday, the S&P 500 index fell 1.6%. The Dow Jones industrial index also fell by 1.6% and the Nasdaq Composite index fell by 1.5%. The European STOXX 600 index closed down by 0.94%. Even after last week's rally, as investors celebrated signs of progress in peace talks between Russia and Ukraine, the S&P 500 index is still down 5% for the first three months, its worst quarterly performance in two years.  Figure 1: SP 500 on H4 and D1 chart   The SP 500 index reached the resistance level at 4,600, which it broke, but then closed below it. This indicates a false break. The new nearest resistance is in the range of 4,625 - 4,635. Support is at 4,453 and then significant support is at 4,386 - 4,422.   German DAX index The DAX index has rallied since March 8 and has reached the resistance level which is in the 14,800 - 15,000 range.  However, the index started to weaken in the second half of the week. The news that Russia will demand payments for gas in rubles, which Western countries refuse, contributed to the index's weakening. The fear of gas supply disruption then caused a sell-off.    Figure 2: German DAX index on H4 and daily chart Resistance is between 14,800 - 15,000 according to the daily chart. The nearest support according to the H4 chart is at 14,100 - 14,200.   The euro remains in a downtrend The euro was supported at the beginning of the week by hopes for peace in Ukraine. However, by the end of the week, the Ukrainian President warned that Russia was preparing for more attacks and the Euro started to weaken. News of Russia's demand to pay for gas in rubles had a negative effect on the euro as well. Figure 3: The EURUSD on the H4 and daily charts. From a technical point of view, we can see that the EURUSD according to the daily chart has reached the resistance formed by EMA 50 (yellow line). The new horizontal resistance is in the area of 1.1160 - 1.1180. Support is at 1.0950 - 1.0980. The euro still remains in a downtrend.   CNB raised the interest rate In the fight against the inflation, the CNB decided to further raise the interest rate by 0.50%. Currently, the base rate is at 5%, where it was last in 2001. The interest rate hike is aimed at slowing inflation by slowing demand through higher borrowing costs.   Figure 4: Interest rate developments in the Czech Republic In addition, a strong koruna should support the slowdown in inflation. The koruna could appreciate especially against the euro due to higher interest rates. However, the strengthening of the koruna is conditional on the war in Ukraine not escalating further.  We can see that the koruna against the euro is approaching a support around 24.30. The low of this year was 24.10 korunas for one euro. Figure 5: USD/CZK and EUR/CZK on the daily chart. The koruna is also strengthening against the US dollar. Here, however, the situation is slightly different in that the US Fed is also raising rates and is expected to continue raising rates until the end of the year. Therefore, the interest rate differential between the koruna and the dollar is less favourable than between the koruna and the euro. The appreciation of the koruna against the dollar is therefore slower.   Currently, the koruna is at the support of 22 koruna per dollar. The next support is at 21.70 and then 21.10 koruna per dollar, where this year's low is.   Oil has weakened Oil prices saw the deep losses after the news that the United States will release up to 180 million barrels from its strategic petroleum reserves as part of measures to reduce fuel prices. US crude oil fell 5.4% and Brent crude oil fell 6.6% on Thursday after the news. Figure 6: Brent crude oil on a monthly and daily chart We can see that a strong bearish pinbar was formed on a  monthly chart. The nearest support is in the zone 103 – 106 USD per barel. A strong support is around 100 USD per barel which will be closely watched.  
When I was a Boy… (2)

When I was a Boy… (2)

David Merkel David Merkel 05.04.2022 04:51
Photo Credit: House Photography || I always read a lot when I was young This a is follow-up to When I was a Boy… which I wrote ~5 1/2 years ago. It is also a response to an article posted by Jason Zweig, who I have talked with once or twice, and emailed a little more than that. In that article, he asks the question: How did you learn how to invest? Did you take a class, play a stock-market game in school, have a friend or family member as a mentor?How Should Kids Learn to Invest? If you read the original article, you would know that my original start was from two gifts of stock that male relatives in my extended family gave me in the 1960s. They picked two high-fliers — Litton Industries and Magnavox. Bought and held, by the mid-1970s both generated >80% losses when they were bought by another company. Did I ever play the stock market game in school? Yes, once when I was in seventh grade (early 1973). Our school decided to play around and do an intersession between the two semesters. It was a two week course called “Bulls and Bears. How this Little Piggy Went to Market.” My favorite science teacher was teaching it. I realized that the game was utterly short-term and so I put all of my play money into AT&T warrants, knowing that if AT&T stock rose, the warrants would zoom up. Was I a smart kid, or what? What. Well, AT&T when nowhere for those two weeks, and the same for the warrants. They were at the same price at the contest end, thus losing the commissions on both sides, and this was when commissions were high, prior to deregulation. The three main things that taught me about investing were watching Wall Street Week with my Mom, borrowing books on investing at the Brookfield library, and reading the Value Line subscription that she purchased. I probably read 10 books on investing before I was 18. Louis Rukeyser was an affable guide to the markets, including the elves, the guests, etc. (As an aside, Frank A. Cappiello, Jr. was a founding member of the Baltimore Security Analysts Society, and a frequent guest on his show. After all, where is Owings Mills, Maryland?) With Value Line, I began to understand how corporations worked. The one-page descriptions of companies were just big enough to give me a good idea of what was going on, while not over-taxing a kid 12-21 years old. I remember as a student at Johns Hopkins earning 16% on my money market fund in my freshman year.  I was only at Hopkins for three years 1979-1982, but those were tough years, particularly in the Midwest “Rust Belt.”  My father’s business earned little, but my Mom’s investing paid off.  Though not “working” she was making more off the family portfolio than my Dad was earning off his business.  As it was, to help my family then, I paid the last semester of tuition.  (My Mom later paid me back for that.)  I came back home in 1982 with $5 in my pocket.  Then I learned that I overdrew my bank account, costing me $10. Oh, one more thing the clever and distinguished Carl Christ, who signed my Master’s Thesis at Hopkins, taught a class on investing in my junior year. I learned a lot, but the main thing I remember was writing a research report on a firm that made specialty paper — James River. My mother had owned it for a long time, but had sold her stake at an opportune time. When I wrote the report, she did not own it, and the stock had fallen from where she sold it. Dr. Christ had never heard of James River, an was fascinated at what was at that time a midcap firm in a underfollowed industry. I got an “A.” When I showed the report to my Mom, she bought it again, and made money of it. Also, in my senior year, I wrote my thesis on stock splits. As I said there: This brings me to my conclusion: stock splits are a momentum effect, but it is larger when companies are still have a cheap valuation. Perhaps splits have no effect on stock performance — it is all momentum and valuation. To me, that is the most likely conclusion, and my thesis anticipated quantitative money management by 10+ years.On Stock Splits In the summer of 1982, I remember sitting down with Value Line in my family’s living room (quiet place, no TV) and selecting a paper portfolio of 40-50 stocks. I went through all 1700 stocks. I recorded the prices in the Milwaukee Journal, and then went to Grad School at UC-Davis. Over the next year the stocks in my “portfolio” appreciated at double the rate of the market. At that time, I was a TA for a Corporate Financial Management class. I showed it to the professor, and he said, “Oh, you have a beta of two.” I said, “No, this portfolio has stocks that are not as risky as the market. This is alpha, not beta.” Several years later, I participated in the Value Line Investing Contest. I placed in the top 1%, but not good enough to win. When my dissertation committee dissolved, I was forced to abandon my Ph. D. I took three actuarial exams on the fly in early 1986 and passed. I had an informational interview at Pacific Standard Life which sponsored the exams, and they hired me on the spot. (My boss’ secretary told me that the boss said, “No one can pass the first three exams on the first try.” Then a fellow employee told me later, “You didn’t negotiate hard enough. They would have hired you regardless.”) When I worked for Pacific Standard Life, and later AIG, I got investment-related projects, because I was the one actuary that understood investing. During this time, I was managing my own portfolio, sometimes better, sometimes worse. I bought stocks, and mutual funds investing outside the US. I had a CTA in my portfolio. I tried investing in spectrum with the FCC, but that was a bomb. I settled on small cap value investing in the mid-1990s, which was a bad era for small cap value. Still, I managed to keep pace with the S&P 500. In 2000, I had an email exchange with Kenneth Fisher (yes, the big guy of Fisher Investments). This led to he creation of my eight rules. As I wrote on portfolio rule three: Let me give you a little history of how the eight rules came to be. In 2000, I had an e-mail discussion with Kenneth Fisher. I explained to him what I had been doing with small-cap value, and how I had done well with it in the 90s. He told me to forget everything that I’ve learned, especially the CFA syllabus, and look for the things that I can do better than anyone else. We exchanged about five or so e-mails; I appreciate the time he spent on me. So I sat back and thought about what investments had worked best for me in the past. I noticed that when I got the call right on cyclical industries, the results were spectacular. I also noticed that I lost most when investing in companies that didn’t have good balance sheets, no matter how “cheap” they were in terms of valuation. I came to the conclusion that size and value/growth were not the major determinants of my investing success. Instead, industry selection played a large role in what went right and wrong with my investment decisions. So, I decided to formalize that. I would rotate industries with a value bias. But that would have other impacts on how I invested. One of those impacts is rule number three. Over the next ten years, I tore up the pavement, and would have been in the top percentile of mutual fund managers. And so I opened my own shop in 2010, to find for the next eleven years that value investing was overrated. My life is bigger than my little company. I am a happy man. I know Jesus Christ; I have eternal life. Have there been disappointments? Of course. The one main positive I can say about my investing is that I rarely have big losses on any security. This is not due to stop losses; I pay attention to balance sheets and the cyclicality of markets. Even at the age of 61, I am still learning. I am not a boy, obviously, but I am still absorbing new ideas. To all who read me, be life-long learners. I am closer to the end to my life than my beginning, but invest! Take your opportunities to learn and capitalize on them! And remember, Judgement Day is coming. Are you ready? Investments will help you for now, but will be useless in the hereafter.
FX Daily: Eurozone Inflation Impact on ECB Expectations and USD

Not Again! CSI 300 And Hang Seng - COVID Makes Stock Market Struggle! EuroStoxx 600 and S&P 500 (SPX) Don't Set A Good Example

Marc Chandler Marc Chandler 25.04.2022 18:31
April 25, 2022  $USD, Australia, China, Currency Movement, Federal Reserve, France, Germany Overview:  Fears that the Chinese lockdowns to fight Covid, which have extended for four weeks in Shanghai, are not working, and may be extended to Beijing has whacked equity markets, arrested the increase in bond yields, and lifted the dollar.  Commodity prices are broadly lower amid concerns over demand.  China's CSI 300 fell 5% today and Hong Kong's Hang Seng was off more than 3.5%.  Most of the major markets in Asia Pacific were off more than 1%.  Europe's Stoxx 600 is off around 1.9% after falling 1.4% last week.  US futures are about 0.7%-0.8% lower. The S&P 500 fell last week for the third consecutive week, the longest losing streak in 18 months.  The US 10-year Treasury yield is almost seven basis points lower at 2.83%.  European benchmark yields are 4-6 bp lower.  The BOJ bought JPY727 bln of 10-year bonds at the pre-committed fixed rate operation, more than in the previous three operations last week combined.  The yield slipped half of a basis point.  The dollar rides high.  It has appreciated against all the major currencies but the yen. The Australian dollar, Scandis, and sterling have been hit the hardest and are around 0.9-1.2% lower in the European morning.  Emerging market currencies are heavy as well.  Hungary, Mexico, and China have seen their currencies decline by around 1% to lead the complex.  Gold fell to new lows for the month around $1912 before stabilizing.  June WTI is 4.3% lower near $97.70 after falling around 4% last week.  US natgas is extending last week's 10.5% sell-off, while the European benchmark is up 2.5% after a flat showing last week.  Iron prices are off 8.7%, after tumbling closer to 12% at one juncture today.  It fell a little less than 5% last week.  Copper is off around 2.1% after declining about 3% last week.  July wheat is up about 0.5% as it tries to snap a four-day slide.   Read next: Tightening Alert! How Have Exchange Rates Of Singapore Dollar (SGD), NZD, Canadian Dollar And Korean Won (KRW) Changed?| FXMAG.COM Asia Pacific China's Covid has emerged as a powerful economic force in its own right.   It is threatening demand for commodities and threatening to extend supply chain disruptions.  Shanghai reported a record number of fatalities, and the infection is spreading to Beijing.  The Chaoyang district will submit to three days of testing this week for people who live and/or work in the area.  Reports suggest 14 smaller communities have been sealed and another 14 have imposed limitations on movement.  China's demand for gasoline, diesel, and jet fuel has reportedly fell by 20% year-over-year, which may translate to 1.2 mln barrels of oil a day.   The US has threatened unspecified action if Beijing's new security pact with the Solomon Islands result in a permanent Chinese military presence.   While the US has defended Ukraine's right to make its own foreign policy decisions, it seems to want to limit Solomon Island's choices.  Prime Minister Sogavare has articulated his own 3 No's Policy.  He says that the secret treaty has no provision for a Chinese military base, no long-term presences, and no ability to project power from the islands. The Solomon Islands are about 2k kilometers of Australia's coast.    Read next: President Of France To Be Chosen. It Is Another Factor Which Is Shaping Markets| FXMAG.COM The dispute over the Solomon Islands has emerged as a campaign issue in the May 21 Australian elections.  Prime Minister Morrison, who seeks a fourth term, has defended his foreign policy, and tried shifting the focus back to domestic issues with a promise to cap tax revenue at 23.9% of GDP and A$100 bln of tax relief over the next four years if re-elected.  Government revenues were 22.9% of GDP in FY21.  Labor leader Albanese has been diagnosed with Covid at the end of last week.  This disrupted his campaign in the tight contest.  Morrsion had contracted the disease in early March.   The dollar initially approached JPY129 but falling US yields saw it come off and traded below JPY128, where a $425 mln option expires today.   The greenback remains in the range set last Wednesday (~JPY127.45-JPY129.40).  Indeed, it is trading within the pre-weekend range (~JPY127.74-JPY129.10).  The takeaway is two-fold.  First the exchange rate is still closely tracking the US 10-year yield.  Second, after surging in March and most of April, the exchange rate is consolidating.  The Australian dollar is falling sharply for the third consecutive session.  It fell 1% last Thursday and 1.75% before the weekend and is off another 1% today. It is lower for the 11th session in the past 14.  It fell to a two-month low near $0.7150 in late Asian turnover before stabilizing.  The $0.7200 area now offers resistance.  The sell-off of the Chinese yuan continued.  The greenback gapped higher and never looked back.  Recall that the dollar settled around CNY6.3715 on April 15.  A week later, last Friday, it settled above CNY6.50 and today, pushed over CNY6.56.  It is the greenback's 5th consecutive gain and today's advance of a little more than 0.9% is the largest advance since March 2020. The dollar is trading at its best level in nearly a year and a half.  The PBOC set the dollar's reference rate at CNY6.4909, slightly lower than market projections (CNY6.4911 in the Bloomberg survey). The next key chart area is CNY6.60.   Europe Macron was easily re-elected with a roughly 58%-42% margin.   Partisans, perhaps trying to bolster the turnout and some press accounts seemed to exaggerate Le Pen's chances.  No poll showed her in the lead.  Still, the euro initially trading higher (~$1.0850) before falling to almost $1.07 before the end of the Asia Pacific session.  The June parliamentary election will shape Macron's second term and his ability to enact his program.  Separately Slovenia voted not to grant Prime Minister Jansa another term.  This further isolates Hungary's Orban.  Golob, the former head of the state-owned power company before dismissed by Jansa, will lead what appears to be a center-left government.   Last week, Germany's flash PMI was mostly better than expected.   Recall that helped by the surprising gain in the service PMI, the composite fell to 54.5 not the 54.1 economists expected (median, Bloomberg survey).  Today, the IFO survey was also better than expected.  The current assessment ticked up to 97.2 from 97.1, while the expectations component rose to 86.7 from a 84.9.  The overall business climate reading rose to 91.8 from 90.8.  Separately, the government is expected to announce a supplemental budget on Wednesday that will boost this year's net new debt to at least 140 bln euros.  This is a 40 bln euro increase to fund government measures to cushion the impact of the war and the surge in energy prices.  Some of the off-budget 100-bln euro defense spending initiative will may also be funded this year.   The euro traded to almost $1.0705 in late Asia Pacific turnover, its lowest level since March 2020.   There is a 945 mln euro option struck at $1.07 that expires today.  The pre-weekend low near $1.0770 may now serve as resistance.  There are large options at $1.08 expiring over the next two days (1.6 bln euros tomorrow and 1.2 bln euros on Wednesday). The Covid-low was set in March 2020 near $1.06.  Sterling has been pounded again.  It dropped nearly 1.5% before the weekend, a roughly two-cent fall that took it to around $.12825.  It has lost another cent today to about $1.2730.  While we noted chart support near $1.2700, the next important chart area is closer to $1.25.  It finished last week below its lower Bollinger Band, and it remains well below it (~$1.2850) today. In fact, it is more than three standard deviations from the 20-day moving average (seen near $1.2755).   America St. Louis Fed President Bullard opined last week that a 75 bp hike may be needed at some juncture.   He explicitly said that it was not his base case.  Yet some in the markets, and more in the media seemed to play it up.  No other Fed official seemed to endorse it; Fed futures are pricing in a 51 bp for next week rather than 50 bp.  The Fed's quiet period ahead of the May 4 FOMC meeting means no more official talk.  Today's economic calendar features the Chicago Fed's March national activity index, which is reported with too much of a lag to provide new insight or a market reaction.  The Dallas Fed's April manufacturing survey is due as well.  The early Fed surveys have not generated a consistent signal.  The Empire State survey was stronger than expected while the Philadelphia Fed survey was weaker than anticipated.  The Dallas survey is expected to have softened.   Canada's calendar is light until Friday's February GDP print.   The Bank of Canada does not meet until June 1.  The swaps market currently has a little more than a 25% chance that it hikes by 75 bp instead of 50 bp.  However, the Canadian dollar itself seems more sensitive to the risk-off impulse spurred by falling equities than the policy mixed in Canada.   Mexico reports IGAE economic activity survey for February.   It is too dated to have much impact, and in any event, is being overwhelmed by the risk-off attitude.  The bi-weekly CPI report, covering the first half of April, released before the weekend, was stronger than expected.  The headline rate rose to 7.72% and the core rate rose above 7% for the first time in this cycle.  It is particularly disappointing because seasonal considerations, like the summer discount on electricity taxes, often point to less price pressures.  The risk of a 75 bp hike at the May 12 Banxico meeting is increasing.   Read next: How Are Markets Doing? US Bonds, EuroStoxx 600, CSI 300 And More| FXMAG.COM The US dollar jumped 0.65% against the Canadian dollar last Thursday and slightly more than 1% before the weekend.   It is up another 0.2% in the European morning to around CAD1.2740, after having approached CAD1.2760 in Asia Pacific turnover.  The greenback finished last week above its upper Bollinger Band and has spent most of today's session above it (~CAD1.2720).  The market is over-extended but there is little chart resistance ahead of CAD1.28.  The peso's fall is also continuing.  The US dollar traded above its 200-day moving average (~MXN20.42) for the first time since March 18.  It is also above the (38.2%) retracement objective of the slide since the March 8 high (~MXN21.46), which is found around MXN20.39.  The next retracement (50%) is closer to MN20.60 and the measuring objective of the potential double bottom is near MXN20.60.     Disclaimer
GBPUSD Testing Key Support at 1.2175: Will Oversold Conditions Trigger a Correction?

It's Like A Blockbuster! Crude Oil Price (BRENT/WTI) Electrify Markets As Elon Musk And Twitter (TWTR) Do The Same!

Walid Koudmani Walid Koudmani 26.04.2022 10:46
Oil along with other risk assets is trading higher today as sentiment towards energy commodities and industrial metals improved slightly after declining over the last several days. However, it is important to note that the outlook for oil is still unclear as there are a number of contradicting factors impacting the price of the commodity. On one hand, there is still the risk of a total embargo on Russian oil by the West which is likely to exert an upward pressure on prices. Read next: What Is Chia Coin? - (XCH) - First New Nakamoto Coin Since Bitcoin Launch (2009) | FXMAG.COM Taking a look at the Brent oil chart, we can see that the price bounced off the $100.00 per barrel mark yesterday evening and... On the other hand, the pandemic situation in China and the country's response to it is creating the risk of an economic slowdown in the world's second largest economy. As China is a major consumer and importer of oil and industrial metals, lower demand from this country could have a visible impact on oil prices as well as other commodities and lead to a domino effect across global markets. Taking a look at the Brent oil chart, we can see that the price bounced off the $100.00 per barrel mark yesterday evening and managed to climb to the $103 resistance zone before pulling back slightly today and heading once again towards the $100. A similar situation can be noticed when looking at the Oil.WTI chart with a pullback from the $100 area and a current test of the $97,77 reaction zone. Read next: A Reward For A Transaction!? What Is Kishu Inu Coin? ($KISHU) Let's Take A Look At This New Altcoin  Investors focus on today’s mega cap earnings after Twitter accepts Elon Musk takeover offer After a tense round of negotiations, Twitter accepted Elon Musk's offer and will be bought for $54.20 per share. The company will become private once the deal is completed after he initially became the largest shareholder by buying around 9% of shares. The market reacted favorably to this news with the stock price gaining 5.6% yesterday despite much controversy surrounding the issue. While the situation remains uncertain, it is likely that the effects of this news will have ripple effects across stock markets. However, investors will also be switching their attention to today's mega cap earnings reports in what will be a week filled with high level earnings. Microsoft and Alphabet are due to report their earnings today after market close which could have a noticeable impact on stock markets, particularly the S&P 500 and Nasdaq 100, both of which have been trying to halt a series of losses.  
The Commodities Feed: First US crude draw this year

WTI Crude Oil Prices Soaring Today Amidst The EU Announcing Their Plans To Ban Russian Oil Imports.

Rebecca Duthie Rebecca Duthie 04.05.2022 13:11
Summary: Major concerns around supply of oil. EU to cut demand for all Russian energy imports within a year. Read next: (HOOD) Can Robinhood Recover From Their Q1 Earnings Announcement ?!  Crude Oil Prices Continue To Surge. The ongoing lockdown in China caused the prices of crude oil to fall, the fall comes despite the production issues around oil. The concerns about supply of oil have become much more serious, according to the International Energy Agency, crude oil demand is meant to increase this year, this outlook remains even taking into account the reduction in demand as a result of the extended lockdowns in China. The concerns around supply have outweighed the fall early this week, especially after the EU’s intentions to stop imports of Crude Oil from Russia within 6 months, and all energy within 1 year. European Union’s plans to ban Russian Crude Oil Imports. The European Union announced their plans to ban imports for Russian crude oil within the next 6 months, the announcement pushed the price of WTI crude oil up by almost 4%. This move comes in an attempt to cut off Russia from the EU and by doing so, starve their economic reserves which are currently funding Russia’s invasion of the Ukraine. WTI Crude Oil Futures Price Chart. Read next: (TWTR) Twitter Share Price Down After Musk Takeover Gets Approved.  Sources: finance.yahoo.com, barrons.com
Bank of England's Rate Dilemma: A September Hike and the Uncertain Path Ahead

Wall Street tumbled

Conotoxia Comments Conotoxia Comments 06.05.2022 10:53
Stock markets saw strong declines the day after the Fed decision as investors may have concluded that the Fed will nonetheless fight inflation in a determined manner with the so-called wealth effect at its disposal.   Yesterday's sell-off on Wall Street could have been very impressive, as the indices fell at a rate we haven't seen in two years, mainly due to technology companies. The Dow index lost more than 1,000 points and the Nasdaq Composite fell nearly 5 percent. - Both indexes posted their worst one-day declines since 2020. The S&P 500 Index also fell 3.56 percent, its second-worst day this year. Thursday's session erased Wednesday's strong gains after the Federal Reserve meeting. Technology stocks suffered the most: Tesla (-8.3 percent), Apple (-5.6 percent), Amazon (-7.6 percent), AMD (-5.6 percent) and Microsoft (-4.4 percent), where the outlook for earnings momentum may not be the best for the next few quarters.   The sharp decline in stocks and entire indexes may also be part of the fight against inflation through the so-called wealth effect. Americans, more than half of whom may have exposure to the stock market, may consume less as their savings melt down in the stock market. Thus, this can have a deflationary effect by reducing demand pressures, which appears to be an additional mechanism for fighting inflation. Previously, with the wealth effect, central banks may want to drive current consumption, because it is different to spend income when the value of savings rises rapidly and when it falls rapidly, even though current income is not affected.   Returning to the markets, one also can't help but notice that it wasn't just stocks that were cheapening. Bond and cryptocurrency prices also fell. The yield on 10-year US bonds beat the 3 percent level, and BTC fell below $36,000 at one point. It seems that once again capital was returning to the USD, as its index approached the level of 104 points, the highest since 2002. Nervousness in the markets, therefore, seems to persist, and this will be compounded by today's publication of data from the US labor market at 14:30. It seems that the times when bad data was good for the markets, as they waited for the Fed to help, are over. Now, bad data can be perceived negatively, and good data positively. The consensus is for a reading of 385k. What will be the NFP? That is what we will find out in a few hours and could be the event of the day.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Earnings Season: (DIS) Disney Stock Price Awaits Earnings Announcements

Earnings Season: (DIS) Disney Stock Price Awaits Earnings Announcements

Rebecca Duthie Rebecca Duthie 11.05.2022 16:07
Summary: Disney is expected to make their Q2 financial results announcement. Is Disney plus going to be the company's saviour this quarter? Disney+ may be the companies saviour this quarter Disney is due to make their Q2 earnings announcement after the market closes on Wednesday. Analysts remain positive that the Disney+ streaming service will bring economic flows into the company. The overall subscriber numbers are slowing in the wake of rising inflation. Read Next: Don't Worry Coffee Lovers! The Price Of Coffee Futures Falling Amidst Current Market Conditions, Crude Oil (WTI) Recovers Slightly, Palladium Prices Show Steady Downward Price Trend | FXMAG.COM Eyes are on the performance of the streaming service, parks, experience and consumer products business. The Wall Street earnings forecast are: Revenue: $20.11 billion Adjusted Earnings per share: $1.17 Disney+ subscribers: 4.5 billion expected. Disney Stock Price Chart Read next: Despite The Year The Stock Market Has Seen, One Asset Has Succeeded: The US Dollar.  Sources: finance.yahoo.com
Stock Market Showing Signs Of Slight Recovery Amidst U.S CPI Report Release

Stock Market Showing Signs Of Slight Recovery Amidst U.S CPI Report Release

Rebecca Duthie Rebecca Duthie 11.05.2022 18:05
Summary: S&P 500 has seen 0.72% growth today. The value of (XAUUSD) gold has shown bullish signals in the market today. Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co.  S&P 500 is rising during trading today The U.S CPI report which offered an update on price increases across U.S for April was released by the U.S labour department on Wednesday. The report reflected there was some deceleration of inflation figures compared to March, however, the rate of price increases exceeded analyst expectations. The CPI for April decelerated marginally compared to the March figures. The figures represent how far the Fed will have to go in the future regarding tightening monetary policy to fight the rising prices. S&P 500 Price Chart Will Gold rally in the wake of the CPI report? Gold futures have increased in value today, the initial increase came before the CPI report was released by the U.S labor department, and the increase has continued after the release. The lower than expected CPI figures bode well in the favour of the gold prices as uncertainty arises amongst investors on the Fed's next move. With volatility in the stock markets likely to continue, perhaps investors are trying to hedge their bets, driving the price of gold upwards. Gold Futures Jun’22 Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  Sources: Finance.yahoo.com
What Is The Future Of Modern TAXIS? Uber Stock News and Forecast: UBER CEO buys stock, should you? | FXStreet

What Is The Future Of Modern TAXIS? Uber Stock News and Forecast: UBER CEO buys stock, should you? | FXStreet

FXStreet News FXStreet News 11.05.2022 16:44
Uber stock under pressure after dismal earnings earlier this week. UBER stock is down 44% so far in 2022. Uber CEO just bought 200,000 shares for $5.3 million. Uber (UBER) stock remains mired in depression with bears in total control after earnings earlier this week. The company unveiled a massive loss that led to CEO David Khosrowshahi penning a letter to employees to explain the earnings and what he feels needs to be done to secure the future of the ridesharing company. Uber Stock News: A loss is a loss First, here is a quick recap on those earnings numbers. Earnings per share (EPS) came in at $-3.04 versus a $-0.24 estimate. Revenue came in at $6.85 billion versus estimates of $6.13 billion. First, the earnings per share number is not really comparable as it includes losses in UBER's equity investments related to stakes in Didi (DIDI), Aurora and Grab. I never really pay attention to statements such as the one I just made, not comparable. A loss is a loss. It does not matter how you phrase it. It is not a loss attributable to regular operations, however, but it is still a loss. It affects cash flow, balance sheet, etc. IT IS A LOSS. Wall Street analysts – let's get this straight. UBER lost $5.9 billion for the quarter. Read next: Don't Worry Coffee Lovers! The Price Of Coffee Futures Falling Amidst Current Market Conditions, Crude Oil (WTI) Recovers Slightly, Palladium Prices Show Steady Downward Price Trend | FXMAG.COM Revenue beat estimates, but what is Uber doing with that money? They invested it and lost $5.6 billion. Well done. UBER CEO David Khosrowshahi then said in a letter to employees, which CNBC got a hold of, that the company would cut back on spending and hiring. Peer LYFT had also produced downbeat forecasts for the ride-hailing sector. Despite it all though Uber CEO David Khosrowshahi has put his money on the table and stumped up $5.3 million for some UBER shares this week. Usually, insider purchases are more significant than insider sales, and this is not a small amount. Although we should note, he does not have a great track record. Previously, he bought shares at $44.92, so nearly a 50% loss then! Read next: Earnings Season: (DIS) Disney Stock Price Awaits Earnings Announcements| FXMAG.COM Should you follow him? Difficult call. We are not as bearish on UBER as some other stocks that soared too high, but UBER is a play on the broad economy. It needs economic activity to remain strong to benefit. If people pull back on spending, UBER will be one of the first things to suffer. Certainly in the short term, we view the risk-reward as being slightly more skewed to the upside now. The bad news is largely in the price, and we may see a short-term bounce if today's CPI is in line. Uber Stock Forecast $28.41 remains our key level and is our bearish pivot. UBER returns to neutral above this level. Both the Money Flow Index (MFI) and the Relative Strength Index (RSI) are showing oversold levels, further strengthening our arguments for a short-term relief rally. UBER stock chart, daily
The Commodities Feed: Anticipating LNG Strike Action and Market Dynamics

Philip Morris Buys Match, Fed Members Spills The Tea And Gold Price Nears Quite Low Values | Saxo Bank

Saxo Bank Saxo Bank 11.05.2022 17:29
Summary:  Global equity markets have bounced after the US briefly hit new cycle lows yesterday. One development at the margin that has helped is the sharp decline in longer bond yields, even as a couple of Fed members were out with hawkish comments. A strong 3-year US treasury auction showed strong demand. Elsewhere, gold remains under pressure and is on life support. The data focus today swings to the US and the release of April CPI data.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - the rebound in US equities succeeded closing above the prior session’s close but met resistance above the 12,500 level in Nasdaq 100 futures. However, this morning Nasdaq 100 futures continue to rally trading around the 12,450-level attempting to break above the 12,500 level again which is needed to close Monday’s selloff range. Sentiment is still weak but a pause in the momentum in US 10-year interest rates is providing some support to US equities in the short-term. Q1 earnings results yesterday confirmed the slowdown in gaming and cryptocurrency trading activity. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I). China’s A shares surged with ChiNext rising 4.3% and CSI300 up 2%. Electric equipment, semiconductors, EV battery, consumer electronics, wind and solar names led the charge higher. EV battery maker, CATL (300750) rose 7.7%. Hong Kong’s Hang Seng Index rose 1.7% and Hang Seng TECH Index gained 4.6% by mid-day.  After reporting better than market expected earnings and margin expansion, Li Auto (2015) surged 11%. The COVID related disruption to logistics and production, plus food and daily necessities stockpiling by households seems to make their impact felt on general price levels. China’s April PPI came at +8.0% YoY and CPI at +2.1% YoY, both higher than market expectations.   AUDUSD and USDCAD – the two key commodity currencies broke through key support against the US dollar this week, but so far the reaction to the development has been restrained and would likely take a further slide in risk sentiment, including in the commodity space for a notable extension lower. As the break levels remain nearby, the pairs deserve watching for the trend status and a possible reversal as well – resistance in AUDUSD is 0.7000-0.7050 and support in USDCAD comes in at 1.2900-50. Read next: Don't Worry Coffee Lovers! The Price Of Coffee Futures Falling Amidst Current Market Conditions, Crude Oil (WTI) Recovers Slightly, Palladium Prices Show Steady Downward Price Trend | FXMAG.COM USDJPY and JPY pairs – global sovereign bond yields have tumbled from their highs at the start of the week and crude oil has corrected sharply lower, two developments that support the Japanese yen, as Japan relies so heavily on energy imports and BoJ yield-curve-control policy means that the currency absorbs weakness when the domestic bond market is not “allowed” to. And yet, the JPY bounce on supportive developments has proven surprisingly muted – an opportunity or indication of further weakness to come? Watching for the reactivity in JPY pairs around the US CPI release today and 10-year US T-note auction later today as USDJPY is often one of the more sensitive currencies to US treasury yields. Gold (XAUUSD) dropped below $1850 support yesterday after several Fed officials backed multiple 50 basis point rate hikes. These comments helped drive fresh dollar strength and a continued rise in US real yields ahead of today’s US CPI print. Recent dollar strength, especially against the yuan and rupee has reduced demand from China and India, the world’s two biggest buyers of physical gold. With gold trading near a three-month low, demand for bullion backed ETFs has also ebbed with total holdings falling to a three-week low on Tuesday. Silver (XAGUSD) meanwhile slumped below previous support at $21.5, thereby adding an additional layer of weakness. From a technical perspective, the next key support level in gold is the 61.8% retracement of the March 2021 to March 2022 high at $1827. Crude oil (OILUKJUL22 & OILUSJUN22) traded higher in Asia with Brent bouncing before reaching key support below $100 per barrel. Catalyst for the move ahead of today’s US CPI print was a decline in the Covid19 infections in China providing some cautious optimism about a pickup in demand from the world’s largest importer. The cost of fuel due to lack of refinery capacity and sanctions against Russia remains very elevated with retail gasoline in the US hitting a record. The EIA meanwhile lowered its forecast for US production in 2022 and 2023 while Saudi Arabia and the UAE oil ministers warned that spare capacity is decreasing in all energy sectors. Developments that may offset any slowdown in global consumption due to lower growth and punitive high inflation. Monthly oil market reports from OPEC and IEA on Thursday. US Treasuries (TLT, IEF) – The US yield curve flattened sharply yesterday as hawkish talk from a couple of Fed members (see below) kept the shorter end of the yield curve elevated, while longer yields continued their sharp retreat ahead of a tone-setting 10-year T-note auction today, with the benchmark yield there trading just below 3.00%. The 3-year notes yesterday saw the strongest demand in over a year. What is going on? Fed officials continue to back rate hikes. Fed speakers are back on the wires backing multiple 50 basis point rate hikes, even as that might mean a bumpy ride for the economy and the markets. Cleveland Fed President Loretta Mester, in fact, also brought 75bps rate hikes back on the table for H2 if inflation doesn’t recede. US earnings recap. The big negative surprise was Coinbase reporting Q1 revenue of $1.17bn vs est. $1.48bn and a dark Q2 outlook expecting lower trading activity. Unity was in line with Q1 estimates but puts out a very low Q2 revenue figure of $290-295mn vs est. $360mn, but the fiscal year guidance is closer to consensus suggesting timing issues. Electronic Arts surprised investors given the weakness in gaming results recently guiding fiscal year 2023 (the company is not following the traditional calendar year) revenue a bit above consensus. Staying with gaming results, Roblox reported a slowdown in user activity (bookings) as so many other gaming companies have done in Q1. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Philip Morris to buy Swedish Match for SEK 106 per share. This is one of Europe’s largest transactions this year worth $16bn in an all-cash deal translating into a premium of 40%. Philip Morris is acquiring Swedish Match to get assets that are less about visual cigarettes to better cope with increasing regulation around the world against cigarettes. Declining Covid-19 cases in China helped boost sentiment across battered stock markets in Shanghai and Hong Kong overnight. The industrial metal sector has seen a sharp correction during the lockdown with the Bloomberg Industrial Metal Index currently up just 5% on the year after hitting a 39% gain on March 7. As lockdowns start to ease the focus across the sector is likely to return to tight global inventories and the prospect of a revival in demand with the Chinese government likely to initiate projects to support an economic revival. Six major mining companies who derive more than 60% of their revenue from copper have slumped between 25% and 50% from peaks achieved during the past year. What are we watching next? US CPI and 10-year T-note auction today. The 3-year T-note auction yesterday showed the strongest demand for 3-year US paper since early 2021. A 10-year T-note auction is set for today, with yields having retreated to near 3.00% from the highs earlier this week near the 2018 cycle high of 3.25%. Liquidity in the US treasury market is at its weakest levels since the pandemic-outbreak panic moment even before the Fed is set to begin reducing its balance sheet (requiring the market to absorb more treasury issuance). Reactivity in the US treasury market and the US dollar is also worth close observation today on the release of the April CPI data, expected to show the headline rising at only +0.2% MoM, but the core rising +0.4% MoM. The YoY expectations are +8.1%/+6.0% vs. +8.5%/+6.5% in March. EU gas prices jumped on Tuesday and may rise further today after Ukraine’s network operator warned Ukraine won’t accept gas at Sokhranivka, one of two cross-border points handling Russian flows, from today after occupying forces disrupted operation at the compressor station. It’s still possible for gas to be rerouted to the second entry point, Sudzha, allowing European contracts to be fulfilled, it said. How Gazprom reacts to these changes will set the tone in today’s trading. Dutch TTF benchmark gas briefly traded below its 200-day moving average support line at €89/MWh yesterday before ending the day near €100/MWH on the Ukraine news.  Earnings Watch. In Europe this morning the focus is on earnings from E.ON and Siemens Energy given the energy crisis in Europe. Genmab is also important to watch being one of Europe’s largest pure plays within the biotechnology industry. Later in the US session the focus is on Walt Disney given the latest weak results from Netflix and more reopening post the pandemic benefitting Disney’s physical entertainment assets. We will also watch Coupang, the largest e-commerce company in South Korea, given the bad Q1 results from most e-commerce companies. Today: Genmab, E.ON, Siemens Energy, Continental, Toyota, SoftBank, Takeda Pharmaceuticals, Delhaize, Mowi, Swedish Match, Walt Disney, Coupang Thursday: Verbund, KBC Group, Brookfield, Fortum, Siemens, Allianz, Merck, Hapag-Lloyd, RWE, Atlantia, Snam, NTT, SoftBank Group, Aegon, Naturgy Energy, Motorola Solutions Friday: Deutsche Telekom, KDDI, Honda Motor, Alibaba Economic calendar highlights for today (times GMT) 0715 – ECB's Nagel to speak 0800 – ECB President Lagarde to speak 0800 – ECB’s Vasle to speak 0830 – ECB's Makhlouf to speak 0850 – ECB's Knot to speak 1220 – ECB's Schnabel to speak 1230 – US Apr. CPI 1230 – US Apr. Real Average Hourly Earnings 1600 – US Fed’s Bostic (non-voter) to speak 1800 – US 10-year T-Note auction 2301 – UK Apr. RICS House Price Balance Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank
Stocks to keep an eye on in the second half of 2023

US Stocks: Earnings - (DIS) Disney earnings and fallen angels | Saxo Bank

Peter Garnry Peter Garnry 12.05.2022 09:13
Summary:  Disney has been through some tough years and over the past year the stock price has fallen significantly as investors are waking up to higher interest rates and a more negative outlook for video streaming. We take a look at Disney and what to expect tonight. The entertainment company has joined a group of fallen angels, which are companies that have experienced a significant drawdown and have negative total return over the past three years. Things will continue to be ugly for equities as long as inflation remains hot and financial conditions tighten. Disney is back to square It has been some turbulent years for Walt Disney reporting FY22 Q2 earnings (ending 31 March) tonight after the US market close. It announced its Disney+ video streaming service in April 2019 pushing the company’s valuation much over the subsequent 9 months as investors were expecting a new distribution channel that could fuel growth. Then came the pandemic and Disney’s physical assets went into a tailspin, but things improved for Disney driven by low interest rates (increasing equity valuations), and later the vaccine which sped up the reopening of society. Meanwhile the pandemic had turbocharged its subscribers for Disney+ delighting investors. Sentiment got supersized to the point where investors were willing to pay a little more than 70 times next year’s earnings. Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co. With financial conditions tightening significantly and video streaming being challenged (read our equity note on Netflix earnings outlook) Disney’s equity valuation has come down to earth as a function of the stock price down 46.7% from its March 2021 peak. Tonight investors are expecting revenue of $20.2bn up 29% y/y as Disney is still gaining from base effects related to the reopening of societies, but the q/q growth is expected to by -7.8%. EBITDA is expected to be $4.1bn up from $2.7bn a year ago as the operating margin is expanding back to pre-pandemic levels. Given the recent outlook from technology and entertainment companies, Disney could surprise negatively tonight.Source: Saxo Group Almost 10% of S&P 500 is down over the past three years Yesterday we looked at technology companies with large setbacks, but it got us to go deeper and the equity destruction is quite big when you broaden the lens. In the S&P 500 there are now 43 companies with a drawdown larger than 30% over the past 200 days and that are down on a total return basis over the past three years. As the table below shows there are some quite big names on that list such as Walt Disney, Comcast, Citigroup, PayPal, Starbucks, General Electric, Netflix, Boeing, Ecolab, and Illumina. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  As long as financial conditions and interest rates move higher we remain defensive on equities and will continue to argue that investors need commodities to balance their portfolios. We have described in several equity notes that the period 1968-1982 was very bad for equities in real terms due to inflation. Time will tell whether we get an equally long period with zero real rate returns for equities, given the factors such as urbanization, green transformation (ESG), decade of underinvestment in the physical world, and deglobalization of supply chains to pandemic and lately Chinese Covid-lockdowns, inflation will remain high (3-5%). Forces the cost of capital higher and thus equity valuations down. While US equities have still delivered 40% real return since early 2019 the real returns are eroding fast at these inflation levels. Today’s core CPI m/m print at 0.6% is suggesting inflation will remain elevated for quite some time eating into returns. For bonds the situation looks even more grim (see chart below) and investors are basically losing out on everything except for cash and commodities.Source: Bloomberg Source: Saxo Bank
Tesla Will Struggle To Recover In The Coming Years

Tech Stocks: Tesla Stock News and Forecast: As TSLA struggles, will the TWTR deal still go ahead at $54.20?

FXStreet News FXStreet News 12.05.2022 16:35
Tesla stock falls just over 8% on Wednesday. Twitter stock also falls and is now nearly 20% below its takeover price. TSLA still holding above $700 key support. Tesla (TSLA) stock suffered another humbling day on Wednesday as it yet again suffered more steep losses. As the broader equity market appears to crash, so too does the Tesla share price. This time it dropped by 8% to trade into the low $700s. $700 was the low seen back in February when market panic sold the Ukraine invasion news. Since then Tesla has recovered and held up well. Part of this was the reasonably good earnings quarter it posted. Now though a combination of macro factors and the Twitter (TWTR) deal are weighing on the stock. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Tesla Stock News The latest Tesla recall news hit yesterday, and that certainly helped the stock underperform all the main indices. Tesla has had to recall 130,000 vehicles due to CPU problems affecting the central display unit. There have been a number of recalls for Tesla vehicles this year, none of which seems to have hindered the share price. But this environment has turned more bearish, and any bad news is seized upon. This week we also have had news of a supply problem hindering production at Giga Shanghai, which comes just days after getting the factory back online after covid lockdowns. Adding to pressure on Elon Musk but not directly attributable to Tesla is a report from The Wall Street Journal saying that Elon Musk is facing a federal probe over delays in his filing for his initial stake in Twitter. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM We also note a report from Bloomberg saying smaller investors and hedge funds will get the chance to invest in the Twitter acquisition by way of special purpose vehicles that pool money together. The minimum investment is $5 million. This is not reassuring in our view. Still scrambling around for investors at this late stage in this type of market does not inspire confidence in the deal going through in its current guise. Hindenberg Research also released a report outlining similar concerns last week. Tesla Stock Forecast $700 remains the key support and target for now. As long as this holds then, there is the chance of a strong bear market rally. But it likely is getting too close for comfort now and should be triggered today. That level most likely has stops just beneath, so it could spike lower on a beak. That would then be the time to reassess. Both the Money Flow Index (MFI) and the Relative Strength Index (RSI) are close to oversold, and a break of $700 could put both into oversold territory. Breaking $700 brings $620 as the next support. Resistance and the bullish pivot is all the way up at $945 now. Read next: Where XRP price could bottom and how to reenter the market| FXMAG.COM Tesla (TSLA) chart, daily
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

Elon Musk Tweets That The Twitter (TWTR) His Acquisition Of The Social Media Platform Is Paused

Rebecca Duthie Rebecca Duthie 13.05.2022 13:24
Summary: Elon Musk put the twitter deal on hold. Stock prices drop. Elon Musk Tweets that twitter deal is on hold On Friday Elon Musk tweeted that the deal to buy out twitter has temporarily been put on hold. Elon Musk claims to be awaiting data on the proportion of fake accounts on the social media platform. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM This pause in the acquisition is likely to cause frustrations for many people in the company In the wake of Musk's tweet, the share price of twitter has fallen by almost 15%. Musk Tweeted “Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users.” Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM This pause in the acquisition is likely to cause frustrations for many people in the company, especially given that many executives have been laid off already during company restructuring. The question lies in when the deal will be back on the table. TWTR Price Chart Sources: finance.yahoo.com
(INPST) InPost’s new headquarters in Cracow | Walter Hertz

(INPST) InPost’s new headquarters in Cracow | Walter Hertz

Finance Press Release Finance Press Release 16.05.2022 11:10
InPost, the leader of the modern logistics services market in Poland, is moving its headquarters to Ocean Office Park complex in Cracow. The company has leased 8,300 sq m. of space in building B, implemented in this investment. Walter Herz company supported the company in the process of searching for a location and negotiating lease terms. Amsterdam Stock Exchange, decided to relocate the office to the Cavatina investment located at Pana Tadeusza Street in the Zablocie district of Cracow The international company listed on EURONEXT – Amsterdam Stock Exchange, decided to relocate the office to the Cavatina investment located at Pana Tadeusza Street in the Zablocie district of Cracow, with a view to create the best conditions for the development of the organization and to provide the team with comfortable working conditions in a modern environment. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM - Changing the headquarters is aimed at meeting our current expectations in terms of the quality of office space, as well as the needs related to the intense growth of the organization. We chose Ocean Office Park because it offers the highest standard of office space and common areas, which ensures comfort and safety at work. Attractive architectural and technical solutions that distinguish this project were the main aspects that determined the choice of location. Green areas and recreational zones arranged within the complex were also of great importance - says Marcin Pulchny, Vice President of the Management Board of InPost. - Environmental protection and ESG policy is of great importance to us. The company was listed first in the Electromobility-Friendly Companies 2022 ranking. It is important for us to achieve synergy, combining corporate governance and natural and social environment. All employees working in the complex will have access to parcel lockers, the most eco-friendly for of delivery for on-line shopping, located on the OOP premises. - adds Marcin Pulchny. It is a great satisfaction for us that InPost has once more benefited from the experience of our team specializing in servicing the office sector - informs BartÅ‚omiej Zagrodnik, Managing Partner/CEO at Walter Herz - We are very pleased that once again, we had the opportunity to support InPost in the search for space. This time, our task was to carry out the relocation process of the company's headquarters, including financial, legal and technical negotiations. We advised the company on various levels, both in terms of searching for offices and space for logistics activities, which is related to the expansion of the e-commerce delivery platform throughout Poland. InPost, as one of the largest logistics operators in Poland, is also one of the most active entities on the logistics space market. It is a great satisfaction for us that InPost has once more benefited from the experience of our team specializing in servicing the office sector - informs BartÅ‚omiej Zagrodnik, Managing Partner/CEO at Walter Herz. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM InPost enjoys a leading position on the logistics market in Poland. The operator has created the first in the country network of parcel lockers, self-service points of sending and receiving parcels, open 24/7. The company has been present on the market for 22 years and has almost 17 thousand parcel lockers that form the largest business structure of this type on our market. Moreover, the application used to operate the lockers, has over 9 million users. - Searching for a new office for InPost, it was crucial to provide the company with optimal development opportunities within the selected building and to protect the client against an increase in construction costs. Comprehensive services related to the relocation also included securing the tenant's interests when it comes to Project Management, and above all Cost Management. The basis for choosing Ocean Office Park was a very good relation of the quality and technical standard of the offered space in relation to the financial conditions and the location of the facility in the vicinity of key transport hubs in the city - informs Mateusz Strzelecki, Head of Tenant Representation / Partner at Walter Herz. - Ocean Office Park is our third office project that we are implementing in Cracow. The confirmation of the success of this project, in which we commissioned the first office building, is among others, the main Prime Property Prize in the category of Investment of the Year in the Office Space Market, which it has recently won. So far, we have completed six office buildings on the Cracow market. In addition to building A in the Ocean Office Park investment, our portfolio of completed projects includes four office buildings in the Equal Business Park complex located at Wielicka Street and Tischnera Office project. We are happy that InPost is relocating its headquarters to our newest investment in Cracow. We plan to complete the construction of the second office building in the Zablocie district before the end of the year and we hope that the tenants will move into the offices at the beginning of next year – says Natalia JagliÅ„ska, Leasing Director, Cavatina Holding. Cavatina Capital Group is a leader on the Polish real estate market, it has a portfolio of mixed-use properties with a total of 0.5 million sq m. The company independently manages all key investment processes. About Walter Herz Walter Herz company is a leading Polish entity operating in the commercial real estate sector across the country. For ten years, the company has provided comprehensive and strategic investment consulting services for tenants, investors, and real estate owners across the country. Walter Herz experts assist investors, property owners, and tenants. They provide full service to companies from the private and public sectors. Walter Herz advisors support clients in finding and leasing space and provide consulting in implementing investment projects in the warehouse, office, retail, and hotel sectors. The company is based in Warsaw and runs regional branches in Cracow and Łódź. Walter Herz has created the Tenant Academy, the first project in Poland, which supports and educates commercial tenants from all over Poland by organizing specialized training meetings. To ensure the highest ethical level of services provided, the agency introduced the Code of Good Practice. 
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

(TGT) Target Delivers Disappointing Earnings Results To The Market

Rebecca Duthie Rebecca Duthie 18.05.2022 14:13
Summary: Target share price tanks after earnings release. Retailers getting blindsided by higher costs Targets earnings announcement leaves investors shorting the stock Target Corporation's stock tanked on Tuesday after they released their first quarter earnings, their adjusted earnings per share came in well below investor expectations. However, it was not only the first quarters earning report than sent the share price tumbling, the retailer announced they expected the second quarter that its income margin rate is unlikely to be similar to the first quarters 5.3% operating income margin rate. Supply chain issues have also increased costs Target claims to have been blindsided by rising prices in the current environment, causing many financial indicators to come out lower than expected. In addition, supply chain issues have also increased costs. Despite sales rising as customers are having to spend more to buy more (due to rising inflation) profits are still struggling. Target Price Chart Read next: (DJI) Retail Stocks Help Push Dow Jones Industrial Average Price Up, Another Crypto Loses Value In The Market  Sources: finance.yahoo.com, barrons.com
What is next turn for (TSLA) Tesla? Elon Musk-Twitter Interacting With Tesla Stock Price | FxPro

What is next turn for (TSLA) Tesla? Elon Musk-Twitter Interacting With Tesla Stock Price | FxPro

Alex Kuptsikevich Alex Kuptsikevich 19.05.2022 15:45
Tesla stock has always been more volatile than the stock market. It closed the Thursday session on the lowest level since last August, and it is a common question, what is the next turn for the leading EV producer. For now, it looks like the downside impulse is not over yet but did its main part. Musk’s deal with Twitter The list of variables in this stock ranks from the outlook for demand for electric cars (i.e., oil prices) and interest in the ESG agenda, including the economic outlook and monetary policy, and ends with the tone of the tweets of its founder, Elon Musk. But in recent days, it has also been affected by Musk’s deal with Twitter, where Tesla shares were used as collateral. For investors, the latest news of Musk’s potential break-up of the agreement to buy the social network is good news. The opposite is also true. The promotion of the deal has caused Tesla shares to sell off with acceleration in the market. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Locally, buyers are eyeing current levels to purchase Tesla Shares in the leading electric car maker are now trading 38% below their peaks at the start of April and 43% below their all-time highs in November last year. The company’s shares are looking better than many other pandemic favourites, which have zeroed in on all and much of the gains from the March 2020 lows, while Tesla has become about ten times more expensive in that time. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Locally, buyers are eyeing current levels to purchase Tesla, which is aggressively ramping up production and is well ahead of other electric car makers in sales in an era of record fuel prices. On the one hand, the technical analysis points to a return of the stock from oversold territory, which could be followed by both a recovery bounce and the start of a new wave of growth that could return the price to levels above $1000 in just a few weeks. On the other hand, the share price may not face much of an obstacle moving down another 10% from current levels, regaining half of the pandemic rally to levels near $650, where it has traded repeatedly since December 2020.
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

(TSLA) Tesla Gets Kicked Of The S&P 500 ESG Index

Rebecca Duthie Rebecca Duthie 19.05.2022 13:35
Summary: Tesla gets kicked off the S&P 500 ESG index. Tesla's stock price has also seen major volatility in the past week, with rising investor concerns around the removal from the S&P 500 ESG index On Wednesday, the Electric Vehicle company Tesla, founded by the world's richest man, Elon Musk was dropped from the S&P 500 ESG index. The index moved to remove Musk amidst claims of social discrimination and crashes due to the autopilot vehicles. Shortly after Tesla was removed, Musk took to twitter and tweeted that “ESG is a scam”. There are other factors that lead to the removal of Tesla, such as a lack of publishing details regarding low energy or business conduct codes. Tesla's stock price has also seen major volatility in the past week, with rising investor concerns around the removal from the S&P 500 ESG index, Musks on-and-off Twitter deal and the CEOs political tweets regarding the Republican and Democratic parties in the U.S TSLA Price Chart Read next: (TGT) Target Delivers Disappointing Earnings Results To The Market  Sources: finance.yahoo.com, economictimes.indiatimes.com
Euro Area Final CPI Ahead of ECB's Interest Rate Decision on Thursday

Major Index NASDAQ (IXIC) Sell Off After Equities Fall, Will the ECB Turn Hawkish?

Rebecca Duthie Rebecca Duthie 20.05.2022 09:50
Summary: Despite growing confidence in the stock market, major indices are struggling to keep up with the volatile market. The ECBs turn to a hawkish attitude could lead toward a stronger Euro. Nasdaq loses value during the trading day on Thursday Equity stocks attempted to rebound during trading on Thursday after a sell-off. The sell off came as market participants grew concerned about whether the Fed’s continuous hawkish attitude could cause a slow down in the U.S economy. In general the investor sell-off attitude seems to be easing somewhat, however markets still remain volatile. NASDAQ Price Chart Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM European Central Banks possible tightening of monetary policy During trading on Thursday the Euro saw some strengthening based on the hopes of a more hawkish European Central Bank (ECB) in the summer. As the European Central Bank looks at a 50bps hike in interest rates this July, investor confidence is starting to restore in the Euro. The Euro showed particular strength against the pound sterling, which simultaneously pushed back their next interest rate hike. Sources: pounsterlinglive.com, finance.yahoo.com Follow FXMAG.COM on Google News
US Stocks: (WMT) Walmart misses the target as (TGT) Target stock suffers 1987-style collapse | FXStreet

US Stocks: (WMT) Walmart misses the target as (TGT) Target stock suffers 1987-style collapse | FXStreet

FXStreet News FXStreet News 19.05.2022 16:32
Walmart started the slide as it missed EPS on Tuesday. Target then suffered a collapse on Wednesday after it missed. Retail stocks led the entire market lower on Wednesday. First Walmart (WMT) and then Target (TGT) gave us exactly the picture that the retail sales number failed to do. Investors got somewhat excited as the retail sales number looked reasonably strong earlier this week. We had mentioned in our commentary that this was largely due to inflation, and it was a lagged report anyway. However, investors chose to take the positives. This optimism was dramatically ruptured on Wednesday when Target released earnings and went max bearish on costs and outlook. Walmart had teed this up Tuesday, but Target really rattled cages. Walmart Earnings Walmart's revenue number actually topped analyst estimates of $140.3 billion, coming in just over $2 billion ahead of analysts' estimate. Earnings per share (EPS) at $1.30 missed the expected $1.48. Margins were hit by rising costs and led Walmart's CEO to say, "US inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than expected. We’re adjusting and will balance the needs of our customers for value with the need to deliver profit growth for our future." Walmart stock closed 11% lower on Tuesday, pretty bad but not even close to its competitor. Target Earnings Walmart put us on notice, but things were about to get really ugly. TGT stock fell the most since the 1987 Black Monday crash. TGT stock ended Wednesday down by 25%. Target also beat on revenue, $25.2 billion versus $24.5 billion expected. Earnings per share though also suffered from lower margins. Rising costs are again to blame here. EPS was $2.19 versus $3.06 expected. Profit margins fell to 6% from 8% previously. “We were less profitable than we expected to be, or intend to be over time,” CEO Brian Cornell said in a briefing. “Looking ahead, it’s clear that many of these cost pressures will persist in the near term.” Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM As if things were not bad enough on Wednesday, another retailer cut guidance, citing costs and inflationary concerns. This time it was Bath & Body Works. This does at least set up a contrarian trade possibility for next week. More retailers report next week such as Costco (COST), Dollar General (DG), Best Buy (BBY) and Big Lots (BIG). We are at max bearishness for retail now. Any outperformance or bullish outlooks will see a massive rally in our opinion. The risk reward trade is skewed higher. We all expect more of the same. Walmart, Target Key Takeaways Consumer demand is solid. Both companies reported revenue ahead of analyst forecasts. The US consumer is still spending despite rising prices. So far so good. Target did say though that discretionary items saw less interest from consumers who chose instead to focus on lower ticket items. These carry lower margins for retailers. Despite spending holding up, we already are witnessing a shift in consumer spending patterns to lower-cost items. This will continue to hit margins going forward for retailers. Eventually, persistent inflation will lead to consumers cutting back on spending across all areas. Last week's consumer sentiment data from the University of Michigan showed consumer confidence at the lowest level since 2011. Consumers are spending for now, but they know what is coming. Target Stock Forecast Get ready for some serious range expansion. As the legend that is Stanley Druckenmiller puts it, when you get range expansion, the market is preparing for a move in that direction. Well off you go, next stop $100 with a stop at $125 on the way. This coming recession now looks more and more likely. Back in 2019 before the pandemic, Target was trading around $80 to $110. That was without a recession! Target (TGT) stock chart, weekly Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Walmart Stock Forecast We can see our first target (excuse the pun) in the March 2020 area marked uncertainty and volatility. WMT will trade toward here. After that, it is less clear. WMT is the king of adapting to the market and to consumer demand. It may be better positioned than most to ride out the coming inflationary recession. WMT stock chart, daily
This Week's Tesla Stock Split Could Be The Best Moment To Buy The Stock! Twitter Stock Price Plunged!

Could XAU extend rally? Are Apple, Tesla good to short? | MarketTalk: What’s up today? | Swissquote

Swissquote Bank Swissquote Bank 20.05.2022 10:23
The US equities closed Thursday’s session in the negative following a choppy trading session, as investors’ hearts pounded between buying the dip, or selling further on recession fear. The US 10-year yield declined yesterday, and the sharp retreat in the US yields gave a boost to gold, raising question on whether the gold rally could be sustained, and if yes, how high could it extend. The dollar gave back gains, letting the EURUSD and GBPUSD rally, but the gains may remain short-lived if the dollar skew in market pricing continues. Tesla got kicked out of the S&P’s ESG index, which could have implications on its long-term price potential   On the individual stocks, news that Michal Burry opened a bet against Apple heated conversations about whether Apple is a good ‘short’. And finally, Tesla got kicked out of the S&P’s ESG index, which could have implications on its long-term price potential. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:28 Market update 1:20 Is Apple a good stock to short? 3:50 US yields boosted gold. Is gold rally sustainable? 6:25 FX update: euro, pound up on softer dollar 7:58 Tesla out of S&P ESG index: what does it mean for stock performance? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. Follow FXMAG.COM on Google News
(FTSE) FTSE 100 Rallies In Response To Positive Economic Data, US Dollar Expected To See More Volatility

(FTSE) FTSE 100 Rallies In Response To Positive Economic Data, US Dollar Expected To See More Volatility

Rebecca Duthie Rebecca Duthie 20.05.2022 20:30
Summary: FTSE showing signs of increasing amidst favorable UK economic data US Dollar to have a busy week next week. Read next: Major Index NASDAQ (IXIC) Sell Off After Equities Fall, Will the ECB Turn Hawkish?  FTSE 100 Increasing The FTSE 100 index rallied on Friday. This rally comes in the wake of the retail data released that well exceeded market expectations. Retail data came in at a 1.4% increase in contrast to the expected value of -0.2%. Food sales increased by 2.8% and car fuel sales also rose 1.4% in April. This data indicated to the market that consumers are showing resilience to the current economic situations. In addition, the positive data has improved investor sentiment towards the UK market. FTSE Price Chart US Dollar expected to see more volatility Next week is full of important U.S economic data announcements and events which we can expect to add more volatility to the US Dollar. On Wednesday the FOMC minutes will likely give the market a clearer look at the thoughts of the current state of the US economy and whether or not we can expect to see more interest rate hikes. On Thursday the Fed will release their preferred inflation reading PCE which is expected to highlight the growing US pressures. All the factors above will lead to a heightened volatility in the US Dollar. Sources: finance.yahoo.com, dailyfx.com
ECB's Potential Hike Faces Limited Rate Upside as Macro Headwinds Persist

Xpeng (XPEV) Earnings Results Cause Share Price To Fall

Rebecca Duthie Rebecca Duthie 23.05.2022 14:04
Summary: Xpeng earnings released. EV maker affected first hand by lockdowns in China. Read next: Harley Davidson (HOG) Halting Production  XPeng (XPEV)reported first quarter losses whilst revenue topped. The China based Electric vehicle maker forecasts sales picking up in May after the disappointing April figures as China eases lockdowns. However, the stock price fell in the wake of the disappointing data. The Covid-19 lockdowns in China have led to factory shutdowns and/or slower production. XPEV stock price has fallen. The Electric Vehicle maker reported a loss of 28 cents per ADS, however revenue increased by 153%. Xpeng is expected to improve across the board in quarter 2, they hope to edge closer to pre-covid figures. XPEV Price Chart Sources: finance.yahoo.com, investors.com
GBP: Softer Ahead of CPI Risk Event

(DJIA) Dow Jones Index Rising, Investors Confidence In The Euro Is Looking Bullish As ECB Confirm Interest Rate Increases

Rebecca Duthie Rebecca Duthie 23.05.2022 21:56
Summary: President Joe Biden's announcement of possible easing of tariffs on goods from China fairing well for U.S stocks. Euro expected to continue strengthening. Read next: Xpeng (XPEV) Earnings Results Cause Share Price To Fall  U.S stocks showing signs of recovery The Dow Jones Index rose almost 2% during the trading day on Monday. U.S stocks recovered on Monday in the wake of investors coming-off a 7 week losing streak. The recovery comes after investors received some fresh-trade related information from the Biden Administration. On Monday President Joe Biden announced that he was considering easing tariffs on Chinese goods due to the belief that the tariffs caused financial harm on consumers and businesses. DJIA Price Chart ECB Interest rate hike is confirmed The Euro exchange rate performed well on Monday thanks to the European Central Bank's president confirming that there will be interest rate hikes in July. The Euro responded well to this information and strengthened against both the US Dollar and the Pound. Leading up to the confirmation of the rising interest rates, the Euro had been strengthening, in the wake of the interest rates being risen, investors believe that the Euro will continue to strengthen. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Sources: finance.yahoo.com, poundsterlinglive.com Follow FXMAG.COM on Google News
Eurozone Bank Lending Under Strain as Higher Rates Bite

What's The Future Of British Pound (GBP)? Stocks: Snap Has Fallen! How Far Will New Zealand Dollar Go!? | Least worst choices | Oanda

Jeffrey Halley Jeffrey Halley 25.05.2022 11:05
RBNZ hikes by 50-bps The Reserve Bank of New Zealand has raised policy rates by 0.50% to 2.0% this morning, with Governor Orr setting a hawkish tone in the press conference afterwards. In the statement itself, the RBNZ’s “least worst choices” policy seemed to imply that although external risks remained, the domestic economy was strong and could tolerate tighter monetary conditions. Mr Orr seemed to be saying much the same, suggesting that terminal rates could go above 3.0% and would get there sooner, rather than later. We’ll see just how strong the New Zealand economy is in due course, but a hawkish RBNZ has seen the New Zealand dollar rally by 0.70% to 0.6505 today, making it the biggest currency gainer in Asia today. Elsewhere, Singapore’s GDP growth came in tight on expectations, rising by 3.70% YoY for Q1. With inflation data yesterday also less worse than expected, expectations for another unscheduled tightening by the Monetary Authority of Singapore have receded for now. That may bring some relief to the Malaysian ringgit, which has fallen to 3.20 against the Singapore dollar. Snap Has Fallen In Malaysia itself, Inflation data for April continues to remain benign as domestic demand stays subdued. Inflation YoY rose by just 2.30% and will leave Bank Negara, like Bank Indonesia yesterday, in no hurry to tighten monetary policy. Ominously though, the Malaysian ringgit has shown no strength versus the US dollar. USD/MYR remains at recent highs at 4.4000 even as the greenback is experiencing an extended bull market correction versus the G-10 and EMFX elsewhere. If the US dollar turns higher once again, and the MYR resumes its sell-off, Bank Negara’s hand might be forced. Overnight, the recession word weighed on stock markets once again. European PMI data was a mixed bag. Manufacturing PMIs held steady, while Services PMIs fell as consumer demand takes a hit from the rise in the cost of living. That wasn’t enough to stop the euro rally, powered by suddenly hawkish ECB heavyweights. Bank of England, has already signalled a white flag on bringing down inflation The picture was rather grimmer in the United Kingdom where the most honest central bank in the world, the Bank of England, has already signalled a white flag on bringing down inflation and pencilled in a recession next year. UK Manufacturing PMI held steady at 54.6, but Services PMIs plummeted to 51.8. The UK is facing a winter of discontent as the cost of living soars, with the railways RMT union voting to strike over pay negotiations. Expect more of this going forward. Additionally, the Chancellor is apparently preparing to widen the scope of the windfall tax on energy companies, probably to help pay for his cost of living mini-budget. UK stock markets didn’t like that. Finally, the “party gate” report on those lockdown wine frenzies in the No 10 garden is due for release today, potentially putting more pressure on PM Johnson’s leadership. ​ Little surprise that the sterling slumped versus the euro and the US dollar overnight. In the United States, the recession world hit particularly hard after the Snap Inc. induced meltdown by Nasdaq stocks overnight. US New Home Sales plummeted to 591,000 in April, while Richmond Fed Manufacturing slumped to -9 in May. The S&P Global Services Flash PMI for May fell to 53.5, with Flash Manufacturing easing to 57.5. It was the new home sales that really frightened the street, though, as house building, and its ancillary services and suppliers are a good chunk of US domestic GDP. Soaring mortgage interest rates and petrol prices appear to be doing a lot of the Fed’s work for it before it even gets started. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM If there is one takeout from all of this for me, it is that rising inflation and borrowing rates are already crimping the demand side of the equation. Unfortunately, we are seeing very little sign of price pressures reducing due to a combination of factors, all of which have been thrashed to death here and in research everywhere. The uncomfortable reality is that central banks are going to be forced to continue the tightening path, even as growth slows around the world, because inflation has proven sticky and not transitory. That is the least worst choice central banks need to make in a stagflationary environment. I am asked every day if we have seen the low in the equity market sell-off. Hopefully, I have answered the question. US President Joe Biden’s trip around Asia continues Finally, US President Joe Biden’s trip around Asia continues. Unfortunately, with its emphasis on containing China and hawking a trade agreement empty of potential access to the US domestic market (Congress needs to approve that), the trip is not going to make much headway in re-establishing US leadership in the region. Asia really needs to see the colour of America’s money. Furthermore, the reliability of the US as a partner has taken a further hit today, with White House officials explicitly refusing to rule out the possibility that the US could enact crude oil export restrictions to help cap energy prices domestically. The US doesn’t have a crude oil problem, it has a refining and transportation problem, but let’s not let facts get in the way. I have warned about food nationalism previously, but if President Biden prioritises November’s mid-term elections over the economic war with Russia, and supporting Europe, it really is every man for himself globally. I can’t see that being positive for equities anywhere, or European asset markets full stop, or for Ukraine. Only the Kremlin is likely to be popping champagne as the US does Russia’s divide and conquer for them. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
German industrial production slumps for third straight month, raising recession risk

(IXIC) FOMC Meeting Minutes Drives Nasdaq Up

Rebecca Duthie Rebecca Duthie 25.05.2022 23:17
Summary: Nasdaq rises in the wake of Fed meeting minutes Nasdaq gains 1.5% on Wednesday On Wednesday the Federal Reserve's May meeting minutes confirmed that the Fed officials are keeping a 50bps interest hike on the table for the next few meetings. This pushed U.S stocks higher after a volatile day on the market, the Fed has seemingly instilled investors with confidence that they will try and regain control of the current rising prices. Investors have gotten a taste of the effect rising prices have had on company earnings across the board, the Feds commitment to try and reign in the rising prices is driving the Nasdaq and other indices upwards. IXIC Price Chart Read next: (TWTR) Twitter Shareholders Gathering To Discuss Elon Musk Twitter Purchase  Sources: finance.yahoo.com
Investors Are Worried That Elon Musk Is Losing His Focus | The Eurozone Recession Can Dampen Investors’ Hopes

(TSLA) Tesla Share Price Recovers As Overhang On Tesla Shares Is Reduced

Rebecca Duthie Rebecca Duthie 26.05.2022 19:13
Summary: Elon Musk reduced his Margin Loan for his TWTR deal Prices show some recovery. Tesla share price has gained more than 8.5% on Thursday Tesla's stock price has gained more than 8.5% on Thursday amidst Elon Musk’s closing out on a Margin Loan associated with his $44 billion Twitter deal. In a Securities and Exchange Commission (SEC) filing last night, Musk said he reduced the margin loan that linked his Tesla (TSLA) shares to zero, whilst boosting his overall equity portion of his Twitter takeover to $33.5 billion. This move from Musk reduced the pressure on the Tesla shares, driving the price up. TSLA Share Price Chart Read next: (IXIC) FOMC Meeting Minutes Drives Nasdaq Up  Sources: finance.yahoo.com, thestreet.com
Expectations of decent sales during holiday season have let Best Buy gain

What's Fed Going To Do!? Which Way Will USD Go? Bitcoin Price (BTC/USD) Is Still Near $30K | Citi says buy the dip in European & EM stocks! | MarketTalk: What’s up today? | Swissquote

Swissquote Bank Swissquote Bank 27.05.2022 10:18
Fed minutes released on Wednesday weren’t as hawkish as many investors feared: the Fed deciders mostly agreed that inflation is too high and labour market is too tight and that they should raise the rates by 50bps for the next two meetings. But, there was no sign that the Fed would go down the 75bp hike road. US Indices, EUR/USD And Gold Price US indices gained for the second day as the FOMC minutes helped improving the investor mood. Nvidia jumped. But the futures are slightly in the negative at the time of writing, as the rally in energy prices certainly throw a shadow on the latest optimism, keeping the inflation worries tight, as the soaring energy prices are one of the major responsible for the skyrocketing inflation. The barrel of US crude rallied above the $115 mark, and consolidates above this level this morning. The US dollar continues softening, the EURUSD tests 1.0750 offers, gold remains bid above the 200-dma though with a fading positive momentum. Turkish Lira (TRY) The lira, on the other remains, and should remain under decent negative pressure as the central bank insists keeping its policy rate at 14% level. And finally, Bitcoin slides below the $30K mark as the ECB points to financial stability concerns due to cryptocurrencies. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:32 Fed is not 'that' hawkish after all! 2:54 Market update 4:19 Dark clouds above our head 5:17 Citi says 'buy the dip' in European & EM stocks 7:14 I say 'be careful' with Turkish BIST & the lira 9:00 FX, commodity update: EUR, Gold and Bitcoin Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. Follow FXMAG.COM on Google News
GBP/USD Analysis: GBP Maintains Growth Momentum, Market Awaits US Inflation Report

FTSE 100 Index Rises Thanks To Shell and BP Stocks, British Pound (GBP) Weakens After Thursday Morning Strengthen

Rebecca Duthie Rebecca Duthie 26.05.2022 21:17
Summary: Oil Giants are required to pay more taxes on profits. The BoE is put under more pressure FTSE 100 rises with BP and Shell stocks On Thursday oil giants Shell and BP were informed they would be required to pay 25% extra taxes on their profits from the North Sea. Investors did not seem to lose interest in these stocks despite this news, the share prices of both these companies rose. The Chancellor also announced there would be an extra tax incentive to invest in pumping up more oil and gas. Therefore it is possible that the oil giants can avoid almost their entire tax bill. FTSE 100 Price Chart GBP Weakens after its rally on Thursday morning On Thursday Chancellor Rushi Sunak announced that more than 8 million households would receive a lump sum of GBP650.00 in an attempt to try to fend off the cost of living crisis. The Chancellor also announced there would be a GBP15 billion spending boost. The move will put the Bank of England (BoE) under more pressure going forward, possibly forcing the BoE to raise interest rates even more. The Pound Sterling faces negative market sentiment in the wake of this news as the likelihood of a recession looms closer. Read next: FOMC Meeting Minutes Offer Support To The US Dollar (EUR/USD), Improved Market Attitude Favoured The GBP On Thursday (EUR/GBP, GBP/USD), Market Awaits RBA Monetary Policy  Follow FXMAG.COM on Google News Sources: finance.yahoo.com, poundsterlinglive.com
Fed Expectations Amid Mixed Data: Wishful Thinking or Practical Pause?

(EUR/USD) Euro To US Dollar Hasn't Fluctuated Significantly, US Non-farm Payrolls Coming! Easing Lockdown In China | Asia Morning Bites - 30/05/22 | ING Economics

ING Economics ING Economics 30.05.2022 08:21
A positive start to the week in Asia is helped by easing movement restrictions in China, but US payrolls and quantitative tightening could test that resolve later on... Source: shutterstock Macro Outlook Global: It is the US Memorial day holiday today (Monday), and equity markets rallied into the long weekend, providing a positive tone at the start of this week in Asia markets. News channels this morning noted that the equity rally took place on thin volumes, which is a bit of an exaggeration, though volumes were a bit below average, while the sell-offs recently seem to have more conviction. News stories trying to pinpoint the bottom for markets are still talking about equities approaching average forward P/E valuations. Though surely just touching an average from above is not sufficient to call a trough – averages don’t work that way – at least not if they are stationary. What are they teaching people in maths classes these days? Aside from the rally in stocks, most markets were fairly rangebound on Friday. EURUSD remained at about 1.0727, though looked to push above 1.0770 and below 1.0700 – both without success. AUD has clambered back to 0.7158, and there were also widespread gains amongst the Asian FX pairs, led by the KRW and CNY. Treasury yields were little changed on the previous day’s close. This week we get US non-farm payrolls, which could stir things up a bit. We also get the start of “Quantitative Tightening” (QT) from mid-week on, as the US Fed starts to draw down on its bloated balance sheet at a $30bn monthly rate for Treasuries and $17.5bn monthly rate for agency MBS. This will show just what impact (if any) actual selling has on the market, or whether this is entirely in the price. We also get Eurozone CPI inflation for May tomorrow (Tuesday). Consensus sees this rising to 7.8%YoY from 7.5% in April. And yet the ECB is still purchasing assets and is not expected to start raising rates until July. Enough said.  China: Shanghai announced approval for the resumption of work and production as a sign that it is lifting its lockdowns. However, workers still need a pass to leave their homes for work. Currently, permission is only granted to leave home a few times a week. This situation will change, but it will need to change quickly to be consistent with the resumption of work. In Beijing, the lockdown has been relaxed in the Chaoyang CBD area. The same problem is that workers who do not live in Chaoyang may not be able to get to their workplaces. Meanwhile, other cities are adopting regular and frequent Covid testing to try to detect positive cases early enough to stop the chain of transmission of the virus. As for stimulus measures, in addition to last week's national-level stimuli, Shanghai has offered more incentives, mainly to boost consumption, especially on pure electric vehicles. What to look out for: US non-farm payrolls Philippines bank lending (30 May) Fed Waller speech (30 May) South Korea industrial production (31 May) Japan retail sales and job-applicant ratio (31 May) China PMI manufacturing (31 May) Thailand trade balance (31 May) US Conference board expectations (31 May) Fed Williams speech (1 June) South Korea trade (1 June) Regional PMI manufacturing (1 June) Australia 1Q GDP (1 June) US ISM manufacturing (1 June) Fed Bullard speech (2 June) Indonesia CPI inflation (2 June) Australia trade balance (2 June) US ADP jobs, initial jobless claims, durable goods orders (2 June) South Korea CPI inflation (3 June) US non-farm payrolls and ISM services (3 June) Fed Mester speech (3 June) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Investors Are Awaiting US CPI Print. Earnings Season Is Here! PepsiCo (PEP) And Delta Airlines (DAL) Earnings Are Released This Week!

Striking US Stocks Performance, Crude Oil (BRENT) Nearing $120, Chinese Covid-Zero Influences Markets And More Highlighted In Market Insights Podcast (Episode 335) | Oanda

Jeffrey Halley Jeffrey Halley 30.05.2022 10:37
Jonny Hart speaks to APAC Senior Market Analyst Jeffrey Halley about news impacting the market and the week ahead. It’s June already and a blockbuster week for data releases around the world. First of all, we take a look back at last Friday’s impressive US equity close. Jeff discusses its drivers, its threats, and potentially, its longevity. Then it’s over to Asian equity markets today which are also enjoying a banner day. US Stocks And China   The US Friday session and also covid-zero developments in China over the weekend are driving “most” stock markets higher. Potential banana skin is looming though, with Brent crude rising above $120.00 a barrel in Asia today. Jeff looks at the oil market, what’s driving the price increase, and its potential impact on market sentiment this week. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Holidays And US Non-farm Payrolls There are a number of holidays this week, starting with US markets today, then Greater China is dragon boating on Friday, and the UK has two days off at the end of the week. Happy Jubilee Your Majesty. We discuss how holidays can impact markets. Finally, it’s a wrap of the heavy-duty data calendar across Asia and the US this week, culminating in the US Non-Farm Payrolls. Jeff highlights also, something that markets have been ignoring up until now, the start this week, of Federal Reserve Quantitative tightening. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News
Crude Oil Prices Continue to Rise Amid Tight Supply and Economic Uncertainty

Banning Russian Crude Oil In Progress - Will Hungary Join The EU? Fed's Quantitative Tightening, Chinese PMI Is Released This Week. What Will Eurozone Inflation Bring On To The Markets? | Oanda

Jeffrey Halley Jeffrey Halley 30.05.2022 11:11
Asian markets are mostly positive this morning as Shanghai announced a raft of stimulus measures and both Shanghai and Beijing eased Covid-19 restrictions. The devil is in the detail of course, and corkers in both cities still face challenges either going to work, or even being allowed to leave the house. Nor has the reality that the virus only has to get lucky once, prompting the reimposition of tightened covid-zero restrictions, in the minds of investors. Such minutiae are usually ignored by markets when it doesn’t suit the preferred narrative, and so it is today. Asia is pricing in peak virus in China and a recovery in growth. Wall Street Another tailwind was the strong performance by Wall Street on Friday, which closed out a banner week prompting the usual “maybe this is the bottom” response from the financial press and FOMO investors. That was assisted by US data on Friday. Personal Income and Expenditure for April were still robust, but eased from March’s numbers, and Michigan Consumer Sentiment retreated from 65.2 in April to a still-healthy 58.4 for May. Lower data equalling reduced need for Fed tightening equals buy everything. Simple really. Although I must say, I’m struggling to see how a slowing US economy is good for equities, I don’t want to spoil the party though. Crude Oil - EU Banning Russian Crude Another negative headwind being completely ignored by markets is oil prices. Brent crude has edged above USD 120.00 a barrel this morning as the European Union continues its efforts to get Hungary on board for a proposed EU ban on Russian crude imports. The underlying driver though is the massive squeeze on refined products we are seeing around the world, which is lifting the base ingredient for all that diesel and petrol that has got very expensive. The world would have been flapping and wringing its hands about the end of days if we had said Brent crude was above USD 120.00 a barrel a month or two or three or four ago; now it is being ignored. By the way, if China recovers, oil prices will as well; just saying. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Non-farm Payrolls - Fed's Sell-off Also being ignored by markets completely in Non-Farm Payroll week is that the Federal Reserve also starts quantitative tightening this week. The Fed will start to sell USD 47.50 billion of bonds and MBS’ per month, scaling up to USD 95 billion per month by September. Meanwhile, the ECB is still quantitatively easing while talking about hiking rates to errrr, zero per cent. And there is a war in Eastern Europe. Long EUR/USD above 1.0800 anybody? Despite being less than impressed with either the Fed’s guidance or overall performance over the past year or so, at least they’re not the Reserve Bank of New Zealand. I find it highly unlikely they will abruptly swing to less a hawkish stance between now and September, meaning three more 0.50% hikes into September and fewer jokes being made about their credibility. Additionally, the USD 8.5 trillion balance sheet needs to reduce is carb and saturated fat intake, so quantitative tightening it is. From my position as a pilot fish cleaning the teeth of the capital markets sharp on the periphery, none of this is being priced in, although I acknowledge that markets can remain irrational, longer than you can stay solvent. Read next: Altcoins: Tezos (XTZ) What Is It? - A Deeper Look Into The Tezos Platform | FXMAG.COM Chinese PMI Now that I have fulfilled my role as the voice of reason on a Monday, it is time to have a look at what the week ahead brings. Asia’s calendar is dead today with the week’s highlights being China’s Official and Caixin PMIs coming out tomorrow and Wednesday. Wednesday and Thursday also see a swath of manufacturing and services PMIs from the rest of Asia, while Australia releases its April Trade Balance on Thursday. China’s data will have a very binary impact this week if peak-covid is here. Soft data will likely ramp up fears of a slowdown, with a decent showing likely to see hot money flowing in looking for the bottom. Soft data from the rest of Asia will raise fears of spreading China contagion. Watch also for Indonesian Inflation on Wednesday. A high print will increase the pressure on Bank Indonesia to finally hike this month. Holidays Holidays will play their part this week. US markets are closed for Memorial Day today, although electronic trading is open in Asia. Indonesia is closed Wednesday while mainland China and Hong Kong and Taiwan are closed on Friday for the International Dragon Boat Festival. Thursday and Friday see United Kingdom markets closed for a bank holiday and Her Majesty’s Platinum Jubilee. Activity in Asia will likely be muted from Thursday. Follow FXMAG.COM on Google News Eurozone Inflation Today features German May Inflation with Eurozone, French and Italian Inflation tomorrow. High prints will likely increase the hiking noise around the ECB and could extend the euro’s recent gains. The ECB should probably stop quantitatively easing first though. Eurozone and US Manufacturing PMIs are released on Wednesday, along with US ADPO Employment that forecasters will pointlessly use to extrapolate Friday’s data. We also have a Bank of Canada policy decision which should feature a 0.50% hike. Falling NFP? Finally, on Friday, we will see May’s US Non-Farm Payrolls data. Market expectations are a moving target this week, but as of today, markets are expecting a fall from 428,000 in April to a still robust 320,000 for May. Trading the data in the hour after its release has always been a sure-fire way to lose money. But if pushed, I would say a lower number will have the market pricing in less Fed tightening, while a higher number might dish out a cold dose of reality to the bottom-fishers in equity, bond, and currency markets ahead of the mid-month FOMC meeting. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
5% for the US 10-Year Treasury Yield: A Realistic Scenario

S&P 500 (SPX) Rallied, So Did Nasdaq And Dow Jones (DJI), In Europe Sentiment Can Be Affected By Very High Crude Oil Price Caused And Russian Oil Ban | Oanda

Jeffrey Halley Jeffrey Halley 30.05.2022 12:55
Asian markets rally on positive Wall Street and China hopes S&P 500, Nasdaq And Dow Jones US markets closed out the week on another positive note after US data alleviated inflation fears and thus, future Fed tightening, and showed strength among US consumers still. Realistically, after such a positive week, it would have taken a lot to knock the FOMO gnomes of Wall Street off their path of bottom-picking nirvana. The S&P 500 rallied by 2.48%, while the Nasdaq leapt by an impressive 3.33%, with the Dow Jones climbed by 1.76%. The rally has continued in Asia, with Nasdaq futures 0.90% higher, with S&P 500 futures up 0.40%, and Dow futures edging 0.10% higher. US OTC markets are closed for Memorial Day. End Of COVID Restrictions? Asia is also turning in a positive performance, following the impressive New York close, and boosted by hopes that China’s Beijing and Shanghai hubs are reopening from virus restrictions and a package of stimulus measures released by the Shanghai local government. Nikkei 225 And CSI 300 Japan’s Nikkei 225 has coat-tailed the Nasdaq 2.10% higher today, with South Korea’s Kospi gaining 1.25%, and Taipei rallying by 1.60%. In mainland China, the Shanghai Composite is a more cautious 0.30% higher, with the CSI 300 rising by just 0.40%. The ever-optimistic Hong Kong, however, had leapt 2.50% higher, boosted by hopes of an Evergrande bond deal. Follow FXMAG.COM on Google News Metals In regional markets, Singapore is up just 0.20%, while Kuala Lumpur has fallen 0.25%, and Jakarta is 0.60% lower. A Goldman Sachs report suggesting metals prices have peaked is likely weighing on all three markets, as risk sentiment swings back to more growth-stock orientated markets. Bangkok has gained 0.65%, while Manila has rallied by 1.25%. Australian markets have also liked what they have seen with Wall Street and China, the ASX 200 and All Ordinaries climbing by 1.25% today. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Russian Oil Friday’s New York close and Asia’s rally today should be enough to lift European equity markets this afternoon, although the still simmering EU import ban on Russian oil and Brent crude above USD 120.00 a barrel will temper bullish animal spirits. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

More Efficient Stock Markets Were Accompanied By (USD) US Dollar And US Bonds Yields Weakening Last Week. In This One, Fed Members Speak, US Jobs Data Is Released And HP Stock Price May Be Affected By Earnings | Conotoxia

Conotoxia Comments Conotoxia Comments 30.05.2022 11:41
Last week brought a rebound in stock markets, breaking a series of weeks of losses, along with a weakening USD and falling bond yields. The current one begins in a similar vein. Learn more on Conotoxia US Jobs Data What are the key events for financial markets and investors in the coming days? In the United States, the employment report may draw attention. In May, the US economy is expected by consensus to add 310,000 jobs. The unemployment rate is likely to remain at 3.6 percent for the third consecutive month, remaining the lowest since February 2020. On the other hand, wages were expected to rise 0.4 percent, which is slightly higher expectations than the 0.3 percent increase in April. On an annual basis, however, it is expected to fall from 5.5 to 5.2 percent. Fed Members Speak Their Minds Several Fed officials will speak on monetary policy this week, and the market has already reduced the chances of US interest rate hikes. At present, investors seem to assume that they may amount to 2.5-2.75 percent in July 2023. As recently as at the beginning of the month, hikes were priced at 3.25-3.5 percent. Read next: Altcoins: Tezos (XTZ) What Is It? - A Deeper Look Into The Tezos Platform | FXMAG.COM Earnings - HP Stock And GameStop Stock Price May Fluctuate The earnings season is underway. Salesforce, Kirkland's, Ambarella, HP and GameStop are expected to announce quarterly results. So far, 97 percent of companies in the S&P 500 index have reported updated results, with 77 percent reporting an EPS surprise and 73 percent reporting a revenue beat, according to Factset data. Monetary Policy - Bank Of Canada (BoC) From a global monetary policy perspective, the Bank of Canada may raise its interest rate by 50 basis points, marking the third consecutive increase in rates in Canada. Also in focus: first-quarter GDP growth data for Canada. In the UK, on the other hand, final PMI estimates are likely to confirm a sharp slowdown in business activity growth in May amid intensifying inflationary pressures and heightened geopolitical uncertainty. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Eurozone Inflation - Germany, France, Italy, Spain In Europe, key Eurozone inflation reports will be released, including from Germany, France, Italy and Spain. The Eurozone annual inflation rate is expected to rise again in May, reaching a new record high of 7.7 percent, up from 7.4 percent in April. Unemployment figures will be published in the eurozone, as well as in Germany, Spain and Italy, while France, Italy, Switzerland and Turkey will report updated GDP for the first quarter. Follow FXMAG.COM on Google News Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
So S&P 500 (SPX) Seems To Be Ready To Really, Can US Bond Yields And US Dollar (USD) Go Any Higher? | Monica Kingsley

So S&P 500 (SPX) Seems To Be Ready To Really, Can US Bond Yields And US Dollar (USD) Go Any Higher? | Monica Kingsley

Monica Kingsley Monica Kingsley 30.05.2022 15:13
S&P 500 turned the corner, yields peaked for now, and dollar likewise. Risk-on sentiment is ruling the day, with value outperforming tech – but at least the latter is also recovering. Stocks though haven‘t turned the corner in earnest, no matter the gains they‘re still about to clock in. Enjoy the rally while it lasts (long entry is a matter of individual trade‘s risk reward ratio – more than a few good percent are still ahead before the fresh downleg strikes. Fed You can look forward for tomorrow‘s extensive analysis, where I‘ll examine the Fed and macroeconomics in the weeks and months ahead vs. the turnaround sequence discussed three weeks ago – unfolding like clockwork. Here‘s a quote from tomorrow‘s article: (…) I don‘t think we‘re looking at a fresh uptrend, there is still much stress (to be reflected in stock prices) in the consumer arena. VIX For now, the key question is the degree to which VIX calms down – would it be able to keep below 23-24 to extend the shelf life of this rally? And for how long would the lull in volatility last? I think the answer is a few short weeks, before it becomes obvious that the fundamentals haven‘t changed. The consumer remains in poor shape, inflation would remain stubbornly high (even as it had indeed peaked), and the credit default swaps for quite a few (consumer sensitive) companies are rising relentlessly, which isn‘t yet reflected in underlying stock prices. I‘m talking financials too – this broad stock market rally has more than a couple of percent higher to go before the weight pulls it back down, and earnings estimates get downgraded again. Stayed tuned for more, enjoy and profit along! Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Happy extended weekend. Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals. Follow FXMAG.COM on Google News
S&P 500 Trades 10% Higher Than On May 20th, But Hawks Are About To Hunt Shortly, Probably Bringing Bear Market And People's Unwillingness To Spend Their Money | FxPro

S&P 500 Trades 10% Higher Than On May 20th, But Hawks Are About To Hunt Shortly, Probably Bringing Bear Market And People's Unwillingness To Spend Their Money | FxPro

Alex Kuptsikevich Alex Kuptsikevich 30.05.2022 15:18
US stock indices developed a strong rebound all last week. The S&P500 spot index reached 4200, gaining more than 10% from the lows of May 20. Such a rapid recovery has raised the question of whether we are seeing a brief bear market rally or whether the markets have passed the “bottom” of the correction. The situation looks like touching bear market territory was a red rag for the bulls, who have since turned to aggressive action. Fundamental factors are now on the side of the former, while technical analysis favours the latter scenario. Fighting With Inflation Or Supporting Economic Growth Monetary authorities in the USA and other developed economies are increasing the pace of monetary policy tightening, focusing on fighting inflation rather than supporting economic growth. We continue to get bearish signals from this perspective, as the economy and markets have yet to feel the brunt of rates not seen in over ten years. Meanwhile, inflation and a slowdown in consumer demand due to high rates promise to eat into real corporate profits in the coming months. The tipping point in consumer activity is unlikely to come before we hear from the Fed that there will be no further rate hikes. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The S&P500 index has perfectly touched 61.8% of the rally from the lows of March 2020 to January 2022. We have seen some rallies in a falling market during the five-month decline. But so far, touching the formal bear market area (20% decline from the peak) in the S&P500 has attracted buyers. Moreover, by the time the lows were touched earlier this month, the market was already oversold, but there were also signs of divergence between the RSI on the daily timeframes and the index level. This is a clear indication that the selling was not as fierce as before. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM S&P 500 The very fact that the S&P500 took a 7-week-long losing streak, one of the longest in history, and has now shown a sharp rebound, is setting a positive mood. The last time we saw such a bullish awakening was in November 2020, after which the stock market added for more than a year, even though there seemed to be no room for growth. Follow FXMAG.COM on Google News
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

S&P 500 Sees Good Start To The Week, UK Economy Not Performing As Well As Its Major Economy Counter Parts

Rebecca Duthie Rebecca Duthie 30.05.2022 20:23
Summary: S&P 500 makes up for May losses. The Pound sterling hasn't had a great run lately especially because the UK economy isn't performing as well as its major economy counter-parts. Read next: Strong Investor Sentiment Toward The Euro Continues (EUR/USD), EUR/GBP Currency Pair, As China Ease Lockdowns The AUD Outlook Seems Positive (GBP/AUD, AUD/USD)  The S&P 500 gained almost 2.5% on Monday On Monday the S&P 500 gained back its May losses and broke its seven week losing streak, as institutional investors chose to balance their portfolios again to the end of the month. Luxury stocks seemed to be the top performers today in the wake of improved investor sentiment as China begins easing lockdowns. GSPC Price Chart Pound Sterling under pressure As the cost of borrowing increases, a cost-of-living crisis, the reality of lower productivity and inflation at 40 year highs, all of these factors mentioned are putting the Pound sterling under pressure. The reality of a looming recession keeping investors on their toes. A source on bloomberg predicts that the UK economy could shrink by 0.4% this quarter. The Pound sterling hasn't had a great run lately especially because the UK economy isn't performing as well as its major economy counter-parts. Sources: investors.com, bloomberg.com, finance.yahoo.com
Financial World in a Turbulent Dance: Lego, Gold, and Market Mysteries

Alibaba (BABA) Share Price Rises As Lockdowns Ease In China

Rebecca Duthie Rebecca Duthie 30.05.2022 20:39
Summary: Alibaba and other Chinese based companies may be able to return to normal production levels. BABA stocks to benefit as lockdowns in China continue to ease Although the US Stock markets are closed on Monday due to memorial day celebrations, Alibaba Share price has risen in the wake of China beginning to re-open after Covid-19 lockdowns. The lockdowns in China had taken a toll on many Chinese based companies due to slowing production, however, the easing of the lockdowns means that companies like Alibaba have a chance to start speeding up their production. Currently, according to a source on finance.yahoo.com, the shares of Alibaba are fairly priced at the moment. BABA Price Chart Read next: S&P 500 Sees Good Start To The Week, UK Economy Not Performing As Well As Its Major Economy Counter Parts  Sources: finance.yahoo.com
MSFT Stock Price Analysis: Bearish Signals Point to Potential Decline

(IXIC) NASDAQ Caught In Tuesdays Volatile Trading, New Zealand Dollar (NZD)

Rebecca Duthie Rebecca Duthie 31.05.2022 21:09
Summary: Volatile month for the US stock market. The easing of lockdowns will benefit not only China’s economy but economies that rely on China for trading, such as the NZD. Read next: EuroZone Inflation Exceeds Market Expectations (EUR/USD) (EUR/GBP), New Zealand Economy Will Benefit From China’s Lockdown Easing (GBP/NZD), GBP Bullish (GBP/USD)  The NASDAQ is reflecting the volatility of the financial markets. The NASDAQ is one of the indexes that has been caught in volatile trading on Tuesday. During trading on Tuesday, the NASDAQ turned positive, however, the positive turn was short-lived for the index. Despite managing to recover some of the losses seen this month, May has been a volatile month for the stock markets, concerns over decade-high inflation and fears that the hawkish Federal reserve’s moves to fight rising prices through raising interest rates may tip the US economy into a recession. NASDAQ Price Chart New Zealand Dollar The NZD benefitted of Monday in the wake of China’s easing of COVID-19 lockdowns, strengthening against the Pound Sterling and other currencies. The easing of lockdowns will benefit not only China’s economy but economies that rely on China for trading, New Zealand's economy is one of those who will benefit. The strengthening of China's Renminbi has also offered support to the NZD/USD currency pair, the US Dollar is struggling at the moment, and therefore, the recovery of the NZD has been noticeable. Sources: finance.yahoo.com, poundsterlinglive.com
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

S&P 500 Loses Tuesdays Gains, Australian Dollar Was Wednesdays Best Performing Currency

Rebecca Duthie Rebecca Duthie 01.06.2022 19:43
Summary: S&P 500 has lost more than 1% during the trading day. AUD outperformed USD on Wednesday. S&P 500 loses Tuesdays gains U.S stocks fell early on Wednesday in the wake of stronger-than-expected data from the U.S manufacturing sector. Since then, the S&P 500 has lost more than 1% during the trading day. The data released by the institute for supply management reflected that the U.S manufacturing sector grew faster than the market expected, another signal that the fears of the U.S economy going into a recession may be overblown. Following the manufacturing data release, the JPMorgan boss (Dimon) told Bernstein's Strategic Decisions Conference that the U.S. economy is facing a "hurricane" as the Fed continues its to try to normalise interest rates. GSPC Price Chart Australian Dollar benefits from favourable GDP data The Australian Dollar may have outperformed the US Dollar on Wednesday, but future policies from both the central banks could impact this currency pair. Reserve Bank of Australia (RBA) GDP data released on Wednesday exceeded market expectations, making it Wednesdays best performing currency. Read next: Russian Oil Embargo Decision Weighs on The Euro (EUR/USD, EUR/GBP), Australian GDP Data Released On Wednesday Exceeds Market Expectations (AUD/USD)  Sources: finance.yahoo.com, pounsterlinglive.com
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Meme Stocks: (GME) GameStop Stock News: Reported Wider Than Expected Losses | Rebecca Duthie

Rebecca Duthie Rebecca Duthie 02.06.2022 12:29
Summary: GameStop stocks rose, fell and then settled GameStop reported a net loss On Wednesday GameStop reported a wider-than-expected net loss for the first quarter, and declined to provide an outlook for the market. In the wake of the news, the stock rose, fell and settled at a level close to unchanged. GameStop reported a $158 million loss, or $2.08 per share loss. The speciality retailer is one of the most recognised names amongst the meme stocks. GameStops claims they are keeping their inventory levels high amidst increasing customer demand and supply chain worries. GameStop Price Chart Read next: S&P 500 Loses Tuesdays Gains, Australian Dollar Was Wednesdays Best Performing Currency  Sources: finance.yahoo.com, marketwatch.com
The Swing Overview – Week 20 2022

The Swing Overview – Week 20 2022

Purple Trading Purple Trading 02.06.2022 16:36
The Swing Overview – Week 20 The markets remain volatile and fragile, as shown by the VIX fear index, which has again surpassed the level 30 points. However, equity indices are at interesting supports and there could be some short-term recovery. The euro has bounced off its support in anticipation of tighter monetary policy and the gold is holding its price tag above $1,800 per troy ounce. Is the gold back in investors' favor again? Macroeconomic data The week started with a set of worse data from the Chinese economy, which showed that industrial production contracted by 2.9% year-on-year basis and the retail sales fell by 11.1%. The data shows the latest measures for the country's current COVID-19 outbreak are taking a toll on the economy. To support the slowing economy, China cut its benchmark interest rate by 0.15% on Friday morning, more than analysts expected. While this will not be enough to stave off current downside risks, markets may respond to expectation of more easing in the future. On a positive note, data from the US showed retail sales rose by 0.9% in April and industrial production rose by 1.1% in April. Inflation data in Europe was important. It showed that inflation in the euro area slowed down a little, reaching 7.4% in April compared to 7.5% in March. In Canada, on the other hand, the inflation continued to rise, reaching 6.8% (6.7% in March) and in the UK inflation was 9% in April (7% in the previous month). Several factors are contributing to the higher inflation figures: the ongoing war in Ukraine, problems in logistics chains and the effects of the lockdown in China. Concerns about the impact of higher inflation are showing up in the bond market. The benchmark 10-year US Treasury yield has come down from the 3.2% it reached on 9 May and is currently at 2.8%. This means that demand for bonds is rising and they are once again becoming an asset for times of uncertainty.  Figure 1: US 10-year bond yields and USD index on a daily chart   Equity indices on supports Global equities fell significantly in the past week, reaching significant price supports. Thus, there could be some form of short-term bounce. Although a cautious rally began on Thursday, which was then boosted by China's decision to cut interest rates in the early hours of Friday, there is still plenty of fear among investors and according to Louis Dudley of Federated Hermes, cash holdings have reached its highest level since September 2001, suggesting strong bearish sentiment. Supply chain problems have been highlighted by companies such as Cisco Systems, which has warned of persistent parts shortages. That knocked its shares down by 13.7%. The drop made it the latest big-stock company to post its biggest decline in more than a decade last week. The main risks that continue to cause volatility and great uncertainty are thus leading investors to buy "safe" assets such as the US bonds and the Swiss franc. Figure 2: The SP 500 on H4 and D1 chart From a technical analysis perspective, the US SP 500 index continues to move in a downtrend as the market has formed a lower low while being below both the SMA 100 and EMA 50 moving averages on the H4 and daily charts. The nearest resistance is 4,080 - 4,100. The next resistance is at 4,140 and especially 4,293 - 4,300. Support is at 3,860 - 3,900 level. German DAX index The index continues to move in a downtrend along with the major world indices. The price has reached the support which is at 13,680 – 13,700 and the moving average EMA 50 on the H4 chart is above the SMA 100. This could indicate a short-term signal for some upward correction. However, the main trend according to the daily chart is still downwards. The nearest resistance is at 14,260 - 14,330 level. Figure 3: German DAX index on H4 and daily chart The euro has bounced off its support The EUR/USD currency pair benefited last week from the US dollar moving away from its 20-year highs while on the euro, investors are expecting a tightening economy and a rise in interest rates, which the ECB has not risen yet as one of the few banks. Figure 4: The EURUSD on H4 and daily chart   Significant support is at the price around 1.0350 - 1.040. Current resistance is at 1.650 - 1.700.   The Gold in investors' attention again The gold has underperformed over the past month, falling by 10% since April when the price reached USD 2,000 per ounce. But there is now strong risk aversion in the markets, as indicated by the stock markets, which have fallen. The gold, on the other hand, has started to rise. Inflation fears are a possible reason, and investors have begun to accumulate the gold for protection against rising prices. The second reason is that the gold is inversely correlated with the US dollar. The dollar has come down from its 20-year highs, which has allowed the gold to bounce off its support.  Figure 5: The gold on H4 and daily chart The first resistance is at $1,860 per ounce. The support is at $1,830 - $1,840 per ounce. The next support is then at $1,805 - $1,807 and especially at $1,800 per ounce.
This Week's Tesla Stock Split Could Be The Best Moment To Buy The Stock! Twitter Stock Price Plunged!

Elon Musk Plans To Cut Tesla (TSLA) Workforce Due To “Super Bad Feeling” About The Economy

Rebecca Duthie Rebecca Duthie 03.06.2022 17:01
Summary: Musk plans to cut Tesla workforce by 10% Tesla Stock fell on Friday On Friday the Tesla share price fell in the wake of Musk announcing plans to cut the electric-vehicle giant's workforce by 10% amidst having a “super bad feeling” about the economy. Causing the stock price to drop by 7.8% on Friday. Reports showed that Musk ordered a hiring freeze for Tesla across the globe, and believes it is necessary to reduce his workforce by 10%. Musk is not alone in his belief that a recession could become a reality, however, the influence Musk has is strong, and often recessions that are consumer-led can be self-fulfilled. TSLA Stock Price Sources: finance.yahoo.com, fool.com, investors.com
Now with Purple Trading: VIX volatility index as a tradable CFD futures symbol

Now with Purple Trading: VIX volatility index as a tradable CFD futures symbol

Purple Trading Purple Trading 06.06.2022 08:55
Now with Purple Trading: VIX volatility index as a tradable CFD futures symbol The volatility or market uncertainty index (VIX) is an invaluable tool used by many when analyzing markets. However, its trading also holds great potential. That's why we have decided to include it alongside our CFD futures symbols. Read this article and find out how and when to trade VIX as an CFD futures symbol. What is the VIX index and what does it indicate The Volatility Index (VIX), as the name suggests, is an index that is used to measure the level of market nervousness, uncertainty, and volatility. For these reasons, it is also sometimes called a fear gauge or fear index. The higher the VIX index values get, the greater the uncertainty in the markets and vice versa. However, it is very important to remember that the VIX index is a forward-looking index, so it shows the expected, not actual, market uncertainty.   How the VIX index is calculated VIX index measures 30 days of expected volatility of S&P 500 index, it does so by using S&P 500 options (SPX) listed on CBOE exchange as an input. VIX takes together all SPX call and put options and compares the changing demand and price between them.   Relationship between the VIX index and the markets The VIX index generally tracks the S&P 500 index in an inverse manner. That is, if the stock markets (S&P 500) are turbulent and investor nervousness/fear increases, the same can be observed for the VIX index. On the other hand, if stock prices are on the rise, the VIX index generally declines or advances sideways.   Meet: VIX.f - tradable CFD futures instrument Similar to other indices, the VIX is not tradable on its own and needs an investment vehicle to go with it. And that is what VIX.f is - a tradable continuous CFD futures instrument that behaves just like our other continuous CFD futures products. Its price is based on the underlying asset, which in this case is a specific VIX futures contract. Continuous in this case means that before each futures contract expires, there is an automatic rollover of the position. This will result in selling of old contracts and the buying of additional nearest futures contracts. It is also important to note that since this is a CFD instrument, you don’t become the owner of VIX.f when trading it. You only speculate on its price. How to trade VIX.f futures symbol VIX.f CFD futures is a very versatile symbol that can help traders and investors in several different situations:   Buy/long in case of an expected increase in volatility or turbulence in the markets Risk management or hedging vehicle for investors - through the inverse relationship of the VIX and the S&P 500 Option to open a short position in case of expecting a positive economic development in markets Overall, it should be noted that VIX.f futures is not recommended to be traded in a buy and hold manner, but rather as a short-term investment.Symbol specification: Symbol specification Name in Platform VIX.f Leverage ESMA 1:10 Leverage PRO 1:10 Trade hours (GMT+3) Monday to Friday 1:00 – 24:00  i Check out the current trading hours and hours changes Commission 10 USD/lot Currency USD Tick size 0.01 Tick value 0.1 Volume step 1 Min trade 1 Max trade 50
S&P 500 Rose And Then Pulled Back, Despite Boris Johnson's Vote Of No-Confidence, GBP Remained Strong

S&P 500 Rose And Then Pulled Back, Despite Boris Johnson's Vote Of No-Confidence, GBP Remained Strong

Rebecca Duthie Rebecca Duthie 06.06.2022 20:55
Summary: Is positive investor sentiment returning to the markets? GBP bullish against USD Read next: (TWTR) Twitter Shares Tumble On Monday  S&P 500 sees gains and losses as the index tries to recover U.S stocks rose in early Monday trading but have since dropped again amidst the current uncertain economic outlook and the prospect of tighter monetary conditions. The S&P 500 closed low on Friday in a general market sell-off. The decline last week came in the wake of a stronger-than-expected job report for May that showed that job hiring slowed but still kept a strong tempo. The showing of labor market strength aligned with expectations for policy makers on track with monetary policy tightening. Monday's drop in equities comes as the U.S treasury yields benchmark topped 3% during Monday's session. GSPC Price Chart Pound Sterling remains strong On Monday the pound sterling traded strong despite that Monday evening bringing with it a vote of no-confidence for Prime Minister Boris Johnsson. Despite the vote of no confidence, the pound sterling has remained strong, indicating to the market that it will remain strong despite politics. The pound sterling is bullish against the US Dollar and is showing mixed signals when it comes to its other major counterparts such as the Euro and CHF. Sources: finance.yahoo.com, poundsterlinglive.com
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

Stocks: (SPX) S&P 500, Nasdaq And Dow Jones (DJI) Have Increased... But Not In The USA!? | Oanda

Jeffrey Halley Jeffrey Halley 06.06.2022 16:19
Asian markets rise as China eases restrictions Friday’s higher than expected US Non-Farm Payrolls saw Wall Street make an abrupt retreat as easier Fed hiking hopes on a slowing economy were dashed, although I’d argue a slowing US economy wouldn’t be good for equities either. The S&P 500 finished 1.63% lower, the Nasdaq tumbled by 2.47%, and the Dow Jones fell by 1.06%.  Asian equities rise on Beijing reopening - MarketPulseMarketPulse In Asia, an easing of restrictions in Beijing, along with reiterations of easy monetary policy in Japan has shielded Asia from New York’s back-and-forth volatility, lifting sentiment in US futures and North Asian markets. US futures have rebounded with Nasdaq futures rising 0.70%, S&P 500 futures are 0.50% higher, and Dow futures have added 0.40%.   Japan’s Nikkei 225 has risen by 0.60%, unwinding a rocky start. South Korea is closed today, but mainland China’s Shanghai Composite has jumped by 1.05%, with the CSI 300 leaping 1.50% higher. Hong Kong’s Hang Seng has rallied by 1.10% and it appears that reopening news and its positive outlook forward is outweighing any backwards-looking Chinese data like the PMIs for now.   The picture is more mixed in the rest of Asia, possibly thanks to higher oil prices and a soggy New York close. Singapore is 0.15% lower, having unwound most of its earlier losses. Taipei is 0.55% higher, while Jakarta has fallen by 1.50%, led by resources after the government announced it was investigating potential palm oil distribution cartels. Malaysia closed today, while Bangkok is just 0.25% lower, and Manila is down by 0.55%. Australian markets have also been unable to shake off Friday’s weak Wall Street close, ahead of an expected rate hike by the RBA tomorrow. The All Ordinaries are down by 0.25%, with the ASX 200 falling by 0.55%.   With most of Europe closed today, most eyes will be on UK markets, which reopen after a four-day break. The rise in oil prices over the past two days is likely to make cost-of-living concerns front-and-centre again, potentially weighing on sentiment. A potential change of leadership in the UK, regardless of your political views, will be another source of uncertainty. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
ECB's Knot: July Rate Hike Necessary, Beyond July Uncertain; Canadian CPI Supports Rates on Hold; Global Crypto Market at $1.2 Trillion; Oil Market Tightens with Russian Shipments Drop and China's Support Measures

DOW 30 Turbulent In The Wake Of Targets (TGT) Profit Warning, Japanese Yen Suffering From BoJ Monetary Easing

Rebecca Duthie Rebecca Duthie 07.06.2022 21:39
Summary: Dow 30 closes just above breakeven after a day of volatility. BoJ continues monetary easing. Read next: (AMZN) Amazon Stock Split Comes At A Bad Time  DOW 30 closes just above breakeven On Tuesday the Dow Jones experienced a lot of volatility, the mixed investor sentiment comes in the wake of retail giant Target giving the market a profit warning, which renewed investor concerns about the economic outlook. The Dow 30 is still in the green today as the index struggled to find a direction during Tuesday's trading session. The Dow closed just above breakeven on Tuesday. DJIA Price Chart Japanese Yen hits lows The Bank of Japan (BoJ) announced that they have no plans to tighten monetary policy to fight rising inflation, instead they will be continuing with monetary easing. This move has seemingly encouraged bearish sentiment for the safe-haven currency. The Governor indicated that the only way to fight the pressure the Japanese economy has been feeling from the income side in the wake of rising commodity prices is through monetary easing. This announcement put the USD/JPY currency pair almost at levels not seen since 1998. Sources: finance.yahoo.com, poundsterlinglive.com
Hedging as an effective form of protection from loss

Hedging as an effective form of protection from loss

Purple Trading Purple Trading 09.06.2022 12:19
Hedging as an effective form of protection from loss On the markets, it is used by both professional traders and big players such as banks, investment funds, and others. No wonder, because if you master hedging, it can help you to significantly reduce potential losses and keep you profitable. In this article, we'll show you how to hedge and which instruments are suitable for that. What is hedging? It is a kind of insurance in the form of a trading strategy. It is designed to mitigate potential risks. In hedging, traders (and also financial institutions) hold positions on assets/contracts that have an inverse relationship to each other and thus develop inversely. When one instrument falls, the other rises and vice versa.   Benefits There is one significant advantage to being "hedged". Namely, traders, with this form of insurance, are able to reduce the risks on their opened trading positions and thus better respond to adverse market developments that threaten these positions. At the same time, they have the comfort of being able to guess in advance the value of the maximum potential loss in the event that something goes wrong in the markets. Hedging is thus a really important tool in risk management.   Disadvantages Hedging is essentially a form of insurance. And as it happens, you have to pay for insurance. The same is true for investing in opposing instruments. By having one investment grow while the other declines, you lose a certain amount of potential profit. A theoretical example of hedging We have a trader who buys stock XY for $1000. He decides to hedge and to do so he chooses to buy a six-month put option for $100 with a strike price of $850. This means that our trader has half a year until the option expires to sell his stock at 850USD in case the market is unfavorable for him).   If the share price rises A six-month put option is about to expire and the share price is higher than 850 USD (e.g. 1150 USD). The trader will therefore logically not exercise his option, thus losing 100 USD (the original price of his option). However, by keeping XY stock, which is now worth 1150 USD, his net profit is 1050 USD (1150 - 100). As we wrote above, the hedging in this case reduced the trader’s overall profit, but that is a tax he needs to pay for being “insured”. The following example will show you what would have happened if the trader had not hedged.   The share price plunges In an alternate universe, our trader did not do well and the market gave him a slap in the face in the form of a drop in XY's share price to $600. However, our trader has hedged and exercises his still unexpired option. He can then sell his stock at the option price of the announced 850 USD. In this case, his total loss is 250 USD (850 - 600). If we would take a look at our trader in yet another alternative universe where he has not hedged, his loss would be 400 USD (1000 - 600). CFD hedging: the S&P500 and VIX index The current market developments, influenced by high inflation and the war in Ukraine, are not good for the markets. According to the VIX index, nervousness in the markets will continue to rise and stock indices like the SP500 are currently heading in exactly the opposite direction. However, did you know that these 2 mentioned indices can now be traded in Purple Trading to get a rather effective hedging tool? At Purple Trading, traders now have a unique opportunity to hedge using CFD futures contracts. Namely, we are now launching CFD futures symbols in the form of the VIX index and S&P500, which traders can find in their Purple Trading MT4 platforms. Both symbols have a highly inverse relationship with each other, which is why they are widely sought after when it comes to hedging. Chart 1: Six-month S&P500 price trend (note the apparent inverse relationship with the VIX chart below; source: Googlefinance.com) Chart 2: Six-month VIX price trend (note the apparent inverse relationship with the SP500 chart above) Relationship between VIX and S&P500 The VIX index is often called the fear or nervousness index. Its chart indicates the estimated future nervousness in the markets. This manifests itself in the form of volatility, i.e. sharp and seemingly random price fluctuations caused by nervous investors who are buying/selling more than usual. Thus, if the VIX index shows an increase, volatility/nervousness in the markets can be expected to increase. The exact opposite is true for the S&P500. It outright hates volatility and nervousness in the markets and if it is announced, the S&P500 usually starts to fall. This is due to nervous investors withdrawing from the stock markets to seemingly safer havens, which is gold for example. Thus, if the VIX index (hence volatility) rises, the S&P500 falls and vice versa. Effective hedging is one of the reasons why Purple Trading clients are among the most profitable in the EU FAQ
The movie that changed futures trading once and for all

The movie that changed futures trading once and for all

Purple Trading Purple Trading 14.06.2022 08:01
The movie that changed futures trading once and for all There is more than dozen of films about financial markets. However, there is only one that had such an impact that it led to a legislative change in the commodity futures market. Which movie are we talking about and what changes it introduce in regards to commodity trading? Read on! Holywood’s fascination with financial markets Holywood is no stranger to depicting the world of financial markets. The subject became particularly attractive in the 1980s, when it became clear that market capitalism was more viable economic model than central planning of the Eastern Bloc, resulting in many films set in the stock market environment, majority of which focusing on Wall Street. However, only one of these films has managed to leave a mark in the memory of viewers as well as in law textbooks. Trading Places - a probe into the world of commodity trading Brothers Mortimer and Randolp Duke are bored billionaires who own a commodities trading brokerage firm. One day, as a part of somewhat cynical bet, they decide to swap the lives of a young and promising businessman, Louis Winthorpe III (Dan Aykroyd), and a street hustler, Billy Ray Valentine (Eddie Murphy). They want to crush the dreams of the former while helping the latter to become familiar in the world of financial markets. From today's perspective, the film is a unique probe into the workings of the financial markets before they were heavily computerised. In addition to the brilliant scenes in which are the Duke brothers explaining to Billy Valentine how commodities trading works, we also get a glimpse behind the scenes at the New York Board of Trade, where commodities are traded (climactic trading scenes were actually filmed there). The bulk of the plot and the main storyline then revolves around the trading of Frozen Concentrated Orange Juice (FCOJ), specifically the futures contracts of this commodity. Eddie Murphy rule   This rule, officially titled "Section 136 of the Dodd-Frank Wall Street Transparency and Accountability Reform and Consumer Protection Act, under Section 746" (but commonly referred to as "the Eddie Murphy rule"), prohibits the misuse of internal government information for the purpose of trading in the commodities markets. No one likes spoilers, so if you haven't seen this movie, we won't give away the plot and the denouement of the final scene of the entire movie. We'll just mention that shorting of FCOJ futures plays an important role here. In fact, so important, that this scene is reportedly often reference by traders on the New York Stock Exchange. Figure 1: The final scene of the film that initiated the inception of "Eddie Murphy rule" (source IMDb.com) Trading FCOJ futures today Although nowadays you don't see crowded rooms full of white collar men and women trying to buy low and sell high, FCOJ futures trading still exists. The only main difference is that rooms and phones have been replaced by computer screens and cubicles. Also, virtually anyone can trade today. If you are interested in trying out CFD trading of FCOJ futures, at Purple Trading we have recently introduced this instrument to our trader platforms. Just like our heroes of Trading Places, you can short (and long) and potentialy profit from both favourable and unfavourable market situations. The only difference is that you won't be able to use government information to do so, because Eddie Murphy Rule wouldn't allow you to.
Diesel Supply Concerns Grow as Russia Bans Exports: Impact on Middle Distillate Markets

Can Apple Stock Plunge Today!? Fed Decision May Affect US Dollar (USD), S&P 500, Gold (XAUUSD) And Crypto (e.g. Bitcoin Price & ETHUSD) | Swissquote

Swissquote Bank Swissquote Bank 15.06.2022 10:28
The Federal Reserve (Fed) will announce its latest rate decision today, but most of the wild ride is certainly done by now; the market fully prices in a 75bp hike at today’s decision. The aggressive rise in hawkish Fed expectations pushed the US 2-year yield to 3.45% on Tuesday. The 10-year yield flirted with 3.50%. The S&P500 lost another 0.38%, while Nasdaq eked out a small 0.20% gain, but after hitting a fresh low since November 2020. The US futures are in the positive this morning, but the market will likely remain tense until the Fed breaks the news that it hikes by 75bp. The updated economic projections and the dot plot have an important weight for future expectations. Bigger rate hikes from the Fed, and the soaring US dollar are certainly not a gift for other central banks. The US dollar is a base currency, and the rapid appreciation in the greenback increases the cost of the goods that the other countries negotiate in terms of US dollars on international markets, starting from oil and commodities. As a result, a stronger US dollar is a bigger inflation threat for the world. This is why, the hawkish Fed expectations have a bigger domino effect power on the rest of the world. The German 10-year yield continues pushing higher, and the EURUSD sees a decent support near the 1.04 threshold after the European Central Bank (ECB) announced an unscheduled meeting to discuss the market turmoil. Cable slipped below the 1.20 mark, and a 25bp hike from the Bank of England (BoE) may not suffice to compensate the hawkish Fed, and the renewed Brexit fears.   Watch the full episode to find out more! 0:00 Intro 0:27 The Fed decision 4:26 Market update 5:32 Gold, Bitcoin down 6:43 FedEx jumps & dividend paying stocks see higher interest 7:41 Expensive dollar threatens ECB, BoE 8:52 FTSE to feel the pinch of engdangered Brexit deal Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #decision #dotplot #ECB #unscheduled #meeting #BoE #USD #EUR #GBP #CHF #Bitcoin #MicroStrategy #crude #oil #gold #market #selloff #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH  
Industrial Metals Outlook: Assessing the Impact of China's Stimulus Measures

Have Tech Stocks Plunged!? FX: So Bank Of Japan Seems To Delay Supporting JPY, British Pound (GBP) Rallied| Stock Markets: S&P 500 Lost 3.2%

Saxo Bank Saxo Bank 17.06.2022 12:40
Summary:  The Bank of Japan continues to swim against the stream as it insisted on maintaining its yield-curve-control and negative policy rate at the meeting overnight, with daily operations to defend the yield cap on Japanese government bonds. Elsewhere, US equity markets continued to new lows even as US treasuries found strong support as a batch of weak US data points raises concerns on the US economic outlook.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The Nasdaq 100 and S&P 500 futures fully reversed and more the FOMC pump with S&P 500 futures closing at the 3,671 level yesterday down 3.2%, while technology stocks fell even more. The current drawdown is now the second deepest at the same time into the drawdown compared to previous historical drawdowns underscoring the seriousness of the current market regime. Initial jobless claims weakened yesterday, and the Philly Fed survey showed significant downward pressure on new orders hitting levels typical of recessions. The fear of recession could short-term keep a lid on interest rates and thus ironically support equities and maybe cause a mild rebound over the coming weeks. The VIX forward curve remains well behaved suggesting no panic yet in US equities. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) The indices were up more than 1% despite ugly selloffs in overseas markets overnight. The fall in property prices in the top 70 cities slowed to -0.2% m/m vs April -0.3%.  Property prices in Tier-1 cities rose 0.4% m/m and the declines in Tier-2 and lower-tier cities moderated. On the other hand, JD.COM’s (09618) JD Retail CEO told Bloomberg that recovery in consumption in China had been slow from the reopening of cities, such as Shanghai. The Company was expecting that it would take a long time for household consumption to recover as the economy and household income had been severely hit over this wave of lockdown. EURGBP and GBPUSD Sterling rallied hard yesterday in the wake of the Bank of England meeting yesterday on the guidance the meeting produced rather than due to the smaller 25-basis point hike. its reversal yesterday took GBPUSD well away from the cycle lows of 1.2000 posted earlier this week, trading as high as 1.2406 late yesterday, just above a major local 61.8% Fibonacci retracement of the recent sell-off at 1.2387 and far above the prior low-water mark from May of 1.2156. A full reversal in GBPUSD requires another rally surge through 1.2500. Elsewhere, sterling hopefuls should have a look at EURGBP, where the latest leg higher above 0.8600 has been sharply reversed, suggesting a more well-defined reversal. Watching the 0.8500 area for whether we follow through lower and back into the range extending below 0.8300 again. USDJPY and JPY pairs With the Bank of Japan voting 8-1 to maintain course and the 0.25% cap on 10-year JGB yields, the JPY weakened sharply after a bout of speculation this week that Governor Kuroda and company might relent on its policy and bring a sharp resetting of the JPY higher. In the background, ironically, a powerful rally in global bonds yesterday was a JPY-supportive development that has eased the JPY-negative impact of the overnight BoJ decision. The BoJ statement did say that the Bank needs to pay attention to the FX level, from which one might infer that there is a JPY weakness level that the BoJ would find unacceptable and could prompt a change of course in the future. From here, the only route to a higher JPY is via a new drop in bond yields and shift away from CB tightening elsewhere or if the Bank of Japan is seen as giving up on its policy at a later date, possibly on coming inflation releases and risks of a weaker JPY raising the cost of living to an unacceptable degree. Crude oil (OILUKAUG22 & OILUSJUL22) Crude oil is heading for its first weekly decline in six with global growth concerns and prolonged lockdowns in China being the main catalyst. On top of that the short-term technical outlook has weakened following several failed attempts to break higher, but given the tight supply outlook, highlighted by the IEA earlier in the week. Support in Brent is likely to emerge already between $116 and $113.25. NY Harbor Diesel (HOc1) and gasoil (GASOILUKJUL22) both trades higher on the week, a reflection of the tightness that despite growth concerns, is likely to keep the energy sector supported.  Gold (XAUUSD)  Gold remains rangebound following a two-day rally that was supported by US growth concerns and a continued rout in cryptos and global stock markets. Together with another dose of weak U.S. data (see below) they helped send US treasury yields and the dollar lower on Thursday, thereby easing some of the recent pressure on bullion.  Total holdings in bullion-backed ETFs have declined by less than 0.25% this past week, a strong sign that investors look to gold for protection against the rout in global markets, together with increased focus on the need to hedge against the risk of stagflation.  On a relative basis gold’s year-to-date outperformance against the S&P 500 has reached 24%, long-end bonds 26% and 75% against blockchain (BKCH:arcx). US Treasuries (TLT, IEF) US treasuries rallied hard yesterday amidst ugly sentiment in the equity market and on a set of weak US data points pointing to a decelerating housing sector (more below), with weekly jobless claims remaining near the highs of the last few months. The US 10-year treasury yield has declined back to the pivotal area around 3.20%, which was the cycle high before the latest surge toward 3.50%. An extension of the rally that takes yields significantly back below that 3.20% mark would suggest that we have reached a cycle peak for now and further consolidation is set to follow, perhaps on concerns for an incoming recession. What is going on? Bank of Japan defies the global tightening wave The Bank of Japan maintained the negative 0.10% policy rate today, confirming that it won't join the Federal Reserve and other major global central banks in tightening monetary policy. The Japanese central bank will keep its target for the 10-year Japanese government-bond yield at+0.25% and announced daily operations to ensure the cap on yields is maintained. While the central bank said we will take additional easing measures without hesitation if needed, there was a rare reference to the yen weakness. Swiss National Bank surprises with 50 basis point hike yesterday The Swiss National Bank, according to surveys, was not expected to hike rates yesterday, though a rapidly growing minority of observers were looking for a rate rise. The hike of 50 basis points brought the policy rate to –0.25% and makes it clear that the SNB is happy to separate itself from ECB policy and allow the CHF to strengthen as one of the tools to combat rising inflation risks in the country. EURCHF sold off below 1.0200 after trading above 1.0400 ahead of the decision. USDCHF slid to lows of 0.9632 from above parity the day before the decision. The Bank of England hikes 25 basis points, sharpens forward guidance language The majority of observers were looking for the 25-basis point move from the BoE, with some residual uncertainty on whether the bank might hike by more due to the large Fed rate hike this week and the weakness in sterling. Three MPC members of the nine voting wanted a 50-bp hike. At the same time, the BoE predicted that CPI would peak slightly above 11% in October, said that it would respond “forcefully” on any signs of worsening inflation, language that kept the short end of the UK yield curve pinned near the cycle highs. China centric commodities remain under pressure China centric commodities such as iron ore SCON2), coal and copper (COPPERUSSEP22) remain under pressure after China advised its covid restrictions probably won’t ease until next year. In addition, the recent spate of weaker than expected economic US data combined with central banks stepping up their fight to combat inflation have raised concerns about the outlook for global growth in general. US economic indicators weaken US building permits and housing starts eased in May to 1.695mn and 1.549mn respectively while the initial jobless claims were at 229k versus 217k expected. Further, Philadelphia Fed manufacturing survey printed a negative figure of -3.3 for June, the first such contraction since May 2020. More so, the future activity index was contractionary for the first time since the GFC. Adobe shares slip 5% in extended trading on revenue outlook miss As we highlighted on our podcast yesterday Adobe’s earnings were a test of business investment in marketing and content activities. While the business remains sticky the company put out a revenue outlook at $17.7bn vs est. $17.9bn due some demand weakness, Russia impact and USD headwinds.   What are we watching next? US recession concerns rising The mix of data this week generally raises concerns that the US economy is decelerating, but the evidence is patchy and will need confirmation for this to become a a more entrenched theme. At the same time, equity traders have to figure out whether they should celebrate weak data as something that will eventually lead US yields lower and see the pace of Fed tightening eventually reversing or fret weak data because of the implications for corporate profits. The next US data points of interesting include the preliminary Services and Manufacturing PMI surveys for June next week. Fed blackout period ending The Fed speakers will be back in action as the blackout period ends. Chair Powell is speaking later today at the inaugural conference on the International Roles of the US Dollar. Other Fed speakers are due as well including Esther George who voted for a 50bps rate hike this week. Earnings Watch Next week’s earnings calendar is light but there are three important earnings releases to watch and those are Lennar, FedEx, and Accenture that all will give insights into the US housing market, logistics, and recruitment dynamics. Monday: Kanzhun Tuesday: Lennar Thursday: FedEx, Accenture, Darden Restaurants, FactSet Friday: Carnival, China Gas, CarMax Economic calendar highlights for today (times GMT) 0900 – Eurozone May Final CPI 1200 – Poland May Core CPI 1230 – Canada May Teranet/National Bank Home Price Index 1245 – US Fed Chair Powell to make opening remarks at a conference 1315 – US May Industrial Production / Capacity Utilization 1430 – UK Bank of England Chief Economist Pill to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – June 17, 2022 | Saxo Group (home.saxo)
COT Week 25 Charts: Stock Market Speculator bets mostly lower led by S&P500 Mini & Russell 2000

COT Week 25 Charts: Stock Market Speculator bets mostly lower led by S&P500 Mini & Russell 2000

Invest Macro Invest Macro 25.06.2022 14:28
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 21st and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The stock market speculator bets were mostly lower this week as three out of the eight stock markets we cover had higher positioning this week while the other five markets had lower contracts. Leading the gains for stock markets was VIX (24,255 contracts) with the Nasdaq Mini (2,404 contracts) and Nikkei 225 USD (821 contracts) also showing a positive weeks. Meanwhile, leading the declines in speculator bets this week were S&P500 Mini (-148,597 contracts) and with Russell 2000 Mini (-10,350 contracts), Nikkei 225 Yen (-5,996 contracts), MSCI EAFE Mini (-4,840 contracts) and Dow Jones Industrial Average Mini (-3,184 contracts) also registering lower bets on the week.   Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Nasdaq Mini and the VIX are both in extreme bullish levels (above 80 percent). The Nikkei Stock Average is also above the midpoint of the past 3-year with a 69.9 percent score for a bullish reading. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the S&P 500 Mini and the Russell 200 Mini are leading the downside trends with -43.7 percent and -21.9 percent, respectively. The Nasdaq Mini and the Nikkei 225 Yen are the only markets with positive six week trends.   Data Snapshot of Stock Market Traders | Columns Legend Jun-21-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index S&P500-Mini 2,262,004 6 -114,319 35 144,197 92 -29,878 20 Nikkei 225 12,380 5 -1,592 70 2,139 40 -547 21 Nasdaq-Mini 236,624 34 30,806 92 -27,586 10 -3,220 42 DowJones-Mini 69,024 26 -25,473 4 28,937 98 -3,464 20 VIX 257,930 15 -49,923 84 55,730 16 -5,807 63 Nikkei 225 Yen 51,198 30 -3,047 25 25,170 88 -22,123 29   VIX Volatility Futures: The VIX Volatility large speculator standing this week came in at a net position of -49,923 contracts in the data reported through Tuesday. This was a weekly gain of 24,255 contracts from the previous week which had a total of -74,178 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 84.2 percent. The commercials are Bearish-Extreme with a score of 16.2 percent and the small traders (not shown in chart) are Bullish with a score of 63.2 percent. VIX Volatility Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 18.2 53.8 8.4 – Percent of Open Interest Shorts: 37.6 32.2 10.7 – Net Position: -49,923 55,730 -5,807 – Gross Longs: 46,982 138,746 21,718 – Gross Shorts: 96,905 83,016 27,525 – Long to Short Ratio: 0.5 to 1 1.7 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 84.2 16.2 63.2 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.0 -1.8 27.4   S&P500 Mini Futures: The S&P500 Mini large speculator standing this week came in at a net position of -114,319 contracts in the data reported through Tuesday. This was a weekly fall of -148,597 contracts from the previous week which had a total of 34,278 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 35.0 percent. The commercials are Bullish-Extreme with a score of 91.7 percent and the small traders (not shown in chart) are Bearish with a score of 20.1 percent. S&P500 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 12.1 75.7 9.9 – Percent of Open Interest Shorts: 17.2 69.4 11.3 – Net Position: -114,319 144,197 -29,878 – Gross Longs: 273,629 1,713,053 224,849 – Gross Shorts: 387,948 1,568,856 254,727 – Long to Short Ratio: 0.7 to 1 1.1 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 35.0 91.7 20.1 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -43.7 46.8 -5.2   Dow Jones Mini Futures: The Dow Jones Mini large speculator standing this week came in at a net position of -25,473 contracts in the data reported through Tuesday. This was a weekly decline of -3,184 contracts from the previous week which had a total of -22,289 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.1 percent. The commercials are Bullish-Extreme with a score of 98.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.9 percent. Dow Jones Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.9 69.8 15.1 – Percent of Open Interest Shorts: 51.8 27.9 20.1 – Net Position: -25,473 28,937 -3,464 – Gross Longs: 10,310 48,166 10,418 – Gross Shorts: 35,783 19,229 13,882 – Long to Short Ratio: 0.3 to 1 2.5 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 4.1 98.0 19.9 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -2.9 6.6 -16.3   Nasdaq Mini Futures: The Nasdaq Mini large speculator standing this week came in at a net position of 30,806 contracts in the data reported through Tuesday. This was a weekly lift of 2,404 contracts from the previous week which had a total of 28,402 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 92.2 percent. The commercials are Bearish-Extreme with a score of 9.5 percent and the small traders (not shown in chart) are Bearish with a score of 41.9 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 35.0 46.9 16.3 – Percent of Open Interest Shorts: 22.0 58.5 17.7 – Net Position: 30,806 -27,586 -3,220 – Gross Longs: 82,888 110,913 38,577 – Gross Shorts: 52,082 138,499 41,797 – Long to Short Ratio: 1.6 to 1 0.8 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 92.2 9.5 41.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 9.7 -12.0 4.4   Russell 2000 Mini Futures: The Russell 2000 Mini large speculator standing this week came in at a net position of -105,596 contracts in the data reported through Tuesday. This was a weekly reduction of -10,350 contracts from the previous week which had a total of -95,246 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish with a score of 20.4 percent. Russell 2000 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 7.1 88.3 3.3 – Percent of Open Interest Shorts: 25.6 69.3 3.7 – Net Position: -105,596 107,890 -2,294 – Gross Longs: 40,382 502,812 19,004 – Gross Shorts: 145,978 394,922 21,298 – Long to Short Ratio: 0.3 to 1 1.3 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 20.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -21.9 18.9 8.0   Nikkei Stock Average (USD) Futures: The Nikkei Stock Average (USD) large speculator standing this week came in at a net position of -1,592 contracts in the data reported through Tuesday. This was a weekly increase of 821 contracts from the previous week which had a total of -2,413 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 69.9 percent. The commercials are Bearish with a score of 40.3 percent and the small traders (not shown in chart) are Bearish with a score of 21.5 percent. Nikkei Stock Average Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 25.3 56.8 17.7 – Percent of Open Interest Shorts: 38.1 39.5 22.1 – Net Position: -1,592 2,139 -547 – Gross Longs: 3,130 7,026 2,194 – Gross Shorts: 4,722 4,887 2,741 – Long to Short Ratio: 0.7 to 1 1.4 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 69.9 40.3 21.5 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -18.6 14.0 14.3   MSCI EAFE Mini Futures: The MSCI EAFE Mini large speculator standing this week came in at a net position of 196 contracts in the data reported through Tuesday. This was a weekly decrease of -4,840 contracts from the previous week which had a total of 5,036 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 24.1 percent. The commercials are Bullish with a score of 77.7 percent and the small traders (not shown in chart) are Bearish with a score of 35.3 percent. MSCI EAFE Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 4.9 92.7 1.7 – Percent of Open Interest Shorts: 4.8 93.2 1.2 – Net Position: 196 -2,076 1,880 – Gross Longs: 18,931 358,172 6,538 – Gross Shorts: 18,735 360,248 4,658 – Long to Short Ratio: 1.0 to 1 1.0 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 24.1 77.7 35.3 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -7.1 7.7 -3.4   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 26 Charts: Stock Market Speculators bets dropped this week led by S&P500 Mini & Nasdaq Mini

COT Week 26 Charts: Stock Market Speculators bets dropped this week led by S&P500 Mini & Nasdaq Mini

Invest Macro Invest Macro 02.07.2022 16:24
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday June 28th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The stock market speculator bets were mostly lower this week as three out of the eight stock markets we cover had very small gains in positioning this week while five markets had lower contracts. Leading the gains for stock markets was Russell 2000 Mini (976 contracts) with the Dow Jones Industrial Average Mini (400 contracts) and VIX (354 contracts) also showing a positive weeks. Meanwhile, leading the decreases in speculator bets this week were the S&P500 Mini (-24,907 contracts) and the Nasdaq Mini (-6,616 contracts) with the MSCI Emerging Markets Mini (-6,141 contracts), MSCI EAFE Mini (-2,182 contracts) and Nikkei 225 USD (-23 contracts) also registering lower bets on the week. Strength scores (3-Year range of Speculator positions, from 0 to 100 where above 80 percent is extreme bullish and below 20 percent is extreme bearish) show that the Nasdaq Mini leads currently with an extreme bullish score of 89 percent. The VIX is also at an extreme bullish score of 84.4 percent while on the downside, the Russell 2000 Mini (1 percent) and the Dow Jones Mini (4.6 percent) are both in extreme bearish positions. Strength score trends (or move index, that calculates the 6-week changes in strength scores) show that the Nikkei 225 Yen (15 percent), Nasdaq Mini (5 percent) and the Nikkei 225 USD (2 percent) are the only markets with rising scores over the past six weeks. The S&P Mini (-38 percent) and the Russell 2000 Mini (-21 percent) lead the downward trends of strength scores. Data Snapshot of Stock Market Traders | Columns Legend Jun-28-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index S&P500-Mini 2,248,771 6 -139,226 30 168,405 96 -29,179 20 Nikkei 225 13,442 8 -1,615 70 2,101 40 -486 22 Nasdaq-Mini 248,045 41 24,190 89 -19,930 14 -4,260 40 DowJones-Mini 66,759 23 -25,073 5 29,675 99 -4,602 14 VIX 257,123 14 -49,569 84 56,789 17 -7,220 56 Nikkei 225 Yen 56,111 38 2,330 41 24,398 87 -26,728 20   VIX Volatility Futures: The VIX Volatility large speculator standing this week resulted in a net position of -49,569 contracts in the data reported through Tuesday. This was a weekly advance of 354 contracts from the previous week which had a total of -49,923 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 84.4 percent. The commercials are Bearish-Extreme with a score of 16.7 percent and the small traders (not shown in chart) are Bullish with a score of 56.3 percent. VIX Volatility Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.4 54.5 8.6 – Percent of Open Interest Shorts: 36.7 32.4 11.4 – Net Position: -49,569 56,789 -7,220 – Gross Longs: 44,726 140,039 22,123 – Gross Shorts: 94,295 83,250 29,343 – Long to Short Ratio: 0.5 to 1 1.7 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 84.4 16.7 56.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -5.0 4.2 6.6   S&P500 Mini Futures: The S&P500 Mini large speculator standing this week resulted in a net position of -139,226 contracts in the data reported through Tuesday. This was a weekly decrease of -24,907 contracts from the previous week which had a total of -114,319 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 30.4 percent. The commercials are Bullish-Extreme with a score of 96.1 percent and the small traders (not shown in chart) are Bearish with a score of 20.2 percent. S&P500 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 11.0 76.8 10.0 – Percent of Open Interest Shorts: 17.2 69.3 11.3 – Net Position: -139,226 168,405 -29,179 – Gross Longs: 248,313 1,726,190 223,854 – Gross Shorts: 387,539 1,557,785 253,033 – Long to Short Ratio: 0.6 to 1 1.1 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 30.4 96.1 20.2 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -38.1 39.6 -3.2   Dow Jones Mini Futures: The Dow Jones Mini large speculator standing this week resulted in a net position of -25,073 contracts in the data reported through Tuesday. This was a weekly lift of 400 contracts from the previous week which had a total of -25,473 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 4.6 percent. The commercials are Bullish-Extreme with a score of 98.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 13.8 percent. Dow Jones Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 13.5 70.5 14.9 – Percent of Open Interest Shorts: 51.1 26.1 21.8 – Net Position: -25,073 29,675 -4,602 – Gross Longs: 9,011 47,089 9,948 – Gross Shorts: 34,084 17,414 14,550 – Long to Short Ratio: 0.3 to 1 2.7 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 4.6 98.9 13.8 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -2.0 4.9 -12.8   Nasdaq Mini Futures: The Nasdaq Mini large speculator standing this week resulted in a net position of 24,190 contracts in the data reported through Tuesday. This was a weekly fall of -6,616 contracts from the previous week which had a total of 30,806 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 88.5 percent. The commercials are Bearish-Extreme with a score of 14.2 percent and the small traders (not shown in chart) are Bearish with a score of 39.7 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.8 51.9 14.3 – Percent of Open Interest Shorts: 22.1 59.9 16.0 – Net Position: 24,190 -19,930 -4,260 – Gross Longs: 78,987 128,769 35,528 – Gross Shorts: 54,797 148,699 39,788 – Long to Short Ratio: 1.4 to 1 0.9 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 88.5 14.2 39.7 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.0 -6.6 3.5   Russell 2000 Mini Futures: The Russell 2000 Mini large speculator standing this week resulted in a net position of -104,620 contracts in the data reported through Tuesday. This was a weekly increase of 976 contracts from the previous week which had a total of -105,596 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.6 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 11.0 percent. Russell 2000 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 7.2 88.3 3.3 – Percent of Open Interest Shorts: 25.6 69.0 4.2 – Net Position: -104,620 109,982 -5,362 – Gross Longs: 41,196 503,528 18,674 – Gross Shorts: 145,816 393,546 24,036 – Long to Short Ratio: 0.3 to 1 1.3 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.6 100.0 11.0 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -21.1 20.1 -4.1   Nikkei Stock Average (USD) Futures: The Nikkei Stock Average (USD) large speculator standing this week resulted in a net position of -1,615 contracts in the data reported through Tuesday. This was a weekly reduction of -23 contracts from the previous week which had a total of -1,592 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 69.8 percent. The commercials are Bearish with a score of 40.1 percent and the small traders (not shown in chart) are Bearish with a score of 22.2 percent. Nikkei Stock Average Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 31.4 52.1 16.2 – Percent of Open Interest Shorts: 43.4 36.5 19.8 – Net Position: -1,615 2,101 -486 – Gross Longs: 4,220 7,007 2,177 – Gross Shorts: 5,835 4,906 2,663 – Long to Short Ratio: 0.7 to 1 1.4 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 69.8 40.1 22.2 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.5 -10.4 22.2   MSCI EAFE Mini Futures: The MSCI EAFE Mini large speculator standing this week resulted in a net position of -1,986 contracts in the data reported through Tuesday. This was a weekly decrease of -2,182 contracts from the previous week which had a total of 196 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 21.8 percent. The commercials are Bullish with a score of 79.9 percent and the small traders (not shown in chart) are Bearish with a score of 40.7 percent. MSCI EAFE Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.1 92.2 2.0 – Percent of Open Interest Shorts: 5.6 92.3 1.3 – Net Position: -1,986 -510 2,496 – Gross Longs: 19,973 360,111 7,717 – Gross Shorts: 21,959 360,621 5,221 – Long to Short Ratio: 0.9 to 1 1.0 to 1 1.5 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 21.8 79.9 40.7 – Strength Index Reading (3 Year Range): Bearish Bullish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.5 0.5 6.8   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 27 Charts: Stock Market Speculators bets mostly lower led by S&P500 & MSCI EAFE Mini

COT Week 27 Charts: Stock Market Speculators bets mostly lower led by S&P500 & MSCI EAFE Mini

Invest Macro Invest Macro 09.07.2022 14:15
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 5th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. The stock market speculator bets were mostly lower for a second straight week this week as three out of the eight stock markets we cover had higher positioning this week while five markets had lower contracts. Leading the gains for stock markets was the Nasdaq Mini (6,705 contracts) with the VIX (4,068 contracts) and Dow Jones Industrial Average Mini (1,990 contracts) also showing positive weeks. Meanwhile, leading the decreases in speculator bets this week were the S&P500 Mini (-44,456 contracts) and with MSCI EAFE Mini (-31,197 contracts), Russell 2000 Mini (-13,973 contracts), MSCI Emerging Markets Mini (-4,586 contracts) and the Nikkei 225 USD (-130 contracts) also registering lower bets on the week. Strength scores (measuring the 3-Year range of Speculator positions, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Nasdaq Mini (92.3 percent) is at the highest level of the stock markets currently followed by the VIX (86.4 percent). Both are in extreme bullish levels compared to the past three years of speculator sentiment. On the lower end, the Russell 2000 Mini (0 percent) and the MSCI EAFE Mini (0 percent) are in bearish-extreme levels and at their lowest level of positioning of the past three years. Strength score trends (or move index, that calculate 6-week changes in strength scores) shows that the S&P500 Mini (-43.1 percent) and MSCI EAFE Mini (-37.5 percent) are leading the down-trending scores over the past six weeks. The Nasdaq Mini, meanwhile, leads the trends to the upside with a 9.6 percent trend change. Data Snapshot of Stock Market Traders | Columns Legend Jul-05-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index S&P500-Mini 2,309,241 8 -183,682 22 221,625 100 -37,943 18 Nikkei 225 14,508 11 -1,745 69 3,210 46 -1,465 10 Nasdaq-Mini 259,449 48 30,895 92 -25,919 11 -4,976 38 DowJones-Mini 67,437 24 -23,083 7 27,554 96 -4,471 15 VIX 266,933 17 -45,501 86 52,406 15 -6,905 58 Nikkei 225 Yen 60,276 44 3,916 46 25,226 88 -29,142 15   VIX Volatility Futures: The VIX Volatility large speculator standing this week came in at a net position of -45,501 contracts in the data reported through Tuesday. This was a weekly lift of 4,068 contracts from the previous week which had a total of -49,569 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 86.4 percent. The commercials are Bearish-Extreme with a score of 14.6 percent and the small traders (not shown in chart) are Bullish with a score of 57.9 percent. VIX Volatility Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 17.2 54.0 8.8 – Percent of Open Interest Shorts: 34.3 34.4 11.4 – Net Position: -45,501 52,406 -6,905 – Gross Longs: 45,972 144,271 23,601 – Gross Shorts: 91,473 91,865 30,506 – Long to Short Ratio: 0.5 to 1 1.6 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 86.4 14.6 57.9 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.0 0.7 2.3   S&P500 Mini Futures: The S&P500 Mini large speculator standing this week came in at a net position of -183,682 contracts in the data reported through Tuesday. This was a weekly reduction of -44,456 contracts from the previous week which had a total of -139,226 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish with a score of 22.2 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 18.4 percent. S&P500 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 10.3 77.6 9.9 – Percent of Open Interest Shorts: 18.2 68.0 11.5 – Net Position: -183,682 221,625 -37,943 – Gross Longs: 237,370 1,791,046 227,663 – Gross Shorts: 421,052 1,569,421 265,606 – Long to Short Ratio: 0.6 to 1 1.1 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 22.2 100.0 18.4 – Strength Index Reading (3 Year Range): Bearish Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -43.1 42.5 -3.8   Dow Jones Mini Futures: The Dow Jones Mini large speculator standing this week came in at a net position of -23,083 contracts in the data reported through Tuesday. This was a weekly advance of 1,990 contracts from the previous week which had a total of -25,073 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 7.1 percent. The commercials are Bullish-Extreme with a score of 96.3 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 14.5 percent. Dow Jones Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 16.4 67.4 15.3 – Percent of Open Interest Shorts: 50.6 26.5 22.0 – Net Position: -23,083 27,554 -4,471 – Gross Longs: 11,053 45,425 10,349 – Gross Shorts: 34,136 17,871 14,820 – Long to Short Ratio: 0.3 to 1 2.5 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 7.1 96.3 14.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 1.2 1.6 -12.2   Nasdaq Mini Futures: The Nasdaq Mini large speculator standing this week came in at a net position of 30,895 contracts in the data reported through Tuesday. This was a weekly increase of 6,705 contracts from the previous week which had a total of 24,190 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 92.3 percent. The commercials are Bearish-Extreme with a score of 10.6 percent and the small traders (not shown in chart) are Bearish with a score of 38.3 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 32.2 52.9 13.6 – Percent of Open Interest Shorts: 20.3 62.9 15.6 – Net Position: 30,895 -25,919 -4,976 – Gross Longs: 83,514 137,186 35,380 – Gross Shorts: 52,619 163,105 40,356 – Long to Short Ratio: 1.6 to 1 0.8 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 92.3 10.6 38.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 9.6 -9.1 -4.8   Russell 2000 Mini Futures: The Russell 2000 Mini large speculator standing this week came in at a net position of -118,593 contracts in the data reported through Tuesday. This was a weekly lowering of -13,973 contracts from the previous week which had a total of -104,620 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.3 percent. Russell 2000 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 7.2 88.2 3.4 – Percent of Open Interest Shorts: 27.4 67.1 4.2 – Net Position: -118,593 123,533 -4,940 – Gross Longs: 42,435 517,591 19,684 – Gross Shorts: 161,028 394,058 24,624 – Long to Short Ratio: 0.3 to 1 1.3 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 12.3 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -24.8 24.2 -7.5   Nikkei Stock Average (USD) Futures: The Nikkei Stock Average (USD) large speculator standing this week came in at a net position of -1,745 contracts in the data reported through Tuesday. This was a weekly fall of -130 contracts from the previous week which had a total of -1,615 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 69.2 percent. The commercials are Bearish with a score of 45.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 9.9 percent. Nikkei Stock Average Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 28.4 55.8 15.5 – Percent of Open Interest Shorts: 40.4 33.7 25.6 – Net Position: -1,745 3,210 -1,465 – Gross Longs: 4,119 8,101 2,250 – Gross Shorts: 5,864 4,891 3,715 – Long to Short Ratio: 0.7 to 1 1.7 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 69.2 45.7 9.9 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -1.1 0.2 2.3   MSCI EAFE Mini Futures: The MSCI EAFE Mini large speculator standing this week came in at a net position of -33,183 contracts in the data reported through Tuesday. This was a weekly decrease of -31,197 contracts from the previous week which had a total of -1,986 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.0 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 91.2 percent. MSCI EAFE Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.1 90.6 3.8 – Percent of Open Interest Shorts: 12.9 84.8 1.8 – Net Position: -33,183 24,926 8,257 – Gross Longs: 21,492 384,305 15,954 – Gross Shorts: 54,675 359,379 7,697 – Long to Short Ratio: 0.4 to 1 1.1 to 1 2.1 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.0 100.0 91.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -37.5 33.7 41.4   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
COT Week 28 Charts: Stock Market Speculators bets declined overall led by S&P500-Mini & VIX

COT Week 28 Charts: Stock Market Speculators bets declined overall led by S&P500-Mini & VIX

Invest Macro Invest Macro 16.07.2022 15:25
By InvestMacro | COT | Data Tables | COT Leaders | Downloads | COT Newsletter Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC). The latest COT data is updated through Tuesday July 12th and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets. Weekly Speculator Changes COT stock market speculator bets were mostly lower this week as three out of the seven stock markets we cover had higher positioning while the other four markets had lower weekly net changes. Leading the gains for stock markets was the MSCI EAFE Mini (11,147 contracts) with the Dow Jones Industrial Average Mini (3,240 contracts) and Russell 2000 Mini (815 contracts) also showing  positive weeks. Meanwhile, leading the declines in speculator bets this week were the S&P500 Mini (-31,846 contracts) and the VIX (-20,866 contracts) with the Nasdaq Mini (-11,479 contracts) and the Nikkei 225 USD (-206 contracts) also registering lower bets on the week.   Data Snapshot of Stock Market Traders | Columns Legend Jul-12-2022 OI OI-Index Spec-Net Spec-Index Com-Net COM-Index Smalls-Net Smalls-Index S&P500-Mini 2,317,580 8 -215,528 16 247,687 100 -32,159 20 Nikkei 225 13,053 7 -1,951 68 3,206 46 -1,255 13 Nasdaq-Mini 254,260 45 19,416 86 -9,589 21 -9,827 28 DowJones-Mini 67,254 24 -19,843 11 25,635 94 -5,792 7 VIX 281,586 21 -66,367 76 73,802 25 -7,435 55 Nikkei 225 Yen 61,838 46 7,547 57 25,338 88 -32,885 7   Strength Scores Strength Scores (a normalized measure of Speculator positions over a 3-Year range, from 0 to 100 where above 80 is extreme bullish and below 20 is extreme bearish) show that the Nasdaq-Mini (85.9 percent) leads the stocks and is currently in a bullish extreme position. The VIX (76.0 percent) and the Nikkei USD (68.2 percent) come in as the next highest stock markets in strength scores. On the downside, the Russell2000-Mini (0.5 percent) comes in at the lowest strength level currently (extreme bearish) and continues to scrape the bottom of its 3-year range. The DowJones-Mini (11.1 percent), EAFE-Mini (12.6 percent) and the S&P500-Mini (16.3 percent) round out the next lowest scores and are also in extreme bearish levels (below 20 percent). Strength Statistics: VIX (76.0 percent) vs VIX previous week (86.4 percent) S&P500-Mini (16.3 percent) vs S&P500-Mini previous week (22.2 percent) DowJones-Mini (11.1 percent) vs DowJones-Mini previous week (7.1 percent) Nasdaq-Mini (85.9 percent) vs Nasdaq-Mini previous week (92.3 percent) Russell2000-Mini (0.5 percent) vs Russell2000-Mini previous week (0.0 percent) Nikkei USD (68.2 percent) vs Nikkei USD previous week (69.2 percent) EAFE-Mini (12.6 percent) vs EAFE-Mini previous week (0.0 percent)   Strength Trends Strength Score Trends (or move index, that calculates the 6-week changes in strength scores) show that the DowJones-Mini (7.8 percent) leads the past six weeks trends for stocks currently. The Nasdaq-Mini (7.7 percent) and the Nikkei USD (5.4 percent) fill out the top movers in the latest trends data. The S&P500-Mini (-44.0 percent) and the Russell 2000-Mini (-22.2 percent) lead the downside trend scores this week followed by the EAFE-Mini (-20.7 percent) which saw an improvement from last week (-37.5 percent). Strength Trend Statistics: VIX (-10.8 percent) vs VIX previous week (-1.0 percent) S&P500-Mini (-44.0 percent) vs S&P500-Mini previous week (-43.1 percent) DowJones-Mini (7.8 percent) vs DowJones-Mini previous week (1.2 percent) Nasdaq-Mini (7.7 percent) vs Nasdaq-Mini previous week (9.6 percent) Russell2000-Mini (-22.2 percent) vs Russell2000-Mini previous week (-24.8 percent) Nikkei USD (5.4 percent) vs Nikkei USD previous week (-1.1 percent) EAFE-Mini (-20.7 percent) vs EAFE-Mini previous week (-37.5 percent) VIX Volatility Futures: The VIX Volatility large speculator standing this week came in at a net position of -66,367 contracts in the data reported through Tuesday. This was a weekly lowering of -20,866 contracts from the previous week which had a total of -45,501 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 76.0 percent. The commercials are Bearish with a score of 25.0 percent and the small traders (not shown in chart) are Bullish with a score of 55.3 percent. VIX Volatility Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 14.5 59.2 8.2 – Percent of Open Interest Shorts: 38.1 33.0 10.8 – Net Position: -66,367 73,802 -7,435 – Gross Longs: 40,825 166,659 23,039 – Gross Shorts: 107,192 92,857 30,474 – Long to Short Ratio: 0.4 to 1 1.8 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 76.0 25.0 55.3 – Strength Index Reading (3 Year Range): Bullish Bearish Bullish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -10.8 10.1 4.8   S&P500 Mini Futures: The S&P500 Mini large speculator standing this week came in at a net position of -215,528 contracts in the data reported through Tuesday. This was a weekly decrease of -31,846 contracts from the previous week which had a total of -183,682 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 16.3 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 19.6 percent. S&P500 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 9.7 77.8 10.1 – Percent of Open Interest Shorts: 19.0 67.1 11.4 – Net Position: -215,528 247,687 -32,159 – Gross Longs: 224,577 1,802,289 233,148 – Gross Shorts: 440,105 1,554,602 265,307 – Long to Short Ratio: 0.5 to 1 1.2 to 1 0.9 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 16.3 100.0 19.6 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -44.0 39.8 -1.6   Dow Jones Mini Futures: The Dow Jones Mini large speculator standing this week came in at a net position of -19,843 contracts in the data reported through Tuesday. This was a weekly rise of 3,240 contracts from the previous week which had a total of -23,083 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 11.1 percent. The commercials are Bullish-Extreme with a score of 93.9 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 7.5 percent. Dow Jones Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 20.3 64.3 14.5 – Percent of Open Interest Shorts: 49.8 26.2 23.1 – Net Position: -19,843 25,635 -5,792 – Gross Longs: 13,674 43,227 9,777 – Gross Shorts: 33,517 17,592 15,569 – Long to Short Ratio: 0.4 to 1 2.5 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 11.1 93.9 7.5 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.8 -5.1 -11.5   Nasdaq Mini Futures: The Nasdaq Mini large speculator standing this week came in at a net position of 19,416 contracts in the data reported through Tuesday. This was a weekly reduction of -11,479 contracts from the previous week which had a total of 30,895 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish-Extreme with a score of 85.9 percent. The commercials are Bearish with a score of 20.6 percent and the small traders (not shown in chart) are Bearish with a score of 28.3 percent. Nasdaq Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 30.3 55.4 12.7 – Percent of Open Interest Shorts: 22.6 59.1 16.6 – Net Position: 19,416 -9,589 -9,827 – Gross Longs: 76,972 140,774 32,410 – Gross Shorts: 57,556 150,363 42,237 – Long to Short Ratio: 1.3 to 1 0.9 to 1 0.8 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 85.9 20.6 28.3 – Strength Index Reading (3 Year Range): Bullish-Extreme Bearish Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 7.7 -8.3 -0.7   Russell 2000 Mini Futures: The Russell 2000 Mini large speculator standing this week came in at a net position of -117,778 contracts in the data reported through Tuesday. This was a weekly gain of 815 contracts from the previous week which had a total of -118,593 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 0.5 percent. The commercials are Bullish-Extreme with a score of 100.0 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 8.4 percent. Russell 2000 Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 6.9 89.0 3.1 – Percent of Open Interest Shorts: 26.9 67.9 4.2 – Net Position: -117,778 123,998 -6,220 – Gross Longs: 40,461 523,195 18,305 – Gross Shorts: 158,239 399,197 24,525 – Long to Short Ratio: 0.3 to 1 1.3 to 1 0.7 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 0.5 100.0 8.4 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -22.2 22.1 -9.9   Nikkei Stock Average (USD) Futures: The Nikkei Stock Average (USD) large speculator standing this week came in at a net position of -1,951 contracts in the data reported through Tuesday. This was a weekly lowering of -206 contracts from the previous week which had a total of -1,745 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 68.2 percent. The commercials are Bearish with a score of 45.7 percent and the small traders (not shown in chart) are Bearish-Extreme with a score of 12.6 percent. Nikkei Stock Average Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 22.9 62.1 14.8 – Percent of Open Interest Shorts: 37.9 37.5 24.4 – Net Position: -1,951 3,206 -1,255 – Gross Longs: 2,991 8,101 1,931 – Gross Shorts: 4,942 4,895 3,186 – Long to Short Ratio: 0.6 to 1 1.7 to 1 0.6 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 68.2 45.7 12.6 – Strength Index Reading (3 Year Range): Bullish Bearish Bearish-Extreme NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: 5.4 -2.0 -9.2   MSCI EAFE Mini Futures: The MSCI EAFE Mini large speculator standing this week came in at a net position of -22,036 contracts in the data reported through Tuesday. This was a weekly boost of 11,147 contracts from the previous week which had a total of -33,183 net contracts. This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 12.6 percent. The commercials are Bullish-Extreme with a score of 93.1 percent and the small traders (not shown in chart) are Bearish with a score of 44.2 percent. MSCI EAFE Mini Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS – Percent of Open Interest Longs: 5.7 91.3 2.4 – Percent of Open Interest Shorts: 10.9 86.8 1.7 – Net Position: -22,036 19,139 2,897 – Gross Longs: 24,616 391,518 10,216 – Gross Shorts: 46,652 372,379 7,319 – Long to Short Ratio: 0.5 to 1 1.1 to 1 1.4 to 1 NET POSITION TREND: – Strength Index Score (3 Year Range Pct): 12.6 93.1 44.2 – Strength Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bearish NET POSITION MOVEMENT INDEX: – 6-Week Change in Strength Index: -20.7 23.6 -14.0   Article By InvestMacro – Receive our weekly COT Reports by Email *COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets. The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators) as well as their open interest (contracts open in the market at time of reporting).See CFTC criteria here.
Investors? Bulls? Bears? These Series Are Linked To Finances

Investors? Bulls? Bears? These Series Are Linked To Finances

Purple Trading Purple Trading 15.07.2022 14:23
5 must-watch series from the world of finance With the boom of streaming services, investors are presented with often exciting opportunities. But today, we'll try to move away from looking at the world through the eyes of an investor and focus more on the content that streaming services offer. More accurately, we will take a look at the series that can be found on these platforms. But don’t worry, we won’t get too far from our beloved world of finance either. Financial world has always been an attractive subject not only for Hollywood screenwriters. Classics such as Wall Street (1986) and Wolf of Wall Street (2013) have not only grossed millions of dollars world-wide but even managed to convince many viewers into starting their own careers in finance. However, with the rise of streaming services, finance has also taken centre stage for a number of series. Some of the most well-known are the HBO-produced series Billions (2016) and Succession (2018). Today, let's take a look at a few lesser-known, but definitely not inferior series from the world of finance that are simply a must-watch. Devils (Sky, 2020) - a probe into investment bank’s speculation during global crises Produced by Italian broadcaster Sky, Devils is one of the most interesting European series in years. The plot follows Massimo Ruggero, who has risen from rags to riches as a head of the trading desk of the New York London Investment Bank (strikingly reminiscent of Goldman Sachs).   Massimo and his team speculate on the financial markets during the biggest events of the last 12 years. This gives viewers an insight into the behaviour of investment banks during the mortgage crisis, the Greek debt crisis and the Brexit vote, for example. The series is enriched with real time footage of international financial institutions meeting, mixing fiction with reality.   The second season premiered a few months ago and is of equal quality. With the main roles being masterfully played by Alessandro Borghi (known from the Suburra series and the film) and Patrick Dempsey (known from the Surgeons series).     Industry (HBO, 2020) - a series written by the bankers themselves Industry provides a grim and realistic look at what it's like to start a professional career in the financial sector in the heart of London. Here we follow a group of young bankers as they are trying to work their way up to a full-time position at one of London's investment banks, having to navigate this cutthroat and competitive environment as quick as possible.   The series captures well how depressing a given career can be and partially subverts any standards that may have been ingrained by titles such as Wall Street or Billions, taking off the rose-colored glasses of the viewer. Industry simply shows how challenging and competitive a career in finance can be.   As we watch the story of two main protagonists, experiencing their first successes and failures we simply have to wonder - will the desire for success and money prevail, or will the young bankers realise that there is more to life than the pursuit of money? The series, created by two former bankers, has completed its first season, with a second to follow later this year (2022).     Black Monday (Showtime, 2019) - when crisis meets satire   Welcome to the 1980s! A decade full of extravagant hairstyles, clothes and one of the biggest stock market crises in history. We're talking about "Black Monday", a single day in October 1987 during which world stock indices fell by tens of percent. As bleak as it might sound, Black Monday is the most light-hearted series on this list.   The series follows a group of traders from a second-rate Wall Street firm called the Jammer Group and uses satire and fiction to reveal the events that led to the aforementioned stock market crash. Don Cheadle, known from the Avengers franchise, stars in the lead role. The series ended after three seasons, all of which are currently available on HBO.   The Dropout (Hulu, 2022) - based on true events Enron, Worldcom and Theranos. Three of the biggest investor scams in decades. The Dropout series follows the story of Theranos - a company that promised to revolutionize blood testing. Founder Elizabeth Holmes managed to create an aura of success around herself and Theranos, fooling the biggest investment banks and the most famous investors. The company's market capitalization gradually climbed to $9 billion, which was almost unbelievable given the lack of a fully functional product.   The series reveals the rise and fall of the company and its founder, who went from being a female copy of Steve Jobs to an outlaw. However, If you're not too keen on dramatization of real events, we recommend watching the HBO documentary The Inventor: Out for blood in Silicon Valley. It also deals with this topic.   WeCrashed (Apple TV+, 2022) - when the marketing strategy goes too far   Investors who have followed the events of the US stock markets in recent years will immediately know that behind the title of this series lies the story of WeWork, a company that operates a network of co-working offices around the world. However, comparing WeWork to Theranos would be rather harsh, but there are several similarities.   The company's founder, Adam Neumann, has used a great marketing strategy to attract several major investors, most notably Softbank founder Masayoshi Son. Investors then valued the company at a hard-to-believe $47 billion ahead of its planned IPO. As the title of the series suggests, things did not go quite as planned. You can look forward to seeing well-known actors Jared Leto and Anne Hathaway in the lead roles.   Are you tempted by the world of stocks and even more so by shorting them?   At Purple Trading, you now have the opportunity to speculate on the rise and fall of more than 100 of the world's most famous companies and ride the current trend. And if you don’t feel like risking your own money, you can try it with virtual ones on our free demo account.  
Stock Market: Uber, Palantir And Moderna In Top 3...

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

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

Which stock market sector is currently interesting due to its volatility?

Purple Trading Purple Trading 18.07.2022 07:57
Which stock market sector is currently interesting due to its volatility While long-term investors in physical shares are not too interested in volatility, CFD traders can make potentially very nice profits from it. However, equity markets are vast and it can happen that an interesting title slips through one’s fingers. This article will make sure that it doesn't happen. What is volatility and how is it created If you were to equate the words volatility and nervousness (or moodiness) you would not be far off the mark. Indeed, volatility is really a measure of nervousness in the markets and where there is nervousness, there is also uncertainty. Uncertainty in the markets can arise for many different reasons, but it usually happens before the release of important macroeconomic news (on our economic calendar), you can identify those by the three bulls' heads symbols) or during unexpected events with a major impact on a particular market sector or the geopolitical order of the world (natural disasters, wars).   On the charts of trading platforms, you can recognize a highly volatile market by the dynamically changing price of the instrument, the market is said to be going up or down, and if you switch to a candle chart, you may notice large candles. Conversely, non-volatile, calm markets move sideways without any significant dips or rises. Volatility can also be historical or implied, but we'll write about that another time. Now, let’s talk about how can one potentially profit from volatility and where to find suitable markets to do so.   How to potentially profit from volatility For intraday and swing traders, volatility is the key to their potential success. For traders, often the worst situation is the so-called "sideways" market movement, where the asset in question goes "sideways" without significant movements either up or down. With small and larger price fluctuations, traders can potentially generate interesting profits. One of the most volatile markets is the stock market, where some news can trigger very significant price movements. Events such as important economic reports, a stock split, or an acquisition announcement, for example, can move the price of a given stock. In addition, traders using CFDs for share trading can also use leverage to multiply any gains (and losses) in a given volatility.   The key to potential success is choosing the right stock titles. Some stocks and sectors can be considered more volatile, while others can go longer periods of time without significant fluctuations. So how do you look for volatility? Several indicators measure price movements in stocks, perhaps the most well-known is beta, which measures the volatility of a given stock compared to a benchmark stock index (typically the S&P 500 for US stocks). The beta indicator is listed on most well-known stock sites, but we can calculate it using the following formula: Beta = 1 In this case, the stock is highly correlated with the market and we can expect very similar movements to the benchmark index.   Beta < 1 If the beta is less than 1, we can consider the stock to be potentially less volatile than the stock market.   Beta > 1 Stocks with a beta greater than 1 are theoretically more volatile than the benchmark index. So, for example, if a stock's beta is 1.1, we think of it as 10% more volatile. It is stock titles with a beta above 1 that should be of most interest to investors looking to take advantage of volatility. However, it is not enough to monitor the beta alone, traders should not forget to monitor important news and fundamentals related to the company and the market in general. Thus, it is advisable to choose a few companies whose stocks have been significantly volatile in the past and where we expect strong movements due to positive and negative news to continue. So which sectors may be worth following? In which sectors can you potentially benefit from high volatility? Energy sector The energy companies sector has historically been one of the most volatile, as confirmed by the course of 2022 so far. The price development of energy companies is of course strongly linked to the price of energy commodities. These have had a great year - both natural gas and oil have appreciated by several tens of percent since the beginning of the year. However, this growth has not been without significant fluctuations, often by higher units of percent per day. The current geopolitical situation and growing talk of recession promise to continue the volatility in the sector. In the chart below, you can see the movement of Exxon Mobil Corp shares in recent weeks. Chart 1: Exxon Mobil shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages Travel industry Shares of companies related to the travel industry have always been very volatile. According to data from the beginning of the year (NYU Stern), even the companies classified as hotels and casinos were the most volatile when measured by beta. Given the coronavirus pandemic, this is not surprising. However, the threat of coronavirus still persists and there is currently the talk of another wave. However, global demand for travel is once again strong. Airlines and hotels are beginning to recover from the previous two dry years. As a result, both positive and negative news promises potential volatility going forward. In the chart below, you can see the movement of Hilton Hotels Corp shares in recent weeks. Chart 2: Hilton Hotels shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages Technology Technology is a very broad term - some companies in a given sector can be considered "blue chip" stocks, which can generally be less volatile and have the potential to appreciate nicely over time. These include Apple or Microsoft, for example. However, even these will not escape relatively high volatility in 2022. Traders looking for even stronger moves, however, will be more interested in smaller companies such as Uber, Zoom Technologies, Palantir, or PayPal. In the chart below, we can see the evolution of Twitter stock, which has undergone significant volatility in recent weeks. This was linked to the announcement of the acquisition (April gap) and its recent recall by Elon Musk. With both opposing parties facing a court battle, similarly wild news is just more water on the volatility mill. Chart 3: Twitter shares on the MT4 platform on the H1 timeframe along with the 50 and 100-day moving averages There are, of course, more sectors that are significantly volatile. Traders can follow companies in the healthcare sector, for example, where coronavirus vaccine companies are among the most interesting ones. Restaurants or aerospace and chemical companies can also be worth looking at. But few things can move stock markets as significantly as the economic cycle. We'll look at the impact of expansion and recession on stocks in our next article.  
Let's Have A Look At S&P 500 (SPX) And (BTC/USD) Bitcoin Price Charts

Let's Have A Look At S&P 500 (SPX) And (BTC/USD) Bitcoin Price Charts

Monica Kingsley Monica Kingsley 08.08.2022 08:37
S&P 500 bulls made a good run, but didn‘t deal with the bearish outcome looming, The renewed tightening bets spurred by strong headline NFPs figure, will take their toll on risk-on assets that had been driving Friday‘s run. Bets on another 75bp hike in Sep have increased dramatically, practically proving Daly or Kashkari right in that the Fed isn‘t done yet or even close to the Fed funds rate to really get inflation down. While they claim that 2% is doable and soft landing within reach, the progression from 9% downwards just doesn‘t go fast like that. At best (repeating myself for months here), they would get to 5-6% CPI, which means a tough Sep and one more FOMC still this year. Combined with balnce sheet shrinking projections, that would take a great toll on the real economy – one that is being softened by the still very expansive fiscal policy. Let‘s look around the world (apart from the troubles in Europe and Asia such as shown in JPY weakness), many other central banks are tightening, Latin America is also tightening. It‘s not only UK and the implications discussed on Friday: (…) Let‘s have a look at yesterday‘s Bank of England moves, kind of foreshadowing what‘s reasonable to expect from the Fed. In the UK, the prospect of entering recession Q4 2022 amd remaining in it for more than a couple of quarters, is being acknowledged. The central bank though intends to keep tightening anyway, preferring to take on inflation after it ran out of control longer they publicly anticipated. Meanwhile in the States, unemployment claims have edged higher – indicative of growing softness in the labor market. Long-dated Treasuries continue rising as is appropriate in these conditions of economic slowdown slowly gathering pace. Similarly to inflation expectations, they‘re not yet taking the Fed‘s hawkish rhetoric absolutely seriously unlike commodity prices that are at best carving out a bullish divergence (still in the making, therefore without implications yet). Precious metals appear farther along the route of acknowledging the upcoming stagflationary reality as I continue looking for inflation to remain in the stubbornly high 5-6% range no matter the Fed‘s actions over the next 3 FOMC meetings at least. Obviously, the hotter the underlying markets, the more tightening has to be done, and that‘s extra headwind for the markets, and one making the Fed pivot a bit more elusive. The key thing that has changed from the above, is the turn in yields – Treasuries would have a harder time rising now, but given that I expect better CPI on Wednesday (oil is down and hasn‘t bottomed yet etc), yields should retreat in what I look to be a positive market reaction – one of hoping that the Fed wouldn‘t tighten that much as is feared today they would. This wouldn‘t however save the stock market bulls. Consider though as well where the Fed funds rate is now, and how far above 3% Powell can take it. He will try, sure, but even 4% in our debt based economy would prove bridge too far when it comes to any soft landing (stating the very obvious). Back during the last successful one (mid 1990s), we were going through genuinely positive tech revolution that helped cushion restrictive monetary policy – these macro implications for productivity growth don‘t apply now. To feel the daily pulse, let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article features good 6 ones, with more thoughts for premium subscribers. S&P 500 and Nasdaq Outlook S&P 500 is clinging by the finernails, and the only question remains whether we have a few dozen points still to go on the upside to reach even more excessive bullishness, or whether the slow grind lower is assuming the reins from here. The bull trap is almost complete. Credit Markets HYG is going to attract a sell in the not too distant future – more so than it did on Friday. The opening gap was more than half closed, but this isn‘t going to last. All it takes to bring junk bonds down, is more conviction about the Fed‘s hawkish path ahead. Bitcoin and Ethereum Cryptos are slightly up, which bodes well for risk taking. Not expecting huge gains today here or in SPX, but a reversal of Friday‘s setback.
Tesla Will Struggle To Recover In The Coming Years

Wow! Tech Stocks: Tesla Stock Price Impresses With Its Performance!

FXStreet News FXStreet News 08.08.2022 16:38
Tesla stock falls 6% on Friday as rally starts to stall. TSLA stock is up 31% in the past month. Elon Musk said a recession is likely to last 18 months but be mild. Tesla stock fell on Friday as commentary from Elon Musk was taken as relatively bearish. The Tesla CEO said that the US looked set for a mild recession, probably in the ballpark of 18 months. Also more noteworthy in our view, Tesla stock is up nearly 32% in the past month and was due for a stall. Regular readers will have noted that your author has been short Tesla for some time. Luckily, I saw the writing on the wall and closed the position some 25% ago in the infancy of the rally. Also read: Tesla Stock Deep Dive: Price target at $400 on China headwinds, margin compression, lower deliveries Now it may be time to review the short thesis. This equity rally has been long in duration and percentage now and may be set to stall. The catalyst for the rally, that of falling yields, is reversing after Friday's strong jobs report. That strong report has given the Fed more ammunition to go for 75 basis points again in September. We are likely to see rhetoric turn notably hawkish this week from Fed speakers. Tesla stock news Also of note were other somewhat bearish comments from Elon Musk about the long-awaited Tesla Cybertruck. “Cybertruck pricing, it was unveiled in 2019, and the reservation was $99," Musk said. "A lot has changed since then, so the specs and the pricing will be different.” One has to assume this is a warning that prices will be higher given inflation and supply chain issues, but perhaps the biggest news piece is the imminent Tesla stock split. This is due to take place after August 17, which will be the record date. The Tesla stock split is to be a 3-for-1, so that Tesla shareholders on August 17 will receive an additional two extra shares in the form of a special dividend. Trading on a stock split-adjusted basis is scheduled to begin on August 25. Stock splits are generally seen as beneficial to stock prices simply due to human psychology – we like things that are perceived as cheaper even if in reality they are not. Tesla stock forecast Tesla recently marked its monthly gain of over 30% by flashing overbought on both the Relative Strength Index (RSI) and the Money Flow Index (MFI). It also retraced to the 200-day moving average but has not consolidated above there. The $945-to-$975 zone was an area of major resistance, and TSLA stock price has failed here. Momentum looks to be stalling, and Tesla is nothing if not a momentum play. This week could be interesting with Wednesday's CPI. That will dictate yields and the next Fed move, both of which will be the dominant factors in the next move for Tesla stock. Tesla chart, daily
Turbulent Times Ahead: USD Smile and JPY's Future - Q3 2023 Analysis

US Close – Stock rally faded, Nvidia’s warning, Oil rebounds, Gold above $1800, and Bitcoin eyes breakout

Ed Moya Ed Moya 09.08.2022 08:16
With persistent inflation and a strong labor market, the Fed is on a clear path to raise rates. This week is all about inflation and many traders are expecting to see the inflation to decelerate. Headline inflation is widely expected to decrease on a month-over-month over basis.  The focus will probably fall on core and those prices will remain elevated.  Much of Wall Street was stunned that the Biden administration was able to pass something before the midterm elections.  The Senate was able to pass a $430 billion landmark tax, climate, and health-care bill. Investor appetite for risk was healthy early from the news on American clean power jobs and on a new EV tax credit. A small future tax on buybacks did not spoil the initial stock market rally, but may make some companies run up their repurchases before the end of the year.  US stocks were unable to hold onto the early euphoria after Nvidia reminded us of the troubling macro environment as supply chain issues persist.  Nvidia Tech stocks were dragged down after Nvidia was the bearer of bad news and highlighted a significant slowdown was happening in gaming. Nvidia is going to have disappointing revenue numbers and they expect challenging market conditions to persist in the third quarter.  Nvidia is one of those companies that does things right and has the majority of analysts backing their stock(37 buys, 11 holds, and 1 sell). Nvidia’s warning is reminding traders of how severe the macro impacts might be on tech for the rest of the year.    FX The dollar rally is on hold, but it is far from over. Falling Treasury yields as some investors scramble to the sidelines should remind investors demand for safe-havens won’t be fading away anytime soon.  Corporate America gloom will remain the dominant theme for the third quarter and that should keep the dollar supported despite the current exhaustion with its rally. The interest rate differential has mostly been priced in for the dollar’s advantage and that could get even wider if Wednesday delivers a hotter-than-expected inflation report.  Oil Oil prices are rebounding as the recession riddled outlook and crude demand destruction calls were overdone. A slightly weaker dollar also provided a boost for commodities, but that might not last.  Energy traders digested a Goldman Sachs note that made a case for higher oil prices.  Goldman emphasized that the oil market is stuck in a larger deficit and you can’t argue against that. Much attention remains with Iran nuclear deal talks, but it seems unlikely a breakthrough will happen anytime soon.  Tehran seems like they are willing to negotiate, but an imminent decision to agree to the EU’s proposal seems unlikely.     Gold Gold prices are trying to get its groove back as Treasury yields drop and risk appetite struggles to reassert itself. Gold might struggle to rally much further until we get beyond this massive inflation report. It seems Wall Street is expecting pricing pressures to moderate here and that has been good news for bullion.  While headline inflation might ease, the focus should be on core and that probably will remain hot. Crypto Bitcoin remains near its recent highs as crypto traders are looking to see if the crypto winter is over. The return of some meme stock mania is taking away some attention from cryptos, but that might not matter.  The selling pressure has significantly eased and momentum traders could pounce on the break of the $25,000 level.  This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US Close - Stock rally faded, Nvidia's warning, Oil rebounds, Gold above $1800, and Bitcoin eyes breakout - MarketPulseMarketPulse
Australian CPI Expected to Rise to 5.2%: Impact on AUD/USD and RBA's Rate Hike Dilemma

US Tech Stocks: Reduced Bitcoin Mining May Be One Of Reasons Why Nvidia Stock Price May Be Fluctuates

Peter Garnry Peter Garnry 09.08.2022 10:42
Summary:  Nvidia has see a dramatic reduction in demand for its GPUs related to its gaming segment. While there might be some weakening of demand in gaming the real driver is most likely Bitcoin mining which has seen a plunge in profitability forcing many Bitcoin miners to end operations and flood the market with used GPUs causing prices to tumble. The lower GPU prices are forcing Nvidia to write down its inventory by $1.3bn. Shares opened 8% lower but have recovered half the losses as the company says the long-term gross margin profile is intact. What happened to the gross margin? A little more than two months ago Nvidia announced FY23 Q1 results showing record revenue, but today the graphics card maker is pre-announcing Q2 results cutting its gross margin (GAAP) guidance for the Q2 quarter (ending 31 July) from 65.1% to 43.7% and expected revenue of $6.7bn compared to previously announced $8.1bn. The shortfall in revenue is driven by its gaming segment which Nvidia is saying is impacted by the macroeconomic backdrop. The fall in demand in its gaming segment has also meant that Nvidia has too much inventory and has been forced to adjust prices. The company is therefore booking a $1.3bn inventory write-down. It is a well-known fact that Nvidia’s GPUs are heavily used in Bitcoin mining despite the graphics card maker has never officially linked its business to the industry. Because Nvidia does not know precisely the end use case of their GPUs, revenue related to Bitcoin mining likely ends up in both its datacenter and gaming segments. The falling demand for Nvidia’s GPUs has nothing to do with the gaming industry but instead the profitability of the Bitcoin mining industry. As the chart below shows, the profitability of Bitcoin mining has shrunk from being massively profitable in late 2021 to almost loss-making today. This naturally drives lower demand for additional GPUs used in Bitcoin mining and it also forces miners out of business which subsequently floods the market with old GPUs. This increase in available GPUs through secondary sales has caused GPU prices to fall dramatically as revealed by Gizmodo back in June. Nvidia says long-term outlook is unchanged The last time Nvidia saw a dramatic decline in its share price was back in late 2018 as Bitcoin mining profitability went negative following Bitcoin’s massive speculative rally in late 2017 drumming up demand for GPUs for mining. This time is no different. Long-term Nvidia is riding many of the most important technology vectors, but a key risk of course is the growing tensions between the US and China which could alter its supply chains and market opportunity. Nvidia has 102 partners in China which is roughly 12% of its total number of partners. Despite the significant guidance being cut investors are bidding up shares after being down 8% on the open. Nvidia shares have corrected half of the initial decline down only 4%. The reason is likely that the company states that it believes that its long-term gross margin profile is intact. Nvidia weekly share price | Source: Saxo Group Bitcoin mining profitability | Source: https://en.macromicro.me/charts/29435/bitcoin-production-total-cost Source: Nvidia shares down 4 on guidance cut | Saxo Group (home.saxo)
The Commodities Feed: Delayed LNG Strike Action and Tightening Oil Market Fundamentals

US Indices Decreased Slightly Yesterday. S&P 500 Lost Ca. 0.1%, Nasdaq 100 Decreased By Over 0.3%

Saxo Bank Saxo Bank 09.08.2022 12:50
Summary:  Revenues misses and weaker-than-expected guidance from Nvidia and others dragged technology names and stirred some concerns about potentially more downward earnings revision from other companies. Moderation of U.S. consumers’ inflation expectations helped provide a bid for long-end treasuries and brought the yield curve further inverted. What is happening in markets?    Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities pared a 1% rally in the morning and finished moderately lower, S&P 500 -0.12%, Nasdaq 100 -0.37%.  Tech giant Nvidia (NVDA:xnas) reported preliminary Q2 revenues of US$6.7 billion, missing the expected US$8.1 billion by 17%. The company said demand for its video game processors being weak and the challenging market conditions will persist in Q3.  Share prices of Nvidia fell 6.3%. Palantir Technologies (PLTR:xnys) plunged 14% after reporting guidance expecting slower growth.  The news sparked some concerns among investors’ about more earnings downgrades for the technology sectors. U.S. 2-10 yield curve getting more inverted U.S. treasuries started to rally during London hours, as German bunds and gilts gained, and traded well bids, especially the longer end of the curve, throughout the U.S. session. The long-end was help by moderation of U.S. consumers’ expectations of incoming inflation. In the New York Federal Reserve Banks’s consumer survey, U.S. consumer expectations for inflation over the coming 1 year fell to 6.2% in July  (vs 6.8% in June) and expectations for inflation over the coming 3 years fell to 3.2% in July (vs 3.6% in June), the lowest since April 2021.  In the survey, consumers’ 5-year inflation expectations came down to 2.3% in July (vs 2.8% in June). The 10-year yield declined 7bps to 2.76%.  As the 2-yield was down only 2bps to 3.21%, the 2-10 year yield spread further inverted to -45bps, approaching its -56bps low in 2000.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Stocks traded in Hong Kong and mainland bourses finished Monday moderately lower, Hang Seng Index -0.77%, CSI300 -0.2%.  Chinese internet, online education and Chinese property stocks traded in Hong Kong were mostly down.  Hang Seng Tech Index (HSTECH.I) lost 1.8%, Alibaba (09988:xhkg) -4.4%, Tencent (00700:xhkg) -2.7%, Xiaomi (0181:xhkg) -3.6%, JD.COM (09618:xhkg) -3.3%. After the market close, a report from Bloomberg saying that India, the largest overseas market of Xiaomi, is going to restrict the company from selling smartphones cheaper than 12,000 rupees (USD150).  Cathay Pacific (00293:xhkg) gained 1.4% following Hong Kong’s announcement of cutting inbound travelers’ hotel quarantine to 3 days from 7 days.  In the mainland, the lockdown of Hainan, a southern resort island, triggered some buying of traditional Chinese medicine and Covid-treatment related names.  Australian dollar rallied against the U.S. dollar DXY (DXU2) finished Monday trading 0.2% lower.  Among the G10 currencies, the Australian dollar was the top performer and rallied 1.1% versus the greenback.  Euro and JPY were little changed against the U.S. dollar. Crude oil prices (CLU2 & LCOV2) WTI Crude gained 1.6% to USD90.45, being helped by stronger Chinese import figures. What to consider? Nvidia preannounced weaker-than-expected revenues Nvidia pre-announced preliminary Q2 revenues coming at USD6.7 billion (-19% QoQ, +3% YoY), 17% below the company's prior guidance and below market expectations.  Weaknesses in the processors for the gaming industry, and to lesser extents, the data center and professional visualization industries dragged down revenues.   Softbank's Vision Funds suffered large losses Softbank reported a net loss of 3.16 trillion yen and its Vision Funds business segment reported pretax losses of JPY2.33 trillion. The pre-exit unrealized losses in the Vision Funds 1 & 2 were USD10.9  billion for listed stocks and USD8.9 billion for unlisted stocks.  The company announced smaller additional share buyback authorization of 400 billion yen and said that the company may not use all of it in the coming 12 months. For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: APAC Daily Digest: What is happening in markets and what to consider next – August 9, 2022 | Saxo Group (home.saxo)
(NVDA) Nvidia Stock Price Plunged! Meme Stocks' Performance Seems To Be Surprisingly Good

(NVDA) Nvidia Stock Price Plunged! Meme Stocks' Performance Seems To Be Surprisingly Good

Swissquote Bank Swissquote Bank 09.08.2022 12:23
Nvidia shares dived 6.30% yesterday on news that the company missed its revenue projection by $1.4 billion due to slower demand for PCs and gaming. Nvidia pulled other US chipmakers into the negative along with it, and brought the question of whether the chip rally, which was triggered by a $52 billion government help is over. US Dollar Index Amid NFP The dollar index gave back gains following the blowout NFP figures printed on Friday. Investors are confident that inflation in the US may have peaked last month, as the New York Fed's Survey of Consumer Expectations showed steep drops in inflation expectations in July. Forex - EUR/USD and more In the FX, the EURUSD is steady around the 1.02 level, waiting for the dollar to soften on ‘good news’ to make a further attempt toward the 1.0350 mark, where stands the 50-DMA. Given that the European Central Bank (ECB) played its biggest cards at last meeting, there is not much upside potential from the ECB standpoint. On the dollar-yen front, traders now call the end of a particularly winning long USDJPY trade this year. View on Flipboard!   Watch the full episode to find out more! 0:00 Intro 0:23 Nvidia plunges on slowing earnings 1:44 The revenge of energy stocks 3:10 Crude oil: where to? 4:59 Meme stocks rally, but gains are fragile 6:06 US inflation expectations ease before CPI print 7:52 FX update: EURUSD steady, USDJPY under pressure For economists, inflation expectations are more important than the actual data. Find out why! ▶️ Discover today's market highlights on our #MarketTalk with @IpekOzkardeskay: https://t.co/XnXQYVPS3H pic.twitter.com/v4SJEssR8z — Swissquote (@Swissquote) August 9, 2022 Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Nvidia #earnings #drop #chip #energy #meme #stocks #BBBY #AMC #XOM #Chevron #crude #oil #US #inflation #expectations #EUR #USD #JPY #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Talking S&P 500, Nasdaq, Gold, Bitcoin And More - 09/08/22

Talking S&P 500, Nasdaq, Gold, Bitcoin And More - 09/08/22

Monica Kingsley Monica Kingsley 09.08.2022 16:00
S&P 500 bulls were clearly rejected, and it‘s highly questionable whether they would make another run. I doubt they would. And even if, it‘s bound to get rejected as none of the bearish fundamental reasoning ceased to apply, and it‘s getting reflected in the chart technicals as well. As stated yesterday: (…) The renewed tightening bets spurred by strong headline NFPs figure, will take their toll on risk-on assets that had been driving Friday‘s run. Bets on another 75bp hike in Sep have increased dramatically, practically proving Daly or Kashkari right in that the Fed isn‘t done yet or even close to the Fed funds rate to really get inflation down. While they claim that 2% is doable and soft landing within reach, the progression from 9% downwards just doesn‘t go fast like that. At best (repeating myself for months here), they would get to 5-6% CPI, which means a tough Sep and one more FOMC still this year. Combined with balnce sheet shrinking projections, that would take a great toll on the real economy – one that is being softened by the still very expansive fiscal policy. Given tomorrow‘s CPI that‘s likely to come in better than the markets fear it would (i.e. in support of the inflation has peaked thesis), the room for disappointment in inflation trades is there, and the hopes that the Fed might not get as aggressive on a better CPI figure, wouldn‘t balance that out in my view. Here comes a fitting question just in that allows me to develop these thoughts further to the benefit of the whole audience: Q: CPI wednesday will certainly show much lower numbers than previously (mainly because oil was recently much cheaper than in May, June). FED has proven to be rather readily dovish in such events. Investors will see the US companies and the US technology sector as the safe haven. Because elsewhere in the world (mainly in politically and economically weak Europe) is a mess. US as safe-heaven was proven by recent Apple and Amazon earnings and also by recently approved US government stimulus for micro-chip / semiconductor production. Isn't this environment rather bullish for US equities especially to the near future ?? Outflow of money from Europe into strong and safe US. A: I doubt the Fed would react dovishly to softening inflation as they have to take on the pesky inflation expectations (it was a key lesson of the 1970s when they didn‘t). It gives them optically a better chance at taking inflation down fast – and the markets would wake up to their dovish perception mistake, should they make it in the first place. The fiscal stimulus is though being faded in the stock market, it‘s closer to the case of sell the news than anything else. The money flows are going to be selective about what assets they would lift, and odds are it wouldn‘t be parked in tech for too long if Treasuries stop revolting against the Fed‘s rate raising. Such a time point would come over the nearest months ahead, but still I am not counting on any giant Nasdaq run, or rather any run to speak of (no matter the degree of Treasuries‘ next move). To feel the daily pulse, let‘s move right into the charts (all courtesy of www.stockcharts.com) – today‘s full scale article features good 6 ones, which I am unlocking today in full so that you get a better the regular care premium subscribers get, especially before tomorrow‘s inflation data. S&P 500 and Nasdaq Outlook S&P 500 is turning down, and Friday‘s signal is getting repeated – i.e. getting stronger. The daily indicators have also deteriorated, but the volume and sectoral internals message is the most important here. Credit Markets HYG indeed attracted sell – and the reversal to the downside needs a confirmation today in terms of rising volume and daily close anywhere in the Friday‘s daily range. Gold, Silver and Miners Precious metals want to turn up, and miners are at least on a daily basis following. Echoing yesterday‘s premium thoughts, they aren‘t selling too hard on the turn towards anticipating tougher tightening ahead. With hikes to be paused after Sep for a while, the metals would have an easier time before that FOMC day in Sep. Next week‘s CPI will have a short-term effect only – the consequences of recognizing inflation as sticky no matter what the Fed has done already, would be greater. This moment awaits still. Crude Oil Crude oil‘s rebound isn‘t yet turning the tide, and the approaching seasonality spells trouble ahead. I‘m still leaning towards the $88 support slowly giving way as $85 approach comes next – we may land in the low 80s really before rebounding early November. Copper Copper‘s short-term bullish move is encouraging, but the vulnerability to the hawkish Fed moves and rhetoric remains – it would probably play out after the CPI only, which applies also to oil. Bitcoin and Ethereum Cryptos are clearly reversing, and that‘s a good sign for those betting on a bearish resolution of tomrorow‘s inflation data overall.
Russia-Ukraine War - October 10th: Russian Air Strikes

Risk, Uncertainty And Invasion Of Ukraine. Is Risk Unavoidable Nowadays?

Peter Garnry Peter Garnry 10.08.2022 10:00
Summary:  Concentrated equity portfolios are common for many retail investors leading to very high risk. We show that by blending a 5-stock portfolio 50/50 with an ETF that tracks the broader equity market the risk is brought down considerably without sacrificing the long-term expected return. If an investor is willing to lower return expectations a bit then the ETF tracking the equity market can be switched to track an asset allocation and reduce risk even more. Finally, we highlight the risk to real wealth from inflation and what can potentially offset some of that risk. Risk is...? What should you know about it? Last year I wrote about my personal approach to managing my own capital which we got a lot of positive feedback from. Given equities would peak a few months later the note was quite timely. With equities significantly lower from their recent peak and the recent bounce in equities, we are taking a slightly different angle to risk management. We are laying out what risk is and what the typical retail equity investor can do to avoid having too much risk should equities begin falling again. First we need to distinguish between risk and uncertainty. Risk can formally be described as process that is quantifiable with a certain confidence bound related to the sampling size; in other words, a process in which can have statistics. Uncertainty is defined as unquantifiable such as the invasion of Ukraine, because the event is unique and thus has no meaningful prior. If we look broader at risk it all starts with the ultimate definition of risk which is avoidance of ruin. While being an important concept and something that can be avoided if an investor refrain from using leverage, ruin can also be losing 98% of wealth; it is just not complete ruin. But it is ruin enough that you need a 4900% gain to get back illuminating the asymmetry between gains and losses. The most normal definition of risk is the variance of some underlying process (for instance a stock) which is a statistically measure of how much a process varies around its mean value. The higher the variance the higher probability of big moves in either direction. Since most retail investors are equity investors, and thus long-only investors, we should care more about the downside risk than the upside risk (gains) as I want as much variance if its lower bound is above zero return. Focusing on downside risk/returns leads to a concept called semi-variance which only focuses on the returns below a certain threshold, often zero, and describes the downside risk. The problem with this approach is that the underlying assumption is a well-behaved distribution of negative returns. Now, we know financial markets and equities are fat-tailed meaning that we observe many more big moves (both gains and losses) than what the normal distribution would indicated. This means that the semi-variance will underestimate the true risk because of the asymmetry in returns. These observations have lead to concepts such as conditional value-at-risk which is a fancy word for calculating the average return of the say 1% or 5% worst returns. This measure has many wonderful statistical properties with one of them being that it is less sensitive to the assumptions of the underlying distribution of returns. A somewhat related concept which is easier to understand is maximum drawdown which is defined as the decline in portfolio value from the maximum value to the lowest value over the entire investment period. Because of the asymmetry of gains and losses, traders focus a lot on this measure and cut losses to avoid big drawdowns or large single period losses (daily, weekly, monthly). How to reduce risk? 5-stock rule The typical return investor has limited capital and thus often end up with portfolios holding only 3-5 stocks as minimum commission otherwise would equates to high transaction costs. The first plot shows the returns of a 5-stock portfolio in European equities in which we select randomly five stocks in January 2010 and let them run through time. If one stock is delisted or bought we just place the weight in cash. We do this 1,000 times to the intrinsic variance in outcomes of such portfolios. A considerable percentage of these 1,000 portfolio end up with a negative return over this 12,5 year period which in itself is remarkable, but the number of portfolios that end with extremely high total returns is also surprisingly high. In other words, a 5-stock portfolio is a lottery ticket with an extreme variance in outcome. The blue line and area represent the median total return path and its variance if these random 5-stock portfolios are blended 50/50 with a the STOXX 600 Index. The striking result is that the median expected return is not changed but total risk (both gains and losses) is reduced considerably. The sharpe ratio, which measures the annualised return relative to the annualised volatility, improves 20% on average by adding an equity market component. So most retail investors can drastically improve their risk-adjusted returns by adding an ETF that tracks the overall equity market without sacrificing the expected return. Source: Bloomberg and Saxo Group If move on to the maximum drawdown concept we see on the first plot how much the maximum drawdown is reduced by adding the equity market to the 5-stock portfolio. All retail equity investors that have a small concentrated equity portfolio should seriously move to a portfolio where the 5 stocks are kept but reduced to 50% of the portfolio with the freed up cash invested in an ETF that tracks the overall equity market. If an investor is willing to lower expectations for long-term returns, then the ETF tracking the equity market can be substituted with an ETF holding a balanced basket of many different asset classes including government bonds, credit and different types of equities. We use the Xtrackers Portfolio UCITS ETF as an example and should not be viewed as a recommendation but one example of a diversified asset allocation. As the second plot shows the expected distribution of maximum drawdowns from combining 5 stocks with an ETF tracking multiple asset classes is better compared to the other solution combining only with the equity market. The risk-adjusted return is now 43% better than the simple 5-stock portfolio. Source: Bloomberg and Saxo Group Source: Bloomberg and Saxo Group Given equities have bounced back in July and so far also in August retail investors have an unique opportunity to bolster portfolios in the case we get another setback in equity markets. Our view is still that inflation will continue to surprise to the upside and that financial conditions will continue to tighten further adding headwinds for equities. At the same time deglobalisation is accelerating adding unpredictable sources of risk to the overall system. Inflation always says its' word These classical approaches to reduce equity risk mentioned above hold for normal environments but if we get into trouble with a prolonged inflationary period such as in the 1970s or a deflation of equity valuation among technology and health care stocks then we could get prolonged period of negative real rate returns. We have two periods in US equity market history since 1969 in which it took 13 and 14 years to get back to a new high in real terms. Our overall theme in our latest Quarterly Outlook was about the tangible world and our bet is that tangible assets will continue to be repriced higher against intangible assets and if we are right investors should consider commodities to offset the risk to real wealth from inflation. Source: Bloomberg Source: https://www.home.saxo/content/articles/equities/the-retail-equity-investors-guide-to-risk-management-09082022
Tepid BoJ Stance Despite Inflation Surge: Future Policy Outlook

Walt Disney Results Are Beyond All Expectations. Large Chinese Company Fires More Than 9K Employees!!! Market Newsfeed - 11.08.2022

Saxo Strategy Team Saxo Strategy Team 11.08.2022 10:40
Summary:  Risk on mode activated with a softer US CPI print, both on the headline and core measures. Equities rallied but the Treasury market reaction faded amid the hawkish Fedspeak. The market pricing of Fed expectations also tilted more in favor of a 50 basis points rate hike for September immediately after the CPI release, but this will remain volatile with more data and Fed speakers on tap ahead of the next meeting. Commodities, including oil and base metals, surged higher as the dollar weakened and demand outlook brightened but the gains appeared to be fragile. Gold unable to hold gains above the $1800 level. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities surged after the CPI prints that came in at more moderate level than market expectations. Nasdaq 100 jumped 2.9% and S&P500 gained 2.1%. Technology and consumer discretionary stocks led the market higher. Helped by the fall in treasury yields and better-than-feared corporate earnings in the past weeks, the Nasdaq 100 has risen 21% from its intraday low on June 16 this year and may technically be considered in a new bull market. The U.S. IPO market has reportedly become active again this week and more activities in the pipeline. Tesla (TSLA:xnas) climbed nearly 4% on news that Elon Musk sold USD6.9 billion of Tesla shares to avoid fire sale if having to pay for Twitter. Walt Disney (DIS:xnys) jumped 7% in after-hours trading on better-than-expected results. U.S. yields plunged immediately post CPI but recouped most of the decline during the US session The yields of the front-end of the U.S. treasury curve collapsed initially after the weaker-than-expected CPI data, almost immediately after the CPI release, 2-year yields tumbled as much as 20bps to 3.07% and 10-year yield fell as much as 11bps to 2.67%. Treasury yields then spent the day gradually climbing higher. At the close, 2-year yields were only 6bps at 3.21% and the 10-year ended the day at 2.78% unchanged from its previous close. The 2-10 yield curve steepened by 6bps to -44bps. Hawkish Fedspeak contributed to some of the reversal in the front-end from the post-CPI lows. At the close, the market is pricing in 60bps (i.e. 100% chance of at least a 50bps hike and about 40% chance of a 75bps rate hike) for the September FOMC after having come down to pricing in just about 50bps during the initial post-CPI plunge in yields. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Sang Index declined nearly 2% and CSI300 was down 1.1% on Wednesday. Shares of Chinese property developers plunged.  Longfor (00960) collapsed 16.4% as there was a story widely circulated in market speculating that the company had commercial paper being overdue. In addition, UBS downgraded the Longor together with Country Garden, citing negative free cash flows in the first half of 2022.  Country Garden (02007) fell 7.2%.  After market close, the management held a meeting with investors and said that all commercial papers matured had been duly repaid. China High Speed Transmission Equipment (00658) tumbled 19% after releasing negative profit warnings.  The company expects a loss of up to RMB80 million for first half of 2022. Guangzhou Baiyunshan Pharmaceutical (00874) declined 4.1% after the company filed to the Stock Exchange of Hong Kong that the National Healthcare Security Administration was investigating the three subsidiaries of the company for allegedly “obtaining funds by ways of increasing the prices of pharmaceutical products falsely”. Wuxi Biologics (02269) dropped 9.3% as investors worrying its removal from the U.S. unverified list may be delayed in the midst of deterioration of relationship between China and the U.S. Oversized USD reaction on US CPI The US dollar suffered a heavy blow from the softer US CPI print, with the market pricing for September FOMC getting back closer to 50 basis points just after the release. As we noted yesterday, the July CPI print is merely noise with another batch of US job and inflation numbers due ahead of the September meeting. USD took out some key support levels nonetheless, with USDJPY breaking below the 133.50 support to lows of 132.10. Next key support at 131.50 but there possibly needs to be stronger evidence of an economic slowdown to get there. EURUSD broke above 1.0300 to its highest levels since July 5 but remains at risk of reversal given the frothy equity strength. Crude oil prices (CLU2 & LCOV2) Oil prices were relieved amid the risk on tone in the markets as softer US CPI and subsequent weakness in the dollar underpinned. WTI futures rose towards $91.50/barrel while Brent futures were at $97.40. EIA data also suggested improvement in demand. US gasoline inventories fell 4,978kbbl last week, which helped push gasoline supplied (a proxy for demand) up 582kb/d to 9.12mb/d. This was slightly tempered by a strong gain in US crude oil inventories, which rose 5,457kbbl last week. Supply concerns eased after Transneft resumed gas supplies to three central European countries which were earlier cut off due to payment issues. European Dutch TTF natural gas futures (TTFMQ2) European natural gas rallied amid concerns over Russian gas supplies and falling water levels on the key Rhine River which threatens to disrupt energy shipments. Dutch front month futures rose 6.9% to EUR 205.47/MWh as a drought amid extreme temperatures has left the river almost impassable. European countries have been filling up their gas storage, largely by factories cutting back on their usage. Further demand curbs and more imports of liquefied natural gas are likely the only option for Europe ahead of the winter. Gold (XAUUSD) and Copper (HGc1) Gold saw a run higher to $1800+ levels immediately after the US inflation report as Treasury yields plunged. However, the precious metal gave up much of these gains after Fed governors warned that it doesn’t change the US central bank’s path toward higher rates this year and next. With China also ceasing military drills around Taiwan, geopolitical risks remain capped for now easing the upside pressure on Gold. Copper was more buoyant as it extended gains on hopes of a stronger demand amid a fall in price pressures.   What to consider? Softer US CPI alters Fed expectations at the margin The US CPI print came in weaker than expected for both the headline and the core measures. The headline softness was driven by huge drops in energy prices from June levels, with the entire energy category market -4.6% lower month-on-month and gasoline down -7.7%, much of the latter on record refinery margins collapsing. The ex-Food & Energy category was up only +0.3% vs. the +0.5% expected, with soft prices month-on-month for used cars and trucks (-0.4%) and especially airfares (-7.8%) dragging the most on figure – again primarily a result of lower energy prices. While this may be an indication that US inflation has peaked, it is still at considerably high levels compared to inflation targets of ~2% and the pace of decline from here matters more than the absolute trend. Shelter costs – the biggest component of services inflation – was up 5.7% y/y, the most since 1991. Fed pricing for the September meeting has tilted towards a 50bps rate hike but that still remains prone to volatility with another set of labor market and inflation prints due ahead of the next meeting. Fed speakers continued to be hawkish Fed speaker Evans and Kashkari were both on the hawkish side despite being some of the most dovish members on the Fed panel. Evans again hinted that tightening will continue into 2023 as inflation remains unacceptably high despite a first sign of cooling prices. The strength of the labor market continued to support the case of a soft landing. Kashkari reaffirmed the view on inflation saying that he is happy to see a downside surprise in inflation, but it remains far from declaring victory. He suggested Fed funds rate will reach 3.9% in 2022 (vs. market pricing of 3.5%) and 4.4% in end 2023 (vs. market pricing of 3.1%). China’s PPI inflation eased while CPI picked up in July China’s PPI came in at 4.2% YoY in July, notably lower from June’s 6.1%).   The decline was mainly a result of lower energy and material prices.  The declines of PPI in the mining and processing sectors were most drastic and those in downstream industries were more moderate.  CPI rose to 2.7% YoY in July from 2.5% in June, less than what the consensus predicted.  Food inflation jumped to 6.3% YoY while the rise in prices of non-food items moderated to 1.9%. Core CPI, which excludes food and energy, rose 0.8% YoY in July, down from June’s 1.0%. In its 2nd quarter monetary policy report released on Wednesday, the People’s Bank of China expects the CPI to be at around 3% for the full year of 2022 and the recent downtrend of the PPI to continue. China issues white paper on its stance on Taiwan China ended its military drills surrounding Taiwan on Wednesday, which lasted three days longer what had been originally announced. In a less confrontational white paper released, the Taiwan Affairs Office and the Information Office of China’s State Council reiterated China’s commitment to “work with the greatest sincerity” and exert “utmost efforts to achieve peaceful reunification”.  The paper further says that China “will only be forced to take drastic measures” if “separatist elements or external forces” ever cross China’s red lines.  Walt Disney results beat estimates Disney reported solid Q2 results with stronger than expected 152.1 million Disney+ subscribers, up 31% YoY and beating market expectations (148.4 million).  Revenues climbed 26% YoY to USD21.5 billion and adjusted EPS came in at USD1.09 versus consensus estimates (USD0.96). Singapore Q2 GDP revised lower The final print of Singapore’s Q2 GDP was revised lower to 4.4% YoY from an advance estimate of 4.8% earlier, suggesting a q/q contraction of 0.2% as against gains of 0.2% q/q earlier. The forecast for annual 2022 growth was also narrowed to 3-4% from 3-5% earlier amid rising global slowdown risks. Another quarter of negative GDP growth print could now bring a technical recession in Singapore, but the officials have, for now, ruled that out and suggest a mild positive growth in Q3 and Q4. Softbank settled presold Alibaba shares early and Alibaba let go of a large number of employees The news that Softbank expects to post a gain of over USD34 billion from early physical settlement of prepaid forward contracts to unload its stake in Alibaba (09988:xhkg/BABA:xnas) and Alibaba laid off more than 9,000 staff between April and June this year added to the pressures over the share price of Alibaba.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 11, 2022  
Elon Musk Sells 8 Millions Tesla Stocks? Here Is Why!

Why Elon Musk Sells His Tesla Shares? Here Is The Answer!

Conotoxia Comments Conotoxia Comments 11.08.2022 11:10
What is happening? The CEO of the world's largest electric car company has sold about $8.4 billion worth of Tesla shares over the past week. According to documents provided to regulators, the series of transactions took place between August 5 and 9, 2022, shortly after the August 4 shareholder meeting in Austin. As recently as April of this year, the Tesla and SpaceX CEO wrote that he "has no plans for another stock sale," after divesting a stake worth $8.5 billion to buy Twitter. This is not the first time Elon Musk has confused his public. The businessman seems to frequently abuse his influence, throwing around bold statements and increasing the expectations of his followers. When asked recently if he had stopped selling Tesla, for the time being, he replied "yes. In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock." However, it's hard not to get the impression that the CEO is simply taking advantage of the recent rebound in the share price. It is possible that his goal is not just to finance the deal, but to try to protect his private fortune. Such a major sale of an important shareholder had a significant impact on both Twitter and Tesla's stock price. Elon Musk failure or a smart plan? Twitter rose at the opening by almost 4%, thanks to the increasing likelihood of the deal being finalized, which may have been due to Musk's recent tweet. Most of the news coming out of the courtroom also reinforces analysts' belief that the Tesla CEO will be forced to buy the company. The platform's stock price has gained more than 35% over the past month, with a price target. Tesla, influenced by the news of the sale of a large stake by the most important person in the company, has lost around 7% over the past four sessions. The company itself gained more than 44% from its July 16 bottom to its August 4 peak at the shareholder meeting. Tesla, like many technology companies, has gained significantly from the recent bear market rally. This growth can also be attributed to Tesla's results, in which it beat expectations for earnings per share (EPS) by more than 26%. However, the macroeconomic analysis is rather pessimistic for the electromobility market in the short and midterm. During recessions, companies are usually unable to achieve high expected growth rates by falling consumer demand. More often than not, revenues fall, profits decline, and as a result, stock prices fall as well.   RafaÅ‚ Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Elon Musk sells nearly 8 million Tesla shares, justifying it by the Twitter lawsuit
Apple May Rise Price For iPhone 14! Are Fuel Warehouses Empty?

Apple May Rise Price For iPhone 14! Are Fuel Warehouses Empty?

Saxo Strategy Team Saxo Strategy Team 11.08.2022 13:39
Summary:  Equity markets are ebullient in the wake of the softer than expected US July CPI data print yesterday, as a sharp drop in energy prices helped drag the CPI lower than expected for the month. The knee-jerk reaction held well in equities overnight, if to a lesser degree in the weaker US dollar. But US yields are nearly unchanged from the levels prior to the inflation release, creating an interesting tension across markets, also as some Fed members are explicitly pushing back against market anticipation of the Fed easing next year.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The July CPI report showing core inflation rose only 0.3% m/m compared to 0.5% m/m expected was just what the market was hoping for and had priced into the forward curve for next year’s Fed Funds rate. Long duration assets reacted the most with Nasdaq 100 futures climbing 2.9%. However, investors should be careful not to be too optimistic as we had a similar decline in the CPI core back in March before inflation roared back. As Mester recently stated that the Fed is looking for a sustained reduction in the CPI core m/m, which is likely a 6-month average getting back to around 0.2% m/m. Given the current data points it is not realistic to be comfortable with inflation before late Q1 next year. In Nasdaq 100 future the next natural resistance level is around 13,536 and if the index futures can take out this then the next level be around 14,000 where the 200-day average is coming down to. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hong Kong and mainland Chinese equities climbed, Hang Seng Index +1.8%, CSI300 Index +1.6%. In anticipation of a 15% rise in the average selling price of Apple’s iPhone 14 as conjectured by analysts, iPhone parts supplier stocks soared in both Hong Kong and mainland exchanges, Q Technology (01478:xhkg) +16%, Sunny Optical (02382:xhkg) +7%, Cowell E (01415:xhkg) +4%, Lingyi iTech (002600:xsec) +10%. Semiconductors gained, SMIC (00981:xhkg) +3%, Hua Hong (01347:xhkg) +4%. After collapsing 16% in share price yesterday, Longfor (00960) only managed to recover around 3% after the company denied market speculation that it failed to repay commercial papers due. UBS’ downgraded Longfor and Country Garden (02007:xhkkg) yesterday citing negative free cash flows for the first half of 2022 highlighted the tight spots even the leading Chinese private enterprise property developers are in. Chinese internet stocks rallied, Alibaba (09988:xhkg) +3%, Tencent (0700:xhkg) +1%, Meituan (03690:xhkkg) +2.7%. China ended its military drills surrounding Taiwan on Wednesday, which lasted three days longer what had been originally announced. USD: Treasuries don’t point to further weakness here The US dollar knee-jerked lower on the softer-than-expected July CPI data, although US yields ended the day unchanged, creating an interesting tension in a pair like USDJPY, which normally takes its lead from longer US yields (unchanged yesterday after a significant dip intraday after the US CPI release). USDJPY dipped almost all the way to 132.00 after trading above 135.00 earlier in the day. What are traders to do – follow the coincident US yield indicator or the negative momentum created by yesterday’s move? Either way, a return above 135.00 would for USDJPY would likely require an extension higher in the US 10-year yield back near 3.00%. EURUSD is another interesting pair technically after local resistance just below 1.0300 gave way, only to see the pair hitting a brick wall in the 1.0350 area (major prior range low from May-June). Was this a break higher or a misleading knee-jerk reaction to the US data? A close below 1.0250 would be needed there to suggest that EURUSD is focusing back lower again. A similar setup can be seen in AUDUSD and the 0.7000 area, with a bit more sensitivity to risk sentiment there. Gold (XAUUSD) did not have a good day on Wednesday Gold was trading lower on the day after failing to build on the break above resistance at $1803 as the dollar weakened following the lower-than-expected CPI print, thereby reducing demand for gold as an inflation hedge. Instead, the prospect for a potential shallower pace of future rate hikes supported a major risk on rally in stocks and another daily reduction in bullion-backed ETF holdings. Yet comments by two Fed officials saying it doesn’t change the central bank’s path toward even higher rates – and with that the risk of a gold supportive economic weakness - did not receive much attention. Gold now needs to hold $1760 in order to avoid a fresh round of long liquidation, while silver, which initially received a boost from higher copper prices before following gold lower needs to hold above its 50-day SMA at $20.26. Crude oil Crude oil futures (CLU2 & LCOV2) traded higher on Wednesday supported by a weaker dollar after the lower US inflation print gave markets a major risk on boost. Also, the weekly EIA report showed a jump in gasoline demand reversing the prior week’s sharp drop. Gasoline inventories dropped 5 million barrels to their lowest seasonal level since 2015 on a combination of strong exports and improved domestic demand while crude oil stocks rose 5.4m barrels primarily supported by a 5.3 million barrels release from SPR. Focus today on monthly Oil Market Reports from OPEC and the IEA. Dutch natural gas The Dutch TTF natural gas benchmark futures (TTFMQ2) rallied amid concerns over Russian gas supplies and falling water levels on the key Rhine River which threatens to disrupt energy shipments of fuel and coal, thereby forcing utilities and industries to consumer more pipelined gas. Dutch front month futures rose 6.9% to EUR 205.47/MWh while the October to March winter contract closed at a fresh cycle high above €200/MWH. European countries have been filling up their gas storage, largely by factories cutting back on their usage and through LNG imports, the flow of the latter likely to be challenged by increased demand from Asia into the autumn. Further demand curbs and more imports of liquefied natural gas are likely the only option for Europe ahead of the winter. US Treasuries (IEF, TLT) shrug off soft July CPI data US yields at first reacted strongly to the softer-than-expected July CPI release (details below), but ended the day mostly unchanged at all points along the curve, suggesting that the market is unwilling to extend its already aggressive view that the Fed is set to reach peak policy by the end of this year and begin cutting rates. Some Fed members are pushing back strongly against that notion as noted below (particularly Kashkari). A stronger sign that yields are headed back higher for the US 10-year benchmark would be on a close above 2.87% and especially 3.00%. Yesterday’s 10-year auction saw strong demand. What is going on? US July CPI lower than expected The US CPI print came in lower than expected for both the headline and the core measures. The headline softness was driven by huge drops in energy prices from June levels, with the entire energy category marked -4.6% lower month-on-month and gasoline down -7.7%, much of the latter on record refinery margins collapsing. The ex-Food & Energy category was up only +0.3% vs. the +0.5% expected, with soft prices month-on-month for used cars and trucks (-0.4%) and especially airfares (-7.8%) dragging the most on figure. While this may be an indication that US inflation has peaked, it is still at considerably high levels compared to inflation targets of ~2% and the pace of decline from here matters more than the absolute trend. Shelter costs – the biggest component of services inflation – was up 5.7% y/y, the most since 1991. Fed pricing for the September meeting has tilted towards a 50bps rate hike but that still remains prone to volatility with another set of labor market and inflation prints due ahead of the next meeting. Fed speakers maintain hawkish message Fed speaker Evans and Kashkari were both on the hawkish side in rhetoric yesterday. Evans again hinted that tightening will continue into 2023 as inflation remains unacceptably high despite a first sign of cooling prices. The strength of the labor market continued to support the case of a soft landing. Kashkari reaffirmed the view on inflation saying that he is happy to see a downside surprise in inflation, but it remains far from declaring victory. Long thought of previously as the pre-eminent dove among Fed members, he has waxed far more hawkish of late and said yesterday that nothing has changed his view that the Fed funds rate should be at 3.9% at the end of this year (vs. market pricing of 3.5%) and 4.4% by the end 2023 (vs. market pricing of 3.1%). Siemens cuts outlook Germany’s largest industrial company is cutting its profit outlook on impairment charges related to its energy division. FY22 Q3 results (ending 30 June) show revenue of €17.9bn vs est. €17.4bn and orders are strong at €22bn vs est. €19.5bn. Orsted lifts expectations The largest renewable energy utility company in Europe reports Q2 revenue of DKK 26.3bn vs est. 21.7bn, but EBITDA misses estimates and the fiscal year guidance on EBITDA at DKK 20-22bn is significantly lower than estimates of DKK 30.4bn. However, the new EBITDA guidance range is DKK 1bn above the recently stated guidance, so Orsted is doing better than expected but the market had just become too optimistic. Disney beats on subscribers Disney reported FY22 Q3 (ending 2 July) results showing Disney+ subscribers at 152.1mn vs est. 148.4mn surprising the market as several surveys have recently indicated that Amazon Prime and Netflix are losing subscribers. The entertainment company also reported revenue for the quarter of $21.5bn vs est. $21bn with Parks & Experiences deliver the most to the upside surprise. EPS for the quarter was $1.09 vs est. $0.96. If subscribers for ESPN and Hulu are added, then Disney has surpassed Netflix on streaming subscribers. Shares were up 6% in extended trading. Despite the positive result the company lowered its 2024 target for Disney+ subscriber to 135-165mn range. Coupang lifts fiscal year EBITDA outlook The South Korean e-commerce company missed slightly on revenue in Q2 but lifted its fiscal year adjusted EBITDA from a loss of $400mn to positive which lifted shares 6% in extended trading. China’s central bank expects CPI to hover around 3% In its 2nd quarter monetary policy report released on Wednesday, the People’s Bank of China (PBOC) expects the CPI being at around 3% for the full year of 2022 and at times exceeding 3%.  The release of pend-up demand from pandemic restrictions, the upturn of the hog-cycle, and imported inflation, in particular energy, are expected to drive consumer price inflation higher for the rest of the year in China but overall within the range acceptable by the central bank.  The PBOC expects the recent downtrend of the PPI to continue and the gap between the CPI and PPI growth rates to narrow. What are we watching next? Next signals from the Fed at Jackson Hole conference Aug 25-27 There is a considerable tension between the market’s forecast for the economy and the resulting expected path of Fed policy for the rest of this year and particularly next year, as the market believes that a cooling economy and inflation will allow the Fed to reverse course and cut rates in a “soft landing” environment (the latter presumably because financial conditions have eased aggressively since June, suggesting that markets are not fearing a hard landing/recession). Some Fed members have tried to push back against the market’s expectations for Fed rate cuts next year it was likely never the Fed’s intention to allow financial conditions to ease so swiftly and deeply as they have in recent weeks. The risks, therefore, point to a Fed that may mount a more determined pushback at the Jackson Hole forum, the Fed’s yearly gathering at Jackson Hole, Wyoming that is often used to air longer term policy guidance. Earnings to watch Today’s US earnings in focus are NIO and Rivian with market running hot again on EV-makers despite challenging environment on input costs and increased competition. NIO is expected to grow revenue by 15% y/y in Q2 before seeing growth jumping to 72% y/y in Q3 as pent-up demand is released following Covid restrictions in China in the first half. Rivian, which partly owned by Amazon and makes EV trucks, is expected to deliver its first quarter with meaningful activity with revenue expected at $336mn but free cash flow is expected at $-1.8bn. Today: KBC Group, Brookfield Asset Management, Orsted, Novozymes, Siemens, Hapag-Lloyd, RWE, China Mobile, Antofagasta, Zurich Insurance Group, NIO, Rivian Automotive Friday: Flutter Entertainment, Baidu Economic calendar highlights for today (times GMT) 0800 – IEA's Monthly Oil Market Report 1230 – US Weekly Initial Jobless Claims 1230 – US Jul. PPI 1430 – US Weekly Natural Gas Storage Change 1700 – US Treasury to auction 30-year T-Bonds 2330 – US Fed’s Daly (Non-voter) to speak During the day: OPEC’s Monthly Oil Market Report Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – August 11, 2022  
The US Has Again Benefited From Military Conflicts In Other Parts Of The World, The Capital From Europe And Other Regions Goes To The US

Is Fed Ready For It's Counter-Attack? Commodities, Earnings And More

Saxo Bank Saxo Bank 11.08.2022 13:52
Summary:  Today we look at the sharp correction in energy prices driving a softer than expected CPI print for the US in July, which saw sentiment responding by piling on to the recent rally and taking equities to new highs for the local cycle since June. Interestingly, the reaction to the CPI data has generated some tension as US treasury yields are trading sideways after erasing the knee-jerk drop in yields in the wake of yesterday's data. With financial conditions easing aggressively, the Fed faces quite a task if it wants to counter this development, with recent protests from individual Fed members failing to make an impression. Perhaps the Jackson Hole Fed forum at the end of this month is shaping up as a key event risk? Crude oil, the USD, metals, earnings and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: Soft CPI revives risk rally, but treasury reaction creates dissonance    
Oz Minerals’ Quarterly Copper Output Hit A Record High, Brent Futures Rose

Copper Is Smashing For The Second Time This Summer! WTI Is Back From The Dead

Marc Chandler Marc Chandler 11.08.2022 14:12
Overview: The US dollar is consolidating yesterday’s losses but is still trading with a heavier bias against the major currencies and most emerging market currencies. The US 10-year yield is soft below 2.77%, while European yields are mostly 2-4 bp higher. The peripheral premium over the core is a little narrower today. Equity markets, following the US lead, are higher today. The Hang Seng and China’s CSI 300 rose by more than 2% today. Among the large bourses, only Japan struggled, pressured by the rebound in the yen. Europe’s Stoxx 600 gained almost 0.9% yesterday and is edging higher today, while US futures are also firmer. Gold popped above $1800 yesterday but could not sustain it and its in a $5 range on both sides of $1788 today. September WTI rebounded yesterday from a low near $87.65 to close near $92.00. It is firmer today near $93.00. US natgas is 1.4%, its third successive advance and is near a two-week high. Europe’s benchmark is also rising for the third session. It is up nearly 8% this week. Iron ore rose 2% today and it is the fourth gain in five sessions. September copper is also edging higher. If sustained, it would be the fifth gain in six sessions. It is at its highest level since late June. September wheat is 1.1% higher. It has risen every session this week for a cumulative gain of around 4.25%.  Asia Pacific In its quarterly report, the People's Bank of China seemed to downplay the likelihood of dramatic rate cuts or reductions in reserve requirements. It warned that CPI could exceed 3% and ruled out massive stimulus, while promising "high-quality" support, which sounds like a targeted measure. It is not tightening policy but signaled little scope to ease. Note that the 10-year Chinese yield is at the lower end of its six-month range near 2.74%. Its two-year yield is a little above 2.15%, slightly below the middle of its six-month range. Separately, Yiwa, a city of two million people, south of Shanghai has been locked down for three days starting today due to Covid. It is a manufacturing export hub. South Korea reported its first drop (0.7%) in technology exports in two years last month. While some read this to a statement about world demand, and there is likely something there given the earnings reports from the chip sector. However, there seems to be something else at work too. South Korea figures show semiconductor equipment exports to China have been more than halved this year (-51.9%) through July. China had accounted for around 60% of South Korea's semiconductor equipment. Reports suggest the main drivers are the US-China rivalry. Semiconductor investment in China has fallen and South Korea has indicated it intensions to join the US Chip 4 semiconductor alliance. Singapore's economy unexpectedly contracted in Q2. Initially, the government estimated the economy stagnated. Instead, it contracted by 0.2%. Given Singapore's role as an entrepot, its economic performance is often seen as a microcosm of the world economy. There was a nearly a 7% decline in retail trade services, while information and communication services output also fell. After the data, the Ministry of Trade and Industry narrowed this year's GDP forecast to 3%-4% from 3%-5%. While the drop in the US 10-year yield saw the dollar tumble against the yen yesterday, the recovery in yields has not fueled a recovery in the greenback. The dollar began yesterday above JPY135- and fell to nearly JPY132.00. Today, it has been confined to a little less than around half a yen on either side of JPY132.85. The cap seen at the end of last week and early this week in the JPY135.50-60 area, and the 20-day moving average (~JPY135.30) now looks like formidable resistance. Recall that the low seen earlier this month was near JPY130.40. The Australian dollar is also consolidating near yesterday's high set slightly below $0.7110. It was the best level in two months. The $0.7050 area may now offer initial support. The next upside target is seen in the $0.7150-70 band, which houses the (50%) retracement objective of the Aussie's slide from the April high (~$0.7660) and the July low (~$0.6680), and the 200-day moving average. The broad greenback sell-off yesterday saw it ease to about CNY6.7235, its lowest level in nearly a month. Despite the less-than-dovish message from the PBOC, it seemed to signal it did not want yuan strength. It set the dollar's reference rate at CNY6.7324, a bit above the median (Bloomberg's survey) of CNY6.7308. Europe Germany's coalition government has begun debating over the contours of the next relief package. The center-left government has implemented two support programs to ease the cost-of-living squeeze for around 30 bln euros. A third package is under construction now. The FDP Finance Minister Linder suggested as one of the components a 10 bln euro program to offset the "bracket creep" of higher inflation putting households into a higher tax bracket. The Greens want a more targeted effort to help lower income families. More work needs to be done, but a package is expected to be ready next month. The International Energy Agency estimates that Russian oil output will fall by around a fifth early next year as the EU import ban is implemented. The IEA warns that Russian output may begin declining as early as this month and estimates 2 mln barrels a day will be shut by early 2023. The EU's ban on most Russian oil will begin in early December, and in early February, oil products shipments will also stop. Now the EU buys around 1 mln barrels a day of oil products and 1.3 mln barrels of crude. Russia boosted output in recent months, to around 10.8 mln barrels a day. The IEA estimates that in June, the PRC overtook the EU to become the top market for Russia's seaborne crude (2.1 mln bpd vs. 1.8 mln bpd). Separately, the IEA lifted its estimate of world consumption by about 380k barrels a day from its previous forecast, concentrated in the Middle East and Europe. The unusually hot weather in the Middle East, where oil is burned for electricity, has seen stronger demand. In Europe, there has been more switched from gas to oil. The euro surged to almost $1.0370 yesterday on the back of the softer than expected US CPI. It settled near $1.03. It is trading firmly in the upper end of that range today. It held above $1.0275, just below the previous high for the month (~$1.0295). Today's high, was set in the European morning, near $1.0340. There is a trendline from the February, March, and June highs found near $1.04 today. It is falling by a little less than half a cent a week. Sterling's rally yesterday stalled in front of this month's high set on August 1 slightly shy of $1.2295. It is straddling the area where it settled yesterday (~$1.2220). We suspect the market may test the lows near $1.2180, and a break could see another half-cent loss ahead of tomorrow's Q2 GDP. The median forecast in Bloomberg's survey is for a 0.2% contraction after a 0.8% expansion in Q1.  America What the jobs data did for expectations for the Fed at next month's meeting were largely reversed by slower the expected CPI readings. On the eve of the employment data, the market was discounting a little better than a 35% chance of another 75 bp hike. It jumped to over a 75% chance after employment report but settled yesterday around a 45% chance. It is still in its early days, and the Fed will see another employment and CPI report before it has to decide. Although the market has downgraded the chances of a 75 bp hike at next month's meeting, it still has the Fed lifting rates 115 bp between now and the end of year. The market recognizes that that Fed is not done tightening no matter what trope is dragged out to use as a strawman. The truth is the market is pushing against some Fed views. Chicago Fed's Evans, who many regard as a dove from earlier cycles, said that Fed funds could finish next year in the 3.75%-4.00% area, which opined would be the terminal rate. The swaps market says that the Fed funds terminal rate is closer to 3.50% and in the next six months. More than that, the Fed funds futures are pricing in a cut late next year. At least a 25 bp cut has been discounted since the end of June. It was the Minneapolis Fed President Kashkari that surprised many with his hawkishness. Many see him as a dove because five years ago, he dissented against rate increases in 2017. However, he has been sounding more hawkish in this context and revealed yesterday that it was his "dot" in June at 3.90% this year and 4.4% next year. These were the most extreme forecasts. Perhaps it is not that he is more dovish or hawkish, labels that seemingly take a life on of their own but more activity. While neither Evans nor Kashkari vote on the FOMC this year, they do next year. San Francisco Fed President Daly seemed more willing to consider moderating the pace of tightening but still sees more work to be done. She does not vote this year or next.  Headline CPI was unchanged last month and the 0.3% rise in the core rate was less than expected. At 8.5%, the headline is rate is still too high for comfort, and the unchanged 5.9% core rate warns significant progress may be slow. Shelter is about a third of the CPI basket and it is rising about 0.5% a month. It is up 5.7% year-over-year. If everything else was unchanged, this would lift CPI to 2%. The US reports July Producer Prices. Both the core and headline readings are expected to have slowed. The headline peaked in March, 11.6% above year ago levels. It was 11.3% in June and is expected to have fallen to 10.4%. The core rate is likely to post its fourth consecutive decline. It peaked at 9.6% in March and fell to 8.2% in June. The median forecast (Bloomberg's survey) is for a 7.7% year-over-year pace, which would be the lowest since last October.  Late in the North American session, Mexico's central bank is expected to deliver its second consecutive 75 bp rate hike. It will lift the overnight target rate to 8.5%. The July CPI reported Tuesday stood at 8.15% and the core 7.65%. The swaps market has a terminal rate near 9.5% in the next six months. The subdued US CPI reading, helped spur a 0.85% rally in the JP Morgan Emerging Market Currency Index yesterday, its largest gain in almost four weeks. The peso, often a liquid and accessible proxy, rose around 1.1%. The greenback briefly traded below MXN20.00 for the first time since late June. The move was so sharp that closed below its lower Bollinger Band (~MXN20.08) for the first time in six months. The US dollar slumped to almost CAD1.2750 yesterday to hold above the 200-day moving average (~CAD1.2745). It is the lowest level in nearly two months, and it has not traded below the 200-day moving average since June 9. Like the other pairs, it is consolidating today near the lower end of yesterday's greenback range. The swaps market downgraded the likelihood that the Bank of Canada follows last month's 100 bp hike with a 75 bp move when it meets on September 7. It is now seen as a 30% chance, less than half of what was projected at the end of last week. We suspect that the US dollar can recover into the CAD1.2800-20 area today.     Disclaimer   Source: US Dollar Soft while Consolidating Yesterday's Drop
Eyes On Iran Nuclear Deal: Oil Case. Gold Price Is Swinging

Eyes On Iran Nuclear Deal: Oil Case. Gold Price Is Swinging

Craig Erlam Craig Erlam 11.08.2022 14:32
Oil treading water after volatile 24 hours Needless to say, it was quite a volatile session in oil markets on Wednesday. A positive surprise on inflation was followed by a huge inventory build reported by EIA and then the highest US output since April 2020. Meanwhile, oil transit via the Druzhba pipeline resumed after a brief pause that jolted the markets. That’s a lot of information to process in the space of a couple of hours and you can see that reflected in the price action. And it keeps coming this morning, with the IEA monthly oil report forecasting stronger oil demand growth as a result of price incentivised gas to oil switching in some countries. It now sees oil demand growth of 2.1 million barrels per day this year, up 380,000. It also reported that Russian exports declined 115,000 bpd last month to 7.4 million from around 8 million at the start of the year. The net effect of all of this is that oil prices rebounded strongly on Wednesday but are pretty flat today. WTI is back above $90 but that could change if we see progress on the Iran nuclear deal. It’s seen plenty of support around $87-88 over the last month though as the tight market continues to keep the price very elevated. Gold performs handbrake turn after breakout It was really interesting to see gold’s reaction to the inflation report on Wednesday. The initial response was very positive but as it turned out, also very brief. Having broken above $1,800, it performed a swift u-turn before ending the day slightly lower. It can be difficult to gauge market reactions at the moment, in part because certain markets seem to portray far too much economic optimism considering the circumstances. With gold, the initial response looked reasonable. Less inflation means potentially less tightening. Perhaps we then saw some profit-taking or maybe some of that economic optimism crept in and rather than safe havens, traders had the appetite for something a little riskier. Either way, gold is off a little again today but I’m not convinced it’s peaked. From a technical perspective, $1,800 represents a reasonable rotation point. Fundamentally, I’m just not convinced the market is currently representative of the true outlook. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: Oil stablizes, gold pares gains
Bitcoin Is Showing The Potential For The Further Downside Rotation

Bitcoin Like Phoenix!? Crypto Community Can Breathe A Sigh Of Relief

Craig Erlam Craig Erlam 11.08.2022 14:48
Investors are certainly in a more upbeat mood as the relief from the US inflation data ripples through the markets. Positive surprises have been hard to come by on the inflation front this year and yesterday’s report was very much welcomed with open arms. While we shouldn’t get too carried away by the data, with headline inflation still running at 8.5% and core 5.9%, it’s certainly a start and one we’ve waited a long time for. Fed policymakers remain keen to stress that the tightening cycle is far from done and a policy u-turn early next year is highly unlikely. Once again, the markets are at odds with the Fed’s assessment on the outlook for interest rates but this time in such a way that could undermine its efforts so you can understand their concerns. I expect we’ll continue to see policymakers unsuccessfully push back against market expectations in the coming weeks while further driving home the message that data dependency works both ways. That said, the inflation report has further fueled the optimism already apparent in the markets and could set the tone for the rest of the summer. PBOC signals no further easing Unlike many other central banks, the PBOC has the scope to tread more carefully and continue to support the economy as it contends with lockdowns amid spikes in Covid cases. The country’s zero-Covid policy is a huge economic headwind and proving to be a drain on domestic demand. The PBOC has made clear in its quarterly monetary policy report though that it doesn’t want to find itself in the same position as many other countries right now. With inflation close to 3%, further easing via RRR or interest rates looks unlikely for the foreseeable future. Cautious targeted support looks the likely path forward as the central bank guards against inflation risks, despite the data yesterday surprising to the downside. Singapore trims growth forecasts A surprise contraction in the second quarter has forced Singapore to trim its full-year growth forecast range from 3-5% to 3-4% as the economy contends with a global slowdown, to which the country is particularly exposed, and Covid-related uncertainty in China. While the MAS has indicated monetary policy is appropriate after tightenings this year, inflation remains high so further pressures on this front may add to the headwinds for the economy. Where’s the momentum? Bitcoin took the inflation news very well and it continues to do so. Slower tightening needs and improved risk appetite is music to the ears of the crypto community who will be more confident that the worst is behind it than they’ve been at any point this year. Whether that means stellar gains lie ahead is another thing. The price hit a new two-month high today but I’m still not seeing the momentum I would expect and want. That may change of course and a break of $25,000 could bring that but we still appear to be seeing some apprehension that may hold it back in the near term. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Source: Welcome relief
UK Budget: Short-term positives to be met with medium-term caution

Boris Johnson Resignation Cause Further Difficulties For Pound Sterling (GBP)!? MarketTalk

Swissquote Bank Swissquote Bank 11.08.2022 12:20
US consumer prices eased in July, and they eased more than expected. US yields pulled lower after the CPI print, the US 10-year yield retreated, the US dollar slipped, gold gained, and the US stock markets rallied. Forex The EURUSD jumped to 1.0370 mark, as Cable made another attempt to 1.2272 but failed to extend gains into the 1.23 mark. And It will likely be hard for the pound sterling to post a meaningful recovery even if the dollar softens more, as there are too much political uncertainties in Britain following Boris Johnson’s resignation.   The sterling is under pressure, but the FTSE100 does just fine, and I will focus on why the British blue-chip companies are in a position to extend gains in this episode. Disney Elsewhere, Disney jumped on strong quarterly results, Tesla rallied despite news that Elon Musk dumped more stocks to prepare for an eventual Twitter purchase. Twitter shares gained.   Watch the full episode to find out more!   0:00 Intro 0:27 Softer-than-expected US CPI boosts appetite… 2:03 … but FOMC members warn that inflation war is far over! 3:39 FX update: USD softens, gold, euro, sterling advance 5:55 Why FTSE 100 is still interesting? 8:06 Disney jumps on strong results, Tesla, Twitter gain Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #inflation #data #Gold #XAU #USD #EUR #GBP #FTSE #Disney #earnings #Tesla #Twitter #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq   Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH Source: Stocks up on soft US CPI, but inflation war is not over! | MarketTalk: What’s up today? | Swissquote
Key Support Levels in Forex Pairs: EURUSD, GBPUSD, and EURGBP

Apple Stock Price Hit $170 On Thursday! What About New iPhones Production? Energy Stocks: BP Increased By Over 1% Yesterday!

Swissquote Bank Swissquote Bank 12.08.2022 10:46
US equities could hardly consolidate gains they posted following the Wednesday’s softer-than-expected inflation data in the US, even as the producer price index printed the first monthly decline since April 2020. The barrel of US crude rebounded to $94 as the International Energy Agency (IEA) warned that the biggest US oil companies’ combined deficit is almost back to the historical lows, and that the soaring gas prices boosted the use of oil-power generation, and that the ‘substantial’ gas-to-oil switching is, in return, set to boost crude consumption for the rest of the year, even as demand growth from other parts of the economy slows. Technology stocks and cryptocurrencies remain on a positive path as well, for now. Apple hit $170 yesterday Oil stocks gained along with the rebound in crude prices. But technology stocks and cryptocurrencies remain on a positive path as well, for now. Apple hit $170 yesterday, as Amazon is preparing to test its 200-DMA to the upside. Elsewhere, gold remains under pressure, while Bitcoin tests $25K resistance- Ethereum’s final test before the Merge update was succesful, hinting that major cryptocurrencies could extend gains during the weekend. Watch the full episode to find out more! 0:00 Intro 0:30 Post-CPI rally remains short-lived 3:33 Oil jumps as IEA warns of ‘substantial’ oil-to-gas demand shift 5:12 Oil stocks gain, tech stocks remain on positive path, too 7:55 Gold soft, Bitcoin & Ethereum up on ETH’s successful pre-Merger test #MarketNews Some stock market #bulls are watching a technical indicator for clues on whether a summer rebound in #US equities will roll on. 👇https://t.co/k7q9LZhAsZ — Swissquote (@Swissquote) August 12, 2022 Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #crude #oil #rally #IEA #warning #BP #XOM #Apple #Amazon #Bitcoin #Ethereum #Merge #test #US #inflation #data #Gold #XAU #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH  
Commodities Update: Strong Russian Oil Flows to China and Volatility in European Gas Market

Natural Gas Report After Weekly US Storage - Obnoxious Results

Saxo Bank Saxo Bank 12.08.2022 11:34
Summary:  Today we note that the big surge in yields at the long end of the US yield curve were likely the critical factor in capping and reversing the extension of the rally in equities yesterday. The US dollar found a bit of resilience on the development as well, if only half-hearted. Elsewhere, we zoom in on global natural gas supply concerns after the latest weekly US storage yesterday, discuss the grains outlook with a key report up late today and look ahead at the fairly busy macro calendar next week, while wondering how the Fed deals with re-establishing its hawkish credibility. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please!   We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: US yields jump, capping complacency
RBA Pauses Rates as Australian Dollar Slides; ISM Manufacturing PMI in Focus

Dollar (USD) Became Stronger, Not Enough Yet. Fed Better Meet Expectations!

John Hardy John Hardy 12.08.2022 14:23
Summary:  US treasury yields at the long end of the yield curve jumped higher yesterday to multi-week highs, a challenge to widespread complacency across global markets. The USD found a modicum of support on the development, though this was insufficient to reverse the recent weakening trend. It will likely take a more determined rise in US yields and a tightening of financial conditions, possibly on further Fed pushback against market policy expectations, to spark a more significant USD comeback. FX Trading focus: US yields jump, not yet enough to reverse recent USD dip A very interesting shift in the US yield curve yesterday as long yields jumped aggressively higher, with the 30-year yield getting the most focus on a heavy block sale of US “ultra” futures and a softer than expected 30-year T-bond auction from the US treasury. The 30-year benchmark yield jumped as much as 15 basis points from the prior close, with the 10-year move a few basis points smaller. We shouldn’t over-interpret a single day’s action, but it is a technical significant development and if it extends, could be a sign of tightening liquidity as the Fed ups its sales of treasuries and even a sign that market concern is growing that the Fed will fail to get ahead of inflation. As for the market reaction, the USD found some support, but it was modest stuff – somewhat surprisingly in the case of the normally very long-US-yield-sensitive USDJPY. Overnight, a minor shuffle in Japanese PMI Kishida’s cabinet has observers figuring that there is no real determined pushback yet against the Kuroda BoJ’s YCC policy, with focus more on bringing relief to lower income households struggling with price rises for essentials. Indeed, BoJ policy is only likely to come under significant pressure again if global yields pull to new cycle highs and the JPY finds itself under siege again. As for USDJPY, it has likely only peaked if long US yields have also peaked for the cycle. Chart: EURUSD EURUSD caught in limbo here, having pulled up through the resistance in the 1.0275+ area after a long bought of tight range trading, but not yet challenging through the next key layer of resistance into 1.0350+. It wouldn’t take much of a further reversal here to freshen up the bearish interest – perhaps a dip and close below 1.0250 today, together with a bit of follow through higher in US yields and a further correction in risk sentiment. Eventually, we look for the pair to challenge down well through parity if USD yields retest their highs and beyond. Source: Saxo Group Elsewhere – watching sterling here as broader sentiment may be at risk of rolling over and as we wind our way to the conclusion of the battle to replace outgoing Boris Johnson, with Liz Truss all but crowned. Her looser stance on fiscal prudence looks a sterling negative given the risks from UK external deficits. Her instincts seem pro-supply side on taxation, but the populist drag of cost-of-living issues has shown her to be quick to change her stripes – as she has often been, having reversed her position on many issues, including Brexit (was a former remainer). Today’s reminder of the yawning trade deficit (a current run rate of around 10% of GDP) and the energy/power situation together with dire supply side restraints on the UK economy have us looking for sterling weakness – a start would be a dip below 1.2100 in GBPUSD, which would reverse the reaction earlier this week to the US July CPI release. The week ahead features an RBNZ on Wednesday (market nearly fully priced for another two meetings of 50 basis points each). NZDUSD has looked too ambitious off the lows – there is no strong external surplus angle for the kiwi like there is for the Aussie – might be a place to get contrarian to the recent price action if global risk sentiment is set to roll over again finally now that the VIX has pushed all the way to 20 (!).  A Norges Bank meeting on Thursday may see the bank hiking another 50 basis points as it continues to catch up to inflationary outcomes. The US FOMC minutes are up next Wednesday and may be a bit of a fizzle, given that the bulk of the easing financial conditions that the Fed would like to push back against came after the meeting. Table: FX Board of G10 and CNH trend evolution and strength. The US dollar hasn’t gotten much from the latest development in yields – watching the next couple of sessions closely for direction there, while also watching for the risk of more sterling downside, while NZD looks overambitious on the upside. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. The EURGBP turn higher could follow through here – on the lookout for that development while also watching GBPUSD status in coming sessions and whether the EURUSD move higher also follows through as per comments on the chart above. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Fed’s Barkin (non-voter) to speak 1400 – US Aug. Preliminary University of Michigan sentiment Share Source: FX Update: US yield jump brings USD resilience if not a reversal.
Chile's Lithium Nationalization and the Global Trend of Resource Nationalism: Implications for EV Supply Chains and Efforts to Strengthen Battery Metal Supply

Commodities: Prices Are Rising, Heatwaves In US And China Affect The Production Of Cotton

Ole Hansen Ole Hansen 12.08.2022 16:00
Summary:  The correction that for some commodities already started back in March has since the end of July increasingly been showing signs of reversing, driven by recent economic data strength, dollar weakness and signs inflation may have peaked. With the broad position adjustments having run their course, the focus has returned to supply which in many cases remains tight, thereby providing renewed support, especially across the sectors of energy and key agriculture commodities. The correction that for some commodities already started back in March has since the end of July increasingly been showing signs of reversing. According to the Bloomberg commodity sector indices, the correction period triggered peak to bottom moves of 41% in industrial metals, 31% in grains and 27% in energy. The main reason for the dramatic correction following a record run of strong gains was the change in focus from tight supply to worries about demand. Apart from China’s slowing growth outlook due to its zero-Covid policy and housing market crisis hitting industrial metals, the most important driver has been the way in which central banks around the world have been stepping up efforts to curb runaway inflation by forcing down economic activity through aggressively tightening monetary conditions. This process is ongoing but recent economic data strength, dollar weakness and signs inflation may have peaked have all helped support markets that have gone through weeks and in some cases months of sharp price declines, and with that an aggressive amount of long liquidation from financial traders as well as selling from macro-focused funds looking for a hedge against an economic downturn.With the broad position adjustments having run their course, the focus has returned to supply which in many cases remains tight, thereby providing renewed support and problems for those who have been selling markets looking for even lower prices in anticipation of recession and lower demand. Backwardation remains elevated despite growth worries The behaviour of spot commodity prices, as seen through first month futures contracts, rarely gives us the full fundamental picture with the price action often being dictated by technical price-driven speculators and funds focusing on macroeconomic developments, as opposed to the individual fundamental situation. The result of this has been a period of aggressive selling on a combination of bullish bets being scaled back but also increased selling from funds looking to hedge an economic slowdown.An economic slowdown, or in a worst-case scenario a recession, would normally trigger a surplus of raw materials as demand falters and production is slow to respond to a downturn in demand. However, during the past three months of selling, the cost of commodities for immediate delivery has maintained a healthy premium above prices for later deliveries. The chart below shows the spread measured in percent between the first futures and the 12-month forward futures contract, and while the tightness has eased a bit, we are still seeing tightness across a majority, especially within energy and agriculture. A sign that the market has sold off on expectations more than reality, and it raises the prospect of a strong recovery once the growth outlook stabilises. Crude oil The downward trending price action in WTI and Brent for the past couple of months is showing signs of reversing on a combination of the market reassessing the demand outlook amid continued worries about supply and who will and can meet demand going forward. The recovery from below $95 in Brent and $90 in WTI this week was supported by signs of softer US inflation reducing the potential peak in the Fed fund rates, thereby improving the growth outlook. In addition, the weaker dollar and improving demand, especially in the US where gasoline prices at the pumps have fallen below $4 per gallon for the first time since March.In addition, the International Energy Agency (IEA) lifted its global consumption estimate by 380 kb/d, saying soaring gas prices amid strong demand for electricity is driving utilities to switch from expensive gas to fuel-based products. Meanwhile, OPEC may struggle to raise output in the coming months due to limited spare capacity. While pockets of demand weakness have emerged in recent months, we do not expect these to materially impact on our overall price-supportive outlook. Supply-side uncertainties remain too elevated to ignore, not least considering the soon-to-expire releases of crude oil from US Strategic Reserves and the EU embargo of Russian oil fast approaching. With this in mind, we maintain our $95 to $115 range forecast for the third quarter. Gold (XAUUSD) The recently under siege yellow metal was heading for a fourth weekly gain, supported by a weaker dollar after the lower-than-expected US CPI and PPI data helped reduce expectations for how high the Fed will allow rates to run. However, rising risk appetite as seen through surging stocks and bond yields trading higher on the week have so far prevented the yellow metal from making a decisive challenge at key resistance above $1800/oz, and the recent decline in ETF holdings and low open interest in COMEX futures points to a market that is looking for a fresh and decisive trigger. We believe the markets newfound optimism about the extent to which inflation can successfully be brought under control remains too optimistic and together with several geopolitical worries, we see no reason to exit our long-held bullish view on gold as a hedge and diversifier. Gold has found some support at the 50-day moving average line at $1783, and needs to hold $1760 in order to avoid a fresh round of long liquidation the short-term. While some resistance is located just above $1800 gold needs a decisive break above $1829 in order to trigger the momentum needed to attract fresh buying in ETFs and managed money accounts in futures. Source: Saxo Group Industrial metals (Copper)   Copper has rebounded around 18% since hitting a 20-month low last month, thereby supporting a general recovery across industrial metals, the hardest hit sector during the recent correction. Supported by a softer dollar, data showing the US economy remains robust, easing concerns about the demand outlook in China and not least disruptions to producers in Asia, Europe as well as South America potentially curtailing supply at a time when exchange-monitored inventories remain at a decade low. All developments that have forced speculators to cut back recently established short positions.The potential for an improved demand outlook in China and BHP's recent announcement that it has made an offer for OZ Minerals and its nickel and copper-focused assets, is the latest in a series of global acquisitions aimed at shoring up supplies of essential metals for the energy transition. With its high electrical conductivity, copper supports all the electronics we use, from smartphones to medical equipment. It already underpins our existing electricity systems, and it is crucial to the electrification process needed over the coming years in order to reduce demand for energy derived from fossil fuels.Following a temporary recovery in the price of copper around the beginning of June when China began easing lockdown restrictions, the rally quickly ran out of steam and copper went on to tumble below key support before eventually stabilizing after finding support at $3.14/lb., the 61.8% retracement of the 2020 to 2022 rally. Since then, the price has recovered strongly but may temporarily pause after reaching finding resistance in the $3.70/lb area. We maintain a long-term bullish view on copper and prefer buying weakness instead of selling into strength. Source: Saxo Group The grains sector traded at a five-week high ahead of Friday’s supply and demand report from the US Department of Agriculture. The Bloomberg Grains Index continues to recover following its 28% June to July correction with gains this past week being led by wheat and corn in response to a weaker dollar and not least hot and dry weather in the US and another heatwave in Europe raising concerns about yield and production. Hot and dry weather at a critical stage for yield developments ahead of the soon-to-be-harvested crop has given the World Agricultural Supply and Demand Estimates report some additional attention with surveys pointing to price support with the prospect of lower yields lowering expectations for the level of available stocks ahead of the coming winter. Cotton, up 8% this month has seen the focus switch from growth and demand worries, especially in China, to deepening global supply concerns as heatwaves in the US and China hurt production prospects. Friday’s monthly supply and demand report (WASDE) from the US Department of Agriculture was expected to show lower US production driving down ending stocks by around 10% to 2.2 m bales, an 11-year low. Arabica coffee, in a downtrend since February, has also seen a steady rise since bouncing from key support below $2/lb last month. A persistent and underlying support from South American production worries has reasserted itself during the past few weeks as the current on-season crop potentially being the lowest since 2014. Brazil’s drought and cold curbed flowering last season and severe frosts in July 2021 led farmers to cut down coffee trees at a time of high costs for agricultural inputs, notably fertilizer. In addition, Columbia another top producer, has seen its crop being reduced by too much rainfall. Source: WCU: Commodity correction may have exhausted itself
Forex: XAU/USD Is Rising For The 3rd Day In A Row!

Gold Trading. Gold Is Spreading It's Wings!?

InstaForex Analysis InstaForex Analysis 11.08.2022 15:20
Relevance up to 12:00 2022-08-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical analysis: Gold has been trading downside today and I see the breakout of the rising channel, which is sign that sellers are in control. Trading recommendation: Due to the breakout of the rising channel in the background, I see potential for further downside movement. Watch for potential selling opportunities with the downside objectives at the price of $1.783 and $1.770. Stochastic oscillator is showing overbought condition and bear cross, which is sign that sellers are taking control. Key resistance is set at the price of $1.805 Source: Forex Analysis & Reviews: Analysis of Gold for August 11,.2022 - Breakout of the rising channel in the backgorund
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

WTI Astonishing Streak! Japan Jumps. China, Australia And South Korea Are In Trouble?

Marc Chandler Marc Chandler 12.08.2022 15:15
Overview: The markets are putting the finishing touches on this week’s activity. Japan, returning from yesterday’s holiday bought equities, and its major indices jumped more than 2%. China, South Korea, and Australia struggled. Europe’s Stoxx 600 is firmer for the third consecutive session. It is up about 1.3% this week. US futures are also firmer after reversing earlier gains yesterday to close lower on the day. The US 10-year yield is flat near 2.88%, while European benchmarks are 4-6 bp higher. The greenback is mixed. The dollar-bloc currencies and Norwegian krone are slightly firmer, while the Swedish krona, sterling, and the yen are off around 0.3%-0.6%. Emerging market currencies are also mixed, though the freely accessible currencies are mostly firmer. The JP Morgan Emerging Market Currency Index is up about 1.15% this week, ahead of the Latam session, which if sustained would be the strongest performance in three months. Gold is consolidating at lower levels having been turned back from $1800 in the middle of the week. Near $1787.50, it is up less than 0.7% for the week. September WTI is edging higher for the third consecutive session, which would match the longest streak since January. US natgas surged 8.2% yesterday but has come back offered today. It is off 2.3%. Europe’s natgas benchmark is snapping a three-day advance of nearly 8% and is off 1.8% today. Iron ore rose 2.2% yesterday and it gave most of its back today, sliding almost 1.7%. September copper is unchanged after rallying more than 3.3% over the past two sessions. September wheat has a four-day rally in tow but is softer ahead of the Department of Agriculture report (World Agricultural Supply and Demand Estimates). Asia Pacific   Japan and China will drop some market sensitive high-frequency economic data as trading begins in the new week.  Japan will release its first estimate of Q2 GDP. The median in Bloomberg's survey and the average of a dozen Japanese think tanks (cited by Jiji Press) project around a 2.7% expansion of the world's third-largest economy, after a 0.5% contraction in Q1. Consumption and business investment likely improved. Some of the demand was probably filled through inventories. They added 0.5% to Q1 growth but may have trimmed Q2 growth. Net exports were a drag on Q1 (-04%) and may be flat. The GDP deflator was -0.5% in Q1 and may have deteriorated further in Q2. Some observers see the cabinet reshuffle that was announced this week strengthening the commitment to ease monetary policy. The deflation in the deflator shows what Governor Kuroda's successor next April must address as well. China reports July consumption (retail sales), industrial output, employment (surveyed jobless rate), and investment (fixed assets and property).  The expected takeaway is that the world's second-largest economy is recovering but slowly. Industrial output and retail sales are expected to have edged up. Of note, the year-to-date retail sales compared with a year ago was negative each month in Q2 but is expected to have turned positive in July. The year-over-year pace of industrial production is expected to rise toward 4.5%, which would be the best since January. The housing market, which acted as a critical engine of growth is in reverse. New home prices (newly build commercial residential building prices in 70 cities) have been falling on a year-over-year basis starting last September, and likely continued to do so in July. Property investment (completed investment in real estate) likely fell for the fourth consecutive month. It has slowed every month beginning March 2021. The pace may have accelerated to -5.6% year-over-year after a 5.4% slide in the 12-months through June. The surveyed unemployed rate was at 4.9% last September and October. It rose to 6.1% in April and has slipped back to 5.5% in June. The median forecast in Bloomberg's survey expects it to have remained there in July. Lastly, there are no fixed dates for the lending figures and the announcement of the one-year medium-term lending facility rate. Lending is expected to have slowed sharply from the surge in June, while the MLF rate is expected to be steady at 2.85%. Over the several weeks, foreign investors have bought a record amount of Japanese bonds.  Over the past six weeks, foreigners snapped up JPY6.44 trillion (~$48 bln). It may partly reflect short-covering after the run-in with the Bank of Japan who bought a record amount to defend the yield-curve control cap of 0.25% on the 10-year bond. There is another consideration. For dollar-based investors, hedging the currency risk, which one is paid to do, a return of more than 4% can be secured. At the same time, for yen-based investors, hedging the currency risk is expensive, which encourages the institutional investors to return to the domestic market. Japanese investors have mostly been selling foreign bonds this year. However, the latest Ministry of Finance data shows that they were net buyers for the third consecutive week, matching the longest streak of the year. Still, the size is small. suggesting it may not be a broad or large force yet. Although the US 10-year yield jumped 10 bp yesterday, extending its recovery from Monday's low near 2.75% for a third session, the dollar barely recovered against the yen.  After falling 1.6% on Wednesday, after the softer than expected US CPI, the greenback rose 0.1% yesterday and is edging a little higher today. Partly what has happened is that the exchange rate correlation with the 10-year yield has slackened while the correlation with the two-year has increased. In fact, the correlation of the change in the two-year and the exchange rate is a little over 0.60 and is the highest since March. The dollar appears to be trading comfortably now between two large set of options that expire today. One set is at JPY132 for $860 mln and the other at JPY134 for $1.3 bln. Around $0.7120, the Australian dollar is up about 3% this week and is near two-month highs. It reached almost $0.7140 yesterday. The next technical target is in the $0.7150-$0.7170 area. Support is seen ahead of $0.7050. Next week's data highlight is the employment data (August 18). The greenback traded in a CNY6.7235-CNY6.7600 on Wednesday and remained in that range yesterday and today. For the second consecutive week, the dollar has alternated daily between up and down sessions for a net change of a little more than 0.1%. The PBOC set the dollar's reference rate at CNY6.7413, tight to expectations (Bloomberg's survey) of CNY6.7415. Europe   The UK's economy shrank by 0.6% in June, ensuring a contraction in Q2.  The 0.1% shrinkage was a bit smaller than expected but the weakness was widespread. Consumption fell by 0.2% in the quarter, worse than expected, while government spending collapsed by 2.9% after a 1.3% pullback in Q1. A decline in Covid testing and slower retail sales were notable drags. The one bright spot was business investment was stronger than expected. The June data itself was miserable, though there was an extra holiday (Queen's jubilee). All three sectors, industrial output, services, and construction, all fell in June and the trade balance deteriorated. The market's expectation for next month's BOE meeting was unaffected by the data. The swaps market has about an 85% chance of another 50 bp hike discounted.  Industrial output in the eurozone rose by 0.7%, well above the 0.2% median forecast in Bloomberg's survey and follows a 2.1% increase in May.  The manufacturing PMI warned that an outright contraction is possible. Of the big four members, only Italy disappointed. The median forecast in Bloomberg's survey anticipated a decline in German, France, and Spain. Instead, they reported gains of 0.4%, 1.4%, and 1.1% respectively. Industrial output was expected to have contracted by 0.1% in Italy and instead it reported a 2.1% drop. In aggregate, the strength of capital goods (2.6% month-over-month) and energy (0.6%) more than offset the declines in consumer goods and intermediate goods. The year-over-year rise of 2.4% is the strongest since last September. The disruption caused by Russia's invasion of Ukraine and the uneven Covid outbreaks and responses are as Rumsfeld might have said known unknowns.  But the disruptive force that may not be fully appreciated is about to get worse. The German Federal Waterways and Shipping Administration is warning that water in the Rhine River will fall below a critical threshold this weekend. At an important waypoint, the level may fall to about 13 inches (33 centimeters). Less than around 16 inches (40 centimeters) and barges cannot navigate. An estimated 400k barrels a day of oil products are sent from the Amsterdam-Rotterdam-Antwerp region to Germany and Switzerland. The International Energy Agency warns that the effects could last until late this year, and hits landlocked countries who rely on the Rhine the hardest. Bloomberg reported that Barge rates from Rotterdam to Basel have risen to around 267 euros a ton, a ten-fold increase in a few months. The strong surge in the euro to almost $1.0370 on Wednesday has stalled.  The euro is consolidating inside yesterday's relatively narrow range (~$1.0275-$1.0365). The momentum traders may be frustrated by the lack of follow-through. We suspect a break of $1.0265 would push more to the sidelines. The downtrend line from the February, March, and June highs comes in slightly above $1.0385 today. The broad dollar selloff in response to the July CPI saw sterling reach above $1.2275, shy of the month's high closer to $1.2295. Similar to the euro, sterling stalled. It has slipped through yesterday's low (~$1.2180). A break of the $1.2140 area could see $1.2100. That said, the $1.20 area could be the neckline of a double top and a convincing break would signal the risk of a return to the lows set a month ago near $1.1760. America   Think about the recent big US economic news.  It began last Friday with a strong employment report, more than twice what economists expected (median, Bloomberg survey) and a new cyclical low in unemployment. The job gains were broadly distributed. That was followed by a softer than expected CPI and PPI. Some observers placed emphasis on the slump in productivity and jump in unit labor costs. Those are derived from GDP figures and are not measured separately, though they are important economic concepts. Typically, when GDP is contracting, productivity contracts and by definition, unit labor costs rise. In effect, the market for goods and services adjusts quicker the labor market, and the market for money, even quicker. If the economy expands as the Atlanta Fed GDPNow tracker or the median in Bloomberg's survey project (2.5% and 2.0%, respectively), productivity will improve, and unit labor costs will fall. Barring a precipitous fall today, the S&P 500 and NASDAQ will advance for the fourth consecutive week.  The 10-year yield fell by almost 45 bp on the last three week of July and has recovered around half here in August. That includes five basis points this week despite the softer inflation readings. The two-year note yield fell almost 25 bp in the last two weeks of July and jumped 34 bp last week. It is virtually flat this week around 3.22%. The odds of a 75 bp rate hike at next month's FOMC meeting fell from about 75% to about 47%. The year-end rate expectation fell to 3.52% from 3.56%. Some pundits claim the market is pricing in a March 2023 cut, but the implied yield of the March 2023 Fed funds futures contract is 18 bp above the December 2022 contract. It matches the most since the end of June. Still, while the Federal Reserve is trying to tighten financial conditions the market is pushing back. The Bloomberg Financial Conditions Index is at least tight reading since late April. The Goldman Sachs Financial Condition index is the least tight in nearly two months.  US import and export prices are the stuff that captures the market's imagination.  However, the preliminary University of Michigan's consumer survey, and especially the inflation expectations can move the markets, especially given that Fed Chair Powell cited it as a factor encouraging the 75 bp hike in June. The Bloomberg survey shows the median expectation is for a tick lower in inflation expectations, with the one-year slipping to 5.1% from 5.2%. The 5-10-year expectation is seen easing to 2.8% from 2.9%. If accurate, it would match the lowest since April 2021. The two-year breakeven (difference between the conventional yield and the inflation-protected security) peaked in March near 5% and this week reached 2.70%, its lowest since last October. It is near 2.80% now. Mexico delivered the widely anticipated 75 bp hike yesterday.  The overnight rate target is now 8.50%. The decision was unanimous. It is the 10th consecutive hike and concerns that AMLO's appointments would be doves has proven groundless. The central bank meets again on September 29. Like other central banks, it did not pre-commit to the size of the next move, preserving some tactical flexibility. If the Fed hikes by 75 bp, it will likely match it. Peru's central bank hiked its reference rate by 50 bp, the 10th consecutive hike of that magnitude after starting the cycle last August with a 25 bp move. It is not done. Lima inflation was near 8.75% last month and the reference rate is at 6.50%. The Peruvian sol is up about 1.2% this month, coming into today. It has appreciated by around 3.25% year-to-date, making it the second-best performer in the region after Brazil's 8.1% rise. Argentina hiked its benchmark Leliq rate by 950 bp yesterday to 69.5%. It had delivered an 800 bp hike two weeks again. Argentina's inflation reached 71% last month. The Argentine peso is off nearly 23.5% so far this year, second only to the Turkish lira (~-26%). The US dollar fell slightly below CAD1.2730 yesterday, its lowest level since mid-June. The slippage in the S&P 500 and NASDAQ helped it recover to around CAD1.2775. It has not risen above that today, encouraged perhaps by the firmer US futures. Although the 200-day moving average (~CAD1.2745) is a good mile marker, the next important chart is CAD1.2700-CAD1.2720. A convincing break would target CAD1.2650 initially and then CAD1.2600. While the Canadian dollar has gained almost 1.4% against the US dollar this week (around CAD1.2755), the Mexican peso is up nearly 2.4%. The greenback is pressing against support in the MXN19.90 area. A break targets the late June lows near MXN19.82. The MXN20.00 area provides the nearby cap.       Disclaimer   Source: Heading into the Weekend, Dollar's Downside Momentum Stalls
Central Banks' Rates Outlook: Fed Treads Cautiously, ECB Prepares for Hike

Large Chinese Gas Companies Delisting Their American Stocks! What Is Going To Happen?

Saxo Bank Saxo Bank 16.08.2022 08:50
Summary:  PetroChina, Sinopec, Sinopec Shanghai Petrochemical, Chalco and China Life Insurance notified the New York Stock Exchange on 12 Aug 2022 of their intended application for voluntary delisting of their American depository shares and terminating the relevant ADR programs. The question now is if this is an example set for mega-cap Chinese internet and platform companies to follow. Five Chinese Central State-Owned Enterprises (“Central SOEs”) apply for delisting from the New York Stock Exchange   On August 12, 2022, after the close of the regular session of the Stock Exchange of Hong Kong, PetroChina (00857:xhkg/PTR:xnys), China Petroleum & Chemical Corporation, also known as Sinopec (00386:xhkg/SNP:xnys), Sinopec Shanghai Petrochemical (00338:xhkg/SHI:xnys), Aluminum Corporation of China, also known as Chalco (02600:xhkg/ACH:xnys), and China Life Insurance (02628:xhkg/LFC:xnys) announced that they had notified the New York Stock Exchange (“NYSE”) that they are will apply for delisting of their American depository shares (“ADSs”) from the NYSE. It is expected that the American Depository Receipt (“ADR”) programs will be terminated between September 1 and October 16, 2022, and the ADSs issued under these ADR programs can be surrendered for their underlying H shares, which will continue to trade in the Stock Exchange of Hong Kong (“SEHK”). PetroChina, Sinopec, Sinopec Shanghai Petrochemical and Chalco are Central SOEs that are owned (80.4%, 68.8%, 32.2%, and 50.4% respectively) and controlled by the State-owned Assets Supervision and Administration Commission of the State Council (“SASAC”).  These, together with 93 others that are also owned and controlled by the SASAC are known as Central SOEs or “Yang Qi” in Chinese.  China Life Insurance, not one of those under the SASAC, is not a Central SOE in the strict sense but it is usually considered a Central SOE due to the fact that it is 62.4% owned and controlled by the Ministry of Finance.  All five companies are on the U.S. Securities and Exchange Commission’s (“SEC”) conclusive list of identified entities under the HFCAA    In the U.S., the Sarbanes-Oxley Act enacted in 2002 requires publicly traded companies to give the U.S. Public Company Accounting Oversight Board (“PCAOB”) access to audit work papers. In 2009, the China Securities Regulatory Commission (“CSRC”) issued a rule that forbids overseas regulatory authorities from inspecting Chinese auditing firms without CSRC’s prior approval and audit work papers containing state secretes from being taken outside China.  The PCAOB’s attempt to inspect the China-based affiliates of the “Big”-4” accounting firms in 2010 was rejected by the CSRC.  The SEC subsequently prosecuted these China affiliates of the Big-4 and the cases were subsequently settled. In order to tighten the enforcement of the audit work papers requirement provided in the Sarbanes-Oxley Act, the U.S. enacted the Holding Foreign Companies Accountable Act (“HFCAA”) in 2020 which provides that companies failing to make available audit work papers for inspection by the PCAOB cannot be traded in a U.S. exchange.  Since March 2022, the SEC has put 162 Chinese companies listed in a U.S. bourse first on a provisional list and then 155 of them subsequently on a conclusive list of issuers identified under the HFCAA. After rounds of negotiations, the U.S. and China have so far not been able to come to some resolutions.  While the Chinese authorities have sounded optimistic, especially earlier in April and May, about eventually reaching an agreement with the U.S., SEC Chairman Gary Gensler has expressed doubts about any eventual agreement.PetroChina, Sinopec, Sinopec Shanghai Petrochemical, Chalco, and China Life Insurance are among those on the conclusive list and facing the plausibility of being delisted by the U.S. regulators from the NYSE.  The deadline for delisting is in 2024 but the U.S. Congress is considering passing a bill to bring the deadline forward to 2023.  Actions were seemingly in concert  Each of the five companies notified the NYSE on the same day, August 12, and provided similar reasons for their decisions in their filing with the SEHK, namely relatively small capitalization of H shares being represented by ADSs, small ADS trading volume compared to the turnover of H shares and administrative burden for performing reporting and disclosure. The China Securities Regulatory Commission (“CSRC”) said on Friday that the delisting decision had been made out of these companies’ own business decisions. Nonetheless, given the identical timing, similar reasons provided and status of Central SOEs, one has to wonder if they were acting in concert with coordination from the Chinese authorities.  The other two Central SOEs controlled by the SACAC and on the SEC conclusive list, China Eastern Airlines (00670:xhkg/CEA:xnys) and China Southern Airlines (01055:xhkg/ZNH:xnys) will probably apply for ADS delisting soon as well.  Chinese internet and platform companies are the focus in the coming weeks  While these Central SOEs are thinly traded on the NYSE, the shares of Chinese internet and platform private enterprises, including Alibaba (09988:xhkg/BABA:xnys), Baidu (09888:xhkg/BIDU:xnas), Bilibili (09626:xhkg/BILI:xnas), JD.COM (09618:xhkg/JD:xnas), Pinduoduo (PDD:xnas), Sohu (SOHU:xnas), iQiyi (IQ:xnas), KE Holdings (BEKE:xnys), Weibo (09898:xhkg/WB:xnas), Tencent Music Entertainment (TME:xnys) are widely held and actively traded on the NYSE or Nasdaq.  For examples, Bilibili and Weibo have larger average daily turnover in Nasdaq than in the SEHK and Pinduoduo, iQiyi, KE Holdings, Sohu and are listed only on Nasdaq and Tencent Music on the NYSE.  Alibaba is on the provisional list and the other names above are on the conclusive list of issuers identified under the HFCAA. All of them will be subject to mandatory delisting from the NYSE or Nasdaq if the Chinese and U.S. regulators cannot reach an agreement to resolve the audit work paper inspection issue in the coming months.  Given these internet and platform companies hold a huge amount of potentially sensitive data of hundreds of millions of Chinese individuals as well as numerous private as well as public enterprises and institutions, the plausibility of the Chinese government being willing to make a concession to the SEC and PCAOB regarding the latter’s unfiltered access to audit work papers of these companies is getting increasingly slim in the midst of pervasive Sino-American strategic competition.  Through the voluntary delisting of nstitutional money which is restricted by their investment mandates and retail investors who tend to have a home bias will unload their holdings instead of exchanging their ADSs for H shares.  In the case of those companies that do not yet have a listing in the SEHK, the uncertainty and disruption will be even more significant.  The southbound stock connect flows of money from mainland investors may mitigate somewhat the impact but some turbulence initially can probably be expected.   Source: China Update: State-owned giants seek to delist from the New York Stock Exchange
The Commodity Sector Has Dropped Significantly

People Are Buying Gold. SIlver And Copper Stopped? Crude Oil Weakness

Ole Hansen Ole Hansen 16.08.2022 09:23
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to August 9. A relatively quiet week where a continued improvement in risk appetite drove stocks higher while softening the dollar. Some commodity positions, with crude oil the major exceptions, showed signs of having reached a trough following weeks of heavy selling Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to August 9. A relatively quiet summer holiday impacted week where stocks traded higher ahead of last week’s CPI and PPI print after better than expected economic data helped reduce US recession fears while the market was looking for inflation to roll over. The dollar traded a tad softer, bond yields firmed up while commodities showed signs of having reached a trough following weeks of heavy selling.    Commodities Hedge funds were net buyers for a second week with demand concentrated in metals and agriculture while the energy sector saw continued selling. Overall the net long across 24 major commodity futures rose for a second week after recently hitting a two-year low. Buying was concentrated in gold, platinum, corn and livestock with crude oil and wheat being to most notable contracts seeing net selling. Energy: Speculators responded to continued crude oil weakness by cutting bullish bets in WTI and Brent crude by a combined 14% to a pre-Covid low at 304.5k lots. The reductions were primarily driven by long liquidation in both contracts following a demand fear driven breakdown in prices. Gas oil and gasoline longs were also reduced. Metals: Buying of metals extended to a second week led by gold which saw a 90% jump in the net long to 58.2k lots. Overall, net short positions were maintained in silver, platinum and copper with the latter seing a small amount of fresh selling due to profit taking on recently established longs. Agriculture: Grains were mixed with corn and soybeans seeing continued buying ahead of Friday's WASDE  report while the CBOT corn net short jumped 36% to 20k lotsand the Kansas net long was cut to a two-year low. The total grain long rose for second week having stabilised around 300k lots having collapse from a near record 800k lot on April 22.Soft commodities saw elevated short positions in sugar and cocoa being maintained with price gains in coffee and not least cotton supporting a small increase in their respective net longs. This before Friday's surge in cotton which left it up 13% on the week after the US Department of Agriculture slashed the US crop forecast by 19% to a 12-year low. Driven by a high level of abandonment of fields in the drought-stricken Southwest.      Forex In the week to August 9 when the dollar traded close to unchanged against a basket of major currencies, speculators increased to three the number of weeks of continued dollar selling. The pace of selling even accelerated to the highest since January after the gross long against ten IMM futures and the Dollar Index was slashed by 20% to $17.4 billion, a nine week low. Most notable selling of the greenback was seen against GBP and JPY followed by EUR and CHF. The Japanese yen, under pressure for months as yield differentials to the dollar widened saw its net short being cut by 22% to a 17-month low.     What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming  Source: COT: Speculators cut oil long to pre-covid low
China: PMI positively surprises the market

Hurtful News For Chinese Economy... Is China Able To Get Up? US Use The Situation

Saxo Strategy Team Saxo Strategy Team 16.08.2022 09:40
Summary:  The weaker-than-expected economic data from China caught much of the attention and dragged U.S. bond yields and commodities lower. U.S. equities have been in a 4-week rally. Investors are weighing if the U.S. economy is heading into a soft-landing or a recession and if the Chinese economy can recover in the coming months. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities opened lower on weak economic data prints from China as well as a weaker-than-expected Empire State manufacturing survey but climbed towards midday and finished higher. S&P 500 rose 0.4%. Nine of its 11 sectors gained, with shares of consumer staples and utilities outperforming. Nasdaq 100 rose 0.75%, led by a 3% jump in Tesla (TSLA:xnas).  U.S. treasury yields fell Treasury yields fell across the front end to the belly of the curve after a bunch of weak economic data from China and the Empire State manufacturing survey came in at -31.3, much weaker than 5.0 expected. Two-year yields fell by 7bps to 3.17% and 10-year yields declined 5bps to 2.78%.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland Chinese equities tried to move higher in early trading but soon reversed and turned south, Hang Seng -0.7%, CSI300 -0.1%.   The People’s Bank of China cut its policy on Monday but the unexpected move did not stir up much market excitement. The visit of another delegation of US lawmakers to Taiwan within 12 days of Speaker Pelosi’s visit stirred up concerns about the tension in the Sino-American relationship.   Container liner, Orient Overseas (00316:xhkg) plunged nearly 15%.   Stocks that have a dual listing of ADRs, in general, declined on Monday’s trading in Hong Kong following Friday’s decisions for five central SOEs to apply for delisting from the New York Stock Exchange, PetroChina (00857:xhkg/PTR:xnys) -3.4%, Sinopec (00386:xhkg/SNP:xnys) -2.9%, Alibaba (09988:xhkg/BABA:xnys) -1.2, Baidu (09888:xhkg/BIDU:xnas) -1%, Bilibili (09626:xhkg/BILI:xnas) -1%. SMIC (00981:xhkg) dropped more than 6% on analyst downgrades.  Chinese property names dropped as home prices continued to fall in China.  USD broadly firmer against G10 FX, expect JPY The US dollar started the week on the front foot, amid a weaker risk sentiment following a miss in China’s activity data and the disappointing US manufacturing and housing sentiments. The only outlier was the JPY, with USDJPY sliding to lows of 132.56 at one point before reversing the drop. The 131.50 level remains a key area of support for USDJPY and a bigger move in the US yields remains necessary to pierce through that level. The commodity currencies were the hardest hit, with AUDUSD getting in close sight of 0.7000 ahead of the RBA minutes due this morning. NZDUSD also plunged from 0.6450 to 0.6356. The Chinese yuan weakened and bond yields fell after disappointing economic data and surprising rate cuts USDCNH jumped more than 1% from 6.7380 to as high as 6.8200 on Monday following the weak credit data from last Friday, disappointing industrial production, retail sales, and fixed assets investment data released on Monday morning, and unexpected rate cuts by the People’s Bank of China. The 10-year Chinese government bond yield fell 8bps to 2.67%, the lowest level since April 2020, and about 20bps below the yield of 10-year U.S. treasury notes. Crude oil prices (CLU2 & LCOV2) Crude oil prices had a variety of headwinds to deal with both on the demand and the supply side. While demand concerns were aggravated due to the weak China data, and the drop in US Empire State manufacturing – both signaling a global economic slowdown may be in the cards – supply was also seen as being possibly ramped up. There were signs of a potential breakthrough in talks with Iran as Tehran said it sent a reply to the EU's draft nuclear deal and expects a response within two days. Meanwhile, Aramco is also reportedly ramping up production. WTI futures dropped back below $90 while Brent touched $95/barrel. Metals face the biggest brunt of China data weakness Copper led the metals pack lower after China’s domestic activity weakened in July, which has raised the fears of a global economic slowdown as the zero-Covid policy is maintained. Meanwhile, supply side issues in Europe also cannot be ignored with surging power prices putting economic pressure on smelters, and many of them running at a loss. This could see further cuts to capacity over the coming months. Iron ore futures were also down. What to consider? Weak Empire State manufacturing survey and NAHB Index Although a niche measure, the United States NY Empire State Manufacturing Index, compiled by the New York Federal Reserve, fell to -31.3 from 11.1 in July, its lowest level since May 2020 and its sharpest monthly drop since the early days of the pandemic. New orders and shipments plunged, and unfilled orders also declined, albeit less sharply. Other key areas of concern were the rise in inventories and a decline in average hours worked. This further weighed on the sentiment after weak China data had already cast concerns of a global growth slowdown earlier. Meanwhile, the US NAHB housing market index also saw its eighth consecutive monthly decline as it slid 6 points to 49 in August. July housing starts and building permits are scheduled to be reported later today, and these will likely continue to signal a cooling demand amid the rising mortgage rates as well as overbuilding. European power price soared to record high European power prices continue to surge to fresh record highs amid gas flow vagaries, threatening a deeper plunge into recession. Next-year electricity rates in Germany advanced as much as 3.7% to 477.50 euros ($487) a megawatt-hour on the European Energy Exchange AG. That’s almost six times as much as this time last year, with the price doubling in the past two months alone. UK power prices were also seen touching record highs. European Dutch TTF natural gas futures were up over 6%, suggesting more pain ahead for European utility companies. China’s activity data China’s July industrial production (3.8% YoY vs consensus 4.3% & June 3.9%), retail sales (2.7% YoY vs consensus 4.9% & June 3.1%), and fixed asset investments (5.7% YTD vs consensus 6.2% & June 6.1%) released this more were weak across the board.  Property investment growth dropped to -6.4% YTD or -12.3% YoY in July, well below market expectations of -5.7% YTD.  Surprising rate cuts from the PBOC met with muted market reactions The People’s Bank of China cut its policy 1-year Medium-term Lending Facility Rate by 10bps to 2.75% from 2.85% and the 7-day reverse repo rate by 10bps to 2.0% from 2.1%.  Market reactions to the surprising move were muted as credit demand, as reflected in the aggregate financing and loan growth data was weak in China. BHP ‘s FY22 results better than expected The Australian mining giant reported FY22 results beating analyst estimates with strong EBITDA and EBITDA margin. Coal segment performance was ahead of expectations while results from the copper and iron ore segments were slightly below expectations.  The company announced a larger-than-expected dividend payout and a higher capex plan for 2023. RBA minutes due to be released this morning Earlier in the month, the Reserve Bank of Australia (RBA) raised the cash rate by 50bps to 1.85% and the accompanying Statement on Monetary Policy emphasized an uncertain and data-dependent outlook. The RBA releases its minutes from the July meeting today, and the market focus will be on the range of options discussed for the August hike and any hint of future interest rate path.  US retailer earnings eyed After disappointing results last quarter, focus is on Walmart and Home Depot earnings later today. These will put the focus entirely on the US consumer after the jobs data this month highlighted a still-tight labor market while the inflation picture saw price pressures may have peaked. It would also be interesting to look at the inventory situation at these retailers, and any updated reports on the status of the global supply chains.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: APAC Daily Digest: What is happening in markets and what to consider next – August 16, 2022
Saxo Bank Podcast: The Upcoming Bank Of Japan Meeting, A Look At Crude Oil, Copper And More

Japanese Yen (JPY) Rise. Energy Prices Are Finally Falling!?

John Hardy John Hardy 16.08.2022 10:05
Summary:  Weak data out of China overnight, together with a surprise rate cut from the PBOC and collapsing energy prices later on Monday saw the Japanese yen surging higher across the board. Indeed, the two key factors behind its descent to multi-decade lows earlier this year, rising yields and surging energy prices, have eased considerably since mid-June with only modest reaction from the yen thus far. Is that about to change? FX Trading focus: JPY finding sudden support on new disinflation narrative Weaker than expected Chinese data overnight brought a surprise rate cut from the Chinese central bank and seems to have sparked a broadening sell-off in commodities, which was boosted later by a crude oil drop of some five dollars per barrel on the news that Iran will decide by midnight tonight on whether to accept a new draft on the nuclear deal forward by the Euro zone. In response, the Chinese yuan has weakened toward the highs for the cycle in USDCNH, trading 6.78+ as of this writing and  (there was a spike high to 6.381 back in May but the exchange rate has been capped by 6.80 since then), but the Japanese yen is stealing the volatility and strength crown, surging sharply across the board and following up on the move lower inspired by the soft US CPI data point. US long yields easing considerably lower after an odd spike last Thursday are a further wind at the JPY’s back here. In the bigger picture, it has been rather remarkable that the firm retreat in global long-date yields since the mid-June peak and the oil price backing down a full 25% and more from the cycle highs didn’t do more to support the yen from the yield-spread angle (Bank of Japan’s YCC policy less toxic as yields fall) and from the current account angle for Japan. Interestingly, while the JPY has surged and taken USDJPY down several notches, the US dollar is rather firm elsewhere, with the focus more on selling pro-cyclical and commodity currencies on the possible implication that China may be content to export deflation by weakening its currency now that commodity prices have come down rather than on selling the US dollar due to any marking down of Fed expectations. Still, while the USD may remain a safe haven should JPY volatility be set to run amok across markets, the focus is far more on the latter as long as USDJPY is falling Chart: EURJPY As the JPY surges here, EURJPY is falling sharply again, largely tracking the trajectory of longer European sovereign yields, which never really rose much from their recent lows from a couple of weeks back, making it tough to understand the solid rally back above 138.00 of late. After peaking above 1.90% briefly in June, the German 10-year Bund, for example, is trading about 100 basis points lower and is not far from the cycle low daily close at 77 basis points. The EURJPY chart features a rather significant pivot area at 133.50, a prior major high back in late 2021 and the recent low and 200-day moving average back at the beginning of the month. After a brief JPY volatility scare in late July and into early August that faded, are we set for a second and bigger round here that takes USDJPY down through 130.00 and EURJPY likewise? A more significant rally in long US treasuries might be required to bring about a real JPY rampage. Source: Saxo Group The focus on weak Chinese data and key commodity prices like copper suddenly losing altitude after their recent rally has the Aussie shifting to the defensive just after it was showing strength late last week in sympathy with strong risk sentiment and those higher commodity prices. Is the AUDUSD break above 0.7000-25 set for a high octane reversal here? AUDJPY is worth a look as well after it managed to surge all the way back toward the top of the range before. The idea that a weak Chine might export deflation from here might be unsettling for Aussie bulls. The US macro data focus for the week is on today’s NAHB homebuilder’s survey, which plunged to a low since 2015 in June (not including the chaotic early 2020 pandemic breakout months), the July Housing Starts and Building Permits and then the July Retail Sales and FOMC minutes on Wednesday. With a massive relief in gasoline prices from the July spike high, it will be interesting to see whether the August US data picks up again on the services side. The preliminary August University of Michigan sentiment survey release on Friday showed expectations rising sharply by over 7 points from the lowest since-1980 lows of June, while the Present Situation measure dropped a few points back toward the cycle (and record) lows from May. Table: FX Board of G10 and CNH trend evolution and strength. The JPY is the real story today, but as our trending measures employ some averaging/smoothing, the move will need to stick what it has achieved today to show more. Watch out for a big shift in the commodity currencies in coming days as well if today’s move is the start of something. Elsewhere, the JPY comeback is merely taking CHF from strength to strength, although even the might franc has dropped against the JPY today. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs. Big momentum shift afoot today and watching whether this holds and the JPY pairs and pairs like AUDUSD and USDCAD to see if we are witnessing a major momentum shift in themes here. Also note NOK pairs like USDNOK and EURNOK here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1400 – US Aug. NAHB Housing Market Index 0130 – Australia RBA Meeting Minutes Source: FX Update: JPY jumps on deflating energy prices, fresh retreat in yields.
Could Apple Stock Price Plunge To $118!? What's Possibly Ahead Of APPL?

Could Apple Stock Price Plunge To $118!? What's Possibly Ahead Of APPL?

Jing Ren Jing Ren 16.08.2022 10:22
The current structure of AAPL shares suggests the development of the primary fifth wave, taking the form of an ending diagonal (1)-(2)-(3)-(4)-(5) of the intermediate degree. The wave ⑤ is the last part in the large cycle impulse a. Most likely, the market has completed the construction of an intermediate correction (4) in the form of a minor triple zigzag W-X-Y-X-Z. Thus, in the near future, the price may start moving in the opposite direction, that is, upwards, in the intermediate wave (5). It is assumed that wave (5) will take the form of a standard zigzag A-B-C, as shown on the chart, where wave A is a minute impulse. It is possible that the bulls in wave (5) will go to 189.54. At that level, wave (5) will be equal to wave (3). Let's look at the second option, where the entire cycle wave a ended at the beginning of this year. Thus, at the time of writing the review, we see a downward corrective movement of the stock price in a cycle wave b, which can take the form of a double zigzag Ⓦ-Ⓧ-Ⓨ of the primary degree. It seems that the first two primary sub-waves Ⓦ-Ⓧ have already been formed. There is a high probability that the bears in the final sub-wave, in the form of an intermediate simple zigzag, will be able to bring the market near 118.80. At that level, primary wave Ⓨ will be at 100% of wave Ⓦ.
Saxo Bank Podcast: Natural Gas On Colder Weather, Wheat And Coffee Under Pressure, JPY Weaker And More

Natgas Fought Back And Now Have A Solid Position! Iron And Copper Are Out Of Fashion!?

Marc Chandler Marc Chandler 16.08.2022 14:19
Overview: After retreating most of last week, the US dollar has extended yesterday’s gains today. The Canadian dollar is the most resilient, while the New Zealand dollar is leading the decline with a nearly 0.75% drop ahead of the central bank decision first thing tomorrow. The RBNZ is expected to deliver its fourth consecutive 50 bp hike. Most emerging market currencies are lower as well, led by central Europe. Equities in Asia Pacific and Europe are mostly higher today. Japan and Hong Kong were exceptions, and China was mixed with small gains in Shanghai and Shenzhen composites, but the CSI 300 slipped. Europe’s Stoxx 600 is stretching its advance for the fifth consecutive session. It is at two-month highs. US futures are softer. The US 10-year yield is slightly firmer near 2.80%, while European benchmark yields are mostly 2-4 bp higher, but Italian bonds are under more pressure and the yield is back above the 3% threshold. Gold is softer after being repulsed from the $1800 area to test $1773-$1775. A break could signal a test on the 20-day moving average near $1761. October WTI tested last week’s lows yesterday near $86 a barrel on the back of the poor Chinese data. It is straddling the 200-day moving average (~$87.95). The market is also watching what seems like the final negotiations with Iran, where a deal could also boost supply. US natgas prices are more than recouping the past two days of losses and looks set to challenge the $9 level. Europe’s benchmark leapt 11.7% yesterday and is up another 0.5% today. Iron ore has yet to a base after falling more than 5.5% in the past two sessions. It fell almost 0.65% today. September copper has fallen by almost 2.5% over the past two sessions and is steady today. Lastly, September wheat is slipping back below $8 a bushel and is trading heavily for the third consecutive session. Asia Pacific Japan's 2.2% annualized growth in Q2 does not stand in the way of a new government support package  Prime Minister Kishida has been reportedly planning new measures and has instructed the cabinet to pull it together by early next month. He wants to cushion the blow of higher energy and food prices. An extension of the subsidy to wholesalers to keep down the gasoline and kerosene prices looks likely. Kishida wants to head off a surge in wheat prices. Without a commitment to maintain current import prices of wheat that is sold to millers, the price could jump 20% in October, according to reports. Separately, and more controversially, Kishida is pushing for the re-opening of nine nuclear plants that have passed their safety protocols, which have been shut since the 2011 Fukushima accident.  The minutes from the Reserve Bank of Australia's meeting earlier this month signaled additional rate hikes will be forthcoming  After three half--point hikes, it says that the pace going forward will be determined by inflation expectations and the evolving economic conditions. The minutes noted that consumer spending is an element of uncertainty given the higher inflation and interest rates. Earlier today, the CBA's household spending report shows a 1.1% jump month-over-month in July and a 0.6% increase in June. The RBA wants to bring the cash target rate to neutral (~2.50%). The target rate is currently at 1.85% and the cash rate futures is pricing in about a 40% chance of a 50 bp hike at the next RBA meeting on September 6. It peaked near 60% last week. On Thursday, Australia reports July employment. Australia grew 88.4k jobs in June, of which almost 53k were full-time positions. The median forecast in Bloomberg's survey envisions a 25k increase of jobs in July.  The offshore yuan slumped 1.15% yesterday  It was the biggest drop since August 2019 and was sparked by the unexpected cut in rates after a series of disappointing economic data. The US dollar reached almost CNH6.82 yesterday, its highest level in three months. It has steadied today but remains firm in the CNH6.7925-CNH6.8190 range. China's 10-year yield is still under pressure. It finished last week quietly near 2.74% and yesterday fell to 2.66% and today 2.63%. It is the lowest since May 2020. As we have noted, the dollar-yen exchange rate seems to be more sensitive to the US 2-year yield (more anchored to Fed policy) than the 10-year yield (more about growth and inflation)  The dollar is trading near four-day highs against the yen as the two-year yield trades firmer near 3.20%. Initial resistance has been encountered in Europe near JPY134.00. Above there, the JPY134.60 may offer the next cap. Support now is seen around JPY133.20-40. The Australian dollar extended yesterday's decline and slipped through the $0.7000-level where A$440 mln in options expire today. It also corresponds with a (50%) retracement of the run-up form the mid-July low (~$0.6680). The next area of support is seen in the $0.6970-80 area. The greenback rose 0.45% against the onshore yuan yesterday after gapping higher. Today it gapped higher again and rose to almost CNY6.7975, its highest level since mid-May. It reached a high then near CNY6.8125. The PBOC set the dollar's reference rate at CNY6.7730, slightly less than the median in Bloomberg's survey (CNY6.7736). The takeaway is the central bank did not seem to protest the weakness of the yuan. Europe The euro has been sold to a new seven-year low against the euro near CHF0.9600 The euro has been sold in eight of the nine weeks since the Swiss National Bank hiked its policy rate by 50 bp on June 16. Half of those weekly decline were 1% or larger. The euro has fallen around 7.4% against the franc since the hike. Swiss domestic sight deposit fell for 10 of 11 weeks through the end of July as the SNB did not appear to be intervening. However, in the last two weeks, as the franc continued to strengthen, the Swiss sight deposits have risen, and recorded their first back-to-back increase in four months. This is consistent with modest intervention. The UK added 160k jobs in Q2, almost half of the jobs gain in the three months through May, illustrating the fading momentum  Still, some 73k were added to the payrolls in July, well above expectations. In the three months through July, job vacancies in the UK fell (~19.8k) for the first time in nearly two years. Average weekly earnings, including bonuses, rose 5.1% in Q2. The median forecast was for a 4.5% increase. Yet, real pay, excluding bonuses and adjusted for inflation slid 3% in the April-June period, the most since at least 2001. The ILO measure of unemployment in Q2 was unchanged at 3.8%. The Bank of England warns it will rise to over 6%. The market still favors a 50 bp hike next month. The swaps market has it at a little better than an 80% probability. The euro is extending its retreat  It peaked last week, near $1.0365 and tested this month's low near $1.0125 in the European morning. The intraday momentum indicators are stretched, and that market does not appear to have the drive to challenge the 1.2 bln euros in options struck at $1.0075 that expire today. With yesterday's loss, the euro met the (50%) retracement objective of the bounce off the mid-July 22-year low (~$0.9950). The next retracement objective (61.8%) is near $1.0110. Nearby resistance may be met near $1.0160-70. Sterling has been sold for the fourth consecutive session. It approached the $1.20-level, which may be the neckline of a double top. If violated it could signal a return to the low seen in mid-July around $1.1760. Sterling is holding in better than the euro now. The cross peaked before the weekend in front of GBP0.8500 and is approaching GBP0.8400 today. A break would look ominous and could spur a return to the GBP0.8340 area. America The Empire State manufacturing survey and the manufacturing PMI line up well  Both bottomed in April 2020 and peaked in July 2021. The outsized decline in the August Empire State survey points to the downside risks of next week's preliminary August manufacturing PMI. Recall that the July manufacturing PMI fell to 52.2, its third consecutive decline and the lowest reading since July 2020. There was little good in the Empire survey. Orders and shipments fell dramatically. Employment was also soft. Prices paid softened to the lowest this year, but prices received edged higher. The US reports housing start and permits and industrial output today The housing market continues to slow from elevated levels. Housing starts are expected to have fallen 2% in July, matching the June decline. It would be the third consecutive decline, and the longest declining streak since 2018. Still, in terms of the absolute level of activity, anything above 1.5 mln units must still be regarded as strong. They stood at almost 1.56 mln in June. Permits fell by 10% in April-May before stabilizing in June. The median forecast in Bloomberg's survey projects a 3.3% decline. Permits were running at 1.685 mln in June. From April 2007 through September 2019, permits held below 1.5 mln. The industrial production report may attract more attention Output fell in June (-0.2%) for the first time this year, and even with it, industrial product has risen on average by 0.4% a month in H1 22, slightly above the pace seen in H1 21. Helped by manufacturing and utility output, industrial production is expected to rise by around 0.3%. In the last cycle, capacity use spent four months (August-November 2018) above 80%. It had not been above 80% since the run-up to the Great Financial Crisis when it spent December 2006 through March 2008 above the threshold and peaked slightly above 81.0%. Last month was likely the fourth month in this cycle above the 80% capacity use rate. Note that the Atlanta Fed's GDPNow tracker will be updated later today. The update from August 10 put Q3 GDP at 2.5%. Housing starts in Canada likely slow last month, which would be the first back-to-back decline this year  The median forecast (Bloomberg's survey) calls for a 3.6% decline after an 8.4% fall in June. Still, the expected pace of 264k is still 10% higher since the end of last year. On Monday, Canada reported that July existing home sales fell by 5.3%, the fifth consecutive decline. They have fallen by more than a third since February. Canada also reports its monthly portfolios. Through May, Canada has experienced C$98.5 bln net portfolio inflows, almost double the pace seen in the first five months last year. However, the most important report today is the July CPI. A 0.1% increase, which is the median forecast in Bloomberg's survey would be the smallest of the year and the year-over-year pace to eased to 7.6% from 8.1%. If so, it is the first decline since June 2021. Similar with what the US reported, the core measures are likely to prove sticky. After the employment data on August 5, the swaps market was still leaning in favor a 75 bp hike at the September 7 meeting (64%). However, since the US CPI report, it has been hovering around a 40% chance. While the US S&P 500 rose reached almost four-month highs yesterday, the Canadian dollar found little consolation  It held in better than the other dollar-bloc currencies and Scandis, but it still suffered its biggest decline in about a month yesterday. The greenback reached almost CAD1.2935 yesterday and is consolidating in a narrow range today above CAD1.2890. The next important chart point is near CAD1.2975-85 and the CAD1.3050. After testing the MXN20.00 level yesterday, the US dollar was sold marginally through last week's low (~MXN19.8150). It is consolidating today and has not been above MXN19.8850. It has come a long way from the month's high set on August 3 near MXN20.8335. The greenback's downside momentum seems to have eased as it stalls in front of MXN19.81 for the third consecutive session.     Disclaimer   Source: Greenback Remains Firm
USA: People Are Not Interested In Buying New Houses! Equities Are Still Trading High As The Hopes For Iran Nuclear Deal Are Still Alive

USA: People Are Not Interested In Buying New Houses! Equities Are Still Trading High As The Hopes For Iran Nuclear Deal Are Still Alive

Saxo Strategy Team Saxo Strategy Team 16.08.2022 14:00
Summary:  Equities traded higher still yesterday as treasury yields fell further back into the recent range and on hopes that an Iran nuclear deal will cement yesterday’s steep drop in oil prices. The latest data out of the US was certainly nothing to celebrate as the July US Homebuilder survey showed a further sharp drop in new housing interest and a collapse in the first regional US manufacturing survey for August, the New York Fed’s Empire Manufacturing.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their gains yesterday getting closer to the 200-day moving average sitting around the 4,322 level. The US 10-year yield seems well anchored below 3% and financial conditions indicate that S&P 500 futures could in theory trade around 4,350. The news flow is light but earnings from Walmart later today could impact US equities should the largest US retailer lower their outlook for the US consumer. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hong Kong and mainland Chinese equities were mixed. CSI300 was flat, with electric equipment, wind power, solar and auto names gained. Hang Seng Index declined 0.5%. Energy stocks fell on lower oil price. Technology names were weak overall, Hang Seng TECH Index (HSTECH.I) declined 0.9%. Sunny Optical (02382:xhkg) reported worse than expected 1H22 results, revenues -14.4% YoY, net profits -49.5%, citing weakening component demand from the smartphone industry globally. The company’s gross margin plunged to 20.8% from 24.9%. Li Auto’s (02015:xhkg/LI:xnas) Q2 results were in line with expectations but Q3 guidance disappointed. The launch L9 seems cannibalizing Li ONE sales. USD: strength despite weak US data and falling treasury yields and strong risk sentiment Yesterday, the JPY tried to make hay on China cutting rates and as global yields eased back lower, with crude oil marked several dollars lower on hopes for an Iran nuclear deal. But the move didn’t stick well in USDJPY, which shrugged off these developments as the USD firmed further across the board, despite treasury yields easing lower, weak data and still strong risk sentiment/easy financial conditions. A strong US dollar is in and of itself is a tightening of financial conditions, however, and yesterday’s action has cemented a bullish reversal in some pairs, especially EURUSD and GBPUSD, where the next important levels pointing to a test of the cycle lows are 1.0100 and 1.2000, respectively. Elsewhere, USDJPY remains in limbo (strong surge above 135.00 needed to suggest upside threat), USDCAD has posted a bullish reversal but needs 1.3000 for confirmation, and AUDUSD is teetering, but needs a close back below 0.7000 to suggest a resurgent US dollar and perhaps widening concerns that a Chinese recession will temper interest in the Aussie. Crude oil Crude oil (CLU2 & LCOV2) trades lower following Monday’s sharp drop that was driven by a combination softer economic data from China and the US, the world’s top consumers of oil, and after Iran signaled a nuclear deal could be reached soon, raising the prospect of more Iranian crude reaching the market. The latest developments potentially reducing demand while adding supply forced recently established longs to bail and short sellers are once again in control. Brent needs to hold support at $93 in order to avoid further weakness towards $90. Focus on Iran news. Copper Copper (COPPERUSSEP22) led the metals pack lower, without breaking any key technical levels to the downside, after China’s domestic activity weakened in July. Meanwhile, supply side issues in Europe also cannot be ignored with surging power prices putting economic pressure on smelters, and many of them running at a loss. HG copper jumped 19% during the past month and yesterday’s setback did not challenge any key support level with the first being around $3.50/lb. BHP, the world’s top miner meanwhile hit record profits while saying that China is likely to offer a “tail wind” to global growth (see below). EU power prices hit record high on continued surge in gas prices ... threatening a deeper plunge into recession. The latest surge being driven by low water levels on Europe’s rivers obstructing the normal passage for diesel, coal, and other fuel products, thereby forcing utilities to use more gas European Dutch TTF benchmark gas futures (TTFMU2) has opened 5% higher at €231/MWh, around 15 times higher than the long-term average, suggesting more pain ahead for European utility companies. Next-year electricity rates in Germany (DEBYF3) closed 3.7% higher to 477.50 euros ($487) a megawatt-hour on the European Energy Exchange AG. That is almost six times as much as this time last year, with the price doubling in the past two months alone. UK power prices were also seen touching record highs. US Treasuries (IEF, TLT) see long-end yields surging. Yields dipped back lower on weak US economic data, including a very weak Empire Manufacturing Survey (more below) and another sharp plunge in the NAHB survey of US home builders, suggesting a rapid slowdown in the housing market. The survey has historically proven a leading indicator on prices as well. The 10-year benchmark dipped back further into the range after threatening to break up higher last week. The choppy range extends down to 2.50% before a drop in yields becomes a more notable development, but tomorrow’s US Retail Sales and FOMC minutes offer the next test of sentiment. What is going on? Weak Empire State manufacturing survey and NAHB Index Although a niche and volatile measure, the United States NY Empire State Manufacturing Index, compiled by the New York Federal Reserve, fell to -31.3 from 11.1 in July, its lowest level since May 2020 and its sharpest monthly drop since the early days of the pandemic. New orders and shipments plunged, and unfilled orders also declined, albeit less sharply. Other key areas of concern were the rise in inventories and a decline in average hours worked. This further weighed on the sentiment after weak China data had already cast concerns of a global growth slowdown earlier. Meanwhile, the US NAHB housing market index also saw its eighth consecutive monthly decline as it slid 6 points to 49 in August. July housing starts and building permits are scheduled to be reported later today, and these will likely continue to signal a cooling demand amid the rising mortgage rates as well as overbuilding. China's CATL plans to build its second battery factory in Europe CATL unveiled plans to build a renewable energy-powered factory for car battery cells and modules in Hungary. It will invest EUR 7.34 billion (USD 7.5bn) on the 100-GWh facility, which will be its second one in Europe. To power the facility CATL will use electricity from renewable energy source, such as solar power. At present, CATL is in the process of commissioning its German battery production plant, which is expected to roll out its first cells and modules by the end of 2022. Disney (DIS) shares rise on activist investor interest Daniel Loeb of Third Point announced a significant new stake in Disney yesterday, helping to send the shares some 2.2% higher in yesterday’s session. The activist investor recommended that the company spin off its ESPN business to reduce debt and take full ownership of the Hulu streaming service, among other moves. Elliott exits SoftBank Group The US activist fund sold its stake in SoftBank earlier this year in a sign that large investors are scaling back on their investments in technology growth companies with long time to break-even. In a recent comment, SoftBank’s founder Masayoshi Son used more cautious words regarding the investment company’s future investments in growth companies. BHP reports its highest ever profit, bolstered by coal BHP posted a record profit of $21.3bn supported by considerable gains in coal, nickel and copper prices during the fiscal year ending 30 June 2022. Profits jumped 26% compared to last year’s result. The biggest driver was a 271% jump in the thermal coal price, and a 43% spike in the nickel price. The world’s biggest miner sees commodity demand improving in 2023, while it also sees China emerging as a source of stable commodity demand in the year ahead. BHP sees supply covering demand in the near-term for copper and nickel. According to the company iron ore will likely remain in surplus through 2023. In an interview Chief Executive Officer Mike Henry said: Long-term outlook for copper, nickel and potash is really strong because of “unstoppable global trends: decarbonization, electrification, population growth, increasing standards of living,” What are we watching next? Australia Q2 Wage Index tonight to determine future RBA rate hike size? The RBA Minutes out overnight showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, tonight sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35 bps move. RBNZ set to decelerate its guidance after another 50 basis point move tonight? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 44 bps for the October meeting after tonight’s 50 bps hike and another 36 bps for the November meeting. US retailer earnings eyed After disappointing results last quarter, focus is on Walmart and Home Depot earnings later today. These will put the focus entirely on the US consumer after the jobs data this month highlighted a still-tight labor market while the inflation picture saw price pressures may have peaked. It would also be interesting to look at the inventory situation at these retailers, and any updated reports on the status of the global supply chains.   Earnings to watch Today’s US earnings focus is Walmart and Home Depot with analysts expecting Walmart to report 7% revenue growth y/y and 8% decline y/y in EPS as the US retailer is facing difficulties passing on rising input costs. Home Depot is expected to report 6% growth y/y in revenue and 10% growth y/y in EPS as the US housing market is still robust driving demand for home improvement products. Sea Ltd, the fast-growing e-commerce and gaming company, is expected to report revenue growth of 30% y/y in Q2 but worsening EBITDA margin at -16.2%. The previous winning company is facing headwinds in its gaming division and cash flow from operations have gone from positive $318mn in Q1 2021 to negative $724mn in Q1 2022. Today: China Telecom, Walmart, Agilent Technologies, Home Depot, Sea Ltd Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Germany Aug. ZEW Survey 0900 – Eurozone Jun. Trade Balance 1200 – Poland Jul. Core CPI 1215 – Canada Jul. Housing Starts 1230 – US Jul. Housing Starts and Building Permits 1230 – Canada Jul. CPI 2030 – API Weekly Report on US Oil Inventories 2350 – Japan Jul. Trade Balance 0130 – Australia Q2 Wage Index 0200 – New Zealand RBNZ Official Cash Rate announcement 0300 – New Zealand RBNZ Governor Orr Press Conference  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – August 16, 2022
Russia's Weekend Mutiny and Gold's Bounce off Support Raise Concerns; Verbal Intervention in USD/JPY and US Banking Stocks Tumble Ahead of Fed's Stress Test Results

Why Is Dollar (USD) So Important To Follow? S&P 500 Index Stumbling Block?

Saxo Bank Saxo Bank 16.08.2022 13:30
Summary:  Today we look at a confusing market backdrop as the US dollar rose across the board despite weak US data and US treasury yields easing lower again. While measures of risk sentiment and financial conditions look very strong here, we need to remember that the US dollar is a financial condition unto itself and one of the most import exchange rates, the USDCNH rate should be on every trader's radar. As well, the US S&P 500 index is pushing up against a major resistance level. Crude oil, copper, earnings reports ahead and more on today pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast  Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: The US dollar is a financial condition, too
Volume Of Crude Oil Rose For The Second Session In A Row

The Cheapest Oil In Six Months!!! How Will It Affect The Global Economics?

Conotoxia Comments Conotoxia Comments 16.08.2022 11:55
The price of WTI crude oil remained below $90 per barrel at the beginning of the week, the level before Russia's attack on Ukraine. Oil today is the cheapest in six months. It seems that the topic of a global economic slowdown or recession and how long it may last may be important for the oil market. Chinese and U.S. economic data seem to show a weaker condition in both economies and thus could affect the decline in oil demand. This, in turn, could put downward pressure on prices. According to published data, factory activity in China declined enough in July to force the central bank to cut lending rates to keep demand from collapsing. In the United States, on the other hand, the market may have been taken by surprise by the second-largest drop in the history of the New York Empire State Manufacturing Index. The above indicators may affect the market from the demand side, but this is only one part of the puzzle. On the supply side, long-awaited changes may be brewing. Once the embargo is lifted, oil from Iran may start flowing into the market again. Iran has responded to the European Union's proposal. It may seek to re-implement the 2015 nuclear agreement. The EU is also calling on the US to show more flexibility in implementing the agreement. Saudi Arabia may also be preparing to increase its oil supply. The chairman of Saudi Aramco, the state-owned oil giant, stated over the weekend that his company is ready to increase production to 12 million barrels per day, the company's current production capacity limit. Only a decision by the Saudi Arabian government is needed to increase production. According to the EIA agency's forecast, the United States can also increase its production. US oil production in the August forecast averages 11.9 million barrels per day (b/d) in 2022. It could rise to 12.7 million b/d in 2023. If this forecast comes true, the US could set a production record next year. The current one is 12.3 million b/d and was set in 2019.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Oil near six-month lows
Walmart And Home Depot Did Better Than Expected. S&P 500 Reaches The 4,3k Level

Walmart And Home Depot Did Better Than Expected. S&P 500 Reaches The 4,3k Level

Saxo Strategy Team Saxo Strategy Team 17.08.2022 08:35
Summary:  S&P500 index broke above the key 4,300 resistance level while the NASDAQ pushed lower amid mixed economic data and better-than-feared earnings from Walmart and Home Depot. US housing data continues to worsen, but the focus now turns to FOMC minutes due later today, as well as the US retail sales which will be next test of the strength of the US consumer. Asia session may have trouble finding a clear direction, but Australia’s wage price index and RBNZ’s rate hike may help to provide some bounce. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities were mixed. Tech names had an initial pullback, followed by short-coverings that narrowed the loss of the Nasdaq 100 to 0.23% at the close. S&P500 edged up 0.19% to 4,305 on better-than-feared results from retailers, moving towards its 200-day moving average (4,326). Walmart (WMT:xnys) and Home Depot (HD:xnys) reported Q2 results beating analyst estimates. Walmart gained 5% on strong same-store sales growth and a deceleration in inventory growth. Home Depot climbed 4% after reporting better than expected EPS and same-store sales but with an acceleration in inventory buildup. The declines in housing starts and building permits released on Monday and the downbeat comments about the U.S. housing market from the management of Compass (COMP:xnys), an online real estate brokerage, highlighted the challenges faced in the housing sector.  Short-end U.S. treasury yields rose as the long-end little changed The bigger than expected increases in July industrial production (+0.6% MoM), manufacturing production (+0.7% MoM), and business equipment production (+0.6%) triggered some selling in the short-end of U.S. treasury curve, pushing the 2-year yield 8 bps higher to 3.25% as 10-year yield edged up 1bp.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) China internet stocks were sold off on Tuesday afternoon after Reuters ran a story suggesting that Tencent (00700:xhkg) plans to divest its 17% stake (USD24 billion) in Meituan (03690:xhkg).  The shares of Meituan collapsed 9% while Tencent gained 0.9%.  After the close of the Hong Kong market, Chinese media, citing sources “close to the matter” suggested that the divesture story is not true. However, the ADRs of Meituan managed to recover only 1.7% in New York trading. The newswire story also triggered selling on Kuaishou (01024:xhkg), -4.4%, which has Tencent as a major investor. The decline in internet stocks dragged the Hang Seng Index 1% lower. On the other hand, Chinese developers soared on another newswire report that state-owned China Bond Insurance is going to provide guarantees to new onshore debts issued by several “high quality” developers, including Country Garden (02007:xhkg) +9%, Longfor (00960:xhkg) +12%, CIFI (00884:xhkg) +12.9%, and Seazen (01030:xhkg) +7.6%.  Shares of Chinese property management services also surged higher.  GBPUSD bounced off the 1.2000 support, NZD eyeing RBNZ A mixed overnight session for FX as the US yields wobbled. Risk sentiment held up with the mixed US data accompanied by a less bad outcome in the US retailer earnings than what was expected. This made the safe-haven yen a clear underperformer, and USDJPY rose back above 134. But a clear trend in the pair is still missing and a break above 135 is needed to reverse the downtrend. Cable got lower to remain in close sight of the 1.2000 big figure, but rose above 1.2100 subsequently. UK CPI report due today may confirm the need for further BOE action after labor data showed wage pressures. NZDUSD remains near lows of 0.6320 but may see a knee-jerk higher if RBNZ surprises on the hawkish side. Crude oil prices (CLU2 & LCOV2) Crude oil prices remain under pressure due to the prospect of Iran nuclear deal, and printed fresh lows since the Ukraine invasion. Some respite was seen in early Asian session, and WTI futures were last seen at $87/barrel and Brent is below $93. The EU submitted a final proposal to salvage the Iran nuclear deal, and prospects of more energy supply are dampening the price momentum. It has been reported that Iran’s response was constructive, and they are now consulting with the US on a way ahead for the protracted talks. The API reported crude inventories fell by 448,000 barrels last week, while gasoline stockpiles increased by more than 4 million barrels. Government data is due later Wednesday. European Dutch TTF benchmark gas futures (TTFMU2) touched €250/MWh, but has cooled off slightly recently, but still signals the heavy price that Europe is paying for the dependence on Russian gas. Copper holding up well despite China slowdown concerns Despite reports of weaker financing and activity data from China earlier this week, Copper remains well supported and registered only modest declines. BHP’s results provided some offset, as did the supply side issues in Europe. Only a break below the key 350 support will turn the focus lower. Meanwhile, zinc rallied amid concerns of smelter closures in Europe. What to consider? US housing scare broadens, industrial production upbeat Housing starts fell 9.6% in July to 1.446 mn, well beneath the prior 1.599 mn and the expected 1.537 mn. Housing starts are now down for five consecutive months, and suggest a cooling housing market in the wake of higher borrowing costs and higher inflation. Meanwhile, building permits declined 1.3% in July to 1.674 mn from 1.696 mn, but printed above the expected 1.65 mn. There will be potentially more scaling back in construction activity as demand weakens and inventory levels rise. On the other hand, industrial production was better than expected at 0.6% m/m (prev: -0.2%) possibly underpinned by holiday demand but the outlook is still murky amid persistent inflation and supply chain issues. US retailer earnings come in better than feared Walmart (WMT:xnys) and Home Depot (HD:xnys) reported better-than-feared results on Tuesday. Walmart’s Q2 revenues came in at USD152.9 billion (+8.4% YoY, consensus USD150.5bn). Same-store sales increased 8.4% YoY (vs consensus +6.0% YoY).  EPS of USD1.77, down 0.8% from a year ago quarter but better than the consensus estimate of USD1.63. While inventories increased 25.5% in Q2, the rate of increase has moderated from the prior quarter’s +32.0%. The company cited falls in gas prices, market share gain in grocery, and back-to-school shopping key reasons behind the strength in sales.  Home Depot reported Q2 revenues of USD43.9 billion (vs consensus USD43.4bn), +6.5% YoY.  Same-store sales grew 5.8%, beating analyst estimates (+4.9%).  EPS rose 11.5% to $5.05, ahead of analyst estimates (USD4.95). However, inventories grew 38% YoY in Q2, which was an acceleration from the prior quarter. The management cited inflation and pulling forward inventory purchases given supply chain challenges as reasons for the larger inventory build-up. Target (TGT:xnys) is scheduled to report on Wednesday. Eyes on US retail sales US retail sales will be next test of the US consumer after less bad retailer earnings last night. Retail sales should have been more resilient given the lower prices at pump improved the spending power of the average American household, and Amazon Prime Day in the month possibly attracted bargain hunters as well. However, consensus expectations are modest at 0.1% m/m compared to last month’s 1.0%. A cooling labor market in the UK UK labor market showed signs of cooling as job vacancies fell for the first time since August 2020 and real wages dropped at the fastest pace in history. Unemployment rate was steady at 3.8%, and the number of people in employment grew by 160,000 in the April-June period as against 256,000 expected. There was also a sprinkle of good news, with the number of employees on payrolls rising 73,000 in July, almost triple the pace expected. Also, wage growth was strong at 4.7% in the June quarter from 4.4% in the three months to May, which may be key for the BOE amid persistent wage pressures. Australia Q2 Wage Index to determine future RBA rate hike size? The RBA Minutes out on Tuesday showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, today sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35bps move. RBNZ set to decelerate its guidance after another 50 basis point move today? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 45bps for the October meeting after today’s 50bps hike and another 37bps for the November meeting. FOMC minutes to be parsed for hints on future Fed moves The Federal Reserve had lifted rates by 75bps to bring the Fed Funds rate at the level that they consider is neutral at the July meeting, but stayed away from providing any forward guidance. Meeting minutes will be out today, and member comments will be watched closely for any hints on the expectation for September rate hike or the terminal Fed rate. The hot jobs report and the cooling inflation number has further confused the markets since the Fed meeting, even as Fed speakers continue to push against any expectations of rate cuts at least in ‘early’ 2023. We only have Kansas City Fed President Esther George (voter in 2022) and Minneapolis Fed President Kashkari (non-voter in 2022) speaking this week at separate events on Thursday, so the bigger focus will remain on Jackson Hole next week for any updated Fed views.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 17, 2022
Online Sales Are Becoming A Part Of Everyday Life. Supermarkets Are Having A Good Time

Online Sales Are Becoming A Part Of Everyday Life. Supermarkets Are Having A Good Time

Conotoxia Comments Conotoxia Comments 17.08.2022 09:15
Home Depot (HD) and Walmart (WMT) are among the largest US retailers whose results seem to show the attitude of the average American consumer towards spending money. HD is a chain of large-format home improvement shops, very similar to Europe's Leroy Merlin. WMT, on the other hand, is the largest US retail chain. Last month, Walmart spooked markets by lowering its profit forecasts and warned of a rapid decline in demand. However, the results announced today said sales were up more than 8% year-on-year to $152.9 billion against expectations of $150.8 billion. Online sales alone rose by as much as 12%. The company is struggling with a gigantic inventory problem (worth $61 billion at the end of Q1), prominent among the backlog of products is apparel, for example. To deal with this, discounts have been introduced on many products, thereby boosting sales by stimulating demand. At present, the value of stock amounts to USD 59.9 billion. However, the increased sales do not translate directly into profits. "The actions we’ve taken to improve inventory levels in the US, along with a heavier mix of sales in grocery, put pressure on the profit margin for Q2 and our outlook for the year," - CEO Doug McMillon said. Walmart's second-quarter net income rose to $5.15bn, or $1.77 per share (EPS) against Wall Street analysts' estimates of $1.62. In the same period a year ago, net income was $4.28bn, or $1.52 per share (EPS). Walmart maintained its forecast for the second half of the year. It expects US shop sales to grow by about 3% (excluding fuel), in the second half of the year, or about 4 per cent for the full year. It expects adjusted earnings per share to decline 9% for the year. Home Depot also announced a 5.8% increase in sales, to 43.8 billion against expectations of $43.36 billion. Net sales were up 6.5% year-over-year, marking the highest quarterly sales in the company's history. "Our team has done a fantastic job serving our customers while continuing to navigate a challenging and dynamic environment," - CEO Ted Decker said, commenting on the company's results. Net income increased to $5.17 billion, up 7.6% year-over-year. EPS was $5.05 against analysts' forecasts of $4.94. Walmart and Home Depot gain 4.7% and 1.9%, respectively, on the market open. The retailers' results show that, despite the looming recession, consumers are spending money and the situation could be not that bad in the short term. However, at the same time, the figures for financing this spending are alarming. A large proportion of Americans are covering higher prices with credit cards, which must eventually be repaid, according to data published by Bloomberg. The worsening outlook for economic health, alarming PMI levels and the bond yield curve all translate into possible future deterioration in consumer health.   Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Source: Retailers announce strong results - shares rise
Investors Selling Down Companies That Face Balance Sheet Tightening From Runaway Inflation

Let's See S&P 500, Nasdaq, WWE And Other Stocks Performance

InstaForex Analysis InstaForex Analysis 17.08.2022 12:00
Relevance up to 05:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   As it became known from the report of the US Department of Commerce, the number of houses, the construction of which was started in the country in July, decreased by 9.6% compared to the previous month and amounted to 1.446 million in annual terms. The figure was the lowest since February last year. According to the revised data, in June the number of new buildings amounted to 1.599 million, and not 1.559 million, as previously reported. Experts predicted a decline to 1.54 million from the previously announced level in June. US industrial output rose 0.6% month-on-month in July, doubling the 0.3% rise expected by analysts. According to the revised data, industrial production did not change in June, while a decrease of 0.2% was previously reported. Production in the processing industry increased by 0.7% compared to June, while experts expected a more moderate growth of 0.2%. A month earlier, the indicator fell by 0.4%, and not by 0.5%, as previously reported. In addition, investors are waiting for the publication of the minutes of the July meeting of the Federal Reserve on Wednesday and the report on retail sales in the US on Friday. Also this week, many leading US retailers publish quarterly reports. AJ Bell financial analyst Danny Hewson noted that many US investors have taken a wait-and-see attitude, hoping to get new information from the Fed's minutes and retailers' reports, on the basis of which it is possible to understand what exactly consumers are saving on during a period of high inflation. The value of the Dow Jones Industrial Average by 16:47 GMT+3 increased by 0.05% - up to 33930.76 points. Standard & Poor's 500 has fallen 0.11% since the market opened to 4292.49 points. The Nasdaq Composite dropped 0.35% to 13,081.46. Shares of Walmart Inc. jumped by 5.5%, being the leader of growth in the Dow Jones index. The largest US retailer posted a strong quarterly report and improved its full-year outlook. Walmart's adjusted earnings for the fiscal quarter ended July 31 were $1.77 per share, above analysts' forecast of $1.62 per share. Revenue increased by 8.4% and reached $152.86 billion, while experts on average predicted the figure at $150.99 billion. Quotes Home Depot Inc. increase by 1.4%. The US-leading home improvement chain posted record revenues and net income in the quarter, even though the number of purchases at its stores fell by 3%. Target and Lowe's will report on Wednesday, while department store chain Kohl's will report on Thursday. World Wrestling Entertainment's share price is up 3.2% after the wrestling tournament organizer increased net profit and revenue slightly more than market expectations in the second quarter of 2022. Shares of Warner Bros. Discovery shed 0.3% on rumors of new cost-cutting measures. In particular, the staff of the subsidiary streaming service HBO will be reduced by about 14%. Zoom Video Communications' capitalization fell 5.6% after Citi analysts downgraded the recommendation for the company's shares to "sell" from "neutral" levels.   Read more: https://www.instaforex.eu/forex_analysis/288768
The USD/CNH Pair Remains On The Bear’s Trend

China Is Planning The Devaluation? If So, CNHUSD May Become A Strong Value

Saxo Bank Saxo Bank 17.08.2022 13:20
Summary:  Today we look at the US equity market rolling over a bit after hitting a key resistance point in the form of the S&P 500's 200-day moving average. We continue to note the resilient US dollar and the risk of USDCNH suddenly commanding the market's attention again if China moves to devalue its currency. We also zero in on weak Antipodean currencies as AUDUSD struggles and NZD can't get a boost from the RBNZ overnight. Crude oil, industrial metals, the latest on the dire power emergency in the EU, danger of meme stocks, earnings ahead and more on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Watching for signs of altitude sickness
Increase In Interest Of Nuclear Energy Around The World

Decision On Closing Three German Nuclear Plants Is Not Made Yet. In France Wind Generation And Hydropower Stations Results Are Below Norms

Marc Chandler Marc Chandler 17.08.2022 15:00
Overview: The biggest development today in the capital markets is the jump in benchmark interest rates.  The US 10-year yield is up five basis points to 2.86%, which is about 10 bp above Monday’s low.  European yields are up 9-10 bp.  The 10-year German Bund yield was near 0.88% on Monday and is now near 1.07%.  Italy’s premium over German is near 2.18%, the most in nearly three weeks.  Although Asia Pacific equities rallied, led by Japan’s 1.2% gain, but did not include South Korea, European equities are lower as are US futures.  The Stoxx 600 is struggled to extend a five-day rally.  The Antipodeans are the weakest of the majors, but most of the major currencies are softer. The euro and sterling are straddling unchanged levels near midday in Europe.  Gold is soft in yesterday’s range, near its lowest level since August 5.  While $1750 offers support, ahead of it there may be bids around $1765. October WTI is pinned near its lows around $85.50-$86.00.  The drop in Chinese demand is a major weight, while the market is closely monitoring developments with the Iranian negotiations.  US natgas is edging higher after yesterday 6.9% surge to approach last month’s peak.  Europe’s benchmark is 4.5% stronger today after yesterday’s 2.7% pullback.  Iron ore fell (3.9%) for the fourth consecutive decline. The September contract that trades in Singapore is at its lowest level since July 22.  September copper is a little heavier but is still inside Monday’s range.  September wheat is extending its pullback for the fourth consecutive session.  It had risen in the first four sessions last week. It is moving sideways in the trough carved over the past month.    Asia Pacific   The Reserve Bank of New Zealand delivered the anticipated 50 bp rate hike and signaled it would continue to tighten policy    It did not help the New Zealand dollar, which is posting an outside day by trading on both sides of yesterday's range.  The close is the key and below yesterday's low (~$0.6315) would be a bearish technical development that could spur another cent decline.  It is the RBNZ's fourth consecutive half-point hike, which followed three quarter-point moves.  The cash target rate is at 3.0%.  Inflation (Q2) was stronger than expected rising 7.3% year-over-year.  The central bank does not meet again until October 5, and the swaps market has a little more than a 90% chance of another 50 bp discounted.    Japan's July trade balance deteriorated more than expected    The shortfall of JPY1.44 trillion (~$10.7 bln) form JPY1.40 trillion in June.  Exports slowed to a still impressive 19% year-over-year from 19.3% previously, while imports rose 47.2% from 46.1% in June.  The terms-of-trade shock is significant in both Japan and Europe.  Japan's ran an average monthly trade deficit of about JPY1.32 trillion in H1 22 compared with an average monthly surplus of JPY130 bln in H1 21.  The eurozone reported an average shortfall of 23.4 bln euros in H1 22 compared with a 16.8 bln average monthly surplus in H1 21.  The two US rivals, China, and Russia, have been hobbled by their own actions, while the two main US economic competitors, the eurozone and Japan are experiencing a dramatic deterioration of their external balance,     The 11 bp rise in the US two-year yield between yesterday and today has helped lift the US dollar to almost JPY135.00, a five-day high   It has met the (50%) retracement target of the downtrend since the multiyear peak in mid-July near JPY139.40.  The next target is the high from earlier this month around JPY135.60.  and then JPY136.00.  Initial support now is seen near JPY134.40.  After recovering a bit in the North American session yesterday, the Australian dollar has come under renewed selling pressure and is trading at five-day lows below the 20-day moving average (~$0.6990).  It has broken support in the $0.6970-80 area to test the trendline off the mid-July low found near $0.6965.  A break could signal a move toward $0.6900-10.  The gap created by yesterday's high US dollar opening against the Chinese yuan was closed today as yuan recovered for the first day in three sessions.  Monday's high was CNY6.775 and yesterday's low was CNY6.7825.  Today's low is about CNY6.7690.  For the second consecutive session, the PBOC set the dollar's reference rate a little lower than the market (median in Bloomberg's survey) expected (CNY6.7863 vs. CNY6.7877).  The dollar has risen to almost CNH6.82 in the past two sessions and still trading a little above CNH6.80 today but was sold to nearly CNH6.7755 where is has found new bids.      Europe   The UK's headline CPI accelerated to 10.1% last month from 9.4% in June    It was above market expectations and the Bank of England's forecast for a 9.9% increase.  Although the rise in food prices (2.3% on the month and 12.7% year-over-year) lifted the headline, the core rate, which excludes food, energy, alcohol, and tobacco rose to 6.2% from 5.8% and was also above expectations (median forecast in Bloomberg's survey was for 5.9%).  Producer input prices slowed, posting a 0.1% gain last month for a 22.6% year-over-year pace (24.1% in June).  However, output prices jumped 1.6% after a 1.4% gain in June.  This puts the year-over-year pace at 17.1%, up from 16.4% previously.  The bottom line is that although the UK economy contracted in Q2 and the BOE sees a sustained contraction beginning soon, the market recognize that the monetary policy will continue to tighten.  The market swaps market is fully pricing in a 50 bp hike at the mid-September meeting and is toying with the idea of a larger move (53 bp of tightening is discounted).    What a year of reversals for Germany    After years of pressure from the United States and some allies in Europe, Germany finally nixed the Nord Stream 2 pipeline with Russia.  Putin also got Germany to do something that several American presidents failed to achieve and that is boost is defense sending in line with NATO commitments. The energy crunch manufactured by Russia is forcing Germany to abandon is previous strategy of reducing coal and closing down its nuclear plants.  Ironically, the Greens ae in the coalition government and recognize little choice.  A formal decision on three nuclear plants that were to be shuttered before the end of the year has yet to be made, but reports confirm it is being discussed at the highest levels.     Germany's one-year forward electricity rose by 11% to 530.50 euros a megawatt-hour in the futures market years, a gain of more than 500%     France, whose nuclear plants are key to the regional power grid, is set to be the lowest in decades, according to reports.  France has become a net importer of electricity, while the extreme weather has cut hydropower output and wind generation is below seasonal norms.  The low level of the Rhine also disrupts this important conduit for barges of coal and oil. Starting in October, German households will have a new gas tax (2.4-euro cents per kilowatt hour for natural gas) until 1 April 2024. Economic Minister Habeck estimated that for the average single household the gas tax could be almost 100 euros a month, while a couple would pay around 195 euros.  Also, starting in October, utilities will be able to through to consumers the higher costs associated with the reduction of gas supply from Russia.  This poses upside risk to German inflation.     The euro held technical support near $1.0110 yesterday and is trading quietly today in a narrow (~$1.0150-$1.0185) range today    Yesterday was the first session since July 15 that the euro did not trade above $1.02.  The decline since peaking last week a little shy of $1.0370 has seen the five- and 20-day moving averages converge and could cross today or tomorrow for the first time since late July. We note that the US 2-year premium over German is testing the 2.60% area.  It has not closed below there since July 22.  Sterling held key support at $1.20 yesterday and traded to almost $1.2145 today, which met the (50%) retracement objective of the fall from last week's $1.2275 high.  The next retracement (61.8%) is closer to $1.2175.  The UK reported employment yesterday, CPI today, and retail sales ahead of the weekend.  Retail sales, excluding gasoline have fallen consistently since last July with the exception of October 2021 and June 2022.  Retail sales are expected to have slipped by around 0.3% last month.     America   The Empire State manufacturing August survey on Monday and yesterday's July housing starts pick up a thread first picked up in the July composite PMI, which fell from 52.3 to 47.7 of some abrupt slowing of economic activity  The Empire State survey imploded from 11.1 to -31.3.  Housing starts fell 9.6%, more than four-times the pace expected (median Bloomberg survey -2.1%).  It was small comfort that the June series was revised up 2.4% from initially a 2.0% decline.  The 1.45 mln unit pace is the weakest since February 2021 and is about 9% lower than July 2021.  However, offsetting this has been the strong July jobs report and yesterday' industrial production figures.  The 0.6% was twice the median forecast (Bloomberg's survey) and the June decline (-0.2%) was revised away. The auto sector continues to recover from supply chain disruptions, and this may be distorting typically seasonal patterns.  Sales are rose in June and July, the first back-to-back gain in over a year. To some extent, supply is limiting sales, which would seem to encourage production.  Outside of autos, output slowed (year-over-year) for the third consecutive month in July.     Today's highlights include July retail sales and the FOMC minutes     Retail sales are reported in nominal terms, which means that the 13% drop in the average retail price of gasoline will weigh on the broadest of measures.  However, excluding auto, gasoline, building materials, and food services, the core retail sales will likely rise by around 0.6% after a 0.8% gain in June.  The most important thing than many want to know from the FOMC minutes is where the is bar to another 75 bp rate hike.  The Fed funds futures market has it nearly 50/50.     Canada's July CPI was spot on forecasts for a 0.1% month-over-month increase and a 7.6% year-over-year pace (down from 8.1%)     However, the core rates were firm than average increased.  The market quickly concluded that this increases the likelihood that the central bank that surprised the market with a 100 bp hike last month will lift the target rate by another 75 bp when it meets on September 7.  In fact, the swaps market sees it as a an almost 65% probability, the most since July 20.  Canada reports June retail sales at the end of the week.  The median forecast in Bloomberg's survey is for a 0.4% gain, but even if it is weaker, it is unlikely to offset the firm core inflation readings.     The dollar-bloc currencies are under pressure today, but the Canadian dollar is faring best, off about 0.25% in late morning trading in Europe     The Aussie is off closer to 0.75% and the Kiwi is down around 0.5%.  US equities are softer. The greenback found support near CAD1.2830 and is near CAD1.2880.  Monday and Tuesday's highs were in the CAD1.2930-5 area and a break above there would target CAD1.2985-CAD1.3000.  However, the intraday momentum indicators are overextended, and initial support is seen in the CAD1.2840-60 area. The greenback has forged a shelf near MXN19.81 in recent days.  It has been sold from the MXN20.83 area seen earlier this month.  It has not been above MXN20.05 for the past five sessions.  A move above there, initially targets around MXN20.20.  The JP Morgan Emerging Market Currency Index is off for the third consecutive session. If sustained, it would be the longest losing streak since July 20-22.     Disclaimer   Source: Markets Look for Direction
Summer's End: An Anxious Outlook for the Global Economy

Crypto Market Is Dependent On Stock Market. The Correlation Between Nasdaq 100 And BTC

Conotoxia Comments Conotoxia Comments 17.08.2022 15:27
Michael Burry is a well-known US investor who became famous for betting on the collapse of the US real estate market and the burst of the bubble in 2008. On 15 August, he filed a 13F form with the Securities and Exchange Commission (SEC), revealing the positions of his fund, Scion Asset Management. To the surprise of many, the investment portfolio turned out to be almost completely empty. Burry held shares worth 165 million at the end of the first quarter. These included companies such as Google, Meta and Stellantis. However, the latest report filed with the regulator revealed that all of it had been sold and the glorified investor's only long position is in GeoGroup, a company involved in running private prisons, but the value of the position is negligible at just under $3.31 million. The investor has recently been posting a number of tweets suggesting the end of the bear market rally. This has sent shock waves across the market, as the investment manager has usually been successful in predicting the market moves, famous for his incisiveness. If there were to be large declines in the broad traditional market, e.g. equities, what could this mean for crypto? The correlation between BTC and the Nasdaq 100 seems to be apparent, but after the last all-time high reading of 0.84 in May, it dropped to around 0.48 at the end of June. What is unfortunate, however, is that the correlation has been rising with subsequent waves of declines and peaked near local lows. If the stock market were to actually experience a crash, a strong reaction from the crypto market can be expected. The recent increase in correlation may be due to the increasing participation of token trading institutions. Michael Burry's attitude was addressed by Mati Greenspan CEO of Quantum Economic, stating that predicting the timing and scale of a crash is almost impossible. "Predicting a stock crash is a lot like predicting an earthquake. You know one will happen every so often but you can never tell exactly when or how severe it will be" - Greenspan said. On the Conotoxia MT5 platform, BTC is seeing its fourth day of decline, losing more than 0.7% at 10:30 GMT+3, while ETH is gaining less than 0.3%, drawing its first upward candle in three days. Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Michael Burry closed almost all his positions - what could another stock market crash mean for crypto?
Saxo Bank Podcast: US Equities Continue To Trade Up, Natural Gas In Europe, Bank of Japan Meeting Ahead And More

Natural Gas Is More Valuable Than Crude Oil!? Carbon Emission Is Almost The Highest In History!!!

Kim Cramer Larsson Kim Cramer Larsson 17.08.2022 16:02
Dutch TTF Gas is resuming uptrend taking out July peak testing the 0.618 Fibonacci retracement at around €242.75.RSI has broken its falling trend and is likely to trade out/cancel the divergence since mid-July. If Dutch gas closes above the 0.618 retracement the 0.764 retracement at around 281.82 is next level likely to be reached. The upper rising trend line is likely to be reached and possibly broken in a gas price that seems to accelerate.To reverse the uptrend a close below 187.50 is needed.However, a correction over the next couple of days is not unlikely given the Spinning Top Candle formed yesterday. IT is often a top and reversal indicator but needs to be confirmed by a bearish candle the following day. IF Dutch Gas closes above its peak the potential top and reversal is demolished. Source: Saxo Group Henry Hub Gas has taken out resistance at the 0.618 retracement at around $8.90 and now also 0.764 retracement indicating previous highs at $9.66-9.75 are likely to be tested. If Henry Hub Gas closes above previous highs new price targets Source: Saxo Group Brent Crude oil continue its downtrend closing in on support at around $90. RSI is testing previous lows. There is divergence indicating a weakening of the downtrend but if RSI makes a new low the $90 support could be broken. Next support would be at around the 0.764 retracement at 85.76To set the downtrend on pause a close above 100.38. That will most likely not reverse the trend but merely just put it on pause. Source: Saxo Group WTI Crude oil was rejected at the short-term falling trendline and is now back below the 0.618 retracement. Next support at 81.90. There is divergence on RSI indication the downtrend is weakening. However, if RSI closes below If WTI closes back above the 200 SMA i.e. above $95 thereby also breaking above the short-term falling trendline, a larger correction to around 105-110 is likely. Source: Saxo Group Carbon Emissions broke its falling trendline last week and has now also broken above resistance at 92.75 closing in on its all-time high just below €100. RSI is entering over-bought territory but there is no divergence indicating higher levels (above 100) is likely. However, do expect a correction from just below previous highs.            Source: Saxo Group   Source: Technical Update - Natural Gas powers higher. Oil downtrend weakening, close to and end? Carbon Emission close to all-time highs
Nuclear Power Emerges as Top Theme for 2023, Bubble Stocks Under Pressure

We Need To Build Our Green Energy Future. Here Is Why

Peter Garnry Peter Garnry 17.08.2022 16:26
Summary:  We are used to not think about the energy sector, but the galloping global energy crisis has illuminated our deficits in primary energy due to years of underinvestment in fossil fuels and renewable energy sources inability to scale fast enough with the green transformation and electrification of our economy. It seems more likely now that the non-renewable and the renewable energy sector will both provide attractive returns as we will need both to overcome our short-term energy crisis and long-term aspirations of a greener energy future. The energy crisis keeps getting worse Electricity prices in Europe are nine times higher than the historical average since 2007 as lack of investments and cutting the ties to Russia’s energy supplies are severely constraining available energy in society. Since before the pandemic we have written many equity notes on the green transformation which involves building out renewable energy sources and electrifying everything in the economy to reduce the carbon emissions involved with our current living standard. Switching a large part of the transportation sector to electricity or green fuels, switching the heating source from natural gas to renewable energy through electrification (air-to-water heat pumps) etc. is very difficult as our rising wealth (measured by GDP) is finely mapped to carbon emissions over the past 300 years. We described this in our note The inconvenient truth on energy and GDP. Decoupling our wealth generating function from that of carbon emissions is probably the greatest task humans has ever set out to do. German baseload electricity 1 year forward | Source: Bloomberg There is not ‘one solution’ that fixes our energy crisis As BP’s 2022 Statistical Review of World Energy pictures primary energy demand in 2021 eclipsed 2019 suggesting the world’s demand for energy is now higher than before the pandemic and the usage of fossil fuels (82%) is only slightly down compared to five years ago (85%). We very much still live in a fossil fuel based economy. Things will change over time and the share of fossil fuels will likely decline, but the idea that the world can do the green transformation by electrifying everything based on renewable energy sources is naïve. Investors should also remember that the change in primary energy demand is mostly driven by the non-OECD countries. Renewable energy does not scale fast enough for a complete transition due to the speed on electrification and recently the CEOs of Orsted and Vestas complained about bureaucracy related to get new offshore wind power projects approved. The recent Climate & Tax Bill is acknowledging that we will need oil and gas for longer than expected just three years ago and thus our current energy crisis will allow both renewable energy and fossil fuel energy to be good investments in parallel. Renewable energy is the third best theme basket this year while the commodities basket (which includes oil & gas and mining companies) is the best performer. Our view of the future of energy is that there is no ‘one solution’ to our energy problem. We must move to a mindset of energy diversification. We will need many different sources of energy and never rely too much on one source. Germany’s reliance on natural gas for its economic model has proved fragile. Even France’s concentrated bet on nuclear power has proved to be fragile due to corrosion and now too hot rivers. The world must invest in all types of energy and thus our view is that investors mut get broad exposure to energy going forward. The non-renewable energy sector at a glance In this equity note we will focus on the non-renewable energy because this is the part of the energy sector which has changed the most relative to market pricing and expectations and where there is more room for valuations changing. Despite high oil and gas prices the energy sector is still relatively cheap as we described already back in May in our note Global energy stocks are the cheapest in 27 years where we measured valuation on the free cash flow yield. The high oil and gas prices have also led to record profits for refiners and recently the highest quarterly profit ever recorded in the global energy sector which we described in our note Earnings hit new all-time high as inflation lifts all boats. The global energy sector (defined by GICS and being the non-renewable energy sector) is still cheap relative to the global equity market with the 12-month EV/EBITDA being two standard deviations below the average valuation spread since 2005. In terms of total return the global energy sector has delivered a higher return than the global equity market since 1995 (see chart). It is also worth noting that measured on the 12-month forward EV/EBITDA the renewable energy sector has twice the valuation level compared to the non-renewable energy sector reflecting the different in expectations for the future priced in the market. As we described in our Q1 Outlook the current dividend yield and expected dividend growth suggest that the global energy sector has an expected long-term return of 10% annualised subject of course to a large degree of uncertainty related to equity valuation compression in the industry or lower dividend growth in the future than expected today. Global energy vs global equities | Source: Bloomberg The easiest way to invest in the energy sector is through ETFs tracking the sector and most investors should do that. A different approach is investing in specific parts of the non-renewable energy sector. The tables below show the top five company on market value in each of the GICS industries in the GICS energy sector. As the five-year total returns in USD column show, the industries related only to drilling and providing equipment for drilling activities have done the worst because the decline in capital expenditures since 2015 has dried up activity for this industry. The integrated oil and gas majors have done better due to refining and trading businesses. Over the past five years, the best performing industries in the energy sector have been refining and marketing due to the crack spreads (the difference between crude oil and refined products) have expanded during the pandemic. The global coal industry has also done very well which in terms of climate change and reducing carbon emissions is a sad observation but we should be aware of that the primary fuel source for power generation globally is still coal. GICS industries in the energy sector | Source: Bloomberg and Saxo Group Source: How to invest in energy and the unfolding energy crisis?
US: Drivers Demand Of Oil The Highest This Year! Silver Lost Almost The Half Of Its Recent Gaines

US: Drivers Demand Of Oil The Highest This Year! Silver Lost Almost The Half Of Its Recent Gaines

Saxo Strategy Team Saxo Strategy Team 18.08.2022 10:50
Summary:  US equities traded a bit lower yesterday after the S&P 500 challenged the 200-day moving average from below the prior day for the first time since April in the steep comeback from the June lows. Sentiment was not buoyed by the FOMC minutes of the July meeting suggesting the Fed would like to slow the pace of tightening at some point. Crude oil rose from a six-month low on bullish news from the US and OPEC.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures rolled over yesterday wiping out the gains from the two previous sessions and the index futures are continuing lower this morning trading around the 4,270 level. US retail sales for July were weak and added to worries of the economic slowdown in real terms in the US. The 10-year yield is slowing crawling back towards the 3% level sitting at 2.87% this morning. A move to 3% and potentially beyond would be negative for equities. The next levels to watch on the downside in S&P 500 futures are 4,249 and then 4,200 Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Shares in the Hong Kong and mainland China markets declined. China internet stocks were weak across the board with Tencent (00700:xhkg) +2.7% and Meituan (03690:xhkg) +1%, being the positive outliers. Tencent reported a revenue decline of 3% y/y in Q2, weak, but in line with market expectations. Non-GAAP operating profit was down 14% y/y to RMB 36.7bn, and EPS fell 17% y/y to RMB 2.90 but beating analyst estimates. Revenues from advertising at -18% y/y were better than expected. In the game segment, weaker mobile game revenues were offset by stronger PC game revenues. Beer makers outperformed China Resources Beer (00291:xhkg) +3.8%, Tsingtao Brewery (00168:xhkg) +1.7%. COSCO Shipping Energy Transportation (01138:xhkg) made a new high at the open on strong crude oil tanker freight rates before giving back some gains. USD pairs as the USD rally intensifies The US dollar rally broadened out yesterday, as USDJPY retook the 135.00 area, but needs to follow through above 135.50-136.00 to take the momentum back higher. Elsewhere, AUDUSD has broken down again on the move down through 0.7000 and USDCAD has posted a bullish reversal, needing 1.3000 for more upside confirmation. The GBPUSD pair looks heavy despite a massive reset higher in UK rates in the wake of recent UK inflation data, with a close below 1.2000 indicating a possible run on the sub-1.1800 lows, while EURUSD is rather stuck tactically, as price has remained bottled up above the 1.0100 range low. USDCNH, as discussed below, may be a key pair for whether the USD rally broadens out even more aggressively, and long US treasury yields and risk sentiment are other factors in the mix that could support the greenback, should the 10-year US treasury benchmark move higher toward 3.00% again or sentiment roll over for whatever reason. Certainly, tightening USD liquidity could prove a concern for sentiment as the Fed turns up the pace of quantitative tightening – something it seems behind schedule in doing if we look at the latest weekly Fed balance sheet data.  USDCNH The exchange rate edged higher again to above 6.80 overnight after a brief spike higher earlier this week as China’s PBOC moved to stimulate with a small 10-basis point rate cut of the key lending rate. There is no real drama in the exchange rate yet after the significant rally this spring from below 6.40 to 6.80+, but traders should keep an eye on this very important exchange rate for larger volatility and significant break above 6.83, as China’s exchange rate policy shifts can provoke significant volatility across markets. Crude oil Crude oil (CLU2 & LCOV2) bounced from a six-month low on Wednesday in response to a bullish US inventory report that saw big declines in gasoline and crude oil stocks as demand from US motorist climbed to the highest this year while crude exports reached a record $5 million barrels per day. The prospect for an Iran nuclear deal continues to weigh while OPEC’s new Secretary-General said spare capacity was becoming scarce. US strategic reserves are now at the lowest level since 1985 and the government has by now sold around 90% of what was initially offered in order to bring down prices. While demand concerns remain a key driver for macroeconomic focused funds selling crude oil as a hedge we notice a renewed surge in refinery margins, especially diesel, supported by increased demand from gas-to-fuel switching Gold and silver Gold has so far managed to find support at $1759, the 38.2% retracement of the July to August bounce, after trading weaker in response to a stronger dollar and rising yields. Silver (XAGUSD) meanwhile has almost retraced half of its recent strong gains with focus now on support at $19.50. The latest driver being the FOMC minutes which signaled ongoing interest-rate hikes and eventually at a slower pace than the current. The short-term direction has been driven by speculators reducing bullish bets following a two-week buying spree in the weeks to August 9 which lifted the net by 63k lots, the strongest pace of buying in six months. ETF holdings meanwhile have slumped to a six-month low, an indication investor, for now, trusts the FOMC’s ability to bring down inflation within a relatively short timeframe   What is going on? Financial conditions are tightening, if modestly. Recent days have brough a rise in short US treasury yields, but more importantly it looks as though some of the risk indicators like corporate credit spreads may have bottomed out here after a sharp retreat from early July highs – one Bloomberg high yield credit spreads to US treasuries peaked out above 5.75% and was as low as 4.08% earlier this week before rising to 4.19% yesterday, with high yield bond ETFs like HYG and JNK suffering a sharp mark-down yesterday of over a percent. Factors that could further aggravate financial conditions include a significant CNH weakening, higher US long treasury yields (10-year yield moving back toward 3.00%, for example) or further USD strength. Adyen sees margin squeeze. One of Europe’s largest payment companies reports first-half revenue of €609mn vs est. €615mn despite processed volume came significantly above estimates at €346bn suggesting the payments industry is experiencing pricing pressures. Cisco outlook surprises. The US manufacturer of networking equipment surprised to the upside on both revenue and earnings in its fiscal Q4 (ending 30 July), but more importantly, the company is guiding revenue growth in the current fiscal quarter of 2-4% vs est. -0.2% and revenue growth for the current fiscal year of 4-6% vs est. 3.3%. Cisco said that supply constraints are beginning to ease and that customer cancellations are running below pre-pandemic levels, and that the company’s growth will be a function of availability. Stale FOMC minutes hint at sustained restrictive policy, but caution on pace of tightening. Fed’s meeting minutes from the July meeting were released last night, and officials agreed to move to restrictive policy, with some noting that restrictive rates will have to be maintained for some time to bring inflation back to the 2% target. Still, there was also talk of slowing the pace of rate hikes ‘at some point’, despite pushing back against easing expectations for next year. The minutes were broadly in-line with the market’s thinking, and lacked fresh impetus needed to bring up the pricing of Fed’s rate hikes. Chairman Powell’s speech at the Jackson Hole Symposium next week will be keenly watched for further inputs. US retail sales were a mixed bag. July US retail sales were a little softer at the headline level than the market expected (0% growth versus the +0.1% consensus) but the ex-auto came in stronger at 0.4% (vs. -0.1% expected). June’s growth was revised down to 0.8% from 1%. The mixed data confirmed that the US consumers are feeling the pinch from higher prices, but have remained resilient so far and that could give the Fed more room to continue with its aggressive rate hikes. Lower pump prices and further improvements in supply chain could further lift up retail spending in August. The iron ore miners are resilient despite price pressures Despite China planning more fiscal stimulus to fund infrastructure investment, the iron ore (SCOA, SCOU2) price paired back 8% this week, retreating to its lowest equal level in five weeks at $101.65, a level the iron ore price was last at in December 2021. Since March, the iron ore price has retreated 37%, with the most recent pull back being fueled by concerns China’s Covid cases are surging again with cases at a three-month high, as the outbreak worsens in the tropical Hainan province. Despite iron ore pulling back, shares in iron ore majors like BHP, remain elevated, up off their lows, with BHP’s shares trading 14% up of its July low, and moving further above its 200-day moving average, on hopes of commodity demand picking up. What are we watching next? Norway’s central bank guidance on further tightening. The Norges Bank is expected to hike 50 basis points today to take the policy rate to 1.75% despite an indication from the bank in June that the bank would prefer to shift back to hiking rates by 25 basis points, as a tight labour market and soaring inflation weigh. The path of tightening for the central bank has been an odd one, as it was the first G10 bank to actually hike rates in 2021, but finds itself with a far lower policy rate than the US, for example, which started much later with a faster pace of hikes. But NOK may react more to the direction in risk sentiment rather than guidance from the Norges Bank from here, assuming no major surprises. The EURNOK downtrend has slowed of late – focusing on 10.00 if the price action continues to back up. Japan’s inflation will surge further. Japan’s nationwide CPI for July is due on Friday. July producer prices came in slightly above expectations at 8.6% y/y (vs. estimates of 8.4% y/y) while the m/m figure was as expected at 0.4%. The continued surge reflects that Japanese businesses are grappling with high input price pressures, and these are likely to get passed on to the consumers, suggesting further increases in CPI remain likely. More government relief measures are likely to be announced, while signs of any Bank of Japan pivot away from its low rates and yield-curve-control policy are lacking. Bloomberg consensus estimates are calling for Japan’s CPI to accelerate to 2.6% y/y from 2.4% previously, with the ex-fresh food number seen at 2.4% y/y vs. 2.2% earlier.   Earnings to watch In Europe this morning, the key earnings focus is Adyen which has already reported (see review above) and Estee Lauder which is deliver a significant slowdown in figures and increased margin pressure due to rising input costs. Today’s US earnings to watch are Applied Materials and NetEase, with the former potentially delivering an upside surprise like Cisco yesterday on improved supply chains. NetEase, one of China’s largest gaming companies, is expected to deliver Q2 revenue growth of 12% y/y as growth continues to slow down for companies in China. Today: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0800 – Norway Deposit Rates 0900 – Eurozone Final Jul. CPI 1100 – Turkey Rate Announcement 1230 – US Weekly Initial Jobless Claims 1230 – Canada Jul. Teranet/National Bank Home Price Index 1230 – US Philadelphia Fed Survey 1400 – US Jul. Existing Home Sales 1430 – EIAs Weekly Natural Gas Storage Change 1720 – US Fed’s George (Voter) to speak 1745 – US Fed’s Kashkari (Non-voter) to speak 2301 – UK Aug. GfK Consumer Confidence 2330 – Japan Jul. National CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 18, 2022
GBP Strength and EUR/GBP Testing Lows Amid Economic Data

Euro Bund And T-Note Seems To Be Sliding Down In The Following Years

Kim Cramer Larsson Kim Cramer Larsson 18.08.2022 12:24
US 10-years Treasury Yields have tested the short term falling trendline from the upper side and is trying to move higher but seems to struggle a bit around 2.90%. If Yields move above 55 SMA it is likely to get momentum for higher levels with resistance at 3.11 The US 10-years Treasury Note is in a confirmed downtrend. 55 SMA is providing some support but no strong support before at 117 18/32.To reverse the downtrend a close above 120 is needed. Source: Saxo Group Euro Bund has broken bearish out of rising channel and is testing support at 153.50. Downtrend is confirmed and a close above 156.88 is needed to reserve that picture.Some support at 152.43 and strong support at around 150-149.75           Source: Saxo Group   Source: Technical Update - 10-year Yields ticking higher. US 10-years T-Note future and Euro Bund in confirmed downtrends
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Fed Reptesentatives Are Committed To Holding Back Price Growing And Control The Inflation According To Expectations

Conotoxia Comments Conotoxia Comments 18.08.2022 13:17
Last night's publication of the minutes of the last Fed meeting, which took place at the end of July, may have affected the US dollar's trading. The policymakers touched on the regulation of the digital asset market for the first time at such a meeting. According to the published minutes, Fed officials remain very attentive to inflation risks and are committed to lowering price growth and keeping inflation expectations under control. A commitment to tightening monetary policy can take place, even if it comes at the expense of economic growth, the FOMC minutes show. The July discussion touched on the possible risks of too many and too large interest rate hikes. There was also talk that the Fed may be pursuing too much restrictive monetary policy than is necessary to restore price stability in the economy. The Fed, for the moment, seems unconcerned about GDP data and the risk of a sustained slowdown or official recession, as officials said the economy is stable for now, pointing to strong job growth, a low unemployment rate and elevated wage growth. Moreover, there was also discussion of the possibility of a later upward revision of earlier GDP readings, which are revised over time. There was also a statement regarding possible further action by the Federal Reserve. Policymakers discussed the possibility of slowing the pace of interest rate hikes at some point, but this will require data readings that can be considered satisfactory in terms of the impact of current hikes on slowing inflation. Meanwhile, for the moment, it may be crucial to maintain a restrictive stance to avoid a loosening of inflation expectations. Initially, after the release of the minutes, the EUR/USD exchange rate rose to 1.0200, before retreating to the region of 1.0150 this morning. The reaction thus appears to be mixed, without leading to a major impulse, and the exchange rate of the main currency pair has remained in consolidation since the morning of August 16. On Wall Street, on the other hand, indexes were down after the publication. The S&P500 fell 0.3 percent and the Nasdaq 100 fell 0.6 percent. The committee also turned its attention to the world of digital assets. Participants recognized the growing importance of digital assets and their increasing interconnectedness with other segments of the financial system, underscoring the need to establish a robust supervisory and regulatory framework for the sector to adequately mitigate potential systemic risks. Several participants mentioned the need to strengthen supervision and regulation of certain types of non-bank financial institutions, according to published minutes. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Highlights from the Fed minutes
The Commodities Feed: China's 2023 growth target underwhelms markets

Apple Concentrated On Vietnam Productions As China Having Problems With Energy Supply

Marc Chandler Marc Chandler 18.08.2022 14:03
Overview: The sell-off in European bonds continues today. The 10-year German Bund yield is around four basis points higher to bring three-day increase to about 22 bp. The Italian premium over Germany has risen by almost 18 bp over these three sessions. Its two-year premium is widening for the fifth consecutive session and is above 90 bp for the first time in almost three weeks. The 10-year US Treasury yield is a little softer near 2.88%. Most of the large Asia Pacific equity markets fell, with India a notable exception. Europe’s Stoxx 600 snapped a five-day rally yesterday with a 0.9% loss. It is slightly firmer today, while US futures are hovering around yesterday’s closing levels. The greenback is firm against most of the major currencies. The Australian and Canadian dollars  and Norwegian krone and sterling are the most resilient today. The Philippines, like Norway hiked 50 bp but unlike Norway, the currency has not been bought. Most emerging market currencies are softer today. Gold is trying to break a three-day slide after approaching $1760. It settled last week at $1802. October WTI found a base a little below $85.50 and is around $88.50 near midday in Europe. The week’s high was set Monday by $91.50. US natgas is up 1.1% to recoup yesterday’s loss in full. Europe’s benchmark is extended this week’s run. It finished last week near 205.85 and now is around 232.00, a 12.7% gain after 6% last week. Iron ore ended a four-day 8% slide. September copper is recovering from the early drop to near two-week lows ($354.20) and is now near 362.00. A move above yesterday’s high (~$365) would be constructive. The sell-ff in September wheat has accelerated. It is off for the fifth consecutive session and is at its lowest level since January. After falling around 3% in three days from last Friday, it is off more than 5% between yesterday and today. Asia Pacific For good reasons, Beijing and Washington suspect the other of trying to change that status quo over Taiwan  The visits by US legislators may be only the initial efforts by Congress to force a more aggressive US position. It could come to a head in the fall when a bill that wants to recognize Taiwan as a major non-NATO ally and to foster Taiwan's membership in international forums will draw more attention. Meanwhile, US-Taiwan trade talks will begin later this year that was first aired a couple of months ago. At the same time, the Biden administration has been considering lifting some of the tariffs levied by the previous administration, but China's militaristic response to the visits makes it more difficult. Biden wants to lift the tariffs not to reward Beijing but to ease the costs to Americans. The Consumer Technology Association, an industry group, estimated that the tariffs have boosted the bill for American consumer technology companies by around $32 bln. The tariffs are paid to the US government. It seems that in lieu of lifting the tariffs, a broad exclusion process is possible. Related but separately, the Nikkei Asia reported that Apple is in talks to produce its watches and computers in Vietnam for the first time  Two suppliers have been producing Apple Watches in northern Vietnam. A couple of months ago, reports indicated that Apple would more some production of its tablets to Vietnam. Apple's ecosystem is establishing a presence in Vietnam, with nearly two dozen suppliers have factories now, almost doubling since 2018. As a result of these forces and the movement of capacity outside of China, Vietnam's trade surplus with the US is exploding. The $33 bln surplus in 2016 ballooned to $91 bln last year and was nearly $58 bln in the first half. For the past five years, the dollar has traded in a roughly 2% band around VND23000. The greenback is near the upper end of the range. Australia's July jobs report was disappointing  It lost almost 87k full-time positions after gaining nearly 53k in June. Part-time positions increased (46k), leading to a 40.9k loss of overall jobs. The median forecast (Bloomberg survey) was for a gain of 25k jobs. The unemployment rate slipped to a new record low of 3.4% (from 3.5%) but this was due to a sharp drop in the participation rate (66.4% from 66.8%). Ostensibly, this could give the central bank space to be more flexible at its September 6 meeting. However, the futures market as taken it in stride that has left the odds of a 50 bp hike next month essentially unchanged around 57%. This is essentially where it was at the end of last week and the week before. Many are now familiar with China's rolling lockdowns to combat Covid and the implosion of property market, a key engine of growth and accumulation  A new threat has emerged. The extreme weather has seen water levels in Sichuan's hydropower reserves as much as 50% this month, according to report, prompting the shuttering of factories (hub for solar panels, cement, and urea). Dazhou, a city of nearly 3.5 mln people, imposed a 2 1/2-hour power cuts this week that were expanded to three hours yesterday. Office buildings in Chengdu, the provincial capital, were barred from using air conditioning. Many areas in central and northern China imposed emergency measures to ensure the availability of drinking water. The heat and drought threaten summer crops and risk greater food-driven inflation. At the same time, Shanxi, which provides about a quarter of China's coal is worried about floods, it has suspended the operation of more than 100 mines since June. The government-imposed measures to boost output and Shanxi coal output rose by around 16% in H1.  The dollar is confined to a narrow range, straddling the JPY135 area  It has held `below last week's high around JPY135.60 and above the JPY134.55, where options for $700 mln expire today. The Australian dollar has been sold aggressively this week. It began near $0.7115 and tested $0.6900 today, meeting the (50%) retracement objective of the rally from the mid-July low (~$0.6880). It was only able to make a marginal new low today, suggesting that the selling pressure has abated. The next retracement (61.8%) is closer to $0.6855. Initial resistance is seen around $0.6950. After slipping a little yesterday, the greenback returned to its recent highs against the Chinese yuan around CNY6.7960. This year's high was set in May near CNY6.8125. Between Covid lockdowns, the weather disruptions, and the continued unwinding of the property bubble, a weaker yuan may the path of least resistance. The PBOC set the dollar's reference rate at CNY6.7802 compared with expectations from Bloomberg's survey of CNY6.7806. The yuan is falling for the sixth consecutive month against the dollar. Europe The eurozone may not have completed its banking and monetary union, but the ECB said that it would harmonize how banks offer crypto assets and have sufficient capital and expertise  Crypto companies have negotiated with national authorities in several EMU member countries, but common EU licensing rules are unlikely any time soon. There is a patchwork of differing national rules, and in some countries, some types of crypto activity may require a banking license, for example. Norway's central bank hiked its deposit rate by 50 bp and indicated it would "most likely" lift rates again next month What makes today's move somewhat more aggressive that it may appear is that the hike took place at a meeting that did not include an economic update and projections for the future path of policy. Norges Bank acknowledged that the policy rate trajectory would be faster than projected in June and the inflation risks being higher for longer. The deposit rate now sits at 1.75%. Another 50 bp hike next month (September 22) seems likely followed by a 25 bp move in November, the last meeting of the year. The euro briefly popped a little above $1.02 on what was initially seen as dovish FOMC minutes in the North American afternoon yesterday  However, it returned to yesterday's lows low near $1.0145 before finding a bid. The week's low was set Tuesday slightly below $1.0125, which is ahead of the retracement objective we identified near $1.0110. The euro is consolidating as the US two-year premium over Germany falls to its lowest level in a nearly a month (2.54%), and almost 25 bp below the peak seen after the US jobs data on August 5. Labor disputes are crippling UK trains, buses, subways, and a key container port today. Sterling slipped to $1.1995, its lowest level since July 26. The nicking of the neckline of a possible double top was not a convincing violation and sterling has recovered to the $1.2060 area in the London morning. If this is not the peak in sterling, it seems close. Tomorrow, the UK is expected to report a decline in July retail sales, excluding gasoline. This measure of retail sales rose by 0.4% in June, the first increase since last October. The median forecast (Bloomberg survey) is for a 0.3% fall. The swaps market is pricing in a 50 bp hike at the mid-September BOE meeting and about a 1-in-5 chance of a 75 bp move. America US interest rates softened and dragged the dollar lower following the release of the FOMC minutes  The market seems to have focused on the concern of "many" members that it could over-tighten but there was no sign that this was going to prevent them for raising rates further. Indeed, it suggest that the risk of inflation expectations becoming embedded was greater. More hikes were appropriate, the minutes said, and a restrictive stance may be required for "some time". The minutes also played the recent pullback in commodity prices as an indicator of lower inflation, which it still says the evidence is lacking. When everything was said and done the September Fed funds futures were unchanged for the fourth consecutive session. Autos and gasoline held by retail sales in July, but excluding them, retail sales rose by 0.7%, matching the June increase  The core measure, which also excludes building materials and food services rose a solid 0.8%. Retail sales account for around 40% of personal consumption expenditures. The July PCE is due next week (August 26) and picks up service consumption too. The early call is for it to rise by 0.5%. However, it too is a nominal report, and in real terms, a 0.3%-0.4% gain would be a strong showing. The retail sales report lent credence to anecdotal stories about department stores discounting prices to move inventory. Amazon's Prime Day (July 12-13) was claimed to be the biggest so far. Online sales overall surged 2.7%. Today's data includes weekly jobless claims, the Philadelphia Fed survey, existing home sale, and the index of Leading Economic Indicators  Th four-week average of weekly jobless claims rose to 252k in the week ending August 5. Recall the four-week moving average, used to smooth out some of the noise bottomed in the week ending April 1 at 170.5k. They averaged around 238k in December 2019, which was the highest since the first half of January 2018. Continuing claims have edged higher in recent weeks, but at 1.428 mln, they are roughly 20% below the peak at the start of this year. The Philadelphia Fed survey is particularly interesting today because of the disastrous Empire State survey. The median forecast in Bloomberg's survey is for a -5 reading after -12.3 in July. Meanwhile, existing home sales have fallen for five months through June. In fact, new home sales have been fallen every quarter since the end of 2020, with the exception of Q3 21. They fell by an average of 1.7% in Q1 22 and 3.8% in Q2 22. The median forecast is for a nearly 5% decline in July. The market tends not to get excited about the leading economic index series. Economists expected the fifth consecutive decline. The only month it rose this year was February. The US dollar extended its recovery against the Canadian dollar to reach almost CAD1.2950, its highest level since August 8 today  It was pressed lower by new offers in the European morning that drove it back to almost CAD1.2900. The market may take its cues from the S&P 500 and the general risk appetites in the North American session. With the intraday momentum indicators stretched, yesterday's post-FOMC minutes low near CAD1.2880 may offer sufficient support. The greenback rose to a five-day high against the Mexican peso yesterday around MXN20.09. It is consolidating and straddling the MXN20.00 area. Our reading of the technical condition favors the dollar's upside, and the first important target is near MXN20.20. The US dollar gapped higher against the Brazilian real yesterday and approached the BRL5.22 area, where the 20-day and 200-day moving averages converge. The opening gap was closed late on the pullback spurred by the reading of FOMC minute headlines. The price action is similar to the peso, where the dollar has traded heavily since last month but appears to have found a bottom. A break above BRL5.22 would target the month's high near BRL5.3150.       Disclaimer   Source: Fed Minutes were Not as Dovish as Initially Read
West Texas Intermediate (WTI) Price Analysis: The Oil Price Has Corrected And Dropped

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

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

Crude Oil Has A Selling Weariness? Europe Prefers Oil Over Gas!?

Ole Hansen Ole Hansen 18.08.2022 16:14
Summary:  Crude oil, in a downtrend since June, is showing signs of selling fatigue with the technical outlook turning more price friendly while fresh fundamental developments are adding some support as well. The energy crisis in Europe continues to strengthen, most recently due to lower water levels on the river Rhine preventing the movement of barges carrying coal and fuel products such as diesel. The result being an increased gas-to-fuel switching supporting the demand outlook for crude oil. Crude oil, in a downtrend since June, is showing signs of selling fatigue with the technical outlook turning more price friendly while fresh fundamental developments are adding some support as well. Worries about an economic slowdown driving by China’s troubled handling of Covid outbreaks, and its property sector problems as well as rapidly rising interest rates, were the main drivers behind the selling seen across commodities in recent months. Crude oil with its strong underlying fundamentals, with tight supply driven by Russia sanctions and OPEC struggling to lift production, was the last shoe to drop and since the mid-June peak, speculators and macroeconomic focused funds have been net sellers of both WTI and Brent crude oil futures. With most of these market participants using the front of the futures curve, the selling has seen the forward curve flatten, a development that is normally viewed as price negative as it signals reduced tightness in the market. However, for that to ring true we should see inventory levels of crude oil and fuel products rise while refinery margins should ease. None of these developments have occurred and it strengthens our belief that the weakness sign has more to do with position adjustments and short positions being implemented by traders focusing on macro instead of micro.  In the week to August 9, the combined net long in Brent and WTI slumped to 304k lots a level last seen in April 2020, and 209k lots below the mid-June peak.  While the macro-economic outlook is still challenged, recent developments within the oil market, so-called micro developments, have raised the risk of a rebound. The energy crisis in Europe continues to strengthen, most recently due to lower water levels on the river Rhine preventing the movement of barges carrying coal and fuel products such as diesel. The result being surging gas prices as utilities are forced to buy more gas to keep the turbines running. This week the cost of Dutch TTF benchmark gas reached $400 per barrel of crude oil equivalent. Such a wide gap between oil and gas has and will continue to attract increased demand for fuel-based product at the expense of gas and this switch was specifically mentioned by the IEA in their latest update as the reason for raising their 2022 global oil demand growth forecast by 380k barrels per day to 2.1 million barrels per day. Since the report was published the incentive to switch has increased even more, adding more upward pressure on refinery margins, so called crack spreads (EU diesel crack shown below as an example) As mentioned, the recent selling pressure together with a deteriorating macro-economic backdrop have been the main drivers behind crude oils near 40-dollar slump since mid-June. The WTI chart below points to support at $85.50, a level almost reached on Tuesday. The price action is currently confined within a declining wedge and a break to the upside could trigger a strong buying response. For that to happen the price first needs to go back above $92 and the 21-day simple moving average, currently at $92.85. Source: Saxo Bank   How to invest in energy and the unfolding energy crisis? By Peter Garnry, Head of Equity StrategySummary:  We are used to not think about the energy sector, but the galloping global energy crisis has illuminated our deficits in primary energy due to years of underinvestment in fossil fuels and renewable energy sources inability to scale fast enough with the green transformation and electrification of our economy. It seems more likely now that the non-renewable and the renewable energy sector will both provide attractive returns as we will need both to overcome our short-term energy crisis and long-term aspirations of a greener energy future.   Source: Refinery margin jump lends fresh support to crude
Saxo Bank Podcast: Nvidia And Siemens Earnings, The Budget Statement From UK And More

Online Gaming Is Still The Biggest Source Of Income. Diablo Immortal Is The Most Downoloaded Game On The IOS

Conotoxia Comments Conotoxia Comments 18.08.2022 17:14
NetEase is a Chinese technology company that operates in three segments - online games, search engine (Youdao) and online music (Cloud Music). The company operates both in China and internationally. It is famous for games such as 'The Lord of the Rings: Rise to War', 'Vikingard', 'Lifeafter' and 'Knives Out'. Its shares have fallen more than 10% since the beginning of the year, along with other companies in the Chinese technology sector, by the Chinese government's ambiguous action in the area of interference in their operations, fears of delisting in the US and deteriorating economic indicators in China. However, it is fair to say that its price has still proved to be far more resilient to the issues mentioned above than those of Tencent, Alibaba and Baidu. The company's revenue was 23.2 billion renminbi (US$3.5 billion) in the second quarter, growing 12.8 % year-on-year, slightly beating Wall Street analysts' expectations. Cloud Music revenue grew the most to 2.2 billion renminbi ($327.2 million), rising 29.5% year on year. Online gaming remains the most important revenue stream, with Q2 revenue of 18.1 billion renminbi ($2.7 billion). This increased by 15% compared to the same period a year ago. This was mainly due to the debut of Diablo Immortal, co-developed by NetEase with Blizzard Entertainment. According to the company's report, it became the most downloaded game on the IOS platform in some regions. Major franchise titles had their longevity extended, including the fantasy series Westward Journey and Westward Journey Online, as well as Identity V and Infinite Lagrange. "Players continued to gravitate to our longstanding games in the second quarter, highlighting our strength in game operations longevity. Moreover, the launch of Diablo® Immortal™ attracted the attention of gamers around the world, showcasing our exceptional mobile game development capabilities" - stated CEO William Ding. Revenue fell sharply in the Youdao area, down 29.5% year on year. However, this is the smallest source of revenue and only amounted to 956.2 million renminbi ($142.8 million) in the quarter. Q2 saw a net profit of $790 million, due to lower costs of player retention costs compared to new player acquisitions. Earnings per share (EPS) for those listed in New York were $1.22 on an adjusted basis, beating analysts' estimates by 17 cents. NetEase shares gained almost 3% before the market opened. Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: NetEase increases profits despite declining revenues
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

Fed's Plan Is To Push For More Rate Hikes To Boost Dollar (USD)!?

Saxo Strategy Team Saxo Strategy Team 19.08.2022 10:37
Summary:  Better than expected economic data continued to support sentiment in US in contrast to Europe, where ECB’s Schnabel's warning on the growth/inflation picture aggravated concerns. Fed speakers meanwhile continued to push for more rate hikes this year, aiding dollar strength despite lack of a clear direction in long end yields. EUR and GBP broke below key support levels, but oil prices climbed higher amid improving demand outlook but sustained supply issues. Focus now on Jackson Hole next week. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  In its second lightest volume session of the year, U.S. equities edged modestly higher, S&P 500 +0.23%, Nasdaq 100 +0.26%. As WTI crude climbed 2.7%, rebounding back above $90, the energy space was a top gainer aside from technology. Exxon Mobil (XOM:xnys) gained 2.4%.  Cisco (CSCO:xnas) surged 5.8% after reporting better-than-expected revenues. Nvidia (NVDA:xnas), +2.4% was another top contributor to the gain of the S&P 500 on Wednesday.  95% of S&P 500 companies have reported Q2 results, with about three-quarters of them managing to beat analyst estimates. On Friday there is a large number of options set to expire.  The U.S. treasury yield curve bull steepened on goldilocks hope The U.S. 2-10-year curve steepened 7bps to -32bps, driven by a 9bp decline in the 2-year yield.  In spite of hawkish Fed official comments and the August Philadelphia Fed Index bouncing back to positive territory, the market took note of the falls in the prices paid diffusion index and the prices received index from the survey and sent the short-end yields lower.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Both Hang Seng Index and CSI300 declined about 0.8%.  Tencent (00700:xhkg) rose 3.1% after reporting results that beat estimates as a result of better cost control and adverting revenues. Other China internet stocks traded lower, Bilibili (09626:xhkg) -4.2%, Baidu (09888:xhkg) -4.5%, Alibaba (09988:xhkg) -2.1%, JD.COM (09618:xhkg) -2.5%. The surge of Covid cases in China to a three-month high and the Hainan outbreak unabated after a 2-week lockdown, pressured consumer stocks.  Great Wall Motor (02333:xhkg) led the charge lower in autos, plunging near 6%.  Other automakers fell 2% to 4%.  Geely (00175:xhkg) fell 3.1% after reporting 1H earnings missing estimates.  A share Chinese liquor names declined, Kweichow Moutai (600519:xssc) -1.2%, Wuliangye Yibin (000858:xsec) -1.6%. Chinese brewers were outliner gainers in the consumer space, China Resources Beer (00291:xhkg) +4.8%, Tsingtao Brewery (00168:xhkg) +1.9%. Chinese property developers traded lower with Country Garden (02007:xhkg) losing the most, -5.2% , after warning that 1H earnings may have been down as much as 70%. The China Banking and Insurance Regulatory Commission (CBIRC) is looking at the quality of real estate loan portfolios at some financial institutions.  EURUSD and GBPUSD break through key support levels Dollar strength prevailed into the end of the week with upbeat US economic data and a continued hawkish Fedspeak which continued to suggest more Fed rate hikes remain in the pipeline compared to what the market is currently pricing in. EUR and GBP were the biggest loser, with both of them breaking below key support levels. EURUSD slid below 1.0100 handle while GBPUSD broke below 1.2000 despite a selling in EGBs and Gilts. USDJPY also broke above 136 in early Asian trading hours despite lack of a clear direction in US 10-year yields and a slide in 2-year yields. AUDUSD testing a break below 0.6900 as NZDUSD drops below 0.6240. Crude oil prices (CLU2 & LCOV2) Oil prices reversed their drop with WTI futures back above $90/barrel and Brent futures above $96. Upbeat US economic data has supported the demand side sentiment in recent days. Moreover, President Xi’s comment that China will continue to open up the domestic economy also aided the demand equation. Supply concerns, meanwhile, were aggravated by geopolitical tension around a potential incident at the Zaporizhzhia nuclear plant in Ukraine. Meanwhile, Shell hinted at reducing the capacity of Rhineland oil refinery due to the lower water level on the Rhine river and said the situation regarding supply is challenging but carefully managed. Gold (XAUUSD) still facing mixed signals The fate of gold has been turned lower again this week with the yellow metal facing decline of 2.5% so far in the week and breaking below the $1759 support, the 38.2% retracement of the July to August bounce. Stronger dollar, along with Fed’s continued hawkish rhetoric, weighed. Silver (XAGUSD) is also below the key support at $19.50, retracing half of its recent gains. The short-term direction has been driven by speculators reducing bullish bets, but with inflation remaining higher-for-longer, the precious metals can continue to see upside in the long run. What to consider? Existing home sales flags another red for the US housing market US existing home sales fell in July for a sixth straight month to 4.81 mn from 5.11 mn, now at the slowest pace since May 2020, and beneath the expected 4.89 mn. Inventory levels again continued to be a big concern, with supply rising to 3.3 months equivalent from 2.9 in June. This continues to suggest that the weakening demand momentum and high inventory levels may weigh on construction activity. US economic data continues to be upbeat The Philly Fed survey outperformed expectations, with the headline index rising to +6.2 (exp. -5.0, prev. -12.3), while prices paid fell to 43.6 (prev. 52.2) and prices received dropped to 23.3 (prev. 30.3). new orders were still negative at -5.1, but considerably better than last month’s -24.8 and employment came in at 24.1 from 19.4 previously. While this may be a good signal, survey data tends to be volatile and a long-term trend is key to make any reasonable conclusions. Jobless claims also slid to 250k still suggesting that the labor market remains tight. Fed speakers push for more rate hikes St. Louis Federal Reserve President James Bullard flagged another 75 basis point rate hike at the September meeting and hinted at 3.75-4% Fed funds rate by the end of the year with more front-loading in 2022. Fed’s George, much like Fed’s Daly, said that last month’s inflation is not a victory and hardly comforting. Bullard and George vote in 2022. Fed’s Kahskari said that he is not sure if the Fed can avoid a recession and that there is more work to be done to bring inflation down, but noted economic fundamentals are strong. Overall, all messages remain old and eyes remain on Fed Chair Powell speaking at the Jackson Hole conference on August 25. Japan’s inflation came in as-expected Japan’s nationwide CPI for July accelerated to 2.6% y/y, as expected, from 2.4% y/y in June. The core measure was up 2.4% y/y from 2.2% previously, staying above the Bank of Japan’s 2% target and coming in at the strongest levels since 2008. Upside pressures remain as Japan continues to face a deeper energy crisis threat into the winter with LNG supplies possibly getting diverted to Europe for better prices. Still, Bank of Japan may continue to hold its dovish yield curve control policy unless wage inflation surprises consistently to the upside. Cisco’s revenues came in flat, beating a previously feared decline Cisco Systems reports July 2022 quarter revenues of USD13.1 billion, down 0.2% YoY but better than the consensus of a 3% decline.  Net income came in at USD3.4 billion, -3.2% YoY but more than 1 percentage point above consensus.  The fall in product order was also smaller than feared.  The company guided the fiscal year 2023 revenue growth of +4% to +6%, ahead of the 3% expected and FY23 EPS of USD3.49 to USD3.56, in line with expectations as gross margin pressures are expected to offset the impact of higher sales.  NetEase’s Q2 results beat NetEase (09999:xhkg/NTES:xnas) reported above-consensus Q2 revenues, +13% YoY, and net profit from continuing operations, +28%.  PC online game revenues were above expectations, driven by Naraka Bladepoint content updates and the launch of Xbox version.  Mobile game segment performance was in line.  Geely Automobile 1H earnings missed estimates on higher costs Chinese automaker Geely reported higher-than-expected revenue growth of 29%YoY in 1H22 but a 35% YoY decline in net profit which was worse than analyst estimates.  The weakness in profit was mainly a result of a 2.6 percentage point compression of gross margin to 14.6% due to higher material costs and production disruption, higher research and development costs, and the initial ramping-up of production of the Zeekr model.  The company maintains its sales volume target of 1.65 million units, an growth of 24% YoY, for the full year of 2022.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 19, 2022
Ukraine Saves The Day For The World As The Corridor Shipping Crops Is Opened. Other Countries Harvest Is Quite Low Therefore To Weather Issues

Ukraine Saves The Day For The World As The Corridor Shipping Crops Is Opened. Other Countries Harvest Is Quite Low Therefore To Weather Issues

Saxo Strategy Team Saxo Strategy Team 19.08.2022 11:33
Summary:  Equity markets managed a quiet session yesterday, a day when the focus is elsewhere, especially on the surging US dollar as EURUSD is on its way to threatening parity once again, GBPUSD plunged well below 1.2000 and the Chinese renminbi is perched at its weakest levels against the US dollar for the cycle. Also in play are the range highs in longer US treasury yields, with any significant pull to the upside in yields likely to spell the end to the recent extended bout of market complacency.   What is our trading focus?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures bounced back a bit yesterday potentially impacted by the July US retail sales showing that the consumer is holding up in nominal terms. The key market to watch for equity investors is the US Treasury market as the US 10-year yield seems to be on a trajectory to hit 3%. In this case we would expect a drop in S&P 500 futures to test the 4,200 level and if we get pushed higher in VIX above the 20 level then US equities could accelerate to the downside. Fed’s Bullard comments that he is leaning towards a 75 basis point rate hike at the September meeting should also negatively equities here relative to the expectations. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index edged up by 0.4% and CSI300 was little changed. As WTI Crude bounced back above $90/brl, energy stocks outperformed, rising 2-4%. Technology names in Hong Kong gained with Hang Seng Tech Index (HSTECH.I) up 0.6%. Investors are expecting Chinese banks to cut loan prime rates on Monday, following the central bank’s rate cut earlier this week. The China Banking and Insurance Regulatory Commission (CBIRC) is looking at the quality of real estate loan portfolios and reviewing lending practices at some Chinese banks. The shares of NetEase (09999:xhkg/NTES:xnas) dropped more than 3% despite reporting above-consensus Q2 revenue up 13% y/y, and net profit from continuing operations up 28%.  PC online game revenue was above expectations, driven by Naraka Bladepoint content updates and the launch of Xbox version. Mobile game segment performance was in line. USD pairs as the USD rally intensifies The US dollar rally is finding its legs after follow up action yesterday that took EURUSD below the key range low of 1.0100, setting up a run at the psychologically pivotal parity, while GBPUSD slipped well south of the key 1.2000 and USDJPY ripped up through 135.50 resistance. An accelerator of that move may be applied if US long treasury yields pull come further unmoored from the recent range and pull toward 3.00%+. A complete sweep of USD strength would arrive with a significant USDCNH move as discussed below, and the US dollar “wrecking ball” will likely become a key focus and driver of risk sentiment as it is the premiere measure of global liquidity. The next key event risk for the US dollar arrives with next Friday’s Jackson Hole symposium speech from Fed Chair Powell. USDCNH The exchange rate is trading at the highs of the cycle this morning, and all traders should keep an eye out here for whether China allows a significant move in the exchange rate toward 7.00, and particularly whether CNH weakness more than mirrors USD strength (in other words, if CNH is trading lower versus a basket of currencies), which would point to a more determined devaluation move that could spook risk sentiment globally, something we have seen in the past when China shows signs of shifting its exchange rate regime from passive management versus the USD. Crude oil Crude oil (CLU2 & LCOV2) remains on track for a weekly loss with talks of an Iran nuclear deal and global demand concerns being partly offset by signs of robust demand for fuel products. Not least diesel which is seeing increasing demand from energy consumers switching from punitively expensive gas. Earlier in the week Dutch TTF benchmark gas at one point traded above $400 per barrel crude oil equivalent. So far this month the EU diesel crack spread, the margin refineries achieve when turning crude into diesel, has jumped by more than 40% while stateside, the equivalent spread is up around 25%, both pointing to a crude-supportive strength in demand. US natural gas US natural gas (NGU2) ended a touch lower on Thursday after trading within a 7% range. It almost reached a fresh multi-year high at $9.66/MMBtu after spiking on a lower-than-expected stock build before attention turned to production which is currently up 4.8% y/y and cooler temperatures across the country lowering what until recently had driven very strong demand from utilities. LNG shipments out of Freeport, the stricken export plant may suffer further delays, thereby keeping more gas at home. Stockpiles trail the 5-yr avg. by 13%. US Treasuries (TLT, IEF) The focus on US Treasury yields may be set to intensify if the 10-year treasury benchmark yield, trading near 2.90% this morning, comes unmoored from its recent range and trades toward 3.00%, possibly on the Fed’s increase in the pace of its quantitative tightening and/or on US economic data in the coming week(s). Yesterday’s US jobless claims data was better than expected and the August Philadelphia Fed’s business survey was far more positive than expected, suggesting expansion after the volatile Empire Fed survey a few days earlier posted a negative reading.   What is going on?   Global wheat prices continue to tumble ... with a record Russian crop, continued flows of Ukrainian grain and the stronger dollar pushing down prices. The recently opened corridor from Ukraine has so far this month seen more than 500,000 tons of crops being shipped, and while it's still far below the normal pace it has nevertheless provided some relief at a time where troubled weather has created a mixed picture elsewhere. The Chicago wheat (ZWZ2) futures contract touch a January on Thursday after breaking $7.75/bu support while the Paris Milling (EBMZ2) wheat traded near the lowest since March. Existing home sales flags another red for the US housing market while other US economic data continues to be upbeat US existing home sales fell in July for a sixth straight month to 4.81 mn from 5.11 mn, now at the slowest pace since May 2020, and beneath the expected 4.89 mn. Inventory levels again continued to be a big concern, with supply rising to 3.3 months equivalent from 2.9 in June. This continues to suggest that the weakening demand momentum and high inventory levels may weigh on construction activity. The Philly Fed survey meanwhile outperformed expectations, with the headline index rising to +6.2 (exp. -5.0, prev. -12.3), while prices paid fell to 43.6 (prev. 52.2) and prices received dropped to 23.3 (prev. 30.3). New orders were still negative at -5.1, but considerably better than last month’s -24.8 and employment came in at 24.1 from 19.4 previously Fed speakers push for more rate hikes St. Louis Federal Reserve President James Bullard 2.6% with more front-loading in 2022. Fed’s George, much like Fed’s Daly, said that last month’s inflation is not a victory and hardly comforting. Bullard and George vote in 2022. Fed’s Kashkari said that he is not sure if the Fed can avoid a recession and that there is more work to be done to bring inflation down, but noted economic fundamentals are strong. Overall, all messages remain old and eyes remain on Fed Chair Powell speaking at the Jackson Hole conference on August 26, next Friday.  Japan’s inflation came in as expected Japan’s nationwide CPI for July accelerated to 2.6% y/y, as expected, from 2.4% y/y in June. The core measure was up 2.4% y/y from 2.2% previously, staying above the Bank of Japan’s 2% target and coming in at the strongest levels since 2008. Upside pressures remain as Japan continues to face a deeper energy crisis threat into the winter with LNG supplies possibly getting diverted to Europe for better prices. Still, Bank of Japan may continue to hold its dovish yield curve control policy unless wage inflation surprises consistently to the upside.   What are we watching next?   Strong US dollar to unsettle markets – and Jackson Hole Fed conference next week? The US dollar continues to pull higher here, threatening the cycle highs versus sterling, the euro and on the comeback trail against the Japanese yen as well. The US dollar is a barometer of global liquidity, and a continued rise would eventually snuff out the improvement in financial conditions we have seen since the June lows in equity markets, particularly if longer US treasury yields are also unmoored from their recent range and rise back to 3.00% or higher.  The focus on the strong US dollar will intensify should the USDCNH exchange rate, which has pulled to the highs of the cycle above 6.80, lurch toward 7.00 in coming sessions as it would indicate that China is unwilling to allow its currency to track USD direction. As well, the Fed seems bent on pushing back against market expectations for Fed rate cuts next year and may have to spell this out a bit more forcefully at next week’s Jackson Hole conference starting on Thursday (Fed Chair Powell to speak Friday). Earnings to watch The two earnings releases to watch today are from Xiaomi and Deere. The Chinese consumer is challenged over falling real estate prices and input cost pressures on food and energy, and as a result consumer stocks have been doing bad this year. Xiaomi is one the biggest sellers of smartphones in China and is expected to report a 20% drop in revenue compared to last year. Deere sits in the booming agricultural sector, being one of the biggest manufacturers of farming equipment, and analysts expect a 12% gain in revenue in FY22 Q3 (ending 31 July).   Today: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 1230 – Canada Jun. Retail Sales 1300 – US Fed’s Barkin (Non-voter) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 19, 2022
Latam FX Outlook 2023: Brazil's Local Currency Bonds Can Be Very Attractive

Mexican Gold - Peso Is Climbing High. Russia Is Building Nuclear Plant In Turkey!?

Marc Chandler Marc Chandler 19.08.2022 14:26
Overview:  The dollar is on fire. It is rising against all the major currencies and cutting through key technical levels like a hot knife in butter. The Canadian dollar is the strongest of the majors this week, which often outperforms on the crosses in a strong US dollar environment. It is off 1.5% this week. The New Zealand dollar, where the RBNZ hiked rates this week by 50 bp, is off the most with a 3.5% drop. Emerging market currencies are mostly lower on the day and week as well. The JP Morgan Emerging Market Currency Index is off for the fifth consecutive session, and ahead of the Latam open, it is off 2.1% this week. Asia Pacific equities were mostly lower, and Europe’s is off around 0.4%. It was flat for the week coming into today. US futures are lower, and the S&P and NASDAQ look poised to snap its four-week advance. Gold, which began the week near $1800 is testing support near $1750 now. Next support is seen around $1744.50. October WTI is consolidating in the upper end of yesterday’s range, which briefly poked above $91. Initial support is pegged near $88. US natgas is softer for the third successive session, but near $9.04 is up about 3.2% for the week. Europe’s benchmark is up 1.7% and brings this week’s gain to almost 20%. Demand concerns weigh on iron ore. It was off marginally today, its fifth loss in six sessions. It tumbled 8.8% this week after a 1.15% gain last week. Copper is up fractionally after rising 1.3% yesterday. September wheat is trying to stabilize. It fell more than 4% yesterday, its fifth loss in a row. It is off around 8.5% this week. Asia Pacific Japan's July CPI continued to rise  Th headline now stands at 2.6%, up from 2.4% in June, up from 0.8% at the start of the year and -0.3% a year ago. The core measure that excludes fresh food accelerated from 2.2% to 2.4%. It is the fourth consecutive month above the 2% target. Excluding both fresh food and energy, Japan's inflation is less than half the headline rate at 1.2%. It was at -0.7% at the end of last year and did not turn positive until April. The BOJ's next meeting is September 22, and despite the uptick in inflation, Governor Kuroda is unlikely to be impressed. Without wage growth, he argues, inflation will prove transitory. With global bond yields rising again, the 10-year, the market may be gearing up to re-challenge the BOJ's 0.25% cap. The yield is finishing the week near 0.20%, its highest since late July. Separately, we note that after divesting foreign bonds in recent months, Japanese investors have returned to the buy side. They have bought foreign bonds for the past four weeks, according to Ministry of Finance data. Last week's JPY1.15 trillion purchases (~$8.5 bln) were the most since last September.  China surprised the markets to begin the week with a 10 bp reduction in the benchmark 1-year medium-term lending facility rate  It now stands at 2.75%. It was the first cut since January, which itself was the first reduction since April 2020. Before markets open Monday, China is expected to announce a 10 bp decline in the 1- and 5-year loan prime rates. That would bring them to 3.60% and 4.35%, respectively. These rates are seen closer to market rates, but the large banks that contribute the quotes are state-owned. There is some speculation that a larger cut in the 5-year rate. The one-year rate was cut in January, but the 5-year rate was cut by 15 bp in May. The dollar is rising against the yen for the fourth consecutive session  It has now surpassed the JPY137.00 area that marks the (61.8%) retracement of the decline from the 24-year high set-in mid-July near JPY139.40. There may be some resistance in the JPY137.00-25 area, but a retest on the previous high looks likely in the period ahead. The Australian dollar is off for the fifth consecutive session and this week's loss of 3% offset last week's gain of as similar magnitude and, if sustained, would be the largest weekly decline since September 2020. The Aussie began the week near $0.7125 and recorded a low today slightly below $0.6890. The $0.6855-70 area is seen as the next that may offer technical support. The PBOC set the dollar's reference rate at CNY6.8065 (median in Bloomberg's survey was CNY6.9856). The fix was the lowest for the yuan (strongest for the dollar) since September 2020. Yesterday's high was almost CNY6.7960 and today's low was a little above CNY6.8030. To put the price action in perspective, note that the dollar is approaching the (61.8%) retracement of the yuan's rise from mid-2020 (~CNY7.1780) to this year's low set in March (~CNY6.3065). The retracement is found around CNY6.8250. Europe UK retail sales surprised to the upside but are offering sterling little support  Retail sales including gasoline rose by 0.3% in July. It is the second gain of the year and the most since last October. Excluding auto fuel, retail sales rose by 0.4%, following a 0.2% gain in June. It is the first back-to-back gain since March and April 2021. Sales online surged 4.8% as discounts and promotions drew demand, and internet retailers accounted for 26.3% of all retail sales. Separately, consumer confidence, measured by GfK, slipped lower (-44 from -41), a new record low. Sterling is lower for the third consecutive session and six of the past seven sessions. The swaps market continues to price in a 50 bp rate hike next month and about a 1-in-5 chance of a 75 bp move. Nearly every press report discussing next month's Italian elections cited the fascist roots of the Brothers of Italy, which looks likely to lead the next government  Meloni, who heads up the Brothers of Italy and has outmaneuvered many of her rivals, and may be Italy's next prime minister, plays the roots down. She compares the Brothers of Italy to the Tory Party in the UK, the Likud in Israel, and the Republican Party in the US. The party has evolved, and the center-right alliance she leads no longer wants to leave the EU, it is pro-NATO, and condemns Russia's invasion of Ukraine. The center-right alliance may come close to having a sufficient majority in both chambers to make possible constitutional reform. High on that agenda appears to transform the presidency into a directly elected office. The Italian presidency has limited power under the current configuration, but it has been an important stabilizing factor in crisis. Ironically, the president, picked by parliament, stepped in during the European debt crisis and gave Monti the opportunity to form a technocrat government after Berlusconi was forced to resign in 2011. Fast-forward a decade, a government led by the Conte and the Five Star Movement collapsed and a different Italian president gave Draghi a chance to put together a government. It almost last a year-and-half. Its collapse set the stage for next month's election. The center-left is in disarray and its inability to forge a broad coalition greases the path for Meloni and Co. Italy's 10-year premium over German is at 2.25%, a new high for the month. Last month, it peaked near 2.40%. The two-year premium is wider for the sixth consecutive session. It is near 0.93%, more than twice what it was before the Draghi government collapsed. Some critics argue against the social sciences being science because of the difficulty in conducting experiments  Still an experiment is unfolding front of us. What happens when a central bank completely loses its independence and follows dubious economic logic?  With inflation at more than two decades highs and the currency near record lows, Turkey's central bank surprised everyone by cutting its benchmark rate 100 bp to 13% yesterday. Governor Kavcioglu hinted this was a one-off as it was preempting a possible slowdown in manufacturing. Even though President Erdogan promised in June rates would fall, some observers link the rate cut to the increase in reserves (~$15 bln) recently from Russia, who is building a nuclear plant in Turkey. The decline in oil prices may also help ease pressure on Turkey's inflation and trade deficit. The lira fell to new record-lows against the dollar. The lira is off about 7.5% this quarter and about 26.4% year-to-date. Significant technical damage has been inflicted on the euro and sterling  The euro was sold through the (61.8%) retracement objective of the runup since the mid-July two-decade low near $0.9950. That retracement area (~$1.0110) now offers resistance, and the single currency has not been above $1.01 today. We had suspected the upside correction was over, but the pace of the euro's retreat surprises. There is little from a technical perspective preventing a test on the previous lows. Yesterday, sterling took out the neckline of a potential double top we have been monitoring at $1.20. It is being sold in the European morning and has clipped the $1.1870 area. The low set-in mid-July was near $1.1760, and this is the next obvious target and roughly corresponds to the measuring objective of the double top.  America With no dissents at the Fed to last month's 75 bp hike, one might be forgiven for thinking that there are no more doves  Yet, as we argued even before Minneapolis Fed President Kashkari, once regarded as a leading dove, admitted that his dot in June was the most aggressive at 3.90% for year-end, hawk and dove are more meaningful within a context. Kashkari may be more an activist that either a hawk or dove. Daly, the San Francisco Fed President does not vote this year, suggested that a Fed funds target "a little" over 3% this year would be appropriate. She said she favored a 50 bp or a 75 bp move. The current target range is 2.25%-2.50%. and the median dot in June saw a 3.25%-3.50% year-end target. St. Louis Fed President Bullard says he favors another 75 bp hike next month. No surprise there. George, the Kansas, Fed President, dissented against the 75 bp hike in June seemingly because of the messaging around it, but it's tough to call her vote for a 50 bp hike dovish. She voted for the 75 bp move in July. She recognizes the need for additional hikes, and the issue is about the pace. George did not rule out a 75 bp hike while cautioning that policy operates on a lag. Barkin, the Richmond Fed President, also does not vote this year. He is the only scheduled Fed speaker today.  The odds of a 75 bp in September is virtually unchanged from the end of last week around a 50/50 proposition.  The October Fed funds implies a 2.945% average effective Fed funds rate. The actual effective rate has been rocksteady this month at 2.33%. So, the October contract is pricing in 61 bp, which is the 50 bp (done deal) and 11 of the next 25 bp or 44% chance of a 75 hike instead of a half-point move. Next week's Jackson Hole conference will give Fed officials, and especially Chair Powell an opportunity to push back against the premature easing of financial conditions  The better-than-expected Philadelphia Fed survey helps neutralize the dismal Empire State manufacturing survey. The median from Bloomberg's survey looked for improvement to -5 from -12.3. Instead, it was reported at 6.2. Orders jumped almost 20 points to -5.1 and the improvement in delivery times points to the continued normalization of supply chains. Disappointingly, however, the measure of six-month expectations remained negative for the third consecutive month. Still, the plans for hiring and capex improved and the news on prices were encouraging. Prices paid fell to their lowest since the end of 2020 (energy?) and prices received were the lowest since February 2021. The Fed also asked about the CPI outlook. The median sees it at 6% next year down from 6.5% in May. The projected rate over the next 10-years slipped to 3%. Canada and Mexico report June retail sales today  Lift by rising prices, Canada's retail sales have posted an average monthly gain this year of 1.5%. However, after a dramatic 2.2% increase in May, Canadian retail sales are expected (median in Bloomberg' survey) to rise by a modest 0.4%. Excluding autos, retail sales may have held up better. Economists look for a 0.9% increase after a 1.9% rise in May. Through the first five months of the year, Mexico's retail sales have risen by a little more than 0.5% a month. They have risen by a 5.2% year-over-year. Economists expected retail sales to have slowed to a crawl in June and see the year-over-year pace easing to 5.0%. The greenback rose the CAD1.2935 area that had capped it in the first half of the week. It settled near CAD1.2950 yesterday and is pushing closer to CAD 1.2980 now. Above here, immediate potential extends toward CAD1.3035. The US dollar is gaining for the third consecutive session against the Canadian dollar, the longest advancing streak in a couple of months. Support is seen in the CAD1.2940-50 area. The Mexican peso is on its backfoot, and is falling for the fourth session, which ended a six-day rally. The dollar has met out first target near MXN20.20 and is approaching the 20-day moving average (~MXN20.2375). Above there, the next technical target is MXN20.32. The broader dollar gains suggest it may rise above the 200-day moving average against the Brazilian real (~BRL5.2040) and the (38.2%) of the slide since the late July high (~BRL5.5140) that is found near BRL5.2185.    Disclaimer   Source: The Dollar is on Fire
Commodities: Deglobalization, Green Transformation, Urbanization And Other Things That Got Involved

Commodities: Deglobalization, Green Transformation, Urbanization And Other Things That Got Involved

Ole Hansen Ole Hansen 19.08.2022 15:50
Summary:  Commodities traded with a softer bias this week as the focus continued to rest on global macro-economic developments, in some cases reducing the impact of otherwise supportive micro developments, such as the fall in inventories seen across several individual commodities. Overall, however, we do not alter our long-term views about commodities and their ability to move higher over time, with some of the main reasons being underinvestment, urbanization, green transformation, sanctions on Russia and deglobalization. Commodities traded with a softer bias this week as the focus continued to rest on global macro-economic developments, in some cases reducing the impact of otherwise supportive micro developments, such as the fall in inventories seen across several individual commodities. The dollar found renewed strength and bond yields rose while the month-long bear-market bounce across US stocks showed signs of running out of steam.The trigger being comments from Federal Reserve officials reiterating their resolve to continue hiking rates until inflation eases back to their yet-to-be revised higher long-term target of around 2%. Those comments put to rest expectations that a string of recent weak economic data would encourage the Fed to reduce the projected pace of future rate hikes.The result of these developments being an elevated risk of a global economic slowdown gathering pace as the battle against inflation remains far from won, not least considering the risk of persistent high energy prices, from gasoline and diesel to coal and especially gas. A clear sign that the battle between macro and micro developments continues, the result of which is likely to be a prolonged period of uncertainty with regards to the short- and medium-term outlook.Overall, however, these developments do not alter our long-term views about commodities and their ability to move higher over time. In my quarterly webinar, held earlier this week, I highlighted some of the reasons why we see the so-called old economy, or tangible assets, performing well over the coming years, driven by underinvestment, urbanization, green transformation, sanctions on Russia and deglobalization. Returning to this past week’s performance, we find the 2.3% drop in the Bloomberg Commodity Index, seen above, being in line with the rise in the dollar where gains were recorded against all the ten currencies, including the Chinese renminbi, represented in the index. It is worth noting that EU TTF gas and power prices, which jumped around 23% and 20% respectively, and Paris Milling wheat, which slumped, are not members of the mentioned commodity index.Overall gains in energy led by the refined products of diesel and US natural gas were more than offset by losses across the other sectors, most notably grains led by the slump in global wheat prices and precious metals which took a hit from the mentioned dollar and yield rise. Combating inflation and its impact on growth remains top of mind Apart from China’s slowing growth outlook due to its zero-Covid policy and housing market crisis hitting industrial metals, the most important driver for commodities recently has been the macro-economic outlook currently being dictated by the way in which central banks around the world have been stepping up efforts to curb runaway inflation by forcing down economic activity through aggressively tightening monetary conditions. This process is ongoing and the longer the process takes to succeed, the bigger the risk of an economic fallout. US inflation expectations in a year have already seen a dramatic slump but despite this the medium- and long-term expectations remain anchored around 3%, still well above the Fed’s 2% target.Even reaching the 3% level at this point looks challenging, not least considering elevated input costs from energy. Failure to achieve the target remains the biggest short-term risk to commodity prices with higher rates killing growth, while eroding risk appetite as stock markets resume their decline. These developments, however, remain one of the reasons why we find gold and eventually also silver attractive as hedges against a so-called policy mistake. Global wheat prices tumble The prospect for a record Russian crop and continued flows of Ukrainian grain together with the stronger dollar helped push prices lower in Paris and Chicago. The recently opened corridor from Ukraine has so far this month seen more than 500,000 tons of crops being shipped, and while it's still far below the normal pace, it has nevertheless provided some relief at a time where troubled weather has created a mixed picture elsewhere. The Chicago wheat futures contract touched a January low after breaking $7.75/bu support while the Paris Milling (EBMZ2) wheat traded near the lowest since March. With most of the uncertainties driving panic buying back in March now removed, calmer conditions should return with the biggest unknown still the war in Ukraine and with that the country’s ability to produce and export key food commodities from corn and wheat to sunflower oil. EU gas reaches $73/MMBtu or $415 per barrel of oil equivalent Natural gas in Europe headed for the longest run of weekly gains this year, intensifying the pain for industries and households, while at the same time increasingly threatening to push economies across the region into recession. The recent jump on top of already elevated prices of gas and power, due to low supplies from Russia, has been driven by an August heatwave raising demand while lowering water levels on the river Rhine. This development has increasingly prevented the safe passage of barges transporting coal, diesel and other essentials, while refineries such as Shell’s Rhineland oil refinery in Germany have been forced to cut production. In addition, half of Europe’s zinc and aluminum smelting capacity has been shut, thereby adding support to these metals at a time the market is worried about the demand outlook.An abundance of rain and lower temperatures may in the short term remove some of the recent price strength but overall, the coming winter months remain a major worry from a supply perspective. Not least considering the risk of increased competition from Asia for LNG shipments. Refinery margin jump lends fresh support to crude oil Crude oil, in a downtrend since June, is showing signs of selling fatigue with the technical outlook turning more price friendly while fresh fundamental developments are adding some support as well. Worries about an economic slowdown driven by China’s troubled handling of Covid outbreaks and its property sector problems as well as rapidly rising interest rates were the main drivers behind the selling since March across other commodity sectors before eventually also catching up with crude oil around the middle of June. Since then, the price of Brent has gone through a $28 dollar top to bottom correction. While the macro-economic outlook is still challenged, recent developments within the oil market, so-called micro developments, have raised the risk of a rebound. The mentioned energy crisis in Europe continues to strengthen, the result being surging gas prices making fuel-based products increasingly attractive. This gas-to-fuel switch was specifically mentioned by the IEA in their latest update as the reason for raising their 2022 global oil demand growth forecast by 380k barrels per day to 2.1 million barrels per day. Since the report was published, the incentive to switch has increased even more, adding more upward pressure on refinery margins. While pockets of demand weakness have emerged in recent months, we do not expect these to materially impact on our overall price-supportive outlook. Supply-side uncertainties remain too elevated to ignore, not least considering the soon-to-expire releases of crude oil from US Strategic Reserves and the EU embargo of Russian oil fast approaching. In addition, the previously mentioned increased demand for fuel-based products to replace expensive gas. With this in mind, we maintain our $95 to $115 range forecast for the third quarter. Gold and silver struggle amid rising dollar and yields Both metals, especially silver, were heading for a weekly loss after hawkish sounding comments from several FOMC members helped boost the dollar while sending US ten-year bond yields higher towards 3%. It was the lull in both that helped trigger the recovery in recent weeks, and with stock markets having rallied as well during the same time, the demand for gold has mostly been driven by momentum following speculators in the futures market. The turnaround this past week has, as a result of speculators' positioning, been driven by the need to reduce bullish bets following a two-week buying spree which lifted the net futures long by 63k lots or 6.3 million ounces, the strongest pace of buying in six months. ETF holdings meanwhile have slumped to a six-month low, an indication that investors, for now, trust the FOMC’s ability to bring down inflation within a relatively short timeframe. An investor having doubts about this should maintain a long position as a hedge against a policy mistake. Some investors may feel hard done by gold’s negative year-to-date performance in dollars, but taking into account it had to deal with the biggest jump in real yields since 2013 and a surging dollar, its performance, especially for non-dollar investors relative to the losses in bonds and stocks, remains acceptable. In other words, a hedge in gold against a policy mistake or other unforeseen geopolitical events has so far been almost cost free.   Source: WCU: Bearish macro, bullish micro regime persists
Bed Bath & Beyond (BBBY) Shares Gained +300% But Can Lose It All!

Bed Bath & Beyond (BBBY) Shares Gained +300% But Can Lose It All!

Conotoxia Comments Conotoxia Comments 19.08.2022 16:55
Bed Bath & Beyond (BBBY) shares have gained 300% since the beginning of August after many previously opened short positions were closed. According to Seeking Alpha data, the short interest on BBBY currently stands at a whopping 41.9% (nearly half of the shares available for trading are sold short). At its peak, BBBY shares reached a price of $30. Today, however, they appear to be down almost 45% ahead of the market opening at 14:00 GMT+3 - this could be the company's worst day since its IPO in 1992. BBBY shares were already down almost 20% yesterday, as investors began to realise potential gains. One of those investors is celebrity billionaire investor Ryan Cohen. He sold his shares, earning $68.1 million (56% on invested capital). According to a report filed with the SEC, Cohen's RC Ventures sold millions of shares on Tuesday and Wednesday in a price range of $18.68 to $29.21. Since then, according to Bloomberg data, the activist investor has asked the company to consider selling the business, reached an agreement to add three independent directors to the board and pushed for the departure of CEO Mark Tritton. Shares also peaked in March 2022, when Cohen first disclosed a 9.8% stake in the company. "The ailing retailer’s share price rise of late has defied logic," - said Danni Hewson, an analyst at AJ Bell. The company has hired the law firm, Kirkland & Ellis, to help it deal with its hard-to-manage debt, media reports said yesterday. Kirkland & Ellis is a well-known advisory firm that plans to help its client by raising new funds and refinancing debt. Other so-called 'meme stocks' also fell on Friday before the open. GameStop (GME) lost 6.5% and AMC Entertainment Holdings (AMC) 4.7% at 14:00 GMT+3. Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Bed Bath & Beyond loses more than 45% before the open - the end of the short squeeze?
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Retail traders saved markets by keeping trades open during tough times

InstaForex Analysis InstaForex Analysis 21.08.2022 15:44
Relevance up to 19:00 2022-08-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. After the spring fever, which ended with a global sell-off of all indices and a bearish reversal, many retail traders again tried to get back into the game. However, before the S&P 500 had time to accelerate, a new blow from the meme-stock market brought new losses to the bulls. However, the survey showed that traders are not ready to follow the bearish trend. Retail traders saved markets by keeping trades open during tough times According to analysts, this time it was a fairly large army of "mom-dad" investors that suffered, that is, traders with little trading experience and without a strong educational base. Wall Street was talking about this type of investor when they tried to explain the July rise in cryptocurrencies. Now they are suspected of provoking the latest global surge in US indices.In my opinion, if this reflects the real state of affairs, then only partially. Yes, one cannot but agree that the retail investor base has changed dramatically in recent years, especially after the COVID-19 pandemic. The rise of social media (hello Reddit) and online trading sites and apps has created younger and more market-savvy individuals who complement the more traditional older investors who make monthly contributions to their pension funds. This army of traders, if it can be suspected of naivety, then after the last two extremely volatile years of trading, they have clearly gained experience and are in no hurry to part with their money. Wall Street analysts paint us a portrait of a fickle, speculative day trader who just wants to make a quick buck, especially in the riskier and more complex parts of financial markets like cryptocurrencies. To some extent this is true, let's not deny the obvious. This is also a direct consequence of the surge in liquidity in financial markets after the pandemic, which the Federal Reserve is now trying to reverse. Yet research shows that retail investors are not as easy-going as institutional investors might have thought.For example, a survey of 1,000 retail investors in the United States conducted by the social investment platform eToro in June, when the market was in a bearish peak, showed that 80% of them buy or sell assets monthly or less often. At the time of the survey, about 65% of respondents were holding their investments, 29% were holding and buying more, and only 6% had sold. These numbers give us a completely different picture of what is happening in small trades. According to the traditional school of investing, young investors are less likely to keep their investments. Yet 42% of investors aged 18 to 34 did just that, and 43% held and bought more. Sold only 15% of the total. Typically, retail investors are late to the peak of profitable deals and exit them last and with the worst hangover. Many of them lost some headroom earlier this year, when the S&P 500 (.SPX) posted its worst first half performance in more than half a century. Of course, one might think that retail investors are generally not the most sophisticated or nimble, and that they probably suffered huge losses as the market went against them for months on end. But if they had given up and sold them, the market crash could have been even worse. And more importantly, according to this survey, they never really left. They kept their positions in the trades, not allowing the market to collapse even more. And it's impressive. Therefore, the sharks of Wall Street immediately suspected these hurry-ups that it was they who were now pulling the markets up. Just this week, retail investors were again taken aback by the wild swings in shares of home improvement retailer Bed Bath & Beyond. Meme shares soared over 130% at the start of the week, but fell 20% on Thursday and 40% in early trading on Friday. It comes after billionaire Ryan Cohen suddenly sold his stake in troubled retailer Bed Bath & Beyond - just days after he went bullish on stock options. For Cohen himself, the deal could bring in between $55 million and $60 million. But the traders, who hurried to invest in the newly popular funds, did not do well. Not good for other meme companies. Retail favorites GameStop and AMC Entertainment continued their decline on Friday, leaving most of their weekly profits behind. GameStop and AMC Entertainment lost between 4% and 6%. E-commerce firm Vinco Ventures plunged 17%. Interestingly, Cohen also owns a stake in GameStop. And yet, despite the current dip, BBBY and call option buying volumes by retail investors are up more than 70 times their all-time average, with current five-day net buying up to $188 million on Wednesday.     However, the market is still on a positive wave: step away from meme stocks and look towards the luminaries: the S&P 500 and Nasdaq Composite rebounded almost 20% and 25%, respectively, from their mid-June lows. This has certainly been helped by the strong growth in retail investor buying, which currently averages $1.36 billion per day, with a 21-day moving average of over $27 billion. Moreover, the data shows that retail investors remained active buyers throughout the January-June market downturn. Yes, the 21-day moving average fell to $23 billion over the summer, but it's still well above last year's low of about $21 billion. What does this tell us? That the markets don't want to accept the reality of a bearish downturn, preferring to hold positions and bet on the bulls as soon as there is the slightest opportunity for growth. According to the technical data, the bearish decline is already in full swing. Thus, Citi analysts have identified 22 bear market rallies since the 1920s, lasting from two to 128 trading days and ranging in size from 11% to 47%. There were three such episodes from 2001 to 2002, four in the period 2008-2009, and two this year. However, I want to caution you. The influence of retail traders on the markets is largely seasonal. It's August now, when liquidity is low and the big investment companies usually take their staff on vacation, so it's the off season... and an opportunity for the retail bulls, who have increased their influence due to this factor. In late August - early September, the market of large investors will revive, and the game will follow different rules. The real economy is slow to recover, a recession is waving a red flag in China, the conflict in Ukraine is dragging on, and the coronavirus promises us a fresh strain this season. So there are not so many grounds for optimism. With this in mind, we can expect a rather difficult autumn-winter season, including for traders.   Read more: https://www.instaforex.eu/forex_analysis/319451
China Rolled Out A Special Loan Program! Fed's News

China Rolled Out A Special Loan Program! Fed's News

Saxo Strategy Team Saxo Strategy Team 22.08.2022 12:33
Summary:  Equities closed last week on the defensive as a rising US dollar and especially US treasuries weighed. The US 10-year yield is threatening the 3.00% level for the first time in a month ahead of the important US July PCE inflation data and Fed Chair Powell’s speech on Friday. How forcefully will Powell push back against the virtual melt-up in financial conditions after the market felt the Fed pivoted to less tightening at the July meeting?   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures are still rolling over as the US 10-year yield zoomed to 3% on Friday with the index futures trading just above the 4,200 level this morning. The next levels on the downside sit around the 4,100 to 4,170 range, but in the longer term the 4,000 level is the big level to watch. Energy markets are still sending inflationary signals which is key to watch for sentiment this week. In terms of earnings, Palo Alto Networks and Zoom Video will report earnings. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index and CSI300 were moderately higher, +0.2% and +0.8% respectively. Chinese developers gained on today’s larger-than-expected cut in the 5-year loan prime rate and last Friday’s report that the PBoC, jointly with the Housing Ministry and the Ministry of Finance to roll out a program to make special loans through policy banks to support the delivery of stalled residential housing projects. Great Wall Motor (02333:xhkg) soared 11%. In A-shares, auto names were among stocks that outperformed. Xiaomi (01810:xhkg) dropped 3% after reporting Q2 revenues -20% YoY and net profit -67% YoY, largely in line with expectations.  US dollar dominates focus in forex this week The US dollar rally picked up speed last week, with key levels falling in a number of USD pairs last week that now serve as resistance, including 1.0100 in EURUSD and 1.2000 in GBPUSD, both of which now serve as resistance/USD support. A significant break of EURUSD parity will likely add further psychological impact, and more practically, an upside break in yields at the longer end of the US yield curve is playing a supportive roll, one that will intensify its driving roll if the benchmark 10-year US Treasury yield follows through higher above the 3.00% level it touched in trading overnight. A complete sweep of USD strength also threatens on any significant follow through higher in USDCNH as it threatens an upside break here (more below). The next key event risk for the US dollar arrives with this Friday’s Jackson Hole symposium speech from Fed Chair Powell (preview below). USDCNH Broad USD strength is helping to drive a move to new cycle highs above 6.84 as the week gets underway, but CNH is not weak in other pairings with G10 currencies, quite the contrary. Still, a move in this critical exchange rate will remain a focus, and the contrast between an easing PBOC (moving once again overnight) and tightening central banks nearly everywhere else is stark. The USDCNH moving higher will receive considerable additional focus if the 7.00 level. Crude oil prices (CLU2 & LCOV2) Crude oil turned lower in the Asian overnight after modest gains last week as the focus continues to alter between demand destruction fears and persistent supply shortages. Fears of an economic slowdown reducing demand remains invisible in the physical market but it has nevertheless seen crude oil give up all the post Russia invasion gains while speculators or hedge funds have cut bullish bets on WTI and Brent to the lowest since April 2020. WTI futures trades back below $90/barrel while Brent futures dipped below $96. Still, the gas-to-fuel switch led by record gas prices in Europe has seen refinery margins strengthen again lately and it now adds to the fundamental price-supportive factors. Focus may turn back to Iranian supply early in the week though, with reports that a deal is ‘imminent’. Cryptocurrencies The crypto market took a major hit on Friday with the total crypto market cap diving by more than 9 %, but prices have stabilized over the weekend. The total market cap is now close to the psychological $1 trillion level. US Treasuries (TLT, IEF) Rising US Treasury yields are pushing back against the strong improvement in financial conditions of recent weeks after the US 10-year Treasury yield benchmark jumped to new highs on Friday, well clear of the prior range after a few teases higher earlier in the week and bumping up against the psychologically key 3.00% level. Any follow through higher toward the 3.50% area highs of the cycle would likely add further pressure to financial conditions and risk sentiment more broadly. What is going on? German PPI shocks on the upside Germany’s July PPI smashed expectations to come in at 5.3% MoM, the biggest single gain since the Federal Republic started compiling its data in 1949 and above the consensus estimate of 0.7%. The data suggests potentially a lot more room on the upside to Eurozone inflation, and a lot more pain for German industries. European PMIs due this week will gather attention, as will Germany’s IFO numbers. Berkshire Hathaway wins approval to acquire Occidental Petroleum Warren Buffett’s industrial conglomerate that recently increased its stake in Occidental Petroleum to over 20% following the US Climate & Tax bill which adds more runway for oil and gas companies has now won regulatory approval for acquiring more than 50% the oil and gas company. This means that Berkshire Hathaway is warming up to its biggest acquisition since its Burlington acquisition. The power shortage in China China is currently being hit by a heatwave with a large part of the country experiencing -degree Celsius temperatures since the beginning of August. The surge in air conditioning caused electricity consumption to soar. To make things worse, drought has reduced hydropower output.  Some provinces and municipalities, especially Sichuan, are curbing electricity supply to industrial users in order to ensure electricity supply for residential use. This has caused disruptions to manufacturing production and added to the headwinds faced by the Chinese economy. China cut its 5-year loan prime rate loan prime more than expected China’s National Interbank Fund Center, based on quotes from banks and under the supervision of the PBoC, fixed the 1-year loan prime rate (“LPR”) 5 bps lower at 3.60% and the 5-year loan prime rates (“LPR”) 15 basis points lower at 4.30%. The larger-than-expected reduction in the 5-year LPR, which is the benchmark against which mortgage loan rates in China are set at a spread, may signal stronger support from the PBoC to the housing market.  The Chinese authorities are coming to the developers’ aid in delivering pre-sold homes Last Friday the Housing Ministry, the Ministry of Finance, and the PBoC, according to Xinhua News, jointly rolled out a program to make special loans through policy banks to support the delivery of presold residential housing projects which are facing difficulties in completion due to lack of funding.  Investors will monitor closely this week to gauge if there is additional information about the size of the program and if the PBoC will print money to fund it.  The resurgence of Covid cases in China Daily locally transmitted new cases of Covid-19 in China persistently stated above 2,000 since August 12, 2022, with Hainan, Tibet, and Xinjiang being the regions most impacted. The constituent companies of the Hang Seng Index will increase to 73 from 69 Hang Seng Indexes Company announced last Friday to add China Shenhua Energy (01088:xhkg), Chow Tai Fook Jewellery (01929:xhkg), Hansoh Pharmaceutical (03693:xhkg), and Baidu (09888:xhkg) to the Hang Seng Index, bringing the latter’s number of constituent companies to 73 from 69. The changes will take effect on September 5, 2022. In addition, SenseTime (00020:xhkg) will replace China Pacific Insurance (02601:xhkg) as a constituent company of the Hang Seng China Enterprises Index.  Australian share market at a pivotal point After rising for five straight weeks including last week's 1.2% lift, many market participants hold their breath this rally will continue. However, standing in the way are profit results from a quarter of the ASX200 companies to be released this week. For the final week of profit results, we hear from Qantas (Australia's largest airline), Whitehaven Coal (Australia's largest coal company), as well as other stocks that are typically held in Australian superannuation funds; including Coles, Woolworths, Wesfarmers, Endeavour. And lastly about 20 companies trade ex-dividend this week, however they are not expected to move the market's needle. Money managers increased their commodity exposure for a third week to August 16 The Commitment of Traders (COT) Report covering positions and changes made by money managers in commodities to the week ending August 16 showed a third week of net buying with funds adding 123k lots to 988k lots, a seven-week high. The buying was broad led by natural gas, sugar, cattle and grains with most of the selling concentrated in crude oil and gold. More in our weekly update out later. Prior to the latest recovery in price and positions hedge funds had been net sellers for months after holding 2.6 million lots at the start of the year. What are we watching next? USD and US Treasury yields as Jackson Hole Fed conference is the macro event risk of the week Friday The US dollar strengthened sharply, with EURUSD challenging near parity, USDCNH breaking higher today after another PBOC rate cut, and USDJPY not far from cycle highs. US Treasury yields have supported the move with the entire curve lifting over the last couple of weeks and longer yields pulling to new local highs last week. The Fed has pushed back consistently against the market’s pricing of a Fed turnaround to easing rates next year with partial success, as expectations for rate cuts have shifted farther out the curve and from higher levels. This week, the key test for markets is up on Friday as the US reports the Fed’s preferred measure of inflation, the July PCE inflation data, while Fed Chair Powell will also speak on Friday, offering the most important guidance on how the Fed feels about how it feels the market understands its intentions.   Earnings to watch Plenty of important earnings releases this week with the largest ones listed below. Today’s key focus is Palo Alto Networks, Zoom Video, and XPeng. Cyber security stocks have done reasonably well over the past year despite valuations coming down as demand is still red hot, Analysts expect Palo Alto Networks to report revenue growth of 27% y/y. Zoom Video, which was the pandemic superstar, is also reporting today with estimates looking for 9% revenue growth, down considerably from 54% y/y growth just a year ago. Monday: Palo Alto Networks, Zoom Video, XPeng Tuesday: CATL, Intuit, Medtronic, JD.com Wednesday: LONGi Green Energy, Royal Bank of Canada, PetroChina, Ping An Insurance Group, Nongfu Spring, Mowi, Nvidia, Salesforce, Pinduoduo, Snowflake, Autodesk Thursday: South32, Toronto-Dominion Bank, Fortum, Delivery Hero, AIA Group, China Life Insurance, CNOOC, CRH, Dollar General, Vmware, Marvell Technology, Workday, Dollar Tree, Dell Technologies, NIO Friday: Meituan, China Shenhua Energy, China Petroleum & Chemical Economic calendar highlights for today (times GMT) 0800 – Switzerland SNB weekly sight deposits 1230 – US Jul. Chicago Fed National Activity Index 2300 – Australia Aug. Flash Manufacturing/Services PMI 0030 – Japan Aug. Flash Manufacturing/Services PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 22, 2022
Oil Price Surges Above $91 as Double Bottom Support Holds

All Eyes On Fed Chair Powell's Speech. Latest Natural Gas Developments

Saxo Bank Saxo Bank 22.08.2022 12:52
Summary:  The US dollar wrecking ball is in full swing, taking even USDCNH to new highs for the cycle after another rate cut in China overnight. Longer US treasury yields are also pressuring financial conditions and risk sentiment as the 10-year benchmark yield threatens 3.00% again. The chief event risk for the week will be the Jackson Hole, Wyoming speech from Fed Chair Powell. We also discuss the latest natural gas developments in Europe, speculative positioning in the commodities markets, the long term perspective for tangible vs. intangible stock returns over the last couple of decades, upcoming earnings, & more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: USD and US yields brewing up trouble ahead of Jackson Hole
Gold Has A Chance For Further Downside Movement - 30.12.2022

Gold Is At Risk Of Being Liquidated!? Ukraine Shipment Accelerates

Ole Hansen Ole Hansen 22.08.2022 13:47
Summary:  Our weekly Commitment of Traders update highlights future positions and changes made by hedge funds and other speculators across commodities and forex during the week to August 16. A week that potentially saw a cycle peak in US stocks and where the dollar and treasury yields both traded calmly before pushing higher. Commodities meanwhile continued their recent recovery with funds being net buyers of most contracts, the major exceptions being gold and crude oil Saxo Bank publishes weekly Commitment of Traders reports (COT) covering leveraged fund positions in commodities, bonds and stock index futures. For IMM currency futures and the VIX, we use the broader measure called non-commercial. Link to latest report This summary highlights futures positions and changes made by hedge funds across commodities and forex during the week to August 16. A week that potentially saw a cycle peak in US stocks with the S&P 500 reversing lower after reaching a four-month high, and where the dollar and treasury yields both traded calm before pushing higher. Commodities meanwhile continued their recent recovery with all sectors, except precious metals and grains recording gains. Commodities Hedge funds were net buyers for a third week with the total net long across the 24 major commodity futures tracked in this update rising by 14% to reach a seven week high at 988k lots. Some 56% below the recent peak reached in late February before Russia’s attack on Ukraine drove an across-the-board volatility spike which forced funds to reduce their exposure. Since then and up until early July, worries about a global economic slowdown, caused by a succession of rapid rate hikes in order to kill inflation, was one of the key reasons for the slump in speculative length.Returning to last week, the 123k lot increase was split equally between new longs being added and short positions being scaled back, and overall the net increase was broad led by natural gas, sugar, cattle and grains with most of the selling being concentrated in crude oil and gold. Energy: Weeks of crude oil selling continued with the combined net long in WTI and Brent falling by 26k lots to 278k lots, the lowest belief in rising prices since April 2020. Back then the market had only just began recovering the Covid related energy shock which briefly sent prices spiraling lower. While funds continued to sell crude oil in anticipation of an economic slowdown the refined product market was sending another signal with refinery margins on the rise again, partly due surging gas prices making refined alternatives, such as diesel, look cheap. As a result, the net long in ICE gas oil was lifted by 24% to 62k lots while RBOB gasoline and to a lesser extent ULSD also saw net buying. The net short in Henry Hub natural gas futures was cut by 55% as the price jumped by 19%. Metals: Renewed weakness across investment metals triggered a mixed response from traders with gold seeing a small reduction in recently established longs while continued short covering reduced bearish bets in silver, platinum and palladium. With gold resuming its down move after failing to find support above $1800, the metal has been left exposed to long liquidation from funds which in the previous two weeks had bought 63.3k lots. Copper’s small 1% gain on the week supported some additional short covering, but overall the net short has stayed relatively stable around 16k lots for the past six weeks. Agriculture: Speculators were net buyers of grains despite continued price weakness following the latest supply and demand report from the US Department of Agriculture on August 12, and after shipments of grains from Ukraine continued to pick up speed. From a near record high above 800k lots on April 19, the net long across six major crop futures went on to slump by 64% before buyers began dipping their toes back in to the market some three weeks ago. Buying was concentrated in bean oil and corn while the wheat sector remained challenged with the net long in Kansas wheat falling to a 2-year low. The four major softs contract saw strong buying led by sugar after funds flipped their position back to a 13.4k lots net long. The cocoa short was reduced by 10% while the coffee long received a 25% boost. Cotton’s 18% surge during the week helped lift the long by 35% to 44.7k lots.     Forex A mixed week in forex left the speculative dollar long close to unchanged against ten IMM futures and the DXY. Selling of euro saw the net short reach a fresh 2-1/2-year high at 42.8k lots or €5.3 billion equivalent while renewed selling of JPY, despite trading higher during the reporting week, made up most of the increase in dollar length. Against these we saw short covering reduce CHF, GBP and MXN short while CAD net long reached a 14-month high.    What is the Commitments of Traders report? The COT reports are issued by the U.S. Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the asset class. Commodities: Producer/Merchant/Processor/User, Swap dealers, Managed Money and otherFinancials: Dealer/Intermediary; Asset Manager/Institutional; Leveraged Funds and otherForex: A broad breakdown between commercial and non-commercial (speculators) The reasons why we focus primarily on the behavior of the highlighted groups are: They are likely to have tight stops and no underlying exposure that is being hedged This makes them most reactive to changes in fundamental or technical price developments It provides views about major trends but also helps to decipher when a reversal is looming   Source: COT: Gold and oil left out as funds return to commodities
Japan's Prime Minister Tested Covid Positive. Gazprom Confirmed Gas Shipment Would Be Stopped!

Japan's Prime Minister Tested Covid Positive. Gazprom Confirmed Gas Shipment Would Be Stopped!

Marc Chandler Marc Chandler 22.08.2022 16:28
Overview: The euro traded below parity for the second time this year and sterling extended last week’s 2.5% slide. While the dollar is higher against nearly all the emerging market currencies, it is more mixed against the majors. The European currencies have suffered the most, except the Norwegian krone. The dollar-bloc and yen are also slightly firmer. The week has begun off with a risk-off bias. Nearly all the large Asia Pacific equity markets were sold. Chinese indices were a notable exception following a cut in the loan prime rates. Europe’s Stoxx 600 is off by around 1.20%, the most in a month. US futures are more than 1% lower. The Asia Pacific yield rose partly in catch-up to the pre-weekend advance in US yields, while today, US and European benchmark 10-year yields are slightly lower. The UK Gilt stands out with a small gain. Gold is being sold for the sixth consecutive session and has approached the (61.8%) retracement of the rally from last month’s low (~$1680) that is found near $1730. October WTI is soft below $90, but still inside the previous session’s range. US natgas is up 2.4% to build on the 1.6% gain seen before the weekend. It could set a new closing high for the year. Gazprom’s announcement of another shutdown of its Nord Stream 1 for maintenance sent the European benchmark up over 15% today. It rose almost 20.3% last week. Iron ore rose for the first time in six sessions, while September copper is giving back most of the gains scored over the past two sessions. September wheat rallied almost 3% before the weekend and is off almost 1% now.  Asia Pacific Following the 10 bp reduction in benchmark one-year Medium-Term Lending Facility Rate at the start of last week, most observers expected Chinese banks to follow-up with a cut in the loan prime rates today  They delivered but in a way that was still surprising. The one-year loan prime rate was shaved by five basis points to 3.65%, not even matching the MLF reduction. On the other hand, the five-year loan prime rate was cut 15 bp to 4.30%. This seems to signal the emphasis on the property market, as mortgages are tied to the five-year rate, while short-term corporate loans are linked to the shorter tenor. The five-year rate was last cut in May and also by 15 bp. Still, these are small moves, and given continued pressures on the property sector, further action is likely, even if not immediately. In addition to the challenges from the property market and the ongoing zero-Covid policy, the extreme weather is a new headwind to the economy. The focus is on Sichuan, one of the most populous provinces and a key hub for manufacturing, especially EV batteries and solar panels. It appears that the aluminum smelters (one million tons of capacity) have been completed halted. The drought is exacerbating a local power shortage. Rainfall along the Yangtze River is nearly half of what is normally expected. Hydropower accounts for a little more than 80% of Sichuan power generation and the output has been halved. Officials have extended the power cuts that were to have ended on August 20 to August 25. Factories in Jiangsu and Chongqing are also facing outages. According to reports, Shanghai's Bund District turned off its light along the waterfront. Japan's Prime Minister Kishida tested positive for Covid over the weekend  He will stay in quarantine until the end of the month. In addition to his physical health, Kishida's political health may become an issue. Support for his government has plunged around 16 percentage points from a month ago to slightly more than 35% according to a Mainchi newspaper poll conducted over the weekend. The drag appears not to be coming from the economy but from the LDP's ties with the Unification Church. Meanwhile, Covid cases remain near record-highs in Japan, with almost 24.8k case found in Tokyo alone yesterday. Others are also wrestling with a surge in Covid cases. Hong Kong's infections reached a new five-month high, for example. The dollar reached nearly JPY137.45 in Tokyo before pulling back to JPY136.70 in early European turnover  It is the fifth session of higher highs and lows for the greenback. The upper Bollinger Band (two standard deviations above the 20-day moving average) is near JPY137.55 today. We suspect the dollar can re-challenge the session high in North America today. The Australian dollar is proving resilient today after plunging 3.45% last week. It is inside the pre-weekend range (~$0.6860-$0.6920). Still, we like it lower. Initial support is now seen around $0.6880, and a break could spur another test on the lows. That pre-weekend low coincides with the (61.8%) retracement of the rally from last month's low (~$0.6680) to the high on August 11 (~$0.7135). The Chinese yuan slumped to new lows for the year today. For the second consecutive session, the dollar gapped higher and pushed through CNY6.84. The PBOC set the dollar's reference rate at CNY6.8198. While this was lower than the CNY6.8213, it is not seen as much as a protest as an at attempt to keep the adjustment orderly. Europe Gazprom gave notice at the end of last week that gas shipments through the Nord Stream 1 pipeline would be stopped for three days (August 31-September 2) for maintenance  The European benchmark rose nearly 20.3% last week and 27% this month. It rose 35.2% last month and 65.5% in June. The year-to-date surge has been almost 380%. The energy shock seems sure to drive Europe into a recession. The flash August PMI out tomorrow is expected to see the composite falling further below the 50 boom/bust level. Bundesbank President Nagel, who will be attending the Jackson Hole symposium at the end of this week recognized the risk of recession but still argued for the ECB rate increases to anchor inflation expectations. The record from last month's ECB meeting will be published on Thursday. There are two keys here. First, is the color than can be gleaned from the threshold for using the new Transmission Protection Instrument. Second, the ECB lifted its forward guidance, which we argue is itself a type of forward guidance. Is there any insight into how it is leaning? The swaps market prices in another 50 bp hike, but a slight chance of a 75 bp move. The German 10-year breakeven (difference between the yield of the inflation linked bond and the conventional security) has been rising since last July and approached 2.50% last week  It has peaked in early May near 3% before dropping to almost 2% by the end of June. It is notable that Italy's 10-year breakeven, which has begun rising again since the third week of July, is almost 25 bp less than Germany. Several European countries, including Germany and Italy, have offered subsidies or VAT tax cut on gasoline that have offset some of the inflation pressures. Nagel, like Fed Chair Powell, BOE Governor Bailey, and BOJ Governor Kuroda place much emphasis on lowering wages to bring inflation down. Yet wages are rising less than inflation, and the cost-of-living squeeze is serious. They take for granted that business are simply passing on rising input costs, including labor costs, but if that were true, corporate earnings would not be rising, which they have. Costs are being passed through. Later this week, the UK regulator will announce the new gas cap for three months starting in October  Some reports warn of as much as an 80% increase. It is behind the Bank of England's warning that CPI could hit 13% then. The UK's wholesale benchmark has soared 47.5% this month after an 83.7% surge last month. Gas prices in the UK have nearly tripled this year. The UK's 10-year breakeven rose by 38 bp last week to 4.29%, a new three-month high. Although the UK economy shrank slightly in Q2 (0.1%), the BOE warned earlier this month that a five-quarter recession will likely begin in the fourth quarter. Unlike the eurozone, the UK's composite PMI has held above the 50 boom/bust level. Still, it is expected to have slowed for the fourth month in the past five when the August preliminary figures are presented tomorrow. The euro and sterling extended their pre-weekend declines  The euro slipped below parity to $0.9990. The multiyear low set last month was near $0.9950. The break of parity came in the early European turnover. Only a recovery of the $1.0050-60 area helps stabilizes the tone. Speculators in the futures market extended their next short euro position in the week through August 16 to a new two-year extreme and this was before the euro's breakdown in the second half of last week. The eurozone's preliminary August composite PMI due tomorrow is expected to show the contraction in output deepened while the market is expecting the Fed's Powell to reinforce a hawkish message on US rates. After falling to almost $1.1790 before the weekend, sterling made a marginal new low today, closer to $1.1780. The two-year low set last month was near $1.1760. The $1.1850-60 area offers an initial cap. Strike activity that hobbled the trains and underground spread to the UK's largest container port, Felixstowe, which handles about half of the country's containers. An eight-day strike began yesterday. Industrial activity is poised to spread, and this is prompting Truss and Sunak who are locked in a leadership challenge, to toughen their rhetoric against labor. America This is a busy week for the US  First, there is supply. Today features $96 bln in bills. Tomorrow sees a $60 bln three-week cash management bill and $44 bln 2-year notes. On Wednesday, the government sell another $22 bln of an existing two-year floating rate note, and $45 bln five-year note. Thursdays sale includes four- and eight-week bills and $37 bln seven-year notes. There are no long maturities being sold until mid-September. The economic data highlights include the preliminary PMI, where the estimate for services is forecast (median in Bloomberg's survey) to recover from the drop below the 50 boom/bust level. In the middle of the week, the preliminary estimate of July durable goods is expected. Shipments, which feed into GDP models is expected to rise by 0.3%. The revision of Q2 GDP the following day tends not to be a `big market movers. Friday is the big day. July merchandise trade and personal income and consumption measures are featured. Like we saw with the CPI, the headline PCE deflator is likely to ease while the core measure proves a bit stickier. Shortly after they are released, Powell addresses the Jackson Hole gathering.  Canada has a light economic diary this week, but Mexico's a bit busier  The highlight for Mexico will be the biweekly CPI on Wednesday. Price pressures are likely to have increased and this will encourage views that Banxico will likely hike by another 75 bp when it meets late next month (September 29). The July trade balance is due at the end of the week. It has been deteriorating sharply since February and likely continued.    The US dollar rose more than 1% against the Canadian dollar over the past three sessions. It edged a little higher today but stopped shy of the CAD1.3035 retracement objective. Initial support is seen near CAD1.2975-80. With sharp opening losses expected for US equities, it may discourage buying of the Canadian dollar in the early North American activity. The greenback is rising against the Mexican peso for the fifth consecutive session. However, it has not taken out the pre-weekend high near MXN20.2670. Still, the next important upside technical target is closer to MXN20.3230, which corresponds to the middle of this month's range. Support is now seen near MXN20.12.    Disclaimer   Source: No Relief for the Euro or Sterling
iPhones Banned in Chinese Offices: Tech Tensions Escalate

China's Plan For Dying Property Markets. Nasdaq 100 And S&P 500

Saxo Strategy Team Saxo Strategy Team 23.08.2022 08:37
Summary:  Equities were sold off on Monday, continuing a slide from their summer rally high, in the midst of position adjustments ahead of the Jackson Hole central banker event later this week. U.S. 10-year yields returned to above 3%. China cut its 5-year loan prime rates and plans to extend special loans to boost the ailing property markets. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities lost ground and continued to retrace from the high of the latest rally since mid-June.  The market sentiment has become more cautious ahead of Fed Chair Powell’s speech this Friday at the Jackson Hole symposium and a heavy economic data calendar, S&P 500 – 2.1%, Nasdaq 100 -2.7%.  The rise of U.S. 10-year bond yield back to above 3% added to the selling pressures in equities.  Zoom Video (ZM:xnas) fell 8% in after-hours trading as the company reported Q2 revenues and earnings missing estimates and cut its full year revenues guidance. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Bonds were sold off as traders adjusted positions ahead of the Jackson Hole.  The treasury yield curve bear flattened with 2-year yields surging 8bps to 3.30% and 10-year yields climbing 4bps to 3.01%, above the closely watched 3% handle.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng fell 0.6% while CSI300 climbed 0.7% on Monday. Chinese developers gained on today’s larger-than-expected cut in the 5-year loan prime rate and the Chinese authorities plan to provide special loans through policy banks to support the delivery of stalled residential housing projects, CIFI (00883:xhkg) +11.5%, Country Garden (02007:xhkg) +3.2%.  China extended EV waivers from vehicle purchase tax and other fees to the end of 2023, but the share price reactions of Chinese EV makers traded in Hong Kong were mixed.  Great Wall Motor (02333:xhkg) soared 11%, benefiting from launching a new model that has a 1,000km per charge battery while Nio (09866:xhkg) and Li Auto(02015:xhkg) fell 4.2% and 1.4% respectively. Xiaomi (01810:xhkg) dropped 3.3% after Q2 revenues -20% YoY and net profit -67% YoY, on lower smartphone shipments (-26% YoY).  Smartphone parts suppliers, AAC Technologies (02018:xhkg) and Sunny Optical (02382:xhkg) declined 5.6% and 4.2% respectively.  The share price performance of the four companies that will be added to the Hang Seng Index was mixed, Baidu (09888:xhkg) +0.9%, China Shenhua Energy (01088:xhkg) +2.1%, Hansoh Pharmaceutical (03692:xhkg) +3.2% but Chow Tai Fook Jewellery (01929:xhkg) -0.6%.  SenseTime (00020:xhkg) gained 4.2% as the company will replace China Pacific Insurance (02601:xhkg) -2.8% as a constituent company of the Hang Seng China Enterprises Index.  ENN Energy (02688:xhkg) plunged more than 14% after reporting H1 results below market expectations.  China retailer Gome (00493) collapsed 20% after resuming trading from suspension and a plan t buy from the controlling shareholder a stake in China property assets.  EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows of 0.9926. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. Also on the radar will be Fed Chair Powell’s speech at the Jackson Hole later this week, with a fresh selloff in the pair likely to target 0.9500 next. USDCNH heading to further highs After PBOC’s easing measures on Monday, the scope for further yuan weakness has increased. USDCNH broke above 6.8600 overnight and potentially more US dollar strength this week on the back of a pushback from Fed officials on easing expectations for next year could mean a test of 7.00 for USDCNH. Still, the move in yuan is isolated, coming from China moving to prevent the yuan from tracking aggravated USD strength rather than showing signs of desiring a broader weakening. EURCNH has plunged to over 1-month lows of 6.8216 on the back of broader EUR weakness. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a recovery overnight despite the strength in the US dollar. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nordstream pipeline. Diesel and refinery margins have also been supported as a result, with Asia diesel crack rising to its previous high of $63 amid low inventory levels. WTI futures reversed back to the $90/barrel levels and Brent were back above $96. Comments from Saudi Energy Minister threatening to dial back supply also lifted prices, but these were mis-read and in fact, focused more on the mismatch between the tightness in the futures and the physical market. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support and is now eying $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July.   What to consider?   German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 8% in Europe amid concerns around the next scheduled 3-day maintenance of the Nordstream pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more.  Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Europe and UK PMIs may spell further caution The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. China’s plan to provide loans to ensure delivery of presold residential projects is said to be of the size of RMB 200 billion Last Friday, Xinhua News reported that the PBoC, jointly with the Housing Ministry and the Ministry of Finance rolled out a program to make special loans through policy banks to support the delivery of stalled residential housing projects but the size of the program was not mentioned.   A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the support lending program could be as large as RMB 200 billion.  Beijing municipal government rolled out initiatives to promote hydrogen vehicles The municipal government of Beijing announced support for the construction of hydrogen vehicle refueling stations with RMB500 million for each station, aiming at building 37 new stations by 2023 and bringing the adoption of fuel-cell cars to over 10,000 units in the capital. Earlier in the month, the Guangdong province released a plan to build 200 hydrogen vehicle refueling stations by 2025. Since last year, there have been 13 provinces and municipalities rolling out policies to promote the development of the hydrogen vehicle industry.  Earnings on tap Reportedly there have been shorts being built up in Dollar Tree (DLTR:xnys) as traders are expecting that discount retailer missing when reporting this Thursday.   On the other hand, investors are expecting Dollar General (DG:xnys) results to come in more favourably, , which also reports this Thursday.  Key earnings scheduled to release today including Medtronic (MDT:xnys), Intuit (INTU:xnas), JD.COM (09618.xhkg/JD.xnas), JD Logistics (02615:xhkg), Kingsoft (02888:xhkg), and Kuishaou (01023:xhkg). Singapore reports July inflation figures today Singapore's inflation likely nudged higher in July, coming in close proximity to 7% levels from 6.7% y/y in June. While both food and fuel costs continue to create upside pressures on inflation, demand-side pressures are also increasing as the region moves away from virus curbs. House rentals are also running high due to high demand and delayed construction limiting supplies. The Monetary Authority of Singapore has tightened monetary policy but more tightening moves can be expected in H2 even as the growth outlook has been downwardly revised.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 23, 2022
Market Risk Sentiment Adjusts as Investors Eye US Inflation Data

US Equities Falling Down, EURUSD Is On The Topic

Saxo Strategy Team Saxo Strategy Team 23.08.2022 11:01
Summary:  US equities continued to push sharply lower yesterday as the strong US dollar is in focus as EURUSD dropped well below parity yesterday. US Treasury yields are playing their part in pressuring sentiment as the US 10-year yield benchmark rose above 3.00%. The next important event risk is this Friday’s Jackson Hole, Wyoming speech from Fed Chair Powell, as the Fed is expected to remind the market that it remains in full inflation-fighting mode, pushing back against the impression that it may be set to cut rates next year.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their losses yesterday as the US 10-year yield moved above the 3% level and the Fed Funds futures curve moved lower across the whole curve (meaning less rate cuts expected next year). Markets are beginning to second-guess their aggressive bets in July on inflation cooling fast enough to warrant rate cuts next year as the galloping energy crisis makes it difficult for inflation to cool. Tangibles-driven themes such as commodities, logistics, energy storage and financials were the relative winners in yesterday’s session. S&P 500 futures are now in the support zone from before the last leg up that started on 10 August; we see the 4,100 level as the next level to watch on the downside and then the 100-day moving average at 4,085. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hang Seng Index and CSI300 were both down about 0.6%. A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the central bank and other authorities’ support lending program to developers could be as large as RMB 200bn. The reaction of the share prices of Chinese Property developers were mixed, Country Garden (02007:hkg) +3.1%, Longfor (00960:xhkg) -1.4%. Postal Savings Bank of China (01658:xhkg) plunged 5.5% after the Chinese bank reported net profit miss with a 10 bps y/y fall in net interest margin to 2.27% in H1. Gross loans grew 13% y/y in H1 but at a more tepid growth of 3% q/q.  Non-performing loans ratio overall was steady at 0.8% but mortgage NPL ratio climbed by 8 bps to 0.52%. US dollar rally following through The US dollar rally continued apace yesterday, as EURUSD traded well below parity and closed at its lowest level in nearly twenty years yesterday. GBPUSD has teased below 1.1760, its lowest level since a one-off pandemic-outbreak spike in early 2020, while other USD pairs are not yet at extremes of the cycle, including AUDUSD, still well above the sub-0.6700 lows of July, and USDJPY, which has not yet challenged the cycle high north of 139.00. There is clearly a reflexive situation at the moment in the US dollar, risk sentiment and US treasury yields. USDCNH Broad USD strength remains behind the weaker CNH in the USDCNH exchange rate as the CNH continues to rise versus, for example, the EUR, while the CNHJPY exchange rate trades near the important 20.00 area. Any more significant move in this critical exchange rate could quickly steal some of the focus away from the US dollar. The contrast between an easing PBOC (moving once again earlier this week) and tightening central banks nearly everywhere else is stark. The next important level for the pair is 7.00, with the range high of the last decade near 7.20. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a sharp U-turn higher on Monday after the Saudi Energy Minister talked about a potential production cut after saying the futures market has become increasingly disconnected from underlying fundamental developments, a view that we share. His comment supported the market on a day where risk appetite generally took a knock from the stronger dollar and falling equity markets. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nord Stream 1 pipeline and heatwaves in China. Diesel prices trades higher supported by refinery margins, the so-called crack spread hitting seasonal highs around the world. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support on Monday before finding support at $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July. German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 13% in Europe amid concerns around the next scheduled 3-day maintenance of the Nord Stream 1 pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more. US Treasuries (TLT, IEF) US treasury yields rose yesterday, with the 10-year benchmark closing above 3.00% for the first time in over a month yesterday. Rising yields are likely an important driver of weaker risk sentiment after the melt-up in the wake of the late July FOMC meeting, but practically, a move toward the cycle highs from June near 3.50% (in the lead-up to the FOMC meeting on June 16) is needed to seize the spotlight. The behavior of the treasury market in the wake of the Jackson Hole conference speech from fed Chair Powell this Friday is an important next step, particularly if Powell provides strong guidance on the pace or importance of the Fed’s balance sheet tightening (QT). What is going on? EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows in the low 0.9900’s this morning. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. The next step for the US dollar is the Fed Chair Powell speech this Friday as discussed below. Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Palo Alto outlook remains strong The cyber security company reported last night Q4 revenue and EPS above estimates and Q1 outlook is slightly above estimates while the FY outlook is well above consensus estimates. Q4 networks billing growth was 44% vs est. 25% suggesting demand is accelerating and bolstering our view that the cyber security industry is a high growth and counter-cyclical industry in the years to come. Shares were up 9% in extended trading. Zoom shares were down 8% in extended trading The popular video conferencing software that rose to prominence during the pandemic is lowering its FY outlook relative to previous announcements. The slowdown in their business is due to slower enterprise growth which could be a function of Microsoft and other major technology companies that have entered the enterprise business for video conference. What are we watching next? Europe and UK PMIs may spell further caution. The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. USD and US Treasury yields as Jackson Hole Fed conference is the macro event risk of the week Friday The US dollar and yields are setting risk sentiment on edge as EURUSD has plunged well through parity. US Treasury yields have supported the USD rally with the entire curve lifting over the last couple of weeks and longer yields closing at new one-month highs. The Fed has pushed back consistently against the market’s pricing of a Fed turnaround to easing rates next year with partial success, as expectations for rate cuts have shifted farther out the curve and from higher levels. The next focus is this Friday’s Jackson Hole symposium speech from Fed Chair Powell, who is expected to stay on message and maintain credibility on fighting inflation after the two large 75 basis point hikes at the last two meetings. The Fed’s attitude toward quantitative tightening may be a focus in the speech as well, with the pace of QT supposedly set to pick up in coming weeks to $95B/month. So far, the QT has been slow out of the gates, with the balance sheet currently only some $115B smaller than at its mid-April peak. Earnings to watch Today’s earnings focus is on CATL and JD.com, with especially CATL being important as the world’s largest battery manufacturer to the car industry and thus pivotal for the electrification of the transportation sector. CATL is expected to report revenue growth of 126% y/y in Q2 as EV adoption is accelerating, but key risks ahead are rising input costs across lithium and energy. JD.com is expected to report 3% revenue growth in Q2 as growth is grinding to a halt on very weak consumer confidence in China. Today: CATL, Intuit, Medtronic, JD.com Wednesday: LONGi Green Energy, Royal Bank of Canada, PetroChina, Ping An Insurance Group, Nongfu Spring, Mowi, Nvidia, Salesforce, Pinduoduo, Snowflake, Autodesk Thursday: South32, Toronto-Dominion Bank, Fortum, Delivery Hero, AIA Group, China Life Insurance, CNOOC, CRH, Dollar General, Vmware, Marvell Technology, Workday, Dollar Tree, Dell Technologies, NIO Friday: Meituan, China Shenhua Energy, China Petroleum & Chemical Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone Aug. Flash Manufacturing and Services PMI 0830 – UK Aug. Flash Manufacturing and Services PMI 1000 – UK Aug. CBI Trends in Total Orders and Selling Prices 1100 – ECB's Panetta to speak 1345 – US Aug. Flash Manufacturing and Services PMI 1400 – US Aug. Richmond Fed Manufacturing 1400 – Eurozone Aug. Flash Consumer Confidence 1400 – US Jul. New Home Sales 2300 – US Fed’s Kashkari (non-voter) to speak  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 23, 2022
The Metaverse Will Offer Everyone Endless Possibilities

Snapchat Lost Even More Than Expected! TikTok Is One Of The Reasons. Microsoft Stays Positive

Conotoxia Comments Conotoxia Comments 23.08.2022 11:16
We've had arguably one of the busiest quarterly earnings seasons in history, which showed how companies are behaving in a rapidly changing inflationary environment. The overall findings seem to have been positive, and likely contributed to a bear market rally in the broad stock market, accompanied by dovish Fed signals and a lower US CPI inflation reading. How did technology companies perform? Companies in this category typically base their high valuations on the prospect of growth and increasing profits. That's why analysts were especially curious to see how well-known brands would behave in a difficult environment and what resilience they would show.  Alphabet (GOOG) and Meta (META) are advertising giants, but the characteristics of their businesses are quite different. The former (Google's parent company) makes its money largely from SEO and the latter from social media campaigns such as Facebook and Instagram. The companies' results showed that SEO seems to be more of a priority for customers, and therefore revenue along with GOOG's profits appeared to be more stable. Google's revenue rose 12.6% year-on-year, while Meta's fell by less than 1%, while profits fell 13.6% and 35.7%, respectively. Despite passing some Wall Street analysts' estimates, Microsoft proved more recession-proof than expected. Bill Gates' company reported $51.9 billion in Q2 revenue (up 12.4% year-on-year) and net income of $16.7 billion (up 1.7% year-on-year).  "We continue to expect double-digit revenue and operating profit growth in constant currency and U.S. dollars," - said Microsoft CFO Amy Hood, at the earnings conference. She added that Microsoft will extend the life of its server and network hardware to six years from four years. The company made a similar move in 2020, intending to cut costs.   The biggest problems for technology companies also producing hardware, such as Microsoft (manufacturing Xbox) in addition to high exchange rates volatility, may remain rising production costs and a hard-to-quantify drop in demand due to the recession. One company that may have disappointed many with its results and caused a big drop in its stock price was Snapchat. The platform's shares lost 39% in a single session after the results were released.  Snapchat reported a drop in revenue to $1.11 billion, compared to the expected $1.14 billion. However, earnings per share, to which investors seem to pay the most attention, instead of falling by 1 cent, slipped twice as much, by 2 cents per share. This happened despite an increase in the number of active daily users - 3.2 million more than estimated. Snapchat, despite becoming increasingly unpopular in Central and Eastern Europe is still frequently used in Western Europe and the United States, but it has long struggled with relatively sizable revenue fluctuations and problems maintaining growth rates through app monetization issues. Additionally, with increasing competition from other platforms like TikTok, the company's future may not look too rosy. Most of the leading technology companies, despite an apparent slowdown in growth, maybe in relatively good shape. Their revenues are usually stable, and the biggest challenge is cost containment - hence the companies' announcements about layoffs and cost optimization, and focusing on their most profitable areas of business. According to CNBC, about 50% of technology companies are already planning to carry out layoffs, which appears to be related to the macroeconomic situation.   Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Technology companies earnings recap - what do they signal?
What Should We Expect Before Winter? Will Energy Crisis Come?

What Should We Expect Before Winter? Will Energy Crisis Come?

Peter Garnry Peter Garnry 22.08.2022 18:44
Summary:  Financial conditions loosening over the past six weeks were a natural evolution of the US economy improving in July, but the Fed is poised to hike potentially 75 basis points at the September meeting to tighten financial conditions even more as the nominal economy is still running too hot to get inflation meaningfully lower. The most likely scenario is weaker equities as winter approaching as the energy crisis will hurt. Financial conditions will soon begin tightening again S&P 500 futures are trading 3.4% lower from their high last week touching the 200-day moving average before rolling over again. Sentiment has shifted as the market is slowly pricing less rate cuts for next year with Fed Funds futures curve on Friday (the blue line) has shifted lower compared to a week ago (the purple line) as inflationary pressures are expected to ease as much as betted on by the market over the past month. Fed member Bullard recently said that he was leaning towards 75 basis points rate cut at the September FOMC meeting to cool the economy further. If the Fed goes with 75 basis points while the real economy is seeing lower activity it will mean that financial conditions will begin tightening more relative to the economic backdrop. Financial conditions have been loosening since June but expectation is that we will see another leg of tightening to levels eclipsing the prior high and with that US equities will likely roll over. S&P 500 futures are now well below the 4,200 level and currently in the congestion zone from before the last leg higher. The next gravitational point to the downside is the 4,100 and below that just above 4,000. December put options on the S&P 500 are currently bid around $208 which roughly a 5% premium for getting three-month downside protection at-the-money. S&P 500 futures | Source: Saxo Group   Fed Funds futures forward curve | Source: Bloomberg   US financial conditions | Source: Bloomberg The US is headed for a recession, but when? US financial conditions eased in July lifting equities and with good reasons we can see. The Chicago Fed National Activity Index (the broadest measure of economic activity) rose to 0.27 in July from -0.25 in June suggesting a significant rebound in economic activity. The rebound was broad-based across all the four major sub categories in the index with the production index rising the most. The three-month average is still -0.09 with -0.7 being the statistical threshold for when this indicator suggests that the US economy is in a recession. The probability is therefore still elevated for a recession but the slowdown in the US economy has eased which is positive factor for US equity markets. Predicting the economy is difficult but our thesis going into the winter months on the Northern hemisphere is that it is very difficult to avoid a recession, at least in real terms, when the economy is facing an energy crisis. The most likely scenario is that the US economy will slide into a nominal recession but continue at a fast clip in nominal terms.          China is facing a 2008-style rescue of its real estate sector We have written earlier this year about the downfall of Evergrande and the other Chinese real estate developers. The stress in China’s real estate sector was a big theme earlier this year but has since faded, but recently the Chinese central bank has eased rates and today the government is planning a $29bn rescue package of special loans for troubled developers. Tensions in Chinese real estate are weighing down on the economy through lower consumer confidence and investors are increasingly reducing exposure to China has we have highlighted in our daily podcast. The PBoC (central bank) is urging banks to maintain steady growth of lending, but with the market value of banks relative to assets having declined for many years the market is no longer viewing the credit extension as driven by sound credit analysis, but more as an extended policy tool of the government with unknown but likely less good credit quality.   Source: Equities are rolling over as conditions are set to tighten
Switch Splatoon 3 Broke All Previous Sales Records, The Closer To Winter The More Visible Crisis

Tech Stocks Market: Nvidia May Release Its Growth Rate. People Are Not Interested In Playing Games Anymore?

Peter Garnry Peter Garnry 23.08.2022 14:17
Summary:  Nvidia, Salesforce, and Snowflake report earnings tomorrow providing more clarity on technology spending and the outlook for the overall technology sector. Nvidia is expected to report a big drop in its growth rate due to weakening demand in gaming and more importantly crypto mining. Salesforce is expected to show solid growth and here investors will focus on the Slack integration and what it means for growth ahead. Snowflake's growth rate is coming down and thus investors will demand improvements in the operating income. Nvidia: turbulence to continue Earlier this month Nvidia cut its outlook, which we covered in an equity update, driving by excess inventory of GPUs leading to price pressures in GPUs. Lower demand for GPUs, which we believe is mainly driven by less favourable dynamics for crypto mining, is forcing Nvidia to lower its sales outlook, cutting prices, and writing down its existing inventory. Nvidia has gone to great length explaining off the weakness as due to a slowdown in gaming, but the companies in gaming are not showing the decline in demand consistent with the slowdown Nvidia is experiencing. Because Nvidia does not know very well the end-use cases of their GPUs it is difficult for them to segment revenue, but in our view the economics of crypto mining tied to the Bitcoin price is the best explanation for the historical variance in revenue. Nvidia’s slowdown is tied to cryptocurrencies and thus higher interest rates is not only a key risk to Nvidia’s equity valuation, but it is also a risk to their demand as higher interest rates could lower cryptocurrency prices substantially from current levels. Nvidia is expected on Wednesday to report only 3% y/y revenue growth in FY23 Q2 (ending 31 July) down from 46% y/y in FY23 Q1 (ending 1 May) which is an abrupt slowdown in growth. It also highlights Nvidia’s biggest business risk. The chipmaker does not fully understand its demand function which can lead to a mismatch in supply and demand. The key question for investors is to what extent Nvidia expects growth to come back but more importantly whether they will change their outlook for operating margins. Nvidia financials | Source: Bloomberg Salesforce: can Slack sustain the growth? Salesforce is reporting FY23 Q2 (ending 31 July) results on Wednesday with analysts estimating revenue growth of 21% y/y which is in line with the long-term growth rate the company has enjoyed for 10 years. The Slack acquisition which has now been fully integrated is one of the key drivers for future growth and an acquisition that has expanded the company’s addressable market and market position in cloud business application software. Salesforce is competing against Microsoft, Oracle, and SAP, and has shown over the years that it gain market share plowing back a lot of its profits back into growth. With rising interest rates the pressure is on Salesforce to lift its operating margin and investors are likely demanding a surprise on operating margin rather than revenue in tomorrow’s earnings release. Salesforce financials | Source: Bloomberg Snowflake: consumption model vs economic uncertainty It is rare for Berkshire Hathaway to engage in technology companies let alone IPOs, but that is exactly what the investment firm did with Snowflake back in 2020. The company sits in the data analytics and cloud intersection providing a novel approach to data warehousing on the cloud at a low costs. The company has grown revenue from $97mn in 2018 to around $1.2bn in 2021 and revenue growth is expected at 72% y/y in FY23 Q2 (ending 31 July) but down from 104% y/y a year ago, but this should be expected as all high growth companies always see their growth rate coming down. The question is to what degree the growth rate is decaying over time. The company has recently disappointed analysts and there might be a downside risk to Snowflake’s results as the business model is centered around consumption which means that if technology spending is slowing down then it will hit Snowflake’s growth rate immediately. Secondly, the company’s high equity valuation relative to revenue means that investors will want to see a big improvement in operating income. Snowflake financials | Source: Bloomberg Source: Earnings preview: Nvidia, Salesforce, and Snowflake
The Canadian Dollar Gains Momentum as Crude Oil Prices Surge

Wall Street: The Worst Day Since June. Bitcoin (BTC) And Ethereum (ETH) Can Feel The Tension In The Air

Conotoxia Comments Conotoxia Comments 23.08.2022 14:35
According to Coinmarketcap data, the total capitalization of cryptocurrencies has fallen to nearly $1 trillion, showing a major shift in sentiment among traders and investors in recent days. The last time market capitalization was at this level was in late July. The possible trend reversal does not only apply to cryptocurrencies. The Nasdaq and S&P 500 have fallen from their local highs of August 16 by 5.7% and 3.8%, respectively. This is a significant change for such large indexes. Interest rates on U.S. 5-year Treasury bonds, after recording a local low of 2.55% on August 1, have risen to 3.17% in recent weeks, as Fed policymakers' statements proved more hawkish than expected. These are potential signs of a deteriorating outlook again, which should not be ignored. A chart of the Crypto Fear & Greed Index may show a decline in crypto market sentiment and an increase in investor fear. As recently as last week, the index showed a reading of 44, and now it is 28 points. Despite the partial decrease in the correlation between bitcoin and the S&P 500, it still seems to be high. Especially since it has historically risen during crashes - the last peak in the correlation was reached in mid-May, when both markets were down. BTC and ETH, despite finding support at $20,700 and $25,300, respectively, could be more exposed to the downside due to deteriorating economic data and market sentiment.  On the Conotoxia MT5 platform as of 12:00 GMT+3, one of the strongest falling tokens is EOS, which is losing nearly 9% after a 7-day gain of 48%. EOS is the native token of the EOSIO network. In practice, the project provides blockchain developers with a set of necessary tools and services to build and scale decentralized applications. The project's first whitepaper was released in 2017, and the team conducted an ICO, securing more than $4 billion in investment. It was one of the largest crowdfunding events in the history of cryptocurrencies.   Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Does data signal more short-term declines in the crypto market?
Copper Spreads Widen as Demand Pressures Continue Amidst Industrial Slowdown

Covid Vaccine Caused The World Of Business To Come Back From The Dead, The History Repeats Itself

Peter Garnry Peter Garnry 19.08.2022 16:42
 Summary:  The world and the global equity market can be divided into two parts; the tangible and the intangible. Since 2008 the tangibles driven industry groups have severely underperformed the intangibles driven industry groups due falling interest rates and an explosion in profits by companies utilising a lot of intangibles in their business model. However, since the Covid vaccine was announced the world came roaring back causing demand to outstrip supply and thus fueling inflation. The lack of supply of physical goods in the world and deglobalisation will be a theme going forward and our bet is that the tangible world will stage a comeback against the intangible world. The Great Financial Crisis proved to be the end of the tangible world The SaxoStrats team has been talking a lot about how intangibles took over the world and now the time has come for the tangible world to win back some terrain as years of underinvestment has created enormous supply deficits in energy, food, metals, construction materials etc. We have finally created two indices capturing the market performance of intangibles and tangibles driven industry groups. These indices will make it easier to observe performance in these two parts of the economy and will enable us to quantify whether our “tangibles are coming back” thesis is correct. When we look at intangibles vs tangibles over the period 1998-2022 it is clear we two distinct periods. From 1998-2008 the tangible part of the economy delivered the best total return to investors driven by a booming financial sector, rising real estate prices, and a commodities super cycle. Since 2008, the separation of the two parts of the economy becomes very clear. Lower and lower interest rates are inflating equity valuations of growth assets and intangibles driven industry groups are seeing an unprecedented acceleration in profits due to software business models maturing and e-commerce penetrating all consumer markets fueling the outperformance. If we look at the relative performance the tangible world peaked in April 2008 and was more or less in a continuous decline relative to the intangible world until October 2020. In November 2020, the revelation of the Covid vaccine reopened the economy so fast that demand come roaring back to a degree in which the physical supply of goods could not keep up. Prices began to accelerate causing the current run-away inflation and headache for central banks. The tangible world has since done better relative to intangibles and if we are right in our main theme of an ongoing energy and food crisis combined a multi-decade long deglobalisation then tangibles should continue to do well. Intangibles are still ahead despite rising interest and the current energy crisis During the pandemic the intangibles driven industry groups did better than the physical world because the whole world went into lockdown. Intangibles driven industries were suddenly necessary for making the world go around when we could not operate in the physical world. Government stimulated the economy in extraordinary amounts across monetary and fiscal measures and the demand outcome from this stimulus has caused global demand to outstrip available supply and especially of things in the physical world. The outcome of this has been inflation and also a comeback to the tangible world, but the tangibles driven industry groups are still behind the intangibles measured from the starting point of December 2019. It is our expectations that as interest rates are lifted to cool demand and inflation in the short-term the tangible world will gain more relative to intangibles. What has been the best performing industry group since 1998? One thing is to look at the aggregated indices of the tangibles and intangibles driven industry group, but another interesting observation is to look at the best performing industry. There were three close industry groups, but by a small amount the performing industry group has actually been the retailing industry. The industry group was not creating a lot of shareholder value until after the Great Financial Crisis when the e-commerce, automation, and digitalization combined with expansion of manufacturing in China lifted profitability and market value of retailing companies. The largest retailing companies in the industry group today are Amazon.com, Home Depot, Alibaba, Lowe’s, Meituan, and JD.com. Our definition of tangible and intangible industry groups Tangible assets are loosely defined as physical assets one can touch and feel, and which can be collateralised for loans. This definition is too broad and not meaningful, because in the consumer services industry group, which we have defined as driven by intangibles, you find companies such as Starbucks and McDonald’s which both employ a lot of physical assets in their business. The way we have defined intangibles and tangibles driven industry groups was going back to 1998 and calculate the market value to assets for all the active companies at that point in time. We need calculated the average ratio for each of the 24 industry groups. All the industry groups with a ratio above the average of all groups we put into the intangibles. If the market value is substantially above the book value of assets on the balance sheet it must mean that the market is putting a value on something that is not there, or at least in accounting terms, and this is clearly the intangibles. So for McDonald’s they do employ a lot of physical assets but it is the branding, store network, product etc. that derives the meaningful value creation and thus the market is valuing the company way above the book value of its assets. One could argue that McDonald’s is a hybrid company but for our purposes we define it as being mostly intangibles driven. The full list is presented below. Banks are interesting because many think they are driven by intangibles because it employs a lot of people, but the thing is that banks are essentially deriving their profits from the spread between loans and deposits. The majority of bank loans are tied to physical assets and thus banks are tightly connected to the physical world. Tangibles driven industry groups Automobiles & Components Banks Capital Goods Commercial & Professional Services Consumer Durables & Apparel Diversified Financials Energy Food & Staples Retailing Insurance Materials Real Estate Telecommunication Services Transportation Utilities Intangibles driven industry groups Consumer Services Food, Beverage & Tobacco Health Care Equipment & Services Household & Personal Products Media & Entertainment Pharmaceuticals, Biotechnology & Life Sciences Retailing Semiconductors & Semiconductor Equipment Software & Services Technology Hardware & Equipment Source: The tangible world is fighting back
In Germany, The Next-Year Prices For Energy Are Astonishing! Why?

In Germany The Next-Year Prices For Energy Are Astonishing! Why?

Saxo Strategy Team Saxo Strategy Team 24.08.2022 09:03
Summary:  Equities were sold off on Monday, continuing a slide from their summer rally high, in the midst of position adjustments ahead of the Jackson Hole central banker event later this week. U.S. 10-year yields returned to above 3%. China cut its 5-year loan prime rates and plans to extend special loans to boost the ailing property markets. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities lost ground and continued to retrace from the high of the latest rally since mid-June.  The market sentiment has become more cautious ahead of Fed Chair Powell’s speech this Friday at the Jackson Hole symposium and a heavy economic data calendar, S&P 500 – 2.1%, Nasdaq 100 -2.7%.  The rise of U.S. 10-year bond yield back to above 3% added to the selling pressures in equities.  Zoom Video (ZM:xnas) fell 8% in after-hours trading as the company reported Q2 revenues and earnings missing estimates and cut its full year revenues guidance. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Bonds were sold off as traders adjusted positions ahead of the Jackson Hole.  The treasury yield curve bear flattened with 2-year yields surging 8bps to 3.30% and 10-year yields climbing 4bps to 3.01%, above the closely watched 3% handle.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hang Seng fell 0.6% while CSI300 climbed 0.7% on Monday. Chinese developers gained on today’s larger-than-expected cut in the 5-year loan prime rate and the Chinese authorities plan to provide special loans through policy banks to support the delivery of stalled residential housing projects, CIFI (00883:xhkg) +11.5%, Country Garden (02007:xhkg) +3.2%.  China extended EV waivers from vehicle purchase tax and other fees to the end of 2023, but the share price reactions of Chinese EV makers traded in Hong Kong were mixed.  Great Wall Motor (02333:xhkg) soared 11%, benefiting from launching a new model that has a 1,000km per charge battery while Nio (09866:xhkg) and Li Auto(02015:xhkg) fell 4.2% and 1.4% respectively. Xiaomi (01810:xhkg) dropped 3.3% after Q2 revenues -20% YoY and net profit -67% YoY, on lower smartphone shipments (-26% YoY).  Smartphone parts suppliers, AAC Technologies (02018:xhkg) and Sunny Optical (02382:xhkg) declined 5.6% and 4.2% respectively.  The share price performance of the four companies that will be added to the Hang Seng Index was mixed, Baidu (09888:xhkg) +0.9%, China Shenhua Energy (01088:xhkg) +2.1%, Hansoh Pharmaceutical (03692:xhkg) +3.2% but Chow Tai Fook Jewellery (01929:xhkg) -0.6%.  SenseTime (00020:xhkg) gained 4.2% as the company will replace China Pacific Insurance (02601:xhkg) -2.8% as a constituent company of the Hang Seng China Enterprises Index.  ENN Energy (02688:xhkg) plunged more than 14% after reporting H1 results below market expectations.  China retailer Gome (00493) collapsed 20% after resuming trading from suspension and a plan t buy from the controlling shareholder a stake in China property assets.  EURUSD falls below parity, eyes on 0.9500 The latest concerns on the European energy crisis weighed on the Euro which was seen sipping below parity to the US dollar. Higher US yields and gains in the US dollar also underpinned, taking EURUSD to lows of 0.9926. The European recession is coming hard and fast, and the PMIs today will likely signal increasing pressure on the region. Also on the radar will be Fed Chair Powell’s speech at the Jackson Hole later this week, with a fresh selloff in the pair likely to target 0.9500 next. USDCNH heading to further highs After PBOC’s easing measures on Monday, the scope for further yuan weakness has increased. USDCNH broke above 6.8600 overnight and potentially more US dollar strength this week on the back of a pushback from Fed officials on easing expectations for next year could mean a test of 7.00 for USDCNH. Still, the move in yuan is isolated, coming from China moving to prevent the yuan from tracking aggravated USD strength rather than showing signs of desiring a broader weakening. EURCNH has plunged to over 1-month lows of 6.8216 on the back of broader EUR weakness. Crude oil prices (CLU2 & LCOV2) Crude oil prices made a recovery overnight despite the strength in the US dollar. A global shift from gas to oil, from Europe to Asia, has taken a deeper hold amid gas shortage fears accelerating in the wake of another upcoming maintenance of the Nordstream pipeline. Diesel and refinery margins have also been supported as a result, with Asia diesel crack rising to its previous high of $63 amid low inventory levels. WTI futures reversed back to the $90/barrel levels and Brent were back above $96. Comments from Saudi Energy Minister threatening to dial back supply also lifted prices, but these were mis-read and in fact, focused more on the mismatch between the tightness in the futures and the physical market. Gold (XAUUSD) and Silver (XAGUSD) Gold broke below the key $1744 support and is now eying $1729, the 61.8% retracement of the July to August bounce. Dollar strength and a run higher in US yields weighed on the shine of the yellow metal, which has seen downside pressures since last week after touching the critical $1800-level. Hawkish Fed talk this week could further weigh on the short-term prospects for Gold. Silver also dipped below the key 19 handle, erasing most of the gains seen since late July.   What to consider? German year-ahead power prices hit a fresh record high German year-ahead power prices surged to EUR 700/MWh with Dutch TTF gas prices close to EUR 300/MWh. The surge came on the back of another leg higher in natural gas prices which rose over 8% in Europe amid concerns around the next scheduled 3-day maintenance of the Nordstream pipeline. It appears that demand destruction remains the most obvious but painful cure right now, along with a longer-term focus on ensuring a broad-based supply of energy from coal, gas, nuclear, solar, hydrogen, and more.  Australia and Japan services PMIs plunged into contraction Australia saw its services PMI drop to 49.6 in August in a flash print, from 50.9 in July. Manufacturing PMI, however, held up at 54.5, just weakening slightly from last month’s 55.7. The spate of rate hikes seen from Reserve Bank of Australia is likely taking its toll on demand and manufacturing. Meanwhile, prices remain elevated amid the persistent supply chain issues, and more rate hikes are still on the cards. Japan’s flash manufacturing PMI for August came in lower at 51.0 from 52.1 previously, nut stayed in expansion territory. Services PMI however plunged into the contraction zone below 50, coming in at 49.2 for a flash August print from 50.3 in July. The fresh COVID wave in Japan, although comes without any broad-based new restrictions, is impeding the services demand and will likely weigh on Q3 GDP growth. Europe and UK PMIs may spell further caution The Euro-area flash composite PMI and the UK flash PMI for August are both due to be released on Tuesday. Following a slide in ZEW and Sentix indicators for July, the stage is set for a weaker outcome on the PMIs too. July composite PMI for the Euro-area dipped into contractionary territory at 49.9, while the UK measure held up at 52.1. The surge in gas and electricity prices continue to weigh on GDP growth outlook, with recession likely to hit by the end of the year. China’s plan to provide loans to ensure delivery of presold residential projects is said to be of the size of RMB 200 billion Last Frida, Xinhua News reported that the PBoC, jointly with the Housing Ministry and the Ministry of Finance rolled out a program to make special loans through policy banks to support the delivery of stalled residential housing projects but the size of the program was not mentioned.   A Bloomberg report yesterday, citing “people familiar with the matter”, suggested the size of the support lending program could be as large as RMB 200 billion.  Beijing municipal government rolled out initiatives to promote hydrogen vehicles The municipal government of Beijing announced support for the construction of hydrogen vehicle refueling stations with RMB500 million for each station, aiming at building 37 new stations by 2023 and bringing the adoption of fuel-cell cars to over 10,000 units in the capital. Earlier in the month, the Guangdong province released a plan to build 200 hydrogen vehicle refueling stations by 2025. Since last year, there have been 13 provinces and municipalities rolling out policies to promote the development of the hydrogen vehicle industry.  Earnings on tap Reportedly there have been shorts being built up in Dollar Tree (DLTR:xnys) as traders are expecting that discount retailer missing when reporting this Thursday.   On the other hand, investors are expecting Dollar General (DG:xnys) results to come in more favourably, , which also reports this Thursday.  Key earnings scheduled to release today including Medtronic (MDT:xnys), Intuit (INTU:xnas), JD.COM (09618.xhkg/JD.xnas), JD Logistics (02615:xhkg), Kingsoft (02888:xhkg), and Kuishaou (01023:xhkg). Singapore reports July inflation figures today Singapore's inflation likely nudged higher in July, coming in close proximity to 7% levels from 6.7% y/y in June. While both food and fuel costs continue to create upside pressures on inflation, demand-side pressures are also increasing as the region moves away from virus curbs. House rentals are also running high due to high demand and delayed construction limiting supplies. The Monetary Authority of Singapore has tightened monetary policy but more tightening moves can be expected in H2 even as the growth outlook has been downwardly revised.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast Source: APAC Daily Digest: What is happening in markets and what to consider next – August 23, 2022
Coffee Is In Danger As Its Suppliers Have Troubles With Crops

Coffee Is In Danger As Its Suppliers Have Troubles With Crops

Saxo Bank Saxo Bank 24.08.2022 12:30
Summary:  A zany day for US data as the August flash S&P Global Services PMI suggests a deepening contraction is afoot in the US services sector after an already weak July reading that contrasted with strength in the ISM Services survey for July. What are we supposed to believe. Elsewhere, crude oil has cemented its comeback with an extension higher yesterday and coffee is at risk of a further rise on supply woes. In equities, we look at the latest in the Tesla/Twitter saga, earnings ahead including NVidia after the close today, and an interesting company in the EV batter supply chain in Europe. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Crude oil bounce extends. Zany mismatch in US Services sector surveys
OPEC+ Are Expected To Keeping Oil Production Unchanged, AUD/USD Trades At Its Highest Levels

Saudi's Are Threatening The World By Reducing Oil Supply!?

Marc Chandler Marc Chandler 24.08.2022 12:57
Overview:  A simply dreadful flash US PMI stopped the dollar's four-day rally in its tracks. It followed news that the eurozone, Japan, and Australia's composite PMIs are below 50 boom/bust level. However, the dollar recovered, even if not fully as the market seemed unconvinced that the data could change Fed Chair Powell's message at Jackson Hole on Friday. A consolidative tone is evident today. Asia Pacific equities were mixed. China and Hong Kong fell more than 1% while South Korea, Australia, and India posted gains. Europe’s Stoxx 600 is off for the fourth consecutive session, the longest spill in a couple of months. US futures are straddling unchanged levels. The US 10-year yield is around 3.04%, little changed, while European benchmark rates are 2-4 bp higher. Japan’s 10-eyar yield edged up near 0.22% is once again drawing close to the cap. Gold is firm near $1750, but unable to build much on yesterday’s nearly $12 rally. October WTI is extending its rally since the Saudi’s threatened to reduce supply and Israel is pushing back against the US-Iran deal. US natgas fell 5% yesterday and is about 1.75% firmer today. The European natgas benchmark has jumped almost 7% today to recoup fully yesterday’s 6.5% pullback, which snapped a four-day rally. Iron ore rose 0.5%. It was the third advancing session, the longest rally this month. September copper is giving back about half of yesterday’s 1.2% gain. September wheat is up 2% to bring the gain to 9% since last Thursday.   Asia Pacific In addition to the usual corporate analysis and credit, ESG ratings and investment orientation have become increasingly important. However, the meaning of ESG and ratings not uniform. Arguably, it is where "organic" was a couple of decades ago, and it is still evolving. Some of dismissive and suggest it is a "woke” fad. Japan's Government Pension Investment Fund (GPIF), the largest pension fund in the world, reports that seven of the eight ESG funds it invests in beat the benchmarks in the fiscal year that ended in March. Over the past five years, it said that all eight funds have outperformed. Since US Pelosi's visit to Taiwan, a few other US elected officials have visited Taiwan. UK officials and Japanese officials have either visited or planned to visit Taipei. China has continued its aerial harassment of the island. and repeatedly crossing the median line in the Taiwan Straits. In a recent report, the Atlantic Council argued that one of the lessons from Ukraine, is that the US "strategic ambiguity" is not an effective deterrence, and that the US should be unequivocal in its support. These developments, alongside reports that US military advisors have been in Taiwan since before the 2020 election and the number of "misstatements" by President Biden that were clear signs of support that were "walked back", all play into the hardliners in Beijing who think the US is trying to change the status quo. Congress is considering a bill that would codify some of it. The US strategic ambiguity is ostensibly not about one-China but on how the US would respond to Beijing's use of military power to unite the country. This was not meant to deter China as the military planners would have to game out the US response no matter its declaratory policy. The chief function is to deter Taiwan from declaring independence unilaterally and dragging the US into a war of its making. However, Taiwan, as it stands now, is not a member of organizations based on state sovereignty, like the UN and IMF. The bill that is likely to get more attention in Q4 proposes to recognize Taiwan as an important non-NATO ally and seek to promote Taiwan's membership in international forums. Both sides are giving the other reason to think that they are trying to change the status quo. The dollar is in a narrow range against the Japanese yen today of around a third of a yen on either side of yesterday's settlement, which was slightly above JPY136.75. US yields are slightly softer, and the dollar is closer to session lows (~JPY136.35) in the European morning. The greenback can spend the North American session on the JPY136-handle. The Australian dollar is also in a narrow range as the market awaits fresh news. It has spent most of the local session and the European morning below yesterday's $0.6930 settlement. Meanwhile, the greenback has edged higher against the Chinese yuan. It made a marginal two-year high almost at CNY6.8680. In the past two week, the yuan has fallen by a little more than 2% against the dollar, which has risen broadly. The setting of the PBOC's reference rate today could be the first sign that officials want the market to go slowly. The dollar fix was at CNY6.8388, a wider than usual gap and below the market (Bloomberg survey) estimate for CNY6.8511. Of note, the US dollar did not make a new high against the offshore yuan today. Yesterday's high of almost CNH6.8850 held. Europe On top of the energy crisis, and extreme weather, an economy seemingly slipping inexorably toward a recession, while inflation is still accelerating, Italy's national election is a month away. The three-party alliance on the right continues to dominate drawing about 47% support. The Brothers of Italy remains the largest, accounting for a little more than half that support. Many observers assume that the success of the right reflects a shift in the Italian politics. However, the simpler explanation is the disarray of the center-left. The Democratic Party draws second highest support, less than half a percentage point (within the margins of error) of the Brothers of Italy. The problem is that the center-left has been unable to form a pact like the right has done. The once populist power, the Five Star Movement, the largest party in the current parliament, appears to have lost its way, a partly the cause and effect of its fragmentation. There are several other small groupings that would be more at home with the center-left but have been able to coalesce into an alliance. Still, it is notable that Brothers of Italy leader Meloni argued for more Europe in her debate with the Democratic Party leader Letta. Letta sounded like the nationalist, advocating a temporary price control for gas. Meloni backed an EU-wide cap, which Draghi supported. As Benjamin Franklin told the thirteen colonies on the east coast of the North American continent they prepared to fight against the greatest empire at the time, "hang together or hang separately."  Italy's 10-year premium over Germany is near 2.35%. It reached a two-year high in mid-June slightly above 2.40%. In late July, it also tested 2.40%. Italy offers around 100 bp more than Germany for two-year borrowing. The peak since the Covid panic in March 2020, was set late last month near 1.30%. The extra that is demanded from Italy is not about inflation. Italy's two-year breakeven (difference between the conventional yield and inflation-protected security) is about 4.40% compared with Germany's two-year breakeven near 7.10%. Italy's 10-year breakeven is slightly below 2.25%. Germany's is near 2.45%. Both report August's EU harmonized CPI next week. In July, Italy's inflation stood at 8.4%, just below Germany's 8.5%. Not only is Italian inflation lower than Germany's and is expected to remain so, but it is also growing faster. On a workday adjusted basis, the Germany economy grow 1.4% year-over-year in Q2. Italy expanded by 4.6%. The UK's online paper, The Independent, reported that UK imports from Russia have plummeted by nearly 97% since the invasion. They totaled GBP33 mln in June, it noted, citing data from the Office of National Statistics. The collapse reflected government sanctions and actions of companies seeking alternatives to Russian goods beyond the official sanctions. Today' s is Ukraine's Independence Day and marks the sixth month since the Russian invasion. Reports suggest the US will announce a new $3 bln arms package for Kyiv. The euro was squeezed to almost $1.0020 yesterday after the disappointing US data, but it was short-lived, and it finished the North Americans session near $0.9970. The single currency is in about a third of a cent range today and has not been able to resurface above $1.0, where there are large options that expire there tomorrow (2 bln euros) and Friday (1 bln euros). An expiry today for 720 mln euros at $0.9950 has likely been neutralized. Sterling traded in a broad range yesterday (~$1.1720-$1.1880) and exceeded both sides of Monday's range. However, the close was neutral, well within Monday's range, which set the tone for today's quiet session. Sterling has been confined to less than half a cent range above $1.1800. It settled near $1.1835 and has spent most of the Asian session and the European morning below it. The next level of support is seen in the $1.1760-80 band. America There can no explaining away the weakest composite US PMI since May 2020 and drop in new home sales five-times more than the median forecast in Bloomberg's survey. Yet did not seem to be bipolar as conventional wisdom has it, swinging between recession and inflation anxiety. The implied yield of the October Fed funds contract rose two basis points to 2.95%, unchanged on the week. Another way to look at it, the odds of a 75 bp hike in September stands at almost 60% compared with 52% at the end of last week and slightly less than 50% the prior week (August 12). Nor did equities recover from Monday's gap lower opening. Indeed, while the S&P 500 and NASDAQ largely traded within Monday's range, the Dow Industrials continued to sell off. It is approaching the (38.2%) retracement of the rally off the mid-July low (~30144) found near 32700. A similar retracement in the S&P 500 is near 4095. The NASDAQ found support near its retracement around 12350. The US reports the preliminary estimate of July durable goods orders. The real sector data has held up better than the survey data. One element of durable goods orders that may not be appreciated by economists yet is what appears to be a surge in US arms sales abroad. There seems to be a synchronized arms build-up and demand for US-made weapons is clear. Separately, today's report will be flattered by the jump in Boeing orders. The company reported 130 orders last month, the most since June 2021 after 50 orders in June. Of those orders 27 came from foreign companies up from 20 in June, and the most since January. On the other hand, its deliveries fell to 26 from 51, the least since February. The focus is on the Fed's Jackson Hole symposium that begins tomorrow. Fed Chair Powell is set to speak Friday (10 am ET). Some observers expect him to play up the element in the minutes that recognized the risk that the central bank would tighten too much. However, in the minutes, it was set up in contrast to the bigger risk that inflation getting embedded into business and household expectations. We recognize the market's penchant for reading/hearing a dovish twist to Powell and the Fed even though they are tightening policy faster than most observers had imagined even a few months ago. The pace of the balance sheet adjustment is also set to double starting next month. Separate from the FOMC minutes, the minutes from the discount rate meeting were reported yesterday, and both the Minneapolis and St. Louis Feds called for 100 bp hike in the discount rate before the July 26-27 FOMC meeting but did not convince their colleagues. Nine favored a 75 bp increase, while the KC Fed called for a 50 bp increase. George, the President of the KC Fed supported a 75 bp increases in the Fed funds target at last month's meeting.   The US dollar posted a big outside down day yesterday against the Canadian dollar, trading on both sides of Monday's range and settling below Monday's low. However, there has been no follow-through today and a consolidative tone is evident. It settled near CAD1.2955 and has spent no time below it so far today. It has been capped around CAD1.2985. With softer equities, we ae inclined to see the greenback push back above CAD1.3000 and see resistance near CAD1.3020-30. The US dollar fell yesterday for the second day against the Mexican peso. Its 0.80% drop was the most in nearly two weeks. Selling today has extended its loss to around MXN19.9365, a four-day low. Mexico reports CPI for the first half of August. It is expected have accelerated, with the year-over-year rate rising to 8.55% form 8.14%. The core rate is seen slightly above 7.8% from 7.75%. The central bank meets late next month and another 75 bp hike seems most likely.      Disclaimer   Source: New Recession Worry Stalls Dollar Express but Doesn't Derail It
Detailed Analysis of GBP/USD 5-Minute Chart

Nike, Dolce & Gabbana, Gucci And Adidas Selling Their Collections. Results? See For Yourself!

Conotoxia Comments Conotoxia Comments 24.08.2022 13:54
The NFT, even after huge declines in trading volume in recent months, seems to have attracted the interest of investors - speculators in this market can still look for potential investment opportunities, and NFT projects are outdoing themselves with more and better unveilings of their venture. Strong interest in NFT has naturally attracted the world's best-known apparel and accessories brands. According to data from Dune Analytics, Nike, Gucci, Dolce & Gabbana and Tiffany earned a total of $260 million from the sale of their NFTs.  Nike received the most revenue from NFT sales. Collections were sold for as much as $185.3 mln, with a secondary market turnover of $1.3 bln and more than 67,000 concluded transactions. In second place is Dolce & Gabbana, which earned $25.7 mln. They are followed by Tiffany ($12.6 mln), Gucci ($11.6 mln) and Adidas ($10.9 mln). After the rise of the first big collections, such as Bored Ape Yacht Club and Crypto Punks, which generated billions of dollars in sales, it was the turn for global fashion brands. They began experimenting with technology to reach more customers and generate new revenue streams. There are minimal costs involved in selling NFTs, especially for companies with a such large following as Nike and Adidas, for example. Therefore, margins from token sales can be very high, and revenues mostly turn into pure profit.  Despite waning interest in NFTs, they can still have a significant impact on new trends in corporate branding. Nike and Adidas have already indicated that they intend to develop NFTs in the Metaverse, which could affect the perception of these brands as innovative and unique, also in the virtual world.  It's worth remembering, however, that an alarmingly large number of projects can't sustain a sufficient level of interest. After its peak at the first offering, excitement tends to drop in the secondary market, and with its prices. NFTs seem to have more resilience to decline if they are the equivalent of something real and have additional functionality. One of the few success stories on the market is the collection of entrepreneur and influencer Gary Vee. VeeFrieds, despite the questionable quality of the graphics, produced a great return on investment. The print price of one NFT ranged from 0.5 to 2.5 ETH, and at the current value of the collection, early investors were able to make between 300 and 1,000% gains. In addition, the token gives the holder the right to participate in one of the leading NFT events - Beacon, organized by Gary Vee. The businessman also enjoys a very loyal following, who believe in the words and vision of the idol, so they are rather reluctant to sell their ownership rights, represented by the token.  RafaÅ‚ Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: Nike, Gucci and other big brands make millions from NFT sales despite falling interest
The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

Doubts On The Health Of US Consumers After Dollar Tree Comments

Saxo Strategy Team Saxo Strategy Team 26.08.2022 09:47
Summary:  U.S. equities rallied ahead of the Jackson Hole Powell keynote. Comments from discount retailer Dollar Tree about pressures to cut prices and customers shifting to “needs-based consumable products” cast doubts on the health of U.S. consumers. The market chatters and then a WSJ article on a potential deal between the U.S. and China on access to audit working papers and avoiding Chinese ADR delisting sent the share prices of China internet stocks and ADRs soaring. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities rallied for the second day in a row ahead of the much anticipated Powell speech at the Jackson Hole symposium on Friday, S&P 500 +1.4%, Nasdaq 100 +1.8%.  Discount retailers, Dollar General (DG:xnys) and Dollar Tree (DLTR:xnys) reported Q2 results.  Discount General beat the relatively high expectations and finished the session down modestly -0.6%.  Peer Dollar Tree’s results fared weaker with in-line Q2 results but a downward revision of full-year EPS due to its plan to cut prices sent its share price 10.2% lower.   U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) U.S. treasury yield fell 7 to 8 basis points from the belly to the long-end of the curve after a strong 7-year auction. The change in 2-year yields was relatively modest, -2bps. Flows were light ahead of Chair Powell’s keynote speech at the Jackson Hole event on Friday. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) China internet stocks rallied dramatically in a typhoon-shortened session in Hong Kong on Thursday, JD.COM (09618:xhkg) +11%, Bilibili (09626:xhkg) +10.3%, Baidu (09888:xhkg) +9.2%, Alibaba (09988:xhkg) +8.8%, Meituan (03690:xhkg) +8%, Tencent (00700:xhkg) +4.8%.  Hang Seng Tech Index (HSTECH.I) surged 6%.  Investors found optimism in the 19-point stimulus package as well as chatters among traders about unverified progress on resolving the audit working papers access issue in the heart of the Chinese ADR delisting risk.  During New York hours, the Wall Street Journal ran an article, suggesting that the U.S. and China are nearing a deal to allow American regulators to inspect in Hong Kong the audit working papers of Chinese companies listed in the U.S.  The NASDAQ Golden Dragon China Index soared 6.3%. Compared to their respective Hong Kong closing levels, Alibaba +4.5%, Meituan +4.0%, Tencent +2.1%.  Chinese property names rallied across the board by 2% to 5%.   The performance in A-shares was more measured, CSI 300 fluctuated between gains and losses and finished the session 0.8% higher.   Coal miners, oil and gas, and crude tankers stocks surged in Hong Kong as well as mainland bourses.  Mainland investors did not participate much in the sharp move higher as southbound flows registered a net outflow. AUDUSD on the backfoot in early Asian hours The USD rebound returned in early Asian hours on Friday amid a sustained hawkish tilt inn Fed commentaries ahead of Powell taking the stage at the Jackson Hole summit. AUDUSD saw downside pressures and slid to sub-0.6960 from an overnight high of 0.6991. AUDNZD found support at 1.1200 and may be looking at new highs of the cycle with the current account differentials at play. USDJPY caught a bid early as well, and rose to 136.70 with focus squarely on high Powell’s comments can take the US yields. Crude oil prices (CLU2 & LCOV2) Hawkish Fed comments and further prospects of Iran deal saw crude oil reversing lower in the overnight session. However, modest gains have returned this morning with the supply side remaining a key focus with Brent futures close to $100 and WTI at $93+. Saudi Arabia was joined by Libya and Congo in supporting the view that supply curbs may be needed to stabilise the oil market. Further concerns on Kazakhstan’s supply also emerged amid repair works required on three damage moorings at the port facility. What to consider? Some more hawkish Fed comments before we get to Powell Several Fed speakers were on the wires echoing the same message on inflation and more rate hikes. The markets are still holding their breath for wat Powell has to say later today. James Bullard (2022 voter) reiterated his year-end target of 3.75% to 4% and market expectation is not too far from that now. Esther George (2022 voter) was more open about rates going above 4%, but stayed away from a specific guidance for the September meeting. Patrick Harker (2023 voter) said rates need to be lifted into restrictive territory. Raphael Bostic (2024 voter) told the WSJ it's too soon to call inflation’s peak and that he hasn't decided yet on a 50 or 75bps rate hike next month. Tokyo CPI surprises to the upside Japan’s Tokyo inflation for August has come in close sight of the 3% mark, with headline at 2.9% y/y vs. expectations for 2.6%. The core measure was also above expectations at 2.6% y/y, coming in despite measures to help cool price pressures. Further gains can be expected later in the year as cheaper cell phone fees are reversed, and we also see threats of an energy crisis in Japan as LNG imports get diverted to Europe. This will continue to erode the purchasing power and keep the risk of a BOJ pivot alive. Europe’s energy woes French power prices soared 15% to EUR 900/MWh, more than 10x last year’s price amid expanding nuclear outages. Meanwhile in Germany, power prices for next year soared as much as 23% to an all-time high of EUR 792/MWh. UK and Italy also recorded fresh highs in power prices while Spain's parliament approved a law aimed at cutting energy use. The UK will announce its financial commitment for a new nuclear plant, Sizewell C, next week. The U.S. and China are said to nearing a deal in resolving the Chinese ADR audit papers inspection issue According to a Wall Street Journal article, Chinese securities regulators “are making arrangements for U.S.-listed Chinese companies and their accounting firms to transfer their audit working papers and other data from mainland China to Hong Kong” and “would allow American accounting regulators to travel to Hong Kong to inspect the audit records”. It is important to note that an agreement has yet to be reached and the regulators from both sides remain silent about it so far.  One of the hurdles to the proposed arrangement of transfer of audit working papers from the mainland to Hong Kong can satisfy the U.S. regulators, particularly the U.S. SEC Chair Gensler who has emphasized “full access”.  If this turns out to happen, it will not only benefit the Chinese companies that are listed in the U.S. but also sets the U.S. and China in a more conciliatory mood at least in some financial matters, and shows case the uniqueness of the position of Hong Kong.  German business sentiment is not that bad in August The headline reading is out at 88.5 versus expected 86.8 and prior 88.6. This is only a bit softer than the previous month. The same goes as well for the current conditions (out at 97.5 in August versus prior 97.7) and the expectations (80.3, unchanged compared to July). Overall, business sentiment remains soft. But given the quick economic deterioration, it could have been much worse. We still expect sentiment to further fall in the coming months as the German economy sinks into a recession. The energy crisis is hitting very hard consumers and companies – thus leading to lower demand and corporate investment. Yesterday, Germany’s benchmark year-end power kept rising (+13% in one day) to a new record of EU725/MWH. So far, the German government has spent roughly €60bn to limit the impact of higher energy prices on households and corporations. This represents about 1.7% of GDP according to the calculations of the Belgium-based think tank Bruegel. In percentage of GDP, this is still much less than many other European countries (3.7 % of GDP for Greece, 2.8 % for Italy and 2.3 % for Spain, for instance). In any case, this is unsustainable, of course. Softer July US PCE print would not derail Fed’s tightening After a softer CPI report in July, focus will turn to the PCE measure – the version of the CPI that is tracked by the Fed to gauge price pressures. Lower gasoline prices mean that PCE prints could also see some relief, although we still upside pressures to inflation given that energy shortages will likely persist and easing financial conditions mean that inflation could return. We would suggest not to read too much into a softer PCE print this week, as the stickier shelter and services prices mean that the 2% inflation target of the Fed remains unachievable into then next year. This suggests that the aggressive tightening by the Fed will likely continue, despite any likely softness in the PCE this week. U.S. discount retailers reported mixed Q2 results, highlighting pricing pressures ahead Dollar General (DG:xnys) reported revenue growth of 9% YoY to $9.4 billion, in line with the consensus estimate, and EPS of $2.98, +10.6% YoY, above the consensus estimate of $2.94.  Same-store sales in Q2 grew 4.6% YoY, above the consensus at +3.8%.  In the company’s guidance for 2022, revenue growth was raised to +11% from previously +10.0-10.5% and the same-store-sales growth was raised to +4.0-4.5% from +3.0-3.5%.  Q2 results from another discount retailer, Dollar Tree (DLTR:xnys) were however weaker, with revenue growth of 6.7% YoY to $6.77 billion, slightly below the consensus estimate of $6.79 billion.  EPS came in at $1.60, in line with expectations.  Same-store-sale for the quarter was +4.9%, below the consensus estimate at +5.0%.  The company lowered its 2022 full-year EPS guidance to $7.10-$7.40 and said that 60% of the cut was due to cutting prices.  The management said that they “expect the combination of this pricing investment at Family Dollar and the shoppers’ heightened focus on needs-based consumable products will pressure gross margins in the back half of the year”.  The comments from Dollar Tree casts a shawdow over the health of consumers in the U.S. in general.  Earnings on the tap Meituan (03690:xhkg) is scheduled to report Q2 results on Friday after the market close.  Analysts are upbeat about the food and grocery delivery platform’s potential in being benefited from the recovery of consumer demand amid the reopening and cost control initiatives.  The consensus estimate (as per the Bloomberg survey) for Q2 revenue is to grow 11% YoY to RMB48.59billion and adjusted net loss of RMB2.17 billion.  Coal miner China Shenhua Energy (01088:xhkg) and oil and gas company Sinopec (00386:xhkg) are also scheduled to report on Friday.      For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 26, 2022
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

The US Dollar Trades Near Cycle Highs Ahead Of The Speech

Saxo Strategy Team Saxo Strategy Team 26.08.2022 09:55
Summary:  Markets are steady ahead of a widely anticipated speech at the US Federal Reserve’s Jackson Hole, Wyoming conference from Fed Chair Jerome Powell, although he may do little more than remain on message on the Fed’s plans for tightening policy. The US dollar trades near cycle highs ahead of the speech, with US treasury yields having eased back a bit yesterday on a strong 7-year treasury auction. In Europe, power and natural gas prices continue their ascent from already dire levels, thereby supporting demand for fuel-based products.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures bounced back 1.4% to the 4,200 level in what seems to have been a technical move ahead of Jerome Powell’s keynote speech at Jackson Hole which is expected today. For equities the main question is how central banks are seeing structural in the years to come because that will be linked to the terminal rate the Fed sees as neutral for the economy and inflation. The US 10-year yield is trading around the 3.05% level this morning and we expect a quiet session in US equities unless Powell’s speech delivers a hawkish tone which could then erase yesterday’s gains. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) After staging an impressive bounce from the trough of a 2-month losing streak yesterday, Hong Kong equities opened higher before giving back much of its gains to end the morning session 0.7% higher. Yesterday’s 3.6% rally in the Hang Seng Index and 6% surge in Hang Seng TECH Index were fueled by initially chatters among traders about unverified progress on resolving the audit working papers access issue in the heart of the Chinese ADR delisting risk. During New York hours, the Wall Street Journal ran an article, suggesting that the U.S. and China are nearing a deal to allow American regulators to inspect in Hong Kong the audit working papers of Chinese companies listed in the U.S. The news sent Chinese ADRs soaring, the NASDAQ Golden Dragon China Index +6.3%. US dollar steady on the strong side ahead of Jackson Hole Yesterday saw some tactical chopiness in USD pairs, as the greenback sold off to support in places and criss-crossed parity in EURUSD terms before settling back to the strong side ahead of Fed Chair Powell’s speech at the Jackson Hole conference today. Powell is widely expected to stay on message on the Fed’s hopes to get ahead of the curve, but surprises are possible if his language is a bit more pointed than expected or he brings stronger guidance on the importance of QT, etc. Next event risks for the USD in the wake of today’s Powell speech (and July PCE inflation print as noted below) are next Friday’s payrolls/earnings report, the Sep 13 Aug. CPI data release, and then the Sep 21 FOMC decision. AUDNZD The Antipodean currency pair closed yesterday at its highest level since 2017 in a bid to escape the range that has prevailed since then, with a bit more range toward 1.1300 that stretches all the way back to 2013. If the pair can make a notable foray above these levels, it might suggest that traders are viewing the pair from a current account perspective, as Australia has been running record surpluses on its formidable complex of commodity exports, while New ZEaland is running unprecedented deficits on rising costs for energy imports. In the longer term perspective, AUDNZD has traded above 1.3500 as recently as 2011. Crude oil (CLV2 & LCOV2) Crude oil trades steady with Brent trading around $100 per barrel with a tightening supply outlook offsetting the recessionary drums that have been banging ever louder in recent weeks. Focus on today’s Jackson Hole speech from Fed Chair Powell and its potential impact on bond and currency markets, and with that the general level of risk appetite in the market. EU gas and power reached new peaks on Thursday on worries about Russian gas supplies following the upcoming 3-day maintenance supporting demand for crude-based products like diesel and heating oil. The prospect of a revived Iran nuclear deal still receiving some attention although a deal may only have a small immediate impact, small change compared with the soon to expire US SPR release program which saw 8 million barrels pumped into the market last week. In Brent, the next level of upside interest can be found at $102.50. Copper (COPPERUSDEC22) Copper has settled into a $3.55 to $3.73 range after making a steady recovery from the June/July +30% collapse. The primary focus remains on China and the government’s efforts to shore up its troubled property sector and its slowing economy in general. This past week we have seen rate cuts and the announcement of a 1 trillion-yuan economic stimulus program, including a 300-billion-yuan investment in infrastructure projects, which will boost the consumption of industrial metals, including copper. Above the current range copper may target $3.85/lb next but it will likely require a rally above $4/lb before speculators reverse the net short they have held since April. US Treasuries (TLT, IEF) US treasury yields fel back a few basis points, but the 10-year benchmark still trades above 3.00% today ahead of Fed Chair Powell’s speech. (More below – special focus on longer end of the yield curve on any QT guidance in the speech). A strong auction of 7-year treasuries yesterday helped bring support to the market after the weak 5-year auction the prior day. What is going on? ECB meeting minutes suggest another 50-basis points hike The meeting minutes point to another 50-basis point hike at the September 8 ECB meeting, a move that is actually more than fully priced in by the market. At the same time, the ECB minutes noted that it saw “no evidence of significant second round effects” in which wages drive an inflationary spiral. The central bank’s “TPI” or Transmission Protection Instrument meant to prevent peripheral sovereign yield spreads from widening excessively was widely discussed and is clearly a hot potato politically. An FT article noted that hedge funds have built up a nearly EUR 40 billion speculative short in Italian BTPs Additional hawkish Fed comments before we get to Powell Several Fed speakers were on the wires echoing the same message on inflation and more rate hikes. The markets are still holding their breath for what Powell has to say later today. James Bullard (2022 voter) reiterated his year-end target of 3.75% to 4% and market expectation is not too far from that now. Esther George (2022 voter) was more open about rates going above 4% but stayed away from a specific guidance for the September meeting. Patrick Harker (2023 voter) said rates need to be lifted into restrictive territory. Raphael Bostic (2024 voter) told the WSJ it's too soon to call inflation’s peak and that he hasn't decided yet on a 50 or 75bps rate hike next month. German business sentiment is not that bad in August The headline IFO Survey reading was out at 88.5 versus 86.8 expected and 88.6 prior. This is only a bit softer than the previous month. The same goes as well for the current conditions (out at 97.5 in August versus prior 97.7) and expectations (80.3, unchanged compared to July). Overall, business sentiment remains soft. But given the quick economic deterioration, it could have been much worse. We still expect sentiment to further fall in the coming months as the German economy sinks into a recession. The energy crisis is hitting consumers and companies very hard – thus leading to lower demand and corporate investment. Yesterday, Germany’s benchmark year-end power kept rising (+13% in one day) to a new record of EU725/MWH. So far, the German government has spent roughly €60bn to limit the impact of higher energy prices on households and corporations. This represents about 1.7% of GDP according to the calculations of the Belgium-based think tank Bruegel. In percentage of GDP, this is still much less than many other European countries (3.7 % of GDP for Greece, 2.8 % for Italy and 2.3 % for Spain, for instance). In any case, this is unsustainable, of course. The US and China are getting closer to resolve Chinese ADR audit papers inspection issue According to a Wall Street Journal article, Chinese securities regulators “are making arrangements for US-listed Chinese companies and their accounting firms to transfer their audit working papers and other data from mainland China to Hong Kong” and “would allow American accounting regulators to travel to Hong Kong to inspect the audit records”. It is important to note that an agreement has yet to be reached and the regulators on both sides remain silent about it so far. One of the hurdles to the proposed arrangement of transfer of audit working papers from the mainland to Hong Kong will be whether it can satisfy the US regulators, particularly the SEC Chair Gensler who has emphasized “full access”. If this turns out to happen, it will not only benefit the Chinese companies that are listed in the US but also sets the US and China in a more conciliatory mood at least in some financial matters, and shows case the uniqueness of the position of Hong Kong U.S. discount retailers reported mixed Q2 results, highlighting pricing pressures ahead Dollar General (DG:xnys) reported revenue growth of 9% y/y to $9.4bn, in line with the consensus estimate, and EPS of $2.98, +10.6% y/y, above the consensus estimate of $2.94.  Same-store sales in Q2 grew 4.6% y/y, above the consensus at +3.8%. In the company’s guidance for 2022, revenue growth was raised to +11% from previously +10.0-10.5% and the same-store-sales growth was raised to +4.0-4.5% from +3.0-3.5%. Q2 results from another discount retailer, Dollar Tree (DLTR:xnys) were however weaker, with revenue growth of 6.7% y/y to $6.77bn, slightly below the consensus estimate of $6.79bn.  EPS came in at $1.60, in line with expectations. Same-store-sale for the quarter was +4.9%, below the consensus estimate at +5.0%.  The company lowered its 2022 full-year EPS guidance to $7.10-$7.40 and said that 60% of the cut was due to cutting prices. The management said that they “expect the combination of this pricing investment at Family Dollar and the shoppers’ heightened focus on needs-based consumable products will pressure gross margins in the back half of the year”. The comments from Dollar Tree cast a shadow over the health of consumers in the US in general.  Meituan is scheduled to report Meituan (03690:xhkg) is scheduled to report Q2 results on Friday after the market close. Analysts are upbeat about the food and grocery delivery platform’s potential benefitting from the recovery of consumer demand amid the reopening and cost control initiatives.  The consensus estimate (as per the Bloomberg survey) for Q2 revenue is to grow 11% YoY to RMB48.59 billion and an adjusted net loss of RMB2.17 billion What are we watching next? The Kansas City Fed hosts its annual symposium in Jackson Hole This year’s theme is “Reassessing Constraints on the Economy and Policy”. The symposium will last until Saturady. Fed Chair Jerome Powell will speak today. Given the loosening of financial conditions since the June FOMC meeting, the market has been concerned that Powell will echo the pushback against the notion that the Fed knows that it is set to materially slow its pace of policy tightening after the September 21 FOMC rate decision (majority looking for another 75 basis points). Data dependency will likely be underlined in his speech, but any guidance on the Fed’s approach to QT could also garner considerable attention as longer treasury yields pull back higher toward the cycle highs from June. Softer July US PCE print would not derail Fed’s tightening After a softer CPI report in July, focus will turn to the PCE measure – the version of the CPI that is tracked by the Fed to gauge price pressures. Lower gasoline prices mean that PCE prints could also see some relief, although we still upside pressures to inflation given that energy shortages will likely persist and easing financial conditions mean that inflation could return. We would suggest not to read too much into a softer PCE print this week, as the stickier shelter and services prices mean that the 2% inflation target of the Fed remains unachievable into then next year. This suggests that the aggressive tightening by the Fed will likely continue, despite any likely softness in the PCE this week. Earnings to watch Today’s earnings focus is Meituan which is expected to see 11% y/y revenue growth with estimates expecting to see growth accelerating into Q3, so this will be the market’s focus in today’s earnings release. The latest stimulus efforts by the Chinese government and lifting of mobility restrictions could provide tailwind for the consumer into Q3. Today: Meituan, China Shenhua Energy, China Petroleum & Chemical Next week’s earnings releases: Monday: Fortescue Metals, Haier Smart Home, Foshan Haitian Flavouring, Agricultural Bank of China, BYD, Pinduoduo, Trip.com, DiDi Global Tuesday: Woodside Energy, ICBC, China Yangtze Power, Midea Group, Tianqi Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Economic calendar highlights for today (times GMT) 0800 – Italy Aug. Consumer/Manufacturing Confidence surveys 1230 – US Jul. Personal Income/Spending 1230 – US Jul. PCE Inflation 1400 – US Fed Chair Powell to speak at Jackson Hole, Wyoming 1400 – US Aug. Final University of Michigan Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 26, 2022
Cross-Chain Interoperability Solutions Have The Potential To Significantly Improve

Samsung Securities Announced About Setting Up Its Crypto Exchange!

Conotoxia Comments Conotoxia Comments 26.08.2022 14:50
Samsung Securities, a company engaged in asset management, stock issuance and other financial services, has announced that it will set up its crypto exchange in 2023. The company is expected to start in Korea and later plans to expand to other markets.   The division mentioned above of the company is part of Samsung's large-scale structure, which is part of the so-called chaebols (giant Korean conglomerates). It operates in a wide range of sectors of the global economy - from producing weapons and smartphones to selling clothing or even providing financial services.   The "Securities" division already has experience in implementing crypto-related investment technologies and products. It established the first blockchain ETF (exchange-traded fund) in Asia in June, listed on the Hong Kong Stock Exchange. It gives investors exposure to companies developing and investing in crypto technology.   The company is in talks with regulators and authorities to obtain the necessary approvals and licenses to establish the foundation of the exchange. Mirae Asset Securities and five other domestic companies are also planning to launch their investment platforms, but they do not have as much experience as the rival Samsung.   Earlier this month, the Securities division was one of three financial institutions in South Korea to partner with the country's largest exchange, Bithumb. The partnership meant Samsung Securities customers could indirectly invest in cryptocurrencies through the company's app.   Despite its inflexibility, chaebol has an established market position with enormous outreach and influence. For this reason, acquiring more clients on attractive terms may be easy for the firm, and it could be a significant competitor to Coinbase, Binance FTX or KuCoin.    South Korea seems to be aspiring to become a technology leader in the market. In early August, a "Korea Blockchain Week" event was held in Seoul, bringing together industry leaders, crypto regulation projects revealed are relatively lenient compared to those proposed by authorities in the US, and local companies are interested in further investments in blockchain technology in the DeFi and system infrastructure segments, among others. These plans could make South Korea a hub for the development of crypto technology and companies.  Market losses after recent days of sideways movement   On the Conotoxia MT5 platform, bitcoin and ethereum are losing 1% and 3%, respectively, today at 11 GMT+3. The leading tokens have been outside the previously drawn price channel for a week. The local possible support levels for BTC and ETH are $20700 and $1530, respectively. Their crossing could mean further declines. The continuation of the correction may be indicated by technical indicators such as the MACD, whose histogram for ETH has been falling steadily for a week and a half and now is near zero. In contrast, BTC reached the negative area a few days ago and seems to be falling lower and lower each consecutive day.    The EOS token seems to be losing the most heavily on the trading platform, recording a daily decline of 6.5% at 11:00 GMT+3. EOS is the native token of the EOSIO network, where the project provides blockchain developers with a set of essential tools and services for building and scaling decentralized applications (dApps). Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service)   Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Samsung plans to open a cryptocurrency exchange - will it succeed in dominating another sector? Market losses after several days of stabilization.
Sterling Underperformance: Anticipation Builds Ahead of BoE Announcement

Life After Fed Chair Powell's Speech: Focus On August Jobs Report, Strong Dollar And More

Saxo Strategy Team Saxo Strategy Team 29.08.2022 10:00
Summary:  After a hawkish message from Fed Chair Powell at Jackson Hole on Friday, and the focus is squarely on the US jobs report this week and August CPI due on September 13 to move the needle on the magnitude of the September rate hike. Still, the deliberation will now move to where the terminal rates are seen and how long they would be held there. We also get a further update on US economic momentum from the ISM indices and consumer confidence on the radar. European energy crisis situation and the ECB rate hike expectations will develop with the Eurozone CPI prints and the progress on Nord Stream maintenance. China’s manufacturing PMI will be key given the recent heatwaves, as will be Australia’s final manufacturing PMI.   From Powell to jobs After a hawkish message by Fed Chair Powell at the Jackson Hole conference on Friday, focus shifts to the August jobs report in the US to steer between a 50 vs. 75 basis points rate hike at the September meeting. Last month’s robust employment gains of 528k outperformed market expectations boosted the dollar, although the gains were reversed a few days later with a soft CPI report. Both of these reports have to send out a consistent message this time to seal the deal on a 75bps rate hike at the September meeting. Consensus expectations are for gains of 300k on nonfarm payrolls for August, with a steady unemployment rate of 3.5% and slight weakness in average earnings to 0.4% MoM from 0.5% earlier. Meeting or slightly exceeding these forecasts would put the ball in the court of the CPI release, but another strong outperformance could bump up the tightening expectations. Still, our sense is that that the deliberation should now move to how long the Fed will stay at the peak rate, as well as Quantitative Tightening which goes into full gear from September. US economic momentum has likely improved with lower gasoline prices Lower prices at the pump has seemingly helped the US economy reverse from the slowdown concerns, with Chairman Powell also getting the confidence to say that the economic momentum is strong. Consumer confidence, due on Tuesday should likely show a pickup with lower gasoline prices. The easing of financial conditions last month, in contrast to the Fed’s goal of tightening, may also have supported consumer sentiment. ISM manufacturing, which is scheduled to be reported on Thursday, may reflect the weakness seen in the S&P survey, but will still be lifted by the backlog in auto vehicle production. Housing sales may continue to moderate, but housing prices continue to rise and no systemic risks are seen. China manufacturing PMIs expected to decelerate in the midst of heatwaves The median forecasts of economists surveyed by Bloomberg expect China’s official NBS manufacturing PMI to edge up to 49.3 in August from 49.0 in July but remains firmly in the contractionary territory and the Caixin manufacturing PMI to slide to 50.1 in August from 50.4 in July, approaching the threshold between expansion and contraction. The heatwaves and drought-induced power curbs caused Sichuan and Chongqing to shut-down manufacturing activities for six days and eight days in August respectively. The province of Sichuan accounts for 4.2% of China’s industrial production and is an important manufacturing hub for semiconductor and solar panel industries. Both Sichuan and the municipality of Chongqing, which accounts for 2.1% of China’s industrial production, are crucial manufacturing centres for industrial components, including auto parts. During the month, a Covid outbreak hit Yiwu, an export-focussed manufacturing hub in Zhejiang, and could have contributed to dragging on the Caixin manufacturing PMI, which has a higher weight for SMEs in the eastern coastal region. The median forecast for the August official NBS non-manufacturing PMI is 52.2, down from last month’s 53.8 but remains in the expansionary territory.  The key Australian economic data to watch, and why key stocks will move in response On the same day China releases manufacturing data, which will be watched closely by commodity investors and Australian investors alike, given key commodities such iron ore, copper, nickel, coal are essential to Chinese manufacturing, investors will then quickly turn their attention to Australia’s August manufacturing indicators. Although Australia is not manufacturing economy, given services contribute 70% to GDP, manufacturing is still closely looked at as many top ASX companies are key producers and manufacturers. This includes energy companies like Woodside, Caltex, Viva Energy, as well as global packaging company, Amcor and global vaccine maker CSL, as well as global mining juggernauts BHP, Rio Tinto and Fortescue. So, when manufacturing data comes out, if its stronger than expected, (above a read of 51), then you might see an increase in buying in some of Australia’s key manufacturers. That being said, it’s really important to note that last month’s gauges pointed to slower growth in factory activity with higher interest rates, higher wages, and a lack of workers slowing activity. So it will be key to see if manufacturing continues to slow. Eurozone inflation and Nord Stream maintenance will be key for the ECB There is no question on the direction in Eurozone inflation, given the extensive reports on gas prices and power costs in the region over the last few days. However, some softening may be warranted after an all-time high of 8.9% was reached on the Eurozone inflation print in July, given the easing in pump prices in August. Still, gas supply concerns continue to remain top-of-mind for Germany with Gazprom announcing another leg of maintenance for the Nord Stream pipeline this week. Food prices are also seeing another pickup, and further gains in the headline print in Q4 cannot be ruled out. Calls for a 75 basis points rate hike by the European Central Bank have already picked up, and these could gain further traction if we see a strong CPI print this week. However, if Nord Stream supply comes back on time after its 3-day scheduled maintenance, and with some potential increases in capacity as has been hinted, that could mean a substantial decline in European gas prices and relief in utility costs in the months to come. India/South Korea GDP will re-affirm Asia’s steady growth India and South Korea GDP report GDP growth in Asia this week, along with inflation figures as well in South Korea. A double-digit GDP growth print is expected for India, with consensus at 15.2% YoY amid a strong recovery in services demand, albeit on a weak base. Commodity price gains are however likely to return and weigh on growth recovery going forward, as will slower global demand. But the RBI remains in a position to push further with its rate hikes to get a grip on inflation. South Korea’s Q2 GDP is however likely to remain steady, and focus will instead be on August inflation as that remains a bigger problem with over 6% prints being seen lately.   Key economic releases & central bank meetings this week Monday 29 August United Kingdom Market Holiday Australia Retail Sales (Jul) Japan Coincident Index Final (Jun), Unemployment rate (Jul)   Tuesday 30 August Thailand Industrial Production (Jul) Germany Import Prices (Jul), Inflation (Aug) Spain Inflation Rate (Aug), Business Confidence (Aug) United Kingdom Mortgage Approvals (Jul) Eurozone Consumer Confidence Final (Aug) US House Price Index (Jun), US Conference Board Consumer Confidence (Aug)   Wednesday 31 August South Korea Industrial Production (Jul) Japan Industrial Production (Jul) China NBS Manufacturing PMI (Aug) France Inflation Rate (Aug) Germany Unemployment Rate (Aug) Hong Kong Retail Sales (Jul) Eurozone Core Inflation Rate (Aug) Italy Inflation Rate (Aug) United States MBA Mortgage Applications (26 Aug), United States ADP Employment Change (Jun) India GDP (Q2) Canada GDP (Q2)   Thursday 1 September S&P Worldwide Manufacturing PMIs South Korea GDP Growth Rate (Q2), Exports (Aug) Japan Capital Spending (Q2) Australia Home Loans (Jul) Indonesia Inflation Rate (Aug) Germany Retail Sales (Jul) United Kingdom Nationwide Housing Prices (Aug) Italy GDP Growth Rate (Q2), Unemployment Rate (Jul) Eurozone Unemployment Rate (Jul) United States Jobless Claims (Aug)   Friday 2 September South Korea Inflation (Aug) Germany Balance of Trade (Jul) United States Non-Farm Payrolls (Aug) Unemployment Rate (Aug), Factory Orders (Jul)   Key earnings releases this week Monday: Haier Smart Home, Foshan Haitian Flavouring, Agricultural Bank of China, BYD, Pinduoduo, Trip.com, DiDi Global, CITIC Securities Tuesday: Woodside Energy, ICBC, China Yangtze Power, Muyuan Foods, SF Holdings, Shaanxi Coal, Midea Group, Tianqi Lithium, Ganfeng Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB, Brown-Forman, Veeva Systems   Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis   Source: Saxo Spotlight: What’s on investors and traders radars this week?
USDA's WASDE Update: Wheat Tightens, Corn Loosens

The US 2-year Treasury Yield Reached The Highest Since 2007!

Saxo Strategy Team Saxo Strategy Team 29.08.2022 10:20
Summary:  Equity markets plunged on Friday in the wake of Fed Chair Powell’s speech, in which he invoked famed Fed inflation fighter Volcker and warned against a premature easing of policy. While US yields are only modestly higher in the wake of the speech, the US dollar is soaring, bringing a new unwelcome tightening on global liquidity. Particularly intense focus on USDJPY as the Bank of Japan faces a new challenge from JPY weakness as it insists on maintaining its maximum easing policy.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities posted their worst session since at least June in the wake of Fed Chair Powell’s Jackson Hole speech on Friday, with the S&P 500 losing over 3% on the session and trading lower still overnight to start the week, with the psychologically key 4,000 level looming into view. The Nasdaq sliced over 4% lower and traded near its 55-day moving average overnight, in the 12,400 area. Sentiment looks fragile, with any further rise in treasury yields and the US dollar the key risk for driving a possible worsening of sentiment this week. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) After having staged an impressive bounce from the trough of a 2-month losing streak last week on the back of reports that the U.S. and China regulators were reaching a deal to avoid the delisting of Chinese companies from U.S. bourses, Hang Seng Index fell nearly 1% on Monday following the post-Jackson Hole selloff in U.S. equities. In addition, in statements from the U.S. and China regulators last Friday regarding access to audit work papers, the interpretations looked rather different in some key aspects. According to the Public Company Accounting Oversight Board (PCAOB), the agreement gives the U.S. regulator, “complete access to the audit work papers, audit personnel, and other information”. On the other hand, in its announcement and Q&As with reporters, China Securities Regulatory Commission emphasized that audit work papers and other information will be “obtained by and transferred through Chinese regulators”. Meituan (03690:xhkg) outperformed, +3.7% after reporting a solid Q2 and continuous order growth in June and August. CSI 300 dropped 0.7%.  US dollar and especially USDCNH in the wake of Fed Chair Powell’s speech A forceful new USD rally was set in motion in reaction to Fed Chair Powell’s speech on Friday, with more aggravated strength versus Asian currencies on Monday as yields rose and the JPY weakened (more on USDJPY below), but also as China allowed its currency to drop versus the US dollar, a key development in cementing the impact of this USD move globally. The most salient potential driver for further USD strength this week would be strong US data (especially on Friday’s August US jobs and earnings report) that drives Treasury yields higher. USDJPY While the focus is generally on the US dollar this week already and the broader fallout should the greenback continue its aggravated ascent, the stakes are very high for USDJPY, which risks a new upward spiral that will challenge the Kuroda-led Bank of Japan as it insists on maintaining it accommodative policy in the face of rising yields elsewhere.  A massive bout of volatility may lie ahead if market participants decide to take on the BoJ, which will eventually likely cave at some unknown level higher, perhaps 150 in USDJPY if it rises that far? Crude oil prices (CLV2 & LCOV2) Crude oil trades higher extending last week’s gain with supply concerns more than offsetting the potential negative growth/demand impact of Powell’s higher-for-longer interest rate speech on Friday at Jackson Hole. An Iran nuclear deal has yet to be reached with a breakthrough unlikely to add much in terms of additional barrels before next year. Libya, one of OPEC’s most volatile producers saw deadly clashes in the capital over the weekend sparking fears over supply to an energy starved Europe. In a addition high gas prices in Europe and Asia will continue to underpin demand and prices for diesel and heating oil. Brent is currently stuck in a range around $100 with resistance around $103 and support at $98. Gold (XAUUSD), silver (XAGUSD), platinum (XPTUSD) and copper (COPPERUSDED22) ... have tumbled the most since Friday after Fed’s Powell signaled that interest rates would keep rising and remain elevated for longer. The US 2-year Treasury yield reached the highest since 2007 with additional headwinds seen from the stronger dollar. The markets belief in the Fed’s ability to combat inflation helped drive the one-year inflation swap down to 3.06%, a one-year low. We maintain the view of gold being a hedge against the belief the Fed will be successful in lowering inflation without hurting economic growth to the point where the focus returns to central bank support but given the renewed breakdown on Friday and continuation today, the price may in the short term once again look at critical support below $1700. US Treasuries (TLT, IEF) US treasury yields rose across the board on Friday, actually quite modestly relative to the attention given to Fed Chair Powell’s speech, but the move followed through further in the Asian session Monday as the US dollar also rose, a toxic combination for risk sentiment. The US 10-year benchmark yields trades near the highs last week above 3.10% this morning, with the chief focus on the 3.50% area high established in mid-June if yields continue to rise. This week features important US data through Friday’s US jobs report. What is going on? Powell’s message at Jackson Hole gets serious While Powell still stayed away from clearly defining a rate path or the expected terminal rates for the Fed, his strong message did suggest that the fight against inflation is far from over. Powell reiterated that the decision on September 21st on whether the Fed will lift rates by 50bps or 75bps will be driven by the “totality” of data since the July meeting. That puts a great deal of emphasis on the US jobs report due on September 2nd, and the US CPI report due September 13th. There was also some emphasis on rates being held at the peak rate for some time, but there isn’t a substantial change to the market’s expectation of the Fed path yet, with cuts still seen for next year by the money markets. Other Fed speakers still see higher terminal rates Inflation remains the overarching theme in all the Fed talk, and no comfort is being taken from the softening in July inflation. Mester (2022 voter) accepted that the Fed hasn’t reached neutral rates yet and said that rates need to go above 4% and held there for some time. Bostic (2024 voter) also suggested a higher terminal rate of 3.5-4.75% compared to what was reflected in the June dot plot, and said rates need to be held there for some time and rate cut talks are premature. Soft US July PCE inflation confirms the dip in the CPI data Lower petrol prices cooled price pressures in July, and this has been re-confirmed by the PCE print on Friday. The headline came in at 6.3% YoY (vs. 6.8% expected) while core was at 4.6% YoY (vs. 4.7% expected). The market reaction to these softer numbers was however restrained as the hawkish message from Powell at Jackson Hole took the limelight. The magnitude of the September rate hike still remains a coinflip, but the Fed members have refused to take comfort with the softer CPI print and continue to push for an aggressive fight against inflation. ECB speakers remain committed to inflation fight despite recession risks A host of ECB speakers at the weekend continued to push for aggressive rate hikes to fight inflation. Schnabel, speaking at Jackson Hole, said rates must be raised, even into a recession. Kazaks also emphasised the need for further front-loading of rate hikes after the 50bps rate hike announced by the central bank in July. In fact, there were hints of a 75bps rate hike. There were also some concerns on a weaker EUR, as that fuels further inflationary pressures and the benefit of cheaper exports is diminished by supply chain disruption. Villeroy said that the neutral rate should be reached before the end of the year while Kazaks said he would get there in the first quarter of next year. Energy prices continue to climb in France Last Friday, the French 1-year electricity forward was close to €1,000 per MWh (versus €900 per MWh for Germany). This represents an increase of +1000 % compared with the long-term average of 2010-2020. Since Autumn 2021, the French government has capped electricity and gas prices (electricity price increase was capped at +4 % this year). But this is very costly for public finances (about €20bn so far this year). The cap on energy prices will expire at the end of the year for gas and in February 2023 for electricity. The government is not planning to extend it further. More targeted measures to help the poorest part of the population to cope with higher energy prices is the most likely scenario. The risk of electricity shortage is real in France this winter. During the summer, electricity demand is around 45 GWh. During the winter, higher consumption will push electricity demand around 80-90 GWh. This will put under tension all the electricity infrastructure, thus increasing the risk of shortage. We think that France is certainly in a worse position than Germany when it comes to energy supply (in the short-term). The world's fourth largest iron ore miner, Fortescue releases 2nd highest profit on record Fortuecue Metals (FMG) posted a 40% drop in full-year profits, mirroring the steep declines in iron ore prices. Despite iron ore shipments hitting a record, Fortescue posted a A$6.2 billion profit, down from the A$10.35 billion last year. So what’s next? It’s pledged another record year of iron ore shipments (187-192mt) and wants to accelerate its push into clean energy, aiming to produce an initial 15 million tons a year of green hydrogen by 2030, to help its heavy industry and long-distance transport decarbonize. It will spend $600-$700 million to do so this financial year. As we covered last week in our BHP interview, iron ore demand is likely to slow over the coming 30 years (that’s where Fortescue’s income comes from). Meanwhile, the world requires double the amount of green metals. So the question remains; can Fortescue diversify its business in time? Fortescue’s shares are up 21% from their July low, with investors hoping China infrastructure stimulus will support iron ore demand and boost the company’s earnings.  What are we watching next? The US dollar is the wrecking ball here for risk sentiment – any rise in US yields would make things worse The rising US dollar is bad enough for global markets as the greenback is a financial condition unto itself, but if US treasury yields continue to rise this week, this could prove double trouble for global markets and potentially aggravate the sudden downside momentum tilt set in motion on Friday by Fed Chair Powell’s speech at the Jackson Hole conference.   China manufacturing PMIs, scheduled to release this week, are expected to decelerate in the midst of power curbs The median forecasts of economists surveyed by Bloomberg expect China’s official NBS manufacturing PMI to edge up to 49.3 in August from 49.0 in July but remains firmly in the contractionary territory and the Caixin manufacturing PMI to slide to 50.1 in August from 50.4 in July, approaching the threshold between expansion and contraction. The heatwaves and drought-induced power curbs caused Sichuan and Chongqing to shut-down manufacturing activities for six days and eight days in August, respectively. The median forecast for the August official NBS non-manufacturing PMI is 52.2, down from last month’s 53.8 but remains in the expansionary territory.  Earnings to watch This week’s earnings will tilt towards a Chinese focus, but from a macro perspective we are watching Lululemon on Thursday to get an update on the US consumer. Expectations are still looking for a +20% y/y revenue growth in the current quarter so the bar is set high on the outlook. Monday: Haier Smart Home, Foshan Haitian Flavouring, Agricultural Bank of China, BYD, Pinduoduo, Trip.com, DiDi Global, CITIC Securities Tuesday: Woodside Energy, ICBC, China Yangtze Power, Muyuan Foods, SF Holdings, Shaanxi Coal, Midea Group, Tianqi Lithium, Ganfeng Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0800 – Switzerland SNB Weekly Sight Deposits 1300 – ECB Chief Economist Lane to speak 1430 – US Aug. Dallas Fed Manufacturing survey 1815 – US Fed Vice Chair Brainard to speak 2330 – Japan Jul. Jobless Rate 0130 – Australia Jul. Building Approvals Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 29, 2022
Speech At Jackson Hole Triggered Masacric Slide In Equities! US Treasury Yields Reaction

Speech At Jackson Hole Triggered Masacric Slide In Equities! US Treasury Yields Reaction

Saxo Bank Saxo Bank 29.08.2022 10:46
Summary:  Fed Chair Powell's Jackson Hole speech was credited with triggering the ugly slide in equities and broader risk sentiment on Friday, but the modest reaction in US treasury yields suggests that the Fed was only moderately more hawkish than anticipated. Regardless, the market slide has already developed ugly momentum and could test next supports if US data this week continues to support higher yields and a stronger US dollar, an important financial condition in its own right. We also discuss the latest commodity price developments and weak precious metals on the stronger US dollar and remarkably persistent view that hefty disinflation is just around the corner. Today's pod features Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Markets stumble after Powell's Jackson Hole speech
At The Close On The New York Stock Exchange Indices Closed Mixed

US Stock Market Strongly Recovers Without Any Predispositions!

InstaForex Analysis InstaForex Analysis 29.08.2022 12:46
Relevance up to 05:00 2022-08-30 UTC+2 Key US stock market indexes, the Dow Jones, the NASDAQ, and the S&P 500, dropped sharply on Friday and closed in negative territory. Over the past month, the US stock market strongly recovered from its decline of the previous several months. This was a rather paradoxical recovery, as there was nothing that could have triggered it. Now, everything falls into place. Friday's only key event on the economic calendar was a speech by Fed chairman Jerome Powell at the meeting in Jackson Hole. The US personal spending and income data, which was slightly below expectations, could not have caused Friday's slump. Powell assured the market that monetary tightening would continue and that a period of high interest rates would be longer than previously expected. He did not give any new information, and it was clear that one single monthly decrease of inflation could not indicate a downtrend. For example, the CPI decreased in May, only to surge in the following months. It remains unclear why investors went long on US stocks. It might have been a capital outflow from the EU to the US - the EU is also expected to enter a recession. However, the recession has already begun in the US - investors might have found the US economy to be more stable amid the difficult geopolitical situation in the EU. In addition, the Federal Reserve is actually taking steps to fight inflation, unlike the ECB. Jerome Powell noted on Friday that the regulator would be closely following macroeconomic data, indicating that the pace of interest rate increase could be slowed down in the near future. However, interest rates would still be hiked from the current level of 2.5%. The Fed funds rate is expected to reach 3.5% at the very least, which would weigh down on US risky assets. The strange upsurge in the US stock market could have possibly been a bull trap, deliberately triggered by major market players to sell their stocks at higher prices. Now, equities and US stock indexes are likely to drop once again and hit new yearly lows. In the meantime, the Fed is likely to increase interest rates at least until the end of 2022. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: Jerome Powell triggers slump in US stock market  
Bayer Invented A New Drug For Type II Diabetes. Astonishing Revenue!

Bayer Invented A New Drug For Type II Diabetes. Astonishing Revenue!

Conotoxia Comments Conotoxia Comments 29.08.2022 15:16
The medical giant is after another phase of testing a new drug for type II diabetes and chronic kidney disease. The test results proved positive, and analysts have issued further favourable investment recommendations. Bayer is a German medical company that produces medical equipment, drugs and supplements. It operates globally and has about 100,000 employees, generating more than 44 billion euros in revenue last fiscal year.  In the last quarter, the company announced a whopping €12.8 billion in revenue (an 18.1% year-on-year increase) thanks to favourable currency movements and price increases. Despite a significant increase in net profit (up 87%), the company still posted a loss of €298 million. Despite a significant reduction in costs in the last quarter, the corporation is still struggling to optimize them. This applies especially to the high price of energy, materials and the war in Ukraine. Dealing with intense competition from companies such as Pfizer, Roche, and Novartis remains problematic.  Last year, the company spent as much as 5.4 billion euros on research and development. This enormous amount is used to develop more breakthrough devices and drugs. One of them is Kerendia (finerenone). It's a medicine to treat type II diabetes and chronic kidney disease. Today, the results of the third phase of clinical trials were released, showing that the use of the drug allows a significant decrease in the mortality rate of the mentioned diseases. Kerendia has thus been approved for distribution in the US, Europe and China and could become an essential source of revenue for the company in the coming years.  Bayer has also begun new clinical trials of a thrombosis drug (asundexian). The company said on Sunday that the next phase will test the effectiveness and safety of asundexian in patients with atrial fibrillation and those suffering from certain types of stroke. According to Bloomberg, this is the next step in the company's plan to refresh its drug portfolio, which is under threat from low-cost competitors.  JPMorgan and Barclays have issued a buy recommendation for the German giant, maintaining their previous target price of €75 and €90, respectively. According to MarketScreener data, the current average target price is 78.91 euros for all 24 recommendations. This implies a possible increase in the share price of more than 46%, while the lowest and highest target prices are 55 and 106 euros, respectively. At the close of trading on Friday, the company's share price was €53.70.    Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Bayer’s drug effective - a medical giant with new recommendations from investment banks
The Japanese Yen Retreats as USD/JPY Gains Momentum

After The Speech Global Equity Markets Are Not Risking Anymore! Nasdaq 100 Below Its 50-day Average!

Saxo Strategy Team Saxo Strategy Team 30.08.2022 09:06
Summary:  The rise in U.S. treasury yields pressured growth stocks with the Nasdaq 100 falling below its 50-day average, which puts it back in a precarious position. Fed Kashkari said he was glad to see the markets fell after Chair Powell’s Jackson Hole speech to tighten financial conditions. Global equity markets have certainly got the message and are in a risk-off mood. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  US Stocks fell for the second day, but modestly compared to Friday’s sell-off that was triggered by Fed Chair Powell vowing rates will stay higher for longer to cool runaway inflation while suggesting there will be no pivot to cutting rates in 2023, S&P 500 -0.7%, Nasdaq 100 -1%.  Minneapolis Fed president Kashkari said that “he certainly was not exited to see the stock market rallying” after the last FOMC meeting and “people now understand the seriousness of our commitment to getting inflation back down to 2%.” Tech stocks dragged the markets lower, Nvidia -2.8%, Tesla -1.1%.  Twitter (TWTR:xnys) dropped 1.1% after Elon Musk ad subpoenaed a Twitter whistleblower to share information.  Meanwhile, gains in value stocks somewhat held up the market last night, with the oil, gas, and agricultural sectors rising 1-2%. It comes as Oil prices rose 4% on Monday as potential OPEC+ output cuts and conflict in Libya helped to offset a strong U.S. dollar. While the Ag sectors were supported higher after the wheat price jumped 4.9% and corn rose 2.2% (at its highest level in 2 months) after heat damage worsened US crops more than expected. As such it appears markets are back to their risk off modus operandi, selling down growth names (which are based on future earnings which gets diminished amid higher rates), and instead, buying value (commodities), with rising cashflows. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) US treasury yield rose across the curve.  The 2-year yield rose to as high as 3.48% during the day, the highest level since November 2007, before paring the rise to settle 3bps higher at 3.42%.  The 10-year yield rose 7bps to 3.11%,  taking the 2-10 year curve steepened by 3bps to -32bps.  Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities traded relatively calm in the midst of a large post-Jackson Hole selloff in the U.S., Hang Seng Index -0.7%, CSI 300 -0.4%.  The deal made between the U.S. and China regulators last Friday regarding access to audit work papers did not trigger much new buying in China internet stocks on Monday as it had already been well wired before the official announcement.  Further, there is much remained to be seen if the agreement will be implemented to the satisfaction of both sides as the U.S. and China regulators seem to differ in their interpretation.  Meituan (03690:xhkg) gained 2.6% after reporting solid Q2 results, which Hang Seng Tech Index dropped 1.2%. China’s industrial profits slumped to contracting 14.5% YoY from (v.s. +1.1% in June) and a fall of 11.3% sequentially from June.  The weakness was mainly driven by upstream sectors.  Coal mining stocks initially slumped but rallied later in the days and finished higher in Hong Kong and mainland bourses.   Geely (00175:xhkg) rose 1.7% as the automaker’s Zeekr line of EVs will be the first to use a new battery from CATL that provides over 1,000km range per charge.  SMIC (00981:xhkg), -2.1%, announced spending USD7.5 billion to build a plant in Tianjin to make 12-inch wafers. Chinese banks traded weak as Reuters reported that China’s central bank and bank regulators had been making calls to banks to push them to make more lending to support the real economy than put their funds in financial investments.  USDJPY weakness to bring back pressure on Bank of Japan USDJPY is back to testing its record July highs despite little change in money market pricing of the Fed rate path following Powell’s hawkish speech at Jackson Hole. The peak Fed funds rate is still priced in at 3.8%, while some of the Fed speakers have started to suggest 4%+ levels that may be needed to combat inflation. This brings the September dot plot in focus, but we get the jobs and CPI data before that as well. Any further upward re-pricing of the Fed path, if resulting in gains in US 10-year yields, could very well take USDJPY to new highs with Japanese yields still remaining capped due to the Bank of Japan’s yield curve control policy. If however, US data underwhelms, the room on the downside for USDJPY is tremendous. USDCNH made a new high at 6.9327 Wider interest rate differentials between the U.S. dollar and the renminbi and a weaker economic outlook in China continued to pressure the renminbi weaker. USDCNH surged to as high as 6.9327 on Monday during Asian hours before paring it as the greenback fell against most of the G10 and emerging market currencies in London hours.  In Asia this morning, USDCNH is trading at 6.9066. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw their best day in a month amid threats of a decline in supply from OPEC cuts and production outages in Libya. Brent futures rose above $105/barrel although some softening was seen in the Asian morning, while WTI rose to $97/barrel. This follows news from last week that Kazakhstan’s exports of crude may be impacted for months because of damage to its port facility. Meanwhile, negotiations between Iran and the US over the revival of the 2015 nuclear deal could drag on for weeks, easing fears of an imminent surge in supply. What to consider? The volatility index rises to its highest level in 9 weeks, suggesting more volatility is coming. And the fundamentals back this up with US yields spiking After the Fed’s 8-minute Jackson Hole speech, the volatility index surged to its highest level in 9-weeks, forming an uptrend pattern, suggesting more market volatility is ahead. We believe the market is only just beginning to price in higher for longer interest rates and inflation. The bond market is affirming this with yields spiking again. But what is also alarming, is that the futures market is still pricing in that the Fed will cut rates in 2023. This is despite the Fed suggesting it won’t pivot to cutting rates. The other issue is keeping markets on notice is that; if the Fed makes more hawkish remarks and hikes rates more than expected, then the market will face further volatility, and selling in growth sectors and names that are interest rate sensitive, are likely to come under pressure. Shell CEO cautions against a prolonged European gas crisis Shell CEO Ben van Beurden gave comments from Norway’s ONS conference, suggesting that Europe could face gas shortages for a number of winters. This disproves reports suggesting that Europe has already built reserves for the winter demand, and reaffirms our belief that a move to broad-based energy supply will continue to be top of mind in the long run. In the near term, demand destruction appears to be the only possible solution, and Van Beurden stressed need for efficiency savings as well as rationing. Eurozone inflation and Nord Stream maintenance will be key for the ECB There is no question on the direction in Eurozone inflation, given the extensive reports on gas prices and power costs in the region over the last few days. However, some softening may be warranted after an all-time high of 8.9% was reached on the Eurozone inflation print in July, given the easing in pump prices in August. Still, gas supply concerns continue to remain top-of-mind for Germany with Gazprom announcing another leg of maintenance for the Nord Stream pipeline this week. Food prices are also seeing another pickup, and further gains in the headline print in Q4 cannot be ruled out. Calls for a 75 basis points rate hike by the European Central Bank have already picked up, and these could gain further traction if we see a strong CPI print this week. However, if Nord Stream supply comes back on time after its 3-day scheduled maintenance, and with some potential increases in capacity as has been hinted, that could mean a substantial decline in European gas prices and relief in utility costs in the months to come. ECB Lane tones dials back on jumbo rate hike expectations ECB chief economist Lane was on the wires on Monday, and hinted at a more steady pace of rate hikes in a “step-by-step” manner rather than jumbo rate hikes. This appears to be a pushback against calls for a 75bps rate hike at the September meeting, as he made the case to allow the financial system to absorb the rate changes. Moreover, on inflation, Lane said long-term inflation expectations remain close to the two per cent target, while near-term inflation expectations are quite elevated. BYD reported 1H earnings at the high end of the preannounced range Chinse auto maker BYD (01211) reported 1H revenues growing 66% YoY to RMB 151 billion.  In terms of segments, auto revenues surged 130% YoY while mobile handset revenues contracted 4.8% YoY. Net profits jumped 206% to rMB3.595 billion, at the top end of the preannounced range of CNY2.8-3.6 billion. Volume growth (353K new energy passenger vehicles in 2Q, +265% YoY) beat market expectations despite two rounds of price increases in 2022 and supply chain disruptions.  The company’s EV market share rose to 29% (vs 17% in 2021).  Pinduoduo delivered Q2 results showing stronger than peer sales growth Pinduoduo (PDD:xnas), a leading eCommerce platform with strong penetration into agricultural products and online shoppers from rural areas., reported 1H total revenue growing at 36% YoY, far exceeding the 3% YoY consensus estimate.  The company attributed the revenue growth to a recovery in consumption since mid-May, successful promotion campaigns, and 48-hour daily necessity supply packs for people facing lockdown.  The company’s strong market position in rural areas and agriculture-related products also help it stand out from its rivals.  In Q2, the company achieved a 20 percentage point improvement in margins, reaching 33.5%, but the management cautioned investors that the margin compression was attributed to temporary cost savings early in the quarter and spending had increased since mid-May.  Non-GAAP EPS came in at Rmb7.54, +161% Uranium companies and other nuclear-related companies are back in the spotlight  Elon Musk said countries should not shut down existing nuclear power plants as Europe grapples with an energy crisis “If you have a well-designed nuclear plant, you should not shut it down - especially right now”, said Musk during an energy conference in Norway. That resulted in the Global X Uranium ETF climbing 7.4% on Monday to its highest level since June 8, supported by US uranium stocks rising. Uranium stocks in the Asia-Pacific region to watch include Australia’s Paladin, Deep Yellow and Boss Energy, as well Japan’s Kansai Electric Power and Tokyo Electric Power, as well as Mitsubishi Heavy Industries. In South Korea watch Doosan Enerbility, Kepco. And in Europe, monitor Yellow Cake and Kazatomprom.      For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets and what to consider next – August 30, 2022
Natural Gas Prices Extended The Recovery

Natural Gas Prices Still Fell Besides Russia Shuts The Key Nord Stream Pipeline Down. Dependence Coming To An End?

Saxo Strategy Team Saxo Strategy Team 30.08.2022 09:18
Summary:  Markets traded mostly sideways yesterday as the US dollar’s advance was stymied and US yields pushed back slightly lower. China continues to allow its currency to trade toward the lows for the cycle versus the US dollar as the 7.00 area nears in USDCNH. The euro bobbed back up toward parity versus the US dollar yesterday as natural gas prices fell even as Russia shuts the key Nord Stream pipeline down for a purported few days of maintenance.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities stabilised yesterday following that knee-jerk reaction on Friday to the Jackson Hole presentations with S&P 500 futures touching and bouncing off the 50-day moving average closing above the critical 4,000 level. S&P 500 futures are trading around the 4,044 level this morning sandwiched between the 100-day moving average above this level and the 50-day moving average below suggesting a bigger move is shaping up in either direction. The next big shift in sentiment will be when we get the US August CPI print on 13 September as that is the key data point to shape expectations from current levels. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities pulled back moderately, Hang Seng Index -0.9%. Tech names were weak. Hang Seng Tech Index plunged as much as 3% before bouncing off the lows to finish the morning session down 1.7%.  According to the Ministry of Industry and Information Technology, smartphone sales in China fell 2.9% YoY in the period between Jan and July. Despite reporting solid 1H results, China automaker, BYD (01211:xhg) slid 0.6%. In A-shares, mining stocks, gas, electric equipment, and auto parts underperformed, CSI 300 -0.5%. Pinduoduo (PDD:xnas), a leading Chinese eCommerce platform listed on Nasdaq reported strong 2Q results, showing stronger than peer gross merchandise value growth and better-than-expected margin improvement. US dollar and especially USDCNH The US dollar tried higher, but failed to follow through as risk sentiment stabilized and US Treasury yields eased back lower. The USDCNH rate, however, continues to push toward the high of the cycle, trading near 6.92 this morning. EURUSD trades near parity this morning after natural gas prices fell sharply in Europe yesterday and despite ECB Chief Economist Lane arguing for steady rate increases (pushing back against the pricing of a possible 75 basis point move at next week’s ECB meeting). Incoming data this week will be critical for USD direction. JPY weakness to bring back pressure on Bank of Japan USDJPY is back to testing its record July highs despite little change in money market pricing of the Fed rate path following Powell’s hawkish speech at Jackson Hole. The peak Fed funds rate is still priced in at 3.8%, while some of the Fed speakers have started to suggest 4%+ levels that may be needed to combat inflation. This brings the September dot plot in focus, but we get the jobs and CPI data before that as well. Any further upward re-pricing of the Fed path, if resulting in gains in US 10-year yields, could very well take USDJPY to new highs with Japanese yields still remaining capped due to the Bank of Japan’s yield curve control policy. If, however, US data underwhelms, the room on the downside for USDJPY is tremendous. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw their best day in six weeks amid threats of a decline in supply from OPEC and production outages in Libya. Brent futures rose above $105/barrel although some softening was seen in Asia overnight, while WTI rose to $97/barrel. This follows news from last week that Kazakhstan’s exports of crude may be impacted for months because of damage to its port facility. Meanwhile, negotiations between Iran and the US over the revival of the 2015 nuclear deal could drag on for weeks, easing fears of an imminent surge in supply. Pro Farmer tour see lowest US corn production since 2019 The just completed Pro Farmer tour across the US grain belt helped drive corn futures in Chicago to a two-month high on Monday after the tour saw the US corn crop at 13.76 bn bushels, below USDA forecasts for 14.36 billion bushels. Pro Farmer predicted a soybean crop of 4.54 billion, in line with the USDA’s latest forecast. Wheat, supported by corn’s rally, touched its highest since July 12 despite news that Ukraine agricultural exports could rise to 6.5 million ton in October, double the volume in August.  The soybean vs corn ratio needs to stay low (favouring corn) ahead of the South American planting season in order to persuade farmers there to plant more of the fertilizer intensive crop. US Treasuries (TLT, IEF) US treasury yields eased lower yesterday. An interesting paper presented at the Jackson Hole conference at the weekend suggests that the Fed will have a hard time delivering on quantitative tightening without causing harm to financial market functioning, which could mean less supply of treasuries from the Fed if its shies away from reducing its balance sheet at the previously touted pace of $95 billion/month. Otherwise, incoming US data is the focus through the August CPI release on September 13. What is going on? Shell CEO warns of prolonged European gas crisis Shell CEO Ben van Beurden gave comments from Norway’s ONS conference, suggesting that Europe could face gas shortages for a number of winters. This disproves reports suggesting that Europe has already built reserves for the winter demand and reaffirms our belief that a move to broad-based energy supply will continue to be top of mind in the long run. In the near term, demand destruction appears to be the only possible solution, and Van Beurden stressed the need for efficiency savings as well as rationing. ECB Lane dials back on jumbo rate hike expectations ECB chief economist Lane was on the wires on Monday and hinted at a steady pace of rate hikes in a “step-by-step” manner rather than jumbo rate hikes. This appears to be a pushback against calls for a 75bps rate hike at the September meeting, as he made the case to allow the financial system to absorb the rate changes. Moreover, on inflation, Lane said long-term inflation expectations remain close to the two per cent target, while near-term inflation expectations are quite elevated. BYD reported 1H earnings at the high end of the preannounced range Chinese automaker BYD (01211) reported 1H revenue up 66% y/y to RMB 151bn. In terms of segments, auto revenue surged 130% y/y while mobile handset revenues contracted 4.8% y/y. Net profits jumped 206% to RMB 3.6bn, at the top end of the preannounced range of RMB 2.8-3.6bn. Volume growth (353K new energy passenger vehicles in 2Q, +265% y/y) beating market expectations despite two rounds of price increases in 2022 and supply chain disruptions. The company’s EV market share rose to 29% (vs 17% in 2021). Pinduoduo delivered Q2 results showing stronger than peer sales growth Pinduoduo (PDD:xnas), a leading eCommerce platform with strong penetration into agricultural products and online shoppers from rural areas, reported 1H total revenue up 36% y/y, far exceeding the 3% y/y consensus estimate. The company attributed the revenue growth to a recovery in consumption since mid-May, successful promotion campaigns, and 48-hour daily necessity supply packs for people facing lockdown. The company’s strong market position in rural areas and agriculture-related products also help it stand out from its rivals. In Q2, the company achieved a 20 %-point improvement in margin, reaching 33.5%, but the management cautioned investors that the margin compression was attributed to temporary cost savings early in the quarter and spending had increased since mid-May. Non-GAAP EPS came in at RMB 7.54, +161% y/y. Shares in Uranium companies and other nuclear-related companies are back in the spotlight Japan has signaled its openness to more nuclear power, at the same time, Tesla founder Elon Musk has applauded uranium as an energy alternative, during an energy conference in Norway. Uranium stocks moved higher as a result on Monday in the US, which boosted the Global X Uranium ETF up 7%, to its highest level since June 8. Shares in the Asia-Pacific region followed. Australian stocks saw the most significant moves given the country has the largest uranium reserves globally. Australia’s Paladin rose 11%, Deep Yellow 15% and Boss Energy 10%, while Rio Tinto (which owns a deposit) rose over 1%. Japan’s Mitsubishi Heavy Industries and Tokyo Electric Power gained 3%. Companies to watch in Europe, include Yellow Cake and Kazatomprom. What are we watching next? August U.S. job report is out on Friday There should not be a major surprise. The economist consensus expects a 300,000 payrolls increase in August and a stable unemployment rate at 3.5 % - this is a five-decade low. If this is confirmed, it all points to a healthy labor market (despite the moderate pace of job increases). Today, the U.S. government will also release July data on vacancies and quits. Expect job openings to remain elevated, thus pointing to resilient demand for labor. These figures are unlikely to play a major role at the September FOMC meeting since it is well-known that labor market data are lagged indicators. Inflation remains the main point of concern, as mentioned by Fed Chair Jerome Powell last week at Jackson Hole Symposium. August EZ CPI will be painfully high The consensus expects a new increase of 9 % year-over-year when the data will be released on Wednesday. This should convince European Central Bank (ECB) policy makers to raise borrowing costs by a sizable increase on September 8. At Jackson Hole, ECB’s executive board member Isabel Schnabel indicated the central bank has no other choice but to act with ‘determination’. This is a matter of credibility. According to Bloomberg, traders now price a 50 % chance of a 75-basis points rate hike in September. Earnings to watch Today’s earnings focus is China are lithium miners Tianqi Lithium and Ganfeng Lithium as the growth in electric vehicles sales is putting enourmous pressure on availability of lithium and prices of lithium carbonate. Baidu is another Chinese earnings release to watch today as the company’s footprint in online advertising will give insights into economic activity. Later in the US, earnings to watch are Crowdstrike in the cyber security industry and HP in computing hardware. Today: Woodside Energy, ICBC, China Yangtze Power, Muyuan Foods, SF Holdings, Shaanxi Coal, Midea Group, Tianqi Lithium, Ganfeng Lithium, Bank of Montreal, China Construction Bank, Bank of China, Great Wall Motor, COSCO Shipping, Partners Group, Baidu, Crowdstrike, HP Wednesday: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0700 – Spain Flash Aug. CPI 0830 – UK Jul. Net Consumer Credit 0830 – UK Jul. Mortgage Approvals 0900 – Euro Zone Aug. Confidence Surveys 1115 – ECB's Vasle to speak 1200 – Hungary Rate Decision 1200 – US Fed’s Barkin (Non-voter) to speak 1200 – Germany Aug. Flash CPI 1300 – US Jun. S&P CoreLogic Home Price Index 1400 – US Aug. Consumer Confidence 1400 – US Jul. JOLTS Job Openings 1500 – US Fed’s Williams (voter) to speak 1600 – ECB Speakers Holzmann and others 2030 – API's Weekly Crude and Fuel Stock Report 0130 – China Aug. Manufacturing/Non-manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 30, 2022
The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

Markets Finally Catch Their Breath After The Speech As Dollar Stops Growing

Saxo Bank Saxo Bank 30.08.2022 11:31
Summary:  Today we look at the lackluster session yesterday as risk sentiment found relief after the brief wipeout in the wake of the Fed Chair Powell speech on Friday. Helping to ease pressure on sentiment were the USD halting its rise and US yields easing back lower. In commodities, we look at the latest on the natural gas situation in Europe as Russia is set to shut down a key pipeline for purported maintenance. The corn and wheat outlook, pressure on discretionary spending and related stocks due to soaring energy prices, upcoming earnings reports and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: High energy costs will crowd out discretionary spending
Canadian Dollar Falters as USD/CAD Tests Key Support Amidst Rising Oil Prices and Economic Data

"Fight Against Inflation Is Our Primary Concern..." Central Banks Predicate

Craig Erlam Craig Erlam 30.08.2022 16:05
Stock markets are bouncing back on Tuesday following a rocky couple of weeks as investors grew nervous about the economic impact of tightening. Fed Chair Jerome Powell could not have been more clear on Friday on the central bank’s tightening stance and unlike the warnings from his colleagues, the message appeared to have finally gotten through. Which makes today’s move all the more curious. It’s not the fact that we’re seeing a rebound as equity markets don’t move in straight lines, rather it’s the strength of it that is interesting. Prior to Friday’s speech, investors appeared determined to cast aside warnings in favour of the dovish pivot narrative and today’s moves may suggest the same could still be true after a brief pullback. With a 75 basis point rate hike now viewed as the more likely outcome from the Fed in a few weeks and ECB officials putting a similar move on the table ahead of its meeting next week, how strong of a recovery can we really expect in equity markets? Central banks have made it perfectly clear now that the fight against inflation is their primary concern and a hard landing may just be the price to pay. While that may change if we see any significant improvement on the inflation front over the coming months, the risks still appear more tilted to the downside for the economy. A big moment for bitcoin Bitcoin is enjoying a slight recovery today after surviving a brief dip below $20,000 over the weekend. The hawkish sentiment by Powell took its toll at the end of the week but crypto bulls are fighting back to defend what could be a key level. We may need to see more of the resilience displayed in recent months as a failure to do so could quickly see bitcoin retesting the June lows. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.   Source: A curious rebound
Taiwanese Soldiers Shooting At Civilian Drons And Other Factors Affecting Stock Markets

Taiwanese Soldiers Shooting At Civilian Drons And Other Factors Affecting Stock Markets

Saxo Strategy Team Saxo Strategy Team 31.08.2022 10:06
Summary:  Whiplash in global sentiment as the US equity market ended yesterday on a sour note at new local lows, only to see the mood brighten considerably in Asia, perhaps in part due to a massive plunge in crude oil prices. Sentiment toward the euro has certainly improved this week, as the single currency posted strong gains nearly across the board yesterday on another steep drop in natural gas prices and fresh hawkish rhetoric from an ECB member ahead of next Thursday’s meeting.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures reversed hard yesterday after pushing through above the 100-day moving average closing below the 4,000 level at 3,987. The culprit was more hawkish comments from both the Fed and ECB on top of very strong JOLTS Job Openings supporting the view that the labour market remains tight, likely leading to more wage pressures. Also, the S&P CoreLogic house index for June showed that house prices slowed down significantly on m/m basis highlighting the negative impact from higher mortgage rates. S&P 500 futures are trading back above the 4,000 level this morning with the 50-day moving average sitting around the 4,017 level is a key support level to watch today. Hong Kong’s Hang Seng (HSIQ2) and China’s CSI300 (03188:xhkg) In U.S. trading the night before, Hang Seng Index Futures tumbled 2.3% in a confluence of factors including Taiwanese soldiers on front-line islands firing shots at civilian drones believed flying from mainland China, a newswire report saying the U.S. regulator, PCAOB, selected Alibaba (BABA:xnys/09988:xhkg) for audit inspection commencing in September, Berkshire Hathaway reducing holdings in BYD, Covid-related lockdown concerns, and the continuous decline of the U.S. equity markets. Hang Seng Index gapped down by nearly 2% at the Asian market open but managed to crawl back all the loss and turn to a gain of 0.5% at the time of writing. The tech space led the charge higher, Hang Seng Tech Index (HSTECH.I) surged by 2.4%. In A shares, CSI 300 reversed the downtrend in the morning and bounced to 0.8% higher. Surging euro take the single currency higher across the board The EURUSD exchange rate was stable-to-stronger as the EU continues to build natural gas supplies ahead of the winter and as the price for gas dropped sharply yesterday again. More hawkish comments from the ECB, this time from Nagel, who argued for “front-loading” rate hikes, also helped the euro higher. The Euro was higher across the board, with EURCHF surging nearly to 0.9800 and EURUSD staying above parity despite the USD strength elsewhere. The bigger level in the latter is toward the 1.0100 local range high and former range low. Next Thursday’s ECB will be critical for the euro outlook, with the market leaning for a 75 basis point hike. Selling pressure in GBP ramps up Pessimism built in sterling after Goldman Sachs hinted that peak inflation in the UK could reach 22% in early 2023 and downgraded its GDP forecast. GBPUSD touched lows of 1.1622 before settling around 1.1660.  EURGBP pushed higher to 0.8600, its strongest level since early July. Crude oil prices (CLU2 & LCOV2) Crude oil on track for a third monthly drop took a 7.5% tumble on Tuesday after recording the best day in six weeks on Monday. Both highlight a market suffering from low liquidity and lack of direction. Brent has returned to $100 with the slower growth and demand narrative once attracting sellers. In addition, a two-day plunge in EU gas prices also weighing on sentiment while new Covid infections and the worst heatwaves in decades in China added to the negative sentiment. On the supply side the Iraq turmoil is not having any impact on oil supplies while an Iran nuclear deal still lingers. Ahead of today’s EIA weekly stock report, the API last night reported a 600k barrels increase in oil stocks with big draws seen in gasoline and diesel. Further volatility can be expected in European gas prices over the coming days, and that could spill over to crude oil as well. EU Gas traders watch Nord Stream 1 and political initiatives to suppress power prices Dutch TTF benchmark gas which touched €350/MWh on Friday trades €270/MWh on the opening with focus on Gazprom’s announced 3-day closure of the NordStream 1 pipeline for maintenance, and whether it will reopen on September 3 or remain shut as part of Putin’s gas war against Europe. The closure coinciding with maintenance in Norway, including at the giant Troll fields. NordStream 1 currently supplies Europe with 33 mcm/day compared with its capacity of 167 mcm/day. A re-opening on September 3 could send prices tumbling further towards €200/MWh, a level still high enough to curb demand. Gas has also been losing altitude in response to rapidly filling storage sites, although daily flows will be needed throughout the winter, and signs the EU is preparing to intervene to dampen soaring power prices. Gold (XAUUSD) Gold remains troubled by the recent hawkish shift by the US Federal Reserve, but the downside pressure has eased a bit by a weaker dollar and geopolitical tensions. The price nevertheless trades below support-turned-resistance at $1729/oz with $1715/oz support preventing another attempt to challenge key support at $1680/oz. A host of Fed speakers were on the wires yesterday, and all of them focused on inflation, suggesting aggressive action from the Fed will continue. Meanwhile, Taiwanese soldiers fired shots to ward off civilian drones flying close to islands near China, spooking fears that tensions could escalate. What is going on? First shipment of wheat out of Ukraine arrives in Africa The first export of wheat from Ukraine since the invasion of Russia in February has arrived in Djibouti, east Africa. The 23,000-ton shipment is bound for Ethiopia which is struggling with ongoing drought and conflict. A recent agreement between Russia and Ukraine, mediated by the UN and Turkey, has allowed 50 ships to resume shopping grain around the world. Wheat harvest was also seen picking up in Canada as yields improved amid better weather conditions, helping to ease supply worries in the key agricultural crop. US consumer confidence and JOLTS data came in better-than-expected US consumer confidence rose to its highest level in three months to come in at 103.2 in August from 95.7 previously. Both the expectation index and present situation index saw improvements, rising to 75.1 (prev. 65.6) and 145.4 (prev.139.7), respectively. This could be partly driven by lower pump prices, but also signals that a healthy job market report may be coming this week. The 1-year ahead inflation expectation fell to 7.0% (prev. 7.4%), which was a seven-month low. Meanwhile, US JOLTS rose to 11.239mln in July, above the expected 10.45mln and previous 10.698mln, hinting that the labor market remains tight. German CPI’s upside surprise, ECB still leaning towards front-loading Germany CPI came in higher than expected at 7.9% YoY (vs. 7.5% prev and 7.8% expected) while the MoM print was slightly softer at 0.3% (vs. 0.9% prev and 0.4% expected). Food and energy price gains underpinned, but fuel rebate helped to take some pressure off. Meanwhile, ECB speakers continued to push for more front-loaded rate hikes, in contrast to ECB’s Lane calling for more step-by-step increases on Monday and signaling recession concerns yesterday. THe ECB’s Nagel argued for front-loading rate tightening and Knot clearly said he’s leaning towards a 75bp hike in September, but he is open to a discussion, as did Muller. Wunsch also vouched for rates in restrictive territory, and Vasle (non-voter) said the September rate hike should exceed 50bps. Pricing for the ECB meeting next Thursday closed yesterday around +65 basis points. Taiwan shot at drones flying close to its offshore islands Taiwan’s authorities said in a statement Taiwanese soldiers fired shots in three incidents on Tuesday to ward off drones flying close to small offshore islands controlled by Taiwan. The statement did not identify where these civilian drones were from but said that the drones flew away in direction of Xiamen, a coastal city in mainland China. Taiwan’s President Tsai Ing-wen previously urged Taiwan’s military force to take “appropriate by necessary” actions to drive away civilian drones having been buzzing Taiwan’s military installations on its front-line islands. Crowdstrike reports better than expected results Shares were higher in US extended trading, following a 0.7% rise in the regular session after reporting second-quarter results that topped expectations, while it also raised its forecasts for the year. The cyber security giant reported revenue rose to $535mn, up from $337.7mn last year. Annual recurring revenue grew 59% to $2.14bn compared to the same time last year. This is a somewhat of a testament that cyber security is a defensive industry, as it is able to somewhat thrive regardless of economic conditions weakening. Chinese lithium miners are seeing explosive growth Tiangqi and Ganfeng, two of the world’s largest lithium miners, both reported very strong results seeing net income increasing multiples times from last year as lithium carbonate prices have risen 80% this year in China driven by supply shortages of lithium and extremely rapidly growing demand for electric vehicles. What are we watching next? The EU will hold an emerging energy meeting on 9 September This happens while the EU is set to meet its gas storage filling goal (80 %) two months ahead of target. Germany, which is one of the largest European economies most dependent on Russian gas, is also on track to meet its national storage goal before the deadline expires. In recent weeks, the EU has scaled up efforts in order to avoid energy rationing this winter. On this emergency meeting, Spain is expected to propose that the entire EU apply the ‘Iberian exception’ to set electricity prices. In mid-April 2022, the European Commission agreed that Spain and Portugal create a temporary mechanism to decouple the price of gas from that of electricity for a period of 12 months. Concretely, the price of gas was capped to an average of €50 per megawatt-hour. This resulted in electricity bills being halved for about 40 % of Spanish and Portuguese consumers with regulated rates. This could be applied at the EU scale. The Chinese Communist Party national congress commences on Oct. 16 The politburo decided to propose to schedule the next once-every-five-year National Congress of the Chinese Communist Party (the “CCP”) for Oct 16, 2022.  The 2,300-odd delegates attending the National Congress will elect the CCP’s Central Committee which consists of 205 full (voting) members and 170 alternate (non-voting) members. The full members of the Central Committee will elect among themselves the 25 members of the Politburo and the members of the Politburo will then choose among themselves the seven members of the Politburo Standing Committee, who are the highest leaders of the CCP.  The National Congress will review the CCP’s work over the past five years and formulate policy directions and action plans for the next five years.  Today is the first report of US ADP Payrolls Change using new methodology The ADP Research Institute and Stanford Digital Economy Lab have revised the methodology for the ADP’s monthly employment report, arguing that the new report will offer a better view on the labor market, with breakdowns of weekly data for the prior month and more data on changes in pay. Only time will tell whether the market will begin to trust this data more than the official nonfarm payrolls “establishment” survey. Earnings to watch Today’s US earnings focus is MongoDB expected to report 42% y/y revenue growth in FY23 Q2 (ending 31 July) with operating profit getting very close to break-even. The database company has been running positive cash flow from operations over the past two quarters, but investors would like to see operating income (includes share-based compensation) break-even as well. Today: MongoDB, Brown-Forman, Veeva Systems Thursday: Pernod Ricard, Broadcom, Lululemon Athletica, Hormel Foods Friday: BNP Paribas Fortis Economic calendar highlights for today (times GMT) 0755 – Germany Aug. Unemployment Change/Rate 0800 – Poland Flash Aug. CPI 0900 – Eurozone Flash Aug. CPI 1200 – US Fed’s Mester (voter) to speak 1215 – US Aug. ADP Private Payroll change 1230 – Canada Jun. GDP 1345 – US Aug. Chicago PMI 1430 – EIA's Weekly Crude and Fuel Stock Report 2300 – South Korea Q2 GDP 0145 – China Aug. Caixin Manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – August 31, 2022
It Was Possible That Tesla Would Move Closer To Resistance

Tech Stocks: Could Tesla Stock Price Reach $300?

FXStreet News FXStreet News 30.08.2022 16:17
Tesla falls to the first point of support. TSLA should bounce on Tuesday as markets recover. Tesla stock still looking overvalued as the sector rerates. A more or less normal day for stock markets on Monday took place after the sharp sell-off on Friday. Monday's performance was somewhat better than expected or less bad than many feared. Equity markets held up relatively well with the main indices losing less than 1%. Fears of capitulation were short-lived. This should set up a recovery rally for Tuesday and Wednesday and then probably markets will flatline ahead of Friday's employment report. Also read: Tesla Stock Deep Dive: Price target at $400 on China headwinds, margin compression, lower deliveries Tesla stock news The good news for bulls was that Monday's price action opened on the lows at $280, retested it in the first half, and then put in place a double bottom on an intraday basis that set Tesla (TSLA) stock higher for the remainder of the session. Overall, it was a pretty boring day. Tesla had a range of about $7 on the day, but there was no follow-through from Friday's sell-off. Is this consolidation just a holding pattern before further falls or a base building for a recovery? Tesla stock forecast TSLA stock longer-term view remains bearish with the series of lower tops identified by our trendline below. As we can see, Tesla is stuck in a high-volume area (grey bars on the right). High-volume areas are stabilization zones, and markets tend to move from one to another. Below $281 and above $314, volume thins out, so we would expect Tesla to move quickly through those zones. The recent Fed hawkish commentary from Powell puts the risk-reward in favor of the downside in my view, so I would be looking for TSLA stock to break $281 and a swift move through light volume until we reach the next high volume zone at $240. However, ahead of Friday, there is likely to be some recovery and then stabilization around $300. TSLA 1-day chart
Summer's End: An Anxious Outlook for the Global Economy

Sentiment On US Equity Market Bounced More Than Expected

Saxo Bank Saxo Bank 31.08.2022 10:54
Summary:  Today we discuss a weak US equity market session yesterday as sentiment bounced more than expected in August, at least according to the Conference Board US Consumer Confidence survey. We also look at a far better expansion in Job openings than expected and an interesting measure of "sticky CPI" that continues to rise in the US. In commodities, we discuss the drop in oil prices, and plans possibly afoot in Europe to cap power prices. The equities focus is on BYD, Chinese lithium names, and MongoDB. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: US sentiment brightens, jobs market still looks strong
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

INTC Stock Prices Has Lost More Than 20%! Bearish Signal Was Right

InstaForex Analysis InstaForex Analysis 31.08.2022 14:21
Relevance up to 14:00 UTC+2 Red rectangle- major support (broken) Red lines- bearish channel INTC stock price is trading around $32-$33. At the beginning of June we warned traders that the weekly support at $42.50 was breaking down and that would imply more selling to come. That was an important bearish signal as this support level had been respected for more than 4 years. Price has formed a bearish channel where it continues making lower lows and lower highs. The RSI has still not reached oversold levels. Price is approaching the lower channel boundary where it can find support. Price has lost more than 20% since our warning and so far there is no sign of a reversal or bottom. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: INTC stock price has lost more than 20% since our bearish warning.
USD Stable as Oil Prices Rebound Ahead of US CPI Report Release

MA Stock Price Is Compatible To Bearish Scenario

InstaForex Analysis InstaForex Analysis 31.08.2022 14:37
Relevance up to 14:00 UTC+2 Red line- upper triangle boundary Green line- lower triangle boundary In previous posts we warned bulls in MA stock to be careful as a rejection at the resistance around $360 could lead to another pull back towards $300. The descending triangle pattern we have noted since earlier posts, is so far following the bearish scenario. Price tests the upper triangle boundary, gets rejected and turns lower towards the lower triangle boundary. In this case the lower triangle boundary at $300 is getting closer. We continue to expect MA stock price to move towards the green support line around $300. We remain bearish as long as price is below the red trend line resistance. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: MA stock price repeating pattern under play.
Analyst Favorites: Sunrun, Block, and Nvidia Lead the Pack Among Saxo's Top Traded Stocks with 17% Upside Potential

European Central Bank - There Is A Need To Strengthen Measures That Curb Inflation

InstaForex Analysis InstaForex Analysis 31.08.2022 15:18
Relevance up to 10:00 UTC+2 The more euro falls, the more often European policymakers say there is a need to strengthen measures that curb inflation. ECB board member Joachim Nagel even stated that the next rate hike should not be delayed for fear of a potential recession. Unsurprisingly, these comments fueled speculation on how much the European Central Bank needs to raise interest rates at its meeting next week to keep the balance between the economy sliding into recession and countering further inflation. With the figure already at a record 8.9%, markets are divided over whether policymakers will raise rates by 50 basis points straight away or resort to changing them by 75 basis points at once. If the ECB increases rates by 75 points, euro will correct upwards, which will allow buyers to keep parity under their control. However, there are policymakers calling for restraint in the tightening of monetary policy. Executive Board member Fabio Panetta recently said the current rate hike will ease inflationary pressures anyway, while Chief Economist Philip Lane pointed out that sustained economic growth is more important than the observed inflationary pressures associated with the energy crisis. Although much of the surge in inflation is due to energy problems, there are fears that it could spread to other areas. Nagel mentioned that he supported last month's decision to raise rates by 50 basis points because a larger move minimizes the risk of future price increases being out of control. In terms of the forex market, there is a risk of further sharp fall in EUR/USD. Buyers need to hold above 1.0000 because moving down will make it hard for the pair to recover. Meanwhile, going beyond 1.0050 will give confidence to buyers in pushing the quote to 1.0090 and 1.0130. If euro falls below 1.0000, the bear market will continue, which would push the quote to 0.9970, 0.9940, 0.9905 and 0.9860. Pound is currently below the 17th figure, which creates certain difficulties for buyers. There is very little chance of a strong upward correction, especially if sellers take control of 1.1650. If buyers fail to stay above this level, there will be another set of sell-offs towards 1.1590. Then, its breakdown will lead to subsequent declines to 1.1530 and 1.1480. Only a rise above 1.1720 will bring the pair to 1.1760 and 1.1840. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: ECB members are calling for tighter monetary policy
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

The ECB Is Paying The Price For Its Decision. Risk Assets Are Struggling In The Aftermath Of Powell’s Speech.

Kenny Fisher Kenny Fisher 31.08.2022 15:34
Stock markets in Europe turned lower again on Wednesday while US futures are more mixed, similar to what we saw in Asia overnight. Conditions remain choppy in the aftermath of Jackson Hole last week. There’s clearly a lack of conviction in the markets following a lot of hawkish central bank commentary in recent days. The narrative that investors want to believe is that inflation has peaked and is falling in the US and that a soft landing is plausible. That doesn’t necessarily align with what we’re hearing. Add to that the increasingly hawkish language from other central banks amid severe economic headwinds and the reality of the situation is seemingly becoming impossible to ignore. With 75 basis point hikes now on the table for the US, EU and UK next month, among others, it may not be entirely surprising that investors are taking a more cautious stance. ECB paying the price for dragging its feet amid record inflation The inflation data from the eurozone this morning won’t have hurt the odds of a 75 basis point hike, that’s for sure. Inflation in the bloc rose 9.1% in August, up from the previous record of 8.9% in July. With core inflation also jumping to 4.3% from 4%, the pressure is seriously mounting on the ECB to be more aggressive. The central bank is paying the price for its decision to leave the deposit rate at -0.5% for as long as it did and may have to be much more forceful now as a result. Price pressures are becoming more widespread, with energy increases easing slightly but food, alcohol and tobacco inflation accelerating to 10.6%. The inflation situation is, unfortunately, going to get worse, perhaps much worse, before it gets better, considering what’s to come with energy this winter. Gas flows halted, nervy few days ahead Gas flows through Nord Stream One have now paused for the three-day maintenance period. While Europe is keen to stress its storage levels are well ahead of schedule, the failure of flows resuming on Saturday would be a massive blow ahead of what is already going to be a nervy and expensive winter. European gas prices are near their recent highs and will likely remain so over the coming days until flows resume. If they don’t, prices could rise much further. Can bitcoin hold out much longer? Risk assets are struggling in the aftermath of Powell’s speech at Jackson Hole, the only exception arguably being bitcoin which fell heavily in the immediate aftermath but has now found its feet. In fact, it’s posting gains of more than 1% today, bucking the trend we’re seeing elsewhere, with risk assets generally underperforming. Once more we’re seeing resilience in bitcoin around $20,000; the question is how long can it hold out if sentiment doesn’t improve? For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
EUR/USD Faces Ongoing Decline Amid Budget and Market Turbulence

Avalanche (AVAX) Lost 12% After Being Accused Of Paying For Slander Reputation!

Conotoxia Comments Conotoxia Comments 31.08.2022 17:08
Avalanche (AVAX) on 29 August, lost almost 12% on a day when a new whistleblower accused it of paying lawyers to attack its competitors' reputations. Since the bottom two days ago, the cryptocurrency's price now seems to have recovered some of its losses, rising by around 10 per cent, presumably after the accusations lost credibility in the eyes of investors. CryptoLeaks is a young news site that aspires to become WikiLeaks - known for shedding light on the crimes of governments. Two days ago, the site published an article accusing Ava Labs of paying lawyers from the Roche Freedman law firm to damage the reputation of its competitors.  The alleged evidence was a statement by one of the insiders. However, the claims made in the article appear to be exaggerated, and the evidence is too weak to support allegations of a deliberate and paid legal battle against competitors.  According to Santiment data, Avalanche became the most searched token (by keywords) shortly after the article's release.   How did the AVAX price react? Most likely, as a result of CryptoLeaks, the AVAX token fell by a whopping 12%, but shortly after scepticism about the article began to gain traction, the listing rebounded. At the end of the day, the cryptocurrency had lost just 3.1%, and the token recovered all of its losses the following day. Furthermore, the price declines of 29 August coincided with a correction in other currencies, making it reasonable to believe that the accusations' impact on sentiment was much smaller.  Today on the Conotoxia MT5 platform at 11:00 GMT+3, AVAX is trading at $19.35, losing 1.4%. The price is below the 10, 20, 50, and 100-day moving averages. The MACD indicator may point to a potential trend reversal after the histogram started to turn back from negative territory. Although not yet in the overbought zone (below 30 points), the RSI signal line seems to be relatively low (less than 35 points), which could indicate a possible trend reversal. On the other hand, looking at the chart from a broader perspective, it seems that it may still be in a downtrend. It seems that there are still storm clouds looming over the cryptocurrency market in the form of a hawkish Fed, an economic slowdown, an energy crisis and a big unknown in the form of inflation.   Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Avalanche recovers after accusations against the project are met with scepticism
Earnings, Soft PMIs, and Market Dynamics: Impact on Yields, Dollar, and Key Developments

Amazing Year For Disney! A 26% Increase In Revenue And A Whopping 53% Increase In Net Profits Year-on-year

Conotoxia Comments Conotoxia Comments 31.08.2022 17:23
August seemed to be a month of high volatility, most likely due to the turbulent economic environment and a relatively good quarterly earnings season. We seem to be in for a very interesting bear market rally, with a possible peak in the middle of last month. At that time, the S&P 500 and Nasdaq Composite indices fell 3.2% and 3.9%, respectively. They set a peak (in mid-August), gaining 17.4% and 23.3% (the average historical magnitude of a bear market rally) from their local low (mid-June).    Disney (DIS) The entertainment market giant posted a 1-month gain of 5.9%. The stock had been declining for a year and a half, most likely influenced by extreme pessimism about the company's ability to continue to grow. As a result, the recession and lower consumer spending may have posed an additional threat to revenue from theme parks and streaming platforms. Since its peak in early 2021, Disney shares have fallen by 52.2%.  A short-term trend reversal occurred when Disney announced solid Q3 results (the financial year starts earlier than the calendar year for Disney). There was a 26% increase in revenue and a whopping 53% increase in net profits year-on-year. Net earnings per share were 10 per cent higher than expected. Among the main reasons for such a phenomenal jump in results is the expansion of owned streaming services, namely Disney+, Hulu and ESPN+.   Charles Schwab (SCHW) SCHW is a leading financial company engaged in brokerage, market making, investment banking, consulting and investment advisory services. Its share price rose by 5.5% last month. As for the stock price of other companies, Q2 results proved to be crucial the previous month.  The company reported an increase of as much as 31 per cent in interest income, which is the company's primary source of revenue (more than 50 per cent). Thus, SCHW's revenue and net profit increased by 11.7% and 41.7%, respectively. EPS (earnings per share) turned out to be 6.6% higher than Wall Street analysts' expectations. As a result, expectations of further possible interest rate rises and rising volatility (from which the brokerage business may benefit) appear to push the stock even higher.   Disney and Charles Schwab may be among the more interesting companies of August due to their phenomenal earnings despite the deteriorating macroeconomic environment.    Source: Leaders among the giants — stocks of the month?
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Necessary Points That Must Happened For S&P 500 Index to Rise

InstaForex Analysis InstaForex Analysis 31.08.2022 15:38
Relevance up to 14:00 UTC+2 Stock futures are trading mixed on Wednesday after a sharp fall yesterday. Investors are worried about the ultra-tight monetary policy of the US Federal Reserve aimed at curbing inflation. The US dollar index and Treasury yields moved higher. The Dow Jones futures gained 0.2%, while the S&P 500 and the NASDAQ futures lost 0.1% and 0.2% respectively. European stock indices also slipped to trade at their lowest level in more than six weeks. This decline was caused by the eurozone inflation report and the downbeat data from France and Germany. Rising inflation in the eurozone is viewed as the number one problem by the European Central Bank. The regulator is very likely to announce further rate hikes next week in order to limit soaring prices. When pursuing tighter monetary policy, the ECB will have to find the balance between fighting inflation and pushing the economy into a recession. The inflation rate in the eurozone has already reached a record level of 9.1% and is seen to accelerate further. Yet, analysts wonder whether the regulator will raise the rate by 50 basis points or straight by 75 basis points. In the commodities market, oil has slightly lost ground and is now set to test monthly lows for the third time. The price of natural gas also went up. Hopes that the US central bank will ease its monetary tightening are gradually fading away, which is a bearish factor for stocks and bonds. Of course, investors consider the incoming data when looking for clues regarding monetary policy. Yet, the jobs report from the US will most likely cause another massive sell-off in the stock market. Meanwhile, Asian stocks are trading in positive territory thanks to tech companies. At the same time, Japan's stock indices have dropped. Shares of Chinese EV maker BYD Co. tumbled the most after Warren Buffett's Berkshire Hathaway Inc. trimmed its stake in the company. As for the S&P 500 technical outlook, buyers may get a small chance for an upward correction. For this, they will have to break above the level of $4,003. If the fundamental data from the US is positive, this level may be the key point to watch. Depending on a successful breakout of this range, the S&P 500 index may continue to rise. Otherwise, it may return to monthly lows and extend its fall. If the downtrend continues, a breakout below $3,968 will push the quote to the next downward target of $3,940. This will open the way towards the area of $3,905 where the downward pressure may slightly ease. An upside movement will be confirmed only when bulls take control over the resistance of $4,003. Then, the level of $4,038 will serve as the next target. Only then will the price move further to $4,064 where large sellers will return to the market. Some of you may want to take profit on long positions. The level of $4,091 will act as a more distant target. Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Source: Forex Analysis & Reviews: US premarket trading on August 31, 2022. Stock market enters correction after yesterday's fall  
Investors Selling Down Companies That Face Balance Sheet Tightening From Runaway Inflation

Investors Selling Down Companies That Face Balance Sheet Tightening From Runaway Inflation

Saxo Strategy Team Saxo Strategy Team 01.09.2022 08:54
Summary:  The S&P500 fell 4.2% in August, erasing half of July’s rally, with investors selling down companies that face balance sheet tightening from runaway inflation and higher for longer interest rates. Meanwhile, in August, investors bought into sectors contributing to inflation. At Saxo, we think these trends will probably continue. We cover everything you need to know about what is happening in markets today and what to consider next. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. equities declined for the fourth day in a row, with S&P 500 down 0.78%, the Nasdaq 100 falling 0.57%.The month of August ended with S&P 500 losing 4.24% and Nasdaq 100 down 5.22%.  The markets were in a risk-off mood with the focus being fixed on rising bond yields and the hawkish stance of the central bank in the U.S. and across the pond in Europe, and with an eye on the job report coming out of the U.S. tomorrow.  Chewy (CHWY:xnys) dropped 7.9%, as the pet retailer lowered guidance for 2022 revenues, citing customer pulling back on discretionary items. The consumer trade-down echoed the general trend found in other U.S. retailers.   Bed Bath & Beyond (BBBY:xnas) tumbled 21.3% after announcing a plan to close about 150 stores. Nvidia (NVDA:xnas) plunged 5% in extended hours after the company warned that the new U.S. rules restricting the export of artificial intelligence may substantially affect the company’s sales to China.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas)   Yields took a blip lower initially after the weaker-than-expected ADP Employment report but surged higher to finish the day at the high.  The benchmark 10-year note yield closed at 3.19%.  Cleveland Fed President Mester joined the recent chorus of hawkish fedspeaks vowed to get inflation down “even if the economy were to go into recession” and “it will be necessary” to raise the Fed fund rate to “above 4% by early next year and hold it there”.  The U.S. treasury yield curve bear steepened, with the 2-year yield +5bps as the belly to the long-end yields jumped 8bps to 9bps. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg)   Hang Seng Index gapped down by nearly 2% at the open but managed to crawl back all the losses to finish the day flat.  China consumption stocks led the market higher in anticipation of incremental policy stimuli and recovery of consumer demand during the mid-autumn festival, Xiabuxiabu Catering (00520:xhkg) +9.4%, Haidilao (06862:xhkg) +6.5%, China Tourism Group Duty Free (01880:xhkg) +7.1%, Li Ning (02331:xhkg) +3.9%, Anta Sports (02020:xhkg) +1.5%.  In the auto space, BYD (01211:xhkg) tumbled nearly 8%, following news of Berkshire Hathaway reducing its stake in the company. On the other hand, Nio (09866:xhkg) and XPeng (09868:xhkg) rose more than 2%.  Hang Seng Tech Index (HSTECH.I) gained 1%, with performance divergence among stocks.  Tencent (00700:xhkg) gained 1.1% while Baidu (09888:xhkg) dropped by 3.3% on operating margin contraction. China banking shares traded in Hong Kong were mixed after ICBC (01398:xhkg), China Construction Bank (00939:xhkg), and Bank of China (03988:xhkg) reported growth in revenues and profits but higher non-performing loan ratios. Coal mining and oil stocks fell on the Hong Kong bourse as well as the mainland bourses on weaker energy prices.  CSI 300 bounced from the early sell-off and closed little changed.     Australia's ASX200 (ASX:XASX) closes higher for the 2nd month, but on the first day of September equities unwind the August rally and cut July’s rally  Australia’s market has rallied for two straight months. But the rally is likely to run out of steam iin September, with Aussie equites to face selling pressure. September is historically the worst month for equities, with the ASX200 losing 0.6% each month on average since the index was formed. The reason for this? Companies pay out their yearly dividends in September. Today, many major companies go ex-dividend, transferring the dividend right to shareholders. Companies going ex-dividend include BHP, Whitehaven Coal, AGL and Credit Corp. This month, the ASX faces a host of extra issues. The RBA is tipped to hike interest rates at its September meeting next Tuesday, front loading rate hikes for the next few months. This comes at a time when home prices marked their steepest decline in four decades and building approvals for private homes, fell to their lowest level since 2012. This means banks will face selling pressure. Crude oil prices (CLU2 & LCOV2)   EIA reported a decline in crude oil inventory of 3.3 million and gasoline inventory of 1.1 million with SPR slowing to 3 million barrels, so resulting in an overall draw of 6.4 mb/d, but the reaction in the oil market remained muted. Production was adjusted higher by 0.1 mb/d to 12.1 mb/d. No change in net trade with imports and exports both declining 0.2 mb/d. WTI futures still trading below $90/barrel in Asian morning as focus shifts back to demand concerns, and Brent futures were below $96. USDJPY heading to 140   The late move higher in US 10-year yields has come back to haunt the yen, with Bank of Japan still remaining committed to keeping its 10-year yields capped at 0.25%. USDJPY rose to fresh 24-year highs of 139.44 in early Asian trading hours, and heading straight to 140 unless we see some verbal intervention coming through from the Japanese officials today. Risk abound with US jobs data due on Friday, and dollar momentum remaining strong. EURUSD still above parity with ECB’s rate hike in focus for next week, beyond the vagaries of gas supplies. GBPUSD however made fresh 2022 lows at 1.1586 as economic weakness remains in focus.    What to consider?  Fed’s Mester calls for over 4% Fed funds rate Cleveland Fed President Loretta Mester backed rates to go above 4% early next year and holding it there, while also clearly calling for no rate cuts in 2023. On inflation, Mester noted it is too soon to say inflation has peaked and wage pressures show little sign of abating, while the fight against inflation will be a long one. This message should get stronger if jobs, and more importantly CPI, data continues to be strong. At the same time, we now have Quantitative Tightening going to its full pace and Mester said that balance sheet reduction could take three years or so. New US ADP jobs data disappointed, but wage data remain upbeat While it is hard to trust estimates on the US ADP report given that it is using a new methodology and market impact/trust is only likely to build over time, it was notable that the headline came in at less than the half of the median estimate. Employment change for August was 132k vs expectations of 300k – clearly putting Friday’s NFP release in focus. ADP said that the data suggests a shift toward a more conservative pace of hiring. ADP noted that the median change in annual pay (ADP matched person sample) was +7.6% YoY for Job-Stayers, and +16.1% YoY for Job-Changers, still suggesting a pretty tight labor market.    Eurozone August CPI continues to climb According to the preliminary estimate, it was out at 9.1% year-over-year versus prior 8.9% and expected 9.0%. Core CPI, which is highly watched by the European Central Bank (ECB), is still uncomfortably high at 4.3% year-over-year. This is likely that double-digit inflation in the eurozone will become a reality by year-end. The Bundesbank has already warned that German inflation could peak around 10% year-over-year in the coming months. Expect a lively debate among the ECB Governing Council about the pace of tightening on 8 September. Several governors are leaning towards an aggressive hike (meaning 75 basis points) while a minority of governors and the ECB chief economist Philip Lane would rather prefer a step-by-step increase in order to take into consideration the risk of recession. US stocks wipe out half of the July rally, what is behind this and what’s next? The S&P500 fell 4.2% in August, erasing half of July’s rally, with investors selling down companies that face balance sheet tightening from runaway inflation and higher for longer interest rates. Meanwhile, in August, investors bought into sectors contributing to inflation (The Oil & Gas sector rose 9%, Agricultural 6%, Fertilizers 5%, and Food Retailers 3%). Meanwhile, investors topped up exposure to stocks/sectors that benefit from higher rates, which is why Insurance rose 3%. Inversely, the most selling was in sectors that will likely suffer from slower growth, higher rates, and inflation (Home Furniture fell 14% in August, Semiconductors lost 10%, Office REITs slid 10%). Notably, the S&P500 closed under its 200-day moving average for the 100th day. The last time this occurred was in the GFC. And since then, this is also the only time the S&P500 and Nasdaq have not made a typical V-shape recovery. This is something Saxo’s strategists Peter Garnry and Jessica Amir warned of, and recently highlighted in the Quarterly Outlook. As uncertainty remains, and comments from Fed and ECB speakers are increasingly bearish; we think growth sectors (tech, consumer spending, and REITs) will face further pressure given their futures earnings will dimmish. Inversely we expect commodities to continue to outperform.     China’s official manufacturing PMI edged up but remained in contractionary territory  China’s official NBS manufacturing PMI edged up to 49.4 in August from 49.0 in July, above expectations but remaining in contractionary territory. The improvement was largely driven by the rise of the new orders sub-index to 49.8 in August from 48.5 in July and helped by strong activities in the food and beverage industries ahead of the mid-autumn festival.  Covid-related disruptions and energy rationing were negative factors pressuring manufacturing activities.  Heatwaves and drought-induced power curbs have caused Sichuan and Chongqing to shut-down manufacturing activities for six days and eight days in August respectively. The stepping up of pandemic controls in quite a number of cities affected the survey negatively. The non-manufacturing PMI decelerated to 52.6 in August from 53.8 in July.  Both the services sector and the construction sector weakened.     Caixin China Manufacturing PMI is expected to fall to 50.0 The median forecasts of economists surveyed by Bloomberg expect the Caixin manufacturing PMI to slide to 50.0 in August from 50.4 in July, right at the threshold between expansion and contraction.  The official NBS Manufacturing PMI released yesterday showed that improvements were found in large and medium-sized enterprises but the activities in small businesses decelerated t a 47.6 reading in August from 47.9 in July.  Moreover, during the survey month, a Covid-19 outbreak hit Yiwu, an export-focussed manufacturing hub in Zhejiang, and might drag on the Caixin manufacturing PMI, which has a higher weight for medium and small-sized businesses in the eastern coastal region.   Australian manufacturing data falls, pressured by higher rates, wages, and scarcity of staff  Manufacturing only contributes 30% to GDP, however, two key sets of weaker manufacturing data will be reflected on by professional investors today. Manufacturing data released by AI Group showed activity fell into contractionary territory, following six months of expansion. The drop in Australian PMI to 49.3 in August was triggered by slower growth in factory activity from higher interest rates and wages, and a lack of workers. The other set of manufacturing data released from S&P Global showed manufacturing fell to a reading of 53.8 in August, down from 55.7 in July. Significantly, the reading was revised lower from the flash (preview reading) and was the lowest read in a year. As such, investors may see selling pressures in key manufacturing stocks. ASX manufacturers and producers to watch include; Woodside, Caltex, Woodside, Whitehaven and Viva Energy, in energy, which may also see profit-taking after gaining a post as some of this year’s best ASX performers. Other companies to watch include Amcor, the global packaging giant. CSL, the global vaccine, and blood therapy business. As well as BHP, Rio Tinto, and Fortescue, global mining producers.  US ISM manufacturing data due today Lower prices at the pump has seemingly helped the US economy reverse from the slowdown concerns, with Chairman Powell also getting the confidence to say that the economic momentum is strong. ISM manufacturing, which is scheduled to be reported on Thursday, may reflect the weakness seen in the S&P survey, but will still be lifted by the backlog in auto vehicle production. Consensus estimates expect ISM manufacturing to cool slightly from July’s 52.8 and come in at 51.9 in August, still remaining in expansionary territory. ISM employment will also be key to watch ahead of the NFP data due on Friday.  Singapore’s first digital bank launch Grab and Singtel have entered an alliance to roll out a banking app next week in Singapore called GXS, that will be Singapore's first digital bank. This is mostly targeted to younger users and small businesses, tapping on Grab's food and ride-hailing customers, in order to improve the penetration of financial services in Singapore. A savings account is also in the offering, with no minimum balance requirement, in direct competition to the traditional banks.   For a global look at markets – tune into our Podcast.   Source: APAC Daily Digest: What is happening in markets, what to consider – September 1, 2022
Assessing China's Economic Challenges: A Closer Look Beyond the Japanification Hypothesis"

US Close: Another strong employment report, Wages growth slows, Stocks volatile, Oil rallies, Gold steadies

Ed Moya Ed Moya 06.05.2022 23:33
US stocks appear to be on a permanent rollercoaster ride as investors debate continued signs of a strong economy alongside rising rates, which remains a drag on higher valuation companies. For Wall Street to remain fully confident in piling back into stocks, inflation needs to be showing signs it is easing and that is not happening yet. ​ ​   Market conditions look dangerous but some of these discounts are looking very attractive. ​ It seems that the base case is still that the inflation peak is in place and that the Fed will look to signal a gradual tightening path. Unless inflation shocks prove otherwise, the risk-reward ratios for some of the beloved mega-cap tech stocks are looking attractive. ​ It won’t happen immediately, but when the economy starts to show signs of weakness, that will give investors the green light to buy stocks.   Investors just can’t confidently buy stocks as too much uncertainty persists with what will happen with global growth and how far the Fed will take tightening beyond the summer. ​   NFP The US labor market remains strong as broadbased hiring continues. The economy added 428,000 in April, much more than the analysts estimate of 380,000, also matching the slight downward revision in the prior month. Wage pressures might be showing signs of easing as average hourly earnings ticked lower. ​ Still most signs suggest the labor market is tight and that wage pressures are not quite ready to post a meaningful drop. ​ ​ The labor market remains robust and that should keep the Fed’s half-point tightening on cruise control until the Jackson Hole Symposium.   Oil Crude prices just want to head higher as energy traders completely fixate over the looming European sanctions on Russian oil. ​ No one wants to be on the wrong side of a major crude supply disruption headline, so whatever oil price dips that happen will be short-lived. ​ US oil rig counts continue to rise, but that has not led to increased production. ​ The weekly Baker Hughes report showed oil rig counts rose by 5 to 557 rigs. ​   Gold Gold prices are still licking their wounds following the bond market selloff. ​ Eventually investors will need additional safe-havens, so gold might start to attract some flows if the dollar softens as the global bond market selloff extends. The dollar is slightly softer today, but that doesn’t mean it is ready to lose its crown. ​ Gold could still remain vulnerable to further downward pressure if inflation does not show further signs of peaking next. ​   Gold is trending right between the 50- and -200 day simple moving averages but still looks like it isn’t quite ready to rally. ​ Next week will be pivotal for inflation expectations and for Fed speak that could confirm their commitment to tightening by half a point per meeting until the Jackson Hole Symposium. ​   Read on Oanda This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Navigating GBP/USD: Analysis, Levels, and Indicators

Volatile Markets: US Dollar (USD), Euro (EUR), British Pound (GBP), Russian Ruble (RUB)

Ed Moya Ed Moya 07.05.2022 14:21
Every asset class has been on a rollercoaster ride as investors are watching central bankers all around globe tighten monetary policy to fight inflation.  Financial conditions are starting to tighten and the risks of slower growth are accelerating.   The focus for the upcoming week will naturally be a wrath of Fed speak and the latest US CPI data which is expected to show inflation decelerated sharply last month. A sharper decline with prices could vindicate Fed Chair Powell’s decision to remove a 75 basis-point rate increase at the next couple policy meetings.   A close eye will also stay on energy markets which has shown traders remain convinced that the market will remain tight given OPEC+ will stick to their gradual output increase strategy and as US production struggles to ramp up despite rising rig counts.  Energy traders will continue to watch for developments with the EU nearing a Russian energy ban. US inflation expected to drop Oil rallies as EU nears Russian energy ban Gold remains vulnerable if bond market selloff accelerates US Market volatility following the FOMC decision won’t ease up anytime soon as traders will look to the next inflation report to see if policymakers made a mistake in removing even more aggressive rate hikes off the table over the next couple of meetings.  The April CPI report is expected to show further signs that peak inflation is in place.  The month-over-month reading is expected to decline from 1.2% to 0.2%, while the year-over-year data is forecasted to decrease from 8.5% to 8.1%. The producer prices report comes out the next day and is also expected to show pricing pressure are moderating.  On Friday, the University of Michigan Consumer Sentiment report for the month of May should show continued weakness. The upcoming week is filled with Fed speak that could show a divide from where Fed Chair Powell stands with tightening at the June and July meetings.  On Tuesday, Fed’s Williams, Barkin, Waller, Kashkari, Mester, and Bostic speak.  Wednesday will have another appearance by Bostic. Thursday contains a speech from the Fed’s Daly.  On Friday, Fed’s Kashkari and Mester speak.   UK The Bank of England delivered a 0.25% rate hike at this week’s meeting. This brings the benchmark rate to 1.00%, its highest since 2009. At the same time, the BoE painted a grim economic picture at the meeting, as it revised its inflation forecast to above 10% and warned of a recession. The UK releases GDP for Q1 on Thursday. The consensus estimate stands at 1.0% after a 1.3% gain in Q4 of 2021. A loss of momentum in the economy could mean a contraction in the second quarter, raising the likelihood of stagflation. The only new data in the GDP report will be the March figures, as January and February were already published. The estimate for March is for a flat reading, after gains of 0.1% in February and 0.8% in January.   EU The Russia/Ukraine war and the sanctions against Russia have dampened economic activity in the eurozone. Germany, the largest economy in the bloc has been posting weak numbers as the war goes on. With the EU announcing it will end Russian energy imports by the end of the year, there are concerns that the German economy could tip into a recession. On Tuesday Germany releases ZEW Survey Expectations, which surveys financial professionals. Economic Sentiment is expected to decline to -42.5 in May, down from -41.0 in April. On Friday, the Eurozone releases Industrial Production for March. The Ukraine conflict has exacerbated supply line disruptions, which is weighing on industrial production. The sharp drop in German Industrial Production (-3.9%), suggests that the Eurozone release will also show a contraction. The March estimate is -1.8%, following a gain of 0.7% in February.    Russia Russia’s inflation has been accelerating sharply since the invasion of Ukraine. In March, CPI rose to 16.7% (YoY) and is expected to climb to 18.1% in April. The driver behind the sharp upswing has been Western sanctions, which have reduced the availability of consumer imports and key components for domestic products. CPI is expected to continue to climb in the coming months.   China China releases its Balance of Trade on Monday and Inflation on Tuesday. Both have downside risks given the disruption to business and the collapse in property sales and sentiment due to the covid-zero policy. Restrictions continue tightening in Beijing and the covid-zero policy has become the biggest headwind to a China recovery. The government reaffirmed its commitment to the policy Friday, sending China stocks lower. Additionally, US-listed China stocks face new delisting risk from US regulators that is weighing on Hong Kong markets especially, where most dual listings live. Negative headlines around Covid 19 or US delisting over the weekend could send China equities sharply lower into the start of the week. USD/CNY and USD/CNH have now risen from  6.4000 to 6.7000 in just two weeks. The PBOC remains comfortable at this stage, being a back door stimulus to manufacturers. The PBOC USD/CNY fixing will be the key indicator as to whether the authorities have said Yuan depreciation has gone far enough.   India The Reserve Bank of India sprung a surprise rate hike on markets this past week, sending the Sensex lower whilst providing some support to the INR temporarily. India’s CPI inflation release on Thursday will be this week’s key risk event. If the data comes in above expectations at 7.30%, expectations will rise of a faster more aggressive hiking cycle from the RBI which was quite hawkish in its guidance after the hike. THat will send Indian equities sharply lower once again, while possibly mollifying the impact on the INR from a rampant US Dollar.   Australia Australia could be a correlation trade for the tier-1 PMI releases from China over the weekend. Poor China data could see the AUD and local equities pressured with most of Asia, ex-Japan closed.SImilarly, a decent showing by the China PMIs will have a positive impact. Markets, especially currency markets, could face liquidity issues and see sharp moves if the weekend news wire is heavy as Australia and Japan will be the only two major centres open. Most attention will be focused on Tuesday’s RBA rate decision. A 0.15% hike is fully priced by markets and the clouds from Ukraine and China are weighing heavily on AUD/USD anyway. If the RBA does not hike AUD/USD could fall sharply in the short-term. If the RBA hikes and adjusts its guidance to a more hawkish, AUD/USD could potentially see a big move higher.   New Zealand NZ Retail Card Spending has downside risks and the Food Price Index, upside risks this week. The cost of living has become the central issue in New Zealand at the moment and a high FPI will heap pressure on the RBNZ to accelerate rate hikes as the economy starts to show signs of stress elsewhere. NZD/USD has traded very heavy in past two weeks as investors price in a hard landing and an RBNZ behind the curve, and as risk sentiment sours internationally. NZD/USD is closing at the weeks lows and could test 0.6200 this week.   Japan Japan releases a raft of second tier data this week. THe 10 and 30-year JGB auctions will be closely watched, if only for signs of poor cover ratio given the BOJ JGB intervention and weakening Yen. THe centre of attention will remain the USD/JPY as the US/Japan rate differential widens. USD/JPY could well test 135.00 in the week ahead if the negative sentiment sweeping markets on Friday spills into next week. Higher oil prices will also weigh onthe Yen. We expect the noise to increase from Tokyo but little chance of USD/JPY intervention at these levels.   Singapore No significant data. The currency remains under pressure as a proxy for China and also because the MAS meets six monthly to determine monetary policy. The next meeting will not be until October to determine if monetary policy gets tightened once again.      Markets OilCrude prices are steadily rising as the EU is making progress towards its Russia oil sanctions ban. The oil market will remain tight going forward now that OPEC+ is set on delivering meager output increases and as US production struggles despite rising rig counts. The biggest uncertainty for the crude demand outlook remains the outlook for the Chinese economy. China won’t be abandoning their zero-COVID policy anytime soon and that will keep the short-term crude demand outlook vulnerable. China’s COVID situation might not be improving anytime soon and now that the data is showing the impact of business restrictions is more widespread than just to Shanghai and Beijing. Oil will remain a volatile trade going forward with most of the fundamentals still pointing to higher prices. GoldJust when gold seems to be showing signs it is getting its luster back, the bond market says ‘not so fast’.  Gold continues to struggle in this current environment of surging global bond yields and that might last a little while longer as some central banks for the purpose of defeating inflation might be willing to send their respective economies into a recession. Gold’s awful few weeks of trade has seen a collapse of the $1900 level and that should prove to be key resistance now.  If the bond market selloff accelerates and the dollar surges, gold could be vulnerable to a drop towards $1835 and if that does not hold, $1800 might be targeted. Bitcoin Confidence in crypto markets is waning after Bitcoin tumbled below the $37,000 level following the surge in global bond yields.  If risk appetite does not return, Bitcoin could be vulnerable to a significant drop towards the $30,000 level.  Choppy trading between $35,000 and $40,000 could be where Bitcoin settles if Wall Street does not price in much more tighter monetary policy by the Fed.
Biotech Stocks: WSE – Molecure (MOC) – News And Financial Statement

Biotech Stocks: WSE – Molecure (MOC) – News And Financial Statement

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 31.08.2022 13:18
OATD-01 is back at the starting point We reinstate our coverage of Molecure with a HOLD recommendation and set our FV at PLN 17.0 per share (implying 6% upside). The decision to terminate the OATD-01 partnering agreement by Galapagos was a major disappointment for the market on top of the overall weakness of the biotech sector in recent months. Although Molecure is close to an important milestone in OATD-02 development and is still cash rich (net cash over PLN 80m), we see a share issue risk because the company will not be able to finance two parallel clinical trials from its own resources. In our opinion, this risk together with the uncertainty over the outlook for OATD-01 limits the growth potential of the share price, although, on the other hand, it should be remembered that a partnering window in the OATD-02 project is opening and the chances of partnering in this project are growing. The possible success of Phase 2 clinical trials may remove a large discount from the valuation of OATD-01 and unlock a large transaction potential Galapagos terminated OATD-01 partnering. Molecure has obtained all rights to OATD-01, but the decision to terminate the partnering agreement will weigh on OATD-01 in the near future, causing difficulties in obtaining a new partnering contract on favorable terms or receiving a grant. We expect OATD-01 Phase 2 clinical trials in Sarcoidosis to commence next year and to last until 2025E. We assume a partnering contract in 2025E based on the Phase 2 clinical trial results, with an upfront payment of USD 45m. We assume the success probability at 10% due to uncertainty surrounding Galapagos’ termination of the contract. The possible success of Phase 2 clinical trials may remove a large discount from the valuation of OATD-01 and unlock a large transaction potential. Molecure has applied for authorization to start the OATD-02 Phase 1 clinical trial OATD-02 close to entering clinical trials. Molecure has applied for authorization to start the OATD-02 Phase 1 clinical trial. We assume the probability of entering the first phase of clinical trials in 4Q22 at 90%; its success should increase the valuation by approximately PLN 1.1ps. The study is to be conducted in 3-4 centers in Poland and is to cover 30-40 patients. We assume the cost of the trial at USD 5m. We assume that a partnering agreement will be signed in 2024E after the completion of Phase 1 (cumulative probability of success: 69%). The termination of the partnering with Galapagos complicated Molecure's financial plan Share issue risk. The termination of the partnering with Galapagos complicated Molecure's financial plan. Instead of receiving milestone payments in the OATD01 project, the company will have to conduct and finance two parallel OATD-01 clinical trials (phase 2) and OATD-02 (phase 1) for a total of over PLN 70m. The company itself admits that in the most negative scenario - i.e. without any cofinancing or subsidies - the company has secured financial resources until the end of 2023. In our opinion, there are three possible scenarios for obtaining financing: early OATD-02 partnering, venture debt financing and a new share issue. GPW’s Analytical Coverage Support Programme 3.0 Analyst Łukasz Kosiarski lukasz.kosiarski@ipopema.pl + 48 882 108 382
Apple May Surprise Investors. Analysts Advise Caution

Apple May Surprise Investors. Analysts Advise Caution

InstaForex Analysis InstaForex Analysis 01.09.2022 13:23
We have been following Livermore's Accumulation Cylinder in regard to Apple for quite some time now. We have pinpointed the top at point 10 at 182.94. Point 11 was done at 137.06. Finally, we have point 12 as a death-cat bounce to just below the top at 176.15 which means we now should be looking for a hard decline to complete point 13. The minimum target for point 13 is seen at the 38.2% corrective level at 113.08 but it could move even lower than that towards the 50% corrective level at 91.50. We would like to stress that point 13 only is part of the expected decline as we still miss point 14 and maybe 15 too. So, we advise caution in regard to Apple in the month ahead.     Relevance up to 07:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290931
The Japanese Yen Retreats as USD/JPY Gains Momentum

What Can We Expect From Meta Platform? What Can B-wave Bring?

InstaForex Analysis InstaForex Analysis 01.09.2022 13:35
Meta Platforms (the former Facebook) remains in a corrective structure after the 2021 peak at 384. We have seen a five-wave decline from the peak to a low of 154.25 indicating that a zig-zag correction is unfolding. As wave [A] looks complete, we will expect a temporary corrective bounce towards 50% near 271 before renewed downside pressure. That said, we need to stress, that we are facing a [B]-wave correction and the developments are almost unpredictable. B-wave can take on any shape possible. So, we can face a straight rally towards 271 or we can see new lows before a rally towards 271 if an expanded flat is unfolding as wave [B]. At this point, we don't have any clear indication of the possible shape of wave [B]. Hence, we advise the utmost caution in regard to Meta Platforms in the months ahead.     Relevance up to 07:00 2022-09-02 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/290933
Let's See S&P 500 (SPX) And Credit Market's Performance

Let's See S&P 500 (SPX) And Credit Market's Performance

Monica Kingsley Monica Kingsley 01.09.2022 15:14
S&P 500 dicey premarket upswing fizzled out right after the open, volume picked up, and market breadth correspondigly deteriorated. Bonds confirmed, and the higher yields didn‘t even send the dollar much upwards. Together with the sea of red in commodities and precious metals, this smacks of deleveraging, still of the relatively orderly flavor if you look at the well behaved VIX at 26 only. The steep post Jackson Hole downswing will pause, but there isn‘t a sign that would happen precisely today yet. Looking at the daily chart of CRB Index, crude oil, gold and silver with the miners, odds are that we would see a repeat of yesterday‘s action today as well – to a good degree. Not much has really change since my yesterday‘s review of real assets and cryptos, and especially the crude oil setback (reinforced by the Iran deal speculation Europe is pinning its eyes on) is generally worrying. The Fed keeps hammering the same message, and short end of the curve keeps duly rising. Tombstone reminder for those overstaying in the S&P 500 rally to the 200-day moving average, would be „don‘t fight the Fed – the central bank doesn‘t have your bank now, and would act on the out of control inflation“. I hope you‘re enjoying the very lively Twitter feed, which comes on top of getting the key analytics right into your mailbox. Plenty gets addressed there, but the analyses over email are the bedrock. Still, the next days would feature generally shorter analyses per the legal update on my homepage. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook S&P 500 bears still have the undeniable strategic initiative, and the pace of the downswing is really all that‘s being questioned. Earnings are still to deteriorate, and P/E to go down – inflation isn‘t declining fast enough, so equities react appropriately. CFA material 101. Read next: FX: GBP/USD May Catch Us By Surprise Soon! Tomorrow's US NFP May Let Boost USD (US Dollar) Or Arouse Concerns Over Fed's Strategy| FXMAG.COM Credit Markets HYG rested a little only on intraday basis, and objectively speaking it‘s downswing didn‘t trigger a genuine bloodbath in stocks. This can change but the steady dollar kind of doesn‘t hint at that right next. The S&P 500 bears should take it easy, because the coming days would be and feel like a consolidation compared to what we have been just through.
Apple Stock Price (APPL) May Be Fluctuating Next Week As iPhone 14 Is Said To Be Revealed

Apple Stock Price (APPL) May Be Fluctuating Next Week As iPhone 14 Is Said To Be Revealed

FXStreet News FXStreet News 01.09.2022 16:33
AAPL stock falls again on Wednesday as the sell-off continues. Equities remain under pressure ahead of the employment report on Friday. AAPL stock also waiting for next week's iPhone 14 release details. Apple (AAPL) stock continued its recent run of poor form as the stock once again closed lower on Wednesday. Apple has now registered three straight days of losses as equity markets come to terms with Fed Chair Jerome Powell utilizing himself last week. The doveish tilt that the market seemed to imply was firmly rebutted by Powell, and the equity market has been under continued selling pressure ever since. Also read: Apple Stock Deep Dive: AAPL price target at $100 on falling 2023 revenues Apple stock news Apple investors are now looking to next week for a catalyst to stem recent losses. September 7 is when most observers expect the iPhone 14 to be released. Details around pricing will be the key aspect, and as ever Wall Street analysts have been coming out with more and more bullish prospects. The latest from Bank of America says a price hike for the iPhone 14 over the iPhone 13 could see a boost to earnings in the region of $0.10 to $0.20 on EPS. It seems demand for iPhones will remain inelastic in the eyes of Wall Street, while clearly, the consumer looks to be shifting to lower-cost goods from what we have seen recently from retailers. iPhones are a luxury good and should see a slowdown in demand based on price hikes and inflationary trends. Margins will come under pressure from rising input costs, and the situation in China looks increasingly bearish. The property sector is beginning to falter alarmingly. The only Apple bullish caveat to add is the potential for massive monetary easing from China. We saw how the loose US policy juiced financial assets during the pandemic, and China may embark on its own financial juicing if the economy continues to decline. We do not think this will be enough to stem earnings compression for Apple though. The strong US dollar is another headwind for a firm that does business globally but reports in dollars. Apple stock forecast Enough of the long-term prognosis. How are we shaping up for some swing trading? Ok, first take a look at the AAPL stock daily chart. The downtrend continues with failure at the 200-day moving average, a continued sell-off from the overbought Relative Strength Index (RSI) and now support from the 50-day moving average. Below $171 looks bearish. AAPL daily chart The AAPL stock 15-minute chart below shows the areas of stability and high volume. Current levels around $158 are seeing stabilization. A move above $162 or below $156 will see further buying or selling pressure, so this range is key to playing a breakout scenario. AAPL 15-minute
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Increases on the New York Stock Market. Fall In Raw Materials

InstaForex Analysis InstaForex Analysis 02.09.2022 08:42
At the close of the New York Stock Exchange, the Dow Jones rose 0.46%, the S&P 500 rose 0.30%, and the NASDAQ Composite fell 0.26%. The leading performer among the components of the Dow Jones index today was Johnson & Johnson, which gained 4.00 points or 2.48% to close at 165.34. Amgen Inc rose 5.20 points or 2.16% to close at 245.50. Merck & Company Inc rose 1.79 points or 2.10% to close at 87.15. The losers were Boeing Co shares, which lost 6.59 points or 4.11% to end the session at 153.66. Dow Inc. gained 2.04% or 1.04 points to close at 49.96, while Salesforce.com Inc shed 1.66% or 2.59 points to close at 153. .53. Leading gainers among the S&P 500 index components in today's trading were DXC Technology Co, which rose 7.75% to hit 26.70, General Holdings Inc, which gained 5.72% to close at 233.01, and also Moderna Inc, which rose 5.05% to end the session at 138.95. The losers were shares of NVIDIA Corporation, which lost 7.67% to close at 139.37. Shares of Hormel Foods Corporation shed 6.56% to end the session at 46.98. Quotes of Monolithic Power Systems Inc decreased in price by 6.11% to 425.47. Leading gainers among the components of the NASDAQ Composite in today's trading were Hempacco Co Inc, which rose 63.41% to hit 8.35, GigaCloud Technology Inc, which gained 61.43% to close at 23.65, and also shares of Virax Biolabs Group Ltd, which rose 58.69% to end the session at 5.57. American Virtual Cloud Technologies Inc was the biggest loser, shedding 52.17% to close at 0.22. Shares of Newage Inc lost 46.87% and ended the session at 0.12. Quotes of Okta Inc decreased in price by 33.70% to 60.60. On the New York Stock Exchange, the number of securities that fell in price (2231) exceeded the number of those that closed in positive territory (901), while quotes of 101 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,416 companies fell in price, 1,333 rose, and 244 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.20% to 25.56. Gold futures for December delivery lost 1.13%, or 19.55, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 3.54%, or 3.17, to $86.38 a barrel. Brent oil futures for November delivery fell 3.71%, or 3.55, to $92.09 a barrel. Meanwhile, in the Forex market, EUR/USD fell 1.11% to hit 0.99, while USD/JPY edged up 0.89% to hit 140.20. Futures on the USD index rose 0.91% to 109.65.         Relevance up to 04:00 2022-09-03 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291092
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Tech Stocks: Apple Stock Price (APPL) - Bulls May Reach Almost $190!

Jing Ren Jing Ren 05.09.2022 12:55
  AAPL (Apple Stock): Wave ⑤ is the final leg in a large cycle impulse a. As in the previous review, which was a few weeks ago, AAPL suggests the development of the primary fifth wave, taking the form of an ending diagonal (1)-(2)-(3)-(4)-(5) of the intermediate degree. Wave ⑤ is the final leg in a large cycle impulse a. Most likely, the market has completed the construction of an intermediate correction (4) in the form of a minor triple zigzag W-X-Y-X-Z. Thus, now the price is moving up, in the intermediate wave (5). It is assumed that wave (5) will take the form of a standard zigzag A-B-C, as shown on the chart, where wave A is a minute impulse. It is possible that the bulls in wave (5) will go to 189.34. At that level, wave (5) will be equal to wave (3). Alternative Scenario An alternative scenario assumes that the cycle wave a is fully completed. Thus, in the last section of the chart, we see a downward corrective movement of the stock price in a cycle wave b, which may take the form of a double zigzag â“Œ-Ⓧ-â“Ž of the primary degree. It seems that the first two primary sub-waves â“Œ-Ⓧ have already been formed. There is a high probability that the bears in the final sub-wave â“Ž, in the form of an intermediate simple zigzag, will be able to bring the market to 118.80. At that level, primary wave â“Ž will be at 100% of wave â“Œ. We will add this pair on our watchlist.
Are There Any Chances That Amazon Will Find Itself Under Another Downward Pressure?

Tech Stocks: (AMZN) Amazon Stock Price Nearing $160?

Jing Ren Jing Ren 06.09.2022 10:10
Could Amazon Stock Price draw a zigzag?  AMZN shares are expected to develop a zigzag, which consists of sub-waves a-b-c of the cycle degree. Perhaps the market has completed the formation of the first major wave a, it represents a bullish 5-wave impulse. Since the end of last year, there has been a decline in the price, which may indicate the beginning of the construction of a bearish correction b. This correction may take the form of a zigzag â’¶-â’·-â’¸. Most likely, in the near future we will see a continuation of the depreciation of stocks in the final intermediate wave (5), which may end the primary impulse wave at 93.41. At that level, wave (5) will be at 76.4% of previous impulse (3). Read next: Russia Suspends Flow Through The Nord Stream 1 Pipeline, Cotton Futures, Gold Prices Increase For The First Time In 3-weeks| FXMAG.COM After the end of the impulse wave â’¶, the stock is expected to rise in the primary correction â’·. Another scenatio for AMZN Let's consider a scenario in which the market has completed the formation of the primary wave â’¶. According to this markup, the wave â’¶ has the form of a leading diagonal (1)-(2)-(3)-(4)-(5). In this case, in the last section of the chart, we see a price increase within the bullish correction â’·. It is assumed that the correction wave â’· will take the form of an intermediate double zigzag (W)-(X)-(Y), where the actionary wave (W) is also a double zigzag W-X-Y of a lesser degree. It is possible that the correction â’· will be at 61.8% of wave â’¶. Thus, its completion is expected to reach the level of 154.91. An approximate scheme of possible future movement is shown on the chart.
Apple's Stock Price Reaction To The Release Of New Products

Apple Stock Price Plunged On Friday! When Is The iPhone 14 Coming Out? iPhone 14 Is Expected To Be Announced Next Week!

FXStreet News FXStreet News 30.08.2022 02:25
AAPL stock falls nearly 4% Friday on global equity sell-off. Jackson Hole hawkish tilt behind sell-off. Apple sends out invites for an event on September 7. Apple (AAPL) stock fell sharply on Friday in line with a global rout in equities. The strongly worded hawkish missive from Fed Chair Powell did the trick and sent equity markets into a risk-off tailspin. Not just equity markets, but all risk assets took a hit as the Nasdaq was the worst performer. Now over the weekend Bitcoin cracked below $20,000. Apple stock news Some conflicting positive and negative news for Apple has appeared over the past few sessions. Susquehanna was quite bullish last week in estimating iPhone 13 production would rise to 100 million from a previous 88 million. Overall Susquehanna looks for about an 8% sales growth versus last year for the iPhone. Meanwhile, Politico reported late last week that the DOJ is in the early stages of making an antitrust complaint against Apple and could bring a lawsuit as early as this year. Finally, September 7 looks like the launch date for the new iPhone 14. Reports claim Apple has sent out media invitations to an event on September 7, which it is widely assumed will be the product launch announcement. Apple stock forecast Equity markets look likely to be in for a tough Autumn after Powell carefully scripted the narrative on Friday. Remember, he had most of the summer to plan out what he wanted to say. So he knew the importance of citing Vockler, and he knew what he wanted to achieve when he used words like "pain" and "below trend growth". The plan was well thought out. He wants equity markets lower to hit demand and so bring inflation down. Whatever Apple does may struggle to overcome such a challenging macro backdrop. Apple does remain above its 200-day moving average but has failed at the trend line and to test previous highs above $179. First, we have a failure, but we need confirmation of a bearish trend now. That will come with a break of the 200-day moving average. Once that is in place, then the target needs to be a break of $129, the June lows. That is needed to maintain food for the bears. September is historically not a great one for Apple, and interestingly neither are product launches much of a catalyst for the share price. Apple stock chart, daily
US and European Equity Futures Mixed Amid Economic Concerns and Yield Surge

Demand For Platinum In the Automotive Sector Is Above 2018 And 2019 Levels

InstaForex Analysis InstaForex Analysis 06.09.2022 13:27
In the precious metals sector, platinum has struggled to capture the attention of investors. The precious metal managed to hold its critical long-term support at around $800 an ounce. The World Platinum Investment Council drew attention to the growing dichotomy in the market for platinum as a precious metal. According to the WPIC Platinum Quarterly report, the precious metal had a surplus of 349,000 ounces in the second quarter. The report says total surplus may increase to 974,000 ounces for the year, compared to a previous estimate of 627,000 ounces. The council noted that the outflow of funds from exchange-traded funds backed by platinum affected prices. However, despite the growing surplus, the market is still tight. Platinum remains undervalued by investors who only look at supply and demand factors. Investment demand has the most significant impact on demand for platinum, as the market experienced significant outflows in the second quarter. The report also noted that the outflow of ETFs outpaces the drop in supply by 8%. According to the WPIC, 89,000 ounces of platinum leaked from the ETF markets between April and June. The council said that the demand for bullion and coins is mixed, with purchases in North America rising to a new high of 292,000 ounces after quarantine. However, the weak yen in Japan prompted some investors to sell their physical metal. According to analysts, this year, the total demand for bullion and coins will fall by 47,000 ounces, which is 14% less than in 2021. In addition to investment demand, WPIC said that industry demand for platinum remains stable. And in the second quarter, automotive demand for platinum increased 8% to 50,000 ounces. Even with the global recession, demand for platinum in the automotive sector is above 2018 and 2019 levels. Platinum remains an important metal in automotive catalytic converters, which are used to remove harmful emissions from gasoline and diesel engines. Automotive demand makes up a significant portion of the platinum market. WPIC expects total industrial demand to fall 15% to 2.132 million ounces. At the same time, industrial demand continues to outpace global economic growth. Although there will be a significant surplus of platinum this year, demand from China remains a major surprise and a main driver of the market shortfall. WPIC noted that information on platinum imports to China is limited. However, they estimate that China received 1.3 million ounces in the first half of this year. However, this estimate is not included in the official supply and demand forecast. Significant levels of negative demand for ETFs and an outflow of stocks were enough to meet China's demand for imports and keep prices from rising. WPIC was able to test the demand from China: the current surplus will turn into a deficit. While platinum prices have fluctuated for most of 2022, the WPIC said that robust demand is expected to provide some support for the precious metal.     Relevance up to 10:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/320919
Oil Is An Indicator Of The Health Of The Global Economy

Liz Truss As The New Party Leader. OPEC+ And Production Cut

Saxo Bank Saxo Bank 06.09.2022 09:50
Summary:  While the US markets were closed overnight for Labor Day, the futures this morning in Asia are indicating some respite after weeks of red. The US dollar was also softer in early Asian hours, while the focus remains on the European energy crisis and the EU emergency meeting scheduled for Friday. A token cut by OPEC+ and diminishing hope of a revival of the Iran nuclear deal supported oil prices, although China’s tightening restrictions continue to pose demand concerns. Sterling made a sharp recovery after new UK PM Liz Truss announced plans to freeze energy bills, easing some short-term concerns. Consensus expects another 50 basis points rate hike from Reserve Bank of Australia today, and US ISM services will be on the radar later. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)  U.S. stock markets were closed for Labor Day. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The treasury market was closed for Labor Day. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng TECH Index (HSTECH.I) plunged 1.9% as a Bloomberg story, citing people familiar with the matter, said that the Biden administration is considering imposing restrictions on US investments in Chinese technology companies, Bilibili (09626:xhkg) -3.2%, JD.COM (09618:xhkg) -3.0%, Tencent (00700:xhkg) -2.9%, Alibaba (09988:xhkg) -2.4%. Hang Seng Index fell 1.2%. Chengdu, the largest city in western China, extended its pandemic control lockdown for another three days. The spread of Covid-19 cases and pandemic control measures fueled risk-off sentiment in the market.  Over the weekend, the U.S. Trade Representative said that it received requests from more than 350 American companies to plead for keeping the “Section 301” tariff on goods imported from China, and the Biden administration will remain in place during the review. BYD (01211:xhkg) fell 5.9%, as exchange filing showed that Berkshire Hathaway continued to off-load its stake in BYD.  Other car makers lost as well, Geely (00175) -7%, NIO -6,9, Li Auto 02.3(August).  Thermal coal prices surged in China, following the news that Russia’s Gazprom suspended the supply of natural gas to Germany on the Nord Stream pipeline.  Share prices of coal miners gained, Yancoal Australia (03668:xhkg) +6.6%, Yankuan (01171:xhkg) +12.2%, China Coal (01898:xhkg) +8.3%.  Caixin China Services PMI came in at 55.0, edging down slightly from 55.5 in July but above market expectations. CSI300 spent the day in range-bound trading.  GBPUSD falls to fresh lows, EUR in focus this week The USD lost some ground early in Asia on Tuesday with GBPUSD making the most gains to rise towards 1.1600 as the appointment of new Prime Minister and her plan to freeze energy bills spelled some short-term relief. EURUSD saw a brief drop to 20-year lows below 0.99 yesterday but rose back to 0.9960+ levels in early Asian trading. EURGBP seen sliding slower to 0.8600 but downside may be limited if ECB decides to go for a 75bps rate hike today. But the energy situation and the EU summit on Friday certainly garners more attention with some tough decision ahead. USDJPY retreated from Friday’s 24-year highs of 140.80 to 140.30-levels with Japan’s household spending underperforming expectations at 3.4% y/y vs. expectations of 4.6% y/y. Wage pressures, which remain a key focus for Bank of Japan, also eased with labor cash earnings up 1.8% y/y from last month’s 2.0% y/y. Crude oil prices (CLU2 & LCOV2) Crude oil prices rose on Monday as OPEC+ announced an output cut of 100k bpd in October (more details below). The intention appears to be to keep Brent prices capped at $100/barrels. WTI futures rose to $89/barrel while Brent was above $95/barrel. Price action was also supported by a diminishing hope of a revival of the Iran nuclear deal. US and Iranian positions have diverged in recent days, and it is now expected that the negotiations could stretch beyond the US midterm elections in November. Still, it is key to watch the demand concerns picking up as well, particularly as China lockdowns were extended and will likely remain strict ahead of the CCP meeting on October 16. What to consider? OPEC+ announced a production cut by 100k bpd A token cut by OPEC+ last night of 100k barrels per day just reverses the output increase agreed to last month. The decision was ‘symbolic’, with the new quotas taking effect for October. The amount is significantly small compared to a 100 million bpd market but it shows that OPEC+ wants to set a floor near $100/barrel in Brent. Saudi Arabian oil minister Prince Abdulaziz bin Salman had warned last week that a cut was a possibility given what he said was a disconnect between financial and physical oil markets. The RBA meets today, and is expected to raise rates to 2.35% regardless of the property market struggling Consensus expects the RBA to hike rates by 0.5% which will take Australia’s official interest rate to 2.35%. That will be the highest rate since 2015. However, interest rates futures are pricing in a smaller hike, of just 0.4%. The RBA will likely then proceed to rise rates over the rest of 2022 and then continue to rise rates into the 2023, in a bid to stave off inflation. The issue is, the RBA only has one tool to fight inflation, which is rising rates. But the property market is already struggling to absorb the 1.75% in hikes from May, with property prices falling at their quickest pace since the 80s and construction seeing its biggest decline since 2016. This has seen banks margins (profits) be squeezed, and they face a further squeeze. Why? Australia has one of the highest debt levels in the world (Debt to GPD is 126%). So if the RBA keeps rising rates to slow inflation, it could cause a credit issue and debt to income levels are at risk of hitting GFC highs. RBA outcomes for investors, traders and the macro landscape We highlighted sectors to watch and why yesterday in the Saxo Spotlight. That's worth a quick read. Today, we will be watching what the RBA estimates inflation to be, at the end of the year, remembering the RBA previously said it expects inflation to peak at under 8%. But consider, we traditionally see peak energy (coal) demand later this year, which is likely to support coal prices higher. As such, we think the RBA will rise its inflation target and may allude to commentary about keeping rates higher. For investors and traders, we will be watching energy stocks, which will likely get extra bids today and see momentum rise (not only because of the energy crisis in Europe), but also because Australian energy prices (coal) remains supported, with Australian energy reserves expected to also run out next year. For traders, the currency pair that we are watching is the AUDEUR for an extension to the upside, on the basis that Europe will need to increase energy imports and its balance of trade will likely continue to worsen, vs the Australian balance of trade, likely to hit another record high, with Australian LNG and coal exports to see a lift in demand.    PBOC cuts FX deposit reserve requirement ratio by 200 bps to restrain yuan weakness The PBoC announced that the central bank is cutting the reserve requirement ratio for foreign exchange deposits (the “FX RRR”) to 6% from 8%, effective September 15.  The cut is expected to release about USD19 billion (2% of the USD954 billion FX deposits outstanding) in FX liquidity for banks to make loans in foreign currencies.   The PBoC last cut the FX RRR to 8% from 9% on May 15, in an attempt to send a signal to the market to put a pause to the depreciation of the USDCNY which had weakened from 6.40 to 6.80 in one month (April 15 to May 13, 2022).  After the surge of the USDCNY from 6.75 to above 6.90 in about half a month since Aug 15, the PBoC apparently wants to send a signal again to the market to slow the speed of the renminbi depreciation against the U.S. dollar. Liz Truss won the contest to become the next UK Prime Minister In the UK, the Conservative party has voted for Liz Truss as the new party leader, making her the UK’s next Prime Minister. Her promises range from quick action on energy security to alleviating the cost-of-living crisis for the hardest hit by price rises, all while cutting corporate and other taxes. She has announced a GBP 130bn plan to freeze energy bills, a recipe for ballooning fiscal deficits, an issue that is already an ingredient in sterling’s steep fall this year, so an even steeper recession is in the wings. This could come either from a drop in real GDP due to soaring inflation aggravated by further sterling declines or as demand is crushed by a steep recession due to the need for the Bank of England to accelerate its pace of rate hikes or more likely a combination of the two. Longer term, investments in fracking shale gas and new North Sea exploration could pay dividends. Russia makes a clear case of weaponizing gas supplies While the Kremlin had earlier said that they were halting gas supplies on Nord Stream 1 for a technical fault, it has now clearly said that gas supplies to Europe via the Nord Stream 1 pipeline will not resume in full until the “collective west” lifts sanctions against Moscow over its invasion of Ukraine. Russia is still supplying gas to Europe via Soviet-era pipelines through Ukraine that have remained open despite the invasion, as well as the South Stream pipeline via Turkey. But supplies along the northern pipeline routes, including Nord Stream 1 and the pipelines through Ukraine, have fallen by more than 90% since September last year. Higher supplies from Norway, the UK, north Africa and increased imports of LNG have helped to an extent offset the loss of Russian supplies. Energy summit in EU on Friday EU leaders will meet this Friday to discuss a cap on energy prices across EU countries to limit the disruptions from soaring and illiquid pricing markets, although given limits on generation capacity, much of them due to Russia’s cutting off of gas supplies - possibly semi-permanently in the case of the Nord Stream 1 pipeline – some sort of rationing plan may be required. See our colleague Christopher Dembik’s piece on at the difficult choices Europe faces on this issue here. US ISM services PMI due today With the services sector of the US economy slowing, there are expectations of a slight retreat in August US ISM services, but it should still remain above the 50-mark which differentiates between expansion and contraction. The S&P services PMI for August had also shown a slight decline to 44.1, with the payroll data hinting at still-strong labor market conditions in the services economy.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-6-sept-2022-06092022
Stock Market: Could Digital World Acquisition Corp (DWAC) Stock Price Plunge To $10?

Stock Market: Could Digital World Acquisition Corp (DWAC) Stock Price Plunge To $10?

FXStreet News FXStreet News 06.09.2022 15:52
Merger between DWAC and Trump Media & Technology Group on the rocks. 1-year extension of merger requires 65% affirmation vote from shareholders. DWAC still under investigation by the SEC. You heard it hear first, folks. Digital World Acquisition Corp (DWAC) shares might soon trade more than 50% lower at $10. That is because $10 was the initial price that shares traded at before DWAC announced its merger with the Trump Media & Technology Group (TMTG). The whole reason DWAC has traded much higher than $10 over the past year is that it was slated to merge with TMTG, the owner of Donald Trump's TRUTH Social app, a sort of social media substitute for the MAGA world. That deal looks to be in limbo however. Reuters is reporting that the largely retail base of investors in DWAC have not voted on their proxy statements to extend the merger agreement by one year. The extension is necessary as the Securities & Exchange Commission is continuing to review the merger and is looking into whether the merger was agreed to prior to DWAC's formation. If so, executives at DWAC would be in serious legal jeopardy. DWAC shares are down more than 21% in Tuesday's premarkat at $19.25. DWAC needs 65% of shareholders to approve the merger extension, but a Reuters source told the news outlet that as of Monday night they were no where close to that figure. Digital World officials are scheduled to announce the vote results on September 6. DWAC stock forecast If the extension fails to get approval, then the chart below serves little point. DWAC is trading at $19.25 in the premarket, well below the low from June 30 at $22. A list minute extension approval would however mean that shares would at least spike to resistance at $32 to $33. DWAC daily chart
The Commodities Feed: China's 2023 growth target underwhelms markets

Rate Hike Didn't Turn AUD Upside Down. S&P 500 (SPX) Decreased By 0.41%, Nasdaq Lost 0.74%.

ING Economics ING Economics 07.09.2022 08:28
Surging bond yields won't help risk sentiment Source: shutterstock Macro outlook Global: US equities returned from their holiday yesterday, but the mood remained gloomy, with the S&P500 dropping 0.41% and the NASDAQ falling 0.74%. The session wasn’t particularly brutal. Both indices just fell at the open and stayed low. Equity futures remain in the red today, so the slow bleed in equities looks like it will continue today. However, given the sharp pick up in 2Y US Treasury yields (+11.6bp), it is a bit surprising that equities didn’t fall even more. 10Y yields also added 16bp, taking them to 3.349%. There is probably still some more upside here, but after these moves, we may see a bit of consolidation. Bond futures aren’t suggesting much direction currently. The EUR continues to lose ground to the USD, and EURUSD is now 0.9894. The AUD also took no comfort from yesterday’s 50bp rate hike from the Reserve Bank of Australia and has slid to 0.6729. At 1.1508, Cable is also well down and we are probably looking at a 1.14 handle before long. The JPY has also continued its ascent, rising to 143.24. It’s not clear what or how this dollar rampage will be ended. The USD is looking a bit overbought right now, so like bonds, we may see a pause in the carnage before too long. The CNY led the other Asia Pacific currencies in retreat yesterday, moving to 6.9545. G-7 Macro: European labour market and revised 2Q22 GDP figures are on today’s calendar, together with German July industrial production (-0.6%MoM fall expected). These are followed later by the US Trade numbers for July which are expected to show the trade deficit narrowing to USD70.2bn. Markets may withhold some of their firepower for tomorrow's ECB meeting.  Australia: At 0930 SGT, Australia releases its 2Q22 GDP numbers. We are looking for a slightly stronger than consensus 1.0%QoQ figure (consensus is 0.9%QoQ). Yesterday’s net export contribution and last week’s capex figures both indicate some upside to the consensus forecast. The GDP numbers won’t directly affect the RBA’s rate-setting thinking, but they will highlight the scale of the job that needs to be done to get inflation back down to target. China: China will release trade data today. We expect export growth to exceed import growth, leading to a trade balance of nearly USD100bn in August. Our expectation of almost no growth in imports reflects the weakness of the domestic economy, though the big trade balance could help support GDP growth slightly. Taiwan: Taiwan will also release trade data today. We should see a similar picture to that in Mainland China with exports growing faster than imports. The key detail to watch is semiconductor-related exports and imports. This is especially important for imports, which will provide a hint about the growth prospects of semiconductor exports that are so important for Taiwan’s economy. Korea: The current account balance recorded a surplus of USD 1.1bn in July but the goods trade account turned to a deficit of USD -1.2 bn, the first time it has done so since April 2012. This is mostly due to higher energy prices, but also, export growth slowed due to weak IT demand and weak exports to China.  In the financial account, domestic stock equity investments by foreigners declined for the sixth straight month, while bond investment continued its increase from January 2020. Japan: USDJPY slid to 143 for the first time since 1998. Rate differential widening is the main reason for this depreciation. The recent better-than-expected US data probably also pushed the yen weaker. USDJPY may show some correction this morning, but the trend direction is not likely to change any time soon. We expect there will be more verbal intervention but this is unlikely to be effective at this point. Japan’s last intervention to curb depreciation was in 1998 during the Asian financial crisis. Despite the yen’s rapid depreciation, we still don’t believe it will trigger a policy shift by the Bank of Japan. What to look out for: China trade data and ECB meeting Australia GDP (7 September) China trade (7 September) Taiwan trade (7 September) US trade balance (7 September) Japan GDP (8 September) Australia trade balance (8 September) ECB policy meeting (8 September) US initial jobless claims (8 September) Philippines trade (9 September) China CPI inflation (9 September) US wholesale trade (9 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange, The Number Of Securities Fell In Price

InstaForex Analysis InstaForex Analysis 07.09.2022 08:33
At the close on the New York Stock Exchange, the Dow Jones fell 0.55% to a one-month low, the S&P 500 fell 0.41%, and the NASDAQ Composite fell 0.74%. The leading performer among the components of the Dow Jones index today was Visa Inc Class A, which gained 0.88 points (0.45%) to close at 198.64. Boeing Co rose 0.57 points (0.38%) to close at 152.39. Johnson & Johnson rose 0.44 points or 0.27% to close at 163.18. The losers were 3M Company, which shed 5.05 points or 4.15% to end the session at 116.60. Intel Corporation was up 2.75% or 0.86 points to close at 30.36, while Goldman Sachs Group Inc was down 1.51% or 4.99 points to close at 326. .49. Leading gainers among the S&P 500 index components in today's trading were Rollins Inc, which rose 6.05% to 35.78, Enphase Energy Inc, which gained 4.93% to close at 292.82, and SolarEdge Technologies Inc, which rose 4.22% to end the session at 278.38. The biggest losers were Moderna Inc, which shed 6.13% to close at 130.08. Shares of Church & Dwight Company Inc shed 4.69% to end the session at 80.23. Leading gainers among the components of the NASDAQ Composite in today's trading were Shuttle Pharmaceuticals Inc, which rose 91.28% to hit 28.50, IVERIC bio Inc, which gained 66.31% to close at 15.70, and also shares of HyreCar Inc, which rose 58.12% to end the session at 1.27. Shares of Creatd Inc were the biggest losers, losing 48.11% to close at 0.19. Shares of Addentax Group Corp lost 39.52% and ended the session at 5.80. Quotes of Rigetti Computing Inc decreased in price by 37.09% to 2.29. On the New York Stock Exchange, the number of securities that fell in price (2121) exceeded the number of those that closed in positive territory (1009), while quotes of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,468 companies fell in price, 1,299 rose, and 194 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.54% to 26.91, hitting a new monthly high. Gold futures for December delivery lost 0.62%, or 10.75, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 0.14%, or 0.12, to $86.75 a barrel. Brent oil futures for November delivery fell 3.19%, or 3.05, to $92.69 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.24% to 0.99, while USD/JPY edged up 1.58% to hit 142.80. Futures on the USD index rose 0.66% to 110.24. Relevance up to 05:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291695
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

The US Stock Market Has Been Bearish For Three Weeks Now

InstaForex Analysis InstaForex Analysis 07.09.2022 09:24
The main US stock indices – DOW Jones, NASDAQ, and S&P 500 – closed lower on Tuesday. Overall, the US stock market has been bearish for three weeks now, in line with our expectations. The upward correction of stock indices a month ago raised a lot of questions. The current movement, however, makes sense. The Fed will remain hawkish and will be hiking rates for a longer period of time than expected previously. It remains to be seen whether inflation slows down further. Under the QT program, almost $100 billion will be withdrawn from the US economy every month. Naturally, in light of all these factors, demand for risk assets decreases but increases for safe havens. That is why bitcoin and other cryptocurrencies cannot show any growth. In our view, the latest macro reports were quite strong. Thus, the ISM Services PMI and NonFarm Payrolls exceeded market forecasts. Meanwhile, unemployment somewhat increased, but the overall situation remains quite stable to sound the alarm. Although a recession in the United States seems inevitable, the state of the economy is not as bad as it might seem. Anyway, positive macro results are not enough to keep the stock market from falling. We see the main US indices hitting yearly lows by the end of 2022. What happens afterward will depend solely on the FOMC's rhetoric. US inflation for August is due on September 14. In case of a significant slowdown, monetary pressure on the economy could be eased. The Fed does not want the economy to slide into a recession but its main priority now is fighting inflation. If recession risks could be minimized, the regulator would not miss a chance to do that. If inflation keeps going down, there will be no need for 0.75% rate hikes as well as for more aggressive actions. For the stock market, inflation results for August mean almost nothing because the Fed still remains hawkish. We suggest that the bear market will stop when the regulator starts to hint at the end of the rate hike cycle, that is as early as December 2022. As for the tightening cycle itself, it may end in the first six months of next year. In other words, indices still have plenty of time to fall.       Relevance up to 06:00 2022-09-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321003
Stocks – (WSE: RVU) Ryvu Therapeutics - Partnership

Stocks – (WSE: RVU) Ryvu Therapeutics - Partnership

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 01.09.2022 12:29
Ryvu Therapeutics Company sign partnering deal with Elixis Inc. on the sales of STING agonist with bio-dollar of USD 400mn Ryvu Therapeutics sign partnering deal with Elixis Inc on the sales of STING agonist. Deal assumes the following: Upfront payment of USD 3mn. Low double digit royalties Biodollar value a touch above USD 400mn for each product commercialized under the agreement for the sales of STING agonists (USD 3mn will be received in near future) Conference call will be held today under this link Our view: POSITIVE The signing of the partnering agreement is in line with the declarations of the Management Board, which expected the sale of the immuno-oncological compound (STING agonist or HPK1 inhibitor) by the end of 2022 and in line with our assumptions presented in our report, in which we assumed that the STING agonist would be sold in 2022e. However, the parameters of this deal surprised us positively, and we see these information clearly to the positive side: The upfront payment is USD 3mn (vs. USD 15mn assumed by us) Bio-dollar is USD 400mn for each product commercialized under the agreement for the sales of STING agonists (vs. USD 150mn for all products assumed by us) Low double digit royalties (9% assumed by us) In our last report, we valued STING agonist at PLN 149mn and company’s shares at PLN 58/sh. Now, assuming that the STING agonist will be commercialized in one indication (product), we estimates value of this compound at PLN 213mn and we value company’s shares at PLN 61.2/sh. However, we believe that such high biodollar indicates also much higher peak sales of this compound expected by Elixis. Assuming that the peak sales will be three times higher than our assumption of USD 1206mn, i.e. assuming the peak sales is USD 3618mn, the value of compound is estimated by us at PLN 361mn (PLN 20/share) and share price indicated by our model is PLN 70/sh. The agreement also reduce the risk of new share issue. GPW’s Analytical Coverage Support Programme 3.0
Stock Market: Unimot (WSE: UNT) Publishes Its 2Q22 Results

Stock Market: Unimot (WSE: UNT) Publishes Its 2Q22 Results

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 01.09.2022 12:36
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. 488/2022/AR Event: 2Q22 results revealed; Adjusted EBITDA close to the preliminary figures published earlier. The Company revealed its quarterly consolidated 2Q22 results on Wednesday late after the session. Consolidated figures. The Company’s reported EBITDA amounted to PLN 68.1 million. This figure is impacted by one-time effects at a sum of PLN -6.6 million in addition to other operating income at a value of PLN +4.5 million. The mentioned one-offs of PLN -6.6 million include (i) PLN -2.2 million of timing effects in the ON+Bio segment, (ii) PLN -3.5 million of cost transfers in the natural gas segment and (iii) PLN -0.9 million of other one-offs. Other operating income include PLN 5.39 million of accounting gains on the sale of subsidiaries. Ultimately, the Company’s adjusted EBITDA (as calculated by us) after excluding these items amounted to PLN 70.2 million vs. PLN 65.0 million expected by us initially (and vs. PLN 64.1 million indicated in the preliminary figures previously and PLN 74.3 million of final adjusted EBITDA calculated by management for the quarter). The difference in our adjusted EBITDA and the management adjusted EBITDA lies in other operating income (which in this case include the one-time gains on asset sales). The Company’s reported net income amounted to PLN 45.0 million, while the adjusted net income, as calculated by us amounted to PLN 49.7 million. Results of segment. The Company’s ON/bio segment delivered adjusted EBITDA of PLN 59.1 million vs. PLN 49.6 million expected by us. The Company’s LPG segment recorded adjusted EBITDA of PLN 24.2 million vs. PLN 17.0 million expected by us. The natural gas segment’s adjusted EBITDA amounted to PLN 6.1 million vs. PLN 5.0 million expected by us. The electric energy segment delivered an adjusted EBITDA of PLN 1.8 million vs. PLN 0.0 million expected by us. The results of the photovoltaic segment with adjusted EBITDA at PLN -1.2 million (vs. PLN +1.5 million expected by us). The Company mentioned that the quarterly results had been particularly impacted by the war in Ukraine, and by the resultant instability of energy markets caused by introduction of sanctions on Belarus and Russia. The Company also mentions very high sale volumes generated on diesel, bio and LPG products. Cash flow. The Company’s 2Q22 operating cash flow amounted to PLN 29.3 million vs PLN -32.3 million recognised a year ago. The cumulative operating cash flow for 1-2Q22 amounts to as much as PLN 80.7 million (vs. PLN 65 million delivered a year ago). Net debt. The Company’s net debt at the end of the quarter amounted to PLN 245 million vs. PLN 224 million recognised a year ago. Expected impact: Positive. Not only because the results are slightly stronger than our expectations (and the preliminary figures) but also because of the good operating cash flow and the drop in net debt. The earnings outlook for 2H22 remains very good and we expect the finalization of the purchase of Lotos and Orlen bitumen and logistics assets, which may be a big chance for further growth for the Company. In our view, the risk of SPO is lower than previously given the relatively good balance sheet. GPW’s Analytical Coverage Support Programme 3.0
Sygnity Stock Faces Headwinds Despite New Government Contracts

Stocks: Brand 24 (WSE:B24) – Selected Operating Data For 2Q22

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 05.09.2022 13:22
This is an excerpt from the Polish version of DM BOÅš SA’s research report prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. 394/2022/AR Event: Selected 2Q22 KPIs On July 15 (at noon) Brand 24 released selected operating data for 2Q22. At the end of 2Q22 monthly recurring revenues (MRR) stood at PLN 1.732 million (US$ 408,000) which implies c. PLN 500,000 more than a year ago (up 41% yoy) and PLN 66,000 more than a quarter before (up 4% qoq). As compared to 1Q22, the qoq MRR growth materially slowed (4% vs 21%) which stems mainly from the price rises for the existing clients introduced in the beginning of this year: their effect was largely reflected in the MRR level at the end of 1Q22 (the abovementioned slowdown of a qoq MRR growth does not surprise us; we deem it as neutral). At the end of 2Q22 ARPU (average revenue per user) reached PLN 452 (US$ 106) which implies a qoq increase by PLN 22 (+5%) (and a 37% yoy increase being – again – largely the effect of price rises for the existing clients introduced in the beginning of this year); a slowdown of a qoq ARPU dynamic (from 22% in 1Q22 to 5% in 2Q22) does not surprise us and we deem it as neutral. Additionally, the Company informed that ARPU per a new subscriber (acquired in 2Q22) (so called Initial ARPU) stood at PLN 528 (US$ 124) which is 17% above the ARPU for all clients (we remind that in 1Q22 Initial ARPU reached PLN 495 (US$ 120) exceeding by c. 15% ARPU for all the subscribers in this period, so in 2Q22 this indicator grew 7% (3%) qoq in PLN (US$)). We deem both, the Initial ARPU higher than the ARPU for all the subscribers and ARPU qoq growth for new subscribers as positive; this proves that Brand24’ clients portfolio moves gradually towards bigger brands. Starting from the previous quarter, Brand24 has not revealed a number of subscribers at the quarter end as it claims that this indicator no longer belongs to the important KPIs; instead the Company focused on the variables such as MRR or ARPU. Though the Company’s argumentation is right (that MRR and ARPU are more indicative than a number of subscribers), we believe a showing of the number of subscribers should be continued as it would be a valuable piece of information for at least some investors. In 2Q22 the customer churn oscillated at 4.5-5.4% (the 12M moving average at 5%). In 2Q22 the statistical subscriber remained the Company’s client for almost 20 months which is a historical high level. Between April and May a number of trials was still higher yoy (albeit slightly, by c. 2%), but the conversion ratio deteriorated yoy (for the third consecutive quarter), by c. 20%. All in all, we consider the set of KPIs for 1Q22 as neutral.(given the material (Initial ARPU as positive while the falling conversion ratio and only marginally yoy higher trials number as negative with the remaining KPIs (MRR, ARPU, churn) as neutral). Based on the revealed KPIs, we would expect the Company’s 2Q22 revenues in the range of PLN 5.3 -5.4 million (up c. 40% yoy and up 7- 9% qoq). Analyst SobiesÅ‚aw PajÄ…k, CFA GPW’s Analytical Coverage Support Programme 3.0
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Stock Market: DataWalk (WSE:DAT) – New Contracts

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 05.09.2022 14:12
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. 374/2022/AR Event: Two new contracts: (i) with Total Energies and (ii) extension of contract with Polish Police Headquarters (KGP). After yesterday’s close, the Company informed about signing 2 new contracts for a delivery of DataWalk’s system: the agreement with Total Energies assumes DataWalk’s system implementation in cybersecurity analytics; the agreement with Polish Police Headquarters (KGP in Polish abbreviation) is a continuation of the earlier cooperation which was reported about in September 2020; this agreement is related to the sale of a perpetual license and maintenance and implementation services with a view to full utilization of DataWalk’s platform for crime analysis. Expected impact: Positive; the previous agreement with Polish Police Headquarters has been so far the biggest (in value terms) contract signed by the Company. We believe that the new contract may be bigger as DataWalk’s current information policy assumes sharing the information about further contracts with the same client only in the case when the subsequent contract is bigger (in value terms). Analyst Tomasz Rodak, CFA +48 797 487 381 GPW’s Analytical Coverage Support Programme 3.0
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The Number Of Securities That Rose In Price On New York Market

InstaForex Analysis InstaForex Analysis 08.09.2022 08:22
At the close in the New York Stock Exchange, the Dow Jones rose 1.40%, the S&P 500 index rose 1.83%, the NASDAQ Composite index rose 2.14%. The leading performer among the components of the Dow Jones index today was 3M Company, which gained 3.95 points or 3.39% to close at 120.55. Nike Inc rose 3.33 points or 3.17% to close at 108.48. Home Depot Inc rose 2.74% or 7.93 points to close at 297.47. The biggest losers were Chevron Corp, which shed 2.01 points or 1.28% to end the session at 155.11. Verizon Communications Inc was up 0.02 points (0.05%) to close at 41.08, while Caterpillar Inc was up 0.20 points (0.11%) to close at 180. 86. Leading gainers among the S&P 500 index components in today's trading were SolarEdge Technologies Inc, which rose 11.85% to 311.36, Enphase Energy Inc, which gained 8.02% to close at 316.31, and also shares of DexCom Inc, which rose 7.73% to end the session at 88.37. The biggest losers were APA Corporation, which shed 3.04% to close at 36.67. Shares of Old Dominion Freight Line Inc shed 2.95% to end the session at 263.98. Quotes of Halliburton Company decreased in price by 2.85% to 28.68. Leading gainers among the components of the NASDAQ Composite in today's trading were Imara Inc, which rose 71.79% to hit 2.01, Shuttle Pharmaceuticals Inc, which gained 27.72% to close at 36.40, and shares of Spero Therapeutics Inc, which rose 26.55% to end the session at 1.43. The biggest losers were Cleantech Acquisition Corp, which shed 28.36% to close at 6.77. Shares of Newage Inc lost 25.20% and ended the session at 0.09. First Wave BioPharma Inc (NASDAQ:FWBI) was down 23.22% to 3.24. On the New York Stock Exchange, the number of securities that rose in price (2,400) exceeded the number of those that closed in the red (723), while quotes of 131 shares remained virtually unchanged. On the NASDAQ stock exchange, 2715 companies rose in price, 1027 fell, and 217 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 8.44% to 24.64. Gold futures for December delivery added 0.92%, or 15.70, to $1.00 a troy ounce. In other commodities, WTI October futures fell 5.96%, or 5.18, to $81.70 a barrel. Brent oil futures for November delivery fell 5.70%, or 5.29, to $87.54 a barrel. Meanwhile, on the Forex market, EUR/USD rose 1.08% to hit 1.00, while USD/JPY edged up 0.72% to hit 143.82. Futures on the USD index fell 0.62% to 109.52.   Relevance up to 05:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/291873
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

The SPX Index Was Bullish Yesterday But Price Has Not Broken Any Major Levels

InstaForex Analysis InstaForex Analysis 08.09.2022 10:50
    Red lines- bearish channel Strong positive day for bulls yesterday in SPX. The index gained 1.83% to close around 3,980. Price has not broken any major resistance levels and remains inside the short-term bearish channel it has created. The RSI has provided a bullish divergence which warned short-term traders of a possible bounce. This bounce came yesterday and price is now challenging the upper channel boundary. Is the decline from 4,324 complete? As long as price is below 4,020 we remain short-term bearish looking to see new lower lows. Relevance up to 10:00 2022-09-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/291959
USD Stable as Oil Prices Rebound Ahead of US CPI Report Release

Bearish Is Dominating Market Sentiment Among Individual Investors

Saxo Bank Saxo Bank 08.09.2022 13:29
Summary:  Going back to 1987 individual investors have only been this bearish in less than 2% of the time. Extreme pessimism is often a good starting point for being contrarian and betting on a rebound. In today's equity note we test whether history has shown that it is a good idea to bet on being long equities when bearishness is dominating market sentiment among individual investors. Extreme pessimism is often fuel for a good rebound The American Association of Individual Investors (AAII) asks their members every about their sentiment using the question ”I fell that the direction of the stock market over the next 6 months will be”. From these answers AAII compute the percentage of their members that answered this question in terms of bullish, neutral, or bearish. The spread between the percentages being bullish vs bearish declined today to -35.2% which is an extremely negative reading only observed in less than 2% of the time. The question is whether this statistics have any information value for traders and investors. While the question is examining expectation over a 6-month horizon, it is more interesting to observe whether it has any predictive power over a shorter time horizon. First we identify all the weeks when the bull-bear spread has been lower than -30, which is 37 times since 1987. Three of these observations have been within the last 12 weeks. In our analysis we then calculate the forward 1, 4, 8, and 12-week return going long the S&P 500 Index if the spread is below -30. The table below shows the excess return over S&P 500 on such a strategy which is done by subtracting the average S&P 500 return since 1987 for these different time horizons. If a signal has any informational value then it should be able to beat the passive returns by just being invested in US equities. The average excess return in percentage is -0.11% for the 1-week holding period but then jumps to 1.33% for the 4-week horizon and 1.29% and 1.49% for the 8-week and 12-week holding period respectively. This looks good at first sight, but the average always comes with variance and if we apply a standard t-test on the samples of each holding period scenario then we see that the probability of these different samples being statistically significant from zero excess return is not very high. The best test statistic is for the 4-week holding period at t = 1.28 which correspond to a p-value of 0.21, which is not statistically significant under normal circumstances. In a low signal-to-noise process such as the equity market the question is whether the odds are good enough to bet on. The confidence interval is -0.79% to 3.46% after all, so we let each trader decide for himself whether the odds are stacked in favour of a rebound. One should note that many of the most bearish readings are clustered in time which means that the 34 observations that we are calculating our statistics on are not truly independent and thus the statistical significance is weaker than the numbers displayed below suggest. Outside the world of statistics, yesterday’s price action felt technical across both bond and equities as there was no real news driving the move. It seems the market might be positioning itself differently ahead of the important US CPI print on Tuesday where a lower than estimated inflation figure could ignite a short-term rally equities. These considerations are worth melting into the decision process of whether this is a good time to go long again.     Source: Do the odds favour a rebound in equities | Saxo Group (home.saxo)
Apple's Stock Price Reaction To The Release Of New Products

Apple's Stock Price Reaction To The Release Of New Products

Conotoxia Comments Conotoxia Comments 08.09.2022 16:02
On Wednesday, September 7, Apple's long-awaited event took place, at which new versions of the Cupertino company's products were presented. How did the company's US-listed shares react to the event? Apple Inc. unveiled the new iPhone 14, which has so-called safety features as standard. These include the ability to detect collisions and emergency SOS sending via satellite - a feature that allows users to send text messages in an emergency without access to cellular services. In addition, on Wednesday was the launch of the new AirPods Pro and Apple Watches. Apple's share price gained 1 percent on Wednesday, closing at $155.96. Better than the company itself, however, seemed to be the suppliers of components for the new products. Shares of Skyworks and Texas Instruments rose 1.7 percent, followed by Qualcomm, up 1.5 percent, and Qorvo, up 1.4 percent at the close of yesterday's session. Source: Conotoxia MT5, Apple CFD, D1 Apple stock price in recent times Apple's share price, after peaking in January 2022 in the area of $182, has retreated to the vicinity of $130 in early June. Currently, the share price seems to be in the middle of its annual fluctuation range, at $155. This gives the company a capitalization of $2.5 trillion, making it the largest in the world. In turn, the price-to-earnings ratio for Apple is 25, making it one of the largest in the last decade. In December 2020, this popular valuation ratio reached 35.40, while Apple's revenue for the quarter ended June 30, 2022 was $82.959 billion, up 1.87 percent from a year earlier. And Apple's revenue for the twelve months ended June 30, 2022 was $387.542 billion, up 11.63 percent from a year earlier. What is the outlook for Apple's stock price? According to the MarketScreener portal collecting recommendations from Wall Street analysts, the company has 26 buy recommendations, eight hold recommendations and zero sell recommendations. Institutions pointing to buy Apple shares include Credit Suisse with a target price of $201 and JP Morgan with a target price of $200. The average target price is $181.50, while the so-called Street High, or highest recommendation on Wall Street, is $220, and the Street Low is $130, according to Market Screener data. Source: Conotoxia MT5, MarketScreener - lowest, average and highest target price for Apple shares.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Increases On The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 09.09.2022 08:41
  At the close of the New York Stock Exchange, the Dow Jones rose 0.61%, the S&P 500 rose 0.66% and the NASDAQ Composite rose 0.60%. Salesforce.com Inc was the leading gainer among the components of the Dow Jones index today, up 3.62 points or 2.36% to close at 156.90. JPMorgan Chase & Co rose 2.70 points or 2.33% to close at 118.60. Goldman Sachs Group Inc rose 4.82 points or 1.46% to close at 335.38. The losers were 3M Company shares, which lost 1.28 points or 1.06% to end the session at 119.27. Apple Inc was up 1.51 points (0.97%) to close at 154.45, while Honeywell International Inc was down 1.27 points (0.67%) to close at 187. 82. Leading gainers among the S&P 500 index components in today's trading were Regeneron Pharmaceuticals Inc, which rose 18.85% to 708.85, Freeport-McMoran Copper & Gold Inc, which gained 7.89% to close at 30 .62, as well as shares of Invesco Plc, which rose 4.77% to close the session at 17.36. The biggest losers were McCormick & Company Incorporated, which shed 6.71% to close at 79.30. Shares of Kraft Heinz Co lost 3.38% to end the session at 36.06. Quotes Campbell Soup Company fell in price by 2.98% to 47.84. Leading gainers among the components of the NASDAQ Composite in today's trading were ShiftPixy Inc, which rose 176.54% to 31.00, Amylyx Pharmaceuticals Inc, which gained 51.01% to close at 27.03, and shares of Rubius Therapeutics Inc, which rose 48.58% to close the session at 1.29. The drop leaders were Troika Media Group Inc, which shed 26.83% to close at 0.48. Shares of Ensysce Biosciences Inc shed 17.71% to end the session at 0.33. Quotes of Biophytis fell in price by 17.67% to 0.91. On the New York Stock Exchange, the number of securities that rose in price (1,743) exceeded the number of those that closed in the red (1,342), and quotes of 154 shares remained virtually unchanged. On the NASDAQ stock exchange, 2274 companies rose in price, 1485 fell, and 268 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.18% to 23.61. Gold Futures for December delivery lost 0.47%, or 8.20, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 0.99%, or 0.81, to $82.75 a barrel. Brent oil futures for November delivery rose 0.59%, or 0.52, to $88.52 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged, 0.01% to 1.00, while USD/JPY was up 0.25% to hit 144.05. Futures on the USD index fell 0.17% to 109.65. Relevance up to 05:00 2022-09-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292080
At The Close On The New York Stock Exchange Indices Closed Mixed

Positive Expectations For Adobe, The Equity Market Is Positioning For A Better

Saxo Bank Saxo Bank 09.09.2022 11:20
Summary:  Sentiment had gotten too bearish and equities are now pushing potentially forcing short positions to be covered. The recent sessions seem to driven by technical flows as there has been little new information on the macroeconomy. It seems that the market is positioning itself for a positive surprise in the US August inflation report on Tuesday. The earnings calendar is quite light next week with the key earnings focus being Adobe that is a bellwether in the US technology sector. The software maker is expected to post strong results but a stronger USD and weaker advertising market may cloud the outlook for Adobe. Equities continue to rebound ahead of important CPI print As we indicated yesterday in our equity note without having anything statistical significant to show, the odds were leaning in favour of a rebound in equities as sentiment was historically bad and usually followed by gains. S&P 500 futures closed above the 4,000 level yesterday and are pushing today above the 50-day moving average trading around the 4,039 level. The next big resistance level to watch is the 4,072 level which was the highest exhaustion point in the recent cycle. The past couple of sessions’ price action seems to be driven by technical flows on top of a weaker USD, and maybe the moves are a sign of the equity market positioning itself for a better than expected US August inflation report on Tuesday which is really the key event that will shape expectations in equities in the weeks to come. Can Adobe rise above the dark clouds? The earnings calendar is light these weeks as the market is waiting for Q3 earnings releases to roll in a month from now. Next week earnings calendar of important earnings is listed below with our focus on Adobe. The software maker has surprised negatively in the past four earnings releases due weaker than estimated outlook causing its share price to tumble 44% from its highs. In the past couple of months the share price has stabilised as expectations are no longer deteriorating. Analysts expect Adobe to report revenue growth of 12.6% y/y and expanding operating margin as recent cost cutting is beginning to improve profitability. Adobe is part of the high quality pocket in the equity market with a high market share and double digit organic growth rates expected over the coming years. Key risks to consider for Adobe are the strong USD, corporate spending slowdown on digitalization, and generally weakness in the global advertising industry. Monday: Oracle Tuesday: DiDi Global Wednesday: Inditex Thursday: Polestar Automotive, Adobe   Source: https://www.home.saxo/content/articles/equities/equity-rebound-us-cpi-report-and-adobe-earnings-09092022
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

European Stock Indices End Up Week With Increases

InstaForex Analysis InstaForex Analysis 10.09.2022 12:18
On Friday, key European stock indices rose dramatically. The positive previous closing of trading on the US stock market became the major catalyst for growth in European stocks. At the same time, strong performance of Asian stocks also had a beneficial effect. Moreover, stock market participants continue to discuss the outcome of the European Central Bank's September meeting on monetary policy.   By the time of writing, the STOXX Europe 600 index of Europe's leading companies increased by 1.41% to 419.92 points. Meanwhile, the shares of German energy company Uniper SE (+10.5%) were top gainers among STOXX Europe 600 components. Meanwhile, the French CAC 40 gained 0.69%, the German DAX added 0.89%, and the British FTSE 100 rose by 0.98%. The day before, Buckingham Palace announced the death of British Queen Elizabeth II. Despite this news, the London Stock Exchange operated as normal today. Top gainers and losers The shares of British fire protection company London Security PLC fell by 4.8%. In the first half of fiscal 2022, the company cut pretax profits due to the permanent rise in costs amid inflationary pressures. The stocks of UK retailer ASOS PLC rose by 1.6%. The company predicted revenue and profit in the current fiscal year at the level of market expectations. At the same time, ASOS PLC's sales in August were weaker than analysts expected. Market sentiment European investors on Friday focused on the results of the European Central Bank's September meeting. On Thursday, the regulator increased the benchmark lending rate to 1.25% per annum, the deposit rate to 0.75% and the rate on margin loans to 1.5%. At the same time the discount rate was raised by 0.75 percentage points for the first time in history. In addition, representatives of the Central Bank noted that the regulator intends to continue raising the rate at the upcoming meetings. Thus, the chairman of the European Bank Christine Lagarde said that further pace of interest rate increases will depend on statistical data. During the September meeting, the ECB also raised the forecast of consumer prices in 2022 to 8.1%, in 2023 to 5.5% and in 2024 to 2.3%. At the June meeting of the regulator's representatives, the preliminary figures were 6.8%, 3.5% and 2.1%, respectively. According to the new forecast of the European Central Bank, gross domestic product growth in the eurozone this year will be 3.1% against the previously predicted 2.8%. At the same time, GDP forecasts for next year were worsened to 0.9% from 2.1%, and for 2024 to 1.9% from 2.3%. Meanwhile, an important downward factor for the stock market in Europe is still the global energy crisis with its consequences for the economy of the region. Since the beginning of this week, gas prices have been under pressure due to disruptions in supply chains from Russia to Europe. The end of August saw the world gas prices soar above USD 3,500 per 1,000 cu.m., setting new historical records. The reason for such a dramatic price jump was Gazprom's announcement that Nord Stream, one of the main gas pipelines to Europe, would shut down for three days to perform maintenance. However, Nord Stream did not come out of the scheduled maintenance. Meanwhile, Russia canceled the deadline for resuming gas supply through the pipeline. Gazprom attributed this state of affairs to malfunctions on the Trent 60 gas compressor unit due to an oil leak. The Nord Stream pipeline has been operating at less than 20 percent of its capacity of late, and the recent suspension has raised fears about Europe's energy supply in the run-up to winter. Experts believe that permanently rising energy prices will further increase inflation in the eurozone, which is already rapidly approaching double digits. On Friday morning it was reported that industrial production in France fell in July for the first time since April. This means that the country's leading companies have cut production amid falling demand and high price pressures. Thus, the decrease in July was 1.6% in monthly terms against an increase of 1.2% in June. At that, analysts forecasted the reduction of industrial production only by 0.5%. Previous trading results Last Thursday, European stock market indicators closed in the green zone. Stock market participants were anxiously awaiting the publication of the results of the September European Central Bank meeting on monetary policy. The positive closing of the Wednesday trading on the US stock market proved to be an additional catalyst for the European indices growth yesterday. As a result, the composite indicator of Europe's leading companies STOXX Europe 600 rose 0.5% to 414.09 points. Meanwhile, France's CAC 40 gained 0.33%, Germany's DAX declined a symbolic 0.09% and Britain's FTSE 100 gained 0.33%. Genus Plc, a British animal genetic breeding company, soared more than 13 percent on revenue growth in its fiscal year. French IT company Atos SE is down nearly 15%. The market capitalization of Darktrace, a British cybersecurity systems developer, plummeted 31%. On Thursday, the company reported a return to pre-tax profits for the current fiscal year and nearly doubled its revenue. At the same time, Darktrace management also confirmed the end of talks with U.S. investment firm Thoma Bravo about the possible sale of Darktrace. The share price of Melrose Industries PLC, a British supplier of jet engines and auto parts, fell 2.3%. The day before, the engineering company reported an increase in pre-tax losses in the last fiscal half-year to 358 million pounds from 275 million pounds, noted a year earlier. In addition, earlier the international business newspaper Financial Times reported that Melrose Industries PLC plans to spin off its GKN car division into a new company registered in Britain. The value of securities of the British chain of restaurants and pubs Restaurant Group PLC increased by 2.1%. In January-June, Restaurant Group tangibly reduced its pretax loss due to strong revenue growth. UK food processor and retailer Associated British Foods PLC is down 7.6%. The retailer projected a 40% increase in sales for the fiscal year ending Sept. 17. At the same time, the company warned of a possible decline in adjusted profits next fiscal year amid rising energy prices and a stronger US dollar. The market capitalization of Finnish paper product manufacturer Stora Enso went up 2.8% on news about its purchase of Dutch carton manufacturer De Jong Packaging Group. The deal is valued at 1.02 billion euros. The share price of French retailer Carrefour rose by 2%. The stock price of French financial conglomerate Societe Generale rose by 2.6%. Quotes of the Dutch manufacturer of medical equipment Koninklijke Philips NV declined by 0.2%. Earlier, the French media reported that the Paris prosecutor's office launched an investigation into the recall of respiratory devices by the Dutch company. An important upward factor for the European stock indexes on Thursday was the strong positive dynamics of Wall Street the day before. The Dow Jones Industrial Average closed Wednesday's trading session with a 1.4% increase, breaking a seven-day sequence of permanent declines.     Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321326
📈 Tech Giants Soar, 💵 Dollar Plummets! Disney-Charter Truce, Wall Street's AI Warning!

Fed May Hike The Rate By 75bp, Oracle (ORCL) And Adobe (ADBE) To Release Their Earnings Shortly

Saxo Bank Saxo Bank 12.09.2022 16:08
Summary:  Fed officials gathered around Chair Powell to sing a consistently hawkish chorus and prepared the market for a 75bp rate hike on September 21. This week’s CPI report will be the last key data point before the Fed meets and the bar for convincing the policymakers to deliver a smaller than 75bp hike is high. The U.S. dollar’s uptrend will probably remain intact. Across the pond in the U.K., there is a host of data scheduled to release ahead of the Bank of England making its rate decision. China’s August industrial production and retail sales, and year-to-date fixed asset investment would potentially surprise the downside and point to the continued weakness of the economy. US CPI print will point to higher and stickier price pressures With the labor market remaining strong in the U.S. over the last few months, the focus has remained on the inflation data to predict the path of the Fed’s rate hikes. Clearly, all of the Fed’s members have had a unified hawkish stance since the Jackson Hole conference, and many have clearly hinted at a 75bps rate hike for September. Tuesday’s US CPI report is the one to watch, as it can move the market pricing of the Fed’s rate path and is the last key data point scheduled to release ahead of the September 21 Fed meeting. After some softening in July, it can be expected that the headline print may ease further in August as well given the decline in gasoline prices. Still, the inflation print is likely to stay elevated due to the stickier shelter and services costs, as well as still-high energy and food prices. Consensus estimates point to a mild decline of 0.1% MoM while the core remains strong at 0.3% MoM. A host of UK economic data is due, but the central bank decision shifted to September 22 We get a snapshot of the state of the UK economy this week. UK inflation has already touched double digits last month with a 10.1% YoY print. Price pressures are likely to remain elevated this month as well, despite some softening in fuel prices, as food and services costs continue to rise. Further gains in inflation can be expected in October, but the capping of household energy bills may help to soothe inflationary pressures thereafter. Labor market data for three months to July is also due, and unemployment rate and wage data will be on the watch. Retail sales for August, due on Friday, will continue to show the impact of the cost-of-living crisis that has been seen in the UK due to the rising energy bills. UK consumer confidence is at record lows, and this will likely show up in the retail sales print this week. Bloomberg consensus estimates point to a 0.5% MoM deceleration in retail sales (including auto fuel). However, the pain on the economy from energy costs will likely ease towards the end of the year due to the government support, but that suggests further tightening in monetary policy may be on the cards. The Bank of England decision is now due on September 22, which would give the central bank time to assess the fiscal measures as well as the Fed’s rate hike path. Slower export growth, power shortage, and pandemic controls would probably have taken their toll on China’s August activity data China’s activity data for August, scheduled to release on Friday, would probably be at risk of missing the median forecasts in the Bloomberg survey, which has industrial production at 3.8% YoY in August (vs 3.8% YoY in July), retail sales at 3.2% YoY in August (vs 2.7% YoY in July), and fixed asset investment year-to-date 5.5% YoY (vs 5.7% YoY). The heatwave-induced power shortage caused disruption to production in Sichuan and delays in infrastructure construction. The pandemic control measures affected the manufacturing and export hub of the city of Yiwu in Zhejiang province in August. The much weaker than expected export growth data for August released last week and the continuously weak data in the property market also pointed to potentially downside surprises to these forecasts.  Japan producer prices to remain high Japan’s August producer prices for August are scheduled to be released on Tuesday, and gains are likely to extend further as oil and commodity prices remained elevated and the Japanese yen weakened further. Bloomberg consensus expectations are for producer prices to reach 8.9% YoY in August from 8.6% YoY previously. While a high base from last year may justify some cooling in input prices into the end of the year, demand pressures are picking up as well as the latest wave of Covid in Japan seems to get under control, and higher global prices and weaker currency continue to underpin further price pressures. Can the USD momentum extend further? We saw the USD cool-off slightly last week following the uptick in the hawkish rhetoric from other global central banks. The European Central Bank went ahead with a 75bps rate hike, while also guiding for more jumbo rate hikes to come. The Japanese authorities also got more stern with their warnings against the fall of the yen, but there were no signs of the accommodative policy being tweaked. The recovery in the yen and the euro helped to cool off the recent gains in the greenback, as dis some positioning ahead of the US CPI release for this week. However, Reserve Bank of Australia Governor Lowe hinted that the pace of rate hikes may slow. The Fed will likely stay more aggressive than other global central banks, given the ammunition provided by the resilience of the US economy. Only a big miss in US CPI could move the needle on Fed rate hike expectations for now, and consequently on the US dollar. But for the most part, there are reasons to believe that the USD gains are likely to continue for now. What Australia’s central bank will be watching this week. And if the data is stronger than expected, you could see the AUDUSD extend its short term run up We’ve seen the RBA’s tone shift back to dovish of late, despite the RBA expecting inflation to peak later this year. And for the RBA to stay dovish, they’ll need to see falling inflation and falling employment. With that said, the next data set the RBA will be watching/assessing, ahead of their next interest rate decision (October 4), will be this unemployment data release for August on Thursday. Australia’s unemployment is at 50-year low, 3.4%. That’s where the rate is expected to remain for August. However, the other key data to watch is the employment change. This could give rise as to how much the RBA will be able to lift rates by, next month. In July data showed Australia’s employment fell from a record high, with 41,000 jobs being lost. While for August Bloomberg’s survey of economists suggests 35,000 jobs were added. Some forecasts are bleak though, estimating Australia lost 15,000 jobs.  If the data is showing more jobs were lost, it will give the RBA less room to rise rates. Currently RBA interest rate futures expect the rates to peak at 3.6% next month. If more jobs were added than expected, we could see the AUDUSD extend its rally off its 2-year low. Ethereum merge will draw attention The Ethereum blockchain’s much-anticipated software upgrade, the so-called Merge, is expected to take place this week, according to its core developers. The new system, known as "proof-of-stake", will slash the Ethereum blockchain's energy consumption by 99.9%, developers say. Most blockchains, including bitcoin's, devour large amounts of energy, sparking criticism from some investors and environmentalists. We wrote about this here, and this is a key event to watch this week. The merge could make Ethereum more favourable to pension funds and other institutional investors that are under the scanner for environmental concerns, but there is also come scepticism an how scalable Ethereum could become and if it becomes more susceptible to attacks by hackers. Oracle and Adobe are reporting results this week The earnings calendar is light as most U.S. companies have reported and Q3 earnings releases will roll in a month from now. Oracle (ORCL:xnys) and Adobe System (ADBE:xnas) are the two most notable releases this week.  The Oracle results will include the contributions for the first time from Cerner, a medical information technology provider for which it paid USD28.3 billion.  On Oracle’s core business, investors will focus on how the company’s enterprise software business fared in competition with increasingly popular cloud services by providers such as Amazon and Microsoft.  Adobe System has surprised negatively in the past four earnings releases due to weaker than expected outlook and has seen its share price tumbling 45% since the beginning of the year. In the past couple of months, the share price has stabilised as expectations are no longer deteriorating. Analysts expect Adobe to report revenue growth of 12.6% y/y and expanding operating margin as a result of cost cutting. Adobe is part of the high quality pocket in the equity market with a high market share and double-digit organic growth rate expected over the coming years. Key risks to consider for Adobe are the strong USD, corporate spending slowdown on digitalization, and general weakness in the global advertising industry. Key economic releases & central bank meetings this week Monday, Sep 12 US: NY Fed Survey of Consumer Expectations (Aug)UK: Monthly GDP (Jul)Italy: Industrial Production (Jul)Eurozone: ECB’s de Guindos and Schnabel speakIndia: CPI (Aug)India: Industrial production (Jul) Tuesday, Sep 13 US: CPI (Aug)Japan: PPI (Aug)Australia: Consumer confidence Index (Sep)Australia: Business confidence Index (Aug)Germany: ZEW survey (Sep)UK: Labour market report (Aug)   Wednesday, Sep 14 US: PPI (Aug)Japan: Core machine orders (Jul)UK: CPI (Aug)UK: RPI (Aug)UK: PPI (Aug)Eurozone: Industrial production (Jul)India: WPI (Aug)New Zealand: Current account balance (Q2)Hong Kong: Industrial production (Q2)Hong Kong: PPI (Q2)Thursday, Sep 15US: Jobless claims (weekly)US: Retail sales (Aug)US: Philly Fed manufacturing survey (Sep)US: Empire State manufacturing survey (Sep)US: Industrial production (Aug)US: Business inventories (Jul)Japan: Trade data (Aug)Japan: Tertiary industry activity index (Jul)Australia: Unemployment rate (Aug)UK: Bank of England decision (Sep)Eurozone: ECB’s Centeno speaksIndonesia: Trade dataNew Zealand: Real GDP (Q2) Friday, Sep 16 US: University of Michigan consumer survey (Sep, preliminary)UK: Retail salesEurozone: Harmonized CPI (Aug, final)Eurozone: ECB’s Rehn speaksChina: Industrial production (Aug)China: Retail sales (Aug)China: Urban fixed-asset investment year-to-date (Aug)Singapore: Non-oil domestic exports (Aug) Key earnings releases this week Monday: Oracle (ORCL:xnys), Tuesday: DiDi Global (DIDIY:xnas) Wednesday: Industria de Deseno Texgtil SA (ITX:xmce) Thursday: Polestar Automotive (PSNY:xnas) Friday: Adobe (ADBE:xnas) Source: Saxo Spotlight: What’s on investors and traders radars this week? | Saxo Group (home.saxo)
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

What Makes Alphabet (GOOGL), Pool Corp. And Others Are Such "Solid"? Stock Market: What Is The Difference Between Growth And Value Stocks?

Conotoxia Comments Conotoxia Comments 12.09.2022 21:46
In a nutshell, investors in the stock market can divide companies into two baskets. One is "growth," or growth-type companies, and the other is "value," or companies with value. The former are, for example, start-ups that currently may not even have their own equipment in the office, but are leasing it, but promise investors that they will make "amazing" profits in a few years. Their valuations, despite their current lack of much value can be very high, because they can be driven by expectations. The second group, value companies, usually do not promise investors hundreds of percent earnings growth, while they have an established business, can pay regular dividends or conduct systematic process restructuring to raise margins. Source: Conotoxia MT5, NOBL ProShares S&P 500 Dividend Aristocrats ETF. Solid value and dividend companies will attract investors? According to Goldman Sachs in a note quoted by Bloomberg, stocks of high fundamental quality, value stocks, dividend-paying companies and companies with exposure primarily to drawing income from the U.S. market are four areas that could drive performance through the end of the year, according to analysts from Goldman Sachs. "Rising cost of capital will limit valuation expansion and prompt investors to reward companies with high-quality fundamental metrics." - analysts led by David Kostin wrote in a note. As an example, they give a quality basket of 50 companies created by Goldman Sachs, which includes stocks that are highly rated for a mix of strong balance sheets, stable sales and earnings growth, above-average return on equity and low historical downside risk.  Companies included in the Goldman Sachs index basket The basket includes Alphabet, Pool Corp., Church & Dwight, Coterra Energy, First Republic Bank and American Tower, among others - CFDs and DMAs on shares of these companies can be found on the Conotoxia MT5 platform. According to Goldman Sachs analysts, value stocks could outperform if the Fed would succeed and inflation would soon peak, and the companies' dividends could offer "exposure to the fundamental growth of the S&P 500 while minimizing exposure to equity valuation risk." Source: Conotoxia MT5, DVY iShares Select Dividend ETF Meanwhile, companies with domestic sales in the U.S. have outperformed those with more exposure to foreign sales, particularly in Europe and emerging markets. The economic situation in Europe is dire, and despite concerns about the U.S. equity market, "it offers greater potential for absolute and risk-adjusted returns than the recession-ridden European markets" - write the GS analysts. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Source: Value and dividend companies with potential (conotoxia.com)
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Increases At The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 13.09.2022 08:02
At the close in the New York Stock Exchange, the Dow Jones rose 0.71%, the S&P 500 index rose 1.06%, the NASDAQ Composite index rose 1.27%. The leading performer among the components of the Dow Jones index today was Apple Inc, which gained 6.06 points or 3.85% to close at 163.43. Quotes of American Express Company rose by 4.01 points (2.53%), closing the session at 162.45. Salesforce Inc rose 3.04 points or 1.87% to close at 165.63. The biggest losers were Amgen Inc, which shed 10.07 points or 4.07% to end the session at 237.62. Home Depot Inc was up 2.23 points (0.74%) to close at 297.54, while Johnson & Johnson was down 0.07 points (0.04%) to end at 165. .64. Leading gainers among the S&P 500 index components in today's trading were DXC Technology Co, which rose 5.98% to hit 28.36, APA Corporation, which gained 5.01% to close at 40.00, and shares of Fortinet Inc, which rose 4.20% to end the session at 55.84. The biggest losers were The Mosaic Company, which shed 6.76% to close at 52.44. Shares of Amgen Inc lost 4.07% to end the session at 237.62. Quotes of CF Industries Holdings Inc decreased in price by 4.05% to 99.48. Leading gainers among the components of the NASDAQ Composite in today's trading were Neurobo Pharmaceuticals Inc, which rose 101.30% to hit 0.56, InMed Pharmaceuticals Inc, which gained 70.42% to close at 18.78, and also shares of Ventyx Biosciences Inc, which rose 64.98% to end the session at 38.11. The biggest losers were Tuesday Morning Corp, which shed 31.19% to close at 0.19. Shares of WeTrade Group Inc lost 30.19% and ended the session at 1.11. Akari Therapeutics PLC was down 27.88% to 0.75. On the New York Stock Exchange, the number of securities that rose in price (2,360) exceeded the number of those that closed in the red (764), while quotes of 160 shares remained virtually unchanged. On the NASDAQ stock exchange, 2431 companies rose in price, 1384 fell, and 259 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 4.74% to 23.87. Gold futures for December delivery added 0.43%, or 7.45, to $1.00 a troy ounce. In other commodities, WTI crude for October delivery rose 1.36%, or 1.18, to $87.97 a barrel. Brent oil futures for November delivery rose 1.44%, or 1.34, to $94.18 a barrel. Meanwhile, on the Forex market, EUR/USD rose 0.81% to hit 1.01, while USD/JPY edged up 0.21% to hit 142.82. Futures on the USD index fell 0.60% to 108.08.       Relevance up to 05:00 2022-09-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292447
Reduction In Demand For Power In UK, Bank of Japan Plans To Maintain Current Policy

Reduction In Demand For Power In UK, Bank of Japan Plans To Maintain Current Policy

Saxo Bank Saxo Bank 13.09.2022 09:26
Summary:  Equity sentiment remained upbeat and the US dollar weakened further despite a surge higher in US Treasury yields. Globally sustained inflation pressures, such as those in Japan’s producer prices and New Zealand’s food prices, continues to raise concerns. US inflation print for August takes all the attention today with impact likely to reverberate through markets but unlikely to change the Fed’s upcoming rate hike at the September meeting. Precious metals tested key resistance levels and crude oil prices made a recovery as well. The lack of consensus on EU energy proposals may spark some concerns. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) extend their bear market bounce U.S. equities extended the bear market bounce for the fourth day amid a relatively uneventful and light volume day. The S&P 500 rose 1.1%, Nasdaq 100 up 1.2%. It comes despite bond yields rising, with the 30-year yield hitting a new high of 3.53%. Meanwhile the volatility index, the VIX rose for the first time in four days to 23.9, suggesting uncertainty could be brewing. Noteworthy moves in US stocks   Apple (AAPL:xnas) contributed to the days move, accounting for more than 60 points of the 151 points in Nasdaq 100, after the stock surged 3.9% on strong pre-order data of the new iPhone 14. A larger number of call options were traded on Apple shares on Monday. Twitter (TWTR:xnys) lost 1.7% after it sent a letter to Elon Musk and said the company intends to enforce Musk’s agreement to buy the company. Oracle (ORCL:xnys) reported sales growth of 18% to $11.4 billion, with higher contributions from cloud computing and the newly acquired Cerner, a health records provider. Adjusted EPS came in at $1.03, below the analyst consensus of $1.06 as per the Bloomberg survey. Oracle shares gained 1.3% in after-hours trading. Gilead Sciences (GILD:xnas) surged 4.2% following the settlement of an HIV drug intellectual property dispute. Bristol-Myers Squibb (BMY:xnys) gained 3.2% as regulators approved the company’s psoriasis drug.  US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The treasury yield curve bear steepened on Monday, with the 30-year yield finishing the day at 3.51%, a new high just a little above the previous high print in June. The long-end, yields of the 10-years through 30-years jumped 5 to 6 bps after the poor 3-year notes and 10-year notes auctions, in particular the latter. The 10-year auction stopped at a yield of 3.33%, which was 2.7 bps higher than the notes were trading at 1:00 pm New York time when the results were announced. The 10-year notes weakened to finish the day at 3.36%. In addition to the USD41 billion 3-year and USD32 billion 10-year auctions, eight corporate new issues with a total size of about USD12 billion came to the market yesterday. The decline in the inflation expectations print in the New York Fed’s survey of consumer expectations did not move the treasury markets which had the day’s focus on supply. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong and China markets were closed on Monday for a public holiday.  Overnight in U.S. trading, the Nasdaq Golden Dragon China Index bounced by 2.8%.  Chinese EV maker, NIO (NIO:xnys) soared 13.7% following Deutsche Bank and BoA Merrill Lynch analysts reiterating “buy” rating as well as reiterating and raising price targets respectively.  EURUSD recovery extended, but risks ahead EURUSD tested highs of 1.02 on Monday amid some optimism on Ukraine’s military advances and Bundesbank President Joachim Nagel signaling support for further interest-rate hikes in Europe. Gains however cooled later with ECB's Scicluna suggesting the central bank will continue with rate hikes but they are unlikely to be as large as the 75bps hike seen last week. Meanwhile, EUR/GBP printed a fresh YTD high of 0.8722 before unwinding the gains later. Pressure could build on EUR as the EU energy proposals will likely face some opposition, and US CPI data today will also be on watch. Russia may also increase the energy pressure on Europe if Ukraine’s advances stick. Crude oil prices (CLU2 & LCOV2) Crude oil prices saw some recovery on Monday amid a softer USD as well as weaker US inflation expectations from the NY Fed offset some of the weaker dollar concerns. Iran nuclear deal also seems to be making little progress, delaying any possible relief on the supply side. WTI futures rose to $88/barrel while the Brent futures were up at $94/barrel. US CPI data due later today is key to further gauge the path of Fed’s rate hikes from here, and the EU energy proposals will also be a key catalyst. Gold (XAUUSD) and Silver (XAGUSD) Gold rose on Monday as the dollar extended its retreat from a record high ahead of US inflation data due later today, which could potentially slow down the pace of Fed’s rate hikes if the headline print is softer than expected. Gold tested $1734, the 21-day SMA and 38.2% retracement of the August slump, but was rejected and back below $1730 in early Asian trading. Silver also rallied sharply to touch the $20-mark supported by a weaker dollar, higher gold prices and signs of tightness supporting the copper market. Last Tuesday speculators held the largest short position in three years and the continued rally is now forcing broad short covering.   What to consider? US CPI print will point to higher and stickier price pressures With the labor market remaining strong in the U.S. over the last few months, the focus has remained on the inflation data to predict the path of the Fed’s rate hikes. Clearly, all of the Fed’s members have had a unified hawkish stance since the Jackson Hole conference, and many have clearly hinted at a 75bps rate hike for September. Tuesday’s US CPI report is the one to watch, as it can move the market pricing of the Fed’s rate path and is the last key data point scheduled to release ahead of the September 21 Fed meeting. After some softening in July, it can be expected that the headline print may ease further in August as well given the decline in gasoline prices. Still, the inflation print is likely to stay elevated due to the stickier shelter and services costs, as well as still-high energy and food prices. Consensus estimates point to a mild decline of 0.1% MoM while the core remains strong at 0.3% MoM. EU proposes mandatory cuts to power use and profit levies It is expected that the EU draft energy plan will include mandatory power demand cut, an “exception and temporary” levy on oil, gas, coal and refining companies, as well as revenue caps for non-gas fuelled power generators. There is likely to be opposition from some of the member states, as the plan is detailed out tomorrow. Here is another sign inflation is not peaking; New Zealand food inflation hits a 13-year high New Zealand food prices rose 8.3% over the year to August 2022, which is the biggest annual increase since July 2009, according to data from Statistics New Zealand. The surge was mainly driven by a 8.7% increase in grocery food prices compared to a year ago, after fruit and vegetable prices rose 15%. Prices for staples like, eggs, yogurt, and cheddar cheese saw the largest moves in grocery prices. Companies to look at that sell food and dairy products to supermarkets include Costa Group (CGC), as well as A2 Milk (A2M) and Bega Cheese (BGA) and Synlait Milk (SM1). The New Zealand dollar rose to a two-week high against the USD, on expectation the Reserve Bank of New Zealand (RBNZ) will need to keep hiking rates. Japan producer prices remain above expectations Japan’s August PPI was up 9.0% y/y (vs. 8.9% y/y expected) while last month’s was also revised higher to 9.0% y/y from 8.6% y/y previously. The m/m print was slightly softer at 0.2% vs. 0.4% expected, but continued to show rising cost pressures amid the surge in commodity prices and a weaker yen. This suggests more CPI pain is in the pipeline, and the resolve of Bank of Japan to maintain accommodative policy will continue to be tested. New York Fed 1-year consumer inflation expectations at 10-month lows The latest NY Fed consumer inflation expectation gauges declined sharply, suggesting easing price pressures. Expectations for US inflation three-years ahead fell to two-year lows to come in at 2.8% in August, while the one-year ahead gauge was at 5.7%, a 10-month low. Meanwhile, inflation expectations on a five-year horizon fell to 2% from 2.3% previously, suggesting that inflation expectations remain anchored. Gloomy economic outlook for the United Kingdom According to the Office of National Statistics, UK GDP grew only 0.2% month-over-month in July. This is less than expected (0.4 % month-over-month). The weakness is mostly centered on the industry and the construction sector. This is worrying. There is no big bank holiday effect. However, there is anecdotal evidence of a reduction in demand for power because of cost, but it was also a hot month. In addition, the UK July industrial production fell 0.3% month-over-month versus expected +0.3%. Expect negative print in the eurozone for the same period too. California’s electricity infrastructure is under severe tension According to data released over the weekend by California Independent System Operator, demand on California’s power grid hit an all-time high on 6 September above 50,000 MW. The last two times it was close to this threshold was in 2007 and in 2017. The situation is getting worse and worse. Oracle reported sales in line with expectations but missed EPS estimates Oracle (ORCL:xnys) reported sales growth of 18% to $11.4 billion, in line with expectations. The sales growth was largely attributable to contributions from cloud computing and the newly acquired Cerner, a health records provider. Adjusted income came in at USD1.68 billion, a 33% drop from last year quarter and missing analyst estimates.  Adjusted EPS was $1.03, below the analyst consensus of $1.06 as per the Bloomberg survey. The earnings miss was partly due to FX losses which were results of a stronger dollar. Banking job cuts? Goldman Sachs is getting ready for jobs cuts. Who’s next? Goldman to report a 40% drop in earnings, which will foreshadow job cuts. However, there could be a lot of stake; in July Goldman said it planned to slow hiring and reinstate performance reviews. There is a huge question looming about how banks will get work with global deal volumes having dropped by about $1 trillion from a year ago. Investment banks are reliant on equity capital markets and IPOs and our sense is that more job cuts could be coming with inflation set to continue to rise, and push up the yield curve, and official interest rates into next year. For investors the takeaway here is that while markets remain uncertainty and rates are rising, investment banks will likely continue to face pressure. Banking ETFs, such as Vanguard Financials ETF (VFH) and Financial Select Sector SPDR ETF (XLF) are both down about 13% from their October 2021 peaks. Although they are both rallying amid the bear market bounce lately, we think the sector is likely to pair back again once stronger US data comes out and Fed suggests more rate hikes are coming.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-13-sept-2022-13092022
Asia morning bites - 16.05.2023

Nintendo And Sales Success, Natural Gas Prices In Europe Trade At Their Lowest

Saxo Bank Saxo Bank 13.09.2022 09:35
Summary:  The equity market rally extended further yesterday, in part on hopes that Ukrainian battleground successes bring the chance of the war ending sooner rather than later and as natural gas prices in Europe trade at their lowest in more than a month. Today’s August US CPI release will be the critical event risk for whether the improvement in sentiment can extend. A hot core CPI number could yet spoil the party, while another soft number like July’s could boost the “peak Fed” narrative for a while and see the rally extend if treasury yields also drop in response.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities extended their gains yesterday with S&P 500 futures rallying another 1.5% closing at 4,130. This morning the index futures are continuing higher as the market is clearly positioning itself for a positive US August inflation figure later today which could see S&P 500 futures extend to 4,200. It is worth keeping in mind that the medium-term outlook has not changed much on inflation and a significant slowdown in the US releasing its oil reserves could quickly add renewed pressure on energy prices. But the key event to watch today is the US August CPI report out at 12:30 GMT. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong, Shanghai, and Shenzhen returned from a long weekend and traded moderately higher, Hang Seng Index +0.4%, CSI 300 +0.7%. HSBC (00005:xhkg) climbed 1.8% after its CFO said the bank was considering resuming share buybacks in the second half of next year and raising staff pay in 2023. Alibaba (09988:xhkg) gained 2.4%. NIO (09866:xhkg) jumped 17.2% following analysts reiterating “buy” on the EV maker.  Chinese biotech stocks traded in Hong Kong fell after US President Biden signed an executive order to develop a strategy to “mitigate risks posed by foreign adversary involvement in the biomanufacturing supply chain”, Wuxi Biologics -18.4%, Wuxi AppTec (02359:xhkg) – 14.4%, Genscript Biotech (01548:xhkg) -8.4%.  USD status, please European currencies surged yesterday on hopes that Ukrainian battlefield successes will compound and bring peace sooner rather than later. EURUSD rose up through key local resistance at 1.0100, but the move didn’t well, with plenty of backfilling. Elsewhere, the USD is in technical limbo in pairs like USDCAD (the 1.3000 area refusing to completely let go) and AUDUSD (a strong sense that the choppy bearish trend is ending would be a solid surge-and-hold above 0.7000.) Today’s US CPI release could give us a firmer sense of USD direction, with weaker inflation across the board relative to expectations and an easing back lower of treasury yields likely required to take the USD firmly lower. JPY crosses back higher as yields rise Expect JPY crosses to the be the most sensitive to any sharp move in US treasury yields off the back of the US August CPI data today. After surging to new local highs yesterday, the JPY bounced back a bit. The focus in USDJPY is on the cycle top near 145.00, a break of which likely sets the clock ticking for actual market intervention from Japan’s ministry of finance. Gold (XAUUSD) and Silver (XAGUSD) Gold rose on Monday as the dollar extended its retreat from a record high ahead of US inflation data due later today, which could potentially slow down the pace of Fed’s rate hikes if the headline print is softer than expected. Gold tested $1734, the 21-day SMA and 38.2% retracement of the August slump, and after getting rejected it retraced to $1720 during Asian trading. Silver meanwhile jumped 5% before running into profit taking around $20 with the added support from signs of a tightening copper market and short covering from speculators who in the week to September 6 raised their short bets to a three-year high. Focus on US CPI and its impact on the dollar and future rate hike expectations. Crude oil (CLV2 & LCOX2) Crude oil continues to trade above levels that otherwise could signal additional weakness amid worries about demand from China due to harsh anti-virus restrictions and the world in general as central banks attempt to dampen inflation by lowering economic activity through aggressive rate hikes. Instead, the oil market, just like most other commodities, has received support from a weaker dollar and fading prospect of an Iran nuclear deal anytime soon. However, the potential for a fresh and strong upside push in crude oil has faded as the world is going through a period of lower growth. Focus being the collapse of Russian defenses in Ukraine and the response from Moscow, the impact of a potential price cap on Russian oil, and monthly oil market reports from OPEC today and IEA tomorrow. US Treasuries (TLT, IEF) The 10-year US Treasury benchmark traded steady near the highs for the recent cycle above 3.30% after an auction of 10-year T-notes yesterday saw demand near the lower end of the range of recent months. A 3-year treasury auction yesterday saw better demand metrics. Treasury traders are watching today’s important US CPI release for clues on whether yields will continue to rise toward the cycle top at 3.50% or ease back again. A 30-year T-bond auction is up after the CPI release today. What is going on? Gloomy economic outlook for the United Kingdom According to the Office of National Statistics, UK GDP grew only 0.2 % month-over-month in July. This is less than expected (0.4 % month-over-month). The weakness is mostly centered on the industry and the construction sector. This is worrying. There is no big bank holiday effect. However, there is anecdotal evidence of a reduction in demand for power because of cost, but it was also a hot month. In addition, the UK July industrial production fell 0.3 % month-over-month versus expected +0.3 %. Expect negative print in the eurozone for the same period too. Ocado sees big miss in Q3 on revenue The UK online grocery retailer reports revenue of £532mn vs est. £557mn as the cost-of-living crisis bites the UK consumer. Ocado sees the value of the average basket down by 6% and energy costs are putting pressure on the operating margin. Nintendo shares surge 5% on game launch record The Japanese game developer announced its biggest Switch console game launch success Splatoon 3 with 3.45mn sold units in Japan in its opening weekend. The success is building on the previous years of strong sales figures for its Switch console and games sold on the console. Shares are up 745% over the past 10 years excluding dividends. Oracle hit expectations in Q1 results The software maker was solid in its performance in its FY23 Q1 results (ending 31 August) delivering $11.4bn in revenue up 18% y/y. The 15-17% revenue growth guidance for the current quarter is also in line with estimates and Oracle indicated that the acquisition of Cerner was going according to plan providing the company with more strengths in its cloud offering. California’s electricity infrastructure is under severe tension According to data released over the weekend by California Independent System Operator, demand on California’s power grid hit an all-time high on 6 September above 50,000 MW. The last two times it was close to this threshold was in 2007 and in 2017. The situation is getting worse and worse. EU proposes mandatory cuts to power use and profit levies It is expected that the EU draft energy plan will include mandatory power demand cut, an “exception and temporary” levy on oil, gas, coal and refining companies, as well as revenue caps for non-gas fuelled power generators. There is likely to be opposition from some of the member states, as the plan is detailed out tomorrow. A rare “triple-dip” La Ninã spanning three northern hemisphere winters is coming Changing temperatures around the world have led to several climate emergencies so far in 2022, from historic flooding, above average temperatures and drought. Parts of the world are expected to experience severe weather for the rest of the year and into 2023, as part of a rare "triple dip La Niña" event according to the World Meteorological Organization (WMO). In Australia it may lead to heavy rain and flooding in the coming months while South America and equatorial Africa could see a repeat of the droughts experienced during the past couple of years. A development that could strengthen concerns about a global food crisis with inventories of several key food items falling to a multi-year lows. Japan producer prices remain above expectations Japan’s August PPI was up 9.0% y/y (vs. 8.9% y/y expected) while last month’s figure was also revised higher to 9.0% y/y from 8.6% y/y previously. The m/m print was slightly softer than expected at 0.2% vs. 0.4% but continued to show rising cost pressures amid the surge in commodity prices and a weaker yen. This suggests more CPI pain is in the pipeline, and the resolve of Bank of Japan to maintain accommodative policy will continue to be tested. New York Fed 1-year consumer inflation expectations at 10-month lows The latest NY Fed consumer inflation expectation gauges declined sharply, suggesting easing price pressures. Expectations for US inflation over three years annualised fell to a two-year low at 2.8% in August, while the one-year ahead gauge was at 5.7%, a 10-month low. Meanwhile, inflation expectations on the five-year horizon fell to 2% annualised from 2.3% previously, suggesting that inflation expectations remain anchored. What are we watching next? U.S. August CPI is out today This is a first estimate and the latest release before the Federal Reserve’s September 20-21 meeting. In July, CPI rose 8.5 % on a yearly basis (much slower than the 9.1 % increase in June). The economist consensus expects inflation to continue decelerating at 8.1 % in August. But core CPI will likely be up. This shows that inflation is broad-based and also expanding into the services sector, for instance. At Saxo Bank, we believe the peak in inflation has passed in the United States in June. But this should not influence the path of monetary policy tightening in the short-term. Shanghai Cooperation Organization meeting on 15-16 September This the first time since 2019 that Asian leaders are meeting in person in a bigger strategic forum. Xi Jinping and Vladimir Putin are officially joining the summit and India’s Modi is expected to join as well. Given the recent military success in Ukraine, the pressures are mounting on Russia and Putin Earnings to watch The next important earnings release to watch is Inditex, one of Europe’s largest fashion retailers, which is expected to report revenue growth of 12% y/y in FY23 Q2 (ending 31 July) but with the operating margin expected to show downside pressure. Wednesday: Inditex Thursday: Polestar Automotive, Adobe Economic calendar highlights for today (times GMT) 0800 – Norway Aug. Region Survey 0900 – Germany Sep. ZEW Survey 1000 – US Aug. NFIB Small Business Optimism 1230 – US Aug. CPI 1700 – US 30-year T-bond Auction 2030 – API's Weekly Report on US Oil and Fuel Inventories During the day: OPEC’s Monthly Oil Market Report Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-13-2022-13092022
EU Gloomy Picture Pointing To A Gradual Approach To Recession

Energy Crisis Cause Recession In The European Union And Great Britain

InstaForex Analysis InstaForex Analysis 13.09.2022 13:21
Goldman Sachs say a difficult macroeconomic environment in Europe may continue to put pressure on assets, even despite a positive risk/reward ratio, financial support and measures to reduce energy demand. They remarked that they remain wary due to the energy crisis, monetary tightening and the political backdrop around Italy's elections, and only signs of an "imminent market downturn" could change their view. "Our economists expect the energy crisis to push both Europe and the UK into recession, albeit relatively mild, and forecast an acceleration in policy tightening by both the ECB and the Bank of England," Goldman Sachs strategists wrote. The technical picture also points to at least another wave of decline in European indices, which should lead to an update of the yearly lows. European equities have lagged the S&P 500 this year in dollar terms as euro weakened more than 10%. Meanwhile, the region's credit markets continue to be much more stressed than stocks. On the bright side, Europe's 12-month earnings projections are yet to see any major downsides. Although the region's income-based estimates have fallen this year, they still remain above levels reached during the 2008 financial crisis. Relevance up to 11:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/321558
The Japanese Yen Retreats as USD/JPY Gains Momentum

Apple Stock Price Skyrockets! iPhone 14 Is Said To Be The Rocket Propeller!

FXStreet News FXStreet News 13.09.2022 16:08
Apple stock soars as new iPhone 14 boosts demand for the stock. iPhone 14 sales are reportedly strong despite some critics. Apple stock now soaring to near all-time highs. Apple (AAPL) stock began the week strongly when it dragged the main indices higher as the tech and overall market leader powered ahead by nearly 4%. By the close Apple reached $163.43, having briefly traded above $164 earlier on Tuesday. Apple stock news The stock was pushed higher on the back of a positive note from noted Apple analyst Dan Ives at Wedbush. We should also note he is largely bullish on Apple, which has been the consistently correct call. In a note, to the client, Ives said demand is solid and ahead of the iPhone 13. Also, customers appear to be going for the more expensive models – the iPhone Pro and Max models. Higher prices mean higher margins for Apple. "We expect this heavy Pro/Pro Max mix to continue with China also a major sway factor as more consumers in this key region head to the Pro model," Ives added. This will come as welcome news as some people have been openly stating that the new iPhone 14 does not have enough features to differentiate it from the iPhone 13 and so sway customers to switch. Yahoo Entertainment reported on a cheeky meme from Steve Jobs's daughter Eve. Apple stock forecast Regular readers will notice from the lack of a disclaimer at the bottom of this page that I have cut my short position. I did this last week thankfully before the rally got going. My take is more a macro view than stock specific. I cannot see the equity market making new lows now, and this rally looks set up to continue. CPI should decline when it is released today. Oil and commodity prices are much lower. That will further fuel the Fed pivot and soft landing theory, and so equities should keep rallying. It will take a few months of CPI releases before people realize this is not going to drop enough for the Fed to pivot. Apple has performed very nicely from a technical perspective of late. The strong summer rally saw a near-perfect 50% Fibonacci retracement before bouncing above the 50-day and now 200-day moving averages. The next target is now $171.40 to fill the gap. The bullish pivot is the 38.2% Fibonacci retracement and 50-day moving average at $158.32. Apple stock daily
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Stock Market: Who Ended The Day With A Profit And Who With A Loss

InstaForex Analysis InstaForex Analysis 14.09.2022 08:36
  At the close on the New York Stock Exchange, the Dow Jones fell 3.94% to a one-month low, the S&P 500 fell 4.32%, and the NASDAQ Composite fell 5.16%. Chevron Corp was the top gainer among the components of the Dow Jones index today, losing 3.09 points or 1.90% to close at 159.41. Quotes of The Travelers Companies Inc fell by 3.11 points (1.88%) to end trading at 162.22. Walmart Inc lost 2.85 points or 2.06% to close at 135.22. The losers were Boeing Co shares, which lost 11.41 points or 7.19% to end the session at 147.31. Intel Corporation was up 2.27 points (7.19%) to close at 29.29, while Home Depot Inc was down 19.61 points (6.59%) to close at 277. 93. Leading gainers among the S&P 500 index components in today's trading were Corteva Inc, which rose 0.87% to hit 62.65, Twitter Inc, which gained 0.70% to close at 41.70, and shares CF Industries Holdings Inc, which rose 0.67% to end the session at 100.15. The biggest losers were Eastman Chemical Company, which shed 11.34% to close at 84.11. Shares of NVIDIA Corporation lost 9.47% and ended the session at 131.31. Quotes of Meta Platforms Inc decreased in price by 9.37% to 153.13. Leading gainers among the components of the NASDAQ Composite in today's trading were Akero Therapeutics Inc, which rose 136.76% to hit 29.05, Aditx Therapeutics Inc, which gained 113.75% to close at 0.37, and also shares of Comera Life Sciences Holdings Inc, which rose 100.00% to end the session at 3.86. The biggest losers were Cardiff Oncology Inc, which shed 41.12% to close at 1.89. Shares of Rent the Runway Inc shed 38.74% to end the session at 3.02. Quotes of InMed Pharmaceuticals Inc decreased in price by 35.73% to 12.07. On the New York Stock Exchange, the number of securities that fell in price (2827) exceeded the number of those that closed in positive territory (354), while quotes of 82 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,015 stocks fell, 811 rose, and 188 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 14.24% to 27.27, hitting a new monthly high. Gold futures for December delivery lost 1.64%, or 28.50, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 0.26%, or 0.23, to $87.55 a barrel. Brent oil futures for November delivery fell 0.67%, or 0.63, to $93.37 a barrel. Meanwhile, on the Forex market, EUR/USD fell 1.44% to hit 1.00, while USD/JPY edged up 1.23% to hit 144.59. Futures on the USD index rose 1.37% to 109.58. Relevance up to 05:00 2022-09-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292655
Yen (JPY) Takes A Stab At Resilience, The Grains Sector Has Survived Well

Yen (JPY) Takes A Stab At Resilience, The Grains Sector Has Survived Well

Saxo Bank Saxo Bank 14.09.2022 08:55
Summary:  Equity markets were slammed for their worst losses in more than two years yesterday on a shocking August US CPI print, which showed core inflation rising at twice the anticipated pace for the month. This was a rude shock after a recent strong rally in equities, and US treasury yields jumped, and the US dollar soared as the market rushed to price in the risk that the Fed might hike 100 basis points next week.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities erased most of the gains since 6 September as the market’s positioning ahead of the US August CPI report was completely wrong. Not only did the headline inflation figures not fall m/m, but the core figure is up 0.6% m/m and has been fluctuating around 0.5% m/m for a year suggesting that inflation is getting entrenched at a level suggesting 5-6% annualised inflation in the US. The Fed Funds futures curve immediately shifted downwards lifting peak Fed funds rate at close to 4.5% from around 4% the day before the inflation report. S&P 500 futures tumbled 5.4% from its intraday peak and Nasdaq 100 futures plunged 6.7% from its intraday high. The 3,900 and 12,000 levels are the key levels to watch on the downside in S&P 500 futures and Nasdaq 100 futures respectively. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Shares traded in Hong Kong, Shanghai, and Shenzhen declined on the back of the worst day in more than two years last night in US equities, with Hang Seng Index at -2.6% and CSI 300 -1.2%. Among the top losers, Techtronic Industries (00669:xhkg) plunged 10.6%, Hua Hong Semiconductor (01347:xhkg), Bilibili (09626:xhkg) and Baidu (09888:xhkg) dropped more than 5%, JD.COM (09618:xhkg) and Alibaba (09988:xhkg) slid about 4%. Tencent (000700:xhkg), -1.4%, had an educational game being approved under a company controlled by Tencent’s executives including co-founder Pony Ma. This is the first time Tencent got a game approval this year though being an educational game, it will unlikely be a significant money-making title. CNOOC (00883:xhkg) and COSCO Shipping Energy outperformed, rising 2%-3%. A typhoon is approaching Shanghai and Ningbo causing major container ports in Shanghai and Ningbo to suspend operations. USD rips back higher – suddenly threatening cycle top after CPI data After the shocking August CPI number from the US yesterday, the US dollar soared higher, taking EURUSD all the way back below parity after nearly trading 1.0200 earlier this week. Elsewhere, the USD was universally higher, with a pair like AUDUSD slamming all the way to the low 0.6700's and therefore not far from the cycle low, while NZDUSD actually posted a cycle low, and GBPUSD trading south of 1.1500 after trading north of 1.1700. Moves by the Bank of Japan and verbal intervention from the Japanese Ministry of Finance helped temper the USD move this morning (more below). Now the focus shifts to next week's FOMC meeting, where the market is now pricing the rising risk that the FOMC could hike 100 basis points. JPY takes a stab at resilience on the anticipation of intervention The Bank of Japan carried out a “rate check” in the FX market, which is widely seen as a precursor for actual market intervention. This tamed the USDJPY move higher from sub-142.00 levels to nearly 145, as the gains were pared back to 144.00, with the JPY also firmer broadly. Finance Minister Suzuki said nothing could be ruled out in response to the weakening JPY and that if the current trend persisted, stepping into markets is an option. But as past experience has shown, intervention often only creates temporary volatility if the underlying issue is not addressed - in this case, the Bank of Japan's insistence on maintaining very low rates and controlling yields out to 10 years. If yields continue to rise globally, Japanese officialdom will have an enormous and likely unwinnable fight on its hands if the Bank of Japan fails to change its policy. Gold (XAUUSD), Silver (XAGUSD) and copper (COPPERUSDEC22) ... all tumbled following the stronger than expected US CPI print, thereby reversing some of the recent weak dollar-led gains. Prior to the release copper had been on a tear reaching $3.7/lb as the LME market continued to signal the tightest market conditions since November on increased demand from China. Gold trades near $1700 and close to the current floor around $1680 after the CPI print strengthened the view the FOMC will have to remain hawkish and continue to aggressively hike rates. However, the risk to economic growth while inflation remains stubbornly high may bring back worries about stagflation, a development that may lend support to investment metals. Continued focus on the dollar and the markets pricing of future inflation expectations. Crude oil (CLV2 & LCOX2) Crude oil traded higher on Tuesday before the hotter-than-expected US CPI print helped send most commodity prices, including oil, lower on fears aggressive rate hikes could curb demand. Earlier the market traded up after OPEC maintained their 2023 outlook for a 2.7 million barrel per day increase in global demand. The EIA delivered the same message last week and the IEA is likely to do the same today when their monthly oil market report is released. Developments that highlight the current discrepancy between the (lower) price action and what these major forecasters are seeing. A recovery later in the day was supported by the Biden admin saying it will consider starting refilling strategic reserves when WTI falls below $80. Ahead of today’s EIA stock report, the API reported a 6m bbl crude stock build, a 3.2m bbl drop in gasoline and 1.8m bbl build in distillates. US Treasuries (TLT, IEF) Treasury yields jumped yesterday on the shocking August US CPI data, with the yield curve flattening aggressively as the hot data point saw the market rushing to price in the risk of more aggressive moves to counter inflation at coming meetings. The 10-year yield was taken back toward the cycle top from mid-June at 3.50%. A further rise above this yield level will continue to drive the risk of weaker sentiment and USD strength. What is going on? US August CPI shocks with high core inflation reading The headline US CPI data came in slightly above expectations, with a year-on-year reading of 8.3% vs. 8.1% expected and a month-on-month reading of +0.1% vs. -0.1% expected, a real surprise given sharp drops of late in gasoline prices. But the real shock was the core Ex Food and Energy inflation reading of +0.6% month-on-month, twice what was expected. This triggered an enormous slide in risk sentiment as the market rushed to price the risk that the FOMC might hike as much as 100 basis points next week. As of this morning, about 85 basis points is priced for the meeting. The grains sector maintained a bid on Tuesday ... while most other commodities took a tumble after the US CPI print once again raised concerns about aggressive growth and demand killing rate hikes. With demand being relatively constant the grains sector held up well as the sector continued to focus on supply risks and dwindling inventories. The US Department of Agriculture this week slashed its estimates for soybean supplies from the US, the second-largest producer after Brazil where a lingering “triple-dip” La Nina repeat could bring dry conditions in the coming months. In addition, wheat exports have been cut because of the war in Ukraine, and there’s uncertainty over Ukraine’s grain export corridor after criticism from Putin. Inditex 1H revenue beats estimate The Spanish fashion retailer delivered first-half revenue of €14.9bn vs est. €14.6bn on top of delivering EBITDA margin of 27.1% vs est. 26.8%. Inditex reiterates guidance of online sales exceeding 30% of revenue by 2024. New lockdowns in China Two cities around Beijing announced lockdowns due to Covid risks. Shijiazhuang (over 2.3 million inhabitants) asked all residents of Yuhua district to work from home for a period of three days (expected to end on Friday morning). Sanhe (around 440,000 inhabitants) implemented a full lockdown of its entire population at least until Saturday morning. This underscores the supply chain risks during the winter period in the event China experiences a bigger Covid outbreak. UK August CPI comes in slightly above expectations at core UK inflation came in at 9.9% on the headline versus a slightly higher print expected, but the core inflation level rose to a new cycle high of 6.3%, just above the 6.2% expected. Price pressures are likely to remain elevated this month as well, despite some softening in fuel prices, as food and services costs continue to rise. Further gains in inflation can be expected in October, but the capping of household energy bills may help to soothe inflationary pressures thereafter. Cheniere was the one shining light on Wall Street overnight Cheniere, the US’ biggest LNG exporter, saw its shares rise 3.1% yesterday while markets saw a sea of red when US inflation data came out higher than expected. The highlights the fact that energy companies can and have been able to outperform the market. The largest US exporter of liquefied natural gas boosted its full-year 2022 profit forecast beyond analysts’ expectations as shipments are already set to depart their dock sooner than anticipated. What are we watching next? Shanghai Cooperation Organization meeting on 15-16 September This the first time since 2019 that Asian leaders are meeting in person in a bigger strategic forum. Xi Jinping and Vladimir Putin are officially joining the summit and India’s Modi is expected to join as well. Given the recent military success in Ukraine, the pressures are mounting on Russia and Putin Ethereum merger will draw attention The Ethereum blockchain’s much-anticipated software upgrade, the so-called Merge, is expected to take place tomorrow morning, according to its core developers. The new system, known as "proof-of-stake", will slash the Ethereum blockchain's energy consumption by 99.9%, developers say. Most blockchains, including Bitcoin's, devour large amounts of energy, sparking criticism from some investors and environmentalists. The merge could make Ethereum more favourable to pension funds and other institutional investors that are under the scanner for environmental concerns, but there is also come skepticism on how scalable Ethereum could become and if it becomes more susceptible to attacks by hackers. France is expected to enter a recession next year Barclays is the first major international bank to forecast a recession in France next year (2023 GDP growth at minus 0.7 %). This is highly likely, in our view. But it is certainly too early to assess the depth of the recession at this stage. It will depend on the evolution of the energy crisis and the risk of energy rationing. Forecasting is always a complicated task. This is even more complicated now due to the elevated level of uncertainty regarding the short-term economic path. Expect other European countries to enter a recession next year (the United Kingdom, Germany, Hungary etc.). Earnings to watch Inditex has already reported before the European equity market opens (read earnings review above), so the next earnings release in focus is Adobe tomorrow. Analysts expect revenue growth of 12.6% y/y with operating margin jumping back again following cost reduction exercises. The key risks for Adobe are the strong USD, falling technology spending, and lower advertising growth lowering demand for content creation. Today: Inditex Thursday: Polestar Automotive, Adobe Economic calendar highlights for today (times GMT) 0800 – IEA's monthly Oil Market Report 0900 - Eurozone Jul. Industrial Production 1230 - US Aug. PPI 1230 - Canada Jul. Manufacturing Sales 1430 - US DoE Weekly Crude Oil and Product Inventories 1430 - ECB's Villeroy to speak 2245 - New Zealand Q2 GDP 2350 - Japan Aug. Trade Balance 0120 - China Rate Announcement 0130 - Australia Aug. Employment Data  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher     Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-14-2022-14092022
The Forex Market Is Under Strong Pressure From Geopolitical Events And Statistics

Podcast: Comments To US CPI Report, Discuss About Next The FOMC Meeting, Look At Crude Oil, Metals And Stocks

Saxo Bank Saxo Bank 14.09.2022 12:34
Summary:  Today we discuss the August US CPI shocker yesterday, as the core inflation reading on the month rose at twice the expected pace, taking even headline inflation into positive territory month-on-month despite the huge drop in energy prices. The market tanked and the USD soared as investors are forced to consider whether the FOMC meeting next week will bring a 100 basis point hike. Crude oil, metals, stocks to watch and a preview of Adobe and more also on today's pod, which features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source: https://www.home.saxo/content/articles/podcast/podcast-sep-14-2022-14092022
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

How Did The US Inflation Print Affect Tech Stocks? Check Apple Stock, Amazon And Other Companies' Reaction

FXStreet News FXStreet News 14.09.2022 16:41
META stock falls over 9% on Tuesday in a market meltdown. Nasdaq is down 5%, and S&P 500 is down 4% by comparison. Meta Platforms underperforms markedly versus main indices. Meta Platforms (META) stock fell sharply on Tuesday as the market digested the US CPI print. A higher than expected number led to a sharp sell-off in equities with all the main indices closing sharply lower. However, tech took the biggest brunt of the selling with Apple and Alphabet down 6%, amazon down 7%, and Meta Platforms down a whopping 9%. Meta Platforms stock news Why the big divergence from big tech? Usually, these are seen as haven plays. All are supposed to be cash generative. The problem is big tech is generally seen as having the most to lose from higher interest rates. This may be true for some but not all. The higher the growth rate of a stock, then the bigger effect a change in interest rates has on its performance. That is why FAANG was such an outsized performer during the Fed juiced says of monetary stimulus post-pandemic. Higher growth rates get discounted by the prevailing rate of interest. If those interest rates are forecast to rise, then the present value calculation gets reduced. Adding to tech pressure and especially for the aforementioned companies is the strength of the US dollar. These are global companies, many of whom generate more than half of their revenues in overseas currencies. When that overseas currency depreciates (think euro, yen, GBP, etc.), then all of a sudden those foreign revenues are worth less in dollar terms. This affects revenues and leads to the hilarious lines we see in corporate earnings reports – "in constant currency". When are currencies ever constant? Adding to the sentiment of Meta stock this morning is news that South Korea has fined it and Alphabet (GOOGL) over violation of privacy laws, according to Reuters. Meta Platforms stock forecast META is just on massive support at around $154. Breaking this, the next level is the pandemic low at $137. The double top at $184 keeps a lid on bulls, and only a break there begins to look interesting for the bearish narrative to end. META stock chart, daily
At The Close On The New York Stock Exchange Indices Closed Mixed

On The New York Stock Exchange, The Securities Rose Yesterday

InstaForex Analysis InstaForex Analysis 15.09.2022 08:46
At the close in the New York Stock Exchange, the Dow Jones rose 0.10%, the S&P 500 rose 0.34%, and the NASDAQ Composite rose 0.74%. Chevron Corp was the top gainer among the components of the Dow Jones index today, up 3.86 points or 2.42% to close at 163.27. Quotes Johnson & Johnson rose by 3.33 points (2.06%), ending trading at 164.66. Merck & Company Inc rose 1.36 points or 1.59% to close at 86.95. The losers were shares of Honeywell International Inc, which lost 5.01 points or 2.71% to end the session at 179.97. 3M Company was up 2.44% or 2.94 points to close at 117.53, while Dow Inc was down 1.67% or 0.80 points to close at 47.07. . Leading gainers among the S&P 500 components in today's trading were Coterra Energy Inc, which rose 7.22% to hit 32.23, APA Corporation, which gained 6.72% to close at 41.74, and shares of Moderna Inc, which rose 6.17% to end the session at 139.40. The biggest losers were Nucor Corp, which shed 11.31% to close at 120.71. Shares of Centene Corp lost 6.79% to end the session at 83.92. Quotes of DISH Network Corporation decreased in price by 6.27% to 17.18. Leading gainers among the components of the NASDAQ Composite in today's trading were Avenue Therapeutics Inc, which rose 53.87% to hit 0.36, Aileron Therapeutics Inc, which gained 38.49% to close at 0.27, and also shares of Dawson Geophysical Company, which rose 41.44% to close the session at 1.57. The biggest losers were Neurobo Pharmaceuticals Inc, which shed 43.61% to close at 16.86. Shares of Vintage Wine Estates Inc shed 40.33% to end the session at 3.30. Quotes of Aditx Therapeutics Inc decreased in price by 38.22% to 11.43. On the New York Stock Exchange, the number of securities that rose in price (1,578) exceeded the number of those that closed in the red (1,506), while quotes of 124 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,956 stocks fell, 1,770 rose, and 254 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.07% to 26.16. Gold futures for December delivery lost 0.63%, or 10.90, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 1.68%, or 1.47, to $88.78 a barrel. Brent oil futures for November delivery rose 1.23%, or 1.15, to $94.32 a barrel. Meanwhile, in the forex market, the EUR/USD pair was unchanged 0.08% to 1.00, while USD/JPY fell 0.97% to hit 143.15. Futures on the USD index fell 0.15% to 109.36.   Relevance up to 05:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/292844
The Metaverse Will Offer Everyone Endless Possibilities

The Meta Platforms: The Underlying Impulsive Decline Will Remain Intact

InstaForex Analysis InstaForex Analysis 15.09.2022 09:22
We have been looking for a bottom near 157.66. However, it's clear that Meta Platforms continue to push lower toward the next support seen at 142.26. We are still looking for a low in the near term for a recovery towards 244.18 and maybe even closer to resistance near 275. However, as long as resistance at 171.39 is able to cap the upside, the underlying impulsive decline will stay intact and try to push Meta Platforms lower towards 142.26. A break above minor resistance at 171.39 will confirm that wave [A] has been completed and wave [B] is in motion.     Relevance up to 07:00 2022-09-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/292860
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

Yen's (JPY) Lack Of Conviction For Strength, Meeting Of President Xi And President Putin, Australia’s Employment Data

Saxo Bank Saxo Bank 15.09.2022 10:00
Summary:  Some respite in US equities last night, amid bottom hunting and a cooler US PPI report. UK CPI also eased from record highs, but there is nothing that could change the downtrend that remains in place globally. The USD remained steady despite threats of direct intervention by the Bank of Japan and downplaying of the 7-handle by Chinese authorities. Oil prices jumped on hopes of easing restrictions in parts of China. Focus today on Australia’s jobs report which could guide the path of rate hikes from here, but also key to watch will be the Xi-Putin meeting and how the geopolitical situation develops. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) clawed back from an intraday sell off on Wednesday US equity markets rebounded in late trade on Wednesday after an intraday sell off. The S&P 500 ended up 0.3%, Nasdaq 100 up 0.8%. Hedge funds did some buying in the technology space, but it wasn’t enough the significantly move the needle. The most gains were seen in the Oil and Gas sector with Energy stocks rising the most after the crude oil price rebounded 2%. The Consumer discretionary followed higher. The bearish tone remains in equities with the market toying with the idea that the Fed will raise rates by 100bps (1%). In fact there is a 25% chance the Fed will raise rates by 1% at their meeting next week. Regardless of how high they hike, 0.75% or 1%, the technical picture looks bearish as well. The S&P 500 may head back to test support at around 3,738 and June lows at 3,636. Noteworthy US market moves Moderna (MRNA:xnas) gained 6.2% after the company said it is open to selling Covid vaccines to China. Starbucks (SBUX:xnas) rose 5.5% after the company raised its sales and profit outlook, expecting 7%-9% p.a. comparable sales growth and 15-20% earnings growth over the next three years. Twilio (TWLO:xnys) jumped 10% after announcing a plan to cut 11% of its workforce. Shares of railroad operators dropped on probable labor strike, Union Pacific (UNP:xnys) -3.7%, CSX (CSX:xnas) -1%. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The flattening went on for a second day in a row as traders took to their hearts that the Fed would be hawkish for the rest of the year and the odds for cracking the economy down the road increased. While 2-year to 10-year yields climbed 2 to 4 basis points, the yield of the 30-year long bond continued to slide and finished the session 6bps lower at 3.45%.  Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Shares traded in Hong Kong, Shanghai, and Shenzhen declined on the back of the U.S. stocks’ worst day in more than two years, Hang Seng Index -2.5%, CSI 300 -1.1%. Industrials, semiconductors, and healthcare were among the top losers, Techtronic Industries (00669:xhkg) -10.0%, Hua Hong Semiconductor (01347:xhkg) -5.7%, Wuxi Biologics (02269:xhkg) -4.9%, BeiGene (06160:xhkg) -4.5%. Tech hardware stocks declined following a 31.2% YoY falls in China’s smartphone shipments in July, Sunny Optical (02382:xhkg) -4.2%, Xiaomi (01810:xhkg) -3.3%. China internet stocks traded weak, Hang Seng Tech Index (HSTECH.I) -2.8%, Bilibili (09626:xhkg) -5.2%, Baidu (09888:xhkg) -5.7%, JD.COM (09618:xhkg) -4.2%, Alibaba (09988:xhkg) -4.1%. Fosun (00656:xhkg) tumbled 6.9% on unconfirmed reports claiming that a couple of Chinese regulators had told investors to review their equity and credit exposures to Fosun.  Bank of Japan’s rate-checking: a precursor to direct intervention or just more of verbal intervention? Even as the USD stayed firm overnight, USDJPY retreated from near-145 levels to 143 amid fears of potential FX intervention by Japanese authorities. On Wednesday, the BOJ conducted a so-called rate check in the market, asking for an indicative price at which it could buy yen, a move widely seen as a precursor to intervention. Both the finance minister and the nation’s top currency official also warned that all options were on the table. Japan last intervened to buy the yen in 1998.The 145-level is becoming the tolerance limit for Japanese authorities, but real intervention lack so far and only volatility goes up as threats ramp up. Yen lacks conviction for strength due to fundamental weakness stemming from yield differential with the US. Crude oil (CLU2 & LCOV2) Crude oil prices gained momentum overnight and remained steady in early Asian hours amid reports of the White House looking at refilling its strategic reserves at around $80/barrel. EIA’s weekly inventory report was mixed, with a large build in crude oil and a fall in gasoline. WTI futures rose above $88/barrel while Brent was above $94. Demand side factors also saw a modest improvement with Chinese city of Chengdu looking at easing restrictions from today. However, a looming rail strike in the US is likely to cause some disruption in the commodity markets.   What to consider? US core PPI hotter-than-expected US August PPI relieved some of the pressures seen from the CPI report a day earlier with the headline still in negative territory at -0.1% m/m (exp. -0.1%; prev. -0.4%) and slightly softer on a y/y basis at 8.7% (exp. +8.8%; prev. +9.8%). Core measure however beat expectations at 0.4% m/m (exp. +0.3%; prev. +0.3%) and 7.3% y/y (exp. +7.1%; prev. +7.7%). Lower energy prices helped to cool the headline print, and this may mean somewhat softer CPI prints in the coming months, but still inflation remains uncomfortably higher than the Fed’s 2% target. UK CPI cools but no relief for BOE UK inflation eased slightly to come in at 9.9% y/y (prev. 10.1%, exp. 10.0%) and 0.5% m/m (prev. 0.6%, exp. 0.6%), but it isn’t enough to call for a peak in inflation yet. Prime Minister Liz Truss announced plans to freeze an increase in energy bills due to hit in October, a move economists say will reduce the severity of a further spike in prices this winter. Even with those measures, inflation will remain above the BOE’s 2% goal well into next year. President Xi and President Putin are expected to meet in person for first time since February On the sidelines of the Shanghai Cooperation Organization summit held in Uzbekistan today and tomorrow, President Xi and President Putin are expected to meet up for the first time after Russia’s invasion of Ukraine. Analysts are expecting the two leaders to discuss the sale of Russian oil and natural gas to China and the use of the rubble and the renminbi to settle bilateral trade, in addition to their positions regarding the respective core interest of each side, i.e. Ukraine and Taiwan.  Newswires suggest that the US is considering sanctions on China A Reuters story citing an anonymous source suggests that the U.S. is considering options for a sanctions package against China as part of its attempts to deter China from taking military actions against Taiwan. The story further says that the European Union is under pressure to follow suit.  China’s state-owned media downplayed the importance of the 7-handle in the Yuan State-owned China Securities Journal downplayed the importance of whether the renminbi breaks 7 the figure or not and says that there is no basis for the renminbi to depreciate in the long run. Australia’s jobs data out today will be watched closely by the RBA, when determining how much to rise rates by in October Today’s employment data is expected to show Australia’s unemployment rate remained at 50-year lows, at 3.4% in August. The RBA will also be watching to see how much employment changed in August. In July employment fell from its record high, with 41,000 jobs lost. As for today’s figures to watch; Bloomberg’s survey of economists expect 35,000 jobs to have been added last month. If more jobs are added than expected, you may see a selloff in growth sectors, such as technology, consumer discretionary and property as the RBA will have more room to hike rates. Inversely, employment falls and or unemployment rises, the RBA will have less room to hike and as such you may see an equity rally. Currently RBA interest rate futures expect rates to rise by 0.25% next month. For those watching currency markets, keep in mind the AUDUSD is being pressured to 2-year lows. However if data is stronger than expected, you may see a short lived-knee jerk rally the AUDUSD.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-15-sept-2022-15092022
Stocks to keep an eye on in the second half of 2023

Energy Prices Remain Very Volatile, Activities In The Markets

Swissquote Bank Swissquote Bank 15.09.2022 10:31
US equities eked out small gains yesterday as dip buyers timidly came in, but risks remain tilted to the downside with the disappointing inflation figures, and the risk of the largest rail strike in the US since 1992. Crude Oil Prices Released yesterday, the US producer price data didn’t enchant investors. The headline figure fell for the second consecutive month but the core PPI strengthened, hinting that most of the easing in producer inflation was due to cheaper energy prices – which however remain very volatile, and which, more importantly carries a decent upside risk. The barrel of American crude flirted with the $90 mark yesterday, without however being able to clear resistance at this level. Energy companies gained despite news that Europeans are looking to raise $140 billion euros from energy companies to help households and businesses survive through winter. The situation on the stock market The S&P500 recover a part of losses yesterday, as Nasdaq gained 0.84%. But the risks remain clearly tilted to the downside. The US dollar remains relatively strong near the 20-year highs, the EURUSD consolidates below parity as gold slipped back below $1700 per ounce. The USDJPY retreated on expectation that the Bank of Japan (BoJ) could intervene to stop the yen’s depreciation. Ethereum trades around $1600 as Merger Upgrade is now imminent! Watch the full episode to find out more! 0:00 Intro0:24 Dip buyers return to a risky market2:31 US crude flirts with $90pb3:41 US rail strike risk weighs on sentiment4:55 Energy stocks rally despite EU measures to cope with crisis7:07 Gold under pressure7:50 BoJ could intervene to strengthen the yen8:52 Ethereum Merges today! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #PPI #inflation #rail #strike #USD #EUR #JPY #BoJ #rate #check #Gold #XAU #crude #oil #BP #XOM #Chevron #Coterra #windfall #taxes #energy #crisis #Bitcoin #Ethereum #Merge #update #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
US 20-City house prices decreased by 1.3% month-on-month

Ethereum Is Waiting For Merge, Local Governments In China Are Supporting The Demand For Real Estate

Saxo Bank Saxo Bank 15.09.2022 10:14
Summary:  Yesterday’s session was a muted affair as the market picked up the pieces in the wake of Tuesday’s huge slide in the market after a hot US August CPI number. Tomorrow sees the expiry of options on trillions of notional value in equities and futures, which may have added to the volatility this week. The US dollar remains strong as surging US treasury yields threaten new multi-year highs ahead of the US August Retail Sales release later today.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities are scratching around after the enormous sell-off triggered by the hot US CPI release on Tuesday. Some of the scale of the volatility on Tuesday could be due to options exposures, as options of trillions of dollars on notional equities and futures expire on Friday. If the US August Retail Sales release today leads to even higher yields, stocks could find themselves under renewed pressure. The technical focus is on the recent pivot lower just below 3,900 in the S&P 500 and the 12,000 area low in the Nasdaq 100 index.  USD strength continues, threatens cycle highs A bit of consolidation yesterday in USD pairs after the huge comeback strengthening move in the US dollar in the wake of the Tuesday US August CPI release, but the USD rallied anew from late yesterday and overnight, with the action pinned near the cycle highs in some USD pairs, such as USDSEK, USDNOK and NZDUSD, but elsewhere with a bit of range left to play with. The August Retail Sales release today should garner attention as a strong number could underline the risk of higher US yields and a Fed tightening cycle that extends longer and higher than currently expected if US consumers are getting a second wind after the shock of higher gasoline prices has eased notably since the beginning of the summer. USDJPY has rebounded from yesterday’s lows as traders treat JPY crosses with care, knowing that new highs in the key USDJPY pair are likely to bring actual market intervention from the Bank of Japan/Ministry of Finance. Gold (XAUUSD) Gold trades below $1700 and close to an area around $1680 that has provided support on several occasions during the past two years. The yellow metal turned lower after Tuesday’s CPI shocker raised the prospect of a one percent rate hike next week and a terminal Fed Funds target rate around 4.5% (up 2% from the current level) before March next year. Developments and speculation that continue to underpin the dollar while undermining dollar denominated commodities, such as precious and industrial metals. Crude oil (CLV2 & LCOX2) Crude oil trades sideways with the stronger dollar and expectations for higher US rates hurting the prospect for future demand being offset by news that China’s Chengdu, locked down for weeks, plans to ease measures. The impact of China’s zero-Covid tolerance strategy this year has led to the biggest drop in oil demand in more than three decades according to the IEA. In their latest monthly oil market report, they predicted a continued slowdown in global demand ahead of year-end before accelerating to rise by 2.7 million barrels a day in 2023. Oil market tightness at the beginning of 2023 would be led by a potential 1.9 million barrels Year on year drop in Russian production by February due to sanctions. US natural gas US natural gas trades back above $9 per MMBtu and up 13% on the week as a looming rail strike (see below) would reduce supplies of coal, forcing power generators to rely more heavily on natural gas at a time where demand for cooling remains elevated due to expectations for hotter-than-normal weather across the Midwest and Eastern parts of the US. US Treasuries (TLT, IEF) US 10-year yields are now pinned at the highs for the cycle near 3.50% ahead of today’s US August Retail Sales release. Interesting to see how the market treats a strong data point – with a deepening inversion as the market prices a more aggressive Fed (as happened on the surprisingly strong CPI release Tuesday) or with the entire curve lifting. Exceptionally weak data would also be interesting as it would challenge the rising yields trend/narrative. What is going on? U.S. inflation remains broad-based The producer price index (PPI) dipped 0.1 % month-over-month in August. This reflects cheaper gasoline prices (minus 13 % in August compared to July) and to a lesser extent lower freight costs. However, less volatile elements of the index rose more than expected. The core price index was up 0.4 % on a monthly basis. The numbers like those seen in Tuesday’s US CPI report confirm that U.S. inflation is still broad-based and inflation pressures are unbroken. This opens the door to a new interest rate hike by the U.S. Federal Reserve next week. The majority of the market expects a 75 basis point hike but a minority (between 10 % and 20 % of market participants depending on which indicators we monitor) bet on a 100 basis point hike in the cards. Chinese cities move to boost housing demand Local governments across China have moved to encourage property demand after the Chinese central government called for measures to ease the crisis. Some 120 have loosened restrictions on funds for property purchases. This news supported beleaguered Chinese developers’ stocks in trading on Thursday. Ethereum Merge The second-largest cryptocurrency, Ethereum, is very close to its expected Merge, scheduled to be within the next hour. Ethereum will go through a major upgrade which fundamentally changes the way that transactions are validated on the blockchain, and it will reduce the energy consumption for running the network with around 99.95%. What are we watching next? Looming rail worker strike in the United States The two largest railroad trade unions said they will strike if the ongoing negotiations with employers about higher salaries and better work conditions fail. The strike could start as early as tomorrow and could have a very negative impact on the U.S. economy. Estimates suggest this could cost the economy nearly $2bn per day. In the United States, rail freight represents almost a third of the total domestic freight. Shanghai Cooperation Organization meeting today and tomorrow This is the first time since 2019 that Asian leaders are meeting in person in a bigger strategic forum. Xi Jinping and Vladimir Putin are officially joining the summit in Samarkand, Uzbekistan and India’s Modi is expected to join as well. Given the recent Ukrainian military success against Russia, the pressures are mounting on Russia and Putin, which will test a Russian-China "friendship” that at a meeting of Xi and Putin during the Beijing Olympics and just ahead of Russia’s invasion of Ukraine was declared to be “entering a new era” and “without limits”.  Earnings to watch Today, focus is firmly on Adobe’s earnings report today after the close. The company has seen a wild ride in recent years, pumped to remarkable heights by late 2021 due to its steady solid growth and high profitability with a backdrop of seemingly ever falling yields, only to see the share price crushed in half since its 2021 peak, first due to the seismic shift higher in yields, but compounded by faltering growth rates for the company starting two quarters ago. Today: Polestar Automotive, Adobe Economic calendar highlights for today (times GMT) 0900 – Eurozone Jul. Trade Balance 0915 – ECB's Guindos to speak 1230 – US Weekly Initial Jobless Claims 1230 – US Sep. Empire Manufacturing 1230 – US Aug. Retail Sales 1430 – EIA's Natural Gas Storage Change  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-15-2022-15092022
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Falls On The New York Stock Exchange, Who Lost The Most?

InstaForex Analysis InstaForex Analysis 16.09.2022 08:17
At the close of the New York Stock Exchange, the Dow Jones fell 0.56% to a one-month low, the S&P 500 fell 1.13% and the NASDAQ Composite fell 1.43%. UnitedHealth Group Incorporated was the top performer in the Dow Jones Index today, up 13.14 points or 2.58% to close at 522.91. JPMorgan Chase & Co rose 1.75 points or 1.51% to close at 117.87. Goldman Sachs Group Inc rose 4.36 points or 1.33% to close at 331.62. The losers were Salesforce Inc, which shed 5.50 points or 3.43% to end the session at 154.78. Microsoft Corporation was up 2.71% or 6.84 points to close at 245.38, while Visa Inc Class A was down 2.03% or 4.04 points to close at 195. .37. Leading gainers among the S&P 500 index components in today's trading were Humana Inc, which rose 8.37% to 497.24, Wynn Resorts Limited, which gained 7.48% to close at 65.23, and shares of Paramount Global Class B, which rose 5.16% to close the session at 23.05. The losers were Adobe Systems Incorporated, which shed 16.79% to close at 309.13. Shares of Albemarle Corp shed 6.49% to end the session at 286.75. West Pharmaceutical Services Inc lost 5.91% to 273.63. Leading gainers among the components of the NASDAQ Composite in today's trading were Heartbeam Inc, which rose 85.60% to hit 2.32, Neurobo Pharmaceuticals Inc, which gained 47.21% to close at 24.82, and shares of Nabriva Therapeutics AG, which rose 40.65% to end the session at 0.27. The drop leaders were Shuttle Pharmaceuticals Inc, which shed 55.65% to close at 16.63. Shares of Eloxx Pharmaceuticals Inc lost 40.97% to end the session at 0.22. Quotes Color Star Technology Co Ltd fell in price by 39.54% to 0.07. On the New York Stock Exchange, the number of securities that fell in price (2188) exceeded the number of those that closed in positive territory (909), and quotes of 125 shares remained virtually unchanged. On the NASDAQ stock exchange, 1991 stocks fell, 1759 rose, and 265 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.42% to 26.27. Gold futures for December delivery lost 2.08%, or 35.55, to hit $1.00 a troy ounce. In other commodities, WTI October futures fell 3.84%, or 3.40, to $85.08 a barrel. Brent oil futures for November delivery fell 3.56%, or 3.35, to $90.75 a barrel. Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.20% to 1.00, while USD/JPY was up 0.23% to hit 143.48. Futures on the USD index rose by 0.06% to 109.44.     Relevance up to 05:00 2022-09-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293021
Steady BoE Rate Expectations Amid Empty Event Calendar in the UK

China Is Ready To Work With Russia, Ethereum Merge Successfully Completed

Saxo Bank Saxo Bank 16.09.2022 09:58
Summary:  U.S. equity markets declined again on the economic good news which added to investors’ worries about more and for longer rate hikes from the Fed. The Chinese Yuan weakened and broke the 7-handle. China's August activity data is scheduled to release today. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) face further pressure as US eco news brightens        US equities closed lower on Thursday with the S&P500 losing 1.1% taking its weekly loss to almost 4%, while the Nasdaq fell 1.4%, losing 4.6% across the week, with both major indices eroding last week’s gain. Investors are growing cautious, as new economic data gives the Fed room to raise rates, and keep them higher for longer to control inflation. Retail sales unexpectedly rose in August, showing consumer spending is far from collapsing and jobless claims fell for the fifth straight week, suggesting employers worker demand remains healthy despite an uncertain outlook. For the market to turn around, it will need to see earnings multiples expand, as that supports share price growth. And we need to see earnings per share move up from a decline, to growth. But if the Fed keeps hiking rates, and the energy crisis continues, this scenario means tech stock earnings multiples are likely to see earnings per share (EPS) growth pressure. On the flip side, EPS in energy continues to gain momentum. Big movers in US shares Adobe shares fell 17%, weighing on the Nasdaq and S&P 500 after the software giant announced $20 billion deal to buy design start up Figma. The weakness flowed through to other tech stocks, with Apple shedding 1.9% and Salesforce sliding 3.4%. Meanwhile oil stocks also copped selling after the WTI oil price fell below $86 after the US announced it would restock oil reserves but without a trigger price. Bank stocks were a bright spot, with Goldman Sachs and JPMorgan rising more than 1% apiece. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) The U.S. short-end yields continued to charge higher, 2-year yields up 7bps to finish the session at 3.86%, flattening the 2-10 year curve to -42bps, as the 10-year yields up 5bps to 3.44%.  The 30-year yields, however remained well anchored at 3.47%, up only 1bp and not far from the pre-CPI release levels. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index edged up by 0.4%, helped by the rise in Chinese developers, while the CSI 300 dropped by 0.9%.  Securities Times reported that more than 120 cities have relaxed providence fund policies to boost the local property markets and other media reported that a large number of cities had loosened home purchase restrictions.  Country Garden (02007:xhkg) surged by 8.7% followed by Guangzhou R&F (02777:xhkg) up 8.6%, CIFI (00884:xhkg) up 7%, China Resources Land (01109:xhkg) up 4.9%, and China Overseas Land & Investment (00688:xhkg) up 4%. Catering names gained on news that Chengdu was relaxing its lockdown, Xiabuxiabu (00520:xhkg) up 5.5%.  Li Auto (02015:xhkg) fell 2.3% as the President of the company reduced his shareholding. EV names overall were also pressured by the news that China’s ambassador to the U.S. warned against the potential risks of the US trying to cut China off the EV supply chains.  Solar names were down following reports about the European Union was going to ban manufactured goods with forced labour in them and raised concerns about much of China’s solar products originated from Xinjiang. Australia’s ASX200 The ASX200 is on tracking lower this week, after losing 0.7% Monday to Thursday with the technical indicators suggesting the market is likely to head lower from here and it could retest the lows set in June. However, it’s not all doom and gloom. We saw commodity stocks march up this week, with coal companies Coronado Global rising 13%, New Hope up 5%. It’s also worth noting these are some of this year’s best performing stocks on the ASX, with Coronado up 82%, New Hope up 182%, while the coal giant Whitehaven is up 266% YTD, supported by the coal price hitting new highs this week, as well as the coal futures price. Meanwhile, with crop prices likely to go higher amid La Nina, Agri business Elders rose 4%. Elsewhere, technical buying picked up in oil and gas companies including Woodside, supporting its shares rise ~4%, with Beach Energy following. USDCNH breaks above 7 handle USDCNH broke 7.00 and the markets is expecting little reactions from the PBOC given the latest state-owned media’s effort to downplay the importance of the 7-handle. Crude oil (CLU2 & LCOV2) Crude oil prices slumped overnight as demand concerns came back into the focus. The International Energy Agency said that China faces its biggest annual drop in demand in more than three decades as COVID-19 lockdowns weigh on growth. Oil demand could fall by 420kb/d, or 2.7% this year. This led to the IEA trimming its estimate of global demand. It now sees consumption rising by only 2mb/d. Further, supply situation also seemed to fluctuate with the US Department of Energy walking back on its SPR refill stance by saying that it didn’t include a strike price (that was said to be around $80/barrel) and it isn’t likely to occur until after fiscal 2023. WTI futures fell below $85/barrel while Brent futures touched lows of $90/barrel. Oil technical levels to watch For traders and investors, for WTI to reverse its downtrend, it needs to close above resistance at $97.66, which is what our technical analyst pointed out here. So the next level for you to watch, is if it breaks above $90.40, it would signal an uptrend, for this to occur, the market will need good news, perhaps even bright news from China, the biggest oil consumer. Regardless, right now, oil is in a bear trend and if it closes below $81.20 the bear run-lower could be extend to $78.48-$74.27. Gold (XAUUSD) The yellow metal saw a drop to $1,660/oz down more than 2% to over 2-year lows, amid expectations of more aggressive rate hikes by the Fed as strong US economic data underpinned. Markets are now pricing in a more than 75bps rate hike by the Fed at the September meeting, and a terminal rate of ~4.5%. What to consider? Mixed US data, but further upward pricing of the Fed rate path US retail sales saw the headline rising 0.3% m/m in August (exp -0.1%, prev -0.4%) but the core retail sales print was weaker than expected at -0.3% m/m (exp 0%, prev 0.0%). The slower retail spending does reflect the current slowdown in goods spending despite services remining strong and supporting the overall consumer strength in the US. Meanwhile, initial jobless claims were lower than expected at 213K (exp 226K, prev 218K). That is the lowest since early June and the 5th consecutive decline (the high reached 262K), suggesting that labor markets still remain tight. Regional Fed indices offset each other The regional Fed indices on manufacturing gave contrasting signals with the Philly Fed index falling -9.9 vs +2.8, but the Empire improving markedly to -1.5 vs -13.0 estimate. For both indices, the prices paid components did fall and has moved markedly lower over the last few months, but still remains with a positive number (i.e., more businesses reporting higher prices vs lower prices). For the Philly Fed, the price paid came in at 29.8 v 43.6. For the Empire, the prices paid came in at 39.6 vs 55.5. Australia’s latest economic news shows employment growth is slowing with the jobless rate rising for the first time in 10 months; giving the RBA less room to hike rates Australia’s unemployment rate unexpectedly rose in August, rising from 3.4% to 3.5% with less jobs being added to economy than expected (33,500 instead of the 35,000). Given employment has fallen from its 50-year peak, and job growth is slowing, the RBA effectively has a solid barrier in its way preventing it from rapidly rising rates over the coming months, with room of a 0.5% hike being taken off the table. For equity investors, this supports risk-appetite slightly increasing in the banking sector, given employment nears its peak and credit might not be squeezed as hard as feared, thus property price growth also might not continue to fall as rapidly as forecast. For currency traders, the AUDUSD sharply fell from its intraday high (0.6769) and now faces pressure back to two-year lows, where support is at 0.61358, implying it may fall 10%. Further to that, the currency pair faces downside simply as the market is pricing in 0.25% RBA hike next month, versus the more aggressive US Fed Reserve’s hike potentially being 100bps (or 1%) next week. Slower export growth, power shortage, and pandemic controls would probably have taken their toll on China’s August activity data China’s activity data for August, scheduled to release today, would probably be at risk of missing the median forecasts in the Bloomberg survey, which has industrial production at 3.8% YoY in August (vs 3.8% YoY in July), retail sales at 3.2% YoY in August (vs 2.7% YoY in July), and fixed asset investment year-to-date 5.5% YoY (vs 5.7% YoY). The heatwave-induced power shortage caused disruption to industrial production in Sichuan. The heatwave might have also caused delays in infrastructure construction which was largely outdoor and offset some of the positive impacts of accelerated credit extension. The pandemic control measures affected the manufacturing and export hub of the city of Yiwu in Zhejiang province in August. The much weaker expected export growth data for August released last week and the continuously weak data in the property market also pointed to potentially downside surprises to these forecasts.  While a favourable base effect and stronger auto sales in August could have boosted retail sales, tightened pandemic control measures might have damped catering and other services and dragged down retail sales growth.  Russian President Putin said he appreciated China’s “balanced position” on Ukraine President Xi and President Putin met on the sidelines of the Shanghai Cooperation Organization summit held in Uzbekistan.  The Russian president said he values China’s “balanced position” on Ukraine and he backs the latter’s “One China” principle and opposes “provocations” by the U.S. on the issue of Taiwan.  On the other hand, the readout released by China only did not touch on Ukraine.  As in the readout, Xi told Putin that “China is ready to work with Russia in extending strong support to each other on issues concerning their respective core interests”. China’s State Council reiterated support for the economy and opening up trade and investment In a meeting chaired by Premier Li Keqiang, China’s State Council rolled out an additional RMB200 billion relending quota to support key industries in the real economy and pledged to support international trade and open up to foreign investment. Ethereum Merge – a new chapter in crypto Yesterday, the second-largest cryptocurrency Ethereum successfully underwent its merge from proof-of-work to proof-of-stake. From consuming around 0.2% of the world’s electricity, Ethereum now consumes a fraction of that. Our Crypto analyst calls it a new chapter not only for Ethereum but crypto in general. Read more here.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-16-sept-2022-16092022
EM Index Inclusions and Exclusions: India Thrives, Egypt Faces Challenges

The Markets Are Concentrated On Inflation, Crude Oil Is Down

Swissquote Bank Swissquote Bank 16.09.2022 10:24
US railroad companies and the unions representing their workers reached a tentative agreement early Thursday to prevent a rail strike in the US. Avoiding a rail strike is good news, but not good enough to give a smile to investors. The markets remain too focused on inflation. Increases and decreases The S&P500 closed the session more than 1% lower, as US retail sales and jobless claims – which both hinted that the US economy remains relatively resilient to the Federal Reserve (Fed) rate hikes - didn’t help keeping the Fed hawks at bay. The US 2-year yield spiked to 3.90%, the mortgage rates in the US topped 6%, the US dollar consolidated a touch below the 110 level, Ethereum lost 10% and gold dived to $1660 per ounce. US crude took a good 4% dive. But this time, it wasn’t just the recession talk, it was because the Americans rectified a beginner’s mistake that they have made earlier this week, saying that they will refill their strategic oil reserves if prices fall below $80 per barrel. Waiting For Reports We will likely close this week on a sour note. Next on the economic calendar are the final European CPI read, which will confirm that inflation spiked to 9.1% in August, and the University of Michigan Consumer Sentiment, which will hopefully not print a significantly positive number, because the Fed hawks got strong enough the week before the Fed decision. Watch the full episode to find out more! 0:00 Intro 0:25 US rail strike will likely be avoided! 2:08 But sentiment remains sour on strong US data 3:57 World Bank points at recession 5:04 Crude oil down as Americans understand their mistake 6:41 Strong dollar weighs on major peers 6:55 Joke of the day 7:09 Ethereum down 10% post Merge upgrade 7:51 Adobe dives 17% on Figma acquisition 8:44 Watch EZ final CPI & UoM Consumer Sentiment today! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #rail #strike #inflation #USD #EUR #GBP #Gold #XAU #crude #oil #natgas #energy #crisis #Bitcoin #Ethereum #Merge #update #Bitcoin #Adobe #Figma #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
ECB press conference brings more fog than clarity

The Situation On The European Markets Is Getting Worse

InstaForex Analysis InstaForex Analysis 17.09.2022 08:25
On Friday, key European stock indices declined dramatically. Market participants analyzed the alarming data about the record acceleration of inflation in the EU countries. The negative dynamics on the US exchanges became an additional downward factor for the European stock market. At the time of writing, the STOXX Europe 600 index of Europe's leading companies fell by 1.2% to 409.8 points. Meanwhile, the French CAC 40 sank by 1.47%, the German DAX decreased by 1.71%, and the British FTSE 100 lost 0.06%. Top gainers and losers The shares of carmaker Volkswagen AG dropped by 2%, the stocks of Mercedes-Benz Group AG fell by 2.2% and BMW AG lost 1.4%. The market capitalization of European logistics companies Deutsche Post AG and Royal Mail Plc crashed by 7.3% and 10.3% respectively. The main reason the decline in quotes fell was that the US rival of these companies, FedEx, published weak preliminary data reports. Shares of German energy company Uniper SE dropped by 13% due to the news that its management continues to discuss with the German government a possibility of increasing the state's stake in the company to the major share, which potentially opens the way to its full nationalization in the future. Market sentiment Friday morning saw fresh statistics on consumer prices in the euro region. Thus, the annual inflation rate in the European Union rose to 9.1% in August from July's 8.9%, thereby breaking a historical record. Meanwhile, auto sales in the eurozone rose 4.4% year-over-year in August. The figure broke a 13-month losing streak. According to the European Automobile Manufacturers Association (ACEA), last month the number of registered cars in the countries of the European Union amounted to 650,305 thousand against 622,821 thousand in August 2021. According to the report of the National Statistics Office of Great Britain (ONS), last month retail sales in the country declined by 1.6% for the month and 5.4% for the year, which was the maximum drop for the whole year. At the same time the market had forecast a decline of only 0.5% for the month and 4.2% for the year. The weak UK data was further evidence that the local economy is sliding into recession, as the cost of living crisis is permanently reducing the spending of local households. The Bank of England will hold its next meeting at the end of next week. Analysts believe the British Central Bank will increase the interest rate by 75 basis points. Next Thursday, the regulator will have to adjust its next steps in monetary policy, taking into account the measures of the new government of Liz Truss on limiting energy prices. Recall that during the August meeting, representatives of the Bank of England predicted that inflation in the country will peak at 13.3% by the end of 2022, after which the UK will plunge into recession and will not emerge from it until early 2024. Earlier, British financial conglomerate Barclays predicted a recession in Europe in the first half of 2023. In addition, analysts at the bank suggested that the economy of the Euro-region will decrease by more than 1% during the calendar year. On Friday the participants of the European stock market returned to the discussion of the prospects of monetary policy tightening by the leading central banks of the world. On Thursday, representatives of the World Bank said that recession risks in 2023 are increasing against the background of a simultaneous rise in central bank rates and the energy crisis in Europe. Earlier, the International Monetary Fund said a slowdown in the global economy was imminent. At the same time, Indermit Gill, chief economist at the World Bank, stressed that he was concerned about global stagflation (a period of low growth and high inflation). Recall that last Thursday at its September meeting the European Central Bank raised the prime rate on loans to 1.25% per annum, the rate on deposits - to 0.75% and the rate on margin loans - to 1.5%. At the same time the rate of discount rate increase immediately by 0.75 percentage points for the first time in history. In addition, members of the Central Bank noted that the regulator intends to continue raising the rate in the upcoming meetings. Thus, the ECB chairman Christine Lagarde said that the further pace of interest rate increases will depend on the incoming statistical data. An important downward factor for key indicators of European stock exchanges on Friday was also the weak results of the last trading session on the US stock market. Thus, the Dow Jones Industrial Average index declined 0.56% on Thursday, falling to a one-month low. Meanwhile, the S&P 500 shed 1.13% and the NASDAQ Composite dropped 1.43%. Previous trading results On Thursday, European stock market indicators closed in the red zone, ending in a minus for the third consecutive session. Market participants were walking away from risky assets amid concerns about the prospects of the US Federal Reserve's monetary policy tightening amid slowing economic growth. As a result, the composite indicator of Europe's leading companies STOXX Europe 600 fell by 0.65% to 414.78 points. In this case, the maximum decline among the components of STOXX Europe 600 showed securities of the Swiss online pharmacy Zur Rose Group AG (-10%) and the German supplier of warehouse equipment Kion Group (-6.7%). Meanwhile, the French CAC 40 decreased by 1.04%, the German DAX lost 0.55% and only the British FTSE 100 grew by 0.07%. The value of securities of Finnish telecommunication equipment manufacturer Nokia dropped 1.2% and that of Ericsson, a Swedish telecommunication equipment manufacturer, dropped 2.9%. The day before, analysts at Swiss financial conglomerate Credit Suisse upgraded recommendations for Nokia shares to "above market" from "neutral" and lowered them for Ericsson to "below market" from "above market. Quotes of the British-Dutch oil and gas company Shell fell by 1.1%. Earlier, the media reported that the chief executive officer of the oil giant - Ben van Beurden - will leave his post at the end of 2022. At the same time, from January 1, 2023, the company will be headed by Wael Savan, who currently serves as director of complex gas development. The market capitalization of the French energy company Electricite de France SA decreased by 0.6%. On the eve of the company's management announced that against the backdrop of reduced electricity generation at nuclear power plants, its profits for 2022 will be significantly lower than previously expected. The value of Hungarian airline Wizz Air stock dropped by 5.6% on news about the purchase of 75 A321neo planes from the Dutch Airbus. At the same time Airbus share price fell by 0.6%. Fashion retailer H&M's stock price dropped 0.5%. Earlier the company reported lower-than-forecasted quarterly sales. Market capitalization of Swiss pharmaceutical company Novartis declined by 0.4%. The day before representatives of the pharmaceutical giant said that the company became the subject of an investigation by the Swiss Antitrust Commission on the use of patents. The British online retailer THG Holdings PLC plummeted 18.4% The day before the company said that its sales this year would be below forecasts amid falling consumer appetite. The key reason for the spectacular fall of the French index the day before was the weak statistical data on consumer prices in France. Thus, in August the annual inflation rate in the country declined only to 5.9% from July's 6.1%. At the same time, the market forecasted a more significant slowdown in consumer price growth. Meanwhile, in the past month, consumer confidence in the UK went into negative territory for the first time since the coronavirus pandemic in mid-2020. On Thursday, European exchanges continued to discuss data on annual inflation in the United States, which fell only to 8.3% in August from July's 8.5%. Analysts anticipated earlier that the annual consumer price index in the country would fall to 8.1% by the end of the last month. The final data caused noticeable pessimism in world markets, because the level of inflation in August will be carefully evaluated by the Federal Reserve System at the September meeting next week. Analysts are confident that the regulator will not give up another rate hike of 75 basis points amid a slight decline in the consumer price index. Thus, last week the head of the US Federal Reserve Jerome Powell said the central bank was ready to "act decisively" to fight the record level of consumer prices in the country. As of today, about 90% of the market believes that the US Federal Reserve will raise its benchmark interest rate by 75 basis points. At the same time, the likelihood that the rate will only be raised by 50 basis points next week has all but disappeared.   Relevance up to 19:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/321958
At The Close On The New York Stock Exchange Indices Closed Mixed

Fall Of Indices At The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 19.09.2022 08:07
At the close on the New York Stock Exchange, the Dow Jones fell 0.45% to hit a monthly low, the S&P 500 index fell 0.72%, and the NASDAQ Composite index fell 0.90%. The leading performer among the components of the Dow Jones index today was Home Depot Inc, which gained 4.43 points (1.63%) to close at 275.97. Amgen Inc rose 3.48 points or 1.53% to close at 231.14. Johnson & Johnson rose 2.52 points or 1.53% to close at 167.60. The losers were Boeing Co shares, which fell 5.49 points or 3.67% to end the session at 144.29. Chevron Corp was up 2.60% or 4.17 points to close at 156.45, while Walt Disney Company was down 2.28% or 2.52 points to close at 108. 25. Leading gainers among the S&P 500 index components in today's trading were Iron Mountain Incorporated, which rose 3.35% to hit 55.29, Newmont Goldcorp Corp, which gained 3.09% to close at 43.71, and also Dollar Tree Inc, which rose 2.89% to end the session at 141.92. The biggest losers were FedEx Corporation, which shed 21.40% to close at 161.02. Shares of WestRock Co lost 11.48% to end the session at 34.15. Quotes of International Paper fell in price by 11.21% to 35.23. Leading gainers among the components of the NASDAQ Composite in today's trading were Panbela Therapeutics Inc, which rose 53.06% to hit 0.58, Applied Opt, which gained 50.40% to close at 3.76, and shares of Axcella Health Inc, which rose 29.57% to end the session at 2.41. The biggest losers were Aditx Therapeutics Inc, which shed 58.52% to close at 4.31. Shares of Esports Entertainment Group Inc lost 46.15% and ended the session at 0.18. Shuttle Pharmaceuticals Inc lost 45.94% to 8.99. On the New York Stock Exchange, the number of securities that fell in price (2294) exceeded the number of those that closed in positive territory (816), and quotes of 121 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,586 stocks fell, 1,158 rose, and 233 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.11% to 26.30. Gold Futures for December delivery added 0.38%, or 6.35, to hit $1.00 a troy ounce. In other commodities, WTI October futures rose 0.29%, or 0.25, to $85.35 a barrel. Brent oil futures for November delivery rose 0.81%, or 0.74, to $91.58 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.10% to 1.00, while USD/JPY fell 0.40% to hit 142.95. Futures on the USD index fell 0.02% to 109.43.   Relevance up to 05:00 2022-09-20 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293169
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

Chengdu Returns To Normal Life, The Entry Of Genting Group Into The Competition

Saxo Bank Saxo Bank 19.09.2022 08:30
Summary:  Sentiment in U.S. equities has been dampened by rising expectations of larger rate hikes for the rest of the year and profit warnings and depressed remarks from the management of heavy-weight companies about their business outlook and the economy. All eyes are on the FOMC meeting this Wednesday. China’s August industrial production, retail sales, and infrastructure construction surprised on the upside but housing market activities and home prices remained sluggish. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) are looking bearish again US equities closed off the week with the biggest loss since January after heavy-weight companies were hit by a series of company earnings and guidance woes, with their pain being compounded by rising bond yields. S&P 500 was down 0.7% on Friday and down 4.8% for the week and Nasdaq 100 dropped 0.6% on Friday and 5.8% for the week, wiping out the prior week’s gains. The Nasdaq 100 is now down 29% from its November 2021 peak and the technical indicators on the monthly chart tend to suggest further downside ahead. Big US stock movers   Last week there were a number of industrial titans, first Dow Chemical (DOW:xnys), Eastman Chemical (EMN:xnys), Huntsman (HUN:xnys), Nucor (NUE:xnys), and capped with FedEx (FDX:xnys) warning about grim demand outlook.  FedEx only missed EPS for the August quarter massively but also cut its Nov quarter EPS guidance and completely withdrew the FY2023 guidance, citing significantly worsened macroeconomic trends both internationally and in the US. FedEX tumbled 21.4% on Friday. Amazon (AMZ:xnas) declined 2.2%, following FedEx’ warning. General Electric (GE:xnys) warned the supply chain pressure is having a negative impact on profits.  Uber (UBER:xnys) dropped 3.7% after the ride-hailing services provider following a major data breach in its computer network caused by a hacker.  Amazon (AMZ:xnas) declined 2.2%, being dragged down by the woes in FedEx.  Adobe (ADBE:xnas) slid another 3.1% on Friday and a massive 19.4% in two days since the software maker announced a USD20 billion offer to acquire Figma, collaborated product design platform at 100x of the latter’s recurring revenue. For more discussion on FedEx and Adobe, please refer to Peter Garny’s note here.  Last Friday, over USD3 trillion notional of options expired on Friday and S&P3900 puts traded about 95,000 contracts.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Trading in treasuries on Friday was mixed, with yields of -2-year and 10-year notes unchanged at 3.86% and 3.45% respectively as 5-year yields came off 3bps to 3.63%, and 30-year bonds underperformed for the first time during the week, seeing yield rising 4bps to 3.51%. Treasuries pared their early losses (higher yields) after the 5-10 year inflation expectations in the University of Michigan consumer sentiment survey fell to 2.8%, the lowest since July 2021.  The underperformance in the 30-year bonds was attributable to supply, including a USD12 billion 20-year treasury bond auction on Tuesday and expected corporate issuance of about USD20 billion this week.  The latest data shows that the holding of Japan, the largest foreign holder of U.S. treasury securities, fell USD2 billion to USD1.23 trillion and China, the second largest holder, saw its holdings increase by USD2.2 billion to USD970 billion in July.     Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Shares traded in Shanghai and Shenzhen plunged, with CSI 300 down 2.4%.  The General Office of the State Council issued guidelines to encourage securities firms, funds, and financial guarantee companies to lower fees.  Shares of brokerage firms fell across the board in mainland bourses by nearly 5%.  East Money (300059:xsec) tumbled 10.8%. Chinese brokerage companies listed in Hong Kong also plunged, with GF Securities (01776:xhkg) down by 8.6%, CITIC Securities (06030:xhkg) down by 5.0%, Huatai Securities (06886:xhkg) down by 4.8%.  Chinese property stocks fell in both the mainland bourses and Hong Kong bourse, following the report that new home prices 2nd to 4th tier cities fell sharply again in August despite the recent relaxation of home purchases in a large number of cities.  The weakness of the property sector in the fixed asset investment data in August and the news that the city of Suzhou resumed home purchase restrictions on non-residents in four districts added to the woes in the developer space.  Country Garden (02007:xhkg) tumbled 7.6%.  The EV space declined, falling from 1% to 4.5% following the Ministry of Industry and Information Technology’s Vice Ministry said that there are “blind investments” and overlapping projects in EV in some provinces and municipalities.  In the China internet space, Kuaishou (01024:xhkg) led the charge lower, down more than 7%, as Alibaba (09988:xhkg), Tencent (00700:xhkg), Meituan (03690:xhkg), and Bilibili (09626:xhkg) down from 1.5% to 4.4%.  Australia’s ASX200 has wiped out July’s rally. Focus will be on RBA minutes released Tuesday The ASX200 shed 2.3% last week, erasing July’s gain but faring better than US equities. The market woes have not only come after Australian 10-year bond yield rose to fresh highs, up 0.2% last week, while hovering in 8-year high neighbourhood. But secondly, market sentiment has also been capped as the Fed is set to aggressively hike rates, which pressures Australia’s tech stocks, with many Aussie tech companies making the majority of their revenue from the US. And thirdly, metal commodities have come under pressure again of late, as China’s demand continues to wane. In fact, fresh Chinese export data shows their rare earths and aluminium exports surged yoy. Meanwhile total China’s imports of steel plunged 16% yoy, corn fell 44% and wheat dropped 25% yoy. The trifecta of issues is seeing the ASX200’s technical indicators on the day, week and month charts flag further downside is ahead. Australian dollar on notice with the Fed to hike this week The AUDUSD is under pressure after hitting a new low last week, 0.6727 US cents, which is about a two year bottom. Despite already losing 7% this year, the commodity currency, the AUDUSD is on notice again this week with the Fed expected to hike by 75bps (0.75%) at its Wednesday meet, which will take the Fed funds rate to 3-3.25%. There is also a slim chance (25% chance) of a full percentage hike of 100bps (1%) after the hotter-than-expected August inflation. Either way, the fundamentals support the US dollar gaining momentum against the Aussie, especially as the RBA is limited in its hiking power and likely to only hike by 0.25% next month. Also consider a jump in the US 10-year yield will likely further bolster the USD. A slightly softer USD heading into the FOMC week The USD is slightly softer going into the FOMC week amid some profit-taking, but it still remains the haven of choice with massive amounts of policy tightening packed into the week. AUDUSD pared some of the recent losses amid China reopening optimism and RBA’s Kearns saying that Aussie home buyers could benefit from higher rates. USDCAD rose to near 2-year highs on Friday at 1.3308, partly oil induced, but also due to increasingly sour sentiment and perceptions that BoC-Fed policy will likely diverge in wake of the latest disappointing Canadian employment data vs still-tight US labor markets. USDJPY will be a key focus with both FOMC and BOJ meetings scheduled in the week, and possibility of another round of strong verbal intervention from the authorities is seen. EURUSD is back above parity, as ECB members stay hawkish, but risks remain titled to the downside in the near term. Crude oil (CLU2 & LCOV2) With massive central bank action scheduled in the week, it can be safely assumed that demand concerns will likely remain center-stage. A spate of rate hikes is aggravating concerns of an economic slowdown, but easing of restrictions in China’s Chengdu today will ease some of the concerns. Dalian will also exit restrictions today. Nevertheless, more supply disruptions remain a risk. Germany seized the local unit of Russian oil major Rosneft PJSC, including three refineries. One of those is now preparing for short-term restrictions in crude supplied via the Druzhba pipeline. WTI futures were seen higher above $85/barrel in early Asian hours, while Brent futures were close to $92. Gold (XAUUSD) Gold saw some recovery after touching support of $1660/oz on Friday as interest rate hike bets picked up following the hotter-than-expected August CPI in the US last week. Further resilience in economic data out of the US has further kept interest rates expectations on an upswing, while rising geopolitical and economic risks are doing little to entice haven buying as the US dollar still remains the prime safe-haven choice. Gold was back close to $1680 this morning in Asia. The risk of the FOMC sending the US economy into a recession before getting inflation under control is rising and, once that occurs, the dollar is likely to turn sharply lower, thereby supporting fresh demand for investment metals. What to consider? University of Michigan survey remains optimisticThe preliminary September University of Michigan sentiment survey saw the headline rise to 59.5 from 58.5, just short of the expected 60, but nonetheless marking a fourth consecutive rise. Notably, the rise in forward expectations was starker than in current conditions, with the former also coming in above consensus expectations. Also, key were the inflation expectations, which echoed what was seen in the Fed surveys last week. The 1yr slowed to 4.6% from 4.8% and the 5yr expectations slowed to 2.8% from 2.9%.   China’s August activity data improved better-than-expected China’s activity data for August came in at stronger than expected growth rates.  Industrial production grew 4.2% Y/Y in August beating the consensus estimate of 3.8% Y/Y and improving from last month’s 3.8% Y/Y.  Higher output in automobile and power generation offset the impact from slower activities in other industries such as pharmaceuticals and computers.  Retail sales grew 5.4% Y/Y in August, well exceeding the 3.3% Y/Y median forecast from the Bloomberg survey and the 2.7% YoY in July. A favourable base effect and stronger auto sales during the month boosted retail sales and more than offset the drag from tightened pandemic control measures and a slow housing market.  Fixed asset investment grew 6.4% Y/Y in August, notably accelerating from the 3.6% Y/Y in July, led by 14.8% Y/Y growth in infrastructure and 10.7% Y/Y growth in manufacturing investments while investment in properties slowed further to a decline of -13.9% Y/Y in August from July’s -12.1%.  China’s property prices in lower-tier cities continued to decline in August According to data released by the National Bureau, the weighted average of new home prices in the top 70 cities in China fell 1.1% Y/Y (vs -0.6% Y/Y in July), driven largely by declines in property prices in lower-tier cities.  The easing of home purchase restrictions by local governments has so not been able to stop the decline in property prices in lower-tier cities.  Sequentially, new home prices in Tier-2, Tier-3, and Tier-4 cities dropped by about 5% M/M annualized while new home prices in Tier-1 cities rose by 1.6% M/M annualized.  An unexpected seventh bidder for Macao gambling licenses created uncertainties about incumbent operators In a tender for the six 10-year casino operating licenses, the six incumbent casino operators faced an unexpected rival from the Malaysian Genting Group which submitted a bid into the tender.  As the maximum number of licenses remains at six, the entry of Genting Group into the competition may mean one of the incumbent license holders might be ousted. Chengdu exits lockdown Chengdu, the largest city in Western China ends its nearly 3-week-long lockdown today and allows its 21 million population to leave their home and resume most aspects of normal life.  Residents are required to do PCR tests at least once a week.  Hong Kong considers ending hotel quarantine for inbound travelers The Hong Kong Government is reviewing and considering plans to end the hotel quarantine requirements for inbound travelers.  Currently, travelers to Hong Kong are required to be quarantined in a hotel for 3 nights and followed by four-day medical monitoring at home and then another 3 days of self-monitoring without mobility restriction.  The news may lift the share price of travel-related stocks, such as Cathay Pacific (00293:xhkg).   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-19-sept-2022-19092022
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

What Can We Expect From Standard&Poor 500 (S&P 500)?

Conotoxia Comments Conotoxia Comments 19.09.2022 16:42
Today, U.S. stock index contracts seem to indicate the possibility of a cash market opening on the downside. Investors may be estimating the possibility of Fed action, and not just this week, but for the rest of the year. Currently, the market may believe that the Federal Reserve will not end the cycle of hikes below the 4 percent level, but above it. This could put pressure on company valuations on Wall Street. Have low-interest rates helped the Wall Street stock market? Since 2008, the US stock market has been able to enjoy the ongoing bull market that followed the Great Financial Crisis. Back then, both the financial markets and the economy were supported by very low-interest rates or asset purchase programs. From 2008 until the beginning of 2022, the average federal funds rate was 0.58 percent, and the average price-to-earnings P/E ratio for the entire S&P 500 index had a value of 25. Currently, the P/E for the S&P 500 is 21.49, according to wsj.com, and the federal funds rate rose to 2.33 percent in September. The market, in turn, seems to expect that it could rise above 4 percent in the next two quarters. Source: Conotoxia MT5, US500, W1 Current valuations on Wall Street According to data from wsj.com, the forward P/E ratio, which is the one showing the future earnings of companies in relation to the current stock price, is 17.48 for the S&P 500, while the Nasdaq 100 has a value of 22.57. The current values are 21.49 and 24.97, respectively. This may mean that the market expects that the earnings of U.S. companies may increase next year, which may be good news, but on the other hand, interest rates may rise at the same time. This, in turn, could have a negative impact on company valuations and could cause rates to potentially be lower than they were during a period of low-interest rates. If investors can choose between the U.S. dollar soon at 4.5 percent interest, or riskier stocks with a P/E ratio of 17, it seems that some of them may choose the U.S. dollar over stocks and thus demand for them may be lower. Another group of investors, on the other hand, may forgo risk in favor of safety until valuations become more attractive relative to interest rate levels. This, in turn,  could  happen in one of two ways, either U.S. companies will begin to rapidly expand earnings (which may be difficult in an environment of a slowing economy) or stock prices will find lower levels. Forecasts for the S&P500 at the end of 2022 According to analysts surveyed by Reuters, the S&P 500 could end this year at 4280 points. This is the median forecast of nearly 50 strategists surveyed by Reuters in the second half of August 2022. The median forecast for 2022 is down from 4400 points in a Reuters survey conducted in late May. Survey respondents, therefore, seem to be optimistic about the index's year-end result after all. This could mean a return to the peaks of August this year.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. Are valuations on Wall Street currently attractive? (conotoxia.com)
Saxo Bank Podcast: The Risk Of An Escalation In The US-China Confrontation, The Risk Of An Escalation In The US-China Confrontation And More

Tesla, Apple And Nike Rose, The United States Can Send Military Forces To Taiwan

Saxo Bank Saxo Bank 20.09.2022 08:53
Summary:  Ahead of the Fed’s interest rates decision with rates expected to rise by 0.75%, the price of the 10-year yield rose to 3.5% for the first time since 2011. Normally this puts equities in a precarious position, however, investors looked past this as a big red flag. The most buying overnight in US equities was in the Materials sector after commodity prices rallied, while sizeable moves were also in big tech names. Sentiment flowed to the ASX, with lithium and coal stocks being bid the most, after their commodity prices hit new record highs. And as such, the risk-on mood is set to flow through the Asia-Pacific today. Ahead, all eyes are on Australia's RBA meeting minutes and the reaction to Japan's CPI hitting a 31-year high. For the latest in markets and what to consider next, read today's APAC DD. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Ahead of the Fed’s Wednesday interest rates decision with rates expected to rise by 0.75%, the price of the 10-year yield rose to 3.5% for the first time since 2011 and the 2-year note popped to a 15-year high of 3.96%. Normally this would put equities on the back foot and in a precarious position. As such this remains a big red flag for equities that are interest rate sensitive (tech, property, consumer spending). However, overnight equities looked past the noise and ended on a high note. But indeed, it was a volatile session. The S&P500 was down 1% earlier in the day, but marched higher in the final hour, supported by strong moves in big tech names. The S&P500 not only wiped out the day’s earlier loss but Friday’s fall too, closing up 0.7%. We saw 9 of the 11 sectors rise, led my Materials, Consumer Discretionary, and Industrials, while Heath Care was a laggard. Nasdaq 100 gained 0.8%. Big US stock movers Tesla (TSLA:xnas) gained about 2% on plans to increase the price of its supercharger stations in Europe. Apple (AAPL:xnas) rose 2.5% on news of Apple planning to fix the shaking iPhone 14  camera. Nike (NKE:xnys) gained 3% with investors betting their results later this week might not be as bad as feared. We think there could also be an upside scenario in 2023 for Nike if mainland China strengthens with its easing of lockdowns over the next 12 months, which would likely boost sportswear sales and margins. Afterhours Ford (F:xnys) warned that inflation had caused supplier costs to rise by $1 billion in the current quarter, joining a chorus of major companies experiencing the same macro challenges ripping through the economy. Ford shares fell 4.4% after hours, suggesting they will open lower when normal trading resumes. Moderna (MRNA:xnas), BioNTech(BNTX:xnas), and Novavax (NVAX:xnas) fell 7% to 8% after President Biden said in a CBS 60 Minutes interview that “the Covid pandemic is over”. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) hit new highs The 10-year yield briefly exceeded 3.5% to 3.52% intraday for the first time since 2011, in an otherwise quiet session with the cash treasuries market being closed in London and Tokyo for holiday. The 10-year notes managed to pare some of their losses and finished the day at 3.49%, up 4bps from last Friday. The short end of the curve underperformed ahead of Wednesday’s FOMC, with 2-year yields climbing 7bps to a new closing high at 3.94%.  Australia’s ASX200 hits a two-day high, supported by Lithium and Coal stocks Today the Australian share market opened 1% higher in the first 10 minutes of trade, following Wall Street’s rally. Some of the biggest moves are in lithium and coal. Lithium companies are surging after the lithium price rallied to a brand-new record high, with the lithium carbonate price hitting a new record of $73,315 a ton in China (according to Asia Metal Inc). Core Lithium (CXO) is a stock to watch after it agreed with Tesla (TSLA) to extend the termination date for its binding offtake (sales) agreement to October 26. The extension allows the companies to negotiate a full form binding offtake agreement. Other lithium stocks to watch include Pilbara Minerals (PLS) after its shares rallied 3.6% in early trade, to a brand new record high of A$4.80. Elsewhere, Fortescue (FMG) rose about 1% on plans to decarbonize its business with a A$6.2 billion plan. Also, keep an eye on Oz Minerals (OZ) with the copper miner seeking a $10 billion potential sale to BHP (BHP). Speaking of BHP (BHP), its shares are up 1.8% after the NYSE listed BHP rallied overnight amid the risk-on mood. Risk-on mood setting up in Asian trade today Despite expectations of massive tightening moves being delivered globally this week and the surge in US 10-year yields above 3.5% overnight, the Asia session kicked off with risk-on sentiment. US equity futures extended gains and the USD was weaker, with the Japanese yen stronger at 143 despite CPI touching 3% in August. GBPUSD surged higher to 1.1460 while EURUSD extended gains to get close to 1.0050 levels amid ECB’s hawkishness and some relief on gas prices as well. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Yesterday the Hang Seng Index dropped 1%, dragged down by technology and China property stocks. Hang Seng Tech Index (HSTECH.I) declining 2.1 % with Alibaba (09988:xhkg) down 3.6%, Bilibili (09626:xhkg) down 5.6%.  In the China property space, Longfor (00960:xhkg) dropped 6.1% and Country Garden (02007:xhkg) slid 3.3%.  EV makers underperformed, with NIO (09866:xhkg), Li Auto (02015:xhkg), and Xpeng (09868:xhkg) plunging from 4% to 6%. U.S. President Joe Biden’s affirmative response to the question about sending U.S. forces to fend Taiwan off Chinese military actions added to investors’ concerns about an escalation in Sino-American tension.  Following the news that the Hong Kong Government is reviewing and considering plans to end the hotel quarantine requirements for inbound travelers, Hong Kong tourism and retail stocks rallied, Cathay Pacific Airways (00293:xhkg) up nearly 1%, travel agency EGL (06882:xhkg) soaring 11.5%, Chow Tai Fook Jewellery (01929:xhkg) rising 6.2%.  In mainland bourses, the approaching of the National Day golden week holiday and the Ministry of Culture and Tourism’s public consultation on promoting cross-border tourism pushed up tourism, catering, and beverage stocks. Coal mining stocks also gained. Solar power, semiconductors, and beauty care stocks dropped. CSI300 finished the day little changed.  Crude oil (CLU2 & LCOV2) Some support was seen to crude oil demand on Monday despite the risks of massive central bank tightening this week. A somewhat softer USD as well hoped of easing movement restrictions in China helped crude oil eke out a modest gain, despite the potential for increased supply. The US announced that it will offer an additional 10mbbl from its strategic reserve. Only last week it was reported that the Department of Energy was looking at plans to start replenishing the stockpile. UAE also said it was accelerating its plan to produce 5mb/d of crude oil by 2025. WTI futures rose back towards $86/barrel while Brent futures were above $92. What to consider? US NAHB in its ninth month of decline NAHB Housing Market Index reported its ninth consecutive decline to 46.0, beneath the prior 49.0 and expected 47.0. The weaker-than-expected data highlighted the pessimism hitting the US housing market due to the rising mortgage rates, and housing starts may be set to cool further in the coming months. However, no systemic risks are seen as the housing market remains a lagged indicator. Australia’s RBA expected to increase inflation expectations as coal pushes up and La Nina hits The RBA meeting minutes released today at 11.30am Sydney time, will be dissected for clues that the RBA will be increasing its inflationary expectations. Particularly as the coal price, where Australia gets the majority of its energy from, hit another record high (and coal is not in peak demand season yet). On top of that the RBA will probably allude to La Nina’s threat on Australia. We think the RBA may touch on wheat prices picking up again, given they are up 16% from August. Frost and rain in South America has impacted their wheat supply, dryness in the US will reduce their supply, plus heavy rains are headed for Australia for the third year in a row. So global wheat supply is expected to be short again and push up inflationary pressures. The AUDUSD might see a knee jerk reaction higher if the RBA alludes to this. However, we expect the AUDUSD to come under pressure, as the magnitude of the Fed’s hike supports the favoured currency, the USD moving up. Japan CPI hits a 31-year high Japan’s August CPI touched the dreaded 3% YoY mark from 2.6% previously, coming in at the strongest levels in over three decades and significantly above the Bank of Japan’s 2% target level. The core measure, which excludes fresh food and energy, also come in higher-than-expected at 1.6% YoY. With the wage growth remaining restrained, this may mean nothing for Bank of Japan which remains committed to maintaining its yield curve control policy. However, the markets may start to test the BoJ’s resolve once again, especially with US 10-year yields also touching 3.5% overnight while JGB yields remain capped at 0.25%. Hong Kong’s unemployment rate came in at 4.1% Hong Kong released the city’s unemployment rate which came in at 4,1% for the June to August period, 0.2 percentage points lower from last the May to July period. The underemployment rate fell to 2.0% from 2.2%.  U.S. President Joe Biden gave an affirmative response regarding sending forces to fend Taiwan off from mainland China When being asked in a CBS 60 Minutes interview whether the U.S. would send forces to defend Taiwan in case of military actions from mainland China, President Biden replied: “Yes, if in fact, there was an unprecedented attack.”  In answering a follow-up question about if the U.S, unlike in Ukraine, would send forces men and women to defend Taiwan, Biden said: “Yes.”   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-20-sept-2022-20092022
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

The Bloomberg Grains Index Continues Its Steady Growth, The Lithium Price Hits Record

Saxo Bank Saxo Bank 20.09.2022 09:01
Summary:  Equity markets consolidated some of the recent losses yesterday as traders mull a cavalcade of central bank meetings this week, topped by the FOMC meeting tomorrow. The market has been burned in its attempts at pricing “peak Fed” in recent months and now Fed rate expectations are running steadily higher into tomorrow’s meeting. Can the Fed deliver on the hawkish side of a market that has finally begun to respect what this Fed is all about?   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Yesterday US equities touched new lows intraday for the cycle lower that started on 17 August, but despite weak sentiment and downward momentum the market turned around rallying into gains. S&P 500 futures rallied 1.9% from its lows to the close and the positive momentum is continuing this morning with the index futures trading around the 3,929 level. The US 10-year yield is still sitting just below 3.5% and any meaningful push above the 3.5% level will likely renew the headwinds for equities. The rally in US equities was driven by no news so the setup feels almost like the rally ahead of the Jackson Hole event and the recent US CPI report. The market wants good news and a positive surprise, but the question is whether the FOMC will deliver that tomorrow. We doubt it believing the Fed will rather fail being too hawkish than being too dovish. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong equities rallied, with Hang Seng Index rising 1.3% and Hang Seng Tech Index (HSTECH.I) climbing 2.3%. Alibaba (09988:xhkg), Meituan (03690:xhkg), JD.COM (09618:xhkg), and Netease (09999:xhkg) surged 3% to 4%. EV stocks rebounded, with XPeng (09868:xhkg) soaring nearly 9%, NIO (09866:xhkg), and Li Auto (02015:xhkg) rising nearly 6%. Macao casino stocks were among the outperformers, rising from 3% to 6% across the board. CSI300 Index was little changed, with solar power, energy storage, and auto outperforming. Major Chinese banks fixed their 1-year and 5-year Loan Prime Rates unchanged this morning. USD traders mull FOMC meeting this Wednesday The US dollar slightly on its backfoot yesterday and overnight as EURUSD criss-crosses parity and USDJPY is locked in a tight range ahead of tomorrow’s FOMC meeting. The degree to which the Fed is able to surprise the market on the hawkish side and trigger another rise in US treasury yields (possibly it as important to see longer US yields rising, not just an adjustment at the front-end of the US yield curve to absorb,  for example, a higher than expected Fed “dot plot” forecast for next year) will determine whether the US dollar is set for another significant surge to cycle highs in the wake of the meeting. AUDNZD breaks higher through major level Despite a nominally dovish set of RBA minutes overnight, AUDNZD leaped to a new six-year high overnight, clearing the 1.1300 level. The diverging current account developments in recent quarters are likely a key driver as Australia features a formidable commodity portfolio and has become a current account surplus nation at a time when New Zealand’s reliance on energy imports has taken a toll on its trade balance, which has gone into a steep deficit. The next focus is perhaps 1.1430, the high from 2015 and highest since AUDNZD traded in a range north of 1.2500 for much of the 2008-2012 time frame. Gold (XAUUSD) Gold putting in a higher low compared with Friday was the takeaway from Monday’s price action. The yellow metal has settled into a 20-dollar range near a two-year low ahead of Wednesday’s FOMC meeting and while the risk of a 1% hike cannot be ruled out, the market seems the be settling for another 75 bp hike, a development that may ease some of the recent selling pressure which has seen speculators flip their positions back to a net short, a relatively rare occurrence. Today’s price action is likely to be just noise ahead of Wednesday with algo-driven strategies likely to be in the driving seat, given the dollar and yield movements the overall say on the direction. Below $1854, last week's low in gold, the market may target the 50% retracement of the 2018 to 2020 rally at $1618. Crude oil (CLV2 & LCOX2) The best that can be said about Monday’s price action in energy is that traders don’t currently know which leg to stand on, a situation made worse by thin liquidity. With another interest rate hike looming and with global growth slowing there are good reasons to call for lower prices. Lower prices were also sought in response to news China may grant export permissions for excess fuel supplies, and the US announcing it will offer an additional 10 million barrels from its strategic reserves. Against these a softer dollar and recovering equity markets and continued worries about Russian supply once the EU embargo begins in early December helped sent Brent and WTI back in black following a near seven-dollar round trip. More of the same can be expected until a clearer picture emerges. US Treasuries (TLT, IEF) US treasury yields continue to trade near the peak of the cycle as the market wonders whether the 10-year can explore new territory for the cycle above 3.50% the cycle high from back in June, as well as whether any adjustment higher in Fed rate hike expectations will be entirely felt at the front end of the yield curve, as the inversion has fallen close to the cycle extreme near –0.50% for the 2-10 yield spread as the 2-year rate pushed close to 4.00%. What is going on? The euro area looks set to enter a recession According to Bloomberg, economists see an 80 % chance of a recession in the euro area in the next twelve months. This now looks inevitable. Last week, Barclays downgraded its 2023 growth forecast for France to minus 0.7 %. The Bank of France also published its three main scenarios for the French economy for next year. A recession is one of them (expected drop in GDP of minus 0.5 %). This is not its baseline, though. The length and amplitude of the recession in the eurozone will highly depend on the evolution of the energy crisis and on the risk of energy rationing. This is a bit too early to know exactly how much GDP will drop next year. Economists also expect that the European Central Bank (ECB) will continue to tighten monetary conditions (financial conditions are still loose in the euro area based on the latest credit growth data). More than half consider a second 75 basis-point rate hike is likely in October. This is only the beginning. It is likely the ECB will continue until early next year (when the recession might be officially announced). Covid vaccine related stocks tumble on Biden declaring pandemic over Shares in Moderna and BioNTech fell 7% and 9% respectively as the Biden administration declared the pandemic for over. The designation follows other countries and will lower the alertness among health care regulators and likely lower the demand for Covid vaccines as only the very high-risk people in the population will get a vaccine and booster shoots. This is worse than expected news for Covid vaccine manufacturers such as Moderna and BioNTech that are now forced to expand their product portfolio to offset this weakness. US NAHB declines for ninth month in a row NAHB Housing Market Index reported its ninth consecutive decline to 46.0, beneath the prior 49.0 and expected 47.0. Save for two panicky months during the early 2020 pandemic break-out, this is the lowest levels cine 2014, but for perspective, the indicator was sub-20 for most of 2008 through 2011. The weaker-than-expected data highlighted the pessimism hitting the US housing market due to the rising mortgage rates, and housing starts may be set to cool further in the coming months. Japan CPI hits a 31-year high Japan’s August CPI touched the dreaded 3% YoY mark from 2.6% previously, coming in at the strongest levels in over three decades and significantly above the Bank of Japan’s 2% target level. The core measure, which excludes fresh food and energy, also come in higher-than-expected at 1.6% YoY. With wage growth remaining restrained, this may mean nothing for Bank of Japan, which remains committed to maintaining its yield curve control policy. However, the markets may start to test the BoJ’s resolve once again, especially with US 10-year yields also touching 3.5% overnight while JGB yields remain capped by BoJ YCC policy at 0.25%. Grains trade mixed but remains in an uptrend The Bloomberg Grains Index continues its steady ascent after hitting a low point two months ago with global weather concerns, dwindling stockpiles and uncertainty about the Ukraine grain deal being the focus. Chicago wheat nevertheless fell on Monday on an expected increase in Russia’s crop that will compete with US exports already challenged by a strong dollar. Soybeans was supported by Chinese export demand while corn traded sideways but finding support at its 21-day moving average. Lithium prices and stocks back at records Lithium equities are back in focus as the lithium price hits a fresh record after tripling in the past year fuelled by electric vehicle demand. Recently the IEA forecast lithium demand to accelerate more than 40 times over the next two decades. The lithium carbonate price has also had an extraordinary run, up 1,000% from its covid low as supply remains a concern. Shares in Albemarle Corp (ALB:xnys), the world’s biggest lithium company and its neighbour Livent (LTHM:xnys), as well as SQM (SQM:xnys), the world’s second biggest lithium producer are on watch with their shares trading near their peaks. US President Biden wows support for Taiwan When being asked in a CBS 60 Minutes interview whether the U.S. would send forces to defend Taiwan in case of military actions from mainland China, President Biden replied: “Yes, if in fact, there was an unprecedented attack.” In answering a follow-up question about if the U.S, unlike in Ukraine, would send forces men and women to defend Taiwan, Biden said: “Yes”. China’s Emerging Industries PMI slightly improved Emerging Industries PMI (EPMI) in China climbed slightly to 48.8 in September from 48.5 in August. The modest improvement was below market expectations and the 48.8 print was the lowest September figure (EMPI is not seasonally adjusted) since 2014 when the survey first started, suggesting weak growth momentum. What are we watching next? Sweden’s Riksbank set for largest hike in decades today The market is divided on whether the Riksbank hikes 75 basis points or a full 100 basis points, either of which would be the largest hike in nearly 30 years. One factor possibly tilting the odds in favour of a larger move is the exchange rate, as EURSEK trades near the range high of 10.90 since 2020, and USDSEK is less than three percent from its all-time high, which was just above 11.00 back in 2001. SEK is traditionally very sensitive to risk sentiment, so a larger hike may only impress beyond a knee-jerk reaction if broader sentiment and the outlook for Europe improves. FOMC meeting tomorrow Many headlines discuss whether the Fed is set to hike 75 or 100 basis points tomorrow. The Fed generally doesn’t like to surprise markets too much, so arguably it is safe in “only” hiking another 75 basis points as the 100-basis point odds are priced rather low. The more likely hawkish surprise scenario is one in which the Fed sets the “dot plot” of Fed policy forecasts for 2023 higher than the market currently expects – possibly as high as 5.00% for the median expectation. Another item to watch is the Fed’s forecast of PCE inflation for 2023 and 2024, together with where it places the first forecasts for inflation in its first set of forecasts for 2025. Earnings calendar this week This week our earnings focus is on Lennar on Wednesday as US homebuilders are facing multiple headwinds from still elevated materials prices and rapidly rising interest rates impacting forward demand. Later during this week, we will watch Carnival earnings as forward outlook on cruise demand is a good indicator of the impact on consumption from tighter financial conditions. Today: Haleon Wednesday: Lennar, Trip.com, General Mills Thursday: Costco Wholesale, Accenture, FactSet Research Systems, Darden Restaurants Friday: Carnival Economic calendar highlights for today (times GMT) 0730 – Sweden Riksbank Interest Rate Announcement 0800 – ECB's Muller to speak 1230 – Canada Aug. Teranet/National Bank Home Price Index 1230 – US Aug. Housing Starts & Building Permits 1230 – Canada Aug. CPI 1700 – ECB President Lagarde to speak 2030 – API's Weekly Crude and Fuel Stock Report Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-20-2022-20092022
On The New York Stock Exchange, More Indices Fell

On The New York Stock Exchange, More Indices Fell

InstaForex Analysis InstaForex Analysis 21.09.2022 08:42
At the close of the New York Stock Exchange, the Dow Jones fell 1.01% to a one-month low, the S&P 500 index fell 1.13%, and the NASDAQ Composite fell 0.95%. The leading performer among the components of the Dow Jones index today was Apple Inc, which gained 2.42 points (1.57%) to close at 156.90. Quotes Boeing Co rose by 1.06 points (0.73%), ending trading at 145.94. 3M Company lost 0.12 points or 0.10% to close at 116.52. The biggest losers were Nike Inc, which shed 4.79 points or 4.47% to end the session at 102.42. Caterpillar Inc was up 2.26% or 4.12 points to close at 177.99, while Home Depot Inc was down 2.23% or 6.25 points to close at 274. 17. Leading gainers among the components of the S&P 500 in today's trading were Wynn Resorts Limited, which rose 2.90% to hit 67.80, Valero Energy Corporation, which gained 2.63% to close at 107.42, and also shares of Expedia Inc, which rose 2.09% to end the session at 104.63. The fallers were shares of Ford Motor Company, which fell 12.32% to close at 13.09. Shares of Iron Mountain Incorporated shed 9.84% to end the session at 50.65. Quotes of Generac Holdings Inc decreased in price by 6.99% to 183.49. The leading gainers among the components of the NASDAQ Composite in today's trading were Sobr Safe Inc, which rose 234.98% to 3.05, Powerbridge Technologies Co Ltd, which gained 60.62% to close at 2.20. as well as Neurobo Pharmaceuticals Inc, which rose 42.40% to end the session at 20.79. The biggest losers were Virios Therapeutics Llc, which shed 75.50% to close at 0.49. Pagaya shares shed 67.24% to end the session at 2.29. Quotes of Integrated Media Technology Ltd decreased in price by 46.07% to 1.03. On the New York Stock Exchange, the number of securities that fell in price (2599) exceeded the number of those that closed in positive territory (546), while quotes of 129 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,705 companies fell in price, 1,091 rose, and 227 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 5.43% to 27.16. Gold futures for December delivery shed 0.29% or 4.80 to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 1.19%, or 1.02, to $84.34 a barrel. Brent oil futures for November delivery fell 1.14%, or 1.05, to $90.95 a barrel. Meanwhile, in the Forex market, EUR/USD was flat at 0.49% at 1.00, while USD/JPY edged up 0.35% to hit 143.71. Futures on the USD index rose 0.39% to 109.89. Relevance up to 05:00 2022-09-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293539
Russian Referendum In The Occupied Territory Of Ukraine And More

Russian Referendum In The Occupied Territory Of Ukraine And More

Saxo Bank Saxo Bank 21.09.2022 10:28
Summary:  Nasdaq 100 and S&P 500 on tenterhooks after bond yields hit record highs, the US dollar index hits a record with markets bracing for the Fed’s jumbo hike. Shocking German PPI and Riksbank’s 100bps rate hike sets the stage for the FOMC to deliver a hawkish surprise. Ford becomes the second major company to downgrade their outlook, seeing its shares slide 12%, and sending another warning signal on the upcoming earnings season. Hang Seng rallies on the prospect of ending hotel quarantine. Russia-Ukraine tensions on a boil, sending wheat futures up 7%. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) on tenterhooks after bond yields hit record highs The US benchmark indices came under further pressure overnight (with the S&P500 down 1.1%, the Nasdaq 100 losing 0.9%) with investors selling equities and bonds and buying the US dollar, with markets on tenterhooks for the Fed’s jumbo rate hike on Wednesday. Added pressure came when the US 2-year bond yield hit 4% and the 10-year US bond yield hit 3.6%. Those are treasury yields’ highest levels since 2011, and they are better yields than the S&P500’s 1.7%. Meanwhile the US dollar index hit a record high as investors took shelter in the currency. Investors and traders are bracing for the Fed to boost rates to levels not seen since before the 2008 financial crisis. But is there more downside? The risk is that the Fed paves out a hawkish dot plot, or raises rates more than the 75 bps expected. That scenario will pressure equities. However, if the Fed believes inflation is rolling over, and signals this is peak hawkishness, then equities may see a knee jerk reaction and whipsaw higher. The technical indicators on the day and week chart for the S&P500 and Nasdaq imply further pressure are ahead. Big U.S. stock movers All 11 sectors in the S&P 500 fell on Tuesday, with Real Estate, Materials, and Consumer Discretionary falling the most, and Information Technology, Consumer Staples, and Energy relatively outperformed. Ford (F:xnys) tumbled 12.3% after the automaker said that inflation is making supplier costs USD 1 billion higher than expected in the current quarter. Gap (GPS:xnys) lost 3.2% on reports that the apparel retailer is cutting 500 corporate jobs in response to growing costs and weaker sales. Casino stocks gained as investors found optimism from relaxed Covid test requirements for passengers boarding a flight in Macao and the prospect of loosening hotel quarantine restriction in adjacent Hong Kong, through which many travelers arrive in Macao. Wynn Resorts (VYNN:xnas) gained 2.9% and Las Vegas Sands (LVS:xnys) climbed 1.2%. Apple’s (AAPL:xnas) shares rose 1.6% on Tuesday with estimates now suggesting the company’s most expensive iPhone, the iPhone 14 Pro model accounts for 60-65% of total iPhone 14 shipments, which is up from the previous estimated range of 55-60%. This means Apple could have a positive outlook when they release their next quarterly earnings in late October. U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) were sold off again with 10-year yields reaching 3.6% intraday The sell-off in bonds continued on Tuesday.  The 5-year and 10-year segments of the treasury curve were hit most, with 10-year yields reaching a new intra-session high at 3.60% before paring and settling at 3.56%, up by 7bps from Monday.  The woes in the treasury markets stared across the pond in Europe following the larger-than-expected 100bp hike by the Riksbank in Sweden and the jaw-dropping 45.8% Y/Y increase in German PPI. A solid 20-year treasury bond auction, which stopped through 1.3bps and had a low award to primary dealers (8.1%), helped treasuries stage a short-lived rally and saw yields off their session highs before being sold (yields higher) again as a block sale of 7,200 contracts in the 5-year at 108-221/4 hit the tape.  The 2-year segment relatively outperformed, rising only 3bps in yield to finish the day at 3.97%, a touch below 4%. Hong Kong’s Hang Seng (HSIU2) rallied on the prospect of ending hotel quarantine   Hong Kong equities rallied on Tuesday, with Hang Seng Index rising 1.2% and Hang Seng Tech Index (HSTECH.I) climbing 2.0%. China’s Hong Kong and Macao Affairs Office of the State Council said the Chinese Government supports Hong Kong’s efforts to have “close, extensive contact” with the rest of the world. It was interpreted as a nod to Hong Kong’s plan to scrap the hotel quarantine requirement. Cathay Pacific Airways (00293) rose 2.2%. Stocks in the retail space gained, with jewellers surging from 2% to 7%. Macao casino stocks rose from 3% to 15% across the board, following the enclave extending the validity of PCR tests from 48 hours to 7 days for any person boarding a flight in Macao. Mainland state-owned media continued to publish articles with a positive tone to boost investor confidence. The latest was Securities Daily’s op-ed claiming that investors should have confidence in China’s long-term growth as the Government has launched quite a number of stimulus measures. CCTV says President Xi is committed to ensuring the stability of industrial and supply chains.  The China internet pace gained and Alibaba (09988:xhkg), Baidu (09888:xhkg), Meituan (03690:xhkg), JD.COM (09618:xhkg), and Netease (09999:xhkg) surged 2% to 4%.  EV stocks rebounded, with XPeng (09868:xhkg) soaring nearly 9%, NIO (09866:xhkg), and Li Auto (02015:xhkg) rising around 5%.  CSI300 Index was little changed, with solar power, energy storage, and auto outperforming.  Australia’s ASX200 to unwind yesterday’s rally. But watch for green and gold shoots in agricultural stocks The futures imply the ASX200 could unwind yesterday’s rally and rally 1.1% following US equites. However bright sparks might be seen in the soft commodity space with Wheat prices jumping 7.6% overnight as undersupply fears grip the market. It could be worth watching GrainCorp (GNC) and Elders (ELD).   Australian dollar against the NZ Dollar scales to 7-year highs The Aussie dollar against the kiwi dollar, the AUDNZD leaped to new highs, clearing the 1.1344 level. What supports this currency pair moving is the large divergence between Australia’s exports rising (Australia’s trade surplus rising), versus New Zealand’s imports increasing due to higher costs of energy products (and its trade deficit rising). If this continues, this supports AUDNZD. Want to know more? Australia’s trade account surplus trades near a record high, as Australia is exporting a record amount of coal and LNG. Inversely, the New Zealand economy is trading at a deficit for the second month in a row, as its heavily reliant on energy imports, which have increased significantly in price. What to watch if you are trading this pair? On Thursday September 22, NZ releases its Balance of Trade data. If there is another large deficit, we could see the AUDNZD leap up again. The next focus is perhaps 1.1516, the high of 2015. USDJPY range-bound despite the surge in US yields USDJPY saw some gains on Tuesday but the cap at 144 still prevailed despite the US 10-year yields making a fresh high. The verbal intervention from the Japanese authorities in the last few weeks, and the rate-check from last week, has helped to calm yen traders. However, if the FOMC delivers a hawkish surprise this week and Bank of Japan maintains its dovish policy, further pressure on the yen cannot be ignored. That may prompt another round of intervention from the Japanese authorities, spooking 2-way volatility, but still throwing up some potential trading opportunities as discussed here. Crude oil (CLU2 & LCOV2) suffers on the back of a stronger USD Crude oil prices were lower on Tuesday following the Riksbank’s hawkish surprise and a run higher in US Treasury yields as well as the US dollar. The fresh release announcement from the US strategic reserves scheduled through November also added to the downside. API inventories also saw crude stocks rising for the third straight week, and there were inventory builds across the board. WTI futures dipped below $84/barrel while Brent futures dipped below $91. This comes despite rising war tensions in Ukraine (see below) as the focus has shifted to the massive monetary policy tightening being delivered this week. What to consider? Riksbank goes for a 100bps rate hike, setting the stage for FOMC The Swedish Riksbank surprised yesterday with a 100-basis point hike to take the rate to 1.75%, a move only a minority were looking for. This, in addition to guidance that the Riksbank would look to continue hiking rates, took Swedish yields higher, but didn’t do much for the currency. The decision to hike by 1% was unanimous, prompted by the highest level of CPIF inflation since 1991 and the negative implication it could have on the upcoming wage negotiation which will lock in pay growth for the next three years. However, with global tightening wave turning more hawkish that expectations after ECB’s 75bps rate hike and Riksbank’s 100bps, the stage is being set for the FOMC to deliver above expectations as well. Shocking August German PPI According to the German statistics office Destatis, the PPI rose by 7.9% month-on-month in August. This is much higher than the consensus (2.4%). This shows that forecasting in the current macroeconomic environment is more challenging than ever. On a year-over-year basis, the increase is at 45.8%. This is an historical record. The continued jump is explained by higher energy prices (+139% year-over-year). But not only. Actually, inflation is broad-based. Prices for intermediate goods, for capital goods and for non-durable consumer goods are much higher too. This will probably get worse in the short-term. In the eurozone, it is unlikely the peak in inflation has been reached (contrary to the situation in the United States). Russia-Ukraine tensions heat up Russia is trying to stage a referendum on annexing the regions of Ukraine its forces still control. There were heightened geopolitical tensions regarding Russia and Ukraine where the separatists are to hold a referendum in Donetsk, Luhansk, Kherson and Zaporozhye on September 23rd-27th, although Ukraine and its allies have denounced the referendums as illegal and few countries are likely to recognize the results. An update from Putin on the matter is being awaited, where there have been some suggestions that he is considering introducing martial law and full mobilisation of the Russian army - the speech has now reportedly been delayed until 06:00BST/01:00EDT Wednesday. The move threatens to escalate the conflict even further, potentially giving Putin the formal legal basis to use nuclear weapons to defend what Moscow would consider Russian territory. China’s Emerging Industries PMI slightly improved Emerging Industries PMI (EPMI) in China climbed slightly to 48.8 in September from 48.5 in August.  The modest improvement was below market expectations and the 48.8 print was the lowest September figure (EMPI is not seasonally adjusted) since 2014 when the survey first started, suggesting weak growth momentum.  Reserve Bank of Australia minutes hint at more, but slower, rate hikes RBA minutes from the September 6 meeting suggested that there is more room for interest rates to go up, but there is no pre-set path given the uncertainties surrounding the growth/inflation outlook. After a 50bps rate hike announced at the September meeting, and with global tightening race picking up to make a 75bps as the new 25bps, expectations for further RBA rate hikes of that magnitude could have potentially gained traction. However, the RBA has said that it will consider either 25bps or 50bps for the upcoming meetings. While another 50bps can still be expected in October, given that inflation reached 6.1% (vs. target of -3%), the pace of tightening is set to slow from there. Chinese banks kept Loan Prime Rates unchanged China’s leading banks fixed the 1-year and 5-year loan prime rates unchanged at 3.65% and 4.30% respectively, as expected.  Ford, the second major company to downgrade their outlook Investors have been hit with the second major company downgrade in two weeks, with Ford (F) joining FedEx (FDX) in guiding of a challenging economic environment ahead. As mentioned yesterday, Ford warned inflation will cost its business $1 billion in the quarter, sending Ford shares down 12%, which is the stocks biggest loss in over 10 years. The automakers expect EBIT to range between $1.4b -$1.7 billion when it reports results next month. Lennar’s results may provide some insights into the U.S. housing market With 30-year fixed rate mortgage interest rates jumping above 6% for the first time in 14 years, since Sept 2008 and home affordability has fallen to historically low levels, investors are concerned about the state of the U.S. housing markets.  Results from a leading home builder Lennar (LEN:xnys) this Wednesday after market close will give a good opportunity for investors to gauge the latest market conditions in the U.S. housing market. Analysts, as per the survey by Bloomberg, are estimating revenue growth of 30% Y/Y and 8.3% Y/Y EPS growth in the quarter ending Aug 31, 2022.  Investors, however, will focus on the management’s comments and forward guidance.    Check out here for our views on the FOMC meeting and the Bank of Japan this week. For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-21-2022-21092022
Acquisition Of Aveva By Schneider Electric, Wheat Prices And More

Acquisition Of Aveva By Schneider Electric, Wheat Prices And More

Saxo Bank Saxo Bank 21.09.2022 10:36
Summary:  Equity markets traded sideways ahead of today’s important FOMC meeting as the Fed is set to bring at least another 75 basis points of tightening and expectations for further tightening are at the highs for the cycle. At the longer end of the yield curve, US yields have risen to new eleven-year highs, helping the US dollar to new highs for the cycle in places, including against the Chinese yuan. The Bank of Japan meets tonight in Asia and has shown no signs of backing down from its cap on bond yields, creating enormous attention as yields have risen again elsewhere. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities came under pressure yesterday as US yields advanced with the 10-year yield reaching as much as 3.6%. The market is split on tonight’s FOMC decision but consensus among economists is still a 75 basis point rake hike. We argued yesterday that if the Fed wants to tighten financial conditions a lot they need a surprise which argues for a 100 basis point hike. In any case, the guidance in the dot-plot and the subsequent press conference will be key for equity sentiment in the near-term. Yesterday’s low in S&P 500 futures at 3,643 is the key support level to watch on the downside and 3,800 after that. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index gave back all its gains yesterday and more, falling over 1% ahead the U.S. FOMC meeting. Mega-cap China interest stocks declined from 1% to 3%, dragging the Hang Seng Tech Index down by over 2%.  Energy stocks outperformed coal mining names up from 1% to 2%.  COSCO Shipping Energy Transportation (01138:xhkg) soared more than 8%. Bloomberg reported that Chinese refiners are applying for quotas from the Chinese government to export as much as 16.5 million tons of fuel oil, such as gasoline and diesel.  CSI 300 fell nearly 1% and making a new low last since May this year. USD traders mull FOMC meeting today A minority of observers are looking for another 75-basis point move from the Fed, as discussed below, with forward guidance also playing a roll, although the market continues to price the end-2023 policy rate at below even the end-2022 rate, with the peak rate somewhere in between, despite FEd pushback. The USD has traded to new highs in places, like against all 5 of the smallest G10 currencies and is near the cycle high versus sterling, while EURUSD and USDJPY still trade slightly away from cycle extremes. The Fed will want to maintain a hawkish tone here, but as US 2-year yields have risen sharply to nearly 4%, the bar is somewhat high for a hawkish surprise. Watching the reactivity in treasury yields and risk sentiment for the impact on the US dollar – particularly how USDJPY might treat a fresh strong surge in longer US yields after the 10-year broke above the former cycle high since 2010 of 3.50% yesterday. USDJPY USDJPY could be set for considerable volatility over the next 24 hours as the Bank of Japan meets tonight in Asia’s Thursday session. The pressure for the Bank of Japan to adjust its yield-curve-control strategy has built further on the surge to new cycle highs in longer US yields yesterday above the 3.50% level. The Bank of Japan and Ministry of finance have recently pushed back rather hard on the latest blast of JPY weakness, but will likely be challenged on where and when they intend to intervene against JPY weakness if the BoJ overnight refuses to adjust its policy and if the Fed surprises hawkish at tonight’s FOMC meeting and the entire US yield curve lifts. The 145.00 area is the cycle high, with 150.00 the next obvious psychological level. Gold (XAUUSD) Gold trades near a two-year low but within a relatively narrow 20-dollar range ahead of today’s FOMC meeting (see below). Weeks of selling have seen speculators accumulate a net short position in COMEX futures, a relatively rare occurrence, and one that could set the stage for a surprise upside move, should the dollar and yield retrace some of their recent strong gains. Resistance however remains firm at $1680 while below $1654, last week's low, the market may target the 50% retracement of the 2018 to 2020 rally at $1618. Crude oil (CLV2 & LCOX2) Crude oil remains rangebound with a slight negative tilt ahead of today’s FOMC rate hike given its impact on the dollar and growth expectations. The Fed decision will be followed by other central banks from Europe to Asia which are also expected to announce growth reducing rate hikes. The long-term outlook remains price supportive with US production struggling to find a higher gear and Saudi Aramco saying lack of investments could see spare capacity being wiped out. Also focus on Russia from where seaborne exports is lower this month and where Putin is looking into his toolbox for ideas to reverse his disastrous war against Ukraine. Ahead of today’s EIA stock report the API reported builds in crude oil as well as fuel products. Wheat sees largest gain since March on Russia tensions Wheat futures in Chicago (+7.6%) and Paris (+4.1%) jumped on Tuesday after Russia said it intended to hold votes on annexing the three regions of Ukraine still under its control (see below). Such a move raises the risk of a full Russian mobilization and would increase tensions with Europe and the US while casting more doubts over grain supplies from the Black Sea area, especially the UN sponsored export corridor from Ukraine which recently has helped ease supply worries for wheat and sunflower oils. Also focus on today’s FOMC rate hike and its impact on the dollar. December wheat (ZWZ2) at $8.88 trades near the highest level since July but may face resistance at $9.14/bu, the 200-day moving average. US Treasuries (TLT, IEF) US treasury yields spilled over to new cycle highs yesterday ahead of tonight’s FOMC meeting as the market has sensed a hawkish determination from the Fed to forge ahead with rate hike and provide no sense that it set to pivot to a more neutral stance, although that would have to come at some point. The 10-year benchmark rose to a new cycle high yesterday above 3.50%, posting the highest yield since 2011. What is going on? Shocking August German PPI According to the German statistics office Destatis, the PPI rose by 7.9 % month-on-month in August. This is much higher than the consensus (2.4 %). This shows that forecasting in the current macroeconomic environment is more challenging than ever. On a year-over-year basis, the increase is at 45.8 %. This is an historical record. The continued jump is explained by higher energy prices (+139% year-over-year). But not only. Actually, inflation is broad-based. Prices for intermediate goods, for capital goods and for non-durable consumer goods are much higher too. This will probably get worse in the short-term. In the eurozone, it is unlikely the peak in inflation has been reached (contrary to the situation in the United States). Russia-Ukraine tensions heat up Heightened geopolitical tensions regarding Russia and Ukraine where the “separatists” are to hold a referendum in Donetsk, Luhansk, Kherson and Zaporizhya on September 23rd-27th, although Ukraine and its allies have denounced the referendums as illegal, and few countries are likely to recognize the results. An update from Putin on the matter is being awaited, where there have been some suggestions that he is considering introducing martial law and full mobilisation of the Russian army - the speech has now reportedly been delayed until 06:00BST/01:00EDT Wednesday. The move threatens to escalate the conflict even further, potentially giving Putin the formal legal basis to use nuclear weapons to defend what Moscow would consider Russian territory. Riksbank’s 100bps rate hike sets the stage for FOMC The Swedish Riksbank surprised yesterday with a 100-basis point hike to take the rate to 1.75%. This, in addition to guidance that the Riksbank would look to continue hiking rates, took Swedish yields higher, but didn’t do much for the currency, which fell to new cycle lows versus the EUR and USD after a kneejerk jump. The decision to hike by 1% was unanimous, prompted by the highest level of CPIF inflation since 1991 and the negative implication it could have on the upcoming wage negotiation which will lock in pay growth for the next three years. However, with global tightening wave turning more hawkish that expectations after ECB’s 75bps rate hike and Riksbank’s 100bps, the stage is being set for the FOMC to deliver above expectations as well. Schneider Electric agrees to acquire Aveva for £9.4bn The French industrial giant is announcing this morning that it has agreed to acquire UK-based engineering and software group Aveva for £31 per share valuing the company at £9.4bn. Schneider Electric already owns 60% of Aveva and a full consolidation will bolster Schneider Electric’s ambitions in software within the engineering industry. Rio Tinto joins BHP in saying Copper’s near-term outlook is challenged Rio Tinto’s CEO has joined a suite of companies, including BHP, saying copper’s short-term outlook faces pressure. From supply-chain issues to 30-year high inflation and restricted demand from China, the metal is seeing less demand, and supply is outpacing supply. However, that is not expected to be the case in the longer term with Goldman Sachs predicting copper demand will exceed supply by 2025 and will push prices to twice their current levels. Copper is used in everything from buildings to automobiles, to wiring in homes and mobile phones. Germany nationalises utility company Uniper The German government is injecting €8bn into Uniper to avoid a collapse of the German utility taking full control of Finland-based utility Forum’s shares in Uniper. What are we watching next? Can the Fed surprise hawkish at FOMC or are we nearing peak tightening expectations? The Powell Fed has kept a hawkish tone in recent communications, clearly indicating a desire to forge ahead with rate hikes. After the strong August US CPI print, a minority of observers are even looking for a 100-bp move from the Fed today, though we are more likely to get 75 basis points. This is a quarterly meeting that will bring the latest Fed forecasts for the economy and for the policy rate, a chance for the Fed to send a further message on where it sees its policy evolving for the remainder of this year and next. The forecast in the “dot plot” of Fed policy rate forecasts for the end of 2022 will receive close attention. Currently the market is looking for a policy rate of about 4.2% through the December meeting, which would mean a 75-bp hike today, another in November, followed by a 50-bp hike in December. The Fed raising the 2023 forecast to a median of 5% might make an impression as well, although the market has persistently priced the Fed to begin easing yields at some point next year, figuring that the economy will be in recession at some point next year. This meeting also brings the first batch of 2025 forecasts for the economy and Fed policy, and another way that the Fed could guide hawkish would be in raising PCE core inflation forecasts for next year and/or 2024 (last two forecasts have kept the last of these at 2.3% YoY) or surprising with its 2025 forecast. Earnings calendar this week This week our earnings focus is on Lennar today as US homebuilders are facing multiple headwinds from still elevated materials prices and rapidly rising interest rates impacting forward demand. Later during this week, we will watch Carnival earnings as forward outlook on cruise demand is a good indicator of the impact on consumption from tighter financial conditions. Today: Lennar, Trip.com, General Mills Thursday: Costco Wholesale, Accenture, FactSet Research Systems, Darden Restaurants Friday: Carnival Economic calendar highlights for today (times GMT) 1400 – US Aug. Existing Home Sales 1430 – EIA’s Weekly Crude and Fuel Stock Report 1800 – US FOMC Rate Announcement / Policy Statement 1830 – US Fed Chair Powell Press Conference 2100 – New Zealand Q3 Westpac Consumer Confidence 2130 – Brazil Selic Rate announcement 2245 – New Zealand Aug. Trade Balance 2300 – New Zealand RBNZ Deputy Governor Hawkesby to speak Bank of Japan meeting Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-21-2022-21092022
At The Close On The New York Stock Exchange Indices Closed Mixed

Falls At The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 23.09.2022 08:16
At the close of the New York Stock Exchange, the Dow Jones fell 0.35% to a 3-month low, the S&P 500 fell 0.84%, and the NASDAQ Composite fell 1.37%. Merck & Company Inc was the top performer among the components of the Dow Jones in today's trading, up 2.98 points or 3.53% to close at 87.51. Quotes Johnson & Johnson rose by 2.90 points (1.78%), ending trading at 166.18. Salesforce Inc rose 2.52 points or 1.71% to close at 150.15. Shares of American Express Company were the leaders of the fall, the price of which fell by 5.68 points (3.82%), ending the session at 143.03. Boeing Co was up 3.20% or 4.58 points to close at 138.71, while Goldman Sachs Group Inc was down 2.43% or 7.79 points to close at 312. .92. Among the S&P 500 index components gainers today were Eli Lilly and Company, which rose 4.85% to 310.87, Merck & Company Inc, which gained 3.53% to close at 87.51. , as well as shares of Bristol-Myers Squibb Company, which rose 2.63% to end the session at 71.29. The biggest losers were Caesars Entertainment Corporation, which shed 9.44% to close at 37.62. Shares of Ball Corporation lost 8.66% to end the session at 49.23. FactSet Research Systems Inc dropped 8.29% to 394.75. Leading gainers among the components of the NASDAQ Composite in today's trading were Spero Therapeutics Inc, which rose 167.74% to hit 2.20, Avenue Therapeutics Inc, which gained 105.90% to close at 0.44, and also shares of Panbela Therapeutics Inc, which rose 46.39% to end the session at 0.35. Top Ships Inc. was the biggest loser, shedding 44.06% to close at 0.12. Shares of Ecmoho Ltd lost 42.72% and ended the session at 0.10. Quotes of Pintec Technology Holdings Ltd decreased in price by 28.80% to 0.42. On the New York Stock Exchange, the number of securities that fell in price (2596) exceeded the number of those that closed in positive territory (546), while quotes of 120 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,011 stocks fell, 765 rose, and 257 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.29% to 27.35. Gold futures for December delivery added 0.24%, or 4.00, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 0.54%, or 0.45, to $83.39 a barrel. Brent oil futures for November delivery rose 0.50%, or 0.45, to $90.28 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.04% to 0.98, while USD/JPY fell 1.14% to hit 142.40. Futures on the USD index rose by 0.65% to 111.07.   Relevance up to 05:00 2022-09-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/293918
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

What Traders Can Expect From The S&P 500 Index?

InstaForex Analysis InstaForex Analysis 23.09.2022 08:34
The ongoing correction has only just started making us feel uneasy and we should expect a move into the fear-zone or even extreme fear-zone before this correction is over. Taking into consideration how much the central banks and governments injected extreme liquidity into the market during the Covid-19 pandemic, we should expect an equally huge amount that needs to be removed from the financial system to bring it back into balance. So, we should be looking for a spike into the fear or even extreme fear zone before jumping on the train again for the next big upswing. Relevance up to 07:00 2022-09-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293924
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

Meta Platforms Remains Under Pressure, What Will Be The Next Move?

InstaForex Analysis InstaForex Analysis 23.09.2022 08:47
Meta Platforms remains under pressure, but is testing strong support in the 137 - 142 area and we can count a five-wave decline from the 384 peak. Finally, we see a clear divergence from the price in the RSI all points to a corrective bottom soon for a rally towards resistance at 235 and maybe even closer to the 50% corrective target at 263 before the next push lower. Short-term, we need a break above minor resistance at 150 to confirm that wave [A] has completed and wave [B] is in motion towards at least 235 and maybe 263 before down again in wave [C], but for now, we should stay focused on a possible bottom-building process for a corrective rally to take over.   Relevance up to 07:00 2022-09-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/293926
Worrisome Growth Signals in Eurozone PMI: Recession Risks Loom Amid Persistent Inflation Pressures

Inflation Expectations In Malaysia And Singapore, Costco Shares Fell And More

Saxo Bank Saxo Bank 23.09.2022 08:53
Summary:  Massive tightening was delivered globally after the Fed’s 75bps rate hike, which saw Bank of England, SNB, Norges Bank, and several emerging market central banks joining the race. Bond yields rose to fresh multiyear highs, with 10yr hitting 3.70% and 2yr well above 4%. The strength in the US labor market continues to hint at more room for tightening, and equities slumped. Japan’s intervention to defend the yen put some brakes on the dollar rally, but it would likely be ‘temporary’ at best, and focus shifts to US/UK and Eurozone PMIs today. What is happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) pressured by bond yields rising. S&P500 experiencing a rare technical breach With a parade of central banks joining the Fed in boosting rates to curb inflation, the US 10-year yield rose to 3.7% (its highest since 2011), while the two-year yield rose for the 11th day (which its longest rally in over three decades). This upward pressure in safe-haven yields is luring investors away from investing in companies exposed to inflation and facing earnings slowdowns. The Nasdaq Composite fell 1.4%, on Thursday, shedding 3% over the week, while the S&P500 lost 0.8% on Thursday, falling 3% Monday-Thursday. Of note, the S&P500 is experiencing a rare technical breach, as it trades under its 200-day moving average for over 100 sessions. The last time this occurred in the last 30 years; was in the tech bubble when the index fell 50% before hitting its trough, and before that, the Global Financial Crisis, when the index fell 40% before hitting its trough. The technical indicators show the index is poised for more downside with the June bottom likely to be retested in the coming weeks, then the next level of support is perhaps about the psychological level 3,500, which is 9.1% lower below current levels. Get to know the best performer in the US stock market this week, with the most momentum, General Mills The US’s biggest wheat producer General Mills (GIS) has outperformed the S&P500 this week and risen 7.4% and claimed the best performing post this week. It’s vital to reflect on why this is the case. We’ve been speaking about the Wheat (WHEATDEC22) price of late, being supported higher due to deteriorating global wheat supply, and now with Russia mobilizing fleet against Ukraine, the wheat price move supported higher again, on concerns Ukraine’s export terminal will be shut once more. Wheat is also in a technical uptrend, so we think stocks General Mills could be a stock to watch ahead, as its earnings are likely to swell. In the S&P500 this week, following General Mills (GIS) higher is; Kellogg and Campbell Soup, as the second and third best performers in the S&P500. Costco (COST) was down over 2% post-market on Thursday despite reporting better-than-expected earnings results.  Australia’s ASX200 (ASXSP200.1) to react to the Fed after being closed yesterday for a public holiday On Friday morning the futures are surprisingly calm, with the ASX200 suggested to only open 0.3% lower. So far this week, the ASX200 has once again outperformed global equities and only lost 0.5%, which is a stark contrast to the S&P500’s drop of 3%.  All eyes will be in cybersecurity stocks with Optus investigating a cyber-attack which may have led to authorized access of customer information. In terms of economic news to watch, S&P Global releases September PMI results. As for stocks to watching Fonterra might see increased bids after its APAC chief executive said she sees strong sales ahead for dairy protein. Rio Tinto will also be on watch after it signed a pact to promote low-carbon solutions for the steel value chain. Rio’s focus areas include low-carbon technology, blast furnace and basic oxygen furnace optimization and carbon capture utilization. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong’s Hang Seng index was at 11-year lows yesterday amid the massive global tightening as well as rising geopolitical tensions. HSI later recovered some of the losses to end the day down 1.6%. Hong Kong's de-facto central bank mirrored the tightening and raised its base lending rate by 75 basis points to 3.5% with immediate effect. Hong Kong’s banks have waited through five rounds of rate hikes this year before moving. More pain is in store for Hong Kong’s borrowers, as the HKMA has been conducting its monetary policy in lockstep with the Fed since 1983 to maintain the local currency’s peg to the US dollar. EV shares tumbled with Xpeng down 11.6% and Nio falling 7.5%. Property sector continued to show weakness, with NWD down 3.4%. Meanwhile, CSI300 ended the day down 0.9% EURCHF ignored the intervention warnings EURCHF surged to 0.9700+ levels from 0.9465 after the SNB’s 75bps rate hike remained short of market’s expectation of a 100bps move. USDCHF also moved higher to touch 0.9850 from sub-0.9650 levels, but that was helped by a weaker US dollar following Japan’s intervention to defend the yen. With higher inflation forecasts, one can argue that there will be more room for the SNB to raise rates, and the CHF’s haven status could also come to its rescue as the case for economic slowdown gets stronger with the massive global tightening being delivered. Crude oil (CLU2 & LCOV2) focus back on supply issues Crude oil edged higher as OPEC warned of additional cuts to output. Nigeria’s oil minister, Timipre Sylva, said that OPEC would consider additional cuts if crude prices fall because current levels are affecting the budget of some member states. This helped the crude oil market to shrug off the massive tightening being delivered. A softer USD in the aftermath of Japan’s intervention also created room for the oil prices to focus on the demand-supply fundamentals. WTI futures rose to highs of $86/barrel before some easing, while Brent touched $92+.   What to consider? SNB delivers a 75bps rate hike The 75bps rate hike by the Swiss National Bank lifted the policy rate out of NIRP to 0.50% but disappointed the markets which had started to look for a 100bps rate hike. Guidance that further rate hikes cannot be ruled out was also accompanied by repeating guidance that they are willing to intervene in FX markets as necessary with Chairman Jordan subsequently stressing they are ready to step in to prevent excessive weakening or strengthening of the Franc. Bank of England goes for a dovish 50bps as recession concerns imminent While the consensus was looking for a 50bps rate hike from the Bank of England, market had started to price in a case for 75bps rate hike as well and so the decision to hike rates by 50bps was a slight disappointment. More so, the decision was not unanimous with three members supporting a 75bps move and one calling for a smaller 25bps move. However, the BoE confirmed that they are going to reduce their holdings of government bonds by GBP 80bln over the next 12 months, although the schedule remains open to amendments. Additionally, the BoE retained its guidance that they will continue to “respond forcefully” as necessary to inflation and while the peak forecast was reduced vs August’s update, it remains elevated and well above target. Finally, the Bank has downgraded its view on the UK economy in the near-term, Q3 2022 is now expected to see GDP declining by 0.1% (vs August projection of +0.4%), for a second quarter of contraction; a forecast which, if confirmed by the ONS release, implies the economy is already in a technical recession. US jobless claims suggests a resilient labor market Initial jobless claims marginally rose to 213k from the revised lower 208k but it was beneath the expected 218k. Meanwhile, continued claims fell to 1.379mln (prev. 1.401mln), also lower than the consensus 1.4mln, and dipped beneath 1.4mln for the first time since mid-July. While the strength in the labor market still remains intact given the large number of open positions in the American job market, some moderation can be expected in the coming months with the rapid pace of tightening and still-strained supply chains affecting output. However, as the Fed noted yesterday, the pace of rate hikes is set to continue despite some economic/labor market pain. Japan’s intervention temporarily strengthens the yen Japan’s first market intervention in over two decades came right after a hawkish FOMC and a steady policy decision by the Bank of Japan, with the widening yield differential between the US and Japan continuing to weigh on the Japanese yen. The intervention announcement came as USDJPY surged above 145 – the level that has been the line in the sand for last several weeks – and pair dropped to 140.36 over the next few hours. But as with most unilateral interventions, the effect was short-lived and USDJPY returned to 142+ levels subsequently, just as we had expected here. More steps remain likely, and the US Treasury said it understood Tokyo's move, but stopped short of endorsing it. Eurozone PMIs on the card to gauge how hawkish ECB can get Eurozone PMIs are likely to dip further into contractionary territory as energy price hikes weigh on spending and business plans. Manufacturing PMIs are likely to ease to 48.8 in September from 49.6 previously, and services are expected to fall to 49.1 from 49.8, according to Bloomberg consensus estimates. A weaker-than-expected number could temper the hawkish ECB bets for the October meeting. Singapore and Malaysia inflation to see further upside pressures Singapore’s headline inflation likely jumped further above the 7% mark in August from a reading of 7% YoY in July, underpinned by higher food and energy prices globally, higher rents due to under-supply, and demand side pressures from regional reopening and a pickup in tourism. Malaysia’s continued ban on chicken exports is also adding to the food inflation, and further tightening from the Monetary Authority of Singapore at the October meeting remains likely. Meanwhile, Malaysia’s inflation also likely rose further in August from 4.4% YoY in July due to higher commodity prices and weaker ringgit, as well as the strength in consumer demand. Bank Negara Malaysia’s next meeting is only scheduled in November, before which we will have another CPI print out. However, it can be assumed that monetary tightening will likely continue. Costco outperforms. Is this a sign of what to expect for fourth quarter earnings season? Costco reported fourth quarter earnings results that beat average analysts forecast, with total revenue hitting $72.09 billion, vs the $70.3 billion expected. It comes as fourth quarter membership fees rose 7.5% year on year, to $1.33 billion and accounted for 2% of the retailer's revenue. Although the company typically raises membership fees every five to six years (with its last fee increase in June 2017), Costco held off on rising fees “at this time”. Costco flagged that it sees some beginnings in the inflation situation improving, while it also expects to sell an overstock of holiday goods this season, which was left over from last year. Costco shares fell 2% post market after their results, implying its shares will sour when the market opens.    For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-23-2022-23092022
Middle Distillate Inventories Are Tight Around The Globe

The Global Container Shipping Is Weakening, The Bank of England Decisions And More

Saxo Bank Saxo Bank 23.09.2022 09:02
Summary:  Markets continue to absorb the impact of the FOMC meeting and other central banks continuing to tighten yesterday, with the chief concern for risk sentiment actually the leap in long US treasury yields yesterday, which more directly affect asset valuation models. The US 10-year yield benchmark jumped nearly 20 basis points yesterday to above 3.70% and thus to a new 11-year high. Elsewhere, the latest consumer confidence survey in Europe showed record low sentiment ahead of flash September Manufacturing and Services PMI’s out this morning from France, Germany and the Eurozone.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Further weakness in US equities with the S&P 500 futures posting a new lower close for the cycle and continuing down this morning trading around the 3,770 level. The next big level to watch on the downside is 3,740 in S&P 500 futures which was the big support level multiple times back in July. US equities are naturally being dragged lower from the US bond yields pushing higher with the US 10-year yield rallying to 3.71% the highest since early 2010. In addition, the US leading indicators for August were weakening further with the y/y index pushing into the most negative level since the Great Financial Crisis excluding the dip during the pandemic suggesting the US economy could slip into a recession within the next 6-9 months. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong’s Hang Seng index was at 11-year lows yesterday amid the massive global tightening as well as rising geopolitical tensions. HSI later recovered some of the losses to end the day down 1.6%. Hong Kong's de facto central bank mirrored the tightening and raised its base lending rate by 75 basis points to 3.5% with immediate effect. Hong Kong’s banks have waited through five rounds of rate hikes this year before moving. More pain is in store for Hong Kong’s borrowers, as the HKMA has been conducting its monetary policy in lockstep with the Fed since 1983 to maintain the local currency’s peg to the US dollar. EV shares tumbled with XPeng down 11.6% and Nio falling 7.5%. The property sector continued to show weakness, with NWD down 3.4%. Meanwhile, CSI300 ended the day down 0.9%. USDJPY volatile on BoJ intervention Japan’s first market intervention to support the yen in over two decades came right after a hawkish FOMC and a steady policy decision by the Bank of Japan, with the widening yield differential between the US and Japan continuing to weigh on the Japanese yen. The intervention announcement came as USDJPY surged above 145 – the level that has been the line in the sand for last several weeks – and pair dropped to 140.36 over the next few hours. But as with most unilateral interventions, the effect was short-lived and USDJPY returned to 142+ levels subsequently, just as we had expected here. More steps remain likely, and the US Treasury said it understood Tokyo's move, but stopped short of endorsing it. EURCHF ignored the intervention warnings EURCHF surged to 0.9700+ levels from 0.9465 after the SNB’s 75bps rate hike remained short of market’s expectation of a 100bps move. USDCHF also moved higher to touch 0.9850 from sub-0.9650 levels, but that was helped by a weaker US dollar following Japan’s intervention to defend the yen. With higher inflation forecasts, one can argue that there will be more room for the SNB to raise rates, and the CHF’s haven status could also come to its rescue as the case for economic slowdown gets stronger with the massive global tightening being delivered. Gold (XAUUSD) holding up despite the dollar and yield strength Gold has held up well despite multiple rate hikes and the dollar reaching multi-year highs against several major currencies.  By continuing to raise interest rates while also raising expectations for lower growth and rising unemployment the FOMC is signaling a recession is a price worth paying for getting inflation under control. Putin’s increasingly desperate measures and threats regarding his war in Ukraine has helped support gold and shield it from losses but geopolitical support aside, the yellow metal may struggle as long yields continue to rise and the market continues to price inflation sub 3% in a year from now. Resistance has moved to $1690 while below $1654, last week's low, the market may target the 50% retracement of the 2018 to 2020 rally at $1618. Crude oil (CLX2 & LCOX2) Crude oil remains stuck near the lower end of its recent tight range with the Powell versus Putin battle (demand versus supply) not having a clear winner so far. Brent and WTI are nevertheless both heading for a small fourth weekly loss as the global economic outlook grows darker following a week where central banks around the world, led by the US Fed continued to apply the brakes through rate hikes in order to curb runaway inflation. A difficult and potentially volatile quarter awaits with multiple and contradictory uncertainties having their say in the direction. WTI support at $82 and $87.50 in Brent. Wheat futures jump driven by Ukraine and weather concerns Chicago and Paris wheat futures, two of the best performing commodities markets this week, trade at a two-month high supported by risks of a deepening conflict in Ukraine putting the UN supported grain export corridor at risk, and dry weather in crop areas of Argentina and the U.S. Plains. This despite a forecast from the International Grains Council pointing to an increased 2022/23 global wheat production. Paris Milling wheat (EBMZ2) reached €350 per ton on Thursday with support now the previous triple top at €340 per ton. In Chicago the December wheat contract (ZWZ2) reached a $9.22 per bushel high but for a second day in a row failed to close above the 200-day moving average at $9.16 per bushel. US treasuries (TLT, IEF) A key day for longer US treasuries yesterday, with the US 10-year treasury benchmark closing nearly 20 basis points higher yesterday to a prominent new cycle high above 3.70%. Perhaps the most interesting development was that the move sharply steepened the US yield curve, with the 2-10 slope rising to -41 bps from below -50 bps the day before. Are markets concerned the Fed cycle will extend for longer, that more treasury supply will be coming from the Fed’s QT picking up pace or from the Bank of Japan selling treasuries to fund intervention, that the US growth outlook is actually more positive than previously thought or all of the above? Whatever the cause, US long treasury yields are likely to prove a key driver across markets as long as they continue to rise to new cycle highs. What is going on? US jobless claims suggest a resilient labor market Initial jobless claims marginally rose to 213k from the revised lower 208k but it was beneath the expected 218k. Meanwhile, continued claims fell to 1.379mn (prev. 1.401mn), also lower than the consensus 1.4mln, and dipped beneath 1.4mln for the first time since mid-July. While the strength in the labor market remains intact given the large number of open positions in the American job market, some moderation can be expected in the coming months with the rapid pace of tightening and still-strained supply chains affecting output. However, as the Fed noted yesterday, the pace of rate hikes is set to continue despite some economic and labor market pain. SNB delivers a 75bps rate hike The 75 bps rate hike by the Swiss National Bank lifted the policy rate out of NIRP to 0.50% but disappointed the markets which had started to look for a 100bps rate hike. Guidance that additional rate hikes cannot be ruled out was also accompanied by repeating guidance that they are willing to intervene in FX markets as necessary with Chairman Jordan subsequently stressing, they are ready to step in to prevent excessive weakening or strengthening of the Franc. Bank of England goes for a dovish 50bps as recession concerns imminent While the consensus was looking for a 50bps rate hike from the Bank of England, market had started to price in a case for 75bps rate hike as well and so the decision to hike rates by 50bps was a slight disappointment. More so, the decision was not unanimous with three members supporting a 75bps move and one calling for a smaller 25bps move. However, the BoE confirmed that they are going to reduce their holdings of government bonds by GBP 80bln over the next 12 months, although the schedule remains open to amendments. Additionally, the BoE retained its guidance that they will continue to “respond forcefully” as necessary to inflation and while the peak forecast was reduced vs August’s update, it remains elevated and well above target. Finally, the Bank has downgraded its view on the UK economy in the near-term, Q3 2022 is now expected to see GDP declining by 0.1% (vs August projection of +0.4%), for a second quarter of contraction; a forecast which, if confirmed by the ONS release, implies the economy is already in a technical recession. Global container shipping rates are in free fall The collapse in global container shipping rates is gathering pace with the Drewry Composite down 10% on the week to $4,472 per 40 feet box, and lowest since Dec 2020. Down 57% from the Sept 21 peak but still three times higher than the pre-pandemic average, suggesting further downside as the global economy continues to lose steam. All the major China to US and EU routes have slumped. Costco earnings are strong Costco reported fourth quarter earnings results that beat average analysts' forecast, with total revenue hitting $72bn vs est. $70.3bn. It comes as fourth quarter membership fees rose 7.5% y/y to $1.33bn and accounted for 2% of the retailer's revenue. Although the company typically raises membership fees every five to six years (with its last fee increase in June 2017), Costco held off on rising fees “at this time”. Costco flagged that it sees some beginnings in the inflation situation improving, while it also expects to sell an overstock of holiday goods this season, which was left over from last year. The retailer said that the biggest cost pressures were now in labour expenses. General Mills, the best performer in the S&P500 this week The US biggest wheat producer General Mills has outperformed the S&P500 this week and risen 7.4% due to a much better than expected earnings release and strong wheat prices recently related to Russia’s escalation in its war in Ukraine. AUDNZD hit a new high after NZ trade balance disappointed again AUDNZD rallied to fresh 9-year high at 1.1371 with the next potential target in focus being the 2015 high at 1.1430. The uptrend continued after NZ reported its trade balance worsened in August trade data after NZ’s imports accelerated while exports have declined. The deficit in NZ Trade Balance widened further to -$12.28B vs. the prior release of -$11.97B on an annual basis. This is a stark contrast to Australia, which is reporting record surpluses in its trade balance, due to exporting record amounts of coal. What are we watching next? Eurozone PMIs on the card to gauge how hawkish ECB can get Eurozone PMIs are likely to dip further into contractionary territory as energy price hikes weigh on spending and business plans. Manufacturing PMIs are likely to ease to 48.8 in September from 49.6 previously, and services are expected to fall to 49.1 from 49.8, according to Bloomberg consensus estimates. A weaker-than-expected number could temper the hawkish ECB bets for the October meeting. Chicago Fed National Activity Index and US financial conditions With US leading indicators y/y dipping into the most negative territory since the Great Financial Crisis excluding the dip during the pandemic, the Chicago Fed National Activity Index and US financial conditions updates for August and latest week respectively are important to watch for equity sentiment. Earnings calendar this week Today’s earnings focus is Carnival reporting FY22 Q3 results (ending 31 August) with revenue expected to rise 800% y/y to $4.9bn as the cruise line industry is coming back from years of subdued demand due to the pandemic. Today: Carnival Economic calendar highlights for today (times GMT) 0715-0800 France, Germany, Eurozone Flash September Manufacturing and Services PMI 0830 - UK Sep. Flash Manufacturing and Services PMI 1230 - Canada Jul. Retail Sales 1345 – US Manufacturing and Services PMI 1800 - US Fed Chair Powell to speak at event Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-23-2022-23092022
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Tech Stocks: Tesla Stock Price Decreased By 2% On September 21st

FXStreet News FXStreet News 22.09.2022 15:38
Tesla stock gyrates wildly around the Fed interest rate decision. TSLA eventually closed down over 2% on Wednesday. Tesla is likely to struggle further along with all equities. Tesla (TSLA) swung around pretty wildly as the Fed decision was announced. The gyrations were partly to do with positioning and also lingering hopes for a Fed pivot. Equity markets sold off on the initial 75 bps rate hike. It was more the dot plot showing higher rates in 2023 that caught many by surprise. No Fed pivot in 2023 was not what equity bulls had been hoping for, but the press conference began slightly more dovish with talk of a "pause" and phrases like "data dependent" getting equity bulls' hopes up. The Nasdaq surged into positive territory before finally bowing to the inevitable. Rates are going higher, and equities will have to take some more pain. Tesla stock news All this overshadows any specific Tesla news, of which there is little anyway. Reuters had earlier reported that Tesla was looking to close some showrooms in China, but the company has supposedly denied this. Outside of that, the news was relatively light, an unusual move for Tesla. The attention will now begin to focus on the next set of quarterly earnings, which are due on October 20. Tesla has reported strong sales growth in China, so investors will be looking for clarity on projections there. Delivery lead times have been slashed on the mainland as well, with the Shanghai Giga factory getting upgraded. The question remains how much of this falling delivery time is attributable to falling demand. The last set of data from China appeared to show not much as Tesla nearly tripled its sales growth in China from a year prior. Tesla stock forecast Tesla stock once again failed at the upper resistance at $314 on Wednesday. This was in line with the rally and sharp sell-off of US equities into Wednesday's close. Now we wait to see how much follow-up there is on the sell side. The medium-term outlook is bearish with higher yields now offering a viable alternative to equity investments. In the current climate, safety offered by bonds (especially short-term bonds held to maturity) will likely tempt investors. Below $314 Tesla, therefore, looks bearish with a target of $281 and then $265. TSLA daily chart
The Grains Sector Saw Continued Demand| Acceleration In The Sale Of Gold

Fed Monetary Policy Will Drive Investment In Dividend Stocks

Saxo Bank Saxo Bank 23.09.2022 13:48
Summary:  The FOMC will push interest rates much higher from here to rein in inflation and with that lowering equity valuations. This means that higher P/E ratios, also called growth stocks, will suffer relative more compared to lower P/E companies and especially those with high dividend yields and that have proven their robustness over the past 10 years. Dividend stocks are in high demand and have been outperforming the global equity market by 14% since November and will likely continue to do well over the coming six months. The monetary pivot in November 2021 kickstarted dividend investing Since November last year when the Fed pivoted on its temporary inflation thesis and indicated that it would significantly tighten financial conditions to rein in inflation, dividends aristocrats* (see definition below) have outperformed the global equity market by 14.2% and are only down 10.7% this year compared to 21.2% for the MSCI World. The question is whether the relative outperformance can continue for dividend stocks. The FOMC’s decision on Wednesday to hike the US policy rate by another 75 basis points and sending a hawkish signal through its dot-plot and economic forecasts (read our in-depth take on the FOMC decision in our Thursday Quick Take note) will add more tailwind for dividend stocks. The reason for that is that higher interest rates will reduce equity valuations through a higher discount rate on future cash flows. Lower equity valuations will, all things being equal, have a larger impact on higher P/E ratio companies than those with low P/E ratios, because high P/E companies have a larger part of their value coming from cash flows expected far into the future. As our table below shows, the dividend aristocrats generally have lower valuation multiples and thus have less interest rate sensitivity. In addition, higher interest rates coupled with potential recession and uncertainty lift the value of companies with higher more predictable income stream in the short-term. It is worth noting that over the past five years, global dividend stocks have delivered a significantly worse return for shareholders than the global equity market. There are many ways to define good dividend paying companies and in this equity note we have focused on the SPDR S&P 500 Global Dividend Aristocrats UCITS ETF, but there is also the iShares MSCI World Quality Dividend ESG UCITS ETF which focuses on companies with high dividend yield and quality characteristics (strong return on capital and strong balance sheets). Below we have listed the 10 largest holdings in each ETF. SPDR S&P 500 Global Dividend Aristocrats UCITS ETF – 10 largest holdings H&R Block LTC Properties South Jersey Industries Unum Universal Pinnacle West Capital Northwest Bancshares IBM OGE Energy Spire MSCI World Quality Dividend ESG UCITS ETF – 10 largest holdings Microsoft Apple Roche Cisco AbbVie Merck Texas Instruments Unilever Qualcomm Novartis The chart below shows the 5-year weekly prices on the SPDR S&P Global Dividend Aristocrats UCITS ETF * S&P Global defines dividend aristocrats as the highest dividend yielding companies within the S&P Global Broad Market Index (BMI) that have followed a policy of increasing or stable dividends for at least 10 consecutive years. Source: https://www.home.saxo/content/articles/equities/hawkish-fomc-means-more-tailwind-for-dividend-stocks-23092022
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

Markets Affected By The Announcement Of Tax Cuts In The UK, The Intervention Of The Japanese Authorities

Saxo Bank Saxo Bank 26.09.2022 09:07
Summary:  The global macro environment took another beating late last week with disappointing Eurozone PMIs and a UK mini-budget causing a havoc in markets as it fueled further debt and inflation concerns. Dollar dominance continued with sterling pressured despite higher UK yields, and risk off tone is likely to continue as Russia-Ukraine tensions in focus. The yen’s intervention risks also on watch as Japan returns from holiday today. Oil prices slid to multi-month lows amid a stronger dollar and demand concerns, with supply factors turning supportive for now, weighing on energy stocks. What is happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) continue to tumble on rising interest rates  The selloff last Friday continued its long stretch of turbulence, which first kicked off following Powell’s hawkish Jackson Hole speech on August 26, then was exacerbated by a much-stronger-than expected CPI on September 13. And the selloff has most recently been bolstered by the hawkish rate and economic projections released after the FOMC meeting last Wednesday. Adding to the woes, earnings warnings from heavy-weight industrial and transportation companies have warned of weaker demand and an opaque outlook. The S&P 500 lost 12% and Nasdaq 100 dropped 13.9% over the period. Of note, last Friday, financial conditions tightened further, with US 2-year yields soaring to 4.2%, the highest since 2007, while the dollar soared to a new high and dragged down stocks, with both the S&P 500 and Nasdaq ending Friday down 1.7% lower.   Big US stock movers: oil and gas stocks plunge as oil falls to an eight-month low  All 11 sectors in the S&P500 closed lower on Friday, with Energy falling the most, 6.8%, after WTI crude declined by about 5% to an eight-month low after the US dollar hit its highest level in two decades on fears rising interest rates will tip major economies into a recession. APA Corp (APA:xnas) and Marathon Oil (MRO:xnys) fell about 11%. FedEx (FDX:xnys) fell 3.4% with its US$2.7 billion cost-saving by cutting flights, deferring projects, and closing offices facing skepticism. Ford (F:xnys) fell 3.6%, following a WSJ report that Ford delayed vehicle deliveries due to supply chain issues in getting Ford logo badges to put on its vehicles. On the upside, Generac Holdings (GRNC:xyns), Domino’s Pizza (DPZ:xyns) shares rose the most in the S&P 500 on Friday, gaining 3.2% and 3.1% respectively, perhaps with traders closing shorts as their stocks are continuing to hit new lows on a yearly basis.  U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rattled by soaring U.K. bond yields  In London trading hours before New York came in, U.S. treasuries were rattled by the jaw-dropping, emerging market style meltdown in U.K. Gilts, as 5-year UK Gilts soared 50bps and 10-year Gilts jumped 33bps in yields in an hour, following the announcement of a massive loosening of fiscal policy of nearly 2% of GDP by the new U.K. government. Investors are worried as when the U.K. acted similarly last time in 1972, inflation soared and the U.K. had to go to the IMF for a loan in 1976. When New York came in, bids emerged for U.S. treasuries, in particular, for the long end of the curve. 10-year and 30-year yields fell 3bps to 3.68% and 3.61% respectively while 2-year yields finished the session 8bps higher at 4.20%, the highest level since 2007.    Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) glided lower  Hang Seng Index continued its losing streak and tumbled 1.2% to its lowest level last seen in 2011.  Materials, healthcare, China Internet, EV, shipping, and consumer stocks led the market lower.  In the materials sector, Ganfeng Lithium (01772:xhkg) plunged 5%, followed by MMG (01208:xhkg) down 3.6%, and China Shenhua (01088:xhkg)  off 3.4%.  Despite the weakness in international crude oil prices, PetroChina (00857:xhkg) and Sinopec (00386:xhkg) managed to bounce by around 1.5%. Alibaba (09988:xhkg), Tencent (00700), and Meituan (03690:xhkg) declined by nearly 3%. Hong Kong’s end of hotel quarantine requirement lifted the share price Cathay Pacific (00293:hk) by 1% while Chinese airlines declined moderately.  Hong Kong luxury retailers gained, with Oriental Watch (00398:xhkg), Luk Fook and Chow Sang Sang rising from 0.5% to 2.2%. Banks in Hong Kong gained in anticipation of improvement in net interest margins following the lenders increased their prime rates, BOC Hong Kong (02388:xhkg) rising 3.8%, Hang Seng Bank (00011:xhkg) up by 2.5%. In mainland A shares, CSI300 swung between modest gains and losses and finished the day down by 0.3% and declining to within 3% from its April low. In terms of sectors, electronics, semiconductors, autos, coal, and solar power were among the worst laggards, while banks and appliances outperformed. Australia’s ASX200 (ASXSP200.1) to be pressured by oil prices pulling back  This week Australia’s share market will likely take its lead from commodity prices pulling back, with oil stocks like Woodside (WDS:xasx), Santos (STO:xasx) and Worley (WOR:xasx) to take a hair cut. Inversely, the coal price has continued to move higher, along with coal futures, so there is likely to be further upsdise in coal stocks including; New Hope, Whitehaven (WHC:xasx) and Coronado (CRN:Xasx) Washington Soul Patts (SOL:xasx). Dollar dominance continues, sterling battered The dollar rallied broadly, hitting a new all-time high against a currency basket and pushing the euro to a 20-year low while the pound plunged to a fresh 37-year low below 1.10 after the new UK government unveiled a massive fiscal stimulus plan to boost economic growth, which is sure to send inflation soaring even higher and force the BOE to do even more QT. Safe-haven demand also boosted the greenback amid risks from the escalation of Russia tensions and more signs of a slowing Chinese economy, which raised concerns about the outlook for global economic growth.  Crude oil (CLU2 & LCOV2) inches below key supports Crude oil prices fell sharply last week with the focus fixed on demand concerns while supply issues turned supportive. The continued surge higher in dollar and yields, aided by not just the FOMC but also the UK fiscal expansion measures into the end of the week, drove a slump in risk appetite. Brent crude fell to a nine-month low of $86.15/bbl, and this may warrant an OPEC action to support prices. Russia also warned it will not supply commodities to nations that join any agreement to cap prices for its crude. WTI crude traded below $80/bbl in early Asian trading hours as the new week kicked off.   What to consider? US PMIs come in better than expectations US flash PMIs for September surpassed expectations across the board, as manufacturing rose to 51.8 (prev. 51.5, exp. 51.1) and services, despite remaining in contractionary territory, printed 49.2 (prev. 43.7, exp. 45.0). Composite lifted to 49.3 from 44.6. At the same time, the inflation components of the PMIs continue to show some relief, with the report showing that supplier shortages eased and both cost and selling prices for both goods and services were at fresh lows, while still-high compared to the usual levels.  Eurozone PMIs disappoint, but ECB speakers (including Lagarde) will be in focus this week Both manufacturing and services PMIs for the Eurozone came in weaker-than-expected in a flash reading for September, with rising energy costs and decline in purchasing power weighing on manufacturing activity as well as the services sector. The headline reading fell to 48.2 in September from 48.9 in August. New orders disappointed, and the outlook was bleak as well. Manufacturing continues to be hit harder by elevated commodity prices. The reading slipped to 48.5 from 49.6. The services figure came in a bit higher at 48.9, but still fell from 49.8 in the previous reporting period. While supply bottlenecks eased, surging energy prices suggest these could reverse again. UK’s historic tax cuts raise the case for a BOE’s emergency rate hike New UK Chancellor Kwasi Kwarteng announced a mini-budget on Friday, which included wide-ranging tax cuts of the order of GBP 45bn, adding to an estimated cost of GBP 60bn for the energy plan. Instead of stabilizing markets, the announcement sparked mayhem as it promised even more inflation at a time when the UK is set to slide into a crippling stagflationary recession as prices soar. Bank of England last week stuck with a 50bps rate hike as recession is likely on the cards. Bonds were sold off and the sterling dipped to 37-year lows, suggesting UK’s inflation-fighting credibility at stake and demands risk premia.  Investors pile into insurance against further market sells offs. Over the last four weeks money managers have spent US$34 billion purchasing put options, which provides protection against a further fall in stock markets (according to the Financial Times). According to the article, ‘Investors pile into insurance against further market sell-offs', $9.6 billion was spent in the last weeks alone on options protecting against downside risks.  Will Japanese authorities intervene further to defend the yen? The Japanese authorities intervened in the currency markets for the first time in two decades last Thursday. USDJPY’s move above 145 following a hawkish FOMC and a still-accommodative Bank of Japan prompted the intervention, and dragged the pair to sub-141 levels before some of the move was retraced. However, Japan was closed on Friday for a holiday, and returns to trading today. Moreover, Governor Kuroda will make a speech and talk to reporters today. We believe the yen could weaken further given the pressure from yield differentials between the US, which continues to rise to fresh highs, vs. the yields in Japan which continue to remain capped. Meanwhile, the intervention last week has been possibly unilateral, suggesting it may not be long-lasting. This continues to raise the possibility of further intervention from the Japanese authorities, especially if USDJPY rises back above 145. Russia referendums results may create market volatility The four Moscow-held regions of Ukraine – Donetsk, Luhansk, Kherson and Zaporizhzhia – began voting on Friday on whether to become part of Russia, and results may be expected this week. The referendums are reminiscent of one in 2014 that saw Ukraine’s Crimea annexed by Russia. The four regions’ integration into Russia – which for most observers is already a foregone conclusion – would represent a major new escalation of the conflict. The threat of nuclear weapons will also keep risk off on the table, with Putin threatening to use “all means” to protect the annexed Russian territory. Hong Kong ended hotel quarantine for arrivals Effective from today, Hong Kong ended its requirements for people arriving Hong Kong to be under hotel quarantine.  Under the new arrangement, people arrive to Hong Kong from overseas and Taiwan are still required to undergo three days of medical surveillance at home or hotels.  They can go out, including taking public transportation and going to work but are still denied access to some public venues such as restaurants during the medical surveillance as well as required to take RAT daily for seven days plus three PCR tests on day 2, 4 and 6 each.  For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast .     Source: https://www.home.saxo/content/articles/equities/apac-daily-digest-sept-26-2022-26092022
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

The United States And Investments In New Sources Of Energy, Demand For The iPhone 14 Is Low

Saxo Bank Saxo Bank 26.09.2022 09:25
Summary:  Market sentiment continues to deteriorate as markets test the lows of this bear market on the surging US dollar and US treasury yields, although the latter came down sharply from the highs Friday as the equity market sell-off accelerated. The strong US dollar posted new highs for the cycle against many DM currencies, while sterling is in crisis mode, plunging to an all-time low at one point overnight below 1.0500 to the US dollar.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Last week was hectic with many central bank decisions, BoJ currency intervention and Russian military mobilisation. This morning US equities are not in a better mood with S&P 500 futures down 0.7% trading around the 3,680 level as the US 10-year yield continues to move trading at 3.76%. The VIX Index has also pushed to almost 30 and the VIX forward curve slipped into inversion on Friday signaling a potential panic selloff is in the making. We expect pressures to continue in equities, but with sentiment already historically low, there could be a short-term rebound if S&P 500 futures can hold the line around the June lows at around the 3,640 level. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index fluctuated between modest gains and losses and was 0.4% lower as of writing. HSBC (00005:xhkg) and Standard Charted (02888:xhkg) tumbled around 8% as the Pound Sterling was in turmoil. The market however was supported by rallies in China internet stocks, the China catering space, EV names, and Macao casino stocks. In mainland bourses, tourism, catering, semiconductors, solar power and EV rebounded, CSI300 up by 0.3%. Strong USD, weak GBP The US dollar strength has continued to start this week, as the greenback posted new cycle highs versus most other G10 currencies, with the notable exception of USDJPY, which did trade back higher above 144.00, but continues to respect the threat of official intervention from Japan after last week’s episode. Most intense focus at the moment is on the collapsing pound sterling, which crashed to an all-time low below 1.0500 overnight, down more than 5% in a couple of trading sessions. More on whether sterling’s slide will lead to an emergency move from the Bank of England below. The EURUSD traded to new cycle lows below 0.9600 overnight. There are no real chart points for that exchange rate until the all-time low of 0.8230 from the year 2000. Gold (XAUUSD) under pressure A hawkish Fed and the continued rise in real rates and not least the surging US dollar has seen gold fall towards the lowest since April 2020. Last week’s 1.9% drop, however, was relatively muted given the +3% rally in the dollar index and a 24 basis points jump in the US ten-year nominal and real yield, but as long the dollar continues its relentless rise and until the market reaches peak hawkishness and yields start to top out, gold will struggle to act as a defense against stagflation. Ahead of last week's slump money managers had increased short bets on gold to become the most bearish in more than four years. Having dropped below $1654 on Friday, the market may now target the 50% retracement of the 2018 to 2020 rally at $1618. Focus being the dollar, US inflation data and Russia geopolitical developments. Crude oil (CLX2 & LCOX2) The unrelenting pressure on commodities, including crude oil, continues following Friday’s gloomy session which saw accelerated dollar strength and growth pessimism cause a ripple through markets. The result being a near 5% drop in crude on Friday and weakness remained the theme overnight in Asia as the dollar ripped higher against most major currencies, not least a collapsing sterling. WTI trades below $80 per barrel while a return to the mid-80's in Brent may soon see OPEC+ action to support prices. With Russia repeating its warning of not supplying commodities to nations that join any agreement to cap prices for its crude, and with the market increasingly having priced in a recession, the energy sector could be the first to find support once the dollar stabilises. US treasuries (TLT, IEF) US treasury yields pulled sharply higher on Friday, but treasuries finally found support later in the session before melting lower again to start the week in Asia – taking the 10-year treasury yield back toward the cycle high near 3.80%. The next focus higher for the US 10-year benchmark is 4.00% after the cycle high 3.50% level fell last week. This was the highest yield posted all the way back in the 2009-10 period. What is going on? Right bloc wins Italian election, with Brothers of Italy’s Giorgia Meloni set to be next PM of Italy The bloc will have at least 114 Senate seats, ten more than the level required for a majority.  The three right-leaning parties Brothers of Italy, League and Forza Italia won about 43% of the popular vote, with 25% going to Brothers of Italy. The new government will have to scramble to put together a new budget for approval by the Italian parliament and the EU. Populist pressures could see the new government calling for large deficit spending that former PM Draghi refused to consider. Meloni has promised to roll back some of the reform measures introduced by Draghi, a move that could risk the EU withholding some portion of the EUR 200 billion of extraordinary EU pandemic budget funds targeted for Italy. US PMIs come in better than expected US flash PMIs for September surpassed expectations across the board, as manufacturing rose to 51.8 (prev. 51.5, exp. 51.1) and services, despite remaining in contractionary territory, printed 49.2 (prev. 43.7, exp. 45.0). The Composite lifted to 49.3 from 44.6. At the same time, the inflation components of the PMIs continue to show some relief, with the report showing that supplier shortages eased and both cost and selling prices for both goods and services were at fresh lows, while still high compared to the usual levels.  Eurozone PMIs disappoint, but ECB speakers (including Lagarde) will be in focus this week Both manufacturing and services PMIs for the Eurozone came in weaker-than-expected in a flash reading for September, with rising energy costs and decline in purchasing power weighing on manufacturing activity as well as the services sector. The headline reading fell to 48.2 in September from 48.9 in August. New orders disappointed, and the outlook was bleak as well. Manufacturing continues to be hit harder by elevated commodity prices. The reading slipped to 48.5 from 49.6. The services figure came in a bit higher at 48.9, but still fell from 49.8 in the previous reporting period. While supply bottlenecks eased, surging energy prices suggest these could reverse again. Apple iPhone 14 initial sales below previous introductions According to initial surveys demand for the iPhone 14 is running below previous model instructions suggesting consumers are holding back due to lower disposable income. The lower initial sales figures are in contrast to the pre-orders of the iPhone 14, but these pre-orders do not come with an obligation to buy. It is also worth noting that Apple has begun assembling some of its iPhone 14 in India.  The United States is boosting investments in new sources of energy Over the weekend, the U.S. government has announced it will provide up to $50 million as a reward to private nuclear fusion firms. They will need to provide pre-conceptual nuclear fusion reactor designs within 18 months of receiving their award. Fusion is considered by experts as a clean energy source with less radioactive waste than existing nuclear power plants. If they succeed, this could help accelerate the transition towards a more sustainable and greener economy. At the same time, the United States is the developed country with the most conventional nuclear capacity under construction, according to the latest data of the World nuclear association. While many European countries are debating whether nuclear energy is safe or not, the reality is that it is one of the safer sources of energy. Radioactivity resulting from uranium use diminishes quickly with time. About 40 years after it is done making power, the radioactivity of the fuel bundle falls by over 99 %. Most of the industrial waste we manage never gets less toxic over time…not even in a million years. Investors pile into insurance against further market sell offs During the last four weeks money managers have spent US$34 billion purchasing put options, which provides protection against a further fall in stock markets (according to the Financial Times). US$9.6 billion was spent in the last weeks alone on options protecting against downside risks, according to the Financial Times article ‘Investors pile into insurance against further market sell-offs'. What are we watching next? Sterling crisis after UK’s historic tax cuts may bring emergency rate hike New UK Chancellor Kwasi Kwarteng announced a mini budget on Friday, which included wide-ranging tax cuts approximately GBP 45 billion, adding to an estimated cost of GBP 60bn for the energy plan. Instead of stabilizing markets, the announcement sparked mayhem as it promised even more inflation at a time when the UK is set to slide into a crippling stagflationary recession as prices soar. The Bank of England last week stuck with a 50bps rate hike as recession is likely on the cards. Bonds were sold off and the sterling dipped to 37-year lows, suggesting UK’s inflation-fighting credibility at stake and demands risk premia, in other words, the Bank of England may be forced to announce an emergency rate hike to stabilize the currency. Will Japanese authorities intervene further to defend the yen? The Japanese authorities intervened in the currency markets for the first time in two decades last Thursday. USDJPY’s move above 145 following a hawkish FOMC and a still-accommodative Bank of Japan prompted the intervention, and dragged the pair to sub-141 levels before some of the move was retraced. However, Japan was closed on Friday for a holiday, and returns to trading today. Bank of Japan Governor Kuroda has been out speaking this morning, with no new signals on offer. The yen could weaken further given the pressure from yield differentials between the US, which continues to rise to fresh highs, vs. the yields in Japan which continue to remain capped. Meanwhile, the intervention last week has been possibly unilateral, suggesting it may not be long-lasting. This continues to raise the possibility of further intervention from the Japanese authorities, especially if USDJPY rises back above 145. Earnings calendar this week The Q3 earnings season kicks off in three weeks but there are still earnings releases being released not following the traditional calendar. The action this week will be on Thursday with earnings from H&M, Nike, and Micron Technology, with earnings from Micron being the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Tuesday: Ferguson Wednesday: Paychex, Cintas Thursday: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0800 – Germany Sep. IFO Survey 0800 – Switzerland SNB Weekly Sight Deposits 1230 – US Chicago Fed National Activity Index 1300 – ECB President Lagarde to speak 1400 – US Fed’s Collins (Voter this year) to speak 1430 – ECB’s Centeno to speak 1600 – US Fed’s Bostic (non-Voter) to speak 1600 – UK Bank of England’s Tenreyro to speak 1835 – New Zealand RBNZ Governor Orr to speak 2000 – US Fed’s Mester (Voter) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-26-2022-26092022
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

US Tech Stocks: What Can We Expect From Apple (APPL) Stock Price?

Jing Ren Jing Ren 26.09.2022 11:00
AAPL suggests the development of the primary fifth wave, taking the form of an ending diagonal (1)-(2)-(3)-(4)-(5) of the intermediate degree. Wave ⑤ is the final leg in a scale impulse a of the cycle degree. Most likely, the market has completed the construction of an intermediate correction (4) in the form of a minor triple zigzag W-X-Y-X-Z. Thus, now the price is moving up, in an intermediate wave (5), which may take the form of a standard zigzag A-B-C, as shown on the chart, where wave A is a minute impulse. Bulls in wave (5) may reach 189.11. At that level, wave (5) will be equal to wave (3). An alternative scenario assumes that the cycle wave a has been fully completed. Thus, in the last section of the chart, we see a downward corrective movement of the stock price in a cycle wave b, which may take the form of a double zigzag of the primary degree. It seems that the first two primary sub-waves Ⓦ-Ⓧ have already been formed. There is a high probability that the bears in the final sub-wave Ⓨ, in the form of an intermediate simple zigzag (A)-(B)-(C), will be able to bring the market to 118.80. At that level, primary wave Ⓨ will be at 100% of wave Ⓦ. Read next: Bitcoin Price Going Above The $69K In The Near Future? Find Out What Does Michal Saylor Think About It | FXMAG.COM An approximate scheme of possible future movement is shown on the chart.
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Very Dramatic Moves In Forex Markets With The Euro (EUR) And The Pound (GBP)

Swissquote Bank Swissquote Bank 26.09.2022 11:13
The FX markets kick off the week on an extremely chaotic note. Both the pound and the euro are being severely punished for the political decisions that are taken in the UK and in Italy respectively. Elections in Italy As expected, the far-right candidate Giorgia Meloni won a clear majority in Italy at yesterday’s election, with Brothers of Italy gaining more than 25% of the votes. And Meloni’s right-wing alliance with Salvini’s League and Berlusconi’s Forza Italia got around 43% of the votes: the terrible consequence of the pandemic, the war and the energy crisis. Situation the major currency  The EURUSD has been shattered this morning. The pair dived to 0.9550. But it’s almost worst across the Channel, if that’s any consolation. Investors really hated the ‘mini budget’ announced in UK last Friday. Investors were expecting to hear about a huge spending package from Liz Truss government, but the package has been even HUGER than the market expectations. UK’s 10-year yield jumped more than 20% since last week, the FTSE dived near 2% and Cable tanked below 1.0350 in Asia this morning. Elsewhere, the US dollar index took a lift, and the dollar index is just crossing above the 114 mark at the time of talking. Stock market Outlook Gold dived to $1626 on the back of soaring US dollar. US crude oil plunged below $80 per barrel. The S&P500 fell to the lowest levels since this summer, whereas the Dow Jones fell below the summer dip. Happily, the European equities are better bid this morning, but investors remain tense and worried. Watch the full episode to find out more! 0:00 Intro 0:24 Italy turns right, euro gets smashed 4:15 UK assets treated like EM after the ‘MINI’ budget 7:45 USD rallies, XAU, oil under pressure 8:49 US stocks dive to, or below summer lows on Fed fear Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Italy #election #Meloni #UK #mini #budget #EUR #GBP #selloff #USD #rally #crude #oil #XAU #BP #APA #XOM #recession #energy #crisis #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Steady BoE Rate Expectations Amid Empty Event Calendar in the UK

Podcast: Very Weak Global Sentiment And View Of Gold, Shares And Crude Oil

Saxo Bank Saxo Bank 26.09.2022 11:52
Summary:  Today we look at very weak global sentiment as the US dollar and US treasury yields continue to soar, taking US equities to the key cycle lows as we wonder what shape the capitulation will take - a quick test and reverse or a more profound move driven by poor liquidity? Elsewhere, we note sterling's historic drop and suggest that it is time for the Bank of England to step in with an emergency rate hike - or else. Crude oil, gold, stocks to watch today (including Apple with some concern around iPhone 14 orders) and more are on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean engraver If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-26-2022-26092022
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

Retail Investors Posted The Biggest Losses On European Stock Market

InstaForex Analysis InstaForex Analysis 26.09.2022 12:46
European stock indices hit new yearly lows and the main index of the UK broke through its summer low amid a sell-off triggered by rising recession risks. The Stoxx50 index lost 0.6% in early European trade. Miners and retail investors posted the biggest losses, while tech stocks scored gains. The Stoxx50 index broke through its yearly low. The FTSE 100 index updated its summer low. Today, it bounced slightly off the psychological level of 7,000: Italy's FTSE MIB dropped by 0.1%, following Giorgia Meloni's win of a clear majority in Sunday's Italian election. The European benchmark index plummeted by 21% from its January high amid a collapse in the market triggered by rising recession risks, the energy crisis, and the hawkish stance of the large central banks. Investors are closely monitoring the inflation situation. The European Central Bank is forecast to raise the interest rate by 75 basis points at the next meeting. "In terms of our central bank expectations at this juncture, risks of them over-tightening have significantly increased and that leading to a recession has increased too," Wei Li, global chief investment strategist at BlackRock Inc. said. Relevance up to 10:00 2022-09-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322646
US Nonfarm Payrolls Disappoint: Impact on Dollar and EUR/USD Analysis

Many Of Big Losers On The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 27.09.2022 08:10
At the close in the New York Stock Exchange, the Dow Jones fell 1.11% to hit a 52-week low, the S&P 500 fell 1.03%, and the NASDAQ Composite fell 0.60%. Walmart Inc was the top gainer among the components of the Dow Jones index today, up 1.25 points (0.96%) to close at 131.31. Apple Inc rose 0.34 points (0.23%) to close at 150.77. Procter & Gamble Company rose 0.13 points or 0.10% to close at 135.71. The biggest losers were The Travelers Companies Inc, which shed 4.88 points or 3.14% to end the session at 150.60. Boeing Co was up 2.99% or 3.92 points to close at 127.34, while Chevron Corp was down 2.63% or 3.81 points to close at 140.96. . Leading gainers among the components of the S&P 500 in today's trading were Wynn Resorts Limited, which rose 11.99% to 66.80, Las Vegas Sands Corp, which gained 11.81% to close at 39.66. as well as Costco Wholesale Corp, which rose 2.98% to end the session at 480.30. The losers were DISH Network Corporation, which shed 6.12% to close at 14.27. Shares of The AES Corporation shed 5.48% to end the session at 22.96. Quotes of Halliburton Company decreased in price by 5.17% to 23.31. Leading gainers among the components of the NASDAQ Composite in today's trading were LAVA Therapeutics NV, which rose 97.50% to 4.74, DIRTT Environmental Solutions Ltd, which gained 42.87% to close at 0.45. as well as shares of Panbela Therapeutics Inc, which rose 25.96% to close the session at 0.34. The biggest losers were Powerbridge Technologies Co Ltd, which shed 68.57% to close at 0.50. Shares of Scienjoy Holding Corp lost 43.77% to end the session at 1.67. Quotes of Snow Lake Resources Ltd fell in price by 40.88% to 1.88. On the New York Stock Exchange, the number of securities that fell in price (2652) exceeded the number of those that closed in positive territory (536), while quotes of 132 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,592 stocks fell, 1,248 rose, and 275 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 7.82% to 32.26, hitting a new 3-month high. Gold futures for December delivery lost 1.56%, or 25.90, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 2.82%, or 2.22, to $76.52 a barrel. Futures for Brent crude for December delivery fell 2.81%, or 2.39, to $82.64 a barrel. Meanwhile, in the Forex market, EUR/USD fell 0.84% to hit 0.96, while USD/JPY edged up 0.94% to hit 144.66. Futures on the USD index rose by 0.98% to 114.07.   Relevance up to 05:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/294320
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

In The Long Term The S&P 500 Will Have The Option To Buy

InstaForex Analysis InstaForex Analysis 27.09.2022 08:50
A strong decline in the S&P 500 and a strong spike in the VIX index will provide a very good buying opportunity for the long term. Relevance up to 07:00 2022-09-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294330
Tesla’s Shares Are The Most Expensive|Apple Started Production In India

Tesla’s Shares Are The Most Expensive|Apple Started Production In India

Saxo Bank Saxo Bank 27.09.2022 09:27
Summary:  Bond yields surged and the US dollar picked up strength once more, pressuring US equities for the fifth day. The S&P 500 finished Monday at its lowest closing level in 2022. Investors continued to dump the U.K. Gilts and the Pound Sterling. Australia’s ASX200 could be boosted by M&A and earnings, but pressure remains. China’s central bank raised its risk reserve requirement on banks’ forward FX sales. Australia’s Federal government considers new coal mines, we cover what you need to know. For the latest in markets, with trading and investing ideas, read today's market insights. What is happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) trade at their lowest levels in 2022 The sell-off in equities continued as bond yields continued to surge, and the US dollar picked up strength, which pressed the S&P500 lower for the 5th straight day, seeing the index for the biggest 500 stocks fall 1%, while the Nasdaq 100 gave up 0.5%. The S&P500 not only took out June’s low but closed at its lowest level in 2022. VIX jumped to 32.3. And we think the market is now trading at a level that could perhaps see a very short-term relief technical rally, with the market in oversold territory and the S&P500 trading 9% under its 50-day moving average. Although we could see quant traders likely to swoop and trigger a rally, we emphasize that headwinds still remain in place; as bond yields and the USD are still charging, financial conditions and valuation remain pressured by the Fed’s pledge to tighten liquidity, and we are still likely to see more earnings downgrade. So the overarching pressure on equities remains, which is why we think a potential rally will likely be very short-lived. Australia’s ASX200 (ASXSP200.1) rallies, boosted by M&A and earnings, but pressure remains After falling 1.6% on Monday to 6,469, the Australian share market opened 0.4% higher on Tuesday boosted by earnings results and M&A talk. A company to watch might be Santos, after selling down its PNG LNG in a $1.1 billion deal. Another company to watch is Synlait Milk as it tripled its financial 2022 net profit after tax to NZ$38.5 million, after sales rose 21% to $NZ1.66 billion. Over 2021/2022 the average milk price was NZ$9.30 per kilo of milk solid, and it forecasts for that to rise to an average of NZ$9.50 in 2022/2023. The milk company gave few clues about profits ahead with no financial guidance, but it expects a similar level of profitability in financial 2023 as in financial 2021. Selling in U.S. treasuries (TLT:xnas, IEF:xnas, SHY:xnas) continued as yields surged to new highs Continuous melt-down in U.K. government bonds (10-year Gilt yields jumped 42bps to 4.24%) across the pond and a poor 2-year U.S. treasury note auction pushed treasury yields to a new high, with the 10-year note yielding soaring 24bps to finish the day at 3.92%, putting the psychologically important 4% handle within reach.  The 2-year yield rose 14bps to 4.34%.  The 10-year real rate, represented by the 10-year Treasury Inflation-Protected Securities (TIPS) jumped to as high as 1.62% before settling at 1.59%, a new high since 2010. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) ended lower but casino stocks were a bright spot Hang Seng Index fluctuated between modest gains and losses and finished the session 0.4% lower. HSBC (00005:xhkg) and Standard Charted (02888:xhkg) tumbled more than 7% as the Pound Sterling was in turmoil. The market however was supported by rallies in China internet stocks, with Meituan (03690:xhkg) up by 4.5%, and Tencent (00700:xhkg) rising nearing 3%.  Macao said that it will resume receiving tour groups from mainland China in November. The news boosted Macao casino stocks, Sands China (01928:xhkg) soared 15.7%, followed by SJM (00880:xhkg) and Wynn Macau (01128:xhkg) each rising more than 11%.  XPeng (09868:xhkg) jumped 8.7% after the EV maker’s founder bought USD30 million worth of shares in the company.  Ahead of the National Day golden week holiday, China catering stocks surged, led by Xiabuxiabu’s 14.4% surge and followed by Haidilao (06862:xhkg) and Jiumaojiu (09922:xhkg) rising more than 6%. Following the plunge in gold prices, share prices of gold mining companies dropped sharply, led by Zijin Mining (02899:xhkg) falling nearly 9%, Zhaojin Mining declining more than 5%.  In mainland bourses, tourism, catering, semiconductors, solar power, and EV stocks rebounded. CSI300 Index fell 0.5%. GBPUSD reversed Monday’s flash crash, but risks seen ahead Sterling reversed from the flash crash seen in the Asian session on Monday, and thin liquidity conditions may be a reason for the sharp drop. The new all-time lows were set at 1.0350 but GBPUSD recovered later to trade closer to 1.0800-levels even as BOE’s lack of action (read below) continued to weigh on sterling. BOE’s Chief Economist Pill is scheduled to make a statement on Tuesday, and lack of real action may mean further downside in sterling. EURGBP below 0.90 may mean room for further spikes as the UK inflation picture deteriorates significantly. JGB futures test the Bank of Japan’s patience again The 10-year Japanese government bond futures tested the Bank of Japan’s yield cap of 0.25% this morning as global bonds continued to be sold off following the hawkish Fed last week doubled up by the UK fiscal plan. Japan’s 2-year yield also rose above 1% for the first time since 2015, but these are outside the scope of BOJ’s yield curve control policy. This suggests the central bank may need to increase the pace of its bond buying for longer maturities, as it did in June. USDJPY is also back in close sight of 145, the level above which we saw the direct intervention by the Japanese authorities last week. Still, the scope for intervention may be lower this time as the yen has strengthened against most other currencies other than the USD. EURJPY is still below 140 from 143+ levels at the time of intervention, while GBPJPY is down from 164 to ~154. Crude oil (CLU2 & LCOV2) at year-lows Crude oil prices stabilized in the Asian morning after dipping to the lowest levels since January as tighter global monetary policy continues to underpin recession concerns. Meanwhile the rally in the US dollar continues to stretch further, as we had expected, weighing on the overall commodities sector. WTI futures drifted closer to $77/barrel while Brent futures stayed below $85. Hawkish Fed remarks overnight continue to underpin more USD gains, but the question now is at what levels OPEC will step in to pare supplies and stem the rout. What to consider? Bank of England’s lack of action As a fallout from UK’s fiscal plan, the sterling slid to record lows of 1.0350 on Monday and this prompted calls for an immediate action from the Bank of England to stem the slide in the currency or stabilize inflation expectations. However, all that the BOE did was to try to calm the market nerves with some words rather than action, and delayed any hopes of a rate hike to the next meeting scheduled on November 3. The risk of rate hikes being ineffective to restore sterling credibility may be seen, but BOE’s currency reserves are also rather limited and can only cover about two months of imports. This suggests sterling can remain prone to more wild swings. Fed speakers maintain a hawkish rhetoric Cleveland Fed President Mester was on the wires in the late US hours, reaffirming that further rate hikes will be needed and will need a restrictive stance for some time, while she added it can be better to act more aggressively in an uncertain environment and that pre-emptive action can prevent the worst-case outcome. Collins also spoke about getting inflation under control even if that mean deteriorating labour markets, while Logan (2023 voter) also stressed on the 2% inflation goal. Fed’s 2023 rate cuts bets are easing since the hawkish FOMC last week, More Fed speakers are lined up for Tuesday, including Powell, Bullard, Evans and Kashkari. However, focus may be more on what BOE’s Chief Economist Pill has to say. German Ifo survey slips to new lows Germany’s Ifo business-climate index fell to 84.3 points in September from a revised figure of 88.6 points in August, data from the Ifo Institute showed Monday. This is its lowest value since May 2020 and below expectations of 87.1. The Ifo president said that the German economy is slipping into a recession, as business confidence worsened considerably due to the escalating energy crisis. No Russian oil price cap for the moment The EU countries announced they will delay the introduction of an oil price cap on Russian imports. At least two countries, Cyprus and Hungary (the Hungarian government is one of the most vocal European governments criticizing the sanctions against Russia) have expressed opposition to the oil cap proposal. Expect intense negotiations ahead in order to reach a compromise. For this matter, the EU requires unanimity among member countries. Each country has an effective veto. Australia’s Federal government considers new coal mines; pressuring coal equites The Australian Federal government is considering 29 applications for new expanded coal mines. Coal is already a AUD$63 billion export industry for the nation down under and supported its trade surplus growing to a record. The extra capacity will be able to produce 250 million tones a year. If some or all mines are approved, it will likely cause selling in coal equities in the short term. However, given most of Australia’s coal is exported to India, and green resources will not be able to power Australia’s grid until 2024 (off peak for retail Australians only), the coal price remains supported over the longer term. A climate advocacy group said the extra coal capacity will add to half of the world’s emissions. The government is reviewing applications with BHP, and Glencore on the list.  Australia’s economic data this week, is unlikely to stop the AUD from sliding, but the AUDGBP is the pair to watch Australia’s economy has remained resilient despite the global growth slowdown; however the Aussie currency has continued to lose out, and be pressured by the resilient dollar strength, with the USD index moving to 20-year highs and rising 5% since the Fed’s hawkish Jackson Hole speech on August 26. Also keep in mind, Australian economic data; Australian retail sales out tomorrow (Wednesday 28 September) and private sector credit (borrowing) out Thursday 29 September, are both expected to fall. Although the AUDUSD faces further pressure over the medium term, the AUDGBP is perhaps a pair to watch, after hitting six-year highs on the back of the UK’s tax cuts announced. What also supports this pair rising is Australia’s surplus continuing to trade at record highs, vs UK’s deficit likely to widen. Given that’s likely for now, the AUDGBP is a worthy pair to watch that could extend its uptrend. China’s central bank imposed a 20% risk reserve requirement on banks’ forward FX sales The PBOC imposed a 20% risk reserve requirement on commercial banks’ foreign exchange forward sales to their clients. The move requires banks to set aside a 20% reserve of any forward sale of foreign currencies to their clients, including importers who seek to hedge their FX exposure. As banks will pass along the now higher funding costs of these FX forward transactions to their clients, it is estimated that it will be about 600 to 700 pips more expensive for banks’ clients to hedge their FX exposures for 12 months.  The PBOC did use the same tool before in 2015 and 2018 and triggered some selling in USDCNY but did not reverse the depreciating trend then.  PBOC’s move on Monday failed to halt the weakening in the onshore and offshore Yuan in the midst of a super-charged strong dollar against major currencies, with USDCNH rising by 0.4% to 7.17. Tesla’s share price performance rivals Apple’s So far this year, out of the five biggest US firms by market value, Tesla has become the new megacap unlikely rival to Apple. Tesla shares are outperforming Microsoft, Alphabet, and Amazon so far this year, and coming close to Apple’s performance. However, Tesla’s shares are by far the most expensive. For more on what to expect from Tesla ahead, it’s worth reading or watching our update, available here. Apple begins production in India Apple has begun assembling some of its iPhone 14 in India. This may be the start of a manufacturing boom in India, as China transitions to a consumption economy and US-China tensions continue to play out. Meanwhile, India’s push on electronics manufacturing could mean more foreign investments to come, as India seeks to solidify its position in global supply chains in addition to being a large consumption-driven economy. Our India equity theme basket is worth considering as India remains one of the big winners of deglobalization and slowing Chinese economy. Separately, also consider Apple is one of the most traded stocks at Saxo globally this month. We wrote recently on why to expect Apple to perhaps pave out a bullish sales outlook, for more read here.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-trading-and-investing-ideas-to-consider-27-sept-27092022
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

Statement Of Boston Fed Chief|No Move From The Bank Of England (BoE)

Saxo Bank Saxo Bank 27.09.2022 09:37
Summary:  Market sentiment was weak again yesterday, but the price action in the US market managed to avoid a break of key support despite a fresh surge higher in US treasury yields, taking them to new cycle highs. Sentiment has improved slightly overnight as the further USD spike late yesterday eased off the accelerator. The chaotic moves in sterling likewise calmed, despite lack of clarity from the Bank of England on the degree to which an emergency move to shore up the currency is necessary.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities were under a lot of pressure yesterday as the US 10-year bonds saw big moves pushing the 10-year yield closer towards 4% in moves that smelled of thin liquidity and heightened nervousness. S&P 500 futures did the worst close in terms of level for this drawdown cycle but did not go below the intraday lows hit during the June selloff. This morning the mood among investors is stabilising and S&P 500 futures are rebounding 1.1% trading around the 3,710 level. If the USD Index and US yields come down today we could see the VIX forward curve flip back into contango and help push equity futures higher planting the seeds for a short-term rally. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index fell another 1% to its lowest level since 2011, led by the charge lower of the tech sector. Hang Seng Tech Index (HSTECH.I) dropped 1.7% and leading China Internet names fell over 2%. HSBC (00005:xhkg) failed to rally despite the Pound Sterling having stabilized. Ahead of quarter-end and the National Day golden week holiday, the PBoC for two consecutive days in a row this week via open market operations. The year-on-year decline in China’s industrial profits slowed in August. CSI 300 gained 0.5%, led by wind power, solar power, semiconductor, and infrastructure stocks. Sterling (GBPUSD, EURGBP) reversed Monday’s flash crash, but risks seen ahead Sterling reversed from the flash crash seen in the Asian session on Monday, and thin liquidity conditions may have been a reason for the sharp drop. The new all-time low was set at 1.0350 but GBPUSD recovered later to trade closer to 1.0800-levels even as BOE’s lack of action (read below) continued to weigh on sterling. BOE’s Chief Economist Pill is scheduled to make a statement on Tuesday, and lack of real action may mean further downside in sterling. EURGBP traded between 0.8900 and 0.9000 after the wild spike to 0.9200+ on Monday, with the highest weekly close during the 2016-2020 “Brexit limbo” years just above 0.9300. Some USD pairs seeing wild moves on further spike in US yields The US dollar strength spiked higher yesterday, with the extension higher particularly aggressive against some of the G10 weaklings of late like NZD and NOK (USDNOK only has one weekly close above the current level near 10.75 in its history, posted during the pandemic outbreak in early 2020). The move was supported by a further rise in long US treasury yields yesterday, as the 10-year benchmark rose sharply again. Today’s September US Consumer Confidence reading and 5-year treasury auction (more below under US Treasuries) are in focus for next steps for the USD and US yields. Gold (XAUUSD) Gold dropped further on Monday as the relentless dollar and US yields surge left it with nowhere to go but down. It has since bounced back a bit after almost reaching $1618, the 50% retracement of the 2018 to 2020 rally. The short-term direction will be dictated by the dollar and the duration of the current bond market rout which has seen an almost one percent jump in US ten-year real yields this month. With the recent decline in breakeven yields, as investors buy into the Fed’s ability to bring down inflation, real yields have risen strongly thereby challenging gold and other investment metals. Crude oil (CLX2 & LCOX2) Crude oil traded higher in Asia following another day of selling led by a continued rally in the dollar and US Treasury yields driving concerns about tighter monetary policy leading to weaker demand for crude oil and fuel products. Brent and WTI both reached their lowest levels since January after several Federal Reserve policy makers signaled that further rate rises were in store to tame inflation regardless of the economic impact of such actions. The question now is at what levels OPEC+ will step in to pare supplies and stem what increasingly has become a rout, not only in crude oil but across markets. Also focus on hurricane Ian which is gaining power as it nears Cuba on a path toward the eastern part of the Gulf and Florida, leading to a surge in demand for diesel. While it is expected to miss most of the energy infrastructure in the Gulf of Mexico some offshort production has been shut down with employees being evacuated. US treasuries (TLT, IEF) US treasury yields rose sharply once again yesterday, particularly at the longer end of the curve, where the US 10-year treasury yield came within eight basis points of the 4% handle. For perspective, that benchmark has not closed above 4% on a weekly close since 2008. A 2-year US Treasury auction saw surprisingly tepid demand, given the very high yield on offer well north of 4%. Today sees the auction of 5-year treasuries and tomorrow a 7-year auction. What is going on? Bank of England’s lack of action Sterling slid to record lows of 1.0350 on Monday on the fallout from the announcement of new tax cuts late last week, prompting calls for an immediate action from the Bank of England to stem the slide in the currency or stabilize inflation expectations. However, the BOE response was rather lacking, only bringing a few words rather than action, and bringing doubt on whether the BoE would hike rates between now and the next regularly scheduled meeting on November 3. The risk of rate hikes being ineffective to restore sterling credibility may be seen, but BOE’s currency reserves are also rather limited and can only cover about two months of imports. This suggests sterling can remain prone to more wild swings.  The BOE’s Chief Economist Huw Pill will speak today.  Fed speakers maintain hawkish rhetoric Cleveland Fed President Mester (voter this year) was on the wires in the late US hours, reaffirming that further rate hikes will be needed and as the Fed is set to maintain a restrictive stance for some time, while she added it can be better to act more aggressively in an uncertain environment and that pre-emptive action can prevent the worst-case outcome. Boston Fed chief and FOMC voter Collins also spoke about getting inflation under control even if that means deteriorating labour markets, while Logan (2023 voter) also stressed the 2% inflation goal. Fed’s 2023 rate cuts bets are easing since the hawkish FOMC last week, More Fed speakers are lined up for Tuesday, including Powell, Bullard, Evans and Kashkari. German Ifo survey slips to new lows Germany’s Ifo business-climate index fell to 84.3 points in September from a revised figure of 88.6 points in August, data from the Ifo Institute showed Monday. This is its lowest value since May 2020 and below expectations of 87.1. The Ifo president said that the German economy is slipping into a recession, as business confidence worsened due to the escalating energy crisis.  China’s industrial profits declined 9.5% Y/Y in August but slower sequentially In the first eight months of 2022, China’s industrial profits contracted 2.1% y/y. For the month of August, industrial profits declined 9.5% y/y, a slower contraction that July’s -14.5% y/y. The National Bureau Statistics noted that the slower pace of contraction was helped by stronger auto, electrical equipment, electricity generation, and consumer product industries. No Russian oil price cap for the moment Yesterday, the EU countries announced they will delay the introduction of an oil price cap on Russian imports. At least two countries, Cyprus and Hungary (the Hungarian government is one of the most vocal European governments criticizing the sanctions against Russia) have expressed opposition to the oil cap proposal. Expect intense negotiations ahead to reach a compromise. For this matter, the EU requires unanimity among member countries. Each country has an effective veto. What are we watching next? Traders are expecting further tightening from central banks The money markets expect that the European Central Bank (ECB) will go for another 75 basis point interest rate hike in October. Given the plunge of the sterling pound, traders expect that the Bank of England (BoE) could go in with a 100 basis points emergency rate hike before the scheduled November meeting. Hopefully, this will work. If it fails, the Bank would be in a complicated situation and the sterling pound would certainly further weaken. This is one of at least four options the Bank must use to stop the currency slide. The three others are: 1) say and do nothing until the calm comes back in the forex market; 2) say something but do nothing (with might not be the best option so far); and 3) do something small (50 basis point interest hike for instance) but the market might then test the Bank. There is no easy answer, as you can see. Apple begins production in India Apple has begun assembling some of its iPhone 14 in India. This may be the start of a manufacturing boom in India, as China transitions to a consumption economy and US-China tensions continue to play out. Meanwhile, India’s push on electronics manufacturing could mean more foreign investments to come, as India seeks to solidify its position in global supply chains in addition to being a large consumption-driven economy. Our India equity theme basket is worth considering as India remains one of the big winners of deglobalization and slowing Chinese economy. US September Consumer Confidence up later today Confidence according to this survey rebounded in August to 103.20 versus the local low of 95.30 in July, likely as the labor market remains strong and gasoline prices had fallen sharply from the record levels back in June. Today’s number is expected at 104.5, but it is worth noting that while the overall survey has remained well within the range since 2015, the ratio of the very high Present Situation versus very low Expectations was the widest (-81.4) recorded in July since a brief episode in early 2001. Earnings calendar this week The action this week will be on Thursday with earnings from H&M, Nike, and Micron Technology, with earnings from Micron being the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Today: Ferguson Wednesday: Paychex, Cintas Thursday: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0730 – US Fed’s Evans (voter in 2023) to speak on CNBC 1000 – Sweden Riksbank's Ingves to speak 1015 – US Fed’s Evans to speak 1100 – UK Bank of England Chief Economist Pill to speak 1100 – ECB's Villeroy to speak 1130 – Fed Chair Powell to speak on digital currencies 1230 – US Aug. Preliminary Durable Goods Orders 1300 – US Jul. S&P CoreLogic Home Prices 1315 – ECB's Guindos to speak 1355 – US Fed’s Bullard (voter 2022) to speak 1400 – US Sep. Consumer Confidence 1400 – US Aug. New Home Sales 1700 – US 5-year Treasury Auction 1700 – US Fed’s Kashkari (voter 2023) to speak 2030 – API's Weekly Crude and Fuel Stock Report 2350 – Japan Bank of Japan meeting minutes 0130 – Australia Aug. Retail Sales   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-27-2022-27092022
The Japanese Yen Retreats as USD/JPY Gains Momentum

Tech Stocks: What Can We Expect From (AMZN) Amazon Stock Price?

Jing Ren Jing Ren 27.09.2022 10:09
AMZN suggests the development of a zigzag, which consists of sub-waves a-b-c of the cycle degree. Perhaps the market has completed the formation of the first major wave a, it is a bullish 5-wave impulse In the last section of the chart, we see a decrease in the price, which may indicate the beginning of a bearish correction b. It may take the form of a zigzag â’¶-â’·-â’¸. Most likely, in the near future we will see a continuation of the depreciation of stocks in the final intermediate wave (5), which may end the primary impulse wave near 93.41. At that level, wave (5) will be at 76.4% of previous impulse (3). After the end of the impulse wave â’¶, the stock is expected to rise in the primary correction â’·. However, it is possible that the market has completed the formation of the primary wave â’¶. According to this markup, the wave â’¶ has the form of a leading diagonal (1)-(2)-(3)-(4)-(5). In this case, in the last section of the chart, we see the price increase in a bullish correction â’·. It is assumed that the correction wave â’· will take the form of an intermediate double zigzag (W)-(X)-(Y), where the actionary wave (W) is also a double zigzag W-X-Y of a lesser degree. It is possible that the correction â’· will be at 61.8% of wave â’¶. Thus, its completion is expected to reach the level of 155.06. An approximate scheme of possible future movement is shown on the chart.
Assessing China's Economic Challenges: A Closer Look Beyond the Japanification Hypothesis"

On the New York Stock Exchange, The Number Of Securities That Fell In Price Was Bigger Than This Positive One

InstaForex Analysis InstaForex Analysis 28.09.2022 08:25
At the close of the New York Stock Exchange, the Dow Jones fell 0.43% to hit a 52-week low, the S&P 500 index fell 0.21%, and the NASDAQ Composite index rose 0.25%. The leading performer among the Dow Jones index components today was Salesforce Inc, which gained 2.57 points or 1.76% to close at 148.89. Quotes Dow Inc rose by 0.40 points (0.92%), ending trading at 43.79. Home Depot Inc rose 0.79% or 2.11 points to close at 268.69. The losers were shares of McDonald's Corporation, which lost 7.06 points or 2.90% to end the session at 236.70. Procter & Gamble Company was up 2.75% or 3.73 points to close at 131.98 while Coca-Cola Co was down 2.57% or 1.49 points to close at mark 56.38. Leading gainers among the S&P 500 index components in today's trading were CF Industries Holdings Inc, which rose 6.10% to hit 95.87, Mosaic Company, which gained 4.15% to close at 48.44, and also shares of Royal Caribbean Cruises Ltd, which rose 3.88% to end the session at 45.75. The biggest losers were Digital Realty Trust Inc, which shed 3.98% to close at 97.73. Shares of Organon & Co shed 3.54% to end the session at 24.26. Quotes of Global Payments Inc decreased in price by 3.39% to 108.02. Leading gainers among the components of the NASDAQ Composite in today's trading were Avenue Therapeutics Inc, which rose 106.25% to hit 7.26, Scienjoy Holding Corp, which gained 47.90% to close at 2.47, and also shares of X4 Pharmaceuticals Inc, which rose 40.18% to close the session at 1.25. The drop leaders were NLS Pharmaceutics AG, which shed 25.07% to close at 0.72. Shares of Midatech Pharma PLC ADR lost 20.77% and ended the session at 2.06. Quotes of Fednat Holding Co decreased in price by 18.22% to 0.18. On the New York Stock Exchange, the number of securities that fell in price (1634) exceeded the number of those that closed in positive territory (1527), while quotes of 136 shares remained virtually unchanged. On the NASDAQ stock exchange, 2048 companies rose in price, 1751 fell, and 295 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 1.05% to 32.60, hitting a new 3-month high. Gold Futures for December delivery added 0.18%, or 2.95, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 2.29%, or 1.76, to $78.47 a barrel. Futures for Brent crude for December delivery rose 2.35%, or 1.95, to $84.81 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.14% to 0.96, while USD/JPY rose 0.06% to hit 144.84. Futures on the USD index rose by 0.09% to 114.12.   Relevance up to 06:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/294518
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

US Stocks: S&P 500 Decreased By 0.21%, Nasdaq Gained 0.25%

ING Economics ING Economics 28.09.2022 11:00
Volatile markets tee-up targets for today's trading Source: shutterstock Macro outlook Global Markets: In line with yesterday’s signal from equity futures, US stocks opened up yesterday, but rapidly gave up much of their early gains. A slew of hawkish Fed comments wouldn’t have helped, but this is also becoming part of the wallpaper now. The S&P finished down 0.21%, though the NASDAQ clung onto more of its earlier gains and ended up by 0.25%. Equity futures are again signalling a modest gain at today’s open. The mixed equity backdrop did not provide much solace for the EUR, however, which slid further against the USD to 0.9585, maybe hurt by the apparent sabotage of gas pipelines from Russia. Cable is hovering just above 1.07 now, though failed to hold levels above 1.08 yesterday. The AUD is also down, dropping to 0.6425, while the JPY has crept a little higher and is now 144.82 – only just below the bank of Japan and Ministry of Finance’s 145 red-line. That line could be targeted today. In the Asian FX space, the CNY had another soft day yesterday and is up to 7.1761 now. We are probably due a much stronger-than-expected fix any time now to try to slow its depreciation ahead of the 7.20 level. The PHP also took a beating, gapping higher, weakening further and sitting just under 59 currently. Next stop 60? The KRW bucked the weakening trend, making small gains as speculation over Bank of Korea intervention gained ground. 2Y US Treasury yields actually pared their recent increases yesterday, falling 5.2bp to 4.283%, though there were more yield increases in the 10Y bond which rose 2.1bp to 3.945%, putting 4% within reach. On the whole, though, today looks like it is shaping up to be “rangey”, rather than directional, though there are clearly a few nearby targets that markets may take aim at. G-7 Macro: Yesterday’s data flow contained a few surprises. US new home sales for August were much stronger than expected, rising at a 685,000 annual pace, though the July house price index showed a month-on-month decline of -0.44% (S&P Case Shiller figures the FHFA house price index also fell by 0.6%MoM). Durable goods orders came in soft, much as expected, though the Conference Board consumer confidence survey unexpectedly rose, which is odd given the rising rates backdrop. Today, we get more housing data from the US in the form of pending home sales and mortgage applications. European consumer confidence figures from Germany and France complete the G-7 data picture for the day. China: The People’s Bank of China (PBoC) will increase the reserve ratio from 0% to 20% from today when banks sell USD forwards to their customers. History tells us that this is not an effective tool to stop yuan depreciation. On 6 August 2018, after the same policy was implemented, the yuan continued to depreciate, from around 7.0 to close to 7.2. But we can still refer to the policies for 2018-2019 for today’s reference. The sale of USD by State Owned Enterprises in the offshore market in 2018/2019 is one of the operations that could be replicated later on if the yuan continues to weaken. Australia: August retail sales are forecast to rise 0.4% after the outsize 1.3% MoM gain in July. The data is released at 0930 SGT/HKT. Anything short of an outright decline suggests that the Australian economy is still running strongly, which may provide the Reserve Bank of Australia with more of a headache as it attempts to squeeze inflation out of the economy. Recent conjecture of a slowdown in the pace of RBA tightening may come under some pressure. India: The 2Q22 current account deficit, which is due for release at some point over the rest of this week should show a substantial widening from the -$13.4bn reading for 1Q22, thanks mainly to higher imported energy prices, though also not helped by weakening external demand for India’s exports. The INR, which is already looking very weak, could slide further on the news. What to look out for: China PMI Australia retail sales (28 September) Japan leading index (28 September) Bank of Thailand meeting (28 September) US mortgage applications and wholesale inventories (28 September)       South Korea business survey manufacturing (29 September) US initial jobless claims, 2Q GDP and core PCE (29 September) South Korea industrial production (30 September) Japan labour market data (30 September) China official and Caixin PMI manufacturing (30 September) India RBI meeting (30 September) Hong Kong retail sales (30 September) US personal income, personal spending and core PCE (30 September) US University of Michigan sentiment (30 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

Podcast: US Dollar (USD) Keeps Rising | A Look At The 10-year US Treasury

Saxo Bank Saxo Bank 28.09.2022 11:39
Summary:  Today, a look at the US 10-year Treasury benchmark reaching the 4.0% milestone for the first time for this cycle after a remarkable surge in yields in recent weeks. It's worth considering the 1987 experience of bond markets flip-flopping in their correlation with equities and whether we could be set for a similar flip-flop if risk sentiment worsens further. Also, note that many speculative corners of the market were bid yesterday even as the action soured late and worsened still overnight as the US dollar continued surging - especially against the Chinese yuan overnight. Much more on today's pod, which is a solo flight with John J. Hardy hosting. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-sep-28-2022-28092022
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

Price Of NASDAQ Remains Inside The Medium-term Downward Sloping Channel

InstaForex Analysis InstaForex Analysis 28.09.2022 14:45
Blue lines- bearish channel Red line -horizontal support NDX is in a short-term bearish trend after the high of August 16th. Price has now reached the lows from June 16th. This is important horizontal support. Price remains inside the medium-term downward sloping channel. A break below 11,000 will open the way for a move towards the lower channel boundary at 9,600. A break below the horizontal support, a back test and a new low is the most probable scenario. Bulls need to defend current levels around 11,000. If support is respected, then we should expect NDX to move towards 12,850 at the upper channel boundary.   Relevance up to 14:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294654
Reducing Animal Meat Production As Part Of Climate Policy

MCD Stock Price (McDonald's) Has Been Extremely Bearish But There Are Increased Chances That The Upward Move

InstaForex Analysis InstaForex Analysis 28.09.2022 14:30
Black line- support trend line Red line- 200 Exponential MA Blue line- 50 Exponential MA Green line - 13 Exponential MA Recent price action in MCD has been extremely bearish. There are increased chances that the upward move from 2020 lows is complete and we should at least see a corrective pull back. Price has broken below the key upward sloping resistance trend line after being tested twice. The importance of the trend line was confirmed by previous price action. Price not only has broken below the trend line support, in the Daily chart we also see price below all three MA indicators. Apart from the 200 DMA, the other DMA are negatively sloped and the 13 DMA has crossed below the 5DMA. The Daily RSI has just reached oversold conditions. Current chart, points to more downside implying that MCD should head towards $200 or lower.   Relevance up to 14:00 2022-09-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294652
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Apple Will No Longer Seek To Increase Production

InstaForex Analysis InstaForex Analysis 29.09.2022 08:37
The American stock market continues to be in a fever. If traders are trying to buy out cheaper assets on the premarket, one could observe another market sale of risky assets during the regular session recently. In a situation where the fragile balance of the Federal Reserve System between restraining demand sufficiently to slow inflation is a rather laborious process, many economists continue to predict a recession for the economy, discouraging the desire to buy risky assets. Statements by representatives of the US Federal Reserve System also do not betray optimism. Today, the president of the San Francisco Federal Reserve, Mary Daly, said: "To keep inflation low and stable, we must balance our mandate with full employment." "The attempt to cope with reducing inflation without harming the labor market has failed. While we are trying to do everything as gently as possible so as not to provoke an economic downturn, if this is not necessary, we are ready to act with full determination — this is a struggle." Daly's comments about the Fed's desire to reduce inflation echo the comments of some of her colleagues who spoke earlier. The head of the St. Louis Fed, James Bullard, warned that inflation is a "serious problem" and that confidence in the central bank is under threat. Fed Chairman Jerome Powell said policymakers would not give up on fighting inflation, despite the pain it could cause the US economy. Premarket Apple's rejection of plans to increase production of its new iPhone 14 line led to a sharp collapse in shares in the premarket. The company made this decision after the expected surge in purchases of the new iPhone did not happen. Apple shares fell 3.7% in premarket trading. According to the report, Apple will no longer seek to increase production by 6 million units in the year's second half as planned. Instead, the company will aim to produce 90 million units, roughly in line with Apple's forecast and production volume for last year. The report also affected Apple's shipments and manufacturers. Shares of key chipmaker Taiwan Semiconductor Manufacturing fell about 2.3% before the market opened. Shares of Hon Hai, also known as Foxconn, sank about 2.9%. Biogen shares rose 45.6% in premarket trading after the company announced that its experimental drug for Alzheimer's disease dramatically slowed the progression of the disease, reducing cognitive and functional impairments by 27%. Lyft has said it will suspend hiring until the end of this year. This follows the company's previous statement that it would "significantly" slow down hiring as it seeks to cut costs. Lyft shares fell 2.5% in premarket trading. Ocugen securities rose 8.2% in the premarket after the drugmaker announced a licensing agreement with Washington University in St. Louis for developing, commercializing, and producing its intranasal vaccine against Covid-19. BlackBerry reported smaller-than-expected quarterly losses and earnings that beat analysts' forecasts, but the cybersecurity communications software company's revenue fell amid weak customer spending. As for the technical picture of the S&P500, after yesterday's regular sell-off, traders managed to regain control of the $3,643 level today and have already set their sights on $3,677, which leaves hope for an upward correction. To build it up in an attempt to find the bottom, the bulls need to return to the level of not only $ 3,677 but also $3,704. Only after that will it be possible to count on a breakthrough in the area of $3,744. The breakdown of this range will support a new upward momentum, already aimed at the resistance of $3,773. The furthest target will be the area of $3,801. In the case of a downward movement, a breakdown of $3,643 will quickly push the trading instrument to $3,608 and open up an opportunity to update the support of $3,579. Below this range, you can bet on a larger sell-off of the index to a minimum of 3,544, where the pressure may ease a little.   Relevance up to 15:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/322944
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Dow Jones Index: A Corrective Decline That Will Take Years Has Begun

InstaForex Analysis InstaForex Analysis 29.09.2022 09:29
Today we will look at the long-term chart of the Dow Jones Index dating back to 1921, but the period we would like to focus on is from the 1932 low at 40.56 to the peak on January 2022 at 36,952. If our long-term count is correct, then we have a complete five-wave rally. A corrective decline that will take years has begun. Looking at the major corrections of 1932 - 2022 (90 years), we see the first correction from 1937 - 1942 (5 years). The next major correction stretched from 1966 to 1974 (8 years). Then, we had the 2000 to 2009 correction (8-9 years). Now the index is going through a correction as well. This correction is of a larger degree and therefore is likely to take at least 8 years and possibly even longer. The expected correction doesn't have to be very deep, but the rally from 40.56 to 36,952 does open up for a decline to near the bottom of wave 4 which was the 2009 low. If that is seen, then it is likely to terminate near 7,363, but a decline closer to the 50 to 61.8% corrective targets at 18,303 or maybe even closer to 13,993 is the most likely scenario, though that's also quite a distance to cover from the present 29,684 level. We are braced for hard times in the years ahead with some major changes to the society as we know it today.   Relevance up to 07:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/294749
Tuesday's EUR/USD Analysis: Chaotic Movements on 30M Chart

BHP Shares Rose, Parks In Florida Close Due To Hurricane Ian

Saxo Bank Saxo Bank 29.09.2022 10:02
Summary:  Global markets rallied after the Bank of England decided to stage a ‘temporary’ market intervention, sending bond yields and the USD lower. This seems to have tentatively calmed markets, while end of month and quarter rebalancing could lead to significant flows with notable bond moves and USD strength in this quarter. Oil and gold spiked, and APAC equities futures are returning to green. News of Apple’s production cuts is casting further pessimism on the upcoming earnings season. What is happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rallied after BOE soothed nerves The Nasdaq Composite rallied 2.1%, and the S&P500 gained 1.97%, snapping its six-day rout. Treasuries jumped after the BOE gave some respite and that pushed down 10-year yields 21bps to 3.73% after briefly breaching 4.00%. The dollar also weakened across the board supporting gains. Nasdaq was bolstered by gains from Amazon with its shares gaining 3.2% after it pushed further into wellness, security and the auto industry. On the flip side, Apple’s shares sank about 1.3% on news it is not increasing iPhone production, which casts doubt over the outlook for consumer spending. The U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) plunged on BOE bond buying Once again, the action started from across the pond when the Bank of England surprised the market by announcing a “temporary” plan to purchase long-dated UK Gilts starting immediately yesterday through Oct 14.  The announcement pushed 10-year UK Gilt yields 50bps lower to 4.01% and 30-year UK Gilt yields 106bps lower to 3.93% from the prior day’s 4.99%.  U.S. bond traders took note of the fact that the rout in the U.K. bond market and the Pound Sterling caused the Bank of England to blink and reverse course to roll out a QE-like yield curve control policy and sent in bids to U.S. treasuries.  5-year to 10-year U.S. treasury yields plunged most, down about 20bps from the day before, to 3.97% and 3.75% respectively.  2-year yields fell 14bps to 4.14%.  Market implied terminal Fed Fund rate fell to 4.54% from 4.62 a day before. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) On Wednesday, stocks traded in the Hong Kong bourse notably underperformed those in Shanghai and Shenzhen. Hang Seng Index dropped 3.4% and Hang Seng TECH Index plunged 3.8%.  Risk-off sentiment hung over the market as the Renminbi weakened below 7.20 versus the dollar and Apple’s decision to withdraw its plans to increase the production of new iPhones added to the worries of a slowing global economy.  Apple suppliers, Sunny Optical (02382:xhkg) and AAC Technologies (02018:xhkg) dropped 2.8% and 1.5% respectively.  China Internet names fell across the board, with JD.COM and Bilibili (09629:xhkg) leading the charge lower each plunging 5.6%.  Alibaba (09988:xhkg) lost over 4%.  U.K. headquartered HSBC (00005:xhkg) and Standard Chartered (02888:xhkg) continued their slide, each falling nearly 6% for the day and 11% to 12% since last Friday’s post-mini-budget turmoil in the Pound Sterling and U.K. Gilts.  Both Hong Kong and China developers plunged across the board, mostly by 2% to 6%, with CIFI (00884:xhkg) falling over 32% and being the largest casualty in the property space.  CIFI, the 13th largest property developer in mainland China was reported to have missed a payment on a project-related debt.  Another leading Chinese developer, Country Garden (02007:xhkg) plunged by nearly 13%, being the worst performer in the Hang Seng Index.  Automakers were among the laggards.  Great Wall Motor (02333:xhkg) and XPeng (09868:xhkg) tumbled more than 9%, NIO (09866:xhkg) and Li Auto (02015:xhhg) lost over 7%,  CSI300 fell by 1.6%, with materials, industrial, and information technology dragging down the index most.  Non-ferrous metal, electric equipment, auto, and defense stocks were among the biggest losers.  Banks were outperformers in the A-share market with small gains.  Australia’s ASX200 (ASXSP200.1) futures suggest the market will rally 1.5%; monthly CPI and borrowing/credit data ahead. Given the rally on Wall Street, gains in tech are expected, along with a oil and gold stocks. Meanwhile, the iron ore (SCOA) jumped 1.3% to US$96, which should support iron ore companies higher. Today, on economic news watch; will be Private Sector credit (lending) growth, which will give a gauge into if borrowing has continued to slow amid runaway inflation. Bloomberg’s survey suggest credit growth year on year will slow from 9.1% growth to 9.0% growth. So it’s worth watching the big lenders in Australia, CBA, ANZ, WBC, MQG as well as the smaller banks, SUN and BOQ which are seeing the most lending growth.  Secondly, also on the economic news watch, the ABS will publish its first ever monthly CPI reading, with the data out at 11.30am Sydney time. However keep in mind, only about two-thirds of the items in the CPI data basket will have up-to-date prices each month, including food, clothing, rent, petrol, and holiday travel. Sterling resumed its decline in Asia It was a surprise to see a big move higher in GBPUSD on the BOE intervention yesterday, when the BOE action remains temporary and one that will weigh on sterling, much the same way as we have seen the Japanese yen suffer this year due to the yield cap. GBPUSD however reversed the gains to 1.0838 to drop to lows of 1.0540 but the subsequent weakness in the USD took the pair back to 1.0900 in US session. The downside however returned in early Asian trading hours as pair dropped close to 1.0800. EURGBP dropped back from 0.9066 to 0.8950 but a slight upside returned in Asia. Crude oil (CLU2 & LCOV2) rebounds on worsening geopolitics and drop in US inventories Crude oil prices rallied as supply conditions worsened, as suggested by the first drop in US crude inventories in a month. EIA data showed stockpiles fell 215kbbl last week, while West Coast gasoline stockpiles fell to their lowest level in 10 years. Disruption to supplies due to Hurricane Ian are also causing some concerns, with US president Joe Biden warning oil companies not to hike prices for the second time this week. Furthermore, geopolitical situation has turned more fragile once again with the European Union announcing a new round of sanctions against Russia including a ban on European companies from shipping Russian oil to third countries above an internationally set price cap. Brent futures rose close to $90/barrel while WTI futures got in close sights of $82/barrel.   What to consider? Bank of England’s market intervention to avoid systemic risks The Bank of England on Wednesday announced that it would purchase long date UK gilts to stabilize the market in a “temporary operation”. The move forced UK yields sharply lower, with the 10-year UK Gilt yield moving close to 50bps lower, but US yields were also some 30bps lower. While this may be touted as a yield curve control of some sort, BOE has made it clear that it is a time limited event until October 14 with the intention of restoring orderly market conditions. Pressure is building on Chancellor Kwasi Kwarteng, who faces calls to reverse planned tax cuts. Fed speakers maintain optimism on US economy and markets Fed’s Bostic suggested year-end rates of 4.25-4.50% while the market pricing is still at 4.2% suggesting more room for upward pricing. Although not a voter this or next year, he said that his baseline is a 75bps increase at November meeting and 50bps in December. Meanwhile, he continued to be optimistic on the US economic momentum, as well as ruled out any contagion risks from systemic global events (possibly referring to the UK crisis). Meanwhile, Bostic noted no evidence of dysfunction in the Treasury market at this point. Another Fed speaker, Charles Evans, vouched for a further move into restrictive territory, suggesting a terminal rate of 4.5-4.75% by March as suggested by the Fed’s September dot plot. Apple backs off iPhone production boost; casting doubt over the outlook for consumer spending Apple has reportedly backed off plans to increase production of new its iPhones this year, with demand failing to materialize. That means 6 million extra handsets won’t be produced in the second half of the year. Although it’s not confirmed, Apple is said to instead be focusing on its original production target for its summer period, and produce 90 million handsets. Apple shares fell 1.3% on Thursday, and key chipmakers including Taiwan Semiconductor fell 2.2% and Apple’s biggest iPhone assembler, Hon Hai Precision Industry lost 2.9% amid the electronics supplier selloff, on fears demand will slow. According to our colleague Peter Garnry’s analysis, Apple FY22 Q4 (ending 30 September) earnings estimates are down 20% from the peak in March and that is before adjustments from Apple’s own warning. Apple EPS is expected at $1.26 up 1.4% y/y, but factoring in Apple’s warning it could be a decline of 5-10%. Revenue is expected at $88.5bn up 6.1% y/y compared to 1.9% y/y revenue growth in the previous quarter. It is quite likely that revenue could slip into negative growth for the quarter.Walt Disney and Universal are closing their theme parks due to Hurricane Ian Hurricane Ian strengthened to a Category 4 hurricane and hit the west coast of Florida. Walt Disney (DIS:xnys) closed its Orlando theme parks for at least two days and Comcast’s (CMCSA:xnas) Universal Orlando Resort and SeaWorld Entertainment closed their Florida theme parks.  U.S. Q3 earnings are set to miss significantly to the downside As per Peter Garnry, Saxo’s Head of Equity Strategy, analysts may be way off in their estimates for the S&P 500 for Q3.  It is highly probable that there will be significant misses to the downside followed by gloomy comments from company management about the outlook on margins.   China warned banks about one-way bets on the weakening of the renminbi As the onshore and offshore renminbi weakened below 7.20 versus the dollar, the China Foreign Exchange Market Self-Regulatory Body, attended by PBoC Vice Governor Liu Guoquiang, told banks in a meeting to “safeguard the stability of the market and prevent volatile movements in the exchange rate”, in particular not to make one-way bets on the weakening of the renminbi. BHP update: The giant takes advantage of sterling slump, redeems notes more than half a century early, announces exploration expansion BHP shares rallied to a three-day high yesterday and are likely to see some extra bids after the iron ore price rose. BHP shares lifted after the mining giant paid off debts earlier than expected. The world’s biggest commodity company took advantage of the slump in the sterling against the USD, and used its record profits to redeem pound-denominated notes (due in 2077). This resulted in BHP effectively paying down $643 million of notes early. Last month BHP reported net debt of just $333 million. So will this mean BHP has little to no debt when they report? BHP also announced mining expansion plans; from exploring the idea of mining copper at Cerro Colorado beyond 2023, with Chilean regulation easing, to also spending $12m on exploration in Peru over 10 months (as it sees huge commodity there). BHP also affirmed it’s working toward bringing forward production of its new potash (fertilizer) business to 2026. Australian retail trade hit another record high, ahead of next week’s 6th RBA rate hike. What’s next? Australia retail spending hit another record in August, and rose more than consensus expected, showing Aussie consumers aren’t perturbed by the five RBA rate hikes. Aussie retail sales rose 0.6% in August, up 19.2% year-on-year. The most sales growth came from department store sales, up 2.8% in August to a brand-new record. Household goods sales rose 2.6%, perhaps boosted by winter shopping given the most overall retail growth came from the coldest regions of Australia. The retail record figures give the RBA more room to hike rates with a 0.5% hike likely on the cards at the RBA’s meeting on Tuesday (October 4). In our view, we think retailers or consumer discretionary companies; for instance Harvey Norman (HVN), Bunnings and Kmart owner Wesfarmers (WES) or JB Hi Fi (JBH) are doing it tough here, hurt by higher costs (inflation and wages), while they’re also buffering for higher rates to come. This is why those sectors will likely face downside pressure to come. Inversely, we still remain of the view that commodities offer the most cashflow growth, and likely upside in share price growth, particularly in energy. For more see our Australia resources theme, or our global Commodity basket for inspiration. Currency pairs to watch for month-end and quarter-end  With month-end and quarter-end approaching, our head of FX Strategy outlines the currencies to watch. And whether this seasonal time could put some support under the treasury market and or a ceiling on the US dollar, or if even a tactical consolidation in the two markets will require a change of direction from the Fed. John Hardy also details the US dollar rally finally taking the USDCNH above the 7.20 area (which defined a major top on two occasions in 2019 and 2020) and set a new high-water mark for USDCNH in the history of the offshore CNH currency, getting as high as 7.26 at one point. John covers what to watch next. Read on here for more FX pair updates, see how trends are emerging, and what to watch next.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-29-sept-29092022
A Bright Spot Amidst Economic Challenges

The Move Of The Bank Of England Forced British Yields To Plummet

Saxo Bank Saxo Bank 29.09.2022 10:04
Summary:  Equity markets rallied yesterday after the Bank of England announced an emergency QE action to calm a dysfunctional long maturity gilt market, a move that smashed UK gilt yields lower and took major global sovereign yields lower as well. The market’s inference is perhaps that central bank tightening in general has been taken too far and the Bank of England is perhaps the canary in the coal mine. The US dollar also traded weaker yesterday before rebounding slightly overnight.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities rose sharply after posting new intraday lows for the cycle as the Bank of England QE announcement pushed US treasury yields sharply lower, offering the hope of a pivot in the brutal cycle of rising yields. The rally encourages the technical idea that we have created a double bottom as long as these new marginal cycle lows continue to support the price action. The next area of resistance is around 12,000 in the Nasdaq 100 index. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Following the rally in global equity markets overnight, Hong Kong and mainland China stocks gained, with Hang Seng Index up by 1% and CSI300 0.3% higher. HSBC (00005:xhkg) rose 2.8% on the temporary calm of the U.K. bond market and currency.  China internet stocks and the new energy space were among the top gainers. China property developers failed to participate in the rally, with leading names falling from 1.5% to 9%. In the mainland bourses, medical equipment, healthcare, precious metal, coal mining and chemical stocks outperformed while property developers, shipping, tourism, lodging declined.   Strong USD fades as bond yields punched lower The sharp reversal in bond yields yesterday after yields had ground higher in a seemingly inexorable and increasingly rapid pace over the last few weeks saw the USD trading sharply lower, suggesting that the USD and yields will continue to trade in tightly correlated fashion and as important indicators for global risk sentiment. So far, the move has only reversed a portion of the greenback’s recent gains. A more notable reversal would require, for example EURUSD trading back above 0.9900, GBPUSD back above what looks an impossible 1.1250 or higher, and AUDUSD above 0.6700. Huge sterling focus after BoE move The initial reaction to the BoE emergency QE move (more below) was to sell sterling, as all other things equal, an easing move for a central bank in an otherwise tightening world is a negative for the currency. But perhaps as the market saw the move as the start of a possible trend that might spread elsewhere, sterling actually rose sharply later in the session on the improvement in global sentiment after the BoE’s move helped not only UK yields to sharply reverse, but other yields to do likewise, if less so. GBPUSD rose back to above 1.0900 late yesterday after trading 1.0540 earlier in the session. The gains were reversed in early European trading to below 1.0800 as of this writing. Sterling will remain extremely volatile, with EURGBP worth tracking around the pivotal 0.9000 area. Gold (XAUUSD) Gold rebounded reflexively as the pressure from rising yields and a rising US dollar suddenly faded yesterday. After trading near 1,615 yesterday, the price action ripped all the way back to 1,660+, short of the critical resistance zone into 1,680-1,700 that is the departure point for this latest bear market move. It is clear that global bond yields and the USD will continue to lead the way as coincident indicators. Crude oil (CLU2 & LCOV2) prices rallied as supply conditions worsened... ... as suggested by the first drop in US crude inventories in a month. EIA data showed stockpiles fell 215k bbl last week, while West Coast gasoline stockpiles fell to their lowest level in 10 years. Disruption to supplies due to Hurricane Ian are also causing some concerns, with US president Joe Biden warning oil companies not to hike prices for the second time this week. Furthermore, the geopolitical situation has turned more fragile once again with the European Union announcing a new round of sanctions against Russia including a ban on European companies from shipping Russian oil to third countries above an internationally set price cap. Brent futures rose close to $90/barrel while WTI futures got in close sights of $82/barrel. US treasuries (TLT, IEF) US treasury yields fell sharply in sympathy with UK gilt yields on the surprise announcement of an emergency QE programme from the Bank of England that erased most of the enormous spike in yields there that had developed since the UK government announced its new tax cut package late last week. The price action for the 10-year US treasury benchmark settled near 3.75% after trading slightly above the 4.00% mark yesterday. The Bank of England move brings hope that other central banks may ease off the tightening accelerator. The next important yield level to the downside is the cycle top of 3.50% from June. A 7-year treasury auction yesterday What is going on? Bank of England announces emergency QE to counter systemic risks The Bank of England on Wednesday announced that it would purchase long-dated UK gilts to stabilize the market in a “temporary operation”. The move forced UK yields sharply lower, reversing most of the recent spike that had developed after UK Chancellor Kwasi Kwarteng announced tax cuts late last week. The 30-year UK Gilt yield fell over 100 basis points after the announcement to below 4.0%, although it was trading 3.50% a week ago. While this may be touted as yield curve control of some sort, the BoE claimed that it is a time limited event until October 14 with the intention of restoring orderly market conditions. Pressure is building on the Truss government to reverse the planned tax cuts and shore up fiscal credibility. Apple cancels additional iPhone 14 production capacity Apple announced that it would not move forward with plans for additional iPhone production as the demand for the new phone was not living up to expectations. The increase would have been on the order of 6 million iPhones in the second half of this year, suggesting that the running demand for iPhones in the period is on the order of 90 million, about the same as last year. Demand for higher end new iPhone 14 has been stronger than for the entry-level models. Apple fell 1.3% yesterday after trading as much as 4.5% lower intraday. Key chipmakers were also impacted, including Taiwan Semiconductor, which fell 2.2% and Apple’s biggest iPhone assembler, Hon Hai Precision Industry, lost 2.9% amid the electronics supplier selloff, on fears demand will slow. Fed speakers maintain optimism on US economy and markets Fed’s Bostic suggested year-end rates of 4.25-4.50% while the market pricing is still at 4.2% suggesting more room for upward pricing. Although not a voter this or next year, he said that his baseline is a 75bps increase at November meeting and 50bps in December. Meanwhile, he remained optimistic on US economic momentum and ruled out any contagion risks from systemic global events (possibly referring to the UK crisis). Meanwhile, Bostic noted no evidence of dysfunction in the Treasury market at this point. Another Fed speaker, Charles Evans, vouched for a further move into restrictive territory, saying that the FOMC’s current target range is “not nearly restrictive enough”. Australian inflation rose 7% in the year to July, based on new monthly CPI At this rate it doesn’t appear CPI will peak at just shy of the 8% the RBA forecasts, given price pressures have resumed this month from the largest inflation contributors. Based on the ABS’s new monthly CPI print, some of the largest price jumps year-on-year to July were in fuel (+29.2%) and fruit & vegetables (+14.5%). The concern is that, with La Nina set to hit Australia and population growth continuing, food and housing (rent) prices will continue to rise apace. In September alone, contributors to food prices have risen markedly, as the global supply outlook has weakened amid poor crop conditions. This could tilt the RBA back toward a more hawkish stance. China warned banks about one-way bets on the weakening of the renminbi Yesterday as the onshore and offshore renminbi weakened below 7.20 versus the dollar, the China Foreign Exchange Market Self-Regulatory Body, attended by PBoC Vice Governor Liu Guoquiang, told banks in a meeting to “safeguard the stability of the market and prevent volatile movements in the exchange rate”, in particular not to make one-way bets on the weakening of the renminbi. What are we watching next? End of quarter rebalancing? We have seen aggressive moves across markets this quarter, to say the least, which brings the question of whether significant rebalancing flows are set for the quarter end this Friday. The relative bond performance has been perhaps worse than that for equities, while in FX the focus may be on possible rebalancing after a tremendous USD upsurge in Q3. Porsche shares to debut today (P911:xetr) Volkswagen set the listing price for Porsche’s shares at €82.50, which would value the company at €75 billion. The shares will begin trading today for the company and this will be the largest IPO in over a decade. Earnings calendar this week The chief action this week is up with today’s earnings reports from H&M (this morning before market open at 0700 GMT), Nike (after US market close today at 2100 GMT), and Micron Technology (after market at 2030 GMT). The earnings from Micron the most interesting to watch as we already know H&M and Nike are seeing weak demand. Micron has exposure to the consumer electronics industry and manufactures memory chips in Asia which means that the company sits in at the intersection of many interesting trends. Today: Polestar Automotive, H&M, Nike, Micron Technology, CarMax Friday: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0700 – Spain Flash Sep. CPI 0745 – ECB's Centeno to speak 0800-0815 – Multiple ECB speakers 0900 – Eurozone Sep. Confidence surveys 1130 – UK Bank of England Deputy Governor Ramsden to speak 1230 – Czechia Central Bank Rate Announcement 1230 – Canada Jul. GDP 1230 – US Weekly Initial Jobless Claims 1330 – US Fed’s Bullard (voter 2022) to speak 1430 – US Weekly Natural Gas storage change 0130 – China Sep. Manufacturing and Non-manufacturing PMI 0145 – China Sep. Caixin Manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-29-2022-29092022
Why India Leads the Way in Economic Growth Amid Global Slowdown

Bank Of England Intervention Boosts Risk Appetite And The Possible End Of The iPhone Era

Swissquote Bank Swissquote Bank 29.09.2022 10:39
The Bank of England (BoE) jumped in the UK’s shattered sovereign market to buy long-term UK bonds yesterday, because apparently, they have been warned that collateral calls on Wednesday afternoon could force investors to further dump their UK sovereign holdings. And the UK could no longer afford another heavy selloff wave on its sovereigns. Will the enthusiasm last?  The British 10-year yield fell 10% yesterday, and the pound jumped past the 1.08 mark against the US dollar and consolidated below 0.90 against the euro. The FTSE recovered early losses and closed the session 0.30% higher, gold recovered to $1662 an ounce, American crude rallied past the $80 per barrel, also boosted by the Hurricane Ian’s negative impact on supply. Around 11% of the Gulf of Mexico production was halted due to the storm.The S&P500 gained almost 2% yesterday to above 3700 level, while Nasdaq jumped more than 2%. Will the enthusiasm last? Not so sure. Yesterday’s price action was a sugar rush, triggered by the BoE intervention. Enthusiasm will likely fall as the level of blood sugar falls across the financial markets. Amazon is on the rise Amazon jumped 3% as investors liked the new devices at Wednesday’s annual device event, and Apple slipped on announcement that it will, finally, not produce more iPhones compared to last years.In Europe, all eyes are on Porsche that starts flying with its own wings today! Watch the full episode to find out more! 0:00 Intro 0:27 BoE finally jumps in 3:24 BoE intervention boosts risk appetite, but for how long? 5:30 Amazon convinces, Apple disappoints 8:54 Porsche is now up for grab! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #BoE #intervention #UK #gilt #GBP #Hurricane #Ian #crude #oil #energy #crisis #XAU #FTSE #sovereign #bonds #rally #Apple #Amazon #Porsche #IPO #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
China's Deflationary Descent: Implications for Global Markets

A Strong Bearish Signal For The Equity Markets And A Significant Support Factor For Dollar (USD)

InstaForex Analysis InstaForex Analysis 29.09.2022 12:03
Stock markets in Europe and North America bounced back on Wednesday, thanks to growing demand for US Treasuries, which put pressure on their yields and dollar. There were no special reasons for growth, but the closing of short positions after a multi-day sell-off helped the markets recover the previous losses. However, the hawkish rhetoric of the Fed pointed to a continued increase in interest rates in the foreseeable future, so stock futures started to decline again today. Minutes ahead of the European trading session, the yield on 10-year bonds grew by 3.15% to 3.824%, while futures fell from 0.36% to 0.70%. This is a strong bearish signal for the equity markets and a significant support factor for dollar. Due out today is Germany's data on consumer inflation and revised US GDP figures for the second quarter. Forecasts say the former will rise to 1.3% m/m and 9.4% y/y, which will prompt the ECB to raise rates again by 0.75%. But this is unlikely to stimulate a strong growth in euro as the currency is affected by the current economic situation in the Eurozone. The latter, meanwhile, is expected to show a slight decrease to -0.6%, but a much larger fall will put pressure on market sentiment, which will increase the sale of stocks and purchases of dollar. Forecasts for today: USD/CAD The pair is currently testing the level of 1.3715. If it rises above it, further growth to 1.3835 is possible, especially amid a decline in crude oil prices and general negative dynamics in the markets. USD/JPY The pair is currently testing the resistance level of 145.00. If it rises above it, further growth to 146.00 is possible, especially amid a general negative dynamics in the markets and resumption of growth in the yield of US Treasuries.   Relevance up to 09:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323002
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

It Is Clear That The Apple Is Not Immune To The Cost-Of-Living Crisis

Saxo Bank Saxo Bank 29.09.2022 13:58
Summary:  We see 20% probability of earnings hitting current estimates, 10% exceeding estimates (with potential error coming from health care, energy surprise, and consumer staples sectors), and 70% for a significant miss to the downside followed up by gloomy outlook on margins. It seems to us that analysts are way behind factoring in developments that we are seeing financial markets. Let’s start with Apple and then move on to S&P 500. Apple That Apple is downgrading was partly priced in due to that report recently that their first three-day sales of iPhone 14 was trailing previous product introductions which we also wrote about in our QuickTake and said on our podcast earlier this week. The signals from Micron Technology, reporting today, have long indicated that a rapidly deteriorating environment for memory chips which are used in smartphones and other electronic devices. Apple FY22 Q4 (ending 30 September) earnings estimates are down 20% from the peak in March and that is before adjustments from Apple’s own warning. Apple EPS is expected at $1.26 up 1.4% y/y, but factoring in Apple’s warning it could be a decline of 5-10%. Revenue is expected at $88.5bn up 6.1% y/y compared to 1.9% y/y revenue growth in the previous quarter. It is quite likely that revenue could slip into negative growth for the quarter. Apple is the largest consumer company in the world with a vast supply chain and it is clear that the company is not immune to the cost-of-living crisis from the energy shock hurting consumers. It will have a big impact on the indices but also sentiment. Apple and Tesla are the two stocks that have held up well despite all the headwinds, and if these two stocks are finally coming down then the market may flip into severe negative. The company is valued at 5% free cash flow yield and forward P/E of 24x. Given where the US 10-year yield is headed and the cost-of-living crisis this company should probably be valued closer to 20x forward earnings, and thus there is a 15% downside potential, but if earnings are suddenly in decline then it could be closer to 20-25%. S&P 500 earnings Earnings estimates for Q3 are already down 7% from 1 July and that’s before Apple is factored in. Analysts are way off in their estimates for Q3. They expect a small decline in revenue despite high inflation! If you take the estimates for revenue and earnings then consensus is expecting the profit margin to expand to 13% - the highest recorded level in many decades. EPS estimate is $55.52 up from $54.54 in Q2. A more conservative view is more like revenue is up another 2.5% q/q and profit margin is down from 12.7% to 11.7% due to margin pressure in all sectors and even in energy and mining due to lower prices on energy and metals in Q3. If you square those two numbers then an average estimate is $51.70 or 7% lower than current consensus.   Source: https://www.home.saxo/content/articles/equities/q3-earnings-amid-apple-warning-29092022
It's not clear we find out the results of mid-term elections immediately. Binance to buy FTX

Known Indices - S&P 500, Nasdaq And Dow Jones Fluctuated On Thursday's Morning. What Can We Expect From SPX?

InstaForex Analysis InstaForex Analysis 29.09.2022 16:08
US stock index futures decreased early on Thursday as the Bank of England's intervention was overshadowed by concerns over inflation and the global economy. S&P 500 futures fell by more than 1%, while NASDAQ futures lost 0.8%. Dow Jones futures lost about 0.5% early on Thursday. European stocks also fell, while Chinese stocks on US exchanges declined after the Hang Seng Tech index hit its all-time low.   US Treasury bonds went down as investors' expectations of aggressive Fed interest rate hikes pushed the yield up once again. Bond yields in the UK continued to rise, despite the Bank of England's intervention in the currency market. Earlier, UK prime minister Liz Truss defended her tax cut plans, triggering a panic in the market. This could lead to another major GBP sell-off, making long positions extremely risky. The yield of European bonds after the release of the latest German inflation data. Investors also paid close attention to the latest remarks by ECB policymakers. Read next: Tim Moe (Goldman Sachs) Comments On USD And Turbulent Times For Markets In General, Ole Hansen (Saxo)Talks Nord Stream | FXMAG.COM The European Commission announced its eighth sanction package against Russia, which will include a price cap on Russian oil. The new sanctions are imposed in response to Russia's continuing conflict against Ukraine. Tomorrow, Russia plans to annex territories under its control such as Donetsk and Luhansk, which will jeopardize the situation in the market even further and send risky assets downwards. In the meantime, Fed policymakers are likely to argue for the Federal Reserve's hawkish stance today. Statements of officials from several central banks are expected.   S&P 500 On the technical side, the S&P 500 has come under slight pressure once again after yesterday's upward movement. However, bulls have regained control of $3,677 and are now set to push the index towards $3,706, which would make an upward correction possible. The index must break above $3,706 to test $3,735. The S&P 500 failed to break above this level yesterday. A breakout above this range would extend the index's upward momentum towards the resistance at $3,773, as well as $3,801 further ahead. If the S&P 500 moves down and breaks through $3,677 and $3,643, it will drop towards $3,608, opening the way towards testing the support at $3,579. Below this area lies the low at $3,544, where the pressure on the index could ease slightly. Relevance up to 13:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323040
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

CarMax Inc And SolarEdge Technologies Inc Are The Biggest Losers At The Close In The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 30.09.2022 08:09
At the close in the New York Stock Exchange, the Dow Jones fell 1.54%, the S&P 500 fell 2.11% and the NASDAQ Composite fell 2.84%. The leading gainers among the components of the Dow Jones index today were The Travelers Companies Inc, which gained 1.76 points (1.15%) to close at 154.68. Visa Inc Class A rose 0.88 points or 0.49% to close at 180.06. Merck & Company Inc shed 0.14 points or 0.16% to close at 86.64. The losers were Boeing Co shares, which lost 8.11 points or 6.08% to end the session at 125.33. Walgreens Boots Alliance Inc was up 4.97% or 1.65 points to close at 31.55 while Apple Inc was down 4.91% or 7.36 points to end at 142. .48. Among the S&P 500 index components gainers in today's trading were Everest Re Group Ltd, which rose 3.07% to 267.41, STERIS plc, which gained 2.76% to close at 167.29, and also shares of W. R. Berkley Corp, which rose 2.73% to end the session at 65.18. The biggest losers were CarMax Inc, which shed 24.60% to close at 65.16. Shares of SolarEdge Technologies Inc lost 8.27% to end the session at 235.56. Quotes of Royal Caribbean Cruises Ltd decreased in price by 7.91% to 43.64. Leading gainers among the components of the NASDAQ Composite in today's trading were Senti Biosciences Inc, which rose 50.71% to hit 2.11, Avalon Globocare Corp, which gained 25.85% to close at 0.70, and also shares of TuanChe ADR, which rose 25.31% to close the session at 3.07. The biggest losers were Atlis Motor Vehicles Inc, which shed 54.82% to close at 33.95. Shares of Lion Group Holding Ltd lost 49.25% and ended the session at 1.01. Quotes of Twin Vee Powercats Co decreased in price by 29.01% to 2.52. On the New York Stock Exchange, the number of securities that fell in price (2631) exceeded the number of those that closed in positive territory (530), while quotes of 112 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,842 stocks fell, 956 rose, and 224 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 5.50% to 31.84. Gold futures for December delivery lost 0.07%, or 1.20, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 0.55%, or 0.45, to $81.70 a barrel. Futures for Brent crude for December delivery fell 0.55%, or 0.48, to $87.57 a barrel. Meanwhile, in the Forex market, EUR/USD rose 0.70% to hit 0.98, while USD/JPY edged up 0.21% to hit 144.46. Futures on the USD index fell 0.36% to 112.11.  Go to dashboard   Relevance up to 05:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/294915
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

On Thursday S&P 500 (SPX) Lost 2.11%, Nasdaq Went Down By 2.84%

ING Economics ING Economics 30.09.2022 08:27
Equities and FX decouple as we end the quarter Source: shutterstock Macro outlook Global markets: The bounce didn’t last long. Both S&P500 and NASDAQ fell sharply again on Thursday, the S&P by 2.11% and the NASDAQ by 2.84%. That puts year-to-date losses at respectively 23.62% and 31.37%. And we’d be inclined to argue that we haven’t yet seen the bottom. The S&P500, for example, is sitting just around its June lows, so any break below this level sets the scene for some substantial further declines. On the positive side, equity futures are pricing in small gains at today’s open, but that's a long way from saying that stocks will rally into the weekend and the end of the quarter. UK Gilts gave back some of their gains yesterday on the Truss government’s insistence on sticking to its mini-budget, and yields have risen across the UK curve, though this doesn’t seem to have the market’s eye in the same way it did earlier this week. 2Y US Treasury yields headed up 5.8bp to 4.192% and the yield on the 10Y bond rose a similar amount to 3.786%. 10Y Bunds rose 5.8bp to 2.14%, hurt by a 10% YoY September inflation print (10.9% for the harmonized index). And while this is cementing thoughts of a 0.75% rate increase at the next ECB meeting, that seems like a lame response in a month where the price index rose by 2 percentage points. For now, currency markets seem to disagree, and the EURUSD has risen to 0.982, though this seems a little incongruous against the data backdrop. Other G-10 currencies also did better against the USD. The AUD is now back up above 65 cents, while the GBP has risen to 1.1145 – a long way from the 1.035 low of the week (and approx. last 4 decades!). Can this last? It seems a long shot as there’s plenty more bad news to be priced in. The JPY has also had a reprieve, and is back to 144.42, while the CNY led APAC’s FX gains, gaining by more than a per cent to 7.1249 onshore. G-7 Macro: Besides the unpleasant German inflation data, the macro picture was quite thin, with some marginal upward revisions to 2Q22 US GDP, and a lower than expected initial claims figure suggesting that the Fed still has its work cut out to slow the economy enough to bring inflation down. Today, we see the full European inflation picture for September, which is likely to exceed the 9.7%YoY consensus estimate. This won’t have been adjusted yet for the German figures. US Personal income and spending data will show how consumer spending held up in August together with the latest PCE inflation figures.  And we round off the week with the University of Michigan consumer sentiment (and inflation expectations) figures. China: We expect the manufacturing PMI to be under 50 as manufacturing for real estate construction will still be in monthly contraction. Furthermore, export demand is waning and that could affect manufacturing activity for holiday-season exports. However, services should continue to pick up as Covid measures become more localised. India: The Reserve Bank of India (RBI) meets today to decide on rate policy and the following three factors are relevant to that decision: 1) Inflation is 7.0%, a full per cent above the top of the RBI's target range 2) it is heading in the wrong way. 3) RBI commentary has been clear about the need to focus on fighting inflation. Put that all together and it looks likely that the RBI will deliver a further 50bp of tightening today, taking the repo rate to 5.9%. Later this evening, we will also get India’s fiscal deficit figures for August. Although all major rating agencies have India’s long-term foreign credit rating at "stable', and the deficit data year-to-date seem on track to meet the government’s 6.4% (GDP) target, it wasn’t that long ago that Fitch raised their outlook from negative. The deficit numbers have been whipped around by government subsidies and attempts to limit the pass-through of high energy prices to the consumer, so these are still worth a quick look. South Korea: Industrial production dropped more than expected in August, recording a -1.8%MoM decline (vs -1.3% in July and -0.8% market consensus). Automobile production rebounded (8.8%) but the declines in semiconductors (-14.2%) and petrochemicals (-5.0%) were bigger. We believe that re-opening will support 3QGDP, but thereafter, there should be a sharp deceleration. We also now expect only a 0.1% QoQ gain in 3Q22 (vs 0.7% in 2Q). Yesterday’s business survey outcomes were also quite weak, with manufacturing sentiment rapidly deteriorating to the lowest level since October 2020. Also, today’s forward-looking construction orders data were soft, suggesting more recessionary signals in the coming quarters. Japan: Japan’s data releases surprised the market on the positive side. The jobless rate edged down to 2.5% (vs 2.6% in July), in line with the market consensus. The Jobs-to-applications ratio continued to rise (has risen for several months in a row). And industrial production in August not only recorded a third monthly rise (2.7% MoM sa), but also beat the market expectation significantly (0.2%). We will revise up third quarter GDP soon based on today’s releases. The stronger jobs market is also a good sign for wage growth together with solid production gains. However, we think it is still too early to tell because Japan is reopening at a slower pace than other Asian countries and the reopening effects are just kicking in. With growing global recession headwinds, the BoJ will likely take its time to see whether Japan can still produce solid outcomes in a sustainable way. What to look out for: US core PCE, personal spending and Michigan sentiment South Korea industrial production (30 September) Japan labor market data (30 September) China official and Caixin PMI manufacturing (30 September) India RBI meeting (30 September) Hong Kong retail sales (30 September US personal income, personal spending and core PCE (30 September) US University of Michigan sentiment (30 September) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Saxo Bank Podcast: The Risk Of An Escalation In The US-China Confrontation, The Risk Of An Escalation In The US-China Confrontation And More

Market Focus Will Likely Be On Putin’s Warnings To The West, Nike (NKE) Reported Slightly Better Revenues And More

Saxo Bank Saxo Bank 30.09.2022 08:37
Summary:  Fresh lows return in US equities with more hawkish Fed comments and fear of earnings downgrades picking up as the Q3 earnings season draws closer. Cable extended its rally despite UK PM’s commitment to fiscal plan and weakening BOE hike expectations, while the EUR gained strength on the back of hot German CPI and uptick in ECB rate hike expectations. Talks of OPEC+ production cuts are gaining momentum, and focus today will be on China PMIs. Also watch for Eurozone CPI, US PCE data as well as Putin’s speech in the day ahead. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) fall to 22-month lows US stocks sank to their lowest levels since November 2020 after another round of Fed speakers continued with hawkish remarks, while oil maintained gains on expectations of OPEC+ cuts. Nasdaq 100 was down almost 4% at one point, but trimmed the losses before closing 2.9% lower, while the broader S&P500 met a similar fate nearing 3,600 before ending 2.1% down. All 11 sectors of the S&P 500 dropped, with Utilities falling the most and followed by Consumer Discretionary. Retail favorites Tesla (TSLA) and Apple  (AAPL)  led the declines falling 6.8% and 4.9% while chip makers followed with AMD (AMD) down 6.2% with PC demand falling away. On the upside, oil stocks like Devon Energy (DVN), and Diamondback Energy (FANG) and Occidental (OXY) moved higher. Separately the European Commission announced an eight package of sanctions that would include a price cap on Russia’s oil exports. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) climbed again After plunging sharply the day before on the Bank of England move, yields of U.S. treasury securities rose, with the 10-year note yields rising 6bps to 3.79% on Thursday.  Yields initially crept higher on bounces of U.K. Gilt yields and higher German regional CPI data, but paring their rise in the afternoon.  Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland equity markets opened higher on Thursday and pared the gain through the day and settled moderately lower, with the Hang Seng Index down by 0.5%, and CSI300 little changed. The news of the imposition of a 3-day mandatory PCR test in the financial district, Lujiazui in Shanghai due to one new Covid-19 case triggered some fears among investors. In spite of PBoC’s supportive statement coming out from its quarterly monetary meeting saying that the central bank will expand its special lending program to ensure the delivery of delayed housing projects, Chinese developers declined, with Country Garden (02007:xhkg) plunging 11.6%, Longfor (00960:xhkg) down by 7.5%, and CIFI (00884:xhkg) tumbling 16.3%.  Chinese EV maker, Zhejian Leapmotor (09863:xhkg), tumbled 33.5% in its first day of trading after an IPO priced at the bottom of a guided range.  XPeng (09868:xhkg) dropped 5.3%.  Trading in the China Internet space was mixed with Alibaba outperforming (+2.9%). Australia’s ASX200 (ASXSP200.1) likely to follow Wall Street lower: futures suggest a 0.3% fall today, aluminum stocks to be bright spark As above, on the ASX today, it’s worth keeping an eye on aluminum related stocks on the ASX including Rio Tinto (RIO) and Alumina (AWC). Meanwhile, diversified miners including the major retail favorites, like BHP (BHP) are worth watching after the Iron Ore (SCOA) price remains supported with China ramping up housing support. This morning the iron ore price (SCOA, SCOV2) pushed up ~1.1% to US$96.50. In NY BHP closed 0.6% higher, implying the ASX primary listing of BHP will likely move up, especially after the aluminum and iron ore prices rose. Cable stays bid and Euro follows The US 10-year yields as well as the dollar could not catch a strong bid on Thursday, which helped other G10 currencies gain some ground. Sterling was the strongest on the G10 board, with GBPUSD now testing 1.12 in early Asian hours. BOE’s emergency bond-buying measures however hints at a push lower in gilt yields, and GBP will likely come back under pressure if the surge in global yield resumes. This will need a focus shift back on Fed tightening as we think there is still some room for upward repricing of terminal rate Fed expectations and higher-for-longer rates. Meanwhile, expectations for an ultra-aggressive BOE hike in November cooled slightly. EURUSD also surged above 0.98 with ECB rate hike expectations for October meeting picking up after the hot German inflation, and with the ECB downplaying the chance of an emergency move to prop up Italian bonds. EURGBP was however lower from 0.8950 to 0.88. Aluminum and aluminum stocks on watch It’s worth watching aluminium related shares across the Asian-Pacific region today after the record jump in Aluminum price on the LME after Bloomberg reported plans to discuss a potential ban on new Russian metal supplies. The metal jumped 8.5% (its biggest intraday jump in record) before paring back. Crude oil (CLU2 & LCOV2) prices maintain gains Crude oil prices maintained the momentum with OPEC+ production cuts becoming a key factor going into the next week’s meeting. OPEC+ commenced discussions around an output cut with one saying it a cut is “likely”, according to Reuters sources. This comes after previous reports that Russia will likely propose OPEC+ reduces output by around 1mln BPD. Demand conditions are likely to weaken as global tightening race heats up, and this has prompted expectations for a supply cut as well. Brent futures touched $90/barrel mark but reversed slightly later, while WTI futures rose to $83/barrel before some decline later in the session.   What to consider? German inflation sparks EZ inflation fears German inflation touched double digits, as it came above consensus at 10.9% YoY for September from 8.8% YoY previously. Germany is also preparing to borrow an additional €200 billion to finance a plan to limit the impact of soaring energy costs, which could keep consumption high even as shortages loom. Up today will be the September eurozone inflation print. Expect a new record which will increase the pressure on the European Central Bank to hike interest rates by at least 75 basis points in October. The economist consensus expects that the headline harmonized index of consumer prices (HICP) will reach 9.7% YoY against 9.1% in August. The core rate is expected to climb to 5.6% YoY against 5.5% previously. The spread between the headline and the core inflation figures is mostly explained by a decrease in oil and natural gas prices in recent months. However, this is clear that inflation is becoming broad-based, including in the services sector. This means that inflation is here to stay for long. The HICP is likely to continue increasing in the coming months. A peak in inflation in the eurozone is possible in the first quarter of 2023, in our view. This is much later than in the United States. Fed speakers push for more hikes Loretta Mester remains more hawkish than the Fed’s median dot plot, and said that rate are not in restrictive territory yet and more rate hikes will be needed. No signs of concern on economy or dollar strength were noted, while inflation remained the key point of concern for her. James Bullard also made some key comments on ‘bad idea to mess’ with the inflation target while the labor market conditions remain tight and recession is only a risk. Mary Daly was more cautious, saying officials should work to avoid "inducing a deep recession." However, she still raised the bar on expectations on the Fed funds rate saying that she is comfortable with median Fed rate path projection of 4%-4.5% by year end, 4.5%-5% in 2023 (pointing to upside risks as the dot plot suggested 4.6%, or 4.5-4.75% if we talk in ranges). US initial claims come in strong again Initial claims came in lower than expected at 193k with last week’s also revised lower to 209k from 213k. Continued claims cooled to 1.347mln from 1.376mln despite the expected rise to 1.388mln. The data shows how tight the labour market is in the US and Fed's Bullard labelled today's claims metric as "super low". Meanwhile, the third estimate of Q2 GDP was confirmed to decline 0.6%, notably with consumer spending revised higher to 2% from 1.5% previously. Australian inflation rose 7% in the year to July, based on new monthly CPI At this rate it doesn’t appear CPI will peak at just shy of the 8% the RBA forecasts, given price pressures have resumed this month from the largest inflation contributors. Based on the ABS’s new monthly CPI print, some of the largest price jumps year-on-year to July were in fuel (+29.2%) and fruit & vegetables (+14.5%). The concern is that, with La Nina set to hit Australia and population growth continuing, food and housing (rent) prices will continue to rise apace. In September alone, contributors to food prices have risen markedly, as the global supply outlook has weakened amid poor crop conditions. This could tilt the RBA back toward a more hawkish stance. Australian rents to drive higher, adding to inflation woes Australia’s population growth resumed after borders reopened and business employment remains strong for the time being, at 50-year highs. New office and residential supply is expected be subdued in 2023 as interest rates rise; which supports the notion of falling vacancy rates. According to Colliers and the ABS, Sydney CBD rents rose 3.6% to $5.22 per square foot in the June quarter, driven by competition for top-quality office space. China’s manufacturing PMIs are expected to stay in the contractionary territory China’s September official NBS Manufacturing PMI and Non-manufacturing PMI as well as the Caixin China Manufacturing PMI are scheduled to release today. The median forecast of, economists surveyed by Bloomberg for the NBS Manufacturing PMI is 49.7 for September, a modest improvement from August’s 49.4 but remains in contraction territory.  Economists cite the lockdown of Chengdu and restrictive measures in some other cities during most part of the month and the weak EPMI released earlier as reasons for expecting the NBS Manufacturing PMI to stay below 50.  The Caixin Manufacturing PMI, which has a larger weight in coastal cities in the eastern region, is expected to remain at 49.5 as export-related manufacturing activities and container throughput were weak.  The consensus estimate for the NBS Non-manufacturing PMI is 52.4, staying in the expansionary territory, supported by infrastructure construction but slowing slightly in September from August’s 52.6 due to weakness in the housing sector.  On the other hand, steel production and demand data in September suggest the PMIs may potentially surprise the upside. Buying activity up in food and Agricultural instruments, stocks and ETFs Food prices are supported higher as the global crop outlook dampens for 4 reasons; concern lingers over Ukraine’s exports being cut off, South America has been hit by rains and frosts, the US has been plagued by drought and dry conditions and as Hurricane Ian made landfall in the, US conditions are likely to go from bad to worse. And lastly - La Nina is expected to hit Australia for the third year in a row. So we are seeing clients buy into Wheat and Corn. Both prices are up 20% off their lows. Secondly, buying has been picking up in agricultural stocks like General Mills (GIS) and GrainCorp (GNC). And lastly, clients are biting into agricultural ETFs like Invesco DB Agriculture Fund (DBA) and iShares MSCI Agricultural Producers ETF (VEGI). Fed preferred inflation measure, US PCE, on the radar today The Fed’s preferred inflation measure, the PCE is due today, and it will likely echo the same message as given by the last strong CPI number which has made the Fed even more hawkish in the last few weeks since the Jackson Hole. Headline numbers may be lower due to the decline in gasoline prices, but the price pressure on services side will likely broaden further. Last week, the Fed also raised its forecasts for inflation, with the central bank now seeing core PCE at 4.5% by the end of this year (it previously projected 4.3%), moderating to 3.1% next year and at 2.1% at the end of its forecast horizon in 2025, but thinks that headline PCE prices will be at its 2% target by then. Putin's speech due today after Russia annexed parts of Ukraine Vladimir Putin will address legislators after Russia signs treaties today to absorb four occupied regions, with Ukrainian forces threatening to encircle a pocket of the Donbas region. There is also growing resistance to Putin’s decision to call up 300,000 reservists. Market focus will likely be on Putin’s warnings to the West about any potential threats of using nuclear weapons, which may mean risk aversion getting another leg up. Nike sank on concerns about inventory build-up and margins Nike (NKE) reported slightly better than expected revenues and inline earnings but below expectation gross margins and a 65% surge in inventories for the North American market.  In the earnings call, the company’s CFO pledged to take “decisive action to clear excess inventory” and such efforts will have “a transitory impact on gross margins this fiscal year”.  Investors took note of the implication on demand and profitability and sold stock to more than 9% lower in the extended hour trading. Apple fell on analyst downgrade After being sold on the company’s announcement to back off plans to increase iPhone production this year on the day before, Apple’s shares fell another 4.9% yesterday after an analyst downgrade from a U.S. investment bank.  In this Market Daily Insights piece yesterday, we mentioned the warnings from Peter Garnry, Saxo’s Head of Equity Strategy, about the likelihood that Apple’s revenue could slip into negative growth for the current quarter ending Sep 30 and you can find more details of his analysis from here. In his note, Peter also warns that analysts may be way off in their estimates for the S&P 500 for Q3 and it is highly probable that there will be significant misses to the downside followed by gloomy comments from company management about the outlook on margins.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-30-sept-30092022
Philippines Central Bank's Hawkish Pause: Key Developments and Policy Stance

A Peak In Inflation In The Eurozone Is Possible| H&M’s Challenging Position And Micron's Shocking Forecast

Saxo Bank Saxo Bank 30.09.2022 09:44
Summary:  After celebrating the injection of liquidity from the Bank of England on Wednesday, global markets swooned again yesterday, taking the major US indices. Elsewhere, sterling has recovered most of the lost ground since the announcement of last week’s tax cuts on the stabilization of the gilt market, with other major sovereign yields also easing lower. The drop in yields and a consolidation in the US dollar have supported gold, which is poking higher toward important resistance.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities traded lower yesterday after hawkish remarks from Mester and Bullard that policy rates will stay higher for longer than what the market is expecting (pricing in). In addition, the market is increasingly at edge with the expectation that Russia will annex four regions of Ukrainian territory because the fear is that it could escalate the war to new levels. Nasdaq 100 futures are most sensitive to the hawkish Fed messages and tumbling growth outlook, so watch this index going into the weekend. Nasdaq 100 futures are trading around the 11,265 level this morning and 11,000 is naturally the big next level on the downside in case selling resumes into the weekend. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China markets were treading water ahead of the week-long National Day golden week holiday. Chinese developers rallied to recoup some of the recent losses following PBoC’s supportive statement coming out of its quarterly monetary meeting saying that the central bank will expand its special lending program to ensure the delivery of delayed housing projects. Country Garden (02007:xhkg) rebounded 10% after plunging 11% yesterday. Chinese EV maker, Zhejian Leapmotor (09863:xhkg), tumbled another 11% after having tumbled 33.5% yesterday on its first day of trading. Other Chinese EV names traded in the Hong Kong bourses plunged from 2% to 9%. Strong USD fades as bond yields punched lower The weak US dollar suggests that the market was more focused on rising US treasury yields during the recent upswing than the accompanying risk sentiment deterioration: yesterday, the USD weakened sharply as yields were flat to lower while risk sentiment was in the dumps. Hard to tell if some end-of-month/quarter rebalancing through today might be in play as well. A proper reversal of the recent USD bull move would require far more weakness, for example: EURUSD back above the 0.9900-0.9950 area and AUDUSD above perhaps 0.6700 (more on GBPUSD below). Next week features a full line-up of key US macro data and should bring a test of the USD’s status. Was that the climax for sterling bear market? Too early to draw conclusions here, as sterling has not yet recovered sufficient ground in the most important EURGBP and GBPUSD pairs to suggest that we have seen a climax reversal, although overnight, GBPUSD did reverse the entire plunge sparked by the announcement of the special budget last Friday by Chancellor Kwarteng, which started around 1.1200. Arguably, a close above 1.1200-1.1250 suggests a chance over reversal, though really 1.1500 was a more significant starting point for the recent slide. For EURGBP, the key support/pivot zone is 0.8750-0.8700. While there was nothing specifically supportive about the Bank of England’s emergency QE, if the logic is that the BoE saved the system from a financial crisis and that the exercise demonstrated that quantitative tightening will prove impossible elsewhere eventually (and therefore the BoE is only the first of many), sterling’s situation looks less bad if other central banks eventually follow suit. Gold (XAUUSD) Gold continues to rebound from key support at $1615 with the focus now being the critical resistance zone into 1,680-1,700 that is the departure point for this latest bear market move. While global bond yields and the USD will continue to lead the way as coincident indicators, the market has held up relatively well with geopolitical concerns (Putin’s N threat) and investors increasingly worried the FOMC with its hawkish actions may break the currency and bond market. Some signs of that were seen this week with some extreme moves in local bond and currency markets. Speculators hold a rare net short in COMEX gold futures and any further strength will trigger short covering, while total holdings in ETFs backed by bullion have declined to a 30-month low. Crude oil (CLX2 & LCOX2) Crude oil is heading for its first albeit small weekly gain in five and the first quarterly drop since 2020. The market remains troubled by forces pulling prices in opposite direction, and while the strong dollar, surging yields, and continued lockdowns in China have raised demand worries, the risk to supply continues to be a supporting theme. That focus returned on Thursday when OPEC+ said a production cut would be discussed at next week's meeting with Russia proposing a 1 mln barrels per day cut, a reduction towards which they are unlikely to contribute much as they are already producing below their quota. In addition, the combination of Russian sanctions and embargo and the US pausing its sales from strategic reserves will continue to dampen the downside risks. US treasuries (TLT, IEF) US treasury yields remained calm yesterday as we can infer that the recent wild ride in UK gilts had triggered contagion into US treasury yields, likely aggravating the recent rise toward 4.00% for the 10-year treasury benchmark before the BoE’s emergency efforts took major sovereign yields back lower. US macro data next week, including the ISM surveys and the September jobs report next Friday, will be key for the direction in US yields, with the major 3.50% level, the June high, the key downside pivot point. What is going on? Apple shares (AAPL:xnas) crater after the company announced it will skip production increase and on analyst downgrade Apple shares ended the day nearly 5% lower, helping to drag the broader market lower as it is world’s largest company by market capitalization. A Bank of America analyst cut the rating on the company to “neutral” from “buy”. Apple’s demand is hurt by the cost-of-living crisis and the earnings outlook last night from the chip manufacturer Micron Technology is indicating that demand is coming down fast. Fed speakers push for more hikes Cleveland Fed president Loretta Mester (voter this year) remains more hawkish than the Fed’s median dot plot and said that rates are not in restrictive territory yet and more rate hikes will be needed. No signs of concern on economy or dollar strength were noted, while inflation remained the key point of concern for her. St. Louis Fed president James Bullard, likewise a voter this year, said it was a ‘bad idea to mess’ with the inflation target while labor market conditions remain tight and recession is only a risk. San Francisco Fed president Mary Daly (voter in 2024) was more cautious, saying officials should work to avoid "inducing a deep recession." However, she still raised the bar on expectations on the Fed funds rate saying that she is comfortable with median Fed rate path projection of 4%-4.5% by year end, 4.5%-5% in 2023 (pointing to upside risks as the dot plot suggested 4.6%, or 4.5-4.75% if we talk in ranges). Eurozone inflation is set to hit a new record in September The September eurozone inflation will be released today. Expect a new record which will increase the pressure on the European Central Bank to hike interest rates by at least 75 basis points in October. The economist consensus expects that the headline harmonized index of consumer prices (HICP) will reach 9.7 % year-over-year against 9.1 % in August. The core rate is expected to climb to 5.6 % year-over-year against 5.5 % previously. The spread between the headline and the core inflation figures is mostly explained by a decrease in oil and natural gas prices in recent months. However, this is clear that inflation is becoming broad-based, including in the services sector. This means that inflation is here to stay for long. The HICP is likely to continue increasing in the coming months. A peak in inflation in the eurozone is possible in the first quarter of 2023, in our view. This is much later than in the United States.  Earnings recap (H&M, Nike, and Micron) H&M delivered a big miss yesterday on operating profit as input costs surprised to the upside. H&M is starting charging for online returns to save costs and the demand in China is still weak due to H&M’s challenging position in the country. Nike surprised positively on revenue but missed on earnings against estimates as margin compression has begun, and the company’s inventory is building up fast creating a potential headache going forward as consumer demand is expected to decline in the coming quarters. Micron delivered a shocking outlook for the current quarter with revenue expected at €4-4.5bn vs est. €6bn. CEE currencies under strain, likely on geopolitical unease CEE currencies are under significant pressure since the news of the pipeline explosions this week – this was likely triggered by the sabotage of the Nord Stream pipelines to Germany, which could be a prelude to the cutting off of other pipelines from Russia. EURHUF has pulled above 420 for the first time ever, EURPLN yesterday spiked to the highest level since the timeframe just after the breakout of war in Ukraine.  Hungary continues to not support new sanction efforts against Russian energy imports. In Prague, protests have broken out against the country’s energy policy, while EURCZK remains sedated by heavy Czech central bank intervention. US initial claims come in strong again Initial claims came in lower than expected at 193k with last week’s also revised lower to 209k from 213k. Continued claims cooled to 1.347mln from 1.376mln despite the expected rise to 1.388mln. The data shows how tight the labour market is in the US and Fed's Bullard labelled today's claims metric as "super low". Meanwhile, the third estimate of Q2 GDP was confirmed to decline 0.6%, notably with consumer spending revised higher to 2% from 1.5% previously. Aluminium prices bolt higher; fuelling a rally in major mining companies Aluminum prices on the London Metal Exchange briefly jumped by a record 8.5% on Thursday before retracing lower. The sudden burst which to a minor extent was replicated in zinc and nickel was driven by a Bloomberg report saying that the LME as an option is looking into whether and under what circumstances they might place a ban on Russian metal being cleared via the exchange. Any such move by the LME to block Russian supplies could have significant ramifications for the global metal markets given their importance as a supplier of the mentioned metals, which to a smaller extend also includes copper. What are we watching next? Change of course from UK government after recent events? UK Prime Minister Liz Truss and Chancellor Kwarteng will meet with the Office of Budget Responsibility today for emergency talks before they receive the first draft of fiscal forecasts from the OBR next week. The recent crisis in the UK gilt market and downward spiral in sterling could elicit a response and possible backtracking on some portion of the recent policy announcement, although Truss said as recently as yesterday that she will stay the course. The most recent YouGov political poll release yesterday shows the Conservatives trailing Labour by a whopping 33 points, the largest gap since the 1990’s. Election in Brazil at the weekendBrazilian voters go to the polls on Sunday, with left-leaning former president Lula leading strongly in the polls over the incumbent right-populist Bolsonaro, but with many fearing the risk of disorder and violence as Bolsonaro has already made claims of election fraud and has hinted at not wanting to leave office. A run-off election between the two candidates will be held on October 30 if neither gets more than half the popular vote this weekend. The Brazilian real is at the weak end of the recent range versus the US dollar. Fed preferred inflation measure, US PCE, on the radar today The data point is for August and comes nearly three weeks after the BLS CPI data for the month. It will likely echo the same message as given by the last strong CPI number which has made the Fed even more hawkish in the last few weeks since the Jackson Hole. Headline numbers may be lower due to the decline in gasoline prices, but the price pressure on services side will likely broaden further. At last week’s FOMC meeting, the Fed also raised its forecasts for inflation, with the central bank now seeing core PCE at 4.5% by the end of this year (it previously projected 4.3%), moderating to 3.1% next year and at 2.1% at the end of its forecast horizon in 2025, but thinks that headline PCE prices will be at its 2% target by then. Earnings calendar this week Today’s earnings release to watch is from Carnival which is expected to deliver strong results but there are significant downside risks to the outlook from fuel costs, staffing costs and the cost-of-living crisis hurting disposable income. Today: Carnival (postponed from last week), Nitori Economic calendar highlights for today (times GMT) 0755 – Germany Sep. Unemployment Change/Rate 0800 – Poland Sep. Flash CPI 0800 – Norway Daily FX Purchases 0830 – UK Aug. Mortgage Approvals 0900 – Eurozone Sep. Flash CPI 1230 – US Aug. PCE Deflator/Core Deflator 1300 – US Fed Vice Chair Brainard to speak at Fed conference on Financial Stability. 1345 – US Sep. Chicago PMI 1400 – US Final University of Michigan Sentiment Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-sep-30-2022-30092022
CEE: Busy Week Ahead Drives FX Strength

The Financial Meltdown Continues At Full Speed

Swissquote Bank Swissquote Bank 30.09.2022 14:41
It was a terribly ugly day across the equity and bond markets yesterday. Despite the financial calamity, Porsche had a successful IPO and secured the valuation it was looking for, but the S&P500 plunged another 2% yesterday and wiped out the summer gains entirely. The same is true for Nasdaq. Nothing is left from the summer rally in the US stocks. Job cuts Apple dived more than 6% and closed the session almost 5% lower yesterday, after Bank of America downgraded the stock on worries of weaker consumer demand. Facebook’s Meta joined the others in announcing job cuts. But *unfortunately* for the Federal Reserve (Fed), the US jobless claims came below 200’000 last week. There are not enough people losing their jobs to stop the financial bleeding in the world. One interesting thing about yesterday’s price action was that... the US dollar sharply eased despite the hawkish messages thrown to our faces by the pitiless Fed members. The British pound recovered above the 1.11 mark against the US dollar yesterday. Could the pound rebound sustainably, or is this just a fake alert? Watch the full episode to find out more! 0:00 Intro 0:32 Porsche IPO went well, but… 4:20 Apple nosedived amid BoFA downgrade 6:47 Why did the US dollar ease? 8:42 Could sterling recover sustainably? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #BoE #intervention #UK #gilt #GBP #EUR #USD #Fed #Apple #Meta #Porsche #IPO #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH    
Germany's Economic Déjà Vu: A Look Back and a Leap Forward

It Was A Bad Month For Bulls And DAX Mood Remains Bearish

InstaForex Analysis InstaForex Analysis 30.09.2022 14:55
Blue rectangles- lower highs Black lines- Fibonacci retracements Green lines- expected size of decline Red line- neckline resistance In previous posts in August and mid September we warned traders that it would be a bad month for bulls as price was getting rejected at key resistance levels and was forming lower highs. This week price made new lower lows relative to the double bottom of March and July. The weekly candlestick has broken below the 50% Fibonacci retracement and the double bottom at 12,400-12,450 area. Our target since August remains at the 61.8% retracement around 11,300. Weekly trend remains bearish as price continues making lower lows and lower highs. As long as price is below 13,600 we remain bearish.   Relevance up to 14:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295036
Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

Declines At The Close Of The New York Stock Exchange, The Drop Leaders Were Nike Inc Shares

InstaForex Analysis InstaForex Analysis 03.10.2022 08:21
At the close of the New York Stock Exchange, the Dow Jones fell 1.71% to hit a 52-week low, the S&P 500 fell 1.51% and the NASDAQ Composite fell 1.51%. Shares of UnitedHealth Group Incorporated were among the leaders of gains among the components of the Dow Jones index today, which lost 3.79 points (0.74%) to close at 505.04. Walgreens Boots Alliance Inc fell 0.15 points or 0.48% to close at 31.40. Dow Inc shed 0.23 points or 0.52% to close at 43.93. The drop leaders were Nike Inc shares, which lost 12.21 points or 12.81% to end the session at 83.12. Boeing Co was up 3.39% or 4.25 points to close at 121.08, while Walt Disney Company was down 3.20% or 3.12 points to close at 94. 33. Leading gainers among the S&P 500 index components in today's trading were Charles River Laboratories, which rose 3.57% to hit 196.80, Weyerhaeuser Company, which gained 2.92% to close at 28.56, and shares of Twitter Inc, which rose 2.74% to end the session at 43.91. The losers were shares of Carnival Corporation, which fell 23.31% to close at 7.03. Shares of Norwegian Cruise Line Holdings Ltd lost 18.11% to end the session at 11.35. Quotes of Royal Caribbean Cruises Ltd decreased in price by 13.14% to 37.91. Leading gainers among the components of the NASDAQ Composite in today's trading were FingerMotion Inc, which rose 82.16% to hit 3.37, SAITECH Global Corp, which gained 43.36% to close at 3.24, and shares of Avenue Therapeutics Inc, which rose 39.03% to end the session at 10.08. The biggest losers were Atlis Motor Vehicles Inc, which shed 39.91% to close at 20.40. Shares of Aterian Inc lost 37.06% and ended the session at 1.24. Quotes of Edesa Biotech Inc decreased in price by 34.66% to 0.92. On the New York Stock Exchange, the number of securities that fell in price (1,758) exceeded the number of those that closed in positive territory (1,354), while quotations of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,139 companies fell in price, 1,583 rose, and 228 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.69% to 31.62. Gold futures for December delivery added 0.11%, or 1.80, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 1.87%, or 1.52, to $79.71 a barrel. Futures for Brent crude for December delivery fell 2.13%, or 1.86, to $85.32 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.08% to 0.98, while USD/JPY advanced 0.23% to hit 144.77. Futures on the USD index fell 0.09% to 112.10. Relevance up to 05:00 2022-10-04 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295131
Biden Declared Unwavering Support For Ukraine, The Reserve Bank Of New Zealand May Go Back To Raising Rates

Ukraine's Successes Have Infuriated Putin Allies| Intel Acquired Mobileye And More

Saxo Bank Saxo Bank 03.10.2022 08:42
Summary:  The S&P500 broke below 3600 into the close on Friday as US 10-year yields surged above 3.8%. Risk off seen from multiple forces heading into the new month/quarter as corporate earnings misses continue to raise the threat of an ugly earnings season ahead. Meanwhile, the war could take a turn for the worse if Russia decides to escalates after losing a key city to Ukraine again over the weekend. China heads into the Golden Week holiday and OPEC+ meeting in focus this week with expectations of over 1mn b/d output cut on the table. UK crisis will also take more attention this week along with key US ISM manufacturing data due today and the payrolls data at the end of the week. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) had three down quarters in a row U.S. equities continued to sell off on Friday. S&P500 dropped 1.5% for the day and ended the month more than 9% lower. Nasdaq 100 declined 1.7% on Friday, falling nearly 11% in September. 10 of the 11 sectors in the S&P 500 declined, with Utilities, Information Technology, and Consumer Discretionary leading the charge lower. Real Estate was the only sector that gained on Friday.  Big U.S. stock movers   Being another latest signal of weakening U.S. consumer demand, Carnival (CCL:xnys) tumbled more than 23% after the cruise operator reported occupancy for the quarter ending Aug 31 below market expectations. Nike (NKE:xnys) plunged 12.8% on rising inventories and margin misses. For a detailed discussion on last week’s earnings warning signs from Nike, Micron, and H&M’s margin misses, please refer to Peter Garnry’s analysis here. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) climbed again U.S. treasury yields fell initially during London hours on Friday in tandem with the intraday swings in the U.K. Gilts and then pared the decline in yields in New York hours following the slightly stronger than expected PCE data and Fed Vice-Chair Brainard’s reiteration that the Fed will avoid pulling back from rate hikes prematurely. Yields decisively soared higher in the last hour of trading with 2-year yields rising 9bps to 4.28% and 10-year yields climbing 4bps to 3.83%. September was Hang Seng Index’s (HSIU2) worst month in 11 years Hong Kong and mainland China markets were treading water ahead of the week-long National Day golden week holiday in the mainland, with Hang Seng Index up by 0.3% and CSI 300 Index sliding 0.6%. Despite the lackluster trading last Friday, September was the worst month for the Hang Seng Index, which had fallen 13.7%, over the past 11 years. Chinese developers rallied to recoup some of the recent losses following incremental supporting measures from regulators.  CIFI (00884:xhkg), Country Garden (02007:xhkg), and Guangzhou R&F rebounded 11%, 9%, and 8% respectively. Chinese EV maker, Zhejian Leapmotor (09863:xhkg), tumbled another 22% last Friday after having collapsed 33.5% the day before on its first day of trading.  Other Chinese EV names traded in the Hong Kong bourses plunged from 4% to 7% even after more subsidies and support were announced by the Ministry of Commerce and the Shanghai Municipal Government. Chinese restaurant operator Jiumaojiu (09922:xhkg) plunged by 20.4% following its announcement to pay RMB1 billion for a 26% equity stake in the Guangzhou IFC Mall project which will give the company 30,000 sqm for self-use as headquarter and R&D centre.  GBP ends a volatile week strongest against the USD Sterling ended the week strongest in the G10 pack against the USD despite a flash crash last week and risks of a pension fund crisis in the UK on top of the current energy crisis and the runaway inflation issues at hand. Rising Russia tensions mean that the energy situation could get a leg up this week, but focus for the sterling will remain on any possible rollback of the loose fiscal policy. The political pressure is certainly mounting after the latest YouGov poll showed Labour with a 33-point lead in the polls, the widest margin since the 1990’s. GBPUSD is testing a break above 1.1235, but that for now seems to be underpinned by a softer USD and lower US yields, and it remains to be seen if that story will continue this week as we get past the rebalancing flows. Crude oil (CLX2 & LCOX2) prices waiting for a large OPEC+ production cut Crude oil ended last week mixed but mostly lower on Friday after some gains initially on expectations of an OPEC+ production cut coming this week. It is being reported that OPEC+ is mulling a possible reduction of 0.5-1mn barrels/day, after the September output rose 210k barrels/day from August. Some delegates said over the weekend that output cut could exceed 1 million barrels/day, and this has helped crude oil see a 3% jump at the Asia open. Given that the meeting is in-person for the first time since March 2020 also raises expectations of a large cut. WTI futures were seen above $82/barrel while Brent futures rose towards $88. Still, demand worries especially with China’s lockdowns and rapid global tightening pace will continue to put downside pressure on oil prices. Wheat futures (ZWZ2) higher on supply concerns On Friday, the USDA published its Quarterly Stocks and wheat production reports. Corn stocks were lower and soybeans higher than expected. December wheat (ZWZ2) jumped 2.8% with stocks in line but production in all categories falling short of expectations. Meanwhile, geopolitical concerns are on the rise with Russia threatening use of low-yield nuclear weapons as its military advantage starts to diminish. This has again raised concerns over the fate of the Black Sea export corridor and the supply situation in agri commodities may continue to be challenged. What to consider? Hot US PCE paves the way for another CPI surprise this month US PCE data came in stronger-than-expected, with the headline up 6.2% YoY from 6.3% YoY prior and 6.0% YoY expected. The core measure was at 4.9% YoY, coming in both higher than last month’s 4.6% YoY and the expected 4.7% YoY. This will likely push up the pricing of another 75bps rate hike from the Fed at the November meeting, as the CPI report out this month is generally likely to follow the same trend of remining close to its highs. Meanwhile, the final estimate of University of Michigan survey was revised lower to 58.6 from preliminary print of 59.5 due to the slide in expectations to 58 from 59.9, even as the current conditions fared better at 59.7 from 58.9 previously. The inflation metrics also diverged with 1yr consumer inflation expectations edging higher to 4.7% (prev. 4.6%), although the longer term 5yr slightly fell to 2.7% (prev. 2.8%). Stronger Q3 Atlanta Fed GDP and more calls for restrictive Fed policy The economic momentum in the US is still strong, as hinted by the big upward revision in Atlanta Fed’s Q3 GDP estimate to 2.4% from 0.3% earlier with higher contribution expected from private domestic investment and net exports. The advance Q3 GDP report is due on October 27, so that will likely give more ammunition to the Fed to raise rates aggressively at the November meeting. Meanwhile, more Fed speakers were on the wires on Friday continuing to push for interest rates to move towards or above the median of the dot plot. Fed Vice-Chair Brainard noted policy will need to be restrictive for some time, while Mary Daly (2024 voter) was more specific to say that she  expects to hold rates steady for at least all of 2023 after rate hikes. Barkin (2024 voter) echoed the Saxo view that Fed has decided that they’d rather be wrong by tightening too much rather than tightening too little. He said it would be a good news story if the Fed did a bit too much and inflation came down. Eurozone inflation remains painfully high The September eurozone consumer price index (CPI) reached double-digits at 10% year-over-year versus prior 9.1% and expected 9.7%. The core CPI (excluding volatile components) is up to 4.8% year-over-year versus expected 4.7% too. What is clearly worrying is there is an acceleration in price pressures beyond energy and food prices. This is a signal that inflation is now broad-based. In France, the EU-harmonized CPI was out at 6.2% year-over-year in September. This is much lower than what the consensus expected (6.7%). It stood at 6.8% in July and 6.6% in August. On the downside, the producer price index (PPI) for August reached a new high at 29.5% year-over-year against expected 27.6%. This matters. The PPI usually represents the pipeline in inflation which will be passed on to consumers, at least partially. This means that the peak in inflation is likely ahead of us in France and in all the other eurozone countries. Expect to reach it in the first quarter of next year, at best.  China’s PMIs were mixed in September China’s September official NBS Manufacturing PMI came in at 50.1, stronger than expectations (consensus 49.7, Aug 49.4), and returned to the expansionary territory.  The strength was found in the output sub-index which rebounded to 51.5 in September from 49.8 in August, which was largely due to the receding heatwave and pent-up demand.  The other major sub-indices in manufacturing remained below 50.  Exports were weak as the new export orders sub-index fell to 47 in September from 48.1 in August.  The Caixin Manufacturing PMI, which has a larger weight in coastal cities in the eastern region, fell to 48.1 (consensus 49.5, Aug 49.5), echoing the weakness in the exports element in the official PMI.  The NBS Non-manufacturing PMI came in at 50.6, below expectations (consensus 52.4, Aug 52.6).  Among non-manufacturing activities, the construction sub-index rose to 60.2 from 56.5, supported by infrastructure construction, while the service sub-index fell into the contractionary territory, coming in at 48.9, down from August’s 51.9. Retail, air travel, lodging, catering, and other services requiring close contact contracted in the midst of Covid restrictions. Ukraine’s recapture of key city raises the nuclear threat Ukrainian troops recaptured the city of Lyman over the weekend in occupied eastern Ukraine, less than a day after Russia announced the annexation of the area and vowed to defend it with all military means. Ukraine's successes have infuriated Putin allies such as Ramzan Kadyrov, the leader of Russia's southern Chechnya region who called on Putin to retaliate by escalating even further against Ukraine, including declaring martial law in the border regions and using low-yield nuclear weapons. China relaxes mortgage rates’ lower bound for first-time homebuyers and provides tax rebates to homebuyers plus telling banks to lend to the property sector The People’s Bank of China (PBoC) and the China Banking and Insurance Regulatory Commission (CBIRC) announced last Friday to lower or even remove the lower bounds imposed on first-time homebuyers in cities that experienced three consecutive months (from June to August 2022) declines in new home prices both sequentially and year-on-year.  The currently lower bound is the 5-year Loan Prime Rate minus 20bps.  The new policy will benefit first-time homebuyers in lower-tier cities while tier-1 cities do not meet the above price decline criterion. Among the top-70 cities, eight Tier-2 cities and 15 Tier-3 cities are eligible. The PBoC and the CBIRC also reportedly told the largest banks in the country to extend at least RMB600 billion in net new financing to the housing sector for the rest of the year. In addition, the State Administration of Taxation announced that from Oct 1, 2022, to Dec 31, 2023, homebuyers will be rebated the tax they paid for the sale of their previous home if the sale was within one year from the purchase of the new home.  Tesla reveals a prototype of its humanoid robot On last Friday’s AI Day, Tesla (TSLA:xnas) showcased a prototype of the EV maker’s first humanoid robot, dubbed Optimus, and reveals the latest updates to the company’s assistant deriving system. Tesla’s humanoid robots are still a long way from commercialization and it plans to deploy them first at Tesla factories.  Intel goes ahead to list its self-driving-car unit Intel’s self-driving-car unit, Mobileye said on Friday that the company filed with the Securities and Exchange Commission for IPO.  Mobileye did not provide information about the expected size and price range for its IPO. Intel acquired Mobileye, an Israeli company that develops driver-assistance systems for USD15.3 billion in 2017. Mobileye said it had agreements in hand to supply 266 million vehicles with the company’s driver-assistance systems by 2030.  US ISM manufacturing on watch today Due later today, ISM manufacturing is unlikely to dent the optimism around the US economy that has been building up further with positive economic indicators released over the last few weeks. While the Bloomberg consensus estimates show some signs of a slowdown to 52.1 in September from 52.8 in August – that should likely be underpinned by improving supply chains, while new orders should remain upbeat. On Tuesday, Japan’s Tokyo CPI will see impact of reopening Japan’s inflationary pressures are likely to continue to reign amid higher global prices of food, electricity as well as a weak yen propping up import prices. Bloomberg consensus estimates point to a slightly softer headline print of 2.7% YoY from 2.9% YoY previously, but the core is pinned higher at 2.8% YoY from 2.6% YoY previously. Further, the reopening of the economic from the pandemic curbs likely means demand side pressures are also broadening, and services inflation will potentially pick up as well.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-3-oct-2022-03102022
Why India Leads the Way in Economic Growth Amid Global Slowdown

The GBP/USD Pair Gained Bullish Pace, September PMI Indices And Continued Volatility In The Markets

TeleTrade Comments TeleTrade Comments 03.10.2022 10:10
Here is what you need to know on Monday, October 3: Markets stayed relatively quiet during the Asian trading hours on Monday but volatility picked up in the early European morning. Political developments in the UK are watched closely by market participants ahead of S&P Global's final September PMIs for Germany, the euro area, the UK and Canada. The US economic docket will feature the ISM September Manufacturing PMI later in the day. Several FOMC policymakers, including Kansas City Fed President Esther George and New York Fed President John Williams, will also be delivering speeches in the second half of the day. After having registered modest gains on Friday, the US Dollar Index turned south and broke below 112.00. US Stock index futures are trading mixed in the European session and the benchmark 10-year US Treasury bond yield loses over 1% below 3.8%.  During the Asian trading hours, the data from Japan showed that the Tankan Large Manufacturing Index declined to 8 in Q3, missing the market expectation of 11. On a positive note, the Non-Manufacturing Index edged higher to 14 in the same period from 13. Meanwhile, Japanese Finance Minister Shunichi Suzuki reiterated that they continue to watch FX moves with a strong sense of urgency. USD/JPY showed no reaction to Suzuki's comments or the data releases and it was last seen moving sideways slightly below 115.00. GBP/USD gathered bullish momentum and jumped to its highest level in over a week near 1.1300. Reports suggesting that the UK government is expected to roll back the proposed scrapping of the higher rate of income tax helped the British pound gather strength. British Finance Minister Kwasi Kwarteng confirmed these reports by announcing that the government will not go ahead with a plan to scrap a 45% rate of income tax. Following the initial bullish reaction, the pair returned to the 1.1200 area, where it was up around 0.3% on the day. EUR/USD is having a difficult time making a decisive move in either direction and trading in a narrow range near 0.9800.  Gold snapped a two-week losing streak on Friday and edged higher toward $1,670 early Monday. Although XAU/USD returned to the $1,660 area in the European morning, it managed to hold its ground amid retreating US Treasury bond yields.  Bitcoin closed in negative territory on Saturday and Sunday but found support near $19,000. Ethereum fell nearly 4% over the weekend and dropped below $1,300 before staging a rebound early Monday. ETH/USD was last seen rising 1% on the day at $1,290.
Market Sentiment and Fed Policy Uncertainty: Impact on August Performance

The Third Quarter Ends With Losses, U.S. Dollar (USD) Strength Is Worrying

Swissquote Bank Swissquote Bank 03.10.2022 10:21
We spent the weekend talking about whether Credit Suisse will finally go bust or not. The share price is down below 4 francs a share, and the credit default swaps are going through the roof. The 5-year CDS for Credit Suisse spiked to 250 from around 60 at the start of the year. It means that the market is aggressively pricing a default for one of the biggest Swiss banks. Is it possible? Yes, it is possible, but it is highly unlikely. A negative note Zooming out, the third quarter ends with losses, even though we thought that the summer rally could’ve given something. But no. The S&P500 finished the 3rd quarter having slipped to the lowest levels this year. The same is true for Nasdaq and the Dow Jones. $24 trillion have been wiped out of the stocks so far this year. And the last quarter begins with aggressive rate hike expectations from the Federal Reserve (Fed), but also from the European Central Bank (ECB) and the Bank of England (BoE) to fight inflation and the dollar strength.Nike has been the latest company warning investors of falling profits due to mountains of stockpiles that they inherited from the pandemic times – and which brought the company to make nice price discounts -, and the strong dollar. Waiting for tesla reactions This week, we will watch how Tesla will react to the latest delivery report, the OPEC decision and the US jobs figures… and hope that this week’s jobs data doesn’t reveal strong job additions, and solid salary growth in the US. Watch the full episode to find out more! 0:00 Intro 0:21 What will happen to Credit Suisse? 3:14 Q3 ends on a negative note… 5:36 USD strength to become a major headache for next earnings season 6:51 What to watch this week? Tesla deliveries, OPEC decision & US jobs 7:50 Econ101 minute: Why the Fed must destroy jobs to fight inflation?   Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #CreditSuisse #Q4 #Nike #earnings #strongUSD #USD #EUR #GBP #Tesla #OPEC #US #jobs #Fed #BoE #ECB #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
UK Inflation Expected to Slow Sharply in July: Market Analysis and Insights - August 16, 2023

Podcast: A Look At New Sources Of Concern, Financial Conditions Continue To Deteriorate Badly

Saxo Bank Saxo Bank 03.10.2022 11:27
Summary:  Today we discuss the market sliding to new lows on Friday after a firm US PCE inflation indicator and despite the stabilization of global sovereign bond markets in the wake of the panicky situation in the UK gilt market last week that triggered an easing move from the Bank of England. We look at new sources of concern as financial conditions by some continue to deteriorate badly. A look at the USD, crude oil, natural gas and wheat, Tesla, Biogen's new Alzheimer drug candidate and more in today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean engraver If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-3-2022-03102022
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

The Outlook Of Some Stocks Around The World: Will IAG Continue To Outperform?

Saxo Bank Saxo Bank 04.10.2022 09:01
Summary:  Five stocks to watch this week, in our two minute video. CSL could likely see a pickup in flu-vaccine demand and revenue ahead of the Northern Hemisphere winter. Rio Tinto, is another to watch as it just started producing spodumene concentrate for lithium batteries. Tesco and Constellation Brands are also on watch with results out this week. And Insurance Australia Group is also on watch with the RBA making a bevy of more interest rates hikes. Will IAG continue to outperform? CSL(CSL) CSL is the one of the world’s biggest producers of influenzas vaccines. The thinking is CSL’s revenue could pick up with flu vaccine demand likely to rise ahead of the Northern Hemisphere winter.  Rio Tinto (RIO) Rio just started producing spodumene concentrate for lithium batteries, at its facility in Canada. Rio is also one of the world’s largest producers of Iron Ore (SCOA) and Aluminium. And last week, Aluminium prices saw their biggest jump on record on potential supply fears. So its worth watching to see what eventuates. Tesco (TSCO) Tesco, The British Super market giant is due to release financial results in the first week of October, while also kicking off a huge half price toy sale in a bid to boost its performance. Tesco shares are trading at 4 year lows. Constellation Brands (STZ) Constellation Brands is the business that makes and producers beers such as Corona. It also produces and sells Wines and Sprits. the Alcohol giant is due to report results in the first week of October. And it’s worth watching their shares as they’ve outperformed the market this year.  Insurance Australia Group (IAG) IAG is Australia’s largest insurance group. Insurance groups generally do well when interest rates rise. So with the Reserve Bank of Australia (RBA) expected to rise rates in the first week of October and for the rest of the year and into next year, IAG is worth watching. IAG shares have outperformed the market and risen 6% this year. To find out more about the these companies or other opportunities, head to Saxo's Platform.    Source: https://www.home.saxo/content/articles/equities/looking-for-stocks-to-buy---here-are-five-to-watch-oct-4-04102022
"Private investors will be required to increase their gilt exposure by at least £268bn in FY2023-24"

The Weakening Of Confidence In The British Government| Oil Prices Extended Gains And More

Saxo Bank Saxo Bank 04.10.2022 09:09
Summary:  After a series of positive surprises on US economic data last week, the disappointment from the ISM manufacturing was a big deal for the markets. US Treasury yields slumped, with rising expectations of an earlier Fed pivot which we think may be premature. But that helped equity markets close higher, more a signal of positioning rather than expectations. UK’s tax cut U-turn instilled a fresh bid in sterling, but further impeded confidence in the government. Oil prices extended gains and Gold also reclaimed the $1700-mark. On watch today will be how the Reserve Bank of Australia transitions to a slower rate hike pace. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally over 2% US stocks rallied for the first day of the quarter with the Nasdaq100 up almost 2.4%, and the S&P500 up about 2.6%, which is the best gain since July 27. It comes as the 10-year US Treasury yield rolled over to trade at around 3.65% (after topping 4% at one-point last week). The risk-on mood was fueled by several things; firstly, the UK government did a U-turn and will reverse plans to scrap the top rate of income tax. Secondly, the United Nations called on the Fed and other central banks to halt interest rates hikes. And thirdly, what also boosted sentiment was that two Fed speakers at the weekend, Brainard and Daly were reportedly discussing the downside of hiking too fast. And fourthly, weaker than expected US economic news came out with; US manufacturing falling for the third time in four months. As for the S&P500, the technical indicators; the MACD and the RSI also remain in oversold territory, which supports the notion that some investors believe a short-term rebound may be seen perhaps amid the risk-on mood. However, caution still remains in the air ahead of further Fed's hikes. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) The US Treasury yields retreated on Monday as a subdued ISM manufacturing print led to calls of slower Fed tightening and an earlier Fed pivot, which had already been building last week as well due to the risk of wider market disruptions as things have started to break. The reversal of the UK tax cut also supported Gilts, and some pass-through was seen to the US Treasuries. 2-year yields declined over 16bps to 4.11%, while the 10-year was down 19bps to 3.63%. Australia’s ASX200 (ASXSP200.1) poised to raise 1.5% with a focus on oil stocks Commodities will be focus on the ASX today with Oil and LNG stocks like Woodside (WDS), Santos (STO) set to see some action after the oil and gas prices jumped 5%. Other stocks to watch include Worley (WOR) who services the energy sector. Iron ore companies will be watched as well, supported higher by the iron ore price jumping 1.8% to US$94.50. So it’s worth watching if BHP, RIO and CIA can extend their short-term uptrend. AUDUSD rallies back to 0.6516 ahead of RBA’s expected 0.5% hike Australia’s RBA is likely to make another jumbo rate hike and take rates up by 50 bps (0.5%) to 2.85% on Tuesday (which is what consensus thinking is). And then after that, the RBA is likely to move in smaller increments, according to interest rate futures and what RBA Governor Phillip Lowe signaled he wants. With the majority of Australian mortgages at floating-rates, and wage growth being stronger, the RBA’s thinking is that most Aussies will be able to sustain the higher rates as a lot of Australian made extra mortgage repayments amid the lockdowns, as pulled back on discretionary spending. However there are about 2.5 million Aussies who have no buffer. And 9.8 million Aussies have mortgages. So we still think a property pull back might be on the cards. It’s the magnitude of the pull back that is being questioned. The technical indicator, the MACD suggests the AUDUSD could rally if the RBA proceeds with a likely 0.5% hike. However over the long term, our house view remains bearish on the AUDUSD until Fed hikes cool, and commodity demand picks up from China. GBPUSD made a strong recovery, will it last? Cable was seen advancing above the 1.13 handle in early Asian hours on Tuesday as it extended Monday’s gains following announcement of plans to scarp the tax cut by the UK government. A softer dollar also supported pound’s gains, amid a slide in US Treasury yields. However, more Fed tightening is still in the cards and the lack of trust in the new UK government cannot be ignored even if the tax policy has been reversed for now. Focus on the BOE meeting on November 3 where 115bps rate hike is priced in, lower than last week’s pricing of 150bps. However, a full-budget statement will be released before that and further austerity measures, if included, can bring fresh downside for the sterling. EURGBP slid below 0.8700. Crude oil (CLX2 & LCOX2) extends gains on OPEC+ chatter Crude oil trades higher ahead of Wednesday’s OPEC+ meeting in Vienna as the alliance is considering a production cut of more than 1 million barrels/day to support prices following a 25% slump during Q3 2022. That would be the biggest cut since the pandemic with OPEC+ slashed production by 10 million barrels/day as demand collapsed. WTI futures rose above $83/barrel while Brent was close to $90. With several OPEC+ producers, including Russia, producing below target, and only Saudi Arabia may be able to limit production without a loss in additional market share. Meanwhile, expectations of an earlier Fed pivot also stabilized demand weakness expectations. Gold (XAUUSD) reclaims 1700 on lower US yields Gold extended recent gains as yields on Treasuries continued to decline. After the 10-year yields were seen topping the 4% level at one point last week, they are now off about 40bps to end at 3.63% yesterday. Meanwhile, a softer dollar and rising geopolitical tensions have also brought back investor demand for the yellow metal. A weaker ISM manufacturing print yesterday (read below) has also increased calls for an earlier Fed pivot, which we think may be premature. But the increasing calls for a recession have meant gains for Gold which was last seen back at $1,700/oz.   What to consider? US ISM manufacturing disappoints The headline for September’s US ISM manufacturing came in weaker than expectations at 50.9 from the prior month’s 52.8 and expected 52.2. Both employment and new orders both dropped into contractionary territory printing 48.7 (exp. 53.0, prev. 54.2) and 47.1 (prev. 41.3), respectively. The report showed that higher interest rates are starting to weigh on business investment sentiment, at least in the interest rate sensitive sectors. Still, the inflationary gauge of prices paid declined to 51.7 (exp. 51.9, prev. 52.5) falling for the sixth straight month. Supplier delivery times suggested some easing on the supply chains, but overall the report indicated the case of a slowdown in the US economy as rapid Fed tightening continues. UK scraps plans to cut taxes The UK government confirmed reports it will not go ahead with the abolition of the 45p rate of income tax but they are committed to borrowing extra over the winter to help with the ongoing energy crisis. The Chancellor told BBC the proposal was "drowning out a strong package", which includes support for energy bills, cuts to the basic rate of income tax, and the scrapped increase in corporation tax. However, he saw the abolition of 45p tax rate as a distraction from the overriding mission, and thus decided to remove it. This puts water on the Bank of England’s bond-buying, and exposes further the cracks in UK policymaking, thus suggesting that the UK assets are not out of the woods. A full-budget, which has now been brought forward to before the next BOE meeting on November 3, could include more tax cuts. Fed pushes back on an earlier pivot Fed’s NY President John Williams repeated inflation is too high and the Fed's job is not done, also saying that the monetary policy is still not in restrictive zone, pushing back on some calls for an earlier Fed pivot. He acknowledged signs of a slowdown in the housing sector or the consumer and business investment spending, but nothing that could deter the Fed from fighting inflation. On forecasts, he sees inflation likely down to 3% by next year (median view for Core PCE 3.1%), and the US is likely to see unemployment rise to 4.5% by end of 2023 (median view 4.4%). Thomas Barkin (2024 voter) made the case for more inflation in the post-pandemic world, noting that the Fed must consider global developments, but the focus is on the US. Japan’s Tokyo inflation accelerates further Japan’s September Tokyo CPI came in at 2.8% YoY, a notch softer than last month’s 2.9% YoY and in-line with expectations, but the core-core (ex-fresh food and energy) print accelerated to 1.7% YoY from 1.4% YoY, also coming in ahead of expectations at 1.4% YoY. Higher global food and energy prices along with a record weak yen has brought import price pressures on Japan’s economy, and this print hints at further gains in CPI on the horizon. While the pressure on the Bank of Japan to hike rates may have eased for now as US yields are easing, but there is still more Fed tightening in the pipeline and fresh pressures cannot be ignored. Reserve Bank of Australia may step away from moving to a slower rate hike pace The Reserve Bank of Australia is scheduled to announce its next rate decision on Tuesday, October 4. Governor Lowe had previously signalled that the pace of rate hikes is likely to slow from here after four consecutive rate hikes of the magnitude of 50bps. However, money markets and Bloomberg consensus forecast is still calling for another 50bps rate hike at the October meeting suggesting that RBA may delay taking the foot off the pedal just yet. The recent slide in the Australian dollar and worries over a turmoil in global financial markets may prompt the policymakers to front-load more of the rate hikes while the economy is still holding up. Retail sales data last week was upbeat while the first monthly inflation data reading at 6.8% is only slightly off the 7% levels seen in the preceding month. So, even as a monthly meeting can ensure a steady pace of rate hikes even with a smaller 25bps rate move, policymakers would possibly prefer to make a larger move this week to provide some support to the AUD. Likewise, the Reserve Bank of New Zealand is also expected to hike rates by another 50bps at their October 6 meeting.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-4-oct-04102022
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

Forecasts For Q4: The Power And Gas Crisis Will Reach Its Peak

Saxo Bank Saxo Bank 04.10.2022 09:16
Summary:  The macropolitical and economic landscape has sent freezing weather in over the financial markets. How will you navigate the cold winter? An Executive Summary  Our outlook for Q4 2022 simply recognises the reality that winter is coming, in both the literal and figurative senses. First is the literal sense as Europe and the UK in particular brace for the impact of a winter season that will likely bring with it an economic winter. The power and gas crisis will reach peak impact due to the increased demand during winter heating season, even if prices have fallen considerably. Our macro strategist Christopher Dembik focuses on how Europe can absorb the tremendous headwinds of the energy crisis without turning the lights out entirely, with observers excessively pessimistic on the European outlook. This will include reducing demand through more efficiency, longer-term investments in nuclear, and better buildout of the necessary infrastructure for the green transformation.  In China, our market strategist Redmond Wong notes that the focus on renewables is far less intense. China has moved to secure coal supplies amidst the spike in oil and especially LNG prices in recent quarters, preferring to focus on more efficient use of its coal-fired baseload capacity and the most aggressive buildout of nuclear power of any major economy. For the rest of developed and emerging Asia, market strategist Charu Chanana notes that the soaring prices for LNG have altered the energy security for the region, to the detriment of weaker economies. The response will come in a variety of forms, from Japan’s renewed interest in nuclear despite the 2011 Fukushima disaster, to the intriguing prospect of energy increasingly trading in non-US dollar currencies, as already seen in India’s purchase of Russian crude with roubles. Our Australian market strategist Jessica Amir zeroes in on the factors driving a renaissance of interest in nuclear energy and looks at where to find the companies and ETFs in a rather difficult-to-navigate nuclear investment space.  Now on to the chief driver of asset valuations since the Fed’s dramatic pivot in November of last year: the trajectory of monetary policy. The coming quarter and first part of winter are likely to bring what Saxo CIO Steen Jakobsen dubs “peak tightness”. The market will finally manage to catch up to where the peak Fed rate is likely to rise by early next year, after getting it so wrong in hoping for a policy pivot toward decelerating tightening pressure in Q3. In turn, that policy tightness will lead to a recession, already on the way in Europe but spreading elsewhere next year, eventually even to the US, where the economy has proven far more resilient than the market expected.   In equities, the emphasis from the head of equity and quant strategy Peter Garnry is on how the coming winter will inevitably drive recession risks, as already seen with the pressure on consumer and discretionary stocks. He also explores how the extraordinary pressure on Europe can drive necessary innovation that should allow the continent to come out the other side with a far more competitive economy. Still, an overriding risk for growth and equity valuations is the cost of de-globalisation, which will reverse many of the trends in equities and the supply chains that companies have hyper-tuned over the last 12 years.  Head of commodity strategy Ole Hansen sees less drama for commodities relative to the intense volatility in the months since Russia invaded Ukraine, as ongoing supply concerns vie with shrinking demand concerns for supremacy. One interesting twist in Q4 will be how the crude oil market absorbs a halt of the Biden administration’s release of US strategic reserves if this proceeds according to plan in October.   In the FX outlook, John Hardy, the head of FX strategy, asks whether peak tightness in the anticipated trajectory of the Fed rate hike cycle will likely also bring peak US dollar, which has provided its own wintry pressure on global liquidity and asset prices for the last eleven months.  Elsewhere in FX, will the market force the Bank of Japan to capitulate on its yield-curve-control policy, possibly setting up the yen for spectacular volatility this coming quarter? It’s also worth noting that this is the third quarter running in the massive divergence of the JPY weakness relative to Chinese yuan (CNH and CNY) strength, the latter still in relative terms despite the yuan being allowed to slip considerably lower versus the strong USD in Q3; it’s an important and tense situation that remains unresolved.  In crypto, the market failed to revive in the quarter even with a much-anticipated Ethereum platform shift to proof-of-stake from proof-of-work. As our crypto strategists Mads Eberhardt and quant strategist Anders Nysteen suggest, the risk of a “crypto-winter” continues as global liquidity dries up on the headwind of policy tightening, not to mention the fear of stricter regulation of the space. Still, there are plenty of bright spots, with burgeoning innovation in the industry finding new applications for crypto-related blockchain technology.  Finally, this outlook also features the usual rundown of the longer-term technical outlook for critical assets, as we revisit the critical US 10-year treasury yield chart, the US S&P 500 index and where the ultimate depths of this bear market may lie, and the EURUSD exchange rate after the symbolic parity level was reached—and then some—on the downside in Q3.   We wish you a safe and prosperous Q4. Given the stark challenges that lie ahead for asset markets in a world beset with grinding supply side challenges, and as policymakers clamp down to fight inflation, it’s a difficult time. At the same time, it’s worth keeping in mind that opportunity and longer-term market returns rise as a function of deteriorating current asset prices.      Source: https://www.home.saxo/content/articles/quarterly-outlook/q4-2022-outlook-winter-is-coming-04102022
Investors Are Worried That Elon Musk Is Losing His Focus | The Eurozone Recession Can Dampen Investors’ Hopes

Tesla Investors Begin To Doubt Growth In 2023|The RBA Hiked Rates And More

Saxo Bank Saxo Bank 04.10.2022 09:33
Summary:  Risk sentiment got a strong boost yesterday from falling treasury yields, with Fed rate hike bets for early next year at their lowest in two years after a rising swell of questions from influential sources on whether the Fed is taking its tightening regime too quickly and a soft September US ISM Manufacturing data point. Overnight, Australia’s central bank, the RBA, surprised many with a hike of only 25 basis points.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities bounced back yesterday as the US 10-year yield fell to 3.64% with S&P 500 futures rallying 2.5% and extending another 1% this morning in trading around the 3,726 level; this is just a few points below the obvious short-term resistance level and a break above this level could push S&P 500 futures higher. The moves across markets likely reflect short covering and that the market was getting too stretched in the short-term and the bond market for now wants to sit idle and wait for more data on US inflation. USD and US yields/risk sentiment The US dollar weakened on the usual combination of falling treasury yields after soft US data yesterday and as the market took treasury yields, particularly at the long end of the curve, sharply lower yesterday. The move is still within the range in many key USD pairs, with 0.9900+ at minimum needed for a bear-market-neutralizing reversal in EURUSD. And AUDUSD dropped overnight on the Australia’s reserve bank only hiking 25 basis points (more below) Elsewhere, the strength in GBPUSD is far more sterling related (see more below on Chancellor Kwarteng’s reversal of the most controversial of his tax cuts) and USDJPY is curiously bid near the top of the range after Japan’s September core, ex Food and Energy Tokyo CPI came in at the highest level in years. The status of the US dollar this week will likely be clear only after the release of the September jobs report on Friday. Gold (XAUUSD) and especially silver (XAGUSD) jumped on Monday … with support coming from multiple sources. A softer dollar and US ten-year bond yields slumping to 3.6% after hitting 4% last week leading to some speculation that we may in fact have hit peak hawkishness, meaning the FOMC faced with recession worries and calls for action to curb the dollar may start easing the tone going forward. Whether or not will be data dependent, but in the short term, these developments and worries about what Putin may do next has been enough to trigger short covering across the investment metal sector, not least in gold where the net short held by money managers reached a near four-year high last Tuesday. Silver is looking at resistance at $20.88, the August high and trendline support in XAUXAG around 81.20 Crude oil (CLX2 & LCOX2) extends gains on OPEC+ chatter, weaker USD Crude oil trades higher ahead of Wednesday’s OPEC+ meeting in Vienna as the alliance is considering a production cut of more than 1 million barrels/day to support prices following a 25% slump during Q3 2022. That would be the biggest cut since the pandemic with OPEC+ slashed production by 10 million barrels/day as demand collapsed. WTI futures rose above $83/barrel while Brent was close to $90. With several OPEC+ producers, including Russia, producing below target, only Saudi Arabia may be able to limit production without a loss in additional market share. Meanwhile, expectations of an earlier Fed pivot also stabilized demand weakness expectations. US treasuries (TLT, IEF) US treasury yields fell all along the curve yesterday, as the market pushed Fed hike expectations for early next year toward the lowest in two weeks and yields at the longer end of the curve fell sharply on the release of a weak September US ISM Manufacturing data point. The fall in yields already has the important 3.50% yield level for the 10-year treasury benchmark coming into view after 3.56% traded yesterday. The next important data points include tomorrow’s September ISM Services survey and particularly the September jobs report on Friday. What is going on? Fed pushes back on an earlier pivot Fed’s NY President John Williams repeated inflation is too high, and the Fed's job is not done, also saying that the monetary policy is still not in restrictive zone, pushing back on some calls for an earlier Fed pivot. He acknowledged signs of a slowdown in the housing sector or the consumer and business investment spending, but nothing that could deter the Fed from fighting inflation. On forecasts, he sees inflation likely down to 3% by next year (median view for Core PCE 3.1%), and the US is likely to see unemployment rise to 4.5% by end of 2023 (median view 4.4%). Thomas Barkin (2024 voter) made the case for more inflation in the post-pandemic world, noting that the Fed must consider global developments, but the focus is on the US. RBA hiked less than expected, signaling peak hawkishness could be behind it The RBA hiked rates by just 25 basis points (0.25%) rather than the 50 bps (0.5%) many expected, which takes the cash rate to 2.6%. The RBA’s hiking power has been diminished as household spending is dropping, along with forward looking projections. We know it typically takes around nine months for central bank policy tightening to felt in the economy, and the RBA said that higher inflation and interest rates are putting pressure on households, with the full effects yet to be felt. The RBA said that although consumer confidence and house prices have fallen, the central bank is still focused on slowing inflation which it sees increasing ‘over the coming months ahead’. In addition, the RBA expects unemployment will continue to fall over the months ahead, before rising. This means, the RBA could slow the pace of hikes after December onwards. Tesla shares plunged in a strong US session With US equities rallying 2.5% yesterday high beta and growth stocks were expected to lead the gains, but our bubble stocks basket was up only 1.5% and Tesla shares fell 8.6%. The EV-maker reported Q3 deliveries of 343,830 vs estimates of 357,938 which Tesla said was due to logistical issues in its supply chain. However, the move yesterday in Tesla indicates that investors are beginning to doubt the growth in 2023 that is priced into the price as the lithium continues to be prohibitively expensive and the cost-of-living crisis is lowering demand. Sterling made a strong recovery, but can it last? Cable was seen advancing above the 1.13 handle in Asian hours on Tuesday as it extended Monday’s gains following announcement by Chancellor Kwarteng of the intent to scrap the most controversial – and least impactful on the budget – recently announced tax cut for the highest income earners. A softer dollar also supported sterling’s gains amid a slide in US Treasury yields. Elsewhere, EURGBP also dropped into the old range below 0.8700. Still, the political situation in the UK remains volatile, the bulk of the fiscally aggressive tax adjustments and energy cap proposals remain in place, so the lack of trust in the new UK government cannot be ignored. Focus now on the BOE meeting on November 3 where 115bps rate hike is priced in, lower than last week’s pricing of 150bps. However, a full-budget statement will be released before then and will offer a further sentiment test for sterling. The Eurozone and the UK PMIs confirm the risk of a recession The manufacturing PMI indexes for September are out. There is no good news. In the eurozone, the final estimate was revised down to 48.4 from 48.5 and 49.6 in August. This is the biggest monthly contraction since June 2020 (when the eurozone was getting out from the Spring lockdown). There is no surprise regarding the main reasons behind the drop. This is related to soaring energy bills which limited production across all eurozone member countries and higher cost of living pushing demand lower. Firms are getting prepared for a tough winter and are starting to discuss the opportunity of lower job hiring (very soon the talk will be about cutting jobs). In the United Kingdom, the manufacturing PMI index is also in contraction territory, at 48.4. It was 47.3 in August. This was a 27-month low. However, it is unlikely to get back into expansion anytime soon, in our view. These indicators tend to confirm there is a material risk of a recession both in the eurozone and in the United Kingdom this year. US ISM manufacturing disappoints The headline for September’s US ISM manufacturing came in weaker than expectations at 50.9 from the prior month’s 52.8 and expected 52.2. Both employment and new orders both dropped into contractionary territory printing 48.7 (exp. 53.0, prev. 54.2) and 47.1 (prev. 41.3), respectively. The report showed that higher interest rates are starting to weigh on business investment sentiment, at least in the interest rate sensitive sectors. Still, the inflationary gauge of prices paid declined to 51.7 (exp. 51.9, prev. 52.5) falling for the sixth straight month. Supplier delivery times suggested some easing on the supply chains, but overall the report indicated the case of a slowdown in the US economy as rapid Fed tightening continues. What are we watching next? Risk sentiment brightens – how far can it extend? A hole in the clouds yesterday as US yields dropped on the weak ISM Manufacturing survey and as a rising tide of observers are concerned that the Fed is tightening policy too rapidly, including one heavily covered tweet from the influential WSJ “Fed whisperer” Nick Timiraos noting that Greg Mankiw, the influential former Chairman of the Council of Economic Advisers under George W Bush had expressed approval of economist Paul Krugman’s view that the Fed is tightening too quickly. Hard to see this as more than a tactical turning point for markets, perhaps on overextended short positioning. The Fed’s tune has not changed, and the strongest pushback of developments over the last couple of sessions would be strong US data, including the September ISM Services tomorrow and the September jobs report on Friday. Earnings to watch The earnings season officially starts next week with the first group of US financials reporting but in the meantime a few earnings are worth watching this week. Biogen reports Q3 earnings (ending 30 September) today with analysts expecting revenue growth of -11% y/y and EBITDA at $847mn down from $959mn a year ago. While the current financial performance of Biogen is volatile and weak, the latest news about its breakthrough in Alzheimer’s with a drug that can slow down the disease is what analysts will focus on in terms of gauging the outlook. On Wednesday, Tesco is in focus as the UK largest grocery retailer is at the center of the current food inflation and insights from Tesco will be valuable from a macro point of view. Today: Biogen Wednesday: Keurig Dr Pepper, Aeon, Lamb Weston, Tesco, RPM International Thursday: Seven & I, Conagra Brands, Constellation Brands, McCormick & Co Economic calendar highlights for today (times GMT) 0900 – Eurozone Aug. PPI 1230 – ECB's Centeno to speak 1300 – US Fed’s Williams (voter) to speak 1315 – US Fed’s Mester (voter) to speak 1400 – US Aug. Factory Orders 1400 – US Aug. JOLTS Job Openings Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-4-2022-04102022
UK Labor Market Shows Signs of Loosening as Unemployment Rises: ONS Report

The New Quarter (Q4) Kicked Off On A Volatile In Positive Way

Swissquote Bank Swissquote Bank 04.10.2022 10:35
The new week, the new month and the new quarter kicked off on a volatile, but a positive note. Credit Suisse closed a very ugly session with 0.90% loss only. Stocks  European indices gained, while the US indices rallied as softer-than-expected US ISM manufacturing index gave a positive spin to the market. The Dow Jones jumped the most on Monday, as oil stocks literally roared on the back of firmer oil prices. Oil bulls are betting that OPEC will announce an output cut of around a million barrels per day to ‘stabilize’ oil prices. FX Update In the FX, the US dollar retreat almost 3% since its September peak. The dollar lost more than 4.50% against the Brazilian real, as Cable rallied past the 1.13 level, after Liz Truss government took a ‘mini’ step back from their terribly unpopular fiscal spending plan, and said that they will not reduce taxes on big salaries. Elsewhere, the Reserve Bank of Australia lifted its interest rates by 25bp only, versus 50bp expected by analysts. Today's report Today, we will be watching the job openings data in the US, and hope to see a smaller number, as the Fed sees the job openings as a factor that could ease the pressure in the US jobs market. Then, will follow the ADP report on Wednesday, and the NFP, unemployment rate and the wages growth on Friday. Investors are praying for softish numbers this week to continue the rally. Watch the full episode to find out more! 0:00 Intro 0:22 Stocks rebound 1:23 Oil stocks rally on firmer oil 4:44 …but Tesla slumps 5:55 FX update: USD down, BRL & GBP up 6:33 … but Brits want to see Liz spend less 8:16 RBA cuts less & investors need soft US data to cheer up Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #CreditSuisse #Tesla #Brazil #election #Bolsonaro #Lula #BRL #USD #GBP #OPEC #output #cut #crude #oil #US #jobs #Fed #BoE #Liz #Truss #mini #budget #SMI #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Germany's Economic Déjà Vu: A Look Back and a Leap Forward

Podcast: Bears In The Stock Market, US Treasury Yields Lower And More

Saxo Bank Saxo Bank 04.10.2022 13:02
Summary:  Today we look at the market celebrating a weak September US ISM Manufacturing data point taking long US treasury yields lower, with noise from the commentariat suggesting a Fed pivot may be near possibly adding energy to the squeeze on equity market bears yesterday. At the same time we note further hawkish noise from key Fed officials, include Vice Chair Williams. Elsewhere, we look at financial conditions, unusual behaviour in sectors that normally would have performed better yesterday, possibly on Tesla's very bad day. Crude oil, a huge surge in silver, gold pushing on resistance and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-4-2022-04102022
The RBA Surprised With A Smaller 25 bp Hike , Sterling (GBP) Rose, The USD Has Weakened

The RBA Surprised With A Smaller 25 bp Hike , Sterling (GBP) Rose, The USD Has Weakened

Saxo Bank Saxo Bank 04.10.2022 13:13
Summary:  Markets yesterday show how quickly this hot-tempered market can try to sniff out a Fed that will eventually pivot to a less hawkish stance as a weak US September ISM Manufacturing survey data point engineered a huge decline in US yields and significant USD weakness. More important US data is to come this week through Friday’s jobs report. Elsewhere, the surprisingly dovish RBA battled with supportive developments in commodities to sway the Aussie overnight. FX Trading focus: Desperation for the Fed pivot. Sterling: can it really be that easy? Dovish RBA. Yesterday saw US 10-year treasury yields almost 25 basis points lower from intraday highs, with much of the treasury buying/yield drop coming in the wake of a weaker than expected September US ISM Manufacturing survey, out at 50.9, below the 52.0 expected and 52.8 in August. The New Orders were far worse than expected at 47.1 vs. 50.5 expected and 51.3 in August. Alas, we have to remember that the Manufacturing sector is small in the US and about half of the dips to near or below 50 have not indicated imminent recession in the US. The ISM Services survey – up tomorrow - would be a different matter if it were to show marked deterioration. Elsewhere, a tweet from the WSJ’s Nick Timiraos noting that influential economist Greg Mankiw agreed with economist/pundit Paul Krugman’s assessment that the Fed is tightening too quickly may have helped to drive the sentiment shift at the margin as well. Pushing back against that was Fed Vice Chair Williams out expressing the belief that the Fed must remain on message: “Tighter monetary policy has begun to cool demand and reduce inflationary pressures, but our job is not yet done.” Williams speech does suggest that the Fed thinks that it is succeeding, so the strongest risk to markets here would be stronger US data suggesting a still strong pace of activity in services and a still very tight labor market with accelerating wage pressures. The Fed forecast assume a fairly soft landing of weak growth and 4.4% unemployment. Self-feeding cycles in a downturn and the Fed’s focus on lagging indicators like employment are likely to eventually lead to far worse outcomes. The USD has weakened at the outset of the week here – but note EURUSD holding the line so far just ahead of the key 0.9900 level. AUDUSD has far more wood to chop for a reversal, as discussed below. The most remarkably priced pair at the moment, however, may be USDJPY, which remains pinned near 145.00 despite the significant drop in long US treasury yields. Still uneasy about the risk of a blowout market-BoJ/MoF showdown – that’s a very weak performance from the yen today. Chart: AUDUSDThe AUDUSD chart has been an interesting one to watch since yesterday and overnight. Strong risk sentiment and lower US treasury yields weighed on the US dollar and helped boost commodity prices, both strongly Aussie supportive. But then the huge mark-down in Australian yields on a quite dovish RBA (more below) challenged the Aussie overnight. Looks like a battle-zone tactically around the local 0.6530 resistance, which was briefly taken out this morning on the further USD weakness before reversing back into the zone later in trading today. The down-trend is so well established that it would take a surge to at least above 0.6700 to begin challenging the down-trend here. The RBA surprised the majority of observers with a smaller 25 basis point hike to take the policy rate to 2.60%. It’s a reminder of the vast shift relative to the old regime, in which one might have expected an RBA rate at least 100-200 bps higher than the Fed’s. The last time the Fed was hiking to north of 3.00% was in mid-2005, when the RBA cash target had already reached above 5%. The RBA chose to emphasize caution in its latest statement, citing the anticipation that unemployment will eventually rise beyond the near term strength in the labor market as the economy eventually weakens. Governor Lowe and company are clearly uneasy and uncertain on the effects of the sharp tightening in the bag on mortgage rates and future spending, and the statement continues to cite lower wage growth than elsewhere. In addition to AUDUSD note above, also interesting to watch the relative strength in AUDNZD over tonight’s RBNZ, as the sharply lower Australian yields (the year-forward RBA rate has been marked a remarkable 50 basis points lower by the market after this meeting). A surrender below the 1.1250-1.1300 zone would suggest a risk that the attempt to reprice the pair higher on the shift in relative current account dynamics I have cited before has failed for now. Sterling rose further after Chancellor Kwarteng yesterday reversed his decision on the tax cut for the highest incomes in the UK. Interesting that this is was particularly item, while politically unpopular, was one of the least consequential in terms of the fiscal impact. For now, given the soaring risk sentiment backdrop, sterling short covering continues, but surely it’s not this easy? Technically, watching the major resistance zone at 1.1500 zone in GBPUSD and whether the bearish reversal back into the old range below 0.8700 in EURGBP sticks. This is still a government that is very much on the rocks. The latest controversy PM Truss is courting is claiming that she has yet to decide whether UK welfare distributions, outside of pensioners, should be raised with inflation, which has some Tory MP’s up in arms. Chancellor Kwarteng, feeling the rising pressure, will bring forward his fiscal statement to later this month from late November, around the time the Office of Budget Responsibility publishes its forecasts. Table: FX Board of G10 and CNH trend evolution and strength.The USD rose so far in its up-trend before the recent setback, that there is some residual medium term up-trend strength left, though momentum has shifted markedly against the greenback. The opposite is the case for sterling, which has achieved a positive trend reading versus the G10 broadly due to weak G10 smalls of late (note GBPNZD, for example, at a high since late February. Elsewhere, strong risk sentiment, together with concerns of a struggling Swiss bank have brought CHF south in a hurry over the last week. Table: FX Board Trend Scoreboard for individual pairs.CHF on its back foot and our longest surviving trend, the GBPCHF downtrend, is now dead. Sterling upside breaks are spreading, in fact. Also note the shift in US yields taking XAGUSD onto a sudden moonshot, while XAUUSD is eyeing an up-trend as well. Upcoming Economic Calendar Highlights 1230 – ECB's Centeno to speak 1300 – US Fed’s Williams (voter) to speak 1315 – US Fed’s Mester (voter) to speak 1400 – US Aug. Factory Orders 1400 – US Aug. JOLTS Job Openings 1500 – ECB President Lagarde to speak 0100 – New Zealand RBNZ Official Cash Target Announcement Source: https://www.home.saxo/content/articles/forex/fx-update-the-desperation-for-the-fed-pivot-04102022
The Social Phenomenon Elon Musk Has Kept The Narrative Around Tesla’s Growth Intact

Tesla Is Facing Growing Downside Risks And Very Optimistic Analysts' Expectations

Saxo Bank Saxo Bank 04.10.2022 13:54
Summary:  Tesla has been one of the strongest consumer discretionary stocks since May but yesterday's negative price action amid a strong rebound in US equities is sending a signal that investors are getting nervous. One thing is the Q3 deliveries miss against estimates but elevated lithium prices are hurting on input costs and the cost-of-living crisis is beginning to lower demand significantly across many consumer discretionary categories including cars. Tesla is facing growing downside risks against a very rosy outlook priced into the stock with analysts expecting 42% revenue growth in 2023. Tesla shares down 9% in a strong equity session is a strong sign of nervousness Yesterday’s strong US equity session was sending some odd signals as we would typically expect high beta and growth pockets to rally more than the market, but it was instead theme baskets such as defence and commodities that rallied. Adding to this interesting session, Tesla shares were down 8.6% being the only mega cap stock (the 40 largest stocks in S&P 500) that was down more than 1%. A big part of the move in Tesla was of course due to Q3 deliveries missing estimates (343,830 vs 357,938) which Tesla said is due to logistical issues, but the pressure is on Tesla now as the EV-maker has to produce 450,000 cars in the last quarter to meet its 50% annually target that it has set. This seems to be a quite steep target to reach. One thing is the logistical issues in the global car supply chain, but there are two other growing risk sources for Tesla. So far, Tesla has been immune to the cost-of-living crisis caused by the galloping energy crisis which has led Tesla to significantly outperform the global consumer discretionary sector (see chart below). However, with elevated electricity prices and high inflation due to high energy and food prices, the demand is coming down sharply for many consumer companies hitting Apple, Nike, and H&M recently. This is probably the biggest risk to Tesla’s outlook which is still very optimistic with analysts expecting 42% revenue growth in 2023, something we find hard to be achievable given the development in electricity prices and disposable income. In addition there are two hard physical constraints on Tesla’s growth trajectory. The first one is the price of lithium which remains elevated at very high levels putting pressure on battery prices and thus the price on electric vehicles. Given the adoption curve expected on EVs this market could remain very tight for years. Another constraint is the physical electricity grid which needs a massive upgrade to handle all the new EVs and air-to-water heat pumps. Both of these physical constraints are out of Tesla’s control and if they are not solved quickly the 50% annualized growth target may quickly turn out to be lofty vision with no connection to the real world. Are financial conditions too tight already? The US bond yields continued significantly lower yesterday and the 10-year yield is touching 3.57% ahead of the US trading session. This is a sharp reversal from the 4% level reached on 28 September. US equities responded yesterday to the falling yield bouncing back. Positions were stretched across many markets and we are likely witnessing short covering on a big scale. Several leading economists have also been out warning that maybe the Fed is getting to aggressive on its rate policy. If we look at the US financial conditions (see chart below) then financial conditions are back above zero meaning that they are tighter than the average since 1971 relative to the strength of the economy. In theory the current level of financial conditions should begin to have an impact on inflation going forward. The key risk is that inflation has become engrained in the most sticky parts of the services economy and that rising wages could create a wages-inflation feedback loop that will require even tighter financial conditions to get inflation under control. This wage-inflation dynamic is the key topic to watch in 2023.   Source: https://www.home.saxo/content/articles/equities/is-tesla-driving-into-physical-limits-in-the-economy-04102022
Are There Any Chances That Amazon Will Find Itself Under Another Downward Pressure?

Are There Any Chances That Amazon Will Find Itself Under Another Downward Pressure?

InstaForex Analysis InstaForex Analysis 05.10.2022 08:17
Amazon peaked at 188.65 in mid-July 2021 and since then, has been correcting lower and we could possibly see it at an S/H/S top. If support at 101 is broken that would activate the S/H/S top for at least 68 and possibly even lower to the 35-area. That said, we should expect Amazon to be able to push higher to 125 short-term before coming under renewed downside pressure. Relevance up to 06:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295481
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Expect Even More Downside Pressure For Apple

InstaForex Analysis InstaForex Analysis 05.10.2022 08:27
Apple continues to follow Livermore's Accumulation Cylinder to the letter. After peaking at point 12 at 176.15, Apple again turned lower and should move towards at least 91.50 to fulfill point 13. It's possible that point 13 can be even lower, but for now we will concentrate on the 91.50 target. In the longer term, we should expect even more downside pressure for Apple as Livermore's Accumulation Cylinder also has point 14 to reach, but as always let's take the future corrective decline in baby steps.   Relevance up to 06:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295483
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Expect Even More Downside Pressure For Apple - 05.10.2022

InstaForex Analysis InstaForex Analysis 05.10.2022 08:27
Apple continues to follow Livermore's Accumulation Cylinder to the letter. After peaking at point 12 at 176.15, Apple again turned lower and should move towards at least 91.50 to fulfill point 13. It's possible that point 13 can be even lower, but for now we will concentrate on the 91.50 target. In the longer term, we should expect even more downside pressure for Apple as Livermore's Accumulation Cylinder also has point 14 to reach, but as always let's take the future corrective decline in baby steps.   Relevance up to 06:00 2022-10-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/295483
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

Musk Revived His Bid For Twitter| OPEC Have Started Talking About Cuts With Russia

Saxo Bank Saxo Bank 05.10.2022 09:11
Summary:  Oil rallies for the second day with OPEC+ considering an output cut as much as 2 million barrels a day, which is more than anticipated. US stocks rallied for the second day, moving off their lows on softer than expected labor market data that supported the notion of central bank peak hawkishness. The Reserve Bank of Australia hikes less than expected, and the Reserve Bank of New Zealand meeting ahead today. Also watch for the US ISM services print later, pivotal for Fed pivot expectations that are gaining momentum prematurely. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally for the second day, moving off lows US stocks rallied for the second day, rebounding from their deeply oversold levels with the S&P500 seeing its best two-day surge since April 2020. The S&P500 ended up almost 3.1% higher on Wednesday, the Nasdaq 100 up 3.1%. Retail favorite, Tesla (TSLA) shares revved up 2.9% after Cathie Wood scooped up 132,000 more shares in the electric vehicle giant. Tesla was among the biggest contributors to the S&P500’s gains, along with Amazon and Microsoft. For a detailed discussion of Tesla’s challenges ahead, please refer to Peter Garnry’s excellent article here. The Energy sector was the best performer in the S&P 500, gaining 4.3%, followed by Financials which were up 3.8%. Only seven stocks in the S&P500 closed in the red. However, the news of the day was that Twitter’s takeover by Musk is back on. On top of that, softer US economic data out also boosted sentiment, with the market thinking the Fed might not be as fierce with rate hikes later this month. US job openings sank to a 14-month low, following the day prior weaker than expected manufacturing data. So, perhaps a short-squeeze is fueling the rally here. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) declined modestly on the front end Treasury yields fell first on a dovish hike (25bps vs the 50bps expected) from the Reserve Bank of Australia during Asian hours and then on the biggest decline of the JOLTS job opening (10,053K vs prior 11,239K).  10-year yields made an intraday low at 3.56% before paring it and settled little changed at 3.63%.  The curve bull steepened with the front-end 2 to 5-year fell 2-3bps in yield and the 30-year yield edging up 1bp.  Australia’s ASX200 (ASXSP200.1) rallied above 6,700, snapping its downtrend The ASX200 charged 3.75% yesterday (including the 1.2% rise after the RBA’s pivoted to going softer on rate hikes) which took the market to its highest level since September 23 (just shy of 6,700, closing at 6,699). Today the market opened 0.8% up in the first 10 minutes of trading, with the futures implying the market could rise 1.6% on Thursday to 6,803. If the market can hold above 6,700 it means the market will effectively have broken its downtrend and is staging a comeback. This notion was supported by our technical analyst. For more read on here. EURUSD touches parity again Lower US yields and a softer US dollar is turning things around in the FX space, although pricing out the Fed rate hikes from 2023 appears to be premature. Some of this could also be the positioning ahead of key US NFP data due this week. EUR made a strong recovery on the back of a weaker dollar, as it rose from lows of 0.9800 to touch parity. Commentary from the ECB’s Villeroy also helped, as he said that interest rates will be raised as much as necessary to lower core inflation and called for rates to go to neutral by year-end without hesitation. Meanwhile, President Lagarde reiterated her view that inflation was undesirably high, and it is difficult to say whether or not it had peaked. Crude oil (CLX2 & LCOX2) higher on OPEC cut expectations Crude oil prices rose further amid speculation that OPEC is considering an even larger cut to production than first thought. The group is said to be considering a cut of up to 2mb/d, according to media reports. It is also being reported that the cuts will be made from current production levels and not the quotas as most members are already producing below their quota. That, if true, will likely tighten the market especially as European sanctions will kick in from December and US is also pausing the release from its strategic reserves. This tightness could be exacerbated by a rebound in Chinese demand if it can contain outbreaks of COVID-19. WTI futures rose above $86/barrel while brent crossed the key $90-mark. A significant draw was also reported in API inventories, with crude stocks down 1.77mn. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hong Kong is set to have some catch-up to do with the 5.7% gain in the S&P 500 and 6.1% rise in the NASDAQ Golden Dragon China Index when it returns from a public holiday today.  The stock markets in Shanghai and Shenzhen remain closed for the rest of the week for public holidays.     What to consider?   US JOLTs signalling the tightness in the labor market may be moderating US JOLTs data was out with a weaker than expected number. The number of job openings in the U.S. declined to 10.1 million in August, the lowest since June 2021, and below expectations of 10.8 million. The job openings rate was down to 6.2% from 6.9% in July, and puts the focus on the ADP data due today in the run upto the NFP data on Friday. OPEC+ meeting to bring production cuts There have been some reports that OPEC members have started talking about cuts with Russia proposing a 1 mln barrels per day cut, a reduction towards which they are unlikely to contribute much as they are already producing below their quota. At its last meeting on September 5, the group agreed a token reduction of 100,000 barrels a day for October, despite calls from consuming nations to help tame rampant inflation by keeping the taps open. With gasoline prices retreating in the US, some of that external pressure may now be easing, and that further raises the prospects of some price-supportive action. FT also reported the production cuts will be from current production levels, not from the quota's which many producers do not meet - emphasising the impact of the production cut. The credit market showed signs of calming down Over the past two days, the sharp rise in investment credit spreads has tentatively reserved, showing some sign of relief in the investment grade credit market.  The Markit CDX North America Investment Grade Index (CDX IG39), which represents an equal-weighted average of credit default swap spreads of 125 North American investment grade corporate, fell more than 6bps on Tuesday to 98bps, a decline of nearly 16bps from its intraday high of 114 last week. The Reserve Bank of New Zealand meeting ahead The RBNZ will announce its latest monetary policy decision today. NZ house prices have seen one of their biggest quarterly drops on record in the three months to September. It’s worth watching the NZD against the AUD (NZDAUD) given their current account trajectories. RBA hiked less than expected, signaling peak hawkishness could be behind it. What does it mean to traders and investors? Yesterday the RBA rose rates by just 25bps (0.25%) instead of the 50bps (0.5%) expected, which took the cash rate to 2.6%. The RBA’s hiking power has been diminished as household spending is dropping, along with forward looking projections. We know it typically takes 3-months for an interest rate hike to be felt by the consumer, and the RBA alluded to this, in saying higher inflation and interest rates are putting pressure on households, with the full effects yet to be felt. The RBA referenced although consumer confidence and house prices had fallen, the central bank is still focused on slowing inflation which it sees increasing ‘over the coming months ahead’. Plus the RBA expects unemployment will continue to fall over the months ahead, before rising. This means, the RBA could slow the pace of hikes after December onwards. This implies peak hawkishness is behind us. AUDUSD fell 1% after the meeting however it since reversed those losses and trades 0.6% higher from the meeting. It’s been supported as the USD continued to roll over on expectations the Fed might not be as aggressive with rate hikes later this month. However if the Fed perhaps hikes by 0.75% the AUDUSD might revert back to a bearish stance. For investors, the RBA pivot supports a risk-on tone in equities which is why all 11 sectors rose yesterday, with tech and mining up the most. Energy markets saw the most gains as they have the most momentum amid the energy crisis. Lithium and agricultural stocks dominated the top 10 risers; with lithium stocks Sayona Mining (SYA), Lake Resources (LKE), Core Lithium (CXO), Pilbara Minerals (PLS) and Allkem (AKE), gaining 10%+ each. Musk revived his $44 billion Twitter bid send Twitter shares up 22% Billionaire Elon Musk revived his bid for the social media giant, at the original offer of $54.20 a share after spending months trying to back out of it. Shares of Twitter (TWTR) jumped almost 22% to $52.00 on the news. US ISM services will be key to watch today With chatter on Fed pivot gaining momentum out of a miss in one ISM manufacturing print, possibly also underpinned by the turmoil in the financial system, it will become more key to watch the services sector data out today. Consensus expects the number to be 56, down from 56.9, as higher interest rates and high inflation begins to eat into services spending after a solid post-pandemic rebound.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-5-oct-05102022
Bitcoin Stagnates at $30,000 Level, Awaits US Bitcoin ETF Update and Fed Meeting

Tesco Has Decided To Lock Everyday Items |The US Dollar (USD) Continued To Weaken

Saxo Bank Saxo Bank 05.10.2022 09:32
Summary:  Another banner day for equity markets, which surged further on hopes that central banks will be increasingly easing off the gas pedal in coming weeks and months on signs that the impact of their tightening is wearing on economic growth. It’s counterintuitive and remains to be seen how equity markets will eventually greet recessionary outcomes for earnings and revenue in the quarters ahead. For now, the focus is tactical, particularly on whether the remaining US data this week through Friday’s jobs report will confirm this most recent narrative.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities continued their rebound yesterday with S&P 500 futures hitting the big 3,800 level, but the index futures are coming down a bit this morning trading around the 3,785 level. The significant declines in US bond yields and chatter about a Fed pivot, this still has a low probability at this point, have been the catalyst behind the rebound and the fact that markets were very stretched added to size of the rebound as short covering have been taking place. In today’s session the ADP employment change and ISM Services Index are the key macro events that could add some fresh energy to the downside. Yesterday’s biggest negative change on record in the JOLTS Report suggests that the labour market is beginning to cool down. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) The Hong Seng Index soared over 5% to catch up with the S&P 500 Index’s 5.7% rally over the past two days after Hong Kong returned from a public holiday. Weaker U.S. economic data recently have helped fuel the notion of peak tightening from the Fed and contributed to the turnaround in global stocks this week. Index heavy-weights jumped, HSBC (00005:xhkg) up 6.3%, AIA (01299:xhkg) up 6.7%, Tencent (000700:xhkg) up 5.8%, Meituan (03690:xhkg) up 7.6%, and Alibaba (09988:xhkg) up 8.2%. BYD (01211:xhkg) soared nearly 10% after the Chinese automaker reported record sales of over 200,000 electric and hybrid vehicles in September, a growth of 183% from last year, and the seventh consecutive month of sales growth. The mainland exchanges remain closed for the rest of the week for the National Day golden week holiday. USD and US yields/risk sentiment The US dollar continued to weaken yesterday, particularly against European currencies as EURUSD touched parity briefly and as GBPUSD rose close to 1.1500 on a further change of tune from UK Chancellor Kwarteng, who is making noises about plans to bring forward debt-cutting measures in the new budget he will present later this month. An important test for the greenback lies ahead through the end of this week on macro data and its impact on US treasury yields, as noted below, as well as on risk sentiment. Gold (XAUUSD) and silver (XAGUSD) rise further Hopes that central banks will begin to ease away from the tightening of the last many months after a deceleration from the ECB and at least one weak US data point this week, saw yields a bit lower and precious metals surging, with Gold rushing higher yesterday after the break above the key 1,680-1,700 from Monday was solidified with a move above 1,725 at one point yesterday. Silver’s enormous jump on Monday was only followed up with a much smaller move yesterday. Next area of focus in gold will be the 1,734 area and then the major 1,800 zone. The strength in US macro data and direction of US yields key through Friday’s US jobs report (weak data and lower yields most gold supportive.) Crude oil (CLX2 & LCOX2) higher on larger OPEC cut expectations Crude oil prices rose further amid speculation that OPEC is considering an even larger cut to production than first thought. The group is said to be considering a cut of up to 2mb/d, according to media reports. It is also being reported that the cuts will be made from current production levels and not the quotas as most members are already producing below their quota. That, if true, will likely tighten the market especially as European sanctions will kick in from December and US is also pausing the release from its strategic reserves. This tightness could be exacerbated by a rebound in Chinese demand if it can contain outbreaks of COVID-19. WTI futures rose above $86/barrel while Brent crossed the key $90-mark. A significant draw was also reported in API inventories, with crude stocks down 1.77mn. US treasuries (TLT, IEF) US treasury yields recovered slightly after a further drop yesterday that took the 10-year benchmark to 3.56% at the lows, just ahead of the key 3.50% area former cycle high from June. Key data this week, including the ISM Services (far more important for the current status of the US economy than the ISM Manufacturing that garnered such a strong reaction on Monday) and the US September jobs report are likely to set the tone. What is going on? Twitter (TWTR:xnas) shares rose more than 20% as Elon Musk agrees to original takeover terms The shares of Tesla (TSLA:xnas) were down sharply on one point on the news before these in turn recovered to positive territory in a torrid rally for US equities yesterday. With Twitter’s closing price yesterday being close to the takeover price at $54.20 the downside risk remains now for Tesla shares in the event that Elon Musk is forced to sell more Tesla shares to finance the deal. US JOLTS job openings surveys signals that the tightness in the labor market may be moderating US JOLTs data was out with a weaker than expected number, declining to 10.1 million in August, the lowest since June 2021, and below expectations of 11.1 million and after 11.2 million in July. The job openings rate was down to 6.2% from 6.9% in July, and puts the focus on the ADP data due today in the run up to the nonfarm payrolls change data on Friday. New Zealand’s RBNZ hikes 50 basis points as expected This was the fifth consecutive meeting to bring a half-point hike and took the official cash rate to 3.5%. The bank signaled more tightening to come in its statement, as it noted that “core consumer price inflation is too high and labor resources are scarce. Still, short NZ rates continue to trade lower, if not falling as rapidly as for Australia after the RBA surprised with only a 25 basis point hike yesterday. The AUDNZD rate dropped below 1.1250 at one point overnight from the 1.1350 range before the announcement. Tesco 1H revenue beats estimate The largest Uk grocery retailer reports like-for-like UK revenue of +0.7% vs est. -0.1% but the company says that cost inflation is still significant. Tesco has also decided to lock over 1,000 everyday items at low prices until 2023 which could be negative for operating margin in the short-term. What are we watching next? Risk sentiment brightens – how far can it extend? Quite a short squeeze on bearish risk sentiment as global equities have backed up sharply, in many cases after touching new bear market lows – is this a bullish reversal with legs or will it fade quickly? Two prior bear market rallies in March and especially June-August impressed. For now, the tactical focus higher in the US equity market would be on the 3,800-3,900 zone, the next hurdle for establishing whether this squeeze will develop into something more, with the most immediate sentiment test likely the ISM Services survey today (more below) in the US and especially the jobs (and earnings) data on Friday, as it appears this rally was kicked off by a soft September ISM Manufacturing survey on Monday. UK Prime Minister Truss to deliver address at Tory conference today This is an important speech after the recent volatility in UK gilt markets, mostly attributable to policymaking from the Truss government, including generous caps on energy prices and tax cuts, that suggest little interest in maintaining long term credibility in government debt. US ISM services will be key to watch today With chatter on a Fed pivot gaining momentum out of a miss in one ISM manufacturing print, possibly also underpinned by the turmoil in the financial system on contagion from the wipeout and recovery in UK gilt markets over the last ten days, it will become more key to watch the services sector data out today. Consensus expects the number to be 56, down from 56.9, as higher interest rates and high inflation begin to eat into services spending after a solid post-pandemic rebound. Earnings to watch We had highlighted that Biogen would report earnings yesterday, but our earnings date data was incorrect, and the date is now set for the 18 October. Tesco has already reported earnings (see review above), so today’s remaining earnings focus is Lamb Weston which is a large US food company with analyst expecting FY23 Q1 (ending 31 August) revenue growth of 16% y/y and stable operating margin. Today: Lamb Weston, Tesco, RPM International Thursday: Seven & I, Conagra Brands, Constellation Brands, McCormick & Co Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone final Sep. Services PMI 0830 – UK final Sep. Services PMI Poland Central Bank Rate Announcement 1215 – US Sep. ADP Employment Change 1230 – US Aug. Trade Balance 1230 – Canada Aug. Building Permits 1230 – Canada Aug. International Merchandise Trade 1400 – US Sep. ISM Services 1430 – US Weekly DoE Crude Oil and Product Inventories 2000 – US Fed’s Bostic (non-voter) to speak 0030 – Australia Aug. Trade Balance Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-5-2022-05102022
NZD/USD: Reserve Bank Of New Zealand Is Expected To Hike The Rate By 50bp

Twitter Stock Price Up, Tesla (TSLA) Down, Elon Musk Has Shaken Up The Stock Market Again!

FXStreet News FXStreet News 05.10.2022 15:51
TWTR closes up 22.2% after Musk agrees to go through with acquisition. Tesla stock falls in premarket on the news. Musk says Twitter is part of his designs for a superapp. If you have been living under a rock for the last 24 hours, you may not have heard that Elon Musk has decided to buy Twitter (TWTR) for the original price of $54.20 agreed to back in April. ...And so our corporate fairy tale finally starts on its road to a conclusion. Musk was scheduled to be deposed later this week, and some pundits think the likelihood of failure in extricating himself from his agreement to buy the social media platform back in April was the major reason for wanting to end the current litigation. Either way, Twitter has agreed to the acquisition, and TWTR stock zoomed up 22.2% to close at $52. Carl Icahn reportedly profited about $250 million by holding onto TWTR when Musk tried to exit the deal in July and shares fell to $31.52. Twitter stock news According to reporting from The Financial Times, Musk's lawyers held a Zoom (ZM) call with Judge Kathaleen McCormick from the Delware Chancery Court and Twitter representatives early on Tuesday. The parties agreed to go through with the original acquisition framework, but Twitter has requested new stipulations on timelines and deliverables. Late Tuesday, Musk's legal team filed its intent with the Securities & Exchange Commission (SEC). The relevant section of the filing reads: "On October 3, 2022, the Reporting Person’s advisors sent a letter to Twitter (on the Reporting Person’s behalf) notifying Twitter that the Reporting Person intends to proceed to closing of the transaction contemplated by the April 25, 2022 Merger Agreement, on the terms and subject to the conditions set forth therein and pending receipt of the proceeds of the debt financing contemplated thereby, provided that the Delaware Chancery Court enter an immediate stay of the action, Twitter vs. Musk, et al. (C.A. No. 202-0613-KSJM), and adjourn the trial and all other proceedings related thereto pending such closing or further order of the court." A spokesperson for Twitter stated that the "intention of the company is to close the transaction at $54.20 per share". Now the only thing that stands in the way for the deal going through is ensuring that the financing is there. A number of Wall Street banks had already signed up for $13 billion in financing, which may be more difficult now that interest rates are racing higher. More of the debt may have to come from the banks themselves rather than outside clients. Binance, the crypto exchange, also had agreed to put up $500 million for the deal, and Oracle founder Larry Ellision had said he would put up at least $1 billion. That leaves Musk, who already owns 9.6% of Twitter, to come up with the other $25 billion or so. Plenty of other institutions will likely be brought into the fold, but the market is still thinking Musk will need to sell a further chunk of Tesla stock. TSLA gained 2.9% in Tuesday's regular session, but is off 1.5% in Wednesday's premarket. For his part, Musk decided to forget about his mid-Summer fight over the number of bots on the social network and focus on the possibilities. He posted that Twitter would become part of an "everthing app" called X, which of course reminds one of his vaunted X.com startup that eventually merged to become part of PayPal (PYPL).   Twitter stock forecast Technically, if you buy TWTR stock at $52, then you could make 4% when the acquisition is finalized. With 10-year treasuries still at 3.6% though and Musk requiring financing in a poorer investing climate, TWTR should remain at a discount until the end. Below you can see how both TWTR and TSLA reacted to the news release. TWTR ran up over 22%, and TSLA sold off after adding 2.9% in the regular session. TWTR vs TSLA 1-minute chart for 10/4/22 If this is indeed the end, how did TWTR do as a public company? The answer is: simply awful. If you had bought TWTR near its height in December 2013 (nearly 10 years ago), you would have lost money at Musk's acquisition price. Twitter will continue, but as a public stock it has never amounted to a solid business. Instead it might even be its lackluster corporate prospects that have endeared it to so many fans, myself included. TWTR monthly chart
On the New York Stock Exchange A Lot Of Shares Fell, The Biggest Losers Were Bit Brother Ltd And Avenue Therapeutics Inc

On the New York Stock Exchange A Lot Of Shares Fell, The Biggest Losers Were Bit Brother Ltd And Avenue Therapeutics Inc

InstaForex Analysis InstaForex Analysis 06.10.2022 08:07
At the close of the New York Stock Exchange, the Dow Jones fell 0.14%, the S&P 500 fell 0.20%, and the NASDAQ Composite fell 0.25%. The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 2.46 points or 2.78% to close at 91.10. Visa Inc Class A rose 2.02 points or 1.09% to close at 187.67. UnitedHealth Group Incorporated rose 3.90 points or 0.75% to close at 527.07. The biggest losers were Goldman Sachs Group Inc, which shed 5.87 points or 1.86% to end the session at 309.00. Shares of JPMorgan Chase & Co rose 1.38 points (1.23%) to close at 110.39, while Dow Inc shed 0.56 points (1.20%) to close at 46 .06. Leading gainers among the S&P 500 components in today's trading were Illumina Inc, which rose 6.56% to hit 218.52, Schlumberger NV, which gained 6.26% to close at 41.57, and Gap Inc, which rose 5.19% to end the session at 9.72. The biggest losers were Lumen Technologies Inc, which shed 9.45% to close at 7.28. Shares of Enphase Energy Inc shed 9.25% to end the session at 261.60. Quotes Vornado Realty Trust fell in price by 6.38% to 22.47. The leading gainers among the components of the NASDAQ Composite in today's trading were Chardan Nextech Acquisition 2 Corp, which rose 102.63% to hit 21.54, Nauticus Robotics Inc, which gained 96.27% to close at 6.32. , as well as shares of Pineapple Holdings Inc, which rose 93.01% to end the session at 2.76. The biggest losers were Bit Brother Ltd, which shed 42.97% to close at 0.18. Shares of Avenue Therapeutics Inc shed 41.59% to end the session at 8.47. Quotes Scienjoy Holding Corp fell in price by 36.99% to 1.38. On the New York Stock Exchange, the number of securities that fell in price (2102) exceeded the number of those that closed in positive territory (991), while quotes of 107 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,313 companies fell in price, 1,443 rose, and 198 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.79% to 28.55. Gold futures for December delivery shed 0.28%, or 4.90, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 1.76%, or 1.52, to $88.04 a barrel. Futures for Brent crude for December delivery rose 2.07%, or 1.90, to $93.70 a barrel. Meanwhile, in the Forex market, EUR/USD fell 0.96% to hit 0.99, while USD/JPY edged up 0.35% to hit 144.60. Futures on the USD index rose 1.00% to 111.08.   Relevance up to 04:00 2022-10-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295644
A Significant Change In The Prospects For The Crude Oil Market

A Very Political Move By The OPEC+, The US Dollar (USD) Gains Returned

Saxo Bank Saxo Bank 06.10.2022 08:55
Summary:  A 2 million barrel cut from OPEC+ boosted oil prices. Solid U.S. ISM Services PMI and ADP job report smashed Fed pivot expectations and lifted U.S. bond yields higher, seeing 10-year treasury yields bouncing 12bp to 3.75%. U.S stocks took a pause from their rally and finished the session little changed. The Hong Kong equity market returned from a mid-week holiday and surged 5.9% to catch up with the global markets. The return of the Beijing Marathon on Nov 6 is an encouraging sign of China allowing large public events to resume. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) took a pause in light volume U.S. stocks sold off in early trading after a solid ADP employment report and ISM Services Index which poured cold water onto the notion of Fed pivot. S&P500 managed to pare losses and settled 0.2% higher while Nasdaq 100 was down 0.1%.  Volume was light partly because it was Yom Kippur, a Jewish holiday. Eight of the 11 sectors of the S&P 500 declined with the exception of energy, information technology, and healthcare. Energy stocks were helped by the news that OPEC+ agreed to cut production by two million barrels of crude oil a day.  Exxon Mobil (XOM:xnys) and Halliburton (HAL:xnys) rose by 4% and Occidental (OXY:xnys) climbed 2.4%. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) climbed on solid economic data Yields in U.S. treasuries surged most in the belly of the yield curve, with the 5-year and 10-year yields finishing the session from 11bps to 12bps higher to 3.65% and 3.75% respectively, but a smaller 5bp rise to 4.14% in the 5-year notes.  San Francisco Fed President Mary Daly and Altanta Fed President Raphael Bostic pushed back on the market notion of a pivot.  Across the pond, the Bank of England did not buy any bonds at the buyback operations. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) rallied 5.9% to catch up with the gains in the global markets after a mid-week holiday The Hang Seng Index soared 5.9% to catch up with the S&P 500 Index’s 5.7% rally over the past two days after Hong Kong returned from a public holiday. Weaker U.S. economic data recently have helped fuelled the notion of peak tightening from the Fed and contributed to the turnaround in global stocks this week.  Index heavy-weights jumped, HSBC (00005:xhkg) up 5.7%, AIA (01299:xhkg) up 7.4%, Tencent (000700:xhkg) up 5.8%, Meituan (03690:xhkg) up 8.2%, and Alibaba (09988:xhkg) up 8.4%.  The resumption of the Beijing Marathon this year on Nov 6 boosted sportswear and textile names, with Li Ning (02331:xhkg) up 10.4%, Anta (02020:xhkg) up 10.5%, Shenzhou (02313:xhkg) up 13.7%.  The Beijing Marathon and media stories that some major tourist attractions received high visitor traffic during the Golden Week holiday helped arouse hope of some sort of normalization and boosted mainland catering stocks and Macao casino names. BYD (01211:xhkg) soared nearly more than 9% after the Chinese automaker reported record sales of over 200,000 electric and hybrid vehicles in September, a growth of 183% from last year, and the seventh consecutive month of sales growth.  Nio (09866:xhkg) and Li Auto (02015:xhkg) gained from 6% to 8% but XPeng (09868:xhkg) fell 1% as the latter reported a 19% Y/Y decline in vehicle deliveries. Hong Kong local property names were the laggards following the release of the city’s home sales data that registered a 48.1% Y/Y decline in value in September.  The mainland bourses remain closed for the rest of the week for the National Day golden week holiday. Dollar on the backfoot in early Asian hours The US dollar gains returned on Wednesday as US yields clawed back higher, but was off highs into the NY close and slid further in early Asian trading. Stronger US ISM data and hawkish Fed speak further supported the case for more Fed rate hikes, and the OPEC+ production cut has deteriorated the global inflation picture. EURUSD was therefore unable to move back above parity after testing the key level yesterday, although its back above 0.99 this morning. GBPUSD tested 1.1500 but slid from there amid further concerns on the UK policymakers, as well as a Fitch downgrade of the UK economy. USDJPY stayed short of testing the key 145 level again, with Japan continuing to sound the intervention alarm with warnings such as one from a finance ministry official yesterday saying there is no limitation on funds available for intervention. Crude oil (CLX2 & LCOX2) A big production cut from OPEC+ yesterday boosted crude oil prices, with markets getting nervous about further use of energy as a weapon in the war. The move was met with disapproval by many western countries. US President Joe Biden said that the US would release another 10mbbls from its strategic reserve in response to the cuts. At the same time, the European Union announced a new package of sanctions against Russia, including a price cap on oil sales to third countries. The EIA inventory report also reported a crude inventory decline of 1.36mn barrels last week, with gasoline inventories falling to their lowest levels since November 2014. WTI futures rose towards $88/barrel while Brent was above $93.   What to consider?   Saxo’s Q4 2022 Outlook: Winter is coming In Q4, Europe and the UK brace for the impact of a winter season that will likely bring an economic winter with it as the power and gas crisis reaches peak impact.  Figuratively speaking, economic and financial turbulence is creating a volatile, unaccommodating environment for investment.  It is however worth keeping in mind that it will be spring after winter. The potential for longer-term investment returns increases as a function of declining asset prices.  You can read the Q4 2022 Outlook here and listen to the key highlights of the Outlook here.  OPEC+ production cut to more inflation concerns A very political move by the OPEC+ to cut production by 2 million barrels/day based on current production baselines. The impact is likely to be around 1 million b/d with the majority currently producing below and would not need to cut. These cuts are to be effective from November, while OPEC+ agreed to extend the cooperation deal until end-2023, and the JMMC will meet bi-monthly with OPEC+ ministers set to meet every six months. The White House was unimpressed, with comments saying that the OPEC+ production cut is a 'clear' indication that the bloc is 'aligning with Russia'. The move is likely to add fuel to the inflation fire globally, putting further downside pressure on growth and suggesting an even stronger dollar and more hawkish Fed. US ISM services PMI smashed Fed pivot expectations US ISM services softened slightly to 56.7 in September from 56.9 previously, but was far better than expectations of 56.0. Gains were mostly underpinned by strong employment gains to 53 from 50.2 in August, while business activity slowed to 59.1 from 60.9 and new orders slowed to 60.6 from 61.8. Prices paid also eased, dipping to 68.7 from 71.5, but still showing that prices are picking up, just at a slower pace. This stronger than expected ISM print has smashed expectations of a Fed pivot that were gaining traction after a miss in ISM manufacturing and weaker JOLTs data this week, and an RBA pivot as well. Solid ADP sets the tone for NFP, and Fed members stay hawkish ADP data showed an increase of 208k, suggesting demand for workers remains healthy. Next to watch today will be the weekly jobless claims which dipped to sub-200k last week, before the focus turns to NFP data on Friday. Meanwhile, Fed's Daly noted that the Fed is resolute at increasing rates into restrictive territory before holding rates there for a while, pushing back on talk of a Fed pivot. She added that she doesn’t see a rate cut happening next year “at all”. Raphael Bostic sounded similar notes, saying he favors lifting the benchmark to between 4% and 4.5% by the end of this year, and hold it there. The November 6 Beijing Marathon marked the return of large public events The 2022 Beijing Marathon is scheduled for November 6 and registration has started. The event will allow 30,000 runners to compete in Beijing after being cancelled in 2020 and 2021. It will be the largest public event being held in the Chinese capital city since the Winter Olympics.  Residents from other mainland Chinese cities other than Beijing however are not allowed to attend.  Residents of Taiwan, Hong Kong and Macao, and foreigners plus invited “elite” athletes are allowed to participate. The U.S. Government plans to further restrict China’s access to U.S. semiconductor technology It is reported that the U.S. Commerce Department will launch additional regulations this week to further restrict the exports of semiconductor technologies to China. New Zealand’s RBNZ hikes 50 basis points as expected This was the fifth consecutive meeting to bring a half-point hike and took the official cash rate to 3.5%. The bank signalled more tightening to come in its statement, as it noted that “core consumer price inflation is too high and labor resources are scarce. Still, short NZ rates continue to trade lower, if not falling as rapidly as for Australia after the RBA surprised with only a 25 basis point hike earlier in the week. The AUDNZD rate dropped below 1.1250 at one point overnight from the 1.1350 range before the announcement.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-6-oct-06102022
Hong Kong’s Hang Seng Had Its Best Month | EU Inflation Slowed

Beijing Marathon Came Back, The New Zealand Dollar (NZD) Rose Sharply

Saxo Bank Saxo Bank 06.10.2022 09:04
Summary:  Markets gyrated rather wildly yesterday as a strong September ISM Services saw US treasury yields jumping back higher and challenging the narrative that has developed this week of “central bank pivot.” Alas, equities and sentiment were able to overcome the surge in yields and the US dollar interestingly followed the direction of sentiment rather than yields. The next test for sentiment, the US dollar and global yields will be tomorrow’s US September jobs report ahead of earnings season, which will kick off next week.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities were selling off yesterday with S&P 500 futures declining as much as 1.8% before erasing most of the losses which was a strong given the US 10-year yield rallied higher to 3.75%. The ISM Services Index was incredibly strong yesterday suggesting the US services sector remaining robust despite tighter financial conditions which maybe reduces the risk of negative earnings surprises during the Q3 earnings season. This morning S&P 500 futures are trading above the 3,800 level again with the 3,820 level being the natural resistance level on the upside to watch. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index took a pause after yesterday’s 5.9% rally. I traded lower in the morning but pared losses after returning from the mid-day break to little change from the previous close. Wharf Real Estate (01997:xhkg) and Cathay Pacific (0293:xhhg) were among the best performers, up by 4.8% and 3.5% respectively. Automakers were laggards, with leading names falling from 2.5% to 7%. The stock markets in Shanghai and Shenzhen remain closed for a national holiday. USD and US yields/risk sentiment The US dollar very correlated with the direction in risk sentiment yesterday, and less so with the direction in treasury yields, which rose quite sharply yesterday, at first helping to support the greenback as sentiment was spooked by the comeback in yields as strong data challenges the “central bank pivot” narrative afoot this week. But the big USD weakened later in the session as US equities closed near the highs and followed through weaker still overnight on a further brightening of sentiment. EURUSD is a microcosm of the general USD direction and will be a bellwether pair to watch after parity was nearly touched over the last couple of sessions before the action swooned to below 0.9850 briefly yesterday and a subsequent rally retraced about half of the sell-off into this morning. Gold (XAUUSD) Gold trades higher after briefly dipping to and finding support at $1700 during Wednesday’s round of fresh dollar strength. Supported by hopes that central banks will begin to ease away from the tightening of the last many months after at least one weak US data point this week, saw yields a bit lower and precious metals surging. The move through the key 1,680-1,700 area on Monday will be further solidified on a break above 1,725, the 50-day moving average, and not least the recent high at 1735. OPEC’s decision to cut production thereby forcing prices of energy higher will only add to concerns about central banks' ability to get inflation under control before an economic slowdown forces a rethink on rates, a development that may end up adding additional support to gold and silver. Crude oil (CLX2 & LCOX2) Crude oil rallied after OPEC+ producers as speculated, decided to cut their baseline production by 2 million barrels per day. A decision that given the undercompliance from several major producers, including Russia, Nigeria and Angola would likely translate into a somewhat lower impact of around 1 million barrels per day. Cutting production at this time is somewhat controversial given the fact the price has not fallen much below the 90-100 Brent range that seems to be acceptable to most producers. What makes this cut even more difficult to understand from a supply and demand perspective is the comment from Novak that Russian production may fall further over the coming months. This decision risks agitating the US while potentially leading the FOMC to keep tightening for longer as inflation will become stickier. The result being a global economic slowdown that may end up taking longer to reverse. HG Copper (HGZ2) Copper as well as zinc trade higher after the London Metal Exchange said it would restrict deliveries from Ural Mining & Metallurgical. The industry has been grappling with the question of how to handle supplies from Russia - a major producer of aluminum, nickel and copper - since the invasion of Ukraine in February, and the debate has intensified over the past month.  Copper traded in New York trades near a one-month high at $3.57 with the news offsetting continued worries about demand amid a global economic slowdown, not least in China and Europe. Next level of interest being the September high at $3.69. US treasuries (TLT, IEF) US treasury yields jumped above 3.75% at one point yesterday, up 20 bps from the recent lows, in the wake of a stronger than expected Sep. US ISM Services survey and as the private ADP payrolls came in solidly in line with expectations, with upward revisions. The cycle high of 4.00% that was posted during the wipeout in the UK gilt market is the next focus if the bond market remains weak. What is going on? NZD jumps overnight after mixed reaction to latest RBNZ rate hike The NZD rose sharply against the US dollar, challenging the 0.5800 area this morning after a pump-and-dump reaction to the RBNZ’s latest 50 basis point rate hike. Likewise, AUDNZD traded heavily and back toward the pivotal 1.1250 area that was a major resistance point on the way up. Improved global sentiment may be a driver here, as was a rather rosy speech on the prospects for New Zealand avoiding a recession from NZ Deputy Prime Minister Robertson overnight. Better than expected US September ADP payrolls change…but this does not matter much In September, U.S. businesses added 208k jobs according to the ADP report. This is more than the consensus of +200k and higher than in August (revised up from +132k to +185k). The biggest gain was in trade, transportation and utilities (147k) ahead of professional and business services and education. On the downside, annual pay growth for job changers went through its biggest deceleration in the three-year history of the data (from 16.2 % to 15.7 %). Should we be worried about this data? Not much. The ADP report hasn’t been the best gauge of the U.S. labor market (even with the recent change in the methodology). Strong September US ISM Services survey challenges “pivot” narrative US ISM services softened slightly to 56.7 in September from 56.9 previously, but was far better than expectations of 56.0. New orders slowed to 60.6 from 61.8, but that is a very strong reading. Two of the more positive points in the survey were: the ISM Services employment jumped in September, from 50.20 in August to 53 points. The second one: the services Prices Paid has fallen six months in a row, to the lowest level since January 2021. This means inflation is likely to move lower. This is a rather positive report after a number of negative statistics earlier this week (sharp drop in ISM Manufacturing employment, much lower job openings and bad construction spending).  Hawkish Fed refrain remains the same The Fed's Daly (voter in 2024) noted that the Fed is resolute at increasing rates into restrictive territory before holding rates there for a while, pushing back on talk of a Fed pivot. She added that she doesn’t see a rate cut happening next year “at all”. Raphael Bostic (2024 voter) sounded similar notes, saying he favors lifting the benchmark to between 4% and 4.5% by the end of this year, and hold it there. The November 6 Beijing Marathon marks the return of large public events The 2022 Beijing Marathon is scheduled for November 6 and registration has started. The event will allow 30,000 runners to compete in Beijing after being canceled in 2020 and 2021. It will be the largest public event being held in the Chinese capital city since the Winter Olympics. Residents from other mainland Chinese cities other than Beijing however are not allowed to attend. Residents of Taiwan, Hong Kong, and Macao, and foreigners plus invited “elite” athletes are allowed to participate. The US plans to further restrict China’s access to its semiconductor technology It is reported that the US Commerce Department will launch additional regulations this week to further restrict the exports of semiconductor technologies to China. What are we watching next? Risk sentiment recovers despite new surge in yields on strong US data – next test for treasuries/USD/risk sentiment is on September jobs report tomorrow Equity markets launched an impressive recovery yesterday despite the fresh surge in US treasury yields after the release of the strong ISM Services survey. It's hard to believe the comeback can extend aggressively if strong jobs data tomorrow leads to a further surge in yields. The Sep. Nonfarm payrolls change is expected at +260k after +315k in August and the Average Hourly Earnings are seen rising +0.3% MoM and +5.0% YoY – the latter would be the slowest pace of wage growth since December. Fed speakers up this evening Fed members have been rather consistent with a drumbeat of calls for staying on course with further rate tightening. In light of the recent batch of mixed data that has helped push US 2-year treasury yields some 20 basis points lower from their nearly 4.25% peak, it will be interesting to watch the next few Fed speakers of note, which today includes two FOMC voters who are speaking more generally on the economic outlook, including Cleveland Fed President Mester and the Board of Governors’ Waller – see calendar below. Earnings to watch Today’s earnings focus is Conagra Brands which is US processed foods company. Analysts expect revenue growth of 7% y/y in FY23 Q1 (31 August) and stable operating margin of 17.6%. The company has seen its growth rate slowly increase over the previous quarters and with the ongoing cost-of-living crisis there might be an upside surprise in today’s earnings result. Today: Seven & I, Conagra Brands, Constellation Brands, McCormick & Co Economic calendar highlights for today (times GMT) 0830 – UK Sep. Construction PMI 1130 – US Sep. Challenger Job Cuts 1130 – ECB Meeting Minutes 1230 – US Weekly Initial Jobless Claims 1250 – US Fed’s Mester (Voter) to speak 1300 – Poland Central Bank governor Glapinski press conference 1315 – US Fed’s Kashkari (voter in 2023) to speak 1400 – Canada Sep. Ivey PMI 1430 – US Weekly Natural Gas Storage Change 1535 – Canada Bank of Canada Governor Macklem to speak 1700 – US Fed  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-6-2022-06102022
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

Chevron Corp Was The Top Gainer Among The Components Of The Dow Jones Index

InstaForex Analysis InstaForex Analysis 07.10.2022 08:31
At the close on the New York Stock Exchange, the Dow Jones fell 1.15%, the S&P 500 fell 1.02%, and the NASDAQ Composite fell 0.68%. Chevron Corp was the top gainer among the components of the Dow Jones index today, up 2.89 points or 1.82% to close at 161.42. Quotes of Caterpillar Inc rose by 0.43 points (0.24%), closing the session at 178.81. Home Depot Inc rose 0.54 points or 0.19% to close at 290.39. The losers were 3M Company shares, which lost 4.05 points or 3.52% to end the session at 111.12. International Business Machines was up 2.79% or 3.51 points to close at 122.23 while Walgreens Boots Alliance Inc was down 2.74% or 0.91 points to close at 32.25. Among the S&P 500 index components gainers today were DexCom Inc, which rose 4.53% to hit 95.21, APA Corporation, which gained 4.15% to close at 42.20, and Occidental Petroleum Corporation, which rose 4.07% to end the session at 70.50. The biggest losers were shares of Carnival Corporation, which shed 6.19% to close at 6.97. Shares of SolarEdge Technologies Inc lost 5.96% to end the session at 220.27. Shares of Generac Holdings Inc fell 5.59% to 168.69. Leading gainers among the components of the NASDAQ Composite in today's trading were Green Giant Inc, which rose 168.57% to 1.88, Atlis Motor Vehicles Inc, which gained 95.45% to close at 24.49. as well as shares of InVivo Therapeutics Holdings Corp, which rose 83.03% to close the session at 7.98. The biggest losers were Jowell Global Ltd., which shed 45.36% to close at 1.53. Shares of Cyclerion Therapeutics Inc lost 37.57% to end the session at 0.59. Quotes of Top Ships Inc decreased in price by 35.22% to 6.40. On the New York Stock Exchange, the number of securities that fell in price (2114) exceeded the number of those that closed in positive territory (997), while quotes of 125 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,093 stocks fell, 1,655 rose, and 252 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 6.90% to 30.52. Gold futures for December delivery added 0.07%, or 1.20, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 1.30%, or 1.14, to $88.90 a barrel. Futures for Brent crude for December delivery rose 1.57%, or 1.47, to $94.84 a barrel. Meanwhile, on the Forex market, EUR/USD fell 0.87% to 0.98, while USD/JPY edged up 0.35% to hit 145.13. Futures on the USD index rose 1.03% to 112.15.   Relevance up to 05:00 2022-10-08 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/295838
Assessment Of The Chances Of A Future Rate Hike By The ECB| Lowering GDP Forecasts

Assessment Of The Chances Of A Future Rate Hike By The ECB| Lowering GDP Forecasts

Saxo Bank Saxo Bank 07.10.2022 09:06
Summary:  U.S. stocks and bonds sold off after Fed officials reiterated the Fed’s determination to raise rates and keep rates restrictive. USDJPY returned to trade above 145, testing the Japanese authorities’ resolve to defend the yen and its yield curve control policy. AMD’s miss in Q3 revenue pre-announcement, followed by Samsung’s profit warning, is a precursor to what’s to come in the upcoming earnings season. Today, all eyes are on the U.S. employment report as a next test for the Fed pivot narrative that had developed this week before the pushback seen from Fed commentaries. What is happening in markets? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) declined in a light volume session U.S. stocks declined on Thursday, giving back further the rally earlier in the week. S&P500 dropped 1%, with 10 out of 11 sectors in the red with the exception of the energy sector which benefited from a 1.4% rise in WTI crude to USD89.1. Tech-heavy Nasdaq 100 was down 0.8%.  Hawkish Fed official commentaries kept investors cautious of taking on risks ahead of the employment report today and the CPI release next week.  The trading volume was light.  Twitter (TWTR:xnys) fell 3.7% as investors awaiting Musk’s acquisition of the company to complete. Social networking site Pinterest (PINS:xnys) surged 4.8% and game software developer Take-Two Interactive (TTWO:xnas) climbed 3.5% on analyst upgrades. Advanced Micro Devices (AMD:xnas) plunged nearly 4% during the extended-hour trading after the chip maker announced preliminary Q3 sales missing expectations.  U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) cheapened on hawkish Fed official commentaries U.S. treasuries bear flattened on Thursday as the front end of the curve got cheaper on more pushbacks from the Fed’s Cook, Kashkari, and Waller to the idea of a Fed pivot.  Traders have taken the terminal Fed Fund rate expectation back up to 4.57% and a 77% probability of a 75bp rate hike in the November FOMC. 2-year yields surged 11bps to 4.26% and 10-year yields climbed 7bps to 3.82%.  Hong Kong’s Hang Seng (HSIU2) took a pause after a strong rally the day before The Hang Seng Index took a pause after yesterday’s 5.9% rally, trading side-way throughout the day and finished 0.4% lower after a failed attempt to climb to positive territory in the early afternoon.  In anticipation of eventually removing all pandemic control restrictions for people arriving in Hong Kong, shopping malls, retailers, and airlines gained. In addition, the Hong Kong Government plans to give away 500,000 free air tickets to attract travellers to visit Hong Kong. Wharf Real Estate (01997:xhkg), which owns commercial properties, gained 4.7% and was the best performer in the benchmark index.  Chow Tai Fook, a jewelry retailer, climbed 1.4%. Cathay Pacific (0293:xhhg) gained 3.5% and China Eastern Airlines (00670:xhkg), China Southern Airlines (01055:xhkg), and China Airlines (00753:xhkg) surged from 5.7% to 6.9%. Automakers were laggards, with leading names falling from 2.5% to 7%. Despite the latest research note from a major U.S. investment bank forecasting a 30% drop in Hong Kong’s residential property prices on higher interest rates, shares of local developers finished the day with modest gains.  On the other hand, CIFI (00884:xhkg) tumbled 15.3% as the mainland China developer is in discussion with banks about posting an interest payment.  Alibaba (09988:xhkg) shed 1.2% following the news that the Shanghai Municipal Government removed Alipay from its list of high-tech companies which are entitled to tax benefits because Alipay failed to meet the requirement on spending on research and development.  The dollar rose on higher bond yields The DXY rose 0.9% to 112.2 on higher U.S. bond yields, gaining against G10 currencies.  The Aussie dollar sold off to 0.6410, approaching its September 28 ow of 0.6363. USDJPY moved back up to above 145, testing the Ministry of Finance’s resolve to cap the depreciation of the Yen. Crude oil (CLX2 & LCOX2) The energy market tightness concerns continued to underpin further gains in the oil market, with WTI futures now rising towards $89/barrel and Brent above $94 following a 2 million barrels/day cut announced by OPEC+. Other supply issues are also at play with European sanctions on Russian oil coming into effect this quarter, but the US may opt to release more from its strategic reserves to offset some of this decline in supply. Metals gain as LME places restrictions on Russian copper, zinc and aluminium The London Metal Exchange said it will restrict deliveries of some Russian metal. Starting immediately, metal from UMMC or its Chelyabinsk Zinc unit can only be delivered to LME warehouses if the owner can prove it won’t constitute a breach of recent sanctions on the firm’s co-founder, Iskandar Makhmudov. The industry has been grappling with the question of how to handle supplies from Russia - a major producer of aluminium, nickel and copper - since the invasion of Ukraine in February, and the debate has intensified over the past month. HG Copper (HGZ2) rose to a near one-month high of $3.59 before reversing gains later as a strong dollar weighed on investor appetite.   What to consider?   Fed officials reiterated hawkish comments With the markets anticipating a Fed pivot sooner rather than later, Fed members continue to send stronger hawkish signals with the clear message being higher for longer interest rates. Minneapolis President Kashkari (2023 voter) said the Fed is “quite a ways away form a pause in rate hikes” and “not seeing evidence that underlying inflation peaked”. Governor Cook said “restoring price stability likely will require ongoing rate hikes and then keeping policy restrictive for some time”. Fed Governor Waller joined the chorus saying that the Fed needs to continue to raise rates into early 2023. Charles Evans also reiterated that the Fed is heading to 4.5-4.75% by spring, and another 125bps of rate hikes is seen over the next two meetings. ECB minutes suggest inflation concerns The ECB minutes from the September 7-8 meeting were released, and suggested that another big rate hike after the last month’s 75bps move is in the cards. There was broad consensus that the key policy rates are still below neutral. While the assessment of economic performance sounded bleak, taming inflation remained the overarching objective and therefore further tightening is still expected. Markets currently fully price a 50bps rate hike for October, and an increasing chance of another 75bps move as well. Hong Kong’s PMI fell to the contractionary territory in September The S&P Global Hong Kong PMI fell to 48.0 in September from 51.2 in August, returning to the contractionary territory for the first time since March this year when Hong Kong was hit hard by an outbreak of COVID-19.  The S&P Global Hong Kong PMI surveys activities in manufacturing, wholesale, retail and services, and construction.  Among the sub-indices, the new order sub-index fell the most to 46.1 in September from 51.3 in August.  The new export orders sub-index deteriorated further to 45.9 from 47.4 in the prior month.  The output sub-index fell to 47.3 from 52.2 and the employment sub-index declined to 48.3 from 48.6.  Advanced Micro Devices (AMD:xnas) announced preliminary Q3 sales missing expectations AMD pre-announced Q3 revenues at around USD5.6 billion, much below its previous guidance of about USD6.7 billion. The company cited weaker demand for PC and a build-up of inventory in the PC supply chain for the poor performance. Later on, in the Asian session, Samsung pre-announced a weaker profit for Q3 as well, signalling the margin squeeze that is likely to become broader into the Q3 earnings season. Samsung said Q3 profit is likely to fall 32% as demand slumped. The World Bank cut India’s growth forecast by 1% point to 6.5% The World Bank reduced its forecast for India’s GDP growth in the year to March 2023 by 1% to 6.5%, citing a slowdown in the global economy and rising interest rates. This comes despite a double-digit growth in the April-June quarter and RBI’s 7% growth forecast for FY 2023, and generally reflects the tough global macro environment, along with some pullback in consumption as RBI raises rates. US NFP data key for markets The payrolls data is due in the US today, and it is likely to give out further signals on the tightness in the labor market even if we see some slight cooling in the headline print. Bloomberg consensus estimate stand at gains of 255k for September from 315k last month, with unemployment rate and average hourly earnings steady at 3.7% and 0.3% respectively. The annual rate of wage growth is expected to cool a notch. Initial jobless claims rose to 219k after a sub-200k print last week, but it does not feed directly into the NFP. With markets at the edge on whether to price in further Fed tightening or not, even a slight miss in the NFP data could result in some more calls of a Fed pivot, and greater Fed pushback will be needed to pushback easing expectations from 2023 market pricing.     For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-7-oct-2022-07102022
Hungary's Budget Deficit Grows, Raising Concerns Over Fiscal Targets

Samsung And Its Decline In Operating Income| Credit Suisse Is Trying To Buy Back Credit

Saxo Bank Saxo Bank 07.10.2022 11:08
Summary:  Risk sentiment was wobbly yesterday, as yields continued to rise, with late Fed speakers in the US yesterday continuing to deliver a hawkish message. The US dollar has come roaring back, especially against the smaller currencies, ahead of today’s September US jobs report. Given Fed forecasts that it will continue to tighten even if unemployment were to begin rising, we may be some months from a pivot in the Fed’s message.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities retreated yesterday with S&P 500 futures declining 1% yesterday as US bond yields are coming back higher towards the 4% as the US economy is still looking robust despite tighter financial conditions. S&P 500 futures are continuing lower this morning trading around the 3,740 level with the 3,700 level being the next natural gravitational point for the market on the downside. US Nonfarm Payrolls for September is of course today’s main event but it will probably not move much unless we see a big surprise to average hourly earnings figure m/m. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Hang Seng Index sank for the second day in a row after the sharp rally on Wednesday. Chinese EV stocks tanked, with Li Auto (02015:xhkg) tumbling 16.1%, and Nio (09866:xhkg) and XPeng (09868:xhkg) down from 7% to nearly 9%. Investors were concerned about the severe competition in the EV industry with new entrants to the market and rising battery costs. China developer names plunged from 2% to 11% across the board as sentiment was clouded by CIFI’s (00884:xhkg) discussion with banks about posting an interest payment and a 2-notch downgrade to Caa1 by Moody’s for the developer’s senior unsecured debts. Hang Seng Index lost more than 1% by mid-day. Shanghai and Shenzhen exchanges are closed for a national holiday and will return on Monday. USD and US yields/risk sentiment The US dollar bounced back strongly yesterday on the supportive combination of weak risk sentiment and higher US treasury yields, with EURUSD all the way back to 0.9800 this morning after flirting with parity just a couple of sessions ago. The USD strength was most pronounced against the smaller currencies with a pair like AUDUSD trading near the cycle low below 0.6400 ahead of the US jobs data. That combination of higher US yields and weak risk sentiment provides the strongest support for the greenback, with a strong US jobs report the most likely spark for a further rise. Very interesting ahead of the weekend that USDJPY remains pinned near the critical 145.00 level ahead of the US jobs data – will we see a volatility event and official intervention if strong US jobs data sends the pair over the edge? Gold (XAUUSD) Gold eased back lower on the fresh rise in US treasury yields and a stronger US dollar, but the retracement of the recent massive rally off the cycle low of 1,1615 has been fairly shallow, with the first support zone of note into 1,680-1,700 area. The most significant challenge to gold would be a strong US jobs report and further USD strength, but a full reversal of the latest rally wave would require a significant plunge. To the upside, the next resistance of note is the 1,1734 level (61.8% retracement of the big sell-off wave into the lows) and then the huge 1,800 area and pivot high of 1,808 in August. Crude oil (CLX2 & LCOX2) The energy market tightness concerns continued to underpin further gains in the oil market, with WTI futures now rising towards $89/barrel and Brent above $94 following a 2 million barrels/day cut announced by OPEC+. Other supply issues are also at play with European sanctions on Russian oil coming into effect this quarter, but the US may opt to release more from its strategic reserves to offset some of this decline in supply. US treasuries (TLT, IEF) US treasury yields rose all along the curve ahead of today’s important September US jobs report and the market’s attempts to express hope over the last week that the Fed is set to deliver a pivot to less hawkish guidance. The US 10-year benchmark traded this morning aove 3.80%, less than 20 basis points from the significant 4.00% level that was briefly touched during the UK gilt market wipeout that saw some contagion even into US treasuries. What is going on? AMD blasted on ugly outlook and Samsung shows 11% in operating income Advanced Micro Devices revealed preliminary Q3 sales yesterday ahead of its earnings report in coming weeks. These were at $5.6 billion versus company and analyst estimates of $6.7 billion, an enormous miss.  Weaker demand in the PC market was cited, with writedowns in inventories also playing a role. Shares traded more than 3% lower after hours late yesterday after having lost some 60% from late 2021 highs. Samsung is also part of the semiconductor industry has announced its preliminary Q3 results this morning showing operating income declined 11% as demand for consumer electronics is coming down hard. Fed officials reiterated hawkish comments With the markets anticipating a Fed pivot sooner rather than later, Fed members continue to send stronger hawkish signals with the clear message being higher for longer interest rates. Minneapolis President Kashkari (2023 voter) said the Fed is “quite a ways away from a pause in rate hikes” and “not seeing evidence that underlying inflation peaked”. Fed Governor Cook said “restoring price stability likely will require ongoing rate hikes and then keeping policy restrictive for some time”. Fed Governor Waller joined the chorus saying that the Fed needs to continue to raise rates into early 2023. The Chicago Fed’s Charles Evans (Voter 2023) also reiterated that the Fed is heading to 4.5-4.75% by spring, and another 125bps of rate hikes is seen over the next two meetings. Credit Suisse is trying to bolster sentiment by buying back credit The Swiss-based bank is offering this morning to buy back its own debt up to CHF 3bn. ECB minutes suggest inflation concerns The ECB minutes from the September 7-8 meeting were released yesterday and suggested that another big rate hike after the last month’s 75bps move is in the cards. There was broad consensus that the key policy rates are still below neutral. While the assessment of economic performance sounded bleak, taming inflation remained the overarching objective and therefore further tightening is still expected. Markets currently price heavy odds that the ECB will deliver a 75 bp hike. Hong Kong’s PMI fell to the contractionary territory in September The S&P Global Hong Kong PMI fell to 48.0 in September from 51.2 in August, returning to the contractionary territory for the first time since March this year when Hong Kong was hit hard by an outbreak of COVID-19. The S&P Global Hong Kong PMI surveys activities in manufacturing, wholesale, retail and services, and construction. Among the sub-indices, the new order sub-index fell the most to 46.1 in September from 51.3 in August. The new export orders sub-index deteriorated further to 45.9 from 47.4 in the prior month. The output sub-index fell to 47.3 from 52.2 and the employment sub-index declined to 48.3 from 48.6. What are we watching next? Today's US September jobs report and the fate of the “pivot” narrative Fed speakers of late, including those late yesterday, continue to deliver a consistent message of continuing the current tightening regime, and given the Fed’s forecast that it will continue to tighten even as unemployment begins to rise (September forecasted a rise to a 4.4% unemployment rate next year vs. 3.7% currently), we are likely at least many months from the Fed blinking due to a softening labor market. The Sep. Nonfarm payrolls change is expected near +260k after +315k in August and the Average Hourly Earnings are seen rising +0.3% MoM and +5.0% YoY – the latter would be the slowest pace of wage growth since December. Earnings to watch The Q3 earnings season kicks off next week with the most important day being Friday with seven large US financial institutions reporting. The key focus points will be to what extent US banks are able to increase their net interest margin and the levels of credit provisions. Wednesday: PepsiCo Thursday: Progressive, Fast Retailing, Tryg, Walgreen Boots Alliance, Fastanal, BlackRock, Delta Air Lines, Domino’s Pizza Friday: Shanghai Putailai New Energy, YTO Express Group, PNC Financial Services, JPMorgan Chase, Morgan Stanley, Citigroup, UnitedHealth Group, Wells Fargo, US Bancorp, First Republic Bank Economic calendar highlights for today (times GMT) 1100 – Mexico Sep. CPI 1230 – US Sep. Nonfarm Payrolls Change 1230 – US Sep. Unemployment Rate 1230 – US Sep. Average Hourly Earnings 1230 – Canada Sep. Employment Change/Unemployment Rate 1400 – US Fed’s Williams (Voter) to speak 1500 – US Fed’s Kashkari (Voter 2023) to speak 1600 – US Fed’s Bostic (Voter 2024) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-7-2022-07102022
Nasdaq 100 Faces Bearish Breakdown Below Ascending Wedge and RSI Momentum Indicator

Podcast: Eyes On US Job Report, US Treasury Yields Rose And The US Dollar (USD) Roared Back Higher

Saxo Bank Saxo Bank 07.10.2022 12:46
Summary:  Today we note a fresh weakening in sentiment as US treasury yields rose and the US dollar roared back higher, particularly against the smaller currencies. Also, a look at today's US jobs report and whether it can move the needle much, given the drumbeat of Fed rhetoric staying on the unified tightening-and-not-pivoting message, which will likely require many months of weakening inflation and a weakening jobs market to drive a shift. That means the surprise side is a very strong jobs and earnings report today. Discussion of AMD's shock revenue miss for Q3 reported after hours yesterday, the week ahead in earnings as earnings season get under way, the macro calendar points of note next week and more also on today's pod, which features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean engraver If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-oct-7-2022-07102022
Key Economic Events and Earnings Reports to Watch in US, Eurozone, and UK Next Week

The Earnings Season For Large Companies In Q3 Will Have A Negative Surprise

Saxo Bank Saxo Bank 07.10.2022 13:02
Summary:  We have long argued that Q3 earnings will disappoint due to margin compression and the energy sector not delivered the same contribution in Q3 as it did in Q2 lifting aggregate earnings. The warning from Shell's CEO and the bad outlook from AMD and Samsung over the past 24 hours are evidence that the Q3 earnings season is most likely going to disappoint. In today's earnings preview we highlight next week's earnings and we also provide our view on the current S&P 500 earnings estimates for next year which we believe are unrealistic given the current macro backdrop. Negative surprises will pop up everywhere during earnings season We have been arguing for quite some time that the Q3 earnings season will surprise to the downside. The recent string of worse than expected results from Nike and H&M, and now also AMD disappointing last night and Samsung this morning missing estimates on Q3 operating income by 12%, are clear signs of what awaits investors. The energy and mining sectors were among the strong contributors in Q2 holding up the aggregate earnings figures, but Shell’s CEO said yesterday that Q3 earnings will be lower q/q due to lower profitability in its refining and chemicals businesses. The list below shows all the most important earnings releases next week. Consumer oriented companies such as PepsiCo, Walgreens Boots, and Delta Air Lines are important earnings to watch for updating our information picture on the consumer amid the cost-of-living crisis. On Friday, several large US financial institutions will report earnings with our focus on JPMorgan Chase, Citigroup, and Wells Fargo. The key things to watch for in US bank results are their ability to increase their net interest margin and the credit provisions. Wednesday: PepsiCo Thursday: Progressive, Fast Retailing, Tryg, Walgreens Boots Alliance, Fastanal, BlackRock, Delta Air Lines, Domino’s Pizza Friday: Shanghai Putailai New Energy, YTO Express Group, PNC Financial Services, JPMorgan Chase, Morgan Stanley, Citigroup, UnitedHealth Group, Wells Fargo, US Bancorp, First Republic Bank Analysts are too optimistic In our view the bad Q3 earnings season will be a function of both weakening numbers from companies but also unrealistic expectations. The chart below shows the realized quarterly earnings per share for S&P 500 and here we already observe that realized Q3 earnings are behind estimates and that estimates are suggesting strong earnings growth into Q4. This seems very unrealistic to us given the wage pressures that CEOs are complaining about and highlighting as the biggest short-term risk to profitability. The EPS estimates for S&P 500 are $224.98 in 2022 and $243.22 suggesting companies can grow earnings close to trend growth and even expand profit margins to record highs in 2023. We find it very hard to reconcile with the current macro backdrop of tighter financial conditions, war in Ukraine, an energy crisis, and China’s growth slowing down. The high inflation will help revenue growth in nominal terms but it will increase wage demands to offset decline in purchasing power and thus we believe the most realistic dynamic from here is lower profit margin. We expect the net profit margin to decline to 11.3% from 12.6% in 2021 and if apply the estimates on revenue for 20233 of $1801 then our EPS estimate for 2023 is $203.51 which is 16% lower than the current consensus estimate. This translate into a 2023 P/E ratio of 18.4 or earnings yield of 5.4% which one could argue is not an adequate risk premium of US government bond yields and investment grade bonds. One could also argue that the revenue estimate for 2023 is a bit too optimistic as it implies a 4.1% growth rate which might be difficult, but now we are going with this estimate. Dividend futures for 2023 are currently priced at $64.80 which is actually a decline from the expected 2022 dividends of $65.52. A slowdown in dividends is more consistent we our estimate for earnings in 2023 and would take the payout ratio back to 31.9% which again would be closer to the recent average.  Source: https://www.home.saxo/content/articles/equities/q3-earnings-season-kickoff-starts-with-a-warning-from-shell-07102022
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

The Chances Of The Fed For 75bp Rate Hike Increased After The Strong Report|European Stock Indices Are In A Downtrend

InstaForex Analysis InstaForex Analysis 08.10.2022 08:06
Stocks opened lower and Treasury yields rose as the strong report reaffirmed bets that the central bank would continue to be aggressive with its tightening campaign. Odds of a 75-basis point hike increased to a certainty following the report. Aside from the anxiety that usually precedes these numbers, traders had to digest remarks from a raft of Federal Reserve speakers who sounded unequivocally committed to crushing inflation with rate hikes. The hawkish rhetoric helped push the S&P 500 to its second straight day of losses, while lifting the dollar and Treasury yields. Oil topped $88 a barrel. European stock indices are in a downtrend with the target of updating year lows: This is the last jobs report Fed officials will have before their November policy meeting as they consider a fourth-straight 75-basis point interest rate hike. Fresh inflation data coming out next week will also play a fundamental role in their decision making. The report is projected to show the depth and breadth of the Fed's inflation problem, with a key indicator of consumer prices potentially worsening. The Moscow Exchange Index failed to hold above 2,000 and continued its decline: Key events this week: US unemployment, wholesale inventories, non-farm payrolls, Friday Bank of England Deputy Governor Dave Ramsden speaks at event, Friday Fed's John Williams speaks at event, Friday   Relevance up to 17:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323750
German Economy Faces Setback as Ifo Index Plunges in June

On Friday, When NFP Were Released, S&P 500 Lost Almost 3%, Nasdaq Decreased By 3.8%

ING Economics ING Economics 10.10.2022 09:13
A tough day ahead for Asia as markets digest payrolls implications Source: shutterstock Macro outlook Global markets: The US is off for Columbus day today, but Asian markets will still have to adjust to Friday’s payroll-driven market ructions which led to a 2.8% decline in the S&P500 and a 3.8% decline for the NASDAQ. And with US equity futures still pointing to fairly sizeable declines for tomorrow’s open, this looks as if it will be a tough day for Asian markets. The payrolls print, though not far off the consensus call (see below and also this note from our US economist) resulted in further gains in 2Y US Treasury yields (+5.2bp)  and a 5.8bp rise in 10Y bond yields. On average, there were bigger gains in European bond yields on Friday, with 10Y Bund yields up 11bp. The USD strengthened further on Friday. EURUSD fell to 0.9736, the AUD fell to 0.6359, Cable dropped to 1.1073, and the JPY pushed above 145. Asian FX was also down against the USD on Friday, and further losses seem probable today, with the offshore CNH pushing back up to 7.1362 ahead of China returning from vacation today. G-7 Macro: The September non-farm payrolls gain of 263,000 was actually only slightly stronger than the consensus estimate of 255,000, and the drop in the unemployment rate to 3.5% from 3.7% was not hugely significant. Nevertheless, with the market seemingly grasping for excuses for a Fed pivot, this set of data didn’t come close to delivering, resulting in a sell-off for risk assets ahead of the long weekend. It doesn’t look all that likely that this week’s CPI inflation release for September will help much either, with core inflation expected to keep rising, even if the headline rate comes down. There isn’t much out of the G-7 today, though the Autumn IMF meetings start today in Washington. China: The Caixin service-sector PMI fell to 49.3 in September, down from 55.0 a month ago, citing the impact of Covid measures in various cities. Demand for services offered by smaller firms was affected. This could happen again sporadically from time to time. Daily confirmed symptomatic Covid cases are nosing higher again, and at just over 500 are now on a par with the September peak. Singapore: 3Q GDP and the Monetary Authority of Singapore (MAS) statement could be out as early today.  3Q GDP is expected to settle at 3.5%YoY, down from the 4.4%YoY growth posted in 2Q.  Robust retail sales and non-oil domestic exports are expected to support growth although momentum is slowing as inflation accelerates and global trade slips.  Meanwhile, the MAS is widely expected to tighten policy further, the 4th tightening this year, as inflation continues to heat up.  The MAS may need to resort to aggressive tightening with adjustments for both the midpoint and slope of SGD NEER appreciation.  Read next: Great Britain Expects Positive Results For Its Economy | FXMAG.COM What to look out for: Inflation reports and the FOMC minutes Indonesia consumer confidence (10 October) Singapore 3Q GDP and MAS statement (10-14 October) Australia Westpac consumer confidence (11 October) Philippine trade balance (11 October) US small business optimism (11 October) Japan machine orders (12 October) India PPI inflation (12 October) US PPI inflation (12 October) Bank of Korea decision (12 October) FOMC minutes (13 October) Japan PPI inflation (13 October) US CPI inflation and initial jobless claims (13 October) China trade balance, CPI and PPI inflation (14 October) Korea unemployment (14 October) US retail sales and University of Michigan sentiment (14 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
China’s Foreign Minister Qin Gang Downplayed Russia’s Invasion Into Ukraine

Putin's Reaction To The Outbreak | 36.4% Less Passenger Travel In China

Saxo Bank Saxo Bank 10.10.2022 09:22
Summary:  S&P 500 plunged 2.8% following a decline of U.S. unemployment to 3.5% in September, signing a tight labor market and providing cover for the Fed to front-load larger rate hikes. U.S. treasury yields and the dollar continued to charge higher. The AUD dollar fell to a 2.5-year low. WTI crude jumped 5.4% as the OPEC+ production quota cut continued to linger. The U.S. tightened its restrictions on the export of semiconductor technology to China. Putin called an emergency meeting with his Security Council. What is happening in markets?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) retreated on a hot labour market After a stronger-than-expected payroll report and a decline in the unemployment rate to 3.5%, U.S. stocks slid throughout the session and managed only to bounce slightly from the lows toward the market close.  S&P 500 plunged 2.8%, with all 11 sectors of the benchmark declining.  The information technology and consumer discretionary sectors fell the most, down 4.1% and 3.5% respectively. On the back of a 5.4% jump in crude oil prices during the day, the energy sector was the best performer, losing only 0.7%. Nasdaq 100 tumbled 3.9%.  Advanced Micro Devices (AMD:xnas) fell the most among the NDX constituents, down 13.9%, following slashing over USD1 billion from its revenue guidance for Q3. Close behind was another semiconductor name, Marvel Technology, falling 11.7%. Intel (INTC:xnas) and NVIDIA (NVDA:xnas) plunged 5.4% and 8% respectively.  The Biden administration issued new rules to restrict American companies from exporting advanced chip equipment to China.  CVS Health (CVS:xnys) plunged 10.5% after being downgraded to a worse-than-average quality rating from Medicare Advantage’s Star Ratings and on its plan to acquire Cano Health (CANO:xnys).  Trading desk talks suggested large short-selling initiated in financials while short-covering was prevailing in the energy space. This week could be another pivotal moment for markets with the U.S. earnings season kicking off, the September FOMC minutes, and the US CPI. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) climbed from 5bps to 7bps across the curve on the fall in the unemployment rate to 3.5% U.S. treasuries sold off on the larger-than-expected +263K print of the non-farm payrolls and the 3.5% unemployment rate (vs 3.7% expected), with the belly of the curve being hit most.  5-year yields jumped 7bps to 4.14%, while 2-year yields climbed 5bps to 4.31% and 10-year yields moved up 6pbs to 3.88%.  The money market curve now prices in a 75bp hike almost a done deal for the November FOMC. The cash treasury bond market is closed on Monday for Columbus Day (but U.S. stock exchanges are open).  Hong Kong’s Hang Seng (HSIU2) fell in light volume with China property and EV stocks underperforming Hang Seng Index sank for the second day in a row after the sharp rally on Wednesday, falling 1.5%. Chinese EV stocks tanked, with Li Auto (02015:xhkg) tumbling 14.8%, Nio (09866:xhkg) plunging 10.5%, and XPeng (09868:xhkg) moving down 6%. The collapse of EV stock prices contributed significantly to the 3.3% decline of the Hang Sent Tech Index (HSTECH.I).  Investors were concerned about the severe competition in the EV industry with new entrants to the market and rising battery costs.  China developer names plunged from 2% to 9% across the board as sentiment was clouded by CIFI’s (00884:xhkg) discussion with banks about posting an interest payment and a 2-notch downgrade to B3 (long-term rating) and Caa1 (senior unsecured debts) by Moody’s. CIFI and Longfor (00960:xhkg), each tumbled over 8%.  Turnover in the Stock Exchange of Hong Kong hit a new 2022 low at HKD57 billion. Shanghai and Shenzhen exchanges were closed for the National Day holiday the whole last week and are returning today.   Australia’s ASX200 (ASXSP200.1) tipped to open the week lower, while focus remains on commodities The ASX200 charged 4.5% last week outperforming global markets, with the rally being supported by commodity prices moving higher, including iron ore. On Monday the Futures indicate the market could fall 0.9% following Wall Street. Trading screens will likely be in the green (black) in the commodity sector, after the oil price rallied 4.7% to $92.62. A focus will also be on iron ore companies as after China’s markets reopen after a weeklong holiday, and China is the largest buyer of iron ore. It’s also worth noting the US listed BHP closed just 0.8% lower on Friday, outperforming US equites. Other stocks to watch might include; Karoon Energy (KAR), after Brazil agreed to lower the royalty rate on the company’s Bauna project. Core Lithium (CXO) and NRW Holdings (NWH) will also be in focus after NRW’s Primero won a contract for Core Lithium’s plant. And Tabcorp (TAH) will also be in view for traders, after investing $33 million for a 20% equity stake in Dabble Sports.  The U.S. dollar climbed modestly on higher bond yields Higher bond yields lifted the dollar, seeing DXY 0.4% higher to 112.795.  USDJPY hovered above 145 but is yet to make a decisive upward move again to test the resolve of Japan’s Ministry of Finance.  EURUSD weakened -.5% to 0.9744 and GBPUSD declined 0.7% to 1.1089. The Australian dollar (AUDUSD) fell to a 2.5-year low, as the Fed gained more ammunition to hike   The AUD/USD fell 0.7% to 0.6361, which is its lowest level since April 2020. This follows the US jobs report coming out on Friday, which gives the Fed more ammunition to rise rates. Keep in mind, a currency generally appreciates when its central bank rises rates. This is in deeded one of the key reasons why the USD is marching up. And when you compare the Fed’s hawkishness to the RBA’s fresh dovish tone, it makes this currency pair an interesting one to watch, particularly with this week’s US economic data and Fed speeches on tap. On the weekly chart it could worth watching the support level at perhaps 0.61670.   Crude oil (CLX2 & LCOX2) surged more than 5% The front-month contract of WTI crude gained 5.4% to USD92.64 despite a modestly higher U.S. dollar. The production quota cut last Wednesday continued to provide support to crude prices.  Since OPEC+ announced the production quota cut, WTI crude oil prices have risen 7.7%.  While many news headlines say it is a production cut of 2 million barrels, we want to clarify here that the 2 million barrels number is referring to the quota, not production.  However, 15 out of the 23 oil-producing countries involved produced below their current levels of allocated quotas in September 2022. 13 of these oil-producing countries produced less oil in the last month than the reduced quotas to be implemented in November.  In other words, the reduced quotas will cut oil production in 10 countries if they adhere to cap the quota.  Having said that, the cut will still be about 1.3 million barrels a day effectively and it is still substantial, from Saudi Arabia (552,000 barrels), UAE (171,000 barrels), Iran (150,000 barrels), Kuwait (144,000 barrels), Libya (100,000 barrels), Iraq (69,000 barrels), Algeria (43,000 barrels), Gabon (28,000 barrels), South Sudan (21,000 barrels, and Oman (21,000 barrels).   What to consider?   US Unemployment Rate fell 0.2 percentage points to 3.5% Nonfarm payroll growth lowered to +263K in September, down from August’s +315K but slightly above the median forecast of +255K of Bloomberg’s survey.  Major areas of strength in the establishment report (i.e. payrolls) were healthcare, leisure, and hospitality while trade and transportation employment was weak. The market moving part in the cluster of data was the 0.2pp decline in the unemployment rate to 3.5% in September from 3.7% in August which the market had expected unchanged at 3.7%.  Part of the fall in the unemployment rate was attributed to a 0.1pp decline in the labor force participation rate to 62.3% from 62.4%. Investors and trades are concerned about the inability of the participation rate to sustain its rally toward 63 or higher so as to dampen upward pressure on wages. Average hourly earnings came in as expected at +0.3% M/M and +5% Y/Y.  FedEx’s ground delivery unit expects a slower volume ahead FedEx Ground, the ground delivery unit of FedEx (FDX:xnys) said in a statement that they are expecting “weakening macroeconomic conditions are causing volume softness. The unit is working with its customers on the latter’s projected shipping needs and making adjustments.  The U.S. tightened restrictions on exporting semiconductor equipment, components, and high-end chips to China The U.S. Department of Commerce rolled out new regulations last Friday to prohibit American companies from exporting to Chinese companies advanced semiconductor equipment and components that can be used to make equipment without first applying for a license from the Department of Commerce effective immediately. The Department of Commerce’s new rules bans U.S. persons from providing support to the development or production of semiconductors at Chinese semiconductor facilities without a license from the Department of Commerce.  The Department of Commerce also tightened the Foreign Direct Product Rule to restrict China from obtaining advanced microchips that can be used in supercomputers and artificial intelligence applications from American companies as well as foreign companies that rely on American technologies. Tourism data was weak for the National Day Golden Week holiday in China According to data from the Ministry of Culture and Tourism, domestic trips and revenues for the period from Oct 1 to 7 were 18.2% and 26.2% lower than those in the same period last year respectively.  According to estimates from the Ministry of Transport, the aggregate number of passenger trips via roads, railways, waterways and aviation from Oct 1 to 7 was 255.5 million trips or 36.5 million trips per day on average, which was 36.4% lower than that in 2021. Putin is chairing a meeting with his Security Council on Monday Russian President Putin is going to chair a meeting with the permanent members of the Russian Security Council today. It was apparently in response to the explosion two days ago that seriously damaged the Kerch bridge which links Crimea with Russia.   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-10-oct-10102022
Share of Russian metal grows in LME warehouses

Copper Trade Unchanged But There May Be A Supply Problem| Dozens Of Grain-Hauling Vessels Are Already Backing Up

Saxo Bank Saxo Bank 10.10.2022 09:31
Summary:  Markets remained in a risk-off mood on Friday as US equities sold off steeply in the wake of in-line US employment data for September that discourages the notion that the Fed is set to let up on the tightening pressure any time soon. Sentiment has not picked up to start the week in the Asian session overnight as China is back from a long holiday. The macro calendar highlight of the coming week is Thursday’s US September CPI data, while the large US banks will kick off the Q3 earnings season late this week.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US stocks fell sharply on Friday, closing back toward the cycle lows and wiping out most of the rally from the previous Friday’s cycle-low close. The sell-off Friday was triggered by the stronger than expected US jobs report: payrolls growth was in-line with expectations, but the unemployment rate dropped back to the modern record low of 3.5%, taking US yields higher as the market fears sustained further tightening pressure from the Fed. With the price action now back near the bear market lows, this week could prove pivotal for markets as we await the key US September CPI data on Thursday and as quarterly earnings season is set to kick off late this week with the large US banks reporting Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) China returned from a week-long holiday today and declined moderately with CSI300 off 0.9%.  EV, semiconductor, and tourism names retreated.  Domestic trips and revenues, as well as traffic data for the period from Oct 1 to 7, were substantially below the levels during the same period last year.  Last Friday, the Biden Administration rolled out new rules to restrict China’s access to semiconductor equipment.  Oil and gas, poultry, and pig farming stocks gained in the A-share market. Hong Kong’s Hang Seng Index continued to plunge on Monday, falling by more than 2.5%.  Chip makers, SMIC (00981:xhkg) and Hua Hong Semiconductor (01347:xhkg) plunged 29% and 9.9% respectively.  China internet stocks moved lower, with leading names falling from 3% to 8%. USD and US yields/risk sentiment Cratering risk sentiment on Friday took the US dollar higher as the September US jobs report failed to show any negative surprise that might bring some relief in the Fed’s tightening regime, and as the unemployment rate falling back to the modern record low of 3.5% took US yields back toward cycle highs.  The first USD pairs to push to new cycle extremes include AUDUSD overnight, as the pair tested levels below 0.6350, and USDJPY edged further above the 145.00 area as traders wonder if and when the Bank of Japan/Ministry of Finance will intervene again. EURUSD has more room to run before hitting the cycle lows below 0.9600. The key coincident indicators are likely to remain US treasury yields as the front end of the yield curve is pushing on the cycle highs near 4.35%, and on risk sentiment if US equity indices spill to new lows after nearly hitting the cycle lows overnight. Gold (XAUUSD) Gold trades back below $1700 and back on the defensive after Fridays stronger-than-expected US jobs report added a renewed bid to the dollar and yields on raised concerns the Federal Reserve will continue to hike rates aggressively. The latest COT report covering the week to last Tuesday when gold, supported by a temporary slump in the dollar and yields, jumped by around 6% showed that most of the buying that week was due to short covering.  Overall, the net position jumped 46k lots from the biggest short in almost four years to a small net long. With renewed dollar strength in focus the risk of fresh albeit more muted short selling exists with gold’s renewed upside push unlikely until the market feels convinced that the Fed has reached peak hawkishness. Focus this week on US PPI and CPI prints. Crude oil (CLX2 & LCOX2) pauses after +15% weekly jump Crude oil traded softer in Asia as demand concerns resurfaced in response to worries about a global economic slowdown made worse by central banks continuing to hike rates. Despite worries about supply disruptions the OPEC+ group of producers last week agreed to cut production from November, a move that sent prices sharply higher and will likely prolong central banks battle against inflation and with that the risk of a deeper economic contraction. China meanwhile continues its battle with local virus outbreaks further delaying a pickup in demand from the world's largest importer. Ahead of last week’s OPEC decision hedge funds had increased bullish oil bets to a ten-week high, the bulk of the change being driven by short covering. Focus this week being monthly oil market reports from EIA and OPEC on Wednesday followed by the IEA on Thursday. HG Copper Copper trades flat after a two-day sell off ahead of the weekend eroded earlier strong gains led by dollar weakness and supply worries. However, supply risks are looming with a possible ban of Russian supplies to the London Metal Exchange potentially cutting off some of the world's biggest companies impacting supply of key metals from nickel, aluminum, copper and zinc. In addition, China reopening after a weeklong holiday to report a smaller than expected build in copper stockpiles compared with last year. Speculators cut their net short in HG copper to just 2.5k lots in the week to October 4, the lowest conviction in four months that prices will fall further.  US treasuries (TLT, IEF) US treasury yields lifted all along the curve Friday in the wake of the US September jobs report, which saw the unemployment rate dropping back to the modern record low of 3.5% (in part on a slight drop in the participation rate). The 2-year yield overnight hit the cycle high of 4.34%, while the 10-year yields has yet to break back above the cycle high just north of 4.00% that was posted during the UK gilt wipeout before the BoE brought emergency intervention. Focus this week on FOMC minutes on Wednesday and the US September CPI data point on Thursday. What is going on?   The U.S. tightened restrictions on exporting semiconductor equipment, components, and high-end chips to China. The U.S. Department of Commerce rolled out new regulations last Friday to prohibit American companies from exporting advanced semiconductor equipment and components to Chinese companies that can be used to make equipment without first applying for a license from the Department of Commerce effective immediately. The Department of Commerce’s new rules bans U.S. persons from providing support to the development or production of semiconductors at Chinese semiconductor facilities without a license from the Department of Commerce.  The Department of Commerce also tightened the Foreign Direct Product Rule to restrict China from obtaining advanced microchips that can be used in supercomputers and artificial intelligence applications from American companies as well as foreign companies that rely on American technologies. Germany says severing of cables that disrupted train networks Saturday was highly “professional”, although no suspects were identified and no known person or organization has claimed responsibility for the operation, which shut down much of train travel across northern Germany for several hours. Russian leader Putin calls Security Council for a meeting today after Crimean bridge attack. A truck bomb heavily damaged the only bridge link between Russian territory and Crimea, a move dubbed a terrorist attack by Putin and one that could bring more reprisals on Ukrainian infrastructure, with considerable focus on Europe’s largest nuclear power plant Zaporizhzhia, where intense fighting has at times disrupted power to the plant in recent days. Iron Ore (SCOc1) price hits a three-week high after China returns from week-long holiday. The price of the key streel ingredient, Iron Ore (SOCA,SCOX2) rose 2.4% $96.25 in Asia today after China’s markets reopened after a week long holiday. The 2.4% jump in the iron ore is the biggest one day advance in three weeks. The Iron Ore remains 50% lower than its all-time high of $211 after China curbed imports and lockdowns continue to linger. Iron ore is finding it hard to break out of a bear market, despite, US steel giant, Nucor announced two weeks ago its pushing ahead with plans to expand steel production, with its newest line to open in mid-2025. However, shares in BHP (BHP:xasx) listed in Australia have rallied off their lows and trade 15% away from record high-territory, with the miner benefiting from rising cash flows from its other businesses (coal and oil). Chicago wheat futures jumped nearly 3% in early trading, underpinned by concerns over the Russia-Ukraine war slowing grain shipments from the Black Sea region. This after Putin accused Ukraine of orchestrating the explosion on the bridge over the Kerch Strait, a key prestige project for the Russian President. The developments cast even more uncertainty over shipments to the world market through Ukraine’s export corridor in the Black Sea, which comes up for renewal next month. Dozens of grain-hauling vessels are already backing up while awaiting inspection at Istanbul under the terms of the deal.  What are we watching next? The economic calendar for the week picks up on Wednesday with the latest set of FOMC minutes, but the highlight of the week will be Thursday’s US September CPI report, after the August data surprised with significantly higher than expected inflation. Friday we get a look at US September retail sales after core spending has been on a declining trend for the last several months. Earnings to watch The Q3 earnings season kicks off this week, with the most important day being Friday, as seven large US financial institutions reporting. The key focus points will be to what extent US banks are able to increase their net interest margin and the levels of credit provisions. Wednesday: PepsiCo Thursday: Progressive, Fast Retailing, Tryg, Walgreen Boots Alliance, Fastanal, BlackRock, Delta Air Lines, Domino’s Pizza Friday: Shanghai Putailai New Energy, YTO Express Group, PNC Financial Services, JPMorgan Chase, Morgan Stanley, Citigroup, UnitedHealth Group, Wells Fargo, US Bancorp, First Republic Bank Economic calendar highlights for today (times GMT)US Bank Holiday (treasury market closed, equity market open)0815 – ECB's Centeno to speak1030 – ECB's de Cos to speak1300 – US Fed’s Evans (voter 2023) to speak1300 – ECB Chief Economist Lane to speak1700 – US Fed Vice Chair Brainard to speak2200 – Australia Sep. CBA Household Spending2330 – Australia Oct. Westpac Consumer Confidence Index0030 – Australia Sep. NAB Business Conditions/Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-10-2022-10102022
European Markets Face Headwinds Amid Rising Yields and Inflation Concerns

Apple's (AAPL) Changes In Its iOS Expected To Affect Meta (FB) Revenues

ING Economics ING Economics 10.10.2022 14:33
Social media companies have suffered heavily in the recent stock rout. Recent revenue trends contribute to this. Some companies will be impacted by declining advertising revenues more than others, caused by changing policies around the use of cookies The Nasdaq index, which is dominated by technology companies, has lost about -27% of its value over a year Equity returns of social media companies have been dreadful lately The technology sector is not immune to the severe economic disruption caused by the war in Ukraine and rising energy prices. The Nasdaq index, which is dominated by technology companies, has lost about 27% of its value over a year. This loss is larger than the Dow Jones index which is traditionally more focused on industrial companies. The Dow Jones index has lost 15% of its value in a year. However, there are many underlying differences within the technology sectors, pointing to a divergent impact. Social media companies rely on advertisers The business model of many internet companies depends on advertising revenues. This holds especially true for some companies that are well-known online, such as Meta (Facebook, WhatsApp), Alphabet, Amazon, but also Snap, Pinterest and Twitter. For example, about 81% of revenues at Alphabet are from advertising, according to Moody’s. The revenues of these companies have exploded as many advertisers have moved their advertising budgets online. This move has been compounded by the relatively high effectiveness of online advertising. Western Europe advertising expenditure (US$bn) Source: Magna Global, S&P Global Market Intelligence The outlook for advertising revenues has deteriorated As shown by the figures above, advertising expenditures allocated to time-based, or linear, audio-visual media is expected to be moved towards digital media. From 2016 to 2025, advertising spending on linear media is expected to decline by 29% according to Magna Global, while advertising spending on digital media is expected to more than double in the same period. Revenue growth at the digital platforms is therefore not only driven by market growth but mostly by shifting advertising preferences. The bigger advertising agencies have so far not announced any weakness in advertising revenues. According to Bloomberg, the consensus expectation for Omnicom’s organic 2022 revenue growth is still around 3%. Publicis raised its expectation for organic 2022 revenue growth on 21 July, to which the equity market reacted strongly positive. The fact that these companies did not report disappointing revenues can be explained by the fact that the budgets the agencies work with have been committed beforehand. By comparison, ads on technology platforms are often sold through an auction. This real-time process makes the pricing of ads much more susceptible to a drop in demand. Something we see happening now. In addition, agencies are making their way into this new domain of online advertising. Publicis made some acquisitions and is working with an ID-based solution to track online advertising performance. Quarterly revenue developments online advertising companies (YoY) Source: Refinitiv Eikon   Recently, however, many social media companies have announced that they expect their advertising revenues to decline. Meta announced a small year-on-year decline in 2Q revenues by -0.9%, while its historical average quarterly growth rate has been 35.8% since 2015. This is the first time the company has reported negative quarterly revenue growth. Alphabet announced an overall revenue increase of 12.6% in 2Q22, but the company mentioned that its advertising segment is facing headwinds, while cloud is doing well. Snap announced a 2Q22 revenue increase of 13%. The company had indicated already in May that growth would be below the initial guidance of 20-25% growth for 2Q22. Nevertheless, the strong secular growth in online advertisement demand could mask the effects of an economic slowdown. Most companies are still reporting revenue growth, despite headwinds. However, when online advertising becomes more mature, it can no longer take market share from linear advertising budgets while it relies more on growing advertising budgets. Therefore, at some point in the future, growth rates of digital advertising revenues should come down while the industry becomes more prone to economic cycles. For now, online advertisers are still grappling with the effects of policies that intend to increase the privacy of citizens. Apple has restricted the online tracking of users In the summer of 2021, Apple started to significantly restrict the ability of advertisers to track the behaviour of users. Apple introduced a new privacy feature for iOS devices that limits app developers to target users as well as to measure ad performance. Companies that relied on such tools, such as Meta and Snap, have been impacted to a larger extent than advertisement companies relying on other means, such as advertisement income from search ads. In its 4Q21 earnings call, Meta announced that it expects the changes in iOS to have an impact on 2022 revenues of about $10bn. We could see more barriers raised to target specific users Apart from changes made at Apple, Google is also planning to phase out mechanisms that track user behaviour through cookies. There is an industry-wide awareness that users are increasingly concerned with the information collected by technology platforms. The introduction of cookie legislation as well as the European Union’s General Data Protection Regulation (GDPR) have also contributed to this. Google, for example, plans to introduce a new tool which should replace cookie tracking. It has been delayed now to next year. Nevertheless, there are many ways to segment users to be able to target ads. However, this is costly and easier for some than others. Some advertising agencies are also uncertain about the potential impact of restricting cookies. S4 mentions in its 2021 annual report that: “Google’s announcement that it will be blocking third-party cookies by 2023 (delayed from 2022) presents both a significant opportunity and challenge to the group, given that several of our programmatic activities are built on top of the third-party cookie”. In any case, new technology has to match the appropriate regulations such as GDPR. There are also other issues. People use multiple devices interchangeable, which makes it hard for third-party cookies to track consumer behaviour as well as the effectiveness of advertisements. Users may open an email or website on one device and buy the goods or services that are advertised from another device. This reduces the effectiveness of the current systems. Bigger platforms have more opportunities to invest in new technology Other means to place targeted advertisements are possible. Some companies already own specific user data, which makes it easier to sell advertisements targeted at specific user groups. Companies that sell ads based on user search requests still have a straightforward model. It will also be possible to sell ads based on the context it will be shown in. Furthermore, systems could be created around target groups using data in an anonymised way. Nevertheless, it remains a challenge for companies to target specific user groups while also acknowledging privacy regulations that are likely to become stricter over time, because societies seem more willing to implement tougher regulations. And citizens are becoming increasingly aware of the value of their online profiles and are more able to avoid being tracked. So, companies need the financial muscle to keep investing in regulation-proof alternatives. Scale and a large user base make it easier to do so. Alphabet’s division Google announced that it is going to replace cookie tracking. However, the company has postponed the implementation date and has changed the characteristics of the solution that initially was intended to replace cookie tracking. Financial conditions are tightening causing cost reduction efforts Technology platforms are not only faced with revenue headwinds but also their cost of funding increasing. In August 2020, Alphabet issued 2027 notes in dollars at a yield of 0.8%. Today, these bonds have a yield of 4.2%. At the end of August 2021, Netflix's 4.875% 2030 USD notes traded at a yield of 2.37%, while today it yields slightly over 6%. This is happening at a time when interest rates in the broader market are increasing and it implies higher interest costs in the future for companies. The weakening outlook for advertising revenues also reflects a broader weak economic outlook, the catalyst for the equity sell-off, as reflected by equity indices turning lower. According to the Financial Times, investors have been selling private equity and venture capital funds at the fastest pace on record. Because of these tightening financial conditions, technology firms are turning their focus on cash flow generation, as opposed to investing in new ventures with an uncertain and remote pay-off. Snap has announced a reduction of its workforce by 20% and is reprioritising investments. Meta announced a headcount reduction for the first time as well as a sweeping reorganisation. Google chief executive Sundar Pichai hopes to make the company 20% more productive while slowing hiring and investments. Clearly, companies are working hard to make the best out of this situation. Snapchat's parent company Snap is cutting its workforce by 20% due to revenue growth falling below expectations Summary Advertising platforms expect a slowdown in advertising revenue growth because of the expected economic slowdown. This comes at a time when companies are already having to overcome challenges from stricter privacy settings. Over time, the allocation of advertising budgets from linear media to digital media is expected to continue, providing a tailwind to revenues. Nevertheless, digital advertising companies are expected to only grow their revenues in line with market growth and will be more exposed to economic cycles over time. Investments in solutions that can track user behaviour in a privacy regulation-proof way need to continue. But the targeting of narrow audience segments will likely be challenging with regulations becoming stricter. These headwinds are compounded momentarily by tighter financial conditions. Read this article on THINK TagsTechnology Social media NASDAQ Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
CNH Finds Support Amid Battle for Funding in Money Markets

The General Pessimism On The World Markets| The Leading Companies In Europe STOXX Europe 600 Sank By 0.68%

InstaForex Analysis InstaForex Analysis 11.10.2022 08:07
On Monday, the leading stock indicators of Western Europe show a decline against the background of the negative dynamics of stock exchanges in the Asia-Pacific region. The general pessimism on the world markets was also provoked by investors' concern about further tightening of the monetary policy of the US Federal Reserve in the context of permanently rising inflation. In addition, the tense situation in Ukraine has returned to the agenda. Thus, at the time of writing, the composite index of the leading companies in Europe STOXX Europe 600 sank by 0.68% - to 389.21 points, reaching a weekly low. Meanwhile, the French CAC 40 shed 0.53%, the German DAX rose a symbolic 0.05% and the UK FTSE 100 shed 0.45%. Rising and falling leaders The value of securities of the French oil and gas company TotalEnergies SE sank by 1.5%. On the eve of the company's management proposed to organize annual negotiations on employee salaries with trade unions in France ahead of the scheduled date, provided that strikes at refineries are completed The quotes of the British online retailer THG PLC fell by 7.8%. The market capitalization of the German energy company Uniper SE decreased by 7.5%. The share price of the Austrian manufacturer of sensors, semiconductor components and lighting equipment ams-OSRAM AG fell by 6.7%. The value of the securities of the French automotive corporation Renault SA sank by 3.1% after the company's management confirmed that it was negotiating an alliance with Japanese Nissan about future investments in Renault's new electric vehicle business. Quotes of the French bank Societe Generale SA rose by 0.8% on the news that the company's chief operating officer, Gall Olivier, will leave his post at the end of 2022 due to management reshuffles. Market sentiment The focus of attention of participants in the European stock market on Monday is concerns about the consequences of rocket attacks in Ukraine over the weekend. In addition, investors continue to worry about the decisive steps of the world's central banks in the field of monetary policy. So, this morning it became known that the Bank of England will increase the maximum volume of daily auctions for the redemption of government bonds under the temporary program. The British central bank announced the start of the program on September 28. At the same time, the British central bank plans to fully complete the repurchase of government securities on Friday, October 14. Since the launch of the program, the BoE has held 8 auctions. In total, the central bank bought bonds for $ 5.5 billion, although it had previously stated that it was ready to buy securities for 40 billion pounds. Last Friday, a stronger-than-expected labor market report was published in the United States. As a result, the September figures from the US Department of Labor increased investors' concern that the Fed will continue to increase the interest rate in an attempt to cope with record inflation. On Monday, world media reported that Russian President Vladimir Putin plans to meet with representatives of the Security Council after the attack on a major bridge between Russia and Crimea. Following the results of Monday's trading, the stock exchanges of the Asia-Pacific region collapsed sharply. At the same time, trading volumes were insignificant due to the holidays in Japan and South Korea. Thus, the Shanghai Shenzhen CSI 300 stock indicator sank by 2.21%, and the Shanghai Composite lost 1.66%. The main factor of pressure on the Asia-Pacific exchanges on Monday was the securities of chip manufacturers. Thus, the quotes of Anji Microelectronics Tech and Chengdu Xuguang Electronics companies fell by 20% and 10%, respectively, after the White House introduced export control measures. Under the new rules, Chinese companies will no longer have access to some semiconductor materials produced on United States equipment. Such a decisive step by the American authorities, experts suggest, could provoke a tangible deterioration in trade relations between the United States and China and have serious economic consequences if the PRC takes retaliatory measures. Another factor of pressure on Asian stock markets was the release of fresh data that by the end of September, the country's services sector declined amid permanent disruptions related to the consequences of the coronavirus pandemic. This week, European traders will be waiting for the publication of statistical data on consumer prices in the United States. According to preliminary forecasts of experts, by the end of September, annual inflation in America slowed to 8.1% from August's 8.3%.   Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/323903
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

Walgreens Boots Alliance Inc Was The Leading Gainer In The Dow Jones Index

InstaForex Analysis InstaForex Analysis 11.10.2022 08:15
At the close of the New York Stock Exchange, the Dow Jones was down 0.32%, the S&P 500 was down 0.75% and the NASDAQ Composite was down 1.04%. Walgreens Boots Alliance Inc was the leading gainer in the Dow Jones Index today, up 1.32 points or 4.33% to close at 31.84. Merck & Company Inc rose 2.88 points or 3.29% to close at 90.48. Boeing Co rose 2.11 points or 1.63% to close at 131.90. The losers were Salesforce Inc, which shed 4.65 points or 3.09% to end the session at 145.64. Microsoft Corporation was up 2.13% or 4.99 points to close at 229.25, while Walt Disney Company was down 2.06% or 2.00 points to close at 95. 16. Leading gainers among the S&P 500 index components in today's trading were Walgreens Boots Alliance Inc, which rose 4.33% to 31.84, Moderna Inc, which gained 3.44% to close at 123.42, and also shares of McCormick & Company Incorporated, which rose 3.30% to end the session at 75.86. The biggest losers were Wynn Resorts Limited, which shed 12.25% to close at 64.14. Shares of Bio-Rad Laboratories Inc shed 8.33% to end the session at 393.19. Quotes Norwegian Cruise Line Holdings Ltd fell in price by 7.91% to 11.88. Leading gainers among the components of the NASDAQ Composite in today's trading were Applied DNA Sciences Inc, which rose 70.97% to 2.12, Immunic Inc, which gained 56.57% to close at 6.20, and also shares of Green Giant Inc (NASDAQ:GGE), which rose 39.26% to end the session at 2.27. Shares of Siyata Mobile Inc were the biggest losers, losing 59.33% to close at 0.12. Shares of Minim Inc lost 29.38% and ended the session at 0.23. Quotes of Acm Research Inc decreased in price by 26.50% to 9.04. On the New York Stock Exchange, the number of securities that fell in price (2031) exceeded the number of those that closed in positive territory (1053), while quotes of 120 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,297 companies fell in price, 1,471 rose, and 191 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.48% to 32.45. Gold futures for December delivery lost 2.01%, or 34.40, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 1.89%, or 1.75, to $90.89 a barrel. Futures for Brent crude for December delivery fell 2.08%, or 2.04, to $95.88 a barrel. Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.40% to 0.97, while USD/JPY was up 0.27% to hit 145.73. Futures on the USD index rose 0.36% to 113.09.   Relevance up to 05:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/296222
ECB's Hawkish Hike: Boosting EUR/USD and Shaping Global Monetary Policy

The Huge Points Decline In The S&P 500

InstaForex Analysis InstaForex Analysis 11.10.2022 08:41
We will not be surprised to see some kind of market panic unfold and days with huge points decline in the S&P 500 before this correction finally finds its low.   Relevance up to 06:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/296238
UK PMI Weakness Supports Pause in Bank of England's Tightening Cycle

Inflation Data Will Be An Additional Stimulus For The Fed To Further Raise Interest Rates

InstaForex Analysis InstaForex Analysis 11.10.2022 12:49
Analysts at Goldman Sachs say it is too early to assess a dovish turn in Fed policy as the economic outlook is not bad enough yet and the rate markets remain too volatile. They added that significant rate fluctuations mean that expectations of higher stock returns over relatively safer assets are likely to be lowered. Speculation that the Fed's policy would become more equity-friendly has led to the S&P 500 rising from time to time over the past 12 months. But those rallies have all been sold out and the indicator hit new lows each time. The central bank also appears to be on track to fulfill its fourth straight 75 bp rise at its November meeting. Now, the US stock market is just a few points away from closing at its lowest level since November 2020. It has already fallen 24% this year. Tighter financial conditions, a potential escalation in geopolitical risks, and the current mix of economic growth and inflation have increased downside risk for the stock. Meanwhile, 2-year Treasury yields rose to 4.35% on Tuesday, its highest level since 2007. The reason is fears that US inflation data this week will add more incentive for the Fed to keep raising interest rates. There is also a possible government split in the US midterm elections, but this could lead to stocks performing well after the event as political uncertainty subsides.   Relevance up to 09:00 2022-10-12 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/323963
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

Another Gloomy Day In The Asian And European Market

Craig Erlam Craig Erlam 11.10.2022 14:06
European stock markets are poised for another weak open as much of Asia reopened on Tuesday to large declines. Asia is flashing red as it nears the close and Europe may be facing a similarly bleak day. JP Morgan CEO Jamie Dimon didn’t hold back in his assessment of the economic outlook, adding to the warnings of the IMF and World Bank, among many others. Dimon was one of the first earlier this year to warn of far more aggressive monetary tightening and even he proved to be ultra-conservative, even if it didn’t look that way at the time. There is growing pessimism in the markets now and with some big data points to come from the US this week, not to mention the start of earnings season with JP Morgan among those getting us underway, investors should probably brace for more volatility ahead. Tight UK labour market making BoE job harder The UK labour market is showing little sign of loosening, with unemployment in the three months to August falling to 3.5%. At the same time, average earnings including bonuses jumped to 6% while excluding bonuses they rose to 5.4%. That’s another sizeable increase but perhaps not surprising when firms are facing labour shortages, according to a report from CBI and Pertemps. At the same time, with inflation running at close to 10% and expected to increase further, real UK incomes remain extremely negative. One lesson from the pandemic was that companies shouldn’t be in such a rush to let workers go as hiring them back can be difficult and expensive. While that knowledge, alongside higher wages, may help households navigate the cost-of-living crisis and impending recession, it makes the job of reining in inflation that much harder for the Bank of England. How hard that will prove to be will depend on the Chancellor’s budget in three weeks. Markets expect at least 1% of rate hikes in November, maybe more, but that may well change over the coming weeks. The pound tumbled again after the data and is threatening to break back below 1.10 against the dollar, a move that will no doubt fuel parity debate once more. No one panicking just yet The risk-aversion of recent days hasn’t been ideal for bitcoin either, with the cryptocurrency slipping back below $20,000 and struggling to turn its fortunes around. It’s off more than 1% again this morning around $19,000, having spent much of the last six days in the red. Of course, we’ve become accustomed to these fluctuations and the recent sell-off has been modest in pace. No major technical supports have been broken at this stage so I can’t imagine anyone is panicking. Of course, we’ll see if the same is true after Thursday. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
EUR/USD Trading Analysis and Tips: Navigating Signals and Volatility

On The New York Stock Exchange, 1818 Of Securities Fell In Price

InstaForex Analysis InstaForex Analysis 13.10.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones was down 0.10%, the S&P 500 was down 0.33% and the NASDAQ Composite was down 0.09%. The leading performer among the components of the Dow Jones index today was JPMorgan Chase & Co, which gained 1.65 points (1.62%) to close at 103.61. Quotes of Coca-Cola Co rose by 0.66 points (1.21%), closing trading at 55.14. Intel Corporation rose 0.29 points or 1.16% to close at 25.33. The biggest losers were Walgreens Boots Alliance Inc, which shed 0.67 points or 2.05% to end the session at 31.94. Walmart Inc was up 1.13% or 1.50 points to close at 131.17, while Boeing Co was down 0.87% or 1.15 points to close at 130.42. . Leading gainers among the S&P 500 index components in today's trading were Royal Caribbean Cruises Ltd, which rose 11.48% to 45.36, Norwegian Cruise Line Holdings Ltd, which gained 11.61% to close at 12. 98, as well as shares of Carnival Corporation, which rose 9.79% to close the session at 7.29. The biggest losers were Albemarle Corp, which shed 7.89% to close at 251.45. Shares of T. Rowe Price Group Inc lost 5.14% to end the session at 98.07. Quotes of Entergy Corporation decreased in price by 4.52% to 96.58. Leading gainers among the components of the NASDAQ Composite in today's trading were Pintec Technology Holdings Ltd, which rose 191.16% to hit 0.91, Agrify Corp, which gained 88.02% to close at 0.95, and also shares of 9F Inc, which rose 83.42% to close the session at 0.35. The biggest losers were Fednat Holding Co, which shed 33.87% to close at 0.22. Shares of T2 Biosystms Inc lost 30.00% and ended the session at 0.06. Kinnate Biopharma Inc lost 26.65% to 8.12. On the New York Stock Exchange, the number of securities that fell in price (1818) exceeded the number of those that closed in positive territory (1274), while quotes of 132 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,902 stocks fell, 1,820 rose, and 278 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.18% to 33.57. Gold futures for December delivery shed 0.33%, or 5.50, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 2.70%, or 2.41, to $86.94 a barrel. Futures for Brent crude for December delivery fell 2.13%, or 2.01, to $92.28 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.03% to 0.97, while USD/JPY edged up 0.70% to hit 146.88. Futures on the USD index rose 0.06% to 113.19.   Relevance up to 05:00 2022-10-14 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/296618
BSP Maintains Rates Amid Moderate Inflation; Eyes Further Tightening if Needed

US Stocks: S&P 500 And Nasdaq Decreased Slightly Yesterday Losing 0.33% And 0.09% Respectively

ING Economics ING Economics 13.10.2022 10:55
US inflation today's main macro risk event - UK Gilts market still troubling. Asia quiet.  Source: shutterstock Macro outlook Global Markets: Yesterday’s stock movements are probably as close to a “flat” day as you get these days, with the S&P500 down only 0.33% and the NASDAQ down just 0.09%. Equity futures look modestly positive, which seems a carefree stance just before US CPI data, where upside misses to the consensus view have been more common than risk-positive surprises on the downside. There isn’t all that much action in currency space either. EURUSD remains at the very lower end of 0.97, the AUD is also stuck at about 0.6275 though the JPY has pushed well above 145  to sit at 146.74 currently. There has been some recovery of sterling, and Cable has risen back to 1.1098. Short-dated UK bond yields retreated sharply yesterday as the Bank of England (BoE) bought up GBP4.56bn of bonds. The yield on 2Y gilts fell 20.3bp. At the longer end of the curve, big early losses were mostly, but not wholly erased by the BoE’s intervention. The BoE is still sticking to the line that they will cease supporting the bond market by Friday, however. It almost sounds as if they think they are in control. We will see. US Treasury yields also declined slightly, with the 10Y UST yield dropping to 3.896%, a fall of 5.1bp. Asian FX has been pretty quiet except for the KRW which gained following yesterday’s 50bp BoK hike, despite very vague forward guidance.   G-7 Macro: FOMC minutes released last night showed that members were more worried about doing too little to stamp out inflation than about doing too much. Here, there is a clear divergence between central banks in the APAC region, such as the Reserve Bank of Australia, which is taking the opposite approach. US September CPI tonight is forecast to show the headline inflation rate dipping to 8.1%YoY from 8.3%, but the core rate is expected to rise to 6.5% from 6.3%. There is certainly scope for surprises to this data with market reactions in either direction likely to be large. More weight will probably be given to misses on the core figure than the headline. China: The IMF published a note on China's housing issue, pointing to the lack of cash from sales and bond issuance (stemming from the three red line policy) and therefore is a problem if home sales continue to drop. Our forecast is that home sales could contract 45% in 2022 then another 15% in 2023. That should lead to more cross defaults of property developers’ bonds until potential buyers return to the market again. We have seen some home sales during the Golden Week but are unsure whether this can form a trend. The government is trying to replicate 2014-2017 policies to boost demand for homes, which includes shanty-town redevelopments. This time is complicated by a weaker economy (partly because of Covid measures). Yesterday, the government reiterated that dynamic Covid measures are here to stay. India: Inflation released yesterday evening came in at 7.41%, fractionally above the consensus 7.36%. For more details, see the linked note. The main takeaway is that as inflation should start to dip as soon as next month, the Reserve Bank of India can slow its tightening, and may be able to stop after a further 25bp December hike.  Japan: Pipeline prices in September rose more than expected, mainly due to the weak JPY and the rebound in global commodity prices. Producer price inflation rose 9.7%YoY in September (vs 9.0% in August and 8.9% market consensus). The main driver was commodity-related prices, but the weak yen also expanded price gains. This was confirmed by the sharp rise in import prices in yen terms. Import prices on a yen basis surged 48% YoY (vs 43.2 % in August) while import prices on a contract currency base only rose 21.0% YoY in September and decelerated from 22.3% in August.  We expect that Japan’s CPI inflation will rise further and stay above 3% for a considerable time. What to look out for: US inflation Japan PPI inflation (13 October) US CPI inflation and initial jobless claims (13 October) China trade balance, CPI and PPI inflation (14 October) Korea unemployment (14 October) US retail sales and University of Michigan sentiment (14 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
CHF/JPY Hits Fresh All-Time High in Strong Bullish Uptrend

Cheaper Netflix Is Here!| Jim Cramer Comments On The Shares

Kamila Szypuła Kamila Szypuła 14.10.2022 10:02
Today we take a look at real estate risk in UBS the 2022 Global Real Estate Bubble Index, the ecosystem situation and other news. We will also look at the expert commentary Head of Global Thematic and Public Policy Research Michael Zezas and U.S. Equity Strategist Michelle Weaver.  In this article: Companies' stocks rising Biodiversity Situation 2022 Global Real Estate Bubble Index Thoughts by Jim Cramer New Netflix's plan Post-pandemic problems of companies Morgan Stanley tweets about companies' inventory rising. The discussion was attended by Head of Global Thematic and Public Policy Research Michael Zezas and U.S. Equity Strategist Michelle Weaver.   As consumption of goods slows post COVID, companies are experiencing a build up in inventory that could have far reaching implications. Head of Global Thematic and Public Policy Research Michael Zezas and U.S. Equity Strategist Michelle Weaver discuss. https://t.co/cYXO15cG0n pic.twitter.com/XZbanoplvX — Morgan Stanley (@MorganStanley) October 13, 2022 The pandemic situation negatively affected many industries, individuals and the entire economy. Also, the current post-pademic situation is not positive. Currently, the global problem is blowing inflation, which negatively affects the situation of companies. Another problem is the increase in inventories in warehouses. Product stored for a long time may lose its substance, and the inability to travel causes a reduction in production. Firms will begin to struggle with higher maintenance costs, which can result in job cuts and, in the worst case, even closings. Eyes on biodiversity Credit Suisse in its last tweet addresses the topic of the poor condition of the biosphere.   Biodiversity is being increasingly threatened, with up to one million species at risk of extinction. The reasons include climate change, pollution and deforestation. Read more about why climate change matters for biodiversity: https://t.co/C1UDMqGsap pic.twitter.com/2CNYsuypox — Credit Suisse (@CreditSuisse) October 13, 2022 Biodiversity is important to the entire ecosystem. This ensures that the float chain is in balance and that the ecosystem situation is also stable. We have been struggling with a significant climate change for several decades, many species are already extinct. Humanity that has caused this must take action to prevent an ecological catastrophe. Raising awareness about this is very important, because making individuals aware that action, even small, can save the ecosystem. Which cities may be at risk of a real estate bubble UBS in its tweet informs about the 2022 Global Real Estate Bubble Index.   Our 2022 Global Real Estate Bubble Index is out. Read the full report and find out if your city is at risk of a property bubble. https://t.co/b4s39M0nGz #GREBI #ShareUBS pic.twitter.com/g6hINxpLPI — UBS (@UBS) October 13, 2022 The economic situation in the world is tense. Inflation causes economies to lighten or fall into recession. The staggering state of economies affects individual industries, sectors including the real estate sector. Indeed, the property market has long been supported by central banks. Ultra-low financing conditions and demand outpacing construction have led to increasingly optimistic price expectations among buyers. Current rise of Interest rates—and in turn, financing costs—have climbed in recent months to combat elevated inflation. Consequently, the willingness to pay for owner-occupied homes is likely to take a hit. In its report, UBS makes it possible to get acquainted with the situation on the real estate market in individual cities. Expert opinion on several shares Mad Money On CNBC tweets Jim Cramer's thoughts on Tellurian, Zoetis, and more.   .@JimCramer also gave his thoughts on Tellurian, Zoetis and more. https://t.co/vpuGg6Y6vq — Mad Money On CNBC (@MadMoneyOnCNBC) October 13, 2022 The expert looks at the shares of several companies and expresses his opinions. Knowing an expert's opinion on share prices is important for investors in the current climate. This allows you to give a fresh perspective on these companies. Netflix's plan with ad FXMAG on its Twitter feed informs about CNBC's comment about the ad-powered Netflix's plan.   @CNBC has just commented on the “ad-powered” $6.99/mo @netflix’s plan #StockMarkets https://t.co/fMTV5tigCF — FXMAG.com (@FXMAG24) October 13, 2022 Netflix is very popular. It offers three possible plans. Recently, he announced that there will be a plan powered by advertisements. This plan may turn out to be cheaper. The question arises whether it will enjoy popularity, whether people will opt for the cheaper version of the ad, and whether they prefer to pay more to avoid advertising. Doing so can also be a trick for subscribers to decide to pay more for ad-free viewing comfort, but it can also be an option for people who prefer to save money and watch their favorite games on a platform.
EUR: Stagflation Returns Amid Weaker Growth and Sticky Inflation

Japanese Yen (JPY) Suffers The Most, Expectations For The Chinese Economy (CPI, Export)

Saxo Bank Saxo Bank 14.10.2022 10:48
Summary:  A choppy session in equity and bond markets despite a hot US CPI print for September pushing up Fed funds rate expectations by over 25bps on the terminal rate projections which limits the room for Fed officials to out-hawk the markets. Japanese yen suffers the biggest blow as intervention remains weak, while GBP and Gilts generally supported higher with another potential U-turn in UK fiscal plan. Further tightening from Monetary Authority from Singapore boosts the SGD, and China’s CPI will be on watch in the Asian session before Bank earnings take away the limelight later in the day. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) indices plunged after hot CPI data then whipsawed higher, moving in a ~5% range Core inflation (which excludes volatile food and energy items) rose to a 40-year high in September which gives the Federal Reserve reason to continue with its aggressive interest-rate hikes. The Nasdaq 100 fell over 3% and the S&P500 fell 2.35% before both major indices whipsawed higher with the Nasdaq ending up 2.3% and the S&P500 up 2.6%. Short covering and macro trading would have played a huge role in the reason markets whipsawed higher. ETF volume accounted for 39% of the turnover, just a touch lower than the record high of 40%. In terms of sectors, financials and energy led the benchmark index higher. Amid the energy crisis, there are the most rising-free cash flows in energy markets, which offer value. U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) made new highs before waning U.S. treasuries had a volatile after the hot CPI prints. Now the money market fully prices in a 75bps hike in the November FOMC and a terminal rate of 4.9% early next year. The front end of the treasury curve was hit most with 2-year yields rising to as much as 24bps to 4.53% before paring back some of the move to finish the day 17bps higher at 4.65%. 10-year yields made a new high, hitting 4.08% soon after the CPI but spent the rest of the session waning to up only 4bps to close at 3.94%, despite a weak 30-year auction in the afternoon. The sharp rally (yields falling by over 20bps across the curve) in U.K. gilts contributed to stabilising U.S treasuries. The Bank of England bought a record £4.68 billion of gilts in its emergency bond purchase programme which is set to end on Friday. Traders snapped up gilts on speculation that the Truss government will announce the reversal of some of the tax cuts in the mini-budget when the Chancellor of the Exchequer Kwasi Kwarteng returns from the IMF meeting in Washington.  Australia’s ASX200 (ASXSP200.1) may likely meet a similar fate to US equities and have a wild day of trade In Australia a similar situation is playing out with the futures market is now pricing in interest rates will peak at 3.9% next year.  We have seen the RBA express ‘peak hawkishness’, is behind it. But the market is still pricing in rate rises will continue, but at a steady pace. This means growth sectors remain pressured and value strengthens. Consider; amid the energy crisis, there are the most rising-free cash flows in energy markets, which offer value and support share price growth. This is worth perhaps reflecting on, especially given coal prices hit fresh highs and we are not at peak coal demand season (January) yet. As such energy prices seem supported higher. Hong Kong’s Hang Seng (HSIU2) China’s CSI300 (03188:xhkg) Hong Kong and mainland China equities retreated, Hang Seng Index down 1.9% and CSI300 lower by 0.8%. HSBC (00005:xhkg) outperformed and gained 0.7%. Country Garden Services (06098:xhkg), tumbling 14.1%, and Country Garden Holdings (02007:xhkg), falling 9.8% were the worst performers in the Hang Seng Index, as the China property space continued to sell off. Machinery stocks declined on weak excavator sales in China. Weaknesses in China Internet and EV stocks dragged the Hang Seng Tech Index (HSTECH.I) down by 3.4%. On the other hand, local Hong Kong developers, Sun Hung Kai Properties (00016:xhkg), up 2.7%, New World Development (00017:xhkg), up 2.2%, and CK Asset Holdings (01113:xhkg), climbing 1.2% were among the best performers in the benchmark index, following news reports saying the Hong Kong Government is considering to relax the 15% extra stamp duty that non-resident buyers need to pay when buying a property in Hong Kong. In addition, Hong Kong is considering allowing 12 people instead of the currently 4 to gather in public. Macao casino stocks dropped from 1.9% to more than 7% on the dim prospect of relaxation on zero-Covid policy in mainland China. The head of China’s Epidemic Response and Disposal Leading Group, Liang Wannian, said on TV that China had no timeline for an exit from its Covid strategy. Sands China (01928:xhkg) was also troubled by a lawsuit in the U.S. in which the claimant is seeking more than USD7.5 billion in compensation. Healthcare stocks gained at the Hong Kong and mainland bourses. In the A-share market, computing, software, and digital currency concept stocks gained, following China’s central bank’s pledge to promote the development of the digital renminbi. Weak verbal intervention in the Japanese yen USDJPY traded to a fresh record high of 147.67 overnight, and stayed above the 147 handle despite a reversal in US dollar strength later in the session. Only some weak comments were noted from Japanese authorities, with FinMin Suzuki saying that FX volatility was discussed at the G20 meeting. There was also some speculation of more Japanese intervention after some sudden price movements in the Yen yesterday as USDJPY hit a high of 147.47 before knee-jerking lower to 146.52, albeit if it was intervention it wasn't successful with USDJPY back above 147.00. That is perhaps a reason why Japanese MoF official has stayed away from confirming or denying Thursday’s intervention. BOJ Governor Kuroda kept easing bias saying not appropriate to raise rates in Japan now, and with US yields still seeing some more room on the upside, there could be more room for yen weakness. Our technical analyst highlights that if USDJPY breaks 147.65 resistance, 149.34 level is not unlikely. Crude oil (CLX2 & LCOZ2) followed the USD price action While there were enough drivers for the oil prices overnight, price action in crude oil generally followed the USD trend which initially rose after the hot US CPI report cementing expectations for another 75bps rate hike at the November meeting and a small chance of a 100bps rate hike, but it fell later as risk sentiment revived. The IEA's monthly oil market report saw its Q4 demand view lowered by 300k BPD, while its 2023 demand outlook was cut by 470k BPD (both are still expected to show growth). But supply concerns also remained with the weekly US inventory reporting tight market in distillates following a decline of 4.9mln barrels in domestic supply. Crude stocks build was significantly above expectations (9.88mln vs an expected 1.75mln), while stocks at Cushing drew down by 309k; and gasoline posted a surprise build (2.023mln vs an expected -1.825mln). US-Saudi tensions also continue to slide downhill as the White House accused Saudi Arabia of coercing other OPEC+ members into agreeing to a huge output cut, and said it had asked the kingdom for a pause.   What to consider? Hot US CPI pushing Fed tightening expectations higher – can Fed members continue to out-hawk the markets? Core US inflation jumped to a 40-year high of 6.6% y/y in September, making more jumbo Fed rate increases inevitable. Headline CPI also came in higher than expectations, at 8.2% y/y with shelter, food and medical care contributing to the biggest gains. Fed funds rate expectations have pushed higher, with a full 75bps rate hike priced in for November with increasing expectations of a 75bps rate hike in December as well. March 2023 terminal rate expectation pushed higher by about 30bps to 4.94% now. This is above the 4.6% depicted by the Fed’s dot plot, and may leave little room for the Fed members to continue to out-hawk the markets. Fed speakers George, Cook and particularly Waller will be on the wires today. Reports of another potential UK fiscal U-turn There’s no ending the drama in the UK markets, with reports of another potential U-turn in the fiscal plans of Liz Truss government. Now, there are talks that the government is mulling hiking corporation tax despite initial plans to scrap the corporation tax hike and keep it unchanged. Such reports, along with the BOE’s increased bond-buying thus week, could help put a floor on UK assets next week as the central bank halts its bond purchases today. Still, the credibility of UK authorities remains in question, and that would mean it remains hard to include Gilts in asset allocation. Treasury Secretary Yellen warned about the risk of a loss of liquidity in the U.S. treasury market U.S. Treasury Secretary Janet Yellen voiced concerns about a potential breakdown in treasuries trading when answering questions yesterday and said that the Treasury is “worried about a loss of adequate liquidity in the market”. The concern about the potential risk of a sudden loss of liquidity or even a breakdown of trading in the U.S. treasury market has recently risen among some traders as the treasury market loses the largest buyer, the Fed in quantitative tightening. After rounds of QE and large fiscal deficits, the outstanding amount of treasuries has grown to USD23.7 trillion. The daily turnover in treasuries was USD627 billion a day in September.  The turmoil across the pond in the U.K. gilts markets has also added to the worries among traders and probably policy makers in the U.S. U.S. Bank earnings, potential CET1 capital shortfalls to watch Several leading U.S. banks, including JPMorganChase (JPM:xnys), Morgan Stanley (MS:xnys), Citigroup (C:xnys), Wells Fargo (WFC:xnys), US Bancorp (USB:xnys), PNC Financial (PNC:xnys), First Republic Bank (FRC:xnyc) are reporting on Friday. The market focus will be on JPMorganChase, Morgan Stanley, and Citigroup. The key things to watch for are these banks’ net interest margins and their updates on the quality of their loan books, as well as the impact of mark-to-market losses incurred to their available-for-sale investment portfolio, which are largely treasuries and agency mortgage-backed securities, on their common equity tier-1 (CET1).  Some of the banks may be hit by falling bond prices and are facing CET1 capital shortfalls. Taiwan’s TSMC, South Korea’s SK Hynix, and Samsung Electronics secured U.S. approval for getting U.S. equipment for 1 year Taiwan Semiconductor Manufacturing Co said the company had secured a 1-year license from the U.S. government to continue to get U.S. chip-making equipment for its expansion in manufacturing capacity in China for the next 12 months.  Likewise, South Korean chip maker, SK Hynix said it had gotten a 1-year waiver from the U.S. government to import American equipment to its factories in China.  Reportedly, Samsung Electronics got a similar waiver.  On the other hand, China’s top semiconductor equipment maker Naura Technology was said to have told the company’s American engineers to stop working on research and development projects with immediate effect. The Chinese Communist Party convenes its 20th National Congress on Oct 16 General Secretary Xi Jinping will make a speech and presents the Work Report of the 19th Central Committee to the 20th National Congress of the Chinese Communist Party (CCP) on Oct 16. From Oct 16 to 22, around 2,300 delegates from all over the country will elect 205 full members and 171 alternate members of the 20th Central Committee and select the members for the 20th Central Commission for Discipline Inspection. On Oct 22, the 20th National Congress will vote to approve the Work Report of the 19th Central Committee and approve an amendment to the charter of the CCP. The 20th National Congress ends on Oct 22 and the newly elected 20th Central Committee will hold its 1st plenary session on Oct 23 and decide on the most important 25-member Politburo and its 7-member Standing Committee, as well as members of the Central Military Commission and Central Secretariat.  Nomination of Premier and Vice-premiers of the State Council are matters to be decided not this time but later in the 2nd plenary session which may be held in February 2023 and that nomination will need to be approved by the National People’s Congress in March 2023. ECB QT likely to begin in Q2 2023, lower ECB terminal rate ECB discussed possible timeline for balance sheet reduction at Cyprus meeting earlier this month. Consensus appeared to emerge for quantitative tightening to start sometime in Q2 2023. Reports suggested that the ECB could already tweak its language on reinvestments at its October meeting and then could provide a detailed plan possibly in December but more likely in February. Meanwhile, Reuters reported that an ECB staff model puts the terminal rate in Europe at 2.25%, beneath the 3% that markets are currently pricing in; however, the response from ECB policymakers was mixed, with some fearing the model contains errors. China’s CPI is expected to rise to 2.9% in September China is releasing CPI and PPI data on Friday. The median forecast in the Bloomberg survey is expecting the CPI to rise to 2.9% Y/Y in September from 2.5% Y/Y in August.  The rise is likely attributed to higher food prices, including pork prices during the month.  PPI is expected to fall to 1.0% Y/Y in September from 2.3% in August, helped by a high base last year.  China’s export growth is expected to decelerate in September The median forecast in Bloomberg’s survey of economists calls for a sharp deceleration of China’s export growth in USD terms to +4.0% Y/Y in September from +7.1% in August, citing tightened pandemic control measures and a high base of last year. China’s LNG imports are set to decline this winter Bloomberg analysts estimate that China’s LNG import in November and December will be 12.7 million metric tons, a decline of 17% from last year, citing Chinese LNG users canceling LNG import terminal access slots. Singapore avoids a technical recession, MAS re-centres currency band Solid Q3 GDP growth of 4.4% y/y in Singapore according to advance estimates, crushing estimates as construction and services industries outperformed. This reaffirmed that Singapore not only avoided a technical recession, but is on a solid recovery track after the pandemic restrictions were removed. Q/Q growth turned positive to come in strongly at 1.5% from -0.2% previously. This has given further room to the Monetary Authority of Singapore (MAS) to tighten the policy, and it announced re-centring of its currency policy band to the prevailing level. No changes to the width or slope of the band were announced, meaning the boost to the SGD could remain temporary as potentially more USD gains remain likely for now. What is the thinking about what will happen to interest rates in Australia? In Australia the futures market are now pricing in interest rates will peak at 3.9% next year. We have seen the RBA express ‘peak hawkishness’, is behind it. But the market is still pricing in rate rises will continue, but at a steady pace. This means growth sectors remain pressured and value strengthens. Consider; amid the energy crisis, there are the most rising-free cash flows in energy markets, which offer value and support share price growth. This is worth perhaps reflecting on, especially given coal prices hit fresh highs and we are not at peak coal demand season (December-January) yet. Also consider oil prices have moved off their lows. As such energy prices look supported higher for longer despite A. Most traded instruments at Saxo Australia this week The most traded stocks this week at Saxo in Australia are Tesla, Apple, Whitehaven Coal (hit new high), Coles, and Bank of Queensland results. What’s the takeaway here? We need to reflect on the trends. Trends are your friends when it comes to making profits in markets. In the banking sector; we heard from Bank of Queensland who is forecasting house prices to drop and loan growth to slow. Coal prices are moving up and continues to be supported. And in when it comes to the most transacted upon futures, in commodities; we've seen a pick-up in buying of Crude oil Futures; with the OPEC and EIA still predicting demand will outpace supply in 2023, meaning we could expect higher oil prices into next year.   For a week-ahead look at markets – tune into our Saxo Spotlight. For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-14-oct-v2-14102022
The UK Economy Looks Worse Than The Rest Of The G7 Countries

The Credibility Of The British Authorities Remains In Question | The Bloomberg Metals Index Trades Up

Saxo Bank Saxo Bank 14.10.2022 11:13
Summary:  A remarkable bear market turnaround in equities yesterday, as higher than expected US core inflation data aggravated the recent sell-off and sent sentiment plunging, only to quickly find a low and launch a nearly vertical comeback. A fresh rise in treasury yields in reaction to the inflation data only stuck at the short end of the yield curve as the market was forced to nudge Fed rate hike expectations for early next year to new highs for the cycle, while longer yields retreated sharply after briefly posting new cycle highs.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Yesterday’s US equity session will go down in history as one of the weirdest trading sessions. The US September CPI figure showed a negative surprise to inflation with the 6-month average core CPI hitting the highest level for the cycle at around 0.6% m/m (7.4% annualised) initially setting off a steep slide in US equities with S&P 500 futures hitting levels as low as the 3,502 level. However, in the subsequent part of the session US equities rallied hard with S&P 500 futures closing at the 3,681 level up 2.6% and the index futures are continuing higher this morning trading around the 3,703 level. It seems that the session was driven by technical factors and potentially realignment of inventories by market markets and trading firms, so we think investors should not put too much weight on the recent price action. By next week, we will know how long-term institutional investors are judging the inflation print. Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg) Stocks in Hong Kong and mainland China rallied strongly, Hang Seng Index surging 3.4%, and CSI300 climbing 2%. The dramatic turnaround in the U.S. equity overnight helped set a more optimistic tone at the open. To add to the positive sentiment was the softer-than-expected Chinese CPI and PPI data released this morning showing inflation grew at a benign 0.6% y/y in September once the volatile food and energy prices were excluded. It fuels the anticipation of more room for the Chinese authorities to roll out stimulus measures. HSBC (00005:xhkg), which was also boosted by the strong rally in the pound sterling in anticipation of the U.K. Truss government changing course in some of the planned tax cuts, jumped 6.5%. Leading the Hong Kong benchmark were also pharmaceuticals, China property, China consumption, and China Internet names. In China A shares, healthcare, medical equipment, food and beverage, Chinese liquor and cloud computing were among the top performers. USD climax reversal? Lacking confirmation... The US dollar blasted higher on the hotter-than-expected core CPI data, which took the currency to new highs versus many of the less liquid currencies, only to see the action reversing sharply on the day as risk sentiment rallied and the move higher at the longer end of the US yield curve reversed. This created a bullish “hammer” reversal on many USD charts, like AUDUSD and inversely in USDCAD, but we will need for sentiment to launch a sustained recovery and for US yields to retreat further if we are to see a more significant consolidation in the dollar rally. After all, the move higher in Fed rate tightening expectations held up fairly well as the market now sees the Fed peaking at a policy rate of 4.75-5.00% and odds of a 100 basis point move in November have crept higher, though still very low. For EURUSD, the focus will be on the 0.9800-50 zone as the resistance barring the path to parity, while a close back below 0.9700 suggests the risk of further downside in the near term remains. Elsewhere, the USDJPY never really blinked despite all the volatility elsewhere, holding just below the highest levels since 1998 (more below). Gold (XAUUSD) Gold tumbled following the US CPI print but later recovered to settle back into the $1660 to $1680 range that has seen most of the action this week. While the 8.2% YoY inflation print for September raised expectations for more aggressive rate hikes by the Federal Reserve, the sentiment improved as the dollar reversed lower (see above) while the S&P 500 saw its 5th-largest intraday reversal from a low in the history of the index. Another rise in bond yields capped the upside to gold with the yield on two-year Notes hitting a fresh 15-year high above 4.5%. In our latest gold update we highlight the reasons behind our medium-term bullish outlook but also why the ducks are not yet lined up properly for the recovery to begin. Resistance at $1687 and $1695. Crude oil (CLX2 & LCOZ2) Crude oil is heading for a weekly loss made smaller by a surprise dollar weakness following yesterday's higher than expected US CPI print. The overall weakness seen this week being in response to a continued subdued demand outlook globally, especially in China as the government continues to support its growth reducing Covid-zero policy. The week also delivered global demand downgrades from the OPEC, EIA and yesterday the IEA, with the latter warning last week’s OPEC+ production cut was not justified by fundamentals leaving the price at risk of spiking thereby potentially tipping the global economy into a recession. Focus on US distillate stocks (diesel and heating oil) at a seasonal three-decade low driving refinery margins to a record high in New York. US treasuries (TLT, IEF) The strong core US CPI data yesterday lifted the entire US yield curve, but while the move higher in short yields largely stuck, the long end pushed back lower to close the day largely unchanged. In the case of the 10-year yield, that meant back below 4.00% after posting new cycle highs above 4.05% intraday. This inverted the yield curve back toward the cycle extreme negative 50 basis points. A 30-year T-bond auction a couple of hours after the data release yesterday generated few headlines and no notable market reaction. What is going on? U.S. September CPI remains uncomfortably high U.S. CPI was up 8.2 % year-over-year last month versus expected 8.1 % year-over-year. This is a worrying signal which confirms that financial conditions are not tight enough to significantly lower inflationary pressures. Into details, the main drivers behind the increase in inflation are energy with a jump of 19.8 % year-over-year (gasoline fell in recent months but natural gas and electricity increased more), food with an increase of 11.2 % (food at home +13 %) and finally vehicles, transportation, medical and shelter with a price jump of 6.6 %. The latest inflation figures for September (both the headline CPI and the PPI) open the door to a 75-basis point interest hike by the U.S. Federal Reserve at the November meeting. US earnings recap: Walgreens, Delta Air Lines, and BlackRock Investors were relieved to read Walgreens’ EPS outlook for its next fiscal year with EPS at $4.45-4.65 vs est. $4.51, but we would argue there is a downside risk to this target as revenue growth is negative and wage pressures are building in the US labour market. Delta Air Lines surprised the market with an upbeat EPS outlook for Q4 with EPS at $1-1.25 vs est. $0.80 as pent-up demand remains strong and management said as well that the strong USD is not impacting its international business. BlackRock surprised on Q3 earnings against estimates, but AUM missed and the initial reaction from investors was negative. Reports of another potential UK fiscal U-turn There’s no ending to the drama in the UK markets, with reports of another potential U-turn in the fiscal plans of Liz Truss government. Now, there are talks that the government is mulling hiking corporate taxes despite initial plans to scrap the previously planned tax hike and keep it unchanged. Such reports, along with the BOE’s increased bond-buying this week, could help put a floor on UK assets next week as the central bank halts its bond purchases today. Still, the credibility of UK authorities remains in question, and that would mean it remains hard to include Gilts in asset allocation. Sterling is also all over the map – leaning to the strong side on hopes that the market has disciplined the Truss government from undermining the long term stability of UK government finances. The rises in China’s CPI and PPI were slower than expected China’s CPI came in at +2.8% Y/Y (vs consensus +2.9%; August +2.5%) and the core CPI (excluding food and energy) growth slowed to +0.6% Y/Y from +0.8% in August. The rise in the headline CPI was driven by a 36% Y/Y increase in pork prices and increases in most other food prices as well in September. The deceleration in the PPI to +0.9% Y/Y (vs consensus +1.0%) from +2.3% in August was driven by weaknesses in energy, mining, and raw materials as well as declines in prices in the oil and gas process, ferrous metal processing, and non-ferrous metal processing industries. The CPI and PPI overall point to sluggish demand in China. Weak verbal intervention in the Japanese yen USDJPY traded to a fresh record high of 147.67 overnight, and stayed above the 147 handle despite a reversal in US dollar strength later in the session. Only some weak comments were noted from Japanese authorities, with FinMin Suzuki saying that FX volatility was discussed at the G20 meeting. BOJ Governor Kuroda kept the easing bias, saying that it is not appropriate to raise rates in Japan now, and with US yields still seeing some more room on the upside, there could be more room for yen weakness. Our technical analyst highlights that if USDJPY breaks 147.65 resistance, 149.34 level is not unlikely. Industrial metals trade higher for a third week The Bloomberg Metals index trades up 4.4% this month supported by stretched supplies of copper in China and renewed fears over the flow of metals from Russia, especially aluminum currently up 10% this month, as the White House may sanction Russian aluminum producers. The sector saw a very challenging third quarter with multiple risks to demand, from the global threat of recessions to Europe’s energy crisis and China’s chronic property slump. However, low global stockpiles especially in China, where spending on metal intensive renewable energy projects is rising and the government tries to accelerate infrastructure spending. What are we watching next? ECB QT is likely to begin in Q2 2023, lower ECB terminal rate ECB discussed possible timeline for balance sheet reduction at Cyprus meeting earlier this month. Consensus appeared to emerge for quantitative tightening to start sometime in Q2 2023. Reports suggested that the ECB could already tweak its language on reinvestments at its October meeting and then could provide a detailed plan possibly in December but more likely in February. Meanwhile, Reuters reported that an ECB staff model puts the terminal rate in Europe at 2.25%, beneath the 3% that markets are currently pricing in; however, the response from ECB policymakers was mixed, with some fearing the model contains errors. The Chinese Communist Party convenes its 20th National Congress on Oct 16   General Secretary Xi Jinping will make a speech and presents the Work Report of the 19th Central Committee to the 20th National Congress of the Chinese Communist Party (CCP) on Oct 16. From Oct 16 to 22, around 2,300 delegates from all over the country will elect 205 full members and 171 alternate members of the 20th Central Committee and select the members for the 20th Central Commission for Discipline Inspection. On Oct 22, the 20th National Congress will vote to approve the Work Report of the 19th Central Committee and approve an amendment to the charter of the CCP. The 20th National Congress ends on Oct 22 and the newly elected 20th Central Committee will hold its 1st plenary session on Oct 23 and decide on the most important 25-member Politburo and its 7-member Standing Committee, as well as members of the Central Military Commission and Central Secretariat.  Nomination of Premier and Vice-premiers of the State Council are matters to be decided not this time but later in the 2nd plenary session which may be held in February 2023 and that nomination will need to be approved by the National People’s Congress in March 2023. Earnings to watch Today’s earnings focus is on US banks such as JPMorgan Chase, Morgan Stanley, Citigroup, and Wells Fargo. Expectations are low for these US bank earnings with analysts expecting JPMorgan Chase EPS down 24% y/y and the focus is on net interest margin and credit provisions. Today: Shanghai Putailai New Energy, YTO Express Group, PNC Financial Services, JPMorgan Chase, Morgan Stanley, Citigroup, UnitedHealth Group, Wells Fargo, US Bancorp, First Republic Bank Next week’s earnings releases: Monday: Bank of America, Sandvik Tuesday: Charles Schwab, Johnson & Johnson, Goldman Sachs, Intuitive Surgical, Lockheed Martin, Truist Financial Wednesday: ASML, Elevance Health, Tesla, IBM, Lam Research, P&G, Abbott Laboratories, Atlas Copco Thursday: China Mobile, China Telecom, ABB, Danaher, Investor, Philip Morris, Union Pacific, CSX, AT&T, Blackstone, Marsh & McLennan, Yara International, Nordea, Volvo, Ericsson, Freeport-McMoRan, Dow Friday: CATL, American Express, Schlumberger, Verizon Communications, HCA Healthcare, Sika Economic calendar highlights for today (times GMT) 0900 – Eurozone Aug. Trade Balance 1230 – US Sep. Retail Sales 1230 – Canada Aug. Manufacturing Sales 1400 – US Fed’s George (Voter 2022) to speak 1400 – US preliminary University of Michigan Sentiment 1430 – US Fed’s Cook (Voter) to speak on the economic outlook 1615 – US Fed’s Waller (Voter) to speak on central bank digital currency  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher     Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-14-2022-14102022
US Nonfarm Payrolls Disappoint: Impact on Dollar and EUR/USD Analysis

Podcast: Moods In The Stock Markets- The Support Levels Of The Nasdaq 100 And S&P 500 And More

Saxo Bank Saxo Bank 14.10.2022 11:26
Summary:  Today we discuss the remarkable turnaround in equities yesterday after a hotter than expected core US CPI print for September pumped Fed rate expectations higher and triggered a sharp new slide in the market. The rally came after both the Nasdaq 100 and S&P 500 tested important support levels. As the headline suggests, we're far from sure that the market comeback offers much information value despite its impressive scale. Elsewhere, we look at the mixed status of USD pairs after yesterday's action, look at natural gas and copper, preview the day and week ahead on the earnings calendar and upcoming macro data points and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast- slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-14-2022-14102022
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

The New York Stock Exchange: JPMorgan Chase & Co Was A Leader Among The Dow Jones Index Components

InstaForex Analysis InstaForex Analysis 17.10.2022 08:19
At the close on the New York Stock Exchange, the Dow Jones fell 1.34%, the S&P 500 index fell 2.37%, and the NASDAQ Composite index fell 3.08%. The leading performer among the Dow Jones index components today was JPMorgan Chase & Co, which gained 1.82 points or 1.66% to close at 111.19. UnitedHealth Group Incorporated rose 3.22 points or 0.63% to close at 513.13. Boeing Co rose 0.75 points or 0.57% to close at 133.15. The losers were shares of American Express Company, which lost 4.74 points or 3.35% to end the session at 136.81. Apple Inc was up 3.21% or 4.59 points to close at 138.40, while Chevron Corp was down 3.11% or 5.14 points to close at 160.14. . The leaders of growth among the components of the S&P 500 index following the results of today's trading were shares of U.S. Bancorp, which rose 3.36% to 42.76, Delta Air Lines Inc, which gained 2.30% to close at 31.08, and Wells Fargo & Company, which rose 1.86%, ending the session at 43.17. The losers were First Republic Bank, which shed 16.45% to close at 112.57. Shares of The Mosaic Company shed 9.88% to end the session at 46.86. Quotes of CF Industries Holdings Inc decreased in price by 8.40% to 98.04. Leading gainers among the components of the NASDAQ Composite in today's trading were Agrify Corp, which rose 53.75% to hit 1.45, Fednat Holding Co, which gained 48.02% to close at 0.52, and shares of Imara Inc, which rose 46.90% to end the session at 3.79. The drop leaders were shares of TOP Financial Group Ltd, which fell in price by 73.47%, closing at 5.49. Shares of Alfi Inc lost 69.90% and ended the session at 0.25. Quotes of Novo Integrated Sciences Inc decreased in price by 61.94% to 0.29. On the New York Stock Exchange, the number of depreciated securities (2506) exceeded the number of closed in positive territory (579), and quotes of 85 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,720 stocks fell, 1,005 rose, and 229 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.25% to 32.02. Gold futures for December delivery shed 1.67%, or 28.05, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 3.75%, or 3.34, to $85.77 a barrel. Futures for Brent crude for December delivery fell 2.93%, or 2.77, to $91.80 a barrel. Meanwhile, in the Forex market, EUR/USD was down 0.51% to hit 0.97, while USD/JPY was up 1.00% to hit 148.68. Futures on the USD index rose 0.82% to 113.18.     Relevance up to 05:00 2022-10-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   Read more: https://www.instaforex.eu/forex_analysis/296988
EUR/USD Faces Resistance at 1.0774 Amid Inflation and Stagflation Concerns

Reports From China Could Put Negative Pressure On The Asia-Pacific Markets

TeleTrade Comments TeleTrade Comments 17.10.2022 08:47
Asian equities track Wall Street losses, ignores mildly firmer S&P 500 Futures, sluggish yields. China defends the zero covid policy while banks in Beijing intervene secretly. Light calendar, mixed concerns trouble traders but risk-off mood is likely to prevail. Equities in the Asia-Pacific region hold lower ground during the sluggish start to the week even as the market fears emanating from China, Indonesia and the US remain intact heading into Monday’s European session. While portraying the mood, the MSCI’s Index of Asia-Pacific shares outside Japan drops 1.42% whereas Japan’s Nikkei drops 1.31% by the press time. Among the many catalysts that drove the risk-off mood in Asia, headlines from China gained major attention as Chinese Prime Minister Xi Jinping defends his zero-covid policy and determination to add more artillery. On the same line could be the headlines suggesting the Chinese bank’s intervention. “China's major state-owned banks were spotted swapping yuan for U.S. dollars in the forwards market and selling those dollars in the spot market on Monday morning, six banking sources said,” per Reuters. With this, markets in China are mostly red, which in turn drags shares from Hong Kong, New Zealand and Australia. Elsewhere, Indonesia’s trade numbers came in mixed, mostly downbeat for September, but failed to impress the equity traders from Jakarta. Indonesia’s Exports for September came in at 20.28% compared to 27.91% market forecasts and 30.15% prior readings. Further details suggest that the Imports also dropped below 31.48% forecast and 32.81% previous readings to 22.02%. Even so, the Trade Balance improves to $4.99B compared to $4.84B market forecasts and $5.76B prior. On a broader front, S&P 500 Futures part ways from Wall Street losses while the Treasury bond yields seesaw around the multi-month high amid a light calendar and an absence of major data/events. It should be noted that oil prices also pare recent losses and weigh on the Asia-Pacific equities amid the White House pressure on the OPEC+ members to halt/delay the latest supply cut actions. Moving on, the US economic calendar is likely to remain empty throughout the week and may limit the market’s moves. However, pessimism surrounding China may exert downside pressure on the Asia-Pacific markets.
The Australian Market Has Seen Growth | Mercedes-Benz Launches New EV

Podcast: Decline In Tesla And China is Europe's rival?

Saxo Bank Saxo Bank 17.10.2022 14:17
Summary:  Today we look at Friday's whipsaw turnaround in equities after the bizarre Thursday rally, as the heart of earnings season lies dead ahead and the world's most traded stock, Tesla, has dumped to a new low for the year just ahead of its Wednesday earnings call. We also discuss Chinese leader Xi's speech over the weekend and whether Europe is set to declare China an economic rival, as well as watching for the ongoing fallout for semiconductor companies after the Biden administration moved to limit semiconductor tech transfer to China. The latest in FX, individual stocks to watch and more also on today's pod, which features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-17-2022-17102022
Netflix Stock Price May Tumble Tomorrow! What Can We Expect From NFLX Earnings?

Netflix Stock Price May Tumble Tomorrow! What Can We Expect From NFLX Earnings?

FXStreet News FXStreet News 17.10.2022 16:02
Follow us on Google News Netflix is due to launch its advertising tier shortly for $6.99 per month. Netflix reports earnings on Tuesday after the close. NFLX stock is down over 60% year to date. Everyone loves a bargain, and Netflix (NFLX) is certainly offering a discount to investors. A reduction to the tune of 60% would usually be snapped up by shoppers, but in the case of NFLX stock, the large discount is still failing to attract much buying interest. Will the imminent release of earnings and the launch of its advertising tier change the investment thesis in the minds of investors? With the market backdrop remaining challenging, that may prove difficult, but there may be a short-term bounce to end the year as we approach earnings season to be followed by midterm elections. Stocks tend to like midterms and historically perform well following them. Netflix stock news Netflix will report earnings on Thursday after the close. Consensus earnings per share (EPS) forecasts are at $2.17, while revenue is expected to reach $7.85 billion. Earnings releases have not been kind to NFLX stock of late. Last time out was good with the stock bouncing higher, but in April Netflix stock collapsed 35% following earnings. As long-time critics of just how optimistic Wall Street analysts are, we note a report from Seeking Alpha. Netflix has been downgraded 29 times for EPS and 36 times for revenue, but those optimistic analysts still have a buy rating on the stock. Investors will also look for more info on the new advertising tier during the earnings conference call. We now know that the tier will cost $6.99, and guidance for subscriber growth from this new tier will be key. Netflix is expected to show subscriber growth of 1 million for the period. The streaming giant has certainly rerated as investors are no longer willing to pay such a premium when the explosive growth phase is over. This stock has seen its P/E collapse in line with price this year. Netflix (NFLX) P/E ratio Netflix stock forecast Netflix has been trying to bottom and has traded in a sideways range since August, so earnings could provide the catalysts for a breakout. As mentioned I believe the risk-reward lies in an upside surprise. Netflix has suffered this year already, and a lot of bad news can be assumed to already be in the price. Technically, a break higher would target $333, the earnings gap from April. There is a natural volume gap as a result. Breaking $214 will lead Netflix toward $165.90 and likely see a move to make a fresh yearly low. Netflix daily chart
Rates Reversal: US Long Yields on the Rise as Curve Dis-Inverts

Revival On The American Markets And Growth On The S&P 500 Futures

TeleTrade Comments TeleTrade Comments 18.10.2022 08:45
S&P 500 futures have extended their recovery above 3,740 as the quarterly earnings season kicked off. BOFA released stellar earnings led by upbeat NII numbers. The risk profile is cheerful despite escalating recession fears in the US. The DXY has surrendered the critical support of 112.00 with sheer selling pressure. Global markets are displaying a stellar performance following positive cues from US markets. S&P500 futures have extended their gains after a cheerful Monday, which has infused fresh blood in the global indices. The 500-stocks basket futures have extended their gains above 3,740 after surpassing the critical hurdle of 3,720. The risk-on sentiment has strengthened further as 10-year US Treasury yields have dropped further towards 3.97%. US markets displayed a V-shape recovery on Monday after a bloody Friday as quarterly earnings season kick-started with a bang. Bank of America (Bofa) came out with decent earnings growth supported by upbeat Net Interest Income (NII). The US dollar index (DXY) has surrendered the round-level support of 112.00 as the positive market sentiment has trimmed the safe-haven’s appeal. The odds of a bigger rate hike by the Federal Reserve (Fed) are still solid as the CME FedWatch tool displays 99% chances in favor of the fourth consecutive 75 basis points (bps) rate announcement. Meanwhile, recession fears in the US economy have advanced after negative commentary from J.P. Morgan on financial instruments. Strategists at J.P. Morgan cited that they are cutting back on their delivery longs in equities and trimming their underweight position in bonds due to increased risk that central banks will make a hawkish policy error, reported Reuters. Returns on bonds are scaling higher as the Fed will continue its ultra-hawkish stance despite a slowdown in the inflation rate for several months.
China's Position On The Russo-Ukrainian War Confirmed At The G20 Meeting

The Japanese Yen (JPY) Is The Only G20 Currency Which Have Been Weaken | China Delays Publication Of GDP Report

Saxo Bank Saxo Bank 18.10.2022 10:40
Summary:  Risk sentiment was supported by more U-turns in UK fiscal policy and strong earnings from Bank of America supporting the US banks. Equities rallied and the USD declined, but the Japanese yen failed to ride on the weaker USD and continued to test the authorities’ patience on intervention. Higher NZ CPI boosted bets for RBNZ rate hikes, and the less hawkish RBA meeting minutes brought AUDNZD to fresh lows. EU meetings remain key ahead as the bloc attempts to finalize Russian price caps. What’s happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rally after UK-policy U-turn. So far this reporting season earnings are declining The mood was risk-on amid Monday’s rally; with the major indices charging higher with the S&P500 up 2.7%. The breadth of the rally was so strong that at one point over 99% of the companies in the S&P500 were rising, which pushed the index up away from its 200-week moving average (which it fell below last week). Meanwhile the Nasdaq 100 gained 3.5%. The rally came after the UK made $30 billion pounds worth of savings after scrapping tax cuts (see below for more). It was received well by markets and investors looking for short term relief. Bond yields fell, equities rallied and after the GBP lifted 1.6% the US dollar lost strength. But the UK is not out of the lurch with power outages likely later this year. Plus also consider, so far this US earnings season, only 38 of the S&P500 companies have reported results and earnings growth has so far declined on average by 3%. So it’s too soon to gauge if markets can sustain this rally, particularly with the Fed likely to hike rates by 75 bps later this month and next. Strong earnings from bank boosted market sentiment. Bank of America (BAC:xnys), reporting solid Q3 results with net interest income beat and a 50bp sequential improvement on CET1 capital adequacy ratio, surged 6% and was one of the most actively traded stock on the day. U.S. treasury curve (TLT:xnas, IEF:xnas, SHY:xnas) steepened Initially US treasuries traded firmer with yields declining, after taking clues from the nearly 40bps drop in long-dated U.K. gilts following the new U.K. Chancellor Hunt scrapping much of the "mini budget" tax cuts and the support for household energy bills. Some block selling in the long-end treasury curve however took 30-year yields closing 3bps cheaper and 10-year yields little changed at 4.01%. The 2-year to 5-year space finished the session richer, with yields falling around 5bps and 2-year closed at 4.44%. The market has now priced in a 5% terminal Fed fund rate in 2023 and a 100% probability for a 75bps hike in November and over 60% chance for another 75bps hike in December. Australia’s ASX200 (ASXSP200.1) lifts 1.4%; with a focus on Uranium, stocks exposed to the UK and lithium Firstly Lithium stocks are in the spotlight after Pilbara Minerals (PLS) accepted a new sales contract to ship spodumene concentrate for lithium batteries from Mid-may, at $7,100 dmt. PLS shares are up 3.1% with other lithium stocks rising including Core Lithium (CXO) up 3.7% and Sayona Mining (SYA) up 4.7%. Secondly, shares in Uranium are focus today after Germany plans to extend the life of the countries three nuclear power plants till April, as it contends with the energy crisis. The Global Uranium ETF (URA) rose 5.9% on Monday and ASX uranium stocks are following suit like Paladin (PDN) up 2%. For a deep look at the uranium/nuclear sector, covering the stocks to perhaps watch and why read our Quarterly Outlook on the Nuclear sector here. Thirdly, amid the risk-on short term relief in markets from the UK, companies with UK exposure are rallying amid the short-term sentiment shift , including the UK’s 5th biggest bank, Virgin Money (VUK) which is listed on the ASX and trades up 5.3%. Ramsay Health Care (RHC), which is a private hospital/ health care business with presence in the UK trades up almost 2% today. Ramsay's recent full-year showed UK revenue doubled to $1.2 billion. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Stocks in Hong Kong and mainland China traded lower initially and spent the rest of the day climbing to recover all the losses, with Hang Seng Index and CSI300 finishing marginally higher. General Secretary Xi’s speech last Sunday hailed China’s “Dynamic Zero-Covid” strategy and gave no hint of shifting policy priorities toward economic growth as some investors had hoped for. Among the leading Hang Seng constituent stocks, HSBC (00005:xhkg) gained 1.5% and the Hong Kong Stock Exchange (00388:xhkg), which is reporting Q3 results on Wednesday, climbed 2.3%. Chinese banks gained, with China Merchant Bank rising 2.3% and ICBC (01389) up 1.7%.  Healthcare names gained, Hansoh Pharmaceutical (03692:xhkg) surged 13.2% and Sino Biopharm (01177:xhkg) rose 3.6%. EV stocks were among the laggards, dropping from 1% to 5%. Li Ning (02331:xhkg) tumbled over 13% at one point and finished the trading day 4.3% lower following accusations on mainland social media about the sportswear company’s latest designs resembling WWII Japanese army uniforms.  Japanese yen paying no heed to jawboning efforts The US dollar moved lower on Monday, but that was no respite for the Japanese yen. All other G10 currencies got a boost, with sterling leading the bounce against the USD with the help of dismantling of the fiscal measures by the newest Chancellor of the Exchequer Jeremy Hunt and the slide in UK yields. The only G10 currency that weakened further on Monday was the JPY, which continued to test the intervention limits of the authorities. USDJPY rose to 149.08, printing fresh 42-year highs. Bank of Japan Governor Kuroda will be appearing before the Japanese parliament from 9.50am Tokyo time, after some stern remarks in the morning saying that they “cannot tolerate excessive FX move driven by speculators”. While intervention expectations rose, the yen still did not budge until last check. NZD rose on higher New Zealand CPI boosting RBNZ tightening bets Another surprisingly strong inflation print from New Zealand, with Q3 CPI easing only a notch to 7.2% y/y from 7.3% y/y against consensus expectations of 6.5% y/y and an estimate of 6.4% from the RBNZ at the August meeting. The q/q rate rose to 2.2% from 1.7% in Q2 and way above expectations of 1.5%. This has prompted expectations of more aggressive tightening from the RBNZ with a close to 75bps hike priced in for the Nov 23 meeting vs. ~60bps earlier, and the peak in overnight cash rate at over 5.3% from ~5% previously. NZDUSD rose to 0.5660 with the AUDNZD down to over 1-month lows of 1.1120 with RBA minutes due today as well for the October meeting when the central bank announced a smaller than expected rate hike of 25bps. Crude oil (CLX2 & LCOZ2) Crude oil prices stabilized in early Asian hours on Tuesday after a slight decline yesterday, despite a weaker dollar and an upbeat risk sentiment. WTI futures rose towards $86/barrel while Brent was above $91. Chinese demand concerns however weighed on the commodities complex coming out of the weekend CCP announcements. On the OPEC front, Algeria's Energy Minister echoed familiar rhetoric from the group that the decision to reduce output is a purely technical response to the world economic circumstances.   What to consider? UK need to know: Policy U-Turn provides shorter term risk-on rally, but long-term headwinds remain, UK holds talks to avoid power shutdowns New British chancellor Jeremy Hunt reversed almost all of PM Liz Truss’ mini-budget. Initially Truss’ plans sent markets into a tailspin - whereby the pound hit record lows and the Bank of England was forced to intervene. However, after Hunt virtually scrapped all of the announced tax cuts, and cut back support for household energy bills, saving $32 billion pounds, then risk sentiment improved and the pound gained strength. But, the issue is, firstly; there are still almost $40 billion pounds worth of savings to be made to close the fiscal gap; meaning more government spending cuts will come and possibly tax hikes. This is probably why new UK finance chief, Hunt, declined to rule out a windfall profit tax. Nevertheless, the U-turn was received well by markets for the short term, bond yields fell, equities rallies and the pound sterling (GPBUSD) rose 1.6% against the USD with the US dollar losing strength. And the second reason the UK is not out of the lurch is that the fundamentals haven’t changed; the UK energy crisis is not resolved – yesterday in the UK government officials met major data centers discussing the need to use diesel as backup if the power grid goes down in the coming months. Amazon.com and Microsoft run data centers in the UK. Earlier this month, National Grid also warned some UK customers they could face 3-hour power cuts on cold days. The Bank of England is expected to downgrade its rate hike expectations.    NY Fed manufacturing headline lower on mixed components The NY Fed manufacturing survey for October fell to -9.1, contracting for a third consecutive month and coming in below the expected -4.0 and the prior -1.5. While survey data remains hard to trust to decipher economic trends, given a small sample size and questioning techniques impacting results, it is worth noting that more factories are turning downbeat about future business conditions which fell 10 points to -1.8 and was the second weakest since 2009. Also, the prices paid measure rose for the first time since June, echoing similar results as seen from the University of Michigan survey. Fed speakers ahead today include Bostic and Kashkari and terminal rate expectations remain on watch after they are touching close to 5%. La Nina is underway in Australia; floods decimate some wheat crops In the Australian state of Victoria at the weekend, floods decimated some wheat crops, which has resulted in the price of Wheat futures contracts for March and May 2023 lifting in anticipation that supply issues will worsen. The Australian Federal Emergency Management Minister said parts of Australia face ‘some serious flooding’ with more rain forecast later this week, with 34,000 homes in Victoria potentially expected to be inundated or isolated. The Bureau of Meteorology forecasts the La Lina event to peak in spring that’s underway in the Southern Hemisphere, before turning to neural conditions early next year. La Nina is not only disastrous to lives, homes and businesses, but the extra rainfall usually brings about lot of regrowth when rain eases. The risk is, if El Nino hits Australia in 2023 for instance, bringing diminished rainfall and dryness, then there is a greater risk of grassfires and bushfires. Investors will be watching insurance companies like Insurance Australia Group, QBE. As well as companies that produce wheat, including GrainCorp and Elders on the ASX and General Mills in the US. RBA Meeting Minutes out – AUDUSD climbs of lows, up 1.7% The Aussie dollar rose 1.7% off its low after the USD lost strength when the UK re winded some tax cuts. The AUDUSD will be in focus with the RBA Meeting Minutes released, highlighted why the RBA rose interest rates by just 0.25% this month, moving from a hawkish to dovish stance. The RBA previously highlighted it sees unemployment rising next year, and sees inflation beginning to normalize next year, which in our view, implies the RBA will likely pause with rate hikes after December, after progressively making hikes of 25bps (0.25%). Still the Australian dollar against the US (AUDUSD) remains pressured over the medium term, given the Fed’s expected heavy-pace of hikes, while China’s commodity buying-power is restricted with President Xi maintaining a covid zero policy. As such, the AUD's rally might be questioned unless something fundamentally changes. China delays the release of Q3 GDP and September activity data Chin’s National Bureau of Statistics delays the release of Q3 GDP, September industrial production, retail sales, and fixed asset investment data that were scheduled to come on Tuesday without providing a reason or a new schedule.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight.   For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-18-oct-18102022
FX Daily: Upbeat China PMIs lift the mood

The 20th Party Congress Is More Important For China Than Publishing Data

ING Economics ING Economics 18.10.2022 11:00
China's 20th Party Congress remains in focus - delays to data  In this article Macro outlook What to look out for: RBA minutes and China's Communist Party Congress Source: shutterstock Macro outlook Global markets: US stocks erased their losses from Friday’s session, opening higher and then trading quite flat until the close. The S&P500 rose 2.65% and the NASDAQ was up 3.43%. Falling bond yields may have helped restore some confidence, and this may have been helped by tailwinds from the UK Gilts market, where new Chancellor, Jeremy Hunt, took an axe to the previous mini-budget and put the UK’s finances on a sounder footing. 30Y UK Gilt yields fell 40.2bp, the 10Y dropped 35.7bp and 2Y Gilt yields declined by 33.3bp. 10Y European government bond yields declined by about 8bp on average, while the 10Y US Treasury yield was down just 0.8bp. Equity futures suggest that the positive tone will persist into today’s trading, and this could help lift the EUR further. EURUSD rose to 0.9843 yesterday from about 0.972 and could be buoyed further if risk sentiment holds up. The AUD is trading just below 63 cents, after touching 0.6189 briefly yesterday. Cable has recovered all the way to 1.1356, though it looked as if it might hit 1.145 at one point yesterday. But the JPY seems to be looking at further weakness, missing out on the G-10 rallies, and edging ever closer to 150. The BoJ will be getting anxious after their recent jawboning seems to have fallen on deaf ears.  Asian FX has lagged behind the G-10 rally, and will likely pick up the slack today. Yesterday, the VND was the weakest of the Asia pack, dropping as the central bank widened the trading band to 5% (from 3%) on either side of the fixing rate. G-7 Macro: It is very quiet on the G-7 calendar today. Germany’s ZEW business survey is probably the main pick of the day. The expectations component of the survey is not far above the Global Financial Crisis low of -63.9, and could well push below that today. The consensus expects it to fall to -66.5. China: There are some delays to the economic data scheduled for release during the Party Congress. These include the customs export and import numbers, which were scheduled for release yesterday, as well as GDP, retail sales, industrial production, and fixed asset investment, which were previously scheduled for release today. We aren't concerned that the release in the data is because it is particularly weak. Although we don’t expect it to paint a particularly positive picture of the Chinese economy when it is eventually released. Rather, the delay suggests that the government believes that the 20th Party Congress is the most important thing happening in China right now and would like to avoid other information flows that could create mixed messages.   What to look out for: RBA minutes and China's Communist Party Congress New Zealand inflation (18 October) Australia RBA minutes (18 October) China GDP and activity data (18-31 October) US industrial production (18 October) Malaysia trade balance (19 October) US building permits and housing starts (19 October) Fed’s Bostic and Kashkari speak (19 October) Japan trade balance (20 October) Australia labour market data (20 October) China loan prime rate (20 October) Taiwan export orders (20 October) Bank Indonesia policy meeting (20 October) US initial jobless claims (20 October) Fed’s Evans, Bullard and Kashkari speak (20 October) New Zealand trade balance (21 October) Japan CPI inflation (21 October) South Korea advance trade data (21 October) Fed’s Jeferson, Cook and Bowman speak (21 October) TagsEmerging Markets Asia Pacific Asia Markets Asia Economics   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Stock Markets In Europe And The US Showed Marked Gains And Investors Have More Time To Recover

InstaForex Analysis InstaForex Analysis 18.10.2022 11:54
Stocks rose on Monday, primarily due to the start of the corporate reporting season. Clearly, investors are no longer focusing only on increasing interest rates, high inflation and deteriorating world economy, but also on the performance of companies. This inspires optimism in the market, which decreases negative sentiment and brings back demand for shares. Thus, the stock markets in Europe and the US showed a noticeable increase, while US treasury yields have stalled and are not going anywhere after their recent growth. For example, the yield of 10-year bonds hit 4% and so far could not consolidate above it. This, in turn, puts pressure on the dollar, prompting a rise in other currencies paired with it. Considering that there is a two-week time lag until the Fed's meeting in November, investors have more time to win back losses. This may start today, during the European session, and may extend amid positive dynamics of US stock indices. Of course, the dollar will be affected negatively, but there is still the need to buy it because there are too many factors that do not allow it to decline fully. Most likely, further aggressive rate hikes by the Fed and the presence of high demand will keep it afloat for a long time. Forecasts for today: AUD/USD The pair failed to overcome 0.6330, which reinforces the existing downward trend. If this continues, the quote will fall to 0.6220. USD/CAD The pair is testing the level of 1.3715. A rise above it could lead to a further increase to 1.3885.   Relevance up to 07:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324580
Belgian housing market to see weaker demand and price correction

The US Housing Market Is Experiencing Severe Price Drops | The Market Is Now Leaning Towards A RBNZ Rate Hike By 75 bp

Saxo Bank Saxo Bank 18.10.2022 11:38
Summary:  A huge squeeze across equity markets developed yesterday on no readily identifiable catalyst, with yields easing a bit lower and the US dollar dropped falling sharply, as most markets posted a sudden reversal of the Friday melt-down in sentiment. One possible driver for the fresh thaw in sentiment was a report that the Bank of England may delay its quantitative tightening programme, perhaps raising hopes that other central banks will eventually do the same.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Strong equity session yesterday with S&P 500 futures closing at their highest level since 7 October as the index futures rebounded 2.6%. The momentum is continuing this morning with S&P 500 futures trading around the 3,742 level with the 3,800 as the next major resistance level on the upside. Nasdaq 100 futures are trading around the 11,295 level this morning with 11,494 as the next upside level to watch. The US 10-year yield is still hovering around the 4% level and US financial conditions remain around their average historical level. As we scan across different markets there are no obvious reasons for the major rebound so our best guess is short coverings and technical flows. Our medium-term outlook is still negative on equities. Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Stocks traded in Hong Kong bounced the second day in a row with the benchmark Hang Sang Index rising nearly 1.5%. Heavy weight HSBC (00005:xhkg) gained 2.6% and China Internet names surged from 3% to 7%. BYD (01211:xhkg) surged 6.4% after the leading EV maker said its Q3 profit may soar up to 365%. CSI300 was bouncing around small gains and losses. China’s National Development and Reform Commission said China’s economic growth “rebounded significantly” in Q3 while the National Bureau of Statistics delayed the release of Q3 GDP, September industrial production, retail sales, and fixed asset investment data that were scheduled to come today without providing a reason or a new schedule. A document from the European Action Service advises EU’s finance ministers that EU must take a tougher line in its dealing with China and see the latter as an all-out competitor. USD drops as risk sentiment jolts back higher...BoE to drop QT for now? Yesterday was the third consecutive session in which risk sentiment posted a sharp U-turn, as equities rallied sharply and the US dollar sold off steeply, led initially by a drop versus a hard rallying sterling yesterday on hopes that newly minted Chancellor Jeremy Hunt’s elimination of most of PM Liz Truss’ initiatives will stabilize the currency and the country’s bond market. An additional report from the FT that the Bank of England would look to delay its original quantitative tightening (QT) plan may be at the root of some of the broad risk-on, as hopes that other central banks will slow the tightening pressure could bring some relief to deteriorating liquidity across markets. Crude oil (CLX2 & LCOZ2) Crude oil prices stabilized in early Asian hours on Tuesday after a slight decline yesterday. WTI futures rose towards $86/barrel while Brent was above $91. Chinese demand concerns however weighed on the commodities complex coming out of the weekend CCP announcements on Zero Covid. On the OPEC front, Algeria's Energy Minister echoed familiar rhetoric from the group that the decision to reduce output is a purely technical response to the world economic circumstances. US treasuries (TLT, IEF) US treasury yields fell slightly, and the curve steepened in a session marked by far less volatility than the gyrations elsewhere, as the US dollar sold off and risk sentiment squeezed sharply higher. At stake for the longer end of the curve is whether yields remain sticky near the key 4.00% level and head higher still. Data this week is generally second tier stuff. If treasuries rally, the downside focus would be on the 3.84% pivot low in yields. What is going on? Hot Q3 CPI in New Zealand data jolts RBNZ rate expectations The Q3 CPI report came in far above expectations, with the headline printing at 2.2% q/q and +7.2% YoY, far above the 1.5/6.5% expected. This took RBNZ rate expectations sharply higher, and the NZD snapped higher as well. The market is now leaning for the RBNZ to hike by 75 basis points (about 70 bps priced in) at the November 23 meeting, which would be the first time the bank has hiked by more than 50 basis points for this cycle. NZDUSD rose to 0.5700 and AUDNZD punched lower to near 2-month lows after breaking below 1.11 with RBA minutes continuing to highlight concerns of rapid tightening for housing market and household budgets. Q3 earnings recap Bank of America beat estimates yesterday with stronger earnings on disciplined cost controls and robust client activity across both the commercial banking and investment banking activities. Q3 EPS was down 5% y/y, which is much better than its peers, and up q/q to $0.81 from $0.79 in Q2. The US bank is seeing a little slowdown in consumer spending, but it is still minimal supporting the view that the US consumer remains strong and with confidence in the future despite the tighter financial conditions this year. S&P 500 Q3 EPS is down 1.9% q/q but given the weakness among US banks q/q it is too early to say whether this will end up being the conclusion when the entire S&P 500 has reported earnings. Japanese yen paying no heed to jawboning efforts The US dollar moved lower on Monday, but that was no respite for the Japanese yen, which was the only G10 currency that weakened further on Monday, continuing to test the intervention limits of the authorities. USDJPY rose to 149.08, printing fresh 32-year highs. Bank of Japan Governor Kuroda was out overnight noting that the BoJ is watching the market and that JPY weakening drives inflation, but that inflation would eventually fall. He was also defiant when a lawmaker suggested he should resign, saying he had no plans to quit. While intervention expectations rose, the yen remains weak, with EURJPY, for example, hitting new cycle highs and the highest level in nearly eight years. Natural gas prices continue to fall in Europe … with the Netherlands 1-month forward contract falling more than 10% yesterday and at its lowest level since late June as EU storage is essentially fully and weather has been mild thus far this fall. Germany announced that it would keep its three remaining nuclear plants in operation until at least mid-April, cancelling their planned mothballing for now, although there are still no strong signs of a strategic rethink from Germany on the future of nuclear power. NY Fed manufacturing headline lower on mixed components The NY Fed manufacturing survey for October fell to -9.1, contracting for a third consecutive month and coming in below the expected -4.0 and the prior -1.5. While survey data remains hard to trust to decipher economic trends, given a small sample size and questioning techniques impacting results, it is worth noting that more factories are turning downbeat about future business conditions which fell 10 points to -1.8 and was the second weakest since 2009. Also, the prices paid measure rose for the first time since June, echoing similar results as seen from the University of Michigan survey. The U.S. housing market bubble is deflating According to the latest data released by the real estate company Redfin, the U.S. housing market is going through a severe drop in prices in several major cities. From May 2022 to October 2022, the drop in sale prices is the most pronounced in Oakland (minus 16 %), San Jose (minus 14 %), Austin (minus 14 %), Ogden in Utah (minus 11 %) and San Francisco (minus 9 %). The decrease is the most important in California and Texas where home prices jumped sharply in the aftermath of the Covid outbreak. So far, the decrease in prices is positive news for inflation and for home buyers, as the affordability index was at historical levels a few months ago. But this could seriously increase the ongoing economic slowdown. Note that we will see important indicators on the US housing market this week – more below. What are we watching next? US Housing Market Data Housing markets are very interest rate sensitive and thus generally a leading indicator on the direction of the economy. Financing for US house purchases is mostly done on a 30-year fixed mortgage basis, meaning that most of the impact from rising rates, a global phenomenon, is on new purchases in the US. (This contrasts with the floating rates that are popular elsewhere – note the Australian RBA’s and Bank of England’s concerns on housing impact from sharp rate rises). Today we get the Oct. NAHB Housing Market survey, one of the more leading US indicators on housing demand and a survey that has been in freefall in recent months – dropping from 83 in January to 46 last month and expected Earnings to watch Today’s earnings focus is Netflix, Johnson & Johnson, and Lockheed Martin. Headwinds have been building for Netflix since the pandemic growth sprint and analysts expect revenue growth to have slowed down to 5% y/y in Q3 and EPS of $2.22 down 23% y/y and down 12% q/q. Johnson & Johnson is expected to see flat revenue growth in Q3 which given other consumer staples companies might be a bit too pessimistic and we believe there is a good chance that Johnson & Johnson can surprise to the upside given what we know about the US consumer. Today: Charles Schwab, Johnson & Johnson, Goldman Sachs, Intuitive Surgical, Lockheed Martin, Truist Financial, Netflix Wednesday: ASML, Elevance Health, Tesla, IBM, Lam Research, P&G, Abbott Laboratories, Atlas Copco Thursday: China Mobile, China Telecom, ABB, Danaher, Investor, Philip Morris, Union Pacific, CSX, AT&T, Blackstone, Marsh & McLennan, Yara International, Nordea, Volvo, Ericsson, Freeport-McMoRan, Dow, Snap Friday: CATL, American Express, Schlumberger, Verizon Communications, HCA Healthcare, Sika Economic calendar highlights for today (times GMT) 0900 – Germany Oct. ZEW Survey 1215 – Canada Sep. Housing Starts 1315 – US Sep. Industrial Production 1400 – US Oct. NAHB Housing Market Index 1600 – ECB's Schnabel to speak 2130 – US Fed’s Kashkari (voter 2023) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-18-2022-18102022
Alphabet Reports Strong Q2 2023 Results with Growth in Advertising and Cloud Services - 24.07.2023

The Australian Dollar (AUD) Did Not Do Well | Bitcoin Is Still Showing Resilience

Craig Erlam Craig Erlam 18.10.2022 12:45
Asian stocks were flashing green on the second day of trading, while Europe is poised to open in a similarly positive manner as sentiment continues to improve, albeit from very low levels. There’s still a strong feeling of a bear market rally about trading over the course of the last week. From the post-US-inflation rebound to what has now been a strong start to the week – in part driven by the UK’s decision to no longer shoot itself in the foot – nothing about this screams sustainable. Of course, the last couple of months have been tough for equity markets since peaking towards the end of the summer and a rebound of some kind was going to happen eventually. I’m just not convinced there’s much substance behind it as the economic landscape looks treacherous and we don’t even know if we’re at peak inflation and interest rate pricing yet. Those are substantial headwinds that will make any stock market rebound extremely challenging. RBA concerned about the outlook as it slows the pace of tightening The RBA minutes, along with comments from Deputy Governor Michele Bullock alluded to the outlook as contributing to the decision to slow the pace of tightening at the last meeting to 25 basis points. While the central bank will continue to hike rates in order to fight inflation – highlighting the broad-based pick-up in prices and higher wages – it’s clearly uneasy about the economic consequences and the lags in policy after hiking rates 2% over the course of four months since the summer. The Aussie dollar has not performed well in that time, falling around 15% from its June highs against the greenback, although it has rallied a little overnight. When will Japan intervene again? The yen remains under pressure despite desperate attempts by Japan to influence the currency markets through direct and verbal intervention. Last month’s intervention was substantial but short-lived and the commentary before and after has fallen on deaf ears. Overnight there was more of the same – “a high sense of urgency”, “will take appropriate action decisively” – and even a refusal to comment on whether the Ministry of Finance is conducting “stealth FX intervention”. If it is, it isn’t working particularly well, with the yen now very close to 150 against the dollar, a level that may make traders a little nervous. Another big intervention may soon be on the cards, although Japanese officials may be uneasy about the limited effectiveness of the last. What more can and will they do? The environment remains challenging Bitcoin has its sight set on $20,000 once more as it continues to bounce back from last week’s plunge. The sell-off occurred around the release of the US CPI data which could have sent it spiralling lower but risk appetite more broadly quickly bounced back and so did bitcoin. Whether it can continue to do so unless sentiment improves more sustainably is another thing. It continues to show resilience around $18,000 – $20,000 where it’s traded for most of the last couple of months but that may not be enough if risk appetite worsens again. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges

Sygnity - Analytical report: FY2022/23 EBITDA Forecast-(WSE:SGN)

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 18.10.2022 13:42
This analysis was prepared by mBank at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme Sygnity: sell (reiterated) SGN PW; SGN.WA | IT, Poland Overvalued With Weak Growth Prospects Shares in Sygnity plummeted 20% over the past month, underperforming the broad market index by 14pp, but we nevertheless maintain our bearish call on the Company after updating our models to include earnings results for the nine months ended 30 June 2022 (9M’21/22). Sales at Sygnity have been on a consistent upward trend for several quarters, and in the third quarter of fiscal FY2021/22 (calendar Q2 2022) they showed a marked acceleration. At the same time, there is persistent upward pressure on salaries in the tech industry as a whole, with a 10% increase or more forecast in 2022, that leads us to expect a slight profit decline at Sygnity in the coming quarters. With all this in mind, we have cut FY2022/23 EBITDA forecast for Sygnity by 7% to PLN 42.0m, and we have revised the expected net profit 4.1% lower to PLN 25.4m. On the updated estimates, SGN stock is trading at implied EV/EBITDA and P/E ratios of 9.4x and 16.1x, respectively, showing respective premiums of 16% and 31% relative to the median peer ratios, and far outpricing the multiples of Asseco Poland and Comarch – two much better alternatives at the current levels given their size and liquidity. After also updating our models to assume a market risk premium of 6.00% and updated risk-free rate assumptions, we lower our target price for Sygnity to PLN 13.30, implying 27% downside potential and a sell recommendation. Good FY2022/22 Q3 Results Sygnity delivered the first major revenue increase in a long time in the third quarter of fiscal FY2021/22; in the two previous quarters, year-on-year topline growth was constrained at 2-4%. At the same time, sales margins continued to weaken in Q3 while SG&A expenses increased, resulting in substantial contraction in quarterly profits. Sygnity is not able to grow revenues fast enough to offset rising costs. Pay Pressures Expected to Weigh Payroll accounts for a major part of Sygnity's operating expenses. In 2021, the average salary offered in the Polish tech industry remained on an upward trajectory despite the coronavirus pandemic, with the average salary rising in the high single digits as selected specialists received 10% more on average in pay than in 2020. Sygnity has to offer competitive salaries if it wants to attract top talent and skilled specialists for its teams. Increasing Exposure to Government Contracts The public sector accounted for 41% of Sygnity’s revenue in H1 FY’2021/22, and it has been responsible for a large part of this year’s revenue growth. Since then, the Company has added several big orders from the Ministry of Finance – a bad strategy in our view given its poor track record with government contracts in the past; we would rather see Sygnity reduce its exposure to the public sector. Key Risks Goodwill Impairment Sygnity recorded goodwill in the amount of PLN 157.2m as of 30 June 2022, representing more than half of the balance sheet total. A deterioration in the Company's financial standing could lead to impairment of that goodwill which in turn could lead to a violation of debt covenants. No Dividends Sygnity’s net debt is relatively low, with the IFRS 16 ending FY2021/22 balance expected to approximate PLN 8m, equivalent to 0.2x adjusted EBITDA. At the same time, however, the Company has a relatively small asset base after several years of curbed capital expenditures. If Sygnity increases investment and expenses on customer acquisition, this could result in negative changes in working capital, leading to curbed medium-term dividend payments despite good cash flow generation. Supplier Risk Sygnity serves as a local partner to global technology companies, integrating their solutions into customer systems and providing a range of services from training, to maintenance, upgrades, and extensions. If global software providers were to change the terms of their partner policies, for example by limiting the number of local partners or by bringing implementation services in different markets in house, this could have a negative effect on revenues. Increase in Labor Costs Payroll accounts for a major part of Sygnity's operating expenses. The average salary offered in the Polish IT industry has been on a steady rise for the last several years, rising in the high single digits in 2021 as the monthly earnings of selected specialists increased more than 10% compared to 2020. Sygnity has to offer competitive salaries if it wants to attract top talent and skilled specialists for its teams. Liquidated Damages Sygnity is always at risk of claims under liquidated damages- and warranty clauses contained in its many contracts with customers and business partners. As of 30 June 2022, the Company reported having conditional off-balance-sheet obligations under performance and warranty clauses in the amount of PLN 13.2m. Public Contracts Sygnity competes in government tenders for IT services which are typically awarded to the lowest bidder. Meanwhile, the biggest contracts usually require the onboarding of subcontractors, which heightens the risk of default. Another risk are cost overruns on underestimated projects (Sygnity's 2013 e-Taxes contract is one example of an underrated budget). Long-Term Contracts The pricing and successful delivery a long-term contract hinges on many factors, some of which are beyond the control of the supplier. For example, the actual figures at the end of the contract might miss the initial revenue, cost, and profit targets, leading to provisions, adjustments and write-offs (cost overruns are the most common issue), and in the worst case to events of default. Exchange Rate Risk Sygnity's revenues and costs are affected by changes in the zloty's exchange rates relative to the euro and the US dollar. On the balance sheet, assets and liabilities denominated in foreign currencies consist exclusively of trade receivables and trade payables. Corruption Probe In 2019, Sygnity became involved in an investigation into allegations of corruption in the award of contracts by the Polish Post Office brought against its employees, including the CEO and the Supervisory Board Chairman. The Company cooperated with the authorities and turned over all requested records and items. Since we do not have knowledge about the current status of the case, we cannot tell whether or not it might affect the Company's business in the future. Valuation Using DCF analysis and relative valuation, we set our ninemonth per-share price target for Sygnity at PLN 13.30. Multiples Comparison We compared Sygnity with its peer group based on forward P/E and EV/EBITDA multiples, each with an equal weight in the valuation outcome. Each of the forecast years, calendar 2022, 2023, and 2024, is assigned an equal weight. For Sygnity, we took fiscal years of FY2021/22, 2022/23, and 2023/24 as corresponding to the calendar years. We applied a 15% discount to the valuation outcome to reflect Sygnity’s slower earnings growth. Our model takes into account the NPV of a deferred tax asset arising from prior years’ losses. DCF Valuation Assumptions: â–ª The forecast period spans the fiscal years of FY2021/22 – 2030/31. â–ª The perpetuity risk-free rate is 4.50%. â–ª We assume FCF after the forecast period will grow at a rate of 2.0%. â–ª Net debt is ex IFRS 16 as of 30 September 2021. â–ª Perpetuity D&A expenses and CAPEX are assumed to be equal. Financial Results for Q3 FY2021/22 Sygnity missed our estimates with its financial results for the three months ended 30 June 2022 (Q3 of FY2021/22). Revenue amounted to PLN 54.4% in the period after an 8.9% rebound from the same period a year earlier. The gross margin posted a year-over-year decrease of 1.6pp at 30.5%. SG&A expenses increased to PLN 10.2m from PLN 8.1m a year ago. Other operating activity provided a PLN 0.2m gain. After all this, EBIT came in at PLN 6.5m in Q3’21/22 and EBITDA amounted to PLN 9.2m, a year-over-year fall of nearly 17%. Financing activity was neutral to the quarterly results, and the effective tax rate was 16.9%, resulting in net profit of PLN 5.4m. Sygnity delivered the first major revenue increase in a long time in Q3 FY2021/22; in the two previous quarters, year-onyear topline growth was constrained to 2-4%. At the same time, sales margins continued to weaken while SG&A expenses increased, resulting in substantial contraction in quarterly profits. Sygnity is not able to grow revenues fast enough to offset rising costs. Future Prospects Sygnity did not disclose the current size of its order backlog at the Q3'21/22 earnings conference. Nonetheless, we do see a pickup in revenue momentum, backed by new large contacts added in the last few months. They include: (1) A 24-month systems support framework agreement with the Information Technology Center of the Finance Ministry, with a maximum value of PLN 99m gross, and (2) Another framework with the Ministry regarding outsourcing of specialists over a period of 36 months, with a total maximum value of PLN 77.2m gross. We have raised our revenue forecasts for Sygnity after factoring the new contracts into our models. At the same time, to reflect the fact that the salaries of the Company's tech personnel, which account for a major portion of annual costs, are estimated to increase more than 10% a year, we assume as a baseline scenario that Sygnity's future sales margins will be narrowing. As for EBITDA margins, they could be in the 14.5-15% range assuming a reasonable approach to SG&A expenses. Our EBITDA forecasts for Sygnity for FY2021/22 and FY2022/23 have been revised downwards. Analyst: PaweÅ‚ Szpigiel +48 22 438 24 06 pawel.szpigiel@mbank.pl GPW’s Analytical Coverage Support Programme 3.0  
📈 Tech Giants Soar, 💵 Dollar Plummets! Disney-Charter Truce, Wall Street's AI Warning!

Netflix, Tesla (TSLA) And ASML Kick Off The Earnings Season

Peter Garnry Peter Garnry 18.10.2022 23:11
Summary:  The Q3 earnings season will not get much help from the financials, energy, and technology sectors as all three sectors are facing headwinds and US financial earnings last week and Bank of America yesterday have proven this hypothesis. Tonight Netflix will kick of the earnings season for the technology and media segment of the market with focus on input costs and its upcoming ad-tiered business model. Tomorrow, two giants from Europe and the US will report earnings in the form of ASML and Tesla with the latter being extremely important for US equity sentiment among technology and growth stocks. Q3 earnings will get no help from financials and energy The earnings season is slowly kicking into gear this week. Major US financials have already reported Q3 earnings with Bank of America surprising yesterday against estimates and delivering better results compared to a year ago against its peers. As we have written many times, we expect the Q3 earnings season to show margin compression and that earnings will be under pressure. The chart below shows the quarterly EPS for the S&P 500 financials sector showing that earnings are down 2% q/q and 9% y/y, and with weak earnings q/q from the energy and technology sectors it will be difficult to lift aggregate earnings in Q3. Netflix headwinds persists The video streaming giant Netflix reports earnings tonight after the US market close and analysts expect revenue growth of 5% y/y and EPS of $2.22 down 23% y/y as rising input costs are pressuring Netflix’s business. The strong demand during the pandemic has disappeared, competition has increased significantly, and content production has been weak running at higher costs than estimated. The key upside factor for Netflix is the new ad-tiered business model which will enable a new revenue stream and reduce the risk of subscribers cancelling their subscriptions due to the cost-of-living crisis. The semiconductor party is coming to an end for ASML ASML, the world’s largest and most important semiconductor equipment manufacturer, reports Q3 earnings tomorrow morning before European trading opens. Revenue growth is expected to decline to just 1.6% y/y from 35% y/y in Q2. While we believe ASML will meet expectations for operating income and revenue we are more worried about orders as the ongoing tensions between the US and China over semiconductors are negatively impacting the industry. The US has imposed several export restrictions on semiconductors and equipment to China and the full-speed realignment of semiconductors will hit industry growth in the short-term. We have recent seen negative outlook on semiconductors from Samsung and Micron Technology. As the ninth largest European publicly listed company this earnings release will be important for sentiment in European equities. ASML share price | Source: Saxo Tesla is confronted with lithium issues and high electricity prices There is probably not a more important stock than Tesla when it comes to sentiment in the technology and growth segments of the equity market. The EV-maker reports Q3 earnings tomorrow night after the US market close. Estimates are looking for revenue growth of 61% y/y and EPS of $1.02 up 106% y/y as EV adoption has accelerated this year despite supply constraints, price hikes on EVs and high electricity prices. Tesla recently missed estimates on Q3 deliveries and the main focus will be on lithium supply and prices, and to what extent it is impacting Tesla’s margins. We are also curious to see Tesla outlook given the high electricity prices. Car sales has recently stabilised in the US and Europe, and in China growth is coming back. However, the news flow from Chinese EV-makers has recently been negative and that might be a warning sign on the outlook. Tesla has moved from being a premium brand to an average brand when judged on average selling price as Tesla is now firmly in at the same average price as Ford and GM in the US. Its gross margin when factoring out R&D costs of cost of goods sold for other carmakers is also only the 11th best. The question remains whether Tesla can continue to command a high equity valuation, but as the fifth largest publicly listed company in the US this earnings release is the most important earnings release this week. Tesla share price | Source: Saxo Source: Earnings Watch Netflix ASML and Tesla | Saxo Group (home.saxo)
AMZN: Is The Primary Wave Ⓐ An Impulse Or A Leading Diagonal?

AMZN: Is The Primary Wave Ⓐ An Impulse Or A Leading Diagonal?

Jing Ren Jing Ren 18.10.2022 23:16
The structure of AMZN shares shows the development of a corrective trend. It is assumed that a zigzag is formed, which consists of sub-waves a-b-c of the cycle degree. Perhaps at the end of last year, the market completed the formation of the first major wave a, it is a bullish 5-wave impulse. After the end of the impulse growth, the price began to decline, which may indicate the beginning of a bearish correction b. It may take the form of a zigzag â’¶-â’·-â’¸ of the primary degree. Most likely, in the near future we will see a continuation of the depreciation of stocks in the final intermediate wave (5), which may end the primary impulse wave â’¶ near 92.78. At that level, wave (5) will be at 76.4% of previous impulse (3). After the end of the impulse wave â’¶, we expect the stock to grow in the primary correction â’·. An alternative scenario is possible, where the market has completed the formation of the primary wave â’¶. According to this markup, the wave â’¶ has the form of a leading diagonal (1)-(2)-(3)-(4)-(5). In this case, in the last section of the chart, we see the price increase in a bullish correction â’·. It is assumed that the correction wave â’· will take the form of an intermediate double zigzag (W)-(X)-(Y), where the actionary wave (W) is also a double zigzag W-X-Y of a lesser degree. It is possible that the correction â’· will be at 61.8% of wave â’¶. Thus, its completion is expected to reach the level of 154.93.
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

On The New York Stock Exchange, The Price Of Over 2,000 Securities Has Risen

InstaForex Analysis InstaForex Analysis 19.10.2022 08:19
At the close of the New York Stock Exchange, the Dow Jones was up 1.12%, the S&P 500 was up 1.14% and the NASDAQ Composite was up 0.90%. Salesforce Inc was the top performer among the components of the Dow Jones index today, up 6.35 points or 4.31% to close at 153.53. Quotes of American Express Company rose by 4.45 points (3.14%), closing the session at 145.99. JPMorgan Chase & Co (NYSE:JPM) rose 2.98 points or 2.57% to close at 118.84. The losers were shares of Intel Corporation, which lost 0.55 points or 2.08% to end the session at 25.87. Johnson & Johnson was up 0.58 points (0.35%) to close at 166.01, while Nike Inc was down 0.29 points (0.32%) to end at 89. 68. Leading gainers among the S&P 500 index components in today's trading were Carnival Corporation, which rose 11.28% to 8.09, Lockheed Martin Corporation, which gained 8.69% to close at 431.84, and Norwegian Cruise Line Holdings Ltd (NYSE:NCLH), which rose 8.57% to close at 14.31. The biggest losers were Moderna Inc, which shed 3.71% to close at 134.09. Shares of Hasbro Inc lost 2.88% to end the session at 65.76. Quotes of DexCom Inc decreased in price by 2.81% to 96.93. Leading gainers among the components of the NASDAQ Composite in today's trading were COMSovereign Holding Corp, which rose 170.14% to hit 0.12, Akouos Inc, which gained 88.16% to close at 13.19, and shares of Helbiz Inc, which rose by 58.07%, ending the session at around 0.42. The biggest losers were Agrify Corp, which shed 58.60% to close at 4.43. Shares of Cosmos Holdings Inc lost 47.33% and ended the session at 0.08. Quotes of Salarius Pharmaceuticals Inc decreased in price by 45.18% to 2.74. On the New York Stock Exchange, the number of securities that rose in price (2293) exceeded the number of those that closed in the red (825), while quotes of 115 shares remained virtually unchanged. On the NASDAQ stock exchange, 2441 companies rose in price, 1295 fell, and 277 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.77% to 30.50. Gold futures for December delivery lost 0.43%, or 7.10, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 2.33%, or 1.97, to $82.56 a barrel. Futures for Brent crude for December delivery fell 1.43%, or 1.31, to $90.31 a barrel. Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.20% to 0.99, while USD/JPY edged up 0.12% to hit 149.21. Futures on the USD index fell 0.02% to 111.88.   Relevance up to 03:00 2022-10-20 UTC+00 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297377
The Commodities Feed: China's 2023 growth target underwhelms markets

Despite The Strengthening Of The Risk-On Mood The Asian Markets Are Showing Mixed Reactions

TeleTrade Comments TeleTrade Comments 19.10.2022 09:01
Asian equities are displaying a mixed performance due to individual factors. Chinese investors are having anxiety ahead of PBOC’s monetary policy. Oil prices have printed a fresh two-week low amid escalating recession fears. Markets in the Asian domain are displaying a mixed response despite the strengthening of the risk-on mood in global markets. S&P500 futures have raised intermittent highs after two-consecutive bullish trading sessions. Rally in US markets is backed by a bumper start of the quarterly result season despite the headwinds of higher interest rates and soaring price pressures. At the press time, Japan’s Nikkei225 gained 0.63% and Nifty50 added 0.48% while ChinaA50 tumbled more than 1% and Hang Seng dived 1.20%. The US dollar index (DXY) has attempted a rebound move after sensing buying interest around the immediate cushion of 112.00. The rebound move seems less confident amid the absence of a risk-aversion theme. Further, investors are awaiting the release of the US Housing Starts data. The real estate catalyst could get impacted by soaring interest rates by the Federal Reserve (Fed). Meanwhile, Chinese investors have shifted their focus toward the People’s Bank of China (PBOC) monetary policy, which will be announced on Thursday. The central bank could adopt a dovish tone as economic prospects are deteriorating. The continuation of the zero Covid-19 policy by the Chinese administration to contain the epidemic and weak property sector needs monetary easing to get back on the growth track. On the oil front, oil prices have rebounded after printing a fresh two-week low at around $81.20. The rebound move could derail amid headwinds of the central bank's monetary policy tightening and escalating recession fears in the US. Rising US Treasury yields have bolstered the case of a recession situation in the coming months.
The Australian Market Has Seen Growth | Mercedes-Benz Launches New EV

The Australian Market Has Seen Growth | Mercedes-Benz Launches New EV

Saxo Bank Saxo Bank 19.10.2022 09:48
Summary:  Better-than-expected corporate results boosted US stocks for the second day. Afterhours Netflix shares rose 14% on reporting better than expected results. Oil prices fell 3% with the US said to release more strategic petroleum reserves on supply concerns. Gold advanced. Floods hampered commodity production numbers in Australia. RBA notes loan arrears and insolvencies are rising. Mercedes-Benz launched new EV models that rival Tesla’s Model Y. Rio Tinto sees lithium tightness. What’s happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) indices rally for the second day  US stocks extended their gains in choppy trading, with the S&P500 gaining 1.1% and now up 3.8% in two days after continuing to rebound from nearly oversold levels, before closing at 3,719.98 points (its highest level in 8-days) on better-than-expected corporate results. All 11 sectors of the S&P500 gained, with Industrial, Materials, Utilities, and Financials leading. Defense giant, Lockheed Martin (LMT:xnys) shares gained the most since 2020, up 8.7% after its earnings per share topped estimates. Goldman Sachs (GS:xnys) rose over 2%, with stronger trading results helping the investment bank beat quarterly earnings and revenue expectations. Goldman’s results continued a strong stretch of bank earnings, including beats from Bank of America (BAC:xnys) and Bank of New York Mellon (BK:xnys) on Monday, with the financial sector outperforming on Tuesday. Meanwhile, Afterhours, Netflix (NFLX:xnas) shares rose 14% after reporting better than expected results, adding 2.4 million customers in the 3Q, beating expectations. The rally was also supported by the Bank of England calming nerves saying, the funds whose vulnerabilities also fueled the rout in UK markets have now raised tens of billions of pounds in capital, and as such are on a more sustainable footing. U.S. treasury (TLT:xnas, IEF:xnas, SHY:xnas) ended Tuesday little changed Treasuries finished a choppy session with yields largely staying near the levels from the day before. The 2-year yield was 1bp richer at 4.43% and the 10-year yield was unchanged at 4%. U.S. economic data were mixed with stronger industrial production in September but a below-expectation read in the NAHB Housing Market Index. Contrary to a Financial Times report suggesting the Bank of England would delay its quantitative tightening program, the U.K. central bank announced later in the day that it will start bond sales on Nov 1 but not including long-dated bonds initially. Australia’s ASX200 (ASXSP200.1) rises 0.3%, with lithium stocks charging, while energy companies retreat after the oil price fell 3%. The Australian share market trades 0.3% higher on Wednesday (1.5 hours into the seesion) with lithium stocks like Pilbara Minerals, (PLS), Allkem (AKE) up over 3% (for more on lithium see below). Meanwhile, the energy sector is capping broad market gains, with selling in oil stocks taking the energy sector down 1.6% after the oil price fell 3.1% to $82.82, with the US said to release emergency crude on supply concerns. Meanwhile losses in oil stocks are somewhat limited with OPEC+ members defending their supply cuts, saying they are justified by the growing risk of a global recession. Woodside (WDS) trades 1.7% down. Beach Energy (BPT) is down the most in the sector, 4.6%, after reporting production dropped amid flooding. The best performing stock on the ASX this year, Whitehaven (WHC) trades 2.2% lower today after announcing production fell 37% last quarter, with total equity sales down 32% compared the June quarter. Whitehaven Coal’s CEO said he sees demand for high quality coal continuing to outstrip global supply, which will likely continue to support coal prices. The coal price has fallen 3% this month, and is now down 15% from its all-time high. Meanwhile, gold stocks are also in focus after Gold prices steadied after the US dollar continued to fall. However St Barbara (SBM) shares are 6.2% lower after the miner cut its gold output forecast for the year, which disappointed analysts. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Hong Kong stocks rallied, with Hang Seng rising 1.8%, following the move higher in U.S. equity index futures on reports that the Bank of England was delaying its quantitative tightening due to start at the end of October. The Bank of England denied the story later. HSBC (00005:xhkg) and Standard Chartered (02888:xhkg) gained more than 2.5%. BYD (01211:xhkg) surged 6.4% after the leading EV maker said its Q3 profit was set to rise as much as 365% Y/Y, lifting most other EV makers 3%-5% higher in share prices as well. Healthcare names surged again, with Ali Health (00241:xhkg) up 9.4%, Hansoh Pharmaceutical (03692:xhkg) up 5.9%, CSPC Pharmaceutical (01093:xhkg) up 4.5%, Sino Biopharmaceutical (01177:xhkg) up 4% and some biotech stocks soared more than 10%. Chinese airlines stocks gained from 2% to 3% after some Chinese airlines, including China Eastern Airlines and China Southern Airlines, announced the resumption of some more international flights. CSI300 ended a choppy session losing 0.2%. USDJPY climbed to 149.37, the highest level since 1990, and oil price fell to USD83.70 The Yen weekend to 149.37 with the 150 figure in sight. EURUSD, at 0.9850, and GBPUSD, at 1.1330 were little changed from Monday. NZDUSD was the notable outperformer among the G10 currencies, rising to 0.5690 while USDCAD underperformed as oil prices slumped, WTI crude fell 2% to USD83.70 on the report that the Biden administration has approved to release of more strategic petroleum reserves. What to consider? Stronger-than-expected industrial production but a softer NAHB Housing Index U.S. September industrial production came in at +0.4% M/M, (vs consensus: 0.1%, Aug: -0.1% revised) and capacity utilization increased 0.2pp to 80.3%. NAHB Housing Market Index fell to 38, below 43 expected and 46 in August. RBA sounds alarm that rate hikes could soon pause with loan arrears and insolvencies rising The Aussie dollar rose for the 3rd day after the after the USD continued to lose strength when the UK re winded some tax cuts. However, the outlook for the Australian dollar against the US remains restricted, with the RBA noting loan arrears and insolvencies have picked up in Australia. Yesterday's RBA Meeting Minutes highlighted the RBA has little room to rise rates, without compromising the health of the economy. The RBA was only able to raise rates by 0.25% this month, as business insolvencies had picked up, plus a low level of loan arrears were seen, while housing loan commitments declined -  ‘demonstrating the effect of high interest rates on housing’. Lithium sector news; Mercedes-Benz launches new EV that rivals Tesla’s Model Y. Rio Tinto sees lithium tightness Mercedes-Benz (MBR) broadened its electric vehicle range on the eve of the Paris car show; unveiling a new sporty vehicle that’s US$4,300 cheaper than Tesla’s Model Y, with Mercedes selling the EQE SUV later this year for US$68,000. The new sporty EV Merc also has a 590 kilometres range, means it travels 76 kilometres more than Tesla’s Y Model. Mercedes also plans to offer EV versions of all of its vehicles by the end of this year. And aims to only sell EVs by 2030, particularly in markets phasing out fuel engines. Also in Lithium news yesterday, Rio Tinto (RIO) said the lithium market is experiencing tightness, while demand continues to strengthen from government policies, and EV producers rolling out new models. Lithium carbonate prices remained elevated in the quarter after Power rationing in China’s Sichuan province (a key lithium supply hub) also led to production cuts. Also, Australia’s biggest pure play lithium company Pilbara Minerals (PLS) sold spodumene concentrate at a new record high price, equating to $7,830 a ton.     For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-19-oct-19102022
CHF/JPY Hits Fresh All-Time High in Strong Bullish Uptrend

Demand For Netflix Remains Strong | The USD/JPY Pair Is Significantly Approaching The 150.00 Level

Saxo Bank Saxo Bank 19.10.2022 09:58
Summary:  A choppy session for equities yesterday as an intraday rally to new local highs was erased and before futures shot higher in late trading yesterday on surprisingly positive results from Netflix, helping to keep the sharp rally off the recent bear market lows alive for now. Meanwhile, bond yields remain pinned near cycle highs, keeping the pressure on the struggling Japanese yen, while the Chinese renminbi threatens new lows versus a mixed US dollar.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Volatility remains high in the US and equities continued higher yesterday with S&P 500 futures closing at the 3,732 level and pushing higher this morning trading around the 3,747 level. Our view is that the move in US bond yields will dictate direction and with the US 10-year yield pushing higher trading around the 4.05% level this morning we could see a reversal in the equity market. Better than feared results from Netflix also boosted the technology and media segments of the US equity market. Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Hang Seng Index fell more than 1% by mid-day, as China Internet stocks reversing the bounce in the past two days, falling from 2% to 4%, and local property developer names paring early gains as the relief for extra stamp duties for non-resident home buyers in the maiden Policy Address of the Hong Kong Chief Executive is less extensive than expected. Sun Hung Kai Properties (00016:xhkg) dropped 1.5% and New World Development (00017:xhkg) plunged 4%. Hong Kong Stock Exchange (00388:xhkg), falling 0.6%, reported a 30% Y/Y decline in EPS in Q3, slightly better-than-feared. Shipping stocks gained, with tanker and dry bulk operator COSCO Shipping Energy Transportation (01138:xhkg) soaring more than 11% and leading the charge higher. In mainland bourses, the CSI300 fell 0.9% while shipping names and educational service providers outperformed. Risk sentiment keeps USD under pressure, but bigger focus on struggling JPY, CNH The US dollar bobbed around in correlation with risk sentiment and is still supported at the margin by US treasury yields remaining near the highs for the cycle, with the 10-year treasury benchmark above 4.00% this morning. The most interesting development is that, despite the somewhat mixed to lower US dollar relative to its recent top, the Japanese yen remains near the lows for the cycle on the ongoing rise in global yields, with USDJPY just shy of the 150.00 level that some believe could bring an official intervention. Likewise, USDCNH saw its highest daily close yesterday just above 7.22 and is looking higher still above 7.2400 this morning, with broad CNH weakness intensifying. Is China looking to take its currency significantly lower? Crude oil (CLX2 & LCOZ2) Crude oil prices traded heavily yesterday as US president Biden said that it would release 15 million more barrels from the US Strategic Petroleum Reserve (SPR) and could possibly release further barrels this winter. Petrol prices are clearly a concern, and the administration is in an all-out effort to suppress prices ahead of the mid-term election early next month, although releases from reserves will do little to relieve the pinch in especially diesel supplies, where inventories are at record lows on shipments of diesel to the even tighter European markets. At some point, the SPR cannot be credibly tapped for further supplies – as the administration has tapped nearly 200 million barrels from reserves this year already, about a third of the total in storage. US treasuries (TLT, IEF) US treasury yields remain near the highs, with the 10-year treasury benchmark still above 4.00% this morning, with little incoming data of sufficient importance to prompt volatility until the week after next, which will bring both the next key jobs report as well as the next FOMC meeting. An auction of 20-year T-notes is up later today. What is going on? ASML beats Q3 estimates on revenue and gross margin The world’s largest semiconductor equipment maker posts Q3 revenue of €5.8bn vs est. €5.3bn and gross margin of 51.8% vs est. 49.5%. While gross margin beats in Q3 the company’s forecast for Q4 of 49% misses estimates of 50.3% and ASML expects to delay revenue of €2.2bn into 2023. Q4 revenue forecast is €6.1-6.6bn vs est. €6.1bn as the CEO says demand remains strong. The company says that US export rules on semiconductors to have minimal impact on shipments in 2023, but at the same time the company says that it expects to revisit 2025 scenarios and growth opportunities. China is around 15% of sales for ASML. Netflix proves sceptics wrong on strong subscriber figures Netflix surprised investors last night by defying the pessimists that had projected dire subscriber figure, but Netflix reported net change of 2.4mn vs est. 1mn despite price hikes suggesting demand remains strong. The company forecasts Q4 net change in subscribers of 4.5mn vs est. 3.9mn but will not provide future forecasts on paid subscribers after Q4. The company sees worse than expected revenue and EPS figures in Q4 compared to estimates. Netflix also said that it is seeing strong demand for its advertising capacity which is good news for shareholders as advertising is the next big revenue leg for Netflix. Shares were up 14% in extended trading. Johnson & Johnson sees FX headwinds Q3 revenue and EPS in line with estimates suggesting low revenue growth of just 2% y/y and the company says it expects FX headwinds on EPS of 6-7% next year and that modest layoffs are likely. Lockheed Martin expects flat sales in 2023 Q3 revenue at $16.6bn was in line with estimates while EPS of $6.87 beat estimates. Backlog increased 4% y/y to $139.7bn but expects a flat revenue growth in 2023 and lower margins indicating that Lockheed Martin is not expecting to benefit significantly from the war in Ukraine. It should be said that the CEO said demand is strong for its Javelin missile system that is being used in Ukraine. Despite muted growth expectations the company’s decision to expand its buybacks lifted shares considerably in yesterday’s session. US NAHB Housing Market Index plunged further in October … pointing to a rapidly weaking US housing market. The index peaked in late 2020 at a record 90 level and began this year at 83 before the impact of rapidly rising interest rates drove a steep decline in activity. The October level was 38, below expectations of 43 and the September reading of 46. Only two readings since 2012 have come in below the current level, both of which were posted in the panic months during the Covid pandemic outbreak in early 2020. This index has proven a strong leading indicator with a very long and variable lag in past economic cycles, but pointing to headwinds to develop for employment and the broader economy at some point next year. Bank of Japan’s Kuroda keeps foot on the easing pedal The Bank of Japan governor said that a stable weak JPY is a net positive for Japan and merely spoke against the negative effects of "excessive” moves. Another BoJ member Adachi spoke in favour of the current policy of negative rates and yield-curve-control, saying that “sticky inflation” would be needed for a shift in policy. USDJPY traded to a new cycle- and 32-year high above 149.30 in early European hours. UK Sep. CPI out this morning slightly above expectations … with the headline at +0.5% MoM and +10.1% YoY (matching the cycle high) vs. 0.4%/10.0% expected, and the core YoY at 6.5% vs. 6.4% expected. The latter was the highest for the cycle and highest since 1992. What are we watching next? Australian earnings season commodity production amid weather and labour issues Mostly weaker than expected quarterly production and outlooks were released today from BHP, Whitehaven Coal, Beach Energy and St Barbara with these commodity giants in coal, oil and gold being hit by poor weather, flooding and labour shortage issues. Whitehaven (WHC) announced production fell 37% last quarter amid poor weather and labour shortages. The Whitehaven Coal CEO says it sees demand for high quality coal continuing to outstrip global supply. That said, the Newcastle Coal price is 3% this month and about 15% lower than its all-time high. Earnings to watch Today’s earnings focus is ASML (see our earnings review above) and Atlas Copco in Europe, and Tesla and P&G in the US. We wrote a preview on Tesla Q3 earnings in yesterday’s equity note but the main focus is the supply situation on lithium and to what extent demand is impacted from higher electricity prices. Today: ASML, Elevance Health, Tesla, IBM, Lam Research, P&G, Abbott Laboratories, Atlas Copco Thursday: China Mobile, China Telecom, ABB, Danaher, Investor, Philip Morris, Union Pacific, CSX, AT&T, Blackstone, Marsh & McLennan, Yara International, Nordea, Volvo, Ericsson, Freeport-McMoRan, Dow, Snap Friday: CATL, American Express, Schlumberger, Verizon Communications, HCA Healthcare, Sika Economic calendar highlights for today (times GMT) 1230 – US Sep. Housing Starts & Building Permits 1230 – Canada Sep. CPI 1300 – UK Bank of England’s Cunliffe to testify 1430 – US Weekly DoE Crude Oil and Product Inventories 1700 – US Fed’s Kashkari (Voter 2023) to speak 1700 – US Treasury auctions 20-year T-notes 1800 – US Fed Beige Book 2230 – US Fed’s Evans (Voter 2023) to speak 2230 – US Fed’s Bullard (Voter) to speak 2350 – Japan Sep. Trade Balance 0030 – Australia Q3 NAB Business Confidence 0030 – Australia Sep. Employment Change/ Unemployment Rate Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-19-2022-19102022
FX Talking: The Dollar's Break Point Signals Lower US Inflation and Favorable Environment for Pro-Cyclical Currencies

Podcast: The Weakening Of Japanese Yen (JPY) And Chinese Yuan (CNH) | Tesla's Earnings On The Radar

Saxo Bank Saxo Bank 19.10.2022 13:03
Summary:  Today we look at another choppy US equity market session, with a fresh rally attempt in late trading on far better than expected Netflix results and guidance. That rally is unlikely to persist as long as US treasury yields continue to set new highs for the cycle, as they did briefly this morning. The very weak JPY and fresh CNH weakness are key topics in FX as we also look at the key earnings coming up on our radar, especially Tesla. This and much more on today's pod, which features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are found via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-oct-19-2022-19102022
Market Risk Sentiment Adjusts as Investors Eye US Inflation Data

Small Caps Are More Dominated By Retail Investors

Saxo Bank Saxo Bank 19.10.2022 13:15
Summary:  US small caps have since 2006 traded at an average valuation premium of around 35% to the S&P 500 but recently since premium has completely disappeared and small caps are now historically cheap relative to large cap stocks. The question is therefore naturally whether investors should look at small caps despite a challenging environment for equities as interest rates continue to go higher. We take a look at the different arguments for and against US small caps despite their apparent attractiveness. Small caps have mostly traded at a premium The pandemic and the subsequent interest rate shock have caused two seismic shifts in the relative equity valuation between US small caps (Russell 2000 Index) and large caps (S&P 500 Index). During the pandemic small caps rose to three standard deviation premium relative to the historical relationship in relative valuation. Subsequently as society came out of the pandemic and the last year’s interest rate shock the relative valuation has collapsed to historical lows. If history since 2006 is a strong gravitational force in the relative valuation US small caps indeed look cheap. Most of the assessment that the long tail of US publicly listed companies is cheap hinges on the relative argument. In absolute terms US small caps have now the same EV/EBITDA multiple as large cap stocks and historically small caps have traded at a 35% premium to S&P 500 since 2006. The justification for a small cap valuation premium could be placed on the small cap risk premium (stating that small caps outperform large caps over time), but more recent evidence is putting doubt on this so called effect. If small caps provided higher growth rates it could be justified, but if the post pandemic period is removed from the data small caps are not growing operating income (EBITDA) faster than S&P 500. So why pay a premium for the same growth, less liquidity and more volatility? One argument is that small caps are more dominated by retail investors that are not engaged in deep thinking over risk premium, growth rates and valuation, but merely taps into this universe because of its many interesting companies and maybe the old time narrative about small beats large. The argument for buying small caps rests mostly on small caps growing faster than large caps or that the historical valuation premium will be restored. One major risk in small caps is that smaller companies tend to do worse during economic slowdowns or outright recessions. Source: https://www.home.saxo/content/articles/equities/us-small-caps-are-historically-cheap-relative-to-large-caps-19102022
German Business Confidence Dips, ECB's Lagarde Hosts Central Banking Conference in Portugal, EUR/USD Drifts Higher

What May Earnings Of e.g. Amazon (AMZN), Tesco And Walmart Mean To Inflation And, In Consequence, To Forex Market?

Jing Ren Jing Ren 19.10.2022 14:22
Last Friday saw the unofficial start of Q3 earnings season. Over the next month, most major corporations around the world will provide updates to investors on profits and give an outlook for the rest of the year. CEO's will comment on the state of their business, and what of particular interest to forex traders, the general economic environment. Forex, of course, depends on the underlying economic situation. But multinational corporations are also the main drivers of cash flows between different currencies as they pay for products, make investments and repatriate profits. Central banks and governments respond to economic conditions faced by businesses, which also impacts the value of their respective currencies. "Headwinds" is the term of the season Many US firms have pre-announced results, in an unusual move. Virtually all of them have warned of negative results for the quarter. This is one of the factors driving US stocks lower. Among the reasons cited are "currency headwinds". That is, the US dollar has been strengthening over the last several months, and profits generated overseas are worth less in dollar terms. The Fed's policy of pushing rates higher to fight inflation has outstripped most other currencies, making it difficult for US exporters. Importers, on the other hand, are seeing increased profits thanks to relatively cheaper imported goods. The result is that the trade balance will likely be increasingly negative, contributing to outflows of US currency. As long as the economic uncertainty persists, this is unlikely to affect the dollar. But, downward pressure is building on the dollar, which could be released at any moment when the Fed's policy starts to soften. Sequential over comparable Traditionally, companies compare current earnings to the same period in the prior year. This helps avoid seasonality effects. However, last year was the middle of the delta covid wave, which would likely distort the "comparable" earnings. "Sequential" earnings are the difference between the current quarter and the previous one, which could take priority. Given the unusual situation, companies can be reporting knock-out comparable earnings, but disappointing sequential ones. Particularly travel and leisure stocks, given the shutdown of air travel last year. European firms in particular were facing an increasingly challenging environment because of energy prices, which peaked at record highs over the last three months. However, since then, energy prices have cratered. They are still well above pre-war and pre-pandemic levels, but substantially lower. Therefore, the reports for European firms could be extraordinarily negative, and not represent the current (or future) situation. This could lead to further "paradoxical" behavior in the market, as traders’ price in the effects of energy prices into earnings. The focus is still on retail With monetary policy focusing on inflation, consumer behavior is likely to have the biggest impact on forex. Big retail firms like Walmart in the US, Casino in Europe, Tesco in the UK can give some critical insight into consumer behavior. Amazon and Alibaba can do so globally. Companies being able to pass on higher costs to consumers implies inflation can continue. As companies are starting to see margin compression as consumers refuse higher prices, it could mean that inflation is near its peak due to demand destruction. Speaking of demand destruction, recession concerns can be read into earnings reports. Particularly in regards to the item of inventories. If companies are seeing their stock build up, they will be less likely to buy replacements. That in turn means inventory building up in other companies, who will buy less raw materials. In general, it implies slowing economic activity, and could be the precursor to layoffs. Company comments on inventories could be market moving this season.
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Dow Jones Industrial Average Index And Its Movement

InstaForex Analysis InstaForex Analysis 20.10.2022 08:25
  Relevance up to 07:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297555
Investors Are Worried That Elon Musk Is Losing His Focus | The Eurozone Recession Can Dampen Investors’ Hopes

The Expected Decline Of Tesla Can Take Many Months To Complete

InstaForex Analysis InstaForex Analysis 20.10.2022 08:39
Tesla peaked back in January 2021 and has since been in an expanded flat correction as wave B went above the peak of wave 3 at 300 and closed at 414.50. We see a possible S/H/S top building but need a break below the neckline support at 206 to confirm the top formation and a decline towards at least 136 and possibly even closer to 118 before a corrective low is in place for wave 4. As for the long-term outlook, the expected decline can take many months to complete. However, for now, we are looking for a possible break below 206 that will open up for the expected decline towards 136 and possibly lower.   Relevance up to 07:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/297567
Asia Market: Optimistic Headlines From Regional Leaders China And Japan

Equities On Asia Stock Market Are Facing An Intense Sell-Off

TeleTrade Comments TeleTrade Comments 20.10.2022 08:56
An escalation in the risk-off impulse has accelerated nervousness in Asian equities. An unchanged PBOC monetary policy has triggered a sell-off in China’s indices. Oil prices soar as EIA reported a decline in oil stockpiles by 1.725M barrels. Markets in the Asian domain are displaying a vulnerable performance following the weak trend from S&P500. Equities are facing an intense sell-off amid a firmer rebound in the risk-off sentiment. Upbeat returns on the US government bonds have dragged the risk-sensitive assets into a negative trajectory. The 10-year US Treasury yields have recorded a fresh 14-year high at 4.15%. Returns on US bonds have lured investors, which has resulted in the liquidation of equities. At the press time, Japan’s Nikkei225 tumbled 1.04%, ChinaA50 dropped almost 1%, Hang Seng plunged 1.66%, and Nifty50 eased 0.27%. When the mighty US sneezes other countries catch a cold. Weak economic prospects revealed in Federal Reserve (Fed)’s Beige Book triggered the risk-off market mood and a flight of safety to the US dollar index (DXY). The DXY pushed towards the round-level resistance of 113.00. At the time of writing, the DXY has slipped to near 112.80 as S&P500 futures have trimmed their losses, however, the sentiment has not turned positive yet. An announcement of an emergency bond-buying program worth $667 million by the Bank of Japan (BOJ) has triggered the risk of further weakness in the Japanese yen. The announcement followed commentary from Japan Prime Minister Fumio Kishida in which he cited the risk of weaker economic prospects due to external demand shocks. Meanwhile, Chinese equities have witnessed an intense sell-off after the People’s Bank of China (PBOC) maintained the status quo by keeping Prime Lending Rate (PLR) unchanged. The one-year and five-year PLR remained steady at 3.65% and 4.30% respectively. On the oil front, oil prices have climbed above $85.00 firmly after the Energy Information Administration (EIA) disclosed in decline in oil stockpiles by 1.725M barrels last week ending October 16.
bybit-news1

US Indices - S&P 500 And Nasdaq Declined 0.67% And 0.85% Respectively. USD Supported

ING Economics ING Economics 20.10.2022 09:13
Mediocre Australian labour data starts the day while overnight, Fed officials are taking a less hawkish tone. Markets seem oblivious for now Source: shutterstock Macro outlook Global markets: Wednesday continued the selling pressure that started after the briefest of rallies on Tuesday, and leaves the S&P500 only slightly up from its Monday close at 3695, after a daily decline of 0.67%. The NASDAQ dropped 0.85% on the day. US equity futures are showing further small declines at the open today. This sentiment slide has helped the USD, and EURUSD has fallen back to 0.9764. Further disarray in the UK’s Government hasn’t helped Cable, which declined to 1.1205, though Gilt yields continued to decline yesterday. It’s worth considering whether a call for a General Election might actually be positive for sterling. The AUD is also looking softer at 0.6264, while the JPY seems to be plateauing out at just under 150, in what looks like a market version of “Grandmothers’ footsteps” (for those old enough to remember that). Maybe the BoJ won’t notice its ongoing weakness?  Most Asian currencies weakened against the USD yesterday. The Rupee led the pack and pushed over 83 to the USD, though the CNY was also weaker, rising to just under 7.23. US Treasury yields staged a further strong increase. 2Y yields rose by 12.8bp to 4.556%, while 10Y yields rose 12.7bp to 4.134% - a new cycle high. The move is interesting given that it coincided with a more moderate-sounding James Bullard (St Louis Fed), who many (including ourselves) regard as the most prescient and insightful Fed member. “…it doesn’t mean you go up forever...” – Bullard said to Bloomberg journalists. His comments were echoed by Neel Kashkari, who suggested that there could be a pause next year, and said that it was possible that overall inflation had peaked.  The market has been looking for hints of a Fed pivot for weeks, but now that they are here, they seem to be ignoring them. This sets up the day for a possible "lightbulb moment", followed by strong gains in equities, and falls in front-end bond yields and the USD. Possibly… G-7 Macro:  The Fed’s Beige Book was released early this morning Asia time, and the summary concluded that the economy had continued to grow modestly through early October, but was slowing in a couple of places. Although price growth remained elevated, there were signs of some easing in several districts (in line with what we are seeing in the NFIB surveys). The Macro calendar is relatively quiet today, with US existing home sales (following yesterday’s weak housing starts numbers) and weekly jobless claims figures. France produces a raft of business-related surveys today, while German PPI inflation (currently running at a staggering 45.8%YoY) will be worth a nervous glance.    Australia: September labour data showed a much smaller increase in total employment than the 25K expected by market analysts. Total employment rose only by nine hundred jobs, mainly due to a big fall (-12.4K) in part-time employment, which offset the 13.3K rise in full-time employment. The unemployment rate remained 3.5%. There was no change in the participation rate. The split between full-time and part-time workers means the headline overstates the weakness of this report, but this is still not a strong set of numbers. Japan: The September trade outcome was mostly in line with the market consensus. Exports were up 28.9% YoY (vs 22.0% in August and 26.6% market consensus) and showed continued improvement. By export item, the gain was broadly based. Auto exports gained the most and machinery exports also gained solidly. Meanwhile, imports rose 45.9% YoY (vs 49.9% in August, 44.9% market consensus) showing some slowdown as global commodity prices declined.   Indonesia: Bank Indonesia (BI) holds a policy meeting today.  Consensus points to a 50bp rate increase by Governor Warjiyo, with inflation expected to accelerate further in the coming months.  BI Governor Warjiyo also reiterated that policy moves would be "preemptive" suggesting a sizable increase to bring inflation back within target by 3Q next year.    What to look out for: BI policy meeting and Fed speakers Japan trade balance (20 October) Australia labour market data (20 October) China loan prime rate (20 October) Taiwan export orders (20 October) Bank Indonesia policy meeting (20 October) US initial jobless claims (20 October) Fed’s Evans, Bullard and Kashkari speak (20 October) New Zealand trade balance (21 October) Japan CPI inflation (21 October) South Korea advance trade data (21 October) Fed’s Jeferson, Cook and Bowman speak (21 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Netflix Inc Was Leading Gainer While JP Morgan Chase & Co Was Down

InstaForex Analysis InstaForex Analysis 20.10.2022 08:16
At the close of the New York Stock Exchange, the Dow Jones fell 0.33%, the S&P 500 fell 0.67% and the NASDAQ Composite fell 0.85%. The components of the Dow Jones index The leading gainers among the components of the Dow Jones index today were The Travelers Companies Inc, which gained 7.40 points or 4.44% to close at 174.17. Chevron Corp rose 5.28 points or 3.24% to close at 168.00. Procter & Gamble Company rose 0.93% or 1.19 points to close at 129.56. The biggest losers were Home Depot Inc, which shed 9.57 points or 3.36% to end the session at 275.49. Dow Inc was up 2.70% or 1.25 points to close at 45.13, while JPMorgan Chase & Co was down 1.96% or 2.33 points to close at 116. .51. The S&P 500 index components Leading gainers among the S&P 500 index components in today's trading were Netflix Inc, which rose 13.09% to 272.38, Intuitive Surgical Inc, which gained 8.99% to close at 211.14, and shares of Valero Energy Corporation, which rose 5.32% to close the session at 123.96. The biggest losers were Generac Holdings Inc, which shed 25.34% to close at 110.30. Shares of M&T Bank Corp lost 13.89% and ended the session at 163.06. Quotes Northern Trust Corporation fell in price by 9.15% to 79.59. The components of the NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Mullen Automotive Inc, which rose 57.12% to hit 0.34, Scopus Biopharma Inc, which gained 51.59% to close at 0.37, and also shares of SenesTech Inc, which rose 46.55% to close the session at 0.34. The biggest losers were Olaplex Holdings Inc, which shed 56.69% to close at 4.24. Shares of Agrify Corp lost 42.44% to end the session at 2.55. Quotes of Sientra Inc decreased in price by 37.36% to 0.38.  The number of securities that fell and rise On the New York Stock Exchange, the number of securities that fell in price (2363) exceeded the number of those that closed in positive territory (777), while quotes of 105 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,715 stocks fell, 1,085 rose, and 216 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.89% to 30.77. Commodities Gold futures for December delivery lost 1.31%, or 21.65, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery rose 3.23%, or 2.65, to $84.72 a barrel. Futures for Brent crude for December delivery rose 2.53%, or 2.28, to $92.31 a barrel. FX Market Meanwhile, in the Forex market, EUR/USD fell 0.79% to hit 0.98, while USD/JPY edged up 0.43% to hit 149.90. Futures on the USD index rose 0.73% to 112.81.   Relevance up to 05:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297535
Asia Market: Exports In Indonesia Are Likely To Continue To Grow, Chinese Interest Rate Decision Ahead

Australia Has A Growing Number Of Business Insolvencies | Chinese Concept Of Regulating The Way Wealth Is Accumulated

Saxo Bank Saxo Bank 20.10.2022 10:42
Summary:  The major US indices, the Nasdaq 100 and S&P 500 fell on weaker-than-expected company news, Putin clearing martial law, and more hawkish Fed comments. 10-year US bond yields hit 4.14%, its highest since July 2008 which boosted the US dollar against every G-10 peer. Netflix, the standout performer up 13% following their mostly better-than-expected results. Tesla shares slid after hours on weaker-than-expected 3Q results. AU jobs data disappoints, putting the focus back on the AUD and banking shares. Across the Asia Pacific, all eyes are on energy and oil stocks after the Crude oil price lifted 3% on EIA warnings. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) fall on weaker than expected company news, Putin clearing martial law & hawkish Fed comments US stocks fell on the backfoot after a two-day rally, with the 10-year US bond yield hitting 4.136% in the session, which is its highest level since July 2008, while 2-years rose to the highest since 2007. That in turn boosted the dollar, which rallied against every G-10 peer. Gold dropped. It comes as Fed speakers warned US inflation continues to surprise to the upside, saying there’s no reason to think key price measures have peaked. Over in UK and Canada CPI came in stronger than expected in September, up 10.1% year on year (YOY) and 6.9% YOY respectively, ensuring the Bank of England and Bank of Canada keep on hiking rates.  Earnings enthusiasm faded with backup generator manufacturing Generac (GNR) shares sliding 25% on slashing its full year sales outlook. While community bank M&T (MTB) shares crumbled 14% on the company reporting weaker than expected results. On the upside, oil stocks charged with Baker Hughes (BKR), Valero Energy (VLO) and Halliburton (HAL) up over 5% each. While Netflix (NFLX) was the stand out performer up 13% following their mostly better than expected result released the day prior as we mentioned here.  S&P 500 dropped 0.7% and Nasdaq 100 slid 0.4%. 10 of the 11 sectors of S&P 500 declined with the notable exception of Energy, which rose 2.9%. 10-year U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) jumped to 4.13% Higher-than-expected U.K. inflation prints, hawkish comments from Fed’s Bullard and Kashkari, poor results from the 20-year treasury bond auction, and corporate bond supply contributed to an around 13bp rise in yields across the curve. The 2-year yield rose to 4.56% and the 10-year surged to 4.13%, both reaching new highs. The 20-year auction was awarded at 2.5bps cheaper than the market level at the time of the auction, indicating poor demand. Corporate bond issuance amounted to around USD15 billion and added to the upward pressure on yields. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Hang Seng Index fell 2.4% by mid-day, as China Internet stocks reversed the bounce in the past two days, falling by 4% to 7%, and local property developer names paring early gains as the relief for extra stamp duties for non-resident home buyers in the maiden Policy Address of the Hong Kong Chief Executive is less extensive than expected. Sun Hung Kai Properties (00016:xhkg) dropped 3.6% and New World Development (00017:xhkg) tumbled 7.8%. Hong Kong Stock Exchange (00388:xhkg), falling 2%, reported a 30% Y/Y decline in EPS in Q3, slightly better-than-feared. EV stocks tumbled, with Xpeng (09868:xhkg) falling 9.5% and other leading names losing by 4% to 7%.  Tanker and dry bulk operator COSCO Shipping Energy Transportation (01138:xhkg) soared more than 10%. In mainland bourses, the CSI300 fell 1.6%, with Consumer Staple and Consumer Discretionary sectors being the worst performers, falling over 3%. While all major sectors in the CSI300 declined, lithium battery makers, shipping, and coal mining companies gained. Australia’s ASX200 (ASXSP200.1), focus is on bank and energy stocks It’s worth keeping an eye on banking stocks particularly regional banks that could see more volatility, like Suncorp (SUN), Bendigo and Adelaide (BEN) and Bank of Queensland (BOQ). Also, today focus will be on oil stocks like Santos (STO), Woodside Energy Group (WDS) and Beach Energy (BPT) after the oil price darted ahead. Japanese yen flirting with 150, GBP facing political hurdles There is a lot of sense of “urgency” in the Japanese officials as USDJPY continues to flirt with the 150 handle. The surge higher in US yields overnight is likely to further pressure the yen, and FinMin Suzuki’s comments this morning on taking appropriate steps to curb speculative moves still suggest they stand ready to intervene if USDJPY rises above 150. Meanwhile, the rebound in the US dollar weighed on G10 currencies, with GBP suffering despite a pick up n BOE rate hike bets after the higher than expected UK CPI print, as political turmoil continued to weigh. Three officials left the office yesterday, including the Home Secretary and Chief Whip, although there were reports later that some of them will remain in post. Meanwhile, the fight for Truss to stay in office continues. GBPUSD testing the downside at 1.1200. USDCNH climbed to as high as 7.2790 The Chinese offshore yuan weakened to as much as 7.2790 this morning and is trading at around 7.2680 as of writing. Higher U.S. bond yields, sell-offs in Chinese stocks, concerns over a harsher line on income redistribution in China, and reports about talks on the joint production of weapons between the U.S. and Taiwan weighed on the yuan.  Gold (XAUUSD) slumps as the dollar momentum returns Gold prices heading lower to test the support at $1620/oz amid risk aversion and higher Fed bets propelling US yields higher and a rebound in the US dollar. Hawkish Fed speak yesterday, together with fresh highs in UK CPI, suggested higher-for-longer inflation and interest rates, while demand for the yellow metal also remains depressed due to ongoing lockdowns in China.  Crude oil (CLX2 & LCOZ2) in focus again following EIA warnings Oil extended gains rising 3.3% to $85.55 after EIA earlier reported US crude stockpiles dropped by 1.73 million barrels last week. Four-week seasonal demand for distillate fuels soared to the highest since 2007 while inventories remained at the lowest point on record for this time of year.  What to consider? Fed speakers further up the hawkish ante James Bullard and Neel Kashkari kept up their hawkish Fed rhetoric, in light of the burgeoning global price pressures. Bullard warned that inflation continues to surprise to the upside and the Fed needs to continue to act, also emphasising higher-for-longer rates even if inflation starts to decline in 2023. Kashkari (2023 voter) added that there is no reason to think that key price measures have peaked, and he sees little evidence of a labor market softening. He also reiterated the Saxo view that “risk of under shooting on rate hikes bigger than overdoing it”. He also said his best guess is the Fed can pause hikes sometime next year but he favours rate hikes until core inflation starts to cool, noting the Fed's rate changes take a year or so to work through the economy. Chicago Fed President Evans was also on the wires this morning, and given that he’s retiring next year, he was accepting of the fact that “beginning rate hikes six months earlier would have made sense.” UK CPI comes out hotter than expected, Euro headline inflation more subtle UK inflation came in at double-digits again, matching the 40-year high in July, at 10.1% y/y. This puts further pressure on the Bank of England to go big with its rate hike at the November meeting. Price pressures were broad-based, but most notable was the increase in food price. Scaling back of aid for electricity and natural gas prices, as suggested by the latest fiscal measures announced by Chancellor Hunt, could fuel further inflationary pressures next year. Eurozone headline inflation, on the other hand, was revised lower to 9.9% for September from flash reading of 10.0% but core measure rose to 5.8% y/y from 5.2% y/y in August, coming in at a record high. The ECB is expected to raise rates by 75bps at the October 27 meeting. Tesla shares slide after hours on reporting weaker-than-expected results Tesla (TSLA) shares fell 2.7% after hours when the EV giant reported third-quarter sales falling short of analyst estimates, noting the US dollar’s growing strength, along with production and delivery bottlenecks impacted results. Tesla’s Revenue rose to $21.5 billion, versus $22.1 billion expected by Wall Street. Profit rose to $1.05 a share, exceeding the $1.01 average Bloomberg estimate. And the closely watched Q3 automotive gross margin, came in at 27.9%, missed the 28.4% expected. Tesla cited higher costs related to a slower-than-expected ramp up in output at new factories, as well as difficulties shipping vehicles. Tesla’s shares are down almost 45% from their high against the backdrop of a slowing economy, higher inflation and rising interest rates, plus Musk’s $44 billion bid to buy Twitter. For more on Tesla click here to read Peter Garnry’s note. Discussion between the U.S. and Taiwan on joint weapon production According to Nikkei Asia, the Biden administration and Taiwan are in talks for American defense companies to provide Taiwan technology to manufacture weapons in Taiwan or to ship Taiwan-made parts to make weapons in the U.S. This, reading together with U.S. Secretary of State Blinken’s warning this Monday that “a fundamental decision that the status quo was no longer acceptable and that Beijing was determined to pursue reunification on a much faster timeline” and President Biden’s remarks of deploying U.S. forces to defend Taiwan in a CBS 60 Minutes interview last month, stirred up some unease among investors. Separately on Wednesday, Taiwan conducted live-fire military drills on Penghu Island, an archipelago in the Taiwan Strait. Investors are feeling unease about the introduction of the concept of regulating the means of accumulated wealth in China in an official document in China Market chatters show some investors are feeling unease about the phrase “we will improve the personal income tax system and keep income distribution and the means of accumulating wealth well-regulated” in the Work Report delivered by General Secretary Xi at the Chinese Communist Party’s National Congress last Sunday. The concept of regulating the means of accumulating wealth (规范财富积累机制) shows up in an official document for the first time. Hong Kong’s Chief Executive John Lee unveils his plans for active industrial policies and integration into national development schemes In his maiden Policy Address, Chief Executive John Lee unveils a Steering Group on Integration into National Development to devise strategic plans to integrate Hong Kong’s economy into the mainland’s Greater Bay Area development scheme and the Belt and Road Initiative. Li also rolls out investment-led measures aiming to boost the Hong Kong economy, including setting up a Hong Kong Investment Corporation which will establish and fund an HKD30 billion public-private co-investment fund to invest in projects that potentially drive industry development in Hong Kong. Hong Kong will also establish the Office for Attracting Strategic Enterprises whose mandate is to attract business enterprises from the mainland and overseas through favorable tax, financing, land provision, and other incentives. Weaker yen to prop up Japan inflation further Japan’s inflation data for September is due for release on Friday, and as signalled by the Tokyo CPI released earlier this month, price pressures are likely to pick up further. Bloomberg consensus expects the core measure (ex-fresh food) to come in at 3.0% y/y from August’s 2.8% y/y while the core-core measure (ex-fresh food and energy) is expected at 1.8% y/y in September from 1.6% y/y previously. The headline is expected to be a notch softer at 2.9% y/y from 3.0% y/y, but still remain way above the 2% target level. Weakness in the yen prompted an intervention from the Bank of Japan in September but the effect faded fast and the currency was significantly weaker in the month, which possible led to import price pressures. Still, the central bank is unlikely to shift its easing stance and will likely continue to wait for the global pressures to ease and USD to top out.       Aussie unemployment rises. Employment falls Traders digested much weaker than expected jobs data for September. Data released today showed just 923 jobs were added to the economy, much weaker than the 25,000 jobs Bloomberg estimated to be added. It also shows employment is falling ahead of RBA’s expectations, with less jobs added to the Australian economy, following last month’s 33,500 jobs being added. Also in important news; the unemployment rate rose by less than 0.1 percentage points, but remained at 3.5% in rounded terms. The reason for this is because rate rises and rising inflation is having a greater impact on the corporate world with the RBA also noting business insolvencies are rising in Australia.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-20-oct-20102022
Tesla Does Not Say Much Directly About The Demand Situation, Ally Financial Sees A Slowdown In Car Loans

Tesla Does Not Say Much Directly About The Demand Situation, Ally Financial Sees A Slowdown In Car Loans

Saxo Bank Saxo Bank 20.10.2022 11:15
Summary:  Investors are used to Tesla beating estimates but last night the EV-maker surprised investors missing revenue and automotive gross margin estimates as the EV-maker faced battery constraints during the quarter and delivery transportation capacity during peak deliveries at the end of the quarter. While the company disappointed against estimates revenue growth was still impressive 56% y/y and the company is reiterating its 50% average growth target over the coming years, something analysts are not agreeing with seeing revenue growth declining to 14% in 2025. The physical world is tough on Tesla Tesla shares are down 5% in extended trading following Q3 results showing revenue of $21.5bn vs est. $22.1bn and adjusted EPS of $1.05 vs est. $1.01. Q3 automotive gross margin came in at 27.9% vs est. 28.4%. Tesla says that battery supply constraints remain the key limiting factor on deliveries and scaling up the production; Tesla also mentions that ramping up production of its new battery 4680 cells has proven to be more difficult. In addition, delivery transport capacity was a limiting factor on deliveries in Q3 and the EV-maker is working to smooth this process going forward. While investors are reacting to the lower than expected revenue growth and gross margin, Tesla is doubling down on its 50% average growth rate target. Back in April, CEO Elon Musk said that the company would deliver 1.5mn cars this year so with around 930,000 deliveries as of the first nine months, the EV-maker must delivery 570,000 cars in Q4 which would be an increase of 86% y/y which seems like a very high bar to climb given the recent quarters growth in deliveries and the constraints mentioned above. Looking at analyst estimates for revenue the analyst community does not buy the 50% growth story as revenue growth is projected to fall from 57% in 2022 to 14% in 2025. Tesla is not saying much directly on the demand situation as it relates to the current volatility and high prices on electricity which could slow down the transition to electric vehicles. Earlier today, Ally Financial which is one of the biggest US lenders of auto loans said that it sees a slowdown in auto loans and the company also missed estimates. Source: https://www.home.saxo/content/articles/equities/tesla-misses-on-gross-margin-and-reiterates-lofty-goals-20102022
Precious metals: ING forecasts gold price to finish end the year at $1,855

On The Asian Stock Exchange Gold Rose And Its Bullish Momentum Arrived

InstaForex Analysis InstaForex Analysis 20.10.2022 11:48
Gold rose during today's Asian trading session. This bullish momentum can be taken as basis when entering the market. Since a three-wave pattern (ABC) developed, where wave "A" represents the buying pressure, traders can enter the market by taking long positions to the 50% retracement level. Stop loss could be set at 1624, then exit the market on the breakdown of 1635 and 1683. This reversal is not accidental, but caused by USD/JPY testing the important psychological level of 150, which was prompted by the currency intervention of the Bank of Japan. This trading idea is based on the "Price Action" and "Stop Hunting" methods. Good luck and have a nice day! Don't forget to control the risks.   Relevance up to 10:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324831
Conflict Over Taiwan Would Trigger A Huge Global economic Shock

Deployment Of US Forces To Defend Taiwan |Because Of Global Price Pressure, The Fed Strategy Will Remain Unchanged And More

Saxo Bank Saxo Bank 20.10.2022 12:43
Summary:  Equity markets rolled over yesterday suffering in the headwinds of a fresh strong rise in US treasury yields, as the entire US yield curve lifted to new highs for the cycle. After the close, the heavily traded Tesla reported disappointing revenue and margins and traded some 6% lower in late trading. Elsewhere, the rise in yields is pushing hard on the JPY to weaken further, but the USDJPY rate of 150.00 it’s clearly a psychological barrier for official intervention-wary traders.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The S&P 500 index closed the day –0.7% lower and the Nasdaq 100 index was down –0.4% (although far lower from the overnight highs posted after the Netflix earnings late Tuesday) Still, this was not that weak a performance, given the fresh strong lift in treasury yields, with the price action holding up relatively well after the close of trading yesterday despite the disappointing Tesla results that took that heavily traded stock down sharply after the close. The further outlook for treasury yields on incoming data, as well as the heavy earnings calendar of next week, are likely to set the tone for equity markets from here. Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Hong Kong stocks tumbled with Hang Seng Index down 2.4% hitting 13-year lows. Higher U.S. bond yields and the Chinese Yuan weakening to new lows weighed on the markets. To add to the woes, investors have become increasingly concerned about the potential policy implications of the concept of “regulating the means of accumulating wealth” and US-Taiwan discussions on joint manufacturing of defensive capabilities (more below) China Internet names sold off 5% to 9%. CSI 300 declined 0.7%. Semiconductor stocks are the notable outperformers in both the Hong Kong and mainland bourses.  SMIC (00981:xhkg) gained 0.9% and Hua Hong Semiconductor (01347:xhkg) climbed 3.2%. Maximum support for the US dollar from rising treasury yields, but price action uninspiring The US dollar is getting about as much support as it conceivably can from a fresh rise in US treasury yields, but the impact on the currency has been minimal, as it feels as if a large finger has pressed the paus button – could this be a widespread nervousness as traders look at the USDJPY level perched near 150.00, with pressure from rising global yields for the JPY to weaken further, but with market participants knowing that a large bout of official Japanese intervention will be forthcoming at some point above that level? Relatively stable sentiment despite the fresh surge in treasury yields may also be behind the lackluster price action in USD pairs here, with USDCNH correcting back lower after its burst higher yesterday on a strong CNY fixing overnight another source of resistance for the greenback. Crude oil (CLX2 & LCOZ2) in focus again following EIA warnings November WTI extended gains rising above $86/barrel overnight after the EIA yesterday reported US crude stockpiles dropped by 1.73 million barrels last week. Four-week seasonal demand for distillate fuels soared to the highest since 2007 while inventories remained at the lowest point on record for this time of year. Oil stocks charged higher with Baker Hughes, Valero Energy and Halliburton up over 5% each. Gold (XAUUSD) slumps as the dollar momentum returns Gold prices heading lower to test the support at $1620/oz amid risk aversion and higher Fed bets propelling US yields higher and a rebound in the US dollar. Hawkish Fed speak yesterday, together with fresh highs in UK CPI, suggested higher-for-longer inflation and interest rates, while demand for the yellow metal also remains depressed due to ongoing lockdowns in China. US treasuries (TLT, IEF)   US treasury yields lifted all along the curve, with the 2-year rising above 4.55% for the first time and the 10-year yield lifting aggressively to almost 4.15%, well clear of the 4.00% level that seemed to be providing bond market support in recent weeks. What is going on? Fed speakers further up the hawkish ante James Bullard and Neel Kashkari kept up their hawkish Fed rhetoric, in light of the burgeoning global price pressures. Bullard warned that inflation continues to surprise to the upside and the Fed needs to continue to act, also emphasising higher-for-longer rates even if inflation starts to decline in 2023, though he also suggested that “front-loading” of hikes is likely to end early next year (market pricing this anyway). Kashkari (2023 voter) added that there is no reason to think that key price measures have peaked, and he sees little evidence of a labor market softening. He also reiterated the Saxo view that “risk of under shooting on rate hikes bigger than overdoing it”. He also said his best guess is the Fed can pause hikes sometime next year but he favours rate hikes until core inflation starts to cool, noting the Fed's rate changes take a year or so to work through the economy. Chicago Fed President Evans was also on the wires this morning, and given that he’s retiring next year, he was accepting of the fact that “beginning rate hikes six months earlier would have made sense.” Tesla misses on revenue growth and margins, reaffirms longer term growth guidance Investors are used to Tesla beating estimates but last night the EV-maker surprised investors missing revenue and automotive gross margin estimates as the EV-maker faced battery constraints during the quarter and delivery transportation capacity during peak deliveries at the end of the quarter. While the company disappointed against estimates revenue growth was still impressive 56% y/y and the company is reiterating its 50% average growth target over the coming years, something analysts are not agreeing with seeing revenue growth declining to 14% in 2025. Shares were down 6% in late trading after the report. Discussion between the U.S. and Taiwan on joint weapon production According to Nikkei Asia, the Biden administration and Taiwan are in talks for American defense companies to provide Taiwan technology to manufacture weapons in Taiwan or to ship Taiwan-made parts to make weapons in the U.S. This, reading together with U.S. Secretary of State Blinken’s warning this Monday that “a fundamental decision that the status quo was no longer acceptable and that Beijing was determined to pursue reunification on a much faster timeline” and President Biden’s remarks of deploying U.S. forces to defend Taiwan in a CBS 60 Minutes interview last month, stirred up some unease among investors. Separately on Wednesday, Taiwan conducted live-fire military drills on Penghu Island, an archipelago in the Taiwan Strait. Chinese Investors uneasy about the introduction of policy language on wealth regulation Market chatters indicate that some investors are feeling unease about the potential policy implications of the phrase “we will improve the personal income tax system and keep income distribution and the means of accumulating wealth well-regulated” in the Work Report delivered by General Secretary Xi at the Chinese Communist Party’s National Congress last Sunday. The concept of regulating the means of accumulating wealth shows up in an official document for the first time. Weak Aussie September jobs report for September, supporting less hawkish RBA The data showed just 923 jobs were added to the economy, vs the +25k consensus from Bloomberg. It also shows employment is falling far ahead of RBA’s expectations, following last month’s 33,500 jobs being added. The unemployment rate also rose, by less than 0.1 percentage points but remained at 3.5% in rounded terms. It comes as part-time employment fell by 12,400. Recently the RBA noted business insolvencies were rising, and today’s data shows that the official stats are reflecting this too. That said, of the Australian mining companies reporting quarterly result this week, most reported labour shortages are continuing, which is affecting production. What are we watching next? Weaker yen to prop up Japan inflation further   Japan’s inflation data for September is due for release on Friday (tonight), and as signalled by the Tokyo CPI released earlier this month, price pressures are likely to pick up further. Bloomberg consensus expects the core measure (ex-fresh food) to come in at 3.0% y/y from August’s 2.8% y/y while the core-core measure (ex-fresh food and energy) is expected at 1.8% y/y in September from 1.6% y/y previously. The headline is expected to be a notch softer at 2.9% y/y from 3.0% y/y, but still remain way above the 2% target level. Weakness in the yen prompted an intervention from the Bank of Japan in September but the effect faded fast and the currency was significantly weaker in the month, which possible led to import price pressures. Still, the central bank is unlikely to shift its easing stance and will likely continue to wait for the global pressures to ease and USD to top out.         Earnings to watch Today’s earnings focus is on Swedish power and automation equipment maker ABB, diversified and medical equipment maker Danaher, miner Freeport McMoRan and mobile network equipment maker Ericsson. Today: China Mobile, China Telecom, ABB, Danaher, Investor, Philip Morris, Union Pacific, CSX, AT&T, Blackstone, Marsh & McLennan, Yara International, Nordea, Volvo, Ericsson, Freeport-McMoRan, Dow, Snap Friday: CATL, American Express, Schlumberger, Verizon Communications, HCA Healthcare, Sika Economic calendar highlights for today (times GMT) 1100 – Turkey Rate Announcement 1230 – Canada Sep. Teranet/National Bank Home Price Index 1230 – US Oct. Philadelphia Fed Business Survey 1230 – US Weekly Initial Jobless Claims 1400 – US Sep. Existing Home Sales 1400 – US Sep. Leading Index 1430 – US Weekly Natural Gas Storage Change 2145 – New Zealand Sep. Trade Balance 2301 – UK Oct. GfK Consumer Confidence 2330 – Japan Sep. National CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-20-2022-20102022
At The Close On The New York Stock Exchange Indices Closed Mixed

The NASDAQ Composite Was Down 0.61% And The Biggest Losers Were Talaris Therapeutics Inc

InstaForex Analysis InstaForex Analysis 21.10.2022 08:14
At the close of the New York Stock Exchange, the Dow Jones was down 0.30%, the S&P 500 was down 0.80% and the NASDAQ Composite was down 0.61%.  The Dow Jones index The leading gainer among the components of the Dow Jones index today was International Business Machines, which gained 5.79 points (4.73%) to close at 128.30. Salesforce Inc rose 3.83 points or 2.49% to close at 157.50. Verizon Communications Inc rose 0.43 points or 1.18% to close at 37.00. The biggest losers were Home Depot Inc, which shed 6.03 points or 2.19% to end the session at 269.46. Caterpillar Inc was up 2.10% or 3.87 points to close at 180.54 while Nike Inc was down 1.96% or 1.74 points to end at 86.83. .  The S&P 500 results Leading gainers among the S&P 500 components in today's trading were Lam Research Corp, which rose 7.81% to 355.87, AT&T Inc, which gained 7.72% to close at 16.74, and shares of Quest Diagnostics Incorporated, which rose 6.32% to close the session at 134.66. The biggest losers were Allstate Corp, which shed 12.90% to close at 117.71. Shares of Union Pacific Corporation shed 6.80% to end the session at 186.45. Quotes of Tesla Inc decreased in price by 6.65% to 207.28. The components of the NASDAQ Composite  Leading gainers among the components of the NASDAQ Composite in today's trading were Nextplay Technologies Inc, which rose 107.31% to hit 0.41, Cabaletta Bio Inc, which gained 50.77% to close at 1.96, and also shares of Save Foods Inc, which rose 31.33% to end the session at 1.97. The biggest losers were Talaris Therapeutics Inc, which shed 43.39% to close at 1.37. Shares of LMF Acquisition Opportunities Inc shed 34.55% to end the session at 6.82. Quotes of Gaucho Group Holdings Inc decreased in price by 30.40% to 0.21. How many fall and rise On the New York Stock Exchange, the number of securities that fell in price (2067) exceeded the number of those that closed in positive territory (1018), while quotes of 114 shares remained virtually unchanged. On the NASDAQ stock exchange, 2037 stocks fell, 1694 rose, and 240 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.54% to 29.98. Commodities Gold futures for December delivery lost 0.17%, or 2.85, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 0.50%, or 0.42, to $84.94 a barrel. Futures for Brent crude for December delivery rose 0.25%, or 0.23, to $92.64 a barrel. EUR/USD Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.12% to 0.98, while USD/JPY rallied 0.19% to hit 150.18. Futures on the USD index fell 0.07% to 112.81.   Relevance up to 05:00 2022-10-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297723
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

Wall Street Closed In The Red And The S&P 500 Futures Increase Losses

TeleTrade Comments TeleTrade Comments 21.10.2022 08:44
Global markets remain sluggish amid light calendar, early week optimism defends buyers. S&P 500 Futures drop for the third consecutive day. US 10-year Treasury yields seesaw around 14-year high. Inflation woes keep markets on thin ice, last round of Fedspeak before blackout appears important to watch. Traders cheer the Friday mood as an absence of major data/events joins mixed catalysts to keep them off the table during the last day of the week. Even so, cautious optimism prevails as the US dollar struggles to benefit from the strong yields and risk-off mood. While portraying the mood, the US 10-year Treasury bond yields refreshed a 14-year high the previous day, around 4.22% by the press time. Also, the two-year US Treasury yields rose to the highest levels since 2007 before recently taking rounds to 4.62%. That said, Wall Street closed in the red following an initially upbeat performance while the S&P 500 Futures extend the previous day’s losses with 0.50% intraday downside at the latest. “US stocks closed lower on Thursday as data on the labor market and comments from a U.S. Federal Reserve official reinforced expectations the central bank will be aggressive in hiking interest rates outweighed a flurry of solid corporate earnings,” said Reuters. Looking at the data, US Initial Jobless Claims eased to 214K for the week ended on October 07 versus 230K expected and a revised down 226K prior. Further, Philadelphia Fed Manufacturing Survey Index dropped to -8.7 for October versus the -5 market consensus and -9.9 previous reading. Additionally, US Existing Home Sales rose past 4.7M expected to 4.71M but eased below 4.78M prior. Also, Federal Reserve Governor Lisa Cook mentioned that ongoing rate increases will be required. Amid these plays, the CME’s FedWatch Tool suggests a near 98% chance of the Fed’s 75 bps rate hike. Elsewhere, the political crisis in the UK and Japan’s reluctance to intervene despite the multi-year low of the yen, exert downside pressure on the markets. However, China’s readiness to ease virus-led travel curbs seems to defend the buyers. On the same line could be the hopes that Britain will soon overcome the jittery markets. Moving on, the UK’s Retail Sales and the last dose of the Fed speakers’ comments before the blackout period preceding November’s Federal Open Market Committee (FOMC) meeting will be crucial for clear market directions.
Hong Kong’s Hang Seng Had Its Best Month | EU Inflation Slowed

In The Asia-Pacific Region, Only In Japan The Indices Fell

TeleTrade Comments TeleTrade Comments 21.10.2022 08:58
Asia-Pacific equity markets grind lower amid lack of major data. China’s lockdown in Xi’an, multi-year high Treasury yields keep bears hopeful. Indian shares buck the trend amid strong earnings report. Wall Street closed lower on firmer US data, hawkish Fedspeak. Asian stock markets remain mostly lower as multi-year high Treasury bond yields join a lack of major data/events on Friday. Also negatively affecting the region’s equities are fears of higher inflation and central bank meddling to defend the respective currencies in Japan, China and India. Furthermore, fresh covid fears from China exert additional downside pressure on the market sentiment amid a sluggish session. While portraying the mood, MSCI’s Index of Asia-Pacific shares outside Japan prints 0.50% intraday gains whereas Japan’s Nikkei 225 drops to the same tune as we write. Elsewhere, India’s BSE Sensex adds 0.40% at the latest, following an upbeat start, amid firmer company earnings. “Indian shares opened higher on Friday, as strong earnings reports, including from Axis Bank, helped resist the weakness in global markets on fears of the impact of aggressive rate hikes from central banks on economic growth and corporate results,” stated Reuters. On the other hand, Chinese stock remains pressured after witnessing a corrective bounce the previous day as policymakers announce fresh covid-led lockdowns in Xi’an. “China locked down parts of the central metropolis of Xi’an, confining some of the city’s 13 million people to their homes for at least a week, and other major hubs are rolling out virus restrictions in a reinforcement of the country’s commitment to covid zero,” per Bloomberg. It should be noted that an eight-year high core Consumer Price Index (CPI) from Japan and looming fears of Tokyo’s meddling to defend the yen, as well as the same hopes from policymakers in China and India, keeps the risk appetite weak. Australia’s ASX 200 drops nearly 0.80% intraday as traders await the annual budget and expect downbeat growth and firmer inflation ahead. On the same line, New Zealand’s (NZ) NZX 50 also holds lower ground even as NZ trade numbers printed upbeat figures for September. On a broader front, the US 10-year Treasury bond yields refreshed a 14-year high the previous day, around 4.22% by the press time. Also, the two-year US Treasury yields rose to the highest levels since 2007 before recently taking rounds to 4.62%. It’s worth noting that Wall Street closed in the red following an initially upbeat performance while the S&P 500 Futures extend the previous day’s losses with 0.50% intraday downside at the latest. Also read: S&P 500 Futures pare weekly gains as yields dribble around multi-year high
UK PMIs Signal Economic Deceleration, Pound Edges Lower

Restricting China's Access To Advanced Technologies | Advertising Partners From Many Industries Are Reducing Their Marketing Budgets

Saxo Bank Saxo Bank 21.10.2022 09:35
Summary:  With Fed officials keeping up their rate hike rhetoric, swaps are now pricing in a 5% peak rate in the first half of next year. The benchmark 10-year Treasury yield rose 9 basis points to 4.23%, which weighed on equity valuation multiples. Snap earnings also send a warning on tech earnings ahead. UK PM Truss’ resignation would do little to help with the chaos in UK economy and politics. The dollar was mixed, oil was steady, gold retreated as bond-yields rose. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) retreat as bond yields climb US stocks fell for the second day, after Treasury yields rose again, continuing to climb into territory not seen in more than a decade, with Fed officials keeping up their rate hike rhetoric. Swaps are now pricing in a 5% peak rate in the first half of next year. The benchmark 10-year Treasury yield rose 9 basis points to 4.23%, at one point hitting 4.239%, its highest level since 2008. The policy-sensitive yield, the 2-year Treasury traded up five basis points to 4.608%. As such this makes high PE tech stocks look expensive, particularly as the Nasdaq only offers a yield of 0.97%, and the S&P500 has an average yield of 1.8%, and the Dow Jones with a yield of 2.2%, all at a time when US corporate earnings are falling for the first time this year. The Nasdaq 100 fell 0.5% and the S&P 500 erased an earlier gain of more than 1%, before it ended 0.8% lower. Utilities down 2.5%, were the worst performing sector in the S&P 500. Communication Services outperformed, led by AT&T (T:xnys) which jumped 7.8% after the telecommunications giant reported earnings beating estimates and raising profit outlooks. 10-year U.S. treasury yields made a new 14-year high at 4.23% (TLT:xnas, IEF:xnas, SHY:xnas) U.S. treasuries sold off for a second day in a row, with the 2-year yield climbing 5bps to 4.615 and the 10-year yield 9bps higher at 4.23%, the highest levels in 14 years. Yields surged after the Philadelphia Fed President Harker said he was expecting the Fed Fund rate to be “well above 4% by the end of the year” and Fed Governor Cook said fighting inflation “will require ongoing rate hikes and then keeping policy restrictive for some time.” Hedging for new issues in the corporate space also contributed to the rise in yields. Hong Kong’s Hang Seng (HSIV2) China’s CSI300 (03188:xhkg) Hong Kong stocks tumbled with Hang Seng Index down 1.4% hitting 13-year lows. The bounce on the news of China shorting quarantine requirement for inbound travellers failed to hold. Higher U.S. bond yields and the Chinese Yuan weakening to new lows weighed on the markets. To add to the woes, investors have become increasingly concerned about the potential policy implications of the concept of “regulating the means of accumulating wealth” introduced in the Work Report delivered at the Chinese Communist Party’s National Congress last Sunday and the newswire report that the U.S. and Taiwan are in discussion of jointly manufacturing weapons. Chinese leading banks kept the 1-year and 5-year Loan Prime Rates unchanged. China Internet names sold off 3% to 8%. The EV space remained weak, with leading names falling by 2% to 6%. JD Health (06618:xhkg) rose 7.1% on share buyback news. Semiconductor stocks surged in Hong Kong and mainland bourses. Reportedly, the Ministry of Industry and Information Technology summoned executives of microchip manufacturers to discuss the latest moves from the U.S. to contain China’s access to U.S. semiconductor technology and pledged support to the domestic semiconductor industry. In addition, mainland securities firms published reports saying that China’s domestic chip-making industry will benefit from the whole-nation systemic initiatives to develop strategic technologies proposed at the CCP’s National Congress. Semiconductor names surged both in Hong Kong and mainland bourses, with Hua Hong Semiconductor (01347:xhkg) rising 5.6%, SMIC (00981:xhkg) climbing 1.6%, and Naura Technology (002371:xsec) limit up 10%. CSI 300 gained 0.6%. Australia’s ASX200 (ASXSP200.1) falls 0.8% on Friday, losing 1.2% on the week. Focus is on Lithium and Coal company earnings, from Allkem to Whitehaven   The following companies reporting quarterly and revenue numbers are a focus today; with Australia’s second biggest lithium company, Allkem reporting (AKE) quarterly production that missed expectations, seeing its shares decline almost 4%. Investors focused on the mining giants guidance for the year ahead with Allkem noting it expects lithium carbonate prices to be higher by 15% this quarter, than the last. Meanwhile, it reported lower grades, flagged issues including logistics delays in South America and on-going labour and equipment shortages in Western Australia. As a result, production at its South American Olaroz Stage 2 project is now delayed and planned for Q2 CY23. In good news though for Australia’s second biggest lithium company, Allkem, its net cash rose to $447 million (as at Sept. 30, up from $28.9 million from June 30). In Coal news Whitehaven Coal (WHC) shares rocked 3.2% higher after 16.6 million in block trades pushed its shares up, with the block of trades equating to 2.1% of its float. Also in Coal news, Coronado Global (CRN) results are set to be released and pulled apart, with the coal price in record high neighborhood, despite falling 13% from its high. It will be interesting to glean into their outlook for the year, particularly as coal demand usually peaks in January. For Coronado, focus will also be on the potential merger with Peabody. Other companies to watch include, wealth and financial planning business, AMP (AMP) with focus to be on how they can return $1.1b capital to investors in FY23. And in industrials, eyes will be on rubbish business, Cleanaway (CWY), who is holding its Annual Meeting. Traders will be looking to see if Cleanaway changes its earnings (Underlying Ebitda) forecast that’s pegged to be between A$630m to A$670m. USDJPY breaks 150, next to watch is 153 USDJPY finally broke above the key 150 level yesterday, the level above which many expected intervention. Officials have been jawboning the pair, including FinMin Suzuki this morning saying that they continue to watch the markets with a sense of urgency. He also seemed cautioned by the rattle in the UK markets, as suggested by his comments that they will pursue fiscal health so that market trust isn’t lost. BOJ meeting next week is key, although a change in policy stance cannot be expected. The break of 150 now exposes 153 levels in USDJPY. Crude oil (CLX2 & LCOZ2) Gains in crude oil on the back of expectations of China easing inbound tourism policy restrictions, but gains were later reversed with focus still on US efforts to curb price increase in energy. While the 15mbbl of release announced by President Biden is a part of the larger 180mbbl release that commenced earlier this year, focus is also on how the US strategic reserves will be refilled. WTI futures were seen back below $85/barrel while Brent was close to $92.   What to consider? What could the new UK PM bring in terms of policy change? After significant economic and political turmoil, Liz Truss resigned as Britain’s prime minister after just 44 days in office. The easy choice remains Rishi Sunak, former chancellor, who stood against Truss for the Tory leadership in the summer and predicted correctly that his rival would set off panic in the markets if she pressed ahead with a massive package of debt-funded tax cuts. The other alternative being ex-PM Boris Johnson or Penny Mordaunt, who also stood for the Tory leadership in the summer. Fiscal policy is unlikely top see a major shift with the new PM, as UK administration now remains extremely sensitive to market events. There is little they can do to prevent the upcoming recession or bring back asset allocation to UK assets. Market Fed rate expectations reach 5% Early 2023 Fed rate expectations have now reached over 5%, with the Fed funds rate now fully pricing in a 75bps rate hike for the November meeting and a strong probability of another 75bps rate hike at the December meeting. While the Fed has reiterated it will continue to hike more next year before it pauses, but the market pricing is now running higher than what the dot plot has hinted earlier. So the room for the Fed to surprise on the hawkish side in diminishing, especially if core inflation continues to surprise on the upside. Fed speakers are starting to turn slightly cautious looking at the market pricing, with Charles Evans last night saying that if the Fed pushes its policy rate much further than planned it could start to weigh on the economy and says he is worried that at some point rate increases could have a non-linear impact with businesses becoming more pessimistic. Harker (2023 voter) and Cook reasserted that the Fed needs to continue to hike but will noted that the Fed can pause sometime next year to assess the impact of its tightening on the economy. Another fall in weekly jobless claims for the Oct 15 week continued to suggest labor market strength despite the disruptions from recent hurricanes. China is considering reducing inbound quarantine Reportedly, the Chinese authorities are considering to reduce the current 7 days in hotel plus 3 days at home quarantine requirement for people travelling into China to 2 days in hotel plus 5 days at home. While the move may be small in magnitude, and still not confirmed by the authorities, it may have signaling power in terms of more flexbility in the day-to-day implementation of the zero Covid policy which is constraining consumption, investment and tourism. . US to expand China tech ban Bloomberg reports, citing “people familiar with the situation”, that the Biden administration is considering, at an early stage, new export bans limiting China’s access to advanced computing technologies that can be used in quantum computing and artificial intelligent software. Cyber security attacks on the rise globally, US Home Secretary warns to expect more in Asia A US official has warned that aggressive cyberattacks will rise from Russia, China, North Korea, Iran, particularly against Asian countries. It comes after a very strong spate of cyberattacks occurred globally this month, from Microsoft’s data being breached, along with the Japanese Securities Dealer Association, Australia’s Taxation Office batting three attempts per month, to the Indianapolis Housing Agency’s systems being breached as well, as well as one of Australasia’s telcos, and an ASX listed insurance group, Medibank. This reflects the need for companies and organizations to ramp up cybersecurity spending now and on an ongoing basis. This brings to mind perhaps the importance of remembering the need for diversification and possibly considering exposure to Cybersecurity stocks and ETFs. For more information, refer to our cybersecurity basket. Japan inflation hits 3%, update to CPI forecasts expected next week Japan’s core inflation touched 3% levels for the first time in over 30 years, matching expectations. Headline inflation came in higher-than-expected at 3.0% y/y while core-core ex fresh food and energy) measure was up at 1.8% y/y from 1.6% y/y previously. The stark yen weakness can prompt further import price pressures in Q4 as well, and demand is likely to push higher as well with Japan reopening its borders from the pandemic restrictions. Bank of Japan meets next week, and while policy change is hard to expect, it is expected that the central bank will raise the CPI forecast for fiscal 2022 (year ending March) from 2.3% to high-2% range. Snap earnings send tech earnings fear soaring Snap (SNAP:xnys) plunged 26.5% in the after-hour trading, following the company reported Q3 revenues growth at 6% Y/Y, largely in line with street estimates, but said its internal forecast for the Q4 revenues growth is decelerating to about flat year on year (vs market expectations of +6% Y/Y). The social media company said that they are finding “advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven pressures, and rising costs of capital.”   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-21-oct-21102022
Liz Truss The Shortest Prime Minister In The History Of The Great Britain | Crude Oil Is Growing

Liz Truss The Shortest Prime Minister In The History Of The Great Britain | Crude Oil Is Growing

Saxo Bank Saxo Bank 21.10.2022 09:46
Summary:  Equity markets feebly attempted another rally yesterday, but the headwinds of seemingly ever-rising yields proved too strong, sending the indices sharply back lower to the lowest close in three days. This is still a relatively firm performance, given the scale of the rise in yields. Elsewhere, the USDJPY 150.00 level only proved a barrier for about a day, as the weight of rising yields saw the price action spilling higher above this level, with no signs yet of fresh official intervention against JPY weakness.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Yesterday saw a session relatively like the prior one, as an early rally simply failed to find sustenance in the face of the ongoing grind higher in US treasury yields. Still, market sentiment seems remarkably quiet despite the strong headwinds of the 25-basis point jump in longer Treasury yields this week. Next week is an important one for equities as the earnings season hits its peak with most of the megacap companies in the US reporting earnings, with the price action currently buried in the middle of the two-week range ahead of today’s session. Hong Kong’s Hang Seng (HSIV2) and China’s CSI300 (03188:xhkg) Hang Seng Index and CSI300 fluctuated in a narrow range and were down modestly. In Hong Kong, Chinese developers and China Internet stocks bounced. In mainland bourses, solar, wind power, education, nuclear power, and properties outperformed. General market sentiment is weak as U.S. bond yield risen to new highs and investors pondering the policy implications from the Chinese Communist Party’s National Congress. USD finds stride again on higher Treasury yields, USDJPY spilling above 150.00 The US dollar behaved rather oddly in recent sessions in trading sideways even as US treasuries continue to provide strong support for the currency. Hesitation yesterday from USD bulls may have been on concern that official intervention and choppy price action across USD pairs might await if USDJPY attempted to trade above the psychological 150.00 level. But that level fell late yesterday without any real fuss, trading nearly to 150.50. Still, while USDJPY moves are heavily correlated with the fresh rise in US Treasury yields, it’s interesting that another 50 basis point jump in long US treasury yields to new 14-year highs has not seen new cycle lows in EURUSD and many other USD pairs. Crude oil (CLZ2 & LCOZ2) Crude oil is among just a handful of commodities trading higher in a week that has seen another sharp jump in US bond yields drive down growth expectations. Crude and its related fuel products however continue to be supported by the risk of tightness driven by a period of supply uncertainty in the coming months as OPEC+ cuts supply, and the EU implements sanctions on Russian oil. In addition, uncertainty over Chinese demand as the zero Covid tolerance is being maintained and further incremental SPR sales of 15 million barrels will continue to weigh on prices in the short term. All developments, however, that are likely to keep crude oil rangebound for now, with Brent finding support below $90. Focus next week being earnings from six Big Oil companies, led by Exxon, Chevron and Shell. Gold (XAUUSD) Gold trades down 1.5% on the week close to key support at $1617, the September low and 50% retracement of the 2018 to 2022 rally. A second week of weakness being driven by an across the curve surge in US treasury yields with the ten-year yield rising 23 basis points on the week to 4.25%. Hawkish Fed comments and no signs of economic data showing the much-needed slowdown, has seen the market price in a Fed funds rate above 5% by early next year. The exodus from bullion backed ETFs has gathered pace this week as investors instead focus on increasingly attractive bond market yields, not least the two-year yield at 4.6% yield. Gold will likely continue to struggle until we reach peak hawkishness and/or the dollar starts to weaken. US treasuries (TLT, IEF) US treasury yields lifted all along the curve again yesterday, posting new highs for the cycle, with rises at the long end outpacing those at the short end, with the 2-10 inversion up to –37 basis points versus the cycle low below –50 bps in Sep and earlier this month. Traders are perhaps awaiting incoming data before trading shorter yields, now that the market has priced the Fed funds rate to reach above 5.00% by early next year (priced to do so at the March 2023 FOMC meeting). What is going on? UK Prime Minister Liz Truss resigned in a short statement yesterday … becoming the shortest serving Prime Minister in Britain’s history. She will stay in power until a new leader of the Conservative party can be chosen. The leading candidate is former Chancellor Rishi Sunak and other top contenders include Boris Johnson as the Conservative party has fallen to a record low in the polls against Labour. Japan inflation hits 3%, update to CPI forecasts expected next week Japan’s core inflation touched 3% levels for the first time in over 30 years, matching expectations. Headline inflation came in higher-than-expected at 3.0% y/y while core-core ex fresh food and energy) measure was up at 1.8% y/y from 1.6% y/y previously. The stark yen weakness can prompt further import price pressures in Q4 as well, and demand is likely to push higher as well with Japan reopening its borders from the pandemic restrictions. Bank of Japan meets next week, and while policy change is hard to expect, it is expected that the central bank will raise the CPI forecast for fiscal 2022 (year ending March) from 2.3% to high-2% range. UK Retail Sales volumes slide badly again in September Real (volume-based) sales were down for a second consecutive month at –1.4% MoM and –6.9% YoY, with the ex Petrol sales at –1.5% MoM and –6.2% YoY. China is considering reducing inbound quarantine The Chinese authorities are considering reducing the current 7 days in hotel plus 3 days at home quarantine requirement for people travelling into China to 2 days in hotel plus 5 days at home. While the move may be small in magnitude, and still not confirmed by the authorities, it may have signaling power in terms of more flexibility in the day-to-day implementation of the zero Covid policy which is constraining consumption, investment and tourism.Snap earnings send tech earnings fear soaringSnap (SNAP:xnys) plunged 26.5% in the after-hour trading, following the company reported Q3 revenues growth at 6% Y/Y, largely in line with street estimates, but said its internal forecast for the Q4 revenues growth is decelerating to about flat year on year (vs market expectations of +6% Y/Y). The social media company said that they are finding “advertising partners across many industries are decreasing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven pressures, and rising costs of capital.” Gas prices in Europe and US see steep weekly declines US natural gas futures are heading for their longest stretch of weekly declines since 1991 as stockpiles continue to build at a faster than expected pace ahead of winter. The November (NGX2) front month contract trades down by 18% on the week and down 44% since the August peak, driven by mild autumn weather and rising production. In addition, the Freeport LNG export terminal explosion on June 8 has reduced exports, and the terminal will open in November at 85% capacity. In Europe, the TTF price trades down 10% has bounced strongly after almost reaching €100/MWh earlier in the week, a level we do not expect to be challenged until later in the winter when demand becomes more visible. With prices falling and almost full inventories, the political resolve to introduce a price cap has faded, hence the bounce. What are we watching next? US is considering national security reviews of Elon Musk business activities ... according to unnamed sources in a Bloomberg story. These would include the acquisition of Twitter and SpaceX’s Starlink satellite network. Musk has expressed his view on the war in Ukraine and investors in his Twitter takeover include Saudi and Chinese individuals. Tesla also has a strong presence in China, an awkward situation as the US has moved recently to cut off China’s access to advanced semiconductor tech. Market Fed rate expectations reach 5%, can they continue to rise? Early 2023 Fed rate expectations have now reached over 5%, with the Fed funds rate now fully pricing in a 75bps rate hike for the November meeting and a strong probability of another 75bps rate hike at the December meeting. While the Fed has reiterated it will continue to hike more next year before it pauses, market pricing is now running higher than the September FOMC dot plot forecasts. Some Fed speakers are starting to turn slightly cautious looking at the market pricing, with Charles Evans last night saying that if the Fed pushes its policy rate much further than planned it could start to weigh on the economy and says he is worried that at some point rate increases could have a non-linear impact with businesses becoming more pessimistic. Harker (2023 voter) and Cook reasserted that the Fed needs to continue to hike but will noted that the Fed can pause sometime next year to assess the impact of its tightening on the economy. Another fall in weekly jobless claims for the Oct 15 week continued to suggest labor market strength despite the disruptions from recent hurricanes. Earnings to watch Today’s earnings included the report from the world’s largest battery market CATL overnight, with a focus in the US session on consumer demand and consumption patterns in today’s American Express earnings report as well as the largest US oilfield services company Schlumberger. Today: CATL, American Express, Schlumberger, Verizon Communications, HCA Healthcare, Sika Economic calendar highlights for today (times GMT) 1230 – Canada Aug. Retail Sales 1340 – US Fed’s Evans to speak 1400 – Euro Zone Oct. Consumer Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-21-2022-21102022
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Standard & Poor 500 Declined By Almost 1%, Nasdaq Went Down By Over 0.5%

ING Economics ING Economics 21.10.2022 10:00
JPY makes it to 150 with little sign of the Bank of Japan   Source: shutterstock Macro outlook Global Markets: Down we go again. Thursday’s price action was similar to that on Wednesday – early gains, followed by sustained losses, though the losses were again fairly moderate. The S&P500 dropped 0.8%, and the NASDAQ fell 0.61%. Equity futures suggest the selling will continue today. The upwards march in US Treasury yields also continued yesterday. 2Y yields rose 5.4bp to 4.61%, while 10Y yields rose 9.5bp taking them to 4.15%. Unlike Wednesday, when increases in bond yields came despite hints from the Fed's James Bullard and Neel Kashkari in the direction of a rate pause or pivot, there were no such calming voices yesterday. The main Fed comment was from  Patrick Harker, who said that he expected Fed funds rates to be “well above 4%” by the end of this year. The EUR is now down to 0.978, though, given the backdrop, that isn’t bad, and leaves it roughly unchanged from this time yesterday. The AUD is also little changed at 0.6270, though it was up in the mid 63s at one point yesterday despite mediocre labour market data. And it is a similar story for the GBP, which is at 1.1221, treading water while a new Prime Minister is chosen. It took a while, but the JPY is now above 150. There has been no sign of the BoJ apart from a rate check, and maybe the fact that the JPY crept across the line was enough to curb any reaction. If so, onwards and upwards still seems the most likely path for the JPY to follow. Asian FX had a mixed day, with the INR making small gains along with the CNY, but the IDR and KRW at the other end of the spectrum, making losses of about 0.4-0.5% on the day, and in spite of BI’s 0.5% “pre-emptive” rate hike and talk of IDR support.   G-7 Macro: It’s all tranquil on the macro front today, and there wasn’t a whole lot going on yesterday either. US September existing home sales were weak, but not as bad as had been forecast (-1.5%MoM vs -2.1% consensus) and initial jobless claims actually fell from the previous week. China: According to media reports, China is discussing whether to shorten hotel quarantine and replace it with a longer home quarantine, with the entire quarantine period possibly being reduced from 10 days to 7 days. Chinese officials have not confirmed the news. And if there is such a debate, it will be useful to know whether such changes would also apply to foreigners entering mainland China, or only to residents of Mainland China. Even if it applies to everyone, we believe that this relaxation will not be enough to attract many foreigners to enter the country as the quarantine period is still long. However, once the reduction in the number of quarantine days begins, the likelihood of further reductions will grow, which bodes well for China's growth next year. Japan: Consumer price inflation stayed at 3.0% YoY in September for the second month (vs 2.9% market consensus) while core inflation excluding fresh food hit 3.0% YoY in September (vs 2.8% in August, 3.0% market consensus). This is the first time the core inflation rate has reached 3% since 1991. We see some price increases related to the economic reopening, such as apparel (1.9%) and also entertainment (2.2%). While fresh food inflation (1.9%YoY) stabilized quite sharply from the previous month (8.1%).  Inflation pressures are broadening beyond energy, but the Bank of Japan will probably keep its easing stance until they see some signs of wage growth. We expect inflation to climb further until the year-end, but the government’s travel subsidy program may lower some travel-related prices in the coming months. South Korea: Early October trade data raises concerns about Korea’s sluggish exports, mainly in the semiconductor sector. 20-business day exports declined -5.5% YoY. Chip exports were down -12.8%, while automobiles moved up 32.1%. By destination, exports to the US rose 6.3% but exports to China fell -16.3%. The sluggish exports to China are probably due to weak chip exports. We maintain our view that 4QGDP will likely contract as exports are expected to weaken further during the quarter. The September PPI release shows that pipeline prices are slowing from their recent peak in June. The headline PPI inflation rate decelerated slightly to 8.0% YoY in September (vs 8.2% in August). Agricultural product prices accelerated due to floods and typhoons in the past month, but service prices such as transportation and financial services fell. However, the renewed weakness of the KRW and the recent rebound in global oil prices remain as upside risks in the short term. Indonesia: Central bank Governor Warjiyo indicated that Bank Indonesia (BI) would want to continue to "control the exchange rate" and that recent IDR weakness was not reflective of Indonesia's economic fundamentals.  We expect BI to step up intervention to limit imported inflation and to shore up the currency which has slipped 2.2% month-to-date.      What to look out for: Fed speakers slated for tonight New Zealand trade balance (21 October) Japan CPI inflation (21 October) South Korea advance trade data (21 October) Fed’s Williams and Evans speak (21 October) Read this article on THINK TagsAsia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
EM Index Inclusions and Exclusions: India Thrives, Egypt Faces Challenges

The USD/JPY Pair Above 150! | Who Will Replace Liz Truss? | The Central Bank Of Turkey Cut Interest Rates

Swissquote Bank Swissquote Bank 21.10.2022 13:30
Liz Truss resigned. Normally, a PM resignation means uncertainty and limited visibility; it’s not a preferred scenario for the market. But the little time Liz Truss stayed in power was so hectic that investors welcomed the news that she departs sooner rather than later. All eyes are on who will replace Liz Truss? Forex In the FX, the US dollar continues extending its rally across the board, and there is nothing the other currencies can do. The dollar-yen is now trading above the 150 level, with prospect of another Bank of Japan intervention. The Central Bank of Turkey cut interest rates by another 150bp yesterday. Turkish stocks gained, as Turkish Airlines hit 100 lira level. The results American Airlines revenues grew 13% compared to the same time in 2019, and other airline companies also hinted at strong results. Snap, however, nosedived 27% in the afterhours trading, after reporting the lowest ever quarterly sales growth due to lower advertising spending. On the macro front, the Philly Fed manufacturing index came in softer than expected, but the weekly jobless claims fell – which certainly fueled the hawkish Fed expectations. Watch the full episode to find out more! 0:00 Intro 0:24 Who will be the next UK PM? 4:21 FX update: USDJPY above 150! 5:09 Turkey cuts, stocks rally 7:37 Airlines report strong results, Snap dives 8:37 Why the US jobless claims keep falling?! Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Liz #Truss #resignation #Rishi #Sunak #Boris #Johnson #Penny #Mordaunt #GBP #UK #CBT #TRY #TurkishAirlines #AmericanAirlines #Snap #earnings #USD #JPY #BoJ #PhillyFed #jobless #claims #Fed #hawks #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
Top 10 Stocks to Watch: August 2023 - BY: RYAN SULLIVAN

The First Month Of The Fourth Quarter (Q4) Can Be Ugly

Saxo Bank Saxo Bank 22.10.2022 08:19
Summary:  Equities and fixed income could face a tough Q4. Can US dollar positions provide some upside in the cold winter? US 10-year Treasury yields Things have not evolved as quickly as anticipated in my Q3 Outlook on US 10-year Treasury yields. However, the picture remains the same and is still very important to discuss.  A short recap: US 10-year Treasury yields broke a multi-decade-long downtrend with a confirmed uptrend when yields broke above 1.71 percent in January 2022, marking a new higher high. This was followed by a break of the multi-decade-long falling trend line in March.  In June yields broke above the 2018 peak at 3.26 percent and spiked at 3.50 percent, only to be hit by a correction.  That correction seems to be over, and US 10-year Treasury yields are likely set for higher levels. With just the psychological resistance at 4 percent, yields could very well reach the 1.382 Fibonacci projection at around 4.38 percent in Q4. However, there is no strong resistance until around 5.25 percent, which is around the pre-subprime peak between the 1.618 and the 1.764 Fibonacci projection levels from the 2018–2020 downtrend. S&P 500 was rejected at the medium-term falling trend line a few weeks ago just below the 0.618 Fibonacci retracement at 4,367 and just below the 55 Simple Moving Average, which is declining, indicating an underlying bearish sentiment.   Key resistance level is at 4,325. If S&P 500 closes above the falling trend line and above 4,325 the bearish picture has reversed, and the leading US index will push for levels around 4,600 and possibly all-time highs.  The trend is down on the medium term but bulls don’t give up without a fight. If they can’t hold S&P 500 above 3,886, US equities are likely in for a rough Q4. Depending on how the market reacts to the October earnings season, the first month of Q4 can be become ugly. If S&P 500 closes below 3,886 June lows around 3,636 are likely to be taken out and a 3,500-3,200 consolidation area could be reached in Q4.  3,503 is the 0.50 Fibonacci retracement of the 2020–2022 bull market and 3,200 is close to the 0.618 retracement level (3,195 to be exact). It is also the 0.382 retracement of the 2009 (end of subprime crisis bear market) through to the 2002 peak bull market.  There is still massive divergence on RSI that needs to be traded out. That can be done by either a higher high on both RSI and the Index, or by an RSI close below the 40 threshold. For RSI to drop below 40 and reset/trade out the divergence, lower levels on the S&P 500 are needed.  EURUSD The past 18 months of downtrend in EURUSD paused at parity and in the middle of the wide falling channel it has been trading in the past ten years.   Just as most market participants thought that it was the last time in a very long time we were to see the euro being stronger than the dollar, the euro has bounced back strongly.  However, it was time for a correction after almost 18 months in one direction. A correction could take EURUSD to around 1.0350 resistance.  The downtrend is likely to resume in Q4 and the parity and consolidation areas are likely to be tested once again—this time they’re likely to be taken out. The consolidation area was “founded” back in 2002 just before an almost decade-long bull move in EURUSD.  If parity is broken again, EURUSD is likely to drop swiftly to the lower level of the consolidation area, around 0.96.  However, 0.96 is not a strong support level and if EURUSD moves below the middle of the wide channel trendline, selling pressure could accelerate and push EURUSD to 0.90.  0.90 is the 1.618 Fibonacci projection level of the 2020–2022 up-and-down trend. Parity is at the 1.382 projection and 0.90 is close to the 2.00 projection.      Source: https://www.home.saxo/content/articles/quarterly-outlook/autumn-can-become-ugly-for-equities-and-bond-holders-04102022
Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

Results Of Tesla, Netflix And Snap Do Not Seem To Be Affected By The Spectre Of Recession

Conotoxia Comments Conotoxia Comments 22.10.2022 08:40
In the world of macro data this week, the market was able to take a break from central banks' decisions on interest rate changes. On Tuesday, we had the results of the German economic sentiment index, which turned out to be more positive than expected at -59.2 points (forecast -65.7 points). Further down, however, are the low levels last seen during the crisis in 2008. Macro Data Wednesday saw the release of CPI inflation results for the Eurozone and the UK, among others, which were close to market expectations at 9.9% (forecast 10%) and 10.1% (forecast 10%), respectively. The data showed that inflation still seems to be breaking records.  Finally, of the key macroeconomic data, the number of new applications for unemployment benefits filed in the United States was positive, falling to 214,000 (forecast 230,000).   There is an estimation that the rising global inflation and the non-worsening labour market may not change the monetary policy stance from central banks. As it was mentioned in the morning's commentary on the bond market: "Looking at the chart of the quotation of the ETF with the symbol AGG, someone could see that since the peak in August 2020, the price of a unit of this fund has fallen by more than 20 percent [...] Nevertheless, presently, until the peak in US interest rate hikes is reached, this market may continue to be under pressure." Source: Conotoxia MT5, AGG, Weekly Stock Market The current week has been in terms of the earnings season for the third quarter of this year, particularly reported results from the banking sector, most of which reported positive earnings per share (EPS) results than expectations. Among others, Bank of America Corp. (BankofUS) EPS 0.81 (forecast 0.77), Goldman Sachs Group Inc. (GS) EPS 8.25 (forecast 7.69), or Blackstone Inc. (Blackstone) 1.06 (forecast 0.99). This could be a positive sign, because as the stock market saying goes, "there is no bull market without banks."  Surprising for analysts were the results of Tesla (Tesla), Netflix (Netflix) and Snap (Snap), which do not seem to be affected by the spectre of recession. The giant, which sells electric cars, improved net income to $3.33 billion (forecast $1.65 billion), revenue growth jumped 55 percent year-on-year, and earnings per share (EPS) came in at $1.05 (forecast $0.99). Netflix surprised with its first increase in subscriptions since the beginning of the year, which may have pushed its stock price up more than 10 percent at the opening of Wednesday's session.  Source: Conotoxia MT5, Netflix, Weekly In the social media market, one of the first reports was presented by the owner of Snapchat, whose y/y revenues did not seem to show significant change. Investors seem to reacted negatively, however, after the number of users of the Snapchat app appears to have fallen for the fifth consecutive quarter.Source: Conotoxia MT5, Snap, Weekly Currency Market In the absence of a decision on interest rate changes this week,  someone  could see no significant changes in the currency market. The EUR/USD pair continues to hover below parity at 1.00. Recall that these are values previously seen more than 20 years ago. Noticeably weakened the Japanese yen against the US dollar (USD/JPY) piercing the level of JPY 150. The question of possible intervention by the Bank of Japan is beginning to arise, as the exchange rate of this currency pair has risen by more than 30 percent since the beginning of the year. For the British pound, on the other hand, more uncertainty may continue, due to political developments. The recent rise in the GBP/USD pair came after the resignation of the British Prime Minister from office. Source: Conotoxia MT5, GBP/USD, Weekly The earnings season continues next week? Next week on Wall Street will be packed with the publication of reports from well-known companies. On Tuesday, Google will present quarterly results along with Coca-Cola or Microsoft. On Wednesday, there will be a report from Apple, which recently decided to cut orders for the new iPhone due to falling demand. Facebook will also present results on that day. Online retail giant Amazon will present its report on Thursday, October 27, along with McDonald's and MasterCard.  In addition, next week we could expect, among other things, the ECB's decision on interest rates in the Eurozone, CPI inflation in Germany and GDP results in the United States. In addition, at the end of the week there will be a meeting of the central Bank of Japan (BoJ), where it is possible that the topic of possible intervention in the foreign exchange market or a change in the range for Japanese bond yields would come up. The results of Tuesday's consumer mood report from the United States (CB Consumer Confidence) may seem interesting.    Grzegorz Dróżdż, a Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

Stocks: In 2016 and 2018 end of the year was quite pessimistic for Meta stock price, what about this year?

FXStreet News FXStreet News 21.10.2022 16:42
Snap lost 27% following its Q3 earnings call. Meta Platforms has followed suit, dropping 3.7%. The Trade Desk has also lost 4%. Meta Platforms (META) is down 3.7% in Friday's premarket at $126.62. Once again the collapse in the ur-social media company's share price can be blamed on Snap (SNAP). The latter's earnings call late Thursday forced it to sell off more than 27% afterhours when management refused for the second quarter in a row to provide guidance for the following quarter. This poor performance has seeped into the market's outlook on both Meta Platforms stock and The Trade Desk (TTD). The latter is a digital advertising marketplace that fell 4% in the premarket. Both companies were affected negatively last quarter as well due to poor Snap earnings news. TTD, however, quickly rebounded last quarter on its own earnings call. Snap did miss revenue projections by a slight $10 million, but overall the rest of earnings were farely decent. The company beat consensus on both earnings and active daily users. Operating income, adjusted EBITDA and free cash flow, however, suffered compared to a year earlier. Meta Platforms stock forecast META stock has had a horrible year so far, but it is now sitting on support from November and December of 2018. Bargain basement value pickers might get interested at this level, since it holds such precedence on the monthly chart below. A break here would send shares down to support at $115 from late 2016. Isn't that something? META always seems to be finding its multi-year low at the very end of the year. It happened in 2016, 2018 and....maybe 2022. Resistance remains between $160 and $180. Lastly, it is significant that this is the first time that META stock has ever touched the oversold level on the monthly Relative Strength Index (RSI) indicator. Could this be another sign of a bottom? META monthly chart The Trade Desk stock forecast The Trade Desk stock is in a much healthier place compared with META. First, the 8-week moving average is still above the 30-week. This is a rarity among tech stocks in this down cycle. Second, TTD might have alread put in a higher low last week. At least, that is what it looks like. This would be a fantastic case for shareholders since it would mean that the new support level is $50 rather than $40 from July. Last of all, the Moving Average Convergence Divergence (MACD) indicator looks to be popping above the 50 level soon, which is typically a bullish signal. A real bear market rally could push shares back up to the recent resistance zone around $74. TTD weekly chart
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

The Positive Close On The New York Stock Exchange, The Dow Jones Hit A Monthly High

InstaForex Analysis InstaForex Analysis 24.10.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 2.47% to hit a monthly high, the S&P 500 rose 2.37% and the NASDAQ Composite rose 2.31%. Dow Jones index  Caterpillar Inc was the top performer among the components of the Dow Jones index today, up 10.88 points or 6.07% to close at 190.22. JPMorgan Chase & Co rose 6.10 points or 5.25% to close at 122.23. Goldman Sachs Group Inc rose 14.29 points or 4.60% to close at 325.10. The losers were shares of Verizon Communications Inc, which shed 1.65 points or 4.46% to end the session at 35.35. American Express Company rose 1.67% or 2.38 points to close at 140.04, while Procter & Gamble Company rose 1.25% or 1.59 points to close at 128.58. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Schlumberger NV, which rose 10.33% to 50.41, Freeport-McMoran Copper & Gold Inc, which gained 9.99% to close at 32. 03, as well as Huntington Bancshares Incorporated, which rose 9.47% to end the session at 14.45. The drop leaders were SVB Financial Group shares, which lost 23.95% to close at 230.03. Shares of Robert Half International Inc lost 8.55% and ended the session at 73.01. Quotes of HCA Holdings Inc decreased in price by 5.69% to 196.74. NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Huadi International Group Co Ltd, which rose 89.27% to hit 58.92, Altamira Therapeutics Ltd, which gained 58.64% to close at 0.52 , as well as shares of Missfresh Ltd ADR, which rose by 57.50%, ending the session at around 2.52. The drop leaders were shares of Immunic Inc, which fell 77.39% to close at 2.08. Shares of Nextplay Technologies Inc lost 33.23% and ended the session at 0.28. Quotes of Kalera PLC decreased in price by 35.61% to 0.28. The number  On the New York Stock Exchange, the number of securities that rose in price (2282) exceeded the number of those that closed in the red (835), while quotes of 104 shares remained virtually unchanged. On the NASDAQ stock exchange, 2503 companies rose in price, 1265 fell, and 238 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.97% to 29.69. Gold Gold futures for December delivery added 1.40%, or 22.95, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 0.73%, or 0.62, to $85.13 a barrel. Futures for Brent crude for December delivery rose 1.24%, or 1.15, to $93.53 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.80% to hit 0.99, while USD/JPY shed 1.75% to hit 147.51. Futures on the USD index fell 0.90% to 111.80.     Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/297940
China's Position On The Russo-Ukrainian War Confirmed At The G20 Meeting

Asia Stock Markets Are Not Positive, Chinese Markets Have Met An Intense Sell-Off

TeleTrade Comments TeleTrade Comments 24.10.2022 09:23
The third-term leadership of China’s XI Jinping has messed up Chinese and Hang Seng indices. S&P500 futures have extended their gains after an upbeat Friday. Oil prices have dropped amid escalating recession fears. Markets in the Asian domain are not tracking positive cues from S&P500 futures and are displaying terrible price movements. The risk-on sentiment has extremely firmed as 10-US Treasury yields have trimmed further to near 4.15%. Meanwhile, the US dollar index (DXY) is attempting to establish above 112.00 after a roller-coaster move. At the press time, Japan’s Nikkei225 gained 0.57%, ChinaA50 nosedived 2.93%, and Hang Seng witnessed a bloodbath. The index has erased 5.53%. Indian markets are closed on account of Diwali-Balipratipada. Chinese markets have witnessed an intense sell-off after the announcement of China’s XI Jinping's third leadership term.  Investors have dumped equities significantly amid soaring fears of economic slowdown as the Chinese leader could prefer ideology-driven policies even at the cost of economic growth. Apart from that, upbeat Gross Domestic Product (GDP) and Trade Balance data have failed to fetch optimism for investors. Blood has spilled over the roads as indices in Hang Seng have witnessed a bloodbath. The continuation of China’s XI Jinping leadership has strengthened fears of an economic downturn. In Japan, gains in Nikkei225 are weak against the run-up recorded in S&P500. Potential intervention chatters from the Bank of Japan (BOJ) in the currency markets against disorderly yen moves have restricted the upside in Japanese equities. On the oil front, oil prices have dropped below the crucial support of $85.00 amid mounting global recession fears. In addition to the BOC, the BOJ and the European Central Bank (ECB) will announce their monetary policies. The BOJ may continue its ultra-loose stance while the ECB could tighten its monetary policy. An expectation of a fresh rate hike spell is weighing pressure on oil prices.
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

Bank Of Canada (BoC) And ECB Interest Rate Expectations | Redundancies Of 4,000 Employees At Philips

Saxo Bank Saxo Bank 24.10.2022 12:51
Summary:  Equities snapped back higher Friday to close the week on a positive note and near the highs for the week, perhaps as the persistent rise in US treasury yields finally reversed sharply intraday on Friday after posting new cycle highs. The positive mood carried over into the early Asian session overnight as yields fell further, but sentiment has soured again slightly ahead of the open of the European session today. The Japanese yen weakened after Friday’s wild rally from new multi-decade lows, a move that was likely intervention-driven. The week ahead will feature earnings reports from the largest US megacaps.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Strong equity session on Friday with S&P 500 futures closing at a weekly high and this morning the index futures briefly pushed above the 3,800 level which is quite startling given the price action out of China. Many of the large US companies have considerable revenue exposure to China, so there is a downside risk here to US companies as the increasing political risk premium on Chinese equities could impact valuation on US companies with large Chinse exposure. The falling US 10-year yield likely driven by safe-haven seeking flows is offsetting at the margin some of the headwinds for US equities, but the medium-term outlook remains negative. It is also a massive earnings season week in the US with most of the mega caps reporting earnings, so volatility could easily pick up during the week in the event that these earnings surprise to the downside. Hang Seng (HK50.I) In light of the events over the weekend in China with Xi Jinping drawing up a new leadership in China (see more in-depth analysis below), the Hang Seng Index is selling off 6.4% to price levels seen as far back as 2005; in the total return basis is not quite as bad. The equity valuation on Hang Seng Index has fallen to less than 8 on 12-month forward P/E ratio suggesting that a steep political risk premium is being built into Chinese equities. Chinese mainland shares are down 3.2% during the session likely reflecting the divergence in foreign ownership. Wild ride for JPY traders Friday, likely on intervention The yen spiked further to the downside as global bond yields continued to rise Friday, with USDJPY nearly reaching 152.00 before what may have been a powerful intervention from official Japanese sources took USDJPY as far south as sub-146.50 levels on Friday as bonds also found support. Japan’s finance minister Shunichi Suzuki said that the country is in a showdown speculators and can’t tolerate “excessive” moves in the JPY. The action has sprung back overnight, taking USDJPY back to the 149.00 area in early European trading today. Other USD pairs have moved in sympathy with the wild volatility in JPY, with sudden USD weakness late Friday following through in places overnight but reversing later in the session. Elsewhere in FX, sterling is bid on hopes of an orderly transition to a new prime minister, most likely Rishi Sunak. Crude oil (CLZ2 & LCOZ2) Crude oil has given back some of Friday’s weaker-dollar-driven gains as fears over the global economic outlook continues to offset OPEC+ production cuts and EU sanctions on Russian oil flows from early December. A batch of delayed economic data out of China and President Xi tightening his grip on the country also helped sour sentiment at the start of a new week. Overall, however, the oil market judging from the bullish curve structure remains tight signalling no easy path for those looking for lower prices. Focus this week on earnings from Exxon, Shell and their Big Oil peers. HG Copper trades near resistance in the $3.5lb area ... following an end of week rally that was triggered by a weaker dollar and softer yields (see below). A batch of data released by China overnight saw copper imports reach their second highest level this year and despite the current property market crisis, the metal is seeing rising demand in order to replenish low stock levels and from clean energy production which is taking hold even as China’s broader demand for commodities have seen a slowdown due to lower economic activity. Speculators have traded copper from the short side since April, and a break above $3.70 is likely to be the minimum requirement for that to change. Gold (XAUUSD) Gold reached $1670 overnight as Friday's rally extended into the Monday session, and apart from speculation about the timing of a peak-and-reversal in US treasury yields, it is the current wild ride in USDJPY that has got the algo’s going wild in both directions. While we maintain our long-term bullish view on gold and silver, the price action has yet to confirm a reversal. This despite the second failed attempt last week to break lower through key support at $1617. The exodus from bullion backed ETFs has gathered pace recently as investors instead focus on increasingly attractive bond market yields. Gold will likely continue to trade in a choppy fashion until we reach peak hawkishness and/or the dollar starts to weaken. US treasuries (TLT, IEF) US treasury yields spiked further on Friday, with the 10-year treasury yield benchmark posting a remarkable 4.33% before treasuries finally found strong support, closing the day slightly below the prior day’s close of 4.22% and following through to 4.16% in early European trading today. Could this prove a climax peak-and-reversal in yields? We would need to see the yield work back down below 4.00% for a stronger indication. Noted “Fed whisperer” Nick Timiraos of the Wall Street Journal penned an article at the weekend suggesting that the Fed is preparing for a downshift in the pace of rate hikes by early next year (more below). US 2-year yields are also sharply lower from the Friday highs, having fallen some 20 basis points and trading near 4.43% this morning. What is going on? China’s Communist Party’s new leadership China’s General Secretary Xi lined up a team who deeply share his vision of the future of China and the blueprint of the governance model and development strategies that he had established to replace four of the seven members of the Chinese Communist Party’s Politburo Standing Committee, including Li Keqiang, Premier. The strategies of common prosperity, high-quality development, dual circulation, technology self-reliance, strengthening governance within the CCP, and deepening CCP’s leadership over all aspects of the country will continue. WSJ’s Nick Timiraos suggests the Fed is eyeing a slowdown in its pace of tightening Timiraos is widely considered to have solid access to Fed sources and in a piece released this Saturday, affirms the market view that the Fed may begin to downshift from the 75-basis point hike pace, perhaps already after the November meeting and eventually pause the tightening regime at some point early next year to offer time to assess the impact of the rapid pace of rate hikes, which took the Fed Funds rate from 0-0.25% as late as March of this year to a projected 4.25-4.50% after the December meeting. But he also notes the variety of opinions among Fed officials, some of whom are in favour of carrying on with the current pace of tightening and not wanting to signal any change in resolve as long as inflation persists anywhere near current levels. Philips in urgent restructuring laying off 4,000 employees The Dutch industrial conglomerate has been a mess for years and this morning the company is reporting revenue and EBITDA in line with estimates, but announcing a big restructuring of the company laying off 4,000 employees to improve profitability ahead of what the company expects to be more challenging times. What are we watching next? Former UK Chancellor Rishi Sunak may become next UK Prime Minister today Former PM Boris Johnson announced at the weekend that he will not run for leadership of the conservative party. The deadline to announce support from at least 100 Tory lawmakers is today at 14:00 UK time, with the only challenger to Sunak’s bid Penny Mordaunt, who may not have sufficient votes. Sunak has over 100 backers and will automatically become the next Prime Minister if Mordaunt can’t muster sufficient support for a run-off. Bank of Canada and ECB set to hike by 75 basis points this week On Wednesday, the Bank of Canada (BoC) is expected to hike interest rates by as much as 75 basis points, taking the policy rate to 4.00% if they do so, after a hotter than expected CPI print in September for Canada. On Thursday, the European Central Bank (ECB) will also further tighten its monetary policy to fight against widespread and persistent inflation. We think that the ECB will have no other choice but to send a hawkish message to the markets (meaning a 75-basis point interest rate hike) and signal further hikes to come, at least until February 2023. It is likely that the central bank will downshift interest rate hikes in December 2022 and in February 2023 to take into consideration the ongoing economic slowdown (which may end up in a recession). At this week’s meeting, the ECB governing council will also discuss two other matters: 1) Quantitative tightening and when/how it should start. But a final decision is not expected until December; 2) commercial banks’ early repayment of TLTRO (for Targeted Longer-term Refinancing Operations to provide financing at very low rates to credit institutions). Those two points are unlikely to be major market movers. Further pressure on Japan’s yield curve control? Last week, the Bank of Japan (BoJ) was forced to start emergency bond buying operations to maintain its yield curve control (YCC) policy. Pressure could remain high this week again. Several factors are pushing yields higher in Japan: highest inflation print since 1991, calls for very large wage increases and the continued upward migration in global yields, of course. Earnings to watch Around 430 earnings releases expected this week in the earnings universe that we cover during earnings seasons. Out of those more than 400 earnings releases, the most important ones are highlighted below. By the end of this week, we will have an adequate view into revenue growth, operating margin, and earnings growth on a both q/q and y/y basis. Today: Nidec, Philips, Cadence Design Systems Tuesday: First Quantum Minerals, Canadian National Railway, DSV, UPM-Kymmene, SAP, HSBC, ASM International, Norsk Hydro, Novartis, UBS, Kuhne + Nagel, Microsoft, Alphabet, Visa, Coca-Cola, Texas Instruments, UPS, Raytheon Technologies, General Electric, 3M, General Motors, Valero Energy, Biogen, Enphase Energy, Halliburton, Spotify Technology Wednesday: Dassault Systemes, Mercedes-Benz, BASF, Deutsche Bank, PingAn Insurance, CGN Power, UniCredit, Canon, Barclays, Standard Chartered, Heineken, Aker BP, Iberdrola, Banco Santander, SEB, Meta Platforms, Thermo Fisher Scientific, Bristol-Myers Squibb, ADP, Boeing, ServiceNow, Ford Motor, Twitter Thursday: ANZ, Anheuser-Busch InBev, Argenx, Shopify, Teck Resources, Neste, Kone, TotalEnergies, EDF, STMicroelectronics, PetroChina, China Life Insurance, CNOOC, Oriental Land, Shin-Etsu Chemical, Takeda Pharmaceuticals, Hoya, FANUC, Shell, Lloyds Banking Group, Universal Music Group, Repsol, Ferrovial, Hexagon, Evolution, Credit Suisse, Apple, Amazon, Mastercard, Merck & Co, McDonald’s, Linde, Intel, Honeywell, Caterpillar, Gilead Sciences, Pioneer Natural Resources Friday: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Economic calendar highlights for today (times GMT) 0715-0800 – Eurozone Oct. Flash Manufacturing and Services PMI 0830 – UK Oct. Flash Manufacturing and Services PMI 1230 – US Sep. Chicago Fed National Activity Index 1345 – US Oct. Flash Manufacturing and Services PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-24-2022-24102022
The Japanese Yen Retreats as USD/JPY Gains Momentum

Chinese indices - Hang Seng and CSI 300 lost a lot, Q3 earnings season is underway with Coca-Cola, Apple and others publishing their earnings this week!

Peter Garnry Peter Garnry 24.10.2022 23:34
Summary:  Chinese equities are significantly lower today following the country's leadership shuffle over the weekend as investors are increasingly readjusting lower their views on longer term growth in private sector profits. Chinese equities are selling at a historical discount to US equities in a sign of a rising equity risk premium on Chinese equities. This rising equity risk premium comes also with risk for the US equity market as many US companies have large revenue exposure to China. We also take a look at the Q3 earnings season and the upcoming earnings this week which will determine the short-term sentiment and reaction. Will international investors reconsider their exposure to China? There are bad days in the equity market when everything is on sale with liquidity effects driving all stocks over the cliff, and then there are days when an isolated equity market plunges even when most other equity markets are on the rise. The latter happened in today’s trading session when the Hang Seng Index declined by 6% and the CSI 300 (mainland Chinese index) fell 3% as investors decided to sell first and ask questions later upon witnessing the shuffle in Chinese leadership presented over the weekend. The weekend’s events in China are arguably the culmination of a long journey, in which China has been placing ever more emphasis on the importance of the public sector over the private sector, as encapsulated in the Chinese policy of “Common Prosperity”. The price action in Chinese equities speaks volumes when we see the tumbling Hang Seng Price Index trading at levels not seen since the global financial crisis in 2009, even if the total return index is less gloomy and only at a level last seen in 2013. More importantly, the spread in equity valuation between the Hang Seng Composite Index and S&P 500 has dropped to very low levels (60% below S&P 500) with the Hang Seng Composite Index now valued at a mere 6.8 times earnings. The rising Chinese equity risk premium The valuation differential reflects the growing political risk premium and lower confidence in those underlying Chinese earnings as Common Prosperity is likely a drag on private sector earnings growth longer term. At times in recent years, Chinese technology companies often traded at higher equity valuations than their Silicon Valley peers, but since Common Prosperity was adopted, the situation has changed dramatically with lower earnings and revenue growth among Chinese technology companies, leading to massive losses for investors. We maintain an underweight view on Chinese equities as a precautionary measure. As we have noted in previous equity notes countries such as India, Vietnam, and Indonesia are the big winners of the current realignment of global supply chains and thus considering for Asian exposure. A growing equity risk premium on Chinese equities naturally leads to the question of whether the US equity market could suddenly be jolted by a repricing of its China exposure. Is a dollar of free cash flow in China worth the same as a dollar of free cash flow from the US or Europe? Arguably not, and while this has been reflected in the revaluation of many semiconductor companies (also partly due to the US CHIPS Act) it has not been fully reflected in more consumer-oriented stocks like Apple and Tesla. With around 20% of its revenue coming from China, Apple’s risk profile could be rising on the risk of a sudden repricing due of a Chinese equity risk premium. Tesla gets 25% of its revenue in China and thus also has significant China exposure that is currently not reflected in its equity valuation. As we have stated in our previous equity notes, Apple and Tesla shares are key for broader equity sentiment and any downside risk dynamics in these two stocks could quickly jeopardize the wider equity market. Investor flows into Chinese equities and companies with high China exposure While price action tells one story on China, investor flows in ETFs tracking MSCI China A shares are telling a slightly different story. The number of outstanding shares (essentially how much capital that is deployed in an underlying index) has been growing steadily over the years as China’s capital markets have opened up. The has led to more inclusion in EM- and global benchmark indices of equities and bonds. While we have seen significant outflows out of ETFs tracking CNY bonds, until very recently at least, we have observed the opposite in Chinese equities. Falling equity prices in China have prompted rising investor flows into a “China is cheap” narrative. But sometimes, things are cheap for a reason (the equity risk premium discussion above). Over the last couple of months, this trend has shifted: in August, the largest UCITS ETF, which tracks MSCI China A shares, has begun seeing declining outstanding shares. As of Friday the current drawdown was -12%. This could be an early sign that investor appetite is on the decline. MSCI, the leading global equity index provider, has created an index called the MSCI World with China Exposure Index (USD) It covers 51 companies with the greatest revenue exposure to China. This index is a good starting point for any investor who would like to break down portfolio exposure to China. The 10 largest companies in the MSCI World with China Exposure Index (USD) are listed below. Qualcomm BHP Group Texas Instruments Broadcom Rio Tinto Applied Materials Woodside Energy Lam Research Fortescue Metals Group Marvell Technology As noted above, in addition to this list we would argue companies such as Apple and Tesla have considerable revenue exposure to China and thus have downside risks to their equity valuation. Q3 earnings so far show margin compression The numbers so far show that earnings are down q/q across all the major equity indices after a strong Q2. With revenue growth remaining strong due to inflation, profit margins on the other hand are under pressure. The technology-heavy Nasdaq 100 index in particular is showing severe margin compression with the profit margin down 2.8%-points since Q2 2021 and narrowing its spread to the MSCI World. This reduction in profit margin relative to the MSCI World is another way of expressing how higher interest rates and inflation are driving the comeback of the physical world over profits driven by intangibles. The list below shows a condensed version of the more than 400 earnings releases this week among the companies that are included in our earnings coverage. The most important earnings releases for market sentiment in US equities are Microsoft, Alphabet, Visa, UPS, General Electric, Meta, Apple, Amazon, Mastercard, Intel, Caterpillar, Exxon Mobil, and Chevron. In Europe, investors will focus on DSV, SAP, HSBC, Mercedes-Benz, BASF, TotalEnergies, EDF, Shell, Credit Suisse, Sanofi, Airbus, and Volkswagen. Today: Nidec, Philips, Cadence Design Systems Tuesday: First Quantum Minerals, Canadian National Railway, DSV, UPM-Kymmene, SAP, HSBC, ASM International, Norsk Hydro, Novartis, UBS, Kuhne + Nagel, Microsoft, Alphabet, Visa, Coca-Cola, Texas Instruments, UPS, Raytheon Technologies, General Electric, 3M, General Motors, Valero Energy, Biogen, Enphase Energy, Halliburton, Spotify Technology Wednesday: Dassault Systemes, Mercedes-Benz, BASF, Deutsche Bank, PingAn Insurance, CGN Power, UniCredit, Canon, Barclays, Standard Chartered, Heineken, Aker BP, Iberdrola, Banco Santander, SEB, Meta Platforms, Thermo Fisher Scientific, Bristol-Myers Squibb, ADP, Boeing, ServiceNow, Ford Motor, Twitter Thursday: ANZ, Anheuser-Busch InBev, Argenx, Shopify, Teck Resources, Neste, Kone, TotalEnergies, EDF, STMicroelectronics, PetroChina, China Life Insurance, CNOOC, Oriental Land, Shin-Etsu Chemical, Takeda Pharmaceuticals, Hoya, FANUC, Shell, Lloyds Banking Group, Universal Music Group, Repsol, Ferrovial, Hexagon, Evolution, Credit Suisse, Apple, Amazon, Mastercard, Merck & Co, McDonald’s, Linde, Intel, Honeywell, Caterpillar, Gilead Sciences, Pioneer Natural Resources, Friday: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Source: Chinas risk premium on the rise critical earnings week ahead | Saxo Group (home.saxo)
At The Close On The New York Stock Exchange Indices Closed Mixed

On The NASDAQ Stock Exchange, 1925 Companies Rose

InstaForex Analysis InstaForex Analysis 25.10.2022 08:08
At the close of the New York Stock Exchange, the Dow Jones rose 1.34% to a one-month high, the S&P 500 was up 1.19% and the NASDAQ Composite was up 0.86%. The Dow Jones index Amgen Inc was the top performer among the components of the Dow Jones index today, up 9.38 points or 3.72% to close at 261.32. Quotes Coca-Cola Co rose by 1.61 points (2.88%), ending trading at 57.57. Home Depot Inc rose 7.73 points or 2.81% to close at 283.26. The least gainers were Nike Inc, which lost 0.49 points or 0.55% to end the session at 88.01. The Walt Disney Company (NYSE:DIS) was up 0.32 points or 0.31% to close at 101.72, while Chevron Corp was down 0.06 points or 0.03% to end the trading at 173.13. The S&P 500 index  Leading gainers among the S&P 500 index components in today's trading were HCA Holdings Inc, which rose 7.02% to hit 210.47, Tractor Supply Company, which gained 5.30% to close at 207.83, and also shares of Regions Financial Corporation, which rose 5.28% to close the session at 20.55. The least gainers were Las Vegas Sands Corp, which shed 10.29% to close at 35.05. Shares of Starbucks Corporation shed 5.47% to end the session at 83.76. Quotes of Wynn Resorts Limited decreased in price by 3.86% to 56.53. The NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Applied Genetic, which rose 62.43% to hit 0.39, Vaxcyte Inc (NASDAQ:PCVX), which gained 60.35% to close at 33. 00, as well as shares of Mullen Automotive Inc, which rose 32.94% to close the session at 0.50. The least gainers were Tricida Inc, which shed 94.48% to close at 0.60. Shares of Alfi Inc lost 54.32% and ended the session at 0.11. Quotes of Huadi International Group Co Ltd decreased in price by 43.99% to 33.00. The numbers On the New York Stock Exchange, the number of securities that rose in price (1,751) exceeded the number of those that closed in the red (1,344), while quotes of 124 shares remained virtually unchanged. On the NASDAQ stock exchange, 1925 companies rose in price, 1828 fell, and 253 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.54% to 29.85. Gold Gold futures for December delivery lost 0.15%, or 2.55, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery fell 0.26%, or 0.22, to $84.83 a barrel. Futures for Brent crude for January delivery rose 0.13%, or 0.12, to $91.46 a barrel. FX Market Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.14% to 0.99, while USD/JPY edged up 0.98% to hit 149.09. Futures on the USD index fell 0.04% to 111.93.     Relevance up to 05:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/298126
Asia Morning Bites - 14.02.2023

After The Surge In Chinese Stocks, Also Some Concerns Have Appeared

TeleTrade Comments TeleTrade Comments 25.10.2022 08:59
Asian equities fail to track Wall Street amid mixed plays. Rishi Sunak’s victory in the UK PM race, softer PMIs allowed equity buyers to remain hopeful. Alleged meddling by Chinese officials to propel equities, BOJ’s “stealth intervention” fail to entertain traders. Yields remain pressured despite softer PMIs challenge hawkish central banks. Asia-Pacific equities seesaw around a 2.5-year low as fears emanating from China and Japan flash mixed signals to defend the stocks during early Tuesday. That said, a sharp jump in Chinese shares triggered fears of market intervention from Beijing, which in turn allowed traders to pare some losses. However, an absence of confirmation allowed equity bulls to pare some gains. Further, Japan’s stealth intervention also supported the Asia-Pacific equities. While portraying the mood, MSCI’s index of Asia-Pacific shares outside Japan drops 4.5% intraday to a 2.5-year low. However, Japan’s Nikkei 225 rises 1.2% while Chinese equities are on an average 1.0% up on a day. Amid these plays, Reuters stated that the Asian benchmark is nursing losses of nearly 32% so far this year, weighed by big falls in Hong Kong shares while emerging markets such as India and Indonesia have gained on improving growth prospects. The news also mentioned that reports of the size of transactions on Friday and Monday, and moves in USD/JPY, leave no doubt in the minds of most that intervention took place. That said, this new strategy leaves open the possibility of smaller, perhaps more frequent interventions, and could keep market participants cautious for longer. Elsewhere, the US Dollar Index (DXY) remains on the back foot around 111.85, taking rounds to intraday low while struggling to extend the week-start gains amid the mixed clues in the market and the downbeat US data, as well as an absence of Fedspeak. It should be noted that the US 10-year Treasury yields remain pressured around 4.21%, down two basis points (bps) while the US stock futures remain mildly offered. Also, stocks in the Asia-Pacific region are mostly negative led by China. Moving on, a light calendar could test equity traders amid an absence of the Fed speakers. Though, looming risks to the major economies and likely central bank aggression favors the gold sellers ahead of Thursday’s US Gross Domestic Product for the third quarter (Q3).
Bank Of England Will Probably Be Unable To Avoid A Significant Easing Of Policy

British Sovereign Bonds | Tech Giants Will Announce Earnings (Google And Microsoft)

Swissquote Bank Swissquote Bank 25.10.2022 11:59
After both Boris Johnson and Penny Mordaunt pulled out of the British PM race, Rushi Sunak cried victory on Monday afternoon, and markets cried ‘Ready for Rishi’. The new UK Prime Minister The British sovereign bonds posted one of the biggest gains on record, the 10-year gilt yield tanked 8.50%, the 30-year yield dived 8.40%, sterling gained. Investors loved seeing Sunak become the new UK Prime Minister, they, however, hated seeing Xi Jinping confirm a third term. NASDAQ Nasdaq’s Golden Dragon China index lost more than 20% yesterday and closed the session more than 14% down. Direxion’s FTSE China Bear times 3 ETF jumped almost 30% in the session. Macro data On macro, the PMI data revealed yesterday did little good to the mood in Europe. The composite PMI fell to 47.1, which is the lowest level since April 2013. In the US, the services sector saw a sharp, and an unexpected decline to 46.6, from 49.3 printed a month earlier, and 49.6 expected by analysts. Japanese core CPI advanced to 2% versus 1.9% expected by analysts. The dollar-yen trades touch below the 149 mark after the Bank of Japan (BoJ) intervened to slowdown the depreciation in yen. US tech giants In the corporate space, two big US tech giants are due to announce earnings: Alphabet and Microsoft. Their revenues are expected to have slowed in the latest quarter, but how much of the slowdown is already priced in? Walking into the results, it’s important to remember that soft results don’t necessarily mean negative market reaction. If the soft results still beat the market estimates, we could see Google, and Microsoft shares rally. Watch the full episode to find out more! 0:00 Intro 0:39 Markets are ready for Rishi! 2:52 …but not for Xi. 4:32 PMI data disappoint 6:00 Japanese inflation advance 7:25 Google earnings preview 9:07 Microsoft earnings preview 10:20 Option traders bet for Tesla below $200! Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Google #Microsoft #earnings #UK #PM #Rishi #Sunak #GBP #USD #JPY #BoJ #ECB #China #XiJinping #selloff #Tesla #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5  ___  Let's stay connected: LinkedIn: https://swq.ch/cH
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

The Major Indices On The New York Stock Exchange Rose

InstaForex Analysis InstaForex Analysis 26.10.2022 08:02
At the close of the New York Stock Exchange, the Dow Jones rose 1.07% to hit a monthly high, the S&P 500 rose 1.63% and the NASDAQ Composite rose 2.25%. The Dow Jones index  The top performer among the components of the Dow Jones index today was Nike Inc, which gained 3.71 points (4.22%) to close at 91.72. Quotes of American Express Company rose by 5.39 points (3.81%), closing the session at 147.02. Boeing Co rose 4.60 points or 3.24% to close at 146.65. The biggest losers were The Travelers Companies Inc, which shed 3.70 points or 2.06% to end the session at 176.09. Amgen Inc was up 1.33 points (0.51%) to close at 259.99, while UnitedHealth Group Incorporated was down 1.38 points (0.25%) to close at 540. 22. The Dow Jones index  Leading gainers among the S&P 500 index components in today's trading were Centene Corp, which rose 10.47% to 83.75, IQVIA Holdings Inc, which gained 10.17% to close at 197.83, and shares of Charles River Laboratories, which rose 9.10% to end the session at 219.12. The losers were Brown & Brown Inc, which shed 12.65% to close at 55.10. Shares of Cadence Design Systems Inc shed 5.55% to end the session at 151.32. Quotes W. R. Berkley Corp fell in price by 4.64% to 69.20.  The NASDAQ Composite Leading gainers among the components of the NASDAQ Composite in today's trading were Taysha Gene Therapies Inc, which rose 97.35% to hit 2.98, Fangdd Network Group Ltd, which gained 89.64% to close at 1.26. , as well as shares of Revelation Biosciences Inc, which rose 64.60% to close the session at 0.41. The biggest losers were Hoth Therapeutics Inc, which shed 26.37% to close at 0.24. Shares of Mana Capital Acquisition Corp lost 23.24% to end the session at 5.99. Quotes TuanChe ADR fell in price by 18.45% to 6.32. The numbers On the New York Stock Exchange, the number of securities that rose in price (2619) exceeded the number of those that closed in the red (487), while quotations of 112 shares remained practically unchanged. On the NASDAQ stock exchange, 2989 companies rose in price, 753 fell, and 241 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.66% to 28.46, hitting a new monthly low. Gold Gold futures for December delivery added 0.21%, or 3.55, to $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery rose 0.39%, or 0.33, to $84.91 a barrel. Brent futures for January delivery fell 0.05%, or 0.05, to $91.16 a barrel. Forex Market Meanwhile, in the Forex market, EUR/USD rose 0.94% to hit 1.00, while USD/JPY fell 0.71% to hit 147.90. Futures on the USD index fell 1.03% to 110.75.   Relevance up to 04:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/298317
The RBA Will Continue At A 25bp Pace At Coming Meetings

The Australian Government Will Not Be Able To Deliver On Its Election Promise

Saxo Bank Saxo Bank 26.10.2022 08:34
Summary:  The US major indices, the Nasdaq 100 & S&P 500 lift for the 3rd day supported by bonds yields falling, with traders digesting weaker US economic news which could persuade the Fed to slow its pace of hikes, all while parsing through stronger than expected earnings. WTI and gold both gained, while Bitcoin broke above $20,000 for the first time in nearly three weeks. Asian equity futures are in the green. Downunder investors parse through the Australian Federal budget winners; green energy, infrastructure, healthcare and parents. While mulling over Government warnings that power bills will rise 50%. What’s happening in markets?   The US major indices, the Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) lift for the 3rd day The major indices rallied 2.3% and 1.6% respectively, supported by bonds yields falling, with traders digesting weaker US economic news which could persuade the Fed to slow its pace of hikes, all while parsing through stronger than expected earnings. The 10-year Treasury yield plunged 15 bps to 4.10%, which helped the dollar fall against every G-10 peer, while the pound added 1.7%. It's worth noting so far this US earning seasons 146/S&P500 companies reported results, and 3% delivered earnings surprises to the upside, which has supported equites, with energy earnings growth up the most, averaging 164%.  While total aggregate earnings have declined. Crude oil (CLX2 & LCOZ2) rises over $85 on near supply tightness and some thinking the Fed will slow its pace of hikes  Three US economic data sets released over the last two days are pointing to the US economy souring, which could indicate the US Federal Reserve’s rate rises have been working and may perhaps persuade the Fed to slow its pace of hikes. This could be seen as a positive signal for fuel demand. Consumer Confidence fell, while the S&P Core Logic Case-Shiller 20-City House Price Index also released Tuesday showed home prices fell 1.3% in the 20 core cities studied month-on-month, but were still 13.1% higher than a year ago. The day prior we had S&P Global’s flash US Composite PMI Output Index, that tracks the manufacturing and services sectors, falling to 47.3 this month from a final reading of 49.5 in September  Australia’s ASX200 (ASXSP200.1) rises 0.3%, erasing earlier gains on hotter than expected CPI Australian CPI rose more than expected to a 32 year high, with CPI up 7.3%, hotter than the consensus expectation that consumer prices would rise 7.1% YoY. The biggest moves were in Housing prices, up 10.5% YoY, followed by Transport costs up 9.2% (fueled by fuel prices ripping up), while Food price growth remained strong, up 9% YoY. Core inflation (or trimmed mean inflation) which the RBA looks at, which excludes large rises and falls rose to 6.1% YoY, which is the highest reading since the data was first published. Today's proof shows the RBA’s pace of hikes has done very little to slow price growth and serves as a wakeup call that perhaps the RBA will continue to hike rates to slow inflation, despite employment falling and some businesses being in financial hardship. Coincidently, the last time CPI was this high, was in 1990, when the RBA hiked so aggressively it tipped the economy into recession, so that’s something to consider. It's also worth looking at asset classes that typically do well in recessionary cycles (such as bonds, and in equities healthcare, utilities and consumer staples). The Australian share market is up 0.3% on Wednesday, up for the third day. The real estate sector is leading today, up 2.3% after the sector won in the Australian Federal budget handed down last night. As for stocks, Costa Group (CGC) is up the most, 11% with investors speculating the business might be taken over.   What to consider? Australian Govt budget winners are green energy, infrastructure, healthcare and parents  The Australian Federal Budget handed down last night forecasts slower GPD growth, higher energy bills, as well as higher spending. See below for more.  A sector to watch is green transformation. With the AUD$20b to be put toward Australia’s transformation to net zero. The government outlined a large fund to mitigate climate change risk and support the transformation to net zero, with the funding going toward recently commenced projects on windfarms in VIC and the TAS Marinus Link project, while also delivering cheaper infrastructure loans for investment into renewable energy, in order to lower energy costs and achieve net zero over the coming years. Focus will be on lithium, rare earths, hydrogen, with companies like Pilbara Minerals, Allkem, Lynas and Iluka on watch.      Another sector to watch is building, construction, infrastructure and mining. With the introduction of the national Housing Accord between government and other industry bodies, there is a target of building one million new homes over 5yrs, starting mid-2024. The government will establish a AU$10bn housing Australia future fund, with an aim of providing 20k new social housing dwellings. AU$350m will be spent over 5yrs in delivering 10k affordable dwellings, with state governments to provide another 10k homes. The government also committed to its pre-election promise of a shared equity scheme, allowing eligible people to buy a house with a smaller deposit. Focus will be on stocks like Transurban, Abbri and eyes will also be on banks that could benefit from housing polices, so CBA, ANZ Bank, NAB, as well as Westpac as well as Suncorp and Bank of Queensland   Another sector to watch is health and aged care. The Government will spend AU$787.1m over four years on making a greater co-payment for prescription drugs, starting next year. Moreover, the government pledged to open 50 Medicare urgent care clinics, expand access in suburbs and regions. Overall, along with a rise in spending on hospitals, and extending various COVID-19 support measures, the government has pledged AU$6.1b. Elsewhere, the government is committing AU$2.5b to improving aged care to improving aged care facilities and staffing issues. Focus will be on health care businesses like Ramsay Health, Sonic Health Care, ResMed as well as Healius and Australian Clinical Labs.   And another big highlight was increasing child care subsidies and paid parental leave to drive female labour force participation. From July 2023, childcare subsidy rates will increase for all eligible families with annual incomes less than AU$530k, which would cover around 96% of families. The increase in paid-parental leave will cost AU$531.6mn over four years, starting in FY23. Each year from July 2024 to July 2026, the paid parental leave will increase by 2 weeks, with a total increase of 6 weeks to 26 weeks by FY27. Australian Federal Budget 2022 warns power bills will rise 50%  The Australian Federal Budget handed down last night, estimated power prices will rise 50% over the next two years. It follows on from the Australian Energy Regulator warning electricity prices will rise by up to 50% just in 2023. Either way, it seems the Australian Government won’t be able to fulfill its election promise to cut power bills. Several bodies warned Australia will run out of energy next year including the Australian Consumer and Competition Commission, who says there is a significant risk the nation will be short supply in 2023 by 56PJ, which could further cause prices to rise, and result in some manufacturers closing their businesses, with market exists already occurring.  This might be a catalyst for some to perhaps consider looking at large cap oil companies, and ETFs.       For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-26-oct-26102022
Australia Is Expected To Produce A Bumper Year Of Crops

Ukrainian Exports Of Agricultural Products May Increase In October | Rising Energy Costs Will Hurt Microsoft's Operating Margin

Saxo Bank Saxo Bank 26.10.2022 08:45
Summary:  A whiplash-inducing session for equity traders yesterday as the strong market session was spoiled after hours yesterday by weak results from Microsoft and Google-parent Alphabet. A drop in US treasury yields, meanwhile, has driven a sharp correction lower in the US dollar, with EURUSD eyeing parity suddenly ahead of next week’s FOMC meeting and AUDUSD trying to break higher after a hot core Q3 CPI reading overnight.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Strong rally in US equities yesterday touching the 50-day moving average before settling a bit lower on the close. Price action has subsequently turned negative overnight after the cash session as disappointing earnings from Alphabet and worsening outlook from Microsoft are weighing on the indices. On the positive side, the US 10-year yield is coming down from its recent peak and the Chicago Fed National Activity Index showed yesterday that the US economy operated meaningfully above trend growth in both September and August suggesting inflationary forces are still intact despite tighter financial conditions. Euro STOXX 50 (EU50.I) Touched almost the 3,600 level as we indicated yesterday was the upside level the market was looking for, but the weaker US earnings overnight might impact equity sentiment today, but on the other hand European earnings releases this morning have broadly beaten estimates. FX: USD punched lower as yields drop Yesterday saw the potent, USD-negative combination of treasury yields pushing sharply lower and strong risk sentiment, but interesting to note that the USD weakness continued in late trading yesterday, even after important megacap companies in the US reported weak earnings and risk sentiment reversed sharply, suggesting that treasury yields are the primary driver of the moment. EURUSD came within spitting distance of parity again, and could head to 1.0200 on a break above if the US 10-year yield breaks below 4.00%, although traders may rein in their market exposure ahead of next Wednesday’s FOMC meeting. USDJPY is also under pressure, trading near 148.00, and may have a path to 145.00 or lower if yields continue to ease. Elsewhere, a hot CPI print from Australia overnight (more below) has AUDUSD making a bid above the important 0.6400 area. Gold (XAUUSD) and silver (XAGUSD) Gold and silver trade higher after receiving a boost from a weaker dollar and continued decline in US bond yields amid signs the US economy is showing signs of rolling over, just days before the next FOMC interest rate decision on November 2. US yields slumped across the curve after data showed home prices tumbling the most since 2009 and US consumer confidence was down by more than expected. While another bumper 75 basis points hike is expected next week, the FOMC may decide to ease the foot of the brakes in coming meetings while assessing the impact of their rate and quantitative tightening actions. As a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called. Until then watch the dollar and yields for inspiration, while silver, in order to avoid creating a potential bearish head-and-shoulder formation, needs a break above $20. Crude oil (CLZ2 & LCOZ2) Crude oil remains rangebound, with Brent currently stuck in a $90 to $95 range, after a weaker dollar led pop on Tuesday was reversed after the American Petroleum Institute reported a 4.5-million-barrel expansion in US crude stocks. In today’s weekly update from the EIA, the market will be watching distillate stocks as concerns about tight supplies continue to grow ahead of the EU embargo on Russian fuel starting next February. Diesel inventories in the US are at lowest seasonal level ever heading into winter while the situation in Europe looks similar. Developments that have driven distillate crack spreads and diesel prices at the pumps higher in recent weeks relative to gasoline. Also focus this week on earnings from Big Oil. US treasuries (TLT, IEF) US treasury yields dropped further yesterday, with the 2-year benchmark yield easing below 4.50%, and the 10-year yield pushing all the way down below 4.10% and therefore nearing the important 4.00% area. A drop in the latest Consumer Confidence survey (more below) offered a tailwind, as have talks since Monday of a possible treasury “buyback” from US Treasury Secretary Yellen, said to be prompted by the need to improve liquidity in the treasury market and attractive from the Treasury’s point of view as lower yielding long treasuries issued at far lower yields can be bought back at significant discounts. What is going on? Australia September and Q3 CPI comes in hot Yet another hot inflation report out overnight, particularly in the core inflation data, this time from Down Under, as Australia’s September CPI came in at +7.3% YoY vs. +7.1% expected, and the Q3 CPI was also higher than expected at +1.8% QoQ and +7.3% YoY vs. +1.6%/7.0% expected, with the “trimmed mean” core CPI out at +1.8%/6.1%, far above the 1.5%/5.0% expected, and 4.5% YoY in Q2. Housing prices were the biggest contributors up 10.5%, followed by Transport costs up 9.2% and Food price growth up 9%. US October Consumer Confidence weaker than expected The survey was out at 102.5 versus 105.9 expected and 107.8 in September, with a bad miss in the Present Situation component, which fell to 138.9 from 150.2 in September, a large drop and the lowest reading since early 2021. Wheat futures (ZWZ2) slipped to a five-week low on Tuesday ... with Black Sea grain exports pressuring prices while rain in recently dry growing areas in the US and Argentine adding further downward pressure to prices, especially in the US where recently planted winter wheat fields in the US Midwest look set to receive a decent dose of moisture and potentially further speed of the planting currently 79% completed. Ukraine’s export of agricultural products could rise by more than 8% in October from last month, the Ukrainian Agrarian Council said on Tuesday while ADM’s chief grain trader on an earnings call said that he sees “nothing significant that could derail” an extension of the Black Sea grain export corridor next month. Google shares down 7% on big Q3 miss It turned out that Snap’s worse than expected results last week were a good leading indicator on Google’s performance in Q3. Revenue came in at $69.1bn vs $70.8bn and operating income was $17.1bn vs est. $19.7bn as the operating margin is coming under significant pressure q/q and y/y. Revenue growth in Q3 at 6% y/y is the slowest pace since Q2 2020. Microsoft shares down 7% on worsening outlook FY23 Q1 (ending 30 September) revenue was $↨50.1bn vs est. $49.6bn and EPS of $2.35 vs est. $2.29, but it was the forecast for the current quarter that negatively surprised the market. Microsoft expects the slowdown in PC sales and rising energy costs to hurt operating margin, and the company has more or less introduced a hiring freeze to keep costs under control. What are we watching next? Bank of Canada set to hike 75 basis points We have an interesting combination of hot CPI readings in a number of places, including Canada and Australia, seeing the market adjusting expectations higher for the Bank of Canada and Reserve Bank of Australia, all while US yields have eased off on the anticipation that the FOMC will deliver a message. After the recent hot September Canada CPI reading, the market boosted expectations for today’s Bank of Canada hike to 75 basis points for today's, which will take the policy rate to 4.00% UK PM Sunak may delay budget statement scheduled for early next week Prime Minister Rishi Sunak may delay the report to give the new government a chance to find its feet first, with less urgency as sterling has not only stabilized, but rallied and UK Gilt yields have plunged, with the 10-year yield some 100 basis points lower, closing at 3.64% yesterday. Sunak reappointed Jeremy Hunt as Chancellor and announced a number of other appointments. Earnings to watch Today’s US earnings focus is Meta and given the weak results from both Snap and Alphabet due to worsening pricing on online ads we expect downward pressure on Meta’s business. Key for investors will be Meta admitting that its Metaverse bet is too expensive and will be reined in in the short-term as the company is facing tough headwinds on cash flow generation. Today: Dassault Systemes, Mercedes-Benz, BASF, Deutsche Bank, PingAn Insurance, CGN Power, UniCredit, Canon, Barclays, Standard Chartered, Heineken, Aker BP, Iberdrola, Banco Santander, SEB, Meta Platforms, Thermo Fisher Scientific, Bristol-Myers Squibb, ADP, Boeing, ServiceNow, Ford Motor, Twitter Thursday: ANZ, Anheuser-Busch InBev, Argenx, Shopify, Teck Resources, Neste, Kone, TotalEnergies, EDF, STMicroelectronics, PetroChina, China Life Insurance, CNOOC, Oriental Land, Shin-Etsu Chemical, Takeda Pharmaceuticals, Hoya, FANUC, Shell, Lloyds Banking Group, Universal Music Group, Repsol, Ferrovial, Hexagon, Evolution, Credit Suisse, Apple, Amazon, Mastercard, Merck & Co, McDonald’s, Linde, Intel, Honeywell, Caterpillar, Gilead Sciences, Pioneer Natural Resources Friday: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Economic calendar highlights for today (times GMT) 1230 – US Sep. Advance Goods Trade Balance 1400 – Bank of Canada Rate Decision 1400 – US Sep. New Home Sales 1430 – US DoE Weekly Crude Oil and Product Inventories 1500 – Canada Bank of Canada Governor Macklem to speak 1700 – US Treasury auctions 5-year T-notes 2045 – New Zealand RBNZ Governor Orr to speak 2130 – Brazil Selic Rate Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-26-2022-26102022
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

Chinese Markets Have Rebounded And Japanese Investors Have Shifted Their Focus

TeleTrade Comments TeleTrade Comments 26.10.2022 09:24
Asian indices have rebounded firmly despite the absence of support from S&P500 futures. The PBOC has intervened in currency markets to provide a cushion for the weakening yuan. The DXY is declining towards a two-week low at 110.76 while alpha on US government bonds has tumbled. Markets in the Asian domain have rebounded sharply after individual headwinds despite a vertical fall in the S&P500 futures. The 500-stock futures basket has tumbled 0.90% after a three-day buying spree as tech-giant Microsoft (MSFT) has trimmed its sales growth forecast by 5%. In the opinion of economists at Morgan Stanley, the rally in S&P500 could be extended well into the 4000/4150 area. Therefore, a decline in the US index could be considered a corrective move. At the press time, Japan’s Nikkei225 gained 0.84%, ChinaA50 jumped 1.15%, and Hang Seng soared 1.43%. Indian markets are closed on account of Diwali Balipratipada. Chinese markets have rebounded sharply as investors have shrugged off uncertainty that rose after China’s XI Jinping’s leadership for the third term got the green signal. Meanwhile, Reuters reported that the People’s Bank of China (PBOC) intervened in currency markets to support the weakening yuan. Reports claim that Chinese state-owned banks sold U dollars both in onshore and offshore markets on Tuesday. Japanese investors have shifted their focus towards the interest rate decision by the Bank of Japan (BOJ), scheduled on Friday. BOJ Governor Haruhiko Kuroda is expected to continue dovish tone on interest rates to safeguard the economy against external shocks. Prolonged weakness in the Japanese yen is impacting importers dramatically. Purchases of imported goods from oil to food products need US dollars for payouts, which are hurting firms that bank upon raw materials from foreign suppliers. On the US dollar index (DXY) front, the mighty DXY is displaying a sheer downside move after failing to sustain above the 111.00 hurdle.  The DXY is expected to surrender the two-week low of 110.76 amid overall optimism in market spirit. The 10-year US Treasury yields have dropped further to 4.08%.
Sygnity Stock Faces Headwinds Despite New Government Contracts

Analytical Report-LSI Software- WSE: LSI

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 26.10.2022 10:31
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0 Event: 3Q22 preliminary revenues amounted to PLN 14.4 million (-2% qoq; +37% yoy); above our expectations. During yesterday’s session LSI Software informed that 3Q22 preliminary revenues arrived at PLN 14.4 million (-2% qoq; +37% yoy). At the same time the Company informed that it received the PFR decision to be released from the obligation to return the financial subsidy obtained under the Financial Shield 2.0. As a result, revenues from the redemption of subsidies (PLN 3.5 million) will be recognized in the results for 4Q22. Expected impact: Positive – discounted during yesterday’s session. Reported sales turned out 14% above our initial expectations (we assumed PLN 12.6 million sales in 3Q22). Redemption of subsidies has been expected. Analyst: Tomasz Rodak, CFA GPW’s Analytical Coverage Support Programme 3.0 https://bossa.pl/analizy/wsparcie-pokrycia-analitycznego-gpw#lsi
Key Economic Events and Earnings Reports to Watch in US, Eurozone, and UK Next Week

Saxo Bank Members Talks In Podcast About Reports Of The Next Key Companies, The Biden Administration And More

Saxo Bank Saxo Bank 26.10.2022 10:54
Summary:  Today we look at a whiplash-inducing session for equities traders as a strong session yesterday on falling treasury yields and a weaker US dollar was marred in the aftermarket session by very weak earnings from Microsoft and Google-parent Alphabet. We break down those earnings reports, the next key companies to report, the status of the US dollar, crude oil and gold, and importantly: the narrative around the Biden administration, with a cooperative Fed, trying to engineer strong support for the equity market into the mid-term elections the week after next. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-oct-26-2022-26102022
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Google and Microsoft Fell, Expectations For Meta Are Low | The Bank Of Canada Will Deliver A Jumbo Rate Hike

Swissquote Bank Swissquote Bank 26.10.2022 11:11
US indices rallied yesterday on the back of soft economic data from the US, but the sentiment reversed after the Q3 results from Google and Microsoft didn't please. Both stocks fell in the afterhours trading. Rest of the earnings were mixed. Meta is the next US giant to announce earnings, and expectations are rather… low. US Yields The US 2-year yield has been easing after hitting a fresh 15-year high last week, as the US 10-year yield fell to 4.05%. The dollar index tanked around 1%, both the EURUSD and Cable advanced past their 50-DMA, which were acting as strong resistance since the start of the year, especially since the start of the war in Ukraine. Bank of Canada The USDCAD fell to a 3-week low, as the Bank of Canada (BoC) prepares to deliver another jumbo rate hike today. The BoC could deliver a 75bp hike, which would further fuel the odds of recession in Canada by next year. FX Market It’s important to note that the common denominator of the latest FX moves is the softer US dollar. And the downside moves in dollar and the US yields depend on Fed expectations – whatever the other central banks do seem accessory to the main dollar story. Fed The Fed expectations have been shaped by softish data, and some softish comments from the Fed officials recently. But there is nothing official pointing at a potential softening tone from the Fed just yet. Hence, the recent fall in the US dollar, and rebound in equities may not last. Gains remain vulnerable. And very much so, as the latest results from the US tech giants failed to make the investors smile yesterday. Watch the full episode to find out more! 0:00 Intro 0:35 Soft US data fueled optimism… 3:15 … but Big Tech earnings hurt. GOOG & MSFT fell 6.5% post-market 5:01 Other companies announced mixed results 6:30…as UPS surprised 7:00 Some come back to stocks, but stock/ bond correlation remains high 7:52 Meta earnings preview: expect nothing crazy… Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Meta #Google #Microsoft #UPS #Spotify #GM #Visa #UBS #CocaCola #earnings #USD #EUR #GBP #CAD #BoC #rate #decision #US #home #prices #Fed #expectations #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH  
Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges

Analytical Report – Summary - Enter Air – WSE:ENT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 26.10.2022 11:38
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme ACCUMULATE (PREVIOUS: ACCUMULATE) TARGET PRICE 24,0 PLN 26 OCTOBER 2022, 11:10 CET We issue a Accumulate recommendation for Enter Air with a target price of 24,0 PLN/share, which is 11% above the current market price (the fall in the valuation is related to an increase in the risk-free rate and the restoration of comparative analysis in the final valuation). We positively assess the company's results for Q2'22, which in terms of gross result and EBITDA turned out to be significantly better than our expectations. The management board's outlook for 2H'22 and subsequent periods after the results conference was optimistic. Enter is constantly observing an overdemand for its services, and its low-cost structure is a significant advantage over foreign competition, and thanks to this, the carrier wins many tenders with a lower price and higher quality of services. Moreover, we are counting on record results for Q3'22. During this period, we expect more air operations than the best so far Q3'19 and better utilization of the fleet. We forecast PLN 275.8m in Q3'22 EBITDA IFRS 16 (+ 33.8% y/y). Q2'22 results The company's results for Q2'22 exceeded our expectations, which we received positively. The company's revenues in this period amounted to PLN 602.6m (+ 170.6%) and were in line with our expectations. The biggest positive surprise for us turned out to be the significantly lower cost of external services compared to our forecasts. This position includes, among others maintenance costs and some salaries (the company communicated during recent meetings with investors about the optimization of crew salaries, and the implication of which in our model improves the margin). Carrier's gross result in the reported period it amounted to PLN 68.7m (vs. -PLN 14.3m our expectations), and on the EBITDA level, the company generated PLN 112.5m (vs. PLN 27.8m BDM). Q3'22 record results Q3'22 brought a further improvement in demand (this is partially confirmed by readings published by Ryan Air; link), which significantly translated into an increase in the number of flights performed in this period (both y/y and vs the record-breaking 2019). In the summer season, the company used the entire available fleet of 25 aircraft (23 Boeing 737-800 aircraft and 2 737 MAX 8 aircraft) and two additional wet-lease machines, and the demand for its services exceeded the fleet's operational capabilities. We expect that in the discussed period, the utilization of the fleet was at a much better level, and the efficiency (number of hours flown per plane) exceeded even that of 2019. We estimate that in Q3'22 Enter Air generated PLN 1,153.4 million in revenues (+114.8% y/y). According to our calculations, the gross sales result in the last quarter amounted to PLN 233.4 million. At the level of IFRS 16 EBITDA, we forecast PLN 275.8m ( 33.8% y/y). Risk factors Despite the lifting of pandemic restrictions in most countries, the potential next waves of COVID-19 and their consequences are still the main risk to our forecasts. In addition, the above-mentioned deteriorating macro environment and changes in fuel prices (passed on to the customer) may in subsequent periods have a negative impact on the demand for trips abroad and the reconstruction of tourist traffic. However, we believe that the still observed over-demand and the competitive advantage of the company's services (in particular the lower price) will allow it to effectively use its fleet in subsequent periods. Main risks: 1) COVID-19 and its consequences 2) Macroeconomic environment 3) Customer concentration 4) Market competition 5) Aircraft crash 6) Suspension of Boeing 737 MAX 8 7) Terrorist attacks and military conflicts 8) Natural disasters and epidemics 9) Changes in fuel prices 10 ) Seasonality of results 11) Interest rate risk Analyst: Krzysztof Tkocz GPW’s Analytical Coverage Support Programme 3.0  
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

Finalizing Twitter Purchases By Elon Musk | The US Stock Market Scores Gains

InstaForex Analysis InstaForex Analysis 26.10.2022 11:49
S&P 500 Outlook for October 26th The US stock market scores gains The main US stock indices have been bullish for the third straight day: the Dow added 1.1% and the S&P500 grew by 1.6%. The S&P 500 index is seen trading at 3,859 in the range between 3,800 and 3,900. S&P 500 futures showed a fall of up to 1% at the morning open. The US stock market The US stock market has been bullish for three straight days. It also formed a deep bottom. As the chart shows, the index has encountered strong resistance in the 3,860-3,930 range with the 50-day and 100-day moving averages. In order to extend growth, the index should leave the range and close above it. On Tuesday, the market grew, following the release of disappointing consumer sentiment data, which fell to 102. It fuelled speculation that the US Federal Reserve might reduce the pace of rate hikes after raising the rate by 0.75% in November. The US Q3 GDP report is due on Thursday (forecast: +2.1%). The ECB is expected to lift interest rates by 0.75% at a meeting on Thursday. Yesterday, the yield on 10-year Treasury bonds fell to 4.11%. Reports Strong reports came: Coca-Cola (KO 58.95, +1.38, +2.4%), General Motors (GM 37.01, +1.29, +3.6%), and Sherwin-Williams (SHW 220.20, +7.67, +3.6%). Ten of the 11 S&P 500 sectors rose. Real estate led the way with a 3.9% gain. Automatic Data (ADP), Boeing (BA), Bristol-Myers (BMY), General Dynamics (GD), Harley-Davidson (HOG), Hilton (HLT), Kraft Heinz (KHC), Norfolk Southern ( NSC), Roper (ROP), Seagate Tech (STX), and Waste Mgmt (WM) will deliver earnings report on Wednesday. VISA's profit surged by 21% to $15 billion. Microsoft's shares were down by 7%. The firm's profit dropped by 14%. Alphabet's shares lost 6%, following the earnings report that logged a 26% decline in profit. Elon Musk is planning to close the Twitter acquisition deal on Friday. The deal is now at the stage of signing documents. New home sales are due today in the United States. The reading is estimated to plunge to 575,000 from 685,000 year-over-year. Energy: Crude is firm at previous levels. Brent is trading at $92.7 per barrel. Macro data The United States is to sell another 15 million barrels of oil from its strategic reserves in an attempt to prevent a rise in prices. Biden says the US is ready to sell even more. Saudi Arabia slammed the US for using its strategic reserves to manipulate crude prices. However, OPEC's decision to artificially limit supply in the oil market can also hardly be called a market action. The US House of Representatives election will be held in early November. Recent polls show that both Democrats and Republicans have a 50% chance of a House majority. Inflation in Australia accelerated to a record 7.3%. The Bank of Canada will announce its interest rate decision today. The US dollar index dropped to 110.70. Final thoughts: the US stock market needs to pull back deeper. Buy trades could be considered after a pullback.     Relevance up to 08:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325341
Earnings of Microsoft and Google are hard to be seen as S&P 500's and Nasdaq's "healers"

Earnings of Microsoft and Google are hard to be seen as S&P 500's and Nasdaq's "healers"

Alex Kuptsikevich Alex Kuptsikevich 26.10.2022 10:59
The technology companies that have acted as growth drivers for stock markets in recent years are increasingly losing their leading positions. Although it would be too naive to talk about the "beginning of the end" for the IT giants, the initial reaction to the reports of Microsoft and Alphabet makes it seem more like a threat to the recovery of the Nasdaq and S&P500 indices. Shares of both giants are losing around 6.6% on the post-market. Microsoft's revenue and profit beat expectations, but investors see more negative numbers in the dynamic (-3.4% QoQ on revenue and -14.4% YoY on profit). Alphabet noted a tough time in the ad market, with an overall profit fall of 26.6% y/y despite revenue growth of 6.6% y/y. The latter is the lowest rate in 9 years. Experienced traders have long noticed that companies are likely to present the situation to industry analysts, so they make low projections. And easily beat them shortly after in ¾ of the cases. It is, therefore, not uncommon for neutral numbers or a slight overperformance to lead to a share price slump. Also, in growth sectors, markets are paying increased attention to companies' forecasts. And they have been disappointed. Both Microsoft and Alphabet cited falling PC and ad sales. And that's bad news for the future, as it doesn't set the stage for a turnaround in the coming months. Microsoft's comments about cloud computing cuts also pulled Amazon shares, which are losing 4.3% in the post-market. On a more general level, the simple rule of thumb remains that the IT sector is inversely correlated with interest rate movements and is more vulnerable during the economic downturn for which many are now preparing. Dow Jones, S&P 500 and Nasdaq Choosing from major US indices - the Dow Jones, S&P 500, and Nasdaq - the first looks the most promising, including more manufacturing companies and a smaller weighting on the IT sector. This driver change can already be seen in that the Dow Jones made its lows in early October, while the other two made their lows on 13 October: the strongest are recovering first. And it is not the Technology sector right now. Nonetheless, while this trio stays about 20% below the peak and the US Fed forwarding market expectations to slower rate hikes, it looks like the bottom is already behind us.
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

South Korean won and Singapore dollar went up yesterday. S&P 500 and Nasdaq increased by 1.63% and 2.25% respectively

ING Economics ING Economics 26.10.2022 12:06
Australian inflation puts the pressure back on the Reserve Bank Source: shutterstock Macro outlook Global Markets: After Monday’s adverse post 20th Congress market reaction, Asian FX had a better day, with most currencies making small gains overall, though G-10 currencies staged a late rally against the USD and early trading is likely to see Asia playing catch-up. Outside of the G-10 space, the KRW and SGD both gained a little over 0.4% on the day. The CNY opened much  weaker yesterday, pushing close to 7.31, but dropped back sharply in late trading to finish roughly unchanged from Monday’s close at 7.2686 as the USD lost ground against most currencies. EURUSD, for example, pushed strongly higher, reaching 0.9964, putting parity back in the cross-hairs. The AUD also made strong gains, (+1.3%) as did the  JPY (+0.61%), reaching  0.6381 and 148.06 respectively.  Cable has had another strong day too rising to 1.1458. A good start for PM Sunak. The catalyst for the USD’s weakness yesterday looked as it may be coming from the bond market. Fed funds implied yields were slightly down on the day, and 2Y US Treasury yields retreated 2.8bp though much bigger falls were seen in the 10Y and 30Y bonds, where yields were down 14bp and 12.8bp respectively. These declines were echoed in European bond markets. There does not seem to be any particular event or Fed remark driving this development. Yesterday’s US Macro data continued to chip away at the previous “higher for longer” rate expectation (see below). And slightly more temperate Fed comments over the previous week may now be being heeded. The lower bond yield environment won’t have hurt risk sentiment or equity markets. The S&P500 rose 1.63%, the NASDAQ was up 2.25% . After a mixed day yesterday, Asian bourses may show a little more resolve today. Asian equity futures look brighter, though the same cannot be said for their US counterparts, so any early gains may be short-lived.      G-7 Macro: As mentioned, the US data yesterday was on the softer side, with house price data showing further declines in price and bringing the August S&P Case Shiller index down to 13.08%YoY. The April peak was over 21%. Conference board consumer confidence data also showed further substantial declines in both the expectations and current conditions indices, while the Richmond Fed index was also down more than expected. Today we get trade data and new home sales. Neither release is particularly market moving, though both could keep chipping away at perceptions of the US economy’s resilience.    Australia: The 3Q22 consumer price index rose a further 1.8%QoQ, showing no slowdown from 2Q22, and takes the inflation rate to 7.3%YoY (up from 6.1%). The trimmed mean price index rose by the same amount, taking that inflation rate to 6.1% (up from 4.9%) and weighted median inflation also  rose to 5.0% from 4.2%. It is hard to reconcile these latest inflation figures with the RBA’s recent slowdown in hiking to only a 25bp hike at their last meeting, and we believe these numbers must push the odds strongly back in favour of a 50bp hike at their next meeting. South Korea: According to local business surveys, business outlook continues to deteriorate. Both manufacturing and non-manufacturing see a cloudy outlook. The Federation of Korean Industries (FKI)’s all-industry expectation index fell to 86.5 in October (vs 87.4 in September). The Bank of Korea’s survey also showed sentiment falling. The non-manufacturing outlook declined 3 pts, while the manufacturing survey fell a further 2 points. The BoK survey was conducted from October 11th to 18th, when local credit conditions squeezed sharply, and it seems that the effect had a negative impact on corporate sentiment. What to look out for: ECB meeting and US GDP Australia CPI inflation (26 October) South Korea GDP (27 October) China industrial profits (27 October) ECB meeting (27 October) US durable goods, initial jobless claims and 3Q GDP (27 October) Tokyo CPI inflation (28 October) Australia PPI inflation (28 October) Taiwan GDP (28 October) US personal spending, core PCE and Univ of Michigan sentiment (28 October) Read this article on THINK
The Japanese Yen Retreats as USD/JPY Gains Momentum

After MSFT's and Google's earnings, it's over to you, Meta (FB)

Peter Garnry Peter Garnry 26.10.2022 14:43
Summary:  Microsoft and Alphabet did little to help the Q3 earnings season improve on the clear trend of margin pressure. Rising wage pressures, energy costs, lower advertising prices, slowing PC sales and too much hiring impacted operating income and the outlook against estimates. Later tonight Meta is on stage delivering Q3 earnings and given the signals from Snap and Alphabet on the global advertising market we expect significant pressure on Meta's business. Zuckerberg has only one option to please investors and that is by dialing down his efforts on Metaverse which is burning cash on an unprecedented scale. Margin compression is indeed a theme for technology companies Apple recently raised its prices on various of its services offerings from music to TV, and Spotify is also considering raising its prices. The culprit is rising wage pressures and higher energy costs that are hitting energy hungry applications running in the cloud. Microsoft gave the best hint of this saying that it expects $800mn more in energy costs in the current fiscal year which is approximately 1% of its current operating income. As the net profit margin chart below shows, US technology companies are right now facing the biggest margin compression since the Great Financial Crisis. Microsoft and Alphabet disappoint investors The two technology giants, Microsoft and Alphabet, delivered a weaker than estimated outlook. Microsoft’s Q3 revenue and earnings per share were slightly above estimates, but its guidance on growth was lower than estimated. Higher energy costs, wage pressures, slowing PC sales, slowing ad sales and a strong USD are contributing to the expected hit to the operating margin. In order to mitigate some of the cost headwinds and slowing growth the software maker has more or less introduced a hiring freeze. Alphabet was hinted to be weak as Snap last week reported weak advertising sales, but investors did not take the hint adjusting their expectations lower as Alphabet has previously been decoupled from Snap’s performance. But this time investors should have listened to Snap as Alphabet reported a miss on both revenue and operating income with revenue at $69.1bn vs est. $70.8bn and operating income at $17.1bn vs est. $19.7bn. The company added 10,000 new employees in Q3 which is an aggressive increase given the slowdown in the economy but it says that hiring will be significantly lower going forward. Alphabet’s EBIT margin was declining in the 10 years leading into the pandemic which then turbocharged ads pricing because of the high growth in the online economy, but the past year has been a different story with the operating margin declining from 32.3% to 24.8% in Q3 this year. Zuckerberg has one mission tonight Meta is one other Silicon Valley company that is following Alphabet’s hiring bonanza and its bet on the Metaverse, which seems to have hit critical road blocks in terms of user adoption, is burning cash on an unprecedented scale. In Q2, Meta’s operating margin fell to 29% from 42.5% a year before as advertising prices were coming down hard after Apple’s new data privacy rules are making it more difficult for Meta to serve targeted ads. Given the earnings reports from Alphabet and Snap we expect Meta to show margin compression and revenue pressure in Q3 and in our view the pressure is significantly increasing on CEO Mark Zuckerberg to rein in operating expenses. This includes a hiring freeze, or maybe even cuts, and a drastically less ambitious target for Metaverse, and if Zuckerberg dares to admit failure on Metaverse then investors might reward the company with a much higher valuation. European earnings are a bright spot It is still early days on Q3 earnings, but the initial indications suggest that European earnings are doing better than US and Chinese earnings with the strong USD of course creating a tailwind for profits outside Europe. Given relatively better earnings dynamics, lower equity valuations, and a lower discount rate there is a good case to be made for being more positive on European equities rather than US equities. Source: Microsoft and Alphabet Q3 results disappoint Meta on tap tonight | Saxo Group (home.saxo)  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

In Q2 number of active Meta (FB) users decreased by over a million!

Conotoxia Comments Conotoxia Comments 26.10.2022 22:39
Today (October 26) we will learn the results of Meta Platforms (Facebook), a social media company that is part of the five Silicon Valley tech giants known as FAANG (Facebook, Amazon, Apple, Netflix and Google). The environment for the company appears to be unfavorable following the published disappointing results of competitor Snap. Metaverse future, or just a fantasy? Meta has not enjoyed a good run since the beginning of this year. The Metaverse project may have been negatively received by investors, as it could be seen from the company's share price drop of more than 59% since the beginning of the year. The company's CEO Mark Zuckerberg seems to have decided to put everything on the line, which has brought, due to the project's attention, more than $13 billion in costs so far. In addition, we could hear many rumors from the media about the internal situation of the company, or the perspective of employees. However, let's try to verify all assumptions based on hard data regarding the company's core business. Meta Platforms' performance and financial position Last quarter was the first period in which Facebook lost about 1.4 million active users. The company reported that the situation has improved. However, it could be assumed that investors especially decided to watch the development of the company's new project. Analysts predicted earnings per share EPS of 1.89 (previously 2.46).According to one of Altimeter Capital's major shareholders, CEO Brand Gerstner in an open letter to the company, “Meta needs to rebuild trust with investors, employees and the tech community to attract, inspire and retain the best people in the world. [...] Meta shares have declined 55% over the past 18 months (compared to an average of 19% for its big-tech counterparts). The P / E ratio fell from 23x to 12x and is currently half the average P / E ratio of peers. Importantly, this decline in stock prices reflects lost confidence in the company, not just bad sentiment in the market. " In addition, Tuesday's problems with WhatsApp, which stopped working for several hours, may give us an environment of potentially extreme negative sentiment on the company's shares.As Gerstner mentioned in the letter, it seems that valuation has significantly detached itself from the company's core business. Facebook does not seem to have stopped making money from sales, however, it has clearly seen a slowdown in advertising sales, as could be seen from last quarter's results, in which the company reported its first y/y revenue decline. It fell from $29.08 billion to $28.82 billion. At the same time, EBITDA fell from $14.35 billion to $10.33 billion. Everything may depend on the cost of the Metaverse? With such seemingly pessimistic sentiment for this company, all eyes may be on the update and further plans for the Metaverse project. A key piece of information would perhaps turn out to be the subsequent costs incurred for this project. However, someone could get the impression that most of the negative comments have been factored into the stock price. But would the stock market say "buy when the blood pours" be confirmed? What does Wall Street think of Meta Platforms' stock price? Source: Conotoxia MT5, Facebook, WeeklyAccording to Market Screener, the company has 55 recommendations, most of which are buy recommendations. The average target price is set at $209.97, more than 50% higher than the last closing price. The highest target price is at $466, and the lowest is at $150.Author: Grzegorz Dróżdż, a Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Yesterday S&P 500 decreased by less than a percent, NASDAQ lost more as Meta's (FB) earnings disappoint

ING Economics ING Economics 27.10.2022 08:50
China's macroprudential changes help propel the CNY against a much weaker USD backdrop as the pivot story gets a nudge from the Bank of Canada Source: shutterstock Macro outlook Global Markets: A disappointing revenue forecast from Facebook parent, Meta, helped push the NASDAQ down more than 2% yesterday, though there was a much smaller decline from the S&P500, which fell only 0.74%, holding just above support levels. Futures markets indicate a return to growth today. Yesterday's Asian equity markets were also mostly positive, and despite the US moves overnight, the mood looks fairly positive today. This could also set up Asian FX for another positive day after currencies made strong gains yesterday. The THB and CNY led the charge in Asia, with the CNY surging 1.33% taking it all the way back to 7.1730 from about 7.30 earlier in the session. Reuters reported that state-owned Chinese banks were sellers of USD on Tuesday to support the yuan, which suggests that this may also have been what happened yesterday. And there were also policy measures from the PBoC which also helped (see China section below). The USD was weaker across the board after the Bank of Canada raised rates only 50bp – lower than the market had been expecting – citing recession fears. The knock-on from this dragged down implied rates in the US and pulled down the 2Y US Treasury yield by 5.6bp, and the 10Y yield by 9.9bp, which is now only just above 4%. EURUSD was another beneficiary of the lower US yield environment, pushing back above parity for the first time since late September and ahead of today's ECB meeting. The AUD is back to 0. 6490 after a massive surge, and Cable has risen to 1.1631, its highest in more than a month. The USD weakness was also evident in the JPY, which returned to 146.22. The market will no doubt be awash with speculation about whether this represents part of the “pivot” story, which some elements have been desperate to see unfolding. Next move – the Fed. They can either quash any such thoughts or, as it seems to have been doing recently, kindle them with some encouraging noises even as it hikes rates by 75bp next week (03 November). We will see… G-7 Macro: Besides the Bank of Canada decision yesterday, it was a quiet day, with only US new home sales for September worth much of a look, and they were actually a fair bit better than had been expected. The September US trade figures were also out and showed the deficit widening back out to -USD92.2bn, which also won’t have helped the USD.  Today, the ECB takes centre stage, and they are expected to raise the refi rate by 0.75% to 2.0%. Later on, we get the advance 3QGDP release from the US. Bloomberg consensus estimates put this as rising 2.4% (saar), bringing the technical recession to an end, but maybe providing some pointers at a looming “non-technical” recession in the coming quarters.   China: The PBoC, China’s central bank, raised its macro-prudential parameter for cross-border finance from 1.0 to 1.25 yesterday. The last time PBoC implemented an increase of this parameter was in March 2020 when the yuan depreciated to over 7.1. Back then, the yuan peaked a little later (May 2020). During that time, State-owned enterprises (SOEs) with offices offshore (e.g. Hong Kong), sent more USD to onshore parent companies, which would then convert this into yuan. Some converted USD to yuan offshore and sent yuan onshore. The result was the same, namely that there was more demand and therefore, a stronger yuan. The PBoC is now using the same tool. As noted above in the section on global markets, this move comes against a backdrop of uncertainty about the Fed’s ongoing rate hike speed and Fed forward guidance next week will be important for the yuan's coming path. South Korea: GDP recorded a 0.3%QoQ (sa) gain in 3Q22 (vs 0.7% in 2Q22). Reopening-boosted pent-up consumer spending slowed while investment showed a more resilient recovery. Based on the grim outlook for consumption and exports from recently released data, we maintain our view that the economy will experience a moderate recession early next year. What to look out for: ECB meeting and US GDP South Korea GDP (27 October) China industrial profits (27 October) ECB meeting (27 October) US durable goods, initial jobless claims and 3Q GDP (27 October) Tokyo CPI inflation (28 October) Australia PPI inflation (28 October) Taiwan GDP (28 October) US personal spending, core PCE and Univ of Michigan sentiment (28 October) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB's Hawkish Hike: Boosting EUR/USD and Shaping Global Monetary Policy

Bank's of Canada cautious hike makes some think about the end of "hiking season". Meta's earnings strike stock price

Saxo Bank Saxo Bank 27.10.2022 11:53
Summary:  Market sentiment is choppy after a boost yesterday as the Bank of Canada decided to only hike 50 basis points rather than the 75 basis points expected, encouraging the narrative that peak central bank hawkishness may be in the rear-view mirror. Alas, equities closed weaker in the US and after hours, a dire earnings report from Meta dented sentiment further and crumpled Meta stock nearly 20%. Elsewhere, the USD remains weak on retreating treasury yields. What is our trading focus?   Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) With weak technology earnings from Microsoft, Alphabet, and especially Meta last night the focus is currently on Nasdaq 100 futures. Despite a falling Nasdaq 100 yesterday, the index futures are attempting a rebound this morning, which is quite surprising given the lackluster outlook on technology earnings. Nasdaq 100 futures are trading around the 11,485 level with the natural resistance at around 11,713. If downside momentum continues, which could happen after potentially weak outlook from Apple and Amazon tonight, then the 11,000 level is the natural support level to watch. Euro STOXX 50 (EU50.I) Rallied yesterday to the 3,600 level and the index futures are currently hovering around this level in early morning trading. European equities are enjoying tailwind from easing energy and electricity prices due to wild weather and better than expected earnings showing more relative strength than US equities that are heavily impacted by the technology sector. Interest rate pressures and the strong USD are also easing, reducing the pain from financial conditions. If upside momentum continues the 200-day moving average at 3,685 is the next natural resistance level to watch. FX: USD remains down for the count, USDJPY nearing important support The drop in treasury yields has trumped choppy risk sentiment in driving USD weakness over the last couple of sessions, as key USD pairs saw the USD breaking down through key support: parity fell in EURUSD, the 1.1500 level in GBPUSD fell, and the 0.6400 area in AUDUSD likewise gave way. Interesting to note that even CAD managed to stabilize versus the greenback despite the smaller than expected hike from the Bank of Canada (more below). The next important USD support level to watch is perhaps 145.00 in USDJPY, which was an important line of resistance on the way up for the pair. A significant test below that level would likely require that US treasury yields continue lower – with 4.00% in the US 10-year benchmark a key focus over the next batches of data and the FOMC meeting next Wednesday. Gold (XAUUSD) and silver (XAGUSD) Both have steadied after receiving a boost from a weaker dollar and continued decline in US bond yields on speculation the US economy is getting close to rolling over. The attention is now turning to next week’s FOMC interest rate decision on November 2. While another bumper 75 basis points hike is expected, the FOMC may tilt towards slowing the pace at future meetings while assessing the impact of their rate and quantitative tightening actions. As a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called. Until then watch the dollar and yields for inspiration, while silver needs a break above $20. Crude oil (CLZ2 & LCOZ2) Crude oil trade higher for a third day near a two-week high supported by a softer dollar and tightening product markets due to a post-pandemic reduction in refinery capacity and buyers avoiding Russian barrels. Developments that saw US exports of crude fuel hit a record 11.4 million b/d last week at a time where domestic fuel supplies already are at a historic seasonal low. Fuel market tightness has seen refinery margins and not least diesel prompt futures spreads in NY and Europe trade sharply higher, thereby underpinning the price of crude while at the same time highlighting the ineffectiveness of releasing strategic reserves of crude when its products that are needed. Look out for additional technical upside in WTI above $89.25 while Brent’s next level of resistance is the October high at $98.75. High Grade Copper (HGc1) Broke higher on Wednesday and out of the narrowing range that has prevailed since July. While a tight supply outlook, both in London and Shanghai, has been lending support in recent weeks, the latest upside attempt was driven by the weaker dollar, especially against the yuan which reversed sharply higher on Wednesday after China’s central bank and foreign exchange regulator said they would maintain the healthy development of stock and bond markets while calling for a stable yuan. Speculators hold a neutral to bearish view on copper and for that to change the technical outlook needs further improvement. Support at  $3.50 with resistance being the recent highs at $3.59 and $3.69. US treasuries (TLT, IEF) US treasury yields fell again yesterday, with the US 10-year treasury yield benchmark eyeing the important 4.00% level that was an important support level for the market as yields rose. The 2-year yield also eased lower, closing at a 2-week low near 4.40% as the market slowly unwinds forward tightening expectations from the Fed. The smaller than expected Bank of Canada hike yesterday was a contributor to that move (more below). An auction of 5-year  US Treasuries yesterday saw strong demand, also from foreign bidders. What is going on?    Meta shares plunge on huge losses on ‘Metaverse’ bet Meta shares were down 5.6% in yesterday’s primary equity sessions dragged down by Alphabet’s Q3 results showing significant slowdown in the global advertising market. However, the losses intensified in after-market trading down 20% as Q3 earnings showed a sharp decline in operating income and –5% y/y revenue growth. But as we wrote yesterday investors are sending the signal to Mark Zuckerberg that he should slow down the ambitions and cost associated with the Metaverse, but he is doubling down increasing the losses for next year and with revenue in its metaverse division missing big against expectations the growth profile of the company is coming down hard. This was a very ugly earnings release. Bank of Canada surprises with smaller than expected rate hike  The BoC only hiked 50 basis points, a surprise as the market had mostly priced a 75-bp move on the back of the most recent September CPI data surprising to the upside. The Bank’s statement still committed to further tightening in an “overheated” economy but was cautious on how much the rate tightening regime is already impacting growth, noting the increasing evidence of a slowdown in the interest rate sensitive parts of the economy, like housing. The Bank expects growth to be “close to zero” in the next few quarters. Canadian 2-year rates plunged some 25 basis points in the wake of the decision. Interestingly, while USDCAD jumped well over a figure higher on the back of the decision, much of that move was erased in the ensuing hours as the BoC caution encourages the notion that the Fed may also be set to wax more cautious at next week’s FOMC meeting.  UK Budget Statement delayed until November 17 The government was set to deliver a budget statement next Monday, October 31, but that has been delayed to give new Prime Minister Rishi Sunak and the reappointed Chancellor Jeremy Hunt time to assess how to cut spending some £35 billion to further improve the fiscal deficit trajectory after the recent wipeout in the UK gilt market and sterling on fears of spiraling deficits. What are we watching next?    ECB meeting up today The ECB is set to hike rates 75 basis points today, taking the deposit rate to 1.50%. The central bank is already in hot water with Italy’s new Prime Minister Giorgia Meloni, who weighed in against the ECB hiking rates in pointed comments in her first speech as PM yesterday. The ECB is also seen likely to grapple with preventing banks from profiting from rising rates and with its awkward message on eventual quantitative tightening, as the central bank deals with the unique issue of “fragmentation”, the uneven transmission of policy due to multiple sovereign bond markets across the Eurozone.  The bank is expected to hike 50 basis points more in December. Bank of Japan meeting tonight – will the cracks begin to show? No sign that Governor Kuroda and company are set to surrender on YCC policy, and the easing lower of yields this week has given the JPY enough of a boost that the BoJ is under less pressure tactically to cave on its commitment to easing. USDJPY 145.00 an important focus technically for JPY traders. The final US macro data points ahead of Nov 2. FOMC meeting The market is clearly leaning for more cautious guidance from the Fed on its tightening regime after the market had recently finally capitulated and accepted that the Fed is likely to take rates as high as, or higher than forecast in the September FOMC meeting (the peak was slightly above 5.00% by next March, now having retreated to 4.81%), with low probability that 2023 will see any rate cuts. But will the crystallization of that view at the FOMC meeting next Wednesday feed further risk-on and a weaker US dollar? And then there is the next US data, of which we haven’t seen enough for the Fed to draw any strong conclusions. The December 14 FOMC meeting will come after two more inflation prints and will offer a new set of forecasts. Perhaps the Fed will prefer to stay as quiet as possible next week, also given the mid-term elections on Nov. 8? Further out, stubbornly strong core inflation and/or activity surveys could spoil the plot and take yields back higher. The next important data points include today’s Q3 GDP estimate and weekly jobless claims, and we’ll have a look at the Fed’s preferred inflation gauge tomorrow – the PCE inflation data for September, followed by the October ISM Manufacturing survey next Tuesday. Earnings to watch Today’s US earnings focus is Apple, Amazon, Intel, and Caterpillar. The latest round of weak earnings from technology companies driven by margin pressure from input costs, such as energy and wages, and weaker advertising demand is likely to hurt Apple and Amazon tonight. The recent price hikes announced by Apple should mitigate some of the expected weakness in the outlook while Amazon will face triple pressure points in its e-commerce, advertising, and cloud business. Intel is likely going to report a weak earnings report and with an outlook negatively impacted by slowing PC sales and significant capital expenditures to reshore some of its chip production. Caterpillar is the beacon in construction and mining activity, and analysts expect revenue growth to remain high at 13% y/y with unchanged margin telling the story again that the physical world is right now enjoying an advantage over the digital world. Today: ANZ, Anheuser-Busch InBev, Argenx, Shopify, Teck Resources, Neste, Kone, TotalEnergies, EDF, STMicroelectronics, PetroChina, China Life Insurance, CNOOC, Oriental Land, Shin-Etsu Chemical, Takeda Pharmaceuticals, Hoya, FANUC, Shell, Lloyds Banking Group, Universal Music Group, Repsol, Ferrovial, Hexagon, Evolution, Credit Suisse, Apple, Amazon, Mastercard, Merck & Co, McDonald’s, Linde, Intel, Honeywell, Caterpillar, Gilead Sciences, Pioneer Natural Resources Friday: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Economic calendar highlights for today (times GMT) 1000 – UK Oct. CBI Reported Sales 1215 – ECB Rate Announcement 1230 – US Q3 GDP Estimate 1230 – US Sep. Durable Goods Orders 1230 – US Weekly Initial Jobless Claims 1245 – ECB President Lagarde Press Conference 1430 – US Weekly Natural Gas Storage Change 1500 – US Oct. Kansas City Fed Manufacturing 1530 – Bank of England’s Woods to speak 1700 – US Treasury auctions 7-year notes 2100 – New Zealand Oct. ANZ Consumer Confidence 2330 – Japan Tokyo Oct. CPI 2330 – Japan Sep. Jobless Rate 0030 – Australia Q3 PPI Bank of Japan meeting Source: Financial Markets Today: Quick Take – October 27, 2022 | Saxo Group (home.saxo)
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

Meta stock plunges, Caterpillar presents a decent report

Ed Moya Ed Moya 27.10.2022 21:20
US stocks are struggling for direction after a mixed bag of earnings was accompanied by economic data that supports the idea that the economy is weakening. It looks like the economy is still headed for a recession, but that might reinforce Fed pivot calls which still seems to be driving some inflows back into equities. ​ ​ ​ Super Thursday will resume after the close when Apple and Amazon report after the bell. ​ ​ This is peak earnings season and at the end of the day, we will know if investors are going to shun tech stocks for a little while longer. ​ Facebook takes a hit Mark Zuckerberg is looking reckless here. Meta shares plunged after revenue collapsed and they decided to nearly double their CAPEX. ​ It looks like Sheryl Sandberg’s departure was well-timed as this ship is clearly sinking. ​ Artificial Intelligence (AI) investment was boosted and now everyone is expecting Meta to have a free cash flow problem. Caterpillar Caterpillar did not disappoint this earnings season. ​ The heavy-equipment maker did everything right last quarter. ​ Caterpillar posted a strong earnings beat, trimmed their CAPEX budget a little, signaled demand is strong and that highlighted that margins momentum will continue next quarter. ​ Caterpillar also noted ‘some pockets’ of supply chain improvement. What was also very positive is that Asia/Pacific sales were little changed despite the slowdowns that have hit that part of the world. ECB The ECB delivered a third major consecutive rate increase across all three key rates. ​ The 75-basis point hike was well-telegraphed and the comment that “inflation remains far too high” indicates more massive rate increases could be warranted. They signaled they expect to raise rates further and markets are still convinced that they could raise rates by 75bp again in December. It seems the market is convinced that the ECB’s hiking cycle won’t have to be as aggressive next year and traders are now expecting rates to peak at around the 2.75% level. TLTRO changes signals they are going to remove some of the excess liquidity and incentivize the banks to pay back cheap loans before rates go up. US GDP and more The US economy appears to have bounced back from those two negative GDP readings with a solid 2.6% improvement in economic activity. The strong headline number is welcome news, but when you dig into the numbers it is clear that an economic slowdown is here. The international trade component helped this quarter and that obviously won’t continue going forward. ​ Consumer spending is softening and prices are coming down quickly. ​ Business investment is clearly weakening. ​ ​ The labor market remains tight as jobless claims edged slightly higher. Hiring freezes will become a growing trend across corporate America, but layoffs still seem distant as job openings still remain healthy. FX Fed expectations still widely expect a 75 basis point rate increase next week and for a downshift to a half-point in December. ​ The Fed won’t want to lock itself into softening its stance against fighting inflation before the data confirms pricing relief. ​ The economy is slowing and that is sending Treasury yields lower as recession bets grow. ​ Safe-haven flows are powering both the yen and dollar today as global recession risks grow. Oil Crude prices are rallying after the US economy bounced back last quarter. ​ Oil’s gains are capped as the key takeaway from this morning’s swathe of economic readings is that an economic slowdown is here. ​ The dollar remains volatile but safe-haven flows should keep it supported over the short-term and possibly leading up to next week’s FOMC decision. Gold Gold prices aren’t doing much today after the ECB rate decision and a swathe of US data confirmed a global economic slowdown is here. ​ Global bond yields are heading lower and that is good news for bullion, but a major move seems like it might have to wait until next week’s FOMC decision. Cryptos Bitcoin’s rally has run out of steam. ​ Momentum from the rally above the $20,000 level has stalled out as risk appetite struggles to find solid footing post earnings and US economic data. The global crypto market cap is flirting with the $1 trillion level and that might remain a hard barrier to break away from. Bitcoin seems likely to consolidate leading up to the FOMC decision, but it could see further strength if the dollar continues to soften. ​ If Wall Street grows more concerned with the economic outlook, rates could slide even further, which is great news for crypto. ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. OANDA - Super Thursday! Massive earnings day, US GDP, ECB raises rates, FX, crypto momentum stalls - MarketPulseMarketPulse
RBI's Strategic INR Support: Factors Behind India's Stable Currency Amidst Global Challenges

At The Close Of The New York Stock Exchange Only The Dow Jones Rose

InstaForex Analysis InstaForex Analysis 28.10.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.61% to hit a monthly high, the S&P 500 fell 0.61% and the NASDAQ Composite fell 1.63%. The Dow Jones index Caterpillar Inc was the top performer among the components of the Dow Jones index today, up 15.18 points or 7.71% to close at 212.14. Boeing Co rose 5.97 points or 4.46% to close at 139.76. McDonald's Corporation rose 8.50 points or 3.31% to close at 265.11. The losers were shares of Intel Corporation, which lost 0.94 points or 3.45% to end the session at 26.27. Apple Inc was up 3.05% or 4.55 points to close at 144.80 while Nike Inc was down 2.00% or 1.85 points to close at 90.54. .  The S&P 500  Among the S&P 500 components gaining today were ServiceNow Inc, which rose 13.44% to hit 415.67, Arista Networks, which gained 9.31% to close at 119.12, and Caterpillar Inc, which rose 7.71% to end the session at 212.14. The least gainer was Meta Platforms Inc, which shed 24.56% to close at 97.94. Shares of Align Technology Inc lost 18.10% to end the session at 181.53. West Pharmaceutical Services Inc lost 13.04% to 221.22. The NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were AgroFresh Solutions Inc, which rose 71.34% to hit 2.69, HeartCore Enterprises Inc, which gained 55.67% to close at 1.51, and also shares of Altra Holdings Inc, which rose 48.37% to end the session at 59.72. The least gainers were Core Scientific Inc, which shed 78.13% to close at 0.22. Shares of Kalera PLC lost 65.43% and ended the session at 0.07. Quotes of Transcode Therapeutics Inc decreased in price by 37.39% to 0.72. The numbers On the New York Stock Exchange, the number of securities that rose in price (1,719) exceeded the number of those that closed in the red (1,357), while quotes of 128 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,941 stocks fell, 1,821 rose, and 212 remained at their previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.40% to 27.39. Gold Gold futures for December delivery lost 0.21%, or 3.50, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery rose 0.73%, or 0.64, to $88.55 a barrel. Futures for Brent crude for January delivery rose 0.82%, or 0.77, to $94.56 a barrel. FX Market Meanwhile, in the Forex market, EUR/USD fell 1.14% to hit 1.00, while USD/JPY shed 0.10% to hit 146.21. Futures on the USD index rose 0.83% to 110.46.     Relevance up to 05:00 2022-10-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/298704
At The Close On The New York Stock Exchange Indices Closed Mixed

The Down Jones Industrial Average Index Chart

InstaForex Analysis InstaForex Analysis 28.10.2022 08:27
    Relevance up to 06:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade Read more: https://www.instaforex.eu/forex_analysis/298727
ECB's Hawkish Hike: Boosting EUR/USD and Shaping Global Monetary Policy

The Main US Indices Fell | Asia-Pacific Stocks Are Mostly In The Red | Fortescue (FMG) Plans To Increase Iron Ore Production

Saxo Bank Saxo Bank 28.10.2022 08:38
Summary:  The ECB rose its key rate to 1.5% from 0.75% and signaled it is making progress in the fight against inflation. The US economy grew 2.6% on an annualized basis last quarter after two declines in a row, beating consensus as personal consumption rose more than forecast. The Nasdaq 100 & S&P 500 ended 1.6% and 0.6% lower, with Amazon falling 13% after hours, while the Dow Jones lifts, boosted by McDonald’s and Boeing. Crude oil climbs above $89, while iron ore falls to its lowest level since 2020. Asian equity futures mostly trade lower. Australia’s ASX200 opens 0.6% lower today, but tracks 2% higher this week, supported by commodity stocks and Macquarie beating forecasts. What’s happening in markets?     Need to know  The ECB rose its key rate to 1.5% from 0.75% and signaled it is making progress in the fight against inflation. Officials dropped a reference to hikes continuing for "several meetings," while saying they expect further action. Christine Lagarde emphasized that more increases were on the way: "We still have ground to cover." Money markets pared tightening wagers by as much as 20 bps, and European stocks erased losses. The US economy grew 2.6% on an annualized basis last quarter after two declines in a row, beating consensus as personal consumption rose more than forecast. The GDP report showed foreboding signs, as growth was almost entirely driven by trade, and residential housing investment plunged. As such, treasuries yields extended their fall, with 10-year yield pushing below 4%. The dollar was mostly higher, though the yen was barely up ahead of the BOJ meeting. Oil advanced and gold retreated. Asia-Pacific's equity futures are mostly in the red. The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) ended 1.6% and 0.6% lower, while the Dow Jones lifts, boosted by McDonald’s The US major indices fell on Thursday from continued weaker than expected earnings carnage with Facebook (META) falling 25%. In mega caps, Amazon (AMZN) was leading the losses, falling 4.1% on projecting slower growth and cutting its spending in the face of economic uncertainty, falling 13% after hours. Apple (AAPL) shares fell 3% on reporting weaker than expected iPhone and services sales in its latest quarter, however it gave an otherwise somewhat upbeat report, noting record sales spurred its active base of devices to hit an all-time high. Post market, Apple shares trade 0.4% higher. Meanwhile, the Dow Jones 30 blue-chip index ended 0.6% up on Thursday, supported by recession-stalwart McDonald’s (MCD) shares rising 3.3% on reporting sales that well surpassed analysts’ estimates, despite inflationary pressures. McDonald’s results were boosted by McRib sales, with the CEO saying they are “the GOAT of sandwiches on our menu,” using the acronym for greatest of all time. The fast-food chain will offer McRib nationwide in the US from the end of this month. Oct. 31. Boeing (BA) shares moved up 4.5% with the company releasing a bullish 20-year forecast for China’s commercial jet market, saying China will need to double its fleet in two decades and that China will be a major driver of Boeing sales. Boeing expects China to need 8,485 new passenger and freighter planes valued at $1.5 trillion through 2041.   Crude oil (CLX2 & LCOZ2) climbs above $89, while iron ore (SOCA) falls to its lowest level since 2020 Oil is trading higher for the third day, on tightness and heavy worry about the price of fuel products over the coming months as the northern hemisphere heads to winter. WTI climbed above $89 with US data showing an economic rebound last quarter. US natural gas futures steadied after the EIA reported stockpiles rose last week. European gas prices advanced. It’s also really important to note, tight diesel markets are taking the main stage at the moment, which you can read more on from our head of commodity strategy, just click here. As for other commodities, copper fell 0.7%, while iron ore (SCOA, SCOX2) fell 0.2% to $81.55, which is its lowest level since May 2020 on concerns that the iron ore market could be oversupplied. Yesterday Fortescue Metals (FMG) affirmed extra production will come to the market before March, (instead of June), with investors worried there is not enough demand from China. Most other commodities were lower, including Wheat and Corn while Cocoa rose 1.6%  Australia’s ASX200 (ASXSP200.1) falls 0.6% on Friday, but tracks 2% higher this week, supported by commodity stocks. Macquarie beats forecasts  After the Aussie share market rose for four straight sessions putting on 2.5% Monday to Thursday supported by commodity stocks, including lithium, gold stocks and agricultural stocks, today’s focus is on tech stock carnage, following the Wall Street sell off. Brainchip (BRN) is down 15%. While iron ore shares are lower, with Fortescue (FMG) trading 7% lower after noting that its increasing its spending, while its margins are tightening. Plus Fortescue is ramping up production, at a time when iron ore demand is limited. On the upside, Macquarie Group (MGQ) shares trade up 3.5% after reporting profit that beat forecasts with market volatility buoying its commodities and global markets business. Macquarie’s net income for the six months to Sept. 30 rose to A$2.31 billion ($1.49 billion), up from A$2.04 billion in the prior year. That exceeded the A$2.15 billion average estimate of four analysts surveyed by Bloomberg. Elsewhere, oil stocks are higher with the WTI price cleared $89, with Viva Energy (VEA) up the most in energy, up 1.6%. What to consider Markets, businesses, commodities with high exposure to China see heavy selling this week. Will it continue?   Assets with exposure to China are being heavily penalized as it seems investors are realigning their portfolios somewhat with the priorities of President Xi his policy on stronger state control over the economy and markets, which look set to continue unchallenged for years. The confirmation was made on Sunday and across the week, Hong Kong’s Heng Seng fell 7.5%, and the iron ore (SCOA, SCOX2) price fell to 15% $79.60 its lowest level since 2020 on concerns that the biggest iron ore consumer, China will further slow demand, all while iron ore seems oversupplied. The biggest pure play iron ore company in the southern hemisphere, Fortescue (FMG) shares fell almost 12% this week, as a result. Plus Fortescue company affirmed it is increasing its spending, while its margins are tightening. Fortescue plans to ramp up iron ore production at its expanded facility in March, instead of June, which will likely further push the iron ore market into greater oversupply. Australian exports trade prices stumble, imports prices rise   Australian exports prices fell last quarter, but less than expected, falling 3.6% vs the 7% fall consensus forecast. That said, export prices are still up 25.9% YoY. The quarterly drop in prices was driven by the fall in iron ore demand from China, and the drop in coal prices, as global steel demand weakens. That said, Australian gas and crude export prices rose amid surging global demand particularly from Europe. And lithium prices rose markedly, boosted by global electric vehicle sales. Inversely, Australian import prices rose more than expected, up 3%, vs the 0.9% consensus forecast. What contributed to this was price of imports of sodium hydroxide (used in bauxite refining) rose, while the price of importing plastics rose, coinciding with higher energy prices. All in all, import prices to Australia are up 19.3% YoY.    For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-28-oct-28102022
FX Daily: Upbeat China PMIs lift the mood

The Bears On The Asian Stock Market Attack The Lowest Levels

TeleTrade Comments TeleTrade Comments 28.10.2022 09:15
Asia-Pacific shares remain pressured amid firmer inflation data, downbeat growth forecasts and central bank inaction. Japan, Australia print strong inflation numbers, IMF cuts Asia growth outlook. BOJ defends status quo despite upwardly revising inflation forecasts. Asian shares hold lower ground while tracking global cues as fears surrounding inflation and growth prevail during early Friday. While portraying the mood, the MSCI’s index of Asia-Pacific shares outside Japan drops nearly 1.0% as bears attack the lowest levels since March 2020 whereas Japan’s Nikkei 225 loses 0.73% intraday heading into the European session. It’s worth noting, however, that the downbeat yields have earlier favored the equity buyers but the hawkish ECB and strong US Gross Domestic Product (GDP) drowned the stocks afterward. A 33-year high Tokyo inflation data joined strong Australia Producer Price Index (PPI) to keep bears hopeful as the International Monetary Fund (IMF) cut Asia's economic forecasts. “The IMF cut Asia's economic forecasts on Friday as global monetary tightening, rising inflation blamed on the war in Ukraine, and China's sharp slowdown dampened the region's recovery prospects,” said Reuters. The news also adds that the IMF cut Asia's growth forecast to 4.0% this year and 4.3% next year, down 0.9% point and 0.8 points from April, respectively. The slowdown follows a 6.5% expansion in 2021. Further details suggest that the Washington-based institute expects China's growth to slow to 3.2% this year, a 1.2-point downgrade from its April projection, after an 8.1% rise in 2021. The world's second-largest economy is seen growing 4.4% next year and 4.5% in 2024, the IMF said as per Reuters. On a broader front, Thursday’s US data weighed on the Fed wagers even as the headline US Gross Domestic Product (GDP) rose 2.6% on an annualized basis, more than expected, in the third quarter (Q3). The reason could be linked to a fifth consecutive fall in private consumption that challenged the Fed hawks as it showed the policymakers are gradually nearing the target of slowing down private domestic demand, which in turn might favor the easy rate hike talks for December in the next week’s Federal Open Market Committee (FOMC) meeting. That said, the sluggish US Treasury yields and the risk-off mood could also be held responsible for the Asia-Pacific market’s sour conditions. That said, the US Dollar Index (DXY) retreats to 110.50, following Thursday’s recovery from the five-week-low, whereas commodities are slightly red amid the market’s indecision. Moving on, the US Core PCE Price Index for September, expected to rise to 5.2% versus 4.9% prior, will be crucial for traders to watch for clear directions. A firmer print of the Fed’s preferred inflation gauge could add strength to the yields and hawkish Fed bets, which in turn will be favorable for the risk-safe assets ahead of the next week’s FOMC.
Reducing Animal Meat Production As Part Of Climate Policy

McDonald's Recession Resistant | Macquarie Group's Results Better Than Forecast

Saxo Bank Saxo Bank 28.10.2022 09:53
Summary:  Our four minute video covers five stocks for you to watch. Could Boeing shares turn around as they expect greater sales from China. Recession-stalwart McDonald’s, delivers stronger than expected sales and sees sales getting beefier later this year. Computershare defies the Fed-induced bear market and rises 22%; will it continue to benefit from higher interest rates as its business typically does. Plus we also cover Macquarie, why its profits beat expectations, and why it could continue to do well if volatility picks up. And why to watch Marathon Oil with oil margins likely to rise amid oil supply tightness.   Here are five stocks to perhaps watch in no particular order    Boeing (BA) Boeing shares have underperformed this year, falling 33%, however, the question is, could its business be turning around? The company released a bullish 20-year forecast for China’s commercial jet market, saying China will need to double its fleet in two decades with Boeing saying China will be a major driver of its sales. Boeing sees China needing almost 8,500 new passenger and freighter planes valued at $1.5 trillion through 2041. So that’s something to think about. McDonald’s (MCD) Recession-stalwart McDonald’s (MCD) has been outperforming the market his year, as it typically does it tough markets. McDonald’s reported stronger quarterly sales than the market expected, showing its somewhat defying inflationary pressures. McDonald’s put its strong sales down to the McRib burger. With the CEO saying it’s the “the greatest of all time” seller, with the McRib to soon be available across the entire US from the end of this month. That’s something to sink your teeth into.   Macquarie Group (MGQ)  Macquarie Group (MGQ) is Australia’s biggest investment bank and reported profit results that beat market forecasts, with market volatility buoying its commodities and global market trading businesses. Macquarie’s net income for the half year rose to A$2.31 billion up from A$2 billion in the prior year. That also beat forecast, so its shares rose as a result. But here is something to consider; when commodity and market volatility picks up, we typically see financial trading businesses benefit. So, it could be worth keeping an eye on Macquarie. Computershare (CPU) Computershare (CPU) is a share registry business, which you may heard of if you’ve ever bought or sold shares. You may have received their statements in the mail, for share purchase plans perhaps. Computershare shares have been outperforming the market, they are up 21% this year. Businesses like Computershare also are highly leveraged to rising interest rates, meaning, their earnings typically rise when interest rates do. In 2022, consensus (or the market) upgraded Computershare's 2023 earnings by 42%, but Bloomberg is even more optimistic, expecting more earnings upside. Marathon Oil (MAR)  Marathon Oil (MAR) is on the best performing stocks in the US this year, trading up 87%. Its due to report financial results in November. It’s also worth noting that our chief commodity strategist Ole Hansen has been expecting oil margins to rise again, given the oil price is moving up, with the oil market in tight supply and worried about the escalating prices of fuel in the northern hemisphere winter. So that means, oil companies like Marathon could continue to gain momentum. -For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/five-stocks-to-watch-boeing-mcdonalds--macquarie-computershare-marathon-oil-28102022
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

The Risk Is Aggravated By The Weakness Of The Japanese Yen (JPY) |Gold And Oil Are Doing Well

Saxo Bank Saxo Bank 28.10.2022 10:02
Summary:  A rocky session for equity markets once again yesterday, which tried to find cheer on falling bond yields, only for a thorough thrashing after the close yesterday on Amazon issuing its weakest ever holiday sales outlook, which saw its shares knocked some 13% in the aftermarket. Elsewhere, Apple shares managed to stabilize after its earnings report in, as revenue and earnings topped estimates. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The recent string of US earnings have not done much to keep the recent momentum in US equities alive. Neutral earnings from Apple last night was topped with awful outlook from Amazon, the second largest stock in the US equity market, that saw its shares decline 13% in extended trading. S&P 500 futures are retreating this morning trading around the 3,790 level despite a sizeable readjustment lower in the US 10-year yield to 3.93%. Euro STOXX 50 (EU50.I) European equities saw more diverging price action yesterday but closed above the 3,600 level again, but this morning STOXX 50 futures are coming down 1% trading around the 3,570 level with 100-day moving average at 3,528 being the next support level to watch. There are no economic releases in Europe of importance today so it will be interest rate direction and sentiment on earnings that will drive price action into the weekend. FX: USD pulled in two different directions as falling yields negative, weak sentiment positive The further drop in US treasury yields fail to extend the US dollar sell-off yesterday, as a far less hawkish than expected ECB took EURUSD back below parity and the Bank of Japan sent no new signals on its terminally stuck policy mix of ongoing QE and yield-curve-control.  Weak risk sentiment seems to provide offsetting support from the greenback, but the dollar will find stronger support if US data remains resilient and the Fed is faced to stay on message with further tightening, especially now that the market has significantly downshifted expectations for peak Fed Funds rate beyond the 75 basis point move expected at next Wednesday’s FOMC meeting, with less than 100 basis points of further tightening now priced and a peak rate near 4.78% by next March. Gold (XAUUSD) Gold remains on track for a second week of gains although some caution has emerged ahead of next week's FOMC meeting. Yesterday, the positive sentiment received a knock as the dollar regained some ground, especially against the euro after the ECB stayed far less hawkish than expected. Countering this potential gold negative development, US bond yields continued lower with the US 10-year treasury yield benchmark falling below the important 4% level to record a +25-basis point drop on the week. While the FOMC is expected to deliver another bumper 75 basis points hike they may tilt towards slowing the pace at future meetings while assessing the impact of their rate and quantitative tightening actions. As a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called. Crude oil (CLZ2 & LCOZ2) Crude oil remains on track for a second week of gains but for now without challenging resistance indicating a market still struggling for direction with no overriding theme being strong enough to set the agenda. Strength this week has been driven by a developing tightness in the fuel product market, US exports of crude and fuels setting a weekly record and the weaker dollar, as well as strong buying from China as refineries there plan to boost fuel exports through the end of the year. Diesel markets in Europe and the US continues to signal tightness ahead of winter with elevated refinery margins and prompt spreads signalling tight market conditions. Focus next week on the Nov 2 FOMC meeting and major OPEC producers beginning to cut their production. Additional technical upside in WTI above $89.25 while Brent’s next level of resistance is the October high at $98.75. US treasuries (TLT, IEF) The US 10-year treasury yield benchmark fell through the important 4.00% level yesterday, with the yield trading as low as 3.90% before treasuries found resistance. The 3.85% area is arguably a pivotal level if treasuries continue to rally. The entire yield curve dropped yesterday, in part on a less hawkish ECB continuing the trend recently of central banks delivering less than expected on guidance, as German 10-year Bunds dropped below 2.00% for the first time in weeks on the ECB meeting yesterday (more below). It looks like we’ll be heading into next week’s FOMC meeting with a fairly hard market lean for a significant downshift in the Fed’s hawkish message. What is going on? ECB the latest central bank to surprise dovish The ECB hiked its key rate 75 basis points to 1.5% from 0.75%. Officials dropped a reference to hikes continuing for "several meetings," in the statement, while saying they expect further action. Christine Lagarde said in the press conference that more rate hikes were on the way: "We still have ground to cover." The bank will continue to reinvest all maturing assets in its asset purchase program (QE) and QT won’t be discussed until the December meeting. The market read the meeting as a strong dovish surprise, as another 20 basis points of tightening were removed from forward expectations for 2023 (down some 50 basis points now from peak expectations just over a week ago.) Apple is a fortress FY22 Q4 revenue came out at $90.2bn vs est. 88.6bn up 8% y/y keeping up with inflation and EPS at $1.29 vs est. $1.26 driven by a new all-time high of active devices. The number of paid subscriptions, which Apple has recently announced will see price hikes, have doubled in three years to 900mn. Shares were unchanged in extended trading. Amazon shares plunged 13% on Q3 results Revenue in Q3 hit $127.1bn vs est. $127.6bn up 15% y/y but operating income hit $2.5bn vs est. $3.1bn. The weaker than estimated operating income was driven by a negative revenue surprise in their cloud business AWS with revenue of $20.5bn vs est. $21bn. The free cash flow in Q3 was still negative at $5bn with the combined negative free cash flow over the past year at $26bn. The change in cash generation for Amazon indicates that the pandemic turned out to be bad for the business as it spent too much on expanding capacity that could not be maintained. The outlook for Q4 was what terrified investors with the retailer guidance operating income in the range $0-4bn vs est. $4.7bn and revenue of $140-148bn vs est. $155.5bn. Japan announces massive fiscal stimulus Japan’s Prime Minister Fumio Kushida announced a ¥71.6 trillion (nearly $500 billion) stimulus package overnight, in a purported bid to “ease inflation” and shore up his government’s popularity. The new spending in the package is set at ¥39 trillion and will focus on incentivizing companies to raise wages, national security/defense and subsidies to reduce the impact of energy costs, especially electricity bills. With the Bank of Japan not allowing government bond yields to adjust, this risks adding to the yen’s weakness as long as other major central banks are not in easing mode. Caterpillar, McDonalds, and Boeing positive stories in the negative backdrop A few positive stories to highlight amidst the massive drop in marquee megacap names include Caterpillar, which soared a massive 7.7% on impressive results. Elsewhere McDonald’s (MCD) shares rose 3.3% on reporting sales that handily beat analysts’ estimates, despite inflationary pressures. McDonald’s results were boosted by McRib sales, and the fast-food chain will offer McRib nationwide in the US from the end of this month. Meanwhile, Boeing (BA) shares jumped a day after an ugly drop on its earnings report. Yesterday, shares rose 4.5% with the company releasing a bullish 20-year forecast for China’s commercial jet market, saying China will need to double its fleet in two decades and that China will be a major driver of Boeing sales. Boeing expects China to need 8,485 new passenger and freighter planes valued at $1.5 trillion through 2041. A tough week for coffee, cotton and sugar The Bloomberg Commodity Softs index trades down 5% on the week led by a 6% drop in Arabica coffee (KCH3) $1.79/lb, a 14-month low as money managers continue to exit long-held bullish bets, now turning increasingly sour amid concerns a global recession will hurt demand at a time where the outlook for the 2023/24 crop in Brazil is showing signs of improving. However, a combination of exchange monitored stocks lingering at a 23-year low and oversold condition may soon drive a technical bounce ahead of support at $1.73/lb. Sugar (SBH3) meanwhile has been hurt by a weaker Brazilian Real boosting incentives to export. Cotton (CTZ2), down 52% from its May peak has plunged to near a two-year low on weak demand for supplies as consumers around the world cut back on spending. Weekly export sales from top shipper, the US, plunged from a year earlier with overall sales for the current season being well behind last year and the long-term average. What are we watching next? Market leaning very hard now for a dovish downshift at next Wednesday’s FOMC After the Bank of Canada surprised with a smaller than expected hike this week and the ECB surprised with more dovish forward guidance, the market is now. But will the US data cooperate and is the maximum conceivable downshift from the Fed next week already in the price – given that the Fed itself has said that it will continue to hike even as the economy – including the labor market - weakens? After all, the market has removed nearly 25 basis points of tightening through the March FOMC of next year from the peak of just above 5.0% a bit more than a week ago to just under 4.8% now, and is more aggressively pricing the Fed to begin cutting rates by late next year (December ‘23 FOMC yield down almost 50 bps from peak).  Earnings to watch Today’s US earnings focus is on the two oil and gas majors Exxon Mobil and Chevron expected to report strong earnings in Q3. Exxon Mobil is expected to grow revenue 44% y/y with the operating margin expanding further. NextEra Energy is also worth watching given the recently passed US bill on renewable energy because it may lift the outlook for the industry. Today: Macquarie Group, OMV, ICBC, China Merchants Bank, LONGi Green Energy Technology, Midea Group, Imperial Oil, Danske Bank, Sanofi, Airbus, Volkswagen, China Construction Bank, Agricultural Bank of China, Bank of China, BYD, China Shenhua Energy, Eni, Keyence, Hitachi, Denso, Equinor, CaixaBank, Wilmar International, Swiss Re, Exxon Mobil, Chevron, AbbVie, NextEra Energy, Colgate-Palmolive, Royal Caribbean Cruises Earnings releases next week: Monday: Daiichi Sankyo, Stryker Tuesday: Toyota Motor, Sony Group, Mondelez, AMD, Airbnb, Eli Lilly, Pfizer, BP Wednesday: KDDI, Novo Nordisk, GSK, Booking, Qualcomm, CVS Health, Estee Lauder, Humana Thursday: Cigna, Amgen, PayPal, Starbucks, EOG Resources, ConocoPhillips, Regeneron Pharmaceuticals, Zoetis, Canadian Natural Resources, DBS Group Friday: Duke Energy, Enbridge Economic calendar highlights for today (times GMT) 0800 – Germany Q3 GDP0900 – Eurozone Oct. Confidence Surveys1200 – Germany Oct. Flash CPI1230 – Canada Aug. GDP1230 – US Sep. Personal Income/Spending1230 – US Sep. PCE Inflation1400 – US Oct. Final University of Michigan Sentiment   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-28-2022-28102022
Twitter And Elon Musk Faced A Growing List Of Claims

Twitter Belongs To Elon Musk! | Asia-Pacific Exposed To Losses | Some Advices About Financial Independence And Motivation

Kamila Szypuła Kamila Szypuła 28.10.2022 11:48
Today, a lot of information is contained in the word 'change'. Credit Suisse is planning a transformation and Twitter has changed hands. The change also affects developments, including cybersecurity. In this article: Cybersecurity Credit Suisse Motivating employees Financial Independence The Asia-Pacific situation The situation of Twitter Cybersecurity developments Morgan Stanley tweets about cybersecurity developments   The cybersecurity sector is rapidly growing and developing new ways to guard against sophisticated attacks. How can you take advantage of the long-term investment opportunity? Read here: https://t.co/14Auf7lio4 pic.twitter.com/BrqUjLz9v5 — Morgan Stanley (@MorganStanley) October 26, 2022 Currently, every user attaches great importance to online security. Strong passwords or anti-virus programs no longer excuse. As the world creates more data and accesses the web in more ways, cybercriminals find new vulnerabilities to exploit. For this reason, cybersecurity companies are constantly working on new methods of protection. Such a development is especially important for investors who spend their capital, usually quite large, on investments, and the protection of data and resources is the most important issue. For this reason, security in cyberspace is at the center of their attention. Transformation Credit Suisse in its tweet about its transformation.   Today, we unveiled our new strategy and transformation plan, which are based on a series of decisive actions to create a simpler, more focused and more stable Credit Suisse built around client needs. Find out more here: https://t.co/40CU4bUl6Q #CSresults pic.twitter.com/8xFjadtFsA — Credit Suisse (@CreditSuisse) October 27, 2022 Recently, the Swiss bank was full of negative news. Information about changes may evoke mixed emotions. But the company's efforts may prove helpful to its situation. How to motivate? In his tweet, Goldman Sachs promotes his podcast, which this time addresses the topic of motivating employees.   Chief CEO Carolyn Childers shares lessons on how founders motivate their teams on our latest #ExchangesGS podcast: https://t.co/s6hX5svc9c pic.twitter.com/JEDyvEw44n — Goldman Sachs (@GoldmanSachs) October 27, 2022 Motivating employees is a process and one of the management functions regulating the behavior of employed people, so that their actions contribute to the achievement of the company's goals. Thus, it is an important mechanism of every enterprise. new methods emerge with the development of the labor market and the environment of a given sector. Innovation in motivating employees is also important as well as in technology. Knowing what to motivate and what to avoid can bring positive results not only for the company but also for the individual employee. A sense of belonging and appreciation may turn out to be more important for such an entity than remuneration. How to become financially independent? Morningstar, Inc., in its tweet, informs about Kiersten and Julien Saunders’ the topic of the conversation.   ðŸÅ½™ï¸Â This week on The Long View: Kiersten and Julien Saunders, hosts of @richandregular, discuss their journey toward financial independence, the racial wealth gap, and getting off the social-media treadmill.Listen here: https://t.co/u1Z2TTxFlS — Morningstar, Inc. (@MorningstarInc) October 28, 2022 Recently, every young person is asking himself how to become financially independent and what to do to retire early. The life situation and finances are closely related in this type of conferences. Most people see obstacles to the achievement of such goals. Knowing the ways of people who have already achieved it can be information for others. Asia would be the biggest loser? CNBC tweets about the possible biggest loser in the markets - Asia.   Asia would be the biggest loser if the global economy splits up, IMF warns https://t.co/nPiXNEjOFY — CNBC (@CNBC) October 28, 2022 The IMF reports that Asia and the Pacific have more to lose than any other region. Growing geopolitical tensions (USA-China, Ukraine-Russia) mean that trade in Asia is significantly deteriorating. The fear of start-ups has increased not only in terms of GDP but also in the situation of individual companies. So can the IMF be right about the Asia-Pacific situation? Elon Musk is now responsible for Twitter CNBC Now informs about the situation of Twitter purchases by Elon Musk.   BREAKING: Twitter’s CEO and CFO are out as Elon Musk takes over the company, sources tell CNBC https://t.co/P8OaJAPMXg — CNBC Now (@CNBCnow) October 28, 2022 Recently, there is a lot of information about the takeover of twitter by Elon Musk. It turns out that there will be significant shortcomings of this. Twitter CEO Parag Agrawal and Finance Chief Ned Segal have both left the San Francisco headquarters and will not be back. Twitter is now in the hands of Elon Musk. The confirmation is added by the tweet of the CEO Of Tesla. Speaking of Elon Musk's purchases of Twitter, I mentioned it in an article in early October. the bird is freed — Elon Musk (@elonmusk) October 28, 2022 What could this mean for the plaform, will the acquisition be a benefit? Many questions arise about this. We can only know the answer when somethong heppen.
Hungary's Budget Deficit Grows, Raising Concerns Over Fiscal Targets

Amazon Is Still Under Pressure | Apple Has A Price Power

Saxo Bank Saxo Bank 28.10.2022 13:04
Summary:  Amazon issued its weakest Q4 revenue growth outlook in the company's history and missed significantly on its operating income forecast relative to estimates suggesting Amazon is still under pressure on input costs and weakening demand with a negative surprise on its AWS revenue in Q3. Apple on the other turned out to be the bright spot this week among many disappointing earnings releases from technology companies. Next week, the earnings season will be less busy but there are still plenty of important earnings that can move equities. Amazon plunges 14% on gloomy outlook Just like Meta has seen an epic decline in free cash flow generation, Amazon is losing money on an unprecedented scale with 12-month trailing free cash flow declining to $-28.5bn from $-8.8bn from a year ago. Amazon overspent during the pandemic expanding its capacity to a level that is now far above its current demand from customers. Amazon’s Q3 revenue was $127.1bn vs est. $127.6bn up 15% y/y driven by third-party seller services, AWS, and advertising. The two biggest surprises in Q3 were the operating income at $2.5bn vs est. $3.1bn and AWS revenue of $20.5bn vs est. $21bn. However, the biggest shock for investors was the Q4 revenue outlook at $140-148bn vs est. $155.5bn indicating a growth rate of just 5% y/y and thus the weakest Q4 growth in the company’s history. The Q4 outlook for operating income was $0-4bn vs est. $4.7bn indicating severe issues with short-term profitability. While sentiment is short-term negative for Amazon things could improve in 2023 as costs are reined in and logistics costs are coming down due to lower container freight rates. Amazon shares are trading around $97 in pre-market trading taking the stock back to levels not seen since the pandemic lows in early 2020. Apple’s performance the past year with a cost-of-living crisis, supply chain constraints, and soaring input costs has been phenomenal and last night’s result confirms that Apple is a fortress that can withstand the volatile environment. Charlie Munger and Warren Buffett did the right assessment on Apple’s moat characteristics choosing Apple for its technology exposure over other technology companies. Apple has pricing power on both its hardware and software (recently they have announced that they will raise prices on their subscriptions). In it FY22 Q4 earnings report the company reported revenue of $90.1bn up 8% y/y with solid revenue growth across all segments except for the iPad that saw double digit decline. All geographies showed growth except for Japan. Growth is miniscule now in its Greater China segment while Europe was surprisingly strong. While the numbers look good there is a considerable margin squeeze on Apple with the EBITDA margin hitting 30.8% down from 32.1% a year ago which also one of the reasons why the company is raising its subscription prices. Shares are up 1% in pre-market trading. Key earnings next week The Q3 earnings season is leaving a busy week with key US technology earnings that have seen disappointments from Microsoft, Alphabet, Meta and Amazon. Next week is less busy, but there are still plenty of important names. Toyota and Sony are key Japanese earnings to watch on Tuesday, and on the same day in the US, we will watch AMD and Airbnb earnings. On Wednesday, European equities will watch earnings from Novo Nordisk, Maersk, and Vestas. Novo Nordisk will be judged on its obesity drug adoption rate, Maersk will have to manage a weakening outlook for container shipping, and Vestas is struggling with profitability and its order intake. On Wednesday, the US earnings focus will be on Booking as an indicator of travel demand and Fortinet in the cyber security industry. Thursday is the big day with key earnings from Orsted, BNP Paribas, BMW, ConocoPhillips, PayPal, Starbucks, Regeneron Pharmaceuticals, and MercadoLibre. Friday ends with key European banking earnings from Societe Generale and Intesa Sanpaolo. Monday: COSCO, Daiichi Sankyo, Stryker, NXP Semiconductors, Global Payments Tuesday: Toyota Motor, Sony, BP, Eli Lilly, Pfizer, AMD, Mondelez, Airbnb, Uber, Wednesday: Suncor Energy, Nutrien, Novo Nordisk, Maersk, Vestas Wind Systems, GSK, Electronic Arts, Qualcomm, CVS Health, Estee Lauder, Booking, Fortinet, Ferrari, Albemarle Thursday: Verbund, Barrick Gold, Orsted, Novozymes, BNP Paribas, BMW, Enel, ING Groep, DBS Group, ConocoPhillips, Amgen, PayPal, Starbucks, Regeneron Pharmaceuticals, EOG Resources, Moderna, MercadoLibre, Block, Cloudflare, Coinbase Friday: Enbridge, Societe Generale, Intesa Sanpaolo, SoftBank, Amadeus IT Group, Duke Energy Source: https://www.home.saxo/content/articles/equities/earnings-watch-apple-is-a-fortress-and-amazon-predicts-weak-q4-28102022
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Creativeforge Games - Analytical Report - Summary

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 28.10.2022 14:38
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme HOLD (PREVIOUS: BUY) TARGET PRICE 9,1 PLN 28 OCTOBER 2022, 11:30 CEST Decisions regarding the game "Stargate: Timekeepers", which have recently been made on the line Slitherine Software (publisher) - CFG (producer) and the company's communication about the ongoing optimization activities of production / teams, which, in addition to the lack of potential profits from the sale of the game, in our opinion imply significant changes in the functioning of the developer. Bearing the above information in mind, we think that the company intends to deviate from cooperation with publishers in its strategy and limit the number of simultaneous projects. We think that CFG will focus on fewer projects than before, which is implied in our model and which has a large impact on lowering our valuation. Moreover, we are disappointed with the premiere of the game "Aircraft Carrier Survival", which, despite the promising start (return of costs in 24 hours, sale of 20 thousand pieces in 72 hours), significantly differs from our expectations. Additionally, due to the expected significant changes in the operation of the group, we assume that most of the production has been delayed. Having regard to the above-mentioned arguments we are downgrading our recommendation from BUY to HOLD, setting our target price at PLN 9.1/share, which is 0,3% below the current market price. Loss of „Stargate: Timekeepers", ... At the beginning of September '22, CFG announced plans to establish a new company, Slitherine Poland (in which both parties will have shares), with Slitherine Software. New comapny will be responsible for the titles "Stargate: Timekeepers" and "Ancient Arenas: Chariots" on which CreativeForge has worked. Planned actions are to be taken by the end of 2022. We think that this means lack of proceeds from advance payments for the production and sales of the most important game in the CFG group. The direct financial benefit in this case may only be the payment of dividends by the established company or the sale of shares. On the other hand, we do not expect the advance payments received by CFG for the production of this game to be returned. …and its impact on the company's business model We think that the above decisions made by Slitherine Software (publisher) - CFG (producer) may result from "undeliverd" expectations regarding the quality of the game and the optimization of the cost of further production. In addition, in the last report, the company communicated about ongoing activities aimed at maximizing the efficiency of production teams, optimizing production and team management. With the above information in mind, we think that the company intends to leave in its strategy of cooperation with publishers and limit the number of simultaneous projects. We think that CFG will focus on a smaller number of projects than before, which is implied in our model and which has a large impact on lowering our valuation (we describe more in the chapter ("change of assumptions"). The premiere of "Aircraft Carrier Survival" leaves much to be desired The game debuted on April 20, 2022 and it was the first self-premiere of the company's new team, after CFG in 2019 has undergone thorough transformation. The first hours of "ACS" looked promising, the game reached a 24h peak of 2.3 thousand. people and climbed to the third bestselling games on Steam (with ratings at 77% positive). A few days later, the company announced the return of production, testing, location and marketing costs within 24 hours of the debut (they did not exceed PLN 0.4 million) and the sale of 20 thousand. copies in 72h. Unfortunately, the drop in ratings and mixed opinions from players (currently only 62% of positives, link) translated into a slump in the sales of "ACS". We estimate that approx. 40,000 copies was sold, and a year from the premiere, we forecast 48 thousand. units, which is far from our previous expectations (99 thousand). In addition, the game, less than 6 months after the premiere, is sold at a discount of 55% Further perspective of this year Due to the expected significant changes in the functioning of the group, we assume that most of the production has been delayed, thus we shift most of the games forecast for this year to 2023. In addition, given the reduction in employment, we assume that some of the ongoing projects will be suspended. On the other hand, we are counting on large related savings with the running of these projects. Throughout 2022, we forecast PLN 4.4m in revenues, PLN 0.5m in EBIT and PLN 0.4m in net profit. The perspective of 2023. We expect that at the beginning of 2023 there will be premiers of games such as "Handyman Corporation", "Colonize", "My Hotel", and later next year we are counting on such titles as: "Builders of Greece", "House Flipper City", "Black Gold" or "Monsters Domain" Main risks: 1) The risk of diversified and unforeseen demand for different products 2) The risk related to possible delays in game production 3) Risk related to the loss of key employees 4) Risk related to difficulties in acquiring experienced employees 5)The risk related to the possible failure of IT systems, telecommunications infrastructure and servers 6) The risk related to the competitive environment 7) Risk related to the development of new technologies and industry 8)Risk of volatility of foreign exchange rates 9) Risk of aging wishlists Analyst: Krzysztof Tkocz GPW’s Analytical Coverage Support Programme 3.0  
Australia Is Expected To Produce A Bumper Year Of Crops

Grain Prices May Rise As A Result Of Russia's Actions | Stock Markets Increased Profit

Saxo Bank Saxo Bank 31.10.2022 08:58
Summary:  Equities closed higher on Friday on the Wall Street, sending a bid tone to Asian stocks to start the new week. However a host of risks ahead including the Fed meeting which will see another jumbo rate hike but focus is also whether the members send out signals of a downshift in rate hike path. WSJ Timiraos has now hinted at higher for longer interest rates in his latest article, and this has helped a bid tone in US dollar to return in early Asian trading hours. Geopolitics also took an ugly turn with Russia backing off from grain export deal, threatening food crisis again. What is happening in markets? Need to know Asian stocks look to build on last week's US gains, though investors may be cautious ahead of the FOMC meeting. The S&P 500 jumped 2.5% on Friday in another turbulent session, buoyed by tech shares and some modestly positive economic data. Treasuries snapped a three-day rally, with 10-year yields rising back to around 4%, while the dollar inched up. Russia pulls out of the agreement to allow Ukrainian crop shipments, meaning its ready to halt Ukraine Wheat exports. Chinese President Xi Jinping will host a flurry of foreign leaders this week, making a return to the world stage after China's Covid Zero restrictions. On Thursday some Chinese cities ramped up COVID-19 restrictions and the IMF downgraded China’s growth expectations to 3.2%, after a 8.1% rise in 2021. Oil and gold both retreated. The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) trade near 6-week highs Apple (AAPL) shares rocked up 7.6% after it reported mostly better than expected results last week, and the sentiment buoyed technology shares, helping the S&P 500 and the Nasdaq 100 notch their longest weekly rising streak since August. Plus, economic data showed small signs of improvement in the battle against inflation. This week, the most prominent companies to report quarterly results include; Exxon Mobil, Berkshire Hathaway, Advanced Micro Devices, Qualcomm, UBER, PayPal, and Starbucks. If you are looking for inspiration this week, here is the Five Stocks To Watch video. Australia’s ASX200 (ASXSP200.1) futures suggest a bullish 1.3% rise on Monday AM The Reserve Bank of Australia on Tuesday is expected to deliver a 2nd straight quarter of 0.25% hikes on Tuesday’s meeting, according to Bloomberg. Australia’s corporate bond market is showing signs of succumbing to the global volatility in fixed income, unleashed by central bank tightening. And this is causing Australian tech stocks to remain pressured. Focus today is on earnings from Nickel Mines (NIC), Origin Energy(ORG), and coal company Corando Global (CRN). Elsewhere, pressure will likely be on iron ore giants, which might expect their selling rout after China increased covid-19 restrictions. Focus will be on Fortescue Metal, BHP and Rio Tinto which are all trading under their 200-day moving average. Crude oil (CLX2 & LCOZ2) trades at $88. Iron ore (SOCA) erases 3-years of gains Oil fell on Friday with WTI (CLX2 & LCOZ2) settling near $88 but posting a 3.4% weekly gain, despite the biggest crude importer, China, widening its COVID-19 curbs. This week; OPEC unveils its 2022 World Oil Outlook at the ADIPEC conference Monday. Plus, there is a swathe of energy ministers from Saudi Arabia, Kuwait, Iraq and Nigeria will also weigh in, as well as CEOs from BP and Occidental. Meanwhile, Iron ore (SCOA) now trades at its lowest level since 2019, US$78.40 after China confirmed it will maintain its covid-19 policies. Markets, businesses, commodities with high exposure to China see heavy selling this week. Will it continue?  Assets with exposure to China are being heavily penalized as it seems investors are realigning their portfolios somewhat with the priorities of President Xi and his policy on stronger state control over the economy, which means markets could be challenged for years. Xi confirmed this stance on Sunday 24 October, and on top of that China increased covid-19 curbs, which is why Hong Kong’s Heng Seng suffered at 8.3%, drop last week, while the iron ore (SCOA, SCOX2) price fell ~15% last week, and now traded at $78.40 its lowest level since Feb 2019, on concerns that the biggest iron ore consumer will further slow demand, all while iron ore seems oversupplied. The biggest pure play iron ore company in the southern hemisphere, Fortescue (FMG) shares fell 10% last week, plus what added to the selling was that Fortescue affirmed it is increasing its spending, while its margins are tightening. Fortescue says it will ramp up iron ore production at its expanded facility in March, instead of June. Meaning, this could likely further push the iron ore market into greater oversupply. Some investors are concerned Fortescue Metals technical indicators show that perhaps more selling could be ahead, despite the stock trading somewhat in oversold territory. US dollar back on the front foot in Fed week The US dollar was seen returning to mild gains against most major currencies after Fed-pivot bets picked up last week. A turnaround in comments from Fed whisperer Nick Timiraos who is now suggesting higher-for-longer rates (read below) may be one of the reasons. The uptick in geopolitical worries with Russia pulling out of the grain deal may however also play a part in bidding safe haven flows to the dollar. Fed is expected to hike rates by another 75bps this week, and pricing for December is also close to 75bps still. This will likely revive pressure on the JPY this week, while GBP seems to have priced in all the good news for now. USDJPY heading to 148 in early Asian hours while GBPUSD testing 1.1600. Wheat futures (ZWZ2) gap higher Wheat futures (ZWZ2) gapped up 7% to open at $8.88/bushel after Russia pulled out of the UN brokered black sea grain deal over the weekend after Ukraine carried out an attack on Russia’s Black Sea fleet off Sevastopol. Corn has also gained 2.5% to open at $6.96/bushel. What to consider? US core PCE sends no clear signal to the Fed The US core PCE, Fed’s preferred inflation gauge, remained elevated for September as expected. The core measure came in at 5.1% YoY from 4.9% previously, but remained a notch softer than expected at 5.2% YoY. On a m/m basis, gains were flat at 0.5% as expected. While the case for November’s 75bps rate hike from the Fed is still intact, it still remains hard to argue a downshift with the kind of strength we are seeing in the US economy. WSJ Fed whisperer now signalling higher-for-longer rates Nick Timiraos, who is seen as the Fed’s messenger, had sent shivers across markets last week with a report suggesting that the November FOMC meeting may be used to signal a downshift to smaller rate hikes. This saw equity markets extending gains while the USD was on the backfoot last week, but now he has come out with another article saying that higher savings buffers and lower interest expenses could make the Federal Reserve raise rates higher and keep them there for longer. Russia exits Ukraine grain deal Russia suspended its participation in the Ukraine grain export deal after a swarm of drones targeted at least one Russian warship from the Black Sea navy. This will block the passage of millions of tonnes of grain via southern Ukraine and may lead to a fresh jump in prices. The report is especially catastrophic as it comes together with massive wheat crop damage with the US crop belt seeing La Nina for its third consecutive year. Putin is getting desperate after losing ground militarily and in terms of Europe’s winter gas requirement, so he has likely gone back to using the food crisis as another tool. Fed, BOE, RBA meet – what can you expect The Fed and BOE and RBA are expected to hike this week, with robust labour markets defying efforts to tamp down inflation, despite predictions of a imminent recession. Companies are complaining of chronic worker shortages, and a persistent mismatch between hiring demand and supply is supporting wages and shielding consumers from slowdowns. Consensus expects the RBA to take the cash rate from 2.6% to 2.85% on Tuesday. On Wednesday the Fed meets and consensus expects to take rates up by 0.75% to 4%. All in all, Goldman Sachs raised its peak Fed rate prediction to 5% from 4.75%, citing "uncomfortably high" prices will keep rates higher for long. On Thursday the Bank of England meets, and consensus expects to take the rate from 2.25% to 3%. This means FX markets are expected to be quite volatile along with equity market, especially interest rate sensitive parts of the market, tech, consumer spending and real estate stocks. Lula’s comeback in Brazilian presidential elections Luiz Inácio Lula da Silva claimed a victory in Brazil’s presidential election on Sunday, defeating incumbent rightwing leader Jair Bolsonaro by less than two percentage points and setting the stage for a return to leftwing governance in Latin America’s largest nation. Brazilian ETFs including such as EWZ:arcx, IBZL:xams, RIO:xpar, BRZU:arcx, or BRQ:arcx may be the ones to watch, as will be the BRL later in the day. BRL has been the best performer in the EM basket (excluding Russian rouble) against the USD so far this year. Lack of economic plans from Lula may make a case for market outperformance somewhat weaker, however. China PMIs out today at 9:30am SGT/HKT China’s October PMIs are due for a release today and expectations are for the manufacturing number to dip into the contractionary territory with Bloomberg consensus expecting a 49.8 print from 50.1 in September. A slowdown is also expected in the non-manufacturing print, but it still may remain in expansion.   For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-31-oct-31102022
Preparation Of A Common Currency For South America, Gold Trades Softer

Victory In The Elections Of Luiz Inácio Lula Da Silva | Smoother Crude Oil Trade

Saxo Bank Saxo Bank 31.10.2022 09:13
Summary:  Equity markets closed strongly on Friday, even as the narrative that has purportedly driven strength at times in the equity market of late, the hope that central banks and especially the Fed are set for a dovish shift, failed to offer any fresh support on Friday. After a fresh article from “Fed whisperer” Nick Timiraos from the Wall Street Journal suggested that the Fed fears that it may have to keep the policy rate higher for longer, the event risk of the week will be the FOMC meeting this Wednesday, though other important central bank meetings are in the mix, including a Bank of England meeting on Thursday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Strong Friday close in the S&P 500 futures reaching the highest closing price for the up cycle that began earlier this month. S&P 500 futures are now up 8.7% from their lowest close on 12 October. This morning the index futures are trading lower hovering around the 3,898 level which is just below the 100-day moving average. This week is all about the FOMC decision and the ongoing US earnings. Euro STOXX 50 (EU50.I) European equities had a less spectacular performance on Friday and the impressive performance in US equities has not positively impacted STOXX 50 futures this morning trading lower around the 3,620 level. European equities have done better than US equities over the past month as the US technology sector has had weak Q3 earnings. FX: USD mixed as Wednesday’s FOMC meeting eyed Mixed developments for the US dollar on Friday, with the wild rally in equity markets a headwind, while the sharp, partial unwind of the anticipated dovish shift from the Fed at this Wednesday’s FOMC meeting offered some offsetting support as yields perked up slightly after testing key levels last week (see more below in What are we watching next?). After the brief foray above parity and nearly to 1.0100, EURUSD has been tamed back well below that level, while GBPUSD remains relatively bid and well clear of the pivotal level of 1.1500 ahead of the key event risk of the week for sterling, the BoE meeting Thursday (preview below). Elsewhere, USDJPY is coiling within the 145.00-150.00 range, while USDCNH has rebounded sharply and nearly back to the cycle highs. Broad CNH volatility is worth watching for contagion across asset markets. Wheat futures gap higher on Ukraine supply worries Wheat futures (ZWZ2) in Chicago surged as much as 7.7% to $8.93 on the opening after Russia over the weekend pulled out of the UN brokered black sea grain deal (see below). Since the UN and Turkey supported grain corridor opened three months ago Ukraine has shipped more than 9 million tons of foodstuff and it has helped ease tight world supplies and control global food costs. Money managers have been wrongfooted by the latest developments after raising bearish bets on Chicago wheat futures by 63% to a 28-month high in the week to October 25. Food exports from Ukraine also includes corn and sunflower oil and reduced supply of those has lifted corn futures (ZCZ2) in Chicago by 2.3% to trade near resistance at $7/bu and soybean oil futures by 2%. Gold (XAUUSD) Gold trades nervously within a narrowing range ahead of Wednesday’s FOMC meeting where another bumper rate hike is expected. What may follow, however, has caused a great deal of volatility across markets with traders looking for guidance regarding the pace and strength of future rate hikes. Gold is heading for its seventh straight month of declines, the longest losing streak since at least the late 1960’s (Bloomberg) while bullion-backed ETF holdings have dropped to a 30-month low and money managers hold a net short near the highest in four years. All developments supporting an eventual recovery, but not until we reach peak hawkishness from where we could see yields and the dollar soften. As a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called. Crude oil (CLZ2 & LCOZ2) Crude oil trades softer therefore trimming a monthly gain driven by already tight markets and OPEC+’s planned supply cuts from next month. The latest weakness once again being driven by weak economic data from China and a stronger dollar ahead of Wednesday’s FOMC meeting after the famous FOMC whisperer at WSJ in an article speculated the Fed will need to keep rates higher for longer (see below). In addition to OPEC+ production cuts, the market will also have to gauge the impact of EU planned sanctions on Russian oil flows in December, a development that could be a “big hit” to already tight fuel supply, especially in Europe according to Eni’s CEO. US treasuries (TLT, IEF) The low water mark for the US 10-year treasury yield benchmark was near 3.90%, a key pivot level this week as we await the FOMC meeting and how the Fed’s guides for its future policy moves now that it is reaching an important inflection point in which the market expects it is likely the Fed will begin to hike in smaller increments as soon as December. It’s a delicate communication task to guide for a downshift without appearing too dovish. The important US economic data this week includes Thursday’s October ISM Services and especially the Friday October payrolls and earnings data for October. The October CPI is up next week. What is going on? Russia exits Ukraine grain deal Russia suspended its participation in the Ukraine grain export deal after a swarm of drones targeted at least one Russian warship from the Black Sea navy. This will block the passage of millions of tonnes of grain via southern Ukraine and may lead to a fresh jump in prices. The report is especially catastrophic as it comes together with massive wheat crop damage with the US crop belt seeing La Nina for its third consecutive year. Ukraine’s infrastructure ministry said 218 ships had been immediately affected. This included 95 that had already left its ports and were waiting at the inspection site before unloading, 101 waiting for inspection before collecting Ukrainian grain, and a further 22 that were loaded up and ready to set sail. “Putin needs leverage as things go south for him on the battlefields in Ukraine, so the threat of global food crisis needs to be put back in the Russian toolbox of coercion and blackmail,” wrote Alexander Gabuev, senior fellow at the Carnegie Endowment for International Peace via the FT. Lula’s comeback in Brazilian presidential elections Luiz Inácio Lula da Silva claimed a victory in Brazil’s presidential election on Sunday, defeating incumbent rightwing leader Jair Bolsonaro by less than two percentage points and setting the stage for a return to leftwing governance in Latin America’s largest nation. Brazilian ETFs including such as EWZ:arcx, IBZL:xams, RIO:xpar, BRZU:arcx, or BRQ:arcx may be the ones to watch, as will be the BRL later in the day. BRL has been the best performer in the EM basket (excluding Russian rouble) against the USD so far this year. Lack of economic plans from Lula may make a case for market outperformance somewhat weaker, however. What are we watching next? Is Fed concerned that market is expecting too much of a dovish shift at FOMC meeting this Wednesday? Nick Timiraos, who is seen as a kind of “Fed whisperer” and possible conduit of Fed communication with the market, had sent shivers across markets last week with a report suggesting that the November FOMC meeting may be used to signal a downshift to smaller rate hikes. This saw equity markets extending gains while the USD was on the backfoot last week, but now he has come out with another article: Cash-rich Consumers Could Mean Higher Interest Rates for Longer, saying that higher consumers savings buffers and a low level of interest expenses could require that the Federal Reserve raise rates higher and keep them there for longer due to less sensitivity to interest rates than was seen likely previously. The December 2023 EuroDollar contract had rallied as much as 50 basis points off the lows recently, correcting some 15 basis points Friday and slipping a bit lower to start this week as the market is unsure of how aggressively it should lean for dovish guidance. Big week ahead for central bank meetings The general theme is “downshifting” of guidance (As noted in the FOMC comments above). The FOMC meets Wednesday and is expected to hike 75 basis points with guidance indicating that the pace of hikes may start to slow as soon as at the December meeting (if likely with no commitment in either direction). First up, however, is tonight’s RBA meeting, where Governor Philip Lowe and company are expected to only hike 25 basis points tonight after a string of 50 basis point moves as the RBS is concerned about the impact of further tightening on consumption and mortgage payments, though a small minority still expect another 50 basis points moves. On Thursday, we have a pivotal Bank of England meeting, the first after the violent market swings during the uproar over former PM Truss’ fiscally risky policy moves. With calming markets and the new Sunak government rolling out far tighter budget plans, BoE expectations have fallen like a stone, but with the market still expecting the first ever 75 basis point move for this cycle. The BoE has s history of bad communication with the market – and an austere budget brings forward and increases the severity of the coming recession. Finally, Norges Bank also meets Thursday and is expected to hike 25 basis points, seemingly in no hurry despite a very weak currency and high inflation readings, and even having guided that it soon sees an end to the tightening cycle. Earnings to watch Today’s US earnings focus is Stryker which is expected to see its earnings growth increase to 7% y/y with operating margin still under pressure. Otherwise, as we look ahead, earnings tomorrow from Toyota, Sony, BP, AMD, and Airbnb will have the market’s focus. Monday: Daiichi Sankyo, Stryker Tuesday: Toyota Motor, Sony Group, Mondelez, AMD, Airbnb, Eli Lilly, Pfizer, BP Wednesday: KDDI, Novo Nordisk, GSK, Booking, Qualcomm, CVS Health, Estee Lauder, Humana Thursday: Cigna, Amgen, PayPal, Starbucks, EOG Resources, ConocoPhillips, Regeneron Pharmaceuticals, Zoetis, Canadian Natural Resources, DBS Group Friday: Duke Energy, Enbridge Economic calendar highlights for today (times GMT) 0900 – Switzerland SNB Weekly Sight Deposits 0930 – UK Se. Mortgage Approvals 1000 – Eurozone Oct. Flash CPI estimate 1000 – Eurozone Q3 GDP estimate 1345 – US Oct. Chicago PMI 1430 – US Oct. Dallas Fed Manufacturing Activity 1500 – ECB Chief Economist Lane to speak 0145 – China Oct. Caixin Manufacturing PMI 0330 – Australia RBA Cash Target Announcement Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-oct-31-2022-31102022
GBP: BoE Stands Firm on Bank Rate and Mortgage Interest Relief, EUR/GBP Drifts Lower

In the previous week both S&P 500 and Nasdaq gained over 2%

ING Economics ING Economics 31.10.2022 09:44
China PMIs in the spotlight today as Covid cases rise again Source: shutterstock Macro outlook Global markets: US Stocks finished last week on a winning streak after 4 out of five days of gains for the S&P500 (even the one down day was fairly muted The index rose 2.46%, while the NASDAQ, which had been hit over the week by soft earnings and sales projections from major firms, rose 2.87%). The same cannot be said of Chinese stocks. The CSI300 finished down most days last week including Friday. US Equity futures are pointing to an essentially flat open today, with only a slight downward bias, which should leave most Asian markets (though perhaps not those in China) open to gains today. Currency markets (and bond markets) aren’t quite in synch with equities. EURUSD edged fractionally lower to 0.9959 and the AUD is back to just above 64 cents, while Cable is barely higher at 1.1599 while the JPY has returned to weakening, reaching 147.66. In other Asian FX space, moves have been quite muted, with the CNY showing the most weakness, moving up to 7.2524 from 7.229. The KRW was also soft, rising to 1421.60. At the other end of the spectrum, the PHP gained 0.43% on Friday taking it to 57.98. There were further outsize moves on bond markets at the end of last week. The 2Y US Treasury yield surged back by 14bp, as pivot doubts set back in, and 10Y US Treasury yields rose 9.4bp to 4.012%. G-7 macro:  Friday’s data releases included German October CPI inflation, which rose more than expected to 10.4% from 10.0% in September. The equivalent harmonised index inflation rate rose to 11.6% YoY.  In contrast, in the US, the PCE deflator inflation rate for September rose slightly less than expected, coming in flat at 6.2% YoY, while the core rate also slightly undershot expectations, rising only to 5.1% from 4.9% (5.2% expected).  University of Michigan 1Y inflation expectations also drifted off by 0.1pp to 5.0%, while the 5Y rate remained at 2.9%. None of which really fits in with the price action in the bond market on Friday. Today, Eurozone CPI due today will likely go the same way as the October German figures, namely rising, with some upside risk to the consensus forecast of a 10.3%YoY rate. German retail sales for September are expected to fall sharply. It’s a pretty quiet day for US data. China: PMIs for October will be released this morning at 09:30 Hong Kong / Singapore time. The data could show a mixed bag of growth and contraction in sub-indices of both manufacturing and non-manufacturing PMIs. There was a long holiday in October, which should lead to increases in retail and travel on a monthly basis. This should also result in stable month-on-month manufacturing even though October is still the peak-export season in China. Adding more complications is the number of covid cases, which climbed towards the end of October and should lead to a fall in activity in the last week of October. Adding up all these factors means there is more uncertainty in the economy. The number of Covid cases has climbed and some infection cases from a Foxconn factory have returned to their hometowns, which may increase the number of Covid cases further in the less healthcare-equipped rural areas. This will drag on production and exports for the economy in November. Depending on the number of Covid cases in big cities and therefore the scale of possible lockdowns, we should be cautious about the growth prospect of the economy in the coming months. Korea: September IP was weaker than expected, and also weaker than what last week’s 3QGDP had suggested. Manufacturing IP contracted -1.8% MoM in September (vs -1.4% revised August, -0.8% market consensus), recording the third monthly drop. Weakness in September was mainly driven by semiconductors (-4.5%) and basic metals (-15.7%). POSCO closed some facilities due to a typhoon in September and expects to gradually recover within a few months. Service sector output, which was the driver of growth, declined -0.3% in September (vs 1.8% in August) with retail/wholesale and health/social welfare down -2.1% and -1.0%, respectively. The forward-looking orders data was a bit mixed. Machinery orders declined in September but still recorded a solid gain in three-month sequential terms. For construction orders, these rebounded sharply in September, mainly led by non-residential construction such as factories, warehouses, and civil engineering. Japan: Monthly activity data has been mixed. September Industrial production declined -1.6%MoM sa in September (vs 3.4% in August, -0.8% market consensus). In contrast, retail sales were stronger than expected (+1.1% in September vs 1.4% in August, 0.8% market consensus) with motor vehicles and household machines up sharply by 11.1% and 14.6% respectively.   India: Fiscal deficit numbers for September are due later today. The deficit tally has been broadly keeping track with what is needed to meet the Government’s 6.4% (GDP) deficit target for the fiscal year, so the appropriate metric here is how they perform relative to last year’s equivalent release, which came in at INR58,852 Crore. Australia: September retail sales rose by 0.6%MoM, higher than expected, and maintaining a strong run of readings. Floods in October in SE Australia may provide a speedbump. But for now, these numbers show few signs that spending is slowing enough to bring prices down.  What to look out for South Korea industrial production (31 October) Japan retail sales (31 October) Australia retail sales (31 October) China PMI manufacturing and non-manufacturing (31 October) Thailand trade (31 October) South Korea trade (1 November) Indonesia CPI inflation (1 November) US ISM manufacturing and JOLTS (1 November) South Korea inflation (2 November) Australia building approvals (2 November) Australia trade balance (2 November) US trade balance, durable goods orders and initial jobless claims (2 November) Japan Jibun PMI (3 November) Philippine trade and inflation (3 November) Thailand CPI inflation (3 November) Singapore retail sales (3 November) US non-farm payrolls (3 November) Read this article on THINK TagsAsia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
China: PMI positively surprises the market

Investors Are Withdrawing Capital From Chinese Equities

Saxo Bank Saxo Bank 31.10.2022 11:37
Summary:  Financial trading firms were going through a boom during the pandemic as trading activity accelerated, but since the economy reopened activity has been declining and the stocks of financial trading firms have underperformed. But last week was a strong rebound week for the industry driven by better than expected Q3 results and an improving outlook. While the industry generally was up 7% last week, Hong Kong Exchanges and Clearing had a terrible week down 15% extending the year's decline to 53% as the market is getting worried about the outlook for the participation of foreign investors in the Chinese equity market following the recent Chinese leadership shuffle. Financial trading firms in comeback as uncertainty drives activity Our financial trading basket was the best performing basket last week rising 7.1% outperforming other strong themes such as NextGen Medicine and Renewable energy. While it was a strong comeback week for financial trading firms the theme has still  had a tough year underperforming the MSCI World Index. Financial trading firms are keeping up with inflation so far growing revenue by 7% y/y although earnings down 3% y/y as wage pressures are impacting margins. Analysts are generally still positive on the industry and the rising interest rate environment should create a tailwind on earnings for these companies. The best performing stock in the basket last was Flow Traders that delivered better than expected Q3 earnings. The medium outlook for the industry is improving as higher volatility in currencies and bonds is typically good for trading activity and the rising interest rates make excess client funds more valuable. After the initial repricing of the equity market in the beginning of the year, the financial trading industry has got back on its feet outperforming the MSCI World Index by 5.7% since mid-July. Since early 2016, the industry has outperformed global equities by 60%. Hong Kong Exchanges & Clearing was caught in the Chinese rout last week Last week was dramatic for Chinese equities due to the significant leadership shuffle in China which we covered in our Monday equity note. The market is judging the leadership shuffle to be long-term negative for the private sector and negative for earnings growth. For an exchange such as Hong Kong Exchanges & Clearing (HKEC) the rout in Chinese equities was bad taking the stock price down 15% during the week. One thing is the short-term interpretation of the leadership shuffle, but the long-term impact on the Chinese equity business is seen quite obvious in the plunging share price of HKEC which is down 53% this year. One of the key drivers of future revenue is participation of foreign investors, but we see signs now that investors are pulling out capital in Chinese equities pushing up the Chinese equity risk premium. Source: https://www.home.saxo/content/articles/equities/weekly-update-saxo-thematic-investing-performance-31102022
Positive Start Expected as Nvidia's Strong Performance Boosts Market Confidence

Dow Jones Saw The Biggest Profits And The German DAX Index Rebound From Declines

Conotoxia Comments Conotoxia Comments 31.10.2022 12:13
October 2022 seems to have brought respite to many asset classes. During this time, the stock, bond or cryptocurrency markets tried to pick up, while the US dollar seemed to lose value at the same time, along with the falling VIX "fear index" contract. Performance of key indices and companies In October,one of the popular futures contracts, the contract for the U.S. Dow Jones Industrial Average index saw the biggest gains. It rose by almost 13 percent during this period. Although the month is not yet over, for the moment, only Verizon ranks in the entire index since the beginning of October with a negative result. On a monthly basis, the decline is 0.92 percent. In contrast, the biggest increase in the index was achieved by Caterpillar (up more than 30 percent). The company reported that sales and revenues in the third quarter of 2022 recorded an annual increase of 21 percent, reaching $15 billion. The company's profit was $2.04 billion, an increase of 43.13 percent compared to the same quarter of the previous year, BBN reported. Operating profit rose 45.73 percent year-on-year to $2.42 billion. Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel engines, industrial gas turbines and diesel-electric locomotives. Source: Conotoxia MT5, Caterpillar, Monthly DAX also with growth in October The second popular instrument, which seemed to rebound from earlier declines, was the contract for the German DAX index. Although emerging macroeconomic forecasts for the German economy appear to be worsening, and the European Central Bank raised interest rates, the DAX rose nearly 10 percent. The company that may have gained the most was Deutsche Bank, as the month's performance was up more than 30 percent by now. The German bank reported its best results since 2016 in October. Net income for the third quarter of 2022 was €6.9 billion, up 15 percent year-on-year and the highest third-quarter income since 2016. The dollar exchange rate fell nearly 1 percent. Market hopes that the U.S. Fed will slow down interest rate hikes at the end of the year and in the first quarter of 2023 may have led the U.S. dollar to fall in October. At the moment, the USD index is trading 0.9 percent lower than at the beginning of the month at 111 points. The EUR/USD exchange rate is near parity at 1.0000, all likely in anticipation of the Fed's November 2 interest rate decision. The market seems to be expecting a 75bp hike to 3.75-4.00 percent, while the end of the hike cycle could be priced in at 4.75-5.00 percent in early 2023. October's biggest declines? It seems that among the popular contracts, the biggest drop in October may be the VIX, which fell 15 percent to 26.86 points this morning. Looking at the chart of the contract showing expected volatility on the S&P500 index, someone could  see that this month's trading may have turned around at a potential resistance level. Source: Conotoxia MT5, VIX, Weekly Will volatility continue at lower levels in November? Here, a lot may depend on the US central bank and events in Eastern Europe. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

On The New York Stock Exchange Much More Securities Fell Than Rose

InstaForex Analysis InstaForex Analysis 01.11.2022 08:09
At the close in the New York Stock Exchange, the Dow Jones fell 0.39%, the S&P 500 fell 0.75% and the NASDAQ Composite fell 1.03%. The Dow Jones The leading gainers among the components of the Dow Jones index today were The Travelers Companies Inc, which gained 2.59 points (1.42%) to close at 184.55. Quotes of Goldman Sachs Group Inc rose by 3.03 points (0.89%), ending trading at 344.85. UnitedHealth Group Incorporated rose 4.11 points or 0.75% to close at 555.35. The losers were shares of Intel Corporation, which lost 0.64 points or 2.20% to end the session at 28.43. Microsoft Corporation was up 1.59% or 3.74 points to close at 232.13, while Dow Inc was down 1.58% or 0.75 points to close at 46.73 . The S&P 500  Leading gainers among the S&P 500 index components in today's trading were Wynn Resorts Limited, which rose 9.61% to hit 63.90, Coterra Energy Inc, which gained 3.49% to close at 31.15, and also shares of DaVita HealthCare Partners Inc, which rose 3.47% to end the session at 72.99. The biggest losers were Global Payments Inc, which shed 8.83% to close at 114.25. Shares of Newell Brands Inc shed 8.24% to end the session at 13.81. Quotes of Meta Platforms Inc decreased in price by 6.09% to 93.16. The NASDAQ  The leading gainers among the components of the NASDAQ Composite in today's trading were Sonnet Biotherapeutics Holdings Inc, which rose 66.38% to 1.93, Acorda Therapeutics Inc, which gained 63.36% to close at 1.07. as well as shares of Shineco Inc, which rose 37.96% to close the session at 1.09. The biggest loser was Y mAbs Therapeutics, which shed 59.80% to close at 3.61. Shares of Tusimple Holdings Inc lost 45.64% to end the session at 3.43. Quotes Bull Horn Holdings Corp. decreased in price by 45.61% to 6.50. The numbers On the New York Stock Exchange, the number of securities that fell in price (1604) exceeded the number of those that closed in positive territory (1472), while quotes of 118 shares remained virtually unchanged. On the NASDAQ stock exchange, papers of 2004 companies fell, 1753 rose, and 165 remained at the level of the previous closing. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.50% to 25.88. Gold Gold futures for December delivery lost 0.53%, or 8.65, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 1.95%, or 1.71, to $86.19 a barrel. Futures for Brent crude for January delivery fell 1.32%, or 1.24, to $92.53 a barrel. Forex Meanwhile, in the Forex market, EUR/USD was down 0.80% to hit 0.99, while USD/JPY was up 0.87% to hit 148.74. Futures on the USD index rose 0.77% to 111.45.   Relevance up to 04:00 2022-11-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/299126
The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

The US Dollar Started The Week Stronger | Expectations For The RBA's Decisions

Saxo Bank Saxo Bank 01.11.2022 08:44
Summary:  A return to hawkish expectations for the FOMC and risk-off from weak China data as well as possible issues in Russia-Ukraine grain deal saw markets tumble on Monday and US 10-year yields reversed back to 4.10%. Dollar strength returned as well, with gains most pronounced against the sterling and yuan. However, demand concerns returned, while oil also retreated with President Biden’s hopes of a windfall tax on profits of US energy companies weighing as well. Gold extended its downtrend with the surge in yields. Reserve Bank of Australia on watch in the day ahead, with some key Japanese names like Toyota and Sony also reporting earnings. What is happening in markets? The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) fall on Monday ahead of Fed, but hold onto monthly gains US stocks fell into the red on their last trading day of the month with end of month rebalancing coming into play, while stocks were also on the back foot as bond yield climbed ahead of Wednesday's Fed decision. Still the S&P500 held onto a monthly gain of 8%, but on Monday the index dropped 0.75%. The Nasdaq fell 1%, but held a 4% October gain. Most Treasury yields rose, with 10-year notes up to around 4.05%, while the dollar climbed against every G-10 partner, save the kiwi. Oil and gold both retreated. Energy shares whipsawed on news that President Joe Biden will call on Congress to consider tax penalties for oil producers accruing record profits. JPMorgan Chase Marko Kolanovic is joining strategists who believe the aggressive Fed hiking is nearing an end. He thinks the Fed will raise rates by 50 basis points in December and pause after one more 25-basis-point hike in the first quarter. Apple (AAPL) shares fell 1.5% with iPhone’s Foxconn plant in central China grappling with virus outbreak.  Fertilizer giant, Archer Daniels (ADM) rose 2.2% with traders expecting higher agricultural prices amid supply concerns from added geopolitical tension. Australia’s ASX200 (ASXSP200.1) futures suggest a 0.15% rise on Tuesday, ahead of the RBA rising rates today The Reserve Bank of Australia is expected to deliver its 2nd straight month of 0.25% hikes at today’s meeting, according to Bloomberg consensus, which will take the cash rate from 2.6% to 2.85%. However it will be a tough decision, with stronger-than-expected third-quarter inflation data from last week, and hot retail and credit data yesterday giving room for a potential 50-bp (0.5%) hike. This could trigger a knee jerk jump in the Aussie dollar vs the US (AUDUSD), however we maintain our bearish view of the AUDUSD given the Fed has more ammo to aggressively rise. Also note, Governor Philip Lowe has regularly wrong-footed forecasts. Still, swaps imply only a 20% chance of an outsized move, and Australian 10-year yields are a full 25 bps below similar-dated Treasuries, meaning there are expectations that RBA will take a softer line than the Fed. The RBA will last month previously noting loan arrears and insolvencies have picked up in Australia, while housing loan commitments declined -  ‘demonstrating the effect of high interest rates on housing’. This demonstrates, the RBA has a tough task of rising rates to slow inflation, without compromising the health of the economy. FX: Dollar returns to gains ahead of FOMC Dollar started the week on a firmer note as WSJ Timiraos comments turned more hawkish over the weekend after dovish Fed expectations possibly went a bit far. The worst performer was GBP, and we had raised concerns yesterday that it was pricing in all the good news so there was scope for disappointment. GBPUSD broke below 1.1500 with EURGBP also reversing back higher to 0.8620 despite EURUSD weakness to sub-0.99. USDJPY rose back above 148.50, with US 10-year Treasury yields touching 4.1% at one point. Japan’s Finance Ministry data showed a record USD 42.8bln was spent on multiple interventions in the FX market last month to attempt to cushion the Yen’s fall. The Chinese yuan continued to slide, USDCNH rose to 7.34 and the onshore spot USDCNY seen close to 15-year highs of 7.30+ at Monday’s close. Crude oil (CLX2 & LCOZ2) worried about oil demand Crude oil prices were lower on Monday as concerns of weaker demand weighed on sentiment with the Fed commentary from whisperer Nick Timiraos shifting towards a hawkish stance again. Meanwhile, China’s PMIs fell below the 50 mark which separates expansion and contraction. On the other hand, OPEC’s World Oil Outlook estimates demand will climb 13% to reach 109.5mb/d in 2035, then hold around that level for another decade and secretary-general Haitham al Ghais said that the oil supply surplus was the main reason for the decision to cut output. There were also some reports suggesting that President Biden is considering a potential windfall tax on US energy companies. WTI futures slid towards $86/barrel. Gold (XAUUSD) in a downtrend Gold (XAUUSD) fell for a third consecutive day approaching the recent support area $1,625 as US dollar broadly strengthened with 10 year treasury yield touching 4.10% at one point on Monday. With the Fed poised for another 75bps rate hike this week, pressure on gold could increase, but we continue to see fundamental strength in gold especially given the higher-for-longer inflation expectation. But as a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called.   What to consider? What next for the RBA after peak hawkishness? The Reserve Bank of Australia meets today and is expected to continue with a smaller pace of rate hikes with 25bps priced in despite a hotter than expected Q3 CPI. Q3 CPI rose by 7.3% YoY from previous print of 6.1%, coming in higher than expectations. RBA’s preferred Trimmed Mean CPI was seen at 6.1% vs. expected 5.6% (prev. 4.9%), while PPI also accelerated in Q3 to 6.4% from 5.6% previously. There are, therefore, some calls for an outsized 50bps rate hike as well as inflation continues to inch above the central bank’s 2-3% target range. An update on the latest growth and inflation projections will also be seen along with today’s rate decision. AUDUSD will need a clearly larger than expected rate hike of 50bps, or a very hawkish commentary with a 25bps rate hike to make any substantial gains. If RBA tows the line, focus shifts to USD and the Fed meeting on Wednesday. AUDNZD is also key to watch, with the 1.1000 handle on test. Eurozone GDP and inflation prints continue to make the ECB’s job tougher Eurozone inflation data for October YoY printed another record as it soared to 10.7% (prev. 9.9%), and well above the median Bloomberg expectation of 10.3%. Meanwhile, Q3 GDP growth slowed to 0.2% QoQ or 2.1% YoY (prev. 0.8% QoQ, 4.1% YoY). While mild whether and full storage hasn’t unleashed the full effects of energy shortages this year, the threat continues to loom and this could mean the macro story could deteriorate further. China PMIs and Hong Kong GDP growth send red flags China’s manufacturing and non-manufacturing PMI both plunged into contractionary territory in October with Covid curbs likely continuing to weigh on demand and manufacturing ahead of the CCP meeting. China's official manufacturing PMI declined to 49.2 in October after a brief rebound to 50.1 in September following a two-month decline. Meanwhile, services activity fell to 48.7 in October from 50.6 last month. Also, Hong Kong recorded its worst quarter in over two years, with Q3 GDP growth coming in at -4.5% YoY vs. expectations of -0.8%. The QoQ growth was also in negative territory at -2.6%, signalling recession concerns if such a performance continues despite the economy’s reopening. Key Japanese earnings on watch Big Japanese names Toyota (7203) and Sony (6758) report earnings today. While high inflation and interest rates remain a key consideration to watch for consumer spending trends, the effect of a weak yen will also be key to consider. Sony will be key to watch after the US tech tumble last week, and consensus is looking for a 10% drop in its operating profit from a year ago. Toyoto will likely continue to highlight the supply chain pressures, but possible buyback announcements could support.   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-1-nov-01112022
China's Position On The Russo-Ukrainian War Confirmed At The G20 Meeting

Positive Signals In Global Markets Helped The Asian Stock Market

TeleTrade Comments TeleTrade Comments 01.11.2022 09:15
Chinese equities are enjoying significant gains after upbeat Caixin Manufacturing PMI data. The market mood has turned cheerful which has weighed on the DXY. Oil prices have picked bids despite the soaring fears of a slowdown in overall demand. Markets in the Asian domain have extended their recovery on Tuesday amid positive cues from global markets. More traction in risk-perceived assets has trimmed the US dollar index (DXY) appeal. The DXY has slipped to near 111.30 as investors have shrugged off uncertainty ahead of the interest rate decision by the Federal Reserve (Fed). At the press time, Japan’s Nikkei225 added 0.10%, ChinaA50 soared 2.60%, Hang Seng jumped 2.37%, and Nifty50 gained 0.74%. Chinese equities are having a ball after the release of the upbeat Caixin Manufacturing PMI data. The economic data landed higher at 49.2 vs. the projections of 49.0 and the prior release of 48.1. The PMI data has remained solid despite the continuation of the no-tolerance approach to Covid-19 by the Chinese administration. Also, the official manufacturing data from the China National Bureau of Statistics (NBS) was weaker than projections. Outside Asia, Reserve Bank of Australia (RBA) Governor Philip Lowe hiked its Official Cash Rate (OCR) by 25 basis points (bps) for the second time to 2.85%. Australian central bank policymakers have adopted a less hawkish approach, keeping in mind that economic prospects could not be sacrificed entirely in achieving price stability. On the oil front, oil prices have rebounded firmly after sensing buying interest around $85.00. Black gold has witnessed demand despite a fresh rate hike cycle by western central banks. This week, the Bank of England (BOE) and the Fed will announce their monetary policies. As per the projections, the central banks will announce a rate hike of 75 bps. This may trigger fears of a slowdown in overall demand and may also dampen the demand for oil.
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

US 10-Y Treasury Yields Have Eased Back | Airbnb Expects Revenues To Increase

Saxo Bank Saxo Bank 01.11.2022 09:42
Summary:  Risk sentiment remains near the local highs heading into tomorrow’s FOMC meeting, where the market is hoping for guidance that suggests a downshift in the pace of tightening. Another micro-hike of 25 basis points from the RBA increases the sense that more central banks are set to slow their fight on inflation via rate hikes. Elsewhere, unconfirmed stories swirling overnight in China that that Covid restrictions are set to be lifted saw a potent rally in Chinese equities.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Momentum is trying to come back into US equities after yesterday’s retreat with S&P 500 futures trading around the 3,902 level. A higher close today could set in motion an extended rally into tomorrow’s FOMC rate decision lifting expectations for the Fed to signal a slowdown in rate increases. Given the latest macro figures we have gotten this might still be too early for the market to expect this, but if the Fed confirms the ‘peak hawkishness’ narrative then the 4,000 level in the S&P 500 futures is not outrageous. Euro STOXX 50 (EU50.I) Strong earnings from BP lifting sentiment in early trading in addition to positive spillover effects from the Chinese equity session seeing Hang Seng futures 6.1% higher on unconfirmed news that Chinese policymakers are considering phasing out its strict Covid policy. STOXX 50 futures are pushing higher this morning trading around the 3,649 level, which is the highest level since 13 September. The market is increasingly adjusting to the ‘peak hawkishness’ theme and if momentum extends here the 200-day moving average at the 3,675 level is the big area to watch out for. FX: USD on its back foot as market hopes for dovish downshift at FOMC meeting The market’s hope for a dovish downshift in the Fed’s guidance is a bit nuanced, as the expectations for the coming handful of meetings are back near the cycle highs, with the Fed funds priced to reach nearly 5.00% at the March or May FOMC meeting next year, while expectations farther out into next year and in 2024 are 25 or more basis points from the cycle highs. But with the USD on its back-foot and risk sentiment clearly unafraid of the Fed at the moment, the surprise side this Wednesday would be a stern message from the Fed that checks sentiment. Watching parity in EURUSD as an important psychological barometer, 1.1500 in GBPUSD, which was briefly broken yesterday, and eventually 145.00 in USDJPY and 7.25 area in USDCNH if the sudden USD drop overnight on hopes that China Covid policy is set for relaxation sticks and follows through. HG Copper (HGZ2) recovered all of Monday’s losses during Asian trading ...partly driven by a report that a “Reopening Committee” has been formed led by a Politburo Standing Member. The committee is reviewing data to assess various opening scenarios, targeting a March 2023 reopening. In addition to a weakening dollar and demand towards renewable energy, the copper market is being supported by persistent supply challenges highlighted by top supplier Codelco lowering its annual guidance for the second time in three months. The futures price remains stuck within a narrowing trading around $3.45 and looks poised for a breakout soon. Given the latest developments the risk of an upside break has risen. Gold (XAUUSD) trades higher … after falling for a third consecutive day on Monday, thereby extending its monthly losing streak to seven, the longest since the late 1960’s. The market bounced with support from lower bond yields and a softer dollar but as a minimum the yellow metal needs to break above $1730 before an end to the month-long downtrend can be called. The WGC reported that central banks bought a record 400 tons during the third quarter, more than quadruple the amount of a year earlier, thereby more than offsetting the 227 tons reduction in holdings across bullion-backed ETFs Crude oil (CLZ2 & LCOZ2) Crude oil trades higher within the established range after advancing with the broader market overnight as OPEC+ begins to cut production by around 1.2 million barrels per day, a decision that has been driven by excess supply according to its secretary-general. OPEC also released its World Oil Outlook in which they estimate demand will climb 13% to reach 109.5mb/d in 2035, then hold around that level for another decade. A weaker global economic growth hurting demand, OPEC+ production cuts and EU sanctions on Russian crude from December have all clouded the outlook, thereby supporting the current rangebound price action. Focus on Wednesday’s FOMC meeting and its potential impact on the dollar. Brent has since the September low several times been bouncing off trendline support, currently at $92 with resistance at $97.25 and $98.75. US treasuries (TLT, IEF) US 10-year treasury yields have eased back toward 4.00% after briefly touching above 4.1% yesterday. The focus on continued strength in bond markets will be the 3.90% pivot low yield posted last week, which could open up for a run to the 3.50% area, but would such a move represent a flight to safety (weak risk sentiment) or be celebrated as a sign of easing pressure on asset valuations. The key two event risks are the FOMC meeting Wednesday and how the yield curve reacts as well as the US jobs report on Friday, with the ISM Services Thursday also an interesting data point. What is going on? RBA hikes 25 bps, ups inflation forecasts, downgrades GDP and remains dovish Will the RBA stop hikes early? The RBA hiked the cash rate by 25bps (0.25%) as most expected to 2.85%, maintaining its dovish stance and bordering on restrictive, as it again acknowledged tighter financial conditions are yet to be felt in mortgage payments, but higher rates and inflation have put pressure on household budgets, causing a small amount of loan arrears and insolvencies. This rate hike cycle since May, has been the second fastest in history. We note the RBA was the first major central bank to under-deliver on rate hike expectations last month. The RBA raised its year-end 2022 CPI forecast from 7.8% to around 8%. The RBA revised its GDP forecast down, with growth of around 3% expected this year and 1.5% in 2023 and 2024. AUD knee-jerked lower on the decision, but recovered most of the lost ground against a stumbling US dollar in Asia, while sticking near local lows against the NZD. BP had exceptional Q3 in gas marketing and trading The European oil and gas major is lifting sentiment in Europe with strong net income beating expectations while cash flow generation is coming in below estimates. The energy company is increasing its buyback programme further by $2.5bn. Toyota down 2% on big operating income miss Japan’s largest carmaker is lowering its fiscal year production target as Volkswagen also recently did while posting a Q2 operating income of JPY 563bn vs JPY 765bn due to soaring materials costs and one-off items. The lower production target comes as the industry is still facing a chips shortage. UK Treasury says all Britons will have to pay more tax Chancellor Hunt said that “those with the broadest shoulders should be asked to bear the greatest burden” as the clear message from the new Sunak government, after the previous Truss-Kwarteng team triggered chaos in UK Gilts and sterling, is that financial stability is priority number one. The particulars of the new budget and policy will be laid out in a statement on November 17. US President Biden rails against oil companies not reinvesting profits, promising to raise taxes on profits that are “windfall of war”... ... saying that “The oil industry has not met its commitment to invest in America.” Such a move would require a bill to pass through Congress, however, which would likely prove difficult after the mid-term elections next week, if projections of a strong GOP showing flip the House and possibly the Senate into their hands, making for a largely lame-duck presidency for the next two years. Eurozone GDP and inflation prints continue to make the ECB’s job tougher Eurozone inflation data for October YoY printed another record as it soared to 10.7% (prev. 9.9%), and well above the median Bloomberg expectation of 10.3%. Meanwhile, Q3 GDP growth slowed to 0.2% QoQ or 2.1% YoY (prev. 0.8% QoQ, 4.1% YoY). While mild weather and full storage has not unleashed the full effects of energy shortages this year, the threat continues to loom, and this could mean the macro story could deteriorate further. Japan spent a record $42 billion to defend JPY in October The Finance Ministry is said to have another 10 trillion yen, or about $68 billion in ready cash left to throw after defending the JPY if pressure mounts again, although Japan’s central bank reserves are many, many multiples of these amounts, currently at $1.24 trillion. What are we watching next? Another small hike from a central bank (the RBA) encourages speculation of dovish shift at the FOMC meeting on Wednesday A number of recent central bank meetings of late, including the latest RBA meeting overnight, which saw Australia’s central bank only hiking rates 25 basis points for the second consecutive time, encourage the notion that the Fed is set for a dovish shift at this Wednesday’s FOMC meeting. Working against that narrative have been a number of possible “leaks” by journalists at key publications thought to have strong Fed sources, including the WSJ’s Nick Timiraos and a NY Times reporter, whose latest musings suggest that the Fed is not set to indicate any backing down from its hawkish message. An overtly defensive and hawkish FOMC meeting tomorrow could badly shock the market, which coming into this morning, at least, seems hopeful that the Fed is set to downshift its tightening guidance this week. Or at least, given that Fed expectations for the next six months or so are within a few basis points of the cycle highs, isn’t obviously afraid of the message the Fed is set to deliver: equities are up near the local highs after a ripping rally off October lows. Earnings to watch Today’s US earnings focus is AMD, Airbnb, and Uber with analysts expecting revenue growth of 31% y/y for AMD but EPS down 5% y/y as input pressures are eating up growth coming from strong product introductions. Airbnb is still riding the reopening tailwind with revenue expected to increase 26% y/y in Q3 and EBITDA expanding significantly to $1.39bn up from $888mn a year ago. Uber has a goal of becoming self-funded by 2024 and could achieve this based on the current trajectory. The company is expected to deliver revenue growth of 67% y/y and EPS of $-0.06 up from $-0.42 a year ago. Today: Toyota Motor, Sony, BP, Eli Lilly, Pfizer, AMD, Mondelez, Airbnb, Uber Wednesday: Suncor Energy, Nutrien, Novo Nordisk, Maersk, Vestas Wind Systems, GSK, Electronic Arts, Qualcomm, CVS Health, Estee Lauder, Booking, Fortinet, Ferrari, Albemarle Thursday: Verbund, Barrick Gold, Orsted, Novozymes, BNP Paribas, BMW, Enel, ING Groep, DBS Group, ConocoPhillips, Amgen, PayPal, Starbucks, Regeneron Pharmaceuticals, EOG Resources, Moderna, MercadoLibre, Block, Cloudflare, Coinbase Friday: Enbridge, Societe Generale, Intesa Sanpaolo, SoftBank, Amadeus IT Group, Duke Energy, Economic calendar highlights for today (times GMT) 0820 – Australia RBA Governor Lowe to speak 1400 – US Sep. JOLTS Job Openings 1400 – US Oct. ISM Manufacturing 2000 – New Zealand RBNZ publishes Financial Stability Report 2030 – API Weekly Report on US Oil Inventories 2145 – New Zealand Q3 Average Hourly Earnings 2145 – New Zealand Q3 Employment Change/Unemployment Rate 2230 – Canada Bank of Canada Governor Macklem to speak 0030 – Australia Sep. Building Approvals Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-1-2022-01112022
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

The Close On The New York Stock Exchange Was Red

InstaForex Analysis InstaForex Analysis 02.11.2022 08:17
At closing time on the New York Stock Exchange, the Dow Jones was down 0.24%, the S&P 500 was down 0.41% and the NASDAQ Composite was down 0.89%. Dow Jones The leaders among Dow Jones index components in today's trading were shares of JPMorgan Chase & Co. which gained 2.28p (1.81%) to close at 128.16. Nike Inc rose 1.09 pct (1.18%) to close at 93.77. Goldman Sachs Group Inc rose 3.94p (1.14%) to close at 348.45. The least gainers were shares of Apple Inc, which fell 2.69p (1.75%) to close the session at 150.65. Salesforce Inc shares rose 2.79p (1.72%) to close at 159.80, while Microsoft Corporation dropped 3.96p (1.71%) to close at 228.17 S&P 500 The top gainers among S&P 500 index components in today's trading were ABIOMED Inc which gained 49.88% to 377.82, IDEXX Laboratories Inc which gained 9.80% to close at 394.93, and Hologic Inc which gained 9.34% to end the session at 74.13. Catalent Inc shares were the fallers, down 24.62% to close at 49.55. Shares of Zebra Technologies Corporation lost 15.86% and ended the session at 238.30. Ecolab Inc dropped 8.98% to 142.96. NASDAQ  The gainers among the components of the NASDAQ Composite index in today's trading were shares of ABIOMED Inc. which gained 49.88% to 377.82, Sonnet Biotherapeutics Holdings Inc. which gained 46.63% to close at 2.83 and shares of NLS Pharmaceutics AG which gained 44.00% to close the session at 0.74. Varonis Systems shares were the fallers, dropping 35.49% to close at 17.27. Shares of China Liberal Education Holdings lost 27.39% to end the session at 1.14. Acorda Therapeutics Inc. was down 25.22% to 0.80. On the NYSE, 1,960 securities gained more than 1,172 which closed negative and 95 were flat. On NASDAQ, 2,101 stocks gained in value, 1,680 declined, and 194 remained flat. The CBOE Volatility Index, which is based on the S&P 500 options trade, fell 0.27% to 25.81. Gold Gold futures for December delivery added 0.55%, or 8.95, to $1.00 per troy ounce. In other commodities, December WTI crude oil futures rose 2.02%, or 1.75, to $88.28 a barrel. January Brent crude futures traded up 1.83%, or 1.70, to $94.51 per barrel. FX Market Meanwhile, on the Forex market, EUR/USD remained unchanged 0.08% to 0.99, while USD/JPY dropped 0.33% to 148.23. The USD index futures rose 0.02% to 111.44.     Relevance up to 04:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/299302
Hungary's Budget Deficit Grows, Raising Concerns Over Fiscal Targets

Operating Profit Beat Of Sony Was Broad-Based | A Sharp Increase In Base Metals

Saxo Bank Saxo Bank 02.11.2022 09:01
Summary:  Higher-than-expected US job openings data and a still-strong ISM manufacturing print pushed the US yields higher as terminal Fed pricing topped 5% again. This saw equity markets on the backfoot ahead of the Fed meeting scheduled for later today, and mixed earnings results from AMD and Airbnb also underpinned, while Sony jumped higher as FX effects supported better than expected results and improved guidance. Shares of Asian mining companies tied to nickel and copper may move after the metals rallied on speculation Beijing will make preparations to ease China’s stringent Covid rules. NZ jobs gains may support more RBNZ rate hikes but NZD remained cautious. What is happening in markets? The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) fall on solid labor market data, which supports an aggressive Fed hike path The US major indices fell on Tuesday, with the S&P500 ending 0.4% lower, after erasing the 1% earlier gain, while the Nasdaq 100 met a similar fate before ending 0.9% lower. Two-year Treasury US yields , which are most sensitive to imminent Fed moves, topped 4.5% after sliding as much as eight basis points earlier in the day. The added volatility and risk-off mode came after US job openings unexpectedly rebounded in September amid low unemployment. This will likely fuel further wage gains (inflation), and it means the Fed will likely hike by 75-bp (0.75%). But keep in mind, any hint of a dovish pivot on Wednesday could perhaps prompt an outsized market reaction and risk on rally. Big tech weighed on equities, with Apple (AAPL) down almost 2%, and Amazon (AMZN) falling 5.5%, taking its value below $1 trillion for the first time since 2020. On the upside, investment banks did well include JP Morgan (JPM) up 1.8% and Goldman (GS) up 1.2%. While in the S&P500 Abiomed (ABMD) shares rose 50% with Johnson & Johnson, announcing it will takeover the firm for $17.3 billion, building on its portfolio of technology assisting heart function. After market, Advanced Micro Devices (AMD) shares rose almost 5% after its profits beat expectations and it signaled that inroads in the server chip market will continue to bolster its finances. The Dow Jones traded near a resistance level, that saw the index halt a few rally attempts, in the past few months.  China/HK stocks surge on unofficial reports that China may be looking to exit Zero Covid The CSI300 surged over 3.5% on Tuesday and the HSI rose by over 5% on speculation that Beijing is preparing to phase out Covid Zero policies, even as the country’s Foreign Ministry said it was unaware of such a plan. Unverified social media posts circulated online on Tuesday showed a committee was being formed to assess scenarios on how to exit Covid Zero. Internet giants Meituan and Tencent were some of the biggest gainers. While the reports may be unconfirmed for now, it gives a signal on how strong a recovery can come through if China alters its Zero Covid policy stance at some point. Australia’s ASX200 (ASXSP200.1) futures suggest a flat start, but focus will be on copper and nickel giants, and companies with USD exposure Focus will be on nickel and copper companies including Nickel Mines (NIC), Oz Minerals (OZL), and BHP (BHP), which are expected to gain attention and possibly move higher after the commodities prices rallied on speculation Beijing could make preparations to ease China’s stringent Covid rules, which have kept commodities prices underwater. BHP shares rose 3.7% in New York, and the listed entity in Australia is expected to likely follow. Focus will also be in Amcor (AMC) which has just reported financial results, declaring a stronger dividend that expected, stronger EPS than expected, but weaker than expected income, weighed down by the strength of the US dollar. The global packaging giant sees its full year financial results being negatively impacted by the US dollar by 5%, up from its prior 2% estimate. NZDUSD brushes off a broadly positive employment report NZ jobs data for Q2 was rather mixed with unemployment rate still near record lows, while rising slightly to 3.3% and wage growth of 2.6% YoY much higher than last month’s 2.3%. Employment change slowed slightly to 1.2% YoY but was far better than expectations of 0.3%, and also up 1.3% QoQ. While these numbers underscore a case for still-higher inflation and the need for further rate hikes from the RBNZ, NZD remained largely unchanged in early Asian trading hours after the release. NZDUSD eased from overnight highs of 0.5900 to trade around 0.584, while AUDNZD is testing the downside at 1.094 after breaking below 1.10 yesterday following a dovish RBA. While NZDUSD will continue to focus on what the Fed path brings, there may be more downside in store for AUDNZD amid the policy divergence of the RBA and RBNZ, unless one of the two things change: 1. RBNZ pivots to a pace of smaller rate hikes, or 2. China sends signals of opening up. This will bring the focus back on current account differentials which favour the AUD over the NZD. RBNZ’s financial stability report also highlighted some concerns from higher interest rates on consumption and new residential construction. Metals run higher on China speculation Copper and nickel led a surge in base metals on unconfirmed speculation Beijing is preparing to ease Covid rules, even as these reports were later denied by Chinese Foreign Ministry official. This also brought the focus back on supply issues in Copper, with inventories running low on exchanges. LME Nickel was over 8% higher as well, along with Zinc and Aluminium as well. Iron ore (SCOA) moved up slightly as a result, adding 0.3% to $78.35. Gold (XAUUSD) rose back towards $1650 but higher bond yields continue to haunt especially ahead of the critical Fed meeting. Silver, enjoying a trifecta of support from rising gold and copper as well as the weaker dollar, traded up to once again challenging resistance at $20/oz. A break may bring the key $21.14 back into focus. Crude oil (CLX2 & LCOZ2) Oil prices also gained on the China news, while a weaker USD up until the release of the US job openings or the ISM data also supported gains in oil. OPEC+ production cuts continue to keep the supply outlook tight for the oil market, but the overall sentiment is muddled by weakening global demand concerns and also the EU sanctions on Russian crude that are set to begin in December. WTI futures were seen rising towards $89/barrel while Brent futures were close to $95.   What to consider? US job openings and ISM manufacturing complicate Fed’s message US job openings saw an unexpected rebound in September amid low unemployment, suggesting more wage gains could be in store. JOLTS job openings came in higher at 10.7 million in September from a revised 10.3 million in August. This likely thrashes expectations of any material downshift from the Fed after today’s widely expected 75bps increase. Meanwhile, October's ISM manufacturing index also remained in expansion at 50.2, albeit falling from last month’s 50.9. However, disinflationary trends were emphasised as the index of prices paid fell to an over 2-year low. Still, sticky shelter and services inflation remains materially high suggest still-higher interest rates remain on the horizon. Terminal rate pricing for Fed funds futures has picked up again to 5% levels, and it would be hard for the Fed to push it any higher at this point, but what it can clearly hint at today is pushing out of the rate cut expectations for next year. Read our full FOMC preview here for further insights. Lack of insurance halted UN Black Sea shipments, but progress being made The UN halted grain shipments from Ukraine's Black Sea ports on Wednesday, after Russia warned ships weren't safe using the route and demanded guarantees from Ukraine. However, reports suggested early on Wednesday that an agreement had been reached and ships will start to sail again from Thursday, as pressure on Russia continues to build. We continue to watch crop and fertilizer prices, as a meaningful reversal could come through if we see improving shipments across the Black Sea region. RBA ups inflation forecasts, downgrades GPD, remains dovish. Possibly market implications if rate hikes stop early, as they have historical The RBA hiked the cash rate by 25bps (0.25%) as expected to 2.85%, maintaining its dovish stance and bordering on restrictive, as it again acknowledged tighter financial conditions are yet to be felt in mortgage payments, but higher rates and inflation has put pressure on household budgets and caused a small amount of loan arrears and insolvencies. The RBA’s rate hike cycle since May, has been the second fastest in history and we also note the RBA was the first major central bank to under-deliver on rate hike expectations (last month). Also consider, what’s ahead. The RBA has a history of stopping rate hikes early, before CPI peaked in YoY terms. Over the last 30 years the RBA started easing ‘early’ and cut rates despite headline CPI staying above its 2-3% target. So, could the RBA replay this trend? We think so. The RBA rose its 2022 CPI forecast to around 8%, up from 7.8%. Meaning, the Q4 CPI read could print between 7.75% and 8.25%. The RBA downgraded its GDP forecasts, only expecting 3% this year and 1½ per cent in 2023 and 2024. If the RBA makes any hint of a becoming even more dovish at their next meeting, it could perhaps prompt an outsized market reaction in the ASX200 and fuel a risk on rally. Imminently, in FX, the AUDUSD is on watch ahead of the Fed’s hike on Wednesday, and could succumb to further selling if the Fed hikes by 0.75%. Another pair under pressure is the AUDNZD.  AMD earnings supported by servers despite weak PC sales Advanced Micro Devices rose in the after-hour trading as it reported better than estimated Q3 earnings, although issuing guidance that missed analysts’ expectations. EPS came in $0.67 vs estimated $0.65, revenue $5.57B vs estimated $5.62B. Guidance suggested AMD is expecting strong growth in its server chip business in the coming quarters. Q3 results were in-line with a warning issued by AMD on October 6 which helped to reset expectations, as weak PC sales continued to underpin. Airbnb drops on disappointing guidance Airbnb reported its highest revenue and most profitable quarter but a muted Q4 outlook as consumer preferences are shifting back to cities which tend to have lower rates based on smaller sized spaces. Q3 revenue rose 29% to $2.88B, estimated $2.84B. Net profit rose 45.6% to $1.21B. But the company said it expected bookings to moderate after a bumper third quarter. Sony surges on profit beat Weak yen propped up revenues for Sony and also nudged up the fiscal year profit outlook, pushing shares higher in early trading. Q2 sales came in at 2.75tr yen, est. 2.67 tr yen while operating income was 344bn yen vs. 280.66bn yen expected. Operating profit beat was broad-based, except in games.   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-2-nov-02112022
The China’s Covid Containment Continued To Negatively Impact The Output At The End Of 2022

Chinese Stock Indices Are Showing An Increase

TeleTrade Comments TeleTrade Comments 02.11.2022 09:14
Asia-Pacific shares waver as risk-positive headlines from China jostle with pre-Fed anxiety. NZX 50 bucks the trend amid increasing hawkish bets on RBNZ. Yields struggle as strong US data favor Fed hawkish but 75 bps rate hike is priced-in. Clues for Fed’s December rate hike will be crucial to watch during today’s FOMC. Asian equity traders remain cautiously optimistic even as the pre-Fed anxiety challenges the bulls during early Wednesday. The underlying reasons could be linked to the latest headlines from China and the chatters that the US Federal Reserve (Fed) will ease on rate hikes from December. The Governor of the People’s Bank of China (PBOC), Yi Gang, recently crossed wires and stated that China's economy remains broadly on track. “We hope the housing market can achieve a soft landing,” added the policymaker. Additionally, an official from the China Banking and Insurance Regulatory Commission (CBIRC) also helped improve the mood while saying that the property sector is now "stable". On the same line could be the Bank of Japan (BOJ) Governor Haruhiko Kuroda’s defense of the easy money policies. Amid these plays, MSCI’s index of Asia-Pacific shares ex-Japan rises 2.0% whereas Nikkei 225 remains indecisive at around 27,660. Moving on, Chinese equity benchmarks also print gains of around 1.0% and more, which in turn helps Australia’s ASX 200 print mild gains despite downside Aussie data. Elsewhere, New Zealand’s NZX 50 dropped 0.80% intraday after the nation’s third quarter (Q3) employment numbers came in stronger enough to keep the Reserve Bank of New Zealand (RBNZ) hawks on the table. On a broader front, The US 10-year Treasury yields remain sidelined near 4.05% at the latest as traders remain divided over the US central bank’s next move given the 75 bps rate hike and hopes favoring easy rate lifts from December. While portraying the mood, S&P 500 Futures snap a two-day downtrend to print a 0.20% intraday upside by the press time. It should be noted that the firmer US data and recent fears over Taiwan join the Fed policymakers’ readiness for a 75 bps rate lift to challenge the market sentiment, even if the US Dollar Index (DXY) remains pressured. Amid these plays, the prices of gold and crude oil remain firmer. Moving on, traders will pay attention to how well the Fed can defend the hawks even as the 75 bps rate hike is already priced in. Also, the clues for December’s rate lift will be closely observed for clear directions. Also read: Fed November Preview: Is it time for a dovish signal?
Bank of England survey highlights easing price pressures

The Bank Of England (BoE) Starts Selling Bonds | Airbnb Down, Sony Up

Swissquote Bank Swissquote Bank 02.11.2022 11:50
Jay Powell will probably hammer the dovish hopes, and the latest risk rally when he speaks following the FOMC decision today. Fed In preparation for an unpleasantly hawkish Fed statement today, the US 3-month yield spiked above the 4.20% mark, the level it was normally supposed to be in 18 months, the 2-year yield returned above the 4.50% mark, the US dollar index advanced and the US equities sold off, as yields jumped. The ADP report is due a couple of hours before the Fed decision, and is expected to have eased below 200’000 in October. Any positive surprise will likely further boost the Fed hawks, and dampen the mood in risk assets. China In China, stocks extend gains on an unverified social media post that China will end its Covid measures. The Chinese foreign ministry spokesman said he was unaware of the plan. Disneyland in Shanghai was shut with people in it, after a Covid case was found in the park… I wouldn’t cry victory just yet! UK In Britain, the first day of bond selling from the Bank of England was a success. The BoE sold 1$750 million worth of bonds, demand exceeded offer, gilt yields pulled lower and sterling was steady. Airbnb Airbnb fell 5% post-market on disappointing Q4 outlook, Sony jumped near 10% in NY as softer yen helped boosting sales, BP announced the second biggest quarterly results, while Abiomed jumped 50% after Johnson & Johnson announced to buy the company. Watch the full episode to find out more! 0:00 Intro 0:18 Will Powell save the risk rally? 2:22 Market update 4:17 Oil stocks extend rally, BP announce strong profits 5:45 Airbnb down, Sony & Abiomed up 7:11 BoE starts selling bonds successfully 8:42 EUR, XAU faith in Powell’s hands… Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #rate #decision #USD #ADP #US #jobs #report #crudeoil #ExxonMobil #Chevron #BP #China #covidzero #UK #QT #GBP #BoE #Sunak #EUR #XAU #Sony #Abiomed #JohnsonJohnson #Airnbn #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___  Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
The Gold Rally Is Continuing To Stall, This Could Be A Good Year For Crude Oil

Can We See An Improvement In Supplies In The Black Sea Region? | Crude Oil Is Growing

Saxo Bank Saxo Bank 02.11.2022 11:57
Summary:  A surprisingly strong survey of US job openings yesterday suggests that the US labor market remains extremely tight, potentially continuing to feed inflationary pressures. Today sees the latest FOMC meeting, at which the Fed will have to grapple with guidance and whether to flag the much-anticipated possible downshift from 75 basis point hikes at the December meeting. Given the recent easing of financial conditions and strong risk sentiment, the Fed may try to lean against the market and hawkishly keep all options on the table. Industrial metals run higher on speculation China is preparing to ease Covid rules.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The fear of recession has eased quite a bit in October and as a result equities have rallied from their lows in October. S&P 500 futures are trading around the 3,868 level this morning as the US 10-year yield has moved higher above 4% again. The big event is tonight’s FOMC rate decision which will prove to be a delicate balancing act for the Fed keeping financial conditions tight enough but smooth the transition to this higher level of interest rates without breaking the market. If the market interprets a dovish tilt tonight the 4,000 level is quickly the main focus point in the S&P 500 futures. Euro STOXX 50 (EU50.I) STOXX 50 futures touched the 200-day moving average yesterday before retreating, but this morning the index futures are continuing higher trading around the 3,661 level, which is just below the 200-day moving average. The 3,800 level in STOXX 50 futures could be the next big level to watch if momentum continues. European equities are enjoying tailwinds from easing energy and electricity markets and better than expected GDP reports in Q3 showing that the European economy can absorb the input cost shocks for now. FX: USD rallies on very strong JOLTS survey, eyes FOMC The greenback rebounded yesterday on the very strong September JOLTS jobs openings survey, which jumped sharply from the large August dip (see more below), helping US treasury yields back higher. See the FOMC meeting preview under What are we watching next? below. Today and in the wake of the important US jobs data tomorrow, the pivotal areas for EURUSD are perhaps 0.9850 and parity on the daily/weekly close, for GBPUSD, the 1.1400-1.1500 area is the zone of contention, and in AUDUSD, 0.6350-0.6530. USDJPY will be sensitive to any sharp move in US treasury yields, leaning toward 150.00 if yields jump in the wake of tomorrow’s US jobs report or challenging 145.00 if the Fed fails to surprise hawkish today and the jobs data is weak. Gold (XAUUSD) Gold reached $1657 before running into sellers as bond yields rose following stronger US economic data. The dollar and yields developments continue to haunt the metal, especially ahead of today’s critical Fed meeting. Silver, initially enjoying a trifecta of support from rising gold and copper as well as the weaker dollar, traded up to once again challenge resistance at $20/oz before running out of steam. Crude oil (CLZ2 & LCOZ2) Crude oil trades higher for a second day with WTI challenging a recent high at $90 and Brent moving closer to $97.25 resistance. Oil prices initially received a boost from China reopening speculation, the weaker dollar and OPEC+ production cuts before extending gains after the API reported a bumper 6.5-million-barrel drop in crude inventories. Apart from today’s official inventory report from the EIA, crude oil traders will turn their attention to today’s FOMC meeting given the potential impact the rate decision and comments may have on the dollar and the general level of risk sentiment. US treasuries (TLT, IEF) The key US 10-year treasury yields pulled back above the important 4.00% level after the strong September jobs openings survey out of the US yesterday, but far more important are today’s FOMC meeting and further incoming data, discussed below. The recent price action makes it clear that the 3.90% area is important resistance for bond yields and at the shorter end of the curve, the 5.00% level will be an important focus, given that the market has been unwilling to take Fed expectations more than a couple of basis points beyond that level as it continues to see the Fed cutting rates by the end of next year. What is going on? Metals run higher on China speculation Copper and nickel led a surge in base metals on speculation - which was later denied - that Beijing is preparing to ease Covid rules. However, metals held gains after China’s outgoing premier Li Keqiang said China will strive for a "better" economic outcome and promote stable, healthy and sustainable development, saying China’s economy is showing signs of stabilizing, as well as “rebounding momentum" thanks to stimulus. Developments showing the potential support for industrial metals when restrictions are being lifted, and it brought the focus back on supply issues in Copper, with inventories running low on exchanges and major producers struggling to meet their production targets. The BCOM Metal index jumped 3.4% with steel and iron ore prices also receiving a bid. HG copper’s further advance will be challenged by multiple resistance levels between $3.55 and $3.78. European earnings This morning we have got strong results from Novo Nordisk, Maersk, and GSK, while the wind turbine maker Vestas misses big on revenue and EBIT. Vestas is also adjusting its FY EBIT to –5% from previously –5% to 0%. Novo Nordisk reports Q3 revenue of DKK 45.6bn vs est. DKK 44.4bn and EBIT of DKK 20.2bn vs est. DKK 19.2bn in addition to increase its sales forecast due to strong demand for its obesity drug Wegony. Maersk is still enjoying strong earnings beating estimates on EBIT in Q3, but the container shipping company is lowering its forecast for container volume and in general the market is expecting a slowdown in 2023. US job openings and ISM manufacturing complicate Fed’s message US job openings saw an unexpected rebound in September amid low unemployment, suggesting more wage gains could be in store. JOLTS job openings came in higher at 10.7 million in September from a revised 10.3 million in August. This likely thrashes expectations of any material downshift from the Fed after today’s widely expected 75bps increase. Meanwhile, October's ISM manufacturing index also remained in expansion at 50.2, albeit falling from last month’s 50.9. However, disinflationary trends were emphasised as the index of prices paid fell to an over 2-year low. Still, sticky shelter and services inflation remains materially high suggest still-higher interest rates remain on the horizon. Terminal rate pricing for Fed funds futures has picked up again to 5% levels, and it would be hard for the Fed to push it any higher at this point, but what it can clearly hint at today is pushing out of the rate cut expectations for next year. Read our full FOMC preview here for further insights. Lack of insurance halted UN Black Sea shipments, but progress being made The UN halted grain shipments from Ukraine's Black Sea ports on Wednesday, after Russia warned ships weren't safe using the route and demanded guarantees from Ukraine. However, reports suggested early on Wednesday that an agreement had been reached and ships will start to sail again from Thursday, as pressure on Russia continues to build. We continue to watch crop and fertilizer prices, as a meaningful reversal could come through if we see improving shipments across the Black Sea region. AMD earnings supported by servers despite weak PC sales Advanced Micro Devices rose in the after-hour trading as it reported better than estimated Q3 earnings, although issuing guidance that missed analysts’ expectations. EPS came in $0.67 vs estimated $0.65, revenue $5.57B vs estimated $5.62B. Guidance suggested AMD is expecting strong growth in its server chip business in the coming quarters. Q3 results were in-line with a warning issued by AMD on October 6 which helped to reset expectations, as weak PC sales continued to underpin. Airbnb drops on disappointing guidance Airbnb reported its highest revenue and most profitable quarter but a muted Q4 outlook as consumer preferences are shifting back to cities which tend to have lower rates based on smaller sized spaces. Q3 revenue rose 29% to $2.88B, estimated $2.84B. Net profit rose 45.6% to $1.21B. But the company said it expected bookings to moderate after a bumper third quarter. Sony surges on profit beat Weak yen propped up revenues for Sony and also nudged up the fiscal year profit outlook, pushing shares higher in early trading. Q2 sales came in at 2.75tr yen, est. 2.67 tr yen while operating income was 344bn yen vs. 280.66bn yen expected. Operating profit beat was broad-based, except in games. Australian home-lending falls more than expected in September House lending in Australia fell 8.2% YoY in September (far more than the market expected) while building construction lending fell 36.6% YoY, with the weaker data sets coming out just a day after the RBA remained dovish - raising Australia’s official cash rate by 25bps (0.25%) to 2.85%. Yesterday the RBA acknowledged tighter financial conditions and the ‘full effect’ of increased interest rates are yet to be felt in ‘mortgage payments’, but the rate hikes since May, combined with higher inflation have already put pressure on household budgets. What are we watching next? FOMC meeting – Fed may want to keep a low profile, but can’t afford to be seen dovish The September JOLTS jobs openings data point yesterday was the latest to suggest that the Fed will have a hard time pre-committing to any slowdown in the pace of its policy tightening after the 75-basis-point hike that is priced in for today’s meeting. The December 14 FOMC meeting odds have not shifted much over the last couple of weeks, as investors still favour a downshift to a 50-basis-point move then and another 50 basis points of tightening early next year over the space of a couple of meetings. To surprise hawkish today, the Fed may have to make it very clear that it is willing to continue tightening beyond current expectations and beyond its September forecasts to boost the greenback via rate guidance, but is probably also reluctant to pre-commit to anything. Pointing to high reactivity to further incoming data may be one way to achieve this. That will then mean extreme volatility on the next bits of Incoming data ahead of the December meeting, starting with the ISM Services tomorrow and then the October jobs report this Friday and two more CPI releases before December 14. Earnings to watch Today’s US earnings focus is Estee Lauder, Booking, Fortinet, and Albemarle. Analysts expect revenue to decline by 11% y/y at Estee Lauder but improving operating margin. The cosmetic business is facing headwinds from labour costs and transportation. Booking is expected to deliver strong earnings growth given the better-than-expected result from Airbnb yesterday. Analysts expect 26% y/y revenue growth and EPS growth of 35% y/y. Fortinet is one of the market leaders in the fast-growing cyber security industry and with the ongoing war in Ukraine we expect demand for cyber security solutions to be high; analysts expect Fortinet to grow revenue by 30% y/y in Q3. Albemarle is riding the demand for lithium as electric vehicle sales is seeing explosive growth. Albemarle is expected to deliver 168% y/y growth in revenue and EPS growth of 545% y/y. Today: Suncor Energy, Nutrien, Novo Nordisk, Maersk, Vestas Wind Systems, GSK, Qualcomm, CVS Health, Estee Lauder, Booking, Fortinet, Ferrari, Albemarle Thursday: Verbund, Barrick Gold, Orsted, Novozymes, BNP Paribas, BMW, Enel, ING Groep, DBS Group, ConocoPhillips, Amgen, PayPal, Starbucks, Regeneron Pharmaceuticals, EOG Resources, Moderna, MercadoLibre, Block, Cloudflare, Coinbase Friday: Enbridge, Societe Generale, Intesa Sanpaolo, SoftBank, Amadeus IT Group, Duke Energy, Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Final Oct. Manufacturing PMI 0855 – Germany Oct. Unemployment Change/Rate 1215 – US Oct. ADP Employment Change 1430 – EIA's Weekly Crude and Fuel Stock Report 1800 – US FOMC Meeting 1830 – US Fed Chair Powell Press Conference 2000 – New Zealand RBNZ Governor Orr before Parliamentary Committee 0145 – China Oct. Caixin Services PMI  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-2-2022-02112022
Asia Morning Bites - 14.02.2023

Japanese Companies Are Now On A Losing Streak | KakaoBank's Shares Noted Increased By 16%

InstaForex Analysis InstaForex Analysis 02.11.2022 14:45
The Asian stock market has gained up to 1.7%. China's Shanghai Composite and Shenzhen Composite grew by 0.88% and 1.17% respectively. The Hang Seng Index and Australia's S&P/ASX 200 advanced by 1.72% and 0.19% respectively. South Korea's KOSPI dropped by 0.05%, and Japan's Nikkei 225 lost 0.15%. Trading in Hong Kong was suspended due to the issuance of a typhoon warning signal number 8. Among the constituents of the Hang Seng Index, Country Garden Holdings Co., Ltd (+13.3%), Longfor Group Holdings, Ltd. (+13%), and CSPC Pharmaceutical Group, Ltd. (+12%) saw the biggest increase in their share value. Meanwhile, Sands China, Ltd. gained 6.7%, China Resources Beer (Holdings) Co., Ltd. grew by 6.6%, and Haidilao International Holding, Ltd. added 5.8%. The shares of Yum China Holdings Inc. were up by 4.1%, following a double increase in net profit and a 77% rise in operating profit in the previous quarter. KakaoBank's shares advanced by 16%, following the release of a strong Q3 report. Investors are now focused on the FOMC meeting, the regulator's interest rate decision, and the chairman's comments after the event. Investors want to know how long the central bank will be raising interest rates. Over 80% of analysts expect the rate to be lifted by 0.75% to 3.75–4%. Some experts anticipate a 0.50% rate hike. About half of analysts forecast an increase in rates to 4.25–4.5% in December. The other half suggests the rate will rise to 4.5–4.75%. Japanese companies are now on a losing streak with Kao, Corp. down by 8%, CyberAgent, Inc. by 7.2%, and Sumitomo Chemica Co. by 5,7%. At the same time, Sony Group, Corp. posted strong quarterly results and improved its growth forecast for the year. In this light, its shares soared by 7%. The share value of Nippon Steel, Corp. grew by 3.1%, following a 24.7% increase in net profit for the first six months of the fiscal year. With a 1.8% rise in first-half net profit, Yokogawa Electric, Corp. shares gained 5.1%. Consumer prices in South Korea accelerated by 5.7% year-on-year in October from 5.6% in September. Analysts had expected the inflation rate to remain at the same level. On a monthly basis, consumer prices grew by 0.3%. Samsung Electronics lost 0.8%, and Hyundai Motor was down by 0.3%. A 2.4% surge in the share value of BHP and Rio Tinto contributed to a rise in Australia's S&P/ASX 200.     Relevance up to 12:00 2022-11-03 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/326050
FX Daily: Upbeat China PMIs lift the mood

In The US, Stocks May Remain Risk-Free | According To Chinese Prime Minister Li Keqiang, The Chinese Economy Is Showing Signs Of Stabilization

Saxo Bank Saxo Bank 03.11.2022 08:25
Summary:  The Nasdaq 100 & S&P 500 drop after the Fed made hawkish remarks post lifting rates 0.75%. Fed says ‘we still have some ways to go’. It will make ‘ongoing increases’ until rates are ‘sufficiently restrictive’. Provided the upcoming economic data is strong, and shows the US economy is, the Fed can keep hiking. However, it could pivot as early as December. Until the next major US eco data release it seems equites could remain in risk-off mode, especially with high PE stocks, like tech, while defensive and commodity plays with rising cash flows could continue to garner interest. China’s Li signals a potential economic recovery, fuelling commodities and China’s markets. Crude oil rocks up after OPEC raised its forecast for oil demand. a2 Milk gets FDA green light. What is happening in markets? The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) drop after Fed made hawkish remarks post lifting rates 0.75% US major indices dropped on Powell's hawkish comments. The S&P 500 shed 2.5% and the Nasdaq plunged 3.4% with megacap tech stock copping the brunt of the selloff with Apple (AAPL) down 3.73% and Tesla (TSLA) down 5.6% with the EV giant reportedly shutting its flagship showroom in China, in Beijing as it shift strategy. What prompted high PE stocks being sold off was that Treasuries yields rose across the curve, with the 10-years up 4 bps to 4.08%. The dollar reversed course and rose against every G-10 peer save the yen. So, the bottom line is, the market will now be contending with a risk-off tone, until the next US economic data sets prove the Fed can pivot. Oil moved higher, while corn and wheat dropped on grain-corridor developments. Elsewhere, Boeing (BA) shares rose 2.8% with the plane maker saying it could generate $10 billion in cash annually by mid-decade, once it turns around its operations after years of setbacks. Australia’s ASX200 (ASXSP200.1) futures suggest risk-off mode will be enacted with tech stocks on notice. Focus will be on milk Aussie tech stocks are likely to come under pressure with US bond yields rising again. However, there may be bright sparks today. Iron ore (SCOA) rose 0.4% sitting back above $80.85, which might support iron ore companies shares. That said, BHP closed 3.1% lower in NY. A2Milk (A2M) may garner attention after the US FDA gave approval for a2 Milk to be sold in the US. Bubs Australia (BUB) may likely 'piggyback' on any gains. That said, you could expect infant formula stocks to gain interest, particularly as China’s outgoing premier signal China is striving to build sustainable development. In other news; Rio (RIO) moved in on taking over a Canadian copper-gold company, Turquoise Hill Resources (TRQ). On Wednesday in Australia, Rio offered C$43 per share for the Canadian miner, saying that is its best and final offer. Rio is seeking to buy 49% of the Canadian miner, that it doesn’t already own, in a deal valued at around C$4.24 billion. Turquoise Hill Resources shares surged The Investor meeting to consider the takeover is set for November 8. Rio is also bidding to gain control of Mongolia’s Oyu Tolgoi, one of the world’s biggest copper mines. Crude oil (CLX2 & LCOZ2) rocks up after OPEC raised its forecast for oil demand   Oil rallied for several reason; firstly OPEC rose its forecasts for world oil demand in the medium to longer term, saying that $12.1 trillion of investment is needed to meet this demand. Second, an EIA report showed US gasoline inventories fell to the lowest since 2014 and East Coast distillate stocks slide to a record low seasonally, which intensifies supply concerns. Crude supplies also fell. Natural gas rose in the US and in Europe. Fed says ‘we still have some ways to go’; and it will make ‘ongoing increases’ until rates are ‘sufficiently restrictive’. What to watch next, what it means for equities Federal Reserve Chair Jerome Powell stuck to his campaign to bring inflation under control, saying “we still have some ways to go”, before rates were ‘sufficiently restrictive’ but the path may soon involve smaller hikes. Still, Powell sees it may be appropriate to make smaller hikes, as soon as December, or at the meeting after. But, he also said it was very premature to be thinking about pausing. After the Fed raised rates by 75 basis points on Wednesday, Powell said “incoming data since our last meeting suggests that ultimate level of interest rates will be higher than previously expected.” He also mentioned rate hikes have a lag effect on the economy, and the Fed needs to take this into account. This means, the devil will be in the detail ahead, as in the upcoming economic data which the Fed will respond to. Provided the upcoming economic data is strong, shows the US economy is, then the Fed can essentially keep hiking. For equites this means the risk-off mode in high PE stocks, like tech can possibly continue, inversely, defensive and commodity plays with rising cash flows might continue to garner interest. Saxo’s Head of FX Strategy says, so cue tomorrow’s ISM Services, Friday’s US jobs report, the October CPI due out next week, November 11 next week, and the November CPI report due December 12. China’s Li Keqiang signals a potential economic recovery, fueling commodities and China’s markets China’s outgoing premier Li Keqiang said China will strive for a "better" economic outcome and promote stable, healthy and sustainable development, saying China’s economy is showing signs of stabilizing, as well as “rebounding momentum" thanks to stimulus. This has supported gains in iron ore (SCOA) and also supported optimism in Asian equites. Australian lending and building approvals fall more than expected, giving the RBA greater cause to remain dovish. Keeping AUDUSD on notice House lending in Australia fell 8.2% in September (far more than the market expected) while building construction lending fell 36.6%, with the weaker data sets coming out just a day after the RBA remained dovish - rising Australia’s official cash rate by 25bps (0.25%) to 2.85%. On Tuesday the RBA acknowledged tighter financial conditions and the ‘full effect’ of increased interest rates are yet to be felt in ‘mortgage payments’, but the rate hikes since May, combined with higher inflation have already put pressure on household budgets. We believe the RBA could increasingly become dovish despite inflation running away to the upside. We think the RBA may be forced to potentially pause on rate hikes sooner, as they have done in history, despite peak inflation continuing to rise YoY. The AUDUSD remains under pressure for this reason. Plus until the Fed has reason to pivot the US dollar remains supported. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-3-nov-03112022
The China’s Covid Containment Continued To Negatively Impact The Output At The End Of 2022

Equities In China Remain In The Red As Covid Fears Escalate

TeleTrade Comments TeleTrade Comments 03.11.2022 08:52
Asia-Pacific equities remain mostly red as Fed’s Powell backs aggressive rate hikes. Off in Japan restricts bond market moves in Asia and hence DXY gets the chance to pare post-Fed gains. Downbeat China data, covid woes and North Korea’s test fire also weigh on sentiment. Upbeat service sector data from India favor markets ahead of RBI’s special meeting. Share markets in the Asia-Pacific region portray the typical moves after the hawkish Fed decision during early Thursday. The risk-aversion could also be linked to China’s covid woes and geopolitical fears emanating from North Korea. However, holiday in Japan and a light calendar elsewhere restricts the market moves of late. While portraying the mood, the MSCI’s index of Asia-Pacific shares ex-Japan reverses from a two-week high to print half a percent intraday loss heading into Thursday’s European session. It should be noted that equities in China remain in the red as covid fears escalate. A lockdown surrounding the area involving the world’s largest iPhone factory defied hopes of easing China’s zero-covid policy. Additionally, Reuters quotes China’s latest National Health Commission figures to suggest an uptick in coronavirus cases. The news states, “China reported 3,372 new COVID-19 infections on Nov. 2, of which 581 were symptomatic and 2,791 were asymptomatic.” Elsewhere, North Korea fired an unidentified ballistic missile toward the East Sea that has since been reported to have flown over Japan, per Reuters. Following the same, Japan warns residents to take shelter in the threat of the North Korean missile. Recently, the US warns Pyongyang over such an effort and raised market fears in Asia. It should be noted that the mixed Aussie trade numbers and downbeat China Caixin Services PMI exert downside pressure on the ASX 200. Further, markets in Hong Kong lead the bears as HKMA copies the Fed’s 0.75% rate hike. India’s BSE Sensex appears snapping the downtrend, even with mild gains, as the S&P Global India services Purchasing Managers' Index edged up to 55.1 in October from September's six-month low of 54.3, versus 54.6 expected, per Reuters. The news states that activity in India's dominant services industry gathered pace in October despite high inflationary pressures, underpinned by robust domestic demand, leading to the second fastest hiring pace in over three years, a private survey showed. On a broader front, S&P 500 Futures print mild gains whereas the US 10-year and 2-year Treasury yields seesaw around 4.10% and 4.62% by the press time. It should be noted that the Fed’s 75 bps increase in the benchmark rate initially triggered the market’s optimism as the rate statement highlighted the odds of a slower rate hike. The update stated, “Cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”  However, Powell’s speech propelled the fears as he cited the need to bring down inflation “decisively” while also suggesting a bit longer play for the restrictive policy. Moving on, the US ISM Services PMI, forecasted to ease to 55.5 in October compared to 56.7 in previous readings, could offer immediate directions but the pre-NFP trading lull is likely to challenge the momentum traders. Also read: S&P 500 Futures dribble near one-week low as yields fade post-Fed rally
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

Eyes On Bank Of England (BoE) | Gold Is Under Pressure

Swissquote Bank Swissquote Bank 03.11.2022 10:35
Jerome Powell abated the latest risk rally yesterday, saying that the rate hikes will slow down, but the levels will go higher. Equities sold off, the yields jumped, the dollar gained, and hopes of seeing the end of the market turmoil got completely dashed. US Stock Market The US 2-year yield soared to 4.90%. The Dow Jones lost more than 1.50%, the S&P500 dived 2.50% and Nasdaq fell more than 3%. Forex In the FX, the prospect of higher terminal rate from the Fed boosted the USD appetite. The dollar index gained yesterday, as the EURUSD slipped again below its 50-DMA, Cable slipped below 1.14, the dollar-franc is back above parity, the dollar-yen is set for another advance to 150 on the back of the diverging rate prospects between the Fed that is now set to increase rates slower, but higher, and the Bank of Japan (BoJ), set to do nothing, for now. Gold & Bitcoin Gold is also under the pressure of a stronger US dollar and the higher US yields. Bitcoin, on the other hand, is surprisingly resilient to the broad risk selloff. Crude Oil The barrel of American crude rose to $90, as the latest EIA data showed that the US crude inventories fell by more than 3-million-barrel last week, much faster than a 200’000 barrel decline expected by analysts. Bank Of England Today, the Bank of England (BoE) is also expected to raise rates by 75bp today, but that expectation is down from around 100-150bp hike expected when Liz Truss was busy shaking the financial markets with her crazy mini budget. The BoE should no longer act twice as aggressively to compensate for the actions of an irresponsible government, but it still must fight the rising inflation in Britain. Watch the full episode to find out more! 0:00 Intro 0:25 Powell points at slower but higher rates, investors sell assets 4:13 Oil up on falling inventories 5:00 USD up against majors 7:05 BoE to hike by 75bp today 8:13 Gold under pressure, but Bitcoin surprisingly resilient Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #rate #decision #USD #ADP #US #jobs #report #crudeoil #Apple #Amazon #Meta #Google #ExxonMobil #selloff #UK #inflation #BoE #GBP #EUR #XAU #Bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Russia Look Set To Double Its Exports For The First Half Of 2023

Volatility In The Grain Market May Continue | Global Demand For Containers Will Fall This Year

Saxo Bank Saxo Bank 03.11.2022 10:45
Summary:  Traders were given a case of whiplash yesterday over the FOMC meeting after the new monetary policy statement confirmed the impression that the Fed will soon downshift the size of rate hikes after another 75 basis points hike at this meeting. But then a very hawkish press conference from Fed Chair Powell took Fed terminal rate expectations next year to new highs for the cycle, pummeling risk sentiment and lighting a fire under the greenback. The next key focus will be tomorrow’s US October jobs report.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Powell delivered a jolt to equities communicating on the FOMC press conference that the terminal rate could be higher than what the market expects and that rates will stay higher for longer. S&P 500 futures could out many support levels on the downside in the last night session and are continuing lower this morning trading around the 3,765 level with the 3,700 level being the next level to watch on the downside. Powell’s remarks confirm our view that inflation and interest rates will remain higher for longer and that equities will be under pressure in the medium term, being negatively impacted by higher interest rates and more margin compression. Euro STOXX 50 (EU50.I) STOXX 50 futures are naturally responding to Powell’s statements yesterday trading lower this morning around the 3,575 level with the 100-day moving average around the 3,528 level being the gravitational point on the downside to watch. FX: USD bull market is back in business after hawkish Fed Chair Powell presser The dollar was first weak yesterday on the new monetary policy statement before the hawkish Powell presser lit a fire under the greenback as he made it clear that the ceiling could be raised next year for the “ultimate level” of Fed funds rate, de-emphasizing the size of rates from here after several 75-basis point moves. The US dollar ripped back to the strong side, generating compelling reversal patterns for USD bulls almost across the board, with the important 0.9876-0.9850 area falling in EURUSD, GBPUSD slipping below the bottom of the 1.1400-1.1500 zone, AUDUSD crushed back below 0.6400, USDJPY support at 145.00 surviving yesterday with the pair lifting back well north of 147.00, etc. Of course, the USD will be sensitive to incoming data, but yesterday established a clear line in the sand that USD bulls will now use for longs, eyeing the cycle highs for the greenback against most other G10 currencies. Gold (XAUUSD) Gold trades lower following a volatile session where Fed Chair Powell managed to wrongfoot most markets. Following the expected 75 bp rate hike the written statement raised the prospect of the FOMC pausing to assess the “cumulative tightening” impact before saying at the press conference “We still have some ways to go. And incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected”. Most markets, including gold, responded by turning sharply lower with the yellow metal slumping 2% from the high. These comments send a signal that we have not yet reached peak hawkishness and with that the risk of a prolonged period of dollar and yield strength slowing gold’s recovery. It’s the incoming data that everyone will have to watch, starting with US payrolls this Friday. Crude oil (CLZ2 & LCOF3) Crude oil traded lower after the FOMC meeting raised expectations for a higher peak in US rates and together with continued uncertainty over China demand they helped offset support from a tightening fuel market. Earlier in the day the market jumped after the EIA reported US gasoline supplies had fallen to a 2014 low while distillate supplies on the East Coast had reached a near record seasonal low. China’s zero-Covid tolerance remains the overall strategy according to the government, thereby removing some earlier optimism about a change. However, OPEC+ cuts from this month and upcoming EU sanctions is likely to keep the market rangebound with resistance in Brent at $97.25. US treasuries (TLT, IEF) The hawkish Powell press conference yesterday (more below) took Fed rate expectations to new highs for the cycle and the 2-year rate is pushing on cycle highs near 4.62%, while the 10-year merely rebounded above 4.00% as the yield curve is close to its most inverted for the cycle at below –50 bps for the 2-10 spread. Incoming US data will be the focus next for the longer end of the yield curve and whether 10-year yields can threaten the cycle highs well north of 4.25%. What is going on? FOMC one-two as dovish interpretation of new policy statement reversed by hawkish Powell presser The initial read of the FOMC statement was dovish, as the new statement inserted the phrase: “The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.” This read a bit dovish as the market assumed that this means the anticipated downshift in Fed rate hikes is coming and US yields dropped, risk up, USD down, etc. In the press conference, however, Fed Chair Powell was far more hawkish, saying there is a “ways to go”, and spelling out that the incoming data means that the “ultimate level” that the Fed funds reaches is likely to move to higher levels than was though at the September meeting. This had Fed expectations for the spring of next year edging back toward the cycle highs of 5.00% and then closing the day a full 10 basis points higher near 5.10%. While Powell did say it may be possible that the Fed steps down to smaller hikes as soon as the December meeting, the FOMC felt that the speed of hikes Is becoming “less important” (leaving market to infer that the Fed just keeps hiking at more meetings if incoming data supports doing so. As well, we must remember that the Fed has cranked up the pace of quantitative tightening in the background, which provides its own tightening pressure on markets and arguably equates with several hundred basis points of rate tightening over the course of a year. European earnings this morning Orsted is raising its full-year guidance on EBITDA excluding new partnerships to DKK 21-23bn and Q3 revenue was DKK 36.5bn vs est. DKK 26.7bn highlighting the increased profitability in power generation using renewable energy. BNP Paribas beats on both revenue and net income driven by strong results in its fixed-income, commodities, and currencies trading. BMW is also beating on both Q3 revenue and EBIT and maintaining its EBIT margin fo 7-9%. US earnings recap Fortinet, the industry leader in cyber security, delivered Q3 revenue of $1.15bn vs est. $1.12bn and adj. EPS $0.33 vs est. $0.27 and Q4 outlook on revenue of $1.28-1.32bn vs est. $1.27bn and Q4 EPS outlook of $0.38-0.40 vs est. $0.35, but despite strong figures shares were lower in extended trading. Albemarle delivered high growth in Q3 on revenue and earnings, but lowered its fiscal year revenue and EPS a bit against their previous guidance. Wheat (ZWZ2) prices slump as Russia to resume grain deal participation Amid mounting pressure on Russia to avoid a galloping food crisis, Russia finally agreed to resume its participation in the Ukraine grain deal, allowing safe passage of Ukraine’s crop exports. Wheat prices dropped over 6% on the news and corn was lower as well, with vessels likely to resume normal operations today. Russia however threatens to pull out of the agreement at any time, which suggests volatilities can continue till the war goes on. Better-than-expected US ADP turns attention on NFP US ADP national employment reported a 239k increase in October, above the expected 193k and the prior, revised lower, 192k, ahead of the key NFP on Friday. While there is little confidence in this data set as the methodology has been recently revised and there is limited backward data, a tight labor market is still the clear read. Focus now turns to NFP due on Friday, with unemployment rate and wage growth remaining as the key metrics to track. Bloomberg consensus expectations are still set for a headline gain of 200k for October, with unemployment rate inching a notch higher to 3.6% from 3.5% previously and wage growth slightly weaker at 4.7% YoY from 5.0% YoY previously. Maersk warns about rapid economic deterioration Maersk, the world’s largest owner of container ships, said it expects global container demand to decline by up to 4% this year, as against its previous estimate of +/- 1%. It also warned that next year could be worse, signalling further downturn in global trade may be on the cards. Still, Q3 earnings before interest and tax rose to $9.48bn vs. $8.63bn expected. What are we watching next? Next US data points and impact on US yields Fed Chair Powell made it clear yesterday that he didn’t feel the size of Fed rate hikes are very important after yesterday’s 75 basis point move, but that the Fed could continue to tighten beyond what the Fed itself was forecasting less than two months ago, suggesting a higher peak rate. Currently, peak Fed rates for next year are projected at 5.10% by next spring, a new cycle high and well above the prior highs just above 5.0% after Powell made a hawkish impression at yesterday’s press conference. That leaves the market still very sensitive to incoming data for gauging how high the Fed might take rates next year, with the next data points of note the October US ISM Services survey up today and the October jobs data up tomorrow. Earnings to watch Today’s US earnings focus is ConocoPhillips, PayPal, Starbucks, MercadoLibre, and Cloudflare. Based on previous results in the energy sector we expect ConocoPhillips to deliver good results. PayPal has had headwinds for some time and could disappoint. One of our worst performing theme baskets has been e-commerce which has been hit by difficulties in advertising targeting due to Apple’s data privacy decision, supply chain bottlenecks, and explosive prices on logistics. MercadoLibre is the South American version of Amazon and analysts expect revenue growth of 45% y/y and EPS growth of 24% y/y. Cloudflare will be in focus and given the negative sentiment over Fortinet’s earnings release last night expectations might be too high for any cyber security company to deliver on. Today: Verbund, Barrick Gold, Orsted, Novozymes, BNP Paribas, BMW, Enel, ING Groep, DBS Group, ConocoPhillips, Amgen, PayPal, Starbucks, Regeneron Pharmaceuticals, EOG Resources, Moderna, MercadoLibre, Block, Cloudflare, Coinbase Friday: Enbridge, Societe Generale, Intesa Sanpaolo, SoftBank, Amadeus IT Group, Duke Energy, Economic calendar highlights for today (times GMT) 0730 – Switzerland Oct. CPI 0805 – ECB President Lagarde to speak 0900 – Norway Norges Bank Deposit Rate announcement 1130 – US Oct. Challenger Job Cuts 1200 – UK Bank of England Rate Announcement 1230 – UK Bank of England Governor Bailey press conference 1230 – US Sep. Trade Balance 1230 – Canada Sep. Building Permits 1230 – Canada Sep. International Merchandise Trade 1230 – US Q3 Nonfarm Productivity/Unit Labor Coasts 1230 – US Weekly Initial Jobless Claims 1330 – Czech Central Bank Rate Announcement 1400 – US Sep. Factory Orders 1400 – US Oct. ISM Services 1430 – EIA's Weekly Natural Gas Strorage Change 0030 – Australia RBA Monetary Policy Statement 0030 – Australia Q3 Retail Sales Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-3-2022-03112022
The Commodities Feed: Anticipating LNG Strike Action and Market Dynamics

Revenue of Paramount Global turned out to be 5% lower than expected. Actual EPS amounted to $0.39, 5 cents less than the estimated figure

FXStreet News FXStreet News 02.11.2022 15:39
Paramount Global missed Q3 consensus on top and bottom lines. PARA shares have sold off 10% after the earnings announcement. Streaming subscribers and revenue improved during the quarter. Paramount Global (PARA) collapsed 10% on Wednesday morning after unleashing a none-to-good quarterly report for the third quarter. The stock is now trading at a new all-time low of $17.25, although shares of the media company dropped below $17 in the premarket. Paramount Global earnings news Paramount missed Wall Street consensus for adjusted earnings per share (EPS) by 5 cents after the figure came in at $0.39. That number is down 48.7% compared with the same quarter in 2021. The bottom line figure was greatly affected by a $169 million charge for restructuring and other corporate needs. Revenue of $6.92 billion rose nearly 5% YoY but missed consensus by $130 million. Subscription revenue did improve, but investments in content and international expansion took that growth and then some. Advertising revenue in the company's broadcast TV division dropped 2% YoY, which management blamed on the macro picture. Total direct-to-consumer subscriptions, such as streaming, rose to 67 million customers. This segment includes Paramount+, PlutoTV and BET+. Paramount+ added 4.6 million subscribers during the third quarter, increasing revenue in the process by 95% YoY. Paramount Global stock forecast As already stated, PARA stock is at an all-time low. When this happens, there are no historical price levels to measure against, so instead we have to use the financial equivalent of alchemy – Fibonacci levels. As we have it, PARA has found early support on Wednesday at the 50% Fibo level, which in point of fact is not actually part of the Fibonacci sequence. A better estimate for the near-term bottom would be the 61.8% Fibo at $16.13. The 78.6% level at $15.05 also might be eyed by bears. Regardless, if PARA does bounce off of one of these levels, then expect a move toward the 23.6% Fibo level at $18.57. PARA daily chart
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

The Rate Hike Generated An Increase In The Price Of Gasoline In The USA

InstaForex Analysis InstaForex Analysis 03.11.2022 13:15
Oil prices have declined only slightly, and it's all the fault of Federal Reserve Chairman Jerome Powell's statement that interest rates will rise higher than previously forecast. West Texas Intermediate futures fell below $89 per barrel after rising 4% compared to the previous two sessions. Powell said it was "premature to think about suspending the rate hike cycle" after the Fed raised rates again by 75 basis points. All major central banks are currently trying to curb rampant inflation, which puts pressure on demand and energy. The bearish sentiment caused by the increase in rates offset the rise in gasoline prices in the United States, but this was not enough to seriously affect the situation. Growing concerns about the slowdown in the global economy will inevitably affect the oil demand, which will limit the upward potential of the trading instrument. However, the battle between the bearish demand forecast and the bullish supply forecast continues to be waged in full. It is difficult to say how energy carriers will behave in winter since they are largely tied to geopolitical risks and factors. Premarket: Qualcomm shares lost 6% after the company reported weak earnings. Forecasts and targets also fell short of analysts' expectations, as demand was lower than expected due to China. According to Refinitiv, the technology company reported adjusted earnings per share of $3.13. Revenue for the quarter was $11.39 billion, compared with an estimated $11.37 billion. Shares of the Roku streaming TV platform fell nearly 20% after the company said fourth-quarter revenue would be lower than Wall Street expects. The company reported third-quarter results that beat analysts' forecasts: a loss per share of 88 cents compared with a loss of $1.28. Revenue was $761 million, more than the estimated $694 million. However, forecasts for the future have ruined everything. Etsy securities jumped more than 10% after the company reported quarterly profit that exceeded expectations. The online store reported revenue of $594.47 million against the expected $564.48 million. The company also expects continued sales growth in the fourth quarter, leading to a share increase. Zillow shares rose 2.7% after reporting earnings that beat analysts' expectations. The company reported adjusted earnings per share of 38 cents, above the forecast of 11 cents. Revenue was $483 million, while Wall Street expected $456 million. As for the technical picture of the S&P500, after yesterday's decline, demand for the index remains rather sluggish. The main task for buyers now is to protect the support of $3,735. As long as trading is conducted above this level, we can expect a return in demand for risky assets - especially if the US data disappoints. This will create good prerequisites for strengthening the trading instrument and returning $3,773 under control, just above which the level of $3,808 is located. A breakthrough in this area will strengthen the hope for an upward correction with an exit to the resistance of $3,835. The farthest target will be the $3,861 area. In a downward movement, buyers must declare themselves in the $3,735. A breakdown of this range will quickly push the trading instrument to $3,699 and open up the possibility of updating the support of $3,661.     Relevance up to 12:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326182
Oil Prices Rise as OPEC Cuts Output and API Reports Significant Inventory Drawdown

The Bank Of England (BoE) Is Likely To Follow The Fed

InstaForex Analysis InstaForex Analysis 03.11.2022 14:23
The US stock market continues to fall sharply. Stock index futures continued their decline as Jerome Powell warned that the Federal Reserve would raise interest rates further, if necessary. This undermined risk appetite. The US dollar eventually won. S&P 500 futures declined by 0.7% after falling by 2.5% on Wednesday. The industrial Dow Jones lost about 0.4% and the high-tech NASDAQ index sank by nearly 1.0%. Two-year Treasuries rose to 4.72% and remained below the 5.06% yield peak. The sell-off spread to Europe and Asia. China intends to continue its Covid-Zero policy and this dashed investor hopes. Meanwhile, the market is focused on another central bank. The Fed made a 75 bps hike and the Bank of England is likely to follow suit. Although the interest rate in the UK is much worse than in the US, the regulator is not expected to give up its fight against inflation, even amid an expected severe recession in the economy. Yesterday, Fed Chairman Jerome Powell disappointed traders who had bet on a reversal, saying that the US economy remains resilient, which will continue to spur inflation. A similar situation occurred at the end of the summer of this year, when investors, encouraged by a bullish rally suffered huge losses. History repeats. Every time the market participants hope for a bit of dovish rhetoric, they watch the market crash and burn. While investors are concerned about the impact of the central bank's tightening policies on economic growth, Powell said there was no doubt that the committee was ready to raise rates as high as necessary at any time to calm inflation. ECB President Christine Lagarde also spoke today and warned that a moderate recession in the eurozone may be coming soon but it was not enough to stop price hikes. Meanwhile, the US dollar rose against risky assets. The British pound fell by more than 1%, as fears that the Bank of England's interest rate hike could worsen the situation in the economy increased. The rally in Chinese stocks also came to an end before it could begin amid rumors of Covid Zero cancellation. However, this rumor remained a rumor. Economists see a further sell-off in emerging markets in Asia as the US dollar is rising. Wheat prices fell after Russia agreed to renew a deal allowing the safe passage of Ukrainian crop exports. Oil fell after Powell's comments on interest rates overshadowed supply cuts. As for the technical picture of the S&P 500 index, after yesterday's decline, the demand for the index remains rather sluggish. Bulls need to protect the support of $3,735. As long as the trading instrument is trading above this level, we can expect the demand for the risky assets to come back if the US data occurs to be weak. This may strengthen the index and bring it back to the level of $3,773 under control, opening the way to the level of $3,808. If the price breaks through this level, it may start an upward correction and reach the resistance of $3,835. The next target is located at $3,861. If the index declines, bulls will have to show some activity at $3,735. If this level is pierced, the trading instrument may be pushed down to $3,699 and to a new support of $3,661.     Relevance up to 12:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326184
Stocks: Roku's revenue much higher than expected. In Q3 new Roku accounts grew 2.3M

Stocks: Roku's revenue much higher than expected. In Q3 new Roku accounts grew 2.3M

FXStreet News FXStreet News 03.11.2022 15:55
Roku cut Q4 revenue guidance by $94 million. ROKU stock has slid 20% on the outlook. ROKU share price is trading at January 2019 level. Roku (ROKU) stock appears ready to open on Thursday down a hefty 20%. The streaming company stock has sold off severely on the back of fourth-quarter guidance well below Wall Street's expectations. Management is now guiding for $800 million in Q4 revenue, while analysts had a consensus figure of $894 million. That latter consensus figure was already cut dramatically by about $300 million this year, so subsequent guidance below that level stunned the market. The share price of the pandemic favorite is now off 91% from its high of $490 back in July 2021. Roku earnings results For the third quarter, Roku delivered a GAAP earnings per share of $-0.88. This was much better than consensus of $-1.23 however. Revenue also outperformed earlier guidance, coming in at $761 million. That figure was about $68 million ahead of the forecast average. Revenue grew 12% YoY. Costs for the company ballooned, however. The Q3 operating loss of $147 million was much worse than the $69 million operating profit from Q3 2021. "Platform revenue was up 15% YoY to $670 million, representing 88% of total revenue," said CFO Steve Louden. "While platform revenue came in above our expectations and was a positive given the difficult macro environment, the advertising business continues to grow more slowly than our beginning of year forecast due to the current weakness in the overall TV ad market and the ad-scatter market in particular." Louden has found a successor CFO and will be leaving Roku shortly. Besides the worrisome lowered revenue guidance for Q4, management also said the fourth quarter loss could balloon to $-1.75, about 60 cents worse than earlier projections. Roku added 2.3 million new accounts during the third quarter for a total of 65.4 million. Average Revenue Per User (ARPU), however, grew by just 15 cents to $44.25. This is much slower growth than shareholders had gotten used to. During the pandemic, ARPU rose as much as $12 YoY during some quarters. Roku stock forecast The 91% drop-off in Roku's share price is one of the worst performances of any large-cap stock during 2022's tyrannical bear market. Readers will remember that Roku stock actually peaked in July 2021 several months before many of its peers, which mostly peaked in November. By November of 2021, Roku stock had already reached oversold levels on the weekly Relative Strength Index (RSI). Now with its share price in the low $40s, Roku is trading at this price level for the first time since January 2019. There is only one historical support level here, which can be seen on the weekly chart below. The $27 price level was the December 2018 low four years ago. At this point, ROKU shares have been bouncing in and out of oversold levels for a year now, while the share price has continued to sink. At the moment ROKU is not even at oversold levels, because the RSI is "relative". There are no positives here. Despite Roku selling for two times the revenue, the chart leads us to believe that Roku will not bounce back anytime soon. ROKU weekly chart
OPEC+ Meeting: Saudi Arabia Implements Deeper Voluntary Cuts to Boost Oil Prices

Supply Outlook Of Crude Oil Remains Challenged | The Norges Bank (NB) Took The Dovish Path

Saxo Bank Saxo Bank 04.11.2022 08:44
Summary:  While the Fed surprised hawkish this week, most other central banks have been surprising dovish, with the latest being Bank of England which tried to cool down the aggressive market pricing for their terminal rate. Meanwhile, Norges Bank also took the less hawkish path, and this has made USD the king again with sterling suffering the heaviest blow. US stocks and bonds were lower, and oil prices, as well as precious metals, also suffered in the aftermath of Fed’s hawkish tilt. Focus turns to NFP today which should continue to suggest a tight labor market. What is happening in markets?   The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) continued to slide on hawkish Fed and weaker outlook U.S. stocks continued to adjust for the second day to the increased prospect of interest rates being higher for longer following Powell’s pushback to the market’s speculation for Fed pivot on Wednesday, with S&P falling 1.06% and Nasdaq 100 down 2%. For a discussion on the implication of Powell’s hawkish comments on equities, please refer to Peter Garnry’s article here. Information technology, falling 3%, was the worst-performing sector in the S&P 500 while energy, up 2%, and industrials, up 1% were the outperformers. Announcements of hiring or headcount freezes from Amazon (AMZN:xnas), Apple (AAPL:xnas), Lyft (LYFT:xnas), and Morgan Stanley stirred concerns among investors about the outlook of the economy and corporate earnings. After closing, Starbucks (SBUX:xnas) reported above expectations revenues and earnings while a number of software companies, including Atlassian (TEAM:xnas), Twilio (TWLO:xnys), Appian (APPN:xnas), missed revenues guidance. 10-year U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) The U.S. yield curve bear flattened as the 2-year yield jumped to as high as 4.74%, before finishing the session at 4.71%, the highest level since 2007. It brought the 2-10 year spread to was wide as -58 and close at -56, the most inverted level in 40 years. The market has brought another 75bp hike in December back to the table, pricing in a slightly more than 50-50 chance. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) Being hit by the double whammy of the reiteration from China’s National Health Commission that dynamic zero-Covid is the primary pandemic control strategy and a hawkish Fed Chair Powell hinting at higher terminal rates, Hang Seng Index tumbled 3.06% and the Hang Seng Tech Index (HSTECH.I) dropped 3.8% on Thursday. China Internet, EV, healthcare and property stocks dragged the benchmark indices lower. Following the hike by the U.S. Fed overnight, five leading commercial banks in Hong Kong raised their prime rates by 25bps. On the data front, Caixin China PMI Services came in at 48.4 in October (consensus: 49.0; Sep: 49.3), falling further into contractionary territory. CSI300 performed relatively more resilient and pared some losses in the afternoon to finish the day losing only 0.8%. Semiconductors, defence and basic chemicals gained. Buying emerged overnight in the U.S. hours, Nasdaq China Golden Dragon Index jumped more than 3% and Hang Seng futures were nearly 1.5% higher from Hong Kong closing. FX: GBPUSD suffered on BOE-Fed differential The USD is seeing another leg higher not just on the back of Powell’s hawkishness this week, but also with the other central banks taking the less hawkish path. Both Norges Bank and BOE surprised dovish yesterday, in continuation of the trend that we have seen from Reserve Bank of Australia, Bank of Canada and the ECB earlier. GBPUSD fell over 2% to sub-1.12 on the announcement that BOE thinks market’s current pricing is too aggressive. December pricing is still at another 50bps rate hike but it won’t be a surprise if it is pulled lower after we had two dovish dissenters on Thursday. NOK saw a selloff as well, while USDJPY continues to find trouble to overcome 148.50 despite the fresh surge in US yields. Crude oil (CLX2 & LCOZ2) worried about demand After a hawkish FOMC, commodity markets have once again started to focus on demand weakness that could come as a result of Fed’s rapid tightening pace. Meanwhile, any hopes of a recovery in Chinese demand have also been crushed for now with authorities still standing by their zero Covid strategy. WTI futures traded close to $88/barrel while Brent futures were below $95. Supply outlook remains challenged however going into the winter, with OPEC+ having announced production cuts followed by EU sanctions on Russian crude flows from December. Gold (XAUUSD) and Silver (XAGUSD) to face short-term pressures Our Head of Commodity Strategy Ole Hansen wrote yesterday on how gold and silver turned sharply lower yesterday after Fed Chair Powell delivered a hammer-blow to sentiment across markets as he managed to both pull off the idea of the Fed may indeed soon pivot to a slower pace of rate hikes, but that any talk of a pause is “very premature”. Gold touched sub-1620 levels yesterday before a slight recovery later in the session while Silver took a look below $19. There is likely to be more pressure in the short term, but as yields get closer to a peak or as the possibility of central bank policy mistake increases, while inflation continues to run higher, the outlook for the precious metals could revert to being positive.   What to consider? Bank of England’s dovish hike The BOE hiked by 75bps to 3%, as expected by the consensus, but strongly pushed back against expectations for the scale of future moves, saying that the terminal rate priced in currently by the markets would induce a two-year recession. There were also two dovish dissenters at the meeting, one calling for 50bps rate hike and another for a mere 25bps. New forecasts were also released, which gave a particularly grim outlook for the economy, looking for a GDP print of -0.5% QoQ in Q3 2022 vs -0.1% expected in September. The inflation forecast now shows a peak around 11% in Q4, which is marginally hotter than the prior meeting’s projection. US weekly jobless claims tick lower, ISM services softened There was a slight decline in initial jobless claims to 217k from previous 218k, coming in marginally below the expected at 220k. Still, labor market remains tight despite some signs of cooling and continues to provide room to the Fed to continue its tightening cycle. Meanwhile, the ISM services index fell more than expected to 54.4 in October from 56.7 previously, however the prices paid gauge increased by 2% pts to 70.7 and remains elevated. Norges Bank hiked by 25bps With expectations split between a 25 or 50bps rate hike, Norges Bank took the dovish path as well despite a deteriorating inflation outlook. However, the Committee continues to place emphasis on the growth situation writing "there are signs that some areas of the economy are cooling down" and acknowledging the tightening effect that the higher policy rate is beginning to have. For the December gathering, the Committee points to a further hike being likely. Australia to double its Royal Australian Airforce cargo fleet in a $10 billion US military deal US officials are looking to approve the sale of $10 billion of iconic cargo aircraft, including 24 Hercules planes, to Australia. The US Defence Security Co-operation Agency says Australia is one of its most important allies in the western Pacific and its location and economic power ‘contributes significantly to ensuring peace and economic stability in the region’. Australia has operated the Hercules aircraft for decades, with the aircraft playing a major role in moving troops and equipment in and out of war zones and evacuating civilians after the fall of Kabul last year. It has also performed countless missions flying humanitarian supplies to countries hit by natural disasters. Australia trade surplus swells on surging energy exports Australia’s trade surplus swelled to $12.4 billion in September, smashing expectation of a $8.75 billion surplus. It comes as exports rose far than expected, up 7% vs the 1% consensus expected thanks to greater demand for mineral fuels for energy, while iron ore exports also rose. Imports remained unchanged month on month. Multiple reports of hiring freezes emphasizing margin pressures Apple paused all hiring for roles outside research and development. Amazon will pause new incremental hires in its corporate workforce, citing an "uncertain" economy and its recent hiring boom. Lyft will eliminate 13% of staff, or around 683 people.   For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-4-nov-04112022
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Analyst Comment Of Q3’22 Results-Forever Entertainment-WSE:FRA

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 04.11.2022 10:37
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme. Last recommendation BDM: BUY with target price 7,2 PLN/share (2022/10/12) LINK BDM Comment: The final results of Forever Entertainment for Q3'22 turned out to be slightly higher than the previously presented estimates. As indicated in our recent comments, we are positively surprised by the company's results for the past quarter. In our last report (Forever Entertainment Buy 7,2 PLN ). we forecast lower results. Over the discussed quarter, the company generated PLN 11.8 million in revenues (+ 54.3% y/y) - of which PLN 9.8 million relates to revenues from the sale of products - an increase by 45.9% y/y, and the rest that is PLN 2.0 million until the change in the state of products - an increase by 114.0% y/y. The premiere of the game "THE HOUSE OF THE DEAD: Remake", which generated the highest sales revenues in the company's history so far, had the greatest impact on the increase in the company's revenues in Q3'22. Another significant factor in the increase in revenues in the periods discussed was the settlement of advances for the production of games, which reflects the acceptance of subsequent stages of their implementation. We estimate that in the discussed period, sales of the above-mentioned title were at the level of approx. 35-40 thousand. copies. The company's operating expenses in Q3'22 increased by PLN 3.5m, i.e. by 58.3% y/y, to PLN 9.6m. The increase in the value of the company's operating costs was mainly related to the increase in the costs of external services by PLN 3.0 million, i.e. by 74.5% y/y to the amount of PLN 7.0 million for 3Q'22. The amount of external services includes the value of the provision in the amount of (PLN 0.6 million for 3Q'22), created for future costs of settlements with contractors due to their share in profits from the sale of games ("revenue share"). The second significant operating cost was the cost of salaries and social security, for Q3'22 they totaled PLN 2.3 million and were 41.2% higher y/y compared to Q3'21. Employment increase over the year in the group at the level of 35%. The company's EBIT in 3Q'22 amounted to PLN 2.4 million (+ 34.1% y/y), while the company's EBITDA for the period in question was PLN 2.4 million (+ 19.0% y/y). In terms of financial activity, the company generated PLN 0.2m. The net profit for the period in question amounted to PLN 2.3 million and was higher by 46.3% compared to Q3'21. Without the RS provision, FOR's net profit would have been PLN 2.3m for Q3'22. At the end of Q3'22, the company had PLN 2.6m in cash and other assets (PLN - 0.3m q/q). Receivables from other entities decreased q/q by PLN 2.2m to PLN 6.1m. Provisions for liabilities increased by PLN 0.6m q/q to PLN 4.5m. Short-term liabilities fell by PLN 2.9m q/q to PLN 4.5m. The operating CF amounted to -11 thousand. PLN, CF investment = -0.2 million PLN, CF financial = -4.9 thousand. PLN. Most of the titles for which he is the producer and publisher are listed in the release schedule. In addition to them, the company together with entities from the group also realizes the titles not yet disclosed. We would like to remind you that the premiere of the most important production of FOR now, ie "FRONT MISSION 1st: Remake" will take place on November 30, 2022 (presale will start on November 16, 2022). • The company's revenues for Q3'22 amounted to PLN 11.8 million and were higher by 54.3% y/y (of which PLN 9.8 million relates to revenues from sales of products - an increase by 45.9% y/y, and the rest, i.e. PLN 2.0 million, until the change in the state of products - an increase by 114.0% y/y). • The premiere of the game "THE HOUSE OF THE DEAD: Remake", which generated the highest sales revenues in the company's history so far, had the greatest impact on the increase in the company's revenues in 3Q'22. Another significant factor in the increase in revenues in the periods discussed was the settlement of advances for the production of games, which reflects the acceptance of subsequent stages of their implementation. • Currently, Forever Entertainment implements independently or finances or contracts the implementation of several remake games to development studios in which it has shares. Most of the titles for which it is the producer and publisher are listed on the schedule of prime ministers. In addition to them, the company, together with entities from the group, also realizes the titles not yet disclosed. The budgets of currently produced games are much higher than the ones made in previous years. The increase in gaming budgets may be confirmed by the increase in employment (excluding company governing bodies) at the end of September 2022 in FE and the FE Group by 35% y/y. • The company's operating expenses increased by PLN 3.5m, i.e. by 58.3% y/y to PLN 9.6m in Q3'22. • The increase in the value of the company's operating expenses was mainly related to the increase in the costs of external services by PLN 3.0 million, i.e. by 74.5% y/y to PLN 7.0 million for 3Q'22. The amount of external services includes the value of the provision in the amount of (PLN 0.6 million for Q3'22) created for future costs of settlements with contractors due to their share in the profits from the sale of games ("revenue share"). Without the RS provision, FE's net profit would have been PLN 2.3m for Q3'22. • The second significant operating cost was payroll and social security costs for Q3'22, totaling PLN 2.3m, and were 41.2% higher y/y compared to Q3'21. • EBIT for 3Q'22 amounted to PLN 2.4 million (+ 34.1% y/y), while the value of the company's EBITDA profit for the discussed period was PLN 2.4 million (+ 19.0% y/y). • On the financial activity level, the company generated PLN 0.2 million. • Net profit for Q3'22 amounted to PLN 2.3 million and was higher by 46.3% compared to Q3'21. • Operating profitability EBITDA decreased to 20.7% for Q3'22 from 26.8% for Q3'22, with operating profit margin falling to 20.0% from 23.0% in the compared quarters. In the discussed period, FOR's net profitability fell to 15.5% compared to 20.6% in Q3'21. • At the end of Q3'22, the company had PLN 2.6m in cash and other assets (-PLN 0.3m q/q). Receivables from other entities decreased q/q by PLN 2.2m to PLN 6.1m. Provisions for liabilities increased by PLN 0.6m q/q to PLN 4.5m. Short-term liabilities fell by PLN 2.9m q/q to PLN 4.5m. The operating CF amounted to -11 thousand. PLN, CF investment = -0.2 million PLN, CF financial = -4.9 thousand. PLN. • At the end of Q3'22, inventories decreased by PLN 0.5 million: finished products increased by PLN 0.2 million, advance payments for deliveries decreased and services by PLN 0.6 million, a decrease in semi-finished products by PLN 0.1 million. • The most important event in Q3'22 was the presentation at the Nintendo Direct conference of another film material (gameplay) of the game FRONT MISSION 1st: Remake (preorders: 16/11/2022, premiere: 30/11/2022). • At the same global event, the first footage of the upcoming FE Group production: FRONT MISSION 2: Remake was presented. In the case of this title, it will be the first official release of this game outside of the Japanese market. The new version of the game will be characterized by completely new graphics and a few gameplay modifications, thanks to which the game will become more attractive to modern players, while remaining faithful to the original in terms of plot. The premiere of FRONT MISSION 2: Remake is scheduled for 2023. • Moreover, the third major title from the Company's portfolio has been announced at Nintendo Direct: FRONT MISSION 3: Remake. This event strengthened the promotion of the aforementioned titles, and significantly contributed to the recognition of the Company in the world, and this will translate into obtaining attractive licenses. • Magical Drop VI - the premiere of the game is scheduled for the winter of 2022/2023. • In Q3'22, the company continued work on creating tools enabling the transfer of mechanics and the implementation of code fragments of titles from (consoles) older generations in order to accelerate the implementation of game remakes implemented by the company. In addition, the implementation of a tool facilitating prototyping of the mechanics of new titles was started. • UF GAMES - works related to the introduction of all UF GAMES shares to trading in the ASO on NewConnect are in progress. Two titles achieved record sales on the Nintendo Switch console. Exceeding the number of 1,400,000 units sold is a huge success. pieces and 938 thousand. pieces by Thief Simulator and Cooking Simulator respectively. These two titles have been at the top of Nintendo Switch sales lists on various continents for many quarters. On November 2, 2022. Management Board of the Warsaw Stock Exchange S.A. adopted a resolution on introducing series A, B and C ordinary bearer shares to the alternative trading system on the NewConnect market. • As of September 30'22, the company employed a total of 69 people, including 37 people under a contract of employment (32 full-time people) and 32 people on the basis of civil law and B2B contracts. • The current schedule of premieres: https://forever-entertainment.com/premiery,4,pl . Analyst: Krzysztof Tkocz krzysztof.tkocz@bdm.pl tel.: (+48) 516 086 705 GPW’s Analytical Coverage Support Programme 3.0  
Only Ugly US Data Could Reverse Sentiment | Gilt Yields In UK Were Steady To Lower

Only Ugly US Data Could Reverse Sentiment | Gilt Yields In UK Were Steady To Lower

Swissquote Bank Swissquote Bank 04.11.2022 11:30
Investors got the policy pivot they were looking for this week; unfortunately, not from the Federal Reserve (Fed), but from the Bank of England (BoE) instead. Bank of England In a confusing way, the Bank of England raised its interest rate by 75bp yesterday, but announced that the city analysts have got the BoE’s terminal rate wrong, and that the future rate hikes from the BoE will be softer, given that the economic situation is alarming. Sterling dived, while gilt yields were steady to lower. Mareket Reaction Elsewhere, in an extended market reaction to Wednesday’s Fed decision, the US dollar gained across the board, as investors repositioned for a more aggressive Fed tightening. Fed The thing that could throw cold water on burning hot Fed expectations is soft jobs data from the US. That’s also the only thing that could save the rest of the world from the worsening Fed aggression: rapidly deteriorating economic conditions in the US. Due today, the NFP is expected to reveal 200’000 new nonfarm jobs in October, for an average hourly pay rise steady around 0.3%. Watch the full episode to find out more! 0:00 Intro 0:26 Confusing action & statement from the BoE 2:39 The dollar rally continues post-Fed, pre-US jobs 5:20 Stock selloff intensifies 7:10 Only ugly US data could reverse sentiment 8:22 Stoxx600’s 30% discount to S&P hides risk Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #NFP #jobs #wages #data #Fed #hawks #UK #BoE #GBP #dovish #hike #Netflix #Disney #BasicWithAd #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

On The New York Stock Exchange, Over 2000 Of Securities Rose In Price

InstaForex Analysis InstaForex Analysis 07.11.2022 08:14
At the close of the New York Stock Exchange, the Dow Jones rose 1.26%, the S&P 500 rose 1.36%, and the NASDAQ Composite rose 1.28%.  Dow Jones The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 5.43 points (6.01%) to close at 95.83. Quotes Dow Inc rose by 2.52 points (5.41%), ending trading at 49.01. Caterpillar Inc rose 4.37% or 9.58 points to close at 228.84. The least gainers were Salesforce Inc, which shed 6.54 points or 4.47% to end the session at 139.79. UnitedHealth Group Incorporated rose 5.46 points (1.00%) to close at 538.15, while Apple Inc shed 0.27 points (0.19%) to end at 138. 38.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Freeport-McMoran Copper & Gold Inc, which rose 11.53% to 35.20, Estee Lauder Companies Inc, which gained 8.69% to close at 210.62, as well as Newmont Goldcorp Corp, which rose 8.55% to end the session at 41.02. The least gainers were Warner Bros Discovery Inc, which shed 12.87% to close at 10.43. Shares of Live Nation Entertainment Inc shed 7.25% to end the session at 70.88. ServiceNow Inc lost 6.12% to 361.95. NASDAQ Among the components of the NASDAQ Composite Index today, the leaders of growth were Huadi International Group Co Ltd, which rose 70.26% to 180.00, Sentage Holdings Inc, which gained 34.54% to close at 4.09 , as well as shares of Digimarc Corporation, which rose 29.35% to close the session at 18.95. The least gainers were Pulmonx Corp, which shed 60.94% to close at 4.82. Shares of Funko Inc lost 59.38% and ended the session at 7.92. Quotes of Sensus Healthcare Inc decreased in price by 51.23% to 6.34. The numbers On the New York Stock Exchange, the number of securities that rose in price (2275) exceeded the number of those that closed in the red (839), while quotes of 85 shares remained virtually unchanged. On the NASDAQ stock exchange, 2070 companies rose in price, 1658 fell, and 202 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.96% to 24.55, hitting a new monthly low. Gold Gold futures for December delivery added 3.30%, or 53.90, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 5.08%, or 4.48, to $92.65 a barrel. Futures for Brent crude for January delivery rose 4.24%, or 4.01, to $98.68 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 2.16% to hit 1.00, while USD/JPY shed 1.12% to hit 146.60. Futures on the USD index fell 1.91% to 110.65.     Relevance up to 04:00 2022-11-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/299846
Sygnity Stock Faces Headwinds Despite New Government Contracts

Analysis Raport Of Unimot- WSE:UNT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 07.11.2022 08:45
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Event: Preliminary consolidated 3Q22 results revealed. The Company published its preliminary data regarding 3Q22. The Company revealed that its preliminary consolidated adjusted EBITDA for 3Q22 amounted to PLN 124 million (vs. PLN 95.0 million expected by us). The reported consolidated EBITDA amounted to PLN 61 million (vs. PLN 95.0 million expected by us). The quarterly consolidated sales amounted to PLN 3.786 billion. The Company mentioned that the quarterly results had been particularly impacted by the war in Ukraine, and by the resultant instability of energy markets caused by introduction of sanctions on Belarus and Russia. The Company also mentions very high sale volumes generated on diesel, petrol and LPG products and logistical constraints that limited the utilization of market opportunities. Furthermore, The Company generated PLN 23 million on the sale of obligatory reserves (vs. PLN 25 million expected by us and vs. PLN 30 million declared by the Company to be generated in 2H22). Expected impact: Positive. The results were published near the end of Friday’s session and they were probably not fully discounted. The scale of positive surprise in this quarter is quite big: we will probably need to again upgrade our financial forecasts for the Company for this year. We support our positive view on the Company’s equities. Analyst: Łukasz Prokopiuk, CFA GPW’s Analytical Coverage Support Programme 3.0  
China's Position On The Russo-Ukrainian War Confirmed At The G20 Meeting

China Will Maintain Its Zero-Covid Policy | US Dollar (USD) Back Into Gains

Saxo Bank Saxo Bank 07.11.2022 08:58
Summary:  Speculation about China relaxing its stringent dynamic zero-Covid policy stirred up risk-on trades on global equities and commodities on Friday. Hong Kong’s Hang Seng Index surged 5.4% and China’s CSI 300 rose 3.3%. A mixed job report brought about a choppy session in the U.S. and stocks managed to finish the day higher as materials and industrials rallied in the afternoon when Investors turned their focus to the China reopening notion and strength in commodities. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rebounded on Friday but were still down for the week Following a mixed job report, the U.S. equity markets had a choppy session on Friday, fluctuating between gains and losses, and finished the day higher. S&P500 gained 1.4% and Nasdaq 100 climbed 1.6%. For the week, however, S&P 500 was down 3.4% and Nasdaq 100 was 5.7% lower. All 11 sectors of the S&P 500 gained on Friday, with materials having done the best and up 3.4%. Software names underperformed on earnings and revenue misses. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) yields were largely steady after the job report U.S. treasury yields surged initially on the stronger-than-expected non-farm payroll gain of 261K jobs in the establishment survey but pared the rise after the market focus shifted to the higher unemployment rate of 3.7% and a decline of 328K in employment in the household survey. The yield curve turned steeper notably, with the 2-year yield down 6bps to 4.66%, the 10-year yield up 1bp to 4.16%, and the 30-year yield jumping 7bps to 4.25%. The market is pricing in a 65% chance of a 50bp hike at the December FOMC and a terminal Fed Fund rate at around 5.1% next year. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) rallied dramatically on reopening hope Stocks in Hong Kong and the mainland surged on intensification of speculation on relaxation (not abandoning but relaxing) of the dynamic zero-Covid policy, newswire stories reporting that the U.S. Public Company Accounting Oversight Board (PCAOB) has completed the first round of inspection on Chinese ADR ahead of schedule, and an article from Vice-Premier Liu He on the People’s Daily pledging to boost domestic aggregate demand.  Hang Seng Index jumped 5.4% and CSI300 surged 3.3%. Hang Seng China Enterprise Index surged 6% and China Internet stocks climbed 10% to 17%, with Alibaba (09988:xhkg) up 11%, and Tencent (00700:hkxg) up 7.8%. FX: USD gains return as China asserts commitment to Zero Covid FX: USD gains return as China asserts commitment to Zero Covid With plenty of chatter last week about China’s reopening, commodity currencies had been supported with NZD leading the gains against the USD and being up over 2%. AUDUSD also surged above 0.6450 into the end of the week on hopes of a recovery in commodities demand. However, weekend reports from China’s Health Ministry confirmed that China will maintain its present zero-Covid regulations but improve the pandemic control measures, hinting that protracted lockdowns will be avoided. This has sent dollar back into gains this morning, with AUD and NZD leading the declines. GBPUSD also slid back to 1.1300 and EURUSD back at the 0.99 handle. Commodities rally Commodity screens all in the green on the back China reopening hopes. The Crude Oil (CLX2 & LCOZ2) price rose 5% to $92.61, its highest level since August after rising 5.4% last week. Iron Ore (SCOA, SCOZ2) is up 1.6% today $87.30 after gaining 8.3% last week. The Copper price (HGA, HGZ2) rose 7.8% today, after rising 7.5% last week.   What to consider Mixed US jobs report to keep the Fed on a tightening path US NFP headline gains of 261k were above expectations of 200k but slowed from last month’s 315k which was revised higher from 263k. Job gains were broad-based with strong gains in healthcare, professional and business services and manufacturing. Wage growth also held up strongly, coming in at 0.4% MoM in October from 0.3% MoM previously although a tad softer on a YoY basis at 4.7% from 5.0% YoY previously. However, the unemployment rate ticked up to 3.7% from 3.5% (exp. 3.6%), although it was met with a 0.1% decline in the participation rate to 62.2%. However, with layoffs rising recently, especially in tech, it will be interesting to see how that impacts the headline NFP and the Fed tightening path in the months to come. Heightened anticipation of relaxation of the implementation of pandemic control in China Speaking at a meeting hosted by a U.S. investment bank last Friday, the former Chief Expert of Epidemiology of the Chinese Centre for Disease Control and Prevention said the relaxation of pandemic control had already started and more would come, citing the resumption of state visits, sports events (e.g. the Beijing Marathon this Sunday), and relaxing PCR test requirements and starting to charge for the tests. At a press conference last Saturday, China’s National Administration of Disease Control and Prevention reiterated adherence to the dynamic zero-Covid policy. This may dampen somewhat investors’ optimism about reopening. Nonetheless, the Chinese health officials pledged at the same press conference to improve the implementation of the pandemic control measures so as to avoid massive and protracted lockdowns. China’s approval of BioNTech vaccine for foreigners living in mainland China also stirred up some anticipation of the possibility of allowing the more effective BioNTech vaccine to be available eventually beyond foreign residents. Stocks of interest to watch First up this week, Champion Iron (CIA) goes ex-dividend today, along with Macquarie (MGQ). National Australia Bank (NAB) is due to report results on Wednesday 9th. Mosaic (MOS) a fertilizer giant reports on Monday in the US. Walt Disney (DIS) reports 9th November. On with Occidental Petroleum (OXY) and Constellation Energy (CEG) report as well. Note Oxy and CEG are some of the US' best performers this year). Ralph Lauren (RL) reports on Thursday.    For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-7-nov-07112022
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Maersk Expects The Eurozone Enter Into A Recession | iPhone's Demand Is Coming Down

Saxo Bank Saxo Bank 07.11.2022 09:12
Summary:  Traders witnessed a wild session on Friday as the market decided that the US data would not add any further risk of a hawkish Fed for now, helping risk sentiment to rebound sharply as US treasury yields eased a bit lower. The US dollar was pummeled for sharp losses, particularly against commodity currencies that rebounded on chatter of China moving to ease Covid restrictions, only to see those hopes dashed over the weekend. Focus this week on US October CPI release this Thursday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities are holding up pretty well given the remarks on Wednesday from Fed Chair Powell and assessment by Larry Summers that the terminal rates probably should be closer to 6% than 5%. S&P 500 futures are trading around the 3,767 level with the index futures likely trying to attempt again to move to the 3,800 level, but our view is that tighter central bank policy will begin to impact US equities negatively again and the 3,600 level is our shorter-term target for S&P 500 futures. Euro STOXX 50 (EU50.I) European equities are up 13% from late September as European earnings have been better than expected and the energy situation has eased. But this optimistic view might be premature as the economic activity in the euro area is slowing down fast and the winter has not even started, so we do not know the true strength of the European energy market. Also, the idea that ECB will begin pausing is not credible as the inflationary pressures are very high and will force ECB to continue being more aggressive on policy rates. STOXX 50 futures are trading just above the 200-day moving average this morning at the 3,680 level, with some potential to move higher if the index futures can close above Friday’s close. But overall, we maintain that it is more likely that equities will begin to roll over here as central bank hawkishness on terminal rates will sink in. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) While China’s National Administration of Disease Control and Prevention reiterated its adherence to the dynamic zero-Covid policy at a press conference last Saturday, the health officials added that local governments should not unreasonably double down on the implementation and must ensure people’s livelihood and economic activities remain normal.  Investors took note of the above and recent signs of incremental flexibility in the implementation of pandemic control measures in China and saw the Hang Seng Index more than 3% higher as of writing. The resumption of large-scale sports events including the Beijing Marathon last Sunday, multinational sports events scheduled for 2023 such as Shanghai F1 and Hangzhou Asian Games, relaxation of PCR test requirements, increases in international flights, cancellation of circuit breaker for international flights, and approval of BioNTech vaccine for foreigners living in mainland China are among the factors cited by investors who anticipate gradual reopening in the coming months. Mainland A-shares’ reactions were more modest, with CSI300 climbing only 0.2%. FX: USD bounces back as China reasserts Zero Covid commitment after Friday’s huge sell-off The market absorbed Friday’s US data without further punishing US treasuries, as yields were capped and eased back. This saw the former USD strength reversing sharply to pronounced weakness Friday as risk sentiment also rebounded. Chatter late last week about China’s reopening added to brightening of sentiment. Commodity currencies had been supported with NZD leading the gains against the USD and being up over 2%. AUDUSD also surged above 0.6450 into the end of the week on hopes of a recovery in commodities demand. However, weekend reports from China’s Health Ministry confirmed that China will maintain its present zero-Covid regulations but improve the pandemic control measures, hinting that protracted lockdowns will be avoided. This has sent dollar back higher overnight, with AUD and NZD leading the declines, but this still appears merely a small consolidation of Friday’s weakening move. Focus this week on US CPI release on Thursday (more below). Gold (XAUUSD), silver (XAGUSD) and copper (HGZ2) … all raced higher on Friday, before giving back some of those gains overnight. The China reopening story gained its own momentum last week and while the official line has not changed, the tone has softened (see HK and China update above).  The extended rally despite a stronger-than-expected US report was driven by copper which recorded its best day since 2009, rallying close to 8% and in the process breaking through several key levels of resistance, thereby triggering some extra buying momentum from traders, not positioned for a bounce. The strong surge fed through to silver, up 7% on day, which found its own momentum above $20 and finally also Gold which had its biggest jump since March 2020. It may still be too early to call for a reversal given continued worries about the global economic outlook and Fed action, but Friday’s action will force a rethink of whether the sell-into-strength strategy is still valid. China developments, the dollar and incoming US data will provide most of the answers to this question.  Crude oil (CLZ2 & LCOF3) Crude oil trade lower following Friday’s strong gains with the market responding negatively to weekend headlines about zero-Covid policies being maintained in China. However, looking a bit deeper there is no doubt a softening approach is happening. The People’s Daily in an article on November 3 told people not to worry too much about “long Covid” ie the aftermath health problems from Covid while the health officials told local government not to make measures over stringent. With demand in China potentially starting to recover, the ill-timed OPEC+ production cut and EU sanctions against Russian crude is likely to keep the price risk focused to the upside, but with Brent failing to break above $98.75, and WTI above $93.65, the October highs, the market may spend the start of the week consolidating last week’s strong gains. US treasuries (TLT, IEF) US Treasury yields dropped back slightly on Friday as the US data was not seen stoking additional fears of the Fed intensifying its hawkish stance further for now, with this Thursday’s CPI weighing more in the balance than the mixed jobs report Friday. Focus is on the 4.32% top in the US 10-year treasury benchmark yield and the 3.90% low-water mark of the recent consolidation lower. What is going on? Mixed US jobs report US NFP headline gains of 261k were above expectations of 200k but slowed from last month’s 315k which was revised higher from 263k. Job gains were broad-based with strong gains in healthcare, professional and business services and manufacturing. Wage growth also held up strongly, coming in at 0.4% MoM in October from 0.3% MoM previously although a tad softer on a YoY basis at 4.7% from 5.0% YoY previously. However, the unemployment rate ticked up to 3.7% from 3.5% (exp. 3.6%) on a rather weak Household Survey although it was met with a 0.1% decline in the participation rate to 62.2%. However, with layoffs rising recently, especially in tech, it will be interesting to see how that impacts the headline NFP and the Fed tightening path in the months to come. Apple lowers iPhone output by 3mn units The demand for iPhones is coming down and Apple is now announcing a cut of 3mn units as consumers are under pressure from inflation and might be extending the life of their old phones. Apple has recently hiked prices on some of its services aiming to offset the weakness in its hardware business. Meta to start layoffs according to WSJ Investors have been frustrated with Meta following the Q3 earnings release as Mark Zuckerberg has reinforced the image that he does not listen to the concerns of investors that Meta is spending too much capital on its metaverse bets. According to Wall Street Journal, Meta might have listened after all as the technology company is expected to begin laying off thousands of employees. Ryanair lifts passenger target If there is an airliner that can do well during a recession in Europe it is Ryanair and the first half result this morning is a bit better than expected and the airliner expects net income of €1-1.2bn in the FY23 (ending 31 March). The Danish shipping giant Maersk sees the world entering a recession Maersk cut its forecasts for container demand this year. The drop is expected to reach minus 2 to 4 %. This matters because the company is often seen as a barometer for global trade. This is explained by well-known factors we have mentioned several times here: high inflation across the board, structural energy crisis in Europe, the geopolitical tensions and higher cost of capital. All of this weighs on consumer purchasing power and can potentially cause a global recession. Maersk expects the eurozone to be already or to enter into a recession, and potentially the United States as well. At Saxo Bank, we share this view, especially regarding the recession risk in the eurozone. Last week, ECB governor Martins Kazaks (which is seen as a hawk) acknowledged that the eurozone recession is now the baseline. This was the first time that an ECB governing council member said that officially.  The number of penny stocks is increasing on Euronext Paris With the significant equity drop that started earlier this year, many stocks are now close to zero. In Euronext Paris, the number of listed companies with stock value below 0.01 euro has jumped in recent months. For instance: Pharnext (biopharmaceutical company), NFTY (NFT and blockchain marketing services), Safe (specialized in the design and manufacture of medical devices) etc. Retail investors need to be very careful regarding small caps investment (especially when the valuation of the company is below 100 million euros). There are a lot of stocks that are not liquid enough and can represent a high risk of losses. What are we watching next? US inflation to test the 8% level, watch core and stickier components Bloomberg consensus expects US October CPI to drop below the 8% mark and come in at 7.9% YoY from 8.2% previously, but still higher at 0.6% MoM from 0.4% in September. The core measure is also expected to ease slightly to 6.5% YoY, 0.5% MoM (prev. 6.6% YoY, 0.6% MoM) but still remain elevated compared to historical levels. Key to watch also will be the drivers of inflation, particularly the stickier shelter and services costs, which if stuck higher could move the December Fed funds future pricing more towards another 75bps rate hike, resulting in another round of selloff in equities and dollar gains. However, with another CPI report due before the next Fed meeting in December, market impact of this week’s report will likely remain restrained unless a major deviation from expectations is seen. For this week’s CPI data, we will be watching the USD, and bond yields, which may be expected to rally up if the data is hotter than expected. US mid-term elections tomorrow Pundits suggest that the Republicans have very strong odds of flipping the House of Representatives in their favour, while the odds look finely balanced for whether the Senate ends retaining the slim Democratic majorities. Republicans taking both houses has few immediate ramifications, as US President Biden has the presidential veto, but a stronger than expected Democratic showing that somehow sees them retaining the House and strengthening their Senate majority would be a game changer – opening for more policy dynamism (and inflation from fiscal stimulus) from the US over the next two years rather than the expected lame-duck presidency. Uncertainty is high as pollsters have had a hard time gathering accurate indications for the election results since Trump’s victory in 2016. Earnings to watch The Q3 earnings season is slowing down this week but there are still important earnings releases to watch in certain industries or equity themes. Today our earnings focus is Ryanair, Palantir, and SolarEdge. Palantir is part of the technology segment that has been hit hard on valuations and with revenue growth slowing down and a negative EBITDA in Q2 the pressure is on Palantir to deliver a credible path to profitability; analysts expect 21% y/y revenue growth. Solar panel growth is still high and SolarEdge is enjoying this tailwind with revenue expected to grow 57% y/y and EPS up 57% y/y to $1.46. Monday: Westpac Banking, Coloplast, Ryanair (see earnings review above), Activision Blizzard, BioNTech, Palantir Technologies, SolarEdge Technologies Tuesday: Bayer, Deutsche Post, KE Holdings, Nintendo, Walt Disney, Occidental Petroleum, Lucid Group, DuPont Wednesday: National Australia Bank, KBC Group, Genmab, Siemens Healthineers, E.ON, Adidas, Honda Motor, Coupang, Rivian Automotive, Roblox, DR Horton, Trade Desk Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Economic calendar highlights for today (times GMT) 0700 – Germany September Industrial Production Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:   Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-7-2022-07112022
FX Daily: Upbeat China PMIs lift the mood

Disappointment Of Chinese Data | Disney, Occidental, Rivian Earnings

Swissquote Bank Swissquote Bank 07.11.2022 10:11
Week starts with blurred sentiment on the back of mixed US jobs data, and soft Chinese trade figures. Previous data Chinese exports and imports unexpectedly shrank in October; this was the first synchronized drop since May 2020. US jobs data was mixed, and triggered mixed market reaction, a rally that may not last long into the inflation data. US events ahead This week, US midterm elections & latest CPI update will be the major talking point. Earnings On the corporate calendar, Disney, Occidental Petroleum and Rivian are among companies that are due to go to the earnings confessional this week. Watch the full episode to find out more! 0:00 Intro 0:31 Chinese trade data disappoints 1:59 Over-optimistic reaction to the US jobs data’ 6:50 What to expect from US midterm elections? 8:39 Corporate calendar: Disney, Occidental, Rivian earnings Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #midterm #election #2022 #NFP #jobs #wages #inflation #data #Fed #hawks #Disney #Occidental #Petroleum #Rivian #earnings #China #trade #data #Covid #zero #policy #Foxconn #Apple #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

Saxo Bank's Podcast: Discussion On US Consumer Credit Growth, China Is In Focus Over Its Covid Situation

Saxo Bank Saxo Bank 07.11.2022 11:54
Summary:  Today we step back and look at last week's price action and especially after the FOMC rate decision. China is in focus over supposedly easing its Covid restrictions lifting copper and other industrial metals including emerging market equities. The USD also seems to be rolling over in the short-term easing financial conditions a bit and lifting risk sentiment. On the macro side, we discuss US consumer credit growth and what it means for the cycle and we highlighting the plunge in European economic activity over the past three months. On equities, we discuss rumoured Meta layoffs and Apple cutting its iPhone production target. Today's podcast features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-7-2022-07112022
Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges

Analytical Report - VOXEL – WSE:VOX

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 07.11.2022 13:43
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0 Sector: Health care & biotechnology Market Cap: US$ 76.2 m Fundamental rating: Buy (↑) Bloomberg code: VOX PW Market relative: Overweight (↑) Av. daily turnover: US$ 0.01 m Price: PLN 34.90 12M range: PLN 33.10-53.20 12M EFV: PLN 46.4 (→) Free float: 51% Recommended action We upgrade our recommendations for the equities of Voxel: LT fundamental and ST relative to Buy (from Hold) and Overweight (from Underweight), respectively. We expect 3Q22 financial results higher yoy and materially higher qoq given a medical services pricing increase (by 30% on average with respect to diagnostics from 3Q22) and lower losses generated by the hospital business. We believe that a high demand for MRI, PET, and SPECT scans continues with CT procedure deliberately not supported by the Company, in line with the strategic assumptions. We assume a material rise in the medical staff remuneration from 4Q22 on, albeit its impact on the Group’s results should be below the impact of medical services pricing increase. Thus, we raise our financial forecasts for the Group for FY22 and onwards. In our view, it is likely that the Group may write off inventories worth several million PLN; we assume PLN 4 million in 4Q22 as a one-off. 3Q22 financial results preview In 3Q22 we assume Voxel performed 74,000 procedures altogether, (flat yoy) including 24,000 (down 9% yoy)/ 42,000 (up 4% yoy)/ 4,000 (up 3% yoy)/ 4,000 (up 21% yoy) CT/ MRI/PET/ SPECT scans. The Company concentrates on the development in the area of MRI, PET, and SPECT procedures while CT procedures are not a priority, which is in line with the Group’s strategy, and this approach should be visible already in 3Q22. We assume a significant increase of average prices, by 20-40% depending on a diagnostic procedure. We estimate Voxel’s 3Q22 non-consolidated revenues at PLN 58 million (up 29% yoy). We forecast 3Q22 revenues of RP/ Scanix/ Exira/ Vito-Med/ Alteris to reach PLN 2/6/3/7/26 million and expect the Group’s consolidated revenues to arrive at PLN 97 million (up 3% yoy). It is worth reminding that testing for SARS-CoV-2 (34,000 tests performed) increased the Group’s revenues by c. PLN 10 million in 3Q22. The Group’s 3Q22 EBIT should reach PLN 16 million (up 15% yoy). A favorable diagnostic mix (more high margin procedures) should support the profitability. A medical staff salaries growth should be visible from 4Q22. Vito-Med’s hospital should continue generating losses, though they will be lower: we assume PLN -3 million vs PLN -5 million in 2Q22 (PLN -3 million generated by the hospital business and PLN -2 million related to SARS-CoV-2). We expect considerably higher net financial costs (doubling yoy) and forecast PLN 10 million of 3Q22 NI (up 8% yoy and up 109% qoq). Financial forecasts The Group expects the diagnostic services volume to rise in 2022 and we believe this business segment will provide strong support for this year’s financials. This year’s backlog in Alteris is estimated at PLN 105 million and we believe it may slightly increase. Vito-Med closed 3 (out of 4) labs testing for SARS-CoV-2 as from April 1 NFZ stopped funding the testing performed by laboratories and mobile sites. The Company has been restructuring the hospital business in order to increase its revenues keeping the current level of employment and existing equipment base intact. Nevertheless, the hospital will burden this year’s results, we believe. We raise our financial forecasts for the Group incorporating higher pricing of medical services reimbursed by NFZ (in 3Q22 c. 30% rise (vs 1Q22) of pricing for the medical procedures which generate almost 70% of Voxel’s revenues; in 2023 we expect a comparable rise of prices for commercial clients). We assume this factor will outweigh a cost growth, especially related to the medical staff remuneration (we assume material increases from 4Q22) and expect yoy profitability improvement in 2023. Valuation Our 12M EFV for Voxel constituting a 50%–50% mix of DCF FCFF method and peer-relative valuation, stays intact at PLN 46.4 per share. The financial forecasts upgrade was offset by a RFR increase to 7% (from 6.5%) coupled with a market premium growth to 7% (from 6.0%) and a decline of forward peer multiples. The DCF FCF/ peer-relative valuation implies PLN 41/ PLN 52 per share. Risk factors 1. Lower public spending on health care (high exposure to NFZ) 2. Medical services pricing increase too low 3. Change in the State’s policy regarding private medical contractors 4. Changes in the Company’s contracts with NFZ 5. Changes in legislation regarding the funding of hospitals/ treatments 6. The decline in the society’s affluence (FFS and commercial clients contribute up to 20% of Voxel’s revenues) 7. New innovative methods of cancer diagnostics/ treatment 8. Medical errors - reputation risk 9. Low and deteriorating availability of radiologists 10. Loss/low labor supply 11. Salary pressure (in particular of medical and IT staff) 12. Overblown investments 13. Lagging behind the technological progress in diagnostics Catalysts 1. Aging society 2. The number of diagnostic imaging treatments below the standards in developed countries 3. Medical services pricing increase 4. Development of the market of private medical services 5. Improvement of the treatment mix (towards more advanced) 6. New medical services offered 7. Development of a profitable segment of pharmaceutical research (clinical trials) 8. Organic growth, new centers (high barriers to entry) 9. Acquisitions – economies of scale 10. Consolidation of the sector; potential acquisition target 11. AI development and new algorithms for test descriptions 12. IT software development for cloud diagnostics 4 Analyst: Sylwia JaÅ›kiewicz, CFA GPW’s Analytical Coverage Support Programme 3.0  
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

Australia’s Consumer Sentiment Dropped | USA: A Stronger Than Expected Democratic Showing

Saxo Bank Saxo Bank 08.11.2022 08:39
Summary:  Equities extended their rebound from post-Powell lows on Monday with China reopening reports not taking any clear direction. US treasury yields jumped higher, but more so on a heavy corporate calendar rather than macro-driven, and dollar continued to slip for a second consecutive day. Asian economic data sending some warnings signs with China export/import growth turning red and Australian confidence dropping to fresh lows. US midterms ahead, and a clean Republican sweep can be further dollar negative. Earnings focus on Walt Disney in the day ahead. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) rose with tech and energy leading gains Ahead of the U.S. midterm election, equity market sentiments maintained a risk-on tone. Both S&P 500 and NASDAQ rose about 1%.  Community services, energy, and information technology led gains while utilities were the largest loser in S&P 500. On corporate news, Meta (META:xnas) gained 6.5% after the company announced plans to cut staff. Viatris (VTRS:xnas) surged 13% after the pharma company agreed to acquire Oyster Point (OYST:xnas). Lyft (LYFT:xnas) plunged 15% in extended-hour trading after reporting weaker-than expected ridership growth. Tesla (TSLA:xnas), losing 5%, dragged the benchmarks indices most. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) edged higher on incoming supply Yields across the treasury curve rose around 6bps ahead of refunding auctions of the 3-year notes, 10-year notes, and 30-year bonds for a total of USD96 billion from Tuesday to Thursday. A rise of 16bps across the pond in the 2-year UK Gilt yield also added to the pressure on treasuries. Investors will be watching closely the U.S. mid-term election on Tuesday and CPI on Wednesday. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) continued to rally on China reopening hopes Stocks in Hong Kong shrugged off the headlines about China’s National Administration of Disease Control and Prevention reiterating adherence to the dynamic zero-Covid policy over the weekend. Investors took note that the health officials added that local governments should not unreasonably double down on the implementation and must ensure people’s livelihood and economic activities remain normal.  In addition, the resumption of large-scale sports events, relaxation of PCR test requirements, increases in international flights, cancellation of circuit breaker for international flights, and approval of BioNTech vaccine for foreigners living in mainland China were among the factors cited by street analysts in their reports anticipating gradual reopening in the coming months. The Hang Seng Index rose for the second day in a row, finishing 2.7% higher. Financials outperformed, with HKEX (00388:xhkg) up 5.4%, HSBC (00005:xhkg) up 3.7%, and AIA (01299:xhkg) up 3.3%,  China property names surged on better-than-expected home sales data from some tier-1 cities. Country Garden (02007:xhkg), up 11%, was the top gainer in the Hang Seng Index. Despite Apple (AAPL:xnas) cutting iPhone production, Sunny Optical (02382:xhkg) jumped 11%. MMG (01208:xhkg) surged 16%, following the removal of blockage by locals to the company’s copper mine in Peru. Zinjin Mining (02899:xhkg), up 10.3%, announced to buy a 20% stake in Zhaojin Mining (01818:xhkg), up 9.7%.  China’s October trade data came in weaker than expected but it did not have much impact on the market on Monday. FX: Dollar’s decline extends despite rise in 10-year yields The US 10-year yields rose to last week’s post-Powell highs at 4.20%+, but the dollar tumbled for a second day in a row to drop to over one-week lows. Dollar decline was broad-based, against all G10 currencies barring the loonie. Gains were led by sterling, with GBPUSD above 1.1500 and EURGBP also sliding lower to 0.8700. EUR benefitted from the weaker dollar which helped EURUSD rise above parity from lows of 0.9900 even as President Lagarde reiterated her usual tone noting inflation must be brought back down to 2%. Midterms bring further volatility risks to FX, with a clean Republican sweep likely being dollar negative as yields will likely plunge amid speculation of a hamstrung administration limiting scope for fiscal support.    Crude oil (CLX2 & LCOZ2) lower despite dollar weakness Oil prices ended lower as hopes of China easing its zero covid policy faded, even as near-term supply constraints continued to limit the slide. OPEC has begun reducing output in line with the agreement to reduce quotas by 2mb/d at its last meeting. The market is also facing the deadline for European imports of Russian oil before sanctions kick in on 5 December. This has left fuel inventories tight, with Brent crude oil futures still below $100 per barrel and WTI futures staying above $91. Meanwhile, US natural gas futures soared on cold weather fears in the West and the Northeast. December natural gas futures contracts climbed as much as 12.8% to $7.22 per MMBtu before trimming the advance later. Copper (HGZ2) trimmed last week’s gains Copper reversed back to $3.60 after racing to $3.70+ levels on Friday on China reopening optimism. However, reports that China would stick with its adherence to strict virus controls, made the metal reverse some gains. Weak economic data also weighed on sentiment with China’s imports of Copper ore down and overall imports also unexpectedly falling for the first time in more than two years. Gold (XAUUSD) held steady despite the lower USD, and it may still be quite early to call a reversal in the short-term downtrend.   What to consider US mid-term elections to spook market volatility Pundits suggest that the Republicans have very strong odds of flipping the House of Representatives in their favour, while the odds look finely balanced for whether the Senate ends retaining the slimmest of Democratic majorities. Republicans taking both houses has few immediate ramifications, as US President Biden has the presidential veto, but a stronger than expected Democratic showing that somehow sees them retaining the House and strengthening their Senate majority would be a game changer – opening for more policy dynamism from the US over the next two years rather than the expected lame-duck presidency. Uncertainty is high as pollsters have had a hard time gathering accurate indications for the election results since Trump’s victory in 2016. China’s October trade data disappointed China’s exports in USD terms declined 0.3% Y/Y in October, much worse than the growth of 4.5% expected in the Bloomberg survey and the 5.7% in September. It was the first decline in export growth since May 2020 and might point to a turning point of deceleration in exports as the global economy slowed. If adjusting for inflation in export prices, the decline of China’s exports would be even larger in the real term. Imports in USD terms declined 0.7% Y/Y (vs consensus 0.0%, Sept: +0.3%). Bank of Japan affirms easy policy, but not without some mention of a future exit The Bank of Japan released summary of opinions of the October policy meeting today, broadly reaffirming the easy monetary policy stance. Still some members stuck a slightly different tone, noting that Japan's inflation likely to remain fairly high as there are signs service prices starting to rise, and “cannot rule out chance prices will sharply overshoot forecasts.” Still, sustained wage gains remained the base case for Japan to achieve its price target and members agreed that there was no immediate need to tweak monetary policy. Importantly, one member noted that the Bank of Japan must continue examining how a future exit from ultra-low interest rates could affect financial markets, in a rare mention of an exit. Big slump in Australian business and consumer confidence Australia’s consumer sentiment tumbled to its lowest level in 2.5 years and business confidence also weakened as higher interest rates and surging inflation stoke caution over the economic outlook. NAB business confidence plunged to 0 from 5 in September, while the Westpac consumer confidence index was down to 78 for November from 83.7 previously. This bodes ill for spending ahead, suggesting RBA’s caution on rate hikes may continue to prevail despite the continued hot CPI reports. Walt Disney earnings ahead Walt Disney is scheduled to report on Tuesday with analysts expecting Q4 (ending 30 September) revenue growth of 15% y/y but EBITDA at $3bn down from $3.86bn in Q3 highlighting the ongoing margin pressure. Layoffs are coming to Meta and Apple cuts iPhone production The demand for iPhones is coming down and Apple is now announcing a cut of 3mn units as consumers are under pressure from inflation and might be extending the life of their old phones. Apple has recently hiked prices on some of its services aiming to offset the weakness in its hardware business. Meanwhile, investors have been frustrated with Meta following the Q3 earnings release as Mark Zuckerberg has reinforced the image that he does not listen to the concerns of investors that Meta is spending too much capital on its metaverse bets. According to Wall Street Journal, Meta might have listened after all as the technology company is expected to begin laying off thousands of employees. Read our equity strategist Peter Garnry’s note here.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-8-nov-08112022
The US PCE Data Is Expected To Confirm Another Modest Slowdown

All Eyes On The US Midterm Elections | Republicans Are Favoured To Take The House

Swissquote Bank Swissquote Bank 08.11.2022 10:08
Investors are tense and undecided into the US midterm elections today.Joe Biden had a rough time since he is in office: he Covid pandemic, the war in Ukraine, the global energy crisis, the skyrocketing inflation, a pitilessly tighter Federal Reserve (Fed) policy, rising mortgage rates… all these factors will weight on the wrong side of the balance for Democrats at today’s election. The consensus expectation is a divided government between White House and Congress. Republicans are favoured to take the House and have at least 50/50 seats at Senate. What does that mean for the US monetary and fiscal policies, the financial markets, and the dollar? Watch the full episode to find out more! 0:00 Intro 0:20 US midterm elections: what to expect? 2:03 Impact on the Fed policy & USD 5:41 Impact on the fiscal policy & USD 7:34 Impact on stocks Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #midterm #election #2022 #USD #JPY #EUR #Gbp #CHF #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Tesla Does Not Say Much Directly About The Demand Situation, Ally Financial Sees A Slowdown In Car Loans

Investors Are Worried That Elon Musk Is Losing His Focus | The Eurozone Recession Can Dampen Investors’ Hopes

Saxo Bank Saxo Bank 08.11.2022 09:40
Summary:  Markets are trying to build some positive energy as the volatility in the US treasury market has eased in recent days, although Fed tightening expectations remain near the peak for the cycle ahead of another important CPI release on Thursday, certainly the macro event of the week. Today is mid-term election day in the US, where the Republicans are expected to take back at least the House of Representatives.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities gained 0.8% pushing above the 3,800 level and the 50-day moving average. The resistance level is up at around the 3,900 level with the 3,724 level being the short-term support level to watch. For US equities the biggest event to watch is today’s Midterm elections in the US which could change the political landscape in favour of the Republicans flipping the House. But for years polls have been terrible in predicting anything on US politics, so we remain neutral on the outcome. The US 10-year yield is advancing to 4.22% adding headwinds on equity valuations. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) The China reopening trade took a pause in Hong Kong and the mainland bourses as domestically transmitted new cases in the mainland doubled to 7,455. Guangzhou, the capital city of the Southern Guangdong province reported 2,377 new cases and launched mandatory testing in 9 of the 11 districts of the city and extended the lockdown of Haizhu district to Friday. Hang Sang Index fell 0.7% and CSI300 dropped 1.3%. FX: USD near important support ahead of Thursday’s US CPI The US dollar traded in a narrow range yesterday, with EURUSD near parity this morning after trading solidly above yesterday, but not yet threatening the 1.1094 pivot high from late October. Elsewhere, GBPUSD has traded briefly above 1.1500 but is still bottled up below the key range high above 1.1600, while AUDUSD is closer to the cusp of a break-out as it has traded as high as 0.6491, just shy of the 1-month pivot high of 0.6522 and the AUD likely keying off developments in China (hopes for an easing of Covid restrictions, commodities following through higher after last week’s rally, etc.) It feels like the next move for the greenback will key off the Thursday October CPI release, as CPI releases have sparked considerable volatility in recent months. Crude oil (CLZ2 & LCOF3) Crude oil remains in consolidatory mode after failing to find additional buying interest during Monday’s temporary break above the October high in Brent at $98.75 and $93.65 in WTI. The themes driving markets remain the same with supply worries driven by OPEC+ production cuts and EU sanctions against Russian oil from December 5 being offset by concerns about the health of the global economy and China’s prolonged battle with Covid with daily infections hitting a six-month high. Despite this latest acceleration in cases, the market has started to price in a lifting of restrictions sometimes early next year, an event Goldmans estimate could add between $6 and $15 upside risks to prices.  Today, the US Midterm elections is likely to steal some of the attention ahead of API’s weekly stock report tonight. Meanwhile, US natural gas (NGZ2) futures soared beyond $7/MMBtu on cold weather fears in the West and the Northeast before trimming the advance overnight. US treasuries (TLT, IEF) The MOVE index, a measure of the implied volatility of the US treasury market, has dipped sharply in recent days, posting its lowest levels since early September, perhaps as the market feels there are few surprises left in store from the Fed now that Fed funds expectations have reached above 5.00% and US yields at the longer end have remained bottled up in the 3.90%-4.30% range. The October US CPI release on Thursday is the next test for the US treasury market. What is going on? Bank of Japan affirms easy policy, but not without some mention of a future exit The Bank of Japan released summary of opinions of the October policy meeting today, broadly reaffirming the easy monetary policy stance. Still some members stuck a slightly different tone, noting that Japan's inflation likely to remain fairly high as there are signs service prices starting to rise, and “cannot rule out chance prices will sharply overshoot forecasts.” Still, sustained wage gains remained the base case for Japan to achieve its price target and members agreed that there was no immediate need to tweak monetary policy. Importantly, one member noted that the Bank of Japan must continue examining how a future exit from ultra-low interest rates could affect financial markets, in a rare mention of an exit. Tesla shares hit the lowest level since June 2021 Tesla shares were 5% lower yesterday as investors are getting more nervous about CEO Elon Musk intense focus on Twitter after he acquired the social media platform. Many advertisers have pulled back on advertising on Twitter leaving the company losing around $4-5mn a day with sizeable debt due. Investors are worried that Elon Musk is losing his focus but also that he will be forced to sell Tesla shares to fund Twitter operations. Nintendo still sees strong demand for Switch The gaming company lifts its FY net income projection to JPY 400bn from previously JPY 340bn on strong demand with the company seeing little impact on its sales from global inflation. Big slump in Australian business and consumer confidence Australia’s consumer sentiment tumbled to its lowest level in 2.5 years and business confidence also weakened as higher interest rates and surging inflation stoke caution over the economic outlook. NAB business confidence plunged to 0 from 5 in September, while the Westpac consumer confidence index was down to 78 for November from 83.7 previously. This bodes ill for spending ahead, suggesting RBA’s caution on rate hikes may continue to prevail despite the continued hot CPI reports. The Eurozone Sentix Index improved substantially, albeit from a awful level The Eurozone Sentix Investor confidence index was out at minus 30.9 in November versus 38.3 in October. This is a strong improvement. But the index was actually at its lowest level last month since March 2020. The other components increased too. The current situation improved to minus 29.5 while the expectations index jumped to minus 35.5. The uptick is clearly not a reversal trend. This is more of a rebalancing. Investors were too pessimistic in recent months regarding the evolution of the European energy crisis. The risk of energy rationing was overestimated, for instance. High gas storage and better weather will help avoid this nightmare scenario. This does not mean that the improvement in the Sentix index will continue, however. The eurozone recession will likely dampen investors’ hopes.  U.S. used car prices continue to move lower According to the Manheim index, used car prices continue to crash, with a year-over-year change at minus 10.4 % in October. This is the worst drop since December 2008. This matters because until the summer used car prices were one of the main contributors to U.S. inflation. Cryptocurrencies The crypto market is in negative territory today after growing concerns about the liquidity of the crypto exchange FTX - specifically tied to its hybrid investment fund/market maker Alameda Research. The selloff in cryptos was partly triggered by the nosedive of the FTX token, which together with the Solana token makes up a notable portion of Alameda's balance sheet. What are we watching next? US mid-term elections today Pundits suggest that the Republicans have very strong odds of flipping the House of Representatives in their favour, while the odds look finely balanced for whether the Senate ends retaining the slim Democratic majority or moves to Republican control, which would only require one more Republican seat. There are few immediate ramifications if Republicans take both houses, as US President Biden has the presidential veto, but a stronger than expected Democratic showing that somehow sees them retaining the House and strengthening their Senate majority would be a game changer – opening for more policy dynamism (and inflation from fiscal stimulus) from the US over the next two years rather than the expected lame-duck presidency. The latter is a very unlikely scenario, but uncertainty is high as pollsters have had a hard time gathering accurate polls, especially for specific states, for every election since Trump’s victory in 2016. Earnings to watch Today’s US earnings focus is Walt Disney which is expected to deliver revenue growth of 15% y/y but also significant margin pressure with gross margin expected at 32.5% the lowest Q1 2021. EPS is expected at $0.51 down from $0.91 in Q2. Monday: Westpac Banking, Coloplast, Ryanair (see earnings review above), Activision Blizzard, BioNTech, Palantir Technologies, SolarEdge Technologies Tuesday: Bayer, Deutsche Post, KE Holdings, Nintendo, Walt Disney, Occidental Petroleum, Lucid Group, DuPont Wednesday: National Australia Bank, KBC Group, Genmab, Siemens Healthineers, E.ON, Adidas, Honda Motor, Coupang, Rivian Automotive, Roblox, DR Horton, Trade Desk Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Economic calendar highlights for today (times GMT) 0900 – UK Bank of England’s Chief Economist Huw Pill to speak 1100 – US Oct. NFIB Small Business Optimism 1600 – UK BoE’s Pill to speak 1700 – EIA's Monthly Short-term Energy Outlook (STEO) 2030 – API Weekly Report on US Oil Inventories 0130 – China Oct. PPI/CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher     Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-8-2022-08112022
China: PMI positively surprises the market

Podcast: China Is Set To Ease Up On Its Covid Restrictions, Eyes On The USA

Saxo Bank Saxo Bank 08.11.2022 11:53
Summary:  Today we look at markets as we await US elections today and the US CPI data print on Thursday, all while everyone has very twitchy trading fingers on hopes that China is set to ease up on its Covid restrictions. We also discuss the simultaneous decline in bond market and equity market volatility and ask which asset class might be more attractive. Equity sentiment has improved sharply and is near six-month highs. In commodities, we zero in on nat-gas, gold, cocoa and coffee. Stocks to watch, including Tesla, upcoming earnings from Disney and more also on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source: https://www.home.saxo/content/articles/podcast/podcast-nov-8-2022-08112022
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

The Dow Jones Hit A Monthly High, The S&P 500 Index Also Rose

InstaForex Analysis InstaForex Analysis 09.11.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 1.02% to hit a monthly high, the S&P 500 index grew 0.56%, the NASDAQ Composite index climbed 0.49%. Dow Jones Amgen Inc was the top performer among the components of the Dow Jones in today's trading, up 15.37 points or 5.55% to close at 292.39. Quotes Boeing Co jumped by 4.71 points (2.86%), closing at 169.62. American Express Company rose 2.19% or 3.22 points to close at 150.20. The worst performers were Walgreens Boots Alliance Inc, which shed 0.30 points or 0.78% to end the session at 38.29. The Walt Disney Company was up 0.53 points (0.53%) to close at 99.90, while Chevron Corp was down 0.27 points (0.15%) to close at 185. 34. S&P 500 The top performers in the S&P 500 index today were SolarEdge Technologies Inc, which surged 19.13% to 251.73, Expeditors International of Washington Inc, which gained 9.06% to close at 104.40, as well as Welltower Inc, which increased by 8.22% to end the session at 66.51. The least gainers were Take-Two Interactive Software Inc, which shed 13.68% to close at 93.57. Shares of Medtronic PLC lost 6.25% to end the session at 80.19. Quotes of International Flavors & Fragrances Inc decreased in price by 4.96% to 91.41. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Taskus Inc, which rose 37.22% to hit 22.01, GrowGeneration Corp, which gained 35.05% to close at 4.47, and Skywater Technology Inc, which rose 31.60% to end the session at 11.37. The least gainers were Bioventus Inc, which shed 57.51% to close at 3.00. Shares of R1 RCM Inc lost 49.76% and ended the session at 7.41. Quotes of Athersys Inc decreased in price by 43.36% to 1.28. The numbers On the New York Stock Exchange, the number of securities that rose in price (1834) exceeded the number of those that closed in the red (1256), while quotes of 125 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,894 stocks fell, 1,771 rose, and 259 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 4.89% to 25.54. Gold Gold futures for December delivery added 2.15%, or 36.20, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 2.83%, or 2.60, to $89.19 a barrel. Brent futures for January delivery fell 2.39%, or 2.34, to $95.58 a barrel. Forex Meanwhile, in the Forex market, EUR/USD climbed 0.56% to hit 1.01, while USD/JPY fell 0.73% to hit 145.55. Futures on the USD index fell 0.46% to 109.49.     Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300198
The French Housing Market Is More Resilient | The Chance Of Republicans Winning The Senate Is Up

The French Housing Market Is More Resilient | The Chance Of Republicans Winning The Senate Is Up

Saxo Bank Saxo Bank 09.11.2022 08:31
Summary:  Risk sentiment remained upbeat despite the fallout in the crypto world as equities focused on the results of the midterm elections. Bitcoin made fresh YTD lows in the wake of Binance's acquisition of FTX. But US yields and the dollar tumbled, helping Gold and Silver to run higher breaking some key resistances. Another surge in China’s Covid cases still kept a check on gains in oil prices, and focus today will be on inflation data from China. Disney’s disappointing results further add to this quarter’s earnings misery, and Rivian and Roblox report today. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) closed higher in a choppy session A political gridlock with a divided Congress after mid-term elections was historically positive for the equity market. S&P 500 gained nearly 1.4% and Nasdaq 100 rose as much as 2% at one point before paring all the gains and more in the early afternoon, dragged by a selloff in the crypto space. Stocks managed to bounce in the late afternoon and recover some of the early gains, with S&P 500 and Nasdaq 100 finishing a volatile session 0.6% and 0.8% higher respectively. Lyft (LYFT:xnas) tumbled 23% after weak rider growth was reported the day before. Walt Disney (DIS:xnys) plunged 6.4% in extended-hours trading on earnings miss which was dragged by weak streaming results. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) yields fell on hopes for political gridlock and strong demand in the 3-year auction US treasury yields fell 4bps to 9bps across the curve with the best performance in the 5-year to 10-year segment, with the 10-year yield down 9bps to to 4.12%. Anticipations of political gridlock in Washington that historically restrained fiscal policies saw buying in treasuries. Demand in the 3-year auction was solid with awarded yields stopped at more than 1bp richer from the time right before the auction. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) took a pause as Covid cases surged The China reopening trade took a pause in Hong Kong and the mainland bourses as domestically transmitted new cases in the mainland doubled to 7,455. Guangzhou, the capital city of the Southern Guangdong province reported 2,377 new cases and launched mandatory testing in 9 of the 11 districts of the city, and extended the lockdown of Haizhu district to Friday. Hang Sang Index fell 0.2% and CSI300 lost 0.7%. China’s passenger vehicle sales growth slowed in October to +7.3% Y/Y but new energy vehicles sales, rising 75% Y/Y, remained solid. However, EV stocks declined, with NIO (09866:xhkg) falling the most, down 9% following analysts cutting price targets on the stock. Among China internet names, Alibaba (09988:xhkg) underperformed, losing 3.7%. Macau casino stocks were the top performers, rising 2% to 4%, following Macau’s decision to relax entrance rules for some visa holders starting Sunday. FX: Weaker dollar and lower yields amid an expected Republican sweep Expectations of a split Congress saw lower US yields and further USD selling on Tuesday, and eyes are now on US CPI due later this week. Meanwhile, the crypto fallout in the wake of FTX being acquired by Binance sparked a wave of volatility. Yen gained with USDJPY falling below 146. EUR gained a firmer footing above parity amid the latest ECB rhetoric including from de Guindos who noted they will continue raising rates to levels that ensure price stability, while ECB's Nagel said he will do his utmost to make sure the ECB does not let up in the inflation fight and said that large rate hikes are necessary. GBPUSD also reclaimed 1.15 handle. Crude oil (CLZ2 & LCOF3) slid with API inventory build WTI futures slid below the key $90 mark on Tuesday and Brent slid to $95 despite a weaker dollar as a fresh surge in China’s Covid cases further sparked concerns on whether China will part ways with its Zero Covid policy. Xinjian reported its fourth highest number of new cases nationally on Monday. Inner Mongolia, which was sealed off in early October, saw cases jump to almost 1800. New infections in the province of Henan almost doubled. Meanwhile, supply concerns eased with API inventory build coming in larger than expected with crude oil inventory up 5.6mm barrels last week and gasoline inventory also coming in higher. Still, US EIA also cut its 2023 oil production estimate to 12.31mm barrels/day, suggesting structural supply concerns are here to stay. Copper (HGZ2), Gold (XAUUSD) and Silver (XAGUSD) The weakness in the dollar drove metals higher. Copper led the base metals sector higher on dwindling inventories amid positive signs for demand, challenging the September high of $3.6925 once again, ahead of $3.78. Bold move higher in gold and silver as well last night with renewed USD weakness, with the most notable being gold up at one-month highs breaking through $1680/85. A break above $1735 would likely confirm a low in the market. Silver finding some technical resistance here at $21.50 but the break above $21.15 has opened up for a move to $22.25.   What to consider Republicans likely in a strong position in the US mid-term elections Looking at the latest odds on Predictit, the chance of Republicans taking the House is up to 95% from 90% earlier. The chance of them winning the Senate is up to 83% from 74% earlier. All the closest races have tilted towards the Republicans as well. It can take several days to confirm which party will prevail, especially in the Senate. More so if we go to recounts, where the votes cast in a close race are retabulated to verify the initial results. A split Congress, as we wrote yesterday, lowers the expectation of fiscal support measures thereby leading to investors expecting a sooner Fed pivot again. This can spark a further tactically rally in equities and will likely be USD negative. Risk of a contagion in the crypto market After a weeklong dispute between crypto exchanges Binance and FTX, the former is set to acquire FTX, stating a significant liquidity crunch for FTX. This may fuel further contagion throughout the crypto market, as not only FTX but also Alameda Research - the highly linked trading firm to FTX - may be insolvent. Our crypto analyst expects increased volatility in the next couple of days and weeks. Further, this may lead to contagion across the crypto market as experienced in May and June this year, so in our view, traders and investors in the crypto market should act cautiously in the foreseeable future. Likewise, Bitcoin's correlation with NASDAQ has been record-high throughout this year - and relatively high today. Please be aware that the development of crypto may impact particularly NASDAQ. Read more here. China’s PPI and CPI are expected to slow in October China’s PPI is expected to fall -1.5% Y/Y in October vs +0.9% Y/Y in September, due to the high base last year resulting from increases in material and energy prices. Unlike other major economies, CPI in China is expected to slow to +2.4% Y/Y in October from +2.8% in September. Walt Disney reported disappointing FYQ4 results Walt Disney reported FYQ4 revenue at USD20.2 billion, about USD1 billion below street consensus estimates. Adjusted EPS declined to 30 cents, missing substantially the Bloomberg consensus of 51 cents. Subscriptions rose to 164.2 million in FYQ4, up 12 million from 152 million in FYQ3, beating expectations. The operating loss in the direct-to-consumer segment, driven by the Disney+ streaming service, however, jumped to USD1.47 billion in FYQ4 from USD1.05 billion in FYQ3. The management told analysts that they expect the direct-to-consumer segment losses “to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming [they] do not see a meaningful shift in the economic climate.” France’s housing market is cooling down The combination between high inflation across the board (CPI hovering close to 6% on a year-on-year basis), lower purchasing power and higher interest rates is pushing housing prices down in France. According to the real estate promoter Century21 (one of the leading player in this market), real estate prices went down under the threshold of 10.000 Є per square meter in Paris. The deceleration in prices is however limited so far. Contrary to Tel Aviv, Amsterdam and Hong Kong, the parisian housing market is not in a situation of a speculative bubble. Prices are overvalued however. Expect prices to go down a bit more due to a drop in solvent demand. But we won't see a large decrease in prices as it is currently happening in several major cities in the United States, for instance. The French housing market is more resilient for mostly two main reasons: fixed interest rates and a comparatively low household debt (it represents about 124% of net disposable household income versus a peak at 249% in Denmark). For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-9-nov-09112022
Technical Analysis: Gold/Silver Ratio Still On The Rise

Gold, Silver And Copper All Resumed Their Upside Push | The US Dollar (USD) Fell Sharply

Saxo Bank Saxo Bank 09.11.2022 09:51
Summary:  Market sentiment improved further yesterday before dipping slightly overnight, as China Covid cases are on the rise, pushing back against hopes for a lifting of Covid restrictions. In the US mid-term elections, Democrats are slightly outperforming expectations, possibly set to retain control of the Senate even if Republicans look likely set to take narrow control of the House of Representatives.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities exhausted themselves yesterday pulling back from intraday highs to close around the 3,835 level. Sentiment has weakened overnight amid the ongoing impact from the US midterm elections, bad Disney and the fallout from the implosion of FTX in the crypto industry with S&P 500 futures trading down to the 3,829 level. Tesla shares continued lower yesterday, and Elon Musk announced overnight in a filing that he had sold 19.5mn shares in Tesla, and the negative momentum could broaden as many retail investors have sizeable exposure to the stock. The next big event for the US equity market is tomorrow’s October inflation figures which are expected to show core inflation is easing a bit. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) The China reopening continued to fade as new Covid cases surged further to 8,176 yesterday. Hang Seng Index retreated 1.6% and CSI 300 slid 0.8%. China’s PPI declined 1.3% Y/Y in October due to falls in energy and materials prices and weaknesses in metal processing. CPI inflation was also weaker than expected and fell to +2.1% in October from 2.8% in September on weak consumer demand and property prices. Share prices of Chinese developers however surged, following the Chinese authorities pledged to provide credit support, including credit insurance and bond buying, to private enterprise developers. FX: USD remains on back foot after testing important support. Thursday CPI key focus The US dollar fell sharply yesterday, with EURUSD testing the pivot high of 1.0094 before pulling back slightly into this morning and USDJPY had a look toward the pivotal 145.00 level without breaking through. Elsewhere, AUDUSD tested above the 0.6522 pivot late yesterday before pulling back again, likely on concerns that rising China Covid cases are frustrating hopes that a shift away from lockdowns will provide a further boost to the commodity market. Lower US treasury yields yesterday helped drive the US dollar lower and are a key focus over the Thursday October US CPI release, as CPI releases have sparked considerable volatility in recent months. Crude oil (CLZ2 & LCOF3) slid on API inventory build and China’s Covid Challenges WTI futures trade back below $90 and Brent near $95 after a fresh surge in China’s Covid cases sparked concerns over whether China will part ways with its Zero Covid policy. Also weighing on prices was the API reporting a 5.6m build in crude and 2.6m build in gasoline stocks. On the supply the EIA made another downgrade to its forecast for US 2023 production, down 0.7m b/d since March to 12.3m b/d driven by labor shortages, high equipment costs, supply-chain constraints and not least commitment to profits over production. Precious and industrial metals pause following another upside push After pausing on Monday, gold, silver and copper all resumed their upside push yesterday with the moves being triggered by renewed dollar weakness and softer bond yields ahead of tomorrow’s US October CPI release. A selloff in cryptocurrencies potentially helped get the ball rolling, especially gold which found fresh momentum buying on the break above $1680/85 area. Technical resistance levels in silver at $21.50 and copper at $3.69 together with the EURUSD hitting resistance at the pivot high of 1.0094 paused the rally. Gold, up 83 dollars in three sessions, will be watching $1735 closely as a break above could be signalling an end to the month-long correction. Crypto market getting nervous After a weeklong dispute between crypto exchanges Binance and FTX, a letter of intent was signed yesterday for Binance to acquire FTX, stating a significant liquidity crunch for FTX. The announcement was initially a brief relief for the crypto market, but it was followed by a steep crypto sell-off, likely dragging major equity indices such as S&P 500 down as well. Nervousness is spreading throughout the crypto markets in fear of further contagion as we saw earlier this year, and a higher degree of volatility should be expected in the crypto markets. Read more here. US treasuries (TLT, IEF) US Treasury yields fell yesterday all along the curve ahead of the macro data point of the week – tomorrow's US October CPI release. Focus on the 3.90% yield on the 10-year treasury yield to the downside and 4.3% area cycle high to the upside in the wake of that release. What is going on? Disney sees margin compression in Q4 Disney+ delivered Q4 subscribers of 164.2mn vs est. 162.5mn but EPS came in at $0.30 vs est. $0.51 as energy costs and wage pressures are pressuring the operating margin. Disney+ is still on track to be profitable in the FY24 (two years from now). Disney’s Q4 revenue was $20.2bn vs est. $21.3bn. Shares were 7% lower in extended trading. Tesla shares fall another 5% and Elon Musk sells $4bn of shares The rumours about the big losses at Twitter and that Elon Musk would be forced to fund its operations were true as he filed overnight that he had sold $4bn of Tesla shares pushing the price down by another 2% in extended trading. Negative momentum could easily extend here with Tesla shares sitting a crucial support area back from March and June 2021. US Mid-term elections avoid the “red wave” of Republican gains, although Dems likely to lose House The final results are too early to call, but the Democrats may possibly retain control of the US Senate, with one race in Georgia possibly requiring a run-off as was the case in the 2020 election before any final outcome is known. Final tallies are not available for the House of Representative results, but the lean in the results makes it likely that the Republicans will take control of the House by a fairly comfortable margin (NYT estimates 225-210 this morning). Democrats losing the House means that the last two years of the Biden presidency will be “lame-duck”, with no real ability to shape new policy. At the same time, given the situation coming into this election, with soaring inflation and poor popularity for the sitting president, the Republican performance looks quite weak. As well, if the Democrats do retain control of the Senate, Republican-driven legislation will be unlikely to reach Biden’s desk, meaning he won’t have to formally veto their bills. France’s housing market is cooling down The combination between high inflation across the board (CPI hovering close to 6 % on a year-on-year basis), lower purchasing power and higher interest rates is pushing housing prices down in France. According to the real estate promoter Century21 (one of the leading players in this market), real estate prices went down under the threshold of 10.000 Є per square meter in Paris. The deceleration in prices is, however, limited so far. Contrary to Tel Aviv, Amsterdam and Hong Kong, the Parisian housing market is not in a situation of a speculative bubble. Prices are overvalued, however. Expect prices to go down a bit more due to a drop in solvent demand. But we won't see a large decrease in prices as it is currently happening in several major cities in the United States, for instance. The French housing market is more resilient for mostly two main reasons: fixed interest rates and a comparatively low household debt (it represents about 124 % of net disposable household income versus a peak at 249 % in Denmark). What are we watching next? US October CPI release tomorrow is macro event of the week Many recent US CPI releases have sparked considerable market volatility, not least the September release last month which strongly surprised by showing core inflation reaching a new cycle high of 6.6% year-on-year. Tomorrow’s October CPI release, ex Fresh Food and Energy is expected to come in at +0.5% month-on-month and +6.5% year-on-year, with the headline expected at +0.6%/7.9%, which would be the first sub-8.0% year-on-year print since February. Earnings to watch Today’s US earnings focus Rivian Automotive and DR Horton. The electric vehicle industry is in high growth phase and Rivian is also expected to report revenue of $561mn up from $1mn a year ago as the company ramps up production of its delivery vans. DR Horton is expected to deliver FY22 Q4 (ending 30 September) revenue growth up 25% as the tailwind from the backlog is still feeding through, but revenue growth y/y is expected to collapse to –6% y/y in the current quarter so the outlook is the key watch in this earnings release. Wednesday: National Australia Bank, KBC Group, Genmab, Siemens Healthineers, E.ON, Adidas, Honda Motor, Coupang, Rivian Automotive, Roblox, DR Horton, Trade Desk Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Economic calendar highlights for today (times GMT) 0800 – Hungary October CPI 0800 – US Fed’s Williams (Voter) to speak 0905 – Australia RBA’s Bullock to speak Poland Announces Interest Rate 1200 – Mexico Oct. CPI 1300 – UK Bank of England’s Haskel to speak 1530 – EIA's Weekly Crude and Fuel Stock Report 1630 – UK Bank of England’s Cunliffe to speak 1700 – World Agriculture Supply and Demand Estimates (WASDE) 0001 – UK Oct. RICS House Price Balance 0100 – US Fed’s Kashkari (Voter 2023) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-9-2022-09112022
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Investors Continue To Watch Events Unfold In The USA

Craig Erlam Craig Erlam 09.11.2022 12:16
Equity markets are mixed on Wednesday as investors continue to watch events unfold in the US for a sense of what impact they’ll have on sentiment. The impact of the midterms will probably be short-lived, if impactful at all, as far as markets are concerned. Of course, the political implications may be significant if Democrats can manage to retain control of the House and Senate but at this stage, only one of those looks plausible which means deadlock in Washington. The bigger takeaway from the election may well be what support there is for Trump-backed candidates and what that does for his own re-election hopes in two years. But that’s unlikely to sway the markets now, not with so much else to focus on. Investors are more focused on the inflation data on Thursday and whether that will pave the way for a slower pace of tightening in December and early next year. There’s unease about the central bank’s views on the terminal rate but those could abate if we see a favourable inflation number tomorrow. Turmoil at FTX sees cryptos plunge For a long time, bitcoin has aligned itself with broader risk appetite in the markets but it goes without saying that Tuesday was not one of those days. Cryptocurrencies have been pummeled at the start of the week with bitcoin down almost 20% in two days at one stage amid concerns over FTX and the implications for the FTT token. Alameda’s balance sheet is a major factor in those fears which has seen that pain spread to Solana, with contagion fears dragging on the crypto space as a whole. Bitcoin fell to a near-two-year low at one stage and is down almost 3% again today. Nervy days ahead for cryptos as Binance looks to come to the rescue. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
UK Labor Market Shows Signs of Loosening as Unemployment Rises: ONS Report

Jim Cramer: "The Digitizers And Disruptors Are Being Burned"

Kamila Szypuła Kamila Szypuła 09.11.2022 11:38
While the markets are waiting for the US CPI report, other important events take place. Deutsche Bank is successful and the IMF has signed an agreement. Attention is also focused on the US elections. In this article: The agreement US elections: Gretchen Whitmer won Deutsche Bank Affirm situation Refuse new reality Agreement at staff level IMF tweets about an agreement between IMF staff and the Bangladesh authorities. IMF staff and the Bangladesh authorities have reached a staff-level agreement to preserve macroeconomic stability, build climate resilience, and support strong, inclusive growth, while protecting the vulnerable. Learn more here: https://t.co/L62a73m1q8 pic.twitter.com/hIvVr9MiCU — IMF (@IMFNews) November 9, 2022 Agreement is always important for the general good. Bangladesh's new program supported by the Fund aims to maintain macroeconomic stability and foster strong, inclusive and green growth, while protecting vulnerable people. Such cooperation may have a positive result in the economic field, which will translate into the standard of living in Bangladesh. Michigan’s Democratic Gov. Gretchen Whitmer won a second term CNBC Now writes about Michigan Gov Gretchen Whitmer in its post Michigan Gov. Gretchen Whitmer defeats Trump pick Tudor Dixon, winning a second term, NBC News projects https://t.co/zSdVIGOE4s — CNBC Now (@CNBCnow) November 9, 2022 The topic of the US elections is closely watched. There are forecasts, expectations and sepulations. The news posted by autroa tweet is important because The election marked the first time that women have been at the top of the ticket for both major parties in Michigan. The top volume performers in the Securities Lending In its last post Deutsche Bank write about further successes. Deutsche Bank wins @BSEIndia's top volume performer in Securities Lending and Borrowing award for the fifth consecutive year. Read more: https://t.co/GxyU2RB203#SecuritiesServices — Deutsche Bank (@DeutscheBank) November 8, 2022  Deutsche Bank was ranked among the top volume performers in the Securities Lending and Borrowing (SLB) segment by the Bombay Stock Exchange (BSE). Another year in a row, the bank shows its strong position. Some time ago I wrote that the bank is developing in terms of modern forms of payment. We are now finding out that it is once again a leader in another sector in the field of securities lending. Successes and development favor a stronger positioning of the bank. It will also increase the trust of customers and may attract new ones. Read more: Deutsche Bank Continues To Grow | A Look At The US Public Debt| FXMAG.COM Pay later is ineffective Peter Schiff tweets about Affirm. So #Affirm is tanking 20% after hours (down over 92% from its 2021 high) to a new low on an earnings miss. Buy now, pay later doesn't work. Who would have thunk it? Wait until all the people who bought now can't pay later. That's when $AFRM goes from loan now, to bankrupt later. — Peter Schiff (@PeterSchiff) November 8, 2022 The author of the tweet describes the current situation. He emphasizes that the method to crash afterwards can have very undesirable consequences. It will also indicate that if people who buy now with the option to pay later, they may not have the funds to do so. From a logical point of view, it makes sense, because if you don't have money now, then how can you get it later? Underlining that such action may lead to bankruptcy is important information for investors who pay attention not only to the results but also to the actions. The market’s distaste for tech stocks Mad Money On CNBC tweets about CNBC's Jim Cramer’s comment on the stock market .@JimCramer also warned that many investors refuse to embrace the “new reality” of the market’s distaste for tech stocks. https://t.co/i3tdSNJvSF — Mad Money On CNBC (@MadMoneyOnCNBC) November 9, 2022 Jim Cramer is closely monitoring the developments in the stock market. His statements are a valuable source of information. According to the author of the tweet, the expert emphasizes that the actions of technology companies are not doing well. Tech companies have become more popular with investors, but are currently not the best place to invest. An expert's indication of which companies are doing better and which are worse may significantly affect investment decisions, as well as the situation of companies.
In Crypto, You Could Prove You Own A Private Key Without Revealing It

Saxo Bank's Podcast: Huge Liquidity Pressures In The Crypto Space

Saxo Bank Saxo Bank 09.11.2022 12:41
Summary:  Today we look at the US mid-term election results, where the House looks set to flip Republican and the Senate may go down to a December 6th run-off in Georgia (as in 2020 and providing fodder for election denier conspiracy theories, etc...) but either way cementing the lame duck second half of Biden's presidency. Elsewhere, we look at the massive gold rally yesterday, in part on huge liquidity pressures in the crypto space that have prices tumbling there. Also, Tesla, Disney, stocks to watch, the USD on edge ahead of critical CPI release tomorrow and more on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app:           If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.     Source: https://www.home.saxo/content/articles/podcast/podcast-nov-9-2022-09112022
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

The Number Of Securities That Fell Exceeded The Number Of Those That Closed In Positive Territory

InstaForex Analysis InstaForex Analysis 10.11.2022 08:25
At the close on the New York Stock Exchange, the Dow Jones fell 1.95%, the S&P 500 fell 2.08%, and the NASDAQ Composite index fell 2.48%. Dow Jones Merck & Company Inc was the top gainer among the components of the Dow Jones in today's trading, up 0.09 points (0.09%) to close at 101.59. Quotes of McDonald's Corporation fell by 0.61 points (0.22%) to end trading at 277.79. Procter & Gamble Company lost 0.33 points or 0.24% to close at 136.48. The least gainers were Walt Disney Company, which fell 13.15 points or 13.16% to end the session at 86.75. Chevron Corp was up 4.00% or 7.41 points to close at 177.93 while Dow Inc was down 3.97% or 1.97 points to close at 47.68. . S&P 500 Leading gainers among the S&P 500 index components in today's trading were Akamai Technologies Inc, which rose 6.19% to hit 89.08, Gen Digital Inc, which gained 6.01% to close at 22.92, and also shares of Bio-Rad Laboratories Inc, which rose 5.67% to end the session at 403.49. The least gainer was Walt Disney Company, which shed 13.16% to close at 86.75. Shares of Occidental Petroleum Corporation shed 9.22% to end the session at 67.93. Quotes Norwegian Cruise Line Holdings Ltd fell in price by 8.74% to 15.77. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Merrimack Pharmaceuticals Inc, which rose 212.75% to 12.51, Outset Medical Inc, which gained 29.90% to close at 14.90, and also shares of Neurobo Pharmaceuticals Inc, which rose 29.60% to close the session at 1.62. The least gainers were Clovis Oncology Inc, which shed 71.62% to close at 0.28. Shares of Telos Corp lost 68.84% and ended the session at 3.44. Quotes of Athersys Inc decreased in price by 56.45% to 0.56. Numbers On the New York Stock Exchange, the number of securities that fell in price (2539) exceeded the number of those that closed in positive territory (564), while quotes of 97 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,848 stocks fell, 900 rose, and 221 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.15% to 9/26. Gold Gold futures for December delivery lost 0.44% or 7.60 to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 3.77%, or 3.35, to $85.56 a barrel. Futures for Brent crude for January delivery fell 3.15%, or 3.00, to $92.36 a barrel. Forex Meanwhile, in the Forex market, EUR/USD was down 0.62% to hit 1.00, while USD/JPY was up 0.52% to hit 146.41. Futures on the USD index rose 0.75% to 110.37.   Relevance up to 03:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300382
Meta Is Cutting Discretionary Spendings And Extending Its Freeze On Hiring

Meta Is Cutting Discretionary Spendings And Extending Its Freeze On Hiring

Saxo Bank Saxo Bank 10.11.2022 09:12
Summary:  Risk sentiment took a beating again as the midterms fever faded with a lack of a Republican wave, and focus shifted back to the crypto turmoil and continued surge in Covid cases in China. Tech layoffs also took another step up with Meta slashing 13% of its workforce. USD gained despite lower US yields as it is likely turning more risk-sensitive than yield-sensitive, but focus on US CPI will add to some caution ahead of the release. A hotter-than-expected core print will likely bring the focus back on Fed’s hawkishness. What’s happening in markets? The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) dropped on crypto selloff, earnings disappointment, lower oil prices, and midterm elections S&P 500 plunged 2.1% and Nasdaq fell 2.4%. The sell0ff was board based with all 11 sectors of the S&P 500 in the red. The energy sector was the worst performer, falling 4.9% as crude oil prices down nearly 4% on rising US inventory levels. The collapse in crypto prices deepened, following Binance’s decision to walk away from its short-lived takeover bid for the ailing FTX. Robinhood Markets (HOOD:xnas) fell 13.8% as investors were concerned if FTX’s Sam Bankman-Fried might liquidate his 7.5% stake in Robinhood. Disney (DIS:xnys) plunged 13.2% on disappointing earnings. Meta Platforms (META:xnas) gained 5.2% after the company announced to layoff 13% of its employees to cut costs. US treasury (TLT:xnas, IEF:xnas, SHY:xnas) yields fell in a mixed session U.S. treasuries, in particular, the frontend of the curve were supported by selloff in equities and crypto, dovish comments from Fed Evans, and strong rallies in the European bond markets, seeing 2-year yields down 7bps to 4.58%, and 10-year yields falling 3bps to 4.09%. European bond yields dropped on the news that Russia was withdrawing its troops from Kherson, a Ukrainian regional capital city annexed by Russia less than two months ago. Chicago Fed president Charles Evans, who is retiring, said in an interview that there are “benefits to adjusting the pace as soon as” the Fed can and the Fed should not keep raising rates by a large amount every time on disappointing economic data. The 10-year auction did poorly with weak demand from investors but the market managed to shrug it off and had a strong close. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) The China reopening trade continued to fade on Wednesday as new domestically transmitted cases surged further to 8,176 the day before. Hang Seng Index retreated 1.2% and CSI 300 slid 0.9%. China’s CPI fell to 2.1% Y/Y and PPI declined 1.3% Y/Y in October, signaling weak domestic demand. Share prices of Chinese developers however surged, following Chinese authorities saying that they were expanding an existing credit support programme by RMB250 billion to help private enterprises, including developers, in raising debts, by providing debt insurance or bond buying. Country Garden (02007:xhkg), up 13.9%, Longfor (00960:xhkg), up 4%, were top performers in the Hang Seng Index. After trading 1% to 4% lower during the Hong Kong session, China Internet names continued to face selling pressure overnight in New York, with ADRs of Alibaba (09988), Tencent  (00700:xhkg) ,and Meituan (03690:xhkug)  each falling around 3% from their Hong Kong closing levels. FX: USD gains return as risk sentiment deteriorates The USD was back on the front foot on Wednesday ahead of the critical US CPI data due today. US midterms still ended in a political gridlock, even though a Republican wave was avoided. However, limited implication on policy means market focus can return to other key events, such as the crypto turmoil and further rise in China’s Covid cases. US 10-year yields dropped below 4.1% but it appears that the USD is not more risk-sensitive rather than being yield-sensitive. Geopolitics turned calmer with Russia retreating from the only Ukrainian regional capital captured, Kherson, but that brings some risk of new escalations as Putin gets desperate. Focus on US CPI however brought some weakness back in the DXY in early Asian hours with USDJPY back below 146.20. GBPUSD bounced back after a brief slide below 1.1350 and the EUR bounced back higher from parity. Crude oil (CLZ2 & LCOF3) WTI futures dipped further below $90/barrel mark, now touching the $85 handle, while Brent moved lower to sub-$93. Oil prices declined as the EIA reported US crude stocks rose by 3.9 million barrels to the highest since July 2021. This was offset by tightness in the fuel product markets. Gasoline inventories fell by 900kbbl, and distillate fuel stockpiles fell by 521kbbl. Meanwhile, sustained rise in Covid cases in China continued to take a hit on the demand outlook. New cases in Beijing jumped to the highest level in more than five months. Of particular concern was the number of infections found outside quarantine, suggesting the virus is still circulating through the community and would likely delay the easing of Zero Covid policies. Wheat (ZWZ2) prices lower, along with Corn, after USDA report The USDA released it’s November World Agricultural Supply and Demand Estimates report, which led to mixed but mostly lower grain prices. While the overall wheat consumption outlook was raised, USDA said demand may drop in some places, including Indonesia and Sri Lanka, due to high prices. Wheat prices plunged 2.5%. The agency also lifted its soybean output and stockpiles outlook, but robust export demand lifted prices. Meanwhile, USDA expects to see the seventh-largest corn crop on record this year, with a new estimate of 13.93 billion bushels.   What to consider? US midterms avoided a Republican wave Even with votes still being counted and runoffs yet to come to determine the US Senate majority, the midterm election didn't bring the red wave that was expected. Republicans are inching towards control of the House, but with a far narrower margin than what was predicted. Meanwhile, Democrats are likely to keep their majority in the Senate but the outcome won’t likely be confirmed for a while as Georgia heads to a runoff on December 6. The end result is still a political gridlock, much as expected, but with far smaller market implications given lack of a firm policy direction. US inflation to test the 8% level, watch core and stickier components Bloomberg consensus expects US October CPI to drop below the 8% mark and come in at 7.9% YoY from 8.2% previously, but still higher at 0.6% MoM from 0.4% in September. The core measure is also expected to ease slightly to 6.5% YoY, 0.5% MoM (prev. 6.6% YoY, 0.6% MoM) but still remain elevated compared to historical levels. Key to watch also will be the drivers of inflation, particularly the stickier shelter and services costs, which if stuck higher could move the December Fed funds future pricing more towards another 75bps rate hike, resulting in another round of selloff in equities and dollar gains. However, there is another CPI report due before the next Fed meeting in December, and we are going into today’s release with a weak risk sentiment following the crypto meltdown seen this week. This suggests that even a print that matches expectations, or is above it, will likely bring another selloff in equities and further support for the dollar. Binance walked away from FTX acquisition, another plunge in Bitcoin The contagion in the crypto and equities we mentioned yesterday is already here, and getting worse as latest developments suggest that Binance backed away from its earlier pledge, tweeting Wednesday afternoon that it would not pursue the acquisition of FTX. It cited due diligence and a reported US investigation into the exchange. Bitcoin plunged below $16,000, , while Ether followed and dipped to its lowest price since July, barely hanging on to the $1,100 level. China is in disinflation China’s PPI declined 1.3% Y/Y in October due to falls in energy and materials prices and weaknesses in metal processing. CPI inflation was also weaker than expected and fell to +2.1% in October from 2.8% in September on weak consumer demand, falling residential costs, and declines in vegetable prices. Meta to layoff 13% of its workforce Meta’s Mark Zuckerberg announced the social platform’s plan to layoff over 11,000 employees, about 13% of its workforce. Zuckerberg also said Meta is cutting discretionary spendings and extending its freeze on hiring through Q1 2023. The company reaffirmed its Q4 revenue guidance of USD30-32.5 billion, in line with expectations. Capex for 2023, according to the Company, will be in the range of USD34-37 billion, at the low end of prior guidance of USD34-39 billion.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-10-nov-2022-10112022
The USD/JPY Price Seems To Be Optimistic

Correlation Between The USD/JPY Pair And US 2-Y Treasury Yield Remains High

Saxo Bank Saxo Bank 10.11.2022 09:17
Summary:  When Sep CPI came lower than prior but higher than expected, S&P 500 index futures (ESZ2) had immediate reaction selling off ~3% and USDJPY - best carry trade among G10 yielding 5% - also rallied 100 pips so these two are expected to be most obvious ones to trade and show instant price action in terms of sensitivity to the data. First headline squawk highlighted in red that I saw this morning on my Bloomberg terminal was “BITCOIN DROPS BELOW $16,000…”. Last time Bitcoin (BTCUSD) dipped below $16,000 was 2 years ago and now it has fallen 77% from all time high $69,000 that was traded 1 year ago. Also to put this price action into perspective, Bitcoin/gold ratio has declined to just over 9 times compared to 35 times last year. When I checked on coinmarketcap.com, FTX - on the verge of potential bankruptcy - was the fourth biggest cryptocurrency spot exchange based on traffic, liquidity & volume, hence the risk-off sentiment has well and truly arrived as some of the notable crypto related stocks got hammered – COIN -10%, MSTR -20%, GLXY -16% while safehaven US dollar bid up broadly heading into October US CPI release tonight at 9:30pm. However we are yet to see significant systematic risk as VIX sitting at 26 with futures term structure of contango and high yield junk bond ETF (HYG) has not crashed trading 2.2% above recent low $70.40 as well as credit spread is also off 100bps below from the recent high 600bps. The current macro backdrop continues to focus and assess on the relative impact on inflation from rising real yield (10 year at 1.7%) or aggressiveness of interest rates hikes while Fed’s QT has been shrinking its balance sheet by about 3.2% from $8.9t to $8.6 in the last seven months. Even though last week’s unemployment rate looks to have bottomed from 3.5% to 3.7%, two of the mostly watched yield curves – 3m10y and 2y10y - still remain inverted at 9bps & 48bps respectively and we are not seeing substantial steepening happening yet therefore the futures implied terminal rate ~5% in 2Q next year may still have further rooms to move higher despite recent FOMC meeting’s down-shift signal and Powell’s cumulative tightening of 375bps, the most in one year since 1980.  The previous headline Sep CPI numbers 8.2% YoY showed major drivers were food, medical and shelter contributing nearly 1% each while energy and cars cooled. This time, energy may have gone up a bit and services would remain as a key area to watch as it has not stopped rising every month since Aug last year. The most recent PCE figures for Sep was 6.2% that is not only above Fed’s projection of central tendency 5.3%-5.7% but also far from its longer run target of 2%. After all, we have not seen sub 8% headline CPI since February number this year and actual result was less than estimate only once for July but given the estimate for tonight’s figures is anticipated at 7.9%, meeting this estimate may be sufficient for the equity market to find some relief rally. On 13 October, when Sep CPI came lower than prior but higher than expected, S&P 500 index futures (ESZ2) had immediate reaction selling off ~3% and USDJPY - best carry trade among G10 yielding 5% - also rallied 100 pips so these two are expected to be most obvious ones to trade and show instant price action in terms of sensitivity to the data. S&P 500 had a decent rebound last month digesting earnings as 456 companies have now reported with earnings surprise of 3% that is lowest in the last two years post Covid. S&P 500 forward earnings per share (EPS) estimated at 226 makes the PE ratio 16.6 times or 6% yield based on last night’s close 3,748 but again there-are-reasonable-alternatives (TARA) as 2 year treasury is at 4.6% and IG corporate bond ETF (LQD) giving nearly 6% with relatively lower implied volatility compared to SPY (13 vs 24). Lastly USDJPY is trading near a key level 145 that previously acted as resistance in September then turned into support level in the last two weeks. Correlation between USDJPY and US 2 year treasury yield remains high so the pair should be able to at least consolidate assuming 145 holds while long out-of-the-money call options could also work given 1 month implied volatility has fallen from 17 to 11 in recent weeks and 2 vol lower than realised volatility. Alternatively by taking more neutral to bullish view with possible Japan intervention, bull put spread (credit) could be considered using the same level 145 as the lower strike to long put and sell higher strike – say 148.50 that is half way between the recent high 152 and 145 – giving net premium of about 200 pips for one month expiry. Source: https://www.home.saxo/content/articles/forex/st-note---us-oct-cpi-preview-10112022
Saxo Bank Podcast: The Risk Of An Escalation In The US-China Confrontation, The Risk Of An Escalation In The US-China Confrontation And More

The Russia Has Announced The Intention To Withdraw Its Troops | Hopes For A Covid Zero Exit In China Fades

Saxo Bank Saxo Bank 10.11.2022 09:22
Summary:  Markets are increasingly spooked by the liquidity pressure in the crypto space, as the major crypto exchange FTX.com and its associated trading house Alameda Research may be set to go bust without a multi-billion dollar rescue, and as total market cap in crypto currencies has plunged over $100 billion over the last month. Elsewhere, the focus was meant to be on today’s US October CPI release. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities saw a hit to sentiment yesterday as Binance walked away from the deal to save the crypto exchange FTX setting in motion a plunge in cryptocurrencies. One of the largest shareholders in FTX, Sequoai Capital, is marking down its investment to zero suggesting little faith in the company and its ability to function. The risk-off moves spilled over into equity market with Tesla leading the declines among the mega caps down 7% with US President saying that Elon Musk relationships with foreign powers could be a national security issue. S&P 500 futures took out gains over the previous two sessions closing at 3,755 but the index futures are attempting to rebound this morning. Note the critical support level at 3,727 which could come into play later today if we get a negative surprise on the US inflation figures suggesting more sticky inflation. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Following the risk-off sentiments spilling over from the crypto space and then global equities, Hong Kong and mainland China stocks declined, with Hang Seng down 2% and CSI 300 0.6% lower. China EV and Internet stocks are the top losers.  Among Hang Seng Index constituents, LINK REIT (00823:xhkg) was the performer, gaining more than 2%. AAC (02018), Apple’s acoustic product supplier, surged 5.7% on earnings beat and analysts expecting the company gaining market shares from its arch-rival after the latter losing orders from a key foreign client (most likely Apple).  FX: USD finds bids on weak risk sentiment. US October CPI release key focus later today The US dollar clawed back some of its losses as cratering crypto prices are seeing widening contagion, and rising Covid cases in China continue to drive concerns that further lockdowns are on the way. The weakest currencies were those normally associated with risk sentiment, like the smaller G10 currencies, as AUDUSD trades this morning not far above 0.6400 after a spike to 0.6550 at the beginning of the week. Overall USD direction remains in play as the USD is somewhat down, but by no means out and today’s US October CPI to theoretically set the tone, although a liquidity crisis in crypto that continues to drive contagion elsewhere could yet steal the spotlight in the near term, with poor liquidity generally associated with USD strength. A weak US treasury auction yesterday is also a concern on that front (more below). Crude oil (CLZ2 & LCOF3) Trades lower for a third day as hopes for a Covid zero exit in China fades after the country increased restrictions in a key manufacturing hub and new cases in Beijing jumped to the highest level in more than five months. WTI has returned to the $85 handle, down 9% from Monday’s peak, while Brent trades sub-$93. In addition, the market has also been hurt by the loss of risk appetite filtering through from the carnage in cryptos and after the EIA reported US crude stocks rose by 3.9 million barrels to the highest since July 2021. This was somewhat offset by tightness in the fuel product markets with gasoline inventories dropped to an eight-year low. Focus on China, the general level of risk appetite signaled through the dollar and today’s US CPI print for October.  Precious metals hold gains ahead of today’s US CPI print Gold trades above $1700 for a second day with shallow correction attempts since Tuesday's surge so far pointing to underlying support. However, with most of that currently being provided by a drop in Treasury yields and a softer dollar, today’s US CPI print for October will be watched closely. Another upside surprise may cause a temporary drop before potentially supporting prices as the market will start wondering whether the FOMC will be successful in getting inflation control. Some support also emerging from the chaos across the crypto market where the risk of contagion to other coins from the FTX fallout remains elevated. Gold support at $1682 and silver at $21 followed by $20.27. Crypto market: another plunge in crypto as Binance walks away from FTX acquisition  The contagion in the crypto and equities we mentioned yesterday is already here, and getting worse as latest developments suggest that Binance backed away from its earlier pledge, tweeting Wednesday afternoon that it would not pursue the acquisition of FTX. It cited due diligence and a reported US investigation into the exchange. Bitcoin plunged below $16,000, while Ether followed and dipped to its lowest price since July, barely hanging on to the $1,100 level. According to a research note from JPMorgan the crypto market is right now facing a cascade of margin calls and liquidity disappearing in the system. US treasuries (TLT, IEF) US Treasury yields are sharply lower this morning, with the 2-year treasury yield closing below 4.60% yesterday, the lowest since the hawkish Fed Chair Powell press conference last Wednesday. Weak risk sentiment and contagion from the melt-down in crypto markets may finally be driving safe haven flows into what is traditionally the world’s most liquid asset: UYS treasuries. The 10-year treasury benchmark yield edged below 4.10% after a very weak 10-year auction, with bidding metrics the worst in years. The US Treasury is set to auction 30-year T-bonds today. What is going on? Wheat (ZWZ2) prices lower, along with Corn (ZCZ2), after USDA report The USDA released its November World Agricultural Supply and Demand Estimates report, which led to mixed but mostly lower grain prices. While the overall wheat consumption outlook was raised, USDA said demand may drop in some EM countries due to high prices. Wheat prices plunged 2.5% with additional selling from the announcement Russia is moving its troops out of Kherson, a development that may clear the way for more crop shipiments out of Ukraine. The agency also lifted its soybean output and stockpiles outlook, but robust export demand lifted prices. Meanwhile, USDA expects to see the seventh-largest corn crop on record this year, with a new estimate of 13.93 billion bushels. Foxconn still sees high demand for high-end electronics  The electronics maker, and the biggest supplier to Apple, reported Q3 results today with operating profits and revenue beating estimates. The company still sees strong demand for consumer electronics at the high-end of the market, but sees overall consumer electronics falling in Q4 y/y. US earnings recap: Beyond Meat and Rivian The EV delivery van maker Rivian missed estimates on Q3 revenue yesterday due to supply constraints, but the EPS loss of $1.57 was less than estimated at $1.86. The EV maker still sees 2022 production target at 25,000 vs est. 26,166. Rivian shares gained 8% in extended trading hours. Beyond Meat missed big on both revenue and EBITDA, but tries to calm investors by putting out a positive cash flow level around the second half of 2023. Russia said to be set to pull troops from embattled Kherson  In the hardest fought area of the war after the Russian invasion of Ukraine, the Russian side has announced the intention to withdraw its troops to the Eastern side of the river after an intense battle to maintain control of the strategic city, which is the closest major city to the Crimean Peninsula and would bring many Russian targets, including key supply routes from Crimea, within range of Ukrainian artillery if Ukraine takes control of Kherson. UK October Home Price Survey shows massive deceleration in UK housing  The RICS House Price Balance has been tumbling in recent months as mortgage rates have spiked on the overall rate rise, but also as spreads have widened due to by poor liquidity in the market. The positive 30% reading in September was already a sharp drop from the very strong levels above 50% just two months prior, and the October survey was expected to show +19% (still shownig prices generally rising). Instead, it plunged all the way to –2%, suggesting that UK housing market pricing is decelerating at a record clip, with deeper negative readings ahead that will impact overall UK confidence. What are we watching next? US October CPI release today suddenly looking less pivotal? The crypto panic has quickly stolen focus from the US CPI data release here, possibly to a sufficient degree that even an inflation print that is solidly below the expectations could fail to spark notable relief across markets, as weak liquidity concerns possibly keep the US dollar firm and equity markets weak even if yields ease lower. The ex-Fresh Food and Energy number is expected to come in at +0.5% month-on-month and +6.5% year-on-year, after the multi-decade high of 6.6% YoY in September, with the headline expected at +0.6%/7.9%, which would be the first sub-8.0% year-on-year print since February.) Earnings to watch Today’s US earnings focus is NIO which will be latest test for the EV market as maybe providing information on the factory situation in China amid rising Covid cases. The Chinese market is the most important market for Tesla so a dire outlook from NIO could translate into negative sentiment on Tesla shares. Thursday: Brookfield Asset Management, Fortum, Engie, Credit Agricole, Allianz, Merck, Hapag-Lloyd, RWE, SMIC, Nexi, AstraZeneca, ArcelorMittal, Siemens Gamesa Renewable Energy, Becton Dickinson, NIO Friday: Richemont Economic calendar highlights for today (times GMT) 1330 – US Oct. CPI 1330 – US Weekly Initial Jobless Claims 1400 – US Fed’s Harker (voter 2023) 1400 – Poland Central Bank Governor Glapinski news conference 1530 – EIA’s Weekly Natural Gas Storage Change 1730 – US Fed’s Mester (Voter 2022) to speak 1800 – US Treasury auctions 30-year T-bonds 1830 – US Fed’s George (voter 2022) to speak 1900 – Mexico Central Bank Rate Announcement     Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-10-2022-10112022
China's Position On The Russo-Ukrainian War Confirmed At The G20 Meeting

Sales On Asian Stock Markets | Investors Stay Away From Equities

TeleTrade Comments TeleTrade Comments 10.11.2022 09:30
Asian stocks have been prey to sheer volatility ahead of the US inflation data. Massive sell-off at Facebook's helm brought a sell-off in S&P500. Long-term US yields have tumbled in anticipation of a 50 bps rate hike in the December policy meeting. Markets in the Asian domain have witnessed an intense sell-off after fetching negative cues from S&P500. A significant recovery in the risk-off market mood has forced investors to stay away from equities till the release of the US Consumer Price Index (CPI) and the outcome of mid-elections outcome. At the press time, Japan’s Nikkei225 tumbled 1.05%, ChinaA50 dropped 0.43%, Hang Seng plummeted 1.87%, and Nifty50 surrendered 0.70%. Massive lay-off announced at Facebook dented sentiment of market participants. This has triggered the risk of a slowdown in overall demand. Well, US equities are facing the consequences of accelerating interest rates by the Federal Reserve (Fed). Also, a majority win of Republicans would snap some command from Democratic in passing bills and laws. The US dollar index (DXY) is hovering around the day’s low at 110.20 as investors are restricting themselves ahead of the US CPI for making informed decisions. The 10-year US Treasury yields have tumbled to 4.07% as odds are not favoring a rate hike of 50 basis points (bps) in December monetary policy by the Federal Reserve (Fed). Going forward, the extent of deviation in inflationary pressure will provide meaningful cues about the likely monetary policy action by the Fed. Meanwhile, Nikkei225 has witnessed selling pressure despite the announcement of economic stimulus packages this week. To spurt the aggregate demand, the Japanese administration has decided to provide stimulus budgets and hike taxes for big pockets. On the oil front, oil prices have nosedived by more than 3% after the head of the International Energy Agency (IEA) Fatih Birol slammed OPEC+’s decision to cut oil production as it might worsen the outlook for developing countries that are sliding towards recession, reported Bloomberg. He further added that the move is fueling inflation, especially in developing countries, and may require a “rethink,”
Craig Erlam And Jonny Hart Discuss Crypto Situation And The US Election Results

Craig Erlam And Jonny Hart Discuss Crypto Situation And The US Election Results

Craig Erlam Craig Erlam 10.11.2022 10:00
OANDA Senior Market Analyst Craig Erlam reviews the latest market news with Jonny Hart. They discuss the US midterm results, crypto sell-off and the upcoming inflation report. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
ECB's Hawkish Hike: Boosting EUR/USD and Shaping Global Monetary Policy

Saxo Bank's Podcast: The Equity Risk Premium, The Meltdown Of Crypto And More

Saxo Bank Saxo Bank 10.11.2022 12:22
Summary:  Today we look at the sudden shift of the plot over the last 24 hours as the crypto contagion effects from the meltdown in that space have reached sufficient magnitude to impact sentiment across markets. We emphasize caution on the network effects among many clusters of assets held by the same hands holding crypto. Also, a look at where we are with the equity risk premium as investors better not hope for "normal" equity valuations. A glance at FX and the USD rising on liquidity concerns and brushing off the drop in US treasury yields, which brings into question the reaction function around today's October US CPI release, which may not have the impact previously anticipated, even on a surprise. Today's pod features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-10-2022-10112022
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

If US CPI Meets The Expectations, The Us Yields Will Increase

InstaForex Analysis InstaForex Analysis 10.11.2022 12:27
Traders are focused on the upcoming US consumer price data this Thursday, but the inflation data due out a day later could be even more important in determining the short-term outlook for global markets. While the expected fall in the consumer price index is likely to be welcomed by investors, Friday's 5 to 10-year inflation expectations from the University of Michigan will resonate with Fed officials who fear a further increase in prices. The index rebounded to 2.9% in October, so another gain could put pressure on the bank and force it to raise rates even higher than expected. That would reduce risk appetite, from equities to bonds. On Thursday, Richmond Fed President Thomas Barkin vowed that the central bank would not back down from a slow return to normal inflation levels, which could threaten the stability of inflation expectations. US yields could rise if the consumer price index is in line with forecasts. 5-10 year inflation expectations may surge to the highest since 2011, said Prashant Nyunaha, a senior rate strategist at TD Securities. A decline in the expected consumer price index should not provoke a significant market reaction, but retesting the January and June highs, according to the University of Michigan, will confirm that the rate hike to date has not had the expected impact on inflation Relevance up to 10:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326771
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

DataWalk-3Q22 Preliminary Results Revealed-WSE: DAT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 10.11.2022 12:55
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Event: 3Q22 preliminary results revealed – 31% yoy growth of revenues – below expectations. After yesterday’s market close, DataWalk released preliminary financials for 1-3Q22 with the revenues at PLN 25.8 million (up 29% yoy) which implies 3Q22 revenues at PLN 7.7 million (up 31% yoy) while an implied 3Q22 operating loss adjusted for the incentive program costs reached PLN -7.3 million. The incentive program valuation had a positive impact on the reported result. Operating costs grew in 3Q22 (up 65% yoy and 8% qoq) to PLN 15.0 million. The CEO PaweÅ‚ WieczyÅ„ski commented on the results: DataWalk expected a revenue dynamic growth in 3Q22, but this expectations did not materialize; In 3Q22 the Company witnessed a slowdown in making purchase decisions by some clients in spite of the fact that the implementation of solutions offered by DataWalk is deemed indispensable. The Company does not lose contracts, albeit they are delayed and in some cases split into parts with a lower first order; The CEO believes that even if uncertain economic circumstances prevail, DataWalk will come out of it with the stronger organization enabling the Company to accelerate its growth. Our comment: 2Q22 poor dynamics were justified by insufficient training and performance of field engineering teams handling the pre-sale (software trial version installation) and post-sale services (software implementations); this time, in 3Q22 the situation was aggravated by the problems of the wide market such as clients’ delaying decisions stemming from a harsher economic reality. The full 1-3Q22 report will be published on November 22, 2022. Expected impact: Slightly negative; as the revenue growth dynamic disappointed. Nevertheless, it looks like this has been partially discounted by the market. Analyst: Tomasz Rodak, CFA +48 797 487 381 GPW’s Analytical Coverage Support Programme 3.0  
The South America Are Looking For Alternatives To The US Currency

ETF investing in Turkish stocks gained over 45% in Q3, Conotoxia's Grzegorz Dróżdż elaborates on selected exchange trade funds

Conotoxia Comments Conotoxia Comments 10.11.2022 14:20
ETF (exchange-traded fund) a type of passive fund that is designed to reflect the behavior of specific indices, or sectors. With this, we can achieve exposure to a particular market, sector or country while keeping costs low. Thanks to this, we don't have to buy, for example, all 500 companies in the S&P 500 index. So we decided to check which of these funds could achieve the most interesting results in the last 3 months. Fund performance Of the 200 funds surveyed, 24 percent had a positive return. The average volatility of the fund, measured by standard deviation, during the period was 15.12 percent. The largest index, the S&P 500, fell 7.17 percent during the period, reaching a volatility of 12.24 percent. It seems that based on this information, we can see the current moment of the business cycle. The best of the best If we wanted to juxtapose the best winners, we could compare their rates of return. However, it seems that such a comparison does not take into account the risk aspect of a given investment. For this purpose, we will use the Sharpe ratio, that is, the relationship of the achieved rate of return to the level of total risk (standard deviation), to measure the effectiveness of the investment. For this indicator, it is assumed that values above 50% are considered to be an outperformance of the market average over a long period.The iShares MSCI Turkey ETF (TUR) had the highest return, at 47.68 percent over the past quarter. The fund is designed to seek to track the investment performance of a broad index composed of Turkish stocks. It consists of 27.16 percent Turkish industrial companies and 19.47 percent material processing companies. The result of significant growth may have been influenced by rising inflation, which currently stands at, as much as 85.51 percent. Despite such a high decline in the value of the Turkish lira, the dollar-denominated ETF achieved such a result. Sharp for the period was 220.46 percent. Source: MT5, TUR, WeeklyThe second best return was achieved by the VanEck Oil Services ETF (OIH). The fund is designed to track the overall performance of companies listed in the United States and engaged in upstream oil services, which include oil equipment, oil services or drilling. Consisting of 25 companies, the fund's performance in the most recent quarter was 44.67 percent, with the Sharpe ratio at 185.51 percent. It appears that such strong performance may have been due to the oil market.In the final podium spot was the Invesco Energy S&P US Select Sector UCITS ETF (XLES), which, like its predecessor, mimics the performance of the US energy sector. This fund consisting of companies from the S&P 500 (US500) index, unlike its predecessor, is geared only towards energy companies. During the period under review, it achieved a performance of 29.77 percent with a Sharpe ratio of 182.51 percent. The result also seems to have been influenced by the price of oil The safest Among the funds with positive returns and the lowest volatility was the Xtrackers MSCI Japan UCITS ETF (XMUJ). A fund that gives exposure to key Japanese companies that hold a minimum of 85 percent of a given market. In addition, this dollar-denominated fund hedges against changes in the dollar-Japanese yen (USD/JPY) exchange rate. Volatility during the quarter under review was only 6.05 percent, and the fund was up 1.15 percent despite fluctuations in Japan's main NIKKEI 225 (JP225) index. The Sharpe ratio was 18.99 percent during the period under review. Source: MT5, XMUJ, DailyThe iShares MSCI India UCITS ETF (NDIA), which seems to have been growing rapidly for years, came in second with exposure to the Indian economy. What may seem interesting is that it is 24.73 percent composed of companies in the financial industry. In second place in terms of weight are companies from the information technology industry accounting for 15.02 percent of the fund. The volatility for the stated period was 8.09 percent with a performance of 3.47 percent. This gives a performance-to-volatility ratio (Sharpe's) of 42.89 percent.Specially highlighted ones include the AXS First Priority CLO Bond ETF (AAA), which boasts a volatility of just 0.91 percent despite a -0.98 percent drop in value. Sharp Under normal circumstances, this fund invests at least 80 percent of its assets in AAA-rated tranches of top-priority debt backed by credit obligations. This fund can invest in bonds of any maturity. In addition, this fund is actively managed and does not seek to mimic the performance of any particular index. Most independent When we want to reduce portfolio risk, according to portfolio theory, we should look for asset classes that are least correlated with each other. We usually measure the level of dependence by the correlation level of two assets, where a correlation value of 1 means perfectly correlated assets, a value of -1 perfectly opposite correlated (when one goes up, the other goes down exactly the same amount), and a value of 0 means no dependence at all.The lowest dependency ratio relative to the largest S&P 500 index (US500) was demonstrated by the United States Oil Fund, LP (USO), which seeks to reflect changes in the price of oil by investing in futures contracts on this commodity with various maturities. After a period of three months, the fund achieved a return of 6.02 percent with a risk of 18.87 percent. The correlation index (correlation) was 0.24, which may indicate a low correlation to the broad market. The Sharpe for this fund was 31.93 percent. Source: MT5, USO, DailyAuthor: Grzegorz Dróżdż, a Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
The South America Are Looking For Alternatives To The US Currency

Dollar isn't that strong at the moment, if inflation persists to go down, Oanda's analyst seems to hint at the pit of stocks prices

Ed Moya Ed Moya 10.11.2022 21:29
This inflation report was a nice surprise. ​ Inflation has been very slow to come down, but this report gives up hope that this deceleration with pricing pressures might bring back hopes of a soft landing. The headline reading came in lower-than-expected, but most traders were focused with the month-over-month decline with core prices. ​ If this downward trajectory for inflation holds, then you can make a strong case that the bottom is in place for US equities. US stocks are rallying as Wall Street finally sees light at the end of the Fed’s tightening cycle tunnel. ​ This cool inflation report helped stocks post their best trading day in two years. ​ Treasury yields are in freefall, the dollar is tanking, and practically every risky asset is rejoicing over this inflation report. ​ ​ Inflation ​ ​ ​  Inflation has peaked but don’t hold your breath waiting for it to get to target. Inflation is cooling after the core reading only posted a 0.3% monthly increase. ​ The headline reading dropped more than expected to 7.7% from a year ago, which is noticeably better than the peak reading from June of 9.1%. Inflation almost always proves to be stickier, so traders should not be surprised if the descent in pricing pressures takes a little while longer. Good prices have been coming down and that was supported by lower readings from cars, apparel, and energy services. ​ Wall Street is closely watching shelter prices, which rose 0.8%, the most since 1990. ​ There was some optimism with housing affordability as the monthly gains slowed for rents. ​ Shelter prices always take the longest to come down, so investors will expect this key contributor to core PCE to remain hot for another quarter. ​ This inflation was a good sign that the Fed is on the right path to winning this war with inflation, but there will still be a lot of variables thrown its way over the next couple of quarters. ​ The Fed could easily bring rates to 5.00% and if inflation proves to be stickier, it could be as high as 5.50%. ​ FX King dollar has left the building after a soft inflation report cemented the Fed’s downshift to a slower pace of tightening and revived hopes of a soft landing. The price reaction to this inflation report was a bit excessive but could be justified if the next couple of inflation reports are just as cool. ​ ​ ​ ​ Cryptos A dark crypto period was supposed to begin following the FTX debacle, but a cooler-than-expected inflation report gave every risky asset a massive boost. ​ FTX contagion risks remain elevated and while today’s broad-based crypto rally is rather impressive with bitcoin rising over 10% and ethereum surging by 16%, investment into cryptocurrencies will likely struggle here as too many key institutional investors and crypto companies have money tied up with the bankruptcy bound exchange. ​ Until we see which players were impacted by FTX and if we see other exchanges vulnerable to a liquidity crunch, any crypto rebound might be faded. More details about the actions of FTX will lead to harsher regulatory guidelines for all crypto exchanges. ​ Reportedly FTX used customer assets for risky trades, which means it seems unlikely anyone will want to rescue this company. ​ ​ ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Inflation cools, stocks post best day in two years, bye-bye king dollar, FTX debacle, cryptos rally on soft CPI - MarketPulseMarketPulse
Bank Indonesia Maintains Unchanged Rates Amidst Inflation Stability and IDR Pressure

The remainder of the earnings season looks outstanding. Midterm elections are on the way, FTX faces headwinds and Nvidia, Walmart, Cisco are yet to release their results

Conotoxia Comments Conotoxia Comments 10.11.2022 21:52
As we slowly approach the end of the results season, we found ourselves with elections for the Senate and House of Representatives in the United States, after which we would find out whether Joe Biden's party would retain its majority in those chambers. In addition, we encountered a slump in the cryptocurrency market caused by the problems of the FTX exchange. Macroeconomic data This week it seems that we were able to relax relatively after last week's FOMC decision to raise interest rates in the United States and the announced use of all means by the Fed to choke off inflation. On Wednesday, we learned of the change in U.S. crude oil inventories, which rose by 3.25 million barrels (1.36 million barrels were expected) compared to the last period, in which they declined by 3.115 million barrels. We learned the results of the CPI inflation rate, which amounted to 7.7% y/y. (forecast 8 percent y/y). It seems that inflation surprises for another month in a row, falling, which could be perceived as a positive signal for the markets. Elections for the Senate and House of Representatives in the United States were held on Tuesday. The vote counting is still underway, but Republicans are in the lead in both chambers. Stock market On Monday, we were able to learn the results of gaming giants Activision Blizzard (Blizzard) and Take-Two (TakeTwo), among others. The former surprised positively, reporting earnings per share EPS of 0.68 (forecast 0.51). The second posted a loss per share EPS of -1.54 (forecast 1.38), in addition to reporting lower revenue than expected. Source: MT5, Blizzard, Daily On Tuesday, we learned the results of media giant Walt Disney (Disney), which reported a decline in earnings per share EPS to 0.3 (forecast 0.59). It seems that the entertainment industry is not doing well, which could support the thesis of the current economic slowdown. Today we were also able to learn how the medical industry has performed recently. Among other things, we learned about reports from the maker of medications and vaccines AstraZeneca (AstraZeneca), which showed earnings per share more than doubled relative to expectations. Medical instrument and machine manufacturer Becton Dickinson (BDickinson) showed earnings per share of 1.99, in line with expectations, on increased revenues. Elon Musk appears to be having problems with his workforce after taking over Twitter. After massive layoffs at the company, we could learn from the media about mistakes in this aspect and the dismissal of valuable employees, whom the billionaire seems to be trying to recruit back. Currency and cryptocurrency market After the publication of inflation from the US, the EUR/USD exchange rate broke out above parity and reached around 1.016 at its peak. It seems that the market needs to update its valuation when it comes to the announced US interest rate hikes, which may put pressure on the USD. Source: MT5, EURUSD, Daily Blood has been shed in the cryptocurrency market. After the largest crypto exchange Binance announced the sale of the FTT token (FTTUSD.p) belonging to the third largest FTX exchange, the price of the cryptocurrency fell from $26 to $2.7 (89 percent). This situation revealed the problems behind this exchange. This seems to have led to a massive outflow of capital from the virtual money market, as we could see from the largest of them. Bitcoin fell by more than 20 percent during this period, and the price of the second largest cryptocurrency ETH fell by about 28 percent. Source: MT5, FTTUSD.p, Daily What's in store for us next week? On Monday we would learn the GDP reading in the Cherry Blossom country. The current quarter-on-quarter forecast is for growth of 0.3 percent (previously 0.9 percent). China's reported year-on-year change in industrial production may seem key. The forecast, according to analysts, is for an increase of 5.2 percent (previously 6.3 percent). On Tuesday, we'll learn the results of Germany's ZEW economic sentiment index, which recently reached -59.2 points, where values below zero signify deteriorating economic conditions. On Thursday, we would find out how much inflation in the Eurozone was (forecast at 10.7 percent). Among the key Q3 earnings reports it seems we could count Monday's results from the largest retailer in the United States, Walmart (Walmart). On Tuesday, graphics card giant Nvidia (Nvidia) would present its report, along with one of the largest digital communications technology conglomerates Cisco (Cisco).Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
RBI's Strategic INR Support: Factors Behind India's Stable Currency Amidst Global Challenges

The Positive Close Of The New York Stock Exchange, A Significant Part Of The Indices Increased

InstaForex Analysis InstaForex Analysis 11.11.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 3.70% to a one-month high, the S&P 500 rose 5.54% and the NASDAQ Composite rose 7.35%. Dow Jones  Salesforce Inc was the top gainer among the components of the Dow Jones in today's trading, up 14.24 points or 10.02% to close at 156.30. Quotes of Apple Inc rose by 12.00 points (8.90%), ending trading at 146.87. Home Depot Inc rose 24.95 points or 8.70% to close at 311.70. Shares of McDonald's Corporation led the decline, losing 1.91 points (0.69%) to end the session at 275.88. Merck & Company Inc was down 0.30 points (0.30%) to close at 101.89 while Amgen Inc was up 0.47% or 1.36 points to close at 291. .01. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Invesco Plc, which rose 17.85% to hit 18.75, Caesars Entertainment Corporation, which gained 17.83% to close at 50.62, and shares of T. Rowe Price Group Inc, which rose 16.36% to close the session at 124.65. The least gainers were McKesson Corporation, which shed 4.12% to close at 370.32. Shares of Cardinal Health Inc shed 2.79% to end the session at 77.93. Quotes of Altria Group decreased in price by 2.19% to 44.22. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Fast Radius Inc, which rose 156.19% to hit 0.26, SHF Holdings Inc, which gained 85.78% to close at 3.79, and also shares of EpicQuest Education Group International Ltd, which rose 73.79% to close the session at 1.79. The least gainers were Apyx Medical Inc, which shed 60.45% to close at 1.74. Shares of Veru Inc lost 53.56% and ended the session at 6.97. Quotes of AGBA Acquisition Ltd decreased in price by 50.89% to 5.50. Numbers On the New York Stock Exchange, the number of securities that rose in price (2830) exceeded the number of those that closed in the red (347), while quotes of 80 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,100 companies rose in price, 694 fell, and 216 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 9.81% to 23.53, hitting a new monthly low. Gold Gold futures for December delivery added 2.68%, or 45.95, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 0.55%, or 0.47, to $86.30 a barrel. Futures for Brent crude for January delivery rose 0.90%, or 0.83, to $93.48 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 2.03% to 1.02, while USD/JPY shed 3.97% to hit 140.62. Futures on the USD index fell 2.55% to 107.65.     Relevance up to 03:00 2022-11-12 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300576
Crude Oil Ended Higher | Initial Jobless Claims Rose Marginally

Crude Oil Ended Higher | Initial Jobless Claims Rose Marginally

Saxo Bank Saxo Bank 11.11.2022 08:26
Summary:  A softer US CPI print sent the equity markets skyrocketing in an extreme reaction, but there was some pushback against dovish expectations from Fed speakers and WSJ’s Timiraos, highlighting that a 50bps rate hike at the December Fed meeting is still in play. Dollar weakness fueled gains across the metals space, but oil market remained volatile on concerns around China’s covid cases even as the authorities urged targeted measures will remain in place. UK GDP due in the day ahead before focus turns to G20 meetings next week. What’s happening in markets? The S&P 500 (ESZ2) jumped 5.5% and Nasdaq 100 (NQZ2) soared 7.5%, staging the biggest rally in two years US equities surged the most since 2020 on a softer-than-expected CPI report. S&P 500 gained 5.5% and Nasdaq 100 soared 7.5%. The gains were board-based. All 11 sectors of the S&P 500 rose, with the information technology, real estate, and consumer discretionary sectors leading the charge higher. Semiconductor names surge, Marvel Technology (MRVL) up 16.1%, Nvidia (NVDA:xnas) up 14.3%, and Advanced Micro Devices (AMD:xnas) up 14.3%.  Amazon (AMZN:xnas) surged 12%, Meta (META:xnas) gained 10.3% and Apple (AAPL:xnas) climbed 8.9%. The shift of sentiment from risk-off to risk-on saw the crypto stabilize and Bitcoin rally 13%. US treasury (TLT:xnas, IEF:xnas, SHY:xnas) soared, yields tumbling 22 to 30bps across the curve Treasuries jumped in price and yields plunged on slower-than-expected CPI data. Large buying first concentrated on the 2-year and the 5-year notes. The yield curve bull-steepening in initially, with the 2-10 spread narrowed 8bps to minus-41bps at one point. However, the long ends rallied strongly in the afternoon following a strong 30-year bond auction. The curve reversed and became more inverted with 2-10-year finishing the session at minus-52 bps. At the close, 2-year yields fell 25bps to 4.33% and 10-year yields tumbled 28bps to 3.81%. On Fedspeak, Cleveland Fed President Mester said “services inflation, which tends to be sticky, has not yet shown signs of slowing” and she views “the larger risks as coming from tightening too little”. San Francisco Fed President Mary Daly remarked “it was indeed good news that inflation moderated its grip a bit” but “one month of data does not a victory make”. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) retreated on Covid outbreaks Hong Kong and China stocks retreated on Thursday as China’s daily new domestic Covid cases came in above 8,000 second day in a row and Guangzhou extended lockdown in one of its districts. Hang Seng Index dropped 1.7% and CSI 300 lost 0.8%. China Internet and EV stocks underperformed. NIO (0988:xhkg) fell 13.2% on a bigger-than-expected loss in Q3 and a Q4 guidance below analysts’ expectations. Overnight in U.S. hours, Hang Seng Index futures jumped 4.6% after U.S. stocks soared on softer CPI data. ADRs of Alibaba (09988:xhkg), Meituan (03690:xhkg), and Tencent (00700) surged around 7% to 9% in New York hours. FX: Massive dollar selloff in the aftermath of the US CPI release The Dollar Index saw its greatest losses in a single day since 2009, falling to lows of 107.7 after the release of that softer-than-expected US CPI. The biggest gainer on the G10 board was JPY, no surprises there, given its yield-sensitive nature and the plunge in US yields. USDJPY broke below 141 although it has rebounded to 141.68 in the Asian morning. If we do see hawkish Fed comments in the coming days/weeks, some of this rally in the JPY is likely to be unwound but overall the trend in USDJPY remains biased to the downside now with most of the interest rate expectations already in the market. GBPUSD was also a big gainer as it surged to the 1.17 handle, but a test lies ahead with UK GDP release today likely to confirm the onset of a recession (read preview below). Crude oil (CLZ2 & LCOF3) volatile amid dollar weakness and China's Covid concerns Crude oil ended higher in a volatile session as earlier concerns of weak demand were overtaken by the broader market rally in response to lower inflation and the weakness in the US dollar. Concerns however remain on China’s Covid cases with Beijing reporting its highest number of cases in a year, which kept the gains restrained. WTI futures rose above $86/barrel while Brent went above $94 before retreating later. Cooler US inflation prompts gains across metals The weaker USD eased pressure on the base metals complex, with copper rising more than 2%. This was boosted by reports coming out of a Politburo Standing Committee meeting that suggest Beijing would take more targeted measures to avoid damage to the economy. If China’s Zero covid measures remain targeted, this could shift focus back to supply issues and dollar weakness. Copper (HGZ2) broke the September high of $3.6925, and is now testing resistance at $3.78. Gold (XAUUSD) also broke above the double top at 1730, likely suggesting that the bottom is in place. Silver (XAGUSD) rose to $21.83 but has since returned to the resistance turned support at $21.50.   What to consider? Softer US inflation, but what does it mean for the Fed? US CPI was softer than expected across the board, as headline M/M and Y/Y printed 0.4% (exp. 0.6%, unchanged) and 7.7% (exp. 8.0%, prev. 8.2%), respectively, while the core metrics came in at 0.3% M/M (exp. 0.5%, prev. 0.6%) and 6.3% Y/Y (exp. 6.5%, prev. 6.6%) on a Y/Y basis. Shelter prices still remained hot while the used vehicle prices declined by 2.4% M/M. While the inflation still remains high and far from Fed’s 2% target, it can be expected that the trend is lower. Markets cheered the release, expecting a downshift in Fed’s rate hike trajectory which has already been communicated at the last FOMC meeting. December Fed rate hike pricing is still close to 50bps, while the terminal rate projections have slid lower to 4.9% for May 2023. However, it is worth noting that there is one more labor market report and another CPI report due before the FOMC’s Dec 13-14 meeting. Fed speakers pushed back on the market rally The kind of market reaction we have seen to the soft CPI print in the US yesterday confirms that investors still remain on edge expecting a Fed pivot. This can prove to be counterproductive, as easing of financial conditions can derail this downtrend in inflation and reverse the less hawkish path that Fed is expected to take in the coming months. The Cleveland Fed’s Loretta Mester said that, while she was encouraged by October’s data, she sees bigger risks from tightening too little than too much. Kansas City Fed President Esther George said monetary policy “clearly has more work to do”, while the Dallas Fed’s Lorie Logan said earlier that inflation has a long way to go before it reaches the central bank’s target. They also noted it may be time to slow down the pace of hikes, however, but that it shouldn’t be interpreted as easing policy. Equally importantly, WSJ's Timiraos tweeted, "The October inflation report is likely to keep the Fed on track to approve a [50bps rate hike] next month. Officials had already signaled they wanted to slow the pace of rises and were somewhat insensitive to near-term inflation data". Easing financial conditions will likely drive the Fed speakers to a further hawkish tilt in the coming days. US jobless claims still underscore a tight labor market Initial jobless claims rose marginally to 225k from 218k, and above the expected 220k. Meanwhile, continued claims also exceeded consensus to print 1.493mln (exp. 1.475mln) from, the revised higher, 1.487mln. While this still continues to show a tight labor market in the US, it may be worth watching how it moves in the coming months especially after the wave of tech sector layoffs that we have seen in the past few weeks. The latest in the Crypto space Bloomberg reports a balance sheet hole of $8bn for FTX. Likewise, the Wall Street Journal reports that Alameda Research owes FTX about $10bn. Reuters says that the loan to Alameda Research was equal to at least $4bn. Sam Bankman-Fried (SBF), however, went to Twitter to give an explanation. He goes on to talk about two major mistakes that he has made, one being that he underestimated the demand for sudden liquidity by clients withdrawing funds. In terms of liquidity, SBF further says that: “FTX International currently has a total market value of assets/collateral higher than client deposits (moves with prices!). But that's different from liquidity for delivery--as you can tell from the state of withdrawals. The liquidity varies widely, from very to very little.” Remember, that this is contrary to the story by Bloomberg and likely the Wall Street Journal and Reuters story. It now seems plausible that FTX has a serious hole in its balance sheet”, though, hard to judge anything at this stage given the amount of rumors and unconfirmed information floating around. What remains clear is that any liquidity event will unlikely remain isolated as cascading margin calls and contagion effects are likely to be felt beyond the crypto space. UK GDP to confirm the onset of a recession UK’s Q3 GDP is scheduled for release today and the first quarterly negative print of the current cycle is expected to be seen. Consensus forecast is seen at 2.1% YoY, -0.5% QoQ, significantly lower than the second quarter print of 4.4% YoY, 0.2% QoQ. August GDP data had already begun to show a negative print with -0.3% MoM and the trend will only likely get worse in September, exacerbated by a one-off factor relating to Queen Elizabeth II’s funeral in the month, which was a national holiday. The economy is already facing a cost of living crisis, and both fiscal and monetary policy have to remain tight in this very tough operating environment. Technically, a recession may still be avoided as activity levels picked up in October, but still it will remain hard for the UK to dodge a recession going into 2023. This suggests there maybe some downside for the sterling, especially as the market refuses to cater to the Bank of England’s warning that the current expectations of terminal rate may be too steep. Credit growth in China slowed in October China’s new aggregate financing fell to RMB908 billion in October, much lower that the RMB1,600 billion expected in the Bloomberg survey and the RMG3,527 billion in September. The growth of outstanding aggregate financing slowed to 10.3% in October from 10.6% in September. New RMB loans declined to RMB615 billion in October, below the 800 billion consensus estimate and much smaller than the RMB2,470 billion in September. New RMB Medium to long-term loans to corporate fell to RMB462 billion as loan demand was weak. China’s Politburo Standing Committee met to discuss pandemic control policies  On Thursday, President Xi and the rest of the Politburo Standing Committee had a meeting to discuss its policies on pandemic control. While the statement from the meeting reiterated adherence to the dynamic zero-Covid policy, it also highlighted the push for vaccination and treatments and called on government officials to implementation of control measures more scientifically targeted and precise and to avoid doubling down on each layer of execution.   China’s Singles’ Day this Friday, Nov 11 Investors will watch closely Alibaba, JD.com, and other online retailers’ sales on Singles’ Day this Friday to gauge the strength of China’s private consumption. Analysts are expecting slower sales growth as recent data indicated slower user growth across online shopping platforms.   For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-11-nov-2022-11112022
FX Daily: Upbeat China PMIs lift the mood

Meeting Of U.S. President Biden And China’s President Xi | Chinese Methods To Contain The Pandemic

Saxo Bank Saxo Bank 14.11.2022 08:38
Summary:  China released a set of 20-item guidelines on Friday to fine-tune the country’s pandemic control measures aiming at minimizing disruption to people’s livelihood and the economy. The move added fuel to the post-US CPI risk-on sentiments and saw Hong Kong and China stock soaring with Hang Seng Index up 7.7% and commodities prices higher. S&P 500 rallied another 0.9% on Friday and finished the week nearly 6% higher. Over the weekend, China’s financial regulators rolled out a 16-point plan to boost the property sector. What’s happening in markets? The S&P 500 (ESZ2) and Nasdaq 100 (NQZ2) extended post-CPI gains US stocks rallied for the second day, adding to the dramatic surge after the softer CPI prints on Thursday. S&P 500 gained 0.9% and Nasdaq 100 climbed 1.9%. The energy sector, up 3.1%, was the top performer in the S&P 500 as WTI crude oil price bounced 2.8% on China’s easing of pandemic control measures despite a rise in the number of new Covid cases. Gaming and casino stocks and consumer discretionary names also gained from optimism about China’s fine-tuning of Covid policies. FTX filed for Chapter 11 bankruptcy protection on Friday and its CEO and founder resigned. Coinbase (COIN:xnas), the largest US crypto exchange, bounced 12.8% on Friday after being dragged down by the FTX fiasco earlier in the week. Robinhood (HOOD:xnas), in which FTX’s Sam Bankman-Fried has a 7.5% stake, surged 12.9% after steep declines on Tuesday and Wednesday. Over the week, S&P 500 gained 5.9% higher and NASDAQ 100 surged 8.8%. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) markets were closed for holiday The US treasury cash markets, after the massive 25bp-30bp  post-CPI drops in yields on Thursday, took a break to observe the Veterans’ Day holiday on Friday. Treasury note and bond futures were little-changed. Hong Kong’s Hang Seng (HSIX2) China’s CSI300 (03188:xhkg) soared on China’s fine-tuning of pandemic control measures Hang Seng Index soared 7.7% on the post-CPI rally in the U.S. stock market and the easing of pandemic control measures in China. Following a meeting of the Chinese Communist Party’s new Politburo Standing Committee on Thursday, China’s health authorities issued 20 new measures on Friday to fine-tune pandemic control policies including relaxing quarantine and PCR testing requirements and prohibiting excessive lockdowns. China Internet stocks soared, with Alibaba (09988:xhkg) up 12.4%, Tencent (00700:xhkg) up 11.7%, Meituan (03690:xhkg) up 12.5%, JD.Com (09618:xhkg) up 16.1%, and Kuaishou (01024:xhkg) up 17.5%. EV maker NIO (09866:xhkg) jumped 20.4% despite missing Q3 earnings. XPeng (09868:xhkg) surged 16%. Macao casino stocks gained 8% to 9%. China consumption names also climbed on China’s easing of pandemic control. Share prices of China property developers were squeezed massively higher, with Country Garden (02007) soaring 35% and Longfor (00960 ) jumping 29%. The debt-laden CIFI (00884:xhkg) soared 72.2%. Subsequently, Bloomberg ran a couple of news reports saying China is rolling out a 16-point rescue plan to boost the ailing property markets and struggling developers. CSI300 gained 2.8%/ Australia’s ASX200 (ASXSP200.1) rises ~4% last week. Stock poised to extend rally on China’s property measures All eyes will be on Australia tech stocks following the stellar run in the US, however Aussie tech stock gains may not shoot the lights be muted today after Australia’s 10-year bond yield rose seven basis points to 3.72%.  However, Commodity stocks will be a focus; on Covid hopes, with the Copper price up 4.1%, while precious metals are higher and aluminum had its best day since 2009. In New York BHP rose 3.6%, gapping up and rising above its 200-day moving average which could be seen as bullish sign, and also means local listed counterpart will likely follow. Lithium stocks will also be in the spotlight, with Australia’s biggest Allkem (AKE) and Pilbara (PLS) a focus with sentiment picking up and the stocks already trading in record-high territory ahead of China reopening. FX: the US Dollar continued to plunge in the aftermath of a softer CPI The US dollar index plunged 1.7% on Friday, bringing the weekly loss to 4%. After falling the post-CPI decline of 3.8% on Thursday, USDJPY fell another 1.5% to 138.81 on Friday. Over the week, USDJPY fell from 1.4662 to 138.81, a 5.3% decline. EURUSD surged 1.4% on Friday, bringing its weekly gain to nearly 4%. The Chinese renminbi strengthened further against the US dollar, benefiting from China’s easing of pandemic control in addition to the impact in the aftermath of the US CPI. USDCNH declined from 7.15 to 7.09 on Friday.The Aussie dollar is gaining on the back of China's property sector rescue package. China introduced 16 property measures to address the developer liquidity crisis; from blanket debt extensions, to loosening down-payment requirements for homebuyers. On top of that that, China’s eased covid restrictions; shortening to five-day quarantines, which is aimed at reducing the economic impact of Covid Zero, rather than relaxing restrictionsThe Australian dollar jumped 1.4% on Friday and 3.7% over the week. While the market still awaits further easing developments, the market is buoyed on forward looking hopes that the AUD will continue to be bid on commodity demand picking up. The iron ore (SCOA) price is back above US$90 after rising 6% last week, the copper price lifted about 5% last week, and the lithium price is also higher, with carbonate prices up 118% year to date.  Crude oil (CLZ2 & LCOF3) WTI crude oil gained 2.8% to finish the week at USD88.96 on China’s easing of pandemic control and a sharply lower dollar but it remained stuck inside its established trading range. In addition, as the fuel product market has been tightening in Europe and the US due to low inventories of diesel and heating oil, the crude oil price is likely to find support here and the tendency is more to the upside. OPEC issues its monthly market report on Monday so all eyes will be on that. Copper (HGZ2) rose nearly 5% on Friday on China easing Covid policies Benefiting from China fine-tuning Covid policies and a sharply lower US dollar, copper rose 4.7% on Friday and nearly 7% for the week to USD3.91. It is poised to challenge a key resistance zone near $4 in the near term. As noted by Ole Hansen, Saxo’s Head of Commodity Strategy, while the prospect of copper mines in Central America, South America, and Africa temporarily increasing production is significant, the outlook for copper prices remains positive since global electrification will continue to drive the demand for copper higher. Globally, especially in Europe, the need to reduce reliance on Russian-produced natural gas, oil, and the use of coal as energy sources will continue to build momentum for accelerated electrification. But enabling the grid to handle the additional baseload will require significant new copper-intensive investment in the coming years. In addition, producers such as Chile, the world's largest copper supplier, are not optimistic about their ability to increase production of copper mines in the medium and long term amid declining ore grades and water shortages. The slowdown of the Chinese economy is temporary, and the Chinese government's economic stimulus measures are focused on infrastructure and electrification, which require a lot of industrial metals, especially copper. Gold (XAUUSD) Gold climbed 0.9% to USD1771 on Friday, with the biggest weekly gain since March. In addition to a softer US CPI on Thursday, according to Ole Hansen, supporting the underlying improvement in sentiment was the recently published Gold Demand Trends Q3 2022 update from the World Gold Council. The update outlines how central bank demand reached a quarterly record of nearly 400 tons, thereby offsetting a 227 tons outflow from bullion-backed ETFs. What to consider? China issued 20 guidelines to fine-tune its dynamic zero-Covid policy measures China’s health authorities released 20 guidelines on Friday to fine-tune the country’s pandemic control measures, a day after the Politburo Standing Committee, led by President Xi, held a meeting to discuss how to best contain the pandemic. The key measures in the guidelines include reducing the number of quarantine days for close contacts from 10 days to 8 days, relaxing some centralized quarantine to home quarantine, limiting PCR testing, prohibiting excessively extending lockdowns, promoting vaccination and treatments, and prohibiting local authorities from shutting down production, schools, and transportation without proper approval. At a press conference on Saturday, the National Health Commission emphasized the fine-tuning was optimization measures based on scientific findings but not representing a shift in the principles of dynamic zero-Covid policy. China’s financial regulators rolled out a 16-point plan to boost the property sector The People’s Bank of China and the Banking and Insurance Regulatory Commission jointly issued a notice to financial institutions with 16 measures to address the liquidity squeeze faced by property developers through measures including the relaxation of previously imposed redlines restricting banks from lending over certain ceilings and calling for financial institutions to treat private enterprise developers equally with state-owned enterprises. A busy week of Fedspeak kicked off by Fed Governor Waller After the sharp easing of financial conditions after the massive asset price movements after the release of the CPI, helped by lower bond yields, higher stock prices, and lower US dollar, the market is eagerly monitoring if Fed officials will push back on pivot speculations in order to bring financial conditions back to tighter levels. Governor Waller previously proposed that the Fed should not pause until the monthly core PCE substantially falls below 3% on an annualized basis. Biden and Xi are set to meet on the sidelines of the G20 summit U.S. President Biden and China’s President Xi will hold a bilateral meeting on the sidelines of the G20 summit in Indonesia on Monday. It will be the first time they meet in person since Biden took the presidential office in January 2021. The White House said the meeting could last a couple of hours. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-14-nov-2022-14112022
Bank of Japan to welcome Kazuo Ueda as its new governor

Major US indices experienced another wave of gains on Friday as S&P 500 gained almost a percent and Nasdaq increased by ca. 2%. This week we get to know Japan CPI

ING Economics ING Economics 14.11.2022 09:22
China boosts sentiment with plans for the property sector and measures to lessen the economic impact of zero Covid Source: shutterstock Macro outlook Global Markets: US stocks had another positive day on Friday continuing the positive momentum that the October CPI reading provided earlier in the week. The S&P500 rose 0.92%, while the tech-heavy NASDAQ rose 1.88%. Equity futures are signalling that this is far enough for now, though, and are indicating a small decline at the open. Asian equity futures are mostly signalling a positive start to trading today. With the public holiday on Friday in the US, there is no information from US Treasuries to input into the market moves of other assets, but in spite of this, EURUSD went in the direction of the equity markets on Friday, rising to 1.0327,  the AUD rose above 0.67, though has dropped back just below that level in early trading. Cable is sitting almost on top of 1.18 and the JPY is below 140 (139.30 at the time of writing). The Asia-Pacific currencies have made strong gains, most notably the high-beta KRW and THB. G-7 Macro: The G-20 conference in Bali, Indonesia, starts tomorrow. With the US and Russia unlikely to agree to anything substantive at this summit, the prospects for anything very useful are limited. Presidents Xi and Biden are expected to meet. North Korea’s recent missile belligerence will be raised. Later this week, the new UK Chancellor, Jeremy Hunt, will outline the UK government’s proposals to balance Britan's books. Spending cuts and tax increases look inevitable.  There are no notable macro releases in the G-7 today. China: China has released a 16-point plan to support the beleaguered property sector as well as a 20-point plan for reducing the economic costs of containing Covid. The moves will clearly provide some further support to China’s economy, though have to be factored in against the rising Covid case numbers being seen across the country. This is probably more relevant for the medium-term outlook. But it's an encouraging development. Further supportive changes cannot be ruled out.    India: India publishes October inflation data later today, and we are in line with the consensus in looking for the inflation rate to drop back below 7% YoY (6.7% expected, down from 7.4% in September). While this still leaves inflation above the top of the RBI’s 4%+/-2% target range, it means that we can start to think about a slower pace of tightening at the December meeting, with perhaps just one more 25bp hike in early 2023 before the RBI can take stock and pause. What to look out for: China activity data India CPI inflation (14 November) Philippines remittances (14-17 November) Japan GDP and industrial production (15 November) Australia RBA minutes (15 November) China activity data (15 November) Indonesia trade balance (15 November) US empire manufacturing and PPI inflation (15 November) Fed's Brainard, Harker, Cook and Williams speak (15 November) Japan core machine orders (16 November) Australia Westpac leading index and wage price index (16 November) US retail sales (16 November) Fed's Williams and Barr peak (16 November) Japan trade balance (17 November) Australia labor data (17 November) Singapore NODX (17 November) Malaysia trade (17 November) Bank Indonesia policy meeting (17 November) Bangko Sentral ng Pilipinas policy meeting (17 November) US housing starts and initial jobless claims (17 November) Fed's Waller, Bullard, Bowman and Mester speak (17November) Japan CPI inflation (18 November) US existing home sales (18 November) Fed's Kashkari speaks (18November) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Challenges Persist for Company Amidst Falling Demand and Competitive Pressure in Q2'23

Analytical Report - IMC - 3Q22 EBITDA - WSE:IMC

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 14.11.2022 09:38
IMC Recommendation*: BUY 12M TP*: PLN 22.56 â–  In 3Q22 revenues stood at USD 17.3mn, i.e. 15% above our forecast of USD 15.0mn, mainly due to the higher volumes sales. IMC managed to sell 63kt of corn and 13kt of wheat compared to 60kt of wheat we’ve assumed in 3Q22 previews. â–  The reported gain from changes in fair value of biological assets and agricultural produce amounted to USD 12.0mn, only 8% down yoy and double of what we’ve estimated in our previews. The major reason for the beat were higher corn volumes used for the calculation of fair value. However, due to the absence of active market for grains in Ukraine, the valuation was based on cash flows method which apparently resulted in lower corn price used for calculations equal to mere USD 150/t vs. USD 200/t in 3Q22. Drop of that price may herald lower sales price in 4Q22 stemming from unfavorable conditions offered by international commodities traders. â–  Consolidated EBITDA in 3Q22 came in at USD 14.9mn, beating our forecast of USD 8.3mn by wide margin. â–  Net profit came in at USD 1.0mn vs. USD 2.9mn estimated by us, due to the USD 8.5mn FX losses. â–  OCF came in at negative USD 2mn vs. USD 10mn last year in the same time and USD 27mn year before. â–  Net debt came in at USD 152mn vs. USD 184 in 2Q22 due to the drop of long-term liabilities as to right-of-use assets Our view: NEUTRAL The 3Q22 results look decent, however the main reason for the beat was higher than expected gain on changes in FV of biological assets, which is non-cash P&L item. On the cash flow side, there is improvement vs 2Q22, but IMC’s ability to generate cash in 3Q22 was still far cry from previous years. Thankfully, along with reporting the end of harvest in 2022 the company said that in September and October IMC export reached 40.3kt and 56.7kt, which if extrapolated on the remaining months in 4Q22 should provide decent cash inflow (if the payment for sold produce is going to be realized in 4Q22 as well). For the moment being we remain cautious with respect to IMC, though we see the chance it’s out of the woods really soon. Clearly, we’ll be able to say more after 4Q22 report publication, when we know if sales numbers remain stable and what are realized prices vs. the market, or if higher sales are not paid for with hefty discounts. Analyst: Krzysztof KozieÅ‚ GPW’s Analytical Coverage Support Programme 3.0  
In Crypto, You Could Prove You Own A Private Key Without Revealing It

FTX And More Than 100 Affiliates Filed For Bankruptcy | The Aussie Dollar (AUD) Has Gained Ground

Saxo Bank Saxo Bank 14.11.2022 10:03
Summary:  Market sentiment closed last week on a strong note after the wild rally on Thursday in the wake of the softer-than-expected October US CPI data. Sentiment was checked in the Asian session today by rising Covid cases in China, although the Zero Covid policy approach there may be softening. US yields jumped a bit to start this week after a bank holiday on Friday and after Fed Governor Waller was the first significant Fed profile to push back against the market’s lower of forward Fed tightening expectations in the wake of a single data release.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Last was a spectacular week for equities with the MSCI World Index up 6.7% with our theme baskets e-commerce, cyber security, and semiconductors rallying 19.4%, 13.6%, and 12.8% respectively. High duration equity themes responded the most to broad-based easing of financial conditions last week and the key question is now if the market will extend its momentum. S&P 500 futures closed on Friday at the 4,000 level and have opened a bit lower this morning but are already attempting to climb back to the 4,000 level. If we look at financial conditions and where they mostly went last week there are theoretically room for a rally up 4,100 and even beyond that to the 4,200 level. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hang Seng Index climbed 2.7% and CSI 300 edged up 0.9% on the news that the People’s Bank of China and the Banking and Insurance Regulatory Commission jointly issued a notice to financial institutions with 16 measures to address the liquidity squeeze faced by property developers through measures including the temporary relaxation of previously imposed redlines restricting banks from lending over certain ceilings to developers and calling for financial institutions to treat private enterprise developers equally with state-owned enterprises. Leading China private enterprise property developers listed in Hong Kong soared by 20% to 40% at one point. FX: USD picking up the pieces after massive downdraft on lower October CPI The US dollar lurched into an historic two-day plunge late last week after the release of the softer than expected US October CPI data on Thursday ahead of a three-day weekend for US rates (on Friday’s bank holiday). The move was so sharp that it can’t hope to maintain course, so for the nearest term, the market will try to feel out consolidation levels. EURUSD, for example, finally found resistance just above the key 1.0350 area, which was the major low back in May and June and prior to that, back in early 2017. The first support is the 1.0200 area, the 38.2% retracement of the rally sprint, with the reversal level at 1.0100, the 61.8% retracement and near the prior important resistance. For USDJPY, the market managed to take out the 139.40, the prior major high in July, around where it trades this morning. Amazingly, having fallen from 151.95 to the local low of 138.46, the 200-day moving average is still quite far away, near 133.00. Crude oil (CLZ2 & LCOF3) remains rangebound ... trading softer into the European session in response to a recovering dollar after Fed’s Waller said the FOMC has some way to go before it stops raising interest rates. Earlier in the session commodity prices in general, including oil, were supported by demand optimism after China on top easing Covid restrictions issued a rescue package for its struggling property market. A pickup in Chinese demand, despite the current headwinds from rising virus cases, when EU is preparing sanctions against Russian oil and OPEC+ is cutting production, will likely lead to further tightening of the market. Focus on US economic data given its impact on risk appetite as well as Monthly Oil Market Reports from OPEC today and the IEA tomorrow. Gold trades softer following a two-week jump of almost 8% … after Fed’s Waller cautioned that the FOMC isn’t close to pausing interest rate hikes. The dollar strengthened while Treasury yields moved higher after having been closed on Friday for Veterans Day. Overall, however, the sentiment in the market seems to be changing with a period of consolidation, potentially the next phase. Focus on resistance-turned-support at $1735 and whether we have seen a shift in the trading behaviour among speculators from a sell-into-strength to a buy-on-weakness. ETF investors – net sellers for months - and speculators in the futures market now hold the key that could unlock further gains. Expect some consolidation and potentially a recheck of support at $1735 with resistance at $1789 and $1804. Industrial metals remain focussed on China … and overnight iron ore, the key feedstock for steel production, jumped +3% after the Chinese government released a package of policies to rescue its property sector. The news came on top of last week's easing of some virus restrictions which drove a near 14% rally in the Bloomberg Industrial metals index to a five-month high. Copper, now up 25% from the July low was one of the main beneficiaries of the news, coming at a time when supplies are already showing signs of tightening. Overnight, the property news drove HG copper to a fresh five-month high at $3.96 per pound before some profit taking emerged just ahead of critical and potential sentiment as well as momentum changing resistance in the $4 to $4.05 area.  US treasuries (TLT, IEF) US Treasury yields (10Y) closed Thursday on a weak note after the plunge on the October CPI data ahead of a three day weekend for banks (treasuries not trading, even as equity markets were open). Yields have jumped a bit here at the start of this week after Fed Board of Governors member Waller pushed back against the market’s repricing of Fed tightening intentions since that CPI release (more below) in comments overnight. The low water mark for the 10-year treasury benchmark was just above 3.80%, with a jump back above 4.00% needed to suggest that this drop in yields is temporary. The next level of note to the downside is the 3.50% area, which was the high-water mark back in June that held for about three months before new highs were posted in September. What is going on? AUDUSD is up 9% from its low, gaining some extra ground on China’ property rescue package The Aussie dollar has gained ground on the back of China's introduction of a property sector rescue package. AUDUSD now trades at a two-month high, hitting 0.666 in anticipation that Australia’s trade surplus will be further supported by exports into resurgent Chinese demand after China introduced 16 property measures to address its developer liquidity crisis. On top of that that, China’s eased some covid restrictions; shortening to five-day quarantines, which is aimed at reducing the economic impact of Covid Zero. US Fed’s Waller pushes back against market’s lowering of Fed expectations Federal Reserve Governor (and therefore voter) Christopher Waller has been the first high profile Fed official to emerge and push back against the market’s repricing lower of the Fed’s rate tightening trajectory in comments overnight. Speaking at a Sydney, Australia conference, Waller said that “These rates are going to...stay high for a while until we see this inflation get down closer to our target”. “We’ve still got a ways to go. This isn’t ending in the next meeting or two.” The market is now pricing the Fed to reach a peak policy rate below 5.00%, either at the March or May FOMC meeting next year, with a 50-basis point hike priced for December to take the Fed Funds rate to 4.25-4.50% and slightly more than 50 basis points of further tightening priced beyond that. This is some 25 basis points below the prior peak in expectations. Crypto market fear is spreading On Friday, the CEO of the cryptocurrency exchange FTX stepped down, and FTX and more than 100 affiliates filed for bankruptcy, with the filing revealing that FTX and Alameda Research (related trading firm) have liabilities in the range $10-$50 bn. Contagious effects have already appeared with examples of as Genesis has $175 mn stuck in FTX and the crypto lender BlockFi stating that they would be limiting activities in wake of the FTX collapse. As the confidence in centralized exchanges is shrinking, a record-high amount of Bitcoin was moved out of exchanges and into self-custody wallets due to increased fears of exploitation and mismanaging of user funds. What are we watching next? Fed Vice Chair Lael Brainard to speak today Brainard is thought to be one of the most dovish of prominent Fed figures and possibly behind what was seen as slightly dovish insertion in the November FOMC monetary policy statement before Fed Chair Powell’s press conference. What will Brainard say now that the market seems ready to pounce on a single month’s data to significantly alter its projections of Fed policy? NY Fed President and voter Williams will also speak today, with a rather busy schedule of Fed speakers in the week ahead. Incoming US data Traders will remain nervous around incoming US data after the wild reaction to last week’s Thursday October US CPI release. The US macro calendar highlights this week include Tuesday’s October PPI releases, the Oct. Retail Sales data on Wednesday and November NAHB Housing Market Index release the same day. Finally, the US reports October Housing Starts/Building Permits data on Thursday. Major China Internet companies are scheduled to report this week Meituan (03690:xhkg) kicks off the busy earnings calendar of  China Internet companies on Monday, followed by Tencent (00700:xhkg) on Wednesday, Alibaba (09988:xhkg) on Thursday, and JD.COM (09618:xhkg) on Friday. Analysts’ estimates for top-line growth in Q3 are subdued due to weak consumption recovery and the macro environment. Slow merchandise value (GMV) growth during the Singles’ Day festival may point to a sluggish Q4 outlook. Alibaba's GMV growth during the Singles' Day festival was flat. JD.COM has not yet announced its numbers except saying GMV had positive growth Y/Y during the period (from Oct 31 evening to Nov 11 end of the day). According to estimates, eCommerce platform GMV grew about 14% Y/Y but the large traditional eCommerce platforms were estimated to see GMV growth at just around 3% Y/Y. UK Autumn Statement on 17 November Expect a contractionary 2023 UK Budget. The new Prime minister Rishi Sunak needs to find savings worth about £30-40bn/year to convince the independent Office for Budget Responsibility that debt won’t rise across the medium-term as a percentage of GDP. This is not an easy task. But this is certainly the only way for the United Kingdom to win back investor confidence after the disastrous mini-budget presented in September. All of this will likely increase the depth of the UK recession and poverty across the country. The outlook is really grim. The Bank of England expects the UK to be in recession from mid this year all the way through to mid 20024. Then growth will pick up only very modestly (annualized rate of 0.75 %). Poverty is also increasing. The country’s largest foodbank charity says 11.5 million meals were handed out over six months – more than 63.000 a day on average. This is a record. The 2023 budget will likely make things worse. The UK is facing an emerging market economy dynamic. Earnings to watch The Q3 earnings season is still slowing down but with important earnings releases still coming out this week. Today’s focus is Chinese e-commerce giant Meituan, Brazil-based fintech bank Nu Holdings, and finally DiDi Global which is the Uber equivalent in China. For foreign investors the earnings from Nu Holdings will get the most attention as the bank is purely technology-driven, fast growing (expected to grow net revenue 188% y/y in Q3 to $1.09bn), and has Berkshire Hathaway as one of its biggest shareholders. Monday: Meituan, Sonova, Tyson Foods, Nu Holdings, Trip.com, DiDi Global Tuesday: Infineon Technologies, Vodafone, Alcon, Walmart, Home Depot, Sea Ltd Wednesday: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com Economic calendar highlights for today (times GMT) 1000 – Eurozone Sep. Industrial Production 1630 – Switzerland SNB President Jordan to speak 1630 – US Fed Vice Chair Brainard to Speak 2030 – Weekly Commitment of Traders Report (delayed from Friday) During the day: OPEC’s Monthly Oil Market Report 0030 – Australia RBA Minutes 0120 – China Rate Decision 0200 – China Oct. Industrial Production / Retail Sales  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-14-2022-14112022
Easing In Chinese Covid Measures | Crypto Distress Continues | Markets Trade Joyfully

Easing In Chinese Covid Measures | Crypto Distress Continues | Markets Trade Joyfully

Swissquote Bank Swissquote Bank 14.11.2022 10:25
It has been an ugly weekend for cryptocurrencies, even though the selloff remained relatively contained in the sector giants like Bitcoin, compared to the size of the bad news that flew in last Friday. Market mood Market mood outside crypto is extremely joyful after last week’s inflation data surprised investors to the downside and China announced to relax Covid measures, and boost its shattered property sector. US And China Although the US inflation remains relatively high to contain a perhaps premature bull run on dovish Fed expectations, news from China could help keeping the mood nice and sweet. We will yet discover if the latest news will be enough to get international investors back on board of a Chinese dream that has been shot to the ground by the very Xi Jinping. Joe Biden and Xi Jinping  Joe Biden and Xi Jinping will talk today on the sidelines of the G20 summit in Bali. Talks could go either way; they could either boost, or hit risk appetite in Chinese, and global assets. China retailers & Nvidia earnings Other than that, investors will watch the Q3 earnings from Nvidia, and some US and Chinese retail giants throughout this week! Watch the full episode to find out more! 0:00 Intro 0:32 FTX goes bankrupt, crypto distress continues 4:40 Traditional markets trade joyfully post-US CPI… 6:49 And easing in Chinese Covid measures! 8:26 Investor attention shifts to US, China retailers & Nvidia earnings Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FTX #bankruptcy #Bitcoin #Ethereum #Solana #crypto #selloff #USD #inflation #data #Fed #expectations #China #Covid #measures #market #rally #retailer #Walmart #Target #Alibaba #JD #earnings #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
ATM Grupa: Buy Rating and Valuation Update

Analyst Comment – CFG Q3’22 Results – WSE:CFG

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 14.11.2022 09:57
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme Last recommendation BDM: HOLD with target price 9,1 PLN/share (2022/10/28) BDM Comment: The company's results for Q3'22 at the level of EBIT profit are below our expectations, therefore we perceive them negatively. At the level of revenues, CFG generated PLN 1.7 million in the discussed period (-17.1% y/y), of which PLN 0.8 million from sales revenues (a decrease of 22.6% y/y, despite the premiere of ACS” in Q2'22, however, we think that it may be related to the lack of payments for the production of the game "Stargate Timekeepers") vs. PLN 1.0m our expectations. This position was significantly boosted by the change in the state of products, which amounted to nearly PLN 0.9 million and turned out to be significantly higher than our forecasts. In the period under review, operating costs fell by 24.2% y/y and increased by 4.8% q/q to PLN 1.5m. The largest cost, as usual, is associated with game production - the costs of external services increased by 21.8% y/y and 46.7% q/q to PLN 1.2 million, and salaries decreased y/y by approx. 66.1% and 49,7% q/q to PLN 0.3m. Despite the company focused on maximizing the efficiency of the production team and optimizing production, it did not reduce the most important costs and they are significantly above our expectations, which we perceive negatively. At the EBITDA level, the company generated a profit of PLN 0.2 million (+237.8% y/y), EBIT amounted to PLN 0.2 million (+355.4% y/y). In Q3'22, the company generated a PLN 1.0m financial balance due to the profit from the disposal of financial assets (the effect of the agreement with PLW regarding the game "Gnomepunk"), which translated into a net profit of PLN 1.1m (vs +294 .1% y/y). In Q3'22, net cash flows from operating activities amounted to PLN -0.3 million (of which PLN -1.0 million related to investing activities). At the end of September 2022, the company had PLN 0.8m in cash, i.e. PLN 0.1m less q/q. The company continues to focus on maximizing the efficiency of the production team. Production stages and team management are being optimised. • In Q3'22, the company generated PLN 1.7 million in revenues (-17.1% y/y), of which PLN 0.8 million from sales (-22.4% y/y, -34.6% q/q), the second part, i.e. PLN 0.9m, was due to a change in the product state (-11.0% y/y vs. -PLN 0.1m in Q2'22). • In the period under review, operating expenses decreased by 24.2% y/y and increased q/q by 4.8% to PLN 1.5 million. The largest cost, as usual, is associated with game production - the costs of external services increased by 21.8% y/y and 46.7% q/q to PLN 1.2 million, and salaries decreased y/y by approx. 66.1% and 49, 7 q/q by PLN 0.3m. • At the EBITDA level, the company generated a profit of PLN 0.2 million (+237.8% y/y), EBIT amounted to PLN 0.2 million (+355.4% y/y). • In Q3'22, thanks to the profit on the sale of financial assets, the company generated a PLN 1.0 million financial balance, which translated into a net profit of PLN 1.1 million (vs +294.1% y/y). • Over the past quarter, "products and semi-finished products" decreased q/q by PLN 1.5 million to PLN 3.2 million, and "finished products" decreased by PLN 0.1 million to PLN 1.7 million. • In 3Q'22, net cash flows from operating activities amounted to PLN -0.3 million (of which PLN -1.0 million related to investing activities). At the end of September 2022, the company had PLN 0.8m in cash, i.e. PLN 0.1m less q/q. • At the end of September 2022, in CreativeForge Games, there were no people employed on the basis of a full-time employment contract, while CFG employed 11 people on the basis of civil law contracts and one person from the Management Board employed on the basis of an employment contract. vocation. In total, in the group, converted into full-time jobs, no persons were employed on the basis of an employment contract, 3 persons were employed on the basis of appointments and 37 persons on the basis of civil law contracts. • On September 5, 2022, Annex No. 2 was signed to the publishing agreement of July 1, 2021 regarding the game entitled Gnomepunk, under which PlayWay became the new publisher of this title. CFG decided to transfer the role of the publisher to the above-mentioned game due to the need to focus its resources on other productions that are more important from the company's point of view. PlayWay covered all the costs incurred by CFG so far. • Deadwater Sallon - the game was introduced to players at the beginning of last quarter. This title was received with good reviews, and the developer is already working on another production, for which CFG will also be the publisher. • Handyman Corporation - 3Q'22 is intensive work on the release of the game, which will have its premiere soon, i.e. on November 30, 2022. CFG is very pleased with the effects of the above-mentioned. • My Hotel - the game is already in full production. Bugs and performance-degrading elements are still being removed on an ongoing basis. Production is not at risk. Analyzes are also underway examining the direction in which the game's marketing should go, and an appropriate release window is being sought to maximize premiere profits. • In addition to the above-mentioned games, titles such as Blacksmith Simulator, Beer Factory, Colonize, Black Gold and House Flipper City, Builders of Greece are in development. Each of these games is already at an advanced stage of production and each of them has great potential for success. • The company continues to focus on maximizing the efficiency of the production team. Production stages and team management are being optimised. Appropriate procedures have been created to identify potential bugs related to adding new features and mechanics to games more quickly, while at the same time the bug reporting and identification system has been improved, and thus, faster removal of irregularities by the testing teams. CFG already sees that the applied improvements have a positive impact on development activities. Analyst: Krzysztof Tkocz krzysztof.tkocz@bdm.pl tel.: (+48) 516 086 705 GPW’s Analytical Coverage Support Programme 3.0  
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Report - Biomaxima - 3Q22 Financial Results Preview - WSE: BMX

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 14.11.2022 14:36
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Sector: Health Care & biotechnology Market Cap: US$ 20.3 m Bloomberg: BMX PW Av. daily turnover: US$ 0.02 m Price: PLN 22.40 12M range: PLN 18.14-39.00 12M EFV: PLN 33.90 (→) Free float: 73% 3Q22 financial results preview In 3Q22 BioMaxima will not book any revenues from the significant contract for a delivery of SARS-CoV-2 diagnostic tests (worth PLN 94.8 million) which helped materially the Company’s results in 1H22. Besides, the 3rd quarter is the weakest seasonally due to a relatively low incidence of infectious diseases. We forecast 3Q22 revenues/ EBITDA/ EBIT/ NI to reach PLN 15.1/ 1.8/ 1.3/ 1.2 million which implies some growth of revenues and flat margins yoy. Delivery of analyzers In 3Q22 there was only one significant contract the Company informed about, namely a delivery of 2 analyzers for cell cultures monitoring worth c. PLN 2 million (this year BioMaxima received orders for 6 analyzers). According to the Company’s estimations, each analyzer will generate additionally c. PLN 0.5 million of annual revenues on a sale of consumables. Valuation As there are no changes to our financial forecasts for BioMaxima and the peer group multiples changed slightly, our 12M EFV at PLN 33.90 per share stays intact. Catalysts 1. The SARS-CoV-2 becomes endemic 2. Increase in demand for the Group’s products unrelated to the pandemic 3. Increasing patients awareness 4. Production capacity expansion 5. Successful launch of new products 6. Exports development 7. Need for diagnostics of unvaccinated Ukrainian migrants (SARS-CoV-2, measles, tuberculosis, poliomyelitis) 8. Acquisitions of companies compatible with the Company’s operations 9. A potential takeover target 10. Successful restructuring of the Romanian subsidiary 11. Moderate efficacy of vaccines and drugs for Covid-19 12. Presence in all the fast growing IVD segments 13. Increasing recognition of the Company in Poland and abroad 14. High efficacy of the Company’s tests in detection of Omicron 15. Spreading over time the changes in law (IVDR) Risk factors 1. Dwindling demand related to the economic deterioration 2. The SARS-CoV-2 pandemic development 3. Change in the health care systems priorities 4. Change in reimbursement policies and IVD funding 5. Change in cooperation terms with public bodies 6. Change in law (IVDR) (postponed for 3 years) 7. Entry of new solutions to the market 8. Growing competition 9. Intellectual property breach 10. Deterioration of products quality 11. Loss of key employees 12. Lack of qualified staff 13. Changes in the shareholding structure 14. FX rates Competitive advantages 1. European brand (vital for exports) 2. Attractive products prices as compared to global players 3. Well established market position in Poland 4. Important sales relationships outside Poland 5. Broad product offer (over 3,000 indexes) 6. Own production technologies 7. Focus on globally known and implemented technologies Analysts: Sylwia JaÅ›kiewicz, CFA MikoÅ‚aj StÄ™pieÅ„ GPW’s Analytical Coverage Support Programme 3.0  
RoboForex - What is worth knowing about the broker? Details of offer

RoboForex - What is worth knowing about the broker? Details of offer

Finance Press Release Finance Press Release 02.11.2022 09:08
RoboForex is a broker with many years of experience in the industry and has received numerous awards for its activities. RoboForex offers CFDs on numerous asset groups. What are the details of this broker's offer? What are the opinions about the broker? About RoboForex RoboForex is a brokerage company with a market presence since 2009. It currently has over 1 million clients in 169 countries. The broker has many years of experience in the industry and received over 30 awards. In addition, it supports innovative sports projects and achievements. RoboForex is the official sponsor of both Andrei Kulebin - the world champion in Thai boxing and kickboxing. In 2022, it also became an Official sponsor of Club Cienciano. RoboForex offers CFDs on 8 asset groups, which include currencies, stocks, indices, ETFs, commodities, precious metals, energies and cryptocurrencies, and more than 3,000 real stocks. What regulatory authorities is RoboForex subject to? RoboForex Ltd is an international FSC-regulated broker operating under license number 000138/333. The license covers "trading in financial and commodity derivatives and other securities." The company is incorporated in Belize. RoboForex Ltd is an official member of the Financial Commission, an international organisation that settles disputes between participants and their clients. RoboForex is also a member of the Commission's Compensation Fund (a pool of money serving as an insurance policy for members' customers). Since 2018, RoboForex Ltd regularly undergoes an Order Execution Quality Audit on the Trade Verification Service (VMT), which provides an objective assessment of how brokers execute trades. Successful completion of this audit confirms that the company complies with the strict requirements that the Financial Commission expects from its members. Contact details of RoboForex RoboForex Ltd is registered in Belize at 2118 Guava Street, Belama Phase 1, Belize City, Belize. The company's registered office is at 9724 Ramiro Duran Street, Belize City, Belize. The company can be contacted by phone, chat, and through a contact form. Customer support is available 24/7. The broker is also present on social media - Facebook, Instagram, Twitter, and YouTube. RoboForex broker offer - Basic information The brokerage company offers CFDs on numerous assets: currencies, stocks, indices, ETFs, commodities, precious metals, energy commodities, and cryptocurrencies. The offer includes over 35 currency pairs, over 12,000 CFD instruments on stocks of listed companies (e.g. Apple, Twitter, Volkswagen, and many others), popular stock indices, 33 cryptocurrencies, over 20 precious metals (including gold, silver, palladium, platinum), over 100 commodities (including agricultural raw materials such as cocoa, soybean or corn) and energy resources such as Brent crude oil, WTI, and natural gas. Moreover, RoboForex clients have access to more than 3,000 Nasdaq and NYSE stocks in the R StocksTrader platform. RoboForex offers 5 types of accounts: Prime, ECN, R StocksTrader, ProCent, and Pro. They differ in the size of the minimum deposit, the amount of the spread, and the commission. The conditions for the individual accounts are presented in the table below: Trading platforms at RoboForex The broker offers access to the MT4, MT5, cTrader, R StockTrader platforms, and R WebTrader. MT4 is a classic Forex and CFD trading platform and is the most popular and easiest to use. MT5 is a more advanced version of the classic platform with a set of additional features. cTrader is a platform for professional traders that gives direct STP access to the global currency markets. R StockTrader is a next-generation online platform that enables you to trade the most advanced instruments, including ETFs. R WebTrader is the company's own platform and comes both in the form of a web terminal and a mobile application (MobileTrader). RoboForex - Promotions and bonuses with this Forex broker RoboForex offers a welcome bonus of $30 to all new clients. There is also a Profit Share bonus option, which can be up to 60% of the deposit amount on all RoboForex Standard and Cent accounts. In addition, you can get a Classic bonus of up to 120% on your first deposit and all subsequent deposits. Moreover, from July 2022 to April 2023, a promotion is running on the occasion of the 12th anniversary of RoboForex, giving the chance to win monthly prizes ranging from $1,000 to $20,000. Safe Forex Broker - Are there any warnings on the Internet about RoboForex? The broker has the appropriate licenses for carrying out its activities. Currently, there are no warnings online about RoboForex. Reviews of RoboForex - Is it worth trading with RoboForex? Leave your opinion or comment! There are numerous opinions and comments on the web about RoboForex, the vast majority of which are positive. On the website with reviews of various companies, https://www.trustpilot.com/review/, RoboForex received 3.6 stars out of 5 with 13 votes. 61% of voters chose the highest rating and 8% a good one. If you want to share your opinion about RoboForex, be sure to do so in the comment section below this material. This is a helpful reference source for people who are considering opening an account with this broker. None of the comments is deleted by the administration. Your comment can help or harm the brokerage company; it is, therefore, important that you try to formulate your opinions objectively. RoboForex - investor education. Does the broker provide educational materials? There is a dedicated section on the brokerage company's website that contains educational materials. There, you will find a daily analysis of the situation in the markets, an economic calendar, and a blog with articles about individual markets and the most important upcoming events. There is also a section with answers to the most frequently asked questions regarding the operation of the trading platforms, the deposit and withdrawal of funds, order execution, etc. How to create an account with RoboForex If you want to set up an account with this broker, please complete the contact form in which you must provide your basic data, e-mail address, and telephone number. Then follow the further instructions. There is an option to try out a demo account before deciding on real trading. How to deposit and withdraw funds Funds can be deposited and withdrawn via bank transfer, payment cards, and electronic payment processors such as Perfect Money, AdvCash, and AstroPay. Currently, the broker does not charge any commission for fund deposits, and commission withdrawals are available twice a month. INVESTMENT RISK WARNING CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58.42% of retail investor accounts lose money when trading CFDs with this CFD provider. Consider whether you understand how CFDs work and whether you can afford the high risk of losing your money.
The South America Are Looking For Alternatives To The US Currency

Stocks: Fake account's tweet affected one of companies' stock price

Conotoxia Comments Conotoxia Comments 14.11.2022 23:46
After Elon Musk took over Twitter, along with delisting the company's shares (delisting), he introduced an option to buy confirming account authentication with the Twitter Blue stamp for $8. As it turned out, this feature was used against US pharmaceutical company Eli Lilly (EliLilly), whose market value fell by nearly $20 billion. The situation on the Twitter platform In a post dated Friday, November 11, the impersonators wrote: "We are excited to announce insulin is free now." After the incident, ELI Lilly's share price fell by more than 5 percent. Only by the end of the day we could already read the following Tweet on the company's official profile: "We apologize to those who have been served a misleading message from a fake Lilly account. Our official Twitter account is @LillyPad."It seems that such events, where an asset rose or fell significantly after a Twitter post, we might have associated more with the cryptocurrency market or the tweets of Elon Musk himself. Interestingly, a similar event befell defense and aerospace company giant Lockheed Martin (Lockheed) on the same day. Source: MT5, Lockheed, Daily A bargain in the market, or a legitimate discount? The manufacturer of, among other things, insulin, or a vaccine for polio disease, which has been in existence since 1876, boasts Q3 revenues for this year of $29.24 billion, an increase y/y. of 2.5 percent, and operating profit (EBIT) of $7.2 billion (down 10.85 percent y/y). However, the company boasts a very good profitability (ROE) of 64 percent. According to Statista, the average profitability for the drug manufacturer sector in 2022 is 16.97 percent. This gives us a result more than 47 percentage points above the industry average. In addition, the company appears to classify itself as a passive company paying a regular dividend, which averages 1 percent of the share price per quarter.The current macroeconomic situation does not seem to have a negative impact on the company's stock price, whose shares have risen from a price of about $270 to $352 (30% YTD) since the beginning of the year. The annual risk for this company, as measured by standard deviation, was 28.04 percent, where it was 24.61 percent for the main S&P 500 index (US500) during the period. The maximum decline from local peaks (Drowdown) was 13.63 percent, compared to 25 percent for the S&P 500.In addition, the company's shares appear to present a correlation to the broad market of 0.48, which we could interpret that the company is moderately dependent on the market situation. What does Wall Street think of Eli Lilly's stock price? According to Market Screener, the company has 23 recommendations, most of which are buy recommendations. The average target price is set at $364.29, more than 3 percent higher than the last closing price. The highest target price is at $441, and the lowest is $202.Given the current situation, which seems to have no impact on the company's operations. The overvaluation of the stock after the entry from the fake account seems to be a signal for the price to return to pre-decline levels. Source: MT5, EliLilly, WeeklyAuthor: Grzegorz Dróżdż, a Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

The Close Of The New York Stock Exchange Was Mostly Red

InstaForex Analysis InstaForex Analysis 15.11.2022 08:09
At the close of the New York Stock Exchange, the Dow Jones fell 0.63%, the S&P 500 fell 0.89%, and the NASDAQ Composite index fell 1.12%. Dow Jones Merck & Company Inc was the top gainer among the components of the Dow Jones index today, up 2.39 points or 2.44% to close at 100.35. Quotes of Johnson & Johnson rose by 2.66 points (1.57%), ending trading at 171.91. Visa Inc Class A rose 1.86 points or 0.91% to close at 206.86. The least gainers were Walmart Inc, which shed 4.19 points or 2.94% to end the session at 138.39. Home Depot Inc was up 2.55% or 8.02 points to close at 306.92 while Dow Inc was down 2.24% or 1.19 points to close at 51. 95. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were CF Industries Holdings Inc, which rose 5.21% to hit 107.76, PENN Entertainment Inc, which gained 4.59% to close at 37.63. as well as Moderna Inc, which rose 4.57% to close the session at 179.03. The least gainers were Hasbro Inc, which shed 9.86% to close at 57.16. Shares of Bath & Body Works Inc. lost 8.17% and ended the session at 33.06. Quotes of SVB Financial Group decreased in price by 6.73% to 219.76. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Opiant Pharmaceuticals Inc, which rose 111.58% to hit 20.10, Freight Technologies Inc, which gained 113.15% to close at 0.44, and also shares of Toughbuilt Industries Inc, which rose 72.27% to end the session at 3.79. The least gainers were Satsuma Pharmaceuticals Inc, which shed 83.22% to close at 0.68. Shares of Sellas Life Sciences Group Inc lost 43.96% to end the session at 2.55. Quotes of Nuwellis Inc decreased in price by 40.00% to 0.12. Numbers On the New York Stock Exchange, the number of securities that fell in price (2188) exceeded the number of those that closed in positive territory (956), while quotes of 111 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,257 companies fell in price, 1,538 rose, and 202 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 5.37% to 23.73. Gold Gold Futures for December delivery added 0.30%, or 5.30, to $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 4.24%, or 3.77, to $85.19 a barrel. Futures for Brent crude for January delivery fell 3.57%, or 3.43, to $92.56 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged at 0.21% to 1.03, while USD/JPY advanced 0.77% to hit 139.86. Futures on the USD index rose 0.53% to 106.73.       Relevance up to 03:00 2022-11-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/300975
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

Fresh China Stimulus Has Added To The AUD/USD Pair Rally | Meeting Of President Biden And President Xi Showed Some Goodwill Gestures f

Saxo Bank Saxo Bank 15.11.2022 08:39
Summary:  Perhaps reality set in that markets could perhaps have been a bit too euphoric after just one inflation print showed CPI had dropped. Investors took profits from the Nasdaq 100 and S&P 500 seeing the indices fall 1% & 0.9% ahead of US PPI and following Fed officials’ remarks about ‘additional work to do’ and “a ways to go” to bring down inflation. Inflation expectations in a New York Fed consumer survey increased. Crude oil took a haircut, falling 4.2% after OPEC cut its oil demand outlook. Despite the US dollar rising against almost all major G-10 peers, The Aussie dollar nudged up to 0.67 ahead of the RBA meeting minutes. What’s happening in markets? Investors took profits from the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) seeing the indices fall 1% and 0.9% as there’s ‘additional work to do’ to bring down inflation  Perhaps reality set in, that markets could perhaps have been a bit too euphoric after just one inflation print showed CPI had dropped. The major US indices snapped their two-day rally because US Federal Reserve speakers raised the alarm that the Fed had extra work to do to bring down inflation. Fed Governor Christopher Waller warned that “the market seems to have gotten way out in front over this one CPI report” and the Fed has “got a ways to go”.  Adding to that, Fed’s Vice Chair Lael Brainard said there is “additional work to do”. Putting it into perspective, the S&P500 has still managed to hold onto a gain of 10% from October 10. Given the rhetoric of ‘more work to do’ has been reinforced, it’s important to remember bear markets produce wild swings in markets, and volatility might be expected to pick up given the uncertainty. Ten of the 11 sectors of the S&P 500 declined with Real Estate, Consumer Discretionary, and Financials falling the most and Health Care being flat. Amazon (AMXN:xnas) dropped 2.3% as the company announced plans to layoff about 10,000 employees. Tesla (TSLA:xnas) declined 2.6% as Elon Musk said he had too much work to juggle and was running Tesla “with great difficulty”. Toll and board games maker, Hasbro (HAS:xnas) tumbled nearly 10% on analyst downgrades. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) as China rolling out financial support to the property sector Hang Seng Index climbed 1.7% and CSI 300 edged up 0.1% on the news that the People’s Bank of China and the Banking and Insurance Regulatory Commission jointly issued a notice to financial institutions with 16 measures to address the liquidity squeeze faced by property developers through measures including the temporary relaxation of previously imposed redlines restricting banks from lending over certain ceilings to developers and calling for financial institutions to treat private enterprise developers equally with state-owned enterprises. Leading China private enterprise property developers listed in Hong Kong soared, with Country Garden (02007:xhkg) jumping 45.5% and Longfor (00960) surging 16.5%. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) pared some post-CPI gains on hawkish Fedspeak and higher surveyed inflation expectations. US treasury yields rose about 6bps across the curve, paring some of the post-CPI gains, after returning from a long weekend, with the 10-year yield rising to 3.86% and the 2-year yield back to 4.39%. Hawkish comments from Fed Governor Waller that the market has gotten too much ahead of itself on one CPI report and there is still a long way to go triggered selling in treasuries during Asian hours. To add to that, the usually dovish Fed Vice Chair Lael Brainard said there is additional work to do in fighting inflation. Higher inflation expectations from the New York Fed’s Survey of Consumer Expectations weighed on the bond markets. Median one- and three-year-ahead inflation expectations increased to 5.9% and 3.1% from 5.4% and 2.9%, respectively. The median five-year-ahead inflation expectations rose to 2.4% from 2.2%. Also weighing on the markets during the session as about 12 billion corporate bond issuance. Australia’s ASX200 (ASXSP200.1) trades at its highest level since June; focus on CBA today   The biggest bank in Australia and the second biggest company on the ASX, Commonwealth Bank (CBA) reported its financial results today, with the bank reporting its net profit after tax (NPAT) from continuing operations grew just 2% compared to the prior quarter to A$2.5 billion. Its common equity Tier 1 ratio fell slightly to 11.1% vs. 11.5% q/q (showing its holding slightly less cash), and it also declared a loan impairment expense of A$222 million from bad debts, (showing Australians are feeling the pinch of the rate hikes). All in all, CBA’s income rose 9%, driven by higher margins and volume growth, which partly offset the reduced non-interest income. Meanwhile, CBA’s expenses rose, 4.5% (excluding remediation) with higher staff costs adding to the bill. CBA’s shares have risen 21% from their June low. And the technical indicators on the monthly chart suggest its slow grind up could perhaps continue, but the monthly and daily charts look somewhat mixed/choppy- it guess you could say, showing volatility may pick up. A lot can be taken by the RBA’s commentary, which has alluded to insolvencies rising up. Which we can see has been reflected in CBA’s results. Also remember the RBA said that the rate hikes from May have not fully been felt by Australians yet. That means, CBA’s margins could remain thin given inflationary pressures and rising rates. If you are looking for alpha, we still believe commodities offer the most potential over banks. Crude oil (CLZ2 & LCOF3) took a haircut, falling 4.2% after OPEC cut its oil demand outlook WTI crude price fell 4.2% as OPEC cut its global oil demand outlook down 0.1million bpd to 99.6 million bdp for 2022 and down 0.1 million bdp to 101.8 million bdp for 2023.  In the natural gas market, Freeport LNG will likely extend an outage that began in June, curbing the much-needed supply to customers in Europe and Asia. AUDUSD holds steady at around 0.67 after balanced RBA meeting minutes Despite the US dollar rising against almost all major G-10 peers, the Aussie dollar has held its ground, thanks to fresh China stimulus (with China announcing a property sector rescue package, as well as relaxing some Covid restrictions). This has added to the AUDUSD rally, with the pair now gaining 6.2% this month, in anticipation that Australia’s trade surplus will bolster, with hopes that commodity demand will improve. In its minutes released this morning, it shows that the RBA considered the case for a 50bp rate hike but settled at raising 25bps as the RBA was mindful of the full impacts of prior hikes were yet to be fully felt.  What to consider? US PPI today to watch In the October CPI released last week, a decline in health insurance costs due to technical factors contributed to the deceleration in the service component of the core CPI. In the calculation of core PCE, which the Fed watches most closely, the healthcare services prices are estimated from the PPI dataset than the CPI database. As a result, investors are likely to pay more attention to the October PPI numbers scheduled to release on Tuesday than usual as they are trying to gauge the trend of the service component of the core CPI. Bloomberg consensus estimates for headline PPI are +04% M/M and +8.4% Y/Y and for core PPI are +0.3% M/M and +7.2% Y/Y. Biden and Xi stroke a conciliatory tone but key issues unresolved  The 3-hour long meeting between President Biden and President Xi on the sidelines of the G20 Summit in Bali showed some goodwill gestures from both sides. Nonetheless, key issues remain unresolved.  In a relatively conciliatory tone, the two leaders agreed to resume talks on climate change and economic issues between officials of the two countries. U.S. Secretary of State Blinken plans to visit China early next year. Japan’s Q3 GDP unexpectedly declined Japan reported Q3 GDP that unexpectedly declined by 1.2% on a seasonally adjusted annualized basis, contrary to the consensus expecting a 1.2% growth. Falling net exports and a decline in housing investment drove the weakness. China’s October activity data are expected to be weak October retail sales in China are expected to decelerate to +0.7% Y/Y according to the Bloomberg survey from +2.5% Y/Y in September as the surge in COVID cases and pandemic control restrictions took their toll on consumption. Industrial production is estimated to slow to +5.3% Y/Y in October from +6.3% Y/Y in September, amid Covid-related restrictions, slower auto production, and weak exports. Retail bellwether companies report Q3 results today Home Depot (HD:xnys) and Walmart (WMT) are scheduled to report Q3 results today. Investors will be monitoring the top-line growth figures and assessment of business outlooks to gauge the state of US consumers. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-15-nov-2022-15112022
Asia Morning Bites - 14.02.2023

The Japanese GDP Data Has Displayed A Negative Growth Rate

TeleTrade Comments TeleTrade Comments 15.11.2022 08:48
Asian equities continue making gains despite a sell-off in S&P500 on Monday. A contraction in GDP numbers has failed to weigh down Nikkei225. Chinese stocks are accelerating despite weaker Retail Sales and a resurgence in Covid-19 cases. Markets in the Asian domain are displaying positive moves despite the sell-off in S&P500 on Monday. The 500-stock basket was expected to face turbulence as US markets opened after an extended weekend, therefore, an enhancement in volatility was highly expected. In the Asian session, the S&P500 futures have recovered meaningfully while the US dollar index (DXY) is displaying a rangebound structure ahead of the US Retail Sales data. At the press time, Japan’s Nikkei225 added 0.13%, ChinaA50 jumped 1.03%, Hang Seng soared 3.60% and Nifty50 eased 0.15%. Nikkei225 is holding the reins despite reporting a contraction in Gross Domestic Product (GDP) numbers for the third quarter of CY2022. The Japanese economy has displayed a de-growth of 0.3% in the third quarter vs. expectations of expansion by 0.3% and the prior release of 0.9%. On an annualized basis, the GDP data has displayed a negative growth rate at 1.2% against an expansion of 1.1% as expected and the prior release of 3.5%. Meanwhile, Chinese equities are enjoying significant liquidity despite the release of downbeat Retail Sales data. The economic catalyst has turned negative at 0.5%. Prolonged follow-up of Covid-19 measures, weak real estate demand, and low inflation figures are responsible for a decline in Retail Sales. Also, Industrial Production landed lower at 5.0% against the consensus of 5.2%. On the oil front, an upthrust in Covid-19 cases in China has led to a resurgence in weaker economic projections. Therefore, the oil demand will eventually face struggles ahead. It is worth noting that the administration has eased Covid-19 measures. However, Time magazine said in a focus piece that “China just relaxed some pandemic measures, but experts suggest 'Zero-COVID’ probably won’t be going away anytime soon,”      
US-China Tensions Continue To Ramp Up, Dollar Off Its Highs

The US And Chinese Leaders Criticized Russia For Its Threatening The Use Of Nuclear Weapons

Saxo Bank Saxo Bank 15.11.2022 09:47
Summary:  Equity markets traded largely sideways, as did the US dollar after the wild sell-off late last week in the wake of the soft US CPI data. Markets in Asia traded on a strong note overnight after friendly headlines from the long Biden-Xi talk yesterday. The focus on incoming data in the days ahead will be on US PPI today and Retail Sales tomorrow, with the UK set to announce a much anticipated autumn budget statement on Thursday, likely to include new windfall taxes on power and fossil fuel companies.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Despite a strong session in China there is little spillover effect into developed market equities with S&P 500 futures still hovering just below the 4,000 level. Today’s key events are earnings from Walmart and Home Depot, or news coming out of the G20 meeting. US equities are tilted short-term in favour of an upside move with the 200-day moving average in the S&P 500 futures at 4,080 being the natural gravitational point for the market. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hong Kong and China’s equity markets surged for the third day in a row, with Hang Seng Index soaring 3.4% and CSI 300 climbing 1.7%, as optimism returned to the markets due to favourable policy shifts in China regarding pandemic control and property developers’ access to funding and goodwill gestures shown by China’s President Xi and the US’ President Biden at their first face-to-face meeting after President Biden took office. China Internet companies were among the top gainers, with Alibaba (09988:xhkg) up 11%, Tencent (00700:xhkg) up 10%, and Meituan (03690:xhkg) up 6%. Investors brushed off the rise of new Covid cases to 17,772 in mainland China as well as weaker-than-expected retail sales (shrinking 0.5%) and industrial production (+5%) in October. FX: USD still on the mat after massive downdraft on lower October CPI After the massive two-day plunge last week on the release of the softer than expected US October CPI data on Thursday, the US dollar largely tread water in yesterday’s session, with traders unwilling to take it lower still after a huge, one-off adjustment to Fed expectations that will require more weak incoming data from the US if investors want to solidy their case for a coming Fed pivot. EURUSD continues to trade near the key 1.0350 area, which was the major low back in May and June and prior to that, back in early 2017. The first support is the 1.0200 area, the 38.2% retracement of the rally sprint, with the reversal level at 1.0100, the 61.8% retracement and near the prior important resistance. For USDJPY, while the market managed to briefly take out the 139.40, the prior major high in July, it has bounced back above 140.00 at times since yesterday. Crude oil (CLZ2 & LCOF3) returned to the lower end of their current ranges ... after OPEC cut its forecasts for global oil demand in the fourth quarter, virus infections continue to climb in China. In addition, a monthly Drilling Productivity Report from the EIA cast doubt on US shale growth and as oil production per drilled well has fallen to the lowest since July 2020. Weaker than expected China data also highlighted the risk to oil demand during the final quarter before an expected tightening driven by OPEC+ production cuts and EU sanctions against Russian oil. Focus on US economic data given its impact on risk appetite as well as IEA’s Oil Market Report for November due later today. Gold (XAUUSD) Gold has so far seen three shallow corrections during the run up from the post-FOMC low at $1620 on November 3, highlighting an emerging “buy-the-dip" mentality as short positions are being reduced while others trade the current positive momentum. An attempt to reverse some of last week's drop in the dollar and yields initially supported a correction but gold did not get close to test key support at $1735 before receiving a bid after Fed Vice Chair Lael Brainard said it would be appropriate for the Fed to slow its monetary-tightening pace soon. Demand from ETF investors – net sellers for months – have yet to show any appetite while speculators cut their net short by 80% to –8k lots in the week to November 8.  Expect some consolidation and potentially a recheck of support at $1735 with resistance at $1789 and $1804. US treasuries (TLT, IEF) US treasuries failed to consolidate much of last Thursday’s enormous slide in yields, with the 4.00-4.10% area the somewhat far away upside swing zone, while the next major focus lower will be on the major pivot high near 3.50% from June. What is going on? Xi-Biden summit sees positive headlines After a three-hour talk between the US and Chinese heads of state, both sides issued statement suggesting a friendly reset of the tone between the two countries. The two sides are set to resume cooperation on climate change and food security and both leaders criticized Russia for its threatening the use of nuclear weapons. The Chinese Foreign Minister Wang Yi said the talks represent a “new starting point” with both sides hoping “to stop the tumbling of bilateral ties and to stabilize the relationship.” Weak incoming data from China overnight Industrial Production rose 5% YoY in October, a slowing of the pace from the month before and below estimates of 5.3%. Retail Sales for the month were down –0.5%, far below expectations of a rise of +0.7%. Infineon Technologies blasts earnings estimates The German semiconductor manufacturer reports strong Q4 results (ending 30 September) with revenue at €4.14bn vs est. €3.93bn and segment profit of €1.06bn vs est. €970mn. For the current fiscal year, the company guides segment profit margin of 24% vs est. 22.2% and revenue of €15.5bn vs est. €15bn. Fed Vice Chair Brainard mentions slowing the pace of Fed rate hikes In an interview yesterday, Lael Brainard, widely considered the chief dove on this FOMC, confirmed forward market expectations for lowering the size of future rate hikes. After last Thursday’s softer US October CPI print, the market had already lowered expectations to a 50-bp move, so there was little market impact despite a flurry of headlines. Brainard said “It will probably be appropriate soon to move to a slower pace of increases...but I think what’s really important to emphasize, we’ve done a lot, but we have additional work to do.” Higher US inflation expectations ... from the New York Fed’s Survey of Consumer Expectations weighed slightly on bond markets. Median one- and three-year-ahead inflation expectations increased to 5.9% and 3.1% from 5.4% and 2.9%, respectively. The median five-year-ahead inflation expectations rose to 2.4% from 2.2%. Also weighing on the markets during the session was about $12 billion corporate bond issuance. What are we watching next? ECB’s TLTRO repayments on Friday This is usually a non-event for traders, only ECB watchers care about that. But this is before the European Central Bank (ECB) decided on 27 October to change the rules retroactively and increase the targeted longer-term refinancing operation (TLTRO) rates from 23 November onwards. The interest rate will be directly indexed on the ECB’s deposit rate (which could peak at 2.50 % next year) instead of being calculated over the entire life of the operation. This creates strong incentives for commercial banks to repay in advance (the bulk of the TLTRO was going to be repaid in June 2023). This is aimed to reduce the eurozone balance sheet and with that to contribute to the overall monetary policy normalisation. At this stage, it is still unclear what will be the exact consequences on the flow of credit in the eurozone. This is something to monitor, however. Incoming US data Traders will remain nervous around incoming US data after the wild reaction to last week’s Thursday October US CPI release. The US macro calendar highlights this week include today’s October PPI releases, the Oct. Retail Sales data on Wednesday and November NAHB Housing Market Index release the same day. Finally, the US reports October Housing Starts/Building Permits data on Thursday. Hints of new taxes for the coming UK Autumn Budget Statement on 17 November The new Prime minister Rishi Sunak needs to find savings worth about £30-40bn/year to convince the independent Office for Budget Responsibility that debt won’t rise across the medium-term as a percentage of GDP.  At the same time, Sunak was out yesterday promising the return of the “triple lock” he suspended for 2022-23 as Chancellor, under which pensions are adjusted higher by the highest of inflation, average earnings, or 2.5%. Current Chancellor Jeremy Hunt is considering a new 40% windfall tax on electricity producers. He may also extend the current windfall tax on oil and gas producers to 2028 and raise it to 35% from 25% in Thursday’s budget statement. Earnings to watch Today’s US earnings focus is Walmart and Home Depot which are both giants in the US consumer sector. Walmart is expected to deliver 5.2% y/y revenue growth and lower EBITDA margin at 5.5% down from 6.3% a year ago. Home Depot is expected to deliver revenue growth of 3% y/y and unchanged EBITDA margin at 17.5% compared to a year ago. Sea Ltd is also reporting today and was at one point the darling of the market delivering high growth rates and strong returns but the last year has been brutal. Analysts expect revenue growth of 12% y/y down from a revenue growth rate of 122% y/y a year ago as e-commerce, gaming and financial services have slowed down in Southeast Asia. Today: Infineon Technologies, Vodafone, Alcon, Walmart, Home Depot, Sea Ltd Wednesday: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com Economic calendar highlights for today (times GMT) 0900 – IEA’s Oil Market Report for November 1000 – Germany Nov. ZEW Survey 1000 – Eurozone Sep. Trade BAlance 1000 – Eurozone Q3 GDP estimate 1330 – US Oct. PPI 1330 – Canada Sep. Manufacturing Sales 1400 – US Fed’s Harker (voter 2023) to speak 1500 – US Fed’s Barr (Voter) to speak before Senate panel 2130 – API's Weekly Crude and Fuel Stock report 0030 – Australia Q3 Wage Price Index  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-15-2022-15112022
Rates Spark: Discussing the Potential of 4.5% and its Impact on Markets

China Could Be The Next Hit To Global Inflation | Donald Trump's Announcement

Swissquote Bank Swissquote Bank 15.11.2022 09:52
Equities saw some profit taking in last week’s post-US inflation rally, as some Federal Reserve (Fed) officials reminded investors that the 7.7% inflation is still high and that the Fed would continue fighting to bring it lower. G20 In geopolitics, yesterday’s meeting between Jow Biden and Xi Jinping went well. US-listed Chinese stocks extended gains. Crude Oil In energy, American crude dived on the news that OPEC cut its oil demand outlook and warned of uncertainties around global growth. Earnings In earnings, big US retailers Walmart and Home Depot are due to release earnings today Donald Trump And in fun news, Donald Trump will make an important announcement! Whoo! Watch the full episode to find out more! 0:00 Intro 0:41 Fed members warn of premature optimism 2:54 US inflation expectations go up 4:31 China could be the next hit to global inflation 5:05 Crude oil down on OPEC demand outlook cut 6:20 Biden, Xi meeting went well! 7.49 Crypto selloff cools 8:53 What to watch today? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #US #inflation #expectations #G20 #Biden #Xi #meeting #US #China #crude #oil #FTX #bankruptcy #Bitcoin #Ethereum #selloff #Binance #recovery #funds #Walmart #HomeDepot #earnings #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Demand For Gold Rose Around 20% In 2022, Coffee Prices Jumped

Saxo Bank Podcast: The Shift In Attitude In The Gold Market, USD Remains Weak And More

Saxo Bank Saxo Bank 15.11.2022 11:50
Summary:  Today we note an indifferent session yesterday yielding to a strong session for sentiment overnight in Asia, perhaps in part from the friendly tone in the wake of the Biden-Xi summit yesterday, but also on stimulus hopes after weak Chinese data overnight. Elsewhere, we note the shift in attitude in the gold market as the USD remains very weak, with the latter trading at pivotal support areas in places. Wheat, crude oil, key semiconductor stocks to watch and upcoming earnings and more also on today's pod, which features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-15-2022-15112022
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Analytical Report - SFD 3Q22 Results Review- WSE:SFD

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 15.11.2022 12:58
HOLD FV PLN 2.94 5% upside Price as of 14 November 2022 PLN 2.79 SFD reported its 3Q22 results with EBIT of PLN 3.8m and net profit of PLN 2.9m (32% and 33% below our expectations, respectively, on slightly lower sales and higher cost of external services). Below please find key highlights: • Revenues came in at PLN 81.7m (+37% y/y, 1% below preliminary monthly data of PLN 82.9m). We estimate that e-commerce sales increase by 18% y/y to PLN 40m (comparable to previous quarters) and accounted for nearly half of total sales (vs. 57% share in 3Q21). • SFD had 28 own stores (+1 q/q) and 67 franchising stores (+2 q/q) as of end-3Q22. Additionally, the company has launched its own e-commerce platform in Romania at that time. • Gross profit reached PLN 29.4m (+43% y/y), implying gross margin of 35.9% (+1.5pp y/y, in line with our expectations). • EBIT came in at PLN 3.8m (+32% y/y, 32% below our expectations). Operating costs amounted to PLN 77.8m at that time (vs. our estimate PLN 77.3m). Cost of salaries increased by 26% y/y to PLN 7.7m (and was 5% below our expectations), while cost of external services increased by 49% y/y to PLN 14.2m (4% above our expectations). EBITDA came in at PLN 4.7m (+31% y/y), implying EBITDA margin of 5.7% (vs. 6.0% reported in 3Q21). • Net profit amounted to PLN 2.9m (+28% y/y, 33% below our expectations). Net financial costs amounted to PLN 0.5m. • The company had inventory of PLN 60.0m as of end-3Q22 (+79% y/y and +19% q/q). Operating cash flow was negative PLN 5.0m vs. positive PLN 7.8m in 3Q21. Net debt amounted to PLN 21.6m (+67% y/y). • The company expects to maintain growth rate of revenues in 4Q22 at comparable level to 9M22 (+32% y/y in 9M22 and +32% y/y growth reported already in October) and expand its activity on foreing markets based on own platforms. Opinion: Negative, as reported 3Q22 results were below our expectations on lower than preliminary sales and higher inflationary pressure on cost of external services, resulting in deterioration of EBITDA margin. Additionally, we point at solid increase in inventory (+19% q/q), resulting in negative operating cash flow and increase in net debt. On the other hand, we note that the company reported sound sales of PLN 28m in October (+32% y/y); however results may remain under pressure on cost inflation. Analyst: Marek SzymaÅ„ski marek.szymanski@ipopema.pl + 48 22 236 94 12 GPW’s Analytical Coverage Support Programme 3.0  
At The Close On The New York Stock Exchange Indices Closed Mixed

At The Close Of The New York Stock Exchange Most Securities Rose In Price

InstaForex Analysis InstaForex Analysis 16.11.2022 08:02
At the close of the New York Stock Exchange, the Dow Jones rose 0.17%, the S&P 500 rose 0.87% and the NASDAQ Composite rose 1.45%. Dow Jones Walmart Inc was the top performer among the components of the Dow Jones index today, up 9.05 points or 6.54% to close at 147.44. Nike Inc rose 2.32 points or 2.22% to close at 106.71. Salesforce Inc rose 3.41 points or 2.15% to close at 162.07. The least gainers were UnitedHealth Group Incorporated, which shed 10.74 points or 2.09% to end the session at 503.01. The Travelers Companies Inc was up 1.75% or 3.20 points to close at 179.50 while Verizon Communications Inc was down 1.59% or 0.61 points to close at 37.70. S&P 500 Leading gainers among the S&P 500 index components in today's trading were SVB Financial Group, which rose 9.18% to 239.93, Ceridian HCM Holding Inc, which gained 8.30% to close at 72.68. as well as Match Group Inc, which rose 6.66% to end the session at 51.92. The least gainers were Capital One Financial Corporation, which shed 7.18% to close at 103.56. Shares of Albemarle Corp shed 6.48% to end the session at 295.86. Quotes Synchrony Financial fell in price by 4.85% to 35.92.  NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Tenax Therapeutics Inc, which rose 45.74% to hit 0.14, Qurate Retail Inc Series B, which gained 37.28% to close at 7.14. , as well as shares of Exagen Inc, which rose 42.38% to close the session at 2.99. Shares of Jowell Global Ltd. were the biggest losers, losing 56.65% to close at 0.69. Shares of Fast Radius Inc lost 47.79% and ended the session at 0.10. Quotes of Kingstone Companies Inc decreased in price by 45.03% to 0.91. Numbers On the New York Stock Exchange, the number of securities that rose in price (2,346) exceeded the number of those that closed in the red (788), while quotes of 102 shares remained virtually unchanged. On the NASDAQ stock exchange, 2499 companies rose in price, 1319 fell, and 197 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.41% to 24.54. Gold Gold futures for December delivery added 0.29%, or 5.15, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery rose 1.12%, or 0.96, to $86.83 a barrel. Futures for Brent crude for January delivery rose 0.62%, or 0.58, to $93.72 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.25% to 1.04, while USD/JPY fell 0.51% to hit 139.16. Futures on the USD index fell 0.15% to 106.37.   Relevance up to 03:00 2022-11-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/301152
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

The RBA Downgraded Its Outlook For The Property Market | Walmart Is Increasing Its FY Outlook

Saxo Bank Saxo Bank 16.11.2022 08:53
Summary:  Nasdaq 100 and S&P 500 ended higher, being lifted by softer-than-expected producer inflation. Walmart and Home Depot beat in earnings and topline. Chinese stocks surged on additional financial support to the property sector and a conciliatory tone from the Biden-Xi meeting. Hang Seng Index rose 4% to 18,343, more than 25% higher from its October low. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) gained on softer-than-expected US PPI Investors got a lift from the softer-than-expected PPI data which added to the post-CPI optimism that the US inflation may have peaked. S&P 500 gained 0.9% and NASDAQ 100 rose 1.5%. Stocks pared gains in the afternoon when the news of Russian missiles landing in Poland, a NATO member, hit the wires. Stocks nonetheless managed to recover from the missile news and finished the session higher.  Nine out of 11 S&P 500 sectors gained, with communication services, consumer discretionary, information technology and real estate led. On earnings, retail bellwether Walmart (WMT:xnys) surged 6.7% after reporting earnings and revenue beats and raising full-year outlook guidance. Home Depot (HD:xnys) gained 1.7% on earnings beating estimates and reaffirming full-year guidance. US  treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied on PPI prints, with the 10-year yield falling 8bps to 3.77% US treasuries rallied, with yields falling 5-9 basis points across the curve. The 10-year yield fell 8bps to 3.77%. The market surged in price after the growth in PPI, both in headlines and core measures, slowed more than expected. A stronger Empire State manufacturing index, returning to the expansionary territory and Fedspeak from Bostic, Barr, and Harker reiterating the slower pace but still additional work to do message, did not tame market sentiment. Adding to the fuel was some safe-haven buying of treasuries after Russian missiles hit Poland and killed two people. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) on fire as risk-on sentiment returned Hong Kong and China’s equity markets surged for the third day in a row, with Hang Seng Index soaring 4.1 % and CSI 300 climbing 1.9%, as optimism returned to the markets due to favourable policy shifts in China regarding pandemic control and property developers’ access to funding and goodwill gestures shown by China’s President Xi and the US’ President Biden at their first face-to-face meeting after President Biden took office. In addition, the Chinese authorities announced that they will allow developers, after meeting some requirements in their financials and supports from their banks, to tap into some of the presale deposits now placed in escrow accounts. China Internet stocks and semi-conductor names were among the top gainers. Commodities lift; Crude oil (CLZ2 & LCOF3) rose more than 1% after Russian rockets hit, iron ore (SCOA,SCOZ2) extended its gain and wheat whipped up 1% Crude oil (CLZ2 & LCOF3) rose more than 1% after the EIA published a report saying inventories in developed nations sunk to an 18-year low of less than 4 billion barrels. The EIA says a potential EU ban on Russian supply will add further pressure, and its output may drop below 10 million b/d next year, from about 10.7 million so far this year. For the next technical indicators and levels to watch in oil, click here. Moving to metals, the Iron ore (SCOA) price rose 1.7%, continuing its rebound and has now risen 25% this month on the back of fresh China stimulus, however the iron ore price is still down 13% from its high. The question is, if China continues to ease restrictions, will the iron ore price continue its rebound, and support affiliated iron ore equities. Meanwhile in crop markets, wheat trades higher on concerns there could be a potential escalation of the war. What to consider Fed collects more evidence inflation is easing; US producer prices cool more than expected, clocking smallest gain in a year Investors got another piece of evidence the inflationary pressures are easing, with US producer price growth rising 8% Y/Y in October (below the 8.3% Bloomberg consensus expected and down from the 8.5% Y/Y in September), with prices rising 0.2% M/M (which was less than the 0.4% expected). Excluding volatile food, energy, and trade services, the core PPI grew 6.7% Y/Y in October- while the market expected the growth remains unchanged from the September level of 7.2%. After peaking in March at 11.7%, producer price growth has moderated from improving supply chains, softer demand, and weakening commodities prices. This means, following the softer-than-expected CPI print last week, the Fed has garnered more catalysts to slow its pace of hikes, which also provides further support to the equity market and bond market rallies. However, the next important data sets the Fed will be watching are due early next month; US jobs, and November CPI, which are ahead of the Fed’s next meeting (in the third week of December). RBA meeting minutes signal food and energy prices to rise, and property prices to fall Australia’s central bank sees food price inflation rising, along with energy prices, while the Unemployment rate is expected to rise as well off its lows. The RBA downgraded its outlook for the property market, expecting property prices to continue to fall, as they have in history when the RBA is in a rising cycle. It also sees housing loan commitments further falling. Yet the RBA affirmed it will keep rising rates till inflation is within its targets as the central bank wants underlying inflation to be within 2-3%. The RBA also hinted it may be close to its target, "in underlying terms, inflation was a little over 6% with most components of the CPI rising at annualized rates of more than 3%”. What are the investor takeaways from the RBA minutes? It could be worth looking for potential opportunities in investing in Food stocks, food ETFs, and the as well as wheat and corn. Secondly, it could be worth looking for potential opportunities in energy, like crude oil, or oil stocks such as Woodside Energy and Occidental Petroleum to name a few. And with property prices falling, along with lending, keep an eye on bank shares. Consider looking at CommBank (CBA) as a proxy. Will CBA continue to rally off its low on the back of the RBA's dovish stance, or will CBA and big banks take a haircut as banks’ profits are shrinking? Walmart and Home Depot earnings beat estimates Peter Garnry, Head of Equity Strategy wrote in his notes that Walmart showed a positive surprise on its operating margin and an upward revision to the FY results and Home Depot is delivering a decent Q3 result,= as well.  Walmart, the largest US retailer reported FY23 Q3 (ending 31 October) revenue of $152.8bn up 9% y/y beating estimates and adj. EPS of $1.50 vs est. $1.32 while announcing a $20bn buyback programme. The third quarter result is so strong that Walmart is increasing its FY outlook on adj. EPS to -6% to -7% y/y from previously -9% to -11%. The 12-month trailing revenue figure eclipsed $600bn for the first time in its history. As we have seen throughout this Q3 earnings season, retailers and consumer industries have been able to either preserve or expand operating margins. Walmart is valued at a 12-month forward EV/EBITDA of 11.6x compared to 12x for the S&P 500 Index.  The largest US home improvement retailer Home Depot reports FY23 Q3 (ending 31 October) revenue of $38.9bn vs est. $37.9bn up 6% y/y and EPS of $4.24 vs est. $4.13 as the US consumer remains in good shape despite inflation and higher cost of living. Home Depot is confirming its fiscal year guidance. Tencent (00700) is scheduled to report earnings on Wednesday Tencent is scheduled to report Q3 results today. Bloomberg survey shows the street is expecting revenues to edge down around 1% Y/Y with both advertisements and gaming down Y/Y. On adjusted EPS, the consensus is calling for an 8% year-on-year decline. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-16-nov-2022-16112022
Hungary's Budget Deficit Grows, Raising Concerns Over Fiscal Targets

Apple Shares Rose | As Trump Still Enjoys Personal Popularity

Saxo Bank Saxo Bank 16.11.2022 09:08
Summary:  Equity markets were in for a wild ride yesterday as the melt-up continued in early trading, only to violently reverse on an apparently errant missile killing two in a Polish town bordering Ukraine. The price action has since stabilized, with risk sentiment still strong in Asia on hopes for incoming stimulus from China. Important incoming US data up today includes the October Retail Sales data.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Big rejection in S&P 500 futures yesterday with the index futures coming off 1.3% from the intraday highs to close below the 4,000 level. Yesterday’s upside driver was a lower than estimated US PPI print and then later the downside move was triggered by news that a rumoured Russian missile had hit Polish territory killing two persons. This morning S&P 500 futures are attempting to push above the 4,000 level again, but we want to emphasize cautiousness here as geopolitical risks remain high and markets that seem fragile and trading on thin liquidity across many markets. Today’s key earnings event in the US is Nvidia reporting after the market close. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hong Kong and China stocks consolidated and took a pause on the strong rally since last Friday, with Hang Seng Index losing 1% and CSI 300 Index sliding 0.7%. Chinese property names retraced. Leading private enterprise developer Country Garden (02007:xhkg) plunged 14% following the placement of new shares. Chinese EV makers underperformed, with leading names dropping by 2% to 6%. New Covid cases in mainland China went above 20,000 for the first time since April. FX: USD volatile on risk sentiment swings yesterday The US dollar was pummelled yesterday as the risk sentiment melt-up initially continued yesterday in early trading in the US before a missile hitting a Polish town (more below) sharply reversed sentiment. The situation has since stabilized, but the reversal of the spike put a considerable dent in tactical USD downside momentum. GBPUSD traded the most wildly ahead of today’s CPI and tomorrow’s Autumn Budget Statement, squeezing from 1.1750 early yesterday to all the way north of 1.2000 briefly before trading back to 1.1800 and closing the day south of 1.1900. The USD volatility was less pronounced elsewhere, particularly against Asian currencies. The incoming US data and risk sentiment swings around that data (or as we saw yesterday from other sources) will likely drive the next USD move. Crude oil (CLZ2 & LCOF3) Crude oil ended lower on Tuesday following a volatile trading session that briefly saw prices spike on news a Polish border town had been hit by a Russian-made but probably Ukrainian fired missile (see below). Overall, the crude oil market remains rangebound with demand worries currently weighing a touch harder than supply concerns driven by OPEC+ production cuts and from next month, EU sanctions against Russian oil, a development that according to the IEA may drive a 15% reduction in Russian output early next year. In China the number of virus cases have surged to near 20,000 thereby testing local authorities' appetite for maintaining the covid-zero restrictions. Focus on EIA’s weekly stock report after the API reported a 5.8m barrel drop in crude and smaller increases in fuel stocks. Gold (XAUUSD) Gold touched resistance at $1788 on Tuesday as the dollar hit a fresh cycle low after US PPI showed the smallest increase since mid-2021. Later in the day, a brief safe haven bid quickly fizzled out after Biden said the rocket that hit Poland was unlikely to have been fired from Russia. Demand from ETF investors – net sellers for months – remain elusive with total holdings falling to a fresh 31-month low and with that in mind expect continued consolidation and potentially a recheck of support at $1735. Resistance at $1788, the 38.2% retracement of the 2022 correction and $1804, the 200-day moving average. US treasuries (TLT, IEF) US treasuries punched to new local lows yesterday, with the 10-year treasury benchmark dipping below 3.80% after a likely errant missile hit a Polish town bordering Ukraine and on slightly softer than expected PPI data. But yields have rebounded today and are back to slightly below the close from last Thursday after that day’s surprisingly soft October US CPI release. Key levels are 3.50% to the downside, the pivot high around the June FOMC meeting when the Fed hiked 75 basis points for the first time for this cycle, while 4.00-4.10% is perhaps the upside swing area. What is going on? UK October CPI was out at 11.1% YoY, a new cycle high This was vs. 10.7% expected and 10.1% in September. Core CPI matched the cycle high from September at 6.5% YoY, versus 6.4% expected. Sterling trades a bit weaker after the initial reaction to the data point, as higher inflation will likely require more fiscal and monetary tightening that will make the coming UK recession deeper, a sterling negative. Missile comes down in Poland town bordering Ukraine, killing two The source of the missiles is a mystery, with US President Biden saying after an emergency meeting with other leaders that the missile was “unlikely” to have been launched in Russia, while Poland claimed that the missile was “Russian made” and convened an emergency security meeting yesterday afternoon. Markets reacted strongly to the development initially, as Poland is a member of NATO. Russian officials said that claims of an intentional missile firing are a “deliberate provocation with the goal of escalating the situation.” Donald Trump declares third bid for the White House in 2024 Trump was widely seen as the chief liability in a very poor Republican showing in the mid-term elections last week, with candidates strongly denying the results of the 2020 election losing badly in almost every case. The Democrats are set to gain a slightly larger majority in the Senate and the Republicans will only eke out the narrowest of majorities in the House of Representatives. As Trump still enjoys an unmatched “base” of personal popularity, it will be difficult for any Republican profile to rise up to challenge Trump, just as it is likely impossible that Trump can win independent voters and those that are not his base. It’s ideal ground for the formation of a new party. Apple set to shift to US-based chip production Apple shares rose over 2.1%, moving to their highest level since early November after the Apple CEO unveiled the company will be using US-made Chips from Arizona in 2024, as part of reducing its reliance on Asian chip manufacturers and shifting to producing its own. CEO Tim Cook also told staff Apple plans to expand its chip supply into European markets. The moves underscore the necessity for technology companies to reshoring semiconductors from Asia to reduce supply chain risks. These types of moves will add to inflationary pressures in the future. US earnings recap: Walmart, Home Depot, and Sea Ltd Yesterday’s earnings releases from these three consumer retailing companies were all better than expected with Walmart lifting guidance and beating on revenue growth. Home Depot had the most downbeat reaction from investors as the home improvement retailer’s revenue growth beat was only due to inflation and not higher volume. The biggest positive reaction was in Sea Ltd shares as the Southeast Asia gaming and e-commerce company posted a narrower operating loss and beat on revenue growth; however, the company took down guidance in its gaming division. Read more details in our earnings review note from yesterday. US producer prices cool more than expected, clocking smallest gain in a year Investors got another piece of evidence inflationary pressures are easing, with US producer price growth rising 8% Y/Y in October (below the 8.3% Bloomberg consensus expected and down from the 8.5% Y/Y in September). Excluding volatile food, energy, core PPI rose 6.7% Y/Y in October- when the market prices to rise 7.2%. After peaking in March at 11.7%, producer price growth has moderated from improving supply chains, softer demand, and weakening commodities prices. The Fed has therefore garnered more catalysts to slow its pace of hikes, which also provides further support to the equity market and bond markets. However, the next important data sets the Fed will be watching are due early next month; US jobs, and November CPI, which are ahead of the Fed’s next meeting (in the third week of December). Arabica coffee (KCc1) dropped 4.4% on Tuesday … thereby extending a rout that has seen the price retrace almost 61.8% of the 2019 to 2022 surge to a multi-year high above $2.50 per pound. Fast forward nine months and the global economic slowdown has led to a reduction in away-from-home consumption at a time where the production outlook from South America has improved. Stocks at ICE monitored warehouses have risen for the past seven days from a 20-year low and could more than double soon with more than half a million bags awaiting assessment. A new LNG exporter is born Mozambique is now officially a new LNG exporter after the first shipment on Monday left the Coral South floating liquefaction unit, which has a 4.4 bcm annual export capacity. This is positive news for Europe who is desperately looking for new energy suppliers since the Ukraine war has started. It was a long-decade process for Mozambique to get its first LNG supply out of the country. Based on official estimates, this is one of the largest LNG offshore fields in Africa. What are we watching next? Fed hawk Christopher Waller to speak on Economic Outlook tonight Waller is an FOMC voter as he sits on the Board of Governors and is widely considered one of the most hawkish Fed members and may unleash a blast of hawkish rhetoric, although it seems the market is more likely to listen only to Fed Chair Powell himself and more importantly, at incoming data. US October Retail Sales data today An interesting data release is up today, the US Retail Sales for October. This data series suggests rather sluggish US growth and is reported in nominal month-on-month terms, not real- or inflation-adjusted terms. The last three months of the headline data have averaged almost exactly 0.0%, while the “ex Food and Energy” series has averaged +0.36%. Today’s headline number is expected at +1.0% MoM and +0.2% for core sales. Earnings to watch Today’s US earnings focus is Nvidia which is expected to deliver a 18% decline in revenue y/y to $5.8bn and EPS of $0.70 down 31% y/y as the market for GPUs is cooling down as crypto mining is becoming less profitable from lower prices on cryptocurrencies. Tencent is expected to report earnings today following a new round of layoffs announced yesterday as revenue growth is expected to be down 1% y/y in Q3. Today: Siemens Energy, Tencent, Experian, SSE, Nibe Industrier, Nvidia, Cisco, Lowe’s, TJX, Target Thursday: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com Economic calendar highlights for today (times GMT) 0900 – ECB Financial Stability Review 1300 – Poland Oct. CPI 1315 – Canada Oct. Housing Starts 1330 – US Oct. Retail Sales 1330 – Canada Oct. CPI 1330 – US Oct. Import & Export Prices 1415 – US Oct. Industrial Production 1450 – US Fed’s Williams (Voter) to speak 1500 – US Nov. NAHB Housing Market Index 1500 – US Fed’s Barr (Voter) to testify before House Panel 1530 – EIA's Weekly Crude and Fuel Stock Report 1935 – US Fed’s Waller (Voter) to speak 0030 – Australia Oct. Employment Change / Unemployment Rate Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source:https://www.home.saxo/content/articles/macro/market-quick-take-nov-16-2022-16112022
US Dollar Plunges Despite Hawkish Fed Expectations, Inflation Data and Sentiment Indicators in Focus

World’s Population Has Reached 8 Billion People | Trump’s Third Run For President

Kamila Szypuła Kamila Szypuła 16.11.2022 11:59
Once again we can get to know Jim Cramer's comments on the stock market. The market of new technologies, including cryptocurrencies, deserves attention. In addition, information about the re-candidacy of Donald Trump appeared. In this article: Stock Market via Jim Cramer Global Population Trump’s campaign Cryptocurrencies NVIDIA Jim Cramer’s comments Mad Money On CNBC tweets stock market situations.   Stocks rose on Tuesday after the October producer price index data signaled that inflation is cooling. https://t.co/gIMz8ZPn4q — Mad Money On CNBC (@MadMoneyOnCNBC) November 16, 2022 Jim Cramer observes and comments on the situation on the stock market. His comments are very valuable as he is an expert in this field. In his opinion, the current rally in the market may last until the middle of next month, based on chart analysis. 8 billion people The IMF in its post addresses the topic of demographic problems Today the world’s population has reached 8 billion people. But the greatest demographic challenge facing the world is actually population aging, according to @HarvardChanSPH's David E. Bloom and Leo M. Zucker. Read their new F&D article here. https://t.co/ahrBTUSg8F — IMF (@IMFNews) November 15, 2022 On November 15, humanity surpassed 8 billion, but what does that mean? For a long time we have been struggling with general overpopulation, which can have ecological, political and economic consequences. In highly developed countries, the main problem is an aging society, in such countries large families are reluctantly established because it is associated with costs and high responsibility, and now the focus is on career. In underdeveloped countries, where sex education is very low, more and more children are born, which deepens poverty. Alan Weusman in his book Countdown: Our Last, Best Hope For A Future On Earth? have addressed this problem. As we know, the more people, the greater the demand for food, water and a place to live, which will also affect the condition of our planet, and the economy may struggle with greater problems of poverty or other problems. Donald Trump will try again CNBC Now tweeted that Donald Trump will run for president again. Donald Trump launches 2024 presidential campaign https://t.co/zw0nXvNnHv — CNBC Now (@CNBCnow) November 16, 2022 There are still two years until the presidential election in the United States. Former President Donald Trump has officially launched a campaign for president in 2024. The announcement comes just a week after Republicans lost key midterm races. I recently wrote about the Speaker of the United States House of Representatives' endorsement of President Joe Biden's re-election. In connection with the information received, is there a possibility of another revalidation on the Biden-Trump line for the presidency. Recall that in 2020 Trump sought re-election and lost. Cryptocurrencies are extremely volatile Morningstar, Inc. tweets about the lesson that investors got on the example of cryptocurrencies. What lessons can investors take away from crypto's implosion?For one, the dangers of volatility cannot be avoided, writes John Rekenthaler. https://t.co/xOG2nEG4H2 pic.twitter.com/RoNQ1B6G6E — Morningstar, Inc. (@MorningstarInc) November 15, 2022 Some markets are more prone to volatility than others, but volatility is always very likely. This statement comes as no surprise. Cybercurrency buffs can trade countless differences between various digital assets and debate which ones have the brightest future, but knowing them didn't prove helpful when the cryptocurrency bear market hit. A year ago, cryptocurrencies were all the rage. Now the situation in this market is different. What more conclusions can current and future investors draw, maybe the CEO of Binance is right in saying that the market needs regulation? New technologies market Bloomberg Terminal tweets about new technologies market A faltering metaverse, a stagnating crypto market, and weakness in the gaming market signals that @nvidia's gaming arm may need an extra life. Check out the graphics using MODL <GO> on the #BloombergTerminal as Nvidia reports earnings. pic.twitter.com/HiAhopnww9 — Bloomberg Terminal (@TheTerminal) November 15, 2022 Stagnation in the cryptocurrency market and more affects the gaming market, including NVIDIA.As the tweet shows, the situation on the new technologies market is difficult.
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Saxo Bank Podcast: Tightness In The Commodity Markets, Apple Plans To Purchase US-Made Chips And Much More

Saxo Bank Saxo Bank 16.11.2022 12:37
Summary:  Today we discuss US markets exploding higher yesterday after a soft PPI release, only to have an apparently Russian missile hitting Poland on the Ukrainian border roiling sentiment. The USD behavior yesterday was inverse to the swings in equities, pointing to more correlation with risk sentiment swings than US yields as we look ahead at today's US Retail Sales data. Crude oil, tightness in the commodity markets, the huge announcement from Apple on plans to purchase US-made chips and much more on today's pod, which features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-16-2022-16112022
US Nonfarm Payrolls Disappoint: Impact on Dollar and EUR/USD Analysis

S&P 500 Index Potentially Return To Its Bearish Area

InstaForex Analysis InstaForex Analysis 17.11.2022 08:01
If we look at the daily chart of the S&P 500 Index, we can find several interesting things: 1. Upward Correction #SPX is inside the Bullish Pitchfork channel. 2. There are 3 Little Indian Pattern (yellow circle). 3. The appearance of Ascending Broadening Wedge pattern. 4. The appearance of Bearish Wolve Waves pattern. 5. Upward correction held back by quite significant Resistance level which is Mean Threshold from its Bearish Fair Value Gap at the level 4017.39. According to the facts above we can conclude that in a few days ahead, S&P 500 index potentially return to its initial bias (Bearish), so as long as there is no upward correction that exceeds the level 4154,38 then #SPX have the potential to depreciate to the level of 3836.4 as the first target and the ETA Line Wolve Waves level and/or 3631.93 as the second target.   Relevance up to 02:00 2022-11-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114045
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The NASDAQ Stock Exchange 2,616 Companies Fell In Price

InstaForex Analysis InstaForex Analysis 17.11.2022 08:02
At the close of the New York Stock Exchange, the Dow Jones was down 0.12%, the S&P 500 was down 0.83% and the NASDAQ Composite was down 1.54%. Dow Jones McDonald's Corporation was the leading gainer among the components of the Dow Jones index today, up 4.67 points or 1.74% to close at 272.51. UnitedHealth Group Incorporated rose 8.51 points or 1.69% to close at 511.52. Home Depot Inc rose 0.96% or 2.98 points to close at 314.91. The least gainers were Salesforce Inc, which shed 6.95 points or 4.29% to end the session at 155.12. Intel Corporation was up 3.84% or 1.18 points to close at 29.53, while Dow Inc was down 2.11% or 1.09 points to close at 50.51. . S&P 500  Leading gainers among the S&P 500 index components in today's trading were TJX Companies Inc, which rose 5.19% to hit 79.02, Campbell Soup Company, which gained 3.89% to close at 50.71, and also shares of W. R. Berkley Corp, which rose 3.83% to end the session at 71.76. The least gainers were Advance Auto Parts Inc, which shed 15.06% to close at 156.24. Shares of Carnival Corporation shed 13.71% to end the session at 9.63. Quotes of Target Corporation decreased in price by 13.14% to 155.47. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Fast Radius Inc, which rose 106.29% to hit 0.21, Qurate Retail Inc Series B, which gained 45.90% to close at 10.41 , as well as shares of InMed Pharmaceuticals Inc, which rose 36.33% to close the session at 3.79. The least gainers were shares of Dlocal Ltd, which lost 50.71% to close at 10.46. Shares of Brainsway Ltd lost 31.56% and ended the session at 2.19. Quotes of Cuentas Inc decreased in price by 28.00% to 0.25. Numbers On the New York Stock Exchange, the number of securities that fell in price (2104) exceeded the number of those that closed in positive territory (1012), while quotes of 119 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,616 companies fell in price, 1,142 rose, and 236 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.75% to 11/24. Gold Gold Futures for December delivery added 0.04%, or 0.65, to $1.00 a troy ounce. In other commodities, WTI crude futures for December delivery fell 1.83%, or 1.59, to $85.33 a barrel. Futures for Brent crude for January delivery fell 1.29%, or 1.21, to $92.65 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.43% to 1.04, while USD/JPY advanced 0.15% to hit 139.49. Futures on the USD index fell 0.13% to 106.15.     Relevance up to 03:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/301333
At The Close On The New York Stock Exchange Indices Closed Mixed

Technical Analysis Of Nasdaq 100 Index (NDX) By Arief Makmur

InstaForex Analysis InstaForex Analysis 17.11.2022 08:17
On 4 hour chart Nasdaq 100 Index seems visible if #NDX still moving within its Bullish Pitchfork channel even so because of its failure to touch the top line of the Bullish Pitchfork channel it can be considered as Hagopian Rules which confirms that in the near future #NDX will depreciated in the near future where it is also confirmed by the emergence of the Ascending Broadening Wedge pattern so that in the near future #NDX will try to test and broke below the level 11670,5 if this level is successfully broken then #NDX has the potential to fall to 11121.8 as the main target and 10789.1 as the next target to be tested with a note that on its way to the target level it does not return to its initial bias (Bull) until it exceeds above 12082. because if this level is successfully broken, it is very likely that the downside scenario described above will become invalid. Relevance up to 03:00 2022-11-18 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114047
Why India Leads the Way in Economic Growth Amid Global Slowdown

The Risk-off Mood In The Global Markets Has Strengthened

TeleTrade Comments TeleTrade Comments 17.11.2022 09:07
Asian equities have corrected significantly amid escalating geopolitical tensions. The DXY has been strengthened post the upbeat Retail Sales data. Accelerating Covid-19 cases in China have impacted oil prices significantly. Markets in the Asian domain are facing an intense sell-off amid mounting tensions between North Korea and the US. Rising drills by the US army along with South Korea and Japan in the Kim Jong-un region have received a fierce response. In the Asian session, North Korea warned on Thursday of "fiercer military responses" to U.S. efforts to boost its security presence in the region with its allies, says Reuters. This has strengthened the risk-off mood in the global markets and risk-perceived currencies are facing severe heat. At the press time, Japan’s Nikkei225 dropped 0.40%, ChinaA50 plunged 1.65%, Hang Seng nosedived 2.56%, and Nifty50 eased 0.23%. In addition to the cautious market mood, a release of better-than-projected US Retail Sales data has also supported the US dollar index (DXY). The economic data rose by 1.3% in October against the projections of 0.9% and flat performance in September. Despite higher payouts after adjusting for inflation impact, consumer demand has been ‘resilience’ due to higher dependency on credit card borrowing. Analysts at Wells Fargo are of the view that robust consumer demand gives businesses no incentive to forgo price increases, thereby making the task of getting inflation in check more difficult for Federal Reserve policymakers.” Meanwhile, sky-rocketing Covid-19 cases in China have dampened the market mood. The optimism derived from easing curbs has faded dramatically. Also, Gita Gopinath, the first Deputy Managing Director of the International Monetary Fund (IMF), at the Caixin Summit, cited that “Calibrating China's zero-COVID strategy to mitigate the country's economic impact will be critical to sustain and balance the recovery,” On the oil front, rising numbers of Covid-19 infections have also weakened oil prices. It is worth noting that China is a leading importer of oil and weaker demand projections from the dragon economy are sufficient to impact oil prices.    
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

Australian Employment Rose | Microsoft Will Use Nvidia's Graphics Chips

Saxo Bank Saxo Bank 17.11.2022 08:47
Summary:  The hotter-than-expected US retail sales data and hawkish-leaning comments from Fed officials weighed on equities but boosted buying of long-dated bonds as investors focused on the likelihood of Fed overdoing in monetary tightening and triggering a recession. Target disappointed with Q3 miss and weak Q4 sales guidance, highlighting the pain of the US retailers and consumers. Nvidia's results beat expectations, moving its shares up after hours. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated on strong retail sales and hawkish Fedspeak The Good news is bad news phenomenon persists. The hotter-than-expected 1.3% rise in October retail sales, followed by several hawkish-leaning comments from Fed officials triggered concerns that the Fed would overdo monetary tightening and bring about a recession. The fall in yields at the long end of the US treasury curve did not lend support to the equity market as in recent months as stock investors took it as a sign of bond market pricing in a higher recession risk. Nasdaq 100 fell 1.5% and S&P500 declined 0.8%, with 68% of S&P 500 companies and 9 out of 11 sectors closing lower. Energy, consumer discretionary, and information technology led the benchmark index lower while the defensive utilities sector and consumer staples sector managed to finish the session with modest gains. Target (TGT:xnys) fell 13% following the retailer reported a large miss on earnings and cut its outlook for the current quarter far below analyst estimates. Lowe’s (LOW:xnys) gained 3% after reporting better-than-expected comparable sales and raising full-year earnings guidance. Micron (MU:xnas) dropped 6.7% as the chipmaker said it was cutting DRAM and NAND wafer production. After the market closed, Nvdia (NVDA:xnas) and Cisco (CSCO:xnas) reported earnings beating analyst estimates. Nvida rose 1.3% and Cisco gained 3.9% in the extended hours trading. US  treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied with yields in the long end of the curve falling most on recession concerns The US treasury yield curve bull flattened, with the 2-year yield edging up 2bps to 4.35% while the 10-year yield fell 8bps to 3.69%. The much-watched yield curve inversion between the 2-year and the 10-year widened to 67bps, the most invested since February 1982, and heightened the growth scare among investors. The market has largely priced in a 50bps hike in December but is unwinding some of the post-CPI optimism that the Fed may do less next year, after Fed’s George, Daly, Waller, and Williams pushed back on the notion of pausing. The strong results from the 20-year bond auction on Wednesday helped supported the outperformance of the long ends.  Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) on fire as risk-on sentiment returned Hong Kong and China stocks consolidated and took a pause on the strong rally since last Friday, with Hang Seng Index losing 0.5% and CSI 300 Index sliding 0.8%. Chinese property names retreated, following new home prices in the 70 major cities of China falling 1.6% Y/Y in October, the largest decline in seven years, and Agile (03383) announced that the developer will sell new shares at an 18% discount. Agile tumbled 23%. Country Garden (02007:xhkg), which also announced share placement earlier, plunged 15%. Investors also became increasing concerned about the rising trend in new Covid cases in mainland China, which having gone above 20,000 for the first time since April. In New York hours, the ADRs of Tencent (00700:xhks) rose 3.4% versus their Hong Kong closing level after reporting earnings beating estimates while Meituan (03690:xhkg) dropped 6.7% from Hong Kong closing as Tencent said it would disburse its stake on Meituan to shareholders. What to consider U.S. Retails hotter-than expected U.S. headline retail sales grew by 1.3% M/M in October (consensus:  +1%, Sep: 0%). The control-group retail sales increased by 0.7% M/M (consensus: +0.3%, Sep: +0.4%). U.K. headline CPI jumped to 11.1% in October, the highest in 41 years U.K’s October headline CPI came in at 11.1% Y/Y (vs consensus 10.7%), the highest in 41 years. Core CPI remained at 6.5%. Australia’s unemployment falls, employment rises more than expected in October, following Australian wage growth growing more than expected; AUDUSD trades flat Australia’s jobless rate fell to 3.4%, from 3.5% last month, which supports the RBA continuing to rise rates, and not pause on rate hikes at their next meeting in December. Australian employment rose by 32,200 month-on-month in October, almost double the 15,000 jobs expected to be added to the economy. Job growth is also up markedly from the tiny 900 jobs that were added the month prior. The AUDUSD is staying range bound for now. Target reported Q3 earnings miss and full-year guidance reduction Target’s Q3 adjusted EPS fell to USD1.54, nearly 30% below the median of analyst estimates. The retailer is predicting a drop in comparable sales for the first time in five years and estimating operating margins will shrink to about 3%, which is half of its previous forecast. Target is looking to axe $3 billion in costs, but says there will be no mass layoffs. This highlights the pain of the US retailers and also the consumer – who is reluctant to spend on non-essential items in the face of rising interest rates and inflation. Nvidia earnings beat Software graphics giant Nvidia (NVDA) reported revenue for the third quarter that beat analyst estimates. Revenue fell 17% y/y to $5.93 billion, beating the expected drop of 18% y/y to $5.84 billion. NVIDIA’s outlook for the fourth quarter was a bit vague though, but more or less points to improvements in revenue, citing revenue is expected to hit $6.00 billion, plus or minus 2%. Nvidia said Microsoft will use its graphics chips, networking products, and software in Microsoft’s new AI products. Nickel Miners could be under fire Profit taking in oil equites is likely with the after the oil price fell on reports the Druzhba pipeline carrying Russian oil to Europe had restarted, WTI Crude Oil fell 1.9%. Elsewhere, Nickel miners shares could be under fire today move after Nickel futures fell 9% on Wednesday. LME is said to be stepping up surveillance of sharp swings earlier in the week on supply fears. Keep an eye on Australia’s Nickel Mines (NIC) and IGO, Japan’s Pacific Metals, Sumitomo Metal Mining, and Indonesia’s Vale Indonesia, Aneka Tambang. For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-17-nov-2022-17112022
Share of Russian metal grows in LME warehouses

Copper And Silver Both Extended Their Declines | The USD Edged Higher

Saxo Bank Saxo Bank 17.11.2022 10:17
Summary:  The strong equity market rally eased yesterday as a very strong US Retail Sales report for October pushes back against the notion that the US economy is rapidly weakening. Today features a pivotal Autumn Budget Statement that will allow the market to make a vote of confidence on sterling on whether the new spending cuts and tax rises will inspire further confidence in sterling after its recent comeback.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures fell yesterday to close at 3,968 as investors are not following through on the momentum around the ‘peak rates’ narrative. This morning the index futures are trading higher with the 3,964 level being the key level to watch on the downside and 4,000 on the upside. Today’s macro events that can impact the equity market are US housing starts and permits, Philly Fed Business Outlook and initial jobless claims with the latter in focus given the latest mass layoffs in the technology sector. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hong Kong and China stocks retreated for the second day in a row, with Hang Seng Index falling around 2% and CSI 300 declining 1%. Tencent (00700:xhkg) fluctuated between small gains and losses after reporting Q3 EPS beating analyst estimates but a 2% Y/Y decline in revenues, being dragged down by online gaming and advertisement. Meituan (03690:xhkg) however fell nearly 8%, following Tencent’s announcement to disburse its 17% stake in Meituan to shareholders. NetEase (0999:xhkg) tumbled 12% after US gaming company Blizzard Entertainment (ATVI:xnas) would not renew its expiring licensing agreement with NetEase. Also weighing on sentiment was the People’s Bank of China’s emphasizes on financial stability and warns against potential inflation risks in the central bank’s Q3 monetary report, as well as news reports about the temporary suspension of redemption in some investment products suffering losses from the recent rise in Chinese bond yields. In addition, new Covid cases surged to 23,132, a new high since April. FX: GBP focus today as USD stabilizes on very strong October US Retail Sales report Strong US data is at odds with the recent drumbeat of softer inflation numbers that have helped inspired the recent steep sell-off in the US dollar, and kept the 2-year yields and Fed rate expectations from falling any further yesterday, even if longer US yields dipped to new local lows yesterday. The USD edged higher, with the recent lows the key support for the greenback and with the currency trading more in line with risk sentiment now. The top-tier incoming data won’t arrive until the early-mid December time frame, save perhaps for the PCE data on November 30. The bigger focus today is on GBP as Chancellor Jeremy Hunt is set to deliver the Autumn Budget Statement and a chance for thje market to judge whether the UK is an attractive place to invest in addition to whether the moves ill stabilize the country’s finances as it also risks worsening the depth of the coming recession. 1.2000 appears a key in GBPUSD, while EURGBP is choppy in the 0.8700-0.8800+ range. Crude oil (CLZ2 & LCOF3) Crude oil remains on the defensive trading near the lowest levels this month on continued concerns about the demand outlook in the world’s two largest consumers. The US yield curve has inverted the most since the early 1980’s underscoring concerns about the risk of recession next year while China continues to battle with rising covid cases, now nearing the all-time high seen earlier this year. Both developments leading to demand growth for next year being downgraded, thereby offsetting some of the tightness the EU embargo on Russian oil will help create into early 2023. WTI will be looking for support ahead of the recent low at $82 with Brent focusing on the $90-area. Gold (XAUUSD) Gold trades lower as the market pauses for breath following a 170-dollar run up in prices from the November 3 low. The metal is currently dealing with mixed signals as elevated recession worries, highlighted by the most inverted yield curve in almost four decades, are being offset by the biggest increase in US retail sales in eight months, indicating Fed tightening has further to run to bring inflation under control. Demand from ETF investors – net sellers for months – picked up a bit on Wednesday, but not enough to signal a change in their behaviour, and with that in mind expect continued consolidation and potentially a recheck of support at $1735. Resistance at $1788, the 38.2% retracement of the 2022 correction and $1804, the 200-day moving average. Copper (HGH3) and silver (XAGUSD) Copper and silver both extended their declines following a recent strong run up in prices. Copper ran out of steam ahead of major resistance in the $4/lb area and after breaking back below $3.78 the next line of support now comes in at $3.68. Industrial metal traders are keeping a watchful eye on covid developments in China, the US yield curve signalling an increased risk of a recession next year, extreme volatility in nickel market and in copper specifically, an emerging contango indicating a market with ample supply.  currently. Silver meanwhile trades back below its 200-day moving average with the first level of support in the $20.95 area. US treasuries (TLT, IEF) US treasuries punched to new local lows again yesterday, supported by a strong 20-year auction result, and despite the strong US Retail Sales news, with the 10-year treasury benchmark dipping below 3.70% and within 20 basis points of the next psychologically important level and pivot high from mid-June near 3.50%, a level that was quickly reached in the context of the market realizing that the FOMC was set for its first 75 basis point rate hike since 1994. The much-watched yield curve inversion between the 2-year and the 10-year widened to 67bps, the most invested since February 1982, and heightened the growth scare among investors. The market has largely priced in a 50bps hike in December and is unwinding some of the post-CPI optimism that the Fed might do less next year, after Fed’s George, Daly, Waller, and Williams pushed back on the notion of pausing. What is going on? Strong October US Retail Sales, weak November housing Market survey After a string of weak reports, the US October Retail Sales report came in far stronger than expected, with a strong +1.3 % MoM rise (vs. +1.0% expected) for the headline and an even more impressive +0.9% MoM rise in the “ex Food and Energy” print, on top of a +0.3% revision to the September data point. Elsewhere, we can see the massive shift higher in US mortgage rates continue to weigh on housing activity, as the November US NAHB Housing Market Index plunged 5 more points to 33, the lowest reading since the very worst month of the pandemic outbreak shock in 2020 and before that since 2012. Siemens Q4 results beat estimates The German industrial giant reports FY22 Q4 (ending 30 September) revenue of €20.6bn vs est. €19.3bn and orders of €21.8bn vs est. €20.4bn. In addition, the company says that it sees higher operating margins in three divisions and that downside risks from Russia are minimal now. Target reports earnings miss and downgrades sales guidance Target’s Q3 adjusted EPS fell to $1.54, nearly 30% below the median of analyst estimates. The retailer is predicting a drop in comparable sales for the first time in five years and estimating operating margins will shrink to about 3%, which is half of its previous forecast. This indicates that the substitution effect is increasing as the consumer is increasingly under more pressure. Target is looking to reduce $3bn in costs but says there will be no mass layoffs. Nvidia earnings beat Software graphics giant Nvidia (NVDA) reported revenue for the third quarter that beat analyst estimates. Revenue fell 17% y/y to $5.9bn, beating the expected drop of 18% y/y to $5.8bn. NVIDIA’s outlook for the fourth quarter was vague citing revenue is expected to hit $6.0bn, plus or minus 2%, which will translate into a 20% drop in revenue in the important holiday quarter. Nvidia also said Microsoft will use its graphics chips, networking products, and software in Microsoft’s new AI products. The slowdown in demand for GPUs is driven by less profitable crypto mining and as a result GPU pricing is plummeting and inventories on the balance sheet rising to $4.45bn up from $2.23bn a year ago. EPS was $0.28 down 73% y/y. Australia’s unemployment falls, employment rises more than expected in October Australia’s jobless rate unexpectedly fell to 3.4%, from 3.5% last month, which now supports the RBA continuing to raise rates, and not pause on hikes at their next meeting in December (market priced at 50-50 odds of a 25-bp hike). Australian employment rose by 32,200 month-on-month in October, almost double the 15,000 jobs expected to be added to the economy. The AUDUSD is staying range bound for now after its recent sharp rally, consolidating a bit on weak risk sentiment in Asia overnight. The RBA has said it expects the jobless rate to rise. US Fed’s Waller, noted Fed hawk, says he is “more comfortable” with smaller hike It appears that Fed consensus is settling on lowering the pace of rate increases at the December FOMC meeting after one of the more hawkish FOMC voters, Governor Christopher Waller said he is “more comfortable” with a smaller hike in December after the Fed’s four 75-basis points moves since the June FOMC meeting, although he still declared the move is data-dependent. What are we watching next? UK Autumn Budget Statement to be announced today Ahead of the speech, the UK’s Office for Budget Responsibility told the treasury that by 2026-27, the budget deficit could grow to £100 billion from earlier projections of £32 billion. Several moves by Chancellor Jeremy Hunt have already been made to reverse the original budget laid out by former Chancellor Kwarteng under PM Truss’ leadership, including a shortening of the energy bill cap scheme to just six months. Corporate taxes are also set to be raised to 25 percent from 19 percent, and windfall taxes on electricity and oil and gas firms, together with more income earners set to pay tax at the top 45% rate and taxes on capitali gains and dividends set to rise. Still, the pension benefit will be set to rise at September’s 10.1% CPI rate in April of next year. Critics might suggest that much of the tax implementation will be “back-loaded” to beyond the 2024 election to avoid a further hit to Tory popularity. This statement will be critical for the direction of sterling from here. Earnings to watch In today’s US earnings focus we expect Applied Materials to report revenue growth of 4% y/y and lower operating margin from a year ago following the signs we observe in the semiconductors industry. In the cyber security industry, Palo Alto Networks is also reporting today with revenue growth expected to 24% y/y and EBITDA of $349mn up from $-8.8mn a year ago. The Chinese technology and consumer sectors have faced a lot of headwinds over the past year and Tencent’s result yesterday was not rosy either, so there might be a downside risk to Alibaba’s result today. Analysts expect Alibaba to report revenue growth of 4% y/y and EPS of CNY 11.21 up 65% y/y. Today: Siemens, Alibaba, Applied Materials, Palo Alto Networks, NetEase Friday: JD.com Economic calendar highlights for today (times GMT) 0955 – UK Chancellor Jeremy Hunt presents Autumn Budget Statement 1000 – Eurozone Oct. Final CPI 1230 – UK Bank of England Chief Economist Pill to speak 1300 – US Fed’s Bullard (voter 2022) to speak 1330 – US Oct. Housing Starts and Building Permits 1330 – US Oct. Philadelphia Fed 1330 – US Weekly Initial Jobless Claims 1440 – US Fed’s Mester (Voter 2022) to speak 1530 – EIA's Weekly Natural Gas Storage Change  1540 – US Fed’s Jefferson and Kashkari (voter 2023) to speak 1600 – US Nov. Kansas City Fed Manufacturing Activity 1845 – US Fed’s Kashkari (voter 2023) to speak 2330 – Japan Oct. National CPI 0001 – UK Nov. GfK Consumer Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-17-2022-17112022
Saxo Bank Podcast: Nvidia And Siemens Earnings, The Budget Statement From UK And More

Saxo Bank Podcast: Nvidia And Siemens Earnings, The Budget Statement From UK And More

Saxo Bank Saxo Bank 17.11.2022 11:01
Summary:  Today we look at risk sentiment taking a breather after a particularly strong US October US Retail Sales report, although long US treasury yields fell on the day and took the yield curve inversion to its most negative in over forty years as markets continue to price a recession ahead. The key incoming data doesn't start rolling in for another couple of weeks, so we wonder if a possible shift in weather into proper winter mode could change the complacent stance in energy markets. Elsewhere, we wonder if the Budget Statement from UK Chancellor Hunt can continue to support sterling, look at the plunge in coffee prices, Nvidia and Siemens earnings, and more. Today's pod features Peter Garnry on equities and John J. Hardy hosting an on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-17-2022-17112022
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Jason Sen talks Nasdaq December shorts, Emini Dow Jones and Emini S&P - November 17th

Jason Sen Jason Sen 17.11.2022 10:58
I think we will see the bear trend resume from 4000/4020. Nasdaq December shorts at key resistance today at 11850/950 are starting to work. A good chance the market has ended the counter trend correction & the bear trend resumes from here. Emini Dow Jones futures have recovered 61.8% of the losses for 2022. Incredible! The index is only down 3000 ticks or 8% from the all time high. 3 neutral candles indicate the recovery has run out of steam. Remember when support is broken it usually acts as resistance & vice-versa. Update daily by 06:00 GMT. Today's Analysis. Emini S&P December holding Fibonacci resistance at 4000/4020 yesterday starts to put bears in control. Minor support at 3970/60 has also held (as we trade sideways as predicted) but below a break below 3960 is likely today for a sell signal targeting strong support at 3925/15. A low for the day expected if test but longs need stops below 3900. A break below here is an important sell signal. Fibonacci resistance at 4000/4020 but we also have strong resistance at 4070/80 & shorts need stops above 4090. Nasdaq December could be nearing the end of the recovery now as we reverse from key resistance at 11850/950. Again shorts need stops above 12100. Bulls need a sustained break above 12100 for a buy signal. Our shorts at key resistance at 11850/950 held first support at 11750/700 perfectly yesterday but a break below 11700 is expected soon for a sell signal targeting 11580/540, perhaps as far as 11400/350. Emini Dow Jones tests resistance at 33700/800 & our shorts need stops above 34050. A break higher targets 32230/250. Our shorts at 33700/800 target 33400/350 but we should eventually continue lower for 33200 & support at 32800/700.
Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges

Analytical Report - 3Q22 Results – Unimot – WSE:UNT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 17.11.2022 13:40
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Event: 3Q22 results revealed; Adjusted EBITDA close to the preliminary figures published earlier. The Company revealed its quarterly consolidated 3Q22 results on Wednesday late after the session. Consolidated figures. The Company’s reported EBITDA amounted to PLN 62.0 million. This figure is impacted by one-time effects at a sum of PLN -60.9 million in addition to other operating income at a value of PLN -1.3 million. The mentioned one-time effects include (i) PLN -64.4 million of timing effects in the ON+Bio segment and (ii) PLN 3.5 million of cost transfers in the natural gas segment. Ultimately, the Company’s adjusted EBITDA (as calculated by us) after excluding these items amounted to PLN 124.2 million vs. PLN 95.0 million expected by us initially (and vs. PLN 124 million indicated in the preliminary figures previously and PLN 120.7 million of final adjusted EBITDA calculated by management for the quarter). The difference in our adjusted EBITDA and the management adjusted EBITDA lies in other operating income and different calculation of depreciation. The Company’s reported net income amounted to PLN 41.1 million, while the adjusted net income, as calculated by us amounted to PLN 92.0 million. Results of segment. The Company’s ON/bio segment delivered adjusted EBITDA of PLN 122.3 million vs. PLN 90.0 million expected by us initially. The Company’s LPG segment recorded adjusted EBITDA of PLN 16.4 million vs. PLN 15.0 million expected by us. The natural gas segment’s adjusted EBITDA amounted to PLN 1.5 million vs. PLN 0.0 million expected by us. The electric energy segment delivered an adjusted EBITDA of PLN 5.4 million vs. PLN -3.0 million expected by us. The results of the photovoltaic segment with adjusted EBITDA at PLN -1.7 million (vs. PLN -1.0 million expected by us). The Company mentioned that the quarterly results had been particularly impacted by the war in Ukraine, and by the resultant instability of energy markets caused by introduction of sanctions on Belarus and Russia. The Company also mentions very high sale volumes generated on diesel, petrol and LPG products and logistical constraints that limited the utilization of market opportunities. Furthermore, The Company generated PLN 23 million on the sale of obligatory reserves (vs. PLN 25 million expected by us and vs. PLN 30 million declared by the Company to be generated in 2H22). Cash flow. The Company’s 3Q22 operating cash flow amounted to PLN 49 million vs. PLN -81 million recognised a year ago. The cumulative operating cash flow for 1-3Q22 amounts to as much as PLN 182 million (vs. PLN -146 million delivered a year ago). The strong drop in inventories has been confirmed in the quarter (a drop in inventories of PLN -153 million this year). The operating cash flow is negatively affected by a significant increase in trade receivables (of PLN -449 million recognised this year) – a figure which is likely to partly reverse in the next quarters, in our view. Net debt. The Company’s net debt at the end of the quarter amounted to PLN 228 million vs. PLN 337 million recognised a year ago. We were hoping for a greater decrease in net debt in the quarter. There are chances for a drop in trade receivables and a significant drop in net debt in the next quarters. Analyst: Łukasz Prokopniuk GPW’s Analytical Coverage Support Programme 3.0  
European Markets Face Headwinds Amid Rising Yields and Inflation Concerns

Nvidia's earnings beat expectations. Did you know that crypto mining account for ca. 1% of company's revenue?

Conotoxia Comments Conotoxia Comments 17.11.2022 16:12
On Wednesday, we were able to learn about the Q3 financial report of the software giant Nvidia Corp. (Nvidia), a technology company that develops software and processors, among other things. Although the recent environment seemed unfavourable, the financial results may have positively surprised analysts. Is Nvidia's performance dependent on cryptocurrencies? Along with Intel and AMD, Nvidia is one of the top three suppliers of processors and graphics cards. It seems that one of its revenue drivers is the sale of chips, used especially in graphics cards. It could be thought that, due to their computing power, they were mainly bought by cryptocurrency 'miners' in recent years. Following recent problems and the bankruptcy of one of the largest cryptocurrency exchanges, bitcoin (BTC/USD) has seen a decline of more than 76% since its peaks. Read next: Many sued in FTX scandal, Elon Musk to reduce his time at Twitter, EU stocks edged higher on Thursday| FXMAG.COM However, Nvidia states: "We believe the recent transition in verifying Ethereum cryptocurrency transactions from proof-of-work to proof-of-stake has reduced the utility of GPUs for cryptocurrency mining." This category, according to the report, makes up around 1.2% of revenue, illustrating how small this segment is for the company. Source: Conotoxia MT5, BTCUSD, Weekly The company's Q3 revenue was US$5.93 billion (US$5.77 billion was expected), down y-o-y. by 22%. Cloud computing power sales service accounted for as much as 65% of the company's revenue and sales. This increased by 29% year-on-year. In second place was revenue from the gaming sector, accounting for 26% of revenue, but recording a decline of 51%, which appears to be the aftermath of the pandemic. With this data, we could say that Nvidia's performance does not appear to be linked to risks in the cryptocurrency market. An additional argument in favour of the independence of these assets is their correlation, which stands at 0.55 since the beginning of the year, which may indicate their low level of dependence. Earnings per share EPS for the period came in at US$0.58, below analysts' expectations (US$0.69 was expected). The company's gross margin was also negative, falling to 53.6% (previously 65.2%), which the company attributed to increased chip inventory due to falling demand in China. Maribel Lopez, principal analyst at Lopez Maribel comments: “...there is a long tail of AI workloads which will create a return to growth, but it may take several quarters ”. “The issue for Nvidia is the short term, the next several quarters will be rough. Investors will have to take a longer view, similar to what’s required with Intel." - Lopez said. What does Wall Street think of Nvidia shares? Source: Conotoxia MT5, NVDIA, Daily According to Market Screener, the company has 40 recommendations, with 'buy' opinions prevailing. The average target price is set at USD 200.93, 26% higher than the last closing price. The lowest target price is at USD 320 and the highest is USD 110. Author: Grzegorz Dróżdż, a Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
The American Dollar's Unyielding Strength Amidst Market Surprises and Economic Divergence

Leverage - One Of The Main Features Of Futures

Kamila Szypuła Kamila Szypuła 13.11.2022 11:31
Investing on the stock exchange, on the international Forex market and on other markets using various investment instruments requires knowledge, experience and the ability to use various tools. They also include financial leverage. Leverage or financial leverage - these are almost magical words for those who start their adventure with the derivatives market. Leverage is also a feature that is the main factor behind the significant rotation of participants in this market. Definition Leverage - one of the main features of futures contracts - in the long run is primarily suitable for portfolio diversification and should be dosed in moderation. This is a mechanism that allows you to achieve high profits using relatively small capital outlays. Importantly, for this to happen, the investor must use external financing, i.e. find an entity that will help multiply the funds that are the investment force. Who is it most often? Funds are obtained, for example, from banks granting loans in a fixed amount. To calculate the amount, the leverage ratio is used. An institution that agrees to support the investment by providing a specific amount receives appropriate remuneration in the form of interest on the loan. Leverage therefore helps players with less equity to enter the currency markets. Leverage is a way to increase equity, but whether it will be possible to use it depends on the lending institution. Leverage effect What effect can we talk about when we mean the financial leverage tool? It all depends on whether it helped the investment, generated more profits, or rather contributed to the loss of the investor. The effect is positive or negative. The first one can be discussed when the return on equity increases. The second is the opposite - if the operation fails, the effect will be negative. Formula: Determining whether leverage has resulted in profit or loss requires the use of a formula. Thanks to it, you can determine whether the effect of its application has a positive or negative value. The obtained result is the degree of financial leverage. If the calculated value is greater than 1, it is said to be a positive effect, in the opposite situation - a negative one. The level of financial leverage can be calculated according to the formula Or In order to calculate the financial leverage ratio, you first need to calculate return on equity (ROE) and return on assets (ROA), and then divide ROE by ROA. When and where to use? Leverage is used when investing on the Stock Exchange, as well as on the Forex market. It involves the involvement of external capital, such as loans and credits, in order to finance the company's activities. The effect of their application is to increase the profitability of the investor's equity. In practice In fact, it is a very simple tool for multiplying investment profits. If an investor only has 1,000 euros, pounds or dollars, which can be spent, for example, on the purchase of shares, should not expect large profits from the operation. The solution is to use leverage, i.e. external support. The missing amount is added, for example, by a bank or other institution, thus enabling the achievement of much greater profits from the planned operation. Leverage therefore helps to multiply capital, and the loan and scheduled interest return to the lender. It should be remembered that the higher the planned rate of return on investment, the greater the risk of the operation. Benefits There is no doubt that leveraged investing has many advantages. Among them are: the possibility of taking higher investment positions thanks to a significant increase in capital, the ability to invest in different classes of assets, increasing the chance for substantial profits earned in a short time, the ability to earn higher profits during periods and markets with low volatility. What to fear? Trading with leverage does indeed have the potential to make high profits, but if a person's prediction turns out to be wrong, then they could lose a lot more money than they invested. Leverage magnifies losses if the market moves in the opposite direction to what the trader previously assumed. Source: Jakubczyc J.(1999). "Zarządzanie finansami. Odpowiedzialność finansowa", investing.com
A Bright Spot Amidst Economic Challenges

What Is Flash Crash And What Causes It? Simple Moving Average (SMA) - Type Of Moving Average

Kamila Szypuła Kamila Szypuła 13.11.2022 10:50
The stock market crash is a moment that investors fear. It usually leads to the sale of the securities held. Flash Crash is a special kind of crash - unexpected and short-lived. Numerous universities around the world have studied the causes of the phenomenon. In this article, we will explore this type of crash and nail the SMA. Simple Moving Average (SMA) In the previous article EMA – Exponential Moving Average was discussed. Today we focus on Simple Moving Average (SMA). Definition: A simple moving average (SMA) is an arithmetic moving average calculated by adding recent prices and then dividing that figure by the number of time periods in the calculation average. Formula: The use Traders use simple moving averages (SMAs) to plot the long-term trajectory of a stock or other security while ignoring the noise associated with daily price movements. This allows traders to compare mid-term and long-term trends over a longer time horizon. Disadvantages The SMA may rely too heavily on outdated data as it treats the impact of the 10th or 200th day the same as the first or second day. Similarly, the SMA relies entirely on historical data. Many people (including economists) believe that markets are efficient - that is, current market prices already reflect all available information. If the markets are indeed efficient, using historical data should tell us nothing about the future direction of asset SMA vs EMA The major difference between an exponential moving average (EMA) and a simple moving average is the sensitivity each one shows to changes in the data used in its calculation. More specifically, the EMA gives a higher weighting to recent prices, while the SMA assigns an equal weighting to all values. The two averages are similar because they are interpreted in the same manner and are both commonly used by technical traders to smooth out price fluctuations. Flash Crash Definition: Flash Crash is called a flash crash, a collapse in the stock market. The crash itself is a short episode, followed by a recovery, heralded by a moment of complete calm on a given security - no orders. Flash Crash is not only a disturbing phenomenon, but also not fully explained - the reasons for it are still being researched. Flash Crash is observed on stock exchanges - securities and cryptocurrencies. At the beginning, the phenomenon concerned stock trading and was most visible on American stock exchanges. An intense phenomenon also concerned silver and the aforementioned cryptocurrencies. This does not mean, however, that it will not occur on currency or other commodity markets. Cause Numerous universities around the world have studied the causes of the phenomenon. For a long time, it was believed that machine errors were responsible for stock market crashes. This is about investing, which is HFT - instant trading where the entire process is carried out through computers. While it's still not clear what exactly causes Flash Crash, two voices dominate among researchers. One theory is that a flashy and short-lived stock market crash is caused by a single large order, which has been estimated to occur in as many as 60 percent of cases. cases. At the same time, it was established that this phenomenon most often concerns shares of financial companies. There were also suggestions that the stock market crash could be caused by investors' panic caused by, for example, false information in the media. Therefore, the human factor would be responsible for the crash, and therefore the wrong decision of the investor. It should be noted here that an order causing a sharp drop in the value of a security may be placed by mistake - an incorrect entry in the order is enough. An example can be cited here - in 2010, an investor intended to sell 16 million shares, but entered 16 billion in the spreadsheet, which caused a violent reaction and a drop in the stock market. Such erroneous Flash Crash orders are canceled after the exchange closes. But what happens after a sharp decline? The crash lasts a few minutes, sometimes several dozen seconds, then the situation returns to normal, and losses are made up in a fairly short time. Source: investing.com, investopedia.com
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Nvidia expects its earnings will beat Q3 results in the next quarter

FXStreet News FXStreet News 17.11.2022 16:02
NVDA stock gains more than 2% after hours following Q3 earnings. Nvidia missed non-GAAP EPS consensus by 17%. Management expects Q4 revenue to be higher than Q3. Nvidia (NVDA) stock gained 2.2% to $162.60 late Wednesday despite the fact that the premier chip designer in the world missed the Wall Street non-GAAP line of $0.70 a share. Adjusted earnings per share (EPS) actually came in more than 17% below consensus at $0.52. "Why the advance for Nvidia price then?" you ask. It pretty much comes down to revenues. The market was expecting a third poor quarter in a row on the revenue front, but Nvidia emerged in Q3 with $5.93 billion. This was about $115 million ahead of the Street's average forecast. Nvidia earnings news The real silver lining, if you want to call it that, is that management pushed revenue expectations for Q4 higher than the present. Nvidia sales have been in a freefall for most of 2022 as many crypto miners have gone belly-up in the face of falling crypto prices and stopped buying their usual allotment of GPUs. Management, however, guided for $6 billion in Q4 sales, adding that the range was just 2% above or below that figure. The top line of that range at $6.12 billion was still about $20 million below the earlier analyst consensus, but the market has been optimistic this week. Much of that optimism is spillover from inflation data coming in soft and the US Midterm Elections having passed, but the market seems to believe that the worst is over for the semiconductor giant. Though Nvidia's share price remains down 47% year to date, NVDA stock has charged forward more than 35% in the past month. This does seem somewhat surprising, seeing as revenue is down about 17% YoY and EPS in Q3 was down by more than half over that same time period. Management's guidance for gross margin, however, also turned heads. Despite finishing the third quarter with a 56.1% adjusted gross margin, the executive said it would hit 66% in the fourth quarter. This signals to shareholders that notwithstanding the higher inventory levels reducing demand this year, Nvidia is not even close to being a price taker. While the gaming segment continues to deteriorate, down 51% YoY, data center revenue continued to outperform. Sales from that segment rose 31% YoY despite softness in China stemming from covid lockdowns. A big reason for its fall in gross margin during the quarter was a $700+ million charge caused by this lower demand from Chinese data centers. Read next: Many sued in FTX scandal, Elon Musk to reduce his time at Twitter, EU stocks edged higher on Thursday| FXMAG.COM Executives said the inability to sell its A100 and H100 data center processors to Chinese customers due to ongoing US sanctions also hurt results, but that Chinese customers instead chose to bulk up on other products. "We’re seeing surging demand in some very important sectors of AIs and important breakthroughs in AI," said CEO Jensen Huang, while noting that demand for general-purpose computing chips had slowed. "One is called deep recommender systems, which is quite essential now to the best content or item or product to recommend to somebody who’s using a device that is like a cell phone or interacting with a computer just using voice." Nvidia stock forecast Nvidia stock is beginning to trade lower in Thursday's premarket, however, alongside the broad market. Shares are off 1.4% in line with the Nasdaq Composite, so this does not seem to be a result of Nvidia's earnings. The major event has been St. Louis Federal Reserve President James Bullard saying that a "doveish" Fed policy from this point would still require a full one percentage point hike to the fed funds rate. If the market does seek support, NVDA stock can find it at the 9-day moving average near $153. A more drastic sell-off could force it down to the 21-day average at $140. For bulls to come back into this name, Nvidia stock needs to break above the Tuesday high at $170. The Moving Average Convergence Divergence (MACD) is still in a bullish crossover stance, but it has begun to move sideways. NVDA 1-day chart
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Declines At The Close In The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 18.11.2022 08:03
At the close in the New York Stock Exchange, the Dow Jones fell 0.02%, the S&P 500 fell 0.31%, and the NASDAQ Composite fell 0.35%. Dow Jones The leading performer among the components of the Dow Jones index today was Cisco Systems Inc, which gained 2.20 points or 4.96% to close at 46.59. Merck & Company Inc rose 2.38 points or 2.38% to close at 102.31. Apple Inc rose 1.93 points or 1.30% to close at 150.72. The least gainers were Salesforce Inc, which shed 5.43 points or 3.50% to end the session at 149.69. The Walt Disney Company rose 2.66% or 2.50 points to close at 91.45 while American Express Company shed 1.27% or 1.93 points to close at 150. .64. S&P 500  Among the S&P 500 index components gainers in today's trading were Bath & Body Works Inc., which rose 25.18% to 38.97, Gap Inc, which gained 5.56% to close at 12.71., as well as shares of Qorvo Inc, which rose 5.25% to close the session at 97.70. The least gainers were West Pharmaceutical Services Inc, which shed 7.57% to close at 221.93. Shares of Norwegian Cruise Line Holdings Ltd shed 6.77% to end the session at 16.40. Paycom Soft quotes fell 5.73% to 318.34. NASDAQ  The leading gainers among the components of the NASDAQ Composite in today's trading were Ardelyx Inc, which rose 40.98% to hit 1.72, CytomX Therapeutics Inc, which gained 32.23% to close at 1.60, and shares of Cuentas Inc, which rose 28.00% to end the session at 0.32. The least gainers were shares of Inotiv Inc, which fell 56.97% to close at 6.82. Shares of Golden Sun Education Group Ltd lost 46.28% and closed the session at 2.31. Quotes Singularity Future Technology Ltd fell in price by 45.93% to 1.13. Numbers On the New York Stock Exchange, the number of securities that fell in price (1996) exceeded the number of those that closed in positive territory (1109), and the quotes of 147 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,280 companies fell in price, 1,467 rose, and 258 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.75% to 23.93. Gold Gold futures for December delivery lost 0.70%, or 12.40, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery dropped 4.23%, or 3.62, to $81.97 a barrel. Futures for Brent crude for January delivery fell 3.08%, or 2.86, to $90.00 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.23% to 1.04, while USD/JPY rose 0.46% to hit 140.18. Futures on the USD index rose by 0.37% to 106.55. Relevance up to 03:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/301521
The Japanese Yen Retreats as USD/JPY Gains Momentum

Elon Musk seems to be determined in applying his ideas

Walid Koudmani Walid Koudmani 18.11.2022 08:55
UK Retail sales show signs of improvement Retail sales in the UK rose by 0.6% in October compared to the expected 0.5% increase and previous 1.5% decline as British consumers managed to recover slightly despite rising inflation and the ongoing cost of living crisis. While this may appear to be a positive sign, there is still a long way to go before the economic picture begins to look brighter, particularly after yesterday's statement from Chancellor Jeremy Hunt referring to a recession. The pound is starting Friday's session attempting to hold onto some gains with GBPUSD pair testing the 1.19 area after pulling back to 1.175 yesterday. Meanwhile, the FTSE100 remains in the 7370 points area and it remains to be seen if it will be able to extend the upward move or fall further as investors continue to be uncertain. Read next: NVIDIA (NVDA) Q3 earnings results outperformed part of the markets forecasts| FXMAG.COM Twitter saga continues as offices close  Twitter's turbulent story continues after Elon Musk's company just announced the closing of its offices effective immediately until next week. The decision came as a surprise to many, including the employees who were told to comply with company policy. This adds further uncertainty and skepticism as to how the new owner intends to transform the business that took months to acquire while continuing to be a controversial figure. While Twitter stock is no longer available on the market, this is certainly an interesting situation as it could have ramifications and effects on the market as a whole with many holding varying opinions on the matter. In either case, it seems that Elon Musk is willing to take chances and act in unexpected ways if it means achieving his vision for Twitter even if it costs him employees.
Bestway Might Have Larger Designs On The UK's Second Biggest Supermarket

UK Yields Rose Yesterday | The Chinese Electric Vehicle Market Showing Strong Growth

Saxo Bank Saxo Bank 18.11.2022 09:01
Summary:  Market sentiment managed to bounce mid-session yesterday in the US and was steady overnight, with the USD back lower but still very range bound and US treasury yields rising off their lows, with a new extreme for the cycle in the yield-curve inversion, suggesting the market remains worried that the Fed’s tightening will lead to recession. The market shrugged off yesterday’s budget statement from UK Chancellor Jeremy Hunt as most of the measures were flagged ahead of his speech.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their declines yesterday to the 100-day moving average at around the 3,916 level driven by comments from Fed’s Bullard saying the sufficiently restrictive zone on policy rate was in the range 5-7% spooking markets. It is obvious, that the Fed is out trying to dampen expectations following the rally on the lower than estimated US October inflation print. S&P 500 futures are bounced back after the initial shock but closing lower for the session and this morning they are trading around the 3,950 level. Hong Kong’s Hang Seng (HSIX2) and China’s CSI300 (03188:xhkg) Hang Seng Index snapped a two-day decline and bounced about 0.3% as of writing. China interest stocks led the charge higher following Alibaba reporting earnings beating expectations and adding to its share repurchase programme. The Chinese authorities’ grant of a new round of 70 online game licences to firms including Tencent and NetEase also help the market sentiment. Hang Sent Tech Index climbed 2%. In mainland bourses, healthcare shares gained as new Covid cases surged to above 25,000, a new high since April. Online gaming stocks rose on the new game license approval. Financials however continued to trade weak as investors are troubled by recent incidents of retail investment products losing heavily as bond yields rising in China. CSI 300 gained 0.2%. FX: USD rally eases on risk sentiment bounce of the lows yesterday The US dollar eased lower after a bout of weak risk sentiment was turned mid-session yesterday in New York and despite US treasury yields lifting all along the curve (with a new multi-decade low in the yield curve inversion suggesting the market remains concerned that the Fed’s tightening regime will lead to a recession. After the very sharp move lower off the back of the October CPI data, the USD has traded in a rather tight range in most places, with EURUSD bottled up near the 200-day moving average (currently 1.0414) and GBPUSD still hugging the 1.1900 area after the market shrugged off the autumn budget statement yesterday. Next week has the Thanksgiving holiday in the US, which usually sees light trading from Wednesday through Friday and the first key data is not up until the week after, so upcoming catalysts are not readily evident. Crude oil (CLZ2 & LCOF3) Crude dropped sharply yesterday to multi-week lows, trading as low as 89.53 in January Brent and 81.40 in December WTI. Concerns of weakening demand in China are purportedly behind some of the weakness yesterday, but with a new extreme in the yield curve inversion yesterday, rising market anticipation of an incoming recession is likely weighing on sentiment in oil. For the December WTI contract, the 81.30 level is the last significant pivot low ahead of the 75.70 September low for that contract. For January Brent, the  87.52 level is the last pivot low ahead of the 80.94 September low for that contract. Gold (XAUUSD) Pushed a bit lower yesterday on the rise in US treasury yields, trading above 1,760 this morning after the 1,786 high earlier this week. The 200-day moving average is near the important 1,800+ area. An extension of the recent rally likely requires further declines in yields and the US dollar or some other catalyst that sees a run to safety. US treasuries (TLT, IEF) US yields surged across the entire yield curve with yields rising the most in the front end. The 2-year yield jumped 10bps to 4.45% and the 10-year climbed 8bps to 4.77%. The 2-10 year spread inverted further hitting a new low of minus 71bps. Selling concentrated on the front end as St. Louis Fed President James Bullard referred to the “sufficiently restrictive level” being “5% to 5.25%” and “that’s a minimum”. In addition, Bullard showed a chart that suggested a range of terminal rates from 5% to 7%. Meanwhile, Minneapolis Fed President Kashkari said the Fed is “not there yet” to pause and it is an open question of how far the Fed needs to go. What is going on? Japan’s CPI increased more than expected in October Japan released its national CPI data which came in hotter than expected. Headline CPI grew 3.7% Y/Y (consensus: 3.6%, Sep: 3.0%). CPI excluding Fresh Food was 3.6% higher than last year (consensus: 3.5%, Sep: 3.0%) and CPI excluding Fresh Food and Energy increased 2.5% Y/Y in October (consensus: 2.4%, Sep: 1.8%). UK budget statement sees little market reaction, but huge Gilt issuance set for next year The mix of measures was more or less as anticipated, with many of the specific larger moves well flagged ahead of yesterday’s speech on the budget from UK Chancellor Jeremy Hunt. After a strong surge in UK gilts (sovereign bonds), UK yields rose yesterday, as the Debt Management Office in the UK project that issuance of gilts in the 2023-24 financial year will rise almost 50% to £305 billion, with net issuance at £255 billion, almost double the previous high from 2011. Near term issuance to the end of the current fiscal year to April is expected somewhat lower than prior estimates. China urges local authorities to strike a better balance in pandemic control measures China’s National Health Commission urged local authorities to avoid “irresponsible loosening” of pandemic control measures. In a press briefing, health officials said local authorities “must continue to rectify the practice of excessive measures such as lockdowns and oppose the irresponsibility of evading a solution by loosening up”.The world’s second biggest lithium producer, SQM, sees lithium prices staying higher in 2023.SQM sees the Chinese electric vehicle market showing strong growth, buttressing solid demand for lithium. In its third quarter result, SQM’s income beat analyst estimates, rising by more than 10 times to $1.1 billion. The surge was fueled by the lithium price more than tripling over the past year, and rallying over 1,200% since 2020, amid tight supply and rising demand from EV makers. SQM sees the lithium market staying tight and higher prices for the rest of 2022 and into 2023. BHP (BHP) raised its takeover offer for copper giant, Oz Minerals (OZL) The offer was raised to $6.4 billion as global miners are hungry to boost copper production. Copper is a vital metal in electricity networks, electric vehicles, housing and renewable energy. BHP currently makes about 48.7% of its revenue from iron ore, 26.7% from copper, and 24.6% from thermal coal.What are we watching next? Earnings to watch today: JD.com Today’s earnings calendar is light with only the Chinese e-commerce giant JD.com reporting results. Analysts expect revenue growth of 11% y/y and EPS of $4.46 up 194% y/y on expanding EBITDA margin, but given the results from other Chinese companies we find it a bit unlikely that JD.com can deliver those types of results. Options expiry today in US to hit new record Options expire today on a notional $2.1 trillion in underlying instruments today as this month looks likely to set the record for options volume, with 46 million contracts in daily trading on average, up 12% from last month. Increasingly popular are contracts that expire within 24 hours, a phenomenon that may have driven the extreme volatility around the Thursday October CPI release last week. Economic calendar highlights for today (times GMT) 0830 – ECB President Lagarde to speak 1315 – UK Bank of England’s Catherine Mann to speak 1330 – Canada Oct. Home Price Index 1340 – US Fed’s Collins (non-voter) to speak 1500 – US Oct. Existing Home Sales 1500 – US Oct. Leading Index Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-18-2022-18112022
Challenges Persist for Company Amidst Falling Demand and Competitive Pressure in Q2'23

Analytical Report - Forecasts And Valuation – Synektik - WSE: SNT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 18.11.2022 10:07
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0 Synektik BUY FV PLN 39.9 from PLN 45.0 31% upside Price as of 16 November 2022 PLN 30.55 In this report, we update our forecasts and valuation of Synektik. Based on new forecasts of financial results and the current risk-free rate, we set our Fair Value at PLN 39.9/share, which implies 31% upside potential to the current share price. We maintain our Buy recommendation. Synektik is one of our top-picks in the healthcare & biotech sector, the company is entering a period of high financial results, in 2022/23 we assume nearly PLN 40m of adjusted EBITDA, and a significant improvement in cash generation thanks to higher profits and lower working capital requirements. Synektik is currently valued at 8.5x EV/EBITDA for 2022/23E, which in our opinion is an undemanding level for a growing business with an increasing share of recurring revenues and development prospects for surgical robots, especially on the Polish market Accumulation of contracts for da Vinci robots. Over the past few months, Synektik has issued a number of announcements concerning the submission of offers and signing of contracts for the supply of da Vinci surgical robots in all three of its markets. According to our calculations, in 2H22 the company will deliver 12 da Vinci devices, including seven in Poland and five in Czechia and Slovakia. Four deliveries should be booked in 4Q21/22 while the remaining part (eight devices) in 1Q22/23. The high demand on the Polish market results from the current low penetration of surgical robots on the domestic market, but also from the start of reimbursement of procedures using robots by the National Health Fund from April 2022. On the other hand, on the Czech market, where the utilization of average device is much higher than in Poland and close to its maximum level, the growth in the number of treatments results in further purchases from new as well as existing users. Results momentum in 4Q21/22 and 1Q22/23. We expect that in 4Q21/22 Synektik will report PLN 71.8m in revenues, +38% y/y. Reported EBITDA should amount to PLN 9.0m (+36% y/y), and adjusted EBITDA to PLN 10.2m (+39% y/y). We estimate that reported net profit will amount to PLN 5.0m, an increase of 57% y/y. In 1Q22/23, we assume the sale of eight da Vinci devices and the completion of a large contract for delivery of a ZAP-X system to a hospital in Olsztyn, which, according to our preliminary estimates, should translate into over PLN 120m in revenues and approximately PLN 15m in adjusted EBITDA. For the entire FY22/23, we estimate PLN 302m in revenue, PLN 39.5m in adjusted EBITDA and PLN 15.0m in net profit. Valuation. We value Synektik using a 10-year DCF model. Taking into account the new forecasts and the current risk-free rate, we are lowering the company's Fair Value to PLN 39.9/share from PLN 45.0/share. The new valuation implies 31% upside potential relative to the current share price, and therefore we maintain our Buy recommendation. Analyst: Åukasz Kosiarski lukasz.kosiarski@ipopema.pl + 48 882 108 382 GPW’s Analytical Coverage Support Programme 3.0  
DCF Valuation with Assumptions: Risk-Free Rate, Market Premium, Beta, and Growth Rate

Analytical Report - The Results For The 3Q 2022 – Unibep SA – WSE:UNI

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 18.11.2022 10:18
This report was prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Key facts from published results: â–ª In Q3 22, Unibep recorded a higher than we expected increase in sales revenue, which amounted to PLN 576 million, an increase of 63% y/y, a decrease of 4.1% q/q. â–ª At the key level of the gross margin, there was a decrease compared to previous quarters (6.3% vs. 9.2% in Q2 22 and 8.2% in Q1 22. â–ª The Group generated an operating profit of PLN 17 million compared to PLN 11.1 million a year ago (increase by 52.6% y/y), and almost half as compared to Q2 22 (decrease by 47.5% q/q). â–ª On the net profit level, the result of PLN 11.2 million should be considered weak at this level of revenue (decrease by 7.1% y/y, decrease by 52.2% q/q). We consider the results for Q3 22 to be a bit disappointing. In our opinion, the rich portfolio of contracts (PLN 3.4 billion) does not pose a risk to the achievement of forecasts in terms of revenue, but the threats to maintaining profitability (including inflation, prices and availability of materials), which we pointed out, have started to materialize. We hope that the recently concluded contracts (including in the infrastructure and energy and industrial construction segments) will contribute to rebuilding margins in the coming quarters, so we leave the valuation unchanged at PLN 10. Expected impact: We consider the results for Q3 22 to be a bit disappointing, although looking at the three quarters of 2022 in total, they should still be considered good compared to other companies from the construction sector and taking into account a number of problems faced by the industry this year - significant higher costs of materials, energy, transport, pressure to increase wages and lower availability of employees. In our opinion, the segments of cubature construction and infrastructure, which implement large and most extended contracts, are under the greatest pressure of these factors. In Q3 22, the profitability of the building construction sector dropped the most (to 2.3% from 4.2% in Q2 22), which accounted for more than half of the Group's revenues. In second place in Q3 22 in the structure of revenues was the infrastructure segment (share of 21.1%), which in turn recorded an increase in profitability from 1.9% to 5.6%. The good result of the segment was influenced by the completion of the construction of the third and fourth sections of the dam on the border with Belarus and the completion of the construction of the S61 road on the section between Szczuczyn and EÅ‚k. In the modular construction segment, persistent difficulties in the form of high prices of raw materials and materials as well as transport costs, including freight, negatively affecting the profitability of contracts on the Norwegian market, resulted in another quarter of loss (PLN 6.2 million in Q3 22 against PLN 77 PLN 6 million of revenue). We see an opportunity for this area in extending the offer to the hotel and development industries, as well as expansion to the German market. The biggest positive surprise for us in Q3 is the result of the energy and industrial construction segment, which achieved PLN 8.9 million in profit with PLN 75 million in revenue. We forecasted that only the disbursement of funds from the National Reconstruction Plan (KPO) would contribute to the dynamic development of this area. Although the prospect of obtaining EU funds from the reconstruction fund has recently receded, Unibep has acquired contracts with a total net value of approx. PLN 710 million in this area, which allows us to look with optimism at the development of this segment and expect further positive contribution to the Group's result in subsequent quarters. As in previous quarters, despite a small share in the Group's revenue, the development segment had the greatest impact on the result, which generated PLN 22.8 million of profit with PLN 68.8 million of revenue. In Q3 22, Unidevelopment handed over 116 premises, of which 107 as part of joint development projects with external entities. By the end of the year, the Company plans to hand over approx. 160 premises, e.g. in the investments Latte Residential in Warsaw and Idea Leo in Radom, which may have a significant positive impact on the result of the fourth quarter. Sales in Q3 22 amounted to 110 units, of which 78 as part of joint development projects. This gives a total of 318 units sold in 2022 (a decrease of 59.6% y/y) and raises concerns about the decrease in the segment's positive contribution to the Group's results in the coming years. In our opinion, the situation on the development market will have a significant impact on the Unibep stock performance. Analysts: Artur Wizner GPW’s Analytical Coverage Support Programme 3.0  
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

High Inflation Print In Japan | Most Fed Members Remain Relatively Hawkish

Swissquote Bank Swissquote Bank 18.11.2022 10:57
Inflation in Japan soared to the highest levels in more than 30 years, to 3.7% in October, up from 3% printed a month earlier. High inflation print sure revived the Bank of Japan (BoJ) hawks, and the calls for a policy rate hike, and kept the dollar-yen below the 140 level, but it’s unsure whether the BoJ will give up on its ultra-soft policy stance. Therefore, if the US dollar picks up momentum, which will certainly be the case, the USDJPY could easily rebound back above its 50-DMA, which stands near 145. US And the reason I think the US dollar will recover is because most Fed members remain relatively hawkish regarding the Fed’s policy tightening. Plus, option traders are building topside structure over the one-month tenor that covers the next US inflation report and the Fed’s next policy meeting in December. Stock market So, the ambiance in the stock markets is not as cheery as it was at the end of last week. UK In the UK, the autumn budget statement went happily eventless. Gilts rallied, pound saw limited sell-off, while energy companies’ reaction to windfall taxes remained muted. Watch the full episode to find out more! 0:00 Intro 0:30 Japan inflation soars, Mr. Kuroda! 1:34 Should you prepare for another USD rally? 3:32 Market mood turns… meh. 4:01 The retail roundup 6:11 The happily eventless UK budget Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.   #hawkish #Fed #USD #recovery #US #retail #sales #Walmart #Target #Macys #HomeDepot #Lowes #Alibaba #earnings #UK #Budget #GBP #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Analyst Comment – Q3’22 Results - SELENA FM – WSE:SEL

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 18.11.2022 11:58
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme Last recommendation BDM: BUY with target price 22,0 PLN/share (2022/10/05) LINK • Revenues in Q3'22 amounted to PLN 569.0m (+15% y/y), 7% above our expectations. A record quarter in the company's history. • Weak revenues growth in Poland (+1%), still good in other EU markets (+11% y/y). Dynamics slowed in North and South America, but still high (+27% y/y). The biggest surprise was the increase in sales in the Eastern Europe and Asia segment (+35%), despite strong exposure to Russia. • Subsidiaries based in Eastern Europe (Ukraine and Vostok Moskwa) realised revenues of PLN 111.2m in Q3'22 (+26% y/y), and in Asia (Kazakhstan, Turkey, China) PLN 83.5m (+48% y/y). • As at the balance sheet date, inventories located in Eastern Europe was PLN 35m (PLN 49m after Q2'22) and receivables from customers of non-related companies from the region was PLN 30m (PLN 37m after Q2'22). • Gross margin (32.5%) at a markedly improved level q/q and y/y. After a weak Q2'22, we assumed an improvement to 30%. The ratio of SG&A costs to revenue fell y/y and q/q. • The impact of the other operating activities not significant in Q3'22 (PLN +0.7m). • EBITDA amounted to PLN 79.4m in Q3'22 (vs. PLN 47.8m a year ago). A much better result than we had anticipated (we expected PLN 49.0m). The reasons for the surprise were mainly the Eastern Europe and Asia segment, which had EBITDA of PLN 46m (comparable to the EU segment), and the low level of unallocated result. • EBITDA by segment: EU (PLN 49.8m vs. PLN 61.4m a year ago), Eastern Europe and Asia (PLN 46.0m vs. PLN 14.9m), North and South America (PLN 4.0m vs. PLN 2.7m). Nonallocated results PLN -20.4m (PLN -31.2m in Q3'21). • EBITDA after Q1-3'22 is already at PLN 155m (Selena FM had PLN 166m EBITDA in the entire record 2020). Seasonally, Q4 is usually weaker (the company averaged PLN 18m in the last 3 years). • Financial activities with a negative impact of PLN -8.0m (impact of interest and other expenses, neutral impact of foreign exchange differences, not assumed in our forecasts). • Q3'22 net profit at PLN 46.4m (better y/y and above our assumptions). • Cash flows from operating activities amounted to PLN +100.4m in Q3'22. At the end of the period, the company had net debt of PLN 162m (PLN 108m after adjusting for loans extended to related parties). • CAPEX in Q1-3'22: PLN 26m. BDM Comment: Positive. The Company's Q3'22 results are clearly above our expectations due to a very strong result (both revenue and EBITDA) in the Eastern Europe and Asia segment. The company mainly increased revenues from Asian companies (+48% y/y), but Eastern Europe also posted a 28% y/y increase. The positive trend is maintained by the North and South America area. Good sales in Q3'22 in the rest of the EU, while the Polish market looks weak with only a 1% increase in sales, which, with significant inflation in the construction chemicals category, implies a clear decline in volumes. Also of note is the y/y decline in EBITDA profitability in the EU segment. Net debt (PLN 162m, of which PLN 54m finances loans to entities related to the main shareholder) clearly fell thanks to strong operating cash flow. For the last four quarters' results, EV/EBITDA=3.7x, P/E=3.8x. Analyst: Krzysztof Pado krzysztof.pado@bdm.pl tel.: (+48) 512 338 250 GPW’s Analytical Coverage Support Programme 3.0  
Sygnity Stock Faces Headwinds Despite New Government Contracts

Report - MCI Capital ASI - 3Q22 results – WSE:MCI

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 18.11.2022 12:49
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme Management income in 3Q22 was PLN 6 million (-24% y/y), investment earnings of PLN 68.5 million, EBIT of PLN 65.7 million and net income of PLN 60.4 million. After three quarters, net income is PLN 59.4 million and book value per share is PLN 34.9. In 3Q22, the main impact on the operating result was the upward revaluation of investment certificates of MCI.EuroVentures FIZ by PLN 68 million. In the same period, the unrealized gain on the investment certificates of MCI.TechVentures FIZ amounted to PLN 8.5 million, and the realized loss on redemption amounted to PLN 7.6 million (per balance, the impact on the result of MCI.TechVentures FIZ was about +0.9 million PLN). Net debt, according to our estimates, at the end of 3Q22 was around PLN 199 million (PLN 236 million after adjusting for the dividend liability), compared to PLN 162 million at the end of 2Q22. P&L In 3Q22, investment gains amounted to PLN 68.5 million, EBIT +PLN 65.7 million, net income +PLN 60.4 million. The 3Q22 result consisted of a positive result on CI MCI.EuroVentures FIZ (+68 million PLN). In the same period, the unrealized gain on the investment certificates of MCI.TechVentures FIZ amounted to PLN 8.5 million, and the realized loss on redemptions amounted to PLN 7.6 million (on balance, the impact on the result of MCI Capital's MCI.TechVentures FIZ subfund in 3Q22 was about +0.9 million PLN). Management income in 3Q22 amounted to PLN 6 million (vs. PLN 3.3 million in 2Q22). In total, after three quarters of 2022, unrealized gains on the valuation of MCI.EV FIZ amounted to +199 million PLN, and unrealized losses on the valuation of MCI.TV FIZ amounted to 120 million PLN. On the valuation of Internet Ventures FIZ investment certificates, the company reported PLN 6.6 million in unrealized losses and PLN 10 million in realized gains during the period. Gett’s restructuring The company said in the report that in September 2022 the restructuring of the Gett Group took place, under which MCI Capital ASI S.A. entered into the rights and obligations arising from the share instruments of Simbio Holdings Limited and DooBoo Holding Limited. The total valuation of share instruments and the company's liabilities to the MCI.TechVentures 1.0. sub-fund on this account as of September 30, 2022 amounted to PLN 48.4 million. Due to the agreements concluded between the company and the MCI.TechVentures 1.0. subfund, resulting in the return of benefits from the equity instruments to the subfund, the company netted the assets with the corresponding liabilities - the value of the assets less the corresponding liabilities amounted to PLN 0 and was therefore not shown in the balance sheet as of September 30, 2022. In addition, MCI Capital subscribed for 1 million new shares in Simbio Holding Limited for a total of $1 million in a new round of financing (ca. PLN 5 million) - under an agreement between MCI Capital and the MCI.TechVentures 1.0 sub-fund. , the company undertook to return to the MCI.TechVentures 1.0. subfund any proceeds from those shares less the cost of acquiring them, i.e. about PLN 5 million plus WIBOR 3M plus a margin per annum, subject to the company obtaining a surplus from those shares over that value. We estimate that these transactions have a neutral impact on MCI Capital's results. Last valuation: 29.6 PLN/share as of 07.10.2022. Price on the day of issue 16.1 PLN Analys: Krzysztof Radojewski Deputy Head of Research and Advisory Department krzysztof.radojewski@noblesecurities.pl GPW’s Analytical Coverage Support Programme 3.0  
Saxo Bank Podcast: A Massive Collapse In Yields, Fed's Tightening Cycle And More

Fed Is expected To Hike The Rate Aggressively Again

InstaForex Analysis InstaForex Analysis 18.11.2022 14:14
The US stock market has seen another day of a sell-off following Fed policymakers' hawkish comments. They once again confirmed their pledge to aggressive tightening, dispelling rumors about a possible shirt to a softer stance. San Francisco Fed President Mary Daly said that she expects the central bank to raise interest rates at least another percentage point and possibly more before it takes a breather to evaluate how the inflation fight is going. "Pausing is off the table right now. It's not even part of the discussion," she said. "Right now, the discussion is rightly around slowing the pace and ... focusing our attention really on what is the level of interest rates that will be sufficiently restrictive." Daly noted that her most recent estimate puts the benchmark overnight lending rate around 5%. She added that the correct range is probably 4.75% to 5.25% of the current target range of 3.75%-4%. "I still think of that as a reasonable landing place for us before we hold, and the holding part is really important," she pinpointed. Over the year, the Fed has been raising the interest rate, which spills over into various consumer debt products. In December, the regulator is expected to hike the rate aggressively again. Traders assume that the central bank will raise the rate by 0.50 basis points. Premarket trading Gap stock rose by 5.5% at the end of the session and gained another 6% during the premarket after the company's earnings report topped Wall Street estimates. Gap also gave a rather cautious forecast for the holiday season. Palo Alto Networks shares dropped by 1.5%. Before that, they grew by 6.5% after its revenue report beat analysts' expectations. In today's premarket, its stock advanced by 5.6%. StoneCo stock jumped by 12% after its quarterly report exceeded the consensus forecast. However, its shares eventually declined by 5.0%. The company's earnings report was also slightly above analysts' forecasts. Its stock added 18.2% in the premarket. Applied Materials shares gained 3.4% after the semiconductor maker's third-quarter revenue report exceeded analysts' estimates. The stock climbed by more than 4.0% in the premarket. As for the technical outlook of the S&P 500, after a steep decline yesterday and a sharp rise today, it managed to stabilize. Bulls need to protect the support level of $3,942. As long as trading is carried out above this level, risk appetite will remain high. If so, the index may return to $3,968 and $4,003. A breakout of $4,038 will lead to an upward correction to the resistance level of $4,064. A more distant target will be the $4,091 level. In case of a downward movement, buyers need to protect $3,942. If bears push the index below $3,905, it could reach the support level of $3,861. Relevance up to 12:00 2022-11-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327525
Peer Valuation: Toya's Position Among Global Power and Hand Tool Producers

Analyst Comment – Relpol - Q3’22 Results – WSE:RLP

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 18.11.2022 14:38
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme Last recommendation BDM: ACCUMULATE with target price 6,32 PLN/share (11.10.2022) LINK • Q3'22 revenue was PLN 35.8m (+4% y/y), 2.5% below our forecasts. As anticipated, foreign exchange rates and product price increases had a positive impact on revenues. • Sales on the Polish market fell 15.2% to PLN 7.9m, 23.5% below our assumptions. The Polish market share fell to 22%. By comparison, it was 27% in Q3'21 and 33% in Q2'22. The increase in domestic product prices was not sufficient to close the gap created by the negative sentiment in industry and domestic construction. • Export sales increased by 11.2% y-o-y, above our expectations. Sales in Germany rose to PLN 15.3m (+ 25% y/y). This market now accounts for 43% of revenues (36% in Q3'21, 37% in Q2'22). • Revenues from the Italian market increased by 52% y/y, q/q remains flat. Revenues from the Russian market fell to 0. • The rest of the European market performed better than expected, with revenue growth of 52% y/y and 77% q/q. • Gross profit margin declined sharply, well below our expectations. Cost pressures related to material prices, labour costs, third-party services and energy were higher than our expectations. • Despite lower-than-expected general and administrative expenses as well as cost of sales, the EBITDA margin also fell sharply. The margin erosion is due to the high cost of sales. • Operating cash flow amounted to PLN -2.5 million, the change in working capital amounted to PLN -3.8 million. • CAPEX in the last quarter amounted to PLN 6.4 million, of which PLN 4.1 million was the acquisition of intangible assets. Working capital requirements increased. Receivables turnover increased from 86 days in Q2'22 to 97 days, inventory turnover increased from 91 to 100 days respectively. • Net debt increased significantly (to PLN 15.2 million, from PLN 9.9 million in Q2'22). The net debt/EBITDA ratio currently stands at 1.1. BDM Comment: We view Q3'22 results negatively. Although the company's revenues were close to our forecasts, cost pressures proved to be greater than we had anticipated. Domestic sales were hit hard by the low PMI and the slowdown in construction. Sales in Germany were close to our forecasts and rose in EUR terms. Sales in Europe excluding Italy and Germany were also a positive surprise. It was able to fill the gap left by the revenue generated in Russia. The company managed to reduce selling and general and administrative expenses, but cost of sales was too high to generate satisfactory profits. Accounts receivable and inventory turnover raised and consequently, working capital requirements increased. Analyst: Kajetan SroczyÅ„ski Kajetan.sroczynski@bdm.pl tel.: (+48) 668 516 977 GPW’s Analytical Coverage Support Programme 3.0  
It Was Possible That Tesla Would Move Closer To Resistance

Barclays and UBS correct their price targets on NIO

FXStreet News FXStreet News 18.11.2022 14:48
NIO is advancing in Friday's premarket. The Chinese EV maker has been hurt by renewed covid worries. Two analysts downgraded Nio stock this week. Nio (NIO) stock is advancing a little over a percentage point in Friday's premarket as the Chinese automaker continues to try to make up the ground it lost on Wednesday. In the middle day of this week, Nio stock gave up 8.5% on the news that Peking University was locked down due to a single covid case. Other rumors emerged that China is experiencing a covid resurgence, with some reports stating that authorities in the industrial hub of Guangzhou had set up temporary treatment centers and quarantine facilities. This is worrying, because Nio has already halted production twice this year to combat covid, and the news arrives just a week after Nio impressed shareholders by aiming for Q4 44% production growth in just one quarter. That is a lot of growth in a three-month time period, and any single obstacle could set the entire schedule back. Nio stock market news In addition to the covid situation battering Chinese share prices this week, Mercedes-Benz cut prices across the board on its Chinese stock of EVs. The lower end of these vehicles is thought to compete directly with Nio and more so now that prices have been reduced. In the case of the Mercedes-Benz EQE, the headline price was clipped by a little over 9%. This is quite poor timing as higher battery component prices in 2022 have hurt Nio's margins alongside the rest of the industry. Nio's adjusted earnings loss in the third quarter reported one week ago was nearly double what Wall Street had expected, primarily due to these higher input costs. Taking the lay of the land, two separate analysts cut their price targets on Nio stock on Thursday alone. UBS downgraded Nio from Buy to Neutral and cut its $32 price target the whole way to $13. Cutting your price target by more than half is never a good sign, but because it was about 25% above Nio's current price, shares closed up about 1.3% in the session. Barclays also clipped its price target from $19 to $18, noting the rising costs in the sector, but maintained its Overweight rating. One piece of news that may be spurring the Nio share price ahead is Thursday's Alibaba (BABA) earnings. As the most popular Chinese stock in the US market, Alibaba's quarterly earnings impressed the market by beating expectations for profitability and guiding for higher Q4 revenue. Other Chinese ADRs like NIO are benefitting from their national equity market standard-bearer. Nio stock market forecast Despite Wednesday's drawdown, Nio stock is 5.3% lower than a week ago, moving averages still have it looking bullish. The Moving Average Convergence Divergence (MACD) remains crossed over and driving upward, and the 9-day moving average remains 26 cents ahead of the 21-day average. Both of these instances should have traders watching for further upside price action. Resistance at $12 from November 7, as well as the 14th and 15th, will be top of mind for bulls at present. Beyond here lies another resistance point at $13 and then again at $16.54. The last one has a number of price action activities surrounding it and giving it an air of greater significance. A close above $16.54 places Nio stock in rally territory. Support sits between $9 and $9.50. NIO 1-day stock
Monica Kingsley talks S&P 500, crude oil and more - November 18th

Monica Kingsley talks S&P 500, crude oil and more - November 18th

Monica Kingsley Monica Kingsley 18.11.2022 15:58
S&P 500 bulls came back, 3,910 support held, and the dollar was unable to hold on to intraday gains really. In the European morning, I doubted the bearish shift materializing later today as the Fed speakers‘ risk-off momentum did wear off already yesterday. Precious metals are indeed leading the charge among real assets, and I‘m still not writing off crude oil. S&P 500 looks likely to conquer the low 4,010s today, which would flip the daily chart distinctly bullish again. Paying off not to panic – the Fed‘s ability to tighten in the face of slowing economy, is correctly being doubted – 4.50% Fed funds rate year end is still a great tightening achievement but stocks are willing to run higher in its face. Keep enjoying the lively Twitter feed serving you all already in, which comes on top of getting the key daily analytics right into your mailbox. Plenty gets addressed there, but the analyses (whether short or long format, depending on market action) over email are the bedrock, so make sure you‘re signed up for the free newsletter and that you have Twitter notifications turned on so as not to miss any tweets or replies intraday. Let‘s move right into the charts (all courtesy of www.stockcharts.com). S&P 500 and Nasdaq Outlook Fake breakdown on low volume attracting no sellers – that would be the most likely conclusion after today‘s closing bell. Credit Markets HYG posture is bound to improve further today – the downswing was bought, and white body candle awaits today while TLT more or less erases yesterday‘s decline. Gold, Silver and Miners We haven‘t seen an important precious metals top – the sector will likely hold on to and extend today‘s premarket gains. Silver is still recharging batteries, but will recapture $22 with ease. Crude Oil Oil downswing appears overdone, but unless $82.50 is recaptured and WTIC starts outperforming especially base metals, the short-term outlook is tricky. Oil stocks not joining in the slide, is though positive – so, I‘m not turning bearish.
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange Most Of Securities Rose

InstaForex Analysis InstaForex Analysis 21.11.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.59%, the S&P 500 rose 0.48% and the NASDAQ Composite rose 0.01%. Dow Jones UnitedHealth Group Incorporated was the top performer among the Dow Jones index components in today's trading, up 14.69 points or 2.85% to close at 530.00. Quotes of Cisco Systems Inc rose by 1.20 points (2.58%), closing the session at 47.79. Merck & Company Inc rose 1.92 points or 1.88% to close at 104.23. The least gainers were Salesforce Inc, which shed 1.65 points or 1.10% to end the session at 148.04. Walgreens Boots Alliance Inc was up 0.95% or 0.38 points to close at 39.75 while Chevron Corp was down 0.60% or 1.10 points to close at 182. .99. S&P 500 Among the S&P 500 index components gainers today were Ross Stores Inc, which rose 9.86% to hit 107.59, Gap Inc, which gained 7.55% to close at 13.67, and shares of Lincoln National Corporation, which rose 4.37% to close the session at 37.73. The least gainers were Live Nation Entertainment Inc, which shed 7.85% to close at 66.21. Shares of Fortinet Inc lost 3.66% to end the session at 52.16. Diamondback Energy Inc lost 3.44% to 156.22. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were AGBA Acquisition Ltd, which rose 50.67% to hit 6.78, Paxmedica Inc, which gained 37.42% to close at 2.13, and shares of Mercurity Fintech Holding Inc ADR, which rose by 32.91%, ending the session at around 1.05. Shares of Kiora Pharmaceuticals Inc were the biggest losers, losing 35.85% to close at 3.83. Shares of Bit Origin Ltd lost 29.80% and ended the session at 0.15. Quotes of InMed Pharmaceuticals Inc decreased in price by 28.13% to 2.76. Numbers On the New York Stock Exchange, the number of securities that rose in price (1884) exceeded the number of those that closed in the red (1211), while quotes of 138 shares remained virtually unchanged. On the NASDAQ stock exchange, 1985 companies rose in price, 1772 fell, and 237 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.38% to 12/23. Gold Gold futures for December delivery lost 0.66%, or 11.65, to hit $1.00 a troy ounce. In other commodities, WTI crude for December delivery fell 1.73%, or 1.41, to $80.23 a barrel. Futures for Brent crude for January delivery fell 2.17%, or 1.95, to $87.83 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.36% to 1.03, while USD/JPY rose 0.13% to hit 140.37. Futures on the USD index rose 0.25% to 106.86. Relevance up to 03:00 2022-11-22 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/301736
The China’s Covid Containment Continued To Negatively Impact The Output At The End Of 2022

In China The Outbreak Continues To Get Worse | The ECB Has Given Banks An Incentive To Get Rid Of Those Loans

Saxo Bank Saxo Bank 21.11.2022 09:30
Summary:  Markets remain on edge amid lack of economic data but heavy focus on Fed commentaries which were mixed at best with Collins remaining hawkish but Bostic again signaling a slowdown in the pace of rate hikes. Meanwhile, covid outbreaks in China continue to get worse, keeping expectations of a Xi pivot also restrained. Commodities including oil and gold gave up recent gains on higher USD and China concerns. Weekend elections in Malaysia saw its first ever hung parliament, although not a complete surprise. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) traded sideways US equity markets had a lackluster session with modest gains on Friday. Nasdaq 100 was unchanged and the S&P 500 edged up 0.5%. Nine out of the 11 sectors within the S&P 500 gained, with utilities, up 2% being the top performer. Energy was the largest laggard, down 0.9% as WTI crude oil fell to as low as USD77.24 at one point before settling at USD80.08, down 1.9% on Friday and 10% for the week on the concerns of weakening demand. Retailers Foot Locker (FL:xnys), Rose Stores (ROST:xnas), and Gap (GPS:xnys) surged by 7% to 10% on earnings and guidance beating street estimates. US  treasury (TLT:xnas, IEF:xnas, SHY:xnas) yield rose as Fed member Collins keeping 75bps on the table Investors sold the front end of the treasury curve, seeing 2-year yield up 8bps to finish at 4.53% on Friday, following Boston Fed President Susan Collins kept the option of a 75bps hike in December open. Nonetheless, the money market curve continue to assign a higher than 80% chance of a 50bp hike in the next FOMC meeting. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) consolidated on Friday but ended the week higher The risk-on sentiment in Hong Kong and mainland China faded towards the end of last week as investors became cautious about the surge of Covid cases in mainland China that might be testing the resolve of the Chinese authorities, in particular, that of the local governments to implement the 20-item guidelines of relaxing pandemic control measure. Hong Kong stock markets traded higher initially in the morning, led by China Internet stocks, following Alibaba (09988:xhkg) reporting earnings beating expectations and adding to its share repurchase programme and The Chinese authorities’ grant of a new round of 70 online game licences to firms including Tencent (00700:xhkg) and NetEase (0999:xhkg). China property developers declined and dragged the benchmark indices lower, after Moody’s warned that the recent government policy support to the mainland real estate sector was no game changer. Hang Seng Index dropped by 0.3% on Friday and gained 3.9% for the week. In mainland bourses, healthcare shares gained as new Covid cases surged to above 25,000, a new high since April. CSI 300 declined 0.5% on Friday and edged up by 0.3% for the week. Crude oil (CLZ2 & LCOF3) suffering from worsening Covid outbreak in China WTI futures took a look below the key $80/barrel mark on Friday amid the return of demand concerns as the Covid outbreak in China continued to get worse. Further developments over the weekend (read below) suggest further caution on Xi pivot expectations will likely remain. Meanwhile, the winter demand has so far remained restrained but the week ahead may bring further volatility as the deadline for European sanctions on Russia crude looms. NatGas prices were also lower after Freeport LNG announced initial operations are set to resume from their export facility in mid-December, one month later than prior guidance. Gold (XAUUSD) still eying the hawkish Fed Gold stayed short of making an attempt at the key $1800 level last week and was down over 1% as the USD gains returned amid the generally hawkish rhetoric from Fed speakers confirming more rate hikes remain in the pipeline. It is now testing the resistance-turned-support at 1750, and a move higher needs support from further declines in yields and the US dollar or some other catalyst that sees a run to safety. FX: NZD in gains ahead of RBNZ rate decision this week The Reserve Bank of New Zeeland is likely to deliver its sixth consecutive 50bps rate hike this week, or more with consensus tilting towards a larger 75bps move. The calls for a hike come amid hot inflation at 7.2% YoY in Q3 – well above the RBNZ’s 1-3% target – which comes in conjunction with a tight labour market. Most members of the RBNZ shadow board also supported a 75bps rate hike. NZDUSD started the week on a stronger footing, after having touched 0.62 on Friday. AUDNZD remains in a downtrend with China’s Covid outbreak as well as a relatively dovish RBA limiting the prospects for AUD.   What to consider? Fed’s Collins says 75bps still on the table for December, Bostic dovish Fed’s Boston Governor Collins appeared on a CNBC interview on Friday, and said she hasn’t decided on the magnitude of next month’s interest rate hike, but that a 75bps rate hike still remains on the table. She also emphasised that there is no clear and significant evidence that the overall inflation is coming down at this point, and there is also no clear consistent evidence of softening in labor markets. In fact, her comments raised terminal rate expectations as she said that data since September have kind of increased the top of where the Fed may need to go with interest rates. On the economy, she is concerned there could be a self-fulfilling dynamic that could make a more severe downturn more likely. However, Collins is reasonably optimistic a recession can be avoided. On the other hand, we also heard from Atlanta Fed Governor Raphael Bostic who said he favours slowing down the pace of rate hikes and also hinted that terminal rates will be about 1% pt higher from here. Worth noting however that Collins is only a voter this year (and not in 2023) while Bostic is not a voter this year or next. China’s Covid outbreak is getting worse China reported its first Covid-related death in nearly 6 months in Beijing as the outbreak continues to get worse and cast doubts on a Xi pivot. The capital added 516 cases on Sunday, and called the situation "grim." There are some retail and school closures, and the request to stay home was made over the weekend and has been extended. Meanwhile, a district in Guangzhou has imposed a 5-day lockdown to conduct mass coronavirus testing in some areas. ECB balance sheet reduction kicks off Euro zone banks are set to repay 296 billion euros in multi-year loans from the European Central Bank next week, less than the roughly 500 billion euros expected, in its latest step to fight runaway inflation in the Eurozone. The ECB has given banks an incentive to get rid of those loans by taking away a rate subsidy last month. It was its first move to mop up cash from the banking system and the first step towards unwinding its massive bond purchases. While the odds of a 50bos are still in favor for the December 15 meeting, key focus will also be on how fast this move can reverse the ECB's 3.3-trillion-euro Asset Purchase Programme. Christine Lagarde continued to sound the alarm on inflation, saying that even an economic downturn wont be enough to tame soaring prices. However, Knot hinted at slower pace of rate hikes, expecting rates to reach neutral next month. He still reaffirmed that policy needs to be restrictive and QT should be used alongside. UK retail sales signals a temporary recovery in consumer spending A rebound in UK’s retail sales for October signalled that Q4 may see concerns on consumer spending ease slightly. Retail sales grew 0.6% MoM in October after a decline of 1.5% in September. However the outlook remains bleak given the squeeze on incomes amid high inflation and the rise in interest rates. Political gridlock in Malaysia After Saturday’s election, Malaysia saw its first ever hung parliament as none of the three major coalitions won enough seats to form a majority, extending the political crisis in an economy on a fragile rebound. It is unlikely to be a big shock to the markets, as the results were generally as expected. The king has asked the parties to name their PM candidates by Monday afternoon, and while a coalition will likely be formed it is hardly enough to ensure a smooth functioning government. Ex-PM Mahathir lost the election while the ruling coalition was reduced to 30 seats, signalling a complete lack of trust in the political framework.   For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-21-nov-2022-21112022
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Analytical Report – Unimot - 3Q22 Results – WSE:UNI

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 21.11.2022 09:42
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0 Event: 3Q22 results revealed; Adjusted EBITDA close to the preliminary figures published earlier. The Company revealed its quarterly consolidated 3Q22 results on Wednesday late after the session. Consolidated figures. The Company’s reported EBITDA amounted to PLN 62.0 million. This figure is impacted by one-time effects at a sum of PLN -60.9 million in addition to other operating income at a value of PLN -1.3 million. The mentioned one-time effects include (i) PLN -64.4 million of timing effects in the ON+Bio segment and (ii) PLN 3.5 million of cost transfers in the natural gas segment. Ultimately, the Company’s adjusted EBITDA (as calculated by us) after excluding these items amounted to PLN 124.2 million vs. PLN 95.0 million expected by us initially (and vs. PLN 124 million indicated in the preliminary figures previously and PLN 120.7 million of final adjusted EBITDA calculated by management for the quarter). The difference in our adjusted EBITDA and the management adjusted EBITDA lies in other operating income and different calculation of depreciation. The Company’s reported net income amounted to PLN 41.1 million, while the adjusted net income, as calculated by us amounted to PLN 92.0 million. Results of segment. The Company’s ON/bio segment delivered adjusted EBITDA of PLN 122.3 million vs. PLN 90.0 million expected by us initially. The Company’s LPG segment recorded adjusted EBITDA of PLN 16.4 million vs. PLN 15.0 million expected by us. The natural gas segment’s adjusted EBITDA amounted to PLN 1.5 million vs. PLN 0.0 million expected by us. The electric energy segment delivered an adjusted EBITDA of PLN 5.4 million vs. PLN -3.0 million expected by us. The results of the photovoltaic segment with adjusted EBITDA at PLN -1.7 million (vs. PLN -1.0 million expected by us). The Company mentioned that the quarterly results had been particularly impacted by the war in Ukraine, and by the resultant instability of energy markets caused by introduction of sanctions on Belarus and Russia. The Company also mentions very high sale volumes generated on diesel, petrol and LPG products and logistical constraints that limited the utilization of market opportunities. Furthermore, The Company generated PLN 23 million on the sale of obligatory reserves (vs. PLN 25 million expected by us and vs. PLN 30 million declared by the Company to be generated in 2H22). Cash flow. The Company’s 3Q22 operating cash flow amounted to PLN 49 million vs. PLN -81 million recognised a year ago. The cumulative operating cash flow for 1-3Q22 amounts to as much as PLN 182 million (vs. PLN -146 million delivered a year ago). The strong drop in inventories has been confirmed in the quarter (a drop in inventories of PLN -153 million this year). The operating cash flow is negatively affected by a significant increase in trade receivables (of PLN -449 million recognised this year) – a figure which is likely to partly reverse in the next quarters, in our view. Net debt. The Company’s net debt at the end of the quarter amounted to PLN 228 million vs. PLN 337 million recognised a year ago. We were hoping for a greater decrease in net debt in the quarter. There are chances for a drop in trade receivables and a significant drop in net debt in the next quarters. Analyst: Łukasz Prokopiuk, CFA GPW’s Analytical Coverage Support Programme 3.0 https://bossa.pl/analizy/wsparcie-pokrycia-analitycznego-gpw#unimot
The Reserve Bank Of New Zeeland Is Likely To Deliver 50bps Rate Hike

The Reserve Bank Of New Zeeland Is Likely To Deliver 50bps Rate Hike

Saxo Bank Saxo Bank 21.11.2022 10:06
Summary:  Markets are off to a sluggish start this week after a choppy session on Friday, with China reporting its first official Covid deaths in months, one in Beijing, and driving new headwinds for reopening hopes. The Hang Seng Index was down over 5% at one point overnight. The week ahead is a short one in the US, with markets closed there on Thursday for the Thanksgiving holiday. Wednesday sees the release of many preliminary manufacturing and services PMI.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures are trading slightly lower in early European trading hours driven by lower sentiment as China’s zero Covid policy is already under pressure with rising case numbers and the central bank, PBoC, urging stabilisation of financing to the real estate sector indicating how fragile this part of the economy is. The key level on the downside to watch in the S&P 500 futures is the 3,955 level and after that the 100-day moving average at around the 3,919 level. Euro STOXX 50 (EU50.I) European stocks are still up more than 20% from the lows in early October following better than expected macro news and mild weather on the continent. But it seems the good fortune might change now with the weather turning much colder in Northern Europe and if China is not opening up as fast and wide as expected that is a negative for European companies as China is the largest trading partner to Europe. STOXX 50 futures are trading around the 3,910 level with the 3,892 level being the first support level to watch on the downside and then the 3,873 level. FX: USD grinds higher on wobbly risk sentiment The US dollar traded firmer in the Asian session overnight after choppy action late last week as there has been no major follow up move in US yields after the huge reaction to the October CPI data release the week before. Risk sentiment seems to be the local driver here and major reversal levels for USD pairs are still quite distant, meaning the USD can continue to consolidate without major technical implications just yet. Examples of levels are the 1.0100 area in EURUSD, the 1.1600-50 area in GBPUSD and 0.6500-25 in AUDUSD. Little in the way of US macro data this week, although on Wednesday we do get the FOMC minutes, together with a dump of data points including Oct. Durable Goods Orders, weekly jobless claims, preliminary Nov. Manufacturing and Services PMI, and Oct. New Home Sales ahead of the Thanksgiving holiday, with markets close in the US on Thursday and only partially open on Friday. Crude oil (CLZ2 & LCOF3) Crude oil dropped further to fresh multi-week lows in early Monday trading with January Brent touching 86.40 and December WTI below 80. The short-term outlook has been hurt by renewed dollar strength, the most inverted US yield curve in four decades signaling high risk of an economic recession, and not least China’s continued struggle with Covid (see below). Ahead of EU sanctions on Russian oil, which will reduce supply from early next year, the seasonal softness in demand has been exaggerated by the above-mentioned developments. Crude oil trades within a wide range, and it will take a break below the September low at $83.65 in Brent and $76.25 in WTI for that to change. Gold (XAUUSD) Gold trades lower for a fourth day with the market potentially targeting $1735 support. While a stronger dollar driven by FOMC hawks (see below) is weighing on prices, gold’s biggest short-term threat remains long liquidation from funds who in the runup to last week’s failed attempt to break resistance around $1800 had bought gold futures at the fastest pace since June 2019. During a two-week period to November 15 money managers bought 80k lots thereby flipping a short position to a 49k lots net long. During the same period holdings in bullion-backed ETFs continued to drop, signaling no appetite from longer-term focused investors to get involved. An extension of the recent rally likely requires further declines in yields and the US dollar driving fresh demand for ETFs or some other catalyst that sees a run to safety. US treasuries (TLT, IEF) US treasury yields rose slightly on Friday, but have fallen back to start the weak amidst soft risk sentiment in Asia. Friday saw the yield curve inversion reaching a new extreme for the cycle at –72 bps for the 2-10 slope. For the 10-year yield, the cycle low is 3.67%, with considerable focus on the 3.50% level (the major high from June just after the FOMC meeting), while an upside reversal would require a jump well through 4.00%. What is going on? China’s Covid outbreak is getting worse China reported its first official Covid-related death in nearly 6 months in Beijing as the outbreak continues to get worse and cast doubts on a Xi pivot. The capital added 516 cases on Sunday and called the situation "grim." There are some retail and school closures, and the request to stay home was made over the weekend and has been extended. Meanwhile, a district in Guangzhou has imposed a 5-day lockdown to conduct mass coronavirus testing in some areas. China focused commodities have taken a haircut on the recent deterioration on concerns tighter restrictions could be enforced, while China implements its new 20-point tweaking covid restriction plan, aimed at minimising disruptions to people’s daily lives and the economy. The iron ore (SCOc1) price fell almost 4% on Monday in Asia while copper has lost 8% during the last week. Hopes regarding China’s property sector remain after the nation introduced a property rescue package last week. Netherlands trade minister says US cannot impose trade restrictions on Netherlands Referencing the US’ ban against exports of key advanced semiconductor production technology, the Netherland’s trade minister said Friday. This was among signs that Europe is seeking a “middle path” on its policy toward China after US President Biden’s administration asked key allies to comply with its ban as well. French President Macron Friday also pushed back against the idea of dividing the world into rival blocs, while German Chancellor Scholz visited China two weeks ago looking for economic reconciliation between the two countries. Sweden house prices down 3% m/m in October This takes the decline in house prices down 14% from the peak sounding off the alarms at the Riksbank and commercial banks as the house price declines will drive impairments on loans related to the sector. This could in turn lead to lower credit extension from banks into the private sector and thus slow down the economy further. ECB Christine Lagarde reaffirms high inflation remains the number one issue In a speech on Friday, ECB president Christine Lagarde confirmed once again that the central bank will mostly focus on fighting inflation in the short- and medium-term. According to her, the risk of a recession in the eurozone has significantly increased but even if this happens, it is unlikely to quell inflation significantly. This means that hiking interest rates is still on the cards. She also advises the eurozone government to embrace targeted and temporary fiscal stimulus. Too much fiscal stimulus is likely to stimulate demand, thus increasing inflationary pressures. Based on the detailed eurozone HIPC report for October which was released a few days ago, there is so far no sign whatsoever of a peak in underlying inflation pressure. In our view, we should not take for granted that the ECB will slow the pace of hikes to 50 basis points in December. COT report shows major rotation between commodity sectors The weekly Commitment of Traders report covering the week to November 15 saw speculators make some major position adjustments as the dollar and yields dropped, a further inversion of the US yield curve raising the risk of an incoming recession as well as temporary hopes China would ease its Covid restrictions. Developments that saw funds reduce exposure in energy and grains while adding length to metals and softs. The biggest changes being a sharp reduction in speculative bets in crude oil, soybeans, corn and cattle while buying was concentrated in gold, copper, sugar and cocoa. What are we watching next? NZD gains ahead of RBNZ rate decision this week The Reserve Bank of New Zeeland is likely to deliver its sixth consecutive 50bps rate hike this week, or more with consensus tilting towards a larger 75bps move. The calls for a hike come amid hot inflation at 7.2% YoY in Q3 – well above the RBNZ’s 1-3% target – which comes in conjunction with a tight labour market. Most members of the RBNZ shadow board also supported a 75bps rate hike. NZDUSD started the week on a stronger footing, after having touched 0.62 on Friday. AUDNZD remains in a downtrend with China’s Covid outbreak as well as a relatively dovish RBA limiting the prospects for AUD. Fed’s Collins says 75bps still on the table for December, Bostic dovish Fed’s Boston Governor Collins appeared on a CNBC interview on Friday and said she hasn’t decided on the magnitude of next month’s interest rate hike, but that a 75bps rate hike remains on the table. She also emphasised that there is no clear and significant evidence that the overall inflation is coming down at this point, and there is also no clear consistent evidence of softening in labor markets. In fact, her comments raised terminal rate expectations as she said that data since September have kind of increased the top of where the Fed may need to go with interest rates. On the economy, she is concerned there could be a self-fulfilling dynamic that could make a more severe downturn more likely. However, Collins is reasonably optimistic a recession can be avoided. On the other hand, we also heard from Atlanta Fed Governor Raphael Bostic who said he favours slowing down the pace of rate hikes and hinted that terminal rates will be about 1% pt higher from here. Worth noting however that Collins is only a voter this year (and not in 2023) while Bostic is not a voter this year or next. Earnings to watch Today’s US earnings focus is Zoom Video and Dell Technologies. After being a darling through the pandemic Zoom Video has experienced revenue growth coming down to 4.4% y/y expected in the FY23 Q3 (ending 31 October) release down from 35% y/y a year ago. The company is well run but is facing intense competition in the video conferencing business. Dell Technologies will likely highlight the trends we already know of slowing PC sales and lower spending on enterprise technology driven by a slowing economy and falling share price in the technology sector. Today: Compass, Agilent Technologies, Zoom Video, Dell Technologies Tuesday: Kuaishou Technology, Medtronic, Analog Devices, VMware, Autodesk, Dollar Tree, Baidu, HP, Best Buy Wednesday: Xioami, Prosus, Deere Friday: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) 1330 – US Oct. Chicago Fed National Activity Index 1800 – US Fed’s Daly (Voter 2024) to speak 2145 – New Zealand Oct. Trade Balance  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-21-2022-21112022
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Saxo Bank Podcast: Correlation Between Risk Sentiment And The US Dollar (USD), The Outlook Of Gold, Copper And Crude Oil

Saxo Bank Saxo Bank 21.11.2022 11:54
Summary:  Today we look at downbeat sentiment on the latest concern that the reopening trade in China isn't going to happen any time soon with the first official deaths from Covid there in months reported. Elsewhere, we look at tight inverse correlation between risk sentiment and the US dollar and positioning in the US FX futures market, the holiday-shortened week in the US, gold, copper & crude oil, incoming earnings including Dell and Zoom Video, the macro calendar for this week (including the US Thanksgiving holiday) and much more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-21-2022-21112022
Investments In Specific Football Clubs Do Not Appear To Be Profitable

World Cup Begins! |The Euro (EUR) Decline | Equity Rally Wanes

Swissquote Bank Swissquote Bank 21.11.2022 10:54
Stocks in Asia fell this Monday on news that China reported its first death in six months from Covid on Sunday, and two other deaths followed. The news spurred fear that the government could make a U-turn on its decision of easing the strict Covid zero rules, and wreak havoc in Chinese markets, yet again. US Elsewhere, the US-inflation-data boosted rally faded last week, on the back of a too-strong-to-be-happy retail sales print, and a couple of hawkish comments from Federal Reserve (Fed) Presidents, including a chart from Mr. Bullard where the Fed’s terminal rate stretched up to 7%!This week, investors will focus on interest rate hikes and the US Black Friday sales. Commodities In commodities, the barrel of US crude slipped below the $80 psychological level last week, below the post-pandemic ascending trend base. Forex In the FX, the US dollar kicks off the week on a positive footage, on the back of a retreat in dovish Fed expectations. Crypto In cryptocurrencies, contagion news from the FTX collapse continues making the headlines in cryptocurrencies. According to the latest news, FTX owes more than $3 billion to its unsecured creditors, and crypto.com, Binance and OKX suspended deposits of dollar-backed stablecoins, USDC and Tether before last weekend. World Cup In sports, the world’s most expensive World Cup kicked off this weekend in the middle of the Qatari desert, with a lot of unusual news, speculation and backlash about the CO2 emissions and limited sales of alcohol, among other criticism. Investors hope sports betting and beverage companies would see a boost from the event… Watch the full episode to find out more! 0:00 Intro 0:40 China Covid worries resurface 1:57 Equity rally wanes, as attention shifts to rate talks & Black Friday 4:19 Oil dips below $80pb 5:27 USD gains, as XAU, EUR decline 6:52 FTX contagion continues, Solana further pressured 8:20 World Cup begins! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #China #Covid #World #Cup #hawkish #Fed #USD #EUR #XAU #crude #oil #US #retail #sales #Thanksgiving #BlackFriday #FTX #contagion #Bitcoin #Solana #Tether #USDC #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
At The Close On The New York Stock Exchange Indices Closed Mixed

The Minutes Of Fed May Help Shape The Upcoming Week On Wall Street

InstaForex Analysis InstaForex Analysis 21.11.2022 13:21
The minutes of the November meeting of the Federal Reserve are expected to help shape the upcoming week on Wall Street, which is shortened due to the holidays. U.S. stock and bond markets will be closed Thursday, Nov. 24, due to the Thanksgiving holiday. Also, on Black Friday, trading will close early. The report on the discussions at the U.S. central bank meeting earlier this month, due out Wednesday, will be the highlight of the economic calendar in the coming days. The earnings calendar will also be relatively sparse as the third quarter reports come to a close. Stocks posted a loss last week despite a modest gain on Friday after hawkish statements from the Federal Reserve dampened optimism. The S&P 500 fell 0.7% last week: Nasdaq Composite lost about 1.6% as central bank members said they intend to continue aggressive policy tightening. The Dow Jones Industrial Average remained virtually unchanged over the week: Minutes from the latest meeting of the Federal Open Market Committee (FOMC) show that officials are planning a half-point rate hike at their December meeting. Fed Chairman Jerome Powell said at a press conference that he and his colleagues have some avenues to mitigate rising prices, acknowledging that the inflation picture has become more complex. An aggressive increase in interest rates could lead to a recession in the U.S. economy, and Fed officials have recently become more open about this risk. Goldman Sachs raised its Fed rate forecast to a range of 5% to 5.25%, adding another 25 basis point hike in May, noting that the investment bank's exposure to its Fed outlook has turned up. "Inflation is likely to remain uncomfortably high for a while, and this could put pressure on the FOMC to deliver a longer string of small hikes next year," economists led by Jan Hatzius said. Wall Street is nearing the end of its reporting season, but the results from Dell (DELL), J.M. Smucker (SJM), Zoom Video (ZM) and Dollar Tree (DLTR) will be some of the key corporate updates in the report. According to FactSet Research, fewer companies are expressing recession fears in the third quarter compared to the second quarter. Of the S&P 500 companies that reported earnings between Sept. 15 and Nov. 16, 26% fewer companies mentioned the term "recession," with 179 mentioning the word, compared with 242 in the reporting period for the most recent quarter. Still, according to FactSet, this quarter still ranks third among companies stressing fears of a potential economic downturn, at least since 2010.     Relevance up to 10:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327652
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Analytical Report – 3Q22 EBITDA - Rainbow Tours

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 21.11.2022 14:14
3Q22 EBITDA above with market expectations (PLN 69mn / +11% y/y) Rainbow Tours reported 2Q22 results with the following highlights: â–  Gross profit on sales: PLN 140mn (+42% y/y) â–  Gross margin: 12.6% (-1.7 p.p. y/y) â–  SG&A costs: PLN 80mn (+28% y/y) â–  EBIT: PLN 63mn (+9% y/y) â–  Financial costs: PLN -5.0mn vs PLN -3.5mn â–  Interest paid (YTD): PLN -7.2mn vs -1.7mn â–  Cash netto: PLN 101.5mn â–  OCF (YTD): PLN +138mn vs +186mn in last year â–  CAPEX (YTD): PLN -1.4mn vs -44.8mn in last year Our view: POSITIVE Analyst: Dariusz DziubiÅ„ski GPW’s Analytical Coverage Support Programme 3.0  
Swiss Inflation Falls Below Expectations; US Markets Closed, Fed Minutes Awaited

RBNZ Could Deliver A 75bps Rate Hike This Week | A Big Beat For Dell

Saxo Bank Saxo Bank 22.11.2022 08:40
Summary:  Risk off tone in the markets spilled over to the US session on Monday after a fresh surge in Covid cases in China. Fed speakers tilted neutral-to-dovish, but the USD has turned more risk-sensitive rather than being yield-sensitive and ended the day stronger, especially against the Japanese yen. Oil prices whipsawed, falling 6% on OPEC output boost speculation which was later denied by Saudi Arabia, and Gold tested key support as well. Earnings from Zoom and Dell beat consensus, but a consistent message on a tough Q4 continued to dampen sentiment. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) closed in the red Nasdaq 100 dropped by 1.1% and S&P500 slid 0.4% in a relatively quiet session. The sentiment was dampened slightly by concerns of potential China backtracking in easing Covid control measures as new cases surged. On the other hand, dovish-leaning comments from the Fed’s Bostic and Daly boosted the sentiment somewhat. Among the sectors of the S&P 500, consumer discretionary, energy, and communication services declined the most. Tesla (TSLA:xnas) plunged 6.8% on a recall of over 300,000 cares for tail-lamp issues and the Covid outbreak in China. Walt Disney (DIS:xnys) surged 6.3% after Robert Iger, the entertainment giant’s former chairman and CEO to return as CEO, replacing Bob Chapek. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) finished a choppy session little changed The dovish comments from Atlanta President Bostic and San Francisco Fed President about the slowing the pace in December and a terminal rate potentially of around 5% did not have much market impact. The 2-year yield edged up 2bps to 4.55%. The long end however caught a bid in early New York trading, with the 10-year yield falling as much as 7bps to 3.76% at one point when the crude oil price fell over 6% to as low as USD75.08 intraday. The 10-year pared gains and finished the day unchanged at 3.83%.  The Australian share market opens 0.6% higher on Tuesday Bright sparks are in lithium, fertilizers, coal and banking. Lithium company Pilbara Minerals trades 4% higher and Allkem (AKE) ais also up about 3% with sentiment in the lithium sector buoyed after lithium giant SQM shares rose almost 10% in NY on announcing a US$3.08 dividend per share following their optimistic update last week. SQM also operates in fertizliers as well, so ASX fertilizers companies are seeing a sentiment uptick with Incitec Pivot (IPL) are trading higher. Coal companies such as Whitehaven (WHC) and New Hope (NHC) also are trading sharply higher with large block trades coming through with traders expecting higher prices for coal in January. Also in commodities, it’s worth watching copper company Oz Minerals (OZL) as options trading volume increased dramatically after BHP increased their takeover offer for company. Yesterday OZL options volume was almost 7 times the 20-day average, with 5,000 calls and zero puts, meaning the market expects a higher price for OZL. In banking Virgin Money (VUK), trades up 13% today after the London listed stock rose 15%. Virgin reported stronger than expected profits for the year to Sept. 30 and upgraded its outlook on Monday, saying it expects its net interest margin to expand in the medium term. Virgin Money’s Slyce, a buy-now-pay-later product that launched earlier this year, had a waitlist of about 40,000. So many are thinking the business could be potentially turning around.  Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) declined as Covid cases surged Investors turned their focus on how the Chinese authorities would be handling the surge in Covid cases towards the April high and whether China would backtrack the 20 fine-tuning pandemic control measures. Hang Seng Index fell by 1.9% and Hang Seng TECH Index plunged by 3%, with China Internet, consumer, Macau gaming, and EV stocks leading the decline. JD.com (09618:xhkg), Alibaba (09988:xhkg), and Meituan (03690:xhkg) dropped by around 5% each. In mainland bourses, CSI 300 slid 0.9%. Food and beverage, beauty care, services, and media stocks were the major laggards. Kweichow Moutai (600519:xssc), and Wuliangye Yibin (000858:xsec) fell by around 3% each.  FX: Dollar strength returns, mainly on the back of Japanese yen Risk off tone from the fresh surge in cases in China prompted a bid tone in the US dollar on Monday. Fed speakers were neutral-to-dovish, lacking the hawkish push seen from Collins and Bullard last week, but as we have written before, dollar is turning to be less yield-sensitive now, but more risk-sensitive as it draws safe haven flows. USDJPY rose above 142 with US 2-year yields inching above 4.55% and 10-year also somewhat higher. Even as the pace of Fed rate hikes slows down, most members have called for over 5% terminal rate, suggesting downside for the Japanese yen may be close but pressure isn’t completely off yet. Disappointing German PPI and dollar strength pushed EURUSD lower to 1.0222 lows.  Crude oil (CLZ2 & LCOF3) whipsaws on OPEC+ reports A volatile day for crude oil amid reports that OPEC was planning to lift production. Oil prices fell sharply with WTI touching $75/barrel and Brent below $84after the Wall Street Journal reported that OPEC+ alliance was considering an output increase of 500kb/d in light of the looming EU ban on Russian oil imports. Oil pared these losses after Saudi Arabia denied the report; instead insisting that the current cut of 2mb/d was in place until the end of 2023. Demand concerns broadly remained with rising virus cases in China and slowing global consumption as central banks around the world continue to tighten policy. A stronger dollar also weighed on oil prices.  Gold (XAUUSD) tested the key 1735 support A stronger dollar continued to push Gold lower on Monday, and it tested the key support at $1735. With FOMC minutes due this week, and more Fed speakers on the horizon, there may be more talk about a higher terminal rate pricing even as the pace of rate hike slows from December. This, together with the risk of repeat lockdowns in China, could continue to weigh on the precious metal. An extension of the recent rally likely requires further declines in yields and the US dollar driving fresh demand for ETFs or some other catalyst that sees a run to safety. What to consider Development in China’s handling of the Covid outbreak across large cities to watch Daily new cases in mainland China surged to 26,824, a new high since April. Beijing reported three Covid deaths, the first time in more than half a year. Part of the population in Guangzhou, Beijing, Chengdu, Zhengzhou, and Shizjiazhung are urged to stay home or under some sort of movement restrictions. It is a testing time for the local authorities of how to control the outbreak and implement the recently released fine-tuning measures to minimize disruption to daily lives and economic activities. The People’s Daily published an article to call for handling pandemic control scientifically and with precision in the spirit of the 20 fine-turning measures. The National Health Commission released four documents to provide further guidelines on how to do PCR testing, management of high-risk districts, quarantine at home, and health surveillance. As Hong Kong’s Chief Executive John Lee was tested positive and he sat near President Xi in some meetings during the APEC Summit last week, investors are also closing watch if President will meet Cuban President Miguel Diaz-Canel when the latter visit China on Nov 24.  Fed’s Daly tilted dovish, while Mester was more neutral Mary Daly (2024 voter) called on the Fed to be mindful of the lagging impact hikes have on the economy.She suggested financial conditions are tighter than what is suggested by Fed rates, saying financial markets are priced like the FFR is at 6%, not 3.75-4.00%.She also said the Fed must be mindful of overdoing rate hikes but there is still more work to be done but inflation is moving in the right direction. She noted policy is in modestly restrictive territory but she sees it peaking at around 5%, saying 4.725-5.25% is reasonable. Meanwhile, 2022 voter Mester said it makes sense to slow down the pace of rate hikes and believes they can slow down from 75bps in December.Mester is beginning to see the Fed's actions work but they need more, sustained good news. She thinks the Fed is just barely there in regards to restrictive territory, adding they need to get there. Disappointing guidance from Zoom (ZM) Zoom reported Q3 EPS of $1.07, $0.24 better than the analyst estimate of $0.83. Revenue for the quarter came in at $1.1 billion versus the consensus estimate of $1.09B. But guidance disappointed as with expectations penned lower than consensus as Q4 2023 EPS of $0.75-$0.78 was seen, vs. the consensus of $0.80. Zoom sees Q4 2023 revenue of $1.095-1.105B, versus the consensus of $1.12B.  Dell Technologies (DELL) beats consensus A big beat for Dell as it reported third-quarter adjusted EPS of $2.30 on revenue of $24.7 billion, compared with estimates for $1.61 per share and $24.4B, respectively. However, PC demand remained weak and weighed on demand outlook, while Q3 were boosted by favorable corporate-PC positioning and robust operational execution to drive the margin and EPS beat.  RBNZ’s hawkishness to continue to outperform while Riksbank to play catchup The monetary policy decision from the Reserve Bank of New Zealand (RBNZ) will be key on Wednesday to determine the direction of NZD, which has seen strong gains over the past month from higher hawkishness. After a series of 50bps rate hikes, there are some expectations that RBNZ could deliver a 75bps rate hike this week, as inflation and labour market conditions support the case for further front-loading. Inflation has reached 7.2% YoY in Q3 – well above the RBNZ’s 1-3% target. Most members of the RBNZ shadow board also supported a 75bps rate hike. Meanwhile, the Riksbank has been lagging other G10 central banks in tightening policy and is now playing catch up after delivering a 100bp hike in September. The Riksbank is expected to deliver a 75bps hike on Thursday while another 100bps hike can’t be ruled out.     For our look ahead at markets this week - Listen/watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-22-nov-2022-22112022
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Stocks To Watch: Cisco Following Its Better Than Expected Results

Saxo Bank Saxo Bank 22.11.2022 10:09
Summary:  If you are looking for stocks to watch, this six minute video covers some potential companies to keep your eyes on. Including Lithium miners SQM and Albemarle, with their shares trading in record high neighbourhood as the lithium market remains tight and is expected to support lithium prices into 2023 according to SQM. Plus why watch stocks such as; iron ore major Fortescue amid the latest in China, copper play Oz Minerals with buy orders mounting, Ross Stores - the discount department store ahead of Christmas shopping and Cisco following its better than expected results. SQM (SQM) is the world’s 2nd biggest lithium company and shares are trading at a record all time high up 95% this year - and for good reason. It sees lithium prices staying higher and demand rising 40%  this year. It also sees prices and demand continuing to remain strong in 2023. SQM also sees strong demand from the Chinese electric vehicle market, which is buttressing solid demand for lithium. This varies to Goldman Sachs thinking, as they say Chinese EV market will move toward a demand-constrained state over the next 1-2 years. As a house, Saxo, remains optimistic on energy commodities, including lithium however we continue to monitor the situation. The risk is that there is a global recession  or oversupply kicks in. Goldman Sachs believes the lithium price in China will continue to rise into 2023 before falling in second half of the year, as it sees the market moving into oversupply. SQM makes about 33% of its revenue from lithium and the remainder is from fertizliers. And both markets are currently tight. Another lithium stocks to watch is Albemarle (ALB). Its shares are also trading in all time record high neighborhood. They are up 21% this year buoyed by the lithium price being elevated. I guess what you need to consider is, companies like SQM and Albemarle have been growing their revenue by triple digits, and this is even ahead of China reopening.  Fortescue (FMG) is Australia’s biggest iron-ore-only producer, and it makes the majority of its revenue from China. Fortescue Metals shares have strongly rebounded this month, rising up 32%, after the iron ore price rose about 23% this month with China announcing a series of policies to rescue its property sector. However, COVID cases in China are picking up, and one region near Beijing has asked residents to stay home. So, there are concerns China will clamp down on restrictions, which could see the iron ore price pull back, along with shares in iron ore companies. But we will have to wait and see.  Oz Minerals (OZL) is also front a centre with a strong increase in appetite for its shares, after BHP increased its takeover offer to $6.4 billion for copper company. This reflects the hungry to move into copper, given copper is a vital metal in electricity networks, electric vehicles, and renewable energy. BHP currently makes 26.7% of its revenue from Copper but wants to increase that. BHP also makes 24.6% from coal, and 48.7% from iron ore. As a house we are bullish on copper long term, given demand is expected to rise about 60% by 2040. The Copper price is up 11% from its July low with supply showing signs of tightening. For copper to potentially move higher, from $3.63, you might need to see it break over the $4 to $4.05  area, which could be a critical momentum changing resistance level, that might change things in Copper around. Ross Stores (ROST) is on watch with traders expecting solid Black Friday sales. Ross Stores shares are up 17% this month with the extra kick coming from the retail company upgrading its fourth quarter outlook. Its shares are now now trading up 62% off their low and are back at November 2021 levels. The discount department store is seeing sales momentum improving. For the year ahead, consensus is that 2023 sales growth will be flat, but profit growth is expected to marginally improve. Cisco (CSCO). It’s a $196 billion computer network giant, and its shares have continued to rally up off their two-year lows after the company reported stronger than expected earnings results and upgraded its full-year forecast. Recurring revenue from its new offerings rose to more than $23 billion on an annualized basis, with greater availability of chips helping Cisco fill more orders too. For total full 2023 year revenue, Cisco sees it rising 6.5%, which is more than its prior outlook (of 6%) and more than market expectations. On the other hand as for its expenses, like a lot of tech companies like Twitter, Meta and Amazon, Cisco is feeling the inflation and interest rate pain, so plans to cut 5% of its employees (amounts to about 4,000 people). From a technical perspective its shares are also worth watching too, particularly on the weekly and monthly charts as it looks like buying is picking up. To find out more about the these companies or other opportunities, head to Saxo's Platform.  For a global look at markets – tune into our Podcast.     Source:https://www.home.saxo/content/articles/equities/five-stocks-to-watch-including-lithium-giants-sqm-and-albemarle-which-trade-at-records-22112022
Sygnity Stock Faces Headwinds Despite New Government Contracts

Report - 3Q22 Financial Results Preview - LSI Software – WSE:LSI

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 22.11.2022 10:18
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Event: 3Q22 financial results preview. On November 29 the Company will release 3Q22 financial results. On October 25 LSI already released 3Q22 preliminary revenues that reached PLN 14.4 million (down 2% qoq, up 37% yoy) which was above our expectations at c. PLN 12.6 million. We expect the production revenues to rise 13% yoy given last year’s low base (related to the pandemic uncertainty on the market) and forecast a 30% margin in this segment vs 18% in 3Q21 and 30% in 2Q22. We expect a 68% yoy rise of revenues in the distribution segment due to similar reasons and forecast the margin at the level of 26%, slightly lower than 31% recorded in the base quarter. We expect a material rise of SG&A costs because of sales team building for a new business line (restaurant robots); finally these costs should hit PLN 4.7 million (up 52% yoy). To sum up, in 3Q22 we forecast the Company’s revenues/ EBIT/ net loss at PLN 14.4 million (up 37% yoy)/ PLN 0.8 million (up 84% yoy)/ PLN -0.5 million (vs PLN -0.6 million a year ago). Expected impact: LSI Software is in the process of intensive investment in new business lines and a gradual improvement of results is expected in the upcoming quarters of 2023. Analyst: Tomasz Rodak GPW’s Analytical Coverage Support Programme 3.0  
Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

Negative Sentiment Over Massive Recalls Of Tesla Cars In The US

Saxo Bank Saxo Bank 22.11.2022 10:23
Summary:  Markets started the week in a downbeat mood with a weak session in the US yesterday. China posted another weak session as the rise in China Covid cases there has dogged sentiment since the weekend. Crude oil was slammed with a huge sell-off on a report from WSJ that key swing producer Saudi is considering a production boost, but the sell-off was entirely erased yesterday by the end of the day on official Saudi sources denying the story.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures are in a slow grinding downward trend from the recent peak over a week ago trading around the 3,955 level this morning with the 3,920 level being the first support level to watch and then the big 3,900 level. Key risk sources to monitor are the USD, falling Tesla share price which could spill over into other pockets of the market, and the potential bankruptcy of the crypto company Genesis. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Daily new cases in mainland China continued to surge. Hang Seng Index fell 0.8% while CSI 300 managed to edge up 0.5%. China internet shares slid. On the other hand, SOE telecommunication and infrastructure stocks surged as the Chairman of China Securities Regulatory Commission said listed state-owned enterprises are undervalued by stock investors. China Unicom (00762:xhkg) jumped nearly 10% and China Communications Construction (01800:xhkg) surged 9%. FX: Dollar strength returns, mainly against the Japanese yen Risk off tone from the fresh surge in Covid cases in China prompted a bid tone in the US dollar yesterday. Fed speakers were neutral-to-dovish, lacking the hawkish push seen from Collins and Bullard last week, but as we have written before, the dollar seems to be less yield-sensitive now, but more risk-sensitive as it draws safe haven flows. USDJPY rose above 142 with US 2-year yields inching above 4.55% and 10-year also somewhat higher near 3.80%. USDJPY is unlikely to mount a full bullish reversal above the key 145.000 area unless US 10-year yields threaten back above 4.00% (and hit sentiment once again). Elsewhere, EURUSD bottomed out at 1.0222 yesterday, still well above meaningful downside pivot levels, the first being the 1.0100 area. Crude oil (CLZ2 & LCOF3) Crude oil prices whipsawed on Monday in response to a later denied report from the Wall Street Journal that the Saudis together with OPEC+ was considering hiking production by 500,000 barrels a day ahead of the EU embargo on Russian oil. The price quickly dropped $5 to a ten-month low before rallying to end the day close to unchanged. A move that left both buyers and sellers hurting, potentially worsening an already troubled market that is suffering from falling volumes and lower open interest given the current lack of clarity regarding demand and supply, and the potential impact of a G7-planned price-cap-plan on Russian seaborne flows. Russia may retaliate against the plan by refusing to supply crude oil to those involved. Demand concerns, however, broadly remain with rising virus cases in China (see below), slowing global consumption as central banks around the world continue to tighten policy and the stronger dollar weigh on prices Gold (XAUUSD) testing support at $1735 A stronger dollar continued to push Gold lower on Monday, and it tested the key support at $1735. In the short-term the direction will be determined by fund activity and whether they need to make further reductions in recently established, and now under water, long positions. With FOMC minutes due this week, and more Fed speakers on the horizon, there may be more talk about a higher terminal rate pricing even as the pace of rate hike slows from December. This, together with the risk of repeat lockdowns in China, could continue to weigh on the precious metal. An extension of the recent rally likely requires further declines in yields and the US dollar driving fresh demand for ETFs or some other catalyst that sees a run to safety. Silver (XAGUSD) meanwhile trades higher for the first time in six days after retracing 50% of the recent rally. US treasuries (TLT, IEF) US treasury yields are a bit adrift here, awaiting the next incoming data for next steps, with tomorrow’s batch of US data unlikely to move the needle as we await next Wednesday’s PCE inflation data and next Friday’s November US jobs report. The key upside swing area for the 10-year yields is near 4.00%, while the major downside focus beyond the 3.67% pivot low is the 3.50% cycle high from June. The 2-10 yield curve inversion remains near its lows for the cycle, at –70 basis points this morning. What is going on? Development in China’s handling of the Covid outbreak across large cities to watch The number of new Covid-19 cases hit 27,307 and reportedly more than 40 cities across the country are under some sort of lockdown or movement. Guangzhou, the provincial capital of Guangdong reported over 8,000 new cases and Chongqing seconded with over 6,000 new cases. So far, the municipal government of Guangzhou avoids adopting stringent lockdowns. However, Chongqing the manufacturing hub of Western China has rolled out more stringent lockdown. Chinese local governments are struggling to strike the right balance between adhering to zero-Covid policy and minimising disruption to daily lives and economic activities. The swing from abandoning PCR testing a week ago but only to reinstate mandatory testing days later in the city of Shijiazhuang was an example of such dilemma. On a positive note, the People's Daily published an article to call for handling pandemic control scientifically and with precision in the spirit of the 20 fine-tuning measures. The National Health Commission released four documents to provide further guidelines on how to do PCR testing, management of high-risk districts, quarantine at home, and health surveillance. Tesla decline could ignite risk-off Shares were down 7% yesterday following negative sentiment over massive recalls of Tesla cars in the US and renewed uncertainty as China is battling with reopening its society. Investors are also increasingly worried that CEO Elon Musk is spending too much time on his Twitter acquisition and that his recent behaviour around Twitter is damaging his brand and ultimately Tesla’s brand. We know from surveys that there is a large overlap in investors owning cryptocurrencies, Tesla, and Ark Innovation ETF. UK retail sales signals a temporary recovery in consumer spending A rebound in UK’s retail sales (the release is a volume-based measure) for October signalled that Q4 may see concerns on consumer spending ease slightly. Retail sales grew 0.6% MoM in October after a decline of 1.5% in September. The outlook, however, remains bleak given the squeeze on incomes amid high inflation and the rise in interest rates. Disappointing guidance from Zoom (ZM) Zoom reported Q3 EPS of $1.07, $0.24 better than the analyst estimates of $0.83. Revenue for the quarter came in at $1.1 billion versus the consensus estimate of $1.09B. But guidance disappointed as with expectations penned lower than consensus as Q4 2023 EPS of $0.75-$0.78 was seen, vs. the consensus of $0.80. Zoom sees Q4 2023 revenue of $1.095-1.105B, versus the consensus of $1.12B. Dell Technologies (DELL) beats consensus A big beat for Dell as it reported third quarter adjusted EPS of $2.30 on revenue of $24.7 billion, compared with estimates for $1.61 per share and $24.4B, respectively. However, PC demand remained weak and weighed on demand outlook, while Q3 were boosted by favourable corporate-PC positioning and robust operational execution to drive the margin and EPS beat. What are we watching next? RBNZ up tonight with market uncertain of size of hike. Sweden’s Riksbank up tomorrow The monetary policy decision from the Reserve Bank of New Zealand (RBNZ) will be key on Wednesday to drive the direction of NZD, which has seen strong gains over the past month from anticipation that the RBNZ may stay on a determined tightening path. After a series of 50bps rate hikes, there are some expectations that RBNZ could deliver a 75-bp rate hike tonight to take the rate to 4.25%, as inflation and labour market conditions support the case for further front-loading. Inflation reached 7.2% YoY in Q3 – well above the RBNZ’s 1-3% target. Most members of the RBNZ shadow board also supported a 75-bp rate hike. Meanwhile, the Riksbank has been lagging other G10 central banks in tightening policy and is now playing catch up after delivering a 100-bp hike in September. The Riksbank is expected to deliver a 75-bp hike on Thursday, with some looking for another 100-bp move. Crypto lender Genesis in the spotlight on bankruptcy risk Genesis, a large crypto lender and creditor to the FTX fraud operation that recently blew up, is looking for up to $1 billion in funding and has warned that it may have to file for bankruptcy if it is unable to find funding, also claiming that the risk of bankruptcy is not imminent. Bitcoin trades today near the cycle lows below 16,000 as the market cap of the entire crypto space has dipped below $800 billion. Earnings to watch Today’s US earnings focus is technology earnings from VMware, Autodesk, and HP. On the consumer sector, investors will be watching earnings from Dollar Tree and Best Buy. Analysts expect HP revenue growth to be down 12% y/y in FY22 Q4 (ending 31 October) as PC sales and enterprise technology spending are down from the high levels during the pandemic. Today: Kuaishou Technology, Medtronic, Analog Devices, VMware, Autodesk, Dollar Tree, Baidu, HP, Best Buy Wednesday: Xiaomi, Prosus, Deere Friday: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) 0830 – Australia RBA’s Lowe to speak 1300 – Hungary Central Bank Rate Decision 1330 – Canada Sep. Retail Sales 1415 – UK Office for Budget Responsibility testifies to Parliament 1500 – Eurozone Nov. Preliminary Consumer Confidence 1500 – US Nov. Richmond Fed Manufacturing Index 1600 – US Fed’s Mester (Voter 2022) to speak 1645 – Canada Bank of Canada’s Rogers to speak 1915 – US Fed’s George (Voter 2022) to speak 1945 – US Fed’s Bullard (Voter 2022) to speak 2130 – API's Weekly Report on US Oil Inventories 0100 – New Zealand RBNA Official Cash Rate  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-22-2022-22112022
Expectations of decent sales during holiday season have let Best Buy gain

Expectations of decent sales during holiday season have let Best Buy gain

Ed Moya Ed Moya 22.11.2022 23:32
US stocks are rallying as Wall Street continues to expect the Fed to downshift their tightening pace next month and on optimism that the risk of a railroad strike fueling inflation is low. ​ The latest round of Fed speak did not teach us anything new. ​ The Fed’s Mester noted that long-term inflation expectations are reasonably anchored. ​ The labor market is a key concern for the Fed, and Mester also pointed out that labor demand is still outpacing supply. Recent trends however are showing the labor market is showing signs of cooling. ​ ​ Some investors are growing confident that the potential railroad strike might not be as troubling for inflation as the Railway Labor Act will prevent key interruptions. ​ ​ Some traders are looking ahead to the upcoming Minutes, but they are dated (before the cool October inflation report) and will likely show many Fed members have an unclear rate path as inflation is a tricky beast to slay. Read next: Gold could be in some way prevented from rallying by unstable COVID outlook| FXMAG.COM FX/Fixed income Risk appetite is making an appearance today and that is helping send the Treasury yields and the dollar lower. ​ The 10-year Treasury yield fell 4.3 basis points to 3.784%. ​ Cooling inflation drivers, mainly an overpriced weakening of China and the railroad strike impact, are helping drive the dollar down today. The dollar’s weakness might be limited as options markets are showing too many excessive bearish bets being placed by hedge funds and money managers. Best Buy Best Buy shares are rallying after they raised their holiday outlook. ​ This was a welcomed surprise from the retailer that many feared was going to see a weaker consumer refrain from purchasing new TVs, appliances, and other gadgets. It looks like Best Buy is not expecting a disappointing holiday season and that is positive news for other retailers. US Data The Richmond Fed’s regional surveys of business activity showed manufacturing activity continued to soften in November. The composite manufacturing index remained negative and shipment and employment deteriorated slightly. ​ The economy is clearly weakening here and inflation should continue to come down as wages and employment decline. ​ Price trends data was mixed as prices paid declined and prices received rose higher, but that was somewhat expected given the return of supply chain issues. China’s reopening will be key for inflation heading lower next year. Crypto Wall Street is mostly green today and that has provided a little boost for cryptos. ​ Bitcoin is back above the $16,000 level but still remains in the danger zone as everyone waits for the next crypto domino to fall. ​ It seems crypto traders are already pricing in a bankruptcy for crypto lender Genesis. ​ Contagion for FTX will impact many but it seems a fresh catalyst is needed for sellers to take control. Bitcoin could continue to stabilize here if Wall Street rebounds, but that seems unlikely as this bear market for stocks has yet to bottom out. ​ Bitcoin has support ahead of the $15,500 level but if that does not hold, technical selling could send prices toward the $13,500 region. ​ ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Stocks rise on downshift hopes, Dollar lower for now, Best Buy brings holiday cheer, US data, Gold rebound faded, Crypto benefits from Wall Street rally - MarketPulseMarketPulse
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Analytical Report – Unimot – WSE:UNI - Investment Summary

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 23.11.2022 08:05
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program. 3.0. This is an excerpt from the Polish version of DM BOÅš SA’s research report. Sector: Oil & gas Market Cap: US$ 151.2 m Fundamental rating: Buy (→) Bloomberg code: UNT PW Market relative: Overweight (→) Av. daily turnover: US$ 0.26 m Price: PLN 87.60 12M range: 35.45-87.60 PLN 12M EFV: PLN 115.0 (↑) Free float: 36% Investment summary Unimot’s equities stay among our preferred stocks (Buy + Overweight; 12M EFV = PLN 115 per share) and once again we upgrade our financial forecasts for the Company: we (i) incorporate materially higher than we expected 3Q22 financial results, (ii) assume significantly higher 4Q22 results, (iii) include consolidated logistic assets (Olavion + cisterns) being acquired by the Company, and (iv) raise forecasts for the following years. We continue to be positive about the planned acquisition of asphalt and logistic assets from Lotos and PKN Orlen (which may be finalized already in December) and still believe this can be a breakthrough moment for Unimot that may become one of the biggest beneficiaries of Poland’s naphtha sector consolidation. We uphold our view expressed earlier that a share issue will not be necessary for funding these acquisitions, the more so that (i) the Company’s current financial results are record high, (ii) a strong decline of inventories was confirmed in 3Q22 results, and (iii) a high level of commercial receivables is likely to normalize in the upcoming quarters. We are positive about inland fuel premium margins in 2023, albeit in our forecasts we assume their normalization. The war in Ukraine, imposition of numerous sanctions on Russia and Belarus, and self-sanctioning led to a real shortage of particular fuels on European markets, and Poland was not immune to this. Lower supply, lower fuel stock, and more costly alternative imports directions: all this is reflected in higher fuel premiums. There is another important factor that supports margins, namely logistic problems in the region; currently the rail infrastructure is utilized to the limits which plays a significant role in the market creation. In these circumstances the lack of own logistics may indicate a failure to carry out the transportation operations (in Unimot’s case, this risk fully justifies the Company’s decision to purchase Olavion and cisterns). It is worth mentioning that high cost inflation affects fuel imports to Poland (via higher costs of logistics, storage, transport, freight, external services, and salaries) which may act as a strong growth driver for fuel premiums. Given the above mentioned considerations, consolidated FY22E EBITDA for the ON/bio segment stands a chance to exceed the record high level of PLN 325 million. Then, what is the outlook for the quarters to come? Due to a low visibility and unpredictability of the commodities markets we assume that fuel margins will gradually normalize in 2023 and 2024 (which implies that the expected EBITDA of the ON/bio segment will fall to c. PLN 250 million next year, and then to PLN 130 million in 2024), albeit given the current circumstances this approach may be considered a very cautious one, the more so that 4Q22 witnesses a further strengthening of fuel premiums. It seems that the above mentioned factors will prevail in the nearest quarters which could help maintain (or even improve) the current macroeconomic situation. It is worth mentioning that an acquisition of new cisterns and Olavion may prove crucial in securing the Company’s competitive edge over other independent fuel suppliers. After the incorporation of Unimot’s new assets and rationalization of longterm assumptions (for margins and sales volume) our normalized mid-cycle EBITDA for the ON/ bio segment rises to PLN 130 million (from PLN 100 million expected earlier). We assume a cautious approach to the LPG segment as well. This segment, alongside the ON/ bio one, is the main beneficiary of turbulent market changes, limited fuel supply in Europe, and logistic problems in the region. The fact that this year’s EBITDA of the LPG segment is likely to exceed the level of last year’s total EBITDA, truly surprises us. Similarly as with diesel and petrol, we remain cautious and assume significantly lower EBITDA in the following years than expected for this year, although at the moment we believe it is likely that our projections would be beaten. We raise our LT estimate of normalized EBITDA for this segment to c. PLN 20 million (from PLN 15 million expected earlier) The outlook for 2023 for the remaining segments is blurry due to limited visibility and high volatility on the commodities market. It is really difficult to forecast the Company’s margins for next year in other business segments due to an exceptional situation on most commodities markets and continuing geopolitical uncertainty. This refers especially to the gas and electricity segments. The law freezing electricity prices is still another risk factor with an impact difficult to assess. In our f inancial forecasts for the Company we expect much weaker results in these two segments next year, but this is more related to our cautiousness than stemming from a pessimistic approach. Anyway, the fact is that in previous quarters, in spite of the unpredictable environment, Unimot managed to surprise with relatively good financial results Risk factors Inland fuel premium margins will drop significantly in 2023 PKN Orlen fine-tunes its pricing policy negatively affecting the fuel premiums. The purchase of assets from Lotos and PKN Orlen will be more costly than we assume. Prices of natural gas back at high levels negatively affecting generated margins. Liquidity of electric energy contract prices on the TGE remains limited in subsequent months negatively affecting generated margins. Crude oil prices will rebound leading to higher NWC requirements. The Company’s photovoltaic business generates further losses. The Company will fall under the windfall tax. energy prices freezing in 2023 will adversely impact financial results. Catalysts 1. Logistic challenges and full utilization of transport infrastructure in Poland will support fuel margins. 2. No need to conduct an SPO to acquire assets. 3. High yoy increases in revenues recognized in the coming months. 4. Diesel consumption in Poland rises in 2023. 5. Unplanned refinery production stoppages support inland premium margins. 6. The photovoltaic and retail segments will grow at a faster pace than expected. 7. The fuel sector consolidation will bring about a lasting increase of fuel inland premiums in Poland. 8. Weaker market competitiveness results in a lasting growth of fuel inland premiums. 9. Crude oil price drops will lower NWC requirements. 10. The Group’s reshuffle should lower the Company’s NWC by over PLN 200 million per year. 11. The Company will recognize PLN 30 million of savings in 2H22 thanks to the Group’s reshuffle. Competitive advantages 1. As the biggest independent fuel supplier in Poland the Company is currently seen as the alternative for PKN Orlen. 2. Motivated and competent management team holding the equity position in the Company. 3. A big scale of business in the wholesale diesel trading market that may be difficult to reach for newcomers. 4. Tight cooperation with PKN Orlen: Unimot is a big wholesale buyer of PKN’s diesel oil and one of the main suppliers of biocomponents to PKN. 5. Expanding retail fuel chain secures growing wholesale diesel volumes. 6. A high cost effectiveness in comparison to competition. 7. Strengthening of the Company’s competitive edges and adding elements of stabilization and diversification thanks to an acquisition of logistic and asphalt assets from Lotos. 8. Unimot may be among the main beneficiaries of Poland’s fuel sector consolidation Analyst: Łukasz Prokopiuk, CFA GPW’s Analytical Coverage Support Programme 3.0  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The New York Stock Exchange: The Dow Jones Rose 1.18% To A 3-Month High

InstaForex Analysis InstaForex Analysis 23.11.2022 08:24
At the close of the New York Stock Exchange, the Dow Jones rose 1.18% to a 3-month high, the S&P 500 rose 1.36% and the NASDAQ Composite rose 1.36%.  Dow Jones The leading performer among the Dow Jones index components in today's trading was Intel Corporation, which gained 0.88 points or 3.04% to close at 29.82. Salesforce Inc rose 4.40 points or 3.04% to close at 149.25. Walgreens Boots Alliance Inc rose 1.20 points or 2.96% to close at 41.79. The least gainer was Walt Disney Company, which shed 1.37 points or 1.40% to end the session at 96.21. Amgen Inc was up 1.11 points (0.39%) to close at 287.05, while Boeing Co was down 0.44 points (0.25%) to close at 172.50.   S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Best Buy Co Inc, which rose 12.78% to 79.88, Agilent Technologies Inc, which gained 8.08% to close at 156.86. as well as shares of CF Industries Holdings Inc, which rose 6.72% to close the session at 109.68. The least gainers were Dollar Tree Inc, which shed 7.79% to close at 152.37. Shares of Rollins Inc lost 6.14% to end the session at 39.53. Quotes of Medtronic PLC decreased in price by 5.30% to 77.93.  NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Cosmos Holdings Inc, which rose 86.93% to hit 0.33, Palisade Bio Inc, which gained 81.08% to close at 4.02, and also shares of Motorsport Gaming Us LLC, which rose 51.11% to close the session at 6.80. The least gainers were Eqonex Ltd shares, which lost 32.81% to close at 0.14. Shares of WiSA Technologies Inc lost 21.56% and ended the session at 0.20. Quotes of AGBA Acquisition Ltd decreased in price by 22.94% to 4.87. Numbers On the New York Stock Exchange, the number of securities that rose in price (2345) exceeded the number of those that closed in the red (761), while quotes of 110 shares remained virtually unchanged. On the NASDAQ stock exchange, 2259 companies rose in price, 1542 fell, and 236 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 4.79% to 21.29, hitting a new 3-month low. Gold Gold futures for December delivery added 0.07%, or 1.15, to $1.00 a troy ounce. In other commodities, WTI crude for January delivery rose 1.41%, or 1.13, to $81.17 a barrel. Futures for Brent crude for January delivery rose 1.22%, or 1.07, to $88.52 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.62% to hit 1.03, while USD/JPY shed 0.65% to hit 141.20. Futures on the USD index fell 0.63% to 107.05.     Relevance up to 04:00 2022-11-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/302134
The Commodities Feed: OPEC+ meeting ahead

Western Countries Are Set To Agree On Russian Oil Price Cap

Saxo Bank Saxo Bank 23.11.2022 09:06
Summary:  U.S. equity benchmark indices gained over 1%, with energy being the best-performing sector as WTI crude bounced 1.5% on a larger-than-expected draw in private US crude inventory data and continued denials from OPEC+ about any production increases. Deliberations on caps on Russian energy remain on watch. Fed speakers continued to steadily pushback against pivot expectations, and FOMC minutes will be key today. Lower yields and a weaker dollar saw gold steady ahead of key support. Investors are also watching closely the development of the Covid-19 outbreak in China. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) Nasdaq 100 gained 1.5% and S&P 500 rose by 1.4%. All 11 sectors within the S&P 500 gained, led by energy, materials, and information technology. Trading was thin ahead of Thanksgiving. Investors were not overly troubled by yet another round of hawkish-leaning remarks from Fed officials on Tuesday. Best Buy (BBY:xnys), surging 12.7%, was the best performer in the S&P 500. The consumer electronic retailer reported better-than-expected earnings driven by smaller-than-feared declines in revenues and margins. On the other hand, Dollar Tree Store (DLTR:xnas), a discount store chain, tumbled 7.8%, after reporting earnings beat but downbeat Q4 guidance on margin pressure. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) In spite of a weak 7-year auction, treasuries were well bid over the day on Tuesday, in particular for the long end. The 2-year yield fell 4bps to 4.51% and the 10-year yield closed 7bps richer at 3.76%. Following a series of remarks from Fed officials since last week to push back to the market speculation of an early pause at a lower terminal rate next year, investors are adding onto their bets for a recession in the U.S. in 2023. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Daily new cases in mainland China continued to surge and approach the April high. Hang Seng Index fell 1.3% while CSI 300 managed to finish the session flat. Southbound investments registered an HKD5.8 billion net outflow, the largest outflow since August 2021. Southbound investors sold a net HKD3.5 billion of Tracker Fund (02800;xhkg) and HKD1.7 billion of Meituan (03690:xhkg). Meituan tumbled 8.3% and was the worst performer among stocks in the Hang Seng Index on Tuesday. On the other hand, SOE telecommunication and infrastructure stocks surged as the Chairman of the China Securities Regulatory Commission said listed state-owned enterprises were undervalued by stock investors. China Unicom (00762:xhkg) gained 6.8% and China Communications Construction (01800:xhkg) rose by 8.4%. China Aluminum (02068) surged 25.5% after jumping as much as 42.8% at one point. FX: Dollar weakens as risk sentiment stabilizes Data and news flow was thin on Tuesday before it picks up today with FOMC minutes and PMIs due ahead of the US Thanksgiving holiday. Fed speakers Mester and George added little new information, continuing to reaffirm that the fight against inflation had further room to run. US Richmond Fed marginally improved, albeit still negative with mixed details. Philly Fed non-manufacturing survey improved slightly, but firm-level business activity dropped into negative territory alongside full-time employment falling. Dollar slid to lows of 107.11, with gains led by NOK and NZD (ahead of RBNZ meeting where expectations are for a 75bps rate hike). EURUSD is poking at 1.032 while USDJPY is attempting a move below 141. Crude oil (CLZ2 & LCOF3) Crude oil prices were bid on broader risk appetite and continued OPEC+ denials of any production increases. Meanwhile, there was also a larger-than-expected draw of crude inventories while deliberations around Russian energy price caps were held ahead of the planned December 5th implementation. However, there were also reports that China has paused some purchases of Russian oil ahead of the price cap implementation. Supply worries however remained with API reporting that US crude inventories fell by 4.8 million barrels for the week ended November 18, higher than the expected draw of 2.2 million barrels. API data also showed that gasoline inventories declined by about 400,000 barrels last week, and distillate stocks increased by 1.1M barrels. The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 1.1M barrels last week. WTI futures traded firm above the $80 mark while Brent futures were near the $88 mark. Natural gas prices also rose as much as 5.2% after Gazprom threatened to cut its gas flows sent via Ukraine — the last remaining route to western Europe — next week.   What to consider The increase in the ECB’s TLTRO funding costs for European banks came into effect Until today, European banks’ outstanding borrowings from the ECB’s Targeted Long-term Refinancing Operations III (TLTRO III). LTRO III has been funded at as low as 50bps below the average of the ECB’s Depository Facility Rate (DFR) over the entire life of those borrowings. The DFR, which is currently 1.5%, has been kept at minus 50bps from Sept 2019 to July 2022. It has been a large subsidy from the ECB in the form of below-market funding costs to European banks. Some banks are depositing these monies back into the ECB and arbitraging the interest rate differential. Last month, the ECB announced to change the calculation of the applicable DFR index with effect from Nov 23 to over the current period as opposed to the whole life of the borrowings.  The move will reduce European banks’ net interest income and withdraw liquidity from the banking system. Currently, the TLTRO III balance is EUR 2.1 trillion.     A testing time for the implementation of the fine-tuning measures for controlling Covid-19 outbreak in China The number of new Covid-19 cases hit 27,307 and reportedly as many as 48 cities across the countries are under some sort of lockdown or movement. Guangzhou, the provincial capital of Guangdong reported over 8,000 new cases and Chongqing seconded with over 6,000 new cases. So far the municipal government of Guangzhou avoids adopting stringent. However, Chongqing the manufacturing hub of Western China has rolled out more stringent lockdown. Chinese local governments are struggling to strike a right balance about adhering to zero-Covid policy and minimising disruption to daily lives and economic activities. The swing from abandoning PCR testing a week ago but only to reinstate mandatory testing days later was an example of such dilemma. In a press conference on Tuesday, health officials from the State Council reiterated the importance of implementing the 20 recently released fine-turning measures. Fed’s Mester and George keep the focus on inflation As investors continue to try and gauge the path of Federal Reserve rate hikes, Cleveland Fed President Loretta Mester reiterated on Tuesday that lowering inflation remains critical for the central bank, a day after supporting a smaller rate hike in December. Kansas City President Esther George said the central bank may need to boost interest rates to a higher level and hold them there for longer in order to temper consumer demand and cool inflation. Russian oil price cap in the works The Wall Street Journal is reporting that Western countries are set to agree on Russian oil price cap around $60 per barrel. However, it could be as high as $7 per barrel ahead of the December 5 start date. The sanctions that the G7, EU and Australia will set, will ban the provisions of maritime services for shipments of Russian oil unless the oil sells below the cap price. The aim is to reduce petroleum revenues for Russia's war machine while maintaining flows of its oil to global markets and preventing price spikes. EU’s new proposed cap on gas prices The EU proposed a cap of €275 per megawatt-hour on natural gas prices to defend consumers against a steep rise in energy costs. The level is well above the current price of about €120, but below last summer's highs when Dutch TTF gas prices went as high as €300+. The tool will only be used if futures on the Dutch Title Transfer facility exceed €275 for two weeks and the gap between TTF and liquefied natural gas prices is greater than €58 for 10 trading days. Even at the height of the crisis in the summer, the price didn’t stay above that level for two weeks, suggesting the tool would not have been activated had it been in place then. That led several market watchers to question how powerful can will actually be. If approved by EU countries, the cap would be available for one year from January 1. Ant Group could be fined more than USD1 billion, setting the stage for concluding regulatory overhaul over the company According to Reuters, the Chinese regulators may be close to a decision to impose a fine of over USD1 billion on the Ant Group. Since being called to stop its IPO in 2020, the group has been under regulatory overhaul. While the amount of the fine is substantial, initial reactions from the investment community to the news are positive as the fine could set the stage for the conclusion of the regulatory overhaul. JD.COM (09618:xhkg) cut senior management pays while increasing benefits for all employees JD.Com announced that the company is slashing the pay for about 2,000 managers by 10-20% and using some of the savings from the move to fund planned increases in staff benefits, including health and housing benefits, for all employees including hundreds of thousands of delivery staff. Founder Richard Liu will also donate 100 million yuan towards staff benefits. The OECD revised downward its 2023 growth forecasts Yesterday, the OECD published its latest Economic Outlook. There is not much surprise. Global growth is expected to slow down significantly in 2023 to 2.2% and to rebound modestly in 2024 at 2.7%. This will be a long and painful economic crisis. Asia will remain the main engine of growth in the short-term. But the zero Covid policy in China will likely limit the country’s contribution to global GDP growth. Before Covid, China represented about 30% of global growth impulse. It is now down to roughly 10%. The OECD warns that the fight against inflation will take time. But several countries are successful. For example, in Brazil, the central bank moved swiftly, and inflation has started to come down in recent months. In the United States, the latest data also seem to suggest some progress in the fight against inflation. Nevertheless, a pause in monetary policy is unlikely in most countries in the short-term. Get access to the full report here. FOMC minutes to be key for terminal rate pricing The FOMC minutes from the November 2 meeting are scheduled to be released on Wednesday, just ahead of the Thanksgiving holiday. The key message delivered by Powell at this meeting was that the pace of rate hikes will slow down as needed, and that will likely remain the highlight of the minutes as well. However, Powell managed to deliver this message hawkishly at the press conference, but the risk from the minutes remains tilted to the dovish side. There is likely to be little consensus about whether the rates are in restrictive territory or there’s still room for that, and the divide within the committee remains key to watch as investors remain on the edge to expect a Fed pivot sometime in 2023. Flash PMIs on the radar for US, UK and EU The S&P flash PMIs for the US, EU and UK will be released in the week, and will likely test the soft-landing rhetoric that has been gaining traction. We will likely see further broad-based easing in the metrics from the October prints, as consumer spending remains constrained amid high inflation and a rise in interest rates. While expectations for December remain tilted towards a downshift in rate hikes for the Fed, ECB and the BOE, the upcoming data point will be more key in determining the terminal rate pricing. Markets are now back at pricing 5% levels for the Fed, but the ECB’s pricing for the terminal rate is still sub-3% while UK’s is 4.7% with fiscal austerity being delayed. Singapore’s Q3 GDP revised lower The final print of Singapore’s Q3 GDP was revised lower to 4.1% YoY, 1.1% QoQ from 4.4% YoY, 1.5% QoQ in the preliminary estimate. This came primarily on the back of weaker-than-expected manufacturing sector growth amid global demand weakness, which resulted in the first decline in non-oil exports for October. Meanwhile, covid curbs in China also continue to weigh on Singapore’s growth trajectory. The 2022 growth forecast was also trimmed to around 3.5% from a range of 3%-4% seen previously, a reflection of an increasingly challenging global macro environment, while 2023 growth forecast was set at 0.5-2.5%.   For our look ahead at markets this week - Read our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-23-nov-2022-23112022
EUR/USD Faces Pressure Amid PMI Releases: Is More Downside Ahead?

The OECD Warns That The Fight Against Inflation Will Take Time | Credit Suisse May Lose $1.6bn In Q4

Saxo Bank Saxo Bank 23.11.2022 09:12
Summary:  Market sentiment bounced yesterday on little news, with sentiment steady in Asia overnight. Long US treasury yields dipped, and short yields were steady ahead of today's FOMC minutes release from the November 2 meeting, taking the US yield curve inversion to a multi-decade low of -75 basis points. The focus in Europe today will be on preliminary November PMI for a sense of how badly the EU is tilting into recession.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures rallied 1.3% yesterday closing at the 4,010 level, the highest close since 9 September, suggesting bulls are in control as bears are already sitting on strong profits for the year and therefore has little incentive to take bigger positions before yearend. The next big level on the upside is the 200-day moving average at around the 4,060 level. Today’s key events are preliminary US PMI figures for November and later this evening the FOMC Minutes which could provide more clues into the thinking of policymakers. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) According to Reuters, the Chinese regulators may be close to a decision to impose a fine of over $1 billion on Jack Ma’s Ant Group. Since its IPO was halted by the Chinese authorities in 2020, the group has been under regulatory overhaul. While the amount of the fine is substantial, initial reactions from the investment community to the news were positive as the fine could set the stage for the conclusion of the regulatory overhaul. Alibaba (09988:xhkg) jumped more than 4% on the news. China internet stocks gained, led by Kuaishou Technology (01024:xhkg) as the social media platform company surged 6.2% on better-than-expected Q3 results. After rising 25.5% yesterday, China Aluminum (02068:xhkg) continued its advance, rising 18% on Wednesday. Overall market sentiment remains cautious as the number of new cases reached 28,883 on Tuesday, just a touch below the April high of 29,317 cases. Hang Seng Index gained 1.2% and CSI 300 climbed 0.5%. In mainland A shares, infrastructure names surged while pharmaceutical and biotech stocks retreated. FX: Dollar drops as risk sentiment rebounds Softer long US treasury yields also pushed the US dollar lower as the US yield curve inverted to a new cycle low. Still, the big dollar has done very little after the huge, but brief sell-off move on the October CPI release nearly two full weeks ago, with today’s large data dump and FOMC minutes the last hope this week for providing a spark of volatility in either direction ahead of the long holiday weekend (tomorrow, US markets are closed, with most workers also out Friday). The FOMC minutes late today are not highly anticipated, but could surprise if there is more consensus on a hawkish stance than anticipated. EURUSD has carved out a 1.0222-1.0479 range now. Crude oil (CLF3 & LCOF3) Crude oil closed higher on Tuesday supported by a general recovery in risk appetite as the dollar softened and recent short sales in response to false production hike rumor were paired back. Crude oil prices have traded lower this month in response to a drop in demand from China as Covid cases surge to near a record with restrictions of movements currently impacting 48 cities. Ahead of today’s weekly EIA report, the API reported a 4.8 million barrel drop in US crude stocks. The data also showed that gasoline inventories declined by about 0.4m barrels last week, and distillate stocks increased by 1.1M barrels. EU diplomats will discuss and potentially approve a price cap on Russian seaborne oil sales today (see below), and if implemented Russia may retaliate by refusing to sell its crude to nations that adopt the cap. WTI resistance at $82.25 followed by $84.50 Gold (XAUUSD) Gold trades nervously around the $1735 support level for a second day as the market awaits the release of FOMC minutes. The yellow metal managed a small bounce on Tuesday as the dollar softened after Fed officials indicated they were open to implementing less aggressive hikes going forward. In the short-term the direction will be determined by fund activity and whether they need to make further reductions in recently established, and now under water, long positions. An extension of the recent rally likely requires further declines in yields and the US dollar driving fresh demand for ETFs or some other catalyst that sees a run to safety. US treasuries (TLT, IEF) US treasury yields were steady at the short end and dipped at the long end yesterday, driving a new extreme in the 2-10 yield curve inversion of –75 basis points. Traders are awaiting incoming US data today and the FOMC minutes for next steps, although more heavy hitting data awaits next week with Wednesday’s November PCE inflation data and next Friday’s November US jobs report. The key upside swing area for the 10-year treasury yield is near 4.00%, while the major downside focus beyond the 3.67% pivot low is the 3.50% cycle high from June. What is going on? New Zealand’s RBNZ hikes 75 basis points to 4.25% The market was divided on whether the bank would go with the larger rate hike after a string of 50 basis points moves prior to the meeting overnight. NZ two-year yields jumped back toward the cycle highs overnight as the market participants raised the anticipated peak in the policy rate by mid-year next year to almost 5.50%, up about 30 basis points after the decision. Fed’s Mester and George keep the focus on inflation As investors continue to try and gauge the path of Federal Reserve rate hikes, Cleveland Fed President Loretta Mester reiterated on Tuesday that lowering inflation remains critical for the central bank, a day after supporting a smaller rate hike in December. Kansas City President Esther George said the central bank may need to boost interest rates to a higher level and hold them there for longer in order to temper consumer demand and cool inflation. Russian oil price cap in the works The Wall Street Journal is reporting that Western countries are set to agree on Russian oil price cap around $60 per barrel. However, it could be as high as $70 per barrel on oil loaded after the December 5 start date. The sanctions that the G7, EU and Australia will set, will ban the provisions of maritime services for shipments of Russian oil unless the oil sells below the cap price. The aim is to reduce petroleum revenues for Russia's war machine while maintaining flows of its oil to global markets and preventing price spikes. Russian Urals crude oil already trades at around a 25-dollar discount to Brent, so the impact on Russia’s revenues at current international prices would be limited. Credit Suisse warns of big loss in Q4 The Swiss bank is stating in a press release this morning that it could lose $1.6bn in Q4 driven by losses in its investment banks. In addition, the bank says that it has seen net outflows of 6% relative to AUM in Q3. To improve profitability the bank is one-third of all investment banking employees in its Chinese subsidiary following a recent staff expansion in the country. HP cuts 6,000 employees as PC demand weakens The technology company reported Q4 results yesterday in line with estimates but its FY2023 (ending 31 October 2023) outlook was below estimates with adj. EPS guidance of $3.20-3.60 vs est. $3.61. Over the next two years the company expects to reduce staff level by 6,000 to improve profitability. The OECD revised downward its 2023 growth forecasts Yesterday, the OECD published its latest Economic Outlook. There is not much surprise. Global growth is expected to slow down significantly in 2023 to 2.2 % and to rebound modestly in 2024 at 2.7 %. This will be a long and painful economic crisis. Asia will remain the main engine of growth in the short-term. But the zero Covid policy in China will likely limit the country’s contribution to global GDP growth. Before Covid, China represented about 30 % of global growth impulse. It is now down to roughly 10 %. The OECD warns that the fight against inflation will take time. But several countries are successful. For example, in Brazil, the central bank moved swiftly, and inflation has started to come down in recent months. In the United States, the latest data also seem to suggest some progress in the fight against inflation. Nevertheless, a pause in monetary policy is unlikely in most countries in the short-term. Read the full report here. The increase in the ECB’s TLTRO funding costs for European banks came into effect Until today, European banks’ outstanding borrowings from the ECB’s Targeted Long-term Refinancing Operations III (TLTRO III). LTRO III has been funded at as low as 50bps below the average of the ECB’s Depository Facility Rate (DFR) over the entire life of those borrowings. The DFR, which is currently 1.5%, has been kept at minus 50bps from Sept 2019 to July 2022. It has been a large subsidy from the ECB in the form of below-market funding costs to European banks. Some banks are depositing these monies back into the ECB and arbitraging the interest rate differential. Last month, the ECB announced to change the calculation of the applicable DFR index with effect from Nov 23 to over the current period as opposed to the whole life of the borrowings. The move will reduce European banks’ net interest income and withdraw liquidity from the banking system. Currently, the TLTRO III balance is EUR 2.1 trillion.     JD.COM cut senior management pays while increasing benefits for all employees JD.Com announced that the company is slashing the pay for about 2,000 managers by 10-20% and using some of the savings from the move to fund planned increases in staff benefits, including health and housing benefits, for all employees including hundreds of thousands of delivery staff. Founder Richard Liu will also donate 100 million yuan of his own money towards staff benefits. Under the quest for “common prosperity” of the top government leadership, Chinese tycoons are mindful of doing their share in redistributing income. What are we watching next? Flash PMIs on the radar for US, UK and EU The S&P flash PMIs for the US, EU and UK will be released in the week, and will likely test the soft-landing rhetoric that has been gaining traction. We will likely see further broad-based easing in the metrics from the October prints, as consumer spending remains constrained amid high inflation and a rise in interest rates. While expectations for December remain tilted towards a downshift in rate hikes for the Fed, ECB and the BOE, the upcoming data point will be more key in determining the terminal rate pricing. Markets are now back at pricing 5% levels for the Fed, but the ECB’s pricing for the terminal rate is still sub-3% while UK’s is 4.7% with fiscal austerity being delayed. Copper demand growth shifting from China to Europe and the US At the FT Commodities Asia Summit in Singapore, Jeremy Weir, the CEO of Trafigura said demand for copper is shifting away from cooling building activities in China to energy transition demand, especially in Europe and the US. Weir said demand for copper has remained strong despite recent global headwinds. “We’re seeing for example very strong copper demand in Europe through electrification and even through the pandemic,” he said. “Even the current crisis and conflict in Ukraine is not reducing the demand for copper.” Following a recent rally, that got rejected ahead of key resistance at $4 per pound, HG copper has dropped back and currently trades near the middle of its established range around $3.55 FOMC minutes to be key for terminal rate pricing The FOMC minutes from the November 2 meeting are scheduled to be released on Wednesday, just ahead of the Thanksgiving holiday. The key message delivered by Powell at this meeting was that the pace of rate hikes will slow down as needed, and that will likely remain the highlight of the minutes as well. However, Powell managed to deliver this hawkish message at the press conference, but the risk from the minutes remains tilted to the dovish side. There is likely to be little consensus about whether the rates are in restrictive territory or there’s still room for that, and the divide within the committee remains key to watch as investors remain on the edge to expect a Fed pivot sometime in 2023. Earnings to watch Today’s US earnings focus is Deere, the US manufacturer of agricultural and forestry equipment, with analysts expecting FY22 Q4 (ending 31 October) revenue growth of 18% y/y and EPS of $7.09 up 72% as momentum and pricing power remain strong due to high commodity prices on agricultural products. Today: Xiaomi, Prosus, Deere Friday: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Nov. Preliminary Manufacturing and Services PMI 0930 – UK Nov. Preliminary Manufacturing and Services PMI 1330 – US Oct. Preliminary Durable Goods Orders 1330 – US Weekly Initial Jobless Claims 1445 – US Nov. Preliminary Manufacturing and Services PMI 1500 – US Nov. Final University of Michigan Sentiment 1500 – US Oct. New Home Sales 1530 – EIA's Weekly Crude and Fuel Stocks Report 1700 – US Weekly Natural Gas Storage change 1905 – US FOMC Meeting Minutes 1905 – New Zealand RBNZ Governor at Parliament committee 2130 – Canada Bank of Canada Governor Macklem to testify to parliament committee Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-23-2022-23112022
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

Saxo Bank Podcast: The FOMC Minutes, The RBNZ Rate Hike And More

Saxo Bank Saxo Bank 23.11.2022 10:35
Summary:  Today we look at the market bouncing back strongly yesterday as we await a data dump from the US today ahead of the long Thanksgiving weekend there. While the focus from the Fed is on how the FOMC delivers its "deceleration of tightening" message, it is worth noting that financial conditions are close to their easiest since the Fed began hiking in 75 basis point increments back in June. Will this receive any comments in the FOMC minutes release tonight? We also look at leading indicators pointing to an incoming recession, talk crude oil, copper and wheat, the RBNZ hiking 75 basis points overnight, stocks to watch and much more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-23-2022-23112022
The South America Are Looking For Alternatives To The US Currency

On Tuesday, the S&P 500 regained the key level of 4,000 as it climbed 53 points (+1.36%) to 4003, its highest level in 2-1/2 months. - Market update by InterTrader - November 23rd, 2022

Finance Press Release Finance Press Release 23.11.2022 10:47
MARKET WRAP: STOCKS, BONDS, COMMODITIES           On Tuesday, the S&P 500 regained the key level of 4,000 as it climbed 53 points (+1.36%) to 4003, its highest level in 2-1/2 months. The Dow Jones Industrial Average rose 397 points (+1.18%) to 34,098, and the Nasdaq 100 gained 171 points (+1.48%) to 11,724.While investors awaited Wednesday's release of minutes of the Federal Reserve's November meeting, the U.S. 10-year Treasury yield retreated 6.7 basis points to 3.760%.Semiconductors (+3.34%), energy (+3.18%), and consumer durables & apparel (+2.26%) sectors were market leaders.Best Buy (BBY) surged 12.78%, as the consumer electronics retailer raised its full-year comparable sales guidance.Agilent Technologies (A) jumped 8.07%, after the life science company posted better-than-expected quarterly earnings and raised its full-year earnings guidance.Dell Technologies (DELL) climbed 6.77% and Urban Outfitters (URBN) advanced 8.89%, as both companies' quarterly results exceeded expectations.On the other hand, Dollar Tree (DLTR) plunged 7.79% after the discount store chain said it now expects full-year earnings at the lower end of its target range.Zoom Video Communications (ZM) fell 3.87%, and Medtronic (MDT) dropped 5.30%, as both companies gave down-beat business outlook.Regarding U.S. economic data, the Richmond Fed manufacturing index posted at -9 for November (vs +5 expected).European stocks also closed higher. The DAX 40 rose 0.29%, the CAC 40 gained 0.35%, and the FTSE 100 was up 1.03%.Oil prices were boosted by Saudi Arabia saying that OPEC+ was sticking with output cuts. U.S. WTI crude futures gained $1.10 to $81.14 a barrel.Gold price added $2 to $1,740 an ounce.           MARKET WRAP: FOREX           The U.S. dollar index softened against other major currencies. The dollar index fell back to 107.16.EUR/USD rose 60 pips to 1.0302. The Eurozone's official consumer confidence index posted at -23.9 for November (vs -26.8 expected).USD/JPY dropped 96 pips to 141.18.GBP/USD gained 66 pips to 1.1889.AUD/USD increased 41 pips to 0.6646. This morning, the S&P Global Australia manufacturing purchasing managers index fell to 51.5 in November.NZD/USD rebounded 53 pips to 0.6153. Later today, New Zealand's central bank is expected to raise its key interest rate by 75 basis points to 4.25%.USD/CHF slid 65 pips to 0.9520.USD/CAD declined 77 pips to 1.3371. Canada's retail sales declined 0.5% on month in September (as expected).Bitcoin rebounded 3% to $16,100.           MORNING TRADING           In Asian trading hours, NZD/USD traded higher to 0.6178. New Zealand's central bank increased its key interest rate by a record 75 basis points to 4.25%, and signaled further tightening going forward.EUR/USD traded higher to 1.0317, GBP/USD was stable at 1.1884, and AUD/USD was little changed at 0.6644.USD/JPY edged higher to 141.32.Gold price was flat at $1,740 an ounce.Bitcoin advanced a further 1% to $16,450.           EXPECTED TODAY           November S&P Global manufacturing purchasing managers index will be announced for the Eurozone (45.7 expected), Germany (45.4 expected), France (46.8 expected), the U.K. (45.6 expected) and the U.S. (50.1 expected).In the U.S., durable goods orders are expected to grew 0.3% on month in October. The latest number of initial jobless claims is expected to rise to 228,000.The number of U.S. new home sales is expected to fall to an annualized rate of 580,000 units in October.U.S. crude-oil stockpiles are expected to decline 1.055 million barrels last week.           UK MARKET NEWS           United Utilities Group, a water and wastewater services company, reported first-half results: "Revenue was down 13 million pounds, at 919 million pounds, largely reflecting lower consumption more than offsetting the allowed regulatory revenue increase. (...) Operating profit at 259 million pounds was 74 million pounds lower than the first half of last year, (...) Reported basic earnings per share increased from (31.7) pence to 51.8 pence. (...) The Board has proposed an interim dividend of 15.17 pence per ordinary share in respect of the six months ended 30 September 2022. This is an increase of 4.6 per cent compared with the interim dividend relating to last year."Oil & Gas, basic resources and auto & parts shares fell most in London on Monday.From a relative strength vs FTSE 100 point of view, BP (+6.52% to 488p) crossed above its 50-day moving average.From a relative strength vs FTSE 100 point of view, Croda International (-1.07% to 6828p) crossed under its 50-day moving average.From a technical point of view, BAE Systems (+2.07% to 798.2p), BP (+6.52% to 488p) crossed above their 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   04:30 S&P Global/CIPS Manufacturing PMI Flash (Nov) 45.6 MEDIUM     04:30 S&P Global/CIPS UK Services PMI Flash (Nov) 47.6 MEDIUM     08:00 Building Permits Final (Oct) 1.526M MEDIUM     08:30 Durable Goods Orders MoM (Oct) 0.3% HIGH     08:30 Initial Jobless Claims (19/Nov) 228k MEDIUM     08:30 Durable Goods Orders Ex Transp MoM (Oct) 0.1% MEDIUM     09:45 S&P Global Manufacturing PMI Flash (Nov) 50.1 MEDIUM     09:45 S&P Global Services PMI Flash (Nov) 49.3 MEDIUM     09:45 S&P Global Composite PMI Flash (Nov) 49.5 MEDIUM     10:00 New Home Sales (Oct) 580k HIGH     10:00 Michigan Consumer Sentiment Final (Nov) 54.7 MEDIUM     10:30 EIA Gasoline Stocks Change (18/Nov) 383k MEDIUM     10:30 EIA Crude Oil Stocks Change (18/Nov) -1.055M MEDIUM     13:00 Baker Hughes Total Rig Count (25/Nov)   HIGH     14:00 BoE Pill Speech   MEDIUM     14:00 FOMC Minutes   HIGH
The US PCE Data Is Expected To Confirm Another Modest Slowdown

The US Leading Indicators Are Suggesting The US Economy Is Close To Being In A Recession

Saxo Bank Saxo Bank 23.11.2022 14:24
Summary:  US equities rose yesterday to the highest close since 9 September despite US leading indicators for October delivered the biggest m/m decline since March 2009, if we exclude the pandemic, suggesting the US economy is deteriorating and getting closer to a recession. This is adding more evidence to our prediction that corporate earnings will fall next year making 2023 another troublesome year for equities and investors. An echo from the past US leading indicators for October came out yesterday at -0.8% m/m which is worst m/m change, excluding the pandemic, since March 2009 when the global economy was stuck in a global credit and banking crisis. Stretching out the perspective and smoothing the indicators, the 6-month average sits at the same level as in December 2007 when the US economy officially entered a recession that eventually continued and amplified into the Great Financial Crisis. As we recently wrote in one of our equity notes, the Eurocoin Growth Indicator (tracking real time GDP in the Eurozone) is already indicating that the European economy is in a recession, and now the US leading indicators are suggesting the US economy is close to being in a recession. The difficulty in these type of analyses is that recession dynamics change from time to time because the global economy is a complex system. This means that leading indicators fitting prior recessions well will intrinsically have difficulties getting the next recession right. In any case, we can say the economies in the US and Europe are slowing down rapidly due to the interest rate shock, and unless China pulls out a white rabbit successfully kickstarting their economy it will be difficult to avoid a recession. The next question is then what type of recession we get. Is it going to be shallow and short-lived, or is it going to be deeper and longer? Regardless of the severity of the recession the declining leading indicators are adding evidence to our prediction that corporate earnings will fall next year making 2023 another troublesome year for equities and investors. US leading indicators m/m | Source: Bloomberg Have the bears lost interest? S&P 500 futures rallied 1.3% yesterday on no significant new news and the theme basket gainers were predominantly the best performing baskets over the past year if we exclude semiconductors. In other words, it was a momentum driven session yesterday and took the S&P 500 futures to the highest level since 9 September. As we have discussed in our Saxo Market Call podcast the bears are sitting on solid gains for the year if they have been long energy, short bonds, and equities, and as such that there is little incentive for the bears to take a lot of risk in last five weeks of the year. This could lean the sentiment in favour of the bulls and could push equities higher despite the economic picture looks increasingly more negative as discussed above. S&P 500 futures weekly prices | Source: Saxo   Source: https://www.home.saxo/content/articles/equities/us-leading-indicators-are-flashing-red-alert-23112022
CZK: Koruna's Resilience Amid Global Influences - 16.08.2023

It Would Be Hard To Expect More Positive Scenarios For Black Friday This Year

Conotoxia Comments Conotoxia Comments 23.11.2022 13:51
This coming Friday (25.11) is Black Friday, which is the colloquial term for the Friday after Thanksgiving in the United States. It traditionally marks the start of the pre-Christmas shopping season in the United States. Historically, it has kicked off one of the best months for retailers. However, let's examine how the markets have reacted to this time and how this year may unfold. Historical market behaviour According to data from the seasonax platform, on average for the period from 15 to 30 November for the last 37 years (since 1984), the main S&P 500 index (US500) has risen by an average of 0.64% (24 times) which would give a historical performance of as much as 63%. For the uptrend periods, the average gain was 4.44%, and the average loss was -5.55%. The maximum increase was in 2012 and amounted to approximately 15%, while the largest loss occurred in 1987 and amounted to -13%. Interestingly enough, that same year we saw the market collapse later called 'Black Monday'. Comparing this to the later period from the beginning of December to the end of the year for the same years, the index grew by an average of 3.69% (an efficiency of 64%). The average increase was 8.79% and the average loss was -5%. The maximum increase we could see was in 1991, which was 23.53%, and the largest loss of -12% was seen in 1996.  It seems that historically for the stock market this period may have been one of the best for investment. Given the data presented and the current price of the S&P 500 index at 4,000 points, we could see a change in price by the end of the year with about 64% probability to levels around 4148 points, with an average increase to around 4352 points and an average decrease around 3800 points. Source: Conotoxia MT5, US500, Weekly What can we expect in the current year? More often than not, the declines in these periods were during the year when there were financial market crises. For example, we could see falls of more than 5% in 2007 (real estate crisis), 2002 and 2003 (years after the "DOTCOM" crisis), 1986 (Black Monday gold market collapse). The best periods almost always seemed to be linked to a good performance year for the companies. We saw increases above 15% in 1999 (the year before the 'DOTCOM' crisis), 1990 (the year before the severe US drought), or 1985.  It seems that with the current situation of rising interest rates, high inflation, or falling corporate earnings, it would  be hard to expect more positive scenarios. It seems that customers this year, faced with rising borrowing costs or rising product prices, may not seem as willing to spend as much as they did in times of prosperity. Therefore, we might see little change in the index or even declines.  Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.    
Bank of England Faces Rate Decision: Uncertainty Surrounds Magnitude of Hike

After This Holiday Rally, You Better Know When To Walk Away

Chris Vermeulen Chris Vermeulen 23.11.2022 16:46
This week's investor insight will make you think twice about the current stock and bond rally as we head into the end of the year. We get a lot of questions about if the stock market has bottomed or if it is headed lower and how they can take advantage of the next Major market move. Over the next 6 to 12 months, I expect the market to have violent price swings that will either make or break your financial future. So let me show a handful of charts and show what I expect to unfold. Let's dive in. We're told that "quitters never win." But is it always wise to stick with something when it no longer serves us — or worse, continues to harm us? Many years ago, when Texas hold'em poker was big and online gambling was allowed in Canada, I used to run a poker league and build custom poker tables for people across the United States and Canada. I love poker, and I still play it to this very day, but the game does require skill, a proper mindset, and self-discipline. Without all three of these things, poker is pure gambling. It's the same when it comes to active trading or investing if you lack the skills, mindset, and self-discipline. Retired professional poker player Annie Duke, who is also a best-selling author, and decision strategist who advises seed-stage Startups, says that learning when to quit is a critical skill, especially for investors. Annie states, "Quitting is a good thing when applied at the right time." If you've been following me for any time, then you know I follow a detailed trading strategy with position and risk management rules. As a result, you won't find me taking random trades or trading based on emotions. Instead, you'll find me patiently waiting on the sidelines for a high-probability trade signal to reinvest my capital. I trade differently. I don't diversify. I don't buy-and-hope, and I don't have any positions at certain times. What I do is reinvest in assets that are rising in value. And when a particular asset stops moving higher, I give up on the position and exit it immediately. Because I use technical analysis to follow price action, we can quickly and easily determine if an asset is rising or falling. Therefore, I can step aside and let the asset fall and look for a new opportunity that is rising, or hold the falling position and ride it lower for who knows how long… Unfortunately, most traders and investors do not understand how to read the markets, or they don't have control of their money. They are at the mercy of what the market does or the skills of whoever controls their capital. Let me share some of my market insight and help guide you On October 21st, I stated that retirement accounts should bottom and rally into the end of the year. Bonds were hitting 11-year lows. In short, anyone holding 20+ year treasury bonds had just lost more than ten years of investment growth wiped out.  Bonds, the highly touted safe, low-risk asset, fell over 47% from the 2020 high. It caused similar losses to the average investor portfolio comparable to the 2008 financial crisis. It was the worst selloff ever for treasury bonds that I can see on my charting platform. The real kicker is that the selloff in both stocks and bonds could have been avoided with just a little education and management. Subscribers and I happened to ride the COVID bond rally higher by 19%, exited the position, and moved to cash the day bond prices topped. It was partly luck to exit at the peak, but we would have exited the following trading session if we didn’t lock in profits because we managed our positions and risk. As the price reversed direction, we jumped shipped to one of my favorite positions, which almost no one thinks about or uses – CASH. 2022 has been a painful year for investors, and people are telling me they are scared to look at their investment statements. It now looks like bonds and stocks have started a seasonal rally that could help lift your portfolio as we head into the end of the year, but once it ends, look out! Bonds and Stock Seasonality Price Movement Daily Chart of 60/40 Portfolio You should have seen your account rally 6% or more since Oct 21st, and I think it will continue higher once the market digests the recent move up. While this may excite you, be aware that after this rally, we could see another 20-47% decline in stocks and bonds in 2023. This year-end bounce is nothing more than an opportunity to get out of the antiquated Buy-and-Hope strategy that does not work during a volatile and weakening economic environment. The next few charts, which are big heavyweight stocks that drive the market higher and pull it lower, should help you see what I see.  AAPL Weekly Chart and Potential Breakdown Apple is a heavyweight stock. When it moves, it moves the stock market. Currently, AAPL shares are in what I call a STAGE 3 Distribution phase, and if support is broken, then look out below! TSLA Weekly Chart and Potential Breakdown Tesla shares are another heavyweight, and its weekly chart paints a bleak future for holders. META (Facebook) Weekly Chart Breakdown Leads The Way Down Facebook, or what is now called META, is a heavyweight stock that has already broken down from its STAGE 3 Distribution phase. As you can see, when these mega stocks break down and unwind, individual investors who have their money managed by so-called professionals who don’t know how to manage risk suffer the most. The drop in META shares has held the tech, social, and even the S&P 500, and Nasdaq from rallying freely to the upside in the past month. When/if AAPL, TSLA, and other heavyweights break down, expect panic on Wall Street. My general rule of thumb is if someone tells you to diversify into a bunch of different assets, stocks, commodities, bonds, crypto, etc… then they don’t know what they are doing. They are a buy-and-hold believer and willing to let their own money or that of their clients experience the severe price swings the market dishes out. – Billionaire investor warren Buffet says, “Diversification makes very little sense for those who know what they are doing.” – Multimillionaire investor Jim Rogers said, “Diversification is something that stockbrokers came up with to protect themselves, so they wouldn’t get sued for making bad investment choices for clients, and that you can go broke diversifying.” The Four Stages Of Asset Prices If you think the 2022 pullback has been distressing, you better buckle up because the bear market has not even technically started yet, from my standard. Instead, in early 2023 we should enter a STAGE 4 Decline. This is when people's financial future and retirement lifestyles are created or broken, depending on how it's managed. Don’t get me wrong, I’m not saying the market will fall in 2023. I’m letting you know it's very possible, and you best have a plan in place. On the other hand, if the markets have some miraculous recovery and start a new bull market, well, you better have a plan for that also. Either way, you need a plan, and if you are a technical trader who follows price and manages positions, it doesn't matter what the market does; we are set either way. S&P 500 Bear Market Expectations 2023 The S&P 500 chart shows the extreme low that we could possibly reach if the economy and stock market fully unwind. Bonds would sell off as well until the Fed decides to step in and starts lowering the rates to try and save investors, but there will be a delay, and bonds will likely fall sharply before we see that take effect. CONCLUDING THOUGHTS:In short, without going off too much on a rant, you can read the three lies we are told by financial professionals that really IRK me. Because of these lies, individual investors must work harder, work longer and experience painful financial outcomes. What you may not know is that what you went through in 2008, the 2020 crash, and this year's correction could have been completely avoided. If you followed a NO BS investing method that tracks price using technical analysis, is simple to follow, and is uber-conservative, then your account would be sitting at a new all-time high watermark as of this week. The financial industry tells us to do all the wrong things, and almost everyone falls for the BS; it's so frustrating to watch! LIE #1: Diversify, Diversify, Diversify LIE #2: Bonds Are A Safe Investment And Should Represent A Large Portion Of An Investors Portfolio LIE #3: Speak With An investment Broker Or Advisor Before Placing Any Trade To Be Sure It Is Suitable For Your Personal Circumstances.  It's total baloney because almost everyone gets the same generic advice, buy-and-hold stocks and bonds, don't give up on it, ride out the rollercoaster, and you will be fine, trust me… Who came up with that strategy? Sure, my 10-year-old son could buy some stocks and bonds once, let it ride for 20-30 years, and be ok. He has time and not that much money, but the big question is at what age does the stock and bond, buy-and-hope strategy become a harmful and risky investment strategy? 50-ish years of age is my thinking. Knowing bear markets can take 3-12 years to recover from, someone who is 50+, planning to retire soon, or is already retired, doesn't have 10+ years to keep working and saving to avoid withdrawing funds from their retirement account. Also, the fact that they have the most wealth ever in their lifetime, they should be concerned about holding through future bear markets.  Don't be fooled. Just because everyone else has been brainwashed to buy-and-hold, aka buy-and-hope, and suffers stock market selloffs does not mean you should…  It's like the average investor has Stockholm syndrome. They have all been beaten up by the markets over and over again. They think that's how it should be. And in some cases are paying someone to take their money, plop it into the market, and do nothing with it for 10 - 40 years. They pay a % of their life savings each year to someone who has no risk and does not need to do too much of anything, while the investor suffers massive multi-year drawdowns, experiences high levels of stress, and sometimes big losses. The typical investing experience most people endure is NOT how it should be. There is a better way, and I can show you. My passion is trading and investing, having been at it for over 25 years. My goal is to help as many investors as possible to preserve their capital during difficult times and also be able to grow their wealth by trading only the most liquid ETFs. My investing strategy signals allow individuals to only hold assets that are rising in value.
Peer Valuation: Toya's Position Among Global Power and Hand Tool Producers

Analytical Report – Ferro -3Q22 Financial Results Review - WSE:FRO

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 24.11.2022 08:01
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. This is an excerpt from the Polish version of DM BOÅš SA’s research report. Sector: Construction materials Fundamental rating: Hold (→) Market relative: Neutral (↑) Price: PLN 24.00 12M EFV: PLN 28.7 (→) Market Cap: US$ 112 m Bloomberg code: FRO PW Av. daily turnover: US$ 0.03 m 12M range: PLN 22.50-37.80 Free float: 55% Recommended action We raise our ST market-relative bias to Neutral from Underweight while keeping LT Hold fundamental recommendation intact. The Group’s 3Q22 financial results exceeded our expectations on the operating level, albeit financial costs rose more than we assumed and NI was only marginally higher than our forecast. 3Q22 revenues/ EBITDA/ NI changed by 0%/ -6%/ -37% yoy. The market environment does not seem friendly, in our view, as new housing investments in the region start to stumble which will undoubtedly affect the demand for construction materials in the quarters to follow. Moreover, deteriorating consumers’ condition may hurt the secondary market. It looks like a spark of hope for the Company may constitute the perspective of the recovery and reconstruction in Ukraine, but first the war has to end. A tad better situation is on the commodities market with raw materials prices falling in 2Q and 3Q22 and slightly rising in 4Q22 which is offset by PLN appreciation vs US$. The Group plans to launch a new logistic center in Romania in 1H23 which implies temporary higher OPEX and higher inventories, albeit we deem the new warehouse opening is beneficial from the strategic perspective because not only will this enable a revenues growth and faster penetration of South European markets, but also will curb costs streamlining logistic processes (no transportation from Poland). 3Q22 financial results review The Group’s 3Q22 revenues reached PLN 226 million (flat yoy) while we assumed a 2% yoy decline. The Company’s segments of batteries and accessories/ installation fittings/ heating systems generated PLN 105 million (up 2% yoy)/ 78 million (up 18% yoy)/ 40 million (down 23% yoy). We assumed slightly lower revenues in the segments of batteries and accessories (down 3% yoy) and installation f ittings (up 15% yoy) while in the heating systems we expected higher sales (down 10% yoy). The Group’s sales in Poland/ Czechia/ Slovakia/ Romania/ Hungary/ other countries changed by -11%/ +12%/ +11%/ +14%/ +18%/ -2% yoy in 3Q22. The sales in Poland show a declining trend this year (PLN 120/99/ 98 million in 1Q/2Q/3Q22), so do sales in Czechia (PLN 43/38/36 million in 1Q/2Q/3Q22) and Hungary (PLN 12/10/10 million in 1Q/2Q/3Q22). The Group’s 3Q22 sales were supported by the Romanian (PLN 43/43/46 million in 1Q/2Q/3Q22), Slovakian (PLN 15/14/14 million in 1Q/2Q/3Q22), and other markets (PLN 22/20/23 million in 1Q/2Q/3Q22). The EBIT margin at 12.2% (vs 13.3% in 3Q21) exceeded our expectations, as we forecast a profitability decline to 9.6% in 3Q22. The profitability softening should be related to a yoy growth of raw materials costs without the possibility to pass the increase on product prices coupled with rising costs of salaries in relation to revenues. In consequence, the Group’s 3Q22 EBIT fell 8% yoy and reached PLN 28 million beating our expectations. Nonetheless, 3Q22 net financial costs turned out to be materially higher than we assumed: PLN 10 million vs PLN 6 million, on the back of high FX differences and higher interest (debt increase and interest rates hikes) as well. Ultimately, the Group’s 3Q22 NI hit PLN 14 million (down 37% yoy) slightly exceeding our expectations (by 12%). At the end of 3Q22 the Group’s inventories stood at PLN 363 million (up 11% qoq) and the net debt totaled PLN 190 million vs PLN 104 million at the 2021end; the ND/ EBITDA ratio reached 1.5x. Operating cash flows in 3Q22 reached PLN -22 million and PLN -58 million in 1-3Q22. Risk factors 1. Economic slowdown in Europe 2. Falling demand for new flats 3. Falling frequency of renovations 4. Qualified workforce shortage 5. Pressure on salaries 6. Energy/ heat price increase 7. Volatile raw materials prices (of copper and zinc, in particular) 8. Unfavorable/volatile FX rates (currency risk when PLN and CZK weaken against US$ and EUR) 9. Lack of stability in the region 10. Temporary higher inventories 11. High interest rates Catalysts 1. Expansion in European markets 2. Strengthening position on the existing markets 3. Launching a new logistic center in the southern Europe 4. New products (expanding the product offer) 5. Own brands repositioning 6. Favorable FX rates and raw materials prices 7. Acquisitions in attractive segments 8. Implementation of the adopted strategy F1R2 Analyst: Sylwia JaÅ›kiewicz, CFA GPW’s Analytical Coverage Support Programme 3.0  
ATM Grupa: Buy Rating and Valuation Update

Analytical Report - TIM SA - 3Q2022 Results – WSE:TIM

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 24.11.2022 08:01
3Q2022 results: weaker than the two previous quarters, lower y/y • The dynamics of revenue growth clearly weakened (+5% in the TIM cons. and 4% in TIM SA), although it was not a surprise considering the current reports informing about monthly results. • The gross margin on goods in TIM SA decreased (to 20%, compared to 21.7% in 3Q2021 and 24.7% in 2Q2022), which resulted in a decrease in gross profit on goods to approx. PLN 70 million (-4% y/y , -18% q/q). • General costs amounted to PLN 60 million in the entire Group (+19% y/y, -4% q/q), which means that they showed a higher dynamics than gross profit, which resulted in a decrease in both EBIT and EBITDA. • We would like to draw attention to the large increase in financial costs (balance in Q3 at the level of PLN -6.3 million), which was due to higher interest, but above all higher exchange rate differences resulting from the valuation of the financed currency liabilities (leasing in 3LP). • The net debt at the end of the period was higher (mainly the valuation of leasing liabilities at a higher EUR/PLN). • Inventories (PLN -61.5 million) and receivables (PLN -5 million) decreased significantly, but at the same time the level of trade liabilities was reduced (PLN -73 million). As a result, the net working capital (NWC) increased again, this time by approx. PLN 7 million. • In Q3, TIM paid a dividend (PLN 26.6 million), which additionally contributed to an increase in net debt. • At TIM SA, the realization of our forecasts at the level of 75-88% allows us to hope that the plan will be implemented. The situation is worse on a consolidated basis, which is due to the weaker results of the 3LP (lower than expected margin, higher financial costs). Achieving PLN 105 million of consolidated net profit will be a big challenge, currently PLN 90 million seems more realistic. Companies' results The sales of TIM SA in the third quarter of 2022 maintained an upward trend, although the dynamics decreased significantly (+5% vs +50% in Q1 and +11% in Q2), reflecting the downturn in the market. The marked drop in the margin on goods should be assessed negatively (to approx. 20%, after 5 quarters of a much higher profitability), which, in our opinion, may mean the end of the favourable situation on goods lasting for over a year, resulting, among others, from rising raw material prices (e.g. copper). The increase in general costs accelerated (+19% y/y), clearly above the margin change rate (-4% y/y). The balance of other activities and the balance of "cash" did not have a significant impact on the final result at TIM SA. There is a regression in the 3LP logistics company. Although this entity showed 11% an increase in sales to customers from outside the Group (to approx. PLN 15 million), but this is a rather disappointing result for us, our full-year forecasts assume +25%. The EBITDA profit decreased to approx. PLN 5.8 million (-25% y/y), and the net loss increased to approx. PLN 4 million (high financial costs). Inventories plunged sharply, but trade payables dropped even more In 3Q2022, TIM decreased the level of inventories by as much as PLN 61.5 million, and receivables were also slightly reduced (approx. PLN 5 million). On the other hand, TIM reduced its liabilities by over PLN 73 million, which limited the positive impact of lower inventories on generated operating cash flows. As a result, the net working capital (NWC) increased by approx. PLN 7 million, and the cash rotation cycle increased to 53 days (consulted data). From the beginning of the year, the involvement in KON amounted to approx. PLN 56 million, however, the purpose has changed: currently KON finances mainly the increase in receivables (approx. PLN 48 million) and a decrease in liabilities (approx. PLN 9 million). The quarterly value of the operating CF was again positive (PLN +22 million), mainly due to the already slight increase in working capital, which was lower than the profits generated from business. Debt increased (PLN +17.5m, in ¼ of this was due to the weakening of PLN), which, with a lower level of cash (due to the payment of PLN 26.6m in dividends in Q3), increased the level of net debt. This change mainly concerns the 3LP logistics company, the development of which, with the postponement of the share issue, is financed with external capital. TIM SA itself has net cash (lower by PLN 10 million q/q due to the aforementioned dividend payment). The Group's DN/EBITDA ratio increased to 0.7x, but still remains at a very safe level. At TIM SA, the implementation of our forecasts at the level of 75-88% allows us to hope that the plan will be implemented. The situation is worse on a consolidated basis, which is due to the weaker results of the 3LP (lower than expected margin, higher financial costs). Achieving PLN 105 million of consolidated net profit will be a big challenge, currently PLN 90 million seems more realistic. The lower increase in sales (and taking into account inflation in real terms, even a drop in revenues) and the lower margin indicate that the market has already entered the slump phase. In the coming periods, we should prepare ourselves for PLN 10-15 million of quarterly profits versus PLN 25-30 million that the company generated in the previous quarters. Last valuation: PLN 54.3 / share on 06/06/2022. Price on the issue date PLN 31.4. Analyst: MichaÅ‚ Sztabler Equity Analyst +48 (22) 213 22 36 michal.sztabler@noblesecurities.pl GPW’s Analytical Coverage Support Programme 3.0  
US CPI Surprises on the Upside, but Fed Expectations Unchanged Amid Rising Recession Risks

HP Expects To Reduce Staff In Coming Years | Xiaomi Reported Revenue In The Q3

Saxo Bank Saxo Bank 24.11.2022 09:00
Summary:  U.S. equities and bonds rallied on the November FOMC minutes which has a dovish cast stating “a substantial majority of participants judged that a slowing in the pace of increase would soon be appropriate”. The 10-year treasury yield fell to 3.69%. Oil prices slid sharply on Wednesday with WTI futures dipping to sub-$77 lows as the EU proposed a higher-than-expected price cap on Russian crude - between $65-70/barrel. EURUSD rallied above 1.04 and USDJPY fell below 140 amid broad-based dollar weakness. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) finished higher on dovish signals from the Nov FOMC minutes U.S. equities found support and bounced after the release of the Nov 1-2 FOMC minutes in an otherwise thin trading session ahead of the Thanksgiving holiday. As bond yields fell, Nasdaq 100 rallied 1%, and the S&P 500 gained 0.6%. All sectors in the S&P 500 advanced except energy, which was dragged by a 4.3% decline in the price of the WTI crude. Consumer discretionary was the top gaining sector, led by Tesla (TSLA:xnas) that surged 7.8% after a leading US investment bank called the shares of Tesla “a bargain”. Deere (DE:xnys), the largest supplier of farm tractors and crop harvesters in the world, gained 5.1% after reporting an earnings beat and upbeat guidance citing strong demand. Manchester United (MANU:xnys) surged 26.1% after the club’s owner announced that they were exploring a sale. Coupa Software (COUP:xnas) jumped nearly 29% on a report that Vista Equity Partners is exploring an acquisition. Nordstrom (JWN:xnys) dropped by 4.2% after reporting a decline in sales and excessive inventory. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) yields fell after the Fed minutes The minutes for the Nov 1-2 FOMC meeting have a dovish cast, saying “a substantial majority of participants judged that a slowing in the pace of increase would soon be appropriate” and some FOMC members had a concern about rate hikes might ultimately “exceed what was required to bring inflation back”. Yields declined across the curve with buying particularly strong on the long end. The 2-year yield dropped by 4bps to 4.48% and the 10-year yield finished the session 6bps richer at 3.69%. The 2-10-year part of the curve became yet more inverted at minus 79. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) China internet stocks gained, led by Kuaishou Technology (01024:xhkg) up 5.7%, Baidu (09888:xhkg) up 3.4%, JD.COM (09618:xhkg) up 3.3%, and Alibaba (09988:xhkg). Kuaishou and Baidu reported better-than-expected Q3 results. Alibaba shares were boosted by the prospect of coming out of the 2-year-long regulatory overhaul with a fine of over USD 1 billion. Meituan (03690:xhgx) underperformed with a loss of 1.1% following a statement from Prosus, shareholder of Tencent, saying that the Company was planning to unload the Meituan’s shares it received from Tencent. China Aluminum (02068:xhkg) continued its advance, rising 25.3% on Wednesday. Hang Seng Index gained 0.6% and CSI 300 climbed 0.1%. In mainland A shares, infrastructure names surged while pharmaceutical and biotech stocks retreated. Overall market sentiment remains cautious as the number of new cases reached 28,883 on Tuesday, just a touch below the April high of 29,317 cases. Large cities, including Beijing, Chongqing, Chengdu, Guangzhou, Zhengzhou, as well as Shanghai have further tightened pandemic control measures. FX: EURUSD above 1.04 and USDJPY falls below 140 amid broad-based dollar weakness The dovish read of the FOMC minutes from the November 2 meeting is hardly a surprise, given the key message has been around a downshift in the pace of rate hikes as expected. But together with weaker than expected flash PMIs for November (read below) suggesting demand slowdown concerns are starting to pick up pace, and a higher-than-expected jobless claims prints sending some early warning signals on the labor market, the focus has completely shifted away from inflation concerns. Market pricing of the Fed December meeting tilted further towards 50bps, and that resulted in a broad-based dollar sell-off. EURUSD surged above 1.04 while USDJPY slid below 139.50. Crude oil (CLZ2 & LCOF3) Oil prices slid sharply on Wednesday with WTI futures dipping to sub-$77 lows and Brent futures touching $84/barrel as the EU proposed a higher-than-expected price cap on Russian crude - between $65-70/barrel after a $60 level was touted yesterday. This higher price cap means that Russian oil can continue to flow into the international markets as it is above Russia’s production costs. Meanwhile, EIA data showed US crude inventories fell a more-than-expected 3.69 million barrels last week, but US gasoline stockpiles rose by 3 million barrels, the largest buildup since July, suggesting a weaker demand heading into Thanksgiving.   What to consider FOMC Minutes signal a smaller pace of rate hikes The FOMC minutes from the November 2 meeting were released on Wednesday, and the general tone of the members confirmed that the committee was leaning towards moving away from jumbo (75bps) rate hikes to a smaller pace. At the same time, "various" officials noted that the peak rate will be "somewhat higher" than previously expected. The minutes saw participants agree there were very few signs of inflation pressures abating (minutes were pre-October CPI) and they generally noted inflation outlook risks remain tilted to the upside. There were also some concerns about the strength of the labour market, where a few participants said ongoing tightness in the labour market could lead to an emergence of a wage-price spiral, even though one had not yet developed. The message remained less hawkish than what the Fed potentially needs to deliver at this point given the considerable easing in financial conditions. US PMIs disappointed, jobless claims rose US S&P flash PMIs for November disappointed, as manufacturing printed 47.6 (exp. 50.0, prev. 50.4) and services fell to 46.1 (exp. 47.9, exp. 47.8), while the composite dropped to 46.3 (prev. 48.2). New orders fell to 46.4, the lowest since May 2020, while employment saw a slight uptick to 50.8 from 50.4. The only good news is that both input and output prices dipped further, offering further positive signals on inflation. The PMIs indicated how concerns are shifting from the supply side to the demand side, with better news on supply chains but demand concerns from weakening new orders. Initial Jobless claims rose more than expected to 240k from 223k and above expectations of 225k, the highest print since August, suggesting that we continue to watch for further signals on whether the tight labor market may be starting to weaken. Better eurozone flash Composite PMI for November This was unexpected. The consensus forecasted that the EZ flash Composite PMI would fall to 47.0 in November from 47.3 in October. It actually improved a bit at 47.8. The increase mostly results from a better-than-expected Manufacturing PMI (out at 47.3 versus prior 46.4 and forecast at 46.0) while the services sector remains stable. There is another positive news. Price pressures are easing quite fast. The PMI price gauge fell to its lowest levels in two years due to a collapse in input prices. On a flip note, the flash Composite PMI Output Index for the United Kingdom (UK) ticked up to 48.3 in November. Surprisingly, the UK seems to hold up better than the eurozone and especially Germany. The jump in the PMI is still consistent with a recession in the eurozone and in the UK but it may be shallow and its steepness will mostly depend from country to country on the impact of the energy shock and fiscal measures taken to mitigate it. China’s State Council is calling on the PBOC to cut the RRR After a meeting on Wednesday, China’s State Council issued a memo calling on the People’s Bank of China (PBOC) to use monetary tools including a cut in the reserve requirement ratio (RRR) at an appropriate time to support the real economy. According to historical observations, the PBOC will do what the State Council says and cut the RRR in the coming days or weeks. Violent protests at Foxconn’s iPhone factory in Zhengzhou Video clips showed violent protests broke out at Foxconn’s iPhone production plant in Zhengzhou. What exactly caused the protests were unclear but speculation was about retention allowance to workers who are willing to stay at the factory until February 15, 2023, and work conditions. New Zealand’s RBNZ hikes 75 basis points to 4.25% The market was divided on whether the bank would go with the larger rate hike after a string of 50 basis points moves prior to the meeting overnight. NZ two-year yields jumped back toward the cycle highs overnight as the market participants raised the anticipated peak in the policy rate by mid-year next year to almost 5.50%, up about 30 basis points after the decision. Xiaomi reported inline revenue and better-than-feared adjusted net profit Xiaomi reported Q3 revenue of RMB70.47 billion, shrinking 10% Y/Y and flat Q/Q. Adjusted net profit came in at RMB2.1 billion, 6% above the Bloomberg consensus, and -59% Y/Y and +1% Q/Q. Excluding new initiative investment, core net profit increased 9% Q/Q to RMB2.9 billion. Blended ASP declined 4% Y/Y.  Gross margin was 16.6% in Q3, falling from 16.8% in Q2 and 18.3% a year ago. Q3 non-IFRS operating margin was 3.0%, down from Q2’s 3.1% and Q3 last year’s 6.7%. Credit Suisse warns of big loss in Q4 The Swiss bank is stating in a press release this morning that it could lose $1.6bn in Q4 driven by losses in its investment banks. In addition, the bank says that it has seen net outflows of 6% relative to AUM in Q3. To improve profitability the bank is one-third of all investment banking employees in its Chinese subsidiary following a recent staff expansion in the country. HP cuts 6,000 employees as PC demand weakens The technology company reported Q4 results yesterday in line with estimates but its FY2023 (ending 31 October 2023) outlook was below estimates with adj. EPS guidance of $3.20-3.60 vs est. $3.61. Over the next two years the company expects to reduce staff level by 6,000 to improve profitability. The Glazer family is exploring the sale of Manchester United The owner of Manchester United said that they are exploring the sale of the English Premier League football club and will consider “all strategic alternatives”. In May this year, Chelsea, another English Premier League club, was sold for around USD5.3 billion. Deere sees strong demand for farm, forestry, and construction machinery Deere said they are expecting high demand for equipment from farmers on elevated prices for agricultural commodities. In addition, the company expects increases in demand for its construction machinery from the oil and gas industry and construction equipment rental businesses. Strong progress in precision agriculture adoption is expected to help boost margins and aftermarket technology product sales. For our look ahead at markets this week - Read our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/market-insights-today-24-nov-2022-24112022
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The Jump In The PMI Is Still Consistent With A Recession In The Eurozone And In The UK

Saxo Bank Saxo Bank 24.11.2022 09:05
Summary:  US stocks and bonds ended higher on Wednesday while the dollar closed at it weakest level since August after the Federal Reserve’s latest meeting minutes showed most officials backing slowing the pace of interest-rate hike soon, a prospect that was given some support following the release of weaker than expected economic data. Crude oil lost ground on growth concerns while the weaker dollar supported a rebound in gold, silver and copper. Today the US markets are closed for Thanksgiving holiday.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Bad news is good news in the US with lower than estimated PMI figures for November suggesting the US economy continues to slow down bolstering bets that US interest rates have peaked, and the Fed pivot is alive. The FOMC Minutes also suggested that the pace of interest rate hikes will be lowered going forward.  P 500 futures rallied 0.5% to close at 4,030 getting closer to the falling 200-day moving average at 4,058. In addition to yesterday’s US news, China’s State Council (see below) issued a memo advising the PBOC to use monetary instruments to safeguard and kickstart the Chinese economy. In a time with falling economic growth in the US and Europe, an accelerating Chinese economy would balance the global economy and soften the recessionary dynamics. It is Thanksgiving in the US today so cash equity markets will close at 1300 ET today. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) After a meeting on Wednesday, China’s State Council issued a memo calling on the People’s Bank of China (PBOC) to use monetary tools including a cut in the reserve requirement ratio (RRR) at an appropriate time to support the real economy. According to historical observations, the PBOC will do what the State Council says and cut the RRR in the coming days or weeks. The news helped lift market sentiment which was however tempered by the rise of daily Covid cases to an all-time high of 31,444 in mainland China. Hang Seng Index edged up 0.3% while CSI 300 declined 0.5%. Shares of leading Chinese developers surged by 5% to 12% after several large Chinese banks agreed to provide more than RMB 200bn in total in credit facilities to a number of private enterprise developers. EURUSD above 1.04 and USDJPY falls below 140 amid broad-based dollar weakness The dovish read of the FOMC minutes from the November 2 meeting is hardly a surprise, given the key message has been around a downshift in the pace of rate hikes as expected. But together with weaker than expected flash PMIs for November (read below) suggesting demand slowdown concerns are starting to pick up pace, and a higher-than-expected jobless claims print sending some early warning signals on the labor market, the focus has somewhat shifted away from inflation concerns which remain persistent. Market pricing of the Fed December meeting tilted further towards 50bps, and that resulted in a broad-based dollar sell-off which extended in the Asian session. EURUSD is now attempting a break above 1.0450 while USDJPY slid below 139.00. Japan’s Tokyo CPI for October is due tomorrow and may inch higher again, further fuelling pressure for BOJ to tweak its zero-rate policy and supporting a recovery in the yen even as global yields start to get capped. Crude oil (CLF3 & LCOF3) Crude oil fell again on Wednesday thereby extending what has already been a very volatile week. The FOMC minutes driving a weaker dollar did not add much support with the market instead focusing on a challenged demand outlook in China as Covid cases continue to spread, and a 50% risk of a recession in the US next year. In addition, a price cap on Russian oil in the $65-$70 area currently being discussed by EU officials is far higher than expected and would probably not have a major impact on supply given that Russia is already selling its Urals crude at a 25-dollar discount to Brent. The negative sentiment was also reflected by the markets negative response to an otherwise price-supportive EIA stock report. Gold (XAUUSD) and silver (XAGUSD) Gold and silver both rose in response to weaker US economic data (see below) and after the FOMC minutes talked about moderating the pace of interest rate hike soon. The Bloomberg dollar index dropped to the lowest level since August while US government bonds rallied to send yields lower. Gold was already encouraged by the speed with which it recovered after briefly breaking below support in the $1735 area reached $1756 overnight with silver trading at $21.60 after showing some renewed relative strength against gold this week. With no signs yet of a pick up in demand for ETFs from longer-term focused investors, a further extension will likely require further declines in yields and the US dollar or some other catalyst that sees a run to safety. Resistance at $1757 and $1765. EU gas (TTFMZ2) EU gas jumped 8.3% on Wednesday to close near a one-month high at €130 with weather forecasts pointing to a cold beginning to December and Gazprom threatening to reduced supplies through Ukraine, one of just two remaining pipelines in operation. The Sudzha line is currently sending 42 million cubic meters per day to Europe and while the dispute only relates to part of the 5 mcm/day that goes to Moldova, the market clearly worry that this could lead to a complete closure of the line. However, with Russia’s pipeline flow to Europe already down 79% YoY, the ability to shock the system has been much reduced, hence the limited reaction in the peak winter contract of February which only trades €7/MWh above December US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) yields fell after the Fed minutes The minutes for the Nov 1-2 FOMC meeting have a dovish cast, saying “a substantial majority of participants judged that a slowing in the pace of increase would soon be appropriate” and some FOMC members had a concern about rate hikes might ultimately “exceed what was required to bring inflation back”. Yields declined across the curve with buying particularly strong on the long end. The 2-year yield dropped by 4bps to 4.48% and the 10-year yield finished the session 6bps richer at 3.69%. The 2-10-year part of the curve became yet more inverted at minus 79, thereby strengthening the prospects for a recession sometime next year. What is going on? FOMC Minutes signal a smaller pace of rate hikes The FOMC minutes from the November 2 meeting were released on Wednesday, and the general tone of the members confirmed that the committee was leaning towards moving away from jumbo (75bps) rate hikes to a smaller pace. At the same time, "various" officials noted that the peak rate will be "somewhat higher" than previously expected. The minutes saw participants agree there were very few signs of inflation pressures abating (minutes were pre-October CPI) and they generally noted inflation outlook risks remain tilted to the upside. There were also some concerns about the strength of the labour market, where a few participants said ongoing tightness in the labour market could lead to an emergence of a wage-price spiral, even though one had not yet developed. The message remained less hawkish than what the Fed potentially needs to deliver at this point given the considerable easing in financial conditions. US PMIs disappointed, jobless claims rose US S&P flash PMIs for November disappointed, as manufacturing printed 47.6 (exp. 50.0, prev. 50.4) and services fell to 46.1 (exp. 47.9, exp. 47.8), while the composite dropped to 46.3 (prev. 48.2). New orders fell to 46.4, the lowest since May 2020, while employment saw a slight uptick to 50.8 from 50.4. The only good news is that both input and output prices dipped further, offering further positive signals on inflation. The PMIs indicated how concerns are shifting from the supply side to the demand side, with better news on supply chains but demand concerns from weakening new orders. Initial Jobless claims rose more than expected to 240k from 223k and above expectations of 225k, the highest print since August, suggesting that we continue to watch for further signals on whether the tight labor market may be starting to weaken. Deere shares up 5% on strong results The US agricultural equipment maker delivered better than expected revenue and net income in its Q4 fiscal quarter (ending 31 October) and issued a FY23 net income guidance of $8-8.5bn vs est. $7.8bn. Order books are full into fiscal Q3 next year (ending 31 July) and the company sees an extended replacement cycle indicating that the best years are still ahead of the company. Better eurozone flash Composite PMI for November This was unexpected. The consensus forecasted that the EZ flash Composite PMI would fall to 47.0 in November from 47.3 in October, it actually improved a bit to 47.8. The increase mostly results from a better-than-expected Manufacturing PMI (out at 47.3 versus prior 46.4 and forecast at 46.0) while the services sector remains stable. There is another positive news. Price pressures are easing quite fast. The PMI price gauge fell to its lowest levels in two years due to a collapse in input prices. On a flip note, the flash Composite PMI Output Index for the United Kingdom (UK) ticked up to 48.3 in November. Surprisingly, the UK seems to hold up better than the eurozone and especially Germany. The jump in the PMI is still consistent with a recession in the eurozone and in the UK but it may be shallow, and its steepness will mostly depend from country to country on the impact of the energy shock and fiscal measures taken to mitigate it. What are we watching next? Earnings to watch Today’s earnings focus is Meituan and Pinduoduo. Chinese earnings in Q3 have been mixed and the technology sector continues to experience headwinds from both the economy and regulation. Analysts expect Pinduoduo, which has so far navigated the environment flawlessly, to deliver revenue growth of 44% y/y and EPS of CNY 4.75 up 288% y/y. Friday: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) US cash markets closed for Thanksgiving. Early closes in some futures markets. 0900 – German IFO for November Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-24-2022-24112022
At The Close On The New York Stock Exchange Indices Closed Mixed

American Stocks Rallied, USD Drop | Tesla Rallies On Citi

Swissquote Bank Swissquote Bank 24.11.2022 09:40
US stocks spent most of yesterday’s session hesitating between slight gains and slight losses, then the release of the latest Federal Reserve (Fed) minutes helped the bulls take the upper hand, as the minutes confirmed that a ‘substantial majority’ of Fed members thought it was a good idea to slow down the pace of the rate hikes. Stocks The S&P500 gained around 0.60% while Nasdaq jumped around 1%. The US 10-year yield eased, as the US dollar sold off quite aggressively across the board. Economy We saw a decent price action yesterday was oil, and that was well before the Fed minutes. The barrel of American crude dropped up to 5% yesterday on news that the Europeans would set the price cap for Russian oil to around $65 to $70 per barrel, levels at which Russian oil is already exchanged. Tesla and Morgan Stanley On individual stocks, Tesla was one of the biggest gainers of yesterday’s session as Citi and Morgan Stanley revised their views higher, but that rally was maybe… exaggerated. Watch the full episode to find out more! 0:00 Intro 0:21 Fed minutes send stocks higher, USD lower 4:11 Crude oil tanks on EU’s new Russian oil price cap 5:55 Foxconn living a nightmare in China, but Apple holds on 6:32 Tesla rallies on Citi, Morgan Stanley upgrades Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #minutes #USD #crudeoil #EU #Russia #price #cap #EUR #GBP #ECB #minutes #Thanksgiving #holiday #Tesla #rally #Apple #Foxconn #China #Covid #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
EU Gloomy Picture Pointing To A Gradual Approach To Recession

EU Gloomy Picture Pointing To A Gradual Approach To Recession

InstaForex Analysis InstaForex Analysis 24.11.2022 09:54
US stocks fluctuated strongly ahead of the Fed minutes as investors anticipate signals of slower rate hikes in the future. Data showed that the S&P 500 and Nasdaq 100 trudged between modest gains and declines. But for today, trading volumes are expected to be lower because of the Thanksgiving holiday in the US. In the EU, investors are more focused on the data showing that private sector activity in Germany and France declined in November. This painted a gloomy picture, pointing to a gradual approach to recession. Similarly, the UK economy is also in recession, and the downturn is expected to worsen in 2023. The USD index fell after data showed US jobless claims rose more than expected. Meanwhile, oil prices fell after the EU discussed higher price caps of about $65 to $70 a barrel. The Fed minutes will indicate whether the central bank succeeded in curbing inflation. Many already think that it has eased, reducing worries for the economy. Key events for this week: - ECB policy meeting report - early closing of US stock and bond markets due to the holiday Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Read more: https://www.instaforex.eu/forex_analysis/327971
Nasdaq 100 Underperforms and Faces Key Resistance - Technical Analysis and Market Outlook

Due To Situation Of USD And Oil, Markets Believe Peak Inflation To Be Over

InstaForex Analysis InstaForex Analysis 24.11.2022 10:04
Dollar fell, while stocks rose after investors examined the latest Fed minutes, which showed that most officials support slowing the pace of interest rate hikes in the near future. The S&P 500 saw gains, as did 10-year bond yields, which hit 3.70%. But trading volumes are expected to become lower given today's holiday in the US. The latest Fed minutes assessed whether the central bank succeeded in curbing inflation. Several officials supported the need to slow the rate hike, and few even stressed the need for a final rate hike. After the meeting, investors analyzed a lot of economic data, which somewhat eased concerns about inflation. And given that dollar weakened after the minutes, gold and EUR/USD rose sharply. The correction in dollar, oil and Treasury yields seems to suggest that markets believe peak inflation to be over.   Relevance up to 21:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/327973
Saxo Bank Podcast: Riksbank's Expected 75 Basis Point Hike Today

Saxo Bank Podcast: Riksbank's Expected 75 Basis Point Hike Today

Saxo Bank Saxo Bank 24.11.2022 10:18
Summary:  Today we look at the market continuing to rally despite US Services PMI figures for November missed estimates suggesting the US economy continues to slow down. This means that equities right now interpret bad news as good news because it will force the Fed to pivot on the policy rate which will be net positive for equities. We also discuss expected PBOC easing, Riksbank's expected 75 basis point hike today, and the weakening USD helping financial conditions to ease globally. In commodities, our focus today is the energy market with Europe's gas market holding up well despite low volumes coming from Russia. Finally, we talk Deere earnings as the US agricultural equipment maker is delivering strong results as pricing power remain high on the back of high commodity prices on agricultural products. Today's pod features Peter Garnry on equities, Ole Hansen on commodities. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-24-2022-24112022
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

Equity Markets Still Need To Price In A Recession Risk

Saxo Bank Saxo Bank 24.11.2022 10:24
Summary:  The ‘recession’ chatter is buzzing high these days, and a host of indicators have started to point towards an economic slowdown. Global credit impulse, US leading economic indicator, slowing new orders are some of the warning signs, but consumer and corporate balance sheets are still strong. While it remains hard to define a recession, there are some reasons to believe that economic slowdown will take the limelight away from ‘inflation’ next year. Equity markets, however, do not price in this demand slowdown risk yet, and investors are rather chasing the income opportunities offered by bonds. It was exactly one year back when the Fed accepted that inflation is more than ‘transitory’. And we have seen the effects of that shift reverberate through the markets all this year. However, even with indicators pointing towards some signs of cooling in price pressures, it will be premature to take comfort. The Fed especially understands that, having learnt from the 1970s experience when inflation came roaring back as monetary policy was eased prematurely. The focus, however, is now shifting towards recession concerns with several indicators pointing to weakening in demand conditions going into 2023. Let’s take stock: Global credit impulse, which represents the flow of new credit issued from the private sector as a percentage of GDP, is usually a good leading indicator for S&P earnings growth and has started to show a decline. See page 30 of our Macro Strategist Chris Dembik’s Macro Chartmania. The Conference Board leading indicator has dipped to -2.7, down 0.8% m/m as noted by our Equity Strategist Peter Garnry here. New orders are dropping, whether you look at Empire State manufacturing survey, or Philly Fed survey, or yesterday’s flash S&P manufacturing PMIs for the US. US banks are tightening lending conditions on loans for medium and large businesses and for commercial real estate. Lending standards for credit cards and other consumer loans also became more restrictive. Housing market has been flashing a warning sign for some time, and risk of job losses remains high. Given that this will be a high % of GDP and employment, it could be well reflected in headline figures unlike the tech sector layoffs which are a small % of total US employment. However, there are also reasons to believe that any recession, if one was to happen, will be in nominal and not in real terms. Real growth will remain supported by falling inflation levels. The other key counter-argument usually is that US households and corporations still look fairly flush with cash following the pandemic-era savings and stimulus. Whether we enter an official recession as defined by NBER remains tough to argue, but indicators suggest we have a case of demand slowdown building up. Two key things are important to monitor: The pace of slowdown in earnings growth The pace of deterioration in the US jobs market This suggests calling an end to the bear markets may still be premature, as equity markets still need to price in a recession risk. The S&P500 is still trading at a P/E of 18.2x, higher than the average of 17.4x since 2000. It is probably best to play defensive and get exposure to value still rather than growth sectors which can have a lot more downside still. Meanwhile, investors have started to chase the high yields and income opportunity offered by fixed income after a massive jump in interest rates seen this year. Shorter dated and higher quality investment grade fixed income offers attractive income and capital gain opportunities.   Source: https://www.home.saxo/content/articles/macro/macro-insights-weighing-the-odds-of-a-recession-24112022
Tokyo Raises Concerns Over Yen's Depreciation, Considers Intervention

The US Dollar Seems To Have Lost To All Major World Currencies

Conotoxia Comments Conotoxia Comments 24.11.2022 10:28
Americans celebrate Thanksgiving today, which may translate into less activity for investors overseas. However, before that happens, the market seems to be still alive with yesterday's "minutes" from the latest FOMC meeting. The minutes are a record of events and statements at the meeting of the Federal Open Market Committee, which makes decisions on interest rates in the United States. They show that the vast majority of Fed officials felt that a slowdown in the rate of increase in the federal funds rate would probably be appropriate soon, as this would allow the Committee to better assess progress toward achieving its goals of maximum employment and price stability. Policymakers also noted that with inflation showing no signs of abating and the economy's supply-demand imbalance persisting, the ultimate level of the federal funds rate that would be needed to achieve the Committee's goals is somewhat higher than they had previously expected. The Federal Reserve raised the target range for the federal funds rate by 75 basis points to 3.75%-4% at its November 2022 meeting, marking the sixth consecutive rate hike and the fourth consecutive 75bp increase. As a result, the cost of dollar funding has risen to its highest level since 2008, Tradingecnomics calculated. Slower hikes - how are the dollar exchange rate and indexes reacting? The dollar index fell below 106 points on Thursday morning, slipping for the third day in a row toward the lowest levels since mid-August. For the week as a whole, the dollar seems to have lost to all major world currencies. Meanwhile, the British pound was able to record the biggest strengthening, gaining more than 1.7 percent, followed by the New Zealand dollar, which saw a historic interest rate hike yesterday. In third place on a weekly basis is the Swiss franc, with a strengthening of about 1.5 percent. Thus, it seems that the dollar's rally after the US interest rate hike may have slowed or come to an end, and now the market could at least move to a larger correction in price and time after the USD's one-year appreciation. Source: Conotoxia MT5, USDIndex, Daily The chances of a slower pace of interest rate hikes may have appealed to investors on Wall Street, where the green has taken hold. Particular attention may be paid to the Dow Jones index, which is now just a few percent short of reaching new highs. Yesterday, the Dow closed more than 100 points higher, while the S&P 500 and Nasdaq rose 0.6% and 1%, respectively. For the month as a whole, Caterpillar posted the biggest gains in the 30-company index, rising more than 23 percent, while the shares of aircraft manufacturer Boeing achieved a similar result. Meanwhile, only three companies in the entire index recorded a decline. They were UnitedHealth Group, The Walt Disney Co and Salesforce.com Inc. In their case, the declines were in the range of -2.2 to -5.2%, according to data from the BBN service. Source: Conotoxia MT5, Caterpillar, Weekly Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.    
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Ryvu Therapeutics - Report - 3Q22 Results – WSE:RVU

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 24.11.2022 13:41
Recommendation: Buy 12M TP: PLN 68.7 Ryvu Therapeutics reported 3Q22 results with the following highlights: â–  Revenues PLN 20.5mn (+176% y/y, 8% below our estimates and 7% above market consensus). Company booked upfront payment from Exelixis of PLN 14mn (in line with our estimates). Revenues from grants amounted to PLN 5mn (vs. PLN 7mn year ago, vs. PLN 7mn expected by us). â–  Total operating expenses amounted to PLN -34mn (+9% y/y). Total expenses excluding non-cash cost of incentive program amounted to PLN 30mn (vs. PLN 23mn year ago). The growth of this cost is primarily related to the higher by 68% y/y cost of external services, higher by 19% y/y cost of materials and higher by 18% cost of employees. Cost of incentive program amounted to PLN 4mn (vs. PLN 8 year ago, vs. PLN 4mn expected by us) â–  Reported EBITDA loss amounted to PLN 10mn (vs. PLN 20mn year ago, vs. PLN 10mn expected by market consensus, vs. PLN 10mn expected by us). â–  EBITDA adjusted by incentive program amounted to PLN -6mn (vs. PLN -12mn year ago, vs. PLN -6mn expected by us) â–  Net loss amounted to PLN -12mn (vs. PLN -23mn year ago, vs. PLN 12mn expected by market consensus, vs. PLN 13mn expected by us). â–  Net cash came in at PLN 40mn (vs. PLN 41mn in 2Q22, vs. PLN 42mn expected by us). Our view: NEUTRAL The 3Q22 results came in line with our and market expectations and does not change company’s investment story. The upfront payment from Exelixis came fully in line with our expectation and operational cost came even slightly below our estimates, as a result company was managed to show stable level of net cash at the end of 3Q22 compared to 2Q22. In the upcoming quarter, we expect next small milestone payments from Exelixis (aprox. USD 3mn) as company said that it expect to receive another payments within a year after conclusion of partnering deal. Key issues in the upcoming months: â–  RVU120: “Safety and efficacy data from the ongoing Phase Ib clinical study in relapsed/refractory (r/r) acute myeloid leukemia (AML) and high-risk myelodysplastic syndrome (HR-MDS) will be presented at the 2022 ASH meeting. To date, RVU120 demonstrated single-agent activity with a complete response and disease stabilizations in 10 patients with r/r AML or HR-MDS.” â–  RVU120: “On-target activity of RVU120 in AML and HR-MDS patient samples will also be presented at the ASH. As of the cut-off date, inhibition of pSTAT5 reached >50%, a threshold that based on the preclinical predictions is sufficient for robust efficacy in certain groups of super-responder patients.” â–  SEL24. “Ryvu’s partner Menarini Group will present preclinical data showing SEL24 (MEN1703) potential for clinical efficacy in multiple myeloma (MM), Hodgkin’s lymphoma (HL), and diffuse large B-cell lymphoma (DLBCL) at the upcoming ASH meeting.” Analyst: Marcin Górnik marcin.gornik@pekao.com.pl GPW’s Analytical Coverage Support Programme 3.0" https://www.pekao.com.pl/biuro-maklerskie/klient-indywidualny/aktywne-inwestowanie/ryvu-therapeutics.html
Hong Kong’s Hang Seng Had Its Best Month | EU Inflation Slowed

The Pressure On Bank Of Japan To Tighten Policy | China’s Zero Covid Still In Focus

Saxo Bank Saxo Bank 25.11.2022 08:49
Summary:  A quiet overnight session with the Thanksgiving holiday, and most assets remained in consolidation after the FOMC minutes-driven move the day before. China’s zero Covid still in focus as reports suggest that Beijing may go in a lockdown. The US dollar held on to its recent losses, and bets for the December Fed rate hike in favour of a 50bps move. Sweden’s Riksbank hiked 75bps and the pressure on Bank of Japan to tighten policy also remains with Tokyo CPI touching a new 40-year high. Crude oil still below key levels, while Gold and Silver are testing key resistances. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) Closed for the Thanksgiving holiday. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Closed for the Thanksgiving holiday. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Hang Seng Index gained 0.8% on Thursday following China’s State Council’s call on the People’s Bank of China (PBOC) to cut the reserve requirement ratio (RRR). In addition, leading Chinese banks offered more than RMB 270 billion in credit facilities to support private enterprise developers. Chinese developers were top performers in the benchmark index, with Country Garden (02007:xhkg) jumping 20%, Longfor (00960:xhkg) up 12%, and Country Garden Services (06098) up 11%. Hang Seng TECH Index climbed 0.8%. Xiaomi was the laggard among tech peers, falling 3.6% after reporting Q3 results. Market sentiment was tempered by the rise of daily Covid cases to an all-time high of 31,444 in mainland China. CSI 300 edged down by 0.4%, driven by large state-owned enterprise names that consolidated recent strong gains. FX: Dollar held on to its losses in a thin trading day The dollar index traded steady below 106 on Thursday amid thin trading markets with US closed for Thanksgiving. The reaction to a dovish read of the FOMC minutes has been a significant slide in USD, which along with higher equities and lower bond yields, suggest financial conditions continue to ease since that softer CPI release. This is sending warning signals on inflation and Fed members may need to be more hawkish to prevent that. Lower US yields, and still-steady expectations of a BOJ pivot, have meant a stronger Japanese yen, with USDJPY now below 139. GBPUSD touched 1.2150, the highest levels since early August. Crude oil (CLZ2 & LCOF3)   Demand concerns, especially from China’s zero covid, continued to underpin the oil markets. A record high in the number of cases and reports that Beijing may go back in a lockdown show the difficulty of opening up the economy. US gasoline demand is also weakening as the travel season ends, and there are signals of overall demand weakness globally after massive tightening this year. This saw oil prices remain below key levels, with WTI still around $78/barrel and Brent around $85. Meanwhile, the proposed price caps on Russian oil continues to cause concern. EU diplomats are locked in negotiations over how strict the mechanism should be. Poland rejected USD65/bbl, while shipping giant Greece said it doesn’t want it below USD70/bbl. Gold (XAUUSD) and Silver (XAGUSD) testing key resistances A dovish FOMC read, along with softer US economic data from the flash PMIs, have returned the focus again on precious metals. Gold tested $1735 support again this week but is now back at over $1750-levels and testing the resistance at $1757. Break above will bring $1765 in focus, but lack of ETF buying still makes it hard to confirm the reversal of the short-term downtrend. Silver is also at key resistance level of $21.50.   What to consider? Sweden’s Riksbank hiked 75bps, more in the pipeline The Riksbank’s 75bps rate hike was larger than the 50bps signalled at the September meeting, and brings its policy rate to 2.5%, the highest since the GFC. Worsening inflation outlook, with October’s inflation at 9.3% and suggesting wage pressures as well, more rate hikes potentially remain in the pipeline. Peak rate is closer to 3% for now, but the bank showed an alternate scenario where persistent inflation above 3.5% could prompt the peak rate move higher from 2.84% to 4.65%. Japan’s Tokyo CPI above expectations again, more pressures to come Japan’s Tokyo inflation for November rose to its highest level in 40 years, suggesting that price pressures have not peaked yet. Tokyo CPI came in at 3.8% YoY from 3.5% previously, while the ex-food was at 3.6% YoY (prev 3.4%) and ex-food and energy was at 2.5% YoY (prev 2.2%). Meanwhile, Asia LNG prices are rising again, as colder temperatures in Europe heat up the competition to secure LNG cargoes again. This suggests price pressures will likely continue, and Bank of Japan could still likely consider tweaking its yield curve control policy. Anwar Ibrahim sworn in as Malaysia’s PM, political chaos to stay Malaysia’s new PM Anwar Ibrahim plans to test lawmakers' support for his leadership with a confidence vote on Dec 19, as he seeks to prove he commands a majority. His party, Pakatan Harapan, got the most but only 82 seats in the 220-seat parliament and lacks a majority. The political divide in the country is getting worse, suggesting policy paralysis that can likely drive foreign investors away. Local governments across China resorted to lockdowns as Covid cases surged to record highs As new Covid cases hit new highs day after day, local governments are torn between the urge to avoid full lockdowns and the instruction to adhere to the zero-Covid policy. Over 40 cities across China, including Guangzhou, Zhengzhou, Chongqing, Shanghai, and Beijing have to resort to some sort of movement restrictions or lockdown.   For our look ahead at markets this week - Read our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: https://www.home.saxo/content/articles/equities/apac-market-insights-25-nov-2022-25112022
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

In Zhengzhou Manufacturing Plant Could Cut Production Of iPhones | The Bloomberg Commodity Index Is Showing A Small Gain

Saxo Bank Saxo Bank 25.11.2022 09:05
Summary:  Yesterday was rather quiet as the US was out for the Thanksgiving holiday, with only a half-session of thin trading on tap for today. Overnight, Asian sentiment was somewhat downbeat as Covid concerns continue to weigh in China. In Japan, Tokyo November inflation was reported at new multi-decade highs. In FX, the US dollar is eyeing the key 200-day moving average for the first time since slicing above that indicator all the way back in June of 2021.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The US 10-year yield has opened today’s trading session at a new low for the month trading around the 3.65% level. This is naturally adding tailwind for US equities with S&P 500 futures likely attempting today to break above the 200-day moving average around the 4,058 level. The index futures flirted with the moving average back in August when equities rallied on Fed pivot talk and easing inflation. There are no major earnings or macro releases scheduled for today so we expect a quiet session going into the weekend. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Daily new Covid cases surged to yet another record high at 32,695, including 1,444 cases in Beijing. Beijing imposed district-level lockdowns and suspended food delivery. Alibaba (09988:xhkg), Tencent (00700:xhkg), and Meituan (03690:xhkg) lost 2% - 3%. China developers, Chinese banks, Chinese telco giants, and China Aluminum (02068:xhkg) gained. Hang Seng Index declined by 0.8% while CSI 300 climbed 0.5%. USD hits new lows even with US markets closed for holiday yesterday The US dollar’s losses extended on Thursday after the FOMC minutes reported late Wednesday encouraged the view that the Fed is on course to decelerate its tightening regime starting with the December meeting (and further forward, the late 2024 and beyond projections of Fed policy suggest the market believes a recession will trigger a sharp Fed easing of policy beyond the end of next year. The US dollar index is flirting with the 200-day moving average for the first time since crossing above the indicator since June of 2021, while EURUSD has made a feint at the cycle highs above 1.0450, easing back a bit overnight. Hotter than expected November Tokyo CPI data reported overnight (more below) saw USDJPY heavy overnight, trading near 138.00 before bouncing slightly. Next week looks important for incoming US data, with the October PCE inflation data up on Thursday and the November jobs report next Friday. Crude oil (CLF3 & LCOF3) Crude oil trades lower for a third consecutive week as demand fears, especially from an increasingly locked down China, weigh on sentiment. A G7-sponsored price-cap plan on Russian oil looks dead in the water with EU countries struggling to agree on a level, the result being either no cap or a level so high that it will not have any meaningful impact on supply. The 12-month futures spread in WTI and Brent have both weakened to the lowest backwardation since last December, reflecting a market concerned about recession and a seasonal slowdown in demand hurting the front month contracts. Gold (XAUUSD) Gold trades small up on the week in response to weaker US economic data and after the FOMC minutes talked about moderating the pace of interest rate hike soon. Having found support in the $1735 area a further extension will likely require further declines in the yields and the dollar or some other catalyst that sees a run to safety. A break above $1765 may signal a return to key resistance at $1788, but lack of ETF buying still makes it hard to confirm a major change in direction. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) yields fell after the Fed minutes The FOMC minutes late Wednesday confirmed the deceleration in the Fed’s tightening path and the market has become increasingly confident that, while the Fed may hold rates quite high next year, the path of easing policy will eventually prove quite steep, presumably on the combination of lower inflation and a recession. US 10-year yields eased to new lows below the recent low of 3.67% overnight ahead of an important period of incoming data before the December 14 FOMC meeting, with 3.50% the next technical level of note (psychological as well as a major pivot high from June). What is going on? Not many insights in the ECB minutes Yesterday, the minutes of the ECB’s October meeting were released. On the key point of the monetary policy pivot, there was nothing new. According to the minutes, there had been no discussion on a potential slowdown in the pace of rate hike. This is certainly a bit too early. But many participants pointed out risks related to the recession, especially in the housing market and in the labour market. On fiscal policy, the ECB has basically reiterated its long-term view: there is a « risk that fiscal compensation packages would turn out to be bigger than warranted ». Finally, a large majority of participants considered that the best option, in the short-term, is to implement a new 75 basis point interest rate increase at the next meeting scheduled for 15 December. Only a majority expressed a different position (in favor of a 50-basis point hike). This was not a market mover, obviously. Apple’s iPhone output at jeopardy in China The worker unrest at Foxconn’s (Apple’s manufacturing supplier in China) Zhengzhou manufacturing plant could cut production of iPhones of up to 30% according to Reuters. This is a growing risk for Apple’s stock price as the company is moving into its best-selling month during the year. Sweden’s Riksbank hiked 75bps, more in the pipeline The Riksbank’s 75-bp rate hike took the policy rate to 2.50% and was larger than the 50-bp signalled at the September meeting, although markets were priced for a move of at least that magnitude. EURSEK fell after a kneejerk rally and trades this morning in the middle of the range since September. The worsening inflation outlook in Sweden, with October’s inflation at 9.3% amidst signs of wage pressures as well, suggests more rate hikes potentially remain in the pipeline. The anticipated peak rate is closer to 3% now, but the bank showed an alternate scenario where persistent inflation above 3.5% could prompt the peak rate move higher from 2.84% to 4.65%. Japan’s Tokyo CPI above expectations again, more pressures to come Japan’s Tokyo inflation for November rose to its highest level in 40 years, suggesting that price pressures have not peaked yet. Tokyo CPI came in at 3.8% YoY from 3.5% previously, while the ex-food was at 3.6% YoY (prev 3.4%) and ex-food and energy was at 2.5% YoY (prev 2.2%). Meanwhile, Asia LNG prices are rising again, as colder temperatures in Europe heat up the competition to secure LNG cargoes again. This suggests price pressures will likely continue, and Bank of Japan could still likely consider tweaking its yield curve control policy. Mixed week for commodities The Bloomberg Commodity Index is showing a small gain of 1.3% with overall support being provided by the softer dollar and lower bond yields. This despite a darkening, but temporary, Covid cloud hanging over the Chinese economy and the bond market increasingly pricing in the risk of a recession hitting some of the major economies next year. Gas prices in Europe and the US leading the gains on cold weather demand followed by coffee on short covering and silver supported by a bouncing gold price. At the bottom we find wheat, US diesel, sugar and crude oil. What are we watching next? An important week ahead for incoming US data Markets have generally celebrated the downward shift in Fed tightening expectations and hopes for an eventual opening up of China’s economy, notwithstanding the ramping of the case count there. Next week will offer an interesting test for markets, including the US dollar, which trades at pivotal levels, as we have a look at the next important data macro data points out of the US, especially the Friday November jobs report. As well, we’ll have a look at the ISM Manufacturing survey for the month on Thursday. The question for the run-up into the December 14 FOMC meeting and in the month or so beyond is how long the market can continue to celebrate the Fed easing off the accelerator, when the reason it is doing so is that economic slowing and an eventual recession threaten. Normally, a recession is associated with poor market performance as profits fall and credit risks mount. Earnings to watch Today’s earnings focus is Meituan and Pinduoduo. Chinese earnings in Q3 have been mixed and the technology sector continues to experience headwinds from both the economy and regulation. Analysts expect Pinduoduo, which has so far navigated the environment flawlessly, to deliver revenue growth of 44% y/y and EPS of CNY 4.75 up 288% y/y. Today: Meituan, Pinduoduo Economic calendar highlights for today (times GMT) US equity markets close three hours early at 1300 local time in NY.  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-25-2022-25112022
The Turkish Central Bank Cut Its Policy Rate by150bp | Credit Suisse Outflows Benefit UBS

The Turkish Central Bank Cut Its Policy Rate by150bp | Credit Suisse Outflows Benefit UBS

Swissquote Bank Swissquote Bank 25.11.2022 10:49
Markets were quiet yesterday, as the US was closed for Thanksgiving. European markets mostly surfed on the positive reaction from the US equities to the Federal Reserve (Fed) minutes released a day earlier. EU Stocks The German DAX advanced to a fresh 5-month high, as the French CAC40 hit a fresh 7-month high, thanks to the euro’s appreciation against the greenback, which somehow eases the inflationary pressures for the European companies, along with the falling energy prices. Central Banks Elsewhere, the latest minutes from the European Central Bank (ECB) released yesterday revealed that ‘a few’ officials favored a smaller rate increase, than the 75bp that the bank delivered last month, citing the other monetary tightening measures that would help restricting the monetary conditions. The Swedish Riksbank raised its interest rates by 75bp yesterday and said that the monetary tightening will continue to tame inflation in Sweden. The Korean Central Bank raised its interest rates by another 25bp to the highest levels since 2012 and the won gained, whereas the Turkish Central Bank CUT its policy rate by another 150bp points, but said that the easing is perhaps enough at 9%, and that risks on inflation – which stands around 85% officially, and 185% unofficially – increase from here. China In China, the central bank signals lower reserve ratios for banks, and conducts reverse repo operations to boost liquidity in the system, as news of fresh Covid restriction measures creep in. The Chinese news certainly prevent oil bulls from jumping in the market right now, and the American crude consolidates below $80pb this morning, with solid offers seen at $82/85 range. Credit Suisse In Switzerland, Credit Suisse continues making the headlines. The stock price flirts with all-time-lows, as UBS sees its share price extend gains as outflows from CS reportedly benefit UBS. Watch the full episode to find out more! 0:00 Intro 0:32 Soft USD boosts European stocks 4:02 Will the USD further soften? 5:40 Central bank roundup 7:44 China re-closing weighs on oil 8:11 Credit Suisse outflows benefit UBS Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #DAX #CAC #FTSE #EUR #GBP #USD #FOMC #ECB #minutes #Riksbank #CBT #SEK #TRY #China #Covid #crudeoil #CreditSuisse #UBS #Thanksgiving #BlackFriday #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

Saxo Bank Podcast: The US Equity Market Is Working Into A Critical Resistance Zone

Saxo Bank Saxo Bank 25.11.2022 10:56
Summary:  Today we look at the market still in complacent mode as it continues to celebrate easing US yields and the FOMC minutes Wednesday confirming the view that the Fed is set to slow its pace of tightening. We note that the US equity market is working into a critical resistance zone, just as the US dollar eyes important support, with the overriding question of when the market will begin to fret the impact of an oncoming recession rather than maintaining the one-dimensional focus on yields. Thoughts on Apple, commodity performance, platinum vs palladium, Natgas in Europe and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: https://www.home.saxo/content/articles/podcast/podcast-nov-25-2022-25112022
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Earnings Expectations From US Technology Companies: Salesforce FY23 Q3 Revenue Growth To Decline

Saxo Bank Saxo Bank 25.11.2022 11:02
Summary:  In today's equity update we sum up the Q3 earnings season which has now ended in the US and Europe. Earnings and margin compression have been the worst in Europe and China, while US companies have seen less pressure but still lower earnings q/q in Q3 and the weakest earnings season in two years. We expect the margin pressure to continue causing headwinds for earnings growth next year. We also go through the key earnings releases next week with the most important companies reporting being Pinduoduo, Salesforce, and Snowflake. Was Q3 margin pressure the canary in the coal mine? With 97% of the companies in S&P 500 having reported the Q3 earnings season is definitively over and we can now begin to make firm conclusions about what is going on with earnings. S&P 500 earnings were down 2.5% q/q making Q3 the worst earnings season since the market bounced back from the abyss during the early days of the pandemic. European and Chinese earnings have been even worse declining around 9% q/q driven by more intense margin pressures than observed in the US. On revenue European companies did the best with revenue up 6.7% q/q compared to only 3.9%b q/q for S&P 500. The average q/q revenue growth rate the past two years is 5.3% in Europe and 3.5% in the US. Part of the difference can be explained by the stronger USD. As we have writing many times this month, the key dynamic for equities next year is the evolution of operating margin and if they go down to average levels in the past then headwinds will be too much for companies and lower earnings next year will likely follow. Salesforce and Snowflake is seeing growth cooling down Next week’s earnings releases are highlighted below. Pinduoduo on Monday is the key earnings focus in China with analysts expecting Q3 revenue growth of 44% y/y and the EBITDA margin staying at healthy levels around 21.2%. The main menu next week is on Wednesday with earnings from US technology companies Salesforce and Snowflake. Analysts expect Salesforce FY23 Q3 (ending 31 October) revenue growth to decline to 14% y/y down from 27% y/y a year ago and analysts expect Snowflake to report FY23 Q3 (ending 31 October) revenue growth of 61% y/y down from 110% y/y a year ago. Expectations for both companies highlight the slowdown in technology enterprise spending that we have seen from other technology companies including Intel, HP etc. Monday: Pinduoduo, Capitaland, H World Group Tuesday: Li Auto, DiDi Global, Bank of Nova Scotia, Intuit, Workday, Crowdstrike, HP Enterprise, NetApp, Shaw Communication Wednesday: Royal Bank of Canada, National Bank of Canada, Salesforce, Synopsys, Snowflake, Splunk, Hormel Foods, KE Holdings Thursday: Canadian Imperial Bank of Commerce, Bank of Montreal, Toronto-Dominion Bank, Marvell Technology, Veeva Systems, Ulta Beauty, Zscaler, Dollar General, Kroger   Source: https://www.home.saxo/content/articles/equities/earnings-watch-q3-earnings-season-is-coming-to-an-end-25112022
Things May Soon Get Better In The Chinese Markets

Things May Soon Get Better In The Chinese Markets

InstaForex Analysis InstaForex Analysis 25.11.2022 12:49
Stock Asia doesn't display any dynamics in today's trading. Only the S&P/ASX 200 in Australia and the Shanghai Composite in China registered growth at 0.29 and 0.39 percent, respectively. Other metrics revealed a decline. They include the Hong Kong Hang Seng Index, which lost 0.79%, the Shenzhen Shenzhen Composite, which fell by 0.53%, the Japanese Nikkei 225, which fell by 0.37%; and the Korean KOSPI, which fell by 0.11%. The worsening of the situation caused by the spread of COVID-19 in China is one of the factors raising bidders' concerns. This past week, a record number of daytime episodes of infection were noted. Several new restrictive and quarantine measures have already been implemented in some major cities due to the sudden increase in morbidity. Investors are concerned that they might harm the nation's economic expansion. The authorities' announcement of new state initiatives to support the economy could not calm the bidders. However, analysts typically predict that things will soon get better in the Chinese markets. In the coming year, the situation should stabilize, according to experts. They base their prediction on what has happened in other nations where similar events have occurred. The largest quote decline was noted for the following Hong Kong Hang Seng Index constituents: Baidu shares, down 3.4%; Meituan, down 3.1%; Tencent Holdings, down 3%; and Net Ease, down 2.5%. The stock quotes of businesses listed on the Shanghai Stock Exchange also reflect growth at the time: Gemdale Securities increased by 9.7%, Greenland Holdings increased by 7.5%, and China Vanke increased by 6.9%. To stop the recession in this economic sector, the Chinese government approved a package of policies aimed at assisting the real estate development sector this month. With a contribution of about 25%, this industry ranks among the largest in China's GDP. For 162 billion US dollars, banks have opened new credit lines for development companies. The Industrial and Commercial Bank of China, one of the biggest Chinese banks, announced opening credit lines for twelve companies totaling 655 billion yuan (roughly $95 billion).     Relevance up to 09:00 2022-11-26 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/328148
ATM Grupa: Buy Rating and Valuation Update

Analytical Report – Summary - Selena FM – WSE:SEL

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 25.11.2022 14:25
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme BUY (PREVIOUS: ACCUMULATE) TARGET PRICE 28,8 PLN 25th NOVEMBER 2022, 12:15 CEST Selena FM reported very good results in Q3'22. The decrease in raw material pressures allowed the gross sales margin to improve. At the revenue level, the Eastern Europe and Asia segment contributed strongly to the result. In the Polish market, the company is experiencing pressure on sales volumes, but price increases offset this effect at the revenue level. On the fundamental risk side, Selena FM still has a significant sales position in the Russian market (we see a significant reduction in exposure to this area in the future as a potential upside to our valuation). The company is valued at EV/EBITDA'22=3.4x (3.1x after adjusting for loans to the main shareholder) according to our forecasts. These levels are already clearly below the average for the last 5 years. Better-than-expected Q3'22 results and the lower commodity price levels assumed in the model have a positive impact on our valuation of the company. Our current price target is PLN 28.8, which implies an upgrade to Buy. The company's Q3'22 results were clearly above our expectations due to a very strong result (both revenue and EBITDA) in the Eastern Europe and Asia segment. The company mainly increased revenues from Asian companies (+48% y/y), but Eastern Europe also posted a 28% y/y increase. The positive trend continued in North and South America. Good sales in Q3'22 continued in the rest of the EU (with a decline in profitability). The Polish market was weak with only a 1% increase in sales, which, with significant inflation in the construction chemicals category, implies a clear decline in volumes. Net debt (PLN 162m, of which PLN 54m finances loans to entities related to the main shareholder) clearly fell thanks to strong operating cash flows. The company did not hold an earnings conference after Q3'22. Only in a press release did the CEO reiterate that the company is seeing a decline in demand and pressure on volumes and margins. The company wants to increase its presence in western markets (including the US and Western Europe). We view these activities as being derived from the need to develop production capacity (in Poland or Asia) previously intended for the Russian market. The constantly significant exposure to the Russian market (companies located in Eastern Europe, i.e. Ukraine and Russia, accounted for 15% of the group's sales in Q1-3'22) raises risks that are difficult to quantify in our opinion. We note that the company's main European competitors are still present in Russia (with Henkel, for example, having announced divestments), The company also maintains its interest in acquisitions (entities with a recognisable brand and access to the market). The management also emphasised the high importance of working capital reduction measures. ). Selena FM's current market capitalization is PLN 505m (PLN 478m after deducting treasury shares). Net debt at the end of Q3'22 was PLN 162m (PLN 108m after adjusting for loans). EBITDA for the last four quarters amounted to ca. PLN 174m. The company is therefore valued at current adjusted EV/EBITDA=3.4x. The level is relatively low, and the discount to the average for the last five years (4.5x for annually averaged net debt adjusted for loans) has become noticeably larger than a quarter ago. Main risks: • high exposure to Eastern European markets • risks related to the macroeconomic situation, the economic situation in the construction industry and seasonality of revenues; • high prices of strategic raw materials: MDI and polyols and problems with their availability; • strong competition (in the markets where the company operates there is competition in the form of large, international companies offering a wide range of products); • risk related to M&A transactions; • exchange rate risk (mainly euro and EM currencies) • transactions with related entities (in 2015, the purchase of bonds of a subsidiary from the main owner for PLN 60 million - repaid in 2020, and in 2020-2022 - PLN 58m loans); • low free float and trading liquidity. Analyst: Krzysztof Pado pado@bdm.com.pl tel. (0-32) 208-14-32 Dom Maklerski BDM S.A. ul. 3-go Maja 23, 40-096 Katowice GPW’s Analytical Coverage Support Programme 3.0  
Reducing Animal Meat Production As Part Of Climate Policy

USA: Lower income doesn't necessarily mean that eating at McDonald's would become less popular

Conotoxia Comments Conotoxia Comments 25.11.2022 16:05
Looking at the company's recent Q3 results and its share valuation, it's hard not to get the impression that investors could choose it as a cure for worsening times. At a time when the main S&P 500 index (US500) has fallen by more than 16% since its January highs, the fast food giant's valuation has risen by 5%. We decided to see if the average American would switch to a BigMac in times of crisis? The company's financial position Overall year-to-date revenues, despite experiencing a 5% year-on-year decline in Q3, are up 9% year-on-year. According to CEO Chris Kempczinski: "As the macroeconomic landscape continues to evolve and uncertainties persist, we are operating from a position of competitive strength. I also want to thank our franchisees, who have done a tremendous job navigating this environment, while providing great value to our customers."  Source: Conotoxia MT5, McDonalds, Weekly Revenue volumes may have been positively impacted by price increases across the sector. The company seems to have done quite well in passing on costs to customers, as we saw in, for example, the price of a cheeseburger in California, which increased by 50%, from US$0.99 to US$1.48. This was the first price increase for this sandwich in 14 years.  Earnings per share fell by 6.29% year-on-year, which the company explained by rising costs in the Eurozone caused mainly by energy prices. However, we learned from the report that: "comparable sales in the US increased by more than 6% during Q3, marking the ninth consecutive quarter of comparable sales growth in the segment". Currently, the company's price-to-earnings P/E ratio is 34, which may indicate signs of overvaluation. However, if analysts' expectations for future earnings are taken into account, the P/E ratio is 26.2, and this could give potential for further share price increases. The company has also announced another dividend increase. Will Americans eat at McDonald's in times of crisis? According to an analysis by NUMBEO, a company that measures the cost of living in various places around the world, the price of lunch in low-cost restaurants fluctuates between US$10-30 (average US$16). The same spread for an average McMeal set at McDonald's, depending on the state, ranges from US$7 to US$12 (average US$8.5), indicating a meal at the popular fast food outlet is twice as cheap. The question may immediately arise, will Americans decide to cook at home? However, this seems unlikely due to the fact that, according to Statista, as many as 82% of the country's citizens live in cities, where eating out is much more popular. In addition, preparing a meal at home does not seem to be cheap enough to compete with eating at fast food outlets. Therefore, we could surmise that even if the income of the average American worsens, it would be difficult to give up eating out cheaply. Alternatively, the portions ordered may be smaller and thus cheaper, but this could be to everyone's advantage. After all, according to the 2017-2020 National Health and Nutrition Examination Survey, 41.9% of adults nationally (USA) are struggling with obesity. Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
The Japanese Yen Retreats as USD/JPY Gains Momentum

Zoom Video EPS beat market expectations. Next week's Eurozone CPI and the US GDP releases are going to attract investors' attention

Conotoxia Comments Conotoxia Comments 25.11.2022 16:16
Sunday marked the start of the World Cup in Qatar. It seems that it could not have taken place without controversy over the preparations for the event. After yesterday's Thanksgiving holiday in the United States, today we may see increased shopping traffic in celebration of Black Friday. A weakening dollar and falling bond yields may have driven the broad market this week.  Macroeconomic data On Wednesday, we learnt about the PMI reading on managerial sentiment in German industry. The reading of 46.7 points surpassed the expected 45 points and came as a positive surprise over the previous reading of 45.1 points. We could also see values for the same indicator from the UK, with a reading of 46.2 points (45.7 had been expected), against the previous reading of 46.2. From this we could see a warming of the market climate, which appears to have caused a 1% rise on the main German DAX index (DE40) since the start of the week.  Source: Conotoxia MT5, DE40, Weekly On the same day, we learned about the number of building permits issued in the United States. Here, the data turned out to be more modest than expected, amounting to 1.512 million (1.526 million was expected). There was also news from the US economy on crude oil inventories, which fell by 3.69 million barrels (a drop of 1 million barrels was expected).  On Thursday, Americans celebrated the Thanksgiving holiday. In Europe, on the other hand, data from the Ifo index measuring expectations for the next six months among German entrepreneurs may have come as a positive surprise. The index came in at 86.3 points, while 85 points were expected, which, like the PMI index, may have comforted markets in their expectations for the future. The stock market Analysts may have been positively surprised by Q3 earnings this week. Among others, we saw better-than-expected earnings per share from technology, software and laboratory equipment maker Agilent Technologies (Agilient), whose EPS came in at 1.53 (expected 1.38). Zoom Video (Zoom), a popular company during the pandemic, also surprised positively, with EPS of 1.07 (expected 0.83).  On Tuesday, US semiconductor company Analog Devices (AnalogDev) showed EPS of 2.73 (2.58 expected), and the maker of software for industries including architecture, engineering and construction showed earnings per share in line with EPS guidance of 1.7.  Of the 11 sectors of the US economy, consumer goods sales grew strongest. The Consumer Staples Select Sector SPDR Fund (XLP) index has gained more than 3% since the start of the week, which may have been influenced by Friday's Black Friday. Source: Conotoxia MT5, XLP, Weekly Currency and cryptocurrency market For another week in a row, we could see a weakening of the US dollar. The valuation of the EUR/USD pair has risen by 0.7% since the beginning of the week and currently stands at 1.04. The weakening of this largest reserve currency was also evident on the GBP/USD pair, which rose by 2% to around 1.21. The other currencies do not seem to show increased volatility. Source: Conotoxia MT5, EURUSD, Weekly There could still be a gloomy mood in the cryptocurrency market. Not even the reports that the largest exchange Binance has set up and contributed USD 1 billion to a fund to support crypto projects are helping. The price of bitcoin is hovering around US$16500 and ethereum around US$1190. Source: Conotoxia MT5, BTCUSD, Daily What could we expect next week? Next week's key macroeconomic data will start with Tuesday's German CPI inflation reading. On the same day, we will learn the previously discussed Chinese manufacturing PMI. On Wednesday, the Eurozone CPI inflation readings appear to be particularly important. On this day, we will also learn the quarterly change in GDP for the United States. On Thursday, we will learn the PMI values for Germany, the United Kingdom and the United States. At the end of the week, we will find out the unemployment rate in the USA. Tuesday will see Q3 financial results from business software developer Intuit (Intuit). Wednesday will bring a report from cloud software company Salesforce (Salesforce). We will end the week with a report from semiconductor company Marvell (MarvelTech). Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
BOC Rate Hike Odds Rise to 28.8% as Canada's Economy Shows Resilience

Employees Of Amazon Are Planning Protests On Friday

InstaForex Analysis InstaForex Analysis 28.11.2022 08:00
There are no statistical releases scheduled for Friday. In this case, the session will be shortened and will end at 21:00 GMT+2. In this regard, trading activity is likely to be lower than usual on the holiday-thinned market. On Thursday, the exchanges did not work because of the public holiday, Thanksgiving Day. Meanwhile, a number of important indicators will be published in the near future, including revised data on US GDP for the third quarter as well as data on the labor market for November. In addition, the country begins the season of active shopping before the holidays. Dow Jones Industrial Average by 18:02 GMT+2 increased by 0.4% and reached 34,333.97 points. Among the components of the index, the top gainers were Home Depot Inc, up 1.8%, UnitedHealth Group up 1.4% and 3M Co. - by 1.2%. The value of the Standard & Poor's 500 by this time increased by 0.06% - up to 4029.69 points. At the same time, the Nasdaq Composite index fell by 0.39% since the market opened and amounted to 11,241.63 points. Stock quotes for retailers Walmart Inc. and Target Corp. decrease respectively by 0.2% and 0.8% at the beginning of trading. Amazon.com Inc. price fell 1.1% on reports that employees at the online retailer's warehouses around the world, including the US, Germany and France, are planning protests on Friday demanding higher wages. Shares of Ford Motor dropped 0.3% on news that the company is recalling more than 634,000 SUVs worldwide due to malfunctions. Tesla's value is 1.2% down. The company announced that it is recalling about 80,000 electric vehicles in China due to problems with software and seat belts. In addition, Apple Inc. papers are trading lower, having decreased - by 1.6%, Nike Inc. - by 0.6%, Intel Corp. - by 0.5%. At the same time, the share price of Chevron Corp. has grown by 0.3%. According to media reports, the United States is preparing to grant this company a license to produce oil in Venezuela. Chevron will regain partial control of oil production in Venezuelan fields, in which the company has retained stakes through joint ventures with state-owned Petroleos de Venezuela SA.     search   g_translate     Relevance up to 03:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/302664
Hong Kong’s Hang Seng Had Its Best Month | EU Inflation Slowed

The Weighted Average Of RRR Across All Banks In China Falls

Saxo Bank Saxo Bank 28.11.2022 08:52
Summary:  The risk-off mood at the onset of the new week is mostly driven by protests in China over the zero covid policy. This comes after China’s announcement to cut the reserve requirement ratio by 25bps on Friday, which is unlikely to be enough to offset demand weakness. US equity futures gapped lower, and the US dollar got a safe-haven bid as well. Commodity markets are likely vulnerable to this risk aversion and dollar gains, with crude oil prices testing lows as Russian oil price cap discussions resume today. The key week ahead for US data and Fed as Powell takes the stage on Wednesday, but the focus today will be on China and a likely hawkish tilt in the comments from Fed’s Bullard. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) finished the holiday-shortened week with modest weekly gains In a shortened session with thin trading, the S&P 500 Index finished flat and the Nasdaq 100 Index slid by 0.7%. Over the week, S&P 500 gained 1.6% and Nasdaq 100 was up 0.7%. Among the S&P 500 sectors, real estate, utilities, and healthcare gained while communication services, and information technology were the laggards. Activision Blizzard (ATVI:xnas) dropped 4.1% on reports that the U.S. antitrust regulator might file a lawsuit to bar Microsoft (MSFT: xnas) from acquiring the video games developer. Manchester United (MANU:xnys) surged for the third day in a row, up 13% on Friday or 65% for the week, as the controlling shareholder is exploring a sale. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) advanced with yields falling during the week on the dovish-leaning FOMC minutes U.S. treasuries gained in price and lower in yields last week. The 10-year yield dropped 15bps to 3.68%. The market is increasingly pricing in a recession as the 3-month treasury bills vs 10-year treasury notes spread went to minus-64bps, a level usually seen within 12 months preceding the onset of a recession. For a detailed discussion of our take on the outlook of bonds, please refer to this note we published last Friday. We are having a busy and important calendar this coming week with several potentially market-moving data and events. The JOLT report on Wednesday and the jobs report on Friday will tell us about the state of the U.S. job market. The PCE scheduled to release on Thursday is the Fed’s key inflation gauge. Fed Chair Powell will speak at the Brookings Institute about the economic outlook and the labor market. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Investors were weighing new government measures to support the property sector against the alarmingly explosive uptrend in daily new Covid cases and the reports that megacities returning to the practice of movement restrictions and lockdowns. On Friday, Hang Seng Index declined 0.5% while CSI 300 climbed 0.5%. Over the week, Hang Sang Index fell 2.3% and CSI 300 edged down 0.7%. Chow Tai Fook Jewellery Group (01929:xhkg), tumbling 15.5%, was the biggest loser in the Hang Seng Index on Friday. The jeweller lowered mainland China same-store-sales growth (SSSG) to a high-single-digit year-over-year decline over the half-year from Oct 2022 to Mar 2023. The Australian share market is just 5% off its all-time high; but seems vulnerable The Aussie share market has gained 12% from its October low, after rising 1.5% last week; with Virgin Money up the most, about 23%, on upgrading its outlook, while gold company Ramelius Resources rose 15% on maintaining its production outlook. This week stocks exposed to China are vulnerable of a pullback given forward earnings are likely to be downgraded following further China lockdowns and protests. It also means commodities, oil – iron ore, copper, lithium may see demand slow down and their prices fall – that’s important as its underpin some of our largest’ s companies profits. Fresh data on Friday showed the major iron ore companies, BHP, Rio, Fortescue, will be shipping almost 6% less than last year in the final quarter of this year. So the risk is the situation in China worsens, and iron ore shipments could continue to fall and hurt Fortescue, BHP and Rio. Early Monday AM, iron ore trades 0.6% lower. Be mindful investors could be looking to take profits or write options for downside protection in case markets fall on China concerns. Inversely; stocks not exposed to China could likely continue to rally given its first Christmas with no global lockdowns (excluding China). Consider looking at retailers doing well following Black Friday sales and ahead of the likely Santa rally; Shares in JB Hi Fi, Harvey Norman, Premier Investments (owner of Jay Jays and Peter Alexander) are all trading up 20% from June. FX: Dollar getting a safe-haven bid In the previous weeks, we have often argued that the USD is turning more risk-sensitive rather than being yield-sensitive with most of the interest rate story being priced in by the markets now. A confirmation of that trend was seen this morning when US 10-year yields stayed below 3.7% at the Asia open, while the USD rose higher amid a safe haven bid due to the protests in China. Biggest losers on the G10 board were the AUD and NZD, both down 0.5% with the risk-off move. The Japanese yen was more stable, depicting a risk-sensitivity as well, and USDJPY stayed range-bound around 139.30. EURUSD Crude oil (CLZ2 & LCOF3)to be weighed by China turmoil and high Russia cap As hopes of a China reopening retreated last week with a fresh surge in cases, crude oil prices fell sharply with WTI down ~5%. Meanwhile, EU talks on a cap on Russian oil have hinted at a higher price of $65-70/barrel, which suggests Russia’s supply to international markets could continue. Talks are likely to continue this week, and the protests in China mean more short-term headwinds to oil demand outlook are on the horizon. China’s central bank announced a cut in RRR, but that is unlikely to fully offset the demand weakness concerns. WTI future traded around $76/barrel in the Asian morning while Brent was below $84, and focus is likely to shift to the OPEC meeting on December 4 after we get past the cap negotiations. There were also reports that Iraq could increase oil export capacity, to add 1mn to 1.5mn barrels/day by 2025   What to consider Protests against Covid lockdowns sprang up in several Chinese cities as local governments tightened restrictions Anger over suspected delays to rescue from a deadly fire burst into anti-lockdown protests in Xinjiang. After a fire at a locked-down apartment killed 10 people, hundreds of angry residents in Urumqi, Xinjiang took to the street to protest against the Covid lockdown imposed more than three months ago. Meanwhile, daily new cases shot up to a record high of 39,506, with Beijing, Guangzhou, Chongqing, and Shanghai significantly tightening movement restrictions. Video footage and photos on social media showed that protests against Covid restrictions sprang up in several other cities over the weekend, including Wuhan, Nanjing, Beijing and Shanghai. China’s PBOC cut the reserve requirement ratio (RRR) by 25bps The People’s Bank of China (PBOC) announced a reduction of 25bps for all banks except for some small which had already had their RRR cut to 5% earlier. The weighted average of RRR across all banks falls to 7.8% from 8.1% after the latest move. The PBOC projects that the reduction in RRR will make available to banks an additional RMB400 billion. The 25bps cut this time, the same as the cut in April this year, was small by historical standards when 50bp or 100bp cuts seemed to be the norm. It helps improve banks’ funding costs but it may do little to boost the economy as the demand for loans is subdued. RBA’s Lowe still sees a strong demand; but retail sales turned negative The Reserve Bank of Australia Governor Lowe appeared before the Australian parliament's Senate Economics Legislation Committee and said that demand is still too strong relative to supply. He said he is unsure about labor market, and wage growth is consistent with inflation returning to target. He was worried about housing supply and expects to see rental pressure over the next year. Australia’s October retail sales, however, dipped into negative territory for the first time this year, coming in at -0.2% MoM vs. expectations of +0.5%.  The U.S. bans telecommunications equipment from China’s Huawei, ZTE and more The U.S. Federal Communications Commission said on Friday that the U.S. had decided to ban the import and sale of telecommunication equipment from China’s Huawei Technologies, ZTE, Hytera Communications, and surveillance equipment makers Dahua Technology and Hangzhou Hikvision Digital Technology. The U.S. regulator said these Chinese telecommunication equipment makers pose “an unacceptable risk” to U.S. communication networks and national security. Chevron gets US license to pump in Venezuela Chevron had been banned from pumping due to US sanctions against the government of Venezuelan President Nicolás Maduro. But WSJ reported that on Saturday, the US said it will allow Chevron to resume pumping oil from its Venezuelan oil fields. The shift may open the door to other oil companies that had operated previously in Venezuela, despite the near-term headwinds and the massive investments that may be needed.  Pinduoduo (PDD:xnas) is scheduled to report Q3 results on Monday After a strong beat for Q2, analysts are expecting Pinduoduo’s Q3 results to remain solid with Q3 revenue growth to come at 44% y/y and the EBITDA margin to stay at healthy levels around 21.2%. Was Q3 margin pressure the canary in the coal mine? According to the analysis done by Peter Garnry, with 97% of the companies having reported, S&P 500 earnings were down 2.5% q/q making Q3 the worst earnings season since the market bounced back from the abyss during the early days of the pandemic. European and Chinese earnings have been even worse declining around 9% q/q driven by more intense margin pressures than observed in the US. On revenue European companies did the best with revenue up 6.7% q/q compared to only 3.9%b q/q for S&P 500. The average q/q revenue growth rate in the past two years was 5.3% in Europe and 3.5% in the US. Part of the difference can be explained by the stronger USD. The key dynamic for equities next year is the evolution of operating margins and if they go down to average levels in the past then headwinds will be too much for companies, and lower earnings next year will likely follow.   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-market-insights-28-nov-2022-28112022
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

Elon Musk Introduces Verified Accounts On Twitter

Saxo Bank Saxo Bank 28.11.2022 08:57
Summary:  A pivotal post-holiday week ahead kicked off with risk-off due to protests in China over the Zero covid policy, and China PMIs due this week could potentially signal demand weakness as well. The week is also key for US data and Fed as financial conditions are the easiest since May and more pushback may be on the cards with the most hawkish members of the Fed board, Powell and Bullard, on the wires this week before the FOMC quiet period kicks in. We also get ISM manufacturing, PCE inflation and jobs data that will be key for the dollar. Eurozone inflation may soften, but that won’t be enough for the ECB to take the foot off the pedal, while Australian CPI will pressure the RBA to continue with its steady rate hikes. An important week ahead for incoming US data: ISM manufacturing, PCE inflation and jobs data to be key for the dollar This week will offer an interesting test for markets, including the US dollar, which trades at pivotal levels, as we have a look at the next important data macro data points out of the US, especially the PCE inflation data and the Friday November jobs report. Core PCE is forecast to rise 0.3% MoM in October from 0.5% previously. In addition, we’ll have a look at the ISM manufacturing survey for the month on Thursday, which is also expected to slip into contraction after the decline in S&P flash PMIs last week resulted in further easing of Fed tightening expectations. The question for the run-up into the December 14 FOMC meeting and in the month or so beyond is how long the market can continue to celebrate the Fed easing off the accelerator, when the reason it is doing so is that economic slowing and an eventual recession threaten. Normally, a recession is associated with poor market performance as profits fall and credit risks mount. Bullard and Powell speak – pushback against easing financial conditions? While the economic data continues to slow, and markets continue to cheer on that, it will key for Fed members to bring the focus back to easing of financial conditions and consider what that means for inflation. Chicago Fed national financial conditions index eased further in the week of November 18, bringing financial conditions to their easiest levels since May. Most of the Fed members that have spoken since that soft CPI release for October have pushed back against pivot expectations, but it hasn’t been enough. Further pushback is still needed if the Fed is serious about bringing inflation under control, and only the most hawkish members of the committee Bullard and Powell may be able to deliver that. Both will be on the wires this week. Bullard speaks on Monday while Powell discusses the economic outlook and labor market on Wednesday. Other Fed members like Williams, Bowman, Cook, Logan and Evans will also be on the wires. China PMIs likely to show demand weakness, Asia PMIs also due China’s NBS manufacturing PMI is expected to decline to 49.0 in November, further into the contractionary territory, from 49.2 October, according to the survey of economists conducted by Bloomberg. The imposition of movement restrictions in many large cities has incurred disruption to economic activities. High-frequency data such as steel rebar output, cement plants’ capacity utilization rates, and container throughputs have weakened in November versus October. Likewise, the Caixin manufacturing PMI is expected to drop to 49.0 (Bloomberg survey) in November from 49.2 in October. Economists surveyed by Bloomberg expect the NBS Non-manufacturing to slow to 48.0. in November from 48.7 in October, on the enlargement of pandemic containment measures. PMIs for other Asian countries are also due to be reported this week, and the divergence between the tech-dependent North Asian countries like Taiwan and South Korea vs. more domestic-oriented South Asian countries like India and Indonesia will likely continue, with the latter outperforming. EUR may be watching the flash Eurozone CPI release Eurozone inflation touched double digits for October, and the flash release for November is due this week. The headline rate of the harmonized index of consumer prices (HICP) is expected to ease slightly to 10.4% YoY from 10.7% YoY last month. The core rate that excludes food and energy prices is forecast to however remain unchanged at 5% YoY. This print will be key for markets as the magnitude of the ECB’s next rate hike at the December meeting is still uncertain, and about 60bps is priced in for now. But even with a slight cooling in inflation, which will most likely be driven by lower energy costs, there is a possibility that inflation will likely remain high in the coming months as winter months progress and cost of living gets worse. Australia’s economy continues to weaken. Retail slides. CPI data is the next catalyst Australia has continued to receive mostly weaker than expected economic data, that support the RBA’s dovish tone. Today Australian retail trade data unexpected fell, showing sales dropped 0.2% from the prior month. This reflects that consumers are feeling the strain of inflation and rising interest rates. As a house, Saxo thinks further weakness in spending is likely ahead in 4Q and into 2023, with the full impact of rate hikes passing through households, and increasing amount of Australian in financial duress. This view is somewhat supported by the RBA’s thinking. The data the RBA will be watching next is ; Australian inflation data for October, released Wednesday 30 November. Inflation is likely to have fallen over the month, however consensus expects inflation to have increase year on year, up 7.6% year on year. If the market thinking comes to fruition, this would show Australian inflation rose from the prior reading (whereby CPI rose 7.3% yoy). Regardless, if inflation does rise, we think the RBA will likely save face, and keep hiking rates by 0.25%, with its next hike due December 6. Twitter to launch its ‘Verified’ service After Musk acquired Twitter last month for $44 billion, he plans to "tentatively" roll out its verified service on December 2, with multiple colours for different types of users. Blue checks will be allotted to people, while verified company accounts will get gold checks and grey marks will be given to governments. Musk said all verified accounts will be manually authenticated, before the check activates, which will be cumbersome. Twitter recently halted the launch of its $8 verified service, as it failed to cease impersonation issues the company has been having. Key earnings to watch this week Peter Garnry highlights earnings results to watch in his note. Pinduoduo on Monday is the key earnings focus in China with analysts expecting Q3 revenue growth of 44% y/y and the EBITDA margin staying at healthy levels around 21.2%. The main menu next week is on Wednesday with earnings from US technology companies Salesforce and Snowflake. Analysts expect Salesforce FY23 Q3 (ending 31 October) revenue growth to decline to 14% y/y down from 27% y/y a year ago and analysts expect Snowflake to report FY23 Q3 (ending 31 October) revenue growth of 61% y/y down from 110% y/y a year ago. Expectations for both companies highlight the slowdown in technology enterprise spending that we have seen from other technology companies including Intel, HP etc. Key economic releases & central bank meetings this week Monday, Nov 28 Eurozone M3 (Oct)UK CBI Retail Sales (Nov)U.S. Fed Bullard at MarketWatch Live Event Tuesday, Nov 29 U.S.  Conference Board Consumer Confidence (Nov)U.S. St. Louis Fed President Bullard speechJapan Unemployment Rate (Oct)Japan Retail Sales (Oct) Wednesday, Nov 30 U.S. ADP Private Employment (Nov)U.S. JOLTS Job Openings (Oct)U.S.  Fed Chair Powell speechEurozone HICP (Nov, flash)Germany Unemployment Rate (Nov)Japan Industrial Production (Oct)Japan Housing Starts (Oct)China NBS Manufacturing PMI (Nov)China NBS Non-manufacturing PMI (Nov)India Real GDP (Q3)Thailand Bank of Thailand policy meeting Thursday, Dec 1 U.S. PCE (Oct)U.S. ISM Manufacturing (Nov)U.S. Initial Jobless Claims (weekly)Eurozone Unemployment Rate (Oct)Japan Capital Spending (Q3)Japan Consumer Confidence (Nov)China Caixin China PMI Manufacturing (Nov) Friday, Dec 2 U.S. Nonfarm Payrolls (Nov)U.S. Unemployment Rate (Nov)Eurozone PPI (Oct)   Key earnings releases this week Monday: Pinduoduo, Capitaland, H World Group Tuesday: Li Auto, DiDi Global, Bank of Nova Scotia, Intuit, Workday, Crowdstrike, HP Enterprise, NetApp, Shaw Communication Wednesday: Royal Bank of Canada, National Bank of Canada, Salesforce, Synopsys, Snowflake, Splunk, Hormel Foods, KE Holdings Thursday: Canadian Imperial Bank of Commerce, Bank of Montreal, Toronto-Dominion Bank, Marvell Technology, Veeva Systems, Ulta Beauty, Zscaler, Dollar General, Kroger     Source: https://www.home.saxo/content/articles/macro/saxo-spotlight-28-nov-2022-28112022
Commodities Outlook 2023: Stainless Steel Is Still Key For Nickel Semand

Iron Ore Shipments Could Continue To Fall And Hurt Earnings And Shares

Saxo Bank Saxo Bank 28.11.2022 09:06
Summary:  Dramatic scenes of widespread protests in China against Covid policies there have pulled sentiment lower, with US yields dipping to new local lows and crude oil prices pushing on cycle lows even after Friday’s drop. The USD has firmed against most currencies, but the Japanese yen is stronger still as the fall in yields and energy prices support the currency. This is a sudden powerful new distraction for markets when this week was supposed to be about incoming US data.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures failed to touch the 200-day moving average in Friday’s trading retreating slightly into the weekend. This morning the index futures are continuing lower bouncing around just above the 4,000 level. The US 10-year yield declining to 3.65% with the 3.5% level being the likely downside level the market is eyeing is naturally offering some tailwind for equities in the short-term. However, the key dynamic to get right now in the medium term is the potential earnings recession caused by margin compression as the economy slows down and wage pressures remain high. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Mainland China and Hong Kong stock markets retreated as investors were wary about the surge in daily new Covid cases across China and the outburst of anti-strict-control protests in several mega cities, including Beijing and Shanghai. The cut in reserve requirement ratio by the central bank on Friday evening did not give the market much of a boost. Hang Seng Index and CSI 300 plunged more than 2% each. The China internet space fell 2%-5%. Macao casino stocks bucked the trend and rallied following the Macao SAR Government’s announcement to renew casino licenses with all incumbent operators. Wynn Macau (01128:xhkg) jumped nearly 16%. The three leading Chinese catering chains listed in Hong Kong gained 4% to 6%. USD and JPY firm overnight as Chinese Covid protests drag on risk sentiment The US dollar was higher overnight against most currencies even as US treasury yields hit new cycle lows as widespread protests in China against the Covid policies there are weighing heavily on risk sentiment. Hardest hit among G10 currencies has been the Aussie, with AUDUSD trading back below 0.6700 after pulling above 0.6780 at one point on Friday. USDCNH jumped above the important 7.200 level. The hit to yields and perhaps lower crude oil prices are driving a strong revival in the Japanese yen, which traded higher even against the US dollar overnight, taking USDJPY back toward the recent lows overnight. This is a sudden new distraction for FX traders, when this week was supposed to be all about the incoming US economic data, including the October PCE inflation data up on Thursday and the November jobs data on Friday. Crude oil plunges as China unrest rattles markets A weak sentiment spread across commodities as markets opened in Asia with crude oil, copper and iron ore all trading sharply lower following a weekend that saw waves of unrest in China, the world's biggest consumer of raw materials. Protest and boiled up frustration against President Xi’s increasingly unpopular anti-virus curbs erupted over the weekend, raising the threat of a government crackdown. While the short-term demand outlook may take a hit and add further downside pressure to prices, the eventual reopening is likely to be supported by massive amounts of stimulus. The market is also watching ongoing EU price cap discussions, next week’s OPEC+ meeting and rollout of an embargo on seaborne Russian crude and Chevron receiving a license to resume oil production in Venezuela. Gold (XAUUSD) Gold trades unchanged with safe haven bids in bonds and the dollar offsetting each other, while silver (XAGUSD), due to its industrial metal link, trades down more than 2% following a weekend of covid restriction protests across China. After finding support in the $1735 area last week, a break above $1765 may signal a return to key resistance at $1788, but lack of ETF buying still makes it hard to confirm a major change in direction. Aside from China, the market will be watching incoming US data for any signs of a slowdown in the pace of future rate hikes (see below) US treasuries find safe haven appeal, driving new local lows in yields. (TLT:xnas, IEF:xnas, SHY:xnas) The risk-off mood overnight is driving strong safe haven flows into US treasuries, as the 10-year benchmark traded to new local lows below 3.65%, with little room left to the pivotal 3.50% level. The 2-10 yield slope hit a new cycle extreme of –80 basis points overnight, a deepening indication of an oncoming recession. The 3-month treasury bills vs 10-year treasury notes spread went to minus-64bps, a level usually seen within 12 months preceding the onset of a recession. For a detailed discussion of our take on the outlook of bonds, please refer to this note we published last Friday. This week, interesting to see how the market balances the implications of what is unfolding in China versus incoming data in the US, especially the November jobs report on Friday. What is going on? Protests against Covid lockdowns in several Chinese cities Anger over suspected delays to rescue from a deadly fire burst into anti-lockdown protests in Xinjiang. After a fire at a locked-down apartment killed 10 people, hundreds of angry residents in Urumqi, Xinjiang took to the street to protest against the Covid lockdown imposed more than three months ago. Meanwhile, daily new cases shot up to a record high of 40,052, with Beijing, Guangzhou, Chongqing, and Shanghai significantly tightening movement restrictions. Video footage and photos on social media showed that protests against Covid restrictions sprang up in several other cities over the weekend, including Wuhan, Nanjing, Beijing, and Shanghai. China’s PBOC cut the reserve requirement ratio (RRR) by 25bps The People’s Bank of China (PBOC) announced a reduction of 25bps for all banks except for some small which had already had their RRR cut to 5% earlier. The weighted average of RRR across all banks falls to 7.8% from 8.1% after the latest move. The PBOC projects that the reduction in RRR will make available to banks an additional RMB400 billion. The 25bps cut this time, the same as the cut in April this year, was small by historical standards when 50bp or 100bp cuts seemed to be the norm. It helps improve banks’ funding costs, but it may do little to boost the economy as the demand for loans is subdued. The U.S. bans telecommunications equipment from China’s Huawei, ZTE and more The U.S. Federal Communications Commission said on Friday that the U.S. had decided to ban the import and sale of telecommunication equipment from China’s Huawei Technologies, ZTE, Hytera Communications, and surveillance equipment makers Dahua Technology and Hangzhou Hikvision Digital Technology. The U.S. regulator said these Chinese telecommunication equipment makers pose “an unacceptable risk” to U.S. communication networks and national security. RBA’s Lowe still sees a strong demand; but retail sales turned negative The Reserve Bank of Australia Governor Lowe appeared before the Australian parliament's Senate Economics Legislation Committee and said that demand is still too strong relative to supply. He said he is unsure about labor market, and wage growth is consistent with inflation returning to target. He was worried about housing supply and expects to see rental pressure over the next year. Australia’s October retail sales, however, dipped into negative territory for the first time this year, coming in at -0.2% MoM vs. expectations of +0.5%. Chevron gets US license to pump in Venezuela Chevron had been banned from pumping due to US sanctions against the government of Venezuelan President Nicolás Maduro. But WSJ reported that on Saturday, the US said it will allow Chevron to resume pumping oil from its Venezuelan oil fields. The shift may open the door to other oil companies that had operated previously in Venezuela, despite the near-term headwinds and the massive investments that may be needed. Bullard and Powell speak – pushback against easing financial conditions? While the economic data continues to slow, and markets continue to cheer on that, it will key for Fed members to bring the focus back to easing of financial conditions and consider what that means for inflation. Chicago Fed national financial conditions index eased further in the week of November 18, bringing financial conditions to their easiest levels since May. Most of the Fed members that have spoken since that soft CPI release for October have pushed back against pivot expectations, but it hasn’t been enough. Further pushback is still needed if the Fed is serious about bringing inflation under control, and only the most hawkish members of the committee Bullard and Powell may be able to deliver that. Both will be on the wires this week. Bullard speaks on Monday while Powell discusses the economic outlook and labor market on Wednesday. Other Fed members like Williams, Bowman, Cook, Logan and Evans will also be on the wires. Commodity companies exposed to China are vulnerable for further pull backs This week focus is on companies exposed to China, given forward earnings are likely to be downgraded following further China lockdowns and protests. Be cautious that investors could be looking to take profits or write options for downside protection in commodity exposed equites. Also note, on Friday fresh data showed that the major iron ore companies, BHP, Rio, Fortescue, are likely to be shipping almost 6% less than last year, in the final quarter of this year, and if lockdowns worsen, iron ore shipments could continue to fall and hurt iron ore majors' forward earnings and shares. On Monday in Asia, the iron ore (SCOA) fell 1.6% dragging down shares of ASX listed BHP, and Rio Tinto, who both lost about 1%+. What are we watching next? Weighing the sudden new intrusion of the Chinese protests story versus incoming US data The recent narrative has been that markets have room to celebrate the downward shift in Fed tightening expectations and hopes that an eventual opening up of China’s economy will help boost global growth. The widespread protests at the weekend have changed the plot, driving new uncertainty on how things will develop and possibly outweighing a considerable portion of the implications of the next important data macro data points out of the US, especially the Friday November jobs report. As well, we’ll have a look at the ISM Manufacturing survey for the month on Thursday. The situation in China aside (which it won’t be), the question for the run-up into the December 14 FOMC meeting and in the month or so beyond is how long the market can continue to celebrate the Fed easing off the accelerator, when the reason it is doing so is that economic slowing and an eventual recession threaten. Normally, a recession is associated with poor market performance as profits fall and credit risks mount. Apple production risk is on the rise. The protests in China and the unrest around Apple’s largest manufacturing hub for its iPhone could lead to a production shortfall of close to 6mn iPhone Pro which was a Morgan Stanley estimate and was published before the intensified issues at the Apple manufacturing site. Earnings to watch 98% of the S&P 500 companies have reported Q3 earnings reducing the earnings release impact from US equities. But European and Chinese companies are still reporting although the volume of earnings releases is also getting lower. Key earnings release to watch today is Pinduoduo which is expected to grow revenue by 44% y/y with EBITDA margin expanding to 21.2% as their online marketing revenue and uptake remain strong despite the slowing Chinese economy. Monday: Pinduoduo, Capitaland, H World Group Tuesday: Li Auto, DiDi Global, Bank of Nova Scotia, Intuit, Workday, Crowdstrike, HP Enterprise, NetApp, Shaw Communication Wednesday: Royal Bank of Canada, National Bank of Canada, Salesforce, Synopsys, Snowflake, Splunk, Hormel Foods, KE Holdings Thursday: Canadian Imperial Bank of Commerce, Bank of Montreal, Toronto-Dominion Bank, Marvell Technology, Veeva Systems, Ulta Beauty, Zscaler, Dollar General, Kroger Economic calendar highlights for today (times GMT) 1400 – ECB President Lagarde to speak 1530 – US Nov. Dallas Fed Manufacturing 1700 – US Fed’s Williams (voter) to speak 1700 – Us Fed’s Bullard (voter 2022) to speak 2330 – Japan Oct. Jobless Rate/Retail Sales Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-28-2022-28112022
ATM Grupa: Buy Rating and Valuation Update

Analytical Report – DataWalk – WSE:DAT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 28.11.2022 09:26
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Abalytical Coverage Support Program 3.0 Event: Sale to one of uniformed services of the Polish National Government. During Friday’s session DataWalk informed that that it signed an agreement with one of uniformed services of the Polish National Government, for license sale of DataWalk platform. The DataWalk software will be used for applications related to the customer's operational activities. Expected impact: Slightly positive – discounted during Friday’s session. Anlyst: Tomasz Rodak, CFA GPW’s Analytical Coverage Support Programme 3.0  
Asia Market: Optimistic Headlines From Regional Leaders China And Japan

The Asia-Pacific Region Is Facing Immense Heat

TeleTrade Comments TeleTrade Comments 28.11.2022 09:34
Asian indices have witnessed intense heat amid unrest in China due to the anti-Covid lockdown. The USD Index is struggling to surpass the immediate hurdle of 106.40 as investors await US GDP data. Oil prices have refreshed their 11-month low near $74.00 amid weaker projections. Markets in the Asian domain are facing immense pressure amid unrest in China on Covid-19 restrictions. Individuals have come to the roads protesting for a rollback of Covid-19 restrictive measures. The resurgence of Covid-19 in China has been sustained for several months and now households are frustrated and angry being at home without solid earnings to augment basic needs. The situation of protests in China along with slogans of ‘democracy not dictatorship’ has triggered the risk of civil war. This has triggered a risk-aversion theme in global markets, and, the Asia-Pacific region is facing immense heat. Meanwhile, state banks in China are heavily purchasing equities to propel battered markets. At the press time, Japan’s Nikkei225 slipped 0.50%, ChinaA50 plunged 1.88%, Hang Seng plummeted 1.86% while Nifty50 has gained 0.24% as the China+1 strategy is going to strengthen Indian equity markets. The US Dollar Index (DXY) is aiming to establish its business above the two-day high of 106.40 amid an improvement in safe-haven’s appeal. The USD index is expected to remain on tenterhooks ahead of the US Automatic Data Procession (ADP) employment data. As per the consensus, the US economy has added 200k jobs in November vs. the prior release of 239k. Accelerating interest rates and weaker economic projections have forced firms to postpone the recruitment process. On the oil front, oil prices have refreshed their 11-month low near $74.00 as weaker projections for aggregate demand in China have also impacted guidance for oil demand. China is a leading importer of oil and sluggish demand in China is propelling oil bears.  
Steady BoE Rate Expectations Amid Empty Event Calendar in the UK

Saxo Bank Podcast: Protests In China, Lower Yields, Lower Crude Oil, Apple Risks A Further Haircut On The Risk And More

Saxo Bank Saxo Bank 28.11.2022 12:24
Summary:  Today we look at how the market is absorbing the news of widespread protests in China against Covid policies there, from lower yields to lower crude oil prices. That combination offers strong support for the Japanese yen, while Apple risks a further haircut on the risk of widening production disruptions. It is worth noting that corn prices in China are diverging from prices elsewhere, also on Covid policy disruptions. Elsewhere, we consider the status of "de-globalization" (or is it re-globalization?), and look at incoming earnings and macro calendar events for the week ahead. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: https://www.home.saxo/content/articles/podcast/podcast-nov-28-2022-28112022
The China’s Covid Containment Continued To Negatively Impact The Output At The End Of 2022

China Is Finding It Increasingly More Difficult To Leave Its Strict Covid Zero Policies

Saxo Bank Saxo Bank 28.11.2022 13:40
Summary:  Our Chinese equity baskets were down around 5% last week as China is finding it increasingly more difficult to leave its strict Covid zero policies behind as case figures are surging again and protests are erupting across several locations in the country including the main manufacturing hub for Apple and its iPhone. At the other end of the spectrum the defence basket is continuing its momentum up 3.8% last week. The performance means that the defence basket could get closer to end the year as the best performing theme basket this year. The biggest gainers in the defence basket last week were Rolls-Royce and Leonardo. China continues to be out of sync with the world The biggest outliers last week among our equity theme baskets were our two Chinese equity baskets declining 4.5% and 5% respectively as rising Covid case figures dented the narrative that China can smoothly reopen their economy. Already last week there were increasing protests at different locations in China including Apple’s biggest factory that produces its key product the iPhone. This has led sell-side firms to cut their forecast for iPhone production and investors are increasingly worried Apple’s supply chain risks. The protests against China’s Covid zero policies have not eased over the weekend so this theme will continue to impact markets this week. If we zoom out and take a longer look at Chinese equities it has been miserable period since early 2010 with Chinese equities underperforming MSCI World in total return USD terms by 7.9% annualized. But especially the period since mid-2021 has been brutal with the Chinese economy undergoing severe calibrations amid a troubling real estate sector and now the disruptions from the strict Covid zero policies. We remain underweight Chinese equities long-term as the common prosperity policies will continue cause headwinds for Chinese corporate sector profitability which has been very weak since the pandemic started. MSCI China vs MSCI World (total return USD terms) | Source: Bloomberg Could defence stocks end the year on a high? The defence basket was the best performing basket last week gaining 3.8% as the ongoing geopolitical landscape in Europe around the war in Ukraine will continue to drive military spending higher. With just one month to go and the Chinese reopening narrative shattered to pieces over the past week commodities could be under pressure, so if defence stocks can muster more momentum they might even end the year as the best performing theme basket. The two best performing stocks in the defence basket last week were Rolls-Royce and Leonardo up 7.5% and 6% respectively. Roll-Royce seems to have turned a corner and 10 days ago the company’s credit was lifted to positive outlook by S&P from stable suggesting the underlying cash flow generation is improving. Leonardo is still enjoying the tailwind from its good Q3 results and the Q4 performance will likely be driven by another good quarter in its defence and helicopter segments despite looming inflationary pressures on its input costs.   Source: https://www.home.saxo/content/articles/equities/weekly-update-saxo-thematic-investing-performance-28112022
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

US-Listed Chinese Stocks Have Already Fallen Sharply

InstaForex Analysis InstaForex Analysis 28.11.2022 14:14
On Monday, US stock indices fell amid growing unrest in China caused by restrictions had a negative impact on global markets. The US dollar depreciated after stabilizing during the Asian session on risk aversion. US Treasury bonds rose. Futures on the S&P 500 index lost more than 0.9%, while the NASDAQ index was down more than 1.2%. The Dow Jones Industrial Average declined by 0.6%. European stock market indices fell, and the reason for it are oil companies, which lost the most because of the sharp decline in oil prices. The brewing turmoil in China is affecting expectations about the country's continued path to unlock the economy from restrictions. This diminishes the prospect of more moderate interest rate hikes by the Federal Reserve, which have allowed investors to turn their attention back to riskier assets. Traders who used to bet that China might abandon its Covid Zero policy sooner than expected are now beginning to change their minds. Meanwhile, China's economy is unlikely to re-open soon. It may ill put it at greater risk than previously expected. Endless and pointless lockdowns may lead to a serious health care crisis and slower GDP growth this year. US-listed Chinese stocks have already fallen sharply during the premarket trading, with Internet companies being hit the most. Apple Inc. have fallen because of information that a disturbance at its key manufacturing center in China has begun, which could lead to disruptions in production of nearly 6 million iPhone Pro devices. Oil has fallen sharply and is trading at its lowest level since December, as a wave of unrest in China is also affecting demand, overshadowing demand for risky assets as well. Gold recovered from the previous decline that occurred amid the US dollar strengthening. After the Fed meeting, investors digested a lot of economic data, which eased fears about inflation. Thus, a smaller rate hike is expected but so far it is not giving much support to the stock indices. All eyes will be on the US jobs report this week, as well as Fed Chairman Jerome Powell and New York Fed President John Williams' speeches. As for the S&P 500 index, the pressure on the trading instrument has returned. Bulls now need to protect the support level of $4,000. As long as the index is trading above this level, the demand for risky assets may persist. This is likely to strengthen the trading instrument and return the level of $4,038 under control. If the price pierces $4,064, it may start a further upward correction with the target at resistance of $4,091. The next target is located in the area of $4,116. If the S&P 500 index declines, bulls should defend the psychologically important level of $4,000. If this level is broken through, the trading instrument may be pushed down to $3,968, opening the way to a new support of $3,942. Relevance up to 11:00 2022-11-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328314
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

Stock Markets Opened The Week Lower | Apple Seeing Losses

InstaForex Analysis InstaForex Analysis 29.11.2022 08:08
Stock markets opened the week lower as investors worry that China may have to further tighten its Covid restrictions. That could undermine global economic growth prospects, and has led to protest across key cities. Data indicates that the S&P 500 cut its monthly rally, with Apple seeing losses after Bloomberg News reported that unrest at its key manufacturing center in Zhengzhou is likely to lead to a production shortfall of nearly 6 million iPhone Pro units this year. Meanwhile, Amazon made gains in retail sales, and analysts say the Cyber Monday results will paint a fuller picture of demand this holiday season. European stock indices also fell, following the US. The unrest in China is complicating the country's path to economic opening. This, along with the potential moderate rate hikes by the Fed in upcoming sessions, has spurred interest towards riskier assets. Analysts at Goldman Sachs have warned that the chances of a disorderly exit from Beijing's Covid Zero policy are also rising. Just as the S&P 500 was trying to break above its mid-November highs, sentiment turned negative, threatening the recent market momentum. The timing is most inconvenient here as the index is approaching an important technical zone in the form of both the 2022 downtrend and the 200-day moving average. If the bullish mood ends, short-term trades could trigger profit-taking. In Europe, ECB President Christine Lagarde said that she would be surprised if inflation in the region peaked. This would mean that interest rate hikes are not over. On the other hand, Fed Chairman Jerome Powell is expected to reinforce expectations that the central bank will slow the pace of rate hikes next month. However, the fight against inflation will last until 2023. Key news for this week: * US consumer confidence, Tuesday * EIA crude oil report, Wednesday * China PMI, Wednesday * Fed Chairman Jerome Powell's speech, Wednesday * Fed Beige Book, Wednesday * US GDP, Wednesday * US PMI, Thursday * US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday * Bank of Japan Governor Haruhiko Kuroda's speech, Thursday * US unemployment and nonfarm payrolls report, Friday *ECB chief Christine Lagarde's speech, Friday     search   g_translate     Relevance up to 19:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328363
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Dallas Fed Manufacturing Index Came In Less Bad Than Expected

Saxo Bank Saxo Bank 29.11.2022 09:06
Summary:  A slew of Fed speakers remained hawkish on Monday, with Bullard saying that markets were under-pricing the risk of a more aggressive Fed This added to the risk-off tone from the protests in China ahead of the focus turning to an array of key US data due in the week. The US Dollar found a fresh bid into the US close, while the yen is being supported by safe haven demand and shifting tone from BOJ officials. Sharp swings in oil prices as well amid demand weakness concerns being reversed by hopes of an OPEC+ production cut, as the cartel meets over the coming weekend. What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated on China Covid protests and hawkish Fedspeak U.S. equities slid on the outbreak of protests against Covid lockdowns across large cities in China and hawkish comments from Fed officials. Nasdaq 100 dropped 1.4% and the S&P500 lost 1.5%. The selloff was board-based as all 11 sectors of the S&P500 declined on Monday. Energy and materials stocks took a hit as oil and other commodity prices retreated. Apple (AAPL:xnas) fell 2.6% as the iPhone maker could fact a production shortfall of as many as 6 million handsets as a result of the labour unrest in the Foxconn factory in Zhengzhou. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) pared early gains and finished Monday little changed U.S. treasuries caught a risk-off bid in Asian hours as the Covid protests in China triggered buying in safe-haven assets. The gains were pared when New York came with the St. Louis Fed President Bullard saying that the Fed is “is going to need to keep restrictive policy…to continue through -- as least through – next year.” The 10-year finished unchanged at 3.68%. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Mainland China and Hong Kong stock markets retreated as investors were wary about the surge in daily new Covid cases across China and the outburst of anti-strict-control protests in several mega cities, including Beijing and Shanghai. The cut in reserve requirement ratio by the central bank on Friday evening did not give the market much of a boost. Hang Seng Index declined 1.6% and CSI 300 lost 1.1%. The China internet space fell 2%-4% except for Meituan (03690:xhkg) which gained 2% on strong Q3 results reported last Friday. Macao casino stocks bucked the trend and rallied following the Macao SAR Government’s announcement to renew casino licenses with all incumbent operators. Wynn Macau (01128:xhkg) jumped nearly 15%. Stocks of the Chinese catering chains listed in Hong Kong gained some market speculation of earlier exit from the dynamic zero-Covid policy due to the now hard-to-contained outbreaks of inflection across the country. Haidilao (06862:xhkg) surged 6.8%. Buying on Hang Seng Index futures emerged in overnight trading in New Your hours and saw the futures contract jump 1.2% and the Nasdaq Golden Dragon China Index rise 2.8%. FX: USDJPY getting a safe haven bid, but there’s more! Choppy moves in the US dollar on Monday amid risk off and volatility in the US yields. But hawkish Fed speak, with Williams and Bullard both hinting at higher rates than the September dot plot, supported a final leg higher in the USD in the late US session. EURUSD touched highs of 1.0500 but reversed all of the day’s gains later with focus on inflation numbers due tomorrow. USDJPY also touched lows of 137.50 before reversing but a clear shift in tone in BOJ officials is being seen in the last few weeks keeping the BOJ pivot narrative alive into early 2023 before Kuroda or just after Kuroda retires. Kuroda referred to wage gains as being supportive of more stable levels of inflation which gave the yen a boost on Monday. Crude oil (CLZ2 & LCOF3) reversed losses on OPEC cut hopes Crude oil prices made a sharp u-turn on Monday after dipping lower earlier in the session on concerns from protests in China which delayed the hopes of a reopening further and a hawkish commentary from Fed speakers (read below). WTI futures fell to lows of $74/barrel while Brent was down to $81. However, losses were reversed later as OPEC+ delegates said deeper production cuts could be an option when they meet this weekend. OPEC+ is scheduled to meet this Sunday to review its current production plan. At the last meeting it cut output quotas by 2mb/d. Saudi Energy Minister Prince Abdulaziz bin Salman said that OPEC+ was ready to intervene with further supply reductions if it was required to balance supply and demand. Meanwhile, European talks on a price cap have stalled.   What to consider? Fed speakers press for higher rates James Bullard (2022 voter) said markets are underestimating the chances that the FOMC will need to be more aggressive next year, adding tightening may go into 2024. He also said that rates will need to be kept at a sufficiently high level all through 2023 and into 2024 even if the Fed reaches restrictive territory by Q1 2023. John Williams (voter) said "there's still more work to do" to get inflation down. He also hinted at “modestly higher” path of interest rates than what he voted for in September, sending another signal that December’s dot plot could see an upward revision, while also hinting at rate cuts in 2024. He provided some clear forecasts: unemployment rate rising from 3.7% to 4.5%-5.0% by late 2023; inflation declining to 5.0-5.5% by the end of 2022 and 3.0-3.5% by late 2023; modest economic growth this year and in 2023. The central bank isn't near a pause, Loretta Mester (2022 voter) told the FT. Richmond Fed President Barkin also spoke about higher-for-longer rates, despite moving slower BlockFi – another casualty in the FTX saga BlockFi Inc. filed for Chapter 11 bankruptcy, the latest crypto-industry operator to seek court protection in the wake of FTX’s collapse. It sold $239 million of crypto ahead of its filing. ECB’s Lagarde maintains tightening stance ECB President Lagarde repeated her previous comments that the ECB will raise rates further but nothing on how much further, and on how fast they need to go. She said the bank will be data-dependent, adding the ECB may need to move into restrictive territory. She also said that she will be surprised if inflation in the Eurozone (due to be reported on Wednesday 30/11) peaked last month. Even if the November print cools slightly, most likely driven by lower energy costs, there is a possibility that inflation will likely remain high in the coming months as winter months progress and cost of living gets worse. Dallas Fed manufacturing signals job stress is building Dallas Fed manufacturing index came in less bad than expected at -14.4 for November, but the underlying metrics indicated a softening in labor markets. 16% of the factories surveyed indicated net layoffs in November, up from 9% previously, and comments suggested more layoffs may be coming as the backlog and holiday season get over. While it may still be early to see any significant signs of softening in Friday’s jobs report, the jobs data remains key to monitor to see if consumers may be vulnerable to a faster-than-expected pullback in spending. Apple production risk is on the rise Reports suggested that the protests in China and the unrest around Apple’s largest manufacturing hub for its iPhone could lead to a production shortfall of close to 6mn iPhone Pro units this year, roughly about 7% of all iPhones scheduled to be delivered this quarter. Apple shares fell 2.6% on Monday on these reports. Pinduoduo (PDD:xnas) beat expectations, Bilibili up next Pinduoduo, after a strong beat in the prior quarter, surpassed again analyst estimates and delivered a strong Q3 beat. The Chinese eCommerce platform’s revenues grew 65% Y/Y, outperforming its peers, for example, Alibaba”s 3% and JD.COM’s 11% revenue growth in Q3. Adjusted operating margin came in at 34.6% vs 33.5% in Q2. 2022 , and 15.2% in Q3 last year. Adjust EPS of RMB 7.33 was much higher than the RMB4.75 consensus. Bilibili ((09626:xhkg) is scheduled to report today.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Hawkish Fedspeak; OPEC+ to consider production cut – 29 November 2022 | Saxo Group (home.saxo)
Russia Look Set To Double Its Exports For The First Half Of 2023

Russian Wheat Continues To Be Offered At About The Cheapest Prices | The ECB Will Be Data-Dependent

Saxo Bank Saxo Bank 29.11.2022 09:13
Summary:  Markets have been on edge as we await further signs of the official stance in China on Covid restrictions after civil unrest on the issue at the weekend, with signs this morning from Chinese officialdom that a cautious easing will remain underway. This has inspired a comeback in some commodities and the Chinese renminbi after sharp weakening moves yesterday, but there is no profound sense of relief across markets as we also await incoming US data ahead of the December 14 FOMC meeting.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures are stuck in a tight range between 3,926 on the downside and 4,054 on the upside as the market is struggling to find a clear signal and direction. The noise is filled by the back-and-forth news stream out of China related to it Covid policies and backstop plans for its struggling real estate sector. Meanwhile, the US 10-year yield is also stabilising and earnings releases are minimal except for tomorrow with reports expected from Salesforce and Snowflake. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland China equity markets rallied strongly with Hang Seng Index and the CSI300 Index each rising more than 3%. The market sentiment was buoyed by new measures from the Chinese securities regulator to relax its restriction on property developers from equity financing. Leading Chinese developers listed in Hong Kong jumped by 5%-12%. In the mainland’s A-share markets, real estate names led the charge higher. Tourism stocks rose on speculation that pandemic control restrictions might be relaxed further. China’s pandemic control regulators are holding a press conference later today. USD firms, but then retreats overnight on hopes China’s reopening prospects Concerns surrounding China’s reopening status after civil unrest at the weekend sparked considerable volatility across FX yesterday, with a US dollar rally yesterday eventually emerging as the dominant development after choppy action. The USD was a bit weaker again overnight, particularly against the USDCNH, which dropped back below the important 7.20 area ahead of a press briefing in China thought to make clear the official central government position on Covid policies. Expect the most volatility in commodity currencies and the Japanese yen depending on how clearly China either a) signals that the path is open to easing restrictions on an accelerated time frame or b) that restrictions will remain in place and could even tighten if virus numbers don’t fall. Crude oil (CLF3 & LCOF3) made a sharp U-turn on Monday ...as one survey after another pointed to an elevated risk that OPEC+, partly depending on the price when they meet next week, will opt to agree on another production cut in order to stem the recent price drop. Having fallen by more than 15 dollars during the past two weeks, a downturn in Chinese demand has been more than priced in, with technical selling and momentum having taken over. Overnight Brent briefly traded $86 after Chinese health authorities announced they would hold a press conference at 7am GMT. At their last meeting OPEC+ cut output quotas by 2mb/d with Saudi Energy Minister Prince Abdulaziz bin Salman saying the group was ready to intervene with further supply reductions if it was required to balance supply and demand. Meanwhile, European talks on a price cap have stalled. Wheat (ZWH3) in Chicago dropped to a three-month low …on Monday on a combination of ample and cheap supply from Black Sea suppliers increasing competing with US origin wheat, and on concerns about the impact of protests in China on growth and demand. Following a bumper crop this summer, Russian wheat continues to be offered at about the cheapest prices in world export markets which is negative for the export prospects of U.S. wheat. In the week to November 22 speculators increased bearish bets on CBOT wheat to the highest since May 2019. Gold (XAUUSD) has recovered from another stronger dollar driven attempt to challenge support ...in the $1735 area after Fed speakers said more rate hikes are coming. pressed for higher rates. Investors will watch this week’s economic data, including ISM on Thursday and Friday’s nonfarm payrolls and US jobs report, for signs the US central bank may soon ease its monetary-tightening trajectory. Total holdings in bullion-backed gold ETFs rose 6 tons last week, the biggest weekly increase since April. During this time investors sold a total of 397 tons, still less than the 400+ tons bought by central banks during the third quarter. After finding support in the $1735 area last week, a break above $1765 may signal a return to key resistance at $1788. US treasury yields recovered after dip to local lows. (TLT:xnas, IEF:xnas, SHY:xnas) Weak risk sentiment after the weekend news of civil unrest in China due to restrictive Covid policies there saw a dip in the 10-year yield benchmark yesterday to new local lows below 3.65%. But there was little energy in the move as the market awaits important incoming US data starting with today’s November Consumer Confidence survey, but more importantly this Friday’s November jobs numbers on Friday. What is going on? The wave of takeover bids continues at the Paris Stock Market This is mostly happening in Euronext Growth – the market segment for small and medium-caps. Yesterday, Abeille Insurance (member of Aema Group, the fifth largest insurance player in France) acquired the small bank Union Financière de France (a bank mostly specialized in wealth management advisory). Abeille Assurance bought the company at a price per action of 21 euros. This represents a premium of 51 %. With the sharp drop in values that has happened since January, we have seen a wave of takeover bids at the Paris Stock Market. This will likely continue in the short-term, especially in the segment of wealth management advisory where there is an ongoing process of consolidation happening. Fed speakers press for higher rates James Bullard (2022 voter) said markets are underestimating the chances that the FOMC will need to be more aggressive next year, adding tightening may go into 2024. He also said that rates will need to be kept at a sufficiently high level all through 2023 and into 2024 even if the Fed reaches restrictive territory by Q1 2023. John Williams (voter) said "there's still more work to do" to get inflation down. He also hinted at “modestly higher” path of interest rates than what he voted for in September, sending another signal that December’s dot plot could see an upward revision, while also hinting at rate cuts in 2024. He provided some clear forecasts: unemployment rate rising from 3.7% to 4.5%-5.0% by late 2023; inflation declining to 5.0-5.5% by the end of 2022 and 3.0-3.5% by late 2023; modest economic growth this year and in 2023. The central bank isn't near a pause, Loretta Mester (2022 voter) told the FT. Richmond Fed President Barkin also spoke about higher-for-longer rates, despite moving slower China relaxes its restrictions on developers from attaining equity financing The China Securities Regulatory Commission (CSRC) fired the so-called “third arrow” to ease some of the restrictions previously imposed on property developers from attaining equity financing. While property developers are still barred from doing IPO in the domestic equity market, they are now domestically listed A-share developers and some Hong Kong-listed H-share developers to issue new shares to raise capital as long as the proceeds are used for restricting, M&A activities, refinancing, buying existing property projects, repaying debts, and project construction. However, proceeds are not allowed to be used in land acquisition. Pinduoduo shares rally 12% Strong Q3 results pushed the shares of the Chinese e-commerce platform to the highest level since November 2021. Q3 revenue was CNY 35.5bn vs est. CNY 30.9bn and adj. EPS at 8.62 vs est. 4.75 driven by tailwinds from the strict Covid policies in China. BlockFi – another casualty in the FTX saga The crypto lender BlockFi Inc. filed for Chapter 11 bankruptcy, the latest crypto-industry operator to seek court protection in the wake of FTX’s collapse. It sold $239 million of crypto ahead of its filing. ECB’s Lagarde maintains tightening stance ECB President Lagarde repeated her previous comments that the ECB will raise rates further but nothing on how much further, and on how fast they need to go. She said the bank will be data-dependent, adding the ECB may need to move into restrictive territory. She also said that she will be surprised if inflation in the Eurozone (due to be reported on Wednesday 30/11) peaked last month. Even if the November print cools slightly, most likely driven by lower energy costs, there is a possibility that inflation will likely remain high in the coming months as winter months progress and cost of living gets worse. Dallas Fed manufacturing signals job stress is building Dallas Fed manufacturing index came in less bad than expected at -14.4 for November, but the underlying metrics indicated a softening in labor markets. 16% of the factories surveyed indicated net layoffs in November, up from 9% previously, and comments suggested more layoffs may be coming as the backlog and holiday season get over. While it may still be early to see any significant signs of softening in Friday’s jobs report, the jobs data remains key to monitor to see if consumers may be vulnerable to a faster-than-expected pullback in spending. What are we watching next? US November Consumer Confidence, September home prices up today The Conference Board’s monthly Consumer Confidence survey has historically correlated most closely with the strength of the US labour market, although after a strong recover from the pandemic lows by mid-2021, confidence fall sharply, hitting a 95.3 local low in July of this year, likely due to steeply rising inflationary pressures (the other major US confidence survey, the University of Michigan sentiment survey, hit the lowest level in its 44-year history in July, likely as the survey contains questions more closely linked to inflation). Confidence then bounced strongly from that July local low, hitting 107.80 in September before dropping sharply to 102.50 last month. The November reading is expected at 100.00. With inflationary pressures easing relative to their peak, a weaker than expected confidence reading today could suggest rising insecurity in the labour market. The September S&P CoreLogic Home Price data is expected to show an ongoing drop in US home prices of some –1.2% MoM after 30-year mortgage rates rose 400 basis points this year to 20-year highs. Apple production risk is on the rise The protests in China and the unrest around Apple’s largest manufacturing hub for its iPhone could lead to a production shortfall of close to 6mn iPhone Pro which was a Morgan Stanley estimate and was published before the intensified issues at the Apple manufacturing site. Earnings to watch Today’s earnings focus is Crowdstrike with analysts expected FY23 Q3 (ending 31 October) revenue growth expected at 51% y/y with operating margin expected to demand as pricing power and demand remain robust in the cyber security industry. Today: Li Auto, DiDi Global, Bank of Nova Scotia, Intuit, Workday, Crowdstrike, HP Enterprise, NetApp, Shaw Communication Wednesday: Royal Bank of Canada, National Bank of Canada, Salesforce, Synopsys, Snowflake, Splunk, Hormel Foods, KE Holdings Thursday: Canadian Imperial Bank of Commerce, Bank of Montreal, Toronto-Dominion Bank, Marvell Technology, Veeva Systems, Ulta Beauty, Zscaler, Dollar General, Kroger Economic calendar highlights for today (times GMT) 0800 – Spain Nov. CPI 0930 – UK Oct. Mortgage Approvals/Consumer Credit 1000 – Eurozone Nov. Confidence Surveys 1300 – Germany Nov. Flash CPI 1330 – ECB's Schnabel to speak 1330 – Canada Sep. GDP 1400 – US Sep. S&P CoreLogic Home Prices 1500 – UK Bank of England Governor Bailey to testify 1500 – US Nov. Consumer Confidence 2130 – API's Weekly Crude and Fuel Stock Report 0030 – Australia Oct. CPI 0130 – China Nov. Manufacturing and Non-manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – November 29, 2022 | Saxo Group (home.saxo)
FX Daily: Upbeat China PMIs lift the mood

Chinese Equities Have Soared Vigorously As Public Unrest Has Been Restricted

TeleTrade Comments TeleTrade Comments 29.11.2022 09:24
Asian indices have displayed mixed responses as Chinese stocks have roared while Nikkei225 remained weak. Fresh economic stimulus considered by Beijing has infused an adrenaline rush into domestic equities. Oil prices have recovered dramatically in expectations of further supply cuts by OPEC. Markets in the Asian domain have recovered dramatically after Chinese authorities considered economic stimulus to offset Covid-inspired bleak economic projections. Chinese equities have soared vigorously as public unrest has been restricted by marshals. On Monday, Beijing stocks faced an intense sell-off as the general public came on the roads for anti-Covid lockdown protests. This has resulted in a recovery in investors’ risk appetite. At the press time, Japan’s Nikkei225 surrendered 0.45%, China50 soared 3.73%, Hang Seng climbs 4.32%, and Nifty50 gained 0.43%. The announcement of fresh stimulus by the Chinese authorities has managed to offset the dented market sentiment for the time being but downside risks are still solid as the general public is filled with frustration and anger led by the rollback of Covid-19 lockdown curbs. Going forward, investors will shift their focus on Caixin Manufacturing PMI data, however, the fears of a resurgence in public unrest will stay for a while. Meanwhile, Japanese equities have continued their downside bias despite a weakening risk-off mood. It seems that mixed Retail Sales data has impacted sentiment. The annual economic data landed at 4.3%, lower than projections of 5.0%. While monthly Retail Sales are grown by 0.2% against a de-growth of 0.3% as expected. On the oil front, oil prices have recovered dramatically on potential supply cuts by OPEC in its meeting scheduled for December 4. The market participants are expecting that the recent weakness in oil prices could force the OPEC cartel to announce more supply cuts. Also, economic stimulus considered by Chinese authorities to curtain the impact of nationwide Covid-19 has brought optimism to oil prices.
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

China Protests Hit Apple | BlockFi Files For Bankruptcy

Swissquote Bank Swissquote Bank 29.11.2022 10:34
The week started with a selloff across global equities. Unrest in China due to protests against the Covid zero policy combined with the Federal Reserve (Fed) members’ hawkish comments led to an early week selloff in both Asian, European and US equities. Crypto Market In cryptocurrencies, it was another day of bankruptcy news. This time, the crypto lender BlockFi, which had strong ties with FTX announced to file for bankruptcy. Bitcoin eased but didn’t damage important support on the news, while Coinbase dived another 4%. Stocks Market Elsewhere, the S&P500 lost 1.54% on Monday, as Nasdaq slid 1.43%. The US dollar traded up and down as US crude fell to $73pb then rebounded to flirt with the $80pb this morning, despite the Chinese slowdown worries. Expectation that OPEC would use the Chinese unrest as excuse to restrict outlook boosted bulls’ appetite. Fed There is still hope that Fed President Jerome Powell talks about slower rate hikes at his speech this week, but again, his words shouldn’t be heard halfway through. The Fed is willing to slow the pace of rate hikes to avoid going too far. But if they slow down, it’s also because they want to go higher than 5%. Watch the full episode to find out more! 0:00 Intro 0:24 China unrest, hawkish Fed comments hit sentiment 1:00 Fed remains haw-kish! 3:34 What does China developments mean for markets? 4:29 Why did crude oil rebound? 6:34 Ghana wants to buy oil with gold 7:00 China protests hit Apple, VW, but Chinese ADRs rebound 8:20 BlockFi files for bankruptcy Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #China #Covid #protests #Apple #Foxconn #VW #Fed #expectations #USD #XAU #crudeoil #Chevron #Venezuela #Bitcoin #BlockFi #FTX #bankruptcy #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH  
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

In Shanghai The Local Stock Index Rose More Than 2%

Conotoxia Comments Conotoxia Comments 29.11.2022 10:39
This morning, the US dollar seems to be losing ground again in anticipation of upcoming macroeconomic data later in the week. We are specifically talking about data from the US labor market and the popular NFP. Improvement in the markets. Is the dollar losing again? This morning, the US dollar seems to be losing ground again in anticipation of upcoming macroeconomic data later in the week. We are specifically talking about data from the US labor market and the popular NFP. The U.S. Dollar Index on Tuesday seems to have fallen below 106.5 points, despite earlier statements by U.S. Federal Reserve officials. James Bullard of the St. Louis Fed said the central bank still has "a lot of work to do to become restrictive," reiterating that "the interest rate needs to rise to at least 5% to bring inflation down." New York Fed President John Williams also said that "rates must continue to rise and remain high until next year, while being open to a rate cut in 2024." However, the Fed is widely expected to slow the pace of tightening to 50 basis points in December after four 75 basis point hikes in a row. Meanwhile, Fed Vice Chair Lael Brainard warned that lower supply elasticity due to the effects of Covid-19 and the war could lead to a period of higher volatility in inflation data. This phenomenon could be the largest in several decades. Brainard added that "the experience with the pandemic and the war highlights the challenges for monetary policy in responding to a prolonged series of adverse supply shocks," BBN reported. Source: Conotoxia MT5, USDIndex, H1 China's infections decline One short-term factor that appears probably to influence the behavior of financial markets is the situation in China. After a record number of infections, investors' eyes may be on both the protests and the scale of the outbreak. According to the latest information, the number of newly registered cases fell for the first time in more than a week, the Health Commission (NHC) reported. The figure was said to have dropped from more than 40,000 infections to 38645 newly registered infections. The fewer infections there are, the fewer restrictions may not be enforced, as there would be no need for them, which could help both Chinese citizens and the economy. Additionally, Chinese authorities have announced a press conference on the Zero-Covid policy, which may already have markets hoping for a loosening of restrictions. Stock market, commodities and cryptocurrencies rebound U.S. index futures seem to be pointing to the possibility of a positive opening to the session on Wall Street. Futures on the Dow Jones Industrial Average are up more than 0.2%, while the Nasdaq 100 is up 0.6% this morning. Meanwhile, in Shanghai, the local stock index rose more than 2% to 3144 points. On the commodities market, we could see oil prices rise by more than 1.6% to $78 per barrel. Gold, on the other hand, rose 0.7% to $1,753, and silver rose 1.45% to $21.20 per ounce. The cryptocurrency market is also trying to bounce back. The price of bitcoin has risen to $16456, and Ether is back above $1200.   Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Japanese yen loses as jobless rate go up. Australian dollar down, Dow Jones 30 decreases amid China-COVID realties

Japanese yen loses as jobless rate go up. Australian dollar down, Dow Jones 30 decreases amid China-COVID realties

Jing Ren Jing Ren 29.11.2022 08:20
USDJPY remains under pressure The Japanese yen fell after an uptick in October’s jobless rate. The rebound has met stiff selling pressure in the former demand zone around 142.40. A break below the recent low of 138.00 suggests that the path of least resistance remains down. As more buyers switch sides, increased volatility may drive the pair even lower. 135.90 is the next level to see if buyers would make their way back. Otherwise, the greenback could drift towards 132.00. The psychological level of 140.00 is the first hurdle in case of a bounce. Read next: Meta fined by Irish regulators amidst privacy concerns| FXMAG.COM AUDUSD seeks support The Australian dollar retreats after a lacklustre retail sales reading in October. The pair is looking to hold onto its gains above 0.6700 following a rally earlier this month. A bounce off 0.6580 next to the 20-day moving average indicates interest in safeguarding the aussie’s recovery. 0.6720 is a fresh resistance and a close above 0.6800 would open the door for an extension to September’s peak of 0.6910. On the downside, a dip below said support would put the bulls on the defensive with 0.6400 as a second line of defence. US 30 shows overextension The Dow Jones 30 slips as protests in China against Covid curbs raise concerns about growth. While a rally above August’s high of 34200 is an encouraging sign, the bulls would need to secure their foothold before pushing towards 34700. A bearish RSI divergence indicates a deceleration in the upward momentum and the index could use some breathing room. A slide below 34000 has led some buyers to take profit and 33650 is the next level to gauge their interest. Only a bounce above 34300 would resume the uptrend.
Market Risk Sentiment Adjusts as Investors Eye US Inflation Data

The Chinese Stock Market Seem To Limit The Ability Of An International Investor To Purchase Assets In This Market

Conotoxia Comments Conotoxia Comments 29.11.2022 13:24
Looking to take advantage of the current uncertainty in the markets over the Middle Kingdom's continued policy on pandemic restrictions? We have selected funds that you could watch out for in the near term.  Current situation in China After the introduction of the zero-Covid policy by China's Communist Party, it seemed that the Chinese economy might slow down significantly. The situation, which forced many citizens to stop doing their business, may have caused the people of the Middle Kingdom to start protests. As Reuters reports, "Police stopped and searched people at the sites of weekend protests in Shanghai and Beijing, after crowds there and in other Chinese cities demonstrated against stringent COVID-19 measures disrupting lives three years into the pandemic." Now, following Saturday's announcement by Chinese authorities regarding the easing of months-long closures in various regions of the country in stages. Markets appear to be reacting particularly optimistically. Hong Kong's main index, the Hang Seng, is up more than 5% today.  How could you invest in China? The characteristics of the Chinese stock market seem to limit the ability of an international investor to purchase assets in this market. For this reason, many entities originating from China are listed on multiple exchanges simultaneously. The iShares MSCI Hong Kong ETF (EWH) is one of the funds giving exposure to the previously mentioned Hang Seng Index. It consists of 23.88% of Hong Kong-listed property companies. The second largest weighting is insurance companies (22.36%), followed by financials (11.79%) in third place. It appears that the currently tough property market in China, following the introduction of restrictions on developers' borrowing capacity, may be reducing the potential of this market. Nevertheless, the average price-to-earnings P/E ratio is around 13, which may speak to the undervaluation of this fund. Source: Conotoxia MT5, EWH, Daily We could get a glimpse of the broad market for Chinese equities with the iShares MSCI China ETF (MCHI), which has as much as 30.5% of its value in commercial property companies. In second place in terms of weighting is the communications sector (17.41%), and in the last place of the weighting podium is the finance sector (15.55%). As with the previous fund, it has significant exposure to one of the largest sectors of the Chinese economy, real estate. Interestingly, the largest position in the fund, accounting for, as much as 11.74%, is the technology giant Tencent (Tencent). The average price-to-earnings P/E ratio for this fund is just 9.88. This seems  to be due to negative sentiment on the share prices of construction developers. Source: Conotoxia MT5, MCHI, Weekly The third fund already giving direct access to the Chinese A-share market is the iShares MSCI China A ETF. It appears to be the most sectorally diversified relative to its predecessors. Companies from the financial sector are the most heavily weighted, accounting for 17.37% of the fund's value. In second place, with a slightly lower weighting, are companies from the consumer goods sector (17.32%). The podium is rounded off by industrial companies (16%). On average, the price-to-earnings P/E ratio takes on a value of 14.35. Such a value could be considered well valued, giving these potentially smaller growth opportunities.  Source: Conotoxia MT5, CNYA, Daily Knowing that many applications and websites are banned in the Middle Kingdom, we can access Chinese internet companies that provide similar services such as Google, Facebook, Twitter, eBay, Amazon, etc. Therefore, the latest passive fund to look out for is the KraneShares CSI China Internet ETF (KWEB). It is made up of 44 companies with 50% in the consumer goods sector, 36.24% in communication services and 4% in the real estate industry. The largest position is Alibaba Group Holding (Alibaba), which weighs in at 9.36% of the fund's value. It has an average P/E of 11.7, which, additionally taking into account the strongly growth-oriented nature of the fund's companies, seems to give signals for upside in the event of an easing of the pandemic tightening situation.  Source: Conotoxia MT5, KWEB, Daily Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.     search   g_translate    
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Analyst Comment – Esotiq&Henderson Q3’22 Results – WSE: EAH

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 29.11.2022 15:22
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme Last recommendation BDM: BUY with target price 29,6 PLN/share (2022/10/07) LINK Q3'22 results above our expectations - high revenues and lower margin decline (positive) Q3'22 was a record quarter in the company's history in terms of revenue. The high USD exchange rate and sales to reduce inventory levels resulted in a decline in gross margin on sales, but the margin turned out to be higher than our forecasts (58.8% vs. 57.3% expected) Cumulatively after 9 months 2022, the margin was 62.4%, which means that the company is, for the time being, delivering its target of maintaining the ratio above 60%. Due to store closures in Ukraine there was a slight decrease in store space (-1% y/y). The company also closed a store in Romania, where it currently maintains an online presence, wholesale and multibrands. Esotiq intends to expand its ecommerce network in Moldova and Germany. There are also underway efforts to start selling on Zalando in Austria and Switzerland. A mobile application was launched in late October'22. The company notes that in this sales channel, the sales per customer is 15% higher than the standard, and the number of items per receipt is also higher. In the first month of the app's operation, Esotiq recorded about 20,000 downloads, and the conversion rate was 17%. In Q3'22, the company paid a dividend of PLN 3.9 million, while keeping positive cash flow from financing activities, mainly due to proceeds from loans and borrowings. Net debt after equity was PLN 55.1 million, or 1.7x EBITDA. In Q3'22, the Vosedo.com platform, a project in cooperation with Oponeo.pl, has launched and generated first sales. Due to the continued lack of an investment agreement, it was not included in the company's results BDM's comments: Q3'22 results, despite lower y/y figures, surprised positively. First of all, revenues and gross sales margin turned out to be higher than the company's initial estimates. As a result, gross profit on sales turned out to be PLN 2.6 million higher than our forecasts. Further, there was a higher-than-expected increase in general and administrative expenses, which may be due to increased expenditures on a project related to the development of RFID technology. Ultimately, the company achieved PLN 9.9 million in EBITDA and PLN 4.6 million in net profit. In the current reality of rising costs and a strong USD exchange rate, we view the results positively. Note that Q3'21 represents a high base due to lower store operating costs and then ongoing trend of a return to in-store shopping, which was conducive to selling products at first prices and not exerting selling pressure. We also note the high level of inventories, which, given the tightened pandemic restrictions in China, the geopolitical situation and the steady increase in sales, seems justified. Analyst: Anna Tobiasz anna.tobiasz@bdm.pl tel.: (+48) 666 073 972 GPW’s Analytical Coverage Support Programme 3.0  
At The Close On The New York Stock Exchange Indices Closed Mixed

The Main Indices Fell At The Close Of The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 30.11.2022 08:17
At the close of the New York Stock Exchange, the Dow Jones rose 0.01%, the S&P 500 fell 0.16%, and the NASDAQ Composite fell 0.59%. Dow Jones Dow Inc was the top gainer among the components of the Dow Jones index today, up 1.15 points or 2.32% to close at 50.65. Quotes of American Express Company rose by 3.55 points (2.35%), closing the session at 154.42. Boeing Co rose 3.49 points or 2.03% to close at 175.32. Shares of Apple Inc became the losers, the price of which fell by 3.05 points (2.11%), ending the session at 141.17. Salesforce Inc was up 1.31% or 2.01 points to close at 151.68, while Visa Inc Class A was down 1.04% or 2.20 points to close at 209. .06. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Under Armor Inc A, which rose 4.79% to hit 9.84, Celanese Corporation, which gained 4.75% to close at 105.56, and also shares of Ralph Lauren Corp Class A, which rose 4.36% to close the session at 112.66. The biggest losers were Illumina Inc, which shed 3.84% to close at 208.57. Shares of PayPal Holdings Inc lost 2.87% to end the session at 77.64. Enphase Energy Inc lost 2.83% to 303.39. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Otonomy Inc, which rose 113.82% to hit 0.23, Apollo Endosurgery Inc, which gained 67.83% to close at 10.07, and shares of OncoSec Medical Inc, which rose 50.98% to end the session at 3.85. The biggest losers were Digital Brands Group Inc, which shed 34.17% to close at 4.74. Shares of Eqonex Ltd lost 33.88% and ended the session at 0.09. Quotes of Secoo Holding Ltd decreased in price by 32.49% to 1.60. Numbers On the New York Stock Exchange, the number of securities that rose in price (1866) exceeded the number of those that closed in the red (1241), while quotes of 108 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,888 stocks fell, 1,862 rose, and 205 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.44% to 21.89. Gold Gold futures for December delivery added 0.47%, or 8.15, to $1.00 a troy ounce. In other commodities, WTI crude futures for January delivery rose 1.90%, or 1.47, to $78.71 a barrel. Brent crude futures for February delivery rose 0.95%, or 0.80, to $84.69 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.07% to 1.03, while USD/JPY fell 0.18% to hit 138.70. Futures on the USD index rose 0.11% to 106.75.     Relevance up to 03:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/303091
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Technical Outlook Of The Dow Jones Index

InstaForex Analysis InstaForex Analysis 30.11.2022 08:50
Over the last one and a half months, we have seen the DJI correction in a possible B or X wave to a high of 34,386 or just above the 61.8% corrective target at 33,785. This should be enough and we should see the DJI lose steam from here and start to push lower towards support at 31,727. A break below here will confirm that the DJI has peaked for now and a new strong push lower towards at least 22,613 is in the cards. That said, we might first see the real push lower at the beginning of 2023 as Christmas time always is beneficial for the equity markets.   Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/303105
FX Daily: Upbeat China PMIs lift the mood

The Chinese Authorities To Prepare For Further Easing In Its Covid Policy

Saxo Bank Saxo Bank 30.11.2022 09:31
Summary:  A dash of optimism on Tuesday with Chinese officials continuing their commitment to ease the Zero Covid policies, but US economic data continued to disappoint and focus remains on how hawkish Fed Chair Powell can get today. Along with that, a slew of pivotal US data in the week ahead kept the US dollar range-bound. Crude oil market however continued to see volatility despite easing China demand concerns, as OPEC+ production cut hopes were shattered with the weekend meeting moving online. Eurozone CPI on watch today while the softer Australia CPI for October paves the way for RBA to maintain its slower rate hike path next week. What’s happening in markets? The major US indices, the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) continue to retreat The major US indices ended weaker, with NASDAQ100 sliding 0.7% and the S&P500 edging down 0.2% as investors are awaiting Fed Chair Powell’s speech later Wednesday. Powell will likely underscore the Fed’s desire to keep interest rates at elevated levels until inflation eases. The latest US consumer confidence reading (released Tuesday) for November showed US consumer confidence fell to a four-month low. The biggest drag on US markets on Tuesday, were information technology, utilities, and consumer discretionary. Apple (AAPL) shares fell 2.1% after the company said that it would deliver 6 million fewer iPhone Pro units in Q4 due to production disruption in Zhengzhou, China. The real estate, energy, financials, industrials sectors outperformed. United Parcel Services (UPS:xnys) gained 2.8% after the Biden Administration called on Congress to prevent a U.S. rail strike. Apple (AAPL) shares fell 2.1%, continuing their three-day pull back, which totals almost 5% ..on the back of the covid lockdown fallout in China. Apple relies heavily on the key manufacturing hub of Zhengzhou, which is now in lockdown. And as a result Apple’s production shortfall could be close to 6 million iPhone Pro units this year (this is according to people who know about Apple’s assembly operations). These reports are swirling at a time when Apple previously dropped its overall production target to about 87 million units (down from the prior 90 million estimate) on the back of demand slowing. However, Apple and the Foxconn facility are allegedly planning to make up the shortfall in lost output in 2023. But, looking at Apple shares from a technical perspective, its trading 8% lower than its 200 day moving average and the indicators suggest Apple shares could see further downward pressure - as suggested by the weekly and monthly charts. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rose in yields ahead of Fed Chair Powell’s speech Yields edged up across the yield curve with those in the long-end rising the most. The 2-year yield rose 4bps to 4.47% while the 10-year was 6bps cheaper at 3.74%. Large supply from corporate issuance put some upward pressure on yields. There were about 11 deals with a total amount of about USD18 billion, including USD8.25 billion from Amazon, on Tuesday. Fed Chair Powell is scheduled to speak on the economy and labor market at a Brookings Institution event today on Wednesday at 1:30 U.S. eastern time (2:30am SG/HK). Investors are concerned if Powell would give hints of a terminal Fed Fund rate higher than the 5% being priced in by the market. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) surged on renewed optimism about reopening and additional support to the property sector Hang Seng Index surged 5.2% and Hang Seng TECH Index jumped 7.7%. All sectors gained, with information technology, consumer discretionary, and properties leading the charge higher. The CSI 300 gained 3.1%. The market sentiment was first buoyed by new measures from the Chinese securities regulator to relax its restriction on property developers from equity financing. Then the renewed optimism about China reopening from stringent pandemic control added to the market rally. Leading Chinese developers listed in Hong Kong jumped by 3-14%. In the mainland’s A-share markets, real estate, financials, and food and beverage led the charge higher. The strong revenue and margin beat of Pinduoduo (PDD:xnas) aided the surge of Alibaba (09988:xhkg) by 9.1% and JD.COM (09618:xhkg) by 10.9%. The ADR of Bilibili (BILI:xnas) jumped 22% overnight after reporting results beating market expectations. FX: Dollar range-bound ahead of Powell’s speech While the commodity currencies gained on Tuesday after a relief that China officials maintained their commitment to ease the Zero covid policies despite the protests and a recent rise in cases, cyclical currencies like CAD weakened as crude oil futures traded lower. Overall the dollar was range-bound with expectations around a hawkish Powell today picking up given the substantial easing in financial conditions. EURUSD remained stuck below 1.0400 while USDJPY has gains above 139 getting limited. Crude oil (CLZ2 & LCOF3)volatile with large inventory drawdown ahead of OPEC The relief from continued commitment of China officials to ease zero covid restrictions helped crude oil prices gather some momentum early on Tuesday, but the cheer was short-lived as other concerns still clouded the outlook. US economic data showed economic momentum is weakening, while Fed Chair Powell’s speech today will be key for the dollar and the markets. On the supply side, API survey reported a larger than expected crude draw, with inventories down 7.80mm b/d (exp -2.49mm b/d) but production cut expectations from OPEC (read below) this weekend eased as the meeting moved online. WTI futures traded around $79/barrel, while Brent traded lower after touching $86/barrel earlier. Technical update on Brent crude oil from Kim Cramer, our Technical Analyst. The update also takes a closer look at WTI crude oil, Dutch TTF gas and Henry Hub natural gas.   What to consider? US data disappoints, all eyes on Powell Consumer confidence pared back in November to 100.2 from 102.5 (exp. 100.00); the Present Situation Index decreased to 137.4 from 138.7 last month, while the Expectations Index declined to 75.4 from 77.9. Meanwhile, home prices in 20 large cities slipped 1.2% in September, according to the S&P CoreLogic Case-Shiller gauge. More critical data from ISM to PCE to NFP is lined up for the second half of the week, but before we get there, Fed Chair Powell’s speech will be the one to watch. Easing financial conditions raise concerns about inflation shooting back higher, but pushback from Fed officials so far hasn’t been enough for the markets yet. It remains to be seen what more Fed Chair Powell can deliver today. Reopening optimism returned in China While the daily new cases continued to surge and anti-restriction protests sprang up across major cities, investors took comfort from the light-touch reactions from the Chinese authorities and hints of preparing to ease the pandemic control measures further. A Party-controlled newspaper in Beijing published a long article reporting the stories of people having recovered from Covid, which seemingly aimed at easing people’s worries about the disease. The National Health Commission issued a memo pledging to increase the vaccination rate of the country’s senior population. In a press conference later in the afternoon, health officers again emphasized increasing the senior population’s vaccination rate as a priority and highlighted the Omicron variants as being less severe than the original virus. Officials and the state-controlled media have taken a light-touch approach to the recent protests and have not put any political stigma on the incidents. Putting these together, investors are taking the development as hints of the Chinese authorities to prepare for further easing in its Covid policy. China relaxes its restrictions on developers from attaining equity financing The China Securities Regulatory Commission (CSRC) fired the so-called “third arrow” to ease some of the restrictions previously imposed on property developers from attaining equity financing. While property developers are still barred from doing IPO in the domestic equity market, they are now domestically listed A-share developers and some Hong Kong-listed H-share developers to issue new shares to raise capital as long as the proceeds are used for restricting, M&A activities, refinancing, buying existing property projects, repaying debts, and project construction. However, proceeds are not allowed to be used in land acquisition. Softer Australia CPI paves the way for a dovish RBA next week Australian inflation data for October showed inflation is continuing to fall, and far more than expected which supports the RBA’s dovish tone and only hiking rates by 0.25% next week (December 6). Trimmed mean CPI which excludes volatile items, rose 5.3% year-on-year in October, which marks a fall in price rises, compared to the prior read, 5.4% YoY. This also shows prices for consumer goods and services in Australia are falling less than the market expects as Trimmed CPI was expected to rise 5.7%. Meanwhile, headline inflation also rose less than expected, showing consumer prices rose 6.9% YoY, which was cooler than prior 7.3% read, and less than the 7.6% expected. This follows a suite of Australian economic data that supports the RBA remaining more conservative with rate hikes. Earlier in the week, Australian retail trade data unexpectedly fell, showing consumers are feeling the strain of inflation and rising interest rates. As a house, we think spending will likely continue to slow into 2023, with the full impact of rate hikes passing through households under financial duress giving deb to income ratios are some of the highest in the world. China PMIs likely to show demand weakness China’s NBS manufacturing PMI is expected to decline to 49.0 in November, further into the contractionary territory, from 49.2 October, according to the survey of economists conducted by Bloomberg. The imposition of movement restrictions in many large cities has incurred disruption to economic activities. High-frequency data such as steel rebar output, cement plants’ capacity utilization rates, and container throughputs have weakened in November versus October. Economists surveyed by Bloomberg expect the NBS Non-manufacturing to slow to 48.0. in November from 48.7 in October, on the enlargement of pandemic containment measures. OPEC+ weekend meeting goes virtual Instead of meeting in Vienna as planned earlier, OPEC+ has now moved its December 4 meeting online which is downplaying expectations of any significant policy change after production cut expectations gathered hopes this week with crude oil prices falling to test key support levels. Some delegates also suggested that the cartel is leaning towards approving the same production levels agreed in October, when a 2mb/d cut in output was announced. Bilibili (BILI:xnas/09626:xhkg) Q3 beat expectations Bilibili reported 11% Y/Y revenue growth in Q3 and net loss came in at a smaller amount of RMB1.7 billion. User growth was solid, with average daily active users growing 25% Y/Y to 90.3 million, average monthly active users growing 25% to 332.6 million, and average monthly paying users increasing 19% to 28.5 million. Operating margin improved to -31.9% in Q3 from -44.63 in Q2 and -51.1% in Q3 last year. The company guides for a 4-7% Y/Y increase in Q4 revenue, below the consensus estimate of 8% Y/Y. EUR may be watching the flash Eurozone CPI release Eurozone inflation touched double digits for October, and the flash release for November is due this week. The headline rate of the harmonized index of consumer prices (HICP) is expected to ease slightly to 10.4% YoY from 10.7% YoY last month. The core rate that excludes food and energy prices is forecast to however remain unchanged at 5% YoY. This print will be key for markets as the magnitude of the ECB’s next rate hike at the December meeting is still uncertain, and about 60bps is priced in for now. But even with a slight cooling in inflation, which will most likely be driven by lower energy costs, there is a possibility that inflation will likely remain high in the coming months as winter months progress and cost of living gets worse. Crowdstrike (CRWD:xnas) tumbled on guidance miss The shares of Crowdstrike plunged 18.7% in the extended-hour trading after the cybersecurity provider issued Q4 revenue guidance below market expectations. For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/apac-market-insights-30-nov-2022-30112022
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

Austrailan CPI Report Gives The RBA Room To Remain Dovish

Saxo Bank Saxo Bank 30.11.2022 09:39
Summary:  Daily Dose of financial insights for investors and traders; Apple skids 5% in three days what could be next. Australian inflation slows more than expected, what this mean for interest rates and the Aussie dollar. Coal stocks surge to record highs. The major US indices, the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) continue to retreat   The major US indices closed on the back foot again as investors continue to weigh the deteriorating Covid developments and increased restrictions in China, while also awaiting Federal Reserve Chair Jerome Powell’s speech later Wednesday. Powell’s will likely underscore the Fed’s desire to keep interest rates at elevated levels until inflation eases. And it’s fair to say that this double blow, of persistent inflation and rising interest rates is denting sentiment. The latest US consumer confidence reading (released Tuesday) for November showed US consumer confidence fell to a four-month low. The biggest drag on US markets on Tuesday, were technology companies with Apple shares continuing to slide. While some travel companies shares saw some stellar gains, with Carnival Cruise (CCL) shares rose almost 5% after announcing Cyber Monday bookings volumes were 50% higher than Cyber Monday 2019. And Norwegian Cruise Line Holdings (NCLH) shares followed higher on the sentiment boost. Apple (AAPL) shares fell 2.1%, continuing their three day pull back, which totals almost 5% ...on the back of the covid lockdown fallout in China. Apple relies heavily on the key manufacturing hub of Zhengzhou, which is now in lockdown. And as a result Apple’s production shortfall could be close to 6 million iPhone Pro units this year (this is according to people who know about Apple’s assembly operations). These reports are swirling at a time when Apple previously dropped its overall production target to about 87 million units (down from the prior 90 million estimate) on the back of demand slowing. However, Apple and the Foxconn facility are allegedly planning to make up the shortfall in lost output in 2023. However, looking at Apple shares from a technical perspective, its trading 8% lower than its 200 day moving average and the indicators suggest Apple shares could see further downward pressure - as suggested by the weekly and monthly charts. Australia’s ASX200 (ASXSP200.1) rises 0.3% mid-session, which brings the market closer to its record high, that it's just 4.5% away from  What is supporting the Aussie market rally on Wednesday, is firstly - weaker than expected inflation data was released, which gives the RBA room to remain dovish and only rise rates by 0.25% next week. Secondly, ahead of the northern hemisphere winter, coal shares are trading considerably higher, trading at new record highs, with Whitehaven Coal (WHC) up 7.3% to $9.34 and New Hope Coal (NHC) up almost 6% to $5.88. Trimmed mean CPI (which excludes volatile items), showed consumer prices rose 5.3% year-on-year in October, which means that prices of goods and services in Australia are falling, compared to the prior read (5.4% YoY). This also shows price rises are not as bad as feared (Trimmed CPI was expected to rise 5.7%). Meanwhile, headline inflation also rose less than expected, up 6.9% YoY, which was cooler than prior read (7.3%), and less than the 7.6% expected. Remember, this follows a suite of Australian economic data that supports the RBA remaining more conservative with rate hikes ahead. Earlier in the week, Australian retail trade data unexpectedly fell, showing consumers are feeling the strain of inflation and rising interest rates. So where to from here? We think spending will likely continue to slow into 2023, as the full impact of rate hikes passes through households, with some under financial duress, given debt to income ratios are some of the highest in the world. This means, the RBA could not only potentially stop rising rates sooner than expected, but now the market is thinking the RBA will begin to cut rates in December next year. Australian dollar holds onto monthly gain Despite the weaker than expected Australian inflation data, that would traditionally cause the Australian dollar (AUDUSD) to fall, today the Aussie is steady at 0.669. However, the AUD is up 5.3% this month. I suspect the reason for this is because it's ahead of LNG and coal shipments likely rising, to cater to the northern hemisphere winter. For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast.     Source: Daily Dose of financial insights for investors and traders; Apple skids 5% in three days, Australian inflation slows more than expected | Saxo Group (home.saxo)
Financial World in a Turbulent Dance: Lego, Gold, and Market Mysteries

Florida Governor Ron DeSantis Warned Against Apple’s Monopoly Powers

Saxo Bank Saxo Bank 30.11.2022 09:46
Summary:  Markets are in defensive mode ahead of a speech from Fed Chair Powell later today on fears of hawkish pushback against the recent easing of financial conditions and after having priced in significant rate cuts beyond the end of 2023. Economic data releases continue to roll in, with the Eurozone flash November CPI data up this morning after slightly softer inflation releases around Europe this week and US November ADP private payrolls data up today ahead of Friday’s US jobs report.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures are still boxed into a tighter and tighter range between the 100-day moving average at 3,927 and the 200-day moving average at 4,051. The key event today is of course the FOMC rate decision and more importantly the subsequent press conference where all eyes are on Fed Chair Jerome Powell following the latest rally due to the recently lower US inflation print. Financial conditions have eased considerably, and Powell will likely not get away with talking about terminal rates if he wants to tighten conditions again in line with their strategy of easing inflationary pressures. After the US market call, there are key earnings from Salesforce and Snowflake which could impact sentiment in Nasdaq 100 futures. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Hang Seng Index climbed 0.8% and The CSI 300 gained 0.2% as optimism returned about an exit from the stringent dynamic zero-Covid policy, if not in name, at least gradually in practice in mainland China. Investors looked beyond the disappointing Manufacturing PMI data, which came at 48, weaker than expectations and further into the contractionary territory. The focus of the investors, however, was on the recent supportive measures to the real estate sector and signs of sticking to or even preparing for more relaxation of China’s stringent pandemic control restrictions even as Covid cases are on the rise. Teleco names outperformed, with China Unicom (00762:xhkg) and China Telecom (00728:xhkg) rising 6-7%. USD edging higher ahead of anticipated hawkishness from Fed Chair Powell Concerns are mounting that Fed Chair Powell is set to administer a hawkish broadside to US markets after a powerful easing of financial conditions in recent weeks and the pricing in of a significant Fed policy easing starting in late 2023 (see more below). But USD bulls have their work cut out for them if they expect to reverse the recent USD sell-off, even if we have seen a solid reversal in places. The key zone for EURUSD stretches from the 1.0223 pivot low and down to perhaps 1.0100, while the similar zone for USDJPY stretches from the 142.25 pivot high all the way to 145.00. Crude oil (CLF3 & LCOF3) volatile with large inventory drawdown ahead of OPEC The relief from continued commitment of China officials to ease zero covid restrictions helped crude oil prices gather some momentum early on Tuesday, but the cheer was short-lived as production cut expectations from OPEC+ this Sunday eased as the meeting moved online and economic data from the US and China showed weakening momentum. Focus on speech from Fed Chair Powell given its potential impact on the dollar, and EIA’s weekly report after the API reported a larger than expected crude draw, with inventories down 7.80mm b/d (exp -2.49mm b/d). WTI futures traded around $79/barrel, while Brent trades back below $84 after touching $86/barrel on Tuesday. US treasury yields recovered after dip to local lows. (TLT:xnas, IEF:xnas, SHY:xnas) Yields edged up across the yield curve with those in the long end rising the most. The 2-year yield rose 4bps to 4.47% while the 10-year rose 6 bps to 3.74%. Large supply from corporate issuance put some upward pressure on yields. There were about 11 deals with a total amount of about USD18 billion, including USD8.25 billion from Amazon, on Tuesday. Fed Chair Powell to speak later today. (more below) What is going on? Reopening optimism returned in China While the daily new cases continued to surge and anti-restriction protests sprang up across major cities, investors took comfort from the light-touch reactions from the Chinese authorities and hints of preparing to ease the pandemic control measures further. A Party-controlled newspaper in Beijing published a long article reporting the stories of people having recovered from Covid, which seemingly aimed at easing people’s worries about the disease. The National Health Commission issued a memo pledging to increase the vaccination rate of the country’s senior population. In a press conference later in the afternoon, health officers again emphasized increasing the senior population’s vaccination rate as a priority and highlighted the Omicron variants as being less severe than the original virus. Officials and the state-controlled media have taken a light-touch approach to the recent protests and have largely refrained from putting any political stigma on the incidents. Putting these together, investors are taking the development as hints of the Chinese authorities to prepare for further easing in its Covid policy. Apple criticized by possible 2024 presidential hopeful DeSantis, also in the anti-trust spotlight Florida governor Ron DeSantis, a potential rival of Donald Trump for the 2024 presidential nomination, inveighed against Apple for providing “aid and comfort to the CCP” by turning off access in China to the AirDrop app that could be used to organize protests. As well, he warned against Apple’s monopoly powers after Twitter CEO Elon Musk complained that Apple had pulled virtually all advertising from the platform and threatened to remove it from their app store. “Don’t be a vassal of the [Chinese Communist Party] on one hand and then use your corporate power in the United States on the other to suffocate Americans and try to suppress their right to express themselves” DeSantis said. US Senators also weighed in against the company on the issue as anti-trust efforts are afoot in Congress. Crowdstrike beats estimates The US cyber security company reported Q3 revenue of $581mn vs est. $574mn and adj. EPS of $0.40 vs est. $0.31 as the underlying structural growth is still strong in the industry. The Q4 outlook on earnings was much better than expected but the Q4 revenue outlook at $620-628mn vs est. $635mn spooked investors, sending shares down 19%. Management said that the lower guidance was due to increased macroeconomic headwinds. Commodities see November gains on China optimism and Fed Pivot The Bloomberg Commodity Index trades up 2% on the month with strong gains among industrial and precious metals offsetting minor declines in energy and grains. The sector has been supported by a 4% drop in the dollar and sharply lower US bond yields on speculation the FOMC will soon slow its pace of rate hikes. The industrial metal sector trades up 12% on optimism that China may shift away from Covid Zero policies and provide additional stimulus to boost demand in the top metal-consuming economy. Copper, up 8%, is heading for its best month since April 2021 while gold and silver has been supported by the change in direction for the dollar and yields.  Wheat prices in Chicago and Paris scrap the bottom with ample supply, especially from the Black Sea region adding downward pressure. What are we watching next? OPEC+ weekend meeting goes virtual Instead of meeting in Vienna as planned earlier, OPEC+ has now moved its December 4 meeting online which is downplaying expectations of any significant policy change after production cut expectations gathered hopes this week with crude oil prices falling to test key support levels. Some delegates also suggested that the cartel is leaning towards approving the same production levels agreed in October, when a 2mb/d cut in output was announced. Fed Chair Powell to speak today – will he lean hawkish? Fed Chair Powell is scheduled to speak on the economy and labor market at a Brookings Institution event today at 13:30 U.S. eastern time. Market participants are expecting hawkish comments from Powell about higher terminal rates for 2023.  Given the huge shift in market pricing of the Fed policy rate in 2024 (cuts of over 150 basis points from the 2023 rate peak are currently priced by end 2024) the more interesting angle on Powell’s comments are whether he pushes back against the recent strong easing of financial conditions and this anticipation that the Fed will be in full retreat in 2024. The September FOMC “dot plot” projections show a wide dispersion of forecasts, but the median projection is that the policy rate will drop about 100 basis points by end 2024 from end 2023. Earnings to watch Today’s earnings focus is US technology sector earnings from Salesforce and Snowflake. Analysts expect Salesforce FY23 Q3 (ending 31 October) revenue growth to slow down to 14% y/y down from 27% y/y a year ago supporting the growth slowdown in the technology sector. To avoid the negative impact from the earnings release Salesforce must deliver meaningful improvement in profitability or face downward pressure on its share price. Snowflake is expected to see FY23 Q3 (ending 31 October) revenue growth to slow down to 61% y/y down from 110% y/y a year ago. As with Salesforce, Snowflake must deliver significant improvements in profitability to avoid a negative impact from falling revenue growth which current trajectory is worse than estimated just one year a ago. Today:  Royal Bank of Canada, National Bank of Canada, Salesforce, Synopsys, Snowflake, Splunk, Hormel Foods, KE Holdings Thursday: Canadian Imperial Bank of Commerce, Bank of Montreal, Toronto-Dominion Bank, Marvell Technology, Veeva Systems, Ulta Beauty, Zscaler, Dollar General, Kroger Economic calendar highlights for today (times GMT) 0745 – France Nov. Flash CPI 0830 – UK Bank of England Chief Economist Huw Pill to speak 0855 – Germany Nov. Unemployment Rate / Change 0900 – Poland Nov. Flash CPI 1000 – Eurozone Nov. Flash CPI 1315 – US Nov. ADP Employment Change 1330 – US Fed’s Bowman (Voter) to speak 1445 – US Nov. Chicago PMI 1500 – US Oct. JOLTS Job Openings 1530 – US Weekly DoE Crude Oil and Product Inventories 1735 – US Fed’s Cook (Voter) to speak 1830 – US Fed Chair Powell to discuss Economic and Policy Outlook 1900 – US Fed’s Beige Book 0145 – China Nov. Caixin Manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – November 30, 2022 | Saxo Group (home.saxo)
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Analyst Comment – Enter Air - Q3’22 Results – WSE:ENT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 30.11.2022 10:06
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme Last recommendation BDM: ACCUMULATE with target price 24,0 PLN/share (2022/10/26) LINK BDM Comment: Q3 2022, despite the unfavorable environment (according to official analyses, the market was about 18% below the 2019 level), turned out to be a record quarter for the company in terms of results. However, they were lower than our expectations, which we perceive slightly negative. Over the quarter, the company generated revenues of PLN 1,006.1 million (an increase of approx. 87.4% y/y, vs. our assumptions of PLN 1,153.4 million), and the number of flights increased y/y (definitely the increase in revenues was primarily related to the subsiding Covid-19 pandemic and the fact that tourists are eager to return to their holidays abroad after the restrictions are lifted). In the area of air services, the company generated turnover of PLN 981.5 million (+90.5% y/y), and PLN 24.6 million (+13.7% y/y) in on-board sales. In Q3'22, cost of sales increased by 120.8% y/y to PLN 842.1 million, and the main factor influencing the higher level of costs compared to the same period of the previous year is primarily an increase in the cost of materials and energy consumption (+ 167.8% y/y) and third-party services (+146.1% y/y) due to higher number of air operations and higher fuel prices. The gross result on the sale of the company amounted to PLN 164.0 million (+5.5% y/y). In Q3'22, the company recorded PLN 56.9 million in other operating income, which was related to the remission of the PFR loan. At the IFRS16 EBITDA level, Enter Air reported a profit of PLN 266.6 million (+29.4% y/y). The financial balance of the company amounted to PLN -103.3 million (PLN -91.0 million of which were exchange differences from the balance sheet valuation). The result was increased by the profit on the settlement of entities accounted for under the equity method (PLN 5.5 million - applies to Chair Airlines AG - which positively surprised us). In the discussed period, the company generated a net result of PLN 104.0 million (+37.6% y/y). In Q3'22, cash flow from operating activities amounted to PLN 240.8 million (vs. PLN 226 million a year ago), investment CF = PLN -0.3 million, and financial CF = PLN -83.5 million. At the end of September 2022, the group had PLN 448.9 million in cash (+PLN 164.9 million q/q). • In Q3'22, the group generated PLN 1,006.1 million in revenue, which means an increase of approx. 87.4% y/y. Thus, the company beat the record year of 2019, despite the fact that, according to official analyses, the market was about 18% below the level of 2019. The significant increase in revenues was mainly related to the receding Covid-19 pandemic and the fact that tourists are eager to return to their holidays after the restrictions are lifted abroad. • In the area of air services, the company achieved PLN 981.5 million in turnover (+90.5% y/y), and PLN 24.6 million in on-board sales sales (+13.7% y/y). • In the discussed period, the cost of sales increased by 120.8% y/y to PLN 842.1 million, and the main factor contributing to the higher level of costs compared to the corresponding period of the previous year is primarily an increase in the costs of materials and energy consumption (+ 167.8% y/y) and external services (+146.1% y/y) due to higher number of performed air operations. • Gross result on the sale of the company amounted to PLN 164.0 million (+5.5% y/y). • In Q3'22, the company recorded PLN 56.9 million in other operating income, which was related to the remission of the PFR loan. • At the IFRS16 EBITDA level, Enter Air reported a profit of PLN 266.6 million (+29.4% y/y). • The company's financial balance amounted to PLN -103.3 million (of which PLN -91.0 million were exchange differences from the balance sheet valuation). The result was increased by the profit on the settlement of entities accounted for using the equity method (PLN 5.5 million - applies to Chair Airlines AG). • In the discussed period, the company generated a net result of PLN 104.0 million (+37.6% y/y). • In the discussed period, cash flow from operating activities amounted to PLN 240.8 million (vs. PLN 226 million in the previous year), investment CF = PLN - 0.3 million, and financial CF = PLN -83.5 million. At the end of September 2022, the group had PLN 448.9 million in cash (+PLN 164.9 million q/q). • Next year, the company wants to fly more from Western Europe. Already, it is noting a significant increase in revenues from abroad, it intends to mark its presence more strongly on the Scandinavian and German-speaking markets, where it is gaining more and more recognition and is appreciated for its quality. • In the summer season, the company used the entire available fleet of 25 aircraft (23 Boeing 737-800 aircraft and 2 737 MAX 8 aircraft) and two additional wet-lease aircraft. In Poland, Enter Air operated connections for the largest tour operators and, at the same time, its long-term partners. Before the start of the season, the carrier signed charter contracts for the Summer 2022 and Winter 2022/23 seasons with TUI Poland (with an estimated value of PLN 543.3 million), Coral Travel Poland (with an estimated value of PLN 312.6 million) and Rainbow Tours (with an estimated value of PLN 312.6 million). PLN 159.5 million). Enter Air also cooperates with Itaka Holdings. • The Group signed further annexes amending lease agreements, which mainly concerned changes to schedules and rules for calculating lease payments during the Covid-19 pandemic. The agreements are aimed at reducing the group's financial burden in the winter, when sales proceeds are significantly lower. • At the end of September 2022, the average employment was 538 people vs. 462 in 2021 Analyst: Krzysztof Tkocz krzysztof.tkocz@bdm.pl tel.: (+48) 516 086 705 GPW’s Analytical Coverage Support Programme 3.0  
Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges

Analytical Report - WSE:RVU -Ryvu Therapeutics

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 30.11.2022 11:44
Recommendation: Buy 12M TP: PLN 68.7 Company signed partnering deal with Biotech and sales license for STING agonists compounds with following highlights: • Upfront payment EUR 20mn • Bio-dollar value EUR 876mn • Low single digit royalties Additionally Biotech has committed to invest EUR 20mn in Rvyu by purchasing shares of series J at price not higher than PLN 48.86/sh. Company has showed new presentation that included deal with Biontech which can be found under this link Our view: POSITIVE We underline that company has already sold part of rights to this compound to Exelixis and in our last report, we valued STING agonist compound at PLN 328mn (assuming bio-dollar value of USD 400mn and upfront payment USD 3mn) and we valued company’s shares at PLN 68.7/sh. Now, additionally assuming the upfront payment of EUR 20mn and bio dollar value of EUR 876mn from Biontech without changing any other factors, we estimate rNPV of this compound at PLN 857mn and in such case our model would indicate company’s share price at PLN 92/sh. We underline such deal as well as commitment of Biontech to invest in company share significantly increase credibility of Ryvu Therapeutics and all projects developed by company. Analyst: Marcin Górnik Tel.: 691 701 088 marcin.gornik@pekao.com. pl GPW’s Analytical Coverage Support Programme 3.0  
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Saxo Bank Podcast: Zoom In Fed Chair Powel's Speech And Apple, Crowdstrike And More

Saxo Bank Saxo Bank 30.11.2022 12:09
Summary:  Today we note that Fed Chair Powell is set to speak later today and will likely try to push back against the recent strong easing of financial conditions and pricing of hefty Fed rate cuts that the market has priced to start as early as late 2023. If Powell can't impress the market, the incoming US data might have to do so, with the November ADP private payrolls up today and the PCE inflation data tomorrow. Elsewhere, we zoom in on the latest on crude oil and commodity performance this month, talk Apple, Crowdstrike and incoming earnings and more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Can a hawkish Powell pour cold water on this market? | Saxo Group (home.saxo)
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

AMZN: Market Nears The End Of The Primary Wave Ⓐ

Jing Ren Jing Ren 30.11.2022 13:05
The internal structure of AMZN hints at the development of a corrective trend. It is assumed that a zigzag is formed, which consists of sub-waves a-b-c of the cycle degree. Perhaps at the end of last year, the market completed the formation of the first major wave a, it is a bullish 5-wave impulse. After the end of the impulse growth, the price began to decline, which may indicate the beginning of the construction of a bearish correction b. It may take the form of a zigzag â’¶-â’·-â’¸ of the primary degree. Most likely, in the near future we will see a continuation of the depreciation of stocks in the final intermediate wave (5) of the leading diagonal â’¶ to 77.07. At that level, wave (5) will be at 100% of previous impulse (3). After the end of the wave â’¶, we expect the growth of stocks in the primary correction â’·. Let's consider the second option, when the market has completed the formation of the primary wave â’¶, where, as in the first option, it has the form of a leading diagonal (1)-(2)-(3)-(4)-(5). In this case, in the last section of the chart, we see a price increase within the sideways correction â’·. It is assumed that the correction wave â’· will take the form of an intermediate double three (W)-(X)-(Y), where the actionary wave (W) is also a double zigzag W-X-Y of a lesser degree. Perhaps the second intervening wave (X) has also come to an end, so an upward movement in the final wave (Y) to a maximum of 146.85 is expected in the near future.
WTI Oil Shows Signs of Short-Term Uptrend Amid Medium-Term Uptrend Phase

Euro feels a bit better after the release of European inflation data

Craig Erlam Craig Erlam 30.11.2022 18:12
Equity markets are off to a positive start on Wednesday as we await a slew of big economic releases and a speech from Fed Chair Jerome Powell. It’s already been a very headline-driven week, particularly where oil is concerned, while Covid restrictions and protests in China have very much set the tone in Asia, and to a lesser extent elsewhere. The headwinds facing China are intensifying and the protests of recent days could make it even more challenging to navigate. That said, what we’ve heard so far has been promising and potentially indicative of a plan that was already in the works. But we shouldn’t kid ourselves. In the event that China commits 100% to its vaccine drive, especially among the elderly and vulnerable, the move away from zero Covid will take time as the virus spreads rapidly throughout the country necessitating swift action to control the spread. Even the best-case scenario is one of significant turbulence for the world’s second-largest economy next year. Chinese PMIs highlight the challenges ahead The PMIs highlight just how difficult the situation is in China, with the zero-Covid stance combined with the property market crackdown severely impacting domestic sentiment, while a slowing global economy weighs on external demand. With both the manufacturing and non-manufacturing PMIs falling deeper into contraction territory than anticipated, the country really has a mountain to climb in order to achieve decent, consistent growth once more. Some rare good news on inflation The euro is a little higher on the day against the dollar after CPI data for the currency bloc slowed to 10%, far below market expectations of around 10.4%. While still extraordinarily high, it does offer hope that inflation may have peaked and the deceleration could be faster than anticipated, in much the same way it was on the way up. The single currency was choppy in the aftermath of the release, while markets now view the possibility of a 50 or 75 basis points hike in December as a coin flip after previously heavily favouring the latter. That could be a positive for the euro if it means less of an economic slump, with the bloc already likely heading for recession. Rising for now Bitcoin is making steady gains in the session, up more than 2% and eyeing a second positive session. It did run into resistance around $1,700 again, the upper end of its range over the last couple of weeks. While we could see a bigger correction to the upside, especially if we’re treated to some dovish commentary from Powell, I’m not convinced it would be anything more than that. The industry has been shaken by the FTX collapse and as a result, bitcoin could remain vulnerable to further plunges in the price. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Cautiously optimistic - MarketPulseMarketPulse
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

The S&P 500 Is Still On Track For A Monthly Gain

InstaForex Analysis InstaForex Analysis 01.12.2022 08:00
Stock markets saw another downturn as traders considered latest economic data and Fed Chairman Jerome Powell's speech for clues as to whether the central bank will ease the pace of rate hikes to prevent a hard landing. On the bright side, the S&P 500 is still on track for a monthly gain despite recent losses. This is the longest streak since August 2021. Bond yields have also risen. As for European stock indices, they are more confident, thanks to falling inflation in the eurozone. Powell's speech is expected to stress that the fight against inflation will last until 2023. It may not be an overly hawkish tone, but it will be hawkish nonetheless. But this does not mean that stock markets will collapse because given the real Fed targets right now, a strong year-end rally is less likely than many think. A slew of economic data was also released, with key US activity indicators painting a mixed picture in the third quarter. Jobless claims falling in October is an encouraging sign for the Fed as it seeks to curb demand. Key events this week: - S&P Global PMI, Thursday - US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday - BOJ's Haruhiko Kuroda speech, Thursday - US unemployment, nonfarm payrolls, Friday - ECB's Christine Lagarde speech, Friday     Relevance up to 17:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/328634
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

There Was Good Close On The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 01.12.2022 08:11
At the close of the New York Stock Exchange, the Dow Jones rose 2.18% to a 6-month high, the S&P 500 rose 3.09% and the NASDAQ Composite index rose 4.41%. Dow Jones The leading gainers among the components of the Dow Jones index today were shares of Microsoft Corporation, which gained 14.81 points (6.16%) to close at 255.14. Salesforce Inc rose 8.57 points or 5.65% to close at 160.25. Apple Inc rose 4.86% or 6.86 points to close at 148.03. The least gainers were Walmart Inc, which shed 0.55 points or 0.36% to end the session at 152.42. 3M Company rose 0.13% or 0.16 points to close at 125.97, while Caterpillar Inc rose 0.55% or 1.29 points to close at 236.41. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Estee Lauder Companies Inc (NYSE:EL), which rose 9.70% to 235.79, Netflix Inc, which gained 8.75% to close at 305.53, as well as shares of Hewlett Packard Enterprise Co, which rose 8.57% to close the session at 16.79. The least gainers were NetApp Inc, which shed 5.82% to close at 67.61. Shares of Charles River Laboratories shed 4.56% to end the session at 228.57. Hormel Foods Corporation fell 2.47% to 47.00. NASDAQ The top performers on the NASDAQ Composite Index today were Biophytis, which rose 92.03% to hit 0.67, Corbus Pharmaceuticals Holding, which gained 60.08% to close at 0.19, and Biodesix Inc, which rose 47.06% to end the session at 2.00. The least gainers were Aeglea Bio Therapeutics Inc, which shed 65.98% to close at 0.41. Shares of CN Energy Group Inc lost 44.93% and ended the session at 0.82. Pacifico Acquisition Corp lost 42.81% to 5.41. Number On the New York Stock Exchange, the number of securities that rose in price (2686) exceeded the number of those that closed in the red (442), while quotes of 105 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,913 companies rose in price, 872 fell, and 199 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 5.98% to 20.58. Gold Gold futures for February delivery added 1.99% or 34.75 to hit $1.00 a troy ounce. In other commodities, WTI crude for January delivery rose 2.86%, or 2.24, to $80.44 a barrel. Futures for Brent crude for February delivery rose 2.93%, or 2.47, to $86.72 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.76% to hit 1.04, while USD/JPY fell 0.44% to hit 138.07. Futures on the USD index fell 0.75% to 105.96.     Relevance up to 03:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/303272
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

The Nasdaq 100 Index Has The Potential To Appreciate Upwards

InstaForex Analysis InstaForex Analysis 01.12.2022 08:46
With the Descending Broadening Wedge pattern being broken as well level 100 being broken on CCI indicator on the 4-hour chart, the Nasdaq 100 index means that #NDX has the potential to appreciate upwards to the level of 12507.9 as long as there is no downward correction movement that exceeds the 11476.4 level because if this level is successfully exceeded then there is a high probability that the upward rally scenario described earlier will be cancelled. automatically. Relevance up to 05:00 2022-12-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/114983
Hong Kong’s Hang Seng Had Its Best Month | EU Inflation Slowed

Hong Kong’s Hang Seng Had Its Best Month | EU Inflation Slowed

Saxo Bank Saxo Bank 01.12.2022 09:08
Summary:  Fed Chair Powell signaled the moderation of the tightening pace could start as soon as December and the terminal Fed Fund rate would be “somewhat higher” than the FOMC’s September projections. His tone was overall less hawkish than feared. S&P 500 rose to its two-month high and Hong Kong’s Hang Seng had its best month since 1998. Bond prices surged with the 10-year treasury yield falling to 3.61%. Crude oil and commodity currencies gained. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) surged on Powell’s speech and signs of China relaxing Covid-19 restrictions Fed Chair Powell signaled that the Fed would start to moderate the pace of rate hikes as soon as December and the terminal rate might just be “somewhat higher” than the September FOMC’s projections. The less-than-feared comments stirred up another round of risk-on buying in equities. The sentiment was also bolstered by more signs coming out of China on the country’s course to ease Covid restrictions gradually despite the recent outbreaks. The S&P 500 rose by 3.1% to a two-month high. All sectors within the S&P 500, led by information technology and communication services, each rising by around 5%. Nasdaq 100 surged 4.6% to 12,030. The Dow Jones Index rose 2.2% and was said to have technically entered a bull market, after rising more than 20% from is September closing low. US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied on the lack of new hawkishness in Powell’s speech Yields edged up a few basis points after a mixed bag of data in the morning until Fed Chair Powell’s speech hit the wire in the New York afternoon, seeing yields reversing and yields of the 2-year up to the 5-year tumbling by more than 15bps almost immediately from the intra-day highs. The 5-year performed the best and finished the day 19bps richer at 3.74%. The 2-year yield dropped 16bps to 4.31% and the 10-year yield was 14bps lower to settle at 3.61%.  Powell reiterated his well-telegraphed higher-for-longer message but did not add additional hawkish pushback as some feared. He said that it makes sense to moderate the pace of rate increases as the Fed “approach[es] the level of restraint that will be sufficient to bring inflation down. The time for moderating the pace of rate increases may come as soon as the December meeting”. Further, his remark of terminal rate being “somewhat higher” than the Fed’s September projection was less hawkish than feared. Australia’s ASX200 (ASXSP200.1) about 3% away from its record high The Aussie market is up 12% from its October low, with commodities back in focus and rallying after the Fed signals a possibly smaller pace of rate hikes ahead. That has pressured the US dollar, with the US dollar index now down 5.4% from its peak, and that’s supported commodity prices higher, plus, as above, there is forward looking optimism on China. Locally, equites also appear supported in Australia as monthly inflation data came out weaker than expected yesterday, which supports the RBA remaining dovish and likely only hiking by 25bps (0.25%) next week. However, the important inflation read (quarterly CPI) is due early next year, which will be a more accurate reflection of price rises, and will likely show inflation in Australia is more sticky than monthly inflation read alluded to. Also consider if the best performers of late (who are all commodity companies) can continue to build momentum if stimulus continues in China’s property sector. In November, copper-gold company Sandfire (SFR) rose 45%, energy business Origin Energy gained 41% while Australia’s fourth biggest iron ore company, Champion Iron (CIA) rose 35%, with Nickel company Nickel Industries (NIC) following up 33%. So, it’s clear to say we are watching commodity companies closely as we believe the world will still struggle with the lack of tangible supply. Hong Kong’s Hang Seng (HIZ2) gained on the removal of lockdown in four Guangzhou districts Hong Kong stocks surged on Wednesday afternoon after Guangzhou lifted the lockdown in four districts even when the number of new cases was still rising in the city. Hang Seng Index climbed 2.2% with consumer discretionary, consumer staples, and industrials rising the most. In the consumer space, food and beverage names surged, with Haidilao (06862:xhkg) up 15.5% and Xiabuxiabu Catering (00520:xhkg) up 10.9%. Bilibili (09626:xhkg) jumped nearly 17% on the earnings beat. The three Chinese airlines listed in Hong Kong gained around 5% each on reopening optimism. The share prices of automakers jumped 4% to 11% on speculation for an extension of purchase tax credits for petrol vehicles. EV maker XPeng (09868:xhkg) surged 16% ahead of earnings. Another EV maker, Li Auto (02015) surged 8.9%. Hang Seng finished November up more than 26%.  It was the best monthly performance since October 1998 at the end of the Asian financial crisis. After Hong Kong market closed, XPeng reported Q3 results, missing analyst estimates but the share price of its ADRs jumped 46%. In A shares, CSI 300 was flat with auto names outperforming. FX: NZDUSD broke above 0.63, USDJPY below 137.50 Lower yields drove the US dollar lower after Powell’s speech lacked any hints of keeping the door open for 75bps in December or laying out a path for rate hikes through the course of 2023. The Euro was supported by Powell's dovish speech taking EUR/USD back above 1.04, but lacked conviction as hawkish ECB bets also retreated after a softer Eurozone CPI for November. The biggest gainers were NOK and NZD, and NZDUSD broke above the pivotal 0.63 which is the 200dma. USDJPY heading lower for a test of 137 with 200dma next in sight at 134.50. Crude oil (CLZ2 & LCOF3) higher on weaker USD and lower US inventories Crude oil markets extended recent gains amid signs of strong demand. US crude oil inventories fell by 12.6mbbl last week, the biggest decline since June 2019, according to EIA data. Meanwhile, Chinese authorities announced relaxation of Zero Covid policies in Guangzhou despite worsening Covid outbreak, signalling a better demand outlook as well. The lack of escalation in Powell’s speech also turned the dollar lower. WTI futures rose to $81/barrel while Brent futures rose above $85. The focus is now shifting to the weekend OPEC meeting, with some expecting a cut while others suggest a rollover of the current deal is more likely. Breakout in Silver (XAGUSD), Gold (XAUUSD) up as well Silver broke above the key 22 level to its highest levels since May this year as Powell signalled that the pace of interest rate hikes will slow in December. Gold edged higher as well and finished the month up over 8%, the biggest gains since July 2020. Next key levels to watch in Gold will be the 200dma and key level at 1808 while Silver may likely be heading to the 0.618 retracement at 23.35.   What to consider? Jerome Powell sticks to the script Fed Chair Powell repeated his comments from the November FOMC and what we have heard more generally from the Fed speakers over the course of the month. He said it makes sense to moderate the pace of interest rate hikes and the time to moderate the pace of hikes may come as soon as December, while he added it seems likely that rates must ultimately go somewhat higher than what was thought in the September SEPs. Powell also said they have made substantial progress towards sufficiently restrictive policy but have more ground to cover and they will likely need to hold policy at a restrictive level for some time. While his comments still tilted towards the hawkish side but there was no escalation that the markets had hoped for. His comment that he does not want to over-tighten but cutting rates is not something to do soon was a slight contrast to his earlier acceptance that risk of tightening less is greater that the risk over-tightening. Fed's Cook (voter) also said it is prudent for the Fed to hike in smaller steps as it moves forward and how far the Fed goes with hikes depends on how the economy responds, overall sticking to the consensus. US economic data broadly weaker, focus now on PCE prices and ISM manufacturing The private ADP jobs report showed US payrolls rose 127,000 this month, the slowest pace in nearly two years, as wage gains moderated. Job openings also fell in October to 10.334mln from September's 10.687mln, reversing a surprise jump in the prior month but still remaining elevated, according to the JOLTS report. The biggest downside surprise came in Chicago PMI for November which came in at 37.2 against an expected 47.0, falling from a prior 45.2. While monthly surveys can be noisy, but this one is now flirting with pandemic lows and puts the focus on ISM manufacturing due today. The only ray of positive news came from the Q3 GDP release which was upwardly revised by to 2.9% from 2.6% previously. Softer EU CPI weakens hawkish ECB bets Euro inflation slowed for the first time in 1.5 years to 10% in November from 10.6% YoY in October. ECB officials have highlighted the data will be key for their next rate decision, suggesting lower chance of another 75bps rate hike at the December 15 meeting. Still, it remains hard to say that inflation in the Eurozone has peaked. ECB members also remain broadly hawkish and suggest that the commitment to bring inflation back to target will stay. Guangzhou lifted the lockdown of several districts as a sign of easing restrictions even as new cases at elevated levels Guangzhou, the third largest city in China and the capital of the southern province of Guangdong, removed the “temporary control areas” restrictions of several districts even though the city’s daily new cases of Covid-19 stayed at nearly 7,000. It was an encouraging sign pointing to China’s willingness to continue the fine-tuning measures that it had recently started despite the surge in new cases across the country. Speaking at a pandemic control policy workshop, Vice Premier Sun Chunlian emphasized the importance of gradually fine-tuning the pandemic control measures in response to the lower fatality of the Omicron, higher vaccination rate, and the accumulation of experience in containing the spread of the virus. Equities in focus that could benefit from rate hikes not being as aggressive, and from the festive season spending It’s the world’s first festive season not in lockdown (excluding China), so we are watching retailer shares given they will likely benefit from retail shopping rising. It’s worth watching travel and tourism companies with the market forward looking and seeing that travel-services revenue could likely continue to gain momentum. Carnival shares are up 44% from October with the company seeing some of its strongest sales since pre-covid, Royal Caribbean shares are up 83% from July. We are also watching other travel affiliated companies do well, like Boeing, which is up 48% from September, as well as airlines, such as Singapore Airlines, Qantas, Air New Zealand. However, we think although the travel and tourism sector, especially airlines, will likely see a pick-up in sales amid the seasonality, we wonder if airlines will be able to extend their share price rally into 2023 as fuel costs are not expected offer respite into 2023. This means, those larger companies or those with a wide moat, might be more in focus, as they will be more likely able to sustain the costs pressures.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: Powell’s lack of new hawkishness; Guangzhou restrictions eased – 1 December 2022 | Saxo Group (home.saxo)
OPEC+ Meeting: Saudi Arabia Implements Deeper Voluntary Cuts to Boost Oil Prices

The International Energy Agency (IEA) Expects Russian Crude Production To Fall

Saxo Bank Saxo Bank 01.12.2022 09:35
Summary:  Jerome Powell signals downshift likely next month; stocks surge. Dow Jones enters bull market. ASX200 is a sneeze off its record all time high. Focus is on commodity companies with China easing some restrictions and retailers ahead of potential festive season rally. We cover the three key areas of equities to be across and the stocks you might like to watch, with some already up 80% from their fresh lows What’s happening in markets? The US; Fed Chair Jerome Powell signaled the Fed will likely not be as aggressive next month, and only hike by 50 bps (0.5%), however he suggested the hiking cycle is far from over to slow inflation. He said the Fed will need "substantially more evidence" to ensure prices are moderating, with the path ahead for inflation remaining highly uncertain. However, amid the somewhat dovish pivot, Bond traders coiled back their peak rate expectations to below 5%, and that resulted in treasury yields falling; the 10-year yield fell 11 bps to 3.63%, pushing the dollar down against the entire G-10 basket. As a result, the S&P 500 rose 3.1% to a two-month high, while it notched its longest monthly winning streak since August 2021. The Dow Jones 30, rose 2.2% and entered a bull market, after collectively rising 20% from its September low. Gold spiked more than 1%, with most commodities rallying up supported by the US dollar falling. Crude oil rose 2.9% to $80.44 - getting an extra boost on forward looking optimism that China is encouraging vaccinations, while at the same time the International Energy Agency (IEA) said it expects Russian crude production to fall by some 2 million barrels of oil per day by the end of the first quarter next year. However gains were capped in oil as OPEC+ is due to hold its December 4 meeting and reports swirled that OPEC is not really likely to shift its policy. In Australia, the ASX200 (ASXSP200.1) is 3% away from its record high The Aussie market is up 12% from its October low, with commodities back in focus and rallying after the Fed signals a possibly smaller pace of rate hikes ahead while one key province in China has eased restrictions. The Fed’s somewhat pivot has pressured the US dollar (with the US dollar index down 5.4% from its peak). This is also supporting commodity prices higher, as well as the forward looking optimism on China. Locally, equites also appear supported as monthly inflation data came out weaker than expected yesterday - which supports the RBA remaining dovish and likely only hiking by 25bps (0.25%) next week. However, the important inflation read (quarterly CPI) is due early next year, which will be a more accurate reflection of price rises, and will likely show inflation in Australia is more sticky than monthly inflation read alluded to.(remember the RBA previously mentioned food and energy prices would rise – we didn’t see that reflected in yesterday’s data, but it will likely be reflected in the quarterly CPI read due out next year).   Three considerations and investment areas to watch  Firstly, consider if the best performers of late (who are all commodity companies) can continue to build momentum if stimulus continues in China’s property sector In November, copper-gold company Sandfire (SFR) rose 45%, energy business Origin Energy gained 41% while Australia’s fourth biggest iron ore company, Champion Iron (CIA) rose 35%, with Nickel company Nickel Industries (NIC) following up 33%. So, it’s clear to say we are watching commodity companies closely as we believe the world will still struggle with the lack of tangible supply. Secondly, watch those companies that could benefit from rate hikes not being as aggressive, and from the festive season spending It’s the world’s first festive season not in lockdown (excluding China), so we are watching retailer shares given they will likely benefit from retail shopping. As we’ve also been reporting, it’s worth watching retailers like perhaps JBH, HVN, Premier Investments (PMV), given they will likely benefit from Xmas shopping revenue rising. Also, travel and tourism companies will be on watch with travel-services spending likely to continue to gain momentum. Carnival shares are up 44% from October with the company seeing some of its strongest sales since pre-covid, Royal Caribbean shares are up 83% from July. We are also watching other travel affiliated companies do well, like Boeing, which is up 48% from September, as well as airlines, such as Singapore Airlines, Qantas, Air New Zealand. However we think although the travel and tourism sector, especially airlines, will likely see a pick up in sales amid the seasonality, we wonder if airlines will be able to extend their share price rally into 2023 as fuel costs are not expected offer respite into 2023. This means, those larger companies or those with a wide moat, might be more in focus, as they will be more likely able to sustain the costs pressures. And thirdly, as well, keep an eye on companies making the news Australia’s biggest oil companies will be a focus with the oil price likely to pick up next year. Woodside (WDS) today announced it sees operating cashflow at around $7-9 billion in the next five years. BHP (BHP) is also in a focus with its CEO saying steel demand from China will grow next year. Mike Henry sees China’s economy only experience a short-term slowdown before returning to a long-term growth. Lastly, other companies to watch include those lockdown stalwarts that aren’t doing so well, like Domino’s Pizza (DMP) with the company planning to raise $165 million in capital. Domino’s operates in Australia, NZ, France, Belgium and Asia. Domino’s Pizza shares are down 56% from their covid high. But the market thinks the business could see a turn around in revenue growth next year and the year after. So if you are a long-term investor, that’s food for thought.   For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast.     Source: Daily Dose of financial insights for investors and traders; Fed signals likely downshift, China eases some restrictions. Santa rally? | Saxo Group (home.saxo)
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

The ECB Members Also Remain Broadly Hawkish | US Payrolls Rose This Month

Saxo Bank Saxo Bank 01.12.2022 09:46
Summary:  The US equity market exploded higher yesterday in the wake of a Fed Chair Powell speech that outlined the Fed’s view on inflationary risks and the preferred course of monetary policy. Powell confirmed the market view that the Fed willl downshift to a smaller 50-bp hike at the December FOMC meeting. Weak US data added to the sense that an economic slowdown is underway, taking long US treasury yields to new local lows.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities exploded higher yesterday after Fed Chair Powell’s speech failed to push back against easing financial conditions and as US yields dropped further. This gives the impression that further soft data from the US (see preview below) that takes yields lower still will see an extension of this market squeeze higher, despite the implications from softer data that a recession draws nearer. The Nasdaq 100 index closed clear of the important 12,000 level for the first time since September yesterday and may extend its rally to the 200-day moving average, currently near 12,550 for the cash index. The S&P 500 spiked to new highs since September as well and cleared its 200-day moving average at 4,050, closing at 4,080 on the day. This is the first time that moving average has fallen since the March-April time frame. THe next major resistance there is the pivot high near 4,325 from August. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Hang Seng Index climbed 1.7% and CSI300 Index gained 1.5% following the less-hawkish-than-feared speech from the U.S. Fed Chair Powell overnight and China’s Vice-Premier Sun Chunlan, who oversees containing the spread of Covid-19, acknowledged in a pandemic control export workshop that the Omicron variant is less deadly. Mega-cap China internet stocks surged 4-5%. EV maker XPeng (09868:xhkg) jumped 13% after reporting Q3 earnings. Caixin China PMI Manufacturing came in at 49.4 in November, above the consensus estimate of 48.9 and October’s 49.2. USD blasted after Fed Chair Powell’s speech craters US treasury yields, sparks risk-on rally Fed Chair Powell failed to make any notable pushback against easing financial conditions in his speech yesterday (more below), and US Treasury yields downshifted sharply all along the curve after he confirmed the likely downshift to a 50-basis point hike at the December FOMC meeting, with weak US data also pushing US yields lower. The US dollar was lower across the board: EURUSD rushed back higher, and trades this morning not far below the pivotal 1.0500 area, which could open up for 1.0600+, while the action in US yields was a particular tailwind for USDJPY bears, as that pair fell to new local lows well south of the former 137.50 low water mark, hitting 136.21 overnight and possibly on its way for a test of the 200-day moving average near 134.50. Gold trades higher supported by a breakout in silver Silver’s impressive 16% rally last month extended overnight following Powell’s speech in which he signaled a slowdown in the pace of future rate hikes. It trades around $22.25, the 50% retracement of the March to September selloff, and a close above could see it challenge $23.35 next. In addition, the recent dollar and yield slump, the metal has also been supported by improved supply and demand fundamentals.  Gold has built on last month's impressive 8% gain and has now returned to challenging a key area of resistance between $1788 and $1808. Focus on the dollar and incoming US data starting with today’s ISM and Friday’s job report. Crude oil (CLF3 & LCOF3) supported by weaker USD and lower US inventories Crude oil’s three-day recovery has been supported by a weaker dollar and traders assessing signals that China may soften its Covid Zero policy after China’s Vice Premier in charge of fighting Covid acknowledged the Omicron variant is less deadly. Developments that have forced a reduction in recently established short positions ahead of Sunday’s OPEC+ meeting. A meeting that is likely to be strong on words but low on actions, not least considering the unclear impact of an EU embargo on Russian oil starting next week. In addition, US crude stocks fell by 12.6mbbl last week, the biggest decline since June 2019, while the net crude and product export hit a record, highlighting continued strong demand amid Russian sanctions. US treasury yields recovered after dip to local lows. (TLT:xnas, IEF:xnas, SHY:xnas) With Fed Chair Powell confirming a likely downshift to a smaller hike in December and not pushing back against easing financial conditions, the entire US Treasury yield curve fell sharply yesterday, with treasury buying also encouraged by weak US data, including a terrible Chicago PMI and weak ADP private payrolls growth number. The 10-year treasury yield benchmark hit a new local low near 3.60% and is now only 10 basis points above the pivotal 3.50% area, which was the major pivot high from June. What is going on? Jerome Powell sticks to the script Fed Chair Powell repeated his comments from the November FOMC and what we have heard more generally from the Fed speakers over the course of the month. He said it makes sense to moderate the pace of interest rate hikes and the time to moderate the pace of hikes may come as soon as December, while he added it seems likely that rates must ultimately go somewhat higher than what was thought in the September FOMC projections. Powell also said they have made substantial progress towards sufficiently restrictive policy but have more ground to cover and they will likely need to hold policy at a restrictive level for some time. While his comments still tilted towards the hawkish side, there was no specific hawkish pushback against the markets pricing of significant rate cuts in 2024 that the markets feared. His comment that he does not want to over-tighten but cutting rates is not something to do soon was a slight contrast to his earlier acceptance that risk of tightening insufficiently is greater than the risk over-tightening. The Fed's Cook (voter) also said it is prudent for the Fed to hike in smaller steps as it moves forward and how far the Fed goes with hikes depends on how the economy responds, overall sticking to the consensus. US economic data broadly weaker, focus now on PCE prices and ISM manufacturing The private ADP jobs report showed US payrolls rose 127,000 this month, the slowest pace in nearly two years, as wage gains moderated. Job openings also fell in October to 10.334mln from September's 10.687mln, reversing a surprise jump in the prior month but remaining elevated, according to the JOLTS report. The biggest downside surprise came in Chicago PMI for November which came in at 37.2 against an expected 47.0, falling from a prior 45.2. While monthly surveys can be noisy, but this one is now flirting with pandemic lows and puts the focus on ISM manufacturing due today. The only ray of positive news came from the Q3 GDP release which was upwardly revised by to 2.9% from 2.6% previously. Softer EU CPI weakens hawkish ECB bets Euro inflation slowed for the first time in 1.5 years to 10% in November from 10.6% YoY in October. ECB officials have highlighted the data will be key for their next rate decision, suggesting lower chance of another 75bps rate hike at the December 15 meeting. Still, it remains hard to say that inflation in the Eurozone has peaked. ECB members also remain broadly hawkish and suggest that the commitment to bring inflation back to target will stay Guangzhou lifted the lockdown of several districts as a sign of easing restrictions even as new cases at elevated levels  Guangzhou, the third largest city in China and the capital of the southern province of Guangdong, removed the “temporary control areas” restrictions of several districts even though the city’s daily new cases of Covid-19 stayed at nearly 7,000. It was an encouraging sign pointing to China’s willingness to continue the fine-tuning measures that it had recently started despite the surge in new cases across the country.   China’s Vice Premier in charge of fighting Covid acknowledged the Omicron variant is less deadly Speaking at a pandemic control policy workshop, Vice Premier Sun Chunlan emphasized the optimization measures of the pandemic control were supported by a lower fatality rate caused by the Omicron variant, an increasing vaccination rate, and the accumulation of experience in containing the spread of the virus. She called for the acceleration of vaccination and preparation of therapeutic drugs and the news report did not quote her mentioning the dynamic zero-Covid policy What are we watching next? Melt-up in risk if US data remains tepid or worse? The reaction to Fed Chair Powell’s speech yesterday and soft US data comes ahead of a string of US data through tomorrow’s November US jobs report. If the data is in-line or especially if it is a bit softer than expected, the market may continue to celebrate the implications of a lower peak for the Fed policy rate, as well as for the impact on valuations if longer US treasury yields also continue falling. Despite Chair Powell specifically indicating that peak Fed rates next year are likely set to rise above the Fed’s own forecasts from the September FOMC meeting, the market dropped its forecast for peak rates yesterday by several basis points in the wake of his speech. Eventually, market may begin to fret the impact of an incoming recession on asset valuations, but for now, the one-dimensional focus on the monetary policy outlook and rates persists. For the risk-on to continue, we would likely need to see a benign PCE Core inflation data point today, in-line or below expectations of +0.3% MoM and +5.0% YoY (vs. +5.1% in September and Feb. peak of 5.4%). The ISM Manufacturing survey today (expected: 49.7, which would be first sub-50 reading since 2020) is less important than Monday’s ISM Services, but the jobs report tomorrow is important, as a slackening US jobs market will be a key ingredient to confirm a slowdown (and the weekly jobless claims usually give off a warning for many weeks before the evidence shows up in the monthly report – the latest weekly number is up today and it will take some time for this indicator to point to weakness in the US jobs market. The market will be in for significant churn if we get a hotter core inflation reading and a strong jobs report. Earnings to watch A heavy focus on Canadian banks today, as three are reporting, including the largest of them all, Toronto-Dominion. Marvell Technology is a significant semiconductor company with 5G solutions and has been on the comeback trail, up some 30% from its lows ahead of today’s report after the market close, as will Veeva Systems. Today: Canadian Imperial Bank of Commerce, Bank of Montreal, Toronto-Dominion Bank, Marvell Technology, Veeva Systems, Ulta Beauty, Zscaler, Dollar General, Kroger Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Final November Manufacturing PMI 0930 – UK Final November Manufacturing PMI 1000 – Eurozone Oct. Unemployment Rate 1230 – US Nov. Challenger Job Cuts 1330 – US Oct. PCE Inflation 1330 – US Weekly Initial Jobless Claims 1420 – US Fed’s Logan (Voter 2023) to speak 1500 – US Nov. ISM Manufacturing 1530 – US Weekly Natural Gas Storage Change 1645 – ECB Chief Economist Lane to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – December 1, 2022 | Saxo Group (home.saxo)
Peer Valuation: Toya's Position Among Global Power and Hand Tool Producers

Analyst Comment – Simfabric - Q3’22 Results – WSE:SIM

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 01.12.2022 11:12
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme Last recommendation BDM: SELL with target price 7,5 PLN/share (2022/10/07) LINK BDM Comment: SimFabric's results for Q3'22 in terms of revenues and EBIT are significantly below our expectations, which is why we percive them negatively. In the quarter under review, the company generated only PLN 0.4m in revenues from sales of products (-74.4% y/y, -84.4% q/q). SIM did not present the revenue structure as it was done in previous reports. However, we believe that such a large decrease in revenues is the result of the lack of or insignificant impact of the recognition of elearning materials and payments on the production of publishing games. In our last recommendation, we indicated that the company had booked a total of PLN 14.9m/EUR 3.3m in revenues from three games developed under contract publishing agreements vs. EUR 3.6m contracted. The above result may be related to the use of the aforementioned pool of funds. Assuming that the created projects are ready/nearing completion, this may indicate the upcoming premieres of these games. However, bearing in mind the release of only one demo for one of the three games ("ElectriX") and the lack of marketing campaigns, the rest of the projects may need additional funds to complete them. Moving on to the costs. The large drop in revenues resulted in a proportionally large drop in operating expenses, which amounted to just PLN 0.2m (-87.7% y/y, -89.6% q/q). The majority of this item was depreciation (PLN 0.2 million), external services related to the production of games amounted to PLN -0.1 million (vs. PLN 1.3 million in Q2'22), and salaries PLN 11 thousand. PLN (-98.3% y/y and -31.3% q/q). In the last quarter, the company generated PLN 0.4 million EBITDA (-35.9% y/y, -62.2% y/y). In Q3'22, the company recognized PLN 1.6m in financial revenue, which boosted its net profit for the period to PLN 1.5m. Net profit of parent comapny amounted to PLN 1.0 million. Cash flows from operating activities in Q3'22 amounted to PLN -3.8 million, cash flows from investing activities amounted to PLN -1.4 million, and cash flows from financial activities amounted to PLN +4.0 million (PLN 4.0 million from the net effect of the capital increase). At the end of September 2022, the company had PLN 5.9m in cash and cash equivalents (PLN -1.2m q/q). The company's intangible assets increased from PLN 5.6m at the end of Q2'22 to PLN 6.9m at the end of Q3'22 (of which PLN 5.3m was costs of games in progress = PLN +1.0m q/q , PLN 1.1 million costs of completed games = PLN -0.3 million q/q, and PLN 0.5 million acquired rights to games). Trade and other receivables increased from PLN 12.8 million at the end of Q2'22 to PLN 13.2 million at the end of September'22 (PLN +0.4 million). In addition, on November 29, 2022. the company received information from Valve (owner of the Steam store), on the basis of which the company's account this store has been blocked. Thus, at the moment, SIM cannot sell or promote its projects on this platform, which we perceive negatively. SimFabric has contacted STEAM and the matter is currently being investigated in detail by STEAM in cooperation with the company. In the announcement, the company's management board informed that it will make every effort to clarify the matter as soon as possible and restore the operation of the STEAM account in the shortest possible time. • In Q3'22, the company generated only PLN 0.4m in revenues from product sales (-74.4% y/y, -84.4% q/q). The company did not present the revenue structure as it was done in previous reports. We tink that such a large decrease in revenues is the result of the lack of or insignificant impact of the recognition of e-learning materials and payments on the production of publishing games. • A large decrease in revenues was followed by a proportionally large decrease in operating costs, which amounted to only PLN 0.2 million (-87.7% y/y, -89.6% q/q). The majority of this item was depreciation (PLN 0.2 million), and external services related to the production of games amounted to PLN -0.1 million (vs. PLN 1.3 million in Q2'22). • In the last quarter, the company generated PLN 0.4 million EBITDA (-35.9% y/y, -62.2% y/y). • In Q3'22, the company recognized PLN 1.6 million in financial revenues, which increased its net profit for the period, which amounted to PLN 1.5 million. Net profit of parent comapny amounted to PLN 1.0 million. • Cash flows from operating activities in Q3'22 amounted to PLN -3.8 million, cash flows from investing activities amounted to PLN -1.4 million, and cash flows from financial activities amounted to PLN +4.0 million (PLN 4.0 million from the net impact of the capital increase ). At the end of September 2022, the company had PLN 5.9m in cash and cash equivalents (PLN -1.2m q/q). • The company's intangible assets increased from PLN 5.6m at the end of Q2'22 to PLN 6.9m at the end of Q3'22 (of which PLN 5.3m was costs of games in progress = PLN +1.0m q/ q, PLN 1.1 million costs of completed games = PLN -0.3 million q/q, and PLN 0.5 million acquired rights to games). • Trade and other receivables increased from PLN 12.8 million at the end of Q2'22 to PLN 13.2 million at the end of September'22 (PLN +0.4 million). • In Q3'22, the company successfully completed the first stage of production of the first game based on the "Play to Earn" model and blockchain technology. The first game project in this model is implemented as part of the 6th pillar of the Company's Sustainable Development Strategy and is financed from a grant for the development of blockchain technology, awarded to the company by the Swiss DFINITY Foundation. Currently, work is underway on the next stage of the game's development, consisting in the issue of NFT tokens. • During the festival, the Mushrooms: Forest Walker PC demo was downloaded by over 7,000 players worldwide. The full game is currently being finalized. • During the festival, the demo game "My Demon Wife" was downloaded by over 5,000 players worldwide. The full game is currently being finalized. • On October 28, Gardenia's own game was released on PlayStation Store for PS4/PS5. Within 72 hours from the premiere, the game's costs were recouped in 100% and the game currently makes money with every copy sold. Currently, work on the next versions of the game for consoles, mobile devices and VR is being finalized. • On November 18, the company's own game Quantum Storm was released on Nintendo Switch consoles in the Nintendo eShop. Within 72 hours of its release, the game's costs were recouped in 100% and the game currently makes money with every copy sold. Currently, work on the next versions of the game for consoles, mobile devices and VR is being finalized. • On November 18, the prologue of the Company's own game - Cthulhu: Books of Ancients - premiered in the Steam store for PCs. Within 48 hours of its release, the game was downloaded by over 10,000 players around the world. The full game is currently being finalized. • The SimFabric Capital Group continues its development and is currently entering the last phase of preparations for going public with the first subsidiary VRFabric S.A. The debut of the second subsidiary MobileFabric S.A. on the NewConnect market is planned for 2023. GR Games S.A. as the third subsidiary is also planning a stock exchange debut. However, launching the procedure for this subsidiary's listing on the main floor of the Warsaw Stock Exchange will be possible only after the release of the first GR Games S.A. game. – Gumball 3000 in 2024. Analyst: Krzysztof Tkocz krzysztof.tkocz@bdm.pl tel.: (+48) 516 086 705 GPW’s Analytical Coverage Support Programme 3.0  
Challenges Persist for Company Amidst Falling Demand and Competitive Pressure in Q2'23

Analysis Of The Results For The 3Q 2022 - Monnari Trade

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 01.12.2022 14:09
This report was prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Monnari Trade's results for the third quarter are good. The Company generated revenues of PLN 66.162 million, which means an increase of 17.9% compared to the third quarter of 2021 and a decrease by 10.0% q/q. In the clothing industry, characterized by seasonality, a decrease in sales in the third quarter is a normal phenomenon. Gross profit on sales amounted to PLN 35.745 million and was higher by 12.2% y/y. Gross margin on sales amounted to 54.0% (an increase of 2.3 p.p. y/y and a decrease of 7 p.p. q/q), which, taking into account the seasonality of the industry, is a good result (the last time in the third quarter Monnari Trade generated such a high margin in 2018 - 56.1%) We perceive the Company's cost discipline moderately positive. Selling costs increased by 23.9% y/y, and overheads by 30.1% y/y, which resulted in the Company losing profitability at the level of profit on sales. Thanks to the redemption of the preferential loan from PFR (PLN 11.4 million), Monnari Trade generated PLN 10.1 million in operating profit (the year before, the EBIT loss was minus PLN 1.128 million) and PLN 10.914 million in net profit (the year before, plus PLN 692 thousand). The Company's fundamentals remain solid. Thanks to the sale of a part of Geyer’s Gardens, liquidity remains high and liabilities are consistently decreasing. Despite the uncertainty in the macroeconomic environment, we assess the prospects for further growth positively, which is influenced by: a strong labor market, the strengthening of the zloty against the dollar, inflation rate slowdown in Poland and the suspension of the monetary policy tightening cycle. The Company's results are better than our expectations, hence we finally increase our valuation to PLN 7.2 per share (previously PLN 6.7), which is also due to a decrease in discount rates (WIBOR, treasury bond yields) and an increase in valuation multiples of peer companies Expected impact: At the revenue level, Monnari Trade's results are close to our estimates (PLN 66.162 mln vs. PLN 63.277 mln expected). The gross profit on sales turned out to be higher by 6.7% than our forecast (PLN 35.745 million vs. the expected PLN 33.502 million). On the other hand, at the level of operating profit, the result turned out to be slightly worse than we expected. EBIT amounted to PLN 10.111 million, with our estimates at PLN 10.583 million. The Company's net profit surprised us positively and amounted to PLN 10.914 million against the expected PLN 6.92 million. As announced by the Management Board, the Company's cash resources decreased in Q3 (from PLN 97.7 million at the end of Q2 to PLN 51.1 million). These funds were utilized to i.a. increase in inventories and decrease in liabilities, which fell from PLN 57.7 million in Q2 to PLN 48.9 million in Q3. In the perspective of the next year, the Company's results will be influenced by the economic situation in Poland, the exchange rate of the dollar against the zloty (the settlement currency for the purchase of imported goods) and cost discipline. Slightly better than expected results prompt us to revise our forecasts upwards at the level of net profit. Therefore, after updating the data in the model and multiples in the comparative valuation, we increase our valuation to PLN 7.2 per share at the end of 2022 (previously PLN 6.7). We believe the Company remains heavily undervalued. We see potential for growth not only in the company's core business (sale of clothing and clothing accessories), but also in the possibilities of business development of the remaining, unsold part of Geyer Gardens. Analyst Łukasz Bryl Tel.: 785 500 874 GPW’s Analytical Coverage Support Programme 3.0  
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Analytical Report – Sygnity – WSE:SGN

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 01.12.2022 14:18
This analysis was prepared by mBank at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme sell (reiterated) We maintain our negative outlook for Sygnity. Although sales revenues have followed an upward trend for several quarters with a clear acceleration in Q2 2022, the wage pressure in the IT sector remains strong (at least +10% y/y). Therefore, we still expect a slight deterioration of the profitability in results in the coming quarters. Our EBITDA forecast for the period 2022/23 is PLN 42.0 million (no change vs. the previous report of October 2022), and the net profit of PLN 25.4 million. The expected level of results implies EV/EBITDA and P/E at 10.3x and 17.8x, respectively, showing substantial premiums to peers., The level of ratios is higher than valuations of Asseco Poland or Comarch. Both companies are (also due to the size and liquidity) interesting investment types at the current level of share prices. In our valuation model, we assume the level of market risk in the DCF model = 6.00% and a new level of RFRs in the period 2022/30. We our new target price at PLN 13.70 (impact of updated peer multiples), which implies almost 39% downside potential and a reiterated sell recommendation. Analyst: PaweÅ‚ Szpigiel +48 509 603 258 pawel.szpigiel@mbank.pl GPW’s Analytical Coverage Support Programme 3.0  
Tech stocks: Mullen loses almost 5%, Tesla gains over 7%. Nasdaq soars on the back of Powell's rhetoric

Tech stocks: Mullen loses almost 5%, Tesla gains over 7%. Nasdaq soars on the back of Powell's rhetoric

FXStreet News FXStreet News 01.12.2022 16:11
Mullen stock lost 4.6% on Wednesday. TSLA shares gained 7.7% at the same time. The NASDAQ also rallied 4.4% on the strength of Powell's Fed pivot. MULN stock has 43% short interest at the moment. Mullen Automotive (MULN) stock finds itself falling behind once again. On Wednesday, electric vehicle leader Tesla (TSLA) exploded 7.7% on Federal Reserve Chair Jerome Powell's announcement that the central bank would be looking at smaller interest rate hikes going forward. This appeared to be the "pivot" the entire market had been waiting for, and stocks shot up relentlessly. The NASDAQ, on which MULN stock trades, closed up 4.4% on the session. MULN stock was dead in the water however. Shares of the upstart EV maker contrasted with Wednesday's market sharply, closing down 4.6% at $0.1921. Mullen Automotive stock news: Short volume growing heavy for MULN Mullen Automotive stock received little interest from traders on Wednesday as the rest of the market stole all the focus. Taking a look at the S&P 500 heat map below makes it clear that even some of the biggest names in the market took flight. Microsoft (MSFT) and Alphabet (GOOGL) both closed more than 6% ahead, and Nvidia (NVDA) even advanced 8.2%. With that much bullish volatility, there was no need to pay attention to a long-term penny stock play like Mullen. Only a few oil & gas companies closed lower on the day. S&P 500 Heat Map for Nov. 30, 2022 A big reason that MULN stock continued to descend was that shares recently dropped below the $0.21 support level that held up back during its recent swing low on October 18 and 19. This time Mullen Automotive stock has ignored the support level and continued moving lower one penny at a time. Of course, it must worry existing shareholders that short interest reached 43% on Wednesday. That is nearly twice as bad as other EV startups. Hyzon Motors (HYZN) and Arcimoto (FUV), for instance, have short interest of 22% and 27%. Another drag on the MULN share price is that Tesla keeps making all the headlines. Tesla's Texas Gigafactory has been producing 1,000 Model Ys per week since June, but unsubstantiated rumors are leaking that the EV leader will ramp up to 5,000 per week by 2023. Insiders have told the blogs that management is aiming for 75,000 Model Ys to be produced at the Texas plant in the first quarter of 2023. This means 25,000 a month and nearly 5,000 per week. Additionally, Tesla will deliver its first Tesla Semi, a fully battery electric semi tractor trailer, to Pepsi (PEP) at a Thursday event at its Nevada factory. The Tesla Semi is expected to greatly expand Tesla's profits in the coming years and is said to have a range between 300 and 500 miles. Also Tesla says it uses less than 2kWh to travel one mile, a rather efficient figure. This contrasts sharply with Mullen, who does not plan to deliver its Mullen Five crossover vehicle until the second quarter of 2024. With the recent addition of assets from Electric Last Mile Solutions (ELMS), Mullen is a long way away from completely retooling its new Indiana plant to prepare for production. Mullen finally closed its $105 million deal to buy the bankrupt ELMS assets on Thursday. The Indiana plant will be used to produce both the Mullen FIVE model and the Bollinger B1 and B2 models. “I have been working on this plan for many years, putting in place the strategic and critical enablers to be a dominant competitor in the EV market,” Mullen CEO David Michery said. “Successfully completing this asset acquisition moves Mullen into an all-new position with IP, plants and product platforms that no other competitor can offer to both retail and commercial customers. We have everything we need to launch the Mullen and Bollinger EVs product lineup.” Mullen Automotive stock forecast As previously stated, MULN stock crashed through the $0.21 support level on November 23 and has not looked back. It would seem that this is now the target for bulls. A move above would signal that a rally is likely starting up. Above that pivot sits nearby points of resistance at $0.2244 from the 9-day moving average and at $0.27 from the 21-day moving average. There is no historical support for MULN stock at the moment, which will be the main worry for bulls. It would be best to wait for a daily close above $0.21 before getting back in. The Moving Average Convergence Divergence (MACD) indicator is also slotted in a bearish pattern. MULN 1-day stock chart
The US Dollar Weakens as Chinese and Japanese Intervention Threats Rise, While US CPI and UK Jobs Data Await: A Preview

Ed Moya talks US data, Forex, cryptocurrency and more - December 1st

Ed Moya Ed Moya 01.12.2022 23:53
US stocks were unable to hold onto earlier gains as Wall Street digested a swathe of economic data that showed inflation is easing and the labor market is cooling. ​ It’s been a nice rally but no one wants to be aggressively bullish heading into the NFP report. Yesterday’s Fed Chair Powell speech was good news for risky assets as he focused on inflation coming down and that the economy is doing well. ​ The risks of overtightening have many expecting the Fed to end its tightening cycle early next year and that will continue if the labor market softens quickly. ​ Earlier, investors were looking for any signs to buy stocks after reports that China was getting ready to release new Covid guidelines. China is far from willing to completely relax its guidelines, but these next steps could help end protests. ​ ​ ​ ​ US data The Fed’s preferred inflation gauge grew 5% from a year ago, confirming the recent trend of falling pricing data points. ​ The closely watched ISM report fell into contraction territory, reaching the lowest levels since the pandemic recovery began. The ISM’s prices paid also dropped to the lowest levels since May 2020. ​ October personal income and spending data were rather strong but no one expects that to continue going forward. ​ The initial jobless claims headline reading showed the labor market is still strong. ​ First-time claims fell by 16,000 to 225,000, which was lower than expected and well below the highs seen in the summer. ​ Continuing claims was interesting as it jumped to 1.61 million, which is getting closer to the pre-pandemic average of 1.7 million. ​ The trends are clear for inflation, but the big question mark is if the labor market is going to have a broader slowdown. ​ Tomorrow’s NFP report will be important as it could move forward bets that inflation will continue to decline. ​ FX The BOJ’s Tamura made quite a first impression to fx traders. ​ Tamura helped send the yen lower after he noted, “It would be appropriate to conduct a review at the right time, including the monetary policy framework and inflation target.” ​ Currency traders are used to Japan always having ultra-loose policy but that seems like it will have to change in the new year. ​ Cryptos Cryptos are struggling today as the earlier rally faded ahead of NFPs and as concerns brew that Tether loans could be the next big risk for the cryptoverse. ​ Stablecoins are an important part of the crypto world and if one of the major ones break, that will send bitcoin and ethereum to new lows. ​ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Stocks volatile ahead of NFP, US Data, BOJ Tamura’s first impression, Tether loan concerns - MarketPulseMarketPulse
The Price Of USD/JPY Pair Has To Fight With The Resistance Level

The Japanese Yen (JPY) Gained Versus The US Dollar (USD)

Saxo Bank Saxo Bank 02.12.2022 08:40
Summary:  The U.S. Core PCE came in slightly softer than expected. November U.S. ISM Manufacturing Index dropped by 1.2 percentage points to 49.0, entering the contractionary territory. Treasury yields fell across the curve, with the 10-year yield falling to 3.50%. Yen gained 2% on lower U.S. yields and a BOJ board member called for a review of Japan’s monetary policy. Mores encouraging signs coming out of China pointing to the prospect of further easing of Covid restrictions. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) finished Thursday flat after softer economic data U.S. stocks fluctuated between modest gains and losses and finished the session nearly flat. Investors were weighing the decline in bond yields resulting from the softer Core PCE prints and the ISM Manufacturing Index entering into the contractionary territory and the concerns about a contraction in manufacturing activities. Eight of the 11 sectors within the S&P 500 were lower with the exception of communication services, healthcare, and information technology which registered modest gains. Salesforce (CRM: xnys) dropped 8% after the enterprise software maker reported an earnings miss, a weak outlook, and CEO resigning. Dollar General (DG:xnys) shed 7.5% on disappointing results and an outlook cut. Snowflake (SNOW:xnys) gained 7.8% on an earnings beat. Netflix (NFLX:xnas) gained 3.7% on news that the company is expanding a program to seek comments from preview audiences. US treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) fell on softer PCE and ISM Manufacturing A softer core PCE at 0.219% M/M (vs consensus 0.3%; Sept: 0.463% and 4.984% Y/Y in October (vs consensus 5.0%; Sep 5.182%), together with the slide of the ISM Manufacturing Index to 49.0 triggered buying in treasuries. The 2-year yield dropped 8bps to 4.23% and the 10-year yield was 10bps richer, closing at 3.50%.  The long-end outperformed as the 30-year yield fell 14bps to 3.60%. Fed Governor Michelle Bowman echoed Powell’s “somewhat higher” rhetoric as she said that “expectation would be that we ould have a slightly higher rate than I had anticipated in September”. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) gained on a less hawkish Powell and more signs of China preparing to ease Covid restrictions further Hang Seng Index climbed 0.8% and CSI300 Index gained 1.1% following the less-hawkish-than-feared speech from the U.S. Fed Chair Powell overnight and China’s Vice-Premier Sun Chunlan, who is in charge of containing the spread of Covid-19, acknowledged in a pandemic control export workshop that the Omicron variant is less deadly. China is reportedly instructing local authorities to get 90% of the population over 80 years old vaccinated in two months. Caixin China PMI Manufacturing came in at 49.4 in November, above the consensus estimate of 48.9 and October’s 49.2. EV maker XPeng (09868:xhkg) jumped 12.8%. See our update here on a brighter outlook for A shares in 2023, supported by the trend of credit impulse. FX: Yen gained nearly 2% to 135.40 vs the dollar on lower US bond yields and a BOJ board member calling for a review of Japan’s monetary policy The Japanese Yen gained almost 2% to 135.30 versus the dollar as U.S. bond yields fell on a less hawkish Powell and Naoki Tamura, a Bank of Japan board member said that “it would be appropriate to conduct a review at the right time, including the momentary policy framework and inflation target”. What to consider? October U.S. Core PCE softer than expectations The U.S. Core PCE decelerated more than expected to 0.219% M/M (vs consensus 0.3%; Sept: 0.463% revised), and 4.984% Y/Y in October (vs consensus 5.0%; Sep 5.182%). The Core Services Prices excluding Housing Services sub-index, which Fed Chair Powell highlighted as the “most important category for understanding the future evolution of core inflation” in his speech at the Brookings Institution on Wednesday, moderated to 0.33% M/M in October, down from 0.48% M/M in Sep. Headline PCE came in at 0.3% M/M (consensus: 0.4%; Sep 0.3%) and 6.0% Y/Y (consensus 6.0%; Sep: 6.3% revised).  Dropping to 49.0, the U.S. ISM Manufacturing Index entered the contractionary territory  The November ISM Manufacturing Index dropped by 1.2 percentage points to 49.0 (vs consensus 49.7; Oct 50.2) and entered the contractionary territory. It was the lowest since May 2020. The weakness was broad-based with new orders falling to 47.2, order backlogs dropping to 40.0, employment down to 48.4, and prices paid sliding to 43.0. U.S. job data is the key thing to watch today The U.S. Labor Bureau of Statistics is scheduled to release the November job data on Friday. According to the Bloomberg survey of economists, the median forecasts are looking for a 200,000 increase in non-farm payrolls, down from 262,000 in October, and an unchanged unemployment rate at 3.7%. Average hourly earnings are excepted to come in at 0.3% M/M (vs Oct 0.4%) or 4.6% Y/Y (vs Oct: 4.7%) For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Softer US Core PCE, ISM Manufacturing Index entering the contractionary territory – 2 December 2022 | Saxo Group (home.saxo)
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

The RBA Can Potentially Stop Hiking Rates Later Next Year

Saxo Bank Saxo Bank 02.12.2022 08:46
Summary:  Daily Dose of financial insights for investors and traders for the week ending, December 2. Why gold stocks hit their highest level since July, with the gold price jumping 2%. Why the energy crisis continues; Santos lost an appeal to start a gas project, and a coal company in Australia slashed its output target amid La Nina rains impacting production. What the next catalysts are for markets. WATCH this five minute video.       Markets rally, on inflation easing. ASX200 at a seven month high Aussie share market had it worst day in about four weeks, falling 0.7%on Friday. But despite that, as they say the long term trend is your friend; the ASX200 closed off the week at its highest level in 7 months. The market has gained about 13% from October. Over the week; the market held onto a gain of 0.6%; and the ASX200 is just 4% away from its record all time high. What’s supported markets you might ask? Well economic data this week showed inflation pressures are easing for now. Both in the US and Australia. This offers hope to mortgage holders, corporates and equity markets. Hope that the US central bank, the Fed, won’t need to be so aggressive with rate hikes in two weeks. And in Australia; there’s hope the RBA can potentially stop hiking rates later next year. So markets are forwarding looking, and this is what has been supporting equity markets for now. Big market moves; gold equites shine    Today was all about all that glittered. Gold. Gold stock ripped higher hitting their highest level since July; St Barbara rose 10% after an investment firm bought a major stake in the gold miner. Silver Lake rose 6%. with other gold miners following. It’s all because the gold price made its best weekly gain in four weeks, up 2% today and this week. Remember, gold, the safe haven metal, traditionally does well when times are tough. And overnight the US economic slowdown gained pace with constructions and manufacturing data slowing. The US manufacturing sector fell into a contraction for the first time in two years. So this supports the Fed not being so aggressive with rate hikes. That supports the US dollar potentially continuing to fall. And this supports gold moving up. Economic news in Australia gives the RBA more room to stay dovish  On the economic news front in Australia, Home loan data showed lending is continuing to fall and much more than expected. Home loans fell 2.7% in the month, following the 8.2% drop last month. We think home loan demand will continue to fall and that this will continue to pressure property prices into 2023. Company news Santos lost a court appeal to restart a $3.6 billion gas project, as Indigenous groups were not properly consulted on the plan. Also in energy news, coal producer Coronado cut its production target for the year, as rain from La Nina has prevented it from getting as much coal of the ground that it wanted to. The takeaway here, is that Australia will continue to grapple with a lack of physical energy supply. Which is why we think energy prices will continue to rise next year. The RBA is also of the same view.  What to look for in coming days In the US; the final monthly employment report will be released before the Fed’s next interest rates decision. So tonight what’s released is non-farm payrolls. The market is expecting 200,000 jobs were added to the US in November, which is 60,000 less than October. On December 4; The Organization of the Petroleum Exporting Countries (OPEC) and their allies meet. Although a policy change is seen as unlikely. In Australia next week; the RBA meets on Tuesday. A 0.25% hike is expected.  The Australia Dollar continues to rally  The AUDUSD trades up about 10% from its October low, supported by the fact that China's 3rd biggest city is easing restrictions.    For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast. Source: Daily Dose of financial insights for investors and traders December 2; Gold glitters on recession concerns, Energy crisis back on the agenda | Saxo Group (home.saxo)
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

Weak US Data Took US Yields Lower All Along The Curve

Saxo Bank Saxo Bank 02.12.2022 08:52
Summary:  Risk sentiment fizzled after the strong from the prior day on Fed Chair Powell’s less hawkish than feared speech. That was despite softer than expected October PCE inflation data that helped US treasury yields trade to new local lows all along the curve. Today’s US November jobs report will carry a bit more weight for the treasury market, where yields have helped drag the US dollar to new lows.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) U.S. stocks fluctuated between modest gains and losses and finished the session nearly flat. Investors weighed the decline in bond yields from softer US data (see below). Eight of the eleven sectors within the S&P 500 were lower except for communication services, healthcare, and information technology which registered modest gains. Salesforce (CRM: xnys) dropped 8% after the enterprise software maker reported earnings miss, a weak outlook, and CEO resigning. Dollar General (DG:xnys) shed 7.5% on disappointing results and an outlook cut. Snowflake (SNOW:xnys) gained 7.8% on an earnings beat. Netflix (NFLX:xnas) gained 3.7% on news that the company is expanding a program to seek comments from preview audiences. Hong Kong’s Hang Seng (HISX2) and China’s CSI300 (03188:xhkg) Hang Seng Index and CSI300 Index consolidated and were modestly lower on Friday after the recent rally on signs of further easing of Covid restrictions in mainland China. Profit-taking selling weighed on Chinese property developers, with leading names dropping 4-5%. Online health platform stocks surged. Alibaba Health (00241:xhkg), JD Health (06618:xhkg), and Ping An Healthcare and Technology (01833:xhkg) gained 9-13%. USD lower still on falling treasury yields, fresh incoming data Weak US data, including a slightly softer than expected core PCE inflation reading and ISM Manufacturing survey, took US yields lower all along the curve and took the US dollar lower as well, with EURUSD trading above the psychologically key 1.0500 area this morning. The next important resistance there is perhaps the pandemic-outbreak low around 1.0636 or the 38.2% retracement of the entire sell-off from the 1.2350 top at 1.0611. The yield-sensitive USDJPY continued lower as well, nearly hitting the 135.00 level overnight after a chunky further drop yesterday and not far from its 200-day moving average at just above 134.50. An important test for US yields and the US dollar today with the November jobs data releases. Strong week for precious metals on Fed pivot speculation Gold rose above $1800 on Thursday supported by softer US data sending the dollar and yields lower, thereby underpinning speculation about a slower pace of future rate hikes. US 10-year real yields have fallen to a two-month low at 1.14% after hitting 1.82% in October while the Bloomberg Dollar Index has lost close to 8% during the past month alone. A break above resistance at $1808 may add further fuel to an ongoing sentiment change towards the metal but with ETF investors not yet engaging the importance of the dollar and yield developments remain key. Silver, supported by a firmer industrial metal sector, trades above $22.25 with the next level of interest being $23.36. Focus today on the US job report given its potential impact on the dollar and yields. Crude oil (CLF3 & LCOF3) trades up on the week Crude oil is heading for its best week in two months following another roller coaster week that saw Brent test support at $80 before finding resistance at $90. From an early lockdown scare in China on Monday, the sentiment improved ahead of Sunday’s OPEC+ meeting and the beginning of an EU embargo on Russian seaborne oil from Monday. Additional support was provided by a weaker dollar, China softened its virus approach and Washington calling for halt to further sales from its Strategic Petroleum Reserves. Ahead of the OPEC+ meeting a Bloomberg survey found that OPEC, led by the four major Gulf producers cut production by 1 million barrels a day last month. We expect the online meeting is likely to be strong on words but low on actions. Focus on today’s US job report given its potential impact on the dollar. US treasury yields edge lower still on weak US data. (TLT:xnas, IEF:xnas, SHY:xnas) The weak US data (see below) took US treasury yields lower all along the curve, with the 10-year benchmark within a basis point of the important 3.50% area yesterday. That level was a major pivot high posted around the time frame of the June FOMC meeting. But the weak data has not seen much steepening in the US yield curve, even if 2-year yields dropped to new lows cine early October yesterday near 4.25% as the market prices in a slightly lower Fed cycle peak next year (currently 4.87% peak priced) and steeper pace of cuts by late 2023 and especially into 2024. The US November jobs report later today offers an important test for the treasury market as the 10-year has hit this pivotal level. What is going on? Weaker US data continues to take the air out of US yields The October PCE inflation data came in softer than expected for the core month-on-month reading at +0.2% vs. +0.3% expected, while the year-on-year level of 5.0% was expected. Another soft data point was the November ISM Manufacturing survey which came in at 49.0 vs. 49.7 expected and suggesting modest contraction in US manufacturing activity for the first time since the pandemic outbreak months. The New Orders component of that survey dropped to 47.2, Prices Paid plunged further to 43.0 and Employment nudged lower to 48.4. Sterling boost yesterday on hopes for Northern Ireland deal EU Commission president Ursula von der Leyen said that Britain and the EU said that the latest talks with UK Prime Minister Rishi Sunak were “encouraging” and that she is “very confident” a solution is possible if the UK government is on board, with Sunak seen as motivated to iron out a deal with a more pragmatic approach to the issue than former Prime Ministers Boris Johnson and Liz Truss. EURGBP briefly touched a multi-month low yesterday below 0.8560 and traded within 10 pips of the the 200-day moving average before rebounding overnight. Blackstone limits withdrawals from large property fund The company said it would limit how much the wealthy individual investors in its $69 billion real estate fund can withdraw funds to 2% of the net asset value of the fund monthly and 5% quarterly. Real estate is a notoriously illiquid asset. What are we watching next? US November Jobs report on tap The November jobs data is up today, theoretically expected to show payrolls growth of +200k, but with the market perhaps leaning a bit lower after the softest ADP private payrolls growth number in more than 20 months. The Unemployment Rate is seen steady at 3.7%, and Average Hourly Earnings are anticipated to rise +0.3% month-on-month and +4.6% year-on-year after the October data point at 4.7% YoY was the lowest year-on-year reading in just over a year. The Atlanta Fed’s median wage tracker, meanwhile, has shown entirely different levels of earnings growth, with +6.4% in October and 6.7% in both of the prior two months. Earnings to watch Earnings next week are a mish-mash of companies, and include high-end homebuilder Toll Brothers on Tuesday, as it will be interesting to hear their outlook on the new home market after the enormous surge in US mortgage rates and collapse in home sales activity. Broadcom (AVGO: xnas) is the market cap giant of the week to report, with the CEO of the company having said that the semiconductor market will not be affected by the US’ new export restrictions on technology to China. Tuesday:  MongoDB, AutoZone, Toll Brothers, Ferguson Wednesday: Brown Forman, Campbell Soup, GameStop Thursday: Broadcom, Costco, Lululemon, Chewy Friday: Oracle Corp, Li Auto Economic calendar highlights for today (times GMT) 1330 – Canada Nov. Employment Change / Unemployment Rate 1330 – US Nov. Change in Nonfarm Payrolls 1330 – US Nov. Unemployment Rate 1330 – US Nov. Average Hourly Earnings 1415 – US Fed’s Barkin (non-voter) to speak 1900 – Us Fed’s Evans (voter 2023) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-dec-2-202-02122022
Jason Sen talks Emini S&P, Emini Dow Jones and Nasdaq - December 2nd

Jason Sen talks Emini S&P, Emini Dow Jones and Nasdaq - December 2nd

Jason Sen Jason Sen 02.12.2022 10:34
Emini S&P December futures hit the 8 month trend line at 4090/95, the downward sloping 11 month trend line & upward sloping 2 month trend line at 4105/10. A high for the day here although not much of a sell off yet despite overbought conditions. It is make or break day for stock markets with the release of the US non farm payroll number. Nasdaq December consolidates after Wednesday's strong gains but unable to make a break above the November high. Emini Dow Jones futures turns lower but no important sell signal yet despite severely overbought conditions. Remember when support is broken it usually acts as resistance & vice-versa. Update daily by 06:00 GMT. Today's Analysis. Emini S&P December has rejected strong resistance at 4090/95 to 4105/10. Only a weekly close above here will convince me to turn bullish. We then target 4170/90. Shorts at 4090/4110 can target 4060/50, perhaps as far as first support at 4020/10. A break below 4000 can target 3970/50, perhaps as far as strong support at 3930/10. Nasdaq December bulls really need a clean break above the November high at 12118 for a buy signal targeting 12250 & 12400. If we turn lower on the US non farm payroll number look for 12000/11900 then 11750/700. Further losses can target 11550/500. Emini Dow Jones should meet support at 33900/800. A break below 33600 signals further losses towards support at 33300/200. Above 34700 can target 35000/35100.
The Collapse Of The Silicon Valley Bank Weakened The Dollar And USD/JPY But Supported EUR/USD, AUD/USD, And GBP/USD

USA: Jobs market data play in favour of Fed hawkish script. Non-farm payrolls add 263K

ING Economics ING Economics 02.12.2022 15:10
Strong job creation and a big increase in wages underscore the Federal Reserve's argument that a lot more work needs to be done to get inflation under control. It has certainly jolted the market. But with recessionary fears lingering, market participants will remain sceptical over how long the strong performance can last US job growth was strong and wages rose in November 263,000 Number of US jobs added in November   Surging employment and wages show the economy remains strong The US economy added 263,000 jobs in November, well ahead of the 200,000 consensus estimate, even when accounting for a 23,000 downward revision to the past couple of months of data. Private payrolls rose 221,000, led by 88,000 jobs in leisure and hospitality and 82,000 in education and health. Construction was up 20,000 and manufacturing gained 14,000. However, there was weakness in trade & transport (-49,000) and retail trade (-30,000). There was more positive news for workers in the form of big wage gains of 0.6% month-on-month, double what was expected, which leaves the annual rate of wage growth at 5.1%. The unemployment rate remained at 3.7% despite the household survey showing an apparent drop of 138,000 people saying they were in work – the second consecutive decline. The unemployment rate held steady because the participation rate fell yet again as workers remain reluctant to return to the workforce. Read next: FX: Today’s US Payrolls With A Strong Bearish Rhetoric On The USD| FXMAG.COM Given the Fed’s repeated warnings that rates are likely to stay higher for longer to ensure inflation is defeated, officials will be hoping that today’s numbers will be the jolt needed to get market participants to finally believe the Fed’s intent. Payrolls growth is slowing, but not fast enough for the Fed (Jobs added per month '000s) Source: Macrobond, ING Jobs market remains far too hot for the Fed In his speech earlier this week, Fed Chair Jerome Powell discussed the prospect of declines in inflation relating to core goods and housing. His focus though was on another area, core services other than housing, where the situation is more troubling. This grouping accounts for more than half of the core PCE index, the Fed’s favoured measure of inflation. The tightness of the jobs market and the implication for wage pressures, which make up the largest cost in delivering these services, is therefore key to the outlook for interest rates. In the speech, he argued that “job growth remains far in excess of the pace needed to accommodate population growth over time—about 100,000 per month by many estimates.” Consequently, wage growth “shows only tentative signs of returning to balance”. Today’s 263,000 jobs number confirms we remain a long way off from demand balancing with supply, which would ease those labour market related inflation pressures. Adding to the Fed’s problems, monetary conditions have loosened in recent weeks as the dollar and longer-dated Treasury yields have fallen and credit spreads have narrowed. This is undoing the tightening effects of the Fed’s recent rate rises. Furthermore, the latest consumer spending numbers together with the anecdotal evidence of the Black Friday weekend sales show that the economy has not yet met the Fed’s requirements of slowing to a rate “well below its longer-run trend”. As such, the Fed has more work to do and we look for further 50bp rate hikes in December and in February, with the potential for tightening needing to go on for longer. Read this article on THINK TagsWages US Payrolls Jobs Federal Reserve Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
AMC stock price soared 13% yesterday. What can we expect from the price line?

AMC stock price soared 13% yesterday. What can we expect from the price line?

FXStreet News FXStreet News 02.12.2022 15:31
AMC Entertainment stock closed up 13% on Thursday. AMC stock trading was halted on Thursday due to unusual volatility. 46 million AMC shares had traded by shortly after noon. AMC stock is again advancing in Friday's premarket. AMC Entertainment (AMC) stock is up 3.4% in Friday's premarket just a day after authorities halted trading due to unusual volatility. Thursday saw options volume three times higher than the 20-day average, and AMC stock leapt as much as 27% before trading was halted shortly before 12:30pm. Trading then recommenced with AMC's share price closing up 13% at $8.17, its highest closing price since September 21. AMC Entertainment stock news: Call options bring all the boys to the yard AMC Entertainment stock got going early on Thursday and reached as high as a 27% gain before being halted. Authorities said about 46 million shares changed hands by that time compared to an average of 25 million. The AMC price action was led by option market activity. Retail traders and especially the much-maligned AMC Apes were furious with the trading halt. Read next: Porsche NFT Collection Will Hit The Market In January 2023 | FXMAG.COM Bloomberg reported that by 3pm, 550,000 call contracts representing 55 million shares had traded, while the 20-day average was 163,000. Activity was especially noted in the $8, $8.50 and $9 strike prices that are expiring this Friday. On Thursday these strikes saw more than 80,000, 63,000 and 71,000 call contracts trade by the close. The $10 strike also saw nearly 36,000 contracts trade as well. The $8 strike closed the session at $0.36 a share, and the $8.50 closed at $0.17 a share. BNK Invest noted heightened activity last Tuesday as well, writing, "Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in AMC Entertainment Holdings Inc. (Symbol: AMC), where a total volume of 136,950 contracts has been traded thus far today, a contract volume which is representative of approximately 13.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 51.6% of AMC's average daily trading volume over the past month, of 26.5 million shares." AMC Apes on Twitter have been badgering CEO Adam Aron about the APE equity unit price as it recently fell below $1. It closed Thursday up 1.1% at $0.9822, and is now trading up to $1.02 in Friday's premarket. Black Panther: Wakanda Forever dominated the US box office once again last weekend, but observers believe its numbers are falling too rapidly. Still the superhero film has grossed about $683 million worldwide and is already the seventh highest grossing movie of the year with more room to run. AMC stock forecast The Moving Average Convergence Divergence (MACD) indicator in regard to AMC stock's daily chart shows a moderate bullish pattern. Thursday's burst blew well above the November 14 and 15 pinnacle, and a cursory look at this chart makes one think there is more energy left for upside. Of course, traders will be closing out their call options in the afternoon, but other might be already buying up those for next week. $10.39 looms large for bulls since this is where they got stopped out in mid-September. Before AMC can reach that point, however, the R1 pivot sits at $8.70 and the R2 is at $10.18. The 21-day moving average at $6.87 is the current pivot, and $5.17 is the long-term support level from November 7 and 9. AMC 1-day chart
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange Gained More Securities Than Lost

InstaForex Analysis InstaForex Analysis 05.12.2022 08:07
At the time of closing on the New York Stock Exchange, Dow Jones rose 0.10%, the S&P 500 index fell by 0.12%, the NASDAQ Composite index fell by 0.18%. Dow Jones The growth leaders among the components of the Dow Jones index were Boeing Co shares, which went up by 7.09 p. (4.03%), closing at the mark of 182.87. Nike Inc quotes increased by 1.43 p. (1.29%), completing tenders at 112.20. Dow Inc papers increased in price by 0.48 p. (0.94%), closing at 51.55. Salesforce Inc shares were the leaders of the fall, the price of which fell by 2.44 p. (1.66%), completing the session at the mark of 144.56. Intel Corporation shares rose 0.42 p. (1.41%), closing at 29.41, and Goldman Sachs Group Inc decreased in price by 3.23 p. (0.84%) and completed bidding at 380 , 58.  S&P 500  The leaders among the S&P 500 index components in today's trading were shares of Enphase Energy Inc, which gained 7.01% to 336.00, SolarEdge Technologies Inc, which gained 4.40% to close at 308.77, and shares of Huntington Ingalls Industries Inc, which gained 4.24% to close the session at 240.68. The least gainers were the PayPal Holdings Inc shares, which decreased in price by 4.93%, closing at 74.66. Valero Energy Corporation shares lost 3.76% and completed the session at 127.07. Arista Networks quotes decreased by 3.39% to 135.04. Nasdaq  Growth leaders among the components of the Nasdaq Composite index were Shuttle Pharmaceuticals Inc, which went up by 65.07% to 2.41, Yunhong CTI LTD, which gained 46.69%, closed at 0.56, as well as Anavex Life Sciences shares Corp, which increased by 35.85%, completing the session at a mark of 12.05. The leaders of the fall were shares of Theratechnologies Inc, which declined 36.02% to close at 1.35. Shares of Biovie Inc lost 31.80% and ended the session at 5.49. Redhill Biopharma Ltd. fell 27.21% to 0.27. Numbers On the NYSE, 1,672 gained more securities (1,409) than lost (1,409), while 119 stocks were essentially flat. On NASDAQ, 2,141 stocks gained, 1,547 declined, and 268 remained flat. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.93% on June 19, hitting a new 6-month low. Gold Futures for gold futures with delivery in February lost 0.19%, or 3.45, reaching $ 1.00 per troy ounce. As for other goods, the prices for WTI oil with supply in January decreased by 1.31%, or 1.06, to $ 80.16 per barrel. Futures for Brent oil futures with delivery in February fell 1.23%, or 1.07, to $ 85.81 per barrel. Forex Meanwhile, on the Forex market EUR/USD did not change significantly 0.17% to 1.05, while USD/JPY fell 0.74% to 134.27. The USD index futures were down 0.22% to 104.46 Relevance up to 03:00 2022-12-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/303619
The China’s Covid Containment Continued To Negatively Impact The Output At The End Of 2022

Cities In China Announced To Ease Pandemic Control Restrictions | OPEC Is Keeping The Current Production Levels Unchangeded

Saxo Bank Saxo Bank 05.12.2022 08:56
Summary:  A hot US jobs report on Friday brought about a reversal in Fed rate path expectations, but a big part of the move was later reversed. Fed goes into a quiet period, but China reopening optimism is set to gather further momentum this week with easing measures being implemented in Shanghai. This would mean a further bump to metals and energy prices, especially with OPEC+ staying away from a production cut over the weekend and the next meeting only scheduled for February. Key levels on test this week with 3.50% in US 10-year Treasury yields, and USDJPY heading below the 200-day moving average at 134.50. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) finished the week higher despite a surge in wage inflation In spite of a strong non-farm payroll print and a surge in average hourly earnings on Friday which might cause some Fed officials to be wary about the unabated upward wage pressure when they meet on Dec 13 and 14, the major U.S. equity benchmark indices were largely flat and managed to retain the 1-2% gains following Fed Chair Powell’s dovish-leaning remarks on Wednesday. S&P500 and Nasdaq sold off more than 1% at the open but staged an impressive clawback of nearly all the losses when the closing bell rang on Friday. Materials and industrials were the top-performing sectors with the S&P 500 while energy stocks, followed by the information technology space were laggards. PayPal (PYPL:xnas) dropped 4.9%. US treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) clawed back all early losses and more with the 10-year yield down 2bps to 3.49% When the stronger-than-expected 263,000 growth in nonfarm payrolls and white-hot 5.1% Y/Y increase in November average hourly earnings (October revised up to 4.9% Y/Y from 4.7%) hit the wires, yields surged across the curve with the 2-year yield jumping 18bps to 4.41% and the 10-year yield rose 13bps to 3.63% in a matter of minutes. Bids emerged and yields spent the rest of the session grinding lower. By the time of market close, except for the 2-year yield which was 4bps cheaper at 4.27%, treasury yields were 1bp to 5bps richer, with the 30-year being the best performer. The 10-year yield slid 2bps to 3.49% and the 30-year yield dropped 5bps to 3.55%, hitting the lowest yield levels in nearly 3 months. The strong job and wage data made a further drift down to a 25bp hike in February 2023 less likely (only about 20% probability as money market rates suggest) and kept the 2-year yield from falling. The 2-10-year curve inversion widened 6bps to -78bps. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hang Seng Index and CSI300 Index consolidated and were modestly lower on Friday after the recent strong rally on signs of further easing of Covid restrictions in mainland China. Online health platform stocks surged. Alibaba Health (00241:xhkg) and JD Health (06618:xhkg) gained more than 9%, and Ping An Healthcare and Technology (01833:xhkg) jumped 15.4%. Profit-taking selling weighed on Chinese property developers, with leading names, such as Longfor (00960:xhkg) and Country Garden (02007:xhkg) dropping around 4%. More cities rolled out support policies to the property sector. In addition, after the market close, China reportedly told the country’s top state-owned banks to provide offshore financing to help property developers in repaying offshore debts. Overnight in New York hours, the Nasdaq Golden dragon China Index caught a bid, surging 5.4%, and Hang Seng Index Futures gained more than 2%. FX: Dollar continues its downtrend despite a strong jobs report The USD index got a bump higher after the stronger-than-expected jobs report on Friday which suggested that it might not be easy for the Fed to pause or pivot, but gains were reversed later and the index closed back at 104.50. NZDUSD was however a notch weaker this morning staying below 0.64 with AUDNZD testing 1.06 support ahead of RBA meeting tomorrow. USDJPY is testing a critical support level of 134.30 with lower US yields and some BOJ officials hinting at a policy review soon (read below). EURUSD looking stretched above 1.05. USDCNH fell below the 7 handle As cities in China relaxing Covid restrictions across the country and the spread between US treasury and Chinese government bond yields narrowing, the USDCNH dropped below 7.0, the first time since September, to 6.9852. Crude oil (CLZ2 & LCOF3) lower on unchanged OPEC+ output After strong gains in crude oil last week, some softness was seen at the end of the week after speculation of no production cut from OPEC mounted. WTI traded back to $80/barrel from $83 levels mid-week on China’s reopening optimism, while Brent retreated from $90 levels to sub-86. The Sunday OPEC meeting did come out with an unchanged output decision, as expected, while the EU’s price cap on Russian oil was also fixed at $60. This week will be key to watch further China reopening and any signs of a retaliation from Russia on the price cap. European gas prices also continue to pick up as falling weather boosts heating demand, and expectations are for a colder-than-expected winter. Gold (XAUUSD) and Silver (XAGUSD) poised for further upside The supportive factors for precious metals continue to line up – China’s reopening, lower US yields and a weaker dollar. This helped gold run higher to test a break above the key $1800 level for the first time since August. Meanwhile, Silver’s impressive November rally has extended into December with the price breaking above $22.25 – a 50% retracement of the March to September selloff – and on route to the next level of resistance at $23.35. Other metals such as Copper and Iron Ore also charged with China now reopening Shanghai, while the risk of a policy error by the Fed continues to run high. In Australia, home of some of the world’s biggest commodity commodities, BHP and Rio; it could be a positive week The benchmark index, the ASX200  is already trading at a seven-month high and could get a fresh kick this week as the iron ore (SCOA) price is back above $100 for the first time since August on optimism China could increase demand. The iron ore price has moved up 38% from its October low, so if we continue to see easing of restrictions in China, you might except this rally to continue and benefit forward earnings of BHP, Rio, Fortescue and Champion iron. What to consider? Hot US jobs report gives markets a re-think on Fed’s rate path The nonfarm payroll (NFP) data came out stronger-than-expected on Friday, with US employers added 263,000 jobs in November, less than October's upwardly revised 284,000 but well short of the turning point Fed officials seek in their battle against inflation. The unemployment rate was maintained at 3.7% while the wages were very hot: M/M rose 0.6% (exp. 0.3%) and Y/Y rose 5.1% (exp. 4.6%). After a few weeks where markets have been taking the slowdown in the pace of rate hikes by the Fed positively, this report was a reminder that rate hikes will still continue well into 2023. WSJ's Fed Whisperer Timiraos said the report keeps the Fed on track to raise interest rates by 50bps at its meeting in two weeks and underscores the risk that officials will raise rates above 5% in the first half of next year. November Caixin China PMI Services is expected be remain in the contractionary territory Caixin China PMI Services is scheduled to release on Monday. The consensus estimate from the Bloomberg survey is 48.0 for November, shrinking deeper into the contractionary territory from 48.4 in October. The lockdown and pandemic control restrictions during the best part of November when the survey took place weighed on economic activities, especially services. Investors will tend to look beyond this number and focus on the scope and pace of the easing of the pandemic restriction undergoing in China. Beijing, Shanghai, Hangzhou, Tianjin, Guangzhou and other large cities eased Covid policies Cities in China, one after one, announced to ease pandemic control restrictions including removing the requirement to show negative PCR test results when taking public transportation. Shanghai and Hangzhou joined the others on Sunday and announced that the cities no longer require negative PCR test results to enter public venues or taking public transportation. Economic reopening plays and commodities will be in focus this week with China easing some COVID restrictions On Monday, Shanghai and Hangzhou scrapped PCR testing to enter public venues including on public transport and to enter parks. Shanghai and Hangzhou joined other top-tier cities, Beijing, Shenzhen and Guangzhou in relaxing curbs after mass protests took place against China’s stringent policies last week. In equites, focus will be on markets being forwarding looking and hoping of a potential turnaround in consumption, especially cities with easing restrictions.   Another BOJ official fuels policy review speculation New BOJ board member Naoki Tamura urged a policy review, in his conversation with Bloomberg, saying that it would be appropriate for the central bank to conduct a review at the right time – soon or a little later depending on what happens to prices. The yen rose on speculation an assessment flagging policy change may come before Haruhiko Kuroda steps down in the spring. OPEC+ held production unchanged The OPEC+ group decided to keep the current production levels unchanged, as the crude oil prices started to show some tentative signs of a recovery after China’s continued commitment to ease its Zero covid policies. Still, a 2mb/d cut was announced in October, and the full effect of that is yet to be seen. Furthermore, there is volatility expected due to the EU sanctions and a G7 price cap on Russian crude which will go into effect this week, and further changes in China’s zero covid policy are also set to continue. The group’s next meeting is not scheduled until February. EU sets in a price cap for Russian oil, to kick in from today The EU nations have agreed to cap the price of Russian seaborne oil at $60/barrel, with a motive to diminish Russia’s revenues, paving the way for a wider deal with the G7 countries. This price cap is to go in effect on December 5, and represents a discount of ~$27 to the current price for Brent crude, but Urals has been trading at a discount of about $23 in recent days. However the risk of setting a price cap too low is that Russia could slash its output, which would roil markets. It will be important to watch for Russia’s reaction this week, after Putin has repeatedly said that they will not supply oil to countries that implement the price cap.   For a global look at markets – tune into our Podcast. Source: Market Insights Today: Hot US jobs report; No production cut from OPEC – 5 December 2022 | Saxo Group (home.saxo)
OPEC+ Meeting: Saudi Arabia Implements Deeper Voluntary Cuts to Boost Oil Prices

Crude Oil Volatility Will Likely Pick Up This Week

Saxo Bank Saxo Bank 05.12.2022 09:07
Summary:  Today's financial insights for investors & traders:- Economic reopening plays, iron ore, copper and oil rally on China easing restrictions. Coal trades back at record highs and stocks exposed to China rip higher. Fortescue Metals shares are back in record high territory. Here are the Saxo equity baskets and stocks to watch, plus what's ahead this week, in this six minute video. Economic reopening plays and commodities will be in focus this week with China easing some COVID restrictions On Monday, Shanghai and Hangzhou scrapped PCR testing to enter public venues including on public transport and to enter parks. Shanghai and Hangzhou joined other top-tier cities, Beijing, Shenzhen and Guangzhou in relaxing curbs after mass protests took place against China’s stringent policies last week.In equites, which are forward looking – focus will be on stocks exposed to a potential turnaround in consumption, especially in cities with easing restrictions. Reflecting on Saxo's equity baskets, the best returns in markets on Friday, over the week, and month, have been in in Saxo’s China Consumer and Technology basket.  In Saxo basket you see stocks like Nio, Alibaba are up 40% on the month, Tencent is up 24%, while consumer spending giant JD.com is up 50%. Recall that Hangzhou is home of Alibaba so its rally continue with restrictions easing there from today.Meanwhile Commodities will also be a focus will be on oil with its trading back above US$81, and posting its biggest weekly gain on hopes that demand will increase from China. OPEC+ met at the weekend they committed to their targets for the rest of 2032. We think oil volatility will likely pick up this week with Venezuela’s top refinery halting gas output after a malfunction while further cities in China may also ease some restrictions. Australia’s share market, home of some of the commodity kings, hit a new high on China easing restrictions The benchmark index, the ASX200 (ASXSP200.1) hit a new seven month high on Monday and momentum could continue with China’s easing some restrictions today. The iron ore (SCOA) price rose 2.3% move the steel ingredients’ price back over back above $100 for the first time since August, on hope China could increase demand. The iron ore price is up 38% from its October low. This is benefiting benefit forward earnings of BHP, Rio, Fortescue and Champion Iron with all their shares trading higher today, with those most exposed to China seeing the biggest rallies. Fortescue shares are up 8% taking the miner back to record highs. To get more inspiration on stocks exposed to China in commodities, use Saxo’s Australian Resources basket Foreign Exchange traders will be busy this week; RBA meets, before the Fed next week The US dollar is higher against most G-10 pairs, with the New Zealand dollar leading risk currencies lower. Why? The market is focused on the Fed’s meeting next week after hotter than expected US jobs report. Still, the US dollar, against most currencies (as measured by the (DXY) is near a five-month low after losing 8.4% from its high; with US inflation cooling and investors betting the Fed will only hike rates by 50 basis points (0.5%) at their December meeting next. Currencies to watch include the AUDUSD, as the RBA meets on Tuesday December 6. The RBA is expected to make its 3rd consecutive quarter-point (0.25%) hike in the cash rate, which will take the cash rate from 2.85% to 3.1%. AUDUSD is up ~10% from its October low on forwarding thinking that commodity demand from China will increase as some major cities have started to ease restrictions.   For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast. Source: Financial insights for investors & traders: Economic reopening plays, iron ore, oil rally on China easing restrictions. What's ahead | Saxo Group (home.saxo)    
Oil Could Be Ready To Pop, The Bank Of England Market Pricing Is More Mixed

The EU Nations Have Agreed To Cap The Price Of Russian Seaborne Oil

Saxo Bank Saxo Bank 05.12.2022 09:15
Summary:  Strong US November payrolls and especially strong earnings growth data failed to engineer a recovery in US treasury yields or the US dollar, taking both to new cycle lows, which kept global risk sentiment on an even keel for now after the recent rally. Focus tonight swings to Australia’s Reserve Bank which has lagged its global peers in this policy tightening cycle and kept a lid on the Aussie in the crosses, even as hopes for China’s “opening up” have found further encouragement.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities continued in Friday’s session to fade the big rally back from Wednesday last week but did however recover from a big dip during the session with S&P 500 futures finishing above the 200-day moving average. This morning S&P 500 futures are trading lower with the 200-day moving average again being key to watch on the downside and then of course the big 4,000 level. There are no major earnings today and the VIX Index remains relatively calm sitting just above the 19 level. The US 10-year yield also remains in a downward trend adding little headwinds to US equities at this point. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hong Kong and China equity markets surged on yet more signs of easing of Covid-related restriction measures in mainland China. Hang Seng Index soared 3.5% and CSI 300 gained 1.6%. Hang Seng TECH Index rallied 7.4%. Technology stocks, online healthcare platforms, EV makers, and consumer stocks led the charge higher. Bilibili (09626:xhkg) jumped 24% and Alibaba (09988:xhkg) surged 7%. EV maker XPeng (09868:xhkg) soared more than 22%. Leading Chinese catering stocks gained over 10%. USD lower even as earnings data well above expectations The US November payrolls and earnings data (more below) was stronger than expected Friday, which briefly jolted US yields and the US dollar stronger, only to see both rolling back over ahead of the close on Friday and then the US dollar following through lower still to new cycle lows in many places in Asia overnight. USDCNH plunged through 7.00 and EURUSD set a new multi-month high above 1.0550, for example. US data this week is sparse after today’s November ISM Services (that survey’s relative strength compared to the S&P Global measure, which has suggested contraction in the US Services sector for the last five months) as we await next Tuesday’s November CPI data and the FOMC meeting the following day. Without a revival in US treasury yields, the US dollar’s only source of support might be a fresh weakening of risk sentiment. Gold (XAUUSD) and Silver (XAGUSD) poised for further upside The supportive factors for precious metals continue to line up – China’s reopening, lower US yields and a weaker dollar. This helped gold run higher to test a break above the key $1800 level for the first time since August. Meanwhile, silver’s impressive November rally has extended into December with the price breaking above $22.25 – a 50% retracement of the March to September selloff – and on route to the next level of resistance at $23.35. Other metals such as copper and iron ore also charged with China now reopening Shanghai, while the risk of a policy error by the Fed continues to run high. Crude oil (CLF3 & LCOF3) lower on unchanged OPEC+ output After strong gains in crude oil last week, some softness was seen at the end of the week after speculation of no production cut from OPEC mounted. WTI traded back to $80/barrel from $83 levels mid-week on China’s reopening optimism, while Brent retreated from $90 levels to sub-86. The Sunday OPEC meeting did come out with an unchanged output decision, as expected, while the EU’s price cap on Russian oil was also fixed at $60. This week will be key to watch further China reopening and any signs of a retaliation from Russia on the price cap. European gas prices also continue to pick up as falling weather boosts heating demand, and expectations are for a colder-than-expected winter. US treasuries unmoved by strong US payrolls/earnings data (TLT:xnas, IEF:xnas, SHY:xnas) The stronger than expected US payrolls and earnings data failed to inspire a sustained recovery in US yields on Friday, as the US 10-year yield continues to hover near the 3.50% level, having dipped slightly below at times. This was a major high in that important benchmark yield back in June. The strong data pushed the 2-10 yield spread inversion back toward the cycle low of –80 basis points. What is going on? Hot US jobs report takes Fed terminal rate back toward 5.0% The nonfarm payroll change (NFP) data came out stronger-than-expected on Friday, with US employers added 263,000 jobs in November, less than October's upwardly revised 284,000 but well short of the turning point Fed officials seek in their battle against inflation. The unemployment rate was maintained at 3.7% (but with a 0.2% drop in the participation rate, showing once again a discrepancy in the household survey vs. the establishment survey used for the nonfarm payrolls calculation) while the wages were very hot: M/M rose 0.6% (exp. 0.3%) and Y/Y rose 5.1% (exp. 4.6%). After a few weeks where markets have been taking the slowdown in the pace of rate hikes by the Fed positively, this report was a reminder that rate hikes will continue well into 2023. WSJ's Fed Whisperer Timiraos said the report keeps the Fed on track to raise interest rates by 50bps at its meeting in two weeks and underscores the risk that officials will raise rates above 5% in the first half of next year. Another BOJ official fuels policy review speculation New BOJ board member Naoki Tamura urged a policy review, in his conversation with Bloomberg, saying that it would be appropriate for the central bank to conduct a review at the right time – soon or a little later depending on what happens to prices. USDJPY was quiet overnight after the exchange rate touched the 200-day moving average on Friday and near where it trades this morning in early European hours at 134.60. OPEC+ held production unchanged The OPEC+ group decided to keep the current production levels unchanged, as the crude oil prices started to show some tentative signs of a recovery after China’s continued commitment to ease its Zero covid policies. Still, a 2mb/d cut was announced in October, and the full effect of that is yet to be seen. Furthermore, there is volatility expected due to the EU sanctions and a G7 price cap on Russian crude which will go into effect this week, and further changes in China’s zero covid policy are also set to continue. The group’s next meeting is in February. Beijing, Shanghai and other large cities in China eased Covid policies Cities in China, one after one, announced to ease pandemic control restrictions including removing the requirement to show negative PCR test results when taking public transportation. Shanghai and Hangzhou joined the others on Sunday and announced that the cities no longer require negative PCR test results to enter public venues or take public transportation. EU sets in a price cap for Russian oil, to kick in from today The EU nations have agreed to cap the price of Russian seaborne oil at $60/barrel, with a motive to diminish Russia’s revenues, paving the way for a wider deal with the G7 countries. This price cap is to go in effect on December 5 and represents a discount of ~$27 to the current price for Brent crude, but Urals has been trading at a discount of about $23 in recent days. However, the risk of setting a price cap too low is that Russia could slash its output, which would roil markets. It will be important to watch for Russia’s reaction this week, after Putin has repeatedly said that they will not supply oil to countries that implement the price cap. Commodities pegged to China jolt higher Australia’s commodity heavy benchmark index, the ASX200 (ASXSP200.1) hit a new seven month high on Monday as China further eased restrictions in two major provinces. The iron ore (SCOA, SCOF3) price rose 2.2% in APAC trade, taking the steel ingredients’ price over $100 for the first time since August (to $108.30) on hopes China could increase demand. The iron ore price is up 38% from its October low. This is benefiting benefit forward earnings of BHP, Rio, Fortescue and Champion Iron with their shares trading higher today in Australia. Fortescue shares rose 7% taking the iron ore major’s shares to record highs. For inspiration on other commodity stocks exposed to China refer to Saxo’s Australian Resources basket. What are we watching next? Australia RBA’s Cash Target announcement tonight after hot November inflation data The Australia Melbourne Institute Inflation reading for November came out at +1.0% MoM and +5.9% YoY, both new highs for the cycle (the official inflation for October was out last week and was considerably softer than expected) ahead of tonight’s RBA meeting. The RBA has hiked rates at a more cautious pace than many of its peers and consensus is only slightly more than 50/50 that the central bank will hike another 25 basis points at its monthly meeting tonight, which would take the rate to 3.10%. The RBA has maintained a cautious stance on further policy tightening, quite concerned about the impact on households as rises in the adjustable mortgage rates impact disposable income. China’s Politburo meeting is a key event to watch Before the Central Economic Work Conference convenes in mid/late December, the Chinese Communist Party’s Politburo will meet in early December to discuss economic policies and establish the direction and policy framework for the work conference. Investors will pay close attention to the readout from the Politburo meeting for hints about the macroeconomic policy priorities and how they are balanced with the pandemic control strategy. Earnings to watch Earnings this week are a mish-mash of companies, and include high-end homebuilder Toll Brothers on Tuesday, as it will be interesting to hear their outlook on the new home market after the enormous surge in US mortgage rates and collapse in home sales activity. Broadcom (AVGO:xnas) is the market cap giant of the week to report, with the CEO of the company having said that the semiconductor market will not be affected by the US’ new export restrictions on technology to China. Tuesday:  MongoDB, AutoZone, Toll Brothers, Ferguson Wednesday: Brown Forman, Campbell Soup, GameStop Thursday: Broadcom, Costco, Lululemon, Chewy Friday: Oracle Corp, Li Auto Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Nov. Final Services PMI 0830 – Sweden Riksbank Meeting Minutes 0930 – UK Nov. Final Services PMI 1000 – Eurozone Oct. Retail Sales 1330 – Canada Oct. Building Permits 1445 – US S&P Global Nov. Final Services PMI 1500 – US Oct. Factory Orders 1500 – US Nov. ISM Services 1600 – ECB's Wunsch to speak 2330 – Japan Oct. Labor Cash Earnings 0330 – Australia RBA Cash Target Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:   Source: Financial Markets Today: Quick Take – December 5, 2022 | Saxo Group (home.saxo)
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

The Events In China May Help Financial Markets And The Global Economy

Conotoxia Comments Conotoxia Comments 05.12.2022 09:29
The beginning of the week seems to have started with a continuation of the rally in risky assets, which is beginning to resemble the proverbial Santa Claus Rally. The U.S. dollar cheapened at a rate not seen in 12 years, stock market indexes and precious metals climbed. One of the reasons for the improvement in market sentiment is cited as the loosening of Covid-related restrictions by Chinese authorities. Protests on the streets and weaker data from the local economy may have pressed policymakers so hard that they decided to make partial concessions. According to tradingeconomics, the Caixin China General Services PMI fell to 46.7 points in November 2022 from 48.4 in October, indicating the 3rd consecutive month of decline. It was also the steepest decline in the services sector since May, due to Covid's restrictive measures, which could affect demand and service activity. New orders fell the most in six months, with employment contracting at the fastest pace since the survey began in November 2005. Meanwhile, export orders began to rise again as overseas demand picked up after regulations on international travel were eased. In addition, business sentiment fell to levels seen eight months ago due to concerns about how long it will take to contain the virus and the impact of restrictions on business, according to the published data. Source: Conotoxia MT5, USDIndex, Weekly China eases restrictions. Risky assets may gain China's National Health Commission reported Monday that it has identified 30014 new cases of Covid-19 in the past 24 hours, with the country seeing a drop in infections in recent days after a record high when more than 40,000 cases were seen in a single day, BBN reported. What's more, local Chinese authorities have agreed to relax some measures related to Covid-19. In Beijing and Shenzhen, a negative test will no longer be required to enter some public places, such as public transportation and supermarkets. This course of events in China may help financial markets and the global economy, as China may now be the "green island" from the standpoint of GDP growth momentum. Source: Conotoxia MT5, VIX, Weekly Fear in the financial markets, as measured by the VIX index (expected monthly volatility on the S&P500 index) fell last week to its lowest level since August. If the decline were to continue, the VIX could reach its lowest level since January 2022. What are the markets waiting for? This week may be quieter due to the fact that the Fed's interest rate decision will be published as early as December 14. It is the expectation of smaller interest rate hikes in the US that could be the second factor helping the markets climb higher today. Nevertheless, the market is also assuming that in 2023. Fed will cut rates. Information on this subject could be crucial next week. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.      
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

Chinese Stocks Rallied On Easing Covid Measures | US Dollar (USD) Gained

Swissquote Bank Swissquote Bank 05.12.2022 10:15
US stocks fell on Friday, after the latest data showed that Americans got more jobs in November, and more importantly they got a better pay. More, and better paid jobs fueled US inflation expectations, boosted the Fed hawks, and brought forward the idea that the Fed could be attracted by another, a fifth 75bp hike in the December meeting. US US equities fell and the dollar gained, but the post-NFP pricing fully disappeared. The US dollar kicked off the week on a weak footage – a pricing that raises a flashy red flag. Energy market In energy, the weekend was rather eventless, as OPEC decided to maintain its daily output restriction unchanged at 2mio barrels per day at Sunday’s meeting, which could be seen as a negative development for the bulls. But there are two price-supportive developments that could limit losses and support gains. Watch the full episode to find out more! 0:00 Intro 0:34 What happened to post-NFP pricing?! 4:16 USD will likely soften, but it won’t be a one-way trade… 6:39 OPEC's output cut unchanged, EU sets price cap on Russian oil 7:39 Chinese stocks rallied on easing Covid measures. Time to jump in? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #NFP #jobs #unemployment #data #Fed #expectations #EUR #GBP #crudeoil #EU #Russia #oil #cap #OPEC #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Saxo Bank Podcast: Key Economic Indicators Point To An Incoming Recession In Europe

Saxo Bank Saxo Bank 05.12.2022 11:31
Summary:  Today we note that the market seems to be in see-no-evil, hear-no-evil mode, as hot earnings data from the US on Friday was unable to sustain a reaction in treasury yields, with financial conditions at their easiest in months. Still, key economic indicators point to an incoming recession in Europe even as the EURUSD manages to pull above 1.0500. We also preview tonight's RBA meeting, interesting earnings reports this week and much more. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Financial conditions continue to ease, ease, ease | Saxo Group (home.saxo)  
Rates Reversal: US Long Yields on the Rise as Curve Dis-Inverts

Texas Instruments Boasts A Steadily Increasing Net Profit Margin

Conotoxia Comments Conotoxia Comments 05.12.2022 13:04
Over the past 12 months, individuals directly associated with US semiconductor manufacturer Texas Instruments (TexasInst) sold shares worth a total of more than US$6.9 million. The biggest contributor was CEO Richard Templeton, who disposed of shares worth US$5.9 million. What could this mean for the value of this company's shares? Situation of the semiconductor industry Since we learned of Warren Buffett's biggest purchase in Q3 of this year, which was the world's largest semiconductor manufacturer Taiwan Semiconductor (TaiwanSemic), interest in the sector may have increased significantly. Since then, shares in the Taiwan-based company have risen by more than 30 per cent. Source: Conotoxia MT5, TaiwanSemic, Daily Data from the MacroMicro portal shows that the volume of new electronic equipment orders in the United States increased by 6 per cent year-on-year in October, and semiconductor demand appears to be largely dependent on these orders. Semiconductor billing volumes increased by 11.55 per cent y/y in the US, while global demand fell by 3 per cent y/y. The US is the world's largest single customer for these products, with a market share of as much as 22 per cent. However, 62 per cent of global demand is provided by the Asia-Pacific region (excluding Japan). Here, we could see a decline in purchase volumes of 11.51 per cent year-on-year. Which may confirm the slowdown announced by many analysts for this sector, and especially for China, which seems to have been struggling with pandemic problems in recent months, compounded by the zero-Covid policy.  Financial situation of Texas Instruments The financial figures of the semiconductor manufacturer in question may suggest success. Revenues have been on a continuous upward trajectory over the past nine quarters, currently up by 12.88 per cent year-on-year. Over the same period, operating profit has increased by 16.18 per cent year-on-year. The company also boasts a steadily increasing net profit margin, which currently stands at 44 per cent, against a sector average of 35.9 per cent, which may confirm the company's competitive advantage. According to an analysis by Heavy Moat Investments comparing Texas Instruments to the largest US semiconductor manufacturer Intel (Intel): "Texas Instruments has a much more asset-light business model. The significant difference between the two companies is that TI manufactures Analog Chips while Intel manufactures Digital Chips. We can see that Intel requires a much higher CapEx than TI, even though TI has also ramped up CapEx. TI also produced much higher and rising margins, while Intel has seen margins plummet in recent years due to a switch in business models." The stock market saying seems to be: "there are many reasons to sell a stock, but only one to buy it". In this case it may well apply. What does Wall Street think of Texas Instruments' share price? According to the Market Screener website, the company has 32 recommendations, and the majority of them read: "Hold". The average target price is set at $172.39, which is around the last closing price. The highest target price is at USD 230 and the lowest is USD 140. Source: Conotoxia MT5, TexasInst. Daily Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Market Focus: US Rate Hikes, Eurozone Inflation, and UK Monetary Policy Uncertainty

The latest dollar selloff is a hint that the US dollar has certainly peaked this year, and next year will be, (...) , a year of softening for the greenback

Ipek Ozkardeskaya Ipek Ozkardeskaya 05.12.2022 13:36
US stocks fell on Friday, after the latest data showed that Americans got more jobs in November, and more importantly they got a better pay. Wages grew by 0.6% over the month, which was the biggest monthly gain, and the double of what was penciled on by analysts.   Of course, the news was great for the American workers, but much less so for the Federal Reserve (Fed), who is dreaming of a softer US labour market, and weak wages so that people could just STOP spending in hope that inflation would fall.   Read next: If ECB policymakers should make a decision between fighting inflation and avoiding recession, they will likely choose fighting inflation says Ipek Ozkardeskaya| FXMAG.COM But nope, it's just another month of strong US jobs data which certainly got Mr Powell to scratch his head.  Investors just... don't want to price Fed rate at 5%!  More, and better paid jobs fueled US inflation expectations, boosted the Fed hawks, and brought forward the idea that the Fed could be attracted by another, a fifth 75bp hike in the December meeting,   US equities fell and the dollar gained.  But then, the S&P500, which gapped lower at the open closed the session almost flat, and the US dollar index gave back all post-jobs gains to close the week where it was before data, and even came lower in Asia this morning.   Why?   Probably because investors priced in the fact that the Fed won't increase its rates by 75bp this month. It will probably increase them by more in the first half of next year. But that information doesn't go through for some reason, and the pricing for the Fed's terminal rate is still below 5%.   So be careful, even though the rally in equities looks like it could continue, and the weakness in the US dollar is what could mark the last weeks of a chaotic trading year, we will certainly see these forces reverse in the first weeks of January, if not before.  S&P500 at crossroads  The S&P500 closed what was normally supposed to be a week of losses with gains. The index added more than 1% last week, and closed the week right at the top of the year-to-date descending channel, and above its 200-DMA.   The RSI index doesn't point at overbought conditions, the MACD index is slightly positive, and the volatility index slipped below 19, low volatility being a sign of improving risk appetite, and potentially sustainable gains.   Is there a possibility for this rally to extend despite all the red flags? Yes! There is, though, with the risk of Jerome Powell sounding like at the Jackson Hole speech back in summer – which had destroyed the market mood in a couple of minutes.   The next big data is due next week, on Tuesday, a day before the FOMC decision. Until then, investors could give themselves the luxury to dream about a dovish future.   The freefalling dollar  Until then, we could see the US dollar lose more field against most majors, if we are lucky enough. The EURUSD for example gained more than 10% since the end of September, as Cable gained nearly 20% since the Liz Truss dip.   As such, the US dollar rebound seems a bit aggressive, especially knowing that the market has been refusing to price in a terminal rate for the Fed above 5%.  So, there is a risk that we don't see a one-sided dollar selloff when the Fed remains sufficiently hawkish – and when the market pricing will have to match the Fed talk at some point.   But the latest dollar selloff is a hint that the US dollar has certainly peaked this year, and next year will be, despite some Fed hawkishness, and some rebounds, a year of softening for the greenback and recovery for other currencies.   OPEC doesn't cut output  The weekend was rather eventless, as OPEC decided to maintain its daily output restriction unchanged at 2mio barrels per day at Sunday's meeting, which could be seen as a negative development for the bulls.   But there are two price-supportive developments that could limit losses below the $80pb.   First, Europeans finally agreed on the Russian oil price cap at $60pb, that Russia refused – hinting that the Russians could reduce their oil output in the coming months, which would than reduce the global supply and push prices higher.   Second, China is easing Covid measures. The Chinese reopening could counter the global recession odds and support oil prices.  In US crude, strong resistance is seen at $85pb, 50-DMA. 
Apple's overal sales decreased for the second quarter in a row, but iPhone sales turned out to be better than expected

Vodafone Shares Fell By 45%, Apple May Be Moving Production Outside Of China

Kamila Szypuła Kamila Szypuła 05.12.2022 14:57
As we all saw in 2022, supply chain issues and soaring inflation hurt many businesses. Many large retailers have reported weaker profits due to the current macroeconomic challenges. This makes it even harder to figure out how to invest your money. The problems listed above are mostly indirect problems for companies such as Vodafone and Apple. After 4 years, Vodafone changes its CEO. Nick Read will hold the role until the end of the year. The situation with Apple in China and what this means for Apple’s stock. Vodafone - The company has already started looking for a new president Vodafone Group plc is a British multinational telecommunications company. The situation of Vodafone (VOD.PL) is not too good. After Read took the position, the company's shares fell almost 50% (45% to be exact). Stocks are at their lowest in two decades, according to data. The company has already started looking for a new president, as the current one will remain in this position only until the end of the year. Vodafone is also considering a merge with Hutchinson Three. Read next: Gas: Volatility still remains high and colder weather over January and February could see the natural gas bulls come back into town says Luke Suddards| FXMAG.COM   Foxconn, the Chinese iPhone supplier, is having production issues Apple makes most of its devices in China. Recently, however, production is affected by many factors. Foxconn, the Chinese iPhone supplier, is having production issues. COVID-19 lockdowns in the area and employee-management dispute are major sources of problems. Analysts predict these production issues could lead to a 5% to 10% drop in production. Apple's situation is unique as the company relies on partner Foxconn Technology Group, a Taiwanese group that manages the facility to ensure that production runs as intended. If violent protests and lockdowns continue, production could be held back even more than expected. According to analysts and people in the Apple supply chain, after a year of events that have weakened China's status as a stable manufacturing hub, the shock means that Apple is no longer comfortable. Read next: The latest dollar selloff is a hint that the US dollar has certainly peaked this year, and next year will be, (...) , a year of softening for the greenback| FXMAG.COM The solution may be to move production to India. Analysts reported that by the end of 2022, Apple will transfer about 5% of the world's production of iPhone 14s there. Apple and China have spent decades bonding in a relationship that has so far been mostly mutually beneficial. Change won't come overnight. However, the transformation is already underway. In recent weeks, Apple Inc. accelerated plans to move some of its production outside of China, and to reduce reliance on Taiwanese assemblers led by Foxconn. With a market capitalization of $2.33 trillion, Apple is still the world's largest publicly traded company. They also have $169 billion of liquidity on their balance sheet, but all of these production issues are causing investors concern. Analysts noted how much Apple relied on iPhone sales, which accounted for 52% of revenue. Experts also point out that if Apple continues to rely heavily on suppliers in China, it could become vulnerable. As it became clear that manufacturing problems in China could pose a serious threat to supply, Apple shares began to fall. On December 2, Apple shares were down 18.79% year-to-date. Source: reuters.com, forbes.com, wsj.com
Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges

Analytical Report – WSE:LSI - LSI Software

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 05.12.2022 16:29
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Sector: TMT – IT software & services Fundamental rating: Buy (→) Market relative: Overweight (→) Price: PLN 10.20 12M EFV: PLN 17.3 (↓) Market Cap: US$ 7 m Bloomberg code: LSI PW Av. daily turnover: US$ 0.01 m 12M range: PLN 10.00-16.35 Free float: 70% Key points â–  Material growth of costs and revenues in 2022. In 1-3Q22 the Company’s revenues rose 20% yoy to PLN 39.8 million supported by the demand rebound in the HoReCa industry and inflationary growth of costs and goods offered by LSI Software. Nevertheless, the revenues growth was accompanied by an equally dynamic growth of costs resulting from a salaries increase, PLN weakening (the distribution segment’s purchases made in US$), and chiefly from the expansion of sales teams for new business lines: restaurant robots distribution and software sales in the SaaS model. â–  PUDU Robots distribution. The PUDU Roboty profile on Facebook informs that LSI-distributed robots are used in numerous restaurants (Pizza Hut, KFC, Da Grasso), hotels, fairs, entertainment centers in Poland. We assume that at the end of 2022 and 2023 LSI will rent 85 and 150 robots, respectively, which will enable the Company to generate c. PLN 1 million and PLN 3.9 million, respectively. We expect a further increase in a number of rented robots in the coming years. Besides, it is worth reminding that LSI charges a monthly fee for each rented robot, hence the revenues will recur in the following years. â–  Software sales in the SaaS model are another business arm that may exert an important impact on the Company’s future financials. A SaaS model will be implemented in three areas: gastronomy, marketing, and hotel business. LSI believes that these new solutions will not cannibalize old products, as they are addressed at smaller clients looking for a cheap subscription model. We have not included the revenues from this business segment in our forecasts. â–  4Q22E. We tentatively 4Q22 revenues at PLN 16.7 million (down 19% yoy) vs the base quarter’s record high sales thanks to the cinema operating revenues. Ultimately, we forecast 4Q22 EBITDA at PLN 6.6 million (up 22% yoy), with NP at PLN 4.4 million (down 12% yoy). â–  Risk to financial forecasts. Moderate/ high. The Company’s further growth depends on the HoReCa industry and cinema business which are relatively vulnerable to the economic slowdown. 5.4 4.6-8.5 13.1 7.2 6.2-15.2 16%-12%-24%-25%-44% 75.6 15.0 8.5 6.9-11.6 previous 62.3 16.0 9.7 8.0-19.1 change 21%-6%-13%-14%-39% profile and we expect a 33%/ 49%/ 23% EPS yoy growth in 2023/ 2024/ 2025 which will make the Company’s development to resemble business models of growth companies. â–  Forecast changes. 3Q22 sales were higher than our expectations and in the years to come we expect stronger growth dynamics due to inflationary factors. In consequence, we raise our revenue forecasts for 2022/2023/2024 by 6%/16%/21%. On the other hand, 2Q22 brought about higher than expected SG&A costs with slightly lower margins, thus we have adjusted our f inancial assumptions accordingly. â–  LSI perceived as a growth company? New business lines improve the Company’s growth Catalysts 1. Attractive current valuation â–  Valuation. Our target 12M EFV drops by 14% to PLN 17.3 per share (from PLN 20.0 per share) because of lower ST financial forecasts (due to intensive investments in development). â–  Recommended action. We continue to be positive towards LSI Software and keep our recommendations: LT fundamental Buy and ST relative Neutral, intact. The Company continues intensive investments in new business lines development which burden its financial results. We expect a gradual improvement of financials in 2023. Analyst: Tomasz Rodak, CFA GPW’s Analytical Coverage Support Programme 3.0  
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Analytical Report – DataWalk – WSE:DAT - 05.12.2022

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 05.12.2022 16:29
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Key points â– This year we have observed a slowdown of the Company’s revenue dynamic to expected 30% yoy from 96% in 2021 which implies that the management target results (assuming a 70% revenue yoy growth) will not be achieved. There are two main reasons for this; namely (i) insufficient training and slower performance of field engineering teams handling the presale and post-sale services (internal factor) and (ii) a delay in purchase decisions taken by some clients and a decrease in a value of the first contract which are related to the economic slowdown (external factor). The management declares that the dominating internal factor is being addressed and the effectiveness of field engineering teams should not limit growth in 2023. â– A new issue in 2023/2024? In August the Company carried out a private placement of shares within authorized capital and collected PLN 38.3 million for further development. These funds should enable the Company to continue optimal development for a year and a half (until 1H24), we believe. Therefore, we expect another issue not later than in 1H24. â– The Company informed that to-date it signed 15 new contracts this year, which implies a 36% increase vs the analogical period of 2021 when it acquired 11 new contracts. Usually the yearend is particularly busy (clients tend to close their budgets) and we expect an inflow of new contracts till the end of 2022. â– Sales funnel value skewed slightly upwards. DataWalk informed that on September 14 a sales funnel value stood at c. US$ 25.3 million (including c. US$ 12.6 million in the US market and $ 12.7 million in other markets) which reflected a slightly rising trend of the sales funnel value, nonetheless we would like to see stronger growths which could support expectations of higher future growth dynamics. â– 4Q22E. Based on our FY revenue forecast in the amount of PLN 40.0 million, we expect 4Q22 revenues to reach PLN 14.2 million (up 31%/ 85% yoy/ qoq). â–  Risk to financial forecasts. High. Financial forecasts for DataWalk are encumbered with a high level of uncertainty given the early stage of the Company’s development and a relatively immature industry it operates in. During the last conference the management explained that the Company’s target for 2023 was a growth of revenues by at least 50% yoy (earlier they assumed 70% yoy). In consequence, we also lower our expectations related to revenues. â–  Valuation. Our target 12M EFV drops by 32% to PLN 107 per share (from PLN 158 per share), mainly on the back of (i) the revenue forecasts decrease, (ii) the peer multiples lowering by c. 50%, and (iii) valuation horizon forward shift. â–  Recommended action. For us, DataWalk remains an attractive growth company suffering temporary problems related to sales processes and unfavorable macro environment. Given this current negative market sentiment towards the growth companies with high needs for external funding, we maintain our recommendations: LT fundamental Hold and ST relative Neutral. Analyst: Tomasz Rodak, CFA GPW’s Analytical Coverage Support Programme 3.0  
It Was Possible That Tesla Would Move Closer To Resistance

Shanghai: Production of Tesla cut, because of reduced demand

FXStreet News FXStreet News 05.12.2022 16:29
Tesla is cutting production by 20% at its Shanghai factory. The move will mostly involve Model Y production. The production cut is due to a demand shortfall. TSLA stock drops 4.7% on Shanghai news.   Tesla (TSLA) stock gave up 4.7% in Monday's premarket after Bloomberg reported that its Shanghai factory would trim record production by 20% due to sluggish Chinese demand. Shares of the leading electric vehicle maker dropped to $185.75 on the news. At the same time most of the US futures market is down in the premarket. Futures for all three major indices, the Dow, S&P 500 and the NASDAQ, are off close to 0.5%. Tesla stock news: Model Y production clipped The news out of Shanghai caught investors off guard, because until now Tesla had been undergoing a global ramp up in production. These included plants in Berlin and Austin, Texas as well. The Shanghai production cut is said to be caused by a reduction in that market's demand. Due to frequent covid-related shutdowns across China this year, the economy there appears to have pulled back quite a bit. Demand has shrunk even while Tesla has been ramping up production there to an all-time high. In November Tesla reported deliveries just under 100,300 vehicles. Cutting back to 80,000 units a month is still quite a substantial figure, and Bloomberg sources said it would be easy to ramp back up once demand returns. Reports say the cut will primarily focus on Model Ys. Earlier news accounts said that Tesla had finally exceeded Chinese demand in November for both Model Ys and Model 3s. Waiting times between customer order and final delivery for both models are said to be way down compared with earlier in the year. Source: CnEVPost Tesla can of course export vehicles produced at the Shanghai plant, and it does do this. In fact, that is normally the course of action. Tesla Shanghai spends the start of each quarter producing vehicles for export and then spend the latter half producing for the domestic market. In October, for instance, 54,504 vehicles were exported, and just 17,200 vehicles were delivered there in China. Tesla should produce more than 1 million vehicles at the Shanghai factory in 2023. In other news the European Union's Trade & Technology Council has vocally implied that it may challenge parts of the US Inflation Reduction Act (IRA) at the World Trade Organization. Members of the EU regard certain features of the IRA as protectionist since only US-based companies can receive the many tax breaks for going green that the legislation allows. A primary target of EU member countries are the EV tax credits. In order for a consumer to be eligible for a $7,500 tax credit on a new EV, the vehicle must be assembled in North America. "There is a risk that the Inflation Reduction Act could lead to unfair competition, could close markets and fragment critical supply chains," said President of the European Commission Ursula von der Leyen. "We must take action to rebalance the playing field... to improve our state aid frameworks. In other words: We need to do our homework in Europe and at the same time work with the US to mitigate competitive disadvantages." Tesla stock forecast With the latest setback, TSLA stock is once again experiencing resistance at the $200 level. Last Thursday Tesla stock nearly cleared $199 before selling off and closing lower. In order to make a run at late October and early November's swing high at $234, bulls first need to reconquer the $200 level, which is suddenly seeming to be a difficult task. Nearby support at $180 and $167.50 should both offer some confidence in the mean time. The 9-day moving average also found a base of support recently at the $180 level before moving higher. The Moving Average Convergence Divergence (MACD) still shows that a rally is on, so it is quite possible that an unknown catalyst (Tesla Semi?) arrives in the headlines later this week and works to rally the troops for another try at $200. TSLA 1-day stock chart
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

Jason Sen talks Emini S&P, Nasdaq and Emini Dow Jones - 05/12/22

Jason Sen Jason Sen 05.12.2022 11:39
Emini S&P December futures hit the 8 month trend line at 4090/95, the downward sloping 11 month trend line & upward sloping 2 month trend line at 4105/10, with a high for the day week here. Nasdaq December lower on the US non farm payroll number to my target of 11750/700 with a low for the day exactly here. Read next: Vodafone Shares Fell By 45%, Apple May Be Moving Production Outside Of China | FXMAG.COM Emini Dow Jones futures turns lower but no important sell signal yet despite severely overbought conditions. **Friday's dragonfly doji in all 3 markets warns of a potential price decline. A move lower on Monday's candle provides confirmation.** Today's Analysis. Emini S&P December has rejected strong resistance at 4090/95 to 4105/10 with a weekly close below here. Obviously a break above this week will convince me to turn bullish. We then target 4170/90. Shorts at 4090/4110 can retarget 4060/50 & first support at 4020/10. A low for the day exactly here on Friday with longs offered up to 65 points profit. A break below 4000 however is a sell signal targeting 3970/50 & strong support at 3930/10. Read next: The reduction of fears related to a possible frosty winter may support the euro exchange rate | FXMAG.COM Nasdaq December holding below 12000 re-targets 11750/700. Further losses can target 11550/500 & even 11250. Bulls really need a clean break above the November high at 12118 for a buy signal targeting 12250 & 12400. Emini Dow Jones should meet support at 33900/800 & in fact we had a low for the day just 35 ticks above here on Friday. A break below 33600 today signals further losses towards support at 33300/200. Above 34700 can target 35000/35100.
Stronger-than-expected ISM could have affected stocks. Aussie gained from the RBA decision

Presumably, stronger-than-expected ISM affected stocks. Aussie gained from the RBA decision

Ipek Ozkardeskaya Ipek Ozkardeskaya 06.12.2022 08:09
Stocks fell and the US dollar strengthened on Monday.   One of the reasons that could have triggered the move was a stronger-than-expected ISM services read in the US, which came in above expectations, and hinted that the economic activity, at least in the US services sector continues growing, and growing un-ideally faster-than-expected despite the Federal Reserve's (Fed) efforts to cool it down.   So, the economic data may have fueled the Fed hawks yesterday, although I just want to note that another data, which is PMI services remained comfortably in the contraction zone at around 46.   In the short run, the S&P500 may have seen a top near 4100 But the fact that the S&P500 was flirting with critical yearly resistance may have played a bigger role in yesterday's selloff.   The S&P500 shortly traded above the year-to-date bearish channel top last week without a solid reason to do so. The pricing in the markets barely reflects the scenario that the US rates will go above the 5% mark. Therefore, a downside correction was necessary to reflect the reality of the Fed game. Read next: Vodafone Shares Fell By 45%, Apple May Be Moving Production Outside Of China | FXMAG.COM Some people say that it's because the market sees the Fed's bluff. But at the end of the day, if Fed's bluff of tighter policy doesn't do the job, then the Fed will have to do the job itself.   In the short run, the S&P500 may have seen a top near 4100 and could opt for a further downside correction, with the first bearish target set at 3956, the minor 23.6% Fibonacci retracement on the latest rally, then to around 3870, the major 38.2% retracement level and which should distinguish between a short-term bearish reversal, and the continuation of the latest bear market rally.   It is possible we will see the EURUSD recover to 1.10 and Cable to 1.30 within the next 3 to 6 months Looking at the FX, the Aussie was slightly better bid after the Reserve Bank of Australia (RBA) raised its rates by another 25bp today, and took the rates to levels last seen a decade ago.   Elsewhere, the US dollar strengthened as a result of the hawkish Fed rectification. The dollar index first eased to a fresh low since June, then rebounded. It has way to recover above its 200-DMA, which hints that some majors, including EURUSD and Cable could return below their 200-DMA as well.   Yet, even if we see rebounds in the US dollar, the medium to long term direction of the dollar will likely be the south in the coming months.   Read next: The reduction of fears related to a possible frosty winter may support the euro exchange rate | FXMAG.COM The currency markets are not like the equity markets, or the cryptocurrency markets. The valuation of one currency cannot go to the moon, forever. Therefore, it is possible we will see the EURUSD recover to 1.10 and Cable to 1.30 within the next 3 to 6 months.   Even the Japanese yen, which has been the black sheep of the year, is expected to do much better in the coming months.   Analysts at Barclays and Nomura expect the yen to rally more than 7% next year - which is not a big deal if you think that the US dollar gained up to 30% against the yen since the beginning of this year.   Vontobel sees the yen's fair value below the 100 level against the US dollar, which, on the other hand, is a bit stretched as the dollar-yen hasn't seen that level since 2016, and it was a short visit. The last time the dollar-yen was really below 100 is before 2013.   What's more realistic is, we see the dollar-yen trend slowly lower. In the short-run, resistance at 140 should keep the pair within the bearish trend with the next downside target set at 130.
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

The Focus Will Be On The RBA Commentary | Crude Oil Pulled Back

Saxo Bank Saxo Bank 06.12.2022 08:43
Summary:  U.S. stocks and bonds sold off on Monday. On the back of the wage inflation in the job report released last Friday, the ISM Services Index and its employment and price-paid sub-indices on Monday increased the uncertainty of the Fed’s interest path in 2023 as officials would now need to think twice before slowing the pace of rate hikes. China and Hong Kong stocks surged on more signs of China loosening Covid restrictions. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) sold off on a solid ISM Services report After an unexpectedly strong ISM Services, U.S. equities sold off. S&P 500 dropped by 1.8% and Nasdaq 100 lost 1.7%. The selloff was broad-based as all 11 sectors within the S&P 500 pulled back, with consumer discretionary, energy, and financials being the top losers. Within the financial sector, regional banks were the worst performers. Telsa (TSLA:xnas) plunged 6.4% on reports that the EV maker plans to cut production in its Shanghai factory. VF Corp (VFC:xnys) dropped by 11.1% after the maker of the North Face and Vans brands, cut revenue and earnings outlooks and announced the retirement of its Chairman and CEO. United Airlines shares gained 2.6% after a leading U.S. investment bank upgraded the airliner on expecting 2023 travel to be a ’goldilocks’ year with earnings to pick up.  US treasuries (TLT:xnas, IEF:xnas, SHY:xnas) sold off with yields higher on a hot ISM Service Index U.S. treasuries sold off and yields surged after a strong ISM Service Index that came in with a rise in the headline to 56.5 and the employment sub-index back to expansion while price-paid moderating only slightly and remaining in strong expansion territory. Wall Street Journal’s Nick Timiraos, who is considered by market participants of the Fed’ media mouthpiece, said in his latest article that “ elevated wage pressures could lead [the Fed officials] to continue lifting [the Fed fund target] to higher levels than investors currently expect”. The 2-year yield surged 12bps to 4.39% and the 10-year yield climbed 9bps to 3.57%. The 2-10 year curve further inverted to minus 81bps. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) rallied strongly on the loosening of Covid-restrictions Hong Kong and China equity markets surged on yet more signs of the easing of Covid-related restriction measures in mainland China. Hang Seng Index gained 4.5% and CSI 300 climbed 2%. Hang Seng TECH Index soared 9.3%. Technology names, online healthcare platforms, EV makers, and Chinese developers led the charge higher.  Bilibili (09626:xhkg) jumped nearly 29%. Alibaba (09988:xhkg) surged 9.3% and Tencent (00700:xhkg) climbed 7.1%. Tech hardware names performed strongly, with Sunny Optical (02382:xhkg) up 10.1% and Xiaomi (01810:xhkg) rising 13.6%. EV maker XPeng (09868:xhkg) soared more than 26%, followed by Nio (09866:xhkg) up 14.9% and Li Auto (02015:xhkg) up 12.2%. Online healthcare platforms were among the top gainers, with Alibaba Health (00241:xhkg) surging nearly 20% and JD Health (06618:xhkg) advancing 15%. Shares of leading Chinese developers gained. Longfor (00960:xhkg) rose 17.1% and CIFI (00884:xhkg) jumped nearly 24%. Macau casino shares soared by 15%-20%. In A shares, infrastructures and financials were among the top performers. Australia’s share market rally halts, metal prices head lower, coal stocks surge. RBA decision ahead  The Australian benchmark index, the ASX200 (ASXSP200.1) today is lower on Tuesday, following global markets; with selling in oil, gas, and gold stocks dragging down the market. As a result, the ASX200 stumbled from its seven-month high on expectations the Fed might keep rates higher for longer, which is also why interest rate sensitive stocks such as Block (SQ2) are in the loser board, down 5.3%, taking its year to date loss to 51%. While on the upside, coal stocks such as New Hope Corp (NHC) are up 2% with Whitehaven (WHC) up 1.2% supported higher by the coal Newcastle futures price heading back toward its record all-time high, on expectations coal demand will peak up.  FX and Commodities Oil pulled back 3.8% and gold plunged 1.6% as the US dollar rallied and bond yield rose. Iron ore (SCOA) fell 1.7% but held onto near its fresh highs of $106.50. USDJPY bounced 1.6% to 136.43. The Chinese renminbi strengthened versus the dollar to 6.9560 on more signs of China reopening from Covid restrictions.   What to consider? U.S. ISM Services Index unexpectedly rose by 2.1pp to 56.5 The U.S.’ November ISM Services Index came in at 56.5, which is 2.1 percentage points higher than October’s 54.4 and is way above the consensus estimate of 53.5. The business activity sub-index jumped 9pp to 64.7, the higher level since last December. The employment sub-index bounced to 51.5, back to the expansion territory, from 49.1 in October. The price paid sub-index remained at an elevated level of 70, down only modestly from 70.7 in October. China may roll out 10 additional measures to loosen Covid restrictions Reuters, citing “sources with knowledge of the matter”, reports that China “may announce 10 new COVID-19 easing measures as early as Wednesday” and downgrade the containment of COVID-19 to Category B management or even Category C, which are less stringent. Category A covers highly transmissible and deadly diseases such as bubonic plague and cholera. Category B includes SARS, anthrax, and AIDS while Category C has diseases such as influenza, leprosy, and mumps. The major focus in Australia is on the outcome of the RBA meeting today   At 2.30 pm Sydney time, Australia’s central bank is expected to hike rates by a quarter-point (0.25%) for the third straight month, which will take the cash rate from 2.85% to 3.1%. The focus will be on RBA commentary potentially ending its rate hike cycle, given that Australian households have the highest debt-to-income ratios in the world; with indebted households highly vulnerable to tightening, with loan arrears and insolvencies increasing. Look for color in the RBA statement that may allude to the RBA pausing rate hikes in early 2023. Lenders in Australia, Commonwealth Bank (CBA), ANZ (ANZ), Westpac (WBC), and National Australia Bank (NAB), as well as Suncorp (SUN) and Bank of Queensland (BOQ) will be on watch as they have been experiencing smaller profits as the property market is at breaking point with mortgage holders under stress. However, insurance companies are continuing to benefit from higher rates and are worth watching. Insurance company QBE Insurance (QBE) is trading up 9.2% this year and is a buy side analyst favorite. For more Australian buy-side analyst favouities, click here. If the RBA mentions a potential rate hike pause, you could expect banks to rally as well as REITs. For a list of Australian REITs, refer to Saxo’s Australian REIT stock basket. Caixin Services PMI slid further into contraction China’s services sector shrank deeper into contraction in November according to the Caixin Services PMI, which came in at 46.7 below both the consensus estimate (48.0) and the prior month (48.4). Covid containment measures weighed on business operations and consumer demand. China’s Xi is attending a China-Arab summit this week in Saudi Arabia China President Xi Jinping is expected to fly to Saudi Arabia on Dec 9 to attend a China-Arab summit. Saudi Arabia is the largest supplier of crude oil to China. China has been pursuing a grand strategy to move westward to secure ties with countries in Central Asia and the Middle East.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Market Insights Today: U.S. Stocks and bonds sold off on a solid ISM Services print – 6 December 2022 | Saxo Group (home.saxo)
Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

Tesla And Plans To Lower Production At Its Shanghai Factory

Saxo Bank Saxo Bank 06.12.2022 08:49
Summary:  Equities falter with Fed gaining power to keep hiking vs RBA nearing the end of its path, coal stock surge. Here is what you need to watch in markets in this six minute video         US equites fell on the back foot on Monday, falling for the third day The pull back in US stocks was largely fuelled by the US economy’s service gauge unexpectedly rising, fuelling speculations that the Fed can keep hiking interest rates and keep policy tight. As such, in a typical risk off fashion, the 10-year bond yield jumped almost 11 bps to 3.59%, which helped push up the US dollar up against board, with the yen sliding 1.8%. Money is essential being taken off the table ahead of Friday’s US producer prices report, which will be one of the final pieces of data  Fed officials see before their December 13 meeting. 95% of the S&P500 stocks closed underwater, with all major sectors all in the red. The S&P500 fell 1.8%, moving further away from its 200-day average; with the technical indicators flagging another potential pull back could occur.  While the tech heavy Nasdaq Composite fell 1.9%, almost wiping out last week’s rally as tech stocks are the most sensitive to rate hikes as they are deemed expensive, with a PE ratio of over 40 times earnings. As for big sock moves in the US; Tesla tumbled and airlines rallied Tesla shares fell 6.4% on reports its plans to lower production at its Shanghai factory, as China’s demand isn’t meeting expectations. Tesla shares are now down 53% from their high and what’s keeping their shares at this level is that the raw material costs are still high, for example the price of lithium is back at record highs, and the market consensus suggests earnings growth will remain at near the 20% mark. As always, there were pockets of green, United Airlines shares gained 2.6% after Morgan Stanley upgraded the airliner on expecting 2023 travel to be a ’goldilocks’ year with earnings to pick up. In commodities moves Oil pulled back 3.8% as the US dollar rallied, gold plunged 1.6% as the USD and bond yield rose, and iron ore (SCOA) fell 1.7% but held onto its fresh highs of $106.50. Australia’s share market rally halts, metal prices head lower, coal stocks surge RBA decision ahead The Australian benchmark index, the ASX200 (ASXSP200.1) today is lower on Tuesday, following global markets; with selling in oil, gas, and gold stocks dragging down the market. As a result the ASX200 stumbled from its seven month high on expectations the Fed might keep rates higher for longer, which is also why interest rate sensitive stocks such as Block (SQ2) are in the loser board, down 5.3%, taking its year to date loss to 51%. While on the upside, coal stocks such as New Hope Corp (NHC) are up 2% with Whitehaven (WHC) up 1.2% supported higher by the coal Newcastle futures price head back toward its record all time high, on expectations coal demand will pick up. The major focus in Australia is on the outcome of the RBA meeting today At 2.30pm Sydney time, Australia’s central bank is expected to hike rates by 0.25% for the third straight month, which will take the cash rate from 2.85% to 3.1%. Focus will be on RBA commentary potentially ending its rate hike cycle, given Australian households have the highest debt to income ratios in the world; with indebted households highly vulnerable of tightening, with loan arrears and insolvencies increasing. Look for colour in the RBA statement that may allude to the RBA pausing rate hikes in early 2023. Lenders in Australia, Commonwealth Bank (CBA), ANZ (ANZ), Westpac (WBC) and National Australia Bank (NAB), as well as Suncorp (SUN) and Bank of Queensland (BOQ) will be on watch as they have been experiencing smaller profits as the property market is at breaking point with mortgage holders under stress. However, note,  insurance companies are continuing to benefit from higher rates. Insurance company QBE Insurance (QBE) is trading up 9.2% this year and is a buy side analyst favorite. For more Australian buy side analyst favouities, click here. If the RBA mentions a potential rate hike pause, you could expect banks to rally as well as REITs. For a list of Australian REITs, refer to Saxo’s Australian REIT stock basket.   For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast. Source: Video: Equities falter with Fed gaining power to keep hiking vs RBA nearing the end of its path, coal stock surge | Saxo Group (home.saxo)
The RBA Raised The Rates By 25bp As Expected

The RBA Warned It Sees Inflation Increasing Over The Months | Tesla Shares Are Now Down

Saxo Bank Saxo Bank 06.12.2022 09:45
Summary:  Markets were surprised yesterday by the strength of the November US ISM Services survey, which suggests a fresh increase in services activity from the October level as opposed to the deceleration expected. In response, US yields rebounded all along the curve, the US dollar rose sharply, and risk sentiment rolled over again, suddenly threatening key areas in the main US index that were taken out on the way up recently.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures gave up most of their gains from Wednesday last week closing just above the 4,000 key level. The rejection of the move above the 200-day moving average suggests to us that the conviction is low at this stage of the rally and if we see a breakdown below the 4,000 level then the 100-day moving average down at the 3,936 level is the next pivot point to watch. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hong Kong stocks pulled back following overnight weakness in the U.S. market and the uncertainty in the Fed’s ability to slow down in its pace of hiking interest rates after recent data indicating strength in wage inflation and business activities in the U.S. services sector. Hang Seng Index lost 1.3% while the CSI 300 was 0.3% higher. The rapid surge in the Hong Kong dollar money market interest rates recently also weighed on Hong Kong stocks. USD rebounds on hot ISM Services report, wilting risk sentiment The US November ISM Services survey cam in far stronger than expected, inspiring a fresh surge in US treasury yields, if a relatively modest one, and a significant rebound in the US dollar as risk appetite rolled over. The USD reversal is particularly interesting from a technical perspective as it came after support had broken in a few important USD pairs. EURUSD, for example, has been pushed back below 1.0500 this morning after an attempt on 1.0600 yesterday and after clearing the prior cycle high. USDJPY has surged above 137.00 after touching below 134.00. A more comprehensive reversal of the recent USD sell-off, however, would require EURUSD back below 1.0400 and USDJPY back above perhaps 139.00, with the key oncoming event risk next Tuesday’s November US CPI print and the FOMC meeting the following day. Gold (XAUUSD) took a tumble on Monday ...and following the failure to break above $1808, the August high, it reverted lower to a challenge recently established lows in the $1765 area. The turnaround was triggered by unexpectedly strong US services data adding renewed pressure on the Fed to keep interest rates higher for longer. Total holdings in bullion backed ETF’s suffered a large 13.7 tons reduction on Monday, and it highlights golds continued dependence on the dollar and yields to provide support, and once they fail to do so, selling emerges. Focus on Friday’s PPI report and liquidity which is likely to start drying up, thereby raising the risk of volatile price action ahead of year-end. Silver meanwhile tumbled 5.6% on Monday and has now returned to challenge support at $22.25 Crude oil (CLF3 & LCOG3) traded sharply lower on Monday ...after supportive micro developments such as restrictions on Russian sale of oil and China easing Covid restrictions were offset by a broad shift lower in risk sentiment after stronger than expected US data lifted the dollar and bond yields while sending stocks lower. For now, the price action remains stuck in a ten-dollar range with no clear short-term direction emerging. The market is undoubtedly going through a soft patch regarding demand with Saudi Arabia lowering its official January selling prices to Asia while time spreads continues to soften as the spot price falls faster than prices further out the curve. US treasuries rebound on strong US services survey (TLT:xnas, IEF:xnas, SHY:xnas) The stronger than expected US November ISM Services survey saw a rebound in US treasury yields all along the curve as the market priced the Fed to edge its policy rate a bit higher next year (peak yield seen hitting 5.00% again) as the 2-year Treasury yield surged over 10 basis points higher and the US 10-year benchmark pulled away from the important 3.50% level, although to suggest a reversal of the recent downtrend in yields, the benchmark yield would need to recover above 3.70-75%. What is going on? US November ISM Services surprises on the upside with 56.7 reading This is an important data point as the services sector dominates US economic activity. The market was looking for another deceleration of activity in November (consensus expectations for a 53.5 reading) after 54.4 in October. Among the sub-indices, the Prices Paid index was sticky at the high level of 70.0 vs. 70.7 in October, New Orders were 56.0 vs. 56.5 in October and Employment was 51.5 after 49.1 in October. Australia’s RBA hikes 25 basis points as most anticipated The hike took the cash rate from 2.85% to 3.1%. The AUD was mixed, rebounding sharply from session lows against NZD but that only came after a further slide late yesterday. The RBA maintained cautious guidance, saying the full effects of rates hikes since May have not been felt yet by the economy, while also declaring employment growth had slowed. As such the RBA said its path to achieving a soft landing is narrow, meaning it might be hard to avoid a recession. This also follows news out of Australia today that its current account fell into a deficit for the first time since 2019. The RBA warned it sees inflation increasing over the months ahead, particularly in wages. It conceded inflation is damaging the economy and is making life more difficult for people. The market only anticipates another 50 basis points of tightening in the coming 12 months from the RBA, as it’s rate peak lags the US Fed’s by nearly 150 basis points. Tesla shares fell 6.4% on reports its plans to lower production at its Shanghai factory ...as China’s demand isn’t meeting expectations. Tesla shares are now down 53% from their high and what’s keeping their shares at this level is that the raw material costs are still high, for example the price of lithium is back at record highs, and the market consensus suggests earnings growth will remain at near the 20% mark. US and Europe considering new tariffs on metal imports from China ...arguing that global overcapacity and carbon-intensive production in China could see the duties assessed on imports of key metals. The story is from Bloomberg, which cited “people familiar” with the situation. What are we watching next? China’s Politburo meeting is a key event to watch Before the Central Economic Work Conference convenes in mid/late December, the Chinese Communist Party’s Politburo will meet in early December to discuss economic policies and establish the direction and policy framework for the work conference. Investors will pay close attention to the readout from the Politburo meeting for hints about the macroeconomic policy priorities and how they are balanced with the pandemic control strategy. Expect a modest Q4 contraction for the eurozone Yesterday’s final PMI indicators for November point to a very mild GDP contraction in Q4 in the eurozone (minus 0.1 % or minus 0.2 % in our view). The manufacturing PMI surged marginally to 47.1 from 46.4 in October. The report was rather mixed. The softening of inflationary pressures continues but additional orders are falling once again due to lower client demand at the global level. This was expected. The services PMI was also out in contractionary territory at 48.5 against prior 48.6 in October. This is the exact same number as the flash estimate. This is the lowest level since early 2021. Overall, the services and the manufacturing sectors are more resilient than most expected a few months ago when fears of the energy crisis started to cause panic. Earnings to watch Today’s US earnings focus is the homebuilder Toll Brothers which is expected to see revenue growth slow down to 6% y/y in the quarter that in October as the US housing market is drastically slowing down from the interest rate shock in mortgages. While growth is slowing down for Toll Brothers investors will be looking for evidence that margins might even begin expanding as building materials are coming down in price. Today:  MongoDB, AutoZone, Toll Brothers, Ferguson Wednesday: Brown Forman, Campbell Soup, GameStop Thursday: Broadcom, Costco, Lululemon, Chewy Friday: Oracle Corp, Li Auto Economic calendar highlights for today (times GMT) 0900 – Norway Nov. Region Survey 1330 – US Oct. Trade Balance 1330 – Canada Oct. International Merchandise Trade 1500 – Canada Nov. Ivey PMI 1700 – EIA's Short-Term Energy Outlook 2130 – API's Weekly Report on US Oil and Fuel Inventories 0030 – Australia Q3 GDP Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: https://www.home.saxo/content/articles/macro/market-quick-take-dec-6-2022-06122022
Industrial Metals Outlook: Assessing the Impact of China's Stimulus Measures

Should The EU Borrow Money From The US? A Significant Role Of Gig Workers In The Future Of Shopping

Kamila Szypuła Kamila Szypuła 06.12.2022 12:04
The end of this year is extremely intriguing. It shows how economies cope with rising inflation and what lies ahead. Despite the difficulties, there is still development in many areas of our lives. In this article: Prospects of Norwegian companies EU and borrowing money from the US Gig Workers US economy Norwegian companies can Reuters company, in its tweet, writes about the deteriorating prospects of Norwegian companies. Norway companies see weaker outlook, central bank survey shows https://t.co/Hs0kOmgOee pic.twitter.com/KlWSqICCBq — Reuters Business (@ReutersBiz) December 6, 2022 The Norwegian market is also deteriorating. Inflation significantly reduces activity. Data on the condition of firms provide key information for the future policy of the central bank. Norges Bank raised interest rates, which are currently at 2.5% and it looks like they will continue to rise. Further actions may worsen the situation of companies that are already struggling with difficulties. EU and borrowing money from the US CNBC tweets about Germany's stance on borrowing money from the US. Germany says borrowing more money to compete with the U.S. would be a 'threat' to Europe https://t.co/4R6jZqWVRT — CNBC (@CNBC) December 6, 2022 Germans believe that borrowing can threaten competitiveness  The EU is vocal about its concerns about the US Inflation Reduction Act (IRA) that threatens European businesses. Of course, there are advantages to borrowing money, but the greater the dependence can have a negative effect. For this reason, there may be skeptical attitudes as to further sources of financing. The rise of digitization J.P. Morgan tweets about gig workers Through the rise of digitization, gig workers are enhancing many shopping experiences. Learn how payments can help to attract and retain these workers. — J.P. Morgan (@jpmorgan) December 5, 2022 The future of shopping will require different types of employees to provide a topnotch customer experience. For many businesses, gig workers will serve a significant role in the future of shopping experience. These workers are becoming more and more common for two reasons. First, they redefine many roles and responsibilities in companies' business models (discussed below). Second, they provide structure to an otherwise disorganized labor pool; these workers now have a platform and business model to perform ad hoc tasks. In short, the development of employees means better quality of work and thus the development of the company. US economy may soft landing in 2023 Morgan Stanley tweets about US economy. While 2022 saw the fastest pace of policy tightening on record, has the Fed’s hiking cycle properly set the U.S. economy up for a soft landing in 2023?Read more about this episode: https://t.co/RSjBBIX7xm pic.twitter.com/7Qa248UKIW — Morgan Stanley (@MorganStanley) December 5, 2022 This year has undoubtedly been full of events. From the continuation of the fight against the effects of the pandemic, through the war in Ukraine to the fight against inflation. Central banks around the world are trying to fight inflation so as not to worsen the state of their governments and lead to a recession. While many economies believe they are already entering a recession cycle, it is believed that the US economy may land softly in this situation. Increases in interest rates in the fight against inflation cause difficulties for companies, as well as for households. Many experts believe that the Fed has prepared its economy for all eventualities. The coming months will be crucial to confirm this. Share price performance in metals and trading UBS tweets about its report results. Can measures to hold down cost of equity help drive share price performance in metals and trading? Find out how in our #UBSResearch report. #shareUBS — UBS (@UBS) December 6, 2022 UBS conducts numerous studies that are important to many markets as well as their sectors. UBS believe efforts to control COE are now likely to become a more important factor in maintaining and expanding multiples against this backdrop. Its analysis indicates several cases wherein CoE has functioned as a key share price driver.
To Simplify The Organization, Pepsico Will Lay Off Thousands Of Workers At The Headquarters In The USA

To Simplify The Organization, Pepsico Will Lay Off Thousands Of Workers At The Headquarters In The USA

Kamila Szypuła Kamila Szypuła 06.12.2022 15:24
The economic situation has also affected food companies. These types of companies are also planning layoffs. Laying off workers at the headquarters of North American In recent months, companies in the tech and media sectors have been laying off workers to cut costs as economic uncertainty puts pressure on their businesses. Several companies in the food industry have also made redundancies. The overall US labor market remains historically tight, with employers competing for limited labor pools and pushing up wages despite an uncertain economic outlook. PepsiCo, which makes the namesake Pepsi soda and products such as Gatorade, Lays chips and Quaker Oats, is reportedly cutting jobs. Food and beverages sold in grocery stores are in high demand despite rising prices affecting many households. PepsiCo and other food companies are raising prices to compensate for higher ingredient, shipping and labor costs. PepsiCo employed approximately 309,000 people worldwide, including approximately 129,000 in the US, as reported on December 25 last year. The layoffs will affect workers at her food and beverage businesses in Chicago; Plano, Texas and Purchase, New York. The company's beverage division is expected to be hit harder by the cuts, as the snacks division has already reduced staff through a voluntary retirement program, according to The Wall Street Journal. PepsiCo explained that the layoffs aimed to “simplify the organization” to ensure further operational efficiency. Wall Street is cautiously optimistic about PepsiCo stock. Currently, PEP is trading at the highest prices of the year. PepsiCo Inc. Chart Meta and cross check Unfair deference to VIP users of  Facebook and Instagram services under a program called “cross check”. Meta asked the board of directors to review the cross-checking process last October and has committed to responding to the group's questions. The Board noted that during the review period, Meta committed to carrying out annual cross-check reviews. The report provides the most detailed review to date of cross-checking, which Meta described as a quality control attempt to prevent moderation errors on content of increased public interest. The board report does not question the value of the secondary review system for moderating posts from high-profile or sensitive accounts. Moreover, the board's opinion blamed the company for its continued understaffing, opacity, and unfairness of the program. Meta claims that the board's content decisions are binding, but is under no obligation to follow its recommendations more generally. The supervisory board called on Meta to make 32 changes to the program. Examples of suggested improvements include separating the process of granting protections for public interest from the process of granting protections to Meta advertisers, or isolating the program from the influence of Meta's public policy team and other managers. Mr Rusbridger said he did not expect Meta to accept all of the board's recommendations. Currently, there is a correlation in the Meta stock price, the question is whether it will continue. Source: wsj.com
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

It Was A Negative Close In The New York Stock Exchange For 2185 Securities

InstaForex Analysis InstaForex Analysis 07.12.2022 08:00
At the close in the New York Stock Exchange, the Dow Jones fell 1.03%, the S&P 500 fell 1.44%, and the NASDAQ Composite fell 2.00%.  Dow Jones  UnitedHealth Group Incorporated was the top performer among the Dow Jones index components in today's trading, up 4.28 points or 0.80% to close at 539.32. The Travelers Companies Inc rose 0.69% or 1.29 points to close at 188.50. Procter & Gamble Company rose 0.19 points or 0.13% to close at 149.28. The least gainers were Walt Disney Company shares, which lost 3.64 points or 3.79% to end the session at 92.29. Boeing Co was up 3.60% or 6.67 points to close at 178.43, while Chevron Corp was down 2.58% or 4.55 points to close at 172.01.  S&P 500  Among the S&P 500 index components gainers today were Textron Inc, which rose 5.25% to 73.57, Lumen Technologies Inc, which gained 3.85% to close at 5.40, and shares of Exelon Corporation, which rose 2.68% to end the session at 42.87. The least gainers were NRG Energy Inc, which shed 15.08% to close at 34.68. Shares of Enphase Energy Inc shed 7.77% to end the session at 309.73. Paramount Global Class B was down 6.97% to 18.15. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Summit Therapeutics PLC, which rose 194.27% to hit 2.31, Pacifico Acquisition Corp, which gained 59.01% to close at 8.03, and also shares of Eterna Therapeutics Inc, which rose 43.87% to end the session at 4.46. The least gainers were Gossamer Bio Inc, which shed 74.60% to close at 2.36. Shares of INVO Bioscience Inc lost 35.62% to end the session at 0.47. Quotes of MEI Pharma Inc decreased in price by 33.52% to 0.26. Numbers On the New York Stock Exchange, the number of securities that fell in price (2185) exceeded the number of those that closed in positive territory (891), while quotes of 121 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,618 companies fell in price, 1,099 rose, and 217 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 6.84% to 22.17. Gold Gold futures for February delivery added 0.15%, or 2.65, to $1.00 a troy ounce. In other commodities, WTI January futures fell 3.46%, or 2.66, to $74.27 a barrel. Brent oil futures for February delivery fell 3.86%, or 3.19, to $79.49 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.24% to 1.05, while USD/JPY was up 0.22% to hit 137.04. Futures on the USD index rose 0.28% to 105.53   Relevance up to 02:00 2022-12-08 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/303957
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Bank Of Canada: Market Pricing Points Towards A Smaller 25bps Rate Hike

Saxo Bank Saxo Bank 07.12.2022 08:51
Summary:  Heightened fear about a higher-for-longer Fed tightening cycle, recession warnings from top U.S. bankers, and crude oil falling into new lows weighed on U.S. equities and saw bond yields lower. The momentum of China reopening trade seems to have somewhat exhausted despite more signs of easing Covid restrictions coming out from China. What’s happening in markets? S&P 500 (US500.I) pared all its gains since Powell’s Brookings Institution speech   Declining for the fourth day in a row, the S&P500 pared all its gains since Fed Chair Powell delivered a dovish-leaning speech at the Brookings Institution at the end of November. The solid average hourly earnings and the ISM Services Index data released since Powell’s speech have heightened once again concerns about more rate hikes to come. Two consecutive days of sharp falls in the crude oil price to USD74 weighed on energy stocks. Warnings about weakness in the U.S. economy from CEOs of Goldman Sachs, Bank of America, and JPMorgan Chase added fuel to the recession fear. S&P 500 dropped 1.4% and Nasdaq 100 tumbled 2% on Tuesday. All sectors except utilities within the S&P 500 declined, with energy, communication services, and information technology the biggest losers. Meta (META:xnas) tumbled 6.8& after reports saying the EU is targeting the company’s advertising business model. Apple (APPL:xnas) declined 2.5% as the company said it is scaling back its self-driving EV plans. NRG Energy (NRG:xnys) plunged 15.1% after the power plant operator announced to acquire  Vivint Smart Home. Textron (TXT:xnys) gained 5.3% on winning a helicopter contract from the U.S. Army. US treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) lower as equities retreated As equities declined on the prospects of a higher-for-longer Fed tightening cycle after the recent strong U.S. data, treasuries were well bid with yields falling 2bps to 4bps across the yield curve on Tuesday. The buying came in particularly strongly on the 10-year and 30-year segments. Large curve flatter trades, mainly selling the 5-year versus buying the 10-year took place in the futures pit. The 2-year yield fell 2bps to 4.37% while the 10-year was 4bps richer at 3.53%. Hong Kong’s Hang Seng (HIZ2) pulled back on overseas market weakness; China’s CSI300 (03188:xhkg) Hong Kong stocks pulled back following overnight weakness in the U.S. market and renewed concerns about the Fed’s ability to downshift its pace of hiking interest rates after recent data indicating strength in wage inflation and business activities in the U.S. services sector. The China reopening trade has shown signs of exhaustion as market reactions to the announcement from Beijing to ease PCR test requirements were muted. Hang Seng Index edged down 0.4%. Tech stocks retreated. Hang Seng TECH Index lost 1.8%. Alibaba (09988:xhkg) dropped by 3% and Bilibili (09626:xhkg) plunged by 7%. Ping An Health and Technology pulled back after two days of strong advance, falling 8.9%. Leading EV names dropped by around 2%-6% as profit-taking emerged after recent rallies. Chinese property developers and Macao casino operators were among the top gainers. Logan (03380) soared 32%. In A-shares, CSI 300 gained 0.5%, with the consumer staple, technology, and consumer discretionary sectors outperforming. FX: EURUSD back below 1.05; USDJPY at 137 The US dollar maintained a slight bid tone on Tuesday even as a tech rout spread through equities and recession concerns were highlighted by several bank chiefs. There was little data of note, only October US trade seeing a wider deficit but still better-than-expected. EURUSD fell to sub-1.05 levels as ECB’s Lane said that the bulk of work has been done by the ECB and inflation peak may be near. President Lagarde speaks on Thursday, after which focus turns to the December meeting. Meanwhile USDJPY hovered around 137 with BoJ Governor Kuroda remaining dovish as he said that monetary easing will continue even if wages rise 3%. Crude oil (CLZ2 & LCOF3) plummets to its lowest levels in 2022 Oil prices dipped to their lowest levels since the start of the year as concerns of weaker economic growth offset ongoing supply side issues. Equity markets are now starting to price in recession concerns, as seen from a negative reaction to last week’s ISM manufacturing. Yesterday, a number of bank chiefs hinted at recession possibilities, and there were also reports of further job cuts from the likes of Morgan Stanley and even consumer brands like PepsiCo. However, China reopening continues to gather pace but it will continue to be a slow exit from Zero Covid. The Energy Information Administration released its latest market outlook, with a contraction in US economic activity in Q2 2022 and Q1 2023 weighing on demand. It also raised its forecast for US supply to 12.34mb/d in 2023. Meanwhile, Saudi Arabia also lowered oil prices for its crude into Asia and Europe, suggesting demand weakness concerns. Australia’s iron ore kings roar back to six-month highs; Australian economic growth data ahead The Australian benchmark index, the ASX200 (ASXSP200.1) opened 0.7% lower following Wall Street. However, as the iron ore price advanced, iron ore players are testing six-month highs; Fortescue Metals, Champion Iron, BHP, and RIO shares are all higher, testing new six-month highs. Metal companies such as BlueScope Steel and Sims are also higher. In terms of economic news out today, Australian economic growth is due to be released; expected to show an improvement in the gross domestic product (GPD) in the third quarter of 2022. GPD is expected to show growth rose from 3.6% YoY, to 6.3% YoY. We will be watching the Aussie dollar and how it reacts, which a knee-jerk rally up likely if growth is hotter than expected. Also, remember services are the biggest drivers of GPD in Australia; so watch travel stocks, such as Flight Centre, Corporate Travel Management, Webjet, Auckland International Airport, and Qantas. Also keep an eye on stocks affiliated with dining out such as Endeavour Group, Treasury Wine, and Metcash which owns Celebrations, IGA Liquor, and Bottle-O.   What to consider? Saxo’s Outrageous Predictions 2023 are now out! Saxo's ten Outrageous Predictions for 2023 are now out. The theme revolves around a War Economy, not just in military terms, but in economic, political, and social terms as well. Gone are the days when low interest rates could foster dreams of a harmonious world built on renewable energy, equality, and independent central banks. In 2023, world economies will shift into war economy mode, where sovereign economic gains and self-reliance trump globalisation. Some of the calls include Gold rocketing to $3000, the UK holding an UnBrexit referendum, or even a new reserve currency to replace the dollar. Remember, it’s not about being right. The predictions focus on a series of unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets. The APAC strats team, together with our CIO Steen Jakobsen, will be hosting a webinar on December 14 to discuss these predictions. The signup link can be found here. Real wages shrank 2.6% Y/Y in Japan In October, the real cash earnings of Japanese workers declined 2.6% Y/Y (consensus -2.2%; Sep: -1.2% revised), the biggest fall in seven years. Nominal wages slowed to a growth of 1.8% Y/Y (consensus: 2.0%, Sep: 2.1%). Household spending growth slowed to 1.2% Y/Y in October from 2.3% in September. Beijing relaxed PCR test requirements Beijing, joining other cities, announced to lift the requirement for negative PCR test results when entering public venues or taking public transport. Australia’s central bank, the RBA says inflation will continue to cause more pain, validating its hiking path Australia’s central bank, the RBA increased the cash rate by 25bps in the eighth consecutive rate hike, taking the cash rate from 2.85% to 3.1% as expected. However, the RBA toed the line staying on a dovish path, saying the full effects of rates hikes since May have not been felt yet by the economy, while also declaring employment growth had slowed. As such the RBA said its path to achieving a soft landing is narrow, meaning it might be hard to avoid a recession. This also follows news out of Australia today that its current account fell into a deficit for the first time since 2019. The RBA warned it sees inflation increasing over the months ahead, particularly in wages. It conceded inflation is damaging the economy and making life more difficult for people, which traders took as an indication the bank won't pause rate hikes any time soon. China’s Xi is visiting Saudi Arabia from Dec 7 to 9 China President Xi Jinping is expected to fly to Saudi Arabia on Dec 7 to attend a China-Arab summit on Friday. Bank of Canada rate decision due today The Bank of Canada statement is due today and consensus expects another 50bps rate hike taking the overnight rate to 4.25%. However, market pricing points towards a smaller 25bps rate hike. The path of interest rates from here is also very cloudy, with a pause likely coming in early 2023. Therefore, any guidance on rate path will be key to watch for CAD which is lately getting hurt due to the lower oil prices. U.S. leading bank CEOs warned about the possibility of a U.S. recession Jamie Dimon, CEO of JPMorgan Chase, said in a CNBC interview that he saw the possibility of a “mild to hard recession” in the U.S. next year. Likewise, David Solomon, Chairman/CEO of Goldman Sachs, said there is a “very reasonable possibility” that the U.S. enters a recession in 2023. Bank of America’s CEO Brian Moynihan said consumer spending is slowing and the bank is slowing its hiring. EU is targeting Meta’s advertising business model EU privacy regulators are reportedly ruling that Meta, the owner of Facebook should not require Facebook users to agree to personalized ads based on their online activity. The move restraints Facebook’s ability to present targeted ads to users. Apple is postponing its self-driving EV launch to 2026 Apple is said to scale back its self-driving EV plans and is postponing the target launch date to 2026 due to technological hurdles in a self-driving EV without a steering wheel or pedals. Geely is taking its ride-hailing firm to do an IPO in Hong Kong Chinese auto maker Geely is said to be talking to investment banks for a Hong Kong IPO of its Cao Cao Mobility ride-hailing arm. The US and EU are weighing new tariffs on Chinese steel and aluminium According to Bloomberg, citing people familiar with the matter, the U.S. and European Union are considering new tariffs on Chinese steel and aluminum products to reduce global overcapacity and  carbon emissions.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Recession concerns hitting markets, WTI at year-lows – 7 December 2022 | Saxo Group (home.saxo)
Crude Oil Upward Trend Remains Limited

Recessionary Fears And A Higher US Dollar Are Causing Selling In Oil

Saxo Bank Saxo Bank 07.12.2022 08:57
Summary:  There is a lot to be said about stepping back and reflecting on what’s driving markets. The most selling over the last few sessions has been stocks and sectors that will likely come under pressure from rates staying higher for longer, combined with a slowdown in US GPD. As such a Tech names like Atlassian, to EV makers including Lucid are down 10% this week. While the most upside in stocks and sectors are in those that will likely benefit from increased consumption in China and increased commodity demand with the nation continuing to map out further easing of restrictions. Here is what you need to watch in markets, in this seven minute video           Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) head lower ahead of Fed decision next week The S&P500 continued to fall below its 200-day average, slipping 1.4% on Tuesday, taking the four-day loss to 3.4%, with the next level of support at perhaps 3900. The Nasdaq 100 fell 2%, taking its three-day fall to 4%. The most selling over the last few sessions has been stocks that will likely come under pressure from rates staying higher for longer, combined with a slowdown in consumption. Luxury EV maker- Lucid Group, team software company-Atlassian, and online dating company Match, have fallen over 10% this week. While stocks exposed to China, such as Baidu and JD.com have rallied over 3%. For more inspiration of other stocks doing well this month, likely to benefit from China easing restrictions; see Saxo’s China Consumer and Technology basket. What’s driving markets and shareholder returns right now? Fed hiking Vs China easing covid restrictions Firstly – what's pressuring stocks is the hotter than expected US service sector, showing the US economy is strong enough for the Fed to keep hiking interest rates to slow inflation. While major investment banks are saying 2023 will be a downbeat year. Goldman’s David Solomon says a US recession is possible, with smaller bonuses and job cuts expected. Morgan Stanley says it will reduce its global workforce by about 2,000, (2% of the total), while BofA’s chief Brian Moynihan says his bank slowed hiring and JPMorgan’s Jamie Dimon warned of a "mild to hard recession" in 2023, saying the economic clouds "could be a hurricane." So damp sentiment is causing bond yields to move higher again, the US 10-year yield hit 3.53%, while the US dollar is rising again - on track to make its biggest weekly gain in almost 12 weeks. Secondly, what’s driving upside in markets is the easing of restrictions in China, with the country preparing to ease further. This is benefiting forward looking Chinese consumption and commodities, as there is expectations demand will pick up. Refer to Saxo’s China Consumer and Technology basket and Saxo’s Australian Resource basket for stock inspiration. In commodities, iron ore heads back to its highest level since August as China prepares to ease Oil pulled fell 3.5% to $74.25 with hedge funds continuing to sell oil amid nervousness about the Fed’s interest rate decision next week, and its path ahead. Recessionary fears and a higher US dollar are also causing selling in oil. The next level of support is perhaps around $71.74. There is talk in Europe the market has shifted toward supply not being as tight. Engie said Europe may pull through this winter and next as it replaces dwindling Russian natural gas flows, with European refiners making more gasoline than the continent needs. Read our head of commodity strategy’s latest update. The precious metal, gold, rose 0.3% to $1769. While the big news of the day, is that Iron Ore (SCOA) price advanced as China is preparing to ease restrictions further, moving iron ore’s price up 0.7% to $108.95 (its highest level since August). Australia’s iron ore kings roar back to six-month highs; Australia’s economy grows, but less than expected The Australian benchmark index, the ASX200 (ASXSP200.1) lost 0.6% on Wednesday, taking its week to date loss to 1%. However, after the iron ore price advanced, iron ore players tested six-month highs; Fortescue Metals, Champion Iron, BHP and RIO shares are all higher. In other parts of the market, insurance companies continued to shine, as they traditionally do when interest rates are rising. QBE and IAG rose almost 2% today taking their YTD gains to over 14% each. In terms of economic news out today; Australian economic growth showed an improvement in in the third quarter of 2022, but the growth was weaker than expected. GDP grew from 3.6% YoY in the 2nd quarter to 5.9% YoY. But more growth was expected (6.3% YoY). The Aussie dollar rose slightly, gaining 0.2% to 67.02 US cents. Also remember services are the biggest drivers of GDP in Australia; and as GDP is expected to slowly grind higher over current quarter, watch travel stocks, such a Flight Centre, Corporate Travel Management, Webjet, Auckland International Airport and Qantas. Also keep an eye on stocks affiliated with dining out such as Endeavour Group, Treasury Wine, and Metcash which owns Celebrations, IGA Liquor and Bottle-O.       For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast.
India: Reserve Bank hikes and keeps tightening stance

The Reserve Bank Of India Decision Impacted On Indian Indices Volatility

TeleTrade Comments TeleTrade Comments 07.12.2022 09:14
Bearish S&P500 has faded optimism in Asian indices. China’s easing Covid-19 restrictions-inspired optimism has dwindled the impact of a weaker Trade Balance. The oil price has refreshed its 11-month low at $74.54 amid downside revision in economic forecasts. Markets in the Asian domain have failed to continue Tuesday’s optimism and are facing pressure due to negative market sentiment. Indices are following bearish cues from S&P500 as the latter has witnessed selling pressure consecutively for two trading sessions. Volatility inspired by Federal Reserve (Fed)’s interest rate peak chaos is still breathing and impacting risk-sensitive assets. At the press time, Japan’s Nikkei225 dropped 0.69%, ChinaA50 added 0.20%, Hang Seng eased 0.10%, and Nifty50 slipped 0.35%. Growing concerns over Fed’s interest rate peak have strengthened the risk-off mood in global markets. Evidence of fresh strength in the United States economy is compelling for a higher neutral rate as inflation is set to rebound again amid rising fears of wage inflation. No doubt, a higher interest rate peak by the Fed will accelerate recession fears ahead. Meanwhile, optimism in Chinese equities led by easing Covid-19 lockdown restrictions has faded weaker Trade Balance data. In US Dollar terms, Exports dropped by 8.6% against the consensus of 3.5% and Imports tumbled by 10.6% vs. the projections of 6.0%. China’s Trade Balance has slipped sharply to $69.84B in comparison with the estimates of $78.1B. Meanwhile, Indian indices are displaying volatility as the Reserve bank of India (RBI) has raised the repo rate by 35 basis points (bps). Also, RBI Governor Shaktikanta das has trimmed Gross Domestic Product (GDP) forecast to 6.8% for FY2023. The 50-stock Indian basket has slipped by 0.35%. On the oil front, the oil price has refreshed its 11-month low at $74.54 as expectations for a higher interest rate peak by the Fed have revised down economic projections. A fresh downside revision in the growth forecast has offset supply worries from Russia.
Australia Is Expected To Produce A Bumper Year Of Crops

Australia Is Expected To Produce A Bumper Year Of Crops

Saxo Bank Saxo Bank 07.12.2022 09:50
Summary:  The US equity market rolled over further, with the S&P 500 index crossing back below the pivotal 4,000 level, completing the rejection of last week’s rally attempt. In Asia overnight, further signs that China will continue to lift Covid restrictions failed to buoy sentiment further, with weak November export data spooking sentiment at the margin. In commodities, the major crude oil grades dropped to new lows for the cycle on demand concerns.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures declined another 1.5% yesterday pushing briefly below the 100-day moving average before bouncing back above that average. In today’s session the 100-day moving average which sits around the 3,937 level is the important level to watch on the downside and if it breaks then the 3,900 is the next major area of gravitation. The US 10-year yield remains close to 3.5% adding no further pressure from the cost of capital side and in general the equity market is slowly transitioning into hibernation. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) After a lackluster morning session, Hong Kong and mainland China stocks rallied in the afternoon after investors took note of the no mention of dynamic zero-Covid and a more balanced tone towards economic growth in the readout of the politburo meeting. However, stocks pared their gains and more, with the Hang Seng Index and CSI300 Index reversing and losing 1% and 0.4% respectively as of writing. The Chinese health authorities announced 10 additional measures to further fine-tune its pandemic control strategy ... and are holding a press conference later in the afternoon. Separately, China’s exports in November declined 8.7% (in USD terms) in November from a year ago, weaker than expectations. Geely (00175:xhkg) rose more than 2% as the Chinese automaker is reportedly talking to investment banks for a Hong Kong IPO of its Cao Cao Mobility ride-hailing arm. USD stays bid on weak risk sentiment, BoJ comments overnight A weak session for risk sentiment yesterday helped support the greenback, with treasury yields trading sideways and therefore marginalized as a factor. One of the bigger movers overnight was USDJPY, which is challenging above the important 137.50 area (prior range low) this morning after BoJ board member Toyoaki Nakamura supported the BoJ’s current easy policy, noting that the elevated inflation in Japan in the recent cycle is not wage-driven. Nakamura expressed concern that policy tightening might prompt the return of deflation. Elsewhere, USDCAD is making a bid at establishing a new up-trend, AUDUSD has posted a bearish reversal, and EURUSD & GBPUSD still need more downside to suggest a similar reversal, while all USD traders are holding their collective breath for next Tuesday’s US November CPI print and the FOMC meeting the following day. Gold (XAUUSD) holds above support at $1765 despite dollar strength and weak risk sentiment Stronger than expected US services data on Monday has renewed pressure on the Fed ahead of next week’s FOMC meeting, and with ETF investors still side-lined, gold remains very dependent on movements in the dollar and yields, both of which have been providing some headwind this week. While lower energy prices may ease inflationary concerns, Friday’s US producer price report may provide the next round of price volatility. Key resistance at $1808 with support below $1765 at $1735. Crude oil (CLF3 & LCOG3) suffering a three-day decline of close to 9% Brent closed below $80 on Tuesday for the first time since early January with WTI trading near $74on fading risk appetite as the attention turns to 2023 and increased worries about an economic slowdown hurting demand. The slump comes against a backdrop of low liquidity with Brent open interest falling to a seven-year low, thereby stoking volatility. After five months of cuts the EIA upgraded its 2023 production saying it could average a record 12.34m barrels per day. The API reported another big draw in crude oil stocks while China imported 11.42 million barrels per day last month, up 12% from October and highest since January. Overall, however, the market is undoubtedly going through a soft patch with time spreads softening as the spot price falls faster than prices further out the curve. US treasuries drop again, as safe-haven appeal comes and goes. (TLT:xnas, IEF:xnas, SHY:xnas) US treasury yields at the long end of the curve erased much of the previous day’s rise as risk sentiment was broadly weak yesterday, suggesting a safe-haven appeal. The 3.50% area remains the pivotal one for the 10-year benchmark yield. The 2-year US treasury yield was sideways, meaning that the 2-10 yield curve hit new cycle lows around –84 basis points. What is going on? EU to move forward with cases against China on trade policy at the WTO The first case is related to China restricting Lithuanian exports, a move that came after Lithuania allowed Taiwan to open what is arguably an embassy in the country. The other case revolves around Chinese treatment of patent holders. Apple set to postpone the roll-out of its first EV The company will postpone the launch of its first EV to 2026 (thought to be about a year later than originally intended), according to “people familiar” with the situation cited by Bloomberg. The original intention was for the EV to be fully autonomous, but the realization that this is an insurmountable engineering challenge for now has resulted in the redesign, which is now set to include human controls. TSMC plans to more than triple its investment to $40 billion in building plants in Arizona In an equipment installation ceremony at Taiwan Semiconductor Manufacturing Co’s (TSMC) first microchip production plant in the US, which President Biden attended, TSMC Chairman Mark Liu announced that the Taiwan chip foundry is building a second production plant that will make 3-nanometer chips in Arizona. The additional plant will bring TSMC’s previously announced investment of USD12 billion to USD40 billion. TSMC expects the second facility will begin operation by 2026. Also attending the ceremony were CEOs from Apple, Nvidia, AMD, Applied Materials, and Lam Research. The additional investment is a boost to President Biden’s plan to bring the semiconductor supply chain, in particular the capability to fabricate high-end chips, back to the U.S. CBOT Wheat (ZWH3) trades near a 14-month low Despite floods Australia is expected to produce a bumper year of crops including record wheat production in the current financial year, the government said on Tuesday, despite the impact of widespread flooding in the country's eastern region. An announcement that will pose even tougher conditions for US exporters already dealing with reduced competitiveness from the strong dollar and robust supplies from the Black Sea region. On Tuesday, the CBOT bellwether wheat contract dropped as low at $7.23 to the lowest level since October 2021. Focus on Friday’s WASDE report which will publish the US governments latest projections for production and stocks. Sugar prices likely to remain supported as India sees output drop 7% India, the world’s biggest producer and second largest exporter has said its output is likely to fall 7% this year as erratic weather conditions have cut cane fields. A reduction may, despite global economic growth concerns, lift prices and allow rivals Brazil and Thailand to increase their shipments. Sugar (SBH3) traded in New York recently surged higher by 17% before spending the past couple of weeks pairing back some of those strong gains. The biggest short-term risk remains the potential for speculators reducing exposure ahead of yearend. This following a three-week buying spree to November 22 during which time the net long increased four-fold to 202k lots, the strongest three-week period of buying in more than four years. Toll Brothers beat on margin and home sales The high-end US homebuilder delivered strong earnings yesterday with revenue at $3.7bn vs est. $3.2bn and EPS of $5.63 vs est. $3.96. The gross margin outlook for the current quarter came out at 27% vs 27% expected as pressures in building materials are easing. One negative trend for the homebuilder was the backlog which shrunk to 8,098 vs est. 8,814. Australia: Q3 GDP softer than expected, mining majors rally, then retreat Australian economic improved in the third quarter of 2022, but was weaker than expected at +0.6% QoQ and 5.9% YoY (vs. +0.7%/6.3% expected). The Australian market fell on the day, with mining companies Fortescue Metals, Champion Iron, BHP and RIO testing six-month highs before selling off later in the session. In other parts of the market, insurance companies continued to shine, as they traditionally do when interest rates are rising. QBE and IAG rose almost 2% today taking their YTD gains to over 14% each. China’s exports shrank 8.7% Y/Y in November In USD terms, China’s exports declined 8.7% Y/Y in November, much weaker than the -3.9% consensus estimate and -0.3% in October. The fall in exports was broad-based across destinations, U.S.  down 3.8% Y/Y, European Union down 9.3% Y/Y, and Japan down 4.6%. Exports to ASEAN slowed to a 7.7% growth in November from 19.7% in October. Imports, falling by 10.6% Y/Y, also below expectations. What are we watching next? Bank of Canada meeting today – market divided on anticipated hike size The Bank of Canada has shown considerable flexibility in its tightening path, having hiked 100 basis points in one go back in July, followed by a 75-basis point hike in September and 50-basis points hike in October. With that pattern in mind, the market is divided on whether the BoC will hike 50- or 25 basis points today, with market-pricing leaning for the smaller hike, while the majority of surveyed analysts are looking for another 50 basis points, which would take the policy rate to 4.25%. Regardless, the market is pricing that the Bank of Canada is nearing the end of its hiking cycle, projecting a peak rate next year of sub-4.50%. China opening up trade – has it run out of steam? The latest news in China of a further easing of curbs on activity relative to Covid saw equities in Hong Kong and mainland China posting marginal new highs before rolling over badly and then closing near the lows of the session, suggesting that after a torrid 35% rally off the lows, in the case of the Hang Seng Index, the further potential for this story to continue to support a positive outlook may have run out of steam. The highs overnight in the Hang Seng were within a few points of the 200-day moving average. Earnings to watch Today’s US earnings focus is Campbell Soup which is an US processed food manufacturer of meals and snacks. The company is expected to deliver 9.5% revenue growth for the quarter that ended in October suggesting substitution effects as middle income families are shifting into lower priced options. Today:  Brown Forman, Campbell Soup, GameStop Thursday: Broadcom, Costco, Lululemon, Chewy Friday: Oracle Corp, Li Auto Economic calendar highlights for today (times GMT) 1500 – Canada Bank of Canada meeting 1530 – EIA's Weekly Crude oil and Fuel Stock Report 2000 – US Oct. Consumer Credit 2130 – Brazil Selic Rate Announcement 0001 – UK Nov. RICS House Price Balance 0030 – Australia Oct. Trade Balance Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – December 7, 2022 | Saxo Group (home.saxo)
USA: Final Q3 GDP amounts to 3.2%. Subtle Micron earnings

Turbulent times on crude oil market. Nasdaq shrank by 2%, Apple and Amazon lost more

Ipek Ozkardeskaya Ipek Ozkardeskaya 07.12.2022 10:24
Equities extend the downside recovery, following the failure to clear an important year-to-date resistance last week, which was the S&P500's year-to-date descending channel top at around the 4080 level. The index cleared the first bearish target, at 3956 level, the minor 23.6% retracement on the latest rebound and tested its 100-DMA to the downside, but managed to close above that level. Nasdaq slumped 2%, with Apple retreating more than 2.50% while Amazon lost 3% as investors dumped technology stocks faster than the others.   And even oil giants joined the selloff this week. Exxon lost more than 2.50% both on Monday and on Tuesday, as the latest drop in oil prices didn't help improve the mood.   The American crude lost more than 7% since the weekly open. If Monday's fall was mostly driven by a global market selloff, yesterday's selloff was definitely due to the EIA revising its oil production forecast higher for next year, after having cut this prediction for the past five months.   Read next: Presumably, stronger-than-expected ISM affected stocks. Aussie gained from the RBA decision | FXMAG.COM So, now, the EIA expects the US to pump around 12.34 mio barrels per day in 2023, approaching the historical high production of 2019.   Yesterday's selloff sent the barrel of Brent crude below the $80 mark for the first time since the very beginning of this year, and pulled the barrel of American crude a couple of cents below the late November dip, at around $73.40. And even the API data – which showed a 6.4-mio-barrel drop in US oil inventories couldn't bring the oil bulls in. The more official EIA data is due today. Trend and momentum indicators hint that the recession fears could well push the barrel of oil toward the $70pb despite falling oil reserves in the US.     Russian oil price cap is a warning for OPEC  What's good about the falling oil prices is that the Russian oil cap becomes somehow meaningless as prices fall, though the Europeans said to revise the cap every two months. For now, there is not much to worry apart from a couple of vessels carrying Russian oil that are stuck near Turkey as Turks ask insurance apparently to let them sail away.   But here is the thing. The fact that the G7, the EU and Australia agreed to cap the price of Russian oil gave a strong message to the rest of the oil producers: they could do the same with OPEC.  So far, US President Joe Biden reassured OPEC that this is not a 'buyers' league' and that the decisions apply only to Russia. But we can't stop thinking that if OPEC goes severely against the US' will to stop messing around with oil prices, there is no reason we won't see a buyers' league emerge from the darkness.
DCF Valuation with Assumptions: Risk-Free Rate, Market Premium, Beta, and Growth Rate

Analysis - I&C Industry: Apator, Aplisens, Sonel

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 07.12.2022 10:43
A safe balance sheet will become more important Entities from the I&C industry (Control and Measurement Equipment and Automation) belong to the group of companies that systematically pay dividends. The effects of the upcoming economic slowdown, such as the loss of part of revenues and pressure on margins, but also an ambitious investment program or the need to finance increased working capital may have a negative impact on the ability to maintain the dividend policy at the current level in the coming years. Therefore, a strong balance sheet and stable operating cash flows are very important in the context of a demanding economic environment. In the case of Aplisens or Sonel, the expected deterioration of the economic situation and, consequently, the possible reduction in profits will not require verification of development plans and the implementation of drastic savings measures. In turn, Apator may be forced to choose between limiting payments to shareholders and reducing expenses for development. Apator SA We forecast that 2022 will be the weakest period in terms of results, from next year we expect them to improve. The improvement will be gradual and it will take several years to reach the pre-pandemic results. We assess the goals outlined in the updated Strategy of Apator Group as very difficult to achieve. With such assumptions, Apator is still valued at a premium to the fair value determined by us. We maintain the recommendation REDUCE with the target price of PLN 12.9 . Aplisens SA Our fears that Aplisens did not come true, due to the high involvement in eastern markets, most among I&C companies will experience the effects of war in Ukraine. The company coped very well in the new reality, and The passing year promises to be the best in the entire history of the company. Although we forecast a slight deterioration in results next year, further diversification of sales directions and still strong balance sheet give hope for a "dry foot" passage through the economic turmoil and maintaining transfers to shareholders. Quote We raised the share of the 18,3 PLN, which gives a 27% growth potential. Sonel SA Sonel coped quite well with the problems resulting from the increase in production costs and the availability of components. The challenge remains the profitable execution of contracts for the supply of meters (especially with dynamically growing sales in this segment). Sonel's strong side remains a safe balance sheet (net cash), high core business margins and stable operating flows. In our opinion, the company is well prepared for more difficult times. We maintained the valuation of shares at approx. PLN 10, similar to the current price. Analyst: MichaÅ‚ Sztabler Analityk akcji michal.sztabler@noblesecurities.pl +48 667 852 196 GPW’s Analytical Coverage Support Programme 3.0  
Sygnity Stock Faces Headwinds Despite New Government Contracts

Analysis Of The Results For The 3Q 2022 - Protektor SA – WSE:PRT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 07.12.2022 11:08
This report was prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Key facts from published results: â–ª We consider the published results for Q3 2022 as acceptable, but still far from those assumed in the strategy. The company recorded a decrease in sales revenue by 4.5% y/y and 3.5% q/q. Despite the continuing increase in costs (raw materials, energy), compared to Q2 2022, there was a visible increase in the gross margin on sales (from 32.8% to 36.7%), which we assess positively. â–ª Results at other levels with a strong impact of a decrease in general and administrative expenses (7% q/q). â–ª Operating profit was over PLN 1.08 million higher compared to Q2 22 and almost twice as high as compared to Q3 21 â–ª The net profit was mainly affected by the increase in financial costs (PLN 0.34 million in Q2 22 to PLN 1.47 million in Q3 22). The loss in Q3 22 amounted to PLN 0.57 million vs. PLN 0.7 million in Q2 22 and PLN 0.41 in Q3 21. We describe the financial situation of Protektor as stable, but the results achieved in Q3 are far from the assumptions of the strategy. We do not believe that the proposed new issue of shares is necessary for the Protektor (the so-called rescue issue), but we share the Management Board's concerns regarding the various possibilities of the war in Ukraine. We consider the efforts to transfer production from the second factory in Transnistria (Rida) to Poland to be right, and the issue was intended to serve this purpose. In our opinion, the results of Q3 do not give grounds for making another downward revision of the forecasts, so we leave the valuation unchanged at PLN 2.9. Expected impact: We consider the results for Q3 as quite good and meeting our expectations. Sales revenues decreased by PLN 1.2 million (4.5%) on an annual basis, and by PLN 882 thousand compared to Q2. PLN (3.5%). Taking into account the increase in production from 144 thousand. pairs of shoes in Q2 2022 to 174,000 pairs in Q3 2022 (+21%) and a decrease in sales from 169,000 up to 149 thousand par in Q3 2022 (-12%), it can be concluded that revenues are resistant to the observable increase in prices. Both in terms of quantity (sales of 165,000 pairs in Q3 2021) and value, these results are similar to last year's, so for now it is not visible that the new collections will contribute to the assumed increase in sales and improvement of margins. Revenues increased the most on the Romanian market (+73.7%), Switzerland (+29.2%) and Hungary (+28.2%), and fell the most on the Austrian market (-9.2%). On the most important German market for the Group, accounting for almost half of sales, revenues increased by 1%. This is not a bad result, taking into account the fact that the German economy sends the most signals of the forecasted slowdown. Finally, the Group's operating profit was higher by 76.4% compared to Q3 2021 and the net loss amounted to PLN 571 thousand. PLN against PLN 414 thousand PLN in the corresponding period of the previous year and PLN 695 thousand. PLN in Q2 2022. Summing up, we maintain our valuation, still seeing the potential to improve the results and increase the Company's valuation. Analyst: Artur Wizner Tel.: +48 (22) 53 95 548 GPW’s Analytical Coverage Support Programme 3.0  
OPEC+ Meeting: Saudi Arabia Implements Deeper Voluntary Cuts to Boost Oil Prices

The Russian Oil Cap Becomes Somehow Meaningless Due To The Falling Oil Prices

Swissquote Bank Swissquote Bank 07.12.2022 11:16
Equities extend the downside recovery, following the failure to clear an important year-to-date resistance last week, which was the S&P500’s year-to-date descending channel top at around the 4080 level. technology stocks were sold faster than the others, but energy stocks suffered on falling oil prices. Oil The barrel of Brent crude trades below the $80 mark for the first time since the very beginning of this year, and the barrel of American crude came a couple of cents below the late November dip. Even the API data – which showed a 6.4-mio-barrel drop in US oil inventories couldn’t bring the oil bulls in. What’s good about the falling oil prices is that the Russian oil cap becomes somehow meaningless at $60pb. But the fact that the G7, the EU and Australia agreed to cap the price of Russian oil gave a strong message to the rest of the oil producers: they could do the same with OPEC and that would be a big blow for oil prices in the long run.Elsewhere, TSM will invest $40bn in two Arizona plants, and Europeans are frustrated to see the US chipmakers get so much help that they are preparing to do the same! Watch the full episode to find out more! 0:00 Intro 0:34 Equities extend downside correction 1:30 Oil slumps on higher EIA forecast for US oil production 3:52 A ‘buyers’ league’ would be a disaster for OPEC 5:35 US banks’ CEOs see gloom in 2023 6:52 Governments back chip investments 9:10 Hawkish BoC hike may not boost Loonie Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Crude #oil #cap #OPEC #energy #crisis #recession #fear #market #selloff #USD #EUR #Bitcoin #TSM #chipmakers #chip #stocks #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr  _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
S&P 500 ended the session 1.4% higher. This evening Japan's inflation goes public

Jason Sen talks trading Emini S&P, Nasdaq and Emini Dow Jones - 07/12/2022

Jason Sen Jason Sen 07.12.2022 09:46
I told you where the high for the recovery would be!! - get ready for the crash!! Emini S&P December futures shorts at strong resistance at 4090/4110 are working exactly as predicted. AT LAST!!! Nasdaq December shorts are working with the break below 11750/700 yesterday as predicted. Emini Dow Jones futures break support at 33850/800 for a sell signal. Today's Analysis. Read next: Nigeria Bans Cash Withdrawal Higher Than 225$ To Encourage CBDC Use | FXMAG.COM Emini S&P December collapsed from strong resistance at 4090/4110 hitting my target of 3970/50 & strong support at 3930/10. Guess where the low of the day was!? That is the exact high & low for the move so far as predicted days before it happened! The bounce from 3930/10 meets strong resistance at 3960/70. A high for the day is likely. Shorts need stops above 3690. Support at 3930/10 is not expected to hold for ever. A break lower on a second or third test is obviously a sell signal targeting 380/70 then 3820/10. Nasdaq December breaks 11750/700 as predicted to hit my next target of 11550/500, with a low for the day exactly here. However further losses are expected to 11250. Below 11200 look for 11000/10950. Outlook remains negative of course so gains are likely to be limited with first resistance at 11630/690. Shorts need stops above 11770. Emini Dow Jones breaks support at 33850/800 for a sell signal targeting 33600 & support at 33300/200. A low for the day is possible but longs are more risky in the bear trend. A break below 33000 is a sell signal targeting 32750/700. Gains are likely to be limited with resistance at 33800/900. Shorts need stops above 34000.
Twitter And Elon Musk Faced A Growing List Of Claims

Unconventional Measures Taken By Musk In Managing Twitter

Kamila Szypuła Kamila Szypuła 07.12.2022 14:58
Elon Musk surprises once again with his actions against Twitter management. Investors are looking a little more positively at Europe, spurring a revival in the region's downward equities. Read next: The Australian Dollar Failed To Hold Its Gains, The Pound Strengthened Against The US Dollar| FXMAG.COM Sharing internal messages Elon Musk bought Twitter for $44 billion more than six weeks ago. Since then, there has been a lot of talk about his actions towards this social networking site. Employees faced weeks of unrest, including the firing of half of Twitter's staff and sudden decisions on product plans. Musk said he thinks of Twitter as a digital urban market. Since taking over the platform, he has pulled a few levers to ensure that the Twitter conversation is also about Twitter. One of Twitter Inc.'s top lawyers "was exited," part of the fallout from the billionaire's unusual efforts to release internal communications to criticize prior practices. On Tuesday, Musk's tweets linked the departure to a project he dubbed "Twitter Files" - a disclosure of internal communications he characterized as showing partisan decisions by the previous leadership to the benefit of Democrats, for example. The documents are being published as evidence of claims that major social media platforms are biased against the political right. Twitter's own researchers said in a report last year that the platform's algorithms boosted the voices of the political right in several countries, including the US. Musk said he gave journalists Matt Taibbi and Bari Weiss access to company documents in order to rebuild public trust in Twitter. Sharing internal messages with outside control is another example of unconventional measures taken by Musk in managing Twitter. Prior to Elon Musk's share of Twitter, the stock fell, but has been on the rise since then. Currently, the TWTR share price is 53.35. Positive sentiment The benchmark Euro Stoxx 50 index gained nearly 19% this quarter, putting it on track to achieve its best quarterly results. Sentiment has improved after a period of extreme pessimism towards Europe sparked by the invasion of Ukraine, the subsequent spike in energy prices and the highest inflation in decades. Investors and analysts say market sentiment is improving thanks to early signs of easing inflation in the eurozone and hopes that the fight for alternatives for Russian natural gas reduced the risk of an energy crisis this winter. Russia was the European Union's largest energy supplier, exposing the region to the upheavals caused by Western sanctions. Some of Europe's best-performing companies this quarter are in the industrials sector. These companies were among the hardest hit by gas supply disruptions and energy price spikes, with many companies temporarily closing factories or reducing production. France's Alstom SA shares rose 43% this quarter, while Siemens Energy AG shares in Germany rose 42%. Chart: Alstom SA Chart: Siemens Energy AG Source: wsj.com, finance.yahoo.com
US Corn and Soybean Crop Conditions Decline, Wheat Harvest Progresses, and Weaker Grain Exports

Apple (AAPL) dropped 2.54% after Bloomberg reported that the tech giant plans to delay the launch of its electric vehicle to 2026 - Intertrader

Intertrader Market News Intertrader Market News 07.12.2022 15:20
DAILY MARKET NEWSLETTER December 7, 2022                 Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,353.00 -124.00 (-0.86%) Read the analysis 14,270.00 14,478.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,536.00 7,591.00     S&P 500 (CME) 3,943.25 -60.00 (-1.50%) Read the analysis 3,922.00 3,960.00     Nasdaq 100 (CME) 11,561.25 -244.50 (-2.07%) Read the analysis 11,480.00 11,670.00     Dow Jones (CME) 33,624.00 -362.00 (-1.07%) Read the analysis 33,470.00 33,730.00     Crude Oil (WTI) 74.27 -2.66 (-3.46%) Read the analysis 73.40 75.20     Gold 1,771.23 +2.55 (+0.14%) Read the analysis 1,765.00 1,776.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Tuesday, U.S. stocks remained under pressure. The Dow Jones Industrial Average dropped 350 points (-1.03%) to 33,596, the S&P 500 fell 57 points (-1.44%) to 3,941, and the Nasdaq 100 was down 237 points (-2.01%) to 11,549.Media (-3.11%), energy (-2.65%), and semiconductors (-2.58%) sectors lost the most.Apple (AAPL) dropped 2.54% after Bloomberg reported that the tech giant plans to delay the launch of its electric vehicle to 2026.Meta Platforms (META) slid 6.79% on reports that European Union regulators do not allow the company to place personalized ads.NRG Energy (NRG) plunged 15.08% after the company agreed to buy Vivint Smart Home (VVNT) for 2.8 billion dollars.Goldman Sachs (GS) declined 2.32%. Reuters reported that the bank is considering buying crypto-currency companies.The U.S. 10-year Treasury yield retreated 4 basis points to 3.533%.European stocks also closed lower. The DAX 40 fell 0.72%, the CAC 40 dipped 0.14%, and the FTSE 100 was down 0.61%.U.S. WTI crude futures fell $2.70 (-3.51%) to $74.27 a barrel.Gold price added $2 to $1,771 an ounce.Market Wrap: ForexThe U.S. dollar regained further strength against other major currencies. The dollar index climbed to 105.58.EUR/USD fell 25 pips to 1.0466. Data showed that Germany’s factory orders grew 0.8% on month in October (vs +0.6% expected). November S&P Global construction purchasing managers index was posted at 43.6 for the Eurozone (vs 46.0 expected), at 41.5 for Germany (vs 45.1 expected), and at 40.7 for France (vs 49.9 expected).GBP/USD slid 61 pips to 1.2129.USD/JPY rose 31 pips to 137.06.AUD/USD declined 13 pips to 0.6685.USD/CHF dipped 5 pips to 0.9421, and USD/CAD increased 65 pips to 1.3653.Bitcoin kept struggling around the $17,000 level.Morning TradingIn Asian trading hours, Australia's data showed that third-quarter gross domestic product grew 0.6% on quarter (vs +0.8% expected) and 5.9% on year (vs +6.4% expected). China’s data showed that trade surplus declined to $69.84 billion (vs $81.00 billion expected) in November with exports slumping 8.7% on year (vs -3.5% expected).AUD/USD was stable at 0.6689, while USD/JPY traded higher at 137.20.EUR/USD dipped to 1.0461, and GBP/USD was flat at 1.2130.Gold price was little changed at $1,771 an ounce.Bitcoin managed to take back the level of $17,000.Expected Today  The U.K. Halifax house price index is expected to decline 0.1% on month but rise 7.1% on year in November.Germany’s industrial production is expected to decline 0.8% on month in October.Canada's central bank is expected to hike its key interest rate by 25 basis points to 4.00%.The U.S. Energy Department is expected to report a reduction of 3.88 million barrels in crude-oil stockpiles.           UK MARKET NEWS           Mitchells & Butlers Plc, a pub-&-restaurant operator, posted full-year results: "Total sales across the period were 2,208 million pounds reflecting a 1.3% decline on FY 2019, driven mainly by temporary covid-related sales reductions and closures in the first part of the year plus site disposals since FY 2019. Despite this, adjusted operating profit of 240 million pounds reflects a strong return to profitability. (...) On a statutory basis, profit before tax for the year was 8 million pounds (FY 2021 loss 42 million pounds)."Insurance, basic resources and utilities shares gained most in London on Monday.From a relative strength vs FTSE 100 point of view, Aviva (+0.18% to 444.2p), Barclays (+1.59% to 158.76p) crossed above their 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   02:00 Halifax House Price Index MoM (Nov) -0.1% MEDIUM     02:00 Halifax House Price Index YoY (Nov) 7.1% MEDIUM     08:30 Nonfarm Productivity QoQ Final (Q3) 0.3% MEDIUM     08:30 Unit Labour Costs QoQ Final (Q3) 3.5% MEDIUM     10:30 EIA Gasoline Stocks Change (Dec/02) 2.707M MEDIUM     10:30 EIA Crude Oil Stocks Change (Dec/02) -3.305M MEDIUM                                     NEWS SENTIMENT           Standard Chartered PLC STAN : LSE 591.80 GBp -4.15% In the last 5 days         NEWS SENTIMENT (24H) Very Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                 Trade                 Deutsche Bank AG DBK : XETRA 10.072 EUR -0.49% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                 Trade                 Siemens AG SIE : XETRA 133.76 EUR +1.94% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                 Trade                 Glencore PLC GLEN : LSE 556.10 GBp -1.31% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                 Trade         TECHNICAL VIEWS           EUR/USD Intraday: under pressure.   Pivot: 1.0485   Our preference: Short positions below 1.0485 with targets at 1.0445 & 1.0425 in extension.   Alternative scenario: Above 1.0485 look for further upside with 1.0515 & 1.0530 as targets.   Comment: The RSI is mixed to bearish.     Trade               Euro Stoxx 50 (Eurex)‎ (Z2)‎ Intraday: consolidation.   Pivot: 3971.00   Our preference: Short positions below 3971.00 with targets at 3921.00 & 3900.00 in extension.   Alternative scenario: Above 3971.00 look for further upside with 3984.00 & 3998.00 as targets.   Comment: As long as 3971.00 is resistance, look for choppy price action with a bearish bias.     Trade               Brent (ICE)‎ (G3)‎ Intraday: under pressure.   Pivot: 80.70   Our preference: Short positions below 80.70 with targets at 78.70 & 77.50 in extension.   Alternative scenario: Above 80.70 look for further upside with 82.40 & 83.65 as targets.   Comment: The RSI is bearish and calls for further downside.     Trade  
ECB's Hawkish Hike: Boosting EUR/USD and Shaping Global Monetary Policy

On The New York Stock Exchange, The Dow Jones Did Not Rise In Price

InstaForex Analysis InstaForex Analysis 08.12.2022 08:00
At the close of the day on the New York Stock Exchange, the Dow Jones did not rise in price, the S&P 500 index fell 0.19%, the NASDAQ Composite index fell 0.51%. Dow Jones The leading performer among the components of the Dow Jones index today was 3M Company, which gained 1.77 points (1.42%) to close at 126.35. Merck & Company Inc rose 1.16 points or 1.06% to close at 110.09. Amgen Inc rose 0.87% or 2.47 points to close at 285.76. The biggest losers were Salesforce Inc, which shed 2.79 points or 2.09% to end the session at 130.48. Apple Inc. shares rose 1.97 points (1.38%) to close at 140.94, while Boeing Co was down 1.93 points (1.08%) to close at 176.50.  S&P 500  Leading gainers among the S&P 500 index components in today's trading were State Street Corp, which rose 8.19% to hit 80.45, Campbell Soup Company, which gained 6.02% to close at 56.18, and also shares of Bank of New York Mellon, which rose 4.13% to close the session at 44.61. The biggest losers were M&T Bank Corp, which shed 7.72% to close at 147.97. Shares of Brown Forman lost 7.30% to end the session at 68.27. Expedia Inc (NASDAQ:EXPE) dropped 6.32% to 90.79. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Prometheus Biosciences Inc, which rose 165.67% to hit 95.80, Transcode Therapeutics Inc, which gained 133.44% to close at 0.98, and also shares of Vor Biopharma Inc, which rose 41.86% to end the session at 6.10. The biggest losers were Ensysce Biosciences Inc, which shed 53.36% to close at 1.04. Shares of Versus Systems Inc lost 46.98% and ended the session at 0.79. Bruush Oral Care Inc Unit fell 46.95% to 0.50. Numbers On the New York Stock Exchange, the number of securities that fell in price (1608) exceeded the number of those that closed in positive territory (1466), while quotes of 134 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,196 companies fell in price, 1,487 rose, and 198 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.30% to 22.68. Gold Gold futures for February delivery added 0.91%, or 16.30, to $1.00 a troy ounce. In other commodities, WTI futures for January delivery fell 2.40%, or 1.78, to $72.47 a barrel. Futures for Brent crude for February delivery fell 2.28%, or 1.81, to $77.54 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair was unchanged 0.38% to 1.05, while USD/JPY fell 0.38% to hit 136.52. Futures on the USD index fell 0.40% to 105.12.   Relevance up to 03:00 2022-12-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/304121
China’s Foreign Minister Qin Gang Downplayed Russia’s Invasion Into Ukraine

Putin Has Now Warned That The Ukraine Conflict Could Go On For A Long Time

Saxo Bank Saxo Bank 08.12.2022 09:17
Summary:  U.S. bond yields plunged on a softer revision of the Unit Labor Cost, WSJ Nick Timiraos’ article on decelerating in housing cost inflation, and Putin’s nuclear threat. U.S. equities were modestly lower on their fifth day of decline. Profit-taking selling in Hong Kong and China stocks after the release of the Politburo meeting readout and 10 additional measures to ease pandemic control policy saw the Hang Seng Index down 3.2% What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) skid again. Campbell Soup boils up S&P 500 fell for the fifth session and briefly breached its 100-day moving average again before bouncing off the low to close slightly above it. S&P 500 was 0.2% lower and Nasdaq 100 was down 0.5% on Wednesday. Eight of the 11 sectors within the S&P 500 declined, with healthcare, consumer staples, and real estate the only sectors advancing. Market sentiment was depressed by the recessionary signals sent out from the bond markets and Putin’s warning of the rising threat of nuclear war. Tesla (TSLA:xnas) dropped 3.2% on reports of cutting prices in China and the U.S. markets. Campbell Soup (CPB:xnys) surged 6% after reporting earnings beating analyst estimates due to strong gross margins. State Street (STT:xnys) jumped 8.2% after announcing a share buyback. US treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) fell on a softer unit labor cost print, Putin’s nuclear threat and WSJ Nick Timiraos article U.S. treasuries were well bid throughout the session, with yields falling by around 11bps across most parts of the curve. The 2-year was 11bps richer to settle at 4.26% and the 10-year yield fell 11bps to 3.42%. The Q3 unit labor cost was revised down to 2.4% from the previously reported 3.5%. The softer data provided somewhat of a relief to investors who had been concerned about wage inflation might slow the Fed from downshifting rate hikes in 2023. In addition, in his latest article, the Wall Street Journal’s Nick Timiraos, citing street economists, said the deceleration in rental increases in new apartment leases may mean “the end is in sight for one of the biggest sources of inflation” that Fed Chair Powell specifically pointed out as being important to watch in his recent Brookings Institution speech. Adding fuel to the rally in treasuries was the flight to safety bids following Putin’s threat of nuclear war. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) sold the new Covid-19 containment measures news Buy the rumor and sell the news in play yesterday in the Hong Kong and mainland China equity markets. After a lackluster morning session, Hong Kong and mainland China stocks rallied in the early afternoon after investors took note of the no mention of dynamic zero-Covid and a more balanced tone towards economic growth in the readout of the politburo meeting and the release by the Chinese health authorities of additional 10-measures to further fine-tune and ease China’s Covid-19 containment strategy. The markets nonetheless reversed soon afterward and tanked 3.2% as “sell the news” profit-taking came in. Southbound monies had a net outflow from Hong Kong back to the mainland of over HKD5 billion, of which HKD1.9 billion was selling the Tracker Fund of Hong Kong (02800:xhkg). Chinese developers were among the biggest losers following the second share placement in a month from Country Garden (02007:xhkg), with China Resources Land (01109:xhkg) down 5.3%, COLI (00688:xhkg) down 6.2%, Longfor (00960:xhkg) down 12.1%, and Country Garden down 15.5%. Selling was also aggressive in mega-tech names and saw Alibaba (09988:xhkg) down 5.3%, Tencent (00700:xhkg) down 3.7%, and Meituan (03690:xhkg) down 3.6%. The three leading Chinese airlines listed in Hong Kong, however, outperformed and gained by 2% to 6%. In economic data, China’s exports in November declined 8.7% (in USD terms) in November from a year ago, weaker than expectations. CSI 300 was down 0.3%. Australia’s share market holds six month highs, gold stocks charge, Australia's trade surplus beats expectations The Australian benchmark index, the ASX200 (ASXSP200.1) opened 0.3% on Thursday, but holds six month high territory. As for the best performers in the ASX200, clean metal small cap miner Chalice (CHN) rose 12% after drilling confirmed it found new sulphide minerals in Western Australia. CHN would typically be classed as higher risk company as its doesn’t earn income, which is why its share are suffering while interest rates are rising. CHN shares are down 35% YTD. Gold stocks are looking interesting as recessionary calls get louder- gold generally outperforms in a recession. Evolution Mining (EVN) shares are up 5%, continuing to rally it in uptrend and have gained 61%, moving EVN shares up off their 5-year low. In the larger end of town, BHP shares broke higher but profit taking turned its break higher into loss. BHP shares are up 26% this year, with the major miner, along with RIO and Fortescue doing well of late after the iron ore (SCOA) price picked up 7% this month, with China easing restrictions. On the downside, engineering company Downer (DOW) plunged 31% to $3.31, which is its lowest level since April 2020 after Downer downgrading its outlook and flagging irregularities in utilities business. The AUDUSD slides on AU exports falling more in October, and imports sinking; supporting RBA remaining dovish On the economic news front, Australia’s trade surplus fell in October, but less than expected. This reflects that Australia is earning less income as demand for commodities has fallen from its peak, ahead peak energy season and China easing restrictions. The Australian surplus fell from $12.4 billion to $12.2 billion (when the market expected the surplus to fall to $12 billion flat). In October, exports surprisingly fell 1%, vs market expectations they'd rise 1%, while imports fell 1%. This supports the RBA keeping rates low, as such after the data was released, the AUDUSD immediately fell. FX: USD weakens on lower yields The US dollar weakness extended further on Wednesday as US 10-year yields plunged to fresh lows since mid-September breaking below the 3.50% support. There were some concerns on wage pressures as US Q3 Unit Labor Costs were revised lower to 2.4% (prev. 3.5%, exp. 3.1%), which pushed back on some of the wage-price spiral fears while still remaining elevated. GBPUSD pushed above 1.22 and EURGBP is testing the 0.86 handle. NZDUSD came back in sight of 0.64 even as AUDNZD recovered from 1.0532 lows printed after Australian Q3 GDP data came in beneath expectations. The Japanese yen gained on lower US yields, but gains were restrained by commentary from BoJ's Nakamura who reiterated Governor Kuroda, noting it is premature to tweak policy now as service prices remain low and he is not sure now is the right timing to conduct a review of the policy framework. Crude oil (CLZ2 & LCOF3) prices pressured by demand concerns Oil posted its fourth straight day of losses, erasing all of the gains of this year. While demand concerns are rising with the aggressive global tightening seen this year, supply side has remained volatile. US crude inventories fell by a less-than-expected 5.19 million barrels last week, as exports didn't repeat their prior performance. Distillate stocks rose by more than 6 million barrels and gasoline supplies climbed by 5.3 million barrels amid weak demand. Still, the bigger factor is that the short-term technical traders appear to be in control of the oil market currently. WTI plunged to lows of $72/barrel while Brent went to sub-$78 levels. Gold (XAUUSD) higher on China’s central bank purchases Gold’s safe-haven appeal has come back in focus with China joining the long list of other countries who have been strong buyers of bullion. The PBoC added 32 tons to its holdings in November, the first increase in more than three years. This brings it total gold reserves to 1980 tons. This is also potentially a step towards our outrageous prediction on a new reserve asset, as speculations mount that China, Russia and several other countries could be looking to move away from USD reserves. Gold prices gained over 1%, and helped drag the rest of the sector higher as well. Industrial metals like Copper and Nickel also pushed higher due to the weaker US dollar.   What to consider? Putin’s nuclear threat sours risk sentiment Following drone attacks on three Russian air bases that Moscow blamed on Kyiv, Putin has now warned that the Ukraine conflict could go on for a long time and nuclear tensions have also risen because of it. He also did not clearly stay away from pledging that Russia will not be the first to use nuclear weapons, and rather said that Russia will defend itself and its allies “with all the means we have if necessary. The irresponsible talks on nuclear weapons is a sign that Putin is getting desperate with Ukraine gaining military grounds, and his actions will be key to watch. Risk sentiment likely to be on the back foot today, and food prices as well Uranium will be in focus. Japan Q3 GDP continues to show contraction The final print of Japan’s Q3 GDP was released this morning and it was slightly better than the flash estimate of -1.2%, but still showed a contraction of -0.8% annualized sa q/q. Stronger than expected growth in exports and a build of inventories led to the upward revision, private consumption was slower than previously expected at just 0.1% q/q. Lower oil prices and the return of inbound tourists may further aid the Japanese economy, but slowdown in global demand will continue to underpin a weakness in exports. Eurozone Q3 GDP grew more than initially forecasted The final estimate of the Eurozone Q3 GDP shows an increase to 0.3% versus prior 0.2%. Growth fixed capital formation was the biggest contributor to growth (0.8 percentage point) behind household spending (0.4 percentage point). The contribution from government expenditure was negligible on the period. This shows that households and companies are rather resilient despite the negative economic environment and inflation across the board. Based on the latest PMI for November (the last estimate was published on Monday), we expect a small GDP contraction in the eurozone in Q4. This would be marginal (probably minus 0.1%). Bank of Canada hiked 50bps and signalled the next move will be data dependent Bank of Canada hiked policy rate by 50bps to 4.25%, in line with market expectations but higher than the market pricing of 25bps. The central bank signalled the next move will be data dependent by saying that the “Governing Council will be considering whether the policy needs to rise further to bring supply and demand back into balance and return inflation to target.” Still, there was a slight hawkish tilt as the Bank said that the BoC will consider if future rate hikes are necessary to bring supply and demand back into balance and return inflation to target, which means there is potential for more rate hikes after a temporary pause. The Politburo says China will continue to “optimize” its pandemic control measures The Chinese Communist Party ended a politburo meeting that focused on economic policies for 2023 and anti-corruption works in the party on Tuesday. The readout of the meeting released on Wednesday makes no mention of the “dynamic zero-Covid” policy. Instead, it says that China will strive to better coordinate pandemic prevention and control with socioeconomic development and continue to optimize the country’s pandemic control measures. The readout does not reiterate the warning on the property sector and the rhetoric of “housing is for living in, not for speculation” but instead pledges to “be vigilant of large economic and financial risks and strive to prevent systemic risks.” Overall, the readout from the Politburo meeting seems to confirm the policy shift to gradually easing pandemic control measures and supporting the property to the extent of preventing it from causing systemic risks to the financial system and the economy. The readout emphasises stability by the utmost important priority for 2023 and the leadership of the Chinese Communist Party over economic policies as well as economic activities of the country. The readout also pledges to continue the anti-corruption campaign and enhance the governance of  the Chinese Communist Party. China issued 10 additional measures to ease Covid-19 containment practices China’s National Health Commission issued 10 additional measures to further fine-tune and relax the country’s pandemic prevention and control practices. The crux of these new measures are to further reduce the scope and length of lockdowns and quarantines and restrict the use of PCR tests. While these are important relaxation to the current practices, especially in reducing the unit of movement restriction to as narrow as floor or even apartment as opposing to the whole block or community and making quarantine-at-home the default option instead of centralised quarantine. Nonetheless, in comparison with the high expectations in recent days, these measures may be considered a bit underwhelming and do not provide a more definite roadmap of exiting the use of lockdown.  China’s exports shrank 8.7% Y/Y in November In USD terms, China’s exports declined 8.7% Y/Y in November, much weaker than the -3.9% consensus estimate and -0.3% in October. The fall in exports was broad-based across destinations, U.S.  down 3.8% Y/Y, European Union down 9.3% Y/Y, and Japan down 4.6%. Exports to ASEAN slowed to a 7.7% growth in November from 19.7% in October. Imports, falling by 10.6% Y/Y, also below expectations. Some outperforming stocks to watch Generally, there are always outperformers in markets, even when times are tough. A hot scoop for you is that that Campbell Soup shares popped 6% higher on Wednesday, gapping up to $56.18. Its shares are now 15% off their record high that it hit in 2016. That year, the Syrian war escalated, Trump was elected, and there was a string of terror attacks around the world. And amid war talks now escalating this year Campbell Soup shares entered an uptrend, gaining 45% from last November. If recessionary talks and Russia war concerns linger, you might expect this company to continue to benefit. It has free cash flow, and consistent rising profit growth. Another stock that did well overnight was General Mills, rising 2% to an all time high, $87.50 after the wheat price jumped 3% overnight on supply concerns returning. We mentioned General Mills as a company to watch in our Five Stocks to Watch video. Despite the wheat price falling 19% from September after supply returned to the market, General Mills has been able to grow its quarterly profit and free cash flows.      For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Putin’s nuclear warning; China reopening trade is fading – 8 December 2022 | Saxo Group (home.saxo)
Gold Stocks Have Performed Very Well Under Pressure

Gold Stocks Are Looking Interesting As Recessionary Calls Get Louder

Saxo Bank Saxo Bank 08.12.2022 09:24
Summary:  Risk picked up in markets with Putin warning the threat of nuclear war is rising, yet he stopped short of pledging not to use atomic weapons. Traders are also unnerved by growing recessionary fears; and next week’s US CPI read ahead of the Fed's interest rate hike. Campbell Soup boils up on stronger than expected earnings, gold and gold stocks bound higher as they typically do amid recessionary concerns. Gold stock Evolution Mining appears in an uptrend. Watch our six minute video.       What you need to know now about markets Risk picked up in markets with Putin warning the threat of nuclear war is rising, yet he stopped short of pledging not to use atomic weapons. Traders are also unnerved by growing recessionary fears; and next week’s US CPI read. Will it show CPI fell to 7.3% down from 7.7% YoY? And will the Fed hike by 0.5% on December 15 instead of 0.75%? Uncertainty pushed up bond yields, and pressured equities lower with the S&P500 falling for the fifth day. Oil fell for fourth day to $72,01 erasing all of 2022s gains. Focus is on uranium stocks and the URA ETF, as well as metals with iron ore, copper, and gold higher. Agriculture commodities and equities are back in the limelight, with Putin’s threats pushing wheat prices up 3.1%. The major indices, the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) skid again. Campbell Soup boils up S&P500 fell for the fifth session falling below its 100 day moving average again, but managing to close above it as a sign that sell pressure could be easing, as markets await Friday’s producer inflation. Nevertheless, the S&P500 has now lost about 3.6% over five days of selling with the next level of support at perhaps around 3900 still insight. The Nasdaq 100 fell 0.5% on Wednesday, taking its four-day lost to almost 4.6%. Outperforming stocks on watch - Campbell Soup and wheat giant General Mills Generally, there are always outperformers in markets, even when times are tough. A hot scoop for you is that that Campbell Soup shares popped 6% higher on Wednesday, gapping up to $56.18 after the company reported stronger quarterly earnings than expected. Its shares are now 15% off their record high that it hit in 2016. That year, the Syrian war escalated, Trump was elected, and there was a string of terror attacks around the world. And amid war talks now escalating this year Campbell Soup shares entered an uptrend, gaining 45% from last November. If recessionary talks and Russia war concerns linger, you might expect this company to continue to benefit. It has free cash flow, and consistent rising profit growth. Another stock that did well overnight was General Mills, rising 2% to an all-time high, $87.50 after the wheat price jumped 3% overnight on supply concerns returning. We mentioned General Mills as a company to watch in our Five Stocks to Watch video. Despite the wheat price falling 19% from September after supply returned to the market, General Mills has been able to grow its quarterly profit and free cash flows. Gold stocks charge, Australia’s share market holds six month highs   The Australian benchmark index, the ASX200 (ASXSP200.1) opened 0.3% on Thursday, but holds six month high territory. As for the best performers in the ASX200, clean metal small cap miner Chalice (CHN) rose 12% after drilling confirmed it found new sulphide minerals in Western Australia. CHN would typically be classed as higher risk company as its doesn’t earn income, which is why its share are suffering while interest rates are rising. CHN shares are down 35% YTD. Gold stocks are looking interesting as recessionary calls get louder- gold generally outperforms in a recession. Evolution Mining (EVN) shares are up 5%, continuing to rally it in uptrend and have gained 61%, moving EVN shares up off their 5-year low. In the larger end of town, BHP shares broke higher but profit taking turned its break higher into loss. BHP shares are up 26% this year, with the major miner, along with RIO and Fortescue doing well of late after the iron ore (SCOA) price picked up 7% this month, with China easing restrictions. On the downside, engineering company Downer (DOW) plunged 31% to $3.31, which is its lowest level since April 2020 after Downer downgrading its outlook and flagging irregularities in utilities business. In FX, the AUDUSD slides on Australia exports falling in October, and imports sinking; supporting the RBA remaining dovish Australia’s trade surplus fell in October, but less than expected. This reflects that Australia is earning less income as demand for commodities has fallen from its peak, ahead peak energy season and China easing restrictions. The Australian surplus fell from $12.4 billion to $12.2 billion (when the market expected the surplus to fall to $12 billion flat). In October, exports surprisingly fell 1%, vs market expectations they'd rise 1%, while imports fell 1%. This supports the RBA keeping rates low, as such after the data was released, the AUDUSD immediately fell.   For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast.   Source: Video: Risk picks up, oil erases 2022 gains, Campbell Soup boils up, General Mills rises | Saxo Group (home.saxo)
It Was Possible That Tesla Would Move Closer To Resistance

Another Margin Loan With Tesla Shares Is Considered, Gold Traded Higher, US Treasury Yields Dropped

Saxo Bank Saxo Bank 08.12.2022 09:32
Summary:  Risk sentiment steadied in the US yesterday as US treasury yields fell further, with the market seemingly increasingly convinced that inflation is set to roll over quickly next year, allowing the Fed to begin cutting rates in the second half of the year and beyond. The 10-year treasury yield fell below the important 3.50% level while gold rose. Sentiment in Europe is a bit more downbeat as frigid weather spikes energy prices.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures closed right on the 100-day moving average yesterday to the lowest close since 10 November washing away most of the gains delivered post the surprise inflation report back in November. The equity market is finding itself in limbo for the rest of the year with no clear narrative to build a direction on. Downside risks are related to the war in Ukraine and higher interest rates if the market begins to doubt itself on the Fed pivot. Upside risks are mostly related to momentum building in Chinese equities and the government seems to strengthen the policy trajectory of reopening society. The 3,900 level in S&P 500 futures is still the key level to watch on the downside. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hang Seng Index rallied strongly, up 2.8% and recovering most of the loss from yesterday. The 10 additional fine-tuning measures to ease pandemic containment may be underwhelming relative to the high expectations. However, when reading together with the readout of the Politburo, an overall direction of a gradual and now seemingly determined loosening of restrictions seems to have taken hold. Omitting the language of “housing is for living in, not for speculation” and pledging to “be vigilant of large economic and financial risks and strive to prevent systemic risks” point to conditional support to the property sector when socioeconomic and financial stability are at stake. Technology names led the advance. Hang Seng TECH Index surged 5.6% with Bilibili being the top gainer within the index. Alibaba, Meituan, and Tencent climbed 5%-6%. Shares of China online healthcare platforms, China education services providers, China consumption, and Macao casino operators were other top performers. USD slightly lower again on steady risk sentiment and decline in treasury yields The USD softened yesterday as risk sentiment trade sideways and, more importantly, as US treasury yields fell all along the curve, taking the 10-year Treasury benchmark yield below the important 3.50% chart point. The USD will likely struggle unless the market begins to reprice its rising conviction that inflation will allow a significantly lower Fed Funds rate in 2024 and beyond and/or risk sentiment rolls over badly as the market prices an incoming recession and not a soft landing. The key event risks for the balance of this calendar year are next Tuesday’s US November CPI print and the FOMC meeting the following day. Somewhat surprisingly, the new lows in US yields have yet to drive USDJPY to new lows: that pair recently traded below 134.00 but trades this morning well clear of 136.00. Gold (XAUUSD) bounces with focus on recession and PBoC buying Gold traded higher on Wednesday as the dollar weakened and US Treasury yields slumped (see below) and the yield curve inversion reached a new extreme on rising recession fears, and after China joined the lengthy list of other countries who have been strong buyers of bullion. The PBoC added 32 tons to its holdings in November, the first increase in more than three years. This brings its total gold reserves to 1980 tons. This is also potentially a step towards our outrageous prediction on a new reserve asset, as speculations mount that China, Russia and several other countries could be looking to move away from USD reserves. Friday’s US producer price report may provide the next round of price volatility. Key resistance at $1808 with support below $1765 and $1735. Crude oil (CLF3 & LCOG3) pressured by demand concerns Oil posted its fourth straight day of losses on Wednesday, erasing all the gains of this year, before bouncing overnight as China edges toward reopening. While demand concerns are rising with the aggressive global tightening seen this year, the supply side has remained equally volatile. US crude inventories fell by a less-than-expected last week as exports slowed and production reached 12.2m b/d. In addition, distillate stocks rose by more than 6 million barrels as demand on a four-week rolling basis slumped to the lowest level since 2015. Short-term technical traders are in control as the overall level of participation continues to fall ahead of yearend. US 10-year treasury benchmark plunges through 3.50% (TLT:xnas, IEF:xnas, SHY:xnas) US treasury yields dropped at the long end of the yield curve, with the 10-year benchmark dipping well below 3.50%, a key chart- and psychological point. The yield curve inverted to a new extreme for the cycle as the market is pricing that inflationary risks are easing and for the Fed to begin cutting interest rates by late next year. What is going on? New deep coal mine in UK the first to be approved in 30-years The new coking coal mine in Cumbria was approved by levelling-up secretary Michael Gove and will employ approximately 500 people and will cost £165 million to develop. Coking coal is used in steel-making, unlike thermal coal used for power stations. Musk may pledge more Tesla shares to avoid debt spiral Elon Musk and his advisors are considering another margin loan with Tesla shares as collateral to swap with more expensive debt carrying high interest rates ($3bn at 11.75% interest rate) issued during the Twitter takeover. These considerations underscore the increased risk in Elon Musk’s investments, including Tesla. EZ Q3 GDP grew more than initially forecasted The final estimate of the EZ Q3 GDP shows an increase to 0.3 % versus prior 0.2 %. Growth fixed capital formation was the biggest contributor to growth (0.8 percentage point) behind household spending (0.4 percentage point). The contribution from government expenditure was negligible during the period. This shows that households and companies are rather resilient despite the negative economic environment and inflation across the board. Based on the latest PMI for November (the last estimate was published on Monday), we expect a small GDP contraction in the eurozone in Q4. This would be marginal (probably minus 0.1 %). Putin’s nuclear threat sours risk sentiment Following drone attacks on three Russian air bases that Moscow blamed on Kyiv, Putin has now warned that the Ukraine conflict could go on for a long time and nuclear tensions have also risen because of it. He also did not clearly stay away from pledging that Russia will not be the first to use nuclear weapons, and rather said that Russia will defend itself and its allies “with all the means we have if necessary. The irresponsible talk on nuclear weapons is a sign that Putin is getting desperate with Ukraine gaining military grounds, and his actions will be key to watch. Risk sentiment likely to be on the back foot today, and food prices as well Uranium will be in focus. MondoDB shares rally 23% on earnings The database provider delivered Q3 earnings that surprised the market with revenue at $334mn vs est. $303mn and adjusted EPS of $0.23 vs est. $0.17, but more importantly MongoDB raised its fiscal guidance on revenue to $1.26bn vs est. $1.20bn. Japan Q3 GDP continues to show contraction The final print of Japan’s Q3 GDP was released this morning and it was slightly better than the flash estimate of -1.2%, but still showed a contraction of -0.8% annualized seasonally adjusted q/q. Stronger than expected growth in exports and a build of inventories led to the upward revision, private consumption was slower than previously expected at just 0.1% q/q. Lower oil prices and the return of inbound tourists may further aid the Japanese economy, but slowdown in global demand will continue to underpin a weakness in exports. Bank of Canada hiked 50bps and signaled the next move will be data dependent Bank of Canada hiked policy rate by 50bps to 4.25%, in line with market expectations but higher than the market pricing of 25bps. The central bank signaled the next move will be data dependent by saying that the “Governing Council will be considering whether the policy needs to rise further to bring supply and demand back into balance and return inflation to target.” Still, there was some “hawkish optionality” as the Bank said that the BoC will consider if future rate hikes are necessary to bring supply and demand back into balance and return inflation to target, which means there is potential for more rate hikes after a temporary pause. Canadian two-year rates were a basis point or two lower after considerable intraday volatility and near the lows for the cycle. US consumer food giants’ Campbell Soup and General Mills shares surge Campbell Soup shares popped 6% higher on Wednesday, gapping up to $56.18 after the company reported stronger quarterly earnings than expected. Its shares are now 15% off their record high that it hit in 2016. Campbell Soup shares are up 45% from last November. Another stock that did well overnight was General Mills, rising 2% to an all-time high of 87.50 after the wheat price jumped 3% on supply concerns returning. Despite the wheat price falling 19% from September, General Mills has been able to grow its quarterly profit and free cash flows. What are we watching next? What is the playbook for the pricing of the coming “landing”? There are several different paths from here, the one the market is least prepared for is one that shows resilient US economic growth and higher than expected inflation in coming months. But even if data does continue to prove the market’s strong conviction that inflation is headed lower and that growth will soften, will markets price some version of a soft landing or will fears of a “standard” recession cycle begin to weigh on risk sentiment as credit spreads widen and asset prices drop on fears of rising unemployment and falling profits? Until this week, financial conditions have been easing sharply and credit markets look complacent, so there is little fear priced in. After a wild year of volatility, large macro players may be unwilling to place large bets on the direction for markets until we have rolled into the New Year. Earnings to watch Today’s US earnings focus is Broadcom, Costco, and Lululemon. With a market value of $200bn, Broadcom is the most important earnings release for market sentiment and analysts remain bullish with a revenue growth expected at 20% y/y for the quarter that ended in October. Today:  Broadcom, Costco, Lululemon, Chewy Friday: Oracle Corp, Li Auto Economic calendar highlights for today (times GMT) 0800 – Hungary Nov. CPI 1200 – ECB President Lagarde to speak 1200 – Mexico Nov. CPI 1330 – US Weekly Initial Jobless Claims 1400 – Poland National Bank Governor Glapinski press conference 1430 – EIA's Weekly Natural Gas Storage Change Report 0130 – China Nov. PPI/CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – December 8, 2022 | Saxo Group (home.saxo)
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

The Falling Yields Kept The US Dollar (USD) Under Pressure

Swissquote Bank Swissquote Bank 08.12.2022 10:08
Stocks fell for a fifth day, but the sovereign bonds gained, a hint that the market catalyzer shifted from the hawkish Federal Reserve (Fed) pricing – where stocks and bonds fall at the same time, to recession fears, where stocks remain under pressure, while investors seek refuge in safer sovereign assets. Yields and USD The falling yields kept the US dollar under pressure below the critical 200-DMA, which stands at 105.75. American crude oil One big move of the day was oil. The barrel of American crude slipped below the $73 floor and fell to $71.70 on the back of rising recession fears. Oil And note that we have started seeing a structural change in the oil markets. Crude price curve was in backwardation up until a month ago. But over the past weeks we started seeing the front-end of the price curve falling and even going back to contango. I discuss in this episode what that means for oil prices. Gold Elsewhere, news that China increased its bullion reserves for the first time in three years have a boost to gold and silver. The mint ratio fell below 80, but gold could still be a better choice for those preparing their portfolios for recession. Watch the full episode to find out more! 0:00 Intro 0:31 Markets price in recession 2:36 Oil slips below $72pb 3:57 Is contango coming & what does it mean? 6:25 Loonie to remain under the pressure of weaker oil 8:00 Gold or silver?! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Crude #oil #contango #backwardation #energy #crisis #recession #fear #market #selloff #USD #EUR #Gold #silver #mint #ratio #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Tesla (TSLA) slumped 8.88% after the electric-car maker offered a higher discount of $7,500 on Model 3 and Model Y vehicles in the U.S

Tesla (TSLA) fell 3.21%, TripAdvisor (TRIP) slid 6.41%, and Southwest Airlines (LUV) dropped 4.71%

Intertrader Market News Intertrader Market News 08.12.2022 09:45
DAILY MARKET NEWSLETTER December 8, 2022             Pre-Market Session News Sentiment Technical Views       EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)             Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.             Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,235.00 -42.00 (-0.29%) Read the analysis 14,210.00 14,357.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,481.00 7,526.00     S&P 500 (CME) 3,928.75 -8.00 (-0.20%) Read the analysis 3,915.00 3,960.00     Nasdaq 100 (CME) 11,475.50 -34.00 (-0.30%) Read the analysis 11,430.00 11,600.00     Dow Jones (CME) 33,584.00 -41.00 (-0.12%) Read the analysis 33,470.00 33,760.00     Crude Oil (WTI) 72.75 +0.74 (+1.03%) Read the analysis 71.20 73.50     Gold 1,781.83 -4.442 (-0.25%) Read the analysis 1,790.00 1,776.00             MARKET WRAP       Market Wrap: Stocks, Bonds, CommoditiesOn Wednesday, U.S. stocks still lacked upward momentum. The Dow Jones Industrial Average closed flat at 33,597, the S&P 500 declined 7 points (-0.19%) to 3,933, and the Nasdaq 100 was down 52 points (-0.45%) to 11,497.Consumer durables & apparel (+0.86%), pharmaceuticals & biotechnology (+0.85%), and health-care equipment & services (+0.84%) sectors gained the most, while automobiles (-2.67%), consumer services (-1.32%), and technology hardware & equipment (-1.2%) sectors were under pressure.Carvana (CVNA) plunged 42.92% after Bloomberg reported that the used-car platform is consulting lawyers and investment banks about options for managing its debt.Tesla (TSLA) fell 3.21%, TripAdvisor (TRIP) slid 6.41%, and Southwest Airlines (LUV) dropped 4.71%.On the other hand, Campbell Soup (CPB) rose 6.02%, as the company posted better-than-expected first-quarter earnings, and raised its annual outlook.Regarding U.S. economic data, third-quarter unit labor costs rose 2.4% on quarter (vs +3.5% expected), and nonfarm productivity gained 0.8% on quarter (vs +0.3% expected).The U.S. 10-year Treasury yield retreated 11.3 basis points to 3.419%.European stocks closed lower. The DAX 40 fell 0.57%, the CAC 40 dropped 0.41%, and the FTSE 100 was down 0.43%.U.S. WTI crude futures declined $1.80 to $72.46. The U.S. Energy Department reported a reduction of 5.19 million barrels in crude-oil stockpiles (vs -3.88 million barrels expected).Gold price jumped $14 to $1,786 an ounce.Market Wrap: ForexThe U.S. dollar weakened against other major currencies. The dollar index fell to 105.15.USD/CAD was little changed at 1.3655. The Bank of Canada raised its benchmark interest rate by 50 basis points (vs +25 basis points expected) to 4.25%, the highest level in almost 15 years. The central bank signaled that its tightening campaign was near an end.USD/JPY fell 45 pips to 136.55.EUR/USD rose 41 pips to 1.0508. Germany's data showed that industrial production edged down 0.1% on month in October (vs -0.8% expected).GBP/USD climbed 77 pips to 1.2210. In the U.K., the Halifax house price index dropped 2.3% on month in November (vs -0.1% expected).AUD/USD gained 36 pips to 0.6724. USD/CHF lost 11 pips to 0.9409.Bitcoin traded slightly lower to $16,800.Morning TradingIn Asian trading hours, USD/JPY advanced further to 136.85. Japan's data showed that third-quarter gross domestic product growth was confirmed at -0.8% annualized on quarter (vs -1.0% estimated).AUD/USD traded lower to 0.6715. Australia's data showed that trade surplus declined to 12.22 billion Australian dollars in October with exports falling 1.0% on month (vs +1.0% expected).EUR/USD was little changed at 1.0503, and GBP/USD retreated to 1.2188.Gold price dipped to $1,783 an ounce.Bitcoin held up well at $16,870.Expected TodayIn the U.S., the latest number of initial jobless claims is expected to rise to 240,000.       UK MARKET NEWS       UK: The Royal Institute of Chartered Surveyors house price balance fell to -25% in November (vs -10% expected).British American Tobacco, a cigarette maker, posted a trading update: "We are confident in delivering our 2022 guidance, demonstrating once again the strength and resilience of our business. (...) Our New Category business continues to drive strong volume, revenue and market share growth and has become a significant contributor to group performance. (...) We expect growing contribution across all New Categories, and all Regions in 2022. We are confident in delivering our targets of 5 billion pounds revenue, and profitability by 2025."DS Smith, a packaging services provider, reported interim results: "For the six month period, revenue grew to 4,299 million pounds, up 26% on a constant currency basis and 28% on a reported basis (...) Adjusted basic earnings grew by 49% on a constant currency basis to 20.9 pence per share, reflecting the growth in profitability. (...) we are announcing an interim dividend for this year of 6.0 pence per share, an increase of 25%."Technology, chemicals and financial services shares fell most in London on Tuesday.From a relative strength vs FTSE 100 point of view, Barclays (-0.83% to 157.44p) crossed under its 50-day moving average.From a technical point of view, BP (-2.24% to 464p) crossed under its 50-day moving average.       ECONOMIC CALENDAR       Time Event Forecast Importance   08:30 Initial Jobless Claims (Dec/03) 240k MEDIUM     08:30 Continuing Jobless Claims (Nov/26) 1.62M LOW     08:30 Jobless Claims 4-week Average (Dec/03) 231k LOW     10:30 EIA Natural Gas Stocks Change (Dec/02) -31Bcf LOW     11:30 8-Week Bill Auction   LOW     11:30 4-Week Bill Auction   LOW                     NEWS SENTIMENT       Standard Chartered PLC STAN : LSE 584.20 GBp -1.78% In the last 5 days         NEWS SENTIMENT (24H) Very Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                 Trade             Siemens AG SIE : XETRA 132.90 EUR -0.57% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                 Trade             Knorr-Bremse AG KBX : XETRA 52.24 EUR -5.26% In the last 5 days         NEWS SENTIMENT (24H) Very Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                 Trade             Glencore PLC GLEN : LSE 540.30 GBp -2.95% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                 Trade             Bayer AG BAYN : XETRA 52.80 EUR -4.05% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                 Trade     TECHNICAL VIEWS       EUR/USD Intraday: bullish bias above 1.0485.   Pivot: 1.0485   Our preference: Long positions above 1.0485 with targets at 1.0530 & 1.0550 in extension.   Alternative scenario: Below 1.0485 look for further downside with 1.0465 & 1.0440 as targets.   Comment: A support base at 1.0485 has formed and has allowed for a temporary stabilisation.     Trade           Euro Stoxx 50 (Eurex)‎ (Z2)‎ Intraday: key resistance at 3949.00.   Pivot: 3949.00   Our preference: Short positions below 3949.00 with targets at 3908.00 & 3896.00 in extension.   Alternative scenario: Above 3949.00 look for further upside with 3960.00 & 3969.00 as targets.   Comment: The RSI lacks downward momentum.     Trade           Brent (ICE)‎ (G3)‎ Intraday: key resistance at 78.80.   Pivot: 78.80   Our preference: Short positions below 78.80 with targets at 76.30 & 75.10 in extension.   Alternative scenario: Above 78.80 look for further upside with 80.30 & 81.30 as targets.   Comment: The RSI is bearish and calls for further downside.     Trade
"Global Steel Output Rises as Chinese Production Surges, Copper Market Remains in Deficit

The Value Of The Fear Index Could Increase With Sudden Movements

Conotoxia Comments Conotoxia Comments 08.12.2022 13:10
"The S&P 500 could break through the 3,600-point level in the near term as companies cut their earnings forecasts for 2023," - said David Kostin, chief equity strategist at Goldman Sachs. This would mean a decline in the main S&P 500 index of more than 8%. How could someone take advantage of the potential increase in volatility? Fear Index The instrument that assesses the volatility for the S&P 500 (US500) index over the next 30 days is the CBOE Volatility Index (VIX). Its value is determined by the pricing of options on this index. However, let us remind ourselves of the possible options. There are derivatives that give buyers the option to buy call (or in the case of put options, to sell) at a given price in the future of the underlying instrument. Importantly, call and put option quotes are priced independently. Because historically the index has reached its highest levels at times of major falls, it is commonly referred to as the fear index. Source: Conotoxia MT5, VIX, Weekly The fear index peaked during the 2008 real estate crisis. - around 60 points and during the 2020 pandemic crisis. - around 80 points. Currently, its value is around annual lows, at around 20 points.  Theoretically, the value of the fear index could increase with sudden movements (regardless of direction), and with slow changes the index could reach lower values. In line with this, the decline of the S&P 500 index by more than 17% since the beginning of the year has not triggered sizable increases in the fear index. Source: Conotoxia MT5, US500, Weekly ETFs on the VIX index A long-term alternative to investing in the Fear index are ETFs that replicate its movements. It seems that special caution should be exercised in this type of investment due to their complex structure and built-in leverage. The first fund is the Ultra VIX Short-Term Futures ETF (UVXY), which gives exposure to the index with average leverage times 2. It consists of short-term contracts on the VIX index quotes. If we would like to trade in the opposite direction, ProShares offers the opportunity to invest in the Short VIX Short-Term Futures ETF (SVXY). It consists of the same contracts as its predecessor only with opposite positions. Source: Conotoxia, MT5, UVXY, Weekly What can we expect in the future on the VIX? Forecasting changes in the fear index could be difficult and fraught with risk. However, specific events trigger specific market reactions. These include, for example, the publication of surprising data to which investors seem to pay particular attention. At present, these may include: employment figures in the non-farm sector, the Fed's interest rate decision or inflation indicators. The advantage of the fear index, however, seems to be that if there is volatility following the publication of data, we may not have to worry about its impact on the broad market, as the value of the index depends on the expected rate of change.  Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

Craig Erlam, Senior Market Analyst at Oanda talks US equities which seem to be between a rock and a hard place

Craig Erlam Craig Erlam 08.12.2022 18:12
OANDA Senior Market Analyst Craig Erlam discusses the recent performance of US stocks in light of another hot jobs report and ahead of the final Fed meeting of the year.     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US stocks dip ahead of the Fed - MarketPulseMarketPulse
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange, 1727 Of Securities Rose In Price

InstaForex Analysis InstaForex Analysis 09.12.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.55%, the S&P 500 rose 0.75%, and the NASDAQ Composite rose 1.13%. Dow Jones The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 3.03 points (2.80%) to close at 111.36. Quotes of Cisco Systems Inc rose by 0.81 points (1.68%), closing the auction at 48.99. Boeing Co rose 2.58 points or 1.46% to close at 179.08. The least gainers were Goldman Sachs Group Inc, which shed 1.84 points (0.51%) to end the session at 358.08. American Express Company was up 0.65 points (0.42%) to close at 154.12, while 3M Company was down 0.35 points (0.28%) to close at 126. 00. S&P 500 Leading gainers among the S&P 500 index components in today's trading were SVB Financial Group, which rose 6.89% to 222.64, NVIDIA Corporation, which gained 6.51% to close at 171.69, and shares of Ceridian HCM Holding Inc, which rose 5.05% to end the session at 65.83. The least gainers were Lincoln National Corporation, which shed 10.86% to close at 31.45. Shares of Avery Dennison Corp shed 6.54% to end the session at 179.22. Quotes of Aptiv PLC decreased in price by 4.47% to 93.42. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Pharvaris BV, which rose 356.57% to hit 11.46, Rent the Runway Inc, which gained 74.26% to close at 2.37, and also shares of Qutoutiao Inc, which rose 59.66% to end the session at 0.83. Eiger Biopharmaceuticals Inc was the biggest loser, shedding 69.53% to close at 1.17. Relmada Therapeutics Inc lost 47.84% to end the session at 2.17. Design Therapeutics Inc (NASDAQ:DSGN) was down 33.33% at 8.46. Numbers On the New York Stock Exchange, the number of securities that rose in price (1,727) exceeded the number of those that closed in the red (1,352), while quotes of 123 shares remained virtually unchanged. On the NASDAQ stock exchange, 2154 companies rose in price, 1554 fell, and 218 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.72% to 22.29. Gold Gold futures for February delivery added 0.18%, or 3.25, to $1.00 a troy ounce. In other commodities, WTI January futures fell 0.44%, or 0.32, to $71.69 a barrel. Futures for Brent crude for February delivery fell 1.13%, or 0.87, to $76.30 a barrel. Forex Meanwhile, on the Forex market, EUR/USD rose 0.50% to hit 1.06, while USD/JPY edged up 0.01% to hit 136.62. Futures on the USD index fell 0.28% to 104.76. Relevance up to 03:00 2022-12-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/304270
FX Daily: Upbeat China PMIs lift the mood

Asia Market: Chinese Stocks Were Broadly Unchanged

ING Economics ING Economics 09.12.2022 08:44
November CPI inflation report is due from China. Markets tempering earlier China re-opening optimism Source: shutterstock Macro outlook Global Markets: It’s turning out to be a slightly more positive end to the week for US stocks, though nothing to get too excited about. The S&P500 rose 0.75% while the NASDAQ gained 1.13%, but there doesn’t appear to have been any strong catalyst for the moves, which can probably just be put down to re-positioning after several sessions of losses. Chinese stocks were broadly unchanged, as early optimism over the apparent re-opening moves has been tempered by rising Covid cases and scepticism about the ease with which this will be achieved. Equity futures are not indicating any strong conviction for the US open today, and it probably doesn’t help that Treasury yields have begun to head back higher again, as we indicated yesterday was probable as the falls until then looked overdone. 2Y US Treasury yields rose 5.2bp and the 10Y rose 6.5bp, but it still yields only 3.48%. With markets still not fully pricing in a 5.0% peak fed funds rate (4.94% for May 23 contract), there is probably a little further upside once this becomes more certain, for which we may need next week’s FOMC press conference for affirmation. The slight rise in bond yields hasn’t helped the USD much, and EURUSD is up to 1.0556, while the AUD has risen to 0.678, Cable is 1.2234, while the JPY isn’t much changed at 136.59. Asian FX hasn’t done a lot in the last 24 hours with the exception of the THB, which is up 0.76% to 34.833 following a solid rise in tourist arrivals. Other gains were modest (KRW 0.28%, VND 0.2%) and there were also some small losses, (TWD 0.13%, MYR 0.10%). There could be some catch-up with the G-10 today. G-7 Macro: A slight rise in the US weekly continuing jobless claims figures yesterday seems a questionable basis for running with the headline that the “US job market cools” though this is what a well-known financial broadsheet is doing today. The initial claims figures were little changed at 230,000 and bang in line with expectations. Continued claims rose 62,000 to 1,671,000. Today’s G-7 calendar is packed, with PPI inflation data (expected to fall from 8.0% to 7.2% for November), as well as the University of Michigan sentiment and inflation expectations figures, which have been “bigged-up” as potentially market moving, and who knows? If Treasury yields can rise or fall 10bp with seemingly no macro input, I suppose we shouldn’t rule out there being an improbable swing when there is one. China: Loan data could be released any day between today and 15 Dec. We expect more than a doubling of aggregate finance and new yuan loans in November compared to October. This will mainly come from around CNY1.2 trillion in loans to real estate developers near the end of November. There could be more financing from other channels for developers in December. CPI data today should continue to show mild inflation in November while PPI could show a slight yearly contraction from lower commodity prices in general, indicating weak economic activity in November. What to look out for: China inflation plus US producer prices and the Michigan sentiment report China CPI inflation (9 December) US PPI inflation (9 December) US University of Michigan sentiment (9 December) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

The Australian Benchmark Index Looks Like It Could Close Off The Week Lower

Saxo Bank Saxo Bank 09.12.2022 08:59
Summary:  U.S. equities rallied after declining for five consecutive days as investors took a pause in the growth-fear-triggered selling as treasury yields bounced. Hong Kong stocks surged by 3.4%, completely reversing their loss on Wednesday after profit-taking being out of the way and investors looking at the potential improvement to the economic outlook in China. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) snapped a 5-day losing streak An interesting recent development in the U.S equity markets was that investors worried about falls in long-term treasury yields and cheered rises of them as their focus shifted from long-term treasury yields’ negative impact on equity valuation to their signaling function of potentially a U.S. recession, especially when the yield curve going more inverted in the process. The bounce of the 10-year treasury yield by 7bps to 3.48% on Thursday was cited as positive for equities by some investors. Optimism about the outlook of an economic recovery in China also contributed to the improvement in sentiment. S&P 500 gained 0.8% and Nasdaq 100 advanced 1.1%. Nine of the 11 S&P500 sectors climbed, with information technology, consumer discretionary, and healthcare leading the gain, while communication services and energy lost by 0.5%. The Federal Trade Commission is seeking to block Microsoft’s (MSFT:xnas) acquisition of Activision Blizzard (ATVI:xnas). Shares of Microsoft rose by 1.2% while Activision dropped by 1.5%. US treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) bounced on a rise in continuous jobless claims and ahead of PPI and supply U.S. treasury yields took a little pause in their continuous falls. The 2-year yield rose 5bps to 4.31% and the 10-year yield was 7bps cheaper to 3.48%, after retesting the 3.5% level during the day. Initial jobless claims were in line with expectations but traders took note of the larger-than-expected increase in continuous jobless claims to 1,671K from the prior week’s 1,608K. Trading activities were muted ahead of the PPI on Friday and the CPI next week. The Treasury Department announced USD90 billion in the 3-year, 10-year, and 30-year auctions next week. Treasury Secretary Janet Yellen told reporters that “whether or not we can avoid a recession, I believe the answer is yes.” Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) sold the new Covid-19 containment measures news Hang Seng Index rallied strongly, up 3.4% on Thursday and recovered all the loss from “buy the rumor, sell the news” profit-taking selling the day before. The 10 additional fine-tuning measures to ease pandemic containment may be underwhelming relative to the high expectations. However, when reading together with the readout of the Politburo, an overall direction of a gradual and now seemingly determined loosening of restrictions seems to have taken hold. Omitting the language of “housing is for living in, not for speculation” and pledging to “be vigilant of large economic and financial risks and strive to prevent systemic risks” point to conditional support to the property sector when socioeconomic and financial stability are at stake. After the profit-taking selling out of the way, technology stocks led the rally. Hang Seng TECH Index surged 6.6% with Bilibili (09626:xhkg), soaring 22%, being the top gainer within the index. Alibaba (09988:xhkg), Meituan (03690:xhkg), and Tencent (00700:xhkg) advanced 5%-6%. Shares of Macao casino operators soared 12%-22%, following Macao said it will stop requiring negative PCR or RAT test result proof from Chinese visitors. Hong Kong shortened the home isolation period for people infected with Covid-10 to five days from seven days. A newspaper story suggests that the Hong Kong authorities are considering relaxing the outdoor mask rule. Cosmetic chain Sa Sa (00178:xhkg) jumped 19.7%. In A shares, trading was lackluster with CSI300 ending the session flat. Among industries, property, financials, telecom services, and healthcare outperformed. Australia’s share market rises for the first time in four days, with miners leading the charge The Australian benchmark index, the ASX200 (ASXSP200.1) opened 0.7% higher on Friday but looks like it could close off the week lower, with the market now down 1.5%, which marks the first weekly drop in three weeks. The ASX200 holds six-month high territory largely buoyed by the mining sector being bought up (bid) on forward looking hopes that China will ramp up economic activity next year and keep accommodative monetary support in place, which will likely support infrastructure and property. As such, this has supported the key steel making ingredient, iron ore (SCOA) raise 3.6% this week and elevated Fortescue Metals (FMG) shares by 8% this week, with Champion Iron (CIA) up 7%, with Rio Tino (RIO) following. Fortescue Metals shares are on watch as they appear in overbought territory, but what support likely further upside is the iron ore price hit a fresh four-month high today, $109.60, which suggests if this uptrend in iron ore continue, Fortescue Metals earnings could pick up. And it could see subsequent share price upgrades from buy and sell side brokers.  FX: The U.S. dollar index weakened modestly by 0.3% to 104.77 The US dollar weakened modestly against all G10 currencies except for being unchanged versus the Yen. The Aussie dollar gained the most against the U.S. dollar and it rose by 0.7% to 0.6770. Crude oil (CLF3 & LCOF3) declined nearly 10% so far this week At USD72, WTI crude was down nearly 10% over the week on worries of a slowing U.S. economy and larger-than-expected buildup in U.S. fuel product inventories. The first five month of the WTI futures contracts are now in contango. What to consider? Look for more hints about U.S. inflation from the PPI and the University of Michigan Consumer Survey Economists surveyed by Bloomberg are expecting the headline PPI growth in the U.S. to slow to 7.2% Y/Y in November from 8.0% in October and PPI ex-Food and Energy to come at 5.9% Y/Y in November versus 6.7% in October as supply chains continue to improve. Investors will dig in the components of PPI to scrutinize the price changes in various services to gauge their impacts on the more important core personal expenditure price (core PCE). Investors will also look for hints about the trend of the U.S. inflation from the inflation expectation numbers in the University of Michigan Consumer Survey. China’s inflation is expected to have moderated in November The Bloomberg consensus is expecting China’s PPI to shrink further by -1.5% Y/Y in November (vs Oct: -1.3% Y/Y) and CPI to slow to +1.6% in November from +2.1% in October. Weak industrial demand in the midst of countrywide pandemic control-related restrictions during the month and weakness in energy prices would likely have contributed to the decline in the PPI. November CPI would have been dragged by base effects and weakness in food prices. China’s new aggregate financing and RMB loans are expected to have bounced in November Market economists, as surveyed by Bloomberg, are expecting China’s new aggregate financing to bounce to RMB 2,100 billion in November from RMB 907.9 billion in October and new RMB loans to rise to RMB 1,400 billion in November from RMB 615.2 billion as People’s Bank of China urged banks to extend credits to support private enterprises including property developers. Less bond issuance by local governments and corporate and weak loan demand however might have weighed on the pace of credit expansion in November.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: U.S. equities snapped a 5-day losing streak and bond yields bounced ahead of PPI; Hong Kong stocked rallied – 9 December 2022 | Saxo Group (home.saxo)
Unlocking the Future: Key UK Wage Data and September BoE Rate Hike Prospects

Buying In China Tech And In Airlines Shares Picked Up

Saxo Bank Saxo Bank 09.12.2022 09:05
Summary:  In today’s five minute video we bring you up to speed with what traders and investors in Australia at Saxo, have been doing this week. It reflects the two major drives of markets, higher for longer interest rates in US and a potential recession. On the other side, some clients are somewhat excited about China’s major cities easing restrictions, and dangling the carrot to ease further. We explore if upside is sustainable in metals, such as iron ore and why buying is picking up in the US dollar, with the USD index seeing its strongest gain in 12 weeks.   Investors and traders are bunkering into the theme of higher for longer interest rates in the US, and a potential recession This is the major theme that's driving markets and pushed global equities lowers this week. So we’ve been seeing profit taking, a little more selling and options put on tech companies, including Tesla, Google, and Apple  - more so than the last few weeks. And buying of the US dollar picked up again; with the DXY set for its biggest gain in 12 weeks, ahead of US CPI next week and the final Fed decision for 2022. There is pent up investor demand for investing in China’s reopening theme This is the second major driver of markets of late. It comes as five major cities have eased restrictions and dangled the carrot to ease further. As well as potentially scrapping mask wearing.  Commodities buying picked up on the platform at Saxo, given there are hopes for China to fast track economic growth next year. Buying in lithium stocks;  Pilbara Minerals, Allkem picked up  Buying in Fortescue Metals also picked up. This is because the commodity Fortescue makes 90% of its revenue from, iron ore (SCOA) the key steel making ingredient, rose 3.6% this week, taking its gain from the October low to 44%, with the price of the iron ore hitting $110.20, a new four month high. The price of iron ore has been rallying as China is easing restrictions and today the market heard whispers that Chinese property developers will get more support, which would support demand for iron ore rising. However it looks like buying volume in iron ore slowed for now. So perhaps until we see more concrete announcements or further easing of restrictions, iron ore and iron ore miners could maybe see a bit of profit or buying fade next week, especially as iron ore stocks were this weeks best performers. Once we get more hopes, the iron ore price might be supported higher along with upside in iron ore majors shares; Fortescue Metals, Champion Iron, BHP and Rio. Also, next week, iron ore majors may see share price upgrades from buy and sell side brokers. Buying in China Tech picked up;  given there are favourable interest rates in China, pent up demand, and restriction are easing. As such buying in Alibaba picked up.  In energy markets, buying in coal stocks picked up; with Whitehaven Coal buy orders rising.  And lastly, buying in airlines shares picked up as well. Especially in those air companies that travel in and out of Hong Kong, Such as Cathay Pacific. Qantas also saw increased buys.     For a weekly look at what to watch in markets - tune into our Spotlight.For a global look at markets – tune into our Podcast. Source: Video: What traders and investors have been buying amid recession concerns versus China easing restrictions | Saxo Group (home.saxo)      
Key Economic Events and Earnings Reports to Watch in US, Eurozone, and UK Next Week

Credit Suisse Said That Cost Cuts Has Already Done

Saxo Bank Saxo Bank 09.12.2022 11:37
Summary:  Risk sentiment rebounded ever so cautiously as many traders are likely sitting on their hands in anticipation of next Tuesday’s US November CPI release and the FOMC meeting the following day, with many likely wanting to close their books on a very volatile year. Ahead of those event risks, US treasury yields and the US dollar are perched near cycle lows as the market anticipates that the Fed “terminal rate” will peak in the first half of next year.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures rallied 0.7% yesterday on strong economic data and more positive growth optimism tied to China’s reopening trajectory. The 4,000 level is the average level for the trading range since mid-November and thus the likely gravitational point in S&P 500 futures in the short-term. US 10-year yield remains below 3.5% and the VIX Index suggests hibernation is setting in the last couple of weeks of the year. Today’s potential market mover events for US equities are the PPI report for November and later consumer confidence survey from University of Michigan. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hang Seng Index rallied 2% on Friday on continued recovery optimism as the country reopening from Covid containment restrictions and more supportive government policies. Premier Li Keqiang said China will strive to achieve steady growth. Defaulted Chinese property developer Sunac said it had reached agreement with creditor to restrict USD9 billions of debts, including swapping $3-4bn of debts into ordinary shares or equity-linked instruments. Reportedly another defaulted mainland developer Evergrande is meeting offshore creditors later today to discuss restructuring proposals. The Chinese authorities are reportedly considering allowing REITs to invest in long-term rental and commercial real estates. Leading mainland Chinese property developers listed in Hong Kong surged 5% -12%. A day after shortening the home isolation period for people infected with Covid-10 to five days from seven days, a Hong Kong health official said the city is considering ending its vaccine pass scheme. Hong Kong local property developers gained 1%-5%. In A-shares, the CSI300 Index rallied 0.8% US 10-year treasury benchmark plunges through 3.50% (TLT:xnas, IEF:xnas, SHY:xnas)  US treasury yields are quiet after the 10-year benchmark broke down through the pivotal 3.50% level this week, with the 2-year yield also trading at the lower end of the recent range as the market awaits the incoming Tuesday CPI next week and the refresh of the Fed’s staff economic projections and “dot plot” forecasts of the Fed Funds rate at the December FOMC meeting next Wednesday. Next Monday sees the auction of 3-year and 10-year treasuries, with a 30-year T-bond auction up on Tuesday. USD pushing on cycle lows in many pairs on risk sentiment rebound The most USD-negative mix of weak US treasury yields and strong risk sentiment kept the US dollar on the defensive yesterday, as EURUSD edged back toward the cycle highs, trading as high as 1.0586 overnight versus the recent high just below 1.0600. Elsewhere, AUDUSD rebounded back toward 0.6800, erasing much of its recent sell-off even if it is still choppy within the range. It is tough to see traders emboldened to take the USD to new lows and holding them without a look at the next key event risks, and really the final major event risks of the year for the US dollar: next Tuesday’s US November CPI print and the FOMC meeting the following day. Industrial and precious metals showing continued strength so far this month Copper (HGH3) trades near the highest level since June while iron ore (SCOc1) traded in Singapore trades near a four-month high. Together with other industrial related metals they have received a boost from President Xi’s sudden Covid pivot towards loosening Covid-19 controls amid protests from increasingly frustrated citizens together with fresh measures to support the property sector. Precious metals led by silver, given its industrial metal link, trades up on the month supported by falling treasury yields and a weaker dollar amid worries about an incoming economic slowdown. Focus on US inflation data with PPI on tap today and CPI next week. Key resistance in gold at $1808 with support below $1765 and $1735. Crude oil (CLF3 & LCOG3) remains stuck at the lowest level of the year. Crude oil is heading for a weekly loss with Brent crude trading below $77 and down more than 11% on the month after spending the week trading within a wide 13-dollar range. A weakening macroeconomic outlook which has seen the US yield curve inversion extend to levels signalling an incoming recession has overshadowed the EU embargo on Russian oil and the prospect of a pickup in demand in China as lockdowns continue to ease. A disruption on the Keystone pipeline temporarily roiled the markets on Thursday giving WTI a temporary boost which sellers took advantage of. Short-term technical traders looking to squeeze existing longs remain in control as the overall level of participation continues to fall ahead of yearend. What is going on? US FTC will sue to stop Microsoft’s $75 billion acquisition of Activision Blizzard The FTC saying that the combination would give Microsoft too large a footprint in the gaming industry. The offer for Activision Blizzard shares was originally 95 dollars, but shares have dipped from hitting above 85 dollars on the announcement of the intended acquisition back in January to near 75 dollars yesterday after a volatile day. US Atlanta Median Wage Tracker rises to 8.1% YoY in November for Job Switchers This was a strong rebound from the 7.6% level posted in October and could suggest a reset in inflation potential going forward. The previous high for this metric in its 25-year history before the recent surge was in the late 1990’s, when it peaked near 6.5%. The overall median wage growth in November was steady at +6.4%. Credit Suisse raises $4.3bn in capital The Swiss based investment and wealth bank has raised $4.3bn in capital to execute its new strategy in which the company is scaling back in investment banking activities and geographies to improve profitability. The bank says that cost cuts already done represent 80% of target for 2023. China and Saudi Arabia upgrade relationships with top-level dialogue During President his visit to Saudi Arabia this week, China’s President Xi Jinping met with King Salman bin Abdulaziz Al Saul and Crown Prince Mohammed bin Salman. The two sides agreed to upgrade the relationship of the two countries with heads of state meeting every two years and moving established joint committees for trade, tech, security and other areas from vice-premier to premier level. The two countries have signed more than 30 agreements and MOUs from petrochemical, hydrogen energy, information technology, and infrastructure projects to cultural exchanges, and are planning to sign another 20. China’s CPI softened to 1.6% Y/Y; PPI stayed at -1.3% Y/Y China’s CPI inflation decelerated to 1.6% Y/Y in November from 2.1% Y/Y in October, in line with expectations as food inflation slowed and consumer demand was weak during lockdown. In the PPI, price increases in the raw materials sector decelerated while the price declines in mining and processing sectors slowed in November. US earnings recap (Broadcom, Costco, and Lululemon) The US semiconductor company Broadcom delivered Q4 (ending in October) earnings and revenue in line with estimates and the Q1 revenue guidance was a bit above estimates. The company says that China has slowed down in terms of consumptions of products, but demand across the business excluding China remains strong. Broadcom shares rose 3% in extended trading. Costco Q1 revenue and earnings were in line with estimates and the US retailer said it is seeing modest improvement in inflation and a slowdown in big tick discretionary items. Costco is also seeing gains among higher income households. Costco shares were unchanged. Lululemon delivered revenue in line with estimates while adjusted earnings were a bit weaker than estimated and the Q4 revenue outlook was slightly below estimates. Lululemon shares declined 8% in extended trading. Soybeans supported by Chinese demand; Wheat pressured by record Russian crop Soybean futures in Chicago (ZSF3) gained more ground on Friday, trading close to their highest since mid-September, as strong demand led by top importer China underpinned the market. While soybeans were likely to post a weekly gain, wheat (ZWH3) was on track for a fifth consecutive weekly decline as export sales continued at a slow pace due to competition from a record Russian production and corn (ZCH3) was down for a second straight week with the fall being cushioned by the strength seen in soybeans. Overall the grain sector now awaits Friday’s monthly crop forecasts (WASDE) from the US Department of Agriculture. What are we watching next? US preliminary University of Michigan Sentiment survey is out later today Sentiment has rebounded from the lows, according to the survey, although sentiment is still very downbeat after hitting an all-time low of 50.2 in the more than 40-year history of the survey in July. The December reading is expected at 57.0 vs. 56.8. Another focus in the survey could be on longer-term inflation expectations, which have rebounded to 3.0% for the next 5-10 years, according to the survey, close to the high of the range. Earnings to watch . Today’s US earnings focus is Oracle which is expected to report earnings after the US market close with revenue up 16% y/y and EPS up 23% y/y. Today: Oracle Corp, Li Auto Economic calendar highlights for today (times GMT)0930 – UK Bank of England to release inflation attitudes survey1330 – US Nov. PPI1500 – US preliminary University of Michigan Sentiment1700 – World Agriculture Supply and Demand Estimates Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:   Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – December 9, 2022 | Saxo Group (home.saxo)
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

Saxo Bank Podcast: The Market's Conviction That The Fed Will Be Cutting Rates, Today's Important WASDE Report And Much More

Saxo Bank Saxo Bank 09.12.2022 11:46
Summary:  Today, we look at recent commodity market performance, where hopes for a reopening of Chinese activity is weighed against concerns for the forward outlook elsewhere. We also highlight the market's conviction that the Fed will be cutting rates in the second half of next year and wonder how the market will treat a less accommodative dot plot from the Fed at next Wednesday's FOMC meeting. A look at recent earnings reports, soybeans ahead of today's important WASDE report and much more on today's pod, which features Peter Garnry on equities, Ole S Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Next week’s likely FOMC dot plot is not what the market is pricing | Saxo Group (home.saxo)
Apple Stock Price, Microsoft, Amazon And Tesla (TSLA) Added A Lot Since July! How Deep Could EUR/USD Drop?

The FTC Is Trying To Block Microsoft's Merger With Activision

Kamila Szypuła Kamila Szypuła 09.12.2022 12:42
The Federal Trade Commission on Thursday sued to block Microsoft’s planned $69 billion takeover of video game company Activision Blizzard. Read next: UK Santander Bank Fined USD 132 Million, Idris Elba in Cyberpunk 2077:Phantom Liberty| FXMAG.COM The deal has come under pressure The Federal Trade Commission (FTC) to prevent the takeover of Activision Blizzard Inc by Microsoft Corp. filed a lawsuit. Law enforcement said the deal was illegal because it would give Microsoft the ability to control how consumers outside of users of their own Xbox consoles and subscription services access Activision games. The committee's vote was three to one to allow the lawsuit. The FTC said it filed the complaint as part of the administrative process, rather than taking the case to federal court. The FTC's decision to send the complaint to its in-house judge instead of seeking an urgent federal court order to stop the merger could drag the case out for months. The FTC's challenge may be a test of President Joe Biden's mandate to control big tech mergers. Microsoft's last major antitrust battle came more than two decades ago when a federal judge ordered it to break up after the company's anti-competitive actions related to its dominant Windows software. This judgment was overturned on appeal, although the court imposed other, less drastic penalties on the company. Progressive groups are putting pressure on the FTC to block the deal. Sony has been the most vocal critic of the planned deal with Activision, arguing that it could hurt competition if Microsoft restricts access to Activision's games, especially "Call of Duty". Microsoft CEO Brad Smith signaled in a Thursday statement that the company was likely to challenge the FTC's actions. Microsoft has repeatedly said it has no plans to deny Sony and others access to Activision games and that its deal with the company won't hurt competition. The company has publicly pledged to give Sony and Nintendo access to the new "Call of Duty" games on their current hardware. Microsoft said it still believes the deal, which it estimates at $68.7 billion when adjusted for Activision's net cash, will boost competition. Microsoft is committed to addressing competition issues and presented proposed concessions to the FTC earlier this week. According to Bloomberg Intelligence analysts, the combined company would control around 11% of the global digital game publishing business. Microsoft's deal with Activision, which would be its largest ever acquisition, is also being investigated by antitrust authorities in the UK and the European Union. Microsoft is one of the stocks the deal with Activision Blizzard is focused on. Microsoft’s shares closed up about 1%, while Activision’s shares were down by about 1.5%. The downtrend, like many other tech stocks, appeared on the MSFT chart. They reached the lowest level at the beginning of November, where they made up for losses in subsequent periods. At the beginning of December, they reached the highest level in the last quarter. MSFT is currently trading at 247.87. Microsoft shares chart The last quarter of this year does not look too good for Activision shares. Activision shares chart Source: wsj.com, finance.yahoo.com
Assessing Energy Price Dynamics and Their Impact on Inflation in the Short and Medium Term

Until FOMC meeting on December 14th, there could be no other catalyst for markets

Alex Kuptsikevich Alex Kuptsikevich 09.12.2022 14:49
US stock indices have rallied impressively in October and November, but the start of December is still heavy. And now is the right time to figure out whether the previous two months were a bear market rally or the beginning of a new bull market. Right now, there is no answer to that question. It may not be until after the Fed meeting on December 14, as the markets need a strong signal to move from the current point. The stock market has been moving up in the last two months, initially due to a correction after oversold conditions and then on speculation that the Fed will slow the pace of policy tightening. We consider a further retreat in commodity prices to be another supportive factor that eases consumer and company spending burden. Nevertheless, the two-month rally in S&P500 has stalled near the 200-day moving average. The close of October above this curve triggered a sell-off momentum from the first days of December. It would have looked like technical profit-taking if not for the disturbing analogies, as the market reversed from this line in April and August. Read next: UK Santander Bank Fined USD 132 Million, Idris Elba in Cyberpunk 2077:Phantom Liberty| FXMAG.COM Another worrying signal is the performance of the VIX. It has reversed upwards twice since the beginning of the year from the 20 levels, almost coincidentally with the reversal of the S&P 500. By early December, this story repeats as the VIX have reversed to growth after briefly dipping below 20. During the 2000-2003 bear market, to which we often compare the current situation, it was prudent to remain bearish while the index was steadily below its 200-day average and the VIX fear index bounced back from 20. These correlations could still work now, although they give a buy signal with an impressive delay. It is also important to note that after the volatility of 2008, the buy signal from the VIX came a year late after the market bottomed in March 2009. This is understandable, as the Fed’s QE supported the market and suffered another three years of sharp corrections. Our days, market participants may postpone the decision about the future market regime until the Fed's official comments and press conference next Wednesday. Further assurances from the world's biggest central bank that the decline in inflation is sustainable and a slower rate hike is to be expected further, despite indications that the economy and labour market are still better than market expectations, will be required for continued gains in equities. However, when the market is determined, we may see a strong trend in one direction within a few weeks, so remember the importance of the current momentum. Looking at the market levels, an S&P500 rally above 4050 would open the way to 4300 within 4-6 weeks and to 4600 by the middle of next year. If the bears prevail, the S&P500 could make a new local low around 3600 before the end of January, and it will start making regular lows in the first quarter of next year.
August CPI Forecast: Modest Inflation Increase Expected Amidst Varied Price Trends

Although one can find this week attractive, next one may be a real blockbuster featuring Fed, Oracle earnings

Conotoxia Comments Conotoxia Comments 09.12.2022 23:07
As we are already approaching the end of the year, we see the Central Banks' latest interest rate decisions for the year. The continuation of the interest rate hike cycle seems to have given cause for pessimism in the markets. The S&P 500 Index (US500) has fallen by 1.9% since the start of the week. However, we could still see optimism in the Chinese markets following reports of a reduction in the zero-Covid policy restrictions. Macroeconomic data On Monday, we learned the results of the US and UK service sector PMIs. The reading for the US was 56.5 points (53.3 expected) and for the UK 48.8 points (48.8 expected). We seem to be able to see a stagnation among business expectations, as the values do not seem to have changed over the last three months. On the same day, we learned of the Central Bank of Australia's decision to raise interest rates to 3.1% (previously 2.85%), which was in line with analysts' consensus. On Tuesday, we learned about GDP growth in Australia, which came in at 0.6% q/q (0.7% q/q was expected). We also learned about the decision of the Central Bank of India, which decided to raise the benchmark rate as expected to 6.25% (previously 5.9%). Particularly important for the energy and commodity markets on the day was the report from the US Energy Information Administration (EIA), which gave its forecasts for future energy prices. It predicts that the price of WTI crude oil (XTIUSD) could stabilize next year and be in the range of US$92.36/b. Source: Conotoxia MT5, XTIUSD, Daily On Wednesday, we learnt of the Central Bank of Canada's decision, which, like its aforementioned predecessors, raised interest rates to 4.25% (previously 3.75%). Japan's quarterly GDP reading appears to have shown signs of a slowdown for the cherry blossom country. Japan's GDP fell by 0.2% q/q. (a decline of 0.3% q/q was expected) against a previous increase of 1.1%. On the same day, we learnt the weekly reading of crude oil inventories, which fell for the 4th week in a row. The current decline was larger than analysts' expectations at 5.2 million barrels (a decline of 3.3 million barrels was expected). It appears that this may have supported the fall in the price of the commodity.  On Thursday, we learnt the number of new claims for unemployment benefits in the United States, which came in line with expectations at 230,000 (previously 226,000 claims). The stock market This week did not seem positive for the stock market. The main US S&P 500 index has fallen by 1.9% since the start of the week. The most declining company on the index was US electricity and natural gas generation and distribution company NRG Energy (NRGEnergy), whose share price fell by more than 20%. The FAANG technology companies performed particularly poorly this week. Google (Alphabet) shares fell by 7.2%, Apple (Apple) fell by 3.8% and Amazon's valuation fell by 5.3%. Large declines were seen in the energy sector. The value of the Energy Select Sector SPDR Fund (XLE) fell by more than 7%. This appears to be due, among other things, to declines in oil prices. Source: Conotoxia MT5, NRGEnergy, Daily On Tuesday, we learned the third quarter results of, among others, car and truck parts and accessories company AutoZone (AutoZone). Earnings per share EPS surprised analysts positively at 27.45 (25.26 was expected). On Wednesday, liquor producer Brown-Forman Corporation (BrownForman), which has a broad portfolio of brands including Jack Daniel's, Woodford Reserve, Old Forester, Canadian Mist and Finlandia, reported quarterly results. Its EPS was worse than expected at 0.47 (0.55 was expected). On Thursday, we learnt the results of the company that designs and manufactures integrated circuits and other electronic components, Broadcom (Broadcom), which reported EPS of 10.45 (10.28 was expected). On the same day, the results of shop chain Costco (Costco) came in below expectations, showing earnings per share of 3.07 (3.12 expected). Currency and cryptocurrency market The foreign exchange market saw the following rate changes over the past week. We could see the biggest increases in the EUR/JPY (up 1.4%) and USD/CAD (1.1%), while the other popular pairs saw little or no change. We seem to be able to deduce from this a weakening of the Japanese yen after the falling GDP data and a weakening of the Canadian dollar after the interest rate decision. The currency market seems to have been fairly stable this week. Source: Conotoxia MT5, EURJPY, Daily The cryptocurrency market seems to be able to feel the thaw. The price of bitcoin (BTCUSD) has risen by 1.4% since the beginning of the week, and the price of ethereum (ETHUSD) has risen by more than 2%. The most rising cryptocurrency was Axie Infinity (AXSUSD), which has risen by 17.2% since the beginning of the week. It seems that the saying "buy when the blood pours" is starting to find confirmation in this market. However, we would have to wait a little longer to be able to say that definitively. Source: Conotoxia MT5, BTCUSD, Daily What can we expect next week? Next week's key macroeconomic data will start with Monday's UK quarterly GDP reading after the recent 0.2% quarter-on-quarter decline. On Tuesday, we will learn Germany's CPI inflation reading. Analysts are expecting no change. The previous reading was 10% y/y. On the same day, inflation in the United States (previously 7.7% y/y) will also be known. On Wednesday, the Fed's US interest rate decision seems particularly important, immediately followed by a conference call by chairman Jerome Powell. In addition, an inflation reading will be given on that day by the UK, for which analysts expect inflation to fall to 10.9% y/y. (previously 11.1% y/y). Wednesday seems particularly important for the currency market and borrowers. Interest rate decisions will be given by the central banks of Switzerland, the UK and the European Central Bank. The week will close with the Eurozone CPI inflation reading. In the stock market on Monday, we will learn the Q3 results of this year's company Oracle (Oracle), on which we wrote a commentary. On Wednesday, we will see the report of the company that builds and sells single-family homes and manages residential properties in the US Lennar (Lennar). On Thursday, we will see the results of the company selling software for artists and businesses Adobe (Adobe).   Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Read the article on Conotoxia.com
Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges

Analytical Report – Agora – WSE:AGO

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 10.12.2022 10:02
The epidemic surprised Agora at the moment when it was just beginning to reap the fruits of long restructuring and many investments. According to our estimates, the company did not generate approximately PLN 430 million EBITDA in 2020- 2022. We believe that Agora should return to the pre-pandemic scale of operations and cash generation quite quickly. Next year will still not be easy, but the effects of investments in digitization and new areas will start to bring profits. The segment particularly affected by the epidemic was Helios cinemas, which basically lost a year of operation and are only now returning to normal. Although cinemas are already operating without restrictions, they are struggling with the effects of stagnant film production during the epidemic. Without good films, there are no viewers in cinemas, and in addition, two epidemic years allowed streaming platforms to consolidate their position, which raised doubts about the future of the big screen. However, the company presents analysis that contradict the thesis that viewers turn away from cinemas and when the expected title appears on the screens, there are no fewer people willing to watch it in cinemas than before the epidemic. The long-awaited sequel to Avatar is hitting theaters now, so this will be a good sampler. The studios are also announcing more movies for next year than this year. The epidemic also affected Agora's other key pillar, i.e. the AMS outdoor advertising network. This year there is a clear improvement and there is a good chance that, despite the economic slowdown, next year will be equal to the times before the epidemic. The attractiveness of this segment has recently gained a new dimension, which is related to another important segment of Agora, which is the Internet. Namely, it is entering a phase of perturbation due to the approaching end of a tool called cookies. This segment of Agora, like the entire online advertising market, benefited from the limited mobility of people and the transfer of activities to the Internet. However, this year his performance has deteriorated for the first time in years. The company decided in advance to change the nature of its product and service to prepare in advance for the new realities of online advertising. Next year, the first positive effects should be visible, and in 2024. the company is already promising a clearly positive impact of these changes. Importantly, this part of Agora's business related to YieldBird is global, and development opportunities go beyond the domestic market. We see the main source of improvement in Agora's results in the following years mainly in the three business segments mentioned above. A separate topic is the ongoing takeover of Eurozet, which should take Agora to a higher business level by leaps and bounds, and the delay in this process is more a political than economic issue. When discussing the factors affecting future results, it is worth mentioning an important and currently missing element of the Agora Group's revenues and profits. It's about the lack of advertising/revenues from the state administration and SP companies, on which it loses tens of millions a year. Possible changes on the political scene may change this unfavorable situation for the company. Analyst: Adam Zajler GPW’s Analytical Coverage Support Programme 3.0  
Challenges Persist for Company Amidst Falling Demand and Competitive Pressure in Q2'23

Analytical Report – Summary – Elektrotim – WSE:ELT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 10.12.2022 11:27
The report was prepared by Dom Maklerski BDM at the request of the WSE as part of the Exchange's Analytical Coverage Support Programme The company surprised positively with its results for the first time this year (Q3'22). The contract for the construction of an electronic barrier on the border with Belarus contributed significantly more than we expected. The company also booked PLN 4m of indexation of contracts. Management's outlook for Q4'22 at the earnings conference was optimistic. These factors raise our assumptions for 2022 and increase our valuation. At the same time, the company failed to win a contract for the construction of an electronic barrier on the border with Kaliningrad, which poses more challenges to filling the portfolio for 2023-24. We set our current target price at PLN 8.17, which implies an Accumulate recommendation. In Q3'22, the company managed to break the negative series of reporting disappointing results (which started in Q3'21). This was driven by strong revenues, a consequence of the higher-than-our-expected revenue recognition from the contract on the border with Belarus. Elektrotim also recognised in its results the achievement of contracts indexation. We associate the improvement in the cash position in Q3'22 mainly with a faster increase in trade payables over receivables (Q4'22 may be more demanding in terms of liquidity). Q4'22 results will be determined by the progress of the work and the recognised profitability on the barrier contract at the border with Belarus. The contract is likely to finish around the middle of Q1'23, but given the likely late reporting of Q4'22 results (end of April), the company should already recognise the target margin on the contract in Q4'22 (we estimate it was around 10% in Q3'22). After Q3'22, the Company's backlog amounted to PLN 711m, excluding the border contract, which is about PLN 500m, most of which is due in 2023 (we estimate about PLN 350m). The company failed to win a contract for the construction of an electronic barrier on the border with Kaliningrad, which investors believed quite strongly in November. The much smaller Telbud was selected in the tender. As of today, there is still no information about the final signing of the contract. We maintain that in the medium/long term, the company may benefit from increased spending on power grids and the military area (references and certificates held). Elektrotim's current capitalization is PLN 72 m. Net cash at the end of Q3'22 amounted to PLN 27m. At the same time, the company has struggled to stabilize its results in recent years. In 2017-21, it had a net loss three times, with the result ranging from PLN -15m to +17m (average for the last five years: PLN 0m, for the last 10 years: PLN 4m). The smooth implementation of the longterm strategy is also not favored by a rather fragmented shareholder structure. Analyst: Krzysztof Pado pado@bdm.com.pl tel. (0-32) 208-14-32 Dom Maklerski BDM S.A. ul. 3-go Maja 23, 40-096 Katowice GPW’s Analytical Coverage Support Programme 3.0  
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

On The New York Stock Exchange All Indices Fell In Price

InstaForex Analysis InstaForex Analysis 12.12.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones was down 0.90%, the S&P 500 was down 0.74% and the NASDAQ Composite was down 0.70%. Dow Jones The leading performer among the components of the Dow Jones index today was Walt Disney Company, which gained 0.83 points (0.90%) to close at 93.38. Verizon Communications Inc rose 0.30 points or 0.81% to close at 37.40. Salesforce Inc rose 0.98 points or 0.75% to close at 131.11. The least gainers were Chevron Corp shares, which lost 5.54 points or 3.19% to end the session at 168.00. Amgen Inc was up 2.42% or 6.92 points to close at 278.65 while Walmart Inc was down 2.33% or 3.47 points to close at 145.31.  S&P 500  Leading gainers among the S&P 500 index components in today's trading were Paramount Global Class B, which rose 5.08% to hit 19.02, Tesla Inc, which gained 3.23% to close at 179.05, and also shares of Netflix Inc, which rose 3.14% to close the session at 320.01. The least gainers were were Schlumberger NV, which shed 5.91% to close at 46.97. Shares of Etsy Inc lost 5.74% to end the session at 126.78. Quotes of Halliburton Company decreased in price by 5.33% to 33.01. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were HTG Molecular Diagnostics Inc, which rose 117.57% to hit 0.54, ClearOne Inc, which gained 73.40% to close at 1.40, and also shares of China Jo-Jo Drugstores Inc, which rose 51.20% to end the session at 3.31. Shares of Grom Social Enterprises Inc were the biggest losers, losing 66.28% to close at 1.30. Shares of Autolus Therapeutics Ltd shed 38.13% to end the session at 1.85. Quotes Appreciate Holdings Inc fell in price by 33.43% to 2.73. Numbers On the New York Stock Exchange, the number of securities that fell in price (2143) exceeded the number of those that closed in positive territory (958), while quotes of 98 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,359 companies fell in price, 1,374 rose, and 226 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.42% to 22.83. Gold Gold futures for February delivery added 0.36%, or 6.50, to $1.00 a troy ounce. In other commodities, WTI January futures rose 0.10%, or 0.07, to $71.53 a barrel. Futures for Brent crude for February delivery rose 0.72%, or 0.55, to $76.70 a barrel. Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.25% to 1.05, while USD/JPY was up 0.02% to hit 136.68. Futures on the USD index rose 0.17% to 104.93.     Relevance up to 03:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/304437
US Nonfarm Payrolls Disappoint: Impact on Dollar and EUR/USD Analysis

Technical Analysis Of The S&P 500 Index Movement

InstaForex Analysis InstaForex Analysis 12.12.2022 08:23
Quotes on the weekly chart of the S&P 500 bounced down from the upper boundary of the price channel. The Marlin oscillator also turned down, showing an intention to move into negative territory. Most likely, the decline will end the current Fibonacci movement, with the line of the 9th timeframe crossing the lower limit of the price channel - at 3255.00. This level coincides with the 261.8% retracement level, so there is a high chance that quotes will hit the target level by January next year. In terms of the daily chart, quotes reversed towards the MACD line, and moving beyond 3885.00 will be a signal for a more decisive downturn, especially since the Marlin oscillator is already in negative territory. Relevance up to 04:00 2022-12-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329480
The Commodities: In The Near Term The Oil Market Remains Relatively Well Supplied

The Price Of Russian Crude In Asia Appears To Be Holding Well Above The $60 Cap

Saxo Bank Saxo Bank 12.12.2022 08:59
Summary:  U.S. treasuries and stocks sold off after the hotter-than-expected PPI prints which suggest inflation not cooling enough and making the water murkier in the week of CPI and FOMC. The 10-year yield surged 10bps to 3.58%. Other key central bank meetings from the ECB to Bank of England also on watch this week. Hong Kong and Chinese stocks rallied on Friday on continuous optimism about reopening from Covid restrictions and supportive economic policy from the Chinese authorities. The Chinese Communist Party’s Central Economic Work Conference is expected to convene this week. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated on hot PPI data U.S. equities edged down after the producer price Index (PPI), headline as well as core, came in stronger-than-expected and stirred up concerns about risks of pushing the Fed back towards a more hawkish leaning. Nasdaq 100 declined by 0.6% and S&P500 fell by 0.7%. 10 of the 11 S&P sectors declined, with energy, healthcare, and materials dropping the most. Lululemon (LULU:xnas) plunged 12.9% after a gross margin miss, inventory build-up, and below-expectation full sales guidance. Tesla (TSLA:xnas) bounced 3.2%. US treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) bounced on higher producer inflation prints U.S. treasuries sold off on the hotter-than-expected PPI headline as well as core prints. With heavy selling in the 10-year and 30-year segments, the yield curve became less inverted. Two-year yield rose 4bps to 4.34% and 10-year yield surged 10bps to 3.58%. The 2-year-10-year yield curve closed at 76bps on Friday, after hitting as low as 85bps during the week. The money market curve is predicting a 77% probability for a 50bp rate hike on Wednesday. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) rallied on growth optimism Hang Seng Index rallied 2.3% on Friday on continuous optimism on the prospect of a recovery in the growth of the Chinese economy in 2023 as the country reopens from Covid containment restrictions and more supportive government policies. Premier Li Keqiang said China will strive to achieve steady growth. Defaulted Chinese property developer Sunac (01918:xhkg) said it is in discussion with creditors to restructure USD9 billion of debts, including swapping USD3-4 billion of debts into ordinary shares or equity-linked instruments.  Reportedly another defaulted mainland developer Evergrande is meeting offshore creditors to discuss restructuring proposals. The Chinese authorities are considering allowing REITs to invest in long-term rental and commercial real estates. Leading mainland Chinese property developers listed in Hong Kong surged 5% to 18% with Longfor (00960:xhkg) soaring the most. A day after shortening the home isolation period for people infected with Covid-10 to five days from seven days, a Hong Kong health official said the city is considering to end its vaccine pass scheme. Hong Kong local property developers gained 2%-5%. In A shares, the CSI300 Index rallied 1%. The Chinese Communist Party is expected to convene its annual Central Economic Work Conference this week to formulate the macroeconomic policy blueprint for 2023. In Australia; this week the focus will be consumer confidence, employment data and China reopening talk vs pre lunar new year production halt There are a couple of economic readouts that could move the market needle, the ASX200 (ASXSP200.1) this week. Weakening confidence is expected; starting with Consumer Confidence for December (released on Tuesday), followed by Business Confidence for November. Employment reports are due on Thursday for November, and likely to show employment fell; 17,000 jobs are expected to be added, down from the 32,200 that were added in October. So focus will be on the AUD and a potential pull back if the data is weaker than expected. On the equity side, with iron ore (SCOA) trades at four month highs $110.80 but is lower today. We mention on Friday the price of iron ore has been rallying as China on  easing restrictions and because of whispers that Chinese property developers will get more support, which would support demand for iron ore rising. However we mentioned why iron ore could pull back, as buying volume appears slowing. So be mindful of potential pull back in iron ore pricing and mining equities. Secondly, consider seasonable halt of Chinese steel plants ahead of the Lunar New year. Restocking typically occurs 5-8 weeks before the holiday, but plants could be closed earlier, due to poor profits and weak demand. So keep an eye on iron ore majors, Fortescue Metals, Champion Iron, BHP and Rio as they could see profit taking as well after rallying ~25-55% from October.  FX: A weaker start for NZD in Asia, Japan’s November PPI above expectations The US dollar started the week on a firmer footing with a big week ahead as the US CPI and FOMC meeting is eyed. A reversal of the short-term downtrend would however require US 10-year yields to get closer to 4% again. NZDUSD has been a strong performer since the softer October US CPI print and maybe the one to watch if the Fed fails to surprise hawkish this week, given that the RBNZ remains committed to its fight against inflation. Pair dropped below 0.64 in early Asian trading hours this morning as New Zealand Institute of Economic Research (NZIER) published slower GDP growth forecasts through 2025. A higher-than-expected Japan’s November PPI of 9.3% YoY/0.6% MoM, along with an upward revision to last month’s print, may create more talks of a possible policy review (read below) and USDJPY headed higher to 136.80. Crude oil (CLF3 & LCOF3) prices to watch Russia’s response to G7 price cap this week Crude oil prices saw a steadier start to the week after plunging sharply last week on demand concerns from a weakening macro backdrop as well as thin liquidity and control of short-term traders. The uncertainty surrounding European sanctions on Russian oil and the related price also kept volatility high, but was overshadowed by recession concerns. The impact of the potential pickup in demand from China as lockdowns continue to ease also started to fade. This week Russia will announce how it intends to counter the introduced price cap with the risk of a production cut potentially adding fresh support to the market ahead of what looks like a challenging 2023 where supply worries in our opinion will keep prices elevated, despite the risk of lower demand. WTI futures rose above $72 in the Asian morning, while Brent was seen above $77/barrel.   What to consider? Stronger-than-expected US PPI suggests inflation not cooling enough Headline PPI rose 7.4% in November Y/Y, above the expected 7.2% albeit down from the upwardly revised 8.1% for October. The core (ex-food and energy) Y/Y was also above expectations at 6.2% (exp. 5.9%), but cooler than the prior upwardly revised 6.8%. on a M/M basis, headline rose 0.3% while core was stronger at 0.4%, beating expectations. While the PPI data continued to show a peak in inflation in the Y/Y terms, but the downward surprise remains limited and may not be enough to support the Fed pivot expectations. Attention now turns to the US CPI data on Tuesday to see if a similar inflation story is seen for December ahead of the FOMC rate decision on Wednesday. Preliminary University of Michigan survey for December was also strong across the board, as the headline rose to 59.1 from 56.8, and above the expected 56.9. The headline was supported by current conditions and the forward-looking expectations both lifting to 60.2 (prev. 58.8, exp. 58.0) and 58.4 (prev. 55.6, exp. 56.0), respectively. Putin threatening to curb crude exports Vladimir Putin said Russia may lower crude output in response to the G-7 price-cap and added the country won't sell to price-cap participants. The price of Russian crude in Asia appears to be holding well above the $60 cap as it finds enough shipping and insurance capacity. While the crude oil prices last week have remained in the grip of technical traders and seen little impact from the price cap decision, there could be more volatility in store this week as Russia’s response is awaited which could range from production cuts to retaliatory measures. Bank of Japan board members continue to differ on timing for ending YCC All eyes are turning to who could be the possible replacement of Bank of Japan Governor Kuroda in April 2023. One of the contenders, Takehiko Nakao, said that subtle changes in policy framework should be considered as the leadership is changed next year. This comes after board member Naoki Tamura called for a policy review last week and hinted that it may come as early as next year (before Kuroda retires. However, another board member Toyoaki Nakamura said its too early to conduct a review now. Likewise, board member Hajime Takata also said it is too soon to start a policy review. While the timing may be uncertain, the open discussions about a possible BOJ policy review at some point is keeping expectations of an eventual BOJ pivot alive. China and Saudi Arabia upgrade relationships with top-level dialogue; Xi calls for using the renminbi to settle oil and gas trades During his visit to Saudi Arabia last week, China’s President Xi Jinping met with King Salman bin Abdulaziz Al Saul and Crown Prince Mohammed bin Salman. The two sides agreed to upgrade the relationship between the two countries with heads of state meeting every two years and moving established joint committees for trade, tech, security, and other areas from vice-premier to premier level. The two countries have signed a large number of agreements and MOUs from petrochemical, hydrogen energy, information technology, and infrastructure projects to cultural exchanges. Xi reiterates his call for using the renminbi more often to settle trades in crude oil and natural gas but it is not clear how well his call has been received by Saudi Arabia and the other oil-exporting countries at the China-Arab summit last week. China’s CPI softened to 1.6% Y/Y; PPI stayed at -1.3% Y/Y China’s CPI inflation decelerated to 1.6% Y/Y in November from 2.1% Y/Y in October, in line with expectations as food inflation slowed and consumer demand was weak during the lockdown. In the PPI, price increases in the raw materials sector decelerated while the price declines the in mining and processing sectors slowed in November.     Sign up for our Outrageous Predictions 2023 webinar - APAC edition: Wed, 14 Dec, 11.30am SGT For a global look at markets – tune into our Podcast. Source: Market Insights Today: Hot US PPI brings focus to CPI/Fed meeting; HK/China stocks on watch – 12 December 2022 | Saxo Group (home.saxo)
The China’s Covid Containment Continued To Negatively Impact The Output At The End Of 2022

China’s New Aggregate Financing May Bounce | Monetary Policy Decisions Ahead

Saxo Bank Saxo Bank 12.12.2022 09:07
    Softer US CPI to offer mixed signals and considerable volatility Last month’s softer US CPI report was a turning point in the markets and inflation expectations have turned markedly lower since then. Consensus is looking for another softer report in November, with headline rate expected at 7.3% YoY, 0.3% MoM (from 7.7% YoY, 0.4% MoM) while the core is expected to be steadier at 6.1% YoY, 0.3% MoM (from 6.3% YoY, 0.3% MoM). While the case for further disinflationary pressures can be built given lower energy prices, easing supply constraints and holiday discounts to clear excess inventory levels, but PPI report on Friday indicated that goods inflation could return in the months to come and wage inflation also continues to remain strong. Easing financial conditions and China’s reopening can be the other key factors to watch, which could potentially bring another leg higher in inflation especially if there is premature easing from the Fed. Shelter inflation will once again be key to watch, which means clear signs of inflation peaking out will continue to remain elusive. Why volatility in equites could pick up this week and what we learnt from prior inflationary out outs Will the inflation read show CPI fell to 7.3% in November as the market expects, down from 7.7% YoY? The risk is that inflation doesn’t fall as forecast, and that may likely push up bond yields and pressure equites lower. We saw this set up play out on Friday. November’s producer price index showed wholesale prices rose more than expected, which spooked markets that this week’s CPI could be bleak. As such bonds were sold off on Friday, pushing yields up; with the 10-year bond yield rising 10bps to 3.58%, while equities were pressure lower. Consider over the past six months, the S&P 500 has seen an average move of about 3% in either direction on the day US CPI has been released, according to Bloomberg. We haven’t seen these moves since 2009. Also consider, the S&P 500 has fallen on seven of the 11 CPI reporting days this year. December FOMC and dot plot may have little new to offer, so focus remains on Powell’s press conference The Fed is expected to lift its Federal Funds Rate target by 50bps to 4.25-4.50%, according to the consensus as well as the general commentary from Fed officials signalling a downshift in the pace of rate hikes. The updated economic projections will also be released, and are expected to show a higher terminal rate than the September projections (4.6%), as has been alluded to by Chair Powell at the November FOMC and in remarks made in December. But that means little room for market surprise as the Fed funds futures are pricing in a terminal rate of 4.96% in May 2023. Easing financial conditions and expected China stimulus could mean Fed continues to chase the inflation train from the back into the next year as well, so Powell’s press conference remains key to watch. There will have to be a lot of focus on pushing out the rate cuts of ~50bps that are priced in for next year, and emphasise that the Fed will not ease prematurely if Powell and committee want to avoid further easing of financial conditions. China is expected to convene the Central Economic Work Conference this week The Chinese Communist Party is expected to have its annual Central Economic Work Conference this week to formulate the macroeconomic policy framework for 2023. Investors are expecting supportive initiatives including measures to ease the stress in the ailing property sector. The conference will set out directions and blueprints but short of releasing key policy targets which will be for the National People’s Conference to be held next March. A weak set of Chinese activity data is expected Economists surveyed by Bloomberg are forecasting that China’s retail sales shrank sharply by 3.9% Y/Y in November. The potential weakness is likely attributed to poor performance of auto sales, dining-in activities, and sales during the “double-11” online shopping festival in the midst of Covid-19 lockdowns during the best part of November. November auto sales in China fell by 9.2 %Y/Y and by 10.5% M/M. Courier parcels processed on Nov 11 fell 20.7% Y/Y. The growth in industrial production is expected to fall to 3.7% Y/Y in November from 5% to 3.7%, following a weak November NBS manufacturing PMI and soft high-frequency data of steel production. Year-to-date fixed asset investment is expected to edge down to 5.6% from 5.8%, dragged by stringent pandemic control practices. ECB also likely to downshift to a smaller rate hike The European Central Bank (ECB) is also expected to slow down its pace of rate hikes to a 50bps increase this week. Headline inflation eased slightly in November, coming in at 10.0% YoY (exp. 10.4%), but was overshadowed by an unexpected rise in core inflation 6.6% YoY (exp. 6.3%, prev. 6.4%). While there is likely to remain some split in ECB members at this week’s meeting, the central bank’s Chief Economist Lane remains inclined to take into account the scale of tightening done so far. There is also uncertainty on the announcement of quantitative tightening. Bank of England may remain more divided than the other major central banks The Bank of England is also expected to follow the Fed and the ECB and downshift to a smaller rate hike this week, but the decision will likely see a split vote. A host of key data, including GDP, employment and inflation will be due this week in the run up to the BOE decision, and significant positive surprises could tilt the market pricing more in favour of a larger move which also creates a bigger risk of disappointment from the central bank. Headline annualised inflation advanced to 11.1% Y/Y in October, while the core rate remained at an elevated level of 6.5%. Consensus expects inflation to cool slightly to 10.9% Y/Y in November, but the core to remain unchanged at 6.5% Y/Y. Wage pressures are also likely to be sustained, and the cooling in the labor market will remain gradual. In Australia, this week the focus will be on consumer confidence and employment data There are a couple of economic read outs that could move the market needle, the ASX200 (ASXSP200.1) this week. Weakening confidence is expected; starting with Consumer Confidence for December (released on Tuesday), followed by Business Confidence for November. Employment reports are due on Thursday for November, and likely to show employment fell; 17,000 jobs are expected to be added, down from the 32,200 that were added in October. So focus will be on the AUD and a potential pull back if the data is weaker than expected. Iron ore equites to see volatility China reopening talk vs shut downs pre lunar new year The iron ore (SCOA) trading at four month highs $110.80 rallying as China has been easing restrictions, plus there are whispers Chinese property developers could get more support, which would support demand for iron ore rising. However we mentioned on Friday, why iron ore could pull back, as buying volume appears slowing. So be mindful of potential pull back in iron ore pricing and mining equities. Secondly, consider seasonable halts of Chinese steel plants ahead of the Lunar New year holiday. Restocking typically occurs 5-8 weeks before the holiday, but plants could be closed earlier, due to poor profits and weaker demand. This could cause volatility in iron ore and iron ore equities. So, keep an eye on iron ore majors, Vale, Fortescue Metals, Champion Iron, BHP and Rio as they could see profit taking after rallying ~25-55% from October.   China’s new aggregate financing and RMB loans are expected to have bounced in November Market economists, as surveyed by Bloomberg, are expecting China’s new aggregate financing to bounce to RMB 2,100 billion in November from RMB 907.9 billion in October and new RMB loans to rise to RMB 1,400 billion in November from RMB 615.2 billion as People’s Bank of China urged banks to extend credits to support private enterprises including property developers. Less bond issuance by local governments and corporate and weak loan demand however might have weighed on the pace of credit expansion in November. Key earnings to watch: Adobe (ADBE:xnas), Trip.com (TCOM:xnas) In his note for key earnings this week, Peter Garnry highlights Adobe and Trip.com. The past five earnings releases have all led to a negative price reaction in Adobe shares as growth has come down while the cost of capital has gone up. Can Adobe buck the trend next when the company reports earnings? Another question investors will be asking is an update on the company’s $20bn acquisition of the industry challenger Figma, which was delayed due to a US Department of Justice investigation of the deal. Adobe reports FY22 Q4 (ending 30 November) earnings on Thursday with revenue growth expected at 10% y/y and EPS of $3.50 up 36% y/y as cost-cutting exercises are expected to improve profitability. Adobe is expected to end the fiscal year with revenue of $17.6bn and strong free cash flow generation of $7.3bn which translates into 5% free cash flow yield. Recently the Chinese government has chosen to move ahead with reopening the economy taking on the associated Covid risks and this could be good for the outlook for travel activity and thus Trip.com. The Chinese online travel agency platform is expected to report earnings on Wednesday with analysts expecting revenue growth of 22% y/y. Analysts expect revenue to increase 50% y/y in 2023 to CNY 29.6bn. •          Monday: Oracle•         Tuesday: DiDi Global•          Wednesday: Lennar, Trip.com, Nordson, Inditex•          Thursday: Adobe•          Friday: Accenture, Darden Restaurants   Key economic releases & central bank meetings this week Monday 12 December United Kingdom monthly GDP, incl. Manufacturing, Services and Construction Output (Oct)United Kingdom Goods Trade Balance (Oct)India CPI and Industrial Output (Nov)China (Mainland) M2, New Yuan Loans, Loan Growth (Nov) Tuesday 13 December Germany CPI (Nov, final)United Kingdom Labour Market Report (Oct)Hong Kong Industrial Production, PPI (Q3)Germany ZEW Economic Sentiment (Dec)United States CPI (Nov) Wednesday 14 December Japan Tankan Survey (Q4)United Kingdom Inflation (Nov)Eurozone Industrial Production (Oct)United States Fed Funds Target Rate (14 Dec) Thursday 15 December New Zealand GDP (Q3)Japan Trade Balance (Nov)South Korea Export and Import Growth (Nov)Australia Employment (Nov)China (Mainland) Industrial Output, Retail Sales, Urban Investment (Nov)Philippines Policy Interest Rate (15 Dec)Switzerland SNB Policy Rate (Q4)Norway Key Policy Rate (15 Dec)United Kingdom BOE Bank Rate (Dec)Eurozone ECB Deposit and Refinancing Rate (Dec)United States Initial Jobless ClaimsUnited States Retail Sales and Industrial Production (Nov)Taiwan Discount Rate (Q4) Friday 16 December Australia Judo Bank Flash PMI, Manufacturing & ServicesJapan au Jibun Bank Flash Manufacturing PMIUK S&P Global/CIPS Flash PMI, Manufacturing & ServicesGermany S&P Global Flash PMI, Manufacturing & ServicesFrance S&P Global Flash PMI, Manufacturing & ServicesEurozone S&P Global Flash PMI, Manufacturing & ServicesUS S&P Global Flash PMI, Manufacturing & ServicesUnited Kingdom GfK Consumer Confidence (Dec)Singapore Non-Oil Exports (Nov)United Kingdom Retail Sales (Nov)Eurozone Total Trade Balance (Oct)Eurozone HICP (Nov, final)   Sign up for our Outrageous Predictions 2023 webinar - APAC edition: Wed, 14 Dec, 11.30am SGT Source:Saxo Spotlight: What’s on the radar for investors & traders for the week of 12-16 Dec? A flurry of central bank meetings from Fed to BOE to ECB, US/UK CPI, China’s reopening and Adobe earnings | Saxo Group (home.saxo)  
Crude Oil Sees Its Biggest Weekly Pull Back Since April

Crude Oil Sees Its Biggest Weekly Pull Back Since April

Saxo Bank Saxo Bank 12.12.2022 09:13
Summary:  In today's video: The Fed meets this week, but the US inflation print could move markets more as an average 3% move in the S&P500 has been seen in either direction on the day CPI has been released. Oil sees its biggest weekly pull back since April, dragging oil equities down. Stocks exposed to the Chinese consumer rally. Saxo’s China Consumer and Technology Basket of stocks is up the most this month. Australian employment data puts AUD on notice. Iron ore volatility could pick up ahead of Lunar New year         The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) are on edge for higher inflation The major US indices fell on Friday with the S&P500 down 0.7%, the Nasdaq 100 losing 0.6%, capping off a sour week with the S&P500 down 3.4% and the Nasdaq 100 down 3.6%. After oil prices posted their biggest weekly drop since April, Energy stocks were some of the biggest laggards last week; with Halliburton down 15% and Marathon Oil down 12%. Consumer spending stocks that may falter if US a recession occurs also fell the most, with stocks like Lululemon down 15% last week after downgrading holiday trade guidance. While EV giant Tesla fell 8%. The other theme that’s driving markets is that China is easing restrictions, so stocks exposed to China consumers are rallying; with Chinese internet stocks like Baidu up 5.4% and Pinduoduo rising 4% last week Why volatility in equites could pick up this week and what we learnt from prior inflationary read outs   Will the inflation read show CPI fell to 7.3%YoY in November as the market expects, down from 7.7% YoY? The risk is that inflation doesn’t fall as forecast, and that may likely push up bond yields and pressure equites lower. We saw this set-up play out on Friday. November’s producer price index showed wholesale prices rose more than expected, which spooked markets that this week’s CPI could be bleak. As such bonds were sold off on Friday, pushing yields up; with the 10-year bond yield rising 10 bps to 3.58%, while equities were pressure lower. Consider over the past six months, the S&P 500 has seen an average move of about 3% in either direction on the day US CPI has been released according to Bloomberg. We haven’t seen these moves since 2009. Also consider, the S&P 500 has fallen on seven of the 11 CPI reporting days this year. The world holds its breath for the Fed Reserve’s final interest rates decision of 2022. What do you need to know? And it could also be one of the biggest final catalyst for equites for 2022. On December 15, the Fed is expected to hike interest rates; by 50 bps (0.5%) with a similar move early next year. Forward commentary will be looked at, as consensus predicts rapid cutting of interest rates to begin after they peak in May 2023, because US unemployment is expected to rise and US GPD is expected to grind lower. But at Saxo, we think rates won’t be cut next year. So that could cause volatility, as markets may have gotten ahead of themselves. Meaning, if forward commentary is hawkish we could see further pull backs in equites. In Australia; this week the focus will be consumer confidence and employment data   There are a couple of economic read outs that could move the market needle, the ASX200 (ASXSP200.1) this week. Weakening confidence is expected; starting with Consumer Confidence for December (released on Tuesday), followed by Business Confidence for November. Employment reports are due on Thursday for November, and likely to show employment fell; 17,000 jobs are expected to be added, down from the 32,200 that were added in October. So focus will be on the AUD and a potential pull back if the data is weaker than expected. Iron ore equites to see volatility; China reopening talk vs shut downs pre lunar new year The iron ore (SCOA) trading at four month highs $110.80 rallying as China has been easing restrictions, plus there are whispers Chinese property developers could get more support, which would support demand for iron ore rising. However we mentioned on Friday, why iron ore could pull back, as buying volume appears slowing. So be mindful of potential pull back in iron ore pricing and mining equities. Secondly, consider seasonable halts of Chinese steel plants ahead of the Lunar New year holiday could occur. That said, restocking typically occurs 5-8 weeks before the holiday, but we think plants could be closed earlier, due to poor profits and weaker demand. This could cause volatility in iron ore and iron ore equities. So, keep an eye on iron ore majors, Vale, Fortescue Metals, Champion Iron, BHP and Rio as they could see profit taking after rallying ~25-55% from October.   For a weekly look at what to watch in markets - tune into our Spotlight. For a global look at markets – tune into our Podcast. Source: Video: US Inflation read generally causes 3% move in S&P500 on the day, Will iron ore pull back here? | Saxo Group (home.saxo)    
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

Assessment Of US Treasuries Has Also Improved As Interest Rates Have Risen

Ed Perks Ed Perks 11.12.2022 09:27
Yield is set to be a more important component of total return for investors during the next few years, according to Franklin Income Investors. Harnessing the power of duration Yield is set to be a more important component of total return for investors during the next few years as the “Fed Put” exerts less influence on markets. Ed Perks, CIO of Franklin Income Investors, analyzes the move higher for rates and spreads and shares his expectations for yields and total returns across the capital structure during 2023. The investment landscape heading into 2023 is very different to 12 months ago, when there really was no alternative to equities, and investors were locked into a desperate search for yield across all asset classes. The US Federal Reserve’s (Fed’s) singular focus on controlling inflation during 2022 resulted in an aggressive cycle of rate rises, which in turn tightened financial conditions, leading to a sharp rise in yields and spreads on fixed income assets. A year ago, yields on high-quality credit did not seem attractive to us, prospects for total returns were poor, and bonds were not acting as a diversifier. Today, we believe the same assets offer better total return potential than equities,1 while the positive correlation with stocks is also breaking down, allowing fixed income to offset equity market volatility. As a result, Franklin Income Investors (FII) continues to invest with a preference for fixed income, moving closer to a 60/40 split in favor of bonds over equities. Moving forward, our allocation decisions will be driven by what happens with interest rates and inflation during 2023. We believe the move higher in rates is likely almost done, but we expect a long pause from the Fed before any pivot, meaning our attention will be focused on the effect rate hikes have on the economy and inflation.The uncertainty lies in whether the lagged effect of tightening financial conditions and a more challenging growth environment results in a real pullback in fundamentals . Improved total return potential within fixed income Allocation within the fixed income asset class will also depend upon where markets go, although investment-grade (IG) credit is currently our preferred asset class in terms of total return, income and risk management. In a positive economic scenario, we believe these assets have the potential to make double-digit returns as rates move lower and spreads narrow, while they should also outperform other risk assets should fundamentals deteriorate. If IG corporate bond yields move back toward 6%, then, in our view, investors should consider increasing holdings in that sector at a faster pace, taken from either equities, high-yield (HY) bonds or US Treasuries.2 Yields on IG credit Have Become Incrementally More Attractive Relative to Equities Exhibit 1: Yield Spread Between US Equities and US IG CreditNovember 25, 2020–November 25, 2022   Source: Bloomberg, as of November 25, 2022. Past performance is not an indicator or guarantee of future results.   However, our assessment of US Treasuries has also improved as interest rates have risen, given they currently offer attractive yields and downside protection should a recession increase equity market volatility. When 10-year Treasury yields were around 2% they were unattractive to us, but extending duration to lock in yields at 4% is much more compelling from an income perspective. This means US Treasuries will form a core part of FII’s ongoing strategy into 2023. Elsewhere, the HY bond sector is, in our view, more resilient than many investors believe, absent a significant negative impact on corporate earnings. Most HY issues won’t need to be refinanced in the next few years, and therefore a recession in 2023 with a modest pullback doesn’t overly concern us. As a result, while the investment community focuses on whether spreads are wide enough to justify a move into credit, we see opportunities at current yields, which have shot up to levels not seen for 15 years. We don’t think spreads are likely to rise significantly, which means we are very comfortable being in the credit space, particularly at such low prices. Against this background, we believe it is a relatively straightforward call to add selectively to HY credit at the expense of higher volatility equity holdings that, in a recessionary scenario, should underperform credit. In a worst-case scenario, a prolonged period of higher rates or further tightening would eventually put pressure on over-levered companies that need to refinance their debt. Under those circumstances, it is possible to engage with public companies to help them refinance their debt on a private basis, however, we believe the opportunities for healthy returns in the public markets are currently so attractive that private investments would likely not be adequately compensated for the additional illiquidity premium. Managing equity uncertainty We still see opportunities for selective investment in equities to maximize yield and total return while navigating increased volatility. For equities to rally, we believe it would take a favorable trajectory around inflation and economic growth, while earnings would also need to remain relatively robust. We would also want to see the Fed pause rate hikes, move into a position to normalize rates, and get back to a neutral setting. Alternatively, there could be further downside for equities if the economy feels the impact of tightening in 2023 and earnings suffer. In our opinion, equity-linked notes (ELNs) offer a way to manage this uncertainty, while expanding the universe of stocks available for investment. ELNs enable investors to derive income from exposure to equities that offer little or no dividend and can be used in conjunction with common stocks to access both yield and price upside potential. These instruments can also be used to smooth volatility and hedge exposure. The power of duration In summary, we believe the investment environment during 2023 promises to provide much greater potential for yield and total return than we saw at the turn of 2022. In our analysis, locking in attractive yields through duration is the best way to achieve income goals, while investing in fixed income assets at attractive prices should deliver robust returns if rates fall and spreads narrow due to looser Fed policy. Additionally, we think higher-quality bonds offer significant downside protection should any recession prove deeper than expected. Elsewhere, in our opinion, broad equity exposure remains important should an improvement in economic sentiment trigger an equity market rally. Endnotes Exhibit 1 Exhibit 1  WHAT ARE THE RISKS? All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in an investment portfolio adjust to a rise in interest rates, the value of the portfolio may decline. Investments in lower-rated bonds include higher risk of default and loss of principal. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. In general, an investor is paid a higher yield to assume a greater degree of credit risk. The risks associated with higher-yielding, lower-rated debt securities include higher risk of default and loss of principal. Treasuries, if held to maturity, offer a fixed rate of return and fixed principal value; their interest payments and principal are guaranteed. Investments in equity-linked notes (ELNs) often have risks similar to their underlying securities, which could include management, market, and, as applicable, foreign securities and currency risks. In addition, ELNs are subject to certain debt securities risks, such as interest rate and credit risks, as well as counterparty and liquidity risk. Investments in equity index-linked notes (ILNs) often have risks similar to securities in the underlying index, which could include management risk, market risk and, as applicable, foreign securities and currency risks.
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

S&P 500 climbed 0.75%, Dow Jones gained over 0.5%. Nasdaq led the pack with 1.22% increase

Intertrader Market News Intertrader Market News 09.12.2022 10:54
DAILY MARKET NEWSLETTER December 9, 2022                 Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,312.00 +36.00 (+0.25%) Read the analysis 14,375.00 14,259.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,514.00 7,474.00     S&P 500 (CME) 3,970.00 +4.25 (+0.11%) Read the analysis 3,986.00 3,945.00     Nasdaq 100 (CME) 11,668.25 +22.75 (+0.20%) Read the analysis 11,750.00 11,555.00     Dow Jones (CME) 33,818.00 +15.00 (+0.04%) Read the analysis 33,935.00 33,660.00     Crude Oil (WTI) 72.16 +0.70 (+0.98%) Read the analysis 71.20 73.20     Gold 1,794.66 +5.522 (+0.31%) Read the analysis 1,803.00 1,785.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Thursday, U.S. stocks halted their decline. The S&P 500 rose 29 points (+0.75%) to 3,963 breaking an eight-session losing streak. The Dow Jones Industrial Average jumped 183 points (+0.55%) to 33,781, and the Nasdaq 100 was up 140 points (+1.22%) to 11,637.U.S. data showed that the latest initial jobless claims rose to 230,000 (vs 240,000 expected).Semiconductors (+3.11%), consumer services (+1.70%), and consumer durables & apparel (+1.58%) sectors gained the most, while telecoms services (-1.19%), energy (-0.47%), and automobiles (-0.40%) sectors remained under pressure.Nvidia (NVDA) jumped 6.51%, NXP Semiconductor (NXPI) rose 4.59%, and Marvell Technology (MRVL) was up 3.19%.U.S.-listed Chinese tech stocks posted gains as China appears to move away from restrict Covid measures. Baidu (BIDU) rose 5.02%, Alibaba (BABA) climbed 6.61%, and JD.com (JD) was up 3.28%.The U.S. Federal Trade Commission (FTC) filed a complaint seeking to stop the purchase of video game maker Activision Blizzard (ATVI) by Microsoft (MSFT). Activision Blizzard (ATVI) slipped 1.54%, while Microsoft (MSFT) closed 1.24% higher.The U.S. 10-year Treasury yield rebounded 6.9 basis points to 3.486%.European stocks showed a lack of momentum. The DAC 40 was little changed, while the CAC 40 dipped 0.20%, and the FTSE 100 was down 0.23%.U.S. WTI crude futures settled flat at $71.65 a barrel.Gold price added $3 to $1,789 an ounce.Market Wrap: ForexThe U.S. dollar softened against other major currencies. The dollar index declined to 104.79.EUR/USD jumped 51 pips to 1.0557.USD/JPY was flat at 136.62.GBP/USD rose 35 pips to 1.2238.AUD/USD gained 47 pips to 0.6772.USD/CHF dropped 48 pips to 0.9360, and USD/CAD fell 70 pips to 1.3583.Bitcoin advanced over 2% to $17,200.Morning TradingIn Asian trading hours, USD/JPY fell to 135.82. The Bank of Japan reported that the M2 money stock grew 3.1% on year in November (vs +3.0% expected).China’s data showed that consumer prices increased 1.6% on year in November (vs +1.8% expected). USD/CNH declined to 6.9588, while AUD/USD rose to 0.6787.EUR/USD traded higher to 1.0578, and GBP/USD climbed to 1.2272.Gold price advanced further to $1,794 an ounce.Bitcoin held at levels above $17,200.Expected TodayIn the U.S., producer prices are expected to add 0.3% on month and 7.3% on year in November.The University of Michigan consumer sentiment index is expected to dip to 56.4 in December.           UK MARKET NEWS           Berkeley Group, a property development company, posted half-year profit before taxation of 285 million pounds (vs 291 million pounds a year earlier), adding: "Revenue of 1,200.7 million pounds in the period (2021: 1,220.7 million pounds) arose primarily from the sale of new homes in London and the South East. (...) Basic earnings per share have decreased marginally to 200.4 pence per share (2021: 201.7 pence per share), (...) 2,080 new homes (2021: 1,828) were sold across London and the South East at an average selling price of £560,000 (2021: £647,000) reflecting the mix of properties sold in the period."Associated British Foods, a packaged food company, issued a trading update: "We continue to expect the aggregate profit of our Food businesses to be ahead of our last financial year. (...) For the full year, we continue to expect significant growth in sales for the Group, and adjusted operating profit and adjusted earnings per share to be lower than the previous financial year."Anglo American, a global mining giant, posted an investors update: "Anglo American to continue its improvement and growth momentum: 2022 Production down by c.3%: Quellaveco copper ramp-up and strong diamond production, offset by ore grades in Chile and lower production from Kumba and PGMs (...) Unit costs up c.16% (...) 2023 Production expected to increase by 5% as Quellaveco ramps up (...) Unit costs expected to increase by c.3%: inflation expected to moderate; and the benefit of Quellaveco (...) 2024 Production expected to increase by 5% (...) 2025 Production expected to be in line with 2024."Oil & Gas, telecom and basic resources shares fell most in London on Wednesday.In the telecommunications sector, BT Group (-3.72% to 112.55p) reached a new 3-month relative low against the FTSE 100.From a relative strength vs FTSE 100 point of view, BAE Systems (+1% to 831.4p) crossed above its 50-day moving average.From a technical point of view, BAT (-3.09% to 3305p) crossed under its 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   08:30 PPI YoY (Nov) 7.3% HIGH     08:30 PPI MoM (Nov) 0.3% HIGH     08:30 Core PPI MoM (Nov) 0.1% MEDIUM     08:30 Core PPI YoY (Nov) 6.1% LOW     10:00 Michigan Consumer Sentiment Prel (Dec) 56.4 HIGH     10:00 Wholesale Inventories MoM (Oct) 0.8% MEDIUM     10:00 Michigan Inflation Expectations Prel (Dec) 4.8% LOW     10:00 Michigan Current Conditions Prel (Dec) 58 LOW     10:00 Michigan 5 Year Inflation Expectations Prel (Dec) 2.9% LOW     10:00 Michigan Consumer Expectations Prel (Dec) 55 LOW     12:00 Fed Quarterly Financial Accounts   MEDIUM     12:00 WASDE Report   LOW     13:00 Baker Hughes Total Rig Count (Dec/09)   HIGH     13:00 Baker Hughes Oil Rig Count (Dec/09)   LOW                                     NEWS SENTIMENT           Standard Chartered PLC STAN : LSE 591.40 GBp -0.20% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   BP PLC BP. : LSE 463.95 GBp -3.52% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Deutsche Bank AG DBK : XETRA 10.022 EUR -0.02% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   British American Tobacco PLC BATS : LSE 3,305.00 GBp -3.02% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   AstraZeneca PLC AZN : LSE 11,316.00 GBp +1.23% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: the bias remains bullish.   Pivot: 1.0540   Our preference: Long positions above 1.0540 with targets at 1.0595 & 1.0625 in extension.   Alternative scenario: Below 1.0540 look for further downside with 1.0520 & 1.0490 as targets.   Comment: The RSI shows upside momentum.                     Euro Stoxx 50 (Eurex)‎ (Z2)‎ Intraday: limited upside.   Pivot: 3923.00   Our preference: Long positions above 3923.00 with targets at 3947.00 & 3961.00 in extension.   Alternative scenario: Below 3923.00 look for further downside with 3911.00 & 3900.00 as targets.   Comment: The RSI is bullish and calls for further advance.                     Brent (ICE)‎ (G3)‎ Intraday: key resistance at 77.80.   Pivot: 77.80   Our preference: Short positions below 77.80 with targets at 75.70 & 74.50 in extension.   Alternative scenario: Above 77.80 look for further upside with 79.10 & 80.40 as targets.   Comment: As long as the resistance at 77.80 is not surpassed, the risk of the break below 75.70 remains high.        
Rivian Break Down Of Joint Venture Negotiations With Mercedes | Amgen Inc. Begins Action to Acquire Pharmaceutical Company Horizon Therapeutics

Rivian Break Down Of Joint Venture Negotiations With Mercedes | Amgen Inc. Begins Action to Acquire Pharmaceutical Company Horizon Therapeutics

Kamila Szypuła Kamila Szypuła 12.12.2022 12:20
Rivian discontinues its partnership with Mercedes-Benz Group and Amagon Inc begins merger talks with Horizon Therapeutics. Read more: US Government Scientists Have Made A Breakthrough | Elon Musk And Shutting Down IP Addresses Of Known Bad Actors On Twitter| FXMAG.COM Joint Venture Negotiations In September, Rivian and Mercedes-Benz Group said they were entering into negotiations for a potential joint venture at a Mercedes plant in Poland that would produce vans for both automakers. Rivian, in a statement early Monday, said the breakdown of joint venture negotiations with Mercedes comes after reassessing growth opportunities and focusing on projects that promise the best "risk-adjusted" return on investment. “We’ve decided to pause discussions with Mercedes-Benz Vans regarding the Memorandum of Understanding we signed earlier this year for joint production of electric vans in Europe,” Rivian CEO RJ Scaringe said. The CEO of Rivian, said the startup is focusing on projects that give it the best return on investment in the short term. The startup said it believes its current sales of trucks and SUVs to retail customers and the van deal it has with Amazon.com Inc. , are best positioned to increase profitability in the near future. Rivian said he would be willing to make a deal with Mercedes at a later date. Rivian went public last November amid a flurry of initial bids by bustling EV startups promising to turn the auto industry upside down. The Irvine, California-based company was briefly worth more than Ford Motor Co. Capital markets have since deteriorated for many of these firms, including Rivian. The company's shares are down about 84% from the peak. Not only is the company looking bad on the stock markets, the internal situation reflects this as well. Rivian sometimes had difficulty carrying out his plans. In March, the company cut its production guidelines to around 25,000, citing parts shortages and supply chain issues. The company reported a total net loss of $5 billion in the first three quarters of this year. Rivian has laid off about 6% of its staff this summer and cut expenses in an effort to save cash. The company's cash stack - about $17 billion at the end of March - shrunk to $13 billion at the end of September, the last period for which information is available. What's more, the start-up also angered customers by deciding to raise the prices of its products, even those reserved. Rivian quickly reversed the price increase for existing reservation holders, but the lower selling cost of those early orders contributed to losses this year. Rivian's share price is approaching its lowest level of the year. RIVN is currently trading at 27,290. The biggest merger in year is in horizon Horizon develops drugs to treat rare autoimmune and severe inflammatory diseases that are currently sold primarily in the United States. Its biggest drug, Tepezza, is used to treat thyroid disease, a disease characterized by progressive inflammation and damage to the tissues around the eyes. Last year, revenue from Tepezza more than doubled, increasing Horizon's overall net sales by 47% to $3.23 billion. Horizon said the drug's annual global net sales are expected to eventually reach more than $4 billion as the company looks to gain approval to sell the drug in Europe and Japan. The company is listed on Nasdaq but is based in Ireland with operations in Dublin, Deerfield, Illinois, and a new facility in Rockville, Maryland. Horizon said last month it was interested in acquiring from Amgen, Sanofi and Johnson & Johnson. Johnson & Johnson later said it had dropped out. The US biotech firm was the last of three competitors standing in the auction for Horizon, people said, after French drugmaker Sanofi SA said on Sunday it was being sidelined. For this reason, Amgen Inc. is already in advanced talks regarding the purchase of the pharmaceutical company Horizon Therapeutics. The merger is likely to be valued at more than $20 billion. According to Jefferies & Co., the Horizon acquisition could bring Amgen approximately $4 billion in new revenue by 2024. The deal for Horizon would likely be the largest global healthcare acquisition in 2022, surpassing the Johnson & Johnson-Abiomed tie-up. From August to the first half of November, HZNP's share price was at its lowest of the year, but then increased, and the current price level is around 97. Amgen Inc prices have been dropping recently and the current level is 285.57. Chart of Horizon Therapeutics shares Chart of Amegon Inc shares Source: wsj.com, finance.yahoo.com
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Analytical Report – TIM SA – WSE:TIM

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 13.12.2022 08:00
We maintain our opinion that TIM is a good investment for difficult times in the economy. In our opinion, a proven business model (asset light), a safe balance sheet (net cash) and a competent Management Board allow us to expect that the company will also use the coming economic turmoil to further strengthen its market position. We expect a deterioration in financial results in 2023-24, but cash flows should remain stable. This will be conducive to maintaining transfers to shareholders. 3LP's ambitious development path may weigh on consolidated results. Bearing in mind the deterioration of the macroeconomic environment and the worse results of the logistics business, we have lowered our forecasts for 2023-24. Lower forecasts, changes in the parameters of the DCF model and valuation ratios of companies from the comparative group resulted in a reduction in the final valuation. The determined current value of the company (PLN 37.9/share) still gives a large growth potential. Slowdown is an opportunity for TIM We expect a decline in activity in the renovation and construction industry and industrial investments in the coming quarters. As a consequence, TIM's sales and margin will be lower. In our opinion, the company is well prepared for the downturn, both financially and operationally. In addition, the company's board of directors has great competence in running a business in difficult market conditions. We hope to strengthen TIM's market position at the expense of smaller competitors. Skillful management of working capital The company's management board pursues a very conservative liquidity management policy. Active warehouse management and quick adjustment of its level to forecasted sales is a characteristic feature of TIM. We believe that such an approach should work primarily in more difficult market conditions. Given the reduced sales dynamics, we expect a decrease in the value of inventories and freeing up some cash resources. Transfers to shareholders maintained TIM is a dividend company and we assume that it will remain so in the future. Currently, we identify two directions of transfer of funds to shareholders: dividend and buyback. The financial capacity allows us to maintain both of these streams in the years 2022-2024, and the recently launched share buyback should offset the projected decrease in the value of the dividend paid out. The development of the logistics segment costs money The 3LP company, despite an unsuccessful attempt to issue shares in order to obtain financing for new projects, did not stop the dynamic development. The increase in warehouse space will generate an increase in costs, which will be fully covered by revenues only after some time. We expect that in 2023-2024 the subsidiary responsible for the logistics business may generate negative results at the net level, thus affecting the reduction of consolidated profit. We estimated the value of TIM shares based on the following valuation methods: DCF (in total for the entire group: PLN 31.9) and comparative (separately for the commercial business: PLN 33.8 and logistics: PLN 8.0), which, after weighing the above valuations, allowed set the present value at PLN 37.9. VALUATION We calculated the value of one share of TIM SA as the average of the comparative valuation and DCF, with a weight of 50% each. On this basis, we set the current value of the shares at PLN 37.9. With the comparative approach, we valued the commercial and logistics business separately (in both cases using the ratio analysis), and the sum of the obtained values contributed to the total value. When selecting the group of companies for the comparative analysis, in the case of the commercial segment, we decided on domestic companies (operating in the wholesale and / or e-commerce segment) and foreign companies (distribution of products from the electrical engineering segment), and in the case of the logistics segment, due to the lack of equivalents on the WSE, we chose foreign entities. The lower valuation compared to our previous report is mainly due to the change in the parameters of the DCF model and lower ratios for peer companies. At the same time, we raised our forecasts for both the retail segment (TIM SA) and the logistics segment (3LP), which partially compensated for the decrease in valuation. Changes in forecasts are described later in the report. DCF VALUATION Assumptions: We rely on our own forecasts of consolidated results presented in this report, The value of cash flows discounted as at the date of publication of the report, Net debt as at 31/12/2021 in the amount of PLN 73 million (including lease liabilities under IFRS 16), Long-term growth rate after the forecast period equal to 0%. Share of equity in financing assets at the level of 80%. Effective tax rate of 20%. Risk-free rate of 6.8% (previously 6.7%), risk premium of 7.2% (previously 5.1%), beta of 1.0 (unchanged). Analyst: MichaÅ‚ Sztabler Equity michal.sztabler@noblesecurities.pl +48 22 244 13 03 GPW’s Analytical Coverage Support Programme 3.0  
FX Daily: Upbeat China PMIs lift the mood

China’s New Aggregate Financing Increased Less Than Expected | Tesla And Rivian Shares Fell

Saxo Bank Saxo Bank 13.12.2022 09:09
Summary:  U.S. equities had a broad-based rally ahead of the CPI data with energy leading the gains. USDJPY bounced, approaching 138, as US yields moved higher. Crude oil prices rose snapping a 5-day losing streak amid supply worries from Keystone pipeline. Traders took profits in Hong Kong and Chinese stocks, selling Chinese property, technology and EV names. All eyes on November US CPI now where a softer print is generally expected but room for an upside surprise remains. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) advanced ahead of the CPI report Softer prints in the one, three, and five years ahead inflation expectation numbers in the New York Fed’s Consumer Expectations Survey on Monday boosted risk-on sentiments ahead of the release of the most watched CPI report on Tuesday. The S&P500 bounced from its 100-day moving average, gaining 1.4%. All 11 sectors of the benchmark advanced, with energy, utilities, and information technology leading the gains. Valero Energy, surging 5.2%, was the best performer in the S&P500. The tech-heavy Nasdaq 100 rose 1.2%. Tesla (TSLA:xnas) shed 6.3%, falling to the stock’s lowest level in two years on concerns about suspending output in stages at his Shanghai factory ahead of the Lunar New Year and Musk pledged more Tesla shares for margin loans. US Treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) rose after a weak 10-year notes auction In a thin-volume session ahead of the CPI report on Tuesday and the FOMC on Wednesday, yields on Treasuries were 1bp to 3bps higher. The auction of USD32 billion of 10-year notes, awarded at 3.625%, 3.7bps cheaper than at the time of the auction, was the worst since 2009.  The one, three, and five years ahead consumers’ inflation expectations in the New York Fed’s Consumer Expectations Survey fell to 5.2%, 3%, and 2.3% in November from 5.7%, 3.1%, and 2.4% respectively in October. The yields on the 2-year notes and 10-year notes added 3bps each to 4.38% and 3.61% respectively. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) consolidated ahead of key events Ahead of two key events, the FOMC meeting in the U.S. and the Central Economic Work Conference (CEWC) in China, investors in Hong Kong and mainland Chinese stocks took profits and saw the Hang Seng Index 2.2% lower and the CSI300 sliding 1.1%. Chinese property developers and management services, technology, and EV stocks led the charge lower. Country Garden Services (06098:xhk) tumbled 17% after the property services company’s Chairman agreed to sell more than HKD5 billion worth of shares at a 10.9% discount. Longfor (00960:xhkg), The Hang Seng Tech Index dropped by 4%, with Meituan (03690:xhkg) declining by 7%. Li Auto (02015:xhkg) tumbled 12% after reporting larger losses and a large gross margin miss. In A shares, property and financials stocks were top losers while pharmaceuticals gained. FX: USDJPY heading to 138 ahead of US CPI release The US dollar remained supported ahead of the big flow of key data and central bank meetings later in the week. The modest run up higher in US Treasury yields, along with higher oil prices, brought back some weakness in the Japanese yen. USDJPY reached in sight of 138 and the US CPI release today will be key for further direction. EURUSD remained capped below the key 1.06 handle, but a break of that if it was to happen will open the doors to 1.08. NZDUSD eying a firmer break above 0.64 but would possibly need help from CPI for that. Crude oil (CLF3 & LCOF3) prices gain further on China’s easing while Keystone pipeline remains shut Crude oil prices rose on Monday after a week of heavy losses on demand concerns and fading China reopening. Prices were underpinned by further easing of China’s restrictions despite concerns earlier in the week from a rapid surge in cases. Despite reports that the Keystone pipeline was being partially reopened, it remains completely shut on Monday which suggests a potential drop in storage levels at Cushing, Oklahoma, the WTI delivery hub. WTI futures rose to $74/barrel, while Brent touched $78.50. The market awaits news from Russia on whether it will make good on its threat to cut supply to price cap supporters, while the focus will also turn to US CPI today and the FOMC decision tomorrow, as well as the oil market reports from OPEC and IEA.   What to consider? Stronger UK GDP growth but clouded energy outlook, expect more volatility Some respite was seen in UK’s growth trajectory as October GDP rose 0.5% M/M after being down 0.6% M/M last month’s due to the holiday for Queen’s funeral and a period of national mourning. However, the UK may already be in a recession and the outlook remains clouded which suggests there isn’t enough reason for Bank of England to consider anything more than a 50bps rate hike this week. Energy debate continues to run hot and create volatility in gas prices, after weaker wind generation led to talks of refiring the reserve coal plants, but the request was cancelled later on Monday as wind generation rose. The situation continues to highlight the vulnerability of the energy infrastructure due to lack of baseload, and a bigger test probably lies ahead in 2023. Focus will be on energy companies amid the cold snap in the northern hemisphere with coal plants on standby. Agriculture commodities also a focus Australia’s ASX200 (ASXSP200.1) is expected to have a positive day of trade on Tuesday, as well as Japan’s market, while other Asia futures are lower. In Australia, consumer and business confidence are due to be released. In equites, focus will be on energy commodities and equities, given weather forecasts show a deep chill is descending on the northern hemisphere, and threatening to erode heating fuel stockpiles. Natural gas futures surged, while Oil rose 3% $73.17 a barrel. Energy stocks to watch include Australia’s Woodside, Beach Energy and Santos, Japan’s Japan Petroleum Exploration, Eneos, JGC, Chiyoda and Hong Kong-listed PetroChina, CNOOC and China Oilfield Services. Separately, coal futures are also higher, with Asia set to face a coal winter, and coal plants were previously asked to be on high alert in the UK, with snow blanketing parts of the UK. For coal stock to watch, click here. Separately, wheat prices rose 2.8% on expectations supply could wane; so keep an eye on Australia’s wheat producers GrainCorp, and Elders. Elsewhere, Australian beef output is poised to ramp up in the first half of next year, as the herd continues to rebuild. Australia’s Rural Bank agriculture outlook expects increased slaughter rates, and beef production to rise 5% in the first half, (mind you that’s well below average). So keep an eye on Elders, which helps sell and buy livestock, and Australian Agricultural Co – Australia’s largest integrated cattle and beef producer. EV car makers dominate headlines; revving up competition, despite concerns demand could soften Tesla shares fell 6.3% Monday, to its lowest level since November 2020, making it the worst performer by market cap. TSLA shares have fallen about 54% this year. TSLA is reportedly suspending output at its Shanghai electric car factory in stages, from the end of the month, until as long as early January, amid production line upgrades, slowing consumer demand and Lunar New Year holidays. Most workers on both the Model Y and Model 3 assembly lines won’t be required in the last week of December. Rivian shares also fell 6.2% on reports its scrapping plans to make electric vans in Europe with Mercedes. Instead, Rivian will focus on its own products. While Mercedes-Benz says it will continue to pursue the electrification of its vans and its shares closed almost flat in Europe. VW shares were also lower in Europe, despite it announcing plans to increase market share in North America to 10% by 2030 from 4%. VW wants to produce more electric SUV models in the US; and produce ~90,000 VW’s ID.4 model in 2023 in America. NY Fed consumer expectations survey shows slowing inflation, but.. NY Fed’s Survey of Consumer Expectations indicated that respondents see one-year inflation running at a 5.2% pace, down 0.7 percentage point from the October reading. Expectations 3yrs ahead fell to 3.0% from 3.1% and expectations 5yrs ahead fell to 2.3% from 2.4%. However, it is worth noting that inflation expectations remain above fed’s 2% target and unemployment and wage data was reportedly steady. Softer US CPI to offer mixed signals and considerable volatility Last month’s softer US CPI report was a turning point in the markets and inflation expectations have turned markedly lower since then. Consensus is looking for another softer report in November, with headline rate expected at 7.3% YoY, 0.3% MoM (from 7.7% YoY, 0.4% MoM) while the core is expected to be steadier at 6.1% YoY, 0.3% MoM (from 6.3% YoY, 0.3% MoM). While the case for further disinflationary pressures can be built given lower energy prices, easing supply constraints and holiday discounts to clear excess inventory levels, but PPI report on Friday indicated that goods inflation could return in the months to come and wage inflation also continues to remain strong. Easing financial conditions and China’s reopening can be the other key factors to watch, which could potentially bring another leg higher in inflation especially if there is premature easing from the Fed. Shelter inflation will once again be key to watch, which means clear signs of inflation peaking out will continue to remain elusive. China’s aggregate financing and RMB loans weaker than expectations In November, China’s new aggregate financing increased less than expected to RMB1,990 billion (Bloomberg consensus: RMB2,100bn) from RMB908 billion in October. The growth of total outstanding aggregate financing slowed to 10.0% Y/Y in November from 10.3% in October. New RMB loans also came in weaker than expected at RMB1,210 billion (Bloomberg consensus: RMB1,400bn; Oct: RMB615.2bn). Despite the push from the authorities to expand credits, loan growth remained muted as demand for loans were sluggish. Japan and the Netherland joining the U.S. in restricting semiconductor equipment exports to China According to Bloomberg, Japan and the Netherland have agreed in principle with the U.S. to join the latter in restricting the exports of advanced chipmaking machinery and equipment to China. The decisions have yet to be confirmed but it is expected that announcements will be made in the coming weeks.     Detailed US CPI and FOMC Preview – read here. Sign up for our Outrageous Predictions 2023 webinar - APAC edition: Wed, 14 Dec, 11.30am SGT For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: US CPI day, expect considerable volatility – 13 December 2022 | Saxo Group (home.saxo)
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

The Fed Does Not Fear A Recession Or Prolonged Bear Market In Equities

Saxo Bank Saxo Bank 13.12.2022 09:19
Summary:  The Fed is moderating the pace of rate hikes into 2023 but inflation is likely to be stubbornly elevated. The combination of these creates an environment in which Treasury Inflation-protected securities (TIPS) could potentially be an attractive investment option. Declines in real interest rates will see TIPS prices higher and their principal value and coupon amounts (while the coupon rates are constant) will rise together with the consumer price index. The Fed is poised to downshift as it believes that it must have got to somewhere after running so fast As our previous Fixed Income Update suggests, the modus operandi of the Fed has arguably shifted to risk management which aims at balancing the risks of inflation and the yet-to-be-fully-felt impact of monetary tightening on the real economy. Fed Chair Powell signals in his speech at the Brookings Institution on November 30. 2022 that being sufficiently restrictive, in his mind, is likely just “somewhat higher” than the 4.50%-4.75% (mid-point 4.625%) terminal rate in the FOMC’s September projections and he argues for “moderating the pace” of rate increases and “holding policy at a restrictive level”, not keep hiking, “for some time”. Powell acknowledges the fact that the employment, wage growth, and core services ex-housing inflation are all too strong to confidently foretell a victory in fighting inflation anytime soon and admits that the Fed has “a long way to go in restoring price stability”. Nonetheless, resorting to the notion of impact lags of monetary policy, Powell argues that it “makes sense” to downshift rate increases. This may mean that after a 50bp increase this Wednesday, as being well telegraphed and fully priced in, and probably another 50bps to 75bps in total in the February and March 2023 meetings. Powell has apparently on purpose been preparing the market that the Fed may pause even without seeing inflation falling significantly towards the 2% target as he and the November FOMC minutes emphasized the time lags of monetary policies and the importance of financial stability. Since August 2020, the Fed has adopted a new set of a new monetary policy framework that redefines its 2 percent inflation goal not as a ceiling but as inflation averaging 2 percent over time, and the unspecific “average over time” gives the Fed room to maneuver. The Fed may remain behind the inflation train for a prolonged period Alice looked round her in great surprise. “Why, I do believe we’ve been under this tree the whole time! Everything’s just as it was!” “Of course it is,” said the Queen, “what would you have it?” “Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else—if you ran very fast for a long time, as we’ve been doing.” “A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” “I’d rather not try, please!” said Alice."  Lewis Carroll, Through the Looking-Glass. After running as fast as it can with 375bp hikes including four 75bp hikes, since March 2022, the Fed ends up in a situation where inflation rates are not accelerating further but stay at elevated levels and are not coming down. Inflation rates as represented by the key measures on which the Fed is focusing are more or less at the same place as when the Fed started raising rates nine months ago (Figure 1). In his Brookings Institution speech, Powell highlighted the personal consumption expenditure core services ex-housing index being a key indicator for the future path of inflation because he is least confident for this component to fall, as opposed to prices of core goods and costs of housing services.   Figure 1. U.S. inflation rates; Source: Saxo, Bloomberg Likewise, the three measures of wage growth to which the Fed refers are at basically the same place as the Fed start raising the Fed Fund target rate in March 2022 (Figure 2). Elevated wage growth rates tend to fuel inflation, and high inflation raises demand for higher wages. Figure 2. U.S. wage growth; Source: Saxo, Bloomberg While the Fed may not have yet caught up with the runaway inflation train even after running very fast since March this year, it is signaling that it wants to switch to a low gear and hope that the cumulative rate hikes working through the proverbial impact lags, plus the ongoing quantitative tightening will work their wonder in bringing down inflation. The 2-year yield has hit a floor and may bounce As inflation remain elevated, the Fed can downshift the pace of rate hikes but does not have room to pause or cut rates in the next few meetings. Therefore, three-month T-bill rates (currently at 4.23%) will become a floor to the 2-year yield. Unless the Fed’s next move is a rate cut, which will not be the case, 2-year yields will unlikely fall below the yield of 3-month Treasury bills. As illustrated in Figure 3, during the five times over the past 30 years when 2-year yields fell below 3-month yields, the next move by the Fed was cutting rates. When the Fed was not about to cut rates, yields on the 2-year notes did not fall below those of the 3-month bills. When 2-year notes are yielding only 4.33%, they offer little investing value. While we are expecting bonds to be a valuable asset class to have in a portfolio in 2023, we caution investors to be patient and look for a better entry level. Figure 3. 3-month T-bills vs 2-year T-notes spread; Source: Saxo, Bloomberg Without a recession, the value at the long end of the yield curve is stretched At Saxo, it is our view that the U.S. is not entering into a recession. Without a recession that drags down inflation and pushes up unemployment rates substantially and therefore brings about a series of rate cuts, the term premium is unlikely to stay so negative. In other words, investors will demand higher yields to compensate for the risks of owning long-term bonds. This is particularly true when the interest rate volatility is high. Higher implied volatility of treasury yields demands higher term premiums, i.e. higher long-term yields relative to short-term yields. Figure 4 plots the 3-month Treasury yield versus the 10-year Treasury yield spread against the ICE BofA Merrill Lynch Option Volatility Estimate (MOVE) Index. The divergence between the inversion of the yield curve and the elevated level of the MOVE index is unusual and may point to pressure for yields on 10-year notes to go up. Figure 4. 3-month T-bills vs 10-year T-notes spread, Implied volatility of Treasury yields; Source: Saxo, Bloomberg Powell does not want to see bond yields rising too fast and too much from here The Fed does not fear a recession or prolonged bear market in equities. It may welcome both as they help the Fed strive to dampen the development of a wage-price spiral and tighten financial conditions. It is the functioning of the Treasury market that is the elephant in the room and keeps Powell up at night. In the Fed’s own words in its November FOMC minutes, the U.S. Treasury market is important “for the transmission of monetary policy, for meeting the financing needs of the federal government, and for the operation of the global financial system. The FOMC participants noted that “the value of resilience of the market for Treasury securities was underlined by recent gilt market disruption.” In its Global Financial Stability Report Oct 2022, the IMF warns about poor market liquidity in government bond markets as quantitative tightening “leaving more of these bonds in private hands, which could translate into a shallower pocket to absorb shocks and therefore higher liquidity premiums and lower market liquidity.” As the total amount of outstanding Treasury securities has surged by seven times from USD3.2 trillion in 2002 to USD23.7 trillion in November 2022, the average daily turnover of the Treasury market has less than doubled during the same period.  As a result, the average daily turnover as a percentage of the amount of outstanding Treasury securities has declined from 11.6% to 2.6% over the past 20 years (Figure 5). Figure 5. Average daily turnover of Treasury securities as % of outstanding Source: Saxo, Securities Industry and Financial Markets Association Using the deviation of the quoted prices of individual securities from the fair-value curve as a proxy for market liquidity (Figure 6), the liquidity of the Treasury market has drastically deteriorated and stays currently at an elevated level similar to those in March 2020 when the Fed decided to come to the rescue and start a new round of open-ended buying of Treasury securities, i.e. quantitative easing.   Figure 6. Bloomberg U.S. Government Securities Liquidity Index; Source: Saxo, Bloomberg Both the Fed and the Treasury Department will do yield curve control if needed What if inflation does not come down and raising interest rates not “somewhat higher” but much higher, together with quantitative tightening, risk draining market liquidity and breaking the Treasury securities market? Not speculating on the political dynamic between the Fed, the White House, and Congress, the Federal Reserve Act of 1913, under which the Fed operates, provides that: The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.                                                                           Section 2A. of the Federal Reserve Act The notion of moderate long-term interest rates is a goal imposed on the Fed by law, though the Fed has certain leeway to decide on what “moderate” is. The Fed usually talks about a “dual mandate” of monetary policy without mentioning the third one because the Fed considers that “an economy in which people who want to work either have a job or are likely to find one fairly quickly and in which the price level (meaning a broad measure of the price of goods and services purchased by consumers) is stable creates the conditions needed for interest rates to settle at moderate levels”, without the need to define what “moderate levels” are. It may not be the case when bond investors become fed up with the elevated inflation rates and a Fed not willing to run any faster than what it has done to keep up with inflation in a liquidity-strained Treasury market. It was alarming when Treasury Secretary Janet Yellen warned publicly about “a loss of adequate liquidity in the [U.S. Treasury securities] market” in October. As the Fed is busy trimming its holdings of Treasury securities at a pace of USD95 billion a month as qualitative tightening, Secretary Yellen is worried enough to prepare to open her wallet and buy back Treasury securities. In October, the Treasury Borrowing Advisory Committee asked around primary dealers about their responses if the Treasury Department putting in place a debt management program to buy back long-term treasuries and said in its report in November 2022 that the Treasury Department “should continue to gather information as to the benefits and risks” of bond buybacks. The move highlights the Treasury Department’s concern about its costs and even abilities to fund the U.S. Federal Government’s budget deficits through issuing Treasury securities and the amount of federal debt held by the public as a percentage of U.S. GDP has ballooned to nearly 100% this year and is heading towards 110% by 2032 (Figure 7), surpassing the peak at the end of the Second World War. It was noteworthy to remind our readers that from 1942 to 1951, the Fed implemented yield curve control and capped the Treasury long-term bond yield at 2.5% to help the Treasury Department finance the federal government at low interest rates and bring debt down. Figure 7: U.S Federal Debt Held by the Public; Source: Congressional Budget Office (2022) Options for Reducing the Deficit, 2023 to 2032. P.12. file:///C:/Users/WENW/OneDrive%20-%20Saxo%20Bank%20AS/Documents/research/bonds/58164-budget-options-large-effects.pdf Elevated inflation and Fed downshift: TIPS may do well in this environment The total return on Treasury inflation-protected securities (TIPS) tends to outperform that of nominal bonds when real yields are falling and the Consumer Price Index for All Urban Consumers (CPI-U) is rising or simply stays at elevated levels higher and more persistently than previously expected. TIPS are quoted and traded in real yields that can be positive or negative. When the real yield rises, the price of TIPS falls; when the real yield falls, the price of TIPS rises. The most unique feature of TIPS is the principal value varies and is indexed to the CPI-U. The index ratio is calculated by the CPI-U index value published three months before the settlement date divided by the CPI-U index value as of the issuance date of the TIPS. For days during the month, linear interpolation of the monthly CPI-U indices is used. The Treasury Department publishes the updated index ratios for all TIPS issues on its website. When the CPI-U index value rises, i.e. inflation is positive, the principal value of TIPS will rise by the same percentage. When the CPI-U index value falls, i.e. inflation is negative, the principal value of TIPS will fall. The coupon rate of a TIPS is constant and does not change over the life of the bond. However, the coupon payment will change over time proportional to the change in the principal value. Therefore, the principal and coupon cash flows, that the investor receives, are protected from inflation. What is not protected is a rise in the real yield of TIPS that reduce the quoted price of the bond. When inflation is positive and even increasingly positive but the real yield is rising fast, the increase in the inflation-indexed principal may not be sufficiently large to offset a decline in bond price and the investor ends up with a loss in total return. From March, the month the Fed started raising rates, to October 2022, the TIPS yield swung dramatically from negative to positive as the Fed raised interest rates aggressively. The 10-year TIPS yield soared from minus-1.0% on March 1, 2022, to positive 1.6% on October 31, 2022, a 2.6% or 260bp movement which caused the 10-year TIPS to fall 21.4% in price. The rise in principal value contributed 5%. The net loss over that eight months was 16.5%. Rising inflation is not enough to generate a positive return for TIPS investors if the Fed aggressively pushes up real interest rates like it did this year. Many investors asked why TIPS lost money in most of 2022 through October and the 260bps rise in the real yield is the answer. The investment environment has become more favorable for TIPS since November 2022 when the Fed signaled to the market that it will downshift the tightening pace even before inflation falls substantially. In Figure 8, the green, light blue, and dark blue lines are breakeven inflation rates implied by the difference between yields on nominal Treasury note yields and the yields on TIPS, which are real yields. The bond market is pricing in future inflation at very near to the Fed’s 2% target as investors believe that the Fed will be able to bring down inflation towards 2%. In a combination of stubbornly high inflation and the Fed’s downshift in the pace of tightening, the line of least resistance for breakeven inflation is going upward, approaching the elevated actual inflation and away from 2% rather than falling below 2%.  Figure 8. Breakeven inflation rates implied versus CPI-U % change Y/Y; Source: Saxo, Bloomberg The breakeven inflation is the difference between nominal Treasury yields and TIPS yields. As inflation turns out to be more persistent into 2023, nominal bond yields are likely to bounce from this current trough level and rise to test the October 4.34% high in yield. However, given the Fed is mindful of the liquidity in the Treasury securities market and not to disrupt its smooth function, the rise in yields will be measured and much behind the rate of inflation. The aggressive pace of raising interest rates was something for 2022 and will unlikely be repeated in 2023. In this environment, for the breakeven inflation to rise, TIPS yields will probably need to fall. That will give TIPS a sweet spot of elevated inflation and at the same time declining real yield. Currently, 5-year TIPS are at 1.44% and 10-year TIPS are at 1.31% (Figure 9) and have room to fall in yield and rise in price. On top of that, the principal of TIPS is rising at the same rate as inflation as it is indexed to the CPI-U. Current inflation assumptions used for index factor calculation are around 8% p.a. Figure 9. Yields on 5-year and 10-year TIPS; Source: Saxo, Bloomberg In Figure 10 below, a list of TIPS is shown for illustration purposes.    Figure 10: Examples of TIPS on the Saxo trading platform for illustration purposes, not as recommendations; Source: Saxo Key Takeaways: Inflation is not coming down as much as the market is hoping for in 2023 Despite elevated inflation, the Fed is going to moderate its tightening pace The Fed and the Treasury Department are mindful of keeping long-term interest rates at moderate levels Nominal bond yields may bounce from the current low levels but be slower than inflation TIPS benefit from a fall in persistently higher-than-expected inflation and a fall in real yields Elevated inflation and a cautious Fed in low gear may present a sweet spot for TIPS   Source: Fixed Income Update: Elevated inflation and Fed downshift could potentially be a sweet spot for Treasury Inflation-protected Securities (TIPS) | Saxo Group (home.saxo)
Corn Prices Recorded Their Biggest Weekly Gain, Gold Demand In India May Suffer A Temporary Setback

The USDA On Friday Cut The Global Supply Outlook For Corn

Saxo Bank Saxo Bank 13.12.2022 09:24
Summary:  Risk sentiment rebounded yesterday, even as US treasury yields rose further and closed at their highest level in more than a week. Markets are on tenterhooks ahead of the US November CPI print later today as traders recall the explosion higher in risk sentiment in the wake of the October CPI release last month, where the reaction function may have been about extreme short-term option exposure as anything else. The same volatility risk is present over today’s release. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equity markets rebounded yesterday even as US treasury yields edged higher on the day, as traders nervously recall the heavy volatility around the US CPI releases of recent months, particularly the October CPI release on November 10, which saw an explosion higher in US equities of over 5% on the day after softer-than-expected numbers. Today’s release is complicated by the upcoming FOMC meeting tomorrow. The key downside area for the S&P 500 Index remains 3900-10 the cash index, with the equivalent area around 11,430 in the Nasdaq 100 Index. A sharp rise in the VIX yesterday despite the positive session suggests traders are scrambling to protect themselves with short-term options over the key event risks of the coming couple of days, which aggravates the volatility risk further. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hang Seng Index advanced 0.4% after Hong Kong lifted all travel restrictions for visitors arriving the city and relaxed the QR code scanning requirements for residents.  Local Hong Kong catering and retailer stocks surged 5% to 12%. In A-shares, the CSI300 index was little changed. Lodging, tourism and catering stocks outperformed. FX: USDJPY teased 138 ahead of US CPI release The US dollar was mostly sideways ahead of the big flow of key data and central bank meetings later in the week, but a run-up in US treasury yields and higher oil prices yesterday drove a weaker JPY across the board again, with USDJPY nearly reaching 138.00 before pulling back slightly. The US dollar is set to key off the US CPI release today. EURUSD remained capped below the key 1.06 handle, where a break above, for example, on soft data and an indifferent FOMC meeting on Wednesday, possibly opening the doors to 1.08. Crude oil (CLF3 & LCOG3) Crude oil trades higher for a second day after last week's heavy losses on demand concerns. Prices were underpinned by further easing of China’s restrictions despite concerns earlier in the week from a rapid surge in cases. Despite reports that the Keystone pipeline was being partially reopened, it remains completely shut on Monday which suggests a potential drop in storage levels at Cushing, Oklahoma, the WTI delivery hub. The market awaits news from Russia on whether it will make good on its threat to cut supply to price cap supporters, while the focus will also turn to US CPI today and the FOMC decision tomorrow, as well as monthly oil market reports from OPEC today and IEA Wednesday. First level of resistance in Brent at $80.50 and $75 in WTI. Gold (XAUUSD) and silver (XAGUSD) await CPI report Both metals trade steady while awaiting today’s key US CPI print and tomorrow’s FOMC meeting. Having been rejected on a couple of occasions above $1800, the outcome of these will likely determine whether the metal will break higher to signal a strong start to 2023 or whether investors will book some profit ahead of the quiet period before year-end. In such a case, the current strength of the market will be tested with focus on support at $1765 and not least $1735. Silver meanwhile trades near an eight-month high with half an eye on copper as the potential driver for additional strength. US 10-year treasury benchmark rebounds further (TLT:xnas, IEF:xnas, SHY:xnas) In a thin-volume session ahead of the CPI report on Tuesday and the FOMC on Wednesday, yields on Treasuries closed the day higher, with the US 10-year benchmark closing 4 bps up to 3.61% and nearly 10 bps above intraday lows. The auction of USD 32B of 10-year notes, awarded at 3.625%, 3.7bps cheaper than at the time of the auction, was the worst since 2009.  The one, three, and five years ahead consumers’ inflation expectations in the New York Fed’s Consumer Expectations Survey fell to 5.2%, 3%, and 2.3% in November from 5.7%, 3.1%, and 2.4% respectively in October. What is going on? Stronger UK GDP growth but clouded energy outlook, expect more volatility Some respite was seen in UK’s growth trajectory as October GDP rose 0.5% M/M after being down 0.6% M/M last month’s due to the holiday for Queen’s funeral and a period of national mourning. However, the UK may already be in a recession and the outlook remains clouded which suggests there isn’t enough reason for the Bank of England to consider anything more than a 50bps rate hike this week. Energy debate continues to run hot and create volatility in gas prices, after weaker wind generation led to talks of refiring the reserve coal plants, but the request was cancelled later Monday as wind generation rose. The situation continues to highlight the vulnerability of the energy infrastructure due to lack of baseload, and a bigger test probably lies ahead in 2023. NY Fed consumer expectations survey shows slowing inflation, but... NY Fed’s Survey of Consumer Expectations indicated that respondents see one-year inflation running at a 5.2% pace, down 0.7 percentage point from the October reading. Expectations 3yrs ahead fell to 3.0% from 3.1% and expectations 5yrs ahead fell to 2.3% from 2.4%. However, it is worth noting that inflation expectations remain above the Fed’s 2% target and unemployment and wage data was reportedly steady. Corn (ZCH3) advances following biggest clear-out of longs since 2019  Corn futures in Chicago trade higher for a third day, as dry and hot weather conditions in Argentina, an important Southern Hemisphere producer, stresses the crop. In addition, the USDA on Friday cut the global supply outlook for corn due to a smaller crop in Ukraine, and from where supply could slow after Russian attacks on energy infrastructure have affected cargo loading at the Black Sea ports. Renewed support for corn emerged just after money managers in the week to December 6 sliced their corn net long by 37% to 120k lots, lowest since Sept 2020 and biggest one-week reduction since March 2019. Novozymes shares in focus following acquisition news Yesterday should have been a celebration day for Novozymes shareholders according to management as the enzymes manufacturer announced a $12.3bn acquisition of food flavouring manufacturer Chr. Hansen. However, Novozymes shares traded down 15% so the shares will be in focus this morning. The main question is whether regulators will allow the two companies to merge given their respective size and possible market power in the food ingredients business. What are we watching next? US November CPI to likely to trigger considerable volatility Last month’s softer US CPI report was a turning point in the markets and inflation expectations have turned markedly lower since then. Consensus is looking for another softer report in November, with the headline rate expected at 7.3% YoY, 0.3% MoM (from 7.7% YoY, 0.4% MoM in October) while the core, ex-Food & Energy reading is expected to show a steady rise of 6.1% YoY and 0.3% MoM (from 6.3% YoY, 0.3% MoM in October). While a case can be made for further disinflationary pressures, given lower energy prices, easing supply constraints and holiday discounts to clear excess inventory levels, the PPI report on Friday indicated that goods inflation could return in the months to come and wage inflation also remains strong. Easing financial conditions and China’s reopening can be the other key factors to watch, which could potentially bring another leg higher in inflation especially if there is premature easing from the Fed. Shelter inflation will once again be key to watch, which means clear signs of inflation peeking out will continue to remain elusive. Several central bank meetings this week The U.S. Federal Reserve (Wednesday), the Bank of England (Thursday) and the European Central Bank (Thursday) are expected to hike interest rates by 50 basis points each this week. Less than two weeks ago, Fed Chairman Jerome Powell said a December rate-hike slowdown is likely. But the hawkish tone should remain based on the latest Non Farm Payroll and Producer Prices reports which indicated that inflation remains high and broad-based. In the eurozone, this is a done-deal that the central bank will hike rates by 50 basis points. Pay attention to the updated economic forecasts (Is a recession the new baseline for 2023?) and to any indication regarding the expected quantitative tightening process. In the United Kingdom, the money market overwhelmingly believes (78%) that the Bank of England will hike its rate by 50 basis points to 3.5% this week. Only a minority (22%) foresees a larger increase, to 3.75%. Earnings to watch This is a quiet period in the earnings season, though a couple of interesting names are reporting this week, with former high-flyer Adobe up on Thursday. Adobe has something to prove as the US software company has seen a negative share price reaction on its past five earnings releases. Trip.com, China's leading online travel agency, reports on Wednesday and investors will judge the result on the company's outlook for Q4 and ideally 2023 as China's reopening is raising the expected travel demand in China for 2023. Read more here. Tuesday: DiDi Global Wednesday: Lennar, Trip.com, Nordson, Inditex Thursday: Adobe Friday: Accenture, Darden Restaurants Economic calendar highlights for today (times GMT) 1000 – Germany Dec. ZEW Survey 1030 – UK Bank of England Financial Stability Report 1100 – US Nov. NFIB Small Business Optimism 1330 – US Nov. CPI 2230 – Australia RBA Governor Lowe to Speak 2350 – Japan Q4 Tankan Survey 0005 – New Zealand RBNZ Governor Orr before Parliamentary Committee 2130 – API's Weekly Crude and Fuel Stock Report During the day: OPEC’s Monthly Oil Market Report Source: Financial Markets Today: Quick Take – December 13, 2022 | Saxo Group (home.saxo)
European Markets Face Headwinds Amid Rising Yields and Inflation Concerns

Microsoft (MSFT) rose 2.89% after announcing it will purchase a 4% stake in London Stock Exchange Group

Intertrader Market News Intertrader Market News 13.12.2022 10:42
DAILY MARKET NEWSLETTER December 13, 2022                 Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,324.00 -45.00 (-0.31%) Read the analysis 14,397.00 14,199.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,499.00 7,431.00     S&P 500 (CME) 4,018.25 +50.00 (+1.26%) Read the analysis 4,045.00 3,982.00     Nasdaq 100 (CME) 11,809.50 +126.50 (+1.08%) Read the analysis 11,860.00 11,730.00     Dow Jones (CME) 34,218.00 +477.00 (+1.41%) Read the analysis 34,420.00 34,010.00     Crude Oil (WTI) 73.46 +2.44 (+3.44%) Read the analysis 75.40 72.80     Gold 1,781.22 -16.102 (-0.90%) Read the analysis 1,777.00 1,789.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Monday, major U.S. stock indexes rose over 1%. The Dow Jones Industrial Average advanced 528 points (+1.58%) to 34,005, the S&P 500 rose 56 points (+1.43%) to 3,990, and the Nasdaq 100 was up 143 points (+1.24%) to 11,706.The U.S. 10-year Treasury yield added 3.7 basis points to 3.615%.U.S. inflation data will be released on Tuesday, and the Federal Reserve will set interest rates on Wednesday.Transportation (+2.86%), energy (+2.49%), and software (+2.45%) sectors led the market higher.Microsoft (MSFT) rose 2.89% after announcing it will purchase a 4% stake in London Stock Exchange Group.Coupa Software (COUP) surged 26.67%. The cloud-based business software firm said it has agreed to be taken private by buyout firm Thoma Bravo in a deal that values the company at $8 billion.Amgen (AMGN) agreed to buy Horizon Pharma (HZNP) for $116.50 per share or $27.8 billion in total. Amgen's share price closed 0.67% higher, and Horizon Pharma jumped 15.49%.Rivian Automotive (RIVN) declined 6.16%. The company said it paused discussions with Mercedes-Benz on forming a strategic partnership over electric pickup trucks. European stocks closed lower. The DAX 40 fell 0.45%, the CAC 40 declined 0.41%, and the FTSE 100 was down 0.41%.Oil prices were supported by a prolonged outage of the Canada-to-U.S. Keystone crude-oil pipeline. U.S. WTI crude futures gained $2.40 (+3.38%) to $73.46 a barrel.Gold price slid $16 to $1,781 an ounce.Market Wrap: ForexThe U.S. dollar held up well against other major currencies. The dollar index climbed to 105.02.USD/JPY jumped 115 pips to 137.71.EUR/USD dipped 5 pips to 1.0535. GBP/USD rose 9 pips to 1.2268. U.K. gross domestic product grew 0.5% on month (vs +0.4% expected) and 1.5% on year (vs +1.6% expected) in October. Industrial production showed no growth in October, as expected,AUD/USD dropped 47 pips to 0.6748. This morning, the Westpac consumer confidence index rebounded 3.0% on month in December (vs -6.9% in November).USD/CHF added 23 pips to 0.9365, while USD/CAD was down 14 pips to 1.3631.Bitcoin regained the $17,000 level.Morning TradingIn Asian trading hours, USD/JPY held up well at 137.70, while AUD/USD remained under pressure at 0.6742.EUR/USD was little changed at 1.0533, while GBP/USD traded lower to 1.2256.Gold price was flat at $1,781 an ounce.Bitcoin kept trading at levels around $17,100.Expected TodayIn the U.K., the latest jobless rate is expected to edge up to 3.7%.In Germany, the ZEW economic sentiment index is expected to improve to -27 in December. And the November inflation rate is expected to be finalized at 10.0% on year.In the U.S., the inflation rate is expected to tick down to 7.6% on year in November.           UK MARKET NEWS           Royal Dutch Shell, an oil giant, announced the sale of its stake in two offshore production sharing contracts in Malaysia's Baram Delta to Petroleum Sarawak Exploration & Production Sdn Bhd for $475 million.InterContinental Hotels Group, a hotel operator, announced the appointment of Michael Glover as chief financial officer.Auto & Parts, insurance and travel & leisure shares gained most in London on Friday.From a relative strength vs FTSE 100 point of view, BAE Systems (+0.65% to 831p) crossed above its 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   02:00 Unemployment Rate (Oct) 3.7% HIGH     02:00 Claimant Count Change (Nov) 8k HIGH     02:00 Employment Change (Sep) -20k HIGH     02:00 Average Earnings incl. Bonus (3Mo/Yr) (Oct) 6.1% MEDIUM     02:00 Average Earnings excl. Bonus (3Mo/Yr) (Oct) 5.8% LOW     02:00 HMRC Payrolls Change (Nov) 45k LOW     05:00 10-Year Treasury Gilt Auction   LOW     05:30 Financial Stability Report   LOW     05:30 BoE FPC Meeting Minutes   LOW     06:00 NFIB Business Optimism Index (Nov) 89 LOW     08:30 Inflation Rate MoM (Nov) 0.5% HIGH     08:30 Core Inflation Rate MoM (Nov) 0.4% HIGH     08:30 Core Inflation Rate YoY (Nov) 6.2% HIGH     08:30 Inflation Rate YoY (Nov) 7.6% HIGH     08:30 CPI (Nov) 299 MEDIUM     08:55 Redbook YoY (Dec/10)   LOW     10:00 IBD/TIPP Economic Optimism (Dec) 41 MEDIUM     13:00 30-Year Bond Auction   LOW     16:30 API Crude Oil Stock Change (Dec/09)   MEDIUM                                     NEWS SENTIMENT           London Stock Exchange Group PLC LSEG : LSE 7,626.00 GBp -2.85% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Legal & General Group PLC LGEN : LSE 252.00 GBp -1.60% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   BHP Group PLC BHP : LSE 2,537.00 GBp -1.67% In the last 5 days         NEWS SENTIMENT (24H) Neutral       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Argo Group Ltd ARGO : LSE 11.00 GBp 0.00% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Bayerische Motoren Werke AG BMW : XETRA 84.43 EUR -0.89% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: rebound.   Pivot: 1.0530   Our preference: Long positions above 1.0530 with targets at 1.0575 & 1.0590 in extension.   Alternative scenario: Below 1.0530 look for further downside with 1.0505 & 1.0490 as targets.   Comment: The RSI shows upside momentum.                     Euro Stoxx 50 (Eurex)‎ (Z2)‎ Intraday: intraday support around 3902.00.   Pivot: 3902.00   Our preference: Long positions above 3902.00 with targets at 3951.00 & 3970.00 in extension.   Alternative scenario: Below 3902.00 look for further downside with 3879.00 & 3864.00 as targets.   Comment: The RSI lacks downward momentum.                     Brent (ICE)‎ (G3)‎ Intraday: further upside.   Pivot: 77.60   Our preference: Long positions above 77.60 with targets at 80.00 & 80.80 in extension.   Alternative scenario: Below 77.60 look for further downside with 76.80 & 76.10 as targets.   Comment: The RSI is bullish and calls for further advance.        
US stocks gain on hopes of a softer inflation print released later today

US stocks gain on hopes of a softer inflation print released later today

Ipek Ozkardeskaya Ipek Ozkardeskaya 13.12.2022 11:02
European equities traded in the red at the start of the week, but equities in the US rebounded as investors are hanging on to hope of slower inflation and reasonably hawkish Federal Reserve (Fed) by their fingernails.    Today and tomorrow will tell whether they are right being optimistic or not.   The latest US CPI data will reveal whether inflation in the US eased, and by how much. It's highly likely that we will see a number below the 7.7% printed a month earlier. But a number below 7.7% won't be enough as analysts expected it to ease all the way down to 7.3%.   Last Friday, the PPI figure showed that the US factory gate prices eased in November, but not as much as penciled in – leading to some disappointment among investors. Today, a similar disappointment could erase yesterday's 1.43% rebound in the S&P500 and could easily send the index below its 100-DMA. Read next: Microsoft (MSFT) rose 2.89% after announcing it will purchase a 4% stake in London Stock Exchange Group| FXMAG.COM  But if, by any chance, we see a softer CPI figure, then the S&P500 could easily jump above its 200-DMA, and even above the ytd descending channel top.   But, but, but...  Today's US CPI data, unless there is a huge surprise, will probably not change the Fed's plan to hike the interest rates by 50bp this week. Activity on Fed funds futures gives 77% chance for a 50bp hike, and a slim chance of 23% for another 75bp hike.   What will probably change is where investors see the Fed's terminal rate, and for how long.   More importantly, it will give us an idea on how the market pricing for the Fed's terminal rate will clash with the dot plot projections that will come out tomorrow, and that will, in all cases, hammer any potentially optimistic market sentiment.   Therefore, even if we see a great CPI print and a nice market rally today, it may not extend past the Fed decision on Wednesday.   Energy up.  European stock investors are uncomfortable this week due to the icy cold weather, that will get the countries to tap into the natural gas, and other energy supplies.   The US nat gas prices jumped more than 30% since last week due to a powerful Pacific storm bringing cold and snow to the norther and central plains in the US.   In the UK, power prices hit another ATH yesterday. Read next: An incoming cold spell in the US has seen the cost of US gas surge 27% during the past three trading session while (...) Dutch TTF gas contracts remain below €150| FXMAG.COM   Happily, we haven't seen a significant rise in the European nat gas futures, which in contrary kicked off the week downbeat.   But crude oil rallied as much as 2.60% on Monday as Russia said that the EU's $60 cap on its oil could lead to supply cuts, as Goldman said that Chinese reopening could boost demand by 1mpd - which would mean a $15 recovery in crude's price - and as a key pipeline supplying the US closed following a spill discovered last week.   I think that the oil rebound due to these three factors could be short-lived and may offer interesting top selling opportunities for medium term bears looking for a further dip in oil prices to below $70pb. Because, the Russia is not harmed by $60pb currently, US supplies will be restored and  the Chinese reopening may not be smooth due to potential disruptions in economic activity, because people are sick.   Don't count on strong UK GDP  The British GDP grew more than expected last month and that was mostly due to the rebound in activity after Queen Elizabeth's death slowed activity earlier. But strikes across the country are so severe that they could wipe half a billion pounds off the hospitality industry's pre-Xmas earnings. PM Rishi Sunak thinks that military staff could help cover for striking workers.   Cable consolidates gains below 1.23 but is at the mercy of the US dollar. The Bank of England (BoE) is expected to hike by 50bp at this week's MPC meeting, but the hike will certainly be accompanied by dovish statement as the UK economy is not strong enough to withstand a Fed-like tightening in the middle of an energy, and cost-of-living crisis.
Bank of England Confronts Troubling Inflation Report; Fed Chair Powell's Testimony Echoes Expected Path

The Pound (GBP) Is Relatively Steady After The Release Of The UK Jobs Data

Craig Erlam Craig Erlam 13.12.2022 12:28
Stock markets are tentatively higher in Asia while Europe and the US are poised for a similarly modest start to trade in what is the start of a hectic 72 hours in the markets. For so many weeks now, the December Fed decision has dominated the minds of traders, while sentiment in the markets has been dictated by how small changes in various data points influence the outcome of the meeting. When a meeting or event generates this much hype, it can often disappoint and be something of an anticlimax but I’m not sure that will be the case this time. It’s not so much the decision itself but what accompanies it that will set the stage for next year. For so long the question has been will the Fed hike into a recession. In that time it’s remained convinced that a soft landing can be achieved and the resilience of the economic data has supported that but unfortunately, the same resilience has also supported the case for more hikes and a higher terminal rate. Last month’s CPI release gave investors real hope that in much the same way that inflation’s acceleration higher this year blew expectations out of the water, the path lower may also not be as gradual as feared. Unfortunately, some of the data since then hasn’t been so favourable – most notably the wages component of the jobs report – so a lot is now hanging on today’s release. Another number below forecasts of around 7.3%, year on year, could get the excitement flowing once more. Jobs data keeps pressure on BoE The pound is relatively steady after the release of the UK jobs data that was in line with market expectations. Unemployment rose marginally to 3.7% while wages rose by 6.1%. While the data does indicate some additional slack in the labour market, the wages number – despite falling well short of inflation – will be of concern to the BoE and ensure its foot remains firmly on the brake in the short term. Steady despite FTX developments and Binance concerns Bitcoin continues to trade around $17,000, undeterred by reports of Sam Bankman-Fried’s arrest and possible charges for money laundering against Binance. Withdrawals on the platform highlight the uncertainty and shattered confidence in the space, a desperation not to be caught up in another FTX event. Even when the situation looks very different. But that’s what fear does, especially in a situation where confidence has been so severely damaged, as it has in recent weeks. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Oil Prices Show Resilience Despite Setbacks, Gold Holds Above $1,900 Ahead of US Jobs Report

Cathie Wood's ARK Innovation (ARKK) Exchange-Traded Fund Loses Investor Confidence

Kamila Szypuła Kamila Szypuła 13.12.2022 11:37
This year is exceptional in terms of many events, in particular events on the financial markets. ARKK is not doing too well, and Microsoft will take 4% stake in the London Stock Exchange. Read next: Euro Holds Above $1.05, USD/JPY Pair Rose Above 136| FXMAG.COM The Losses Investors have bought up growth stocks and other speculative assets en masse this year. In an environment of rising profits where they suddenly have opportunities to earn returns with little risk, many lose their appetite for cash-losing companies that promise a chance of return in the future. Shares in the fund, a pandemic-era favourite, made up mostly of underperforming, growth-minded tech companies, have fallen 63% this year. Wood's flagship fund is near a five-year low. The three largest holdings in the fund - known by the ticker symbol ARKK - are Zoom Video Communications Inc., Tesla Inc. and Exact Sciences Corp. , companies that Mrs. Wood believes have the potential to change the world. At the beginning of the year, Cathie Wood said that venture stocks in exchange-traded funds sold by ARK Investment Management LLC are so cheap that they will inevitably go up. A surprising number of investors wanted to give it a try. Some $16 billion flowed into ARK Innovation from the second quarter of 2020, when the Covid-19 pandemic took hold, through the first quarter of 2021, when the fund’s assets peaked at $28 billion. Investors heeding a “buy the dip” rallying cry poured money into the fund in each of the first five months of the year—a net $1.89 billion—as markets tumbled. Shares of Zoom and Tesla have lost about half their value this year, while Exact Sciences, an unprofitable supplier of cancer screening and diagnostic tools, is down 42%. While many on Wall Street are curbing risks and preparing for a recession, Ms. Wood has increased her risk in recent weeks by buying more shares in cryptocurrency exchange Coinbase Global Inc. and a bitcoin futures ETF. According to FactSet, ARKK added 931,000 Coinbase shares worth about $43 million in November. ARKK is the second-largest holder of Coinbase shares, which are down 83% since the beginning of the year. Similar bets yielded huge gains in a low-interest-rate environment in 2020 and 2021. ARKK's stock more than doubled in 2020 before concerns about inflation — and the prospect of higher rates — stalled its gains. Currently, ARKK is at its lowest levels, approaching pre-2018 levels. The lowest levels of the year may increase investors' concerns. ARK Innovation ETF (ARKK) Microsoft Corp and LSEG Microsoft Corp. will take a 4% stake in the London Stock Exchange’s corporate parent. The agreement between the London Stock Exchange Group and Microsoft Corp connects one of the largest American technology companies with the largest market exchange in Europe. LSEG has tied its future to data sales, a way to diversify away from the low-margin stock market business. In 2021, it completed the purchase of the financial, information and terminal company Refinitiv Holdings Ltd. from the Blackstone Inc. consortium. and Thomson Reuters Corp. Microsoft takes the unusual step of buying an ownership stake in a customer by acquiring LSEG's stake from the Blackstone-Reuters consortium. Microsoft did not disclose how much it will pay for the shares. LSEG shares were up 1.8% Monday afternoon in London. Source: wsj.com, finance.yahoo.com
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The NASDAQ Stock Exchange 2118 Companies Rose In Price

InstaForex Analysis InstaForex Analysis 14.12.2022 08:05
At the close of the New York Stock Exchange, the Dow Jones rose 0.30%, the S&P 500 index rose 0.73%, the NASDAQ Composite index rose 1.01%. Dow Jones Chevron Corp was the top performer among the components of the Dow Jones index today, up 3.78 points or 2.23% to close at 173.53. Salesforce Inc rose 2.51 points or 1.89% to close at 135.62. Merck & Company Inc rose 1.94 points or 1.78% to close at 110.91. The least gainers were Amgen Inc, which shed 4.52 points or 1.63% to end the session at 272.26. UnitedHealth Group Incorporated was up 1.40% or 7.64 points to close at 538.22, while McDonald's Corporation was down 0.85% or 2.34 points to close at 274. 28. S&P 500 Among the S&P 500 index components gainers in today's trading were Moderna Inc, which rose 19.63% to 197.54, Halliburton Company, which gained 7.87% to close at 37.00, and Match Group Inc, which rose 7.67% to end the session at 46.89. The least gainers were United Airlines Holdings Inc, which shed 6.94% to close at 41.17. Trimble Inc lost 6.38% to end the session at 55.03. Quotes of American Airlines Group decreased in price by 5.21% to 13.46. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were OpGen Inc, which rose 84.80% to hit 0.23, Vincerx Pharma Inc, which gained 60.93% to close at 1.08, and shares of Netcapital Inc, which rose by 58.27%, ending the session at around 2.20. Shares of Quotient Ltd became the leaders of the decline, which decreased in price by 50.01%, closing at 0.34. Shares of Argo Blockchain PLC ADR lost 37.21% and ended the session at 0.43. Quotes of Harpoon Therapeutics Inc decreased in price by 36.87% to 0.89. Numbers On the New York Stock Exchange, the number of securities that rose in price (2162) exceeded the number of those that closed in the red (934), while quotes of 113 stocks remained virtually unchanged. On the NASDAQ stock exchange, 2118 companies rose in price, 1630 fell, and 206 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 9.80% to 22.55. Gold Gold futures for February delivery added 1.65%, or 29.55, to hit $1.00 a troy ounce. In other commodities, WTI crude for January delivery rose 2.95%, or 2.16, to $75.33 a barrel. Futures for Brent crude for February delivery rose 3.33%, or 2.60, to $80.59 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.89% to hit 1.06, while USD/JPY shed 1.48% to hit 135.63. Futures on the USD index fell 1.09% to 103.62 Relevance up to 03:00 2022-12-15 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/304804
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

The Fed Is Expected To Lift Its Federal Funds Rate Target By 50bps

Saxo Bank Saxo Bank 14.12.2022 08:48
Summary:  U.S. equities and bonds faded the initial hype after softer CPI prints and ended the volatile session with muted gains. USD sold off and USDJPY dipped below 135 at one point. Crude rallied for the second day in a row, rising 3% as supply issues remained. A 50bp hike at today’s FOMC is cemented and the market’s focus will be on the dot plot about the Fed’s rate projections for 2023 and Powell’s comment at the press conference. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) jumped at the open before paring most of the gains After a strong opening, soaring at much as 4% in the S&P 500 and 3.9% in Nasdaq 100, the U.S. market spent the rest of the day pulling back from the intraday highs. S&P500 finished the volatile session at 4019.65, up 0.7%, and Nasdaq 100 closed at 11834.21, 1.1% higher.  A large portion of the early surge was in ETFs. A huge USD3.9 trillion notional value of options expiring this Friday may tend to pin the benchmark S&P 500 as well. All sectors with the S&P 500, except consumer staples, advanced. The interest rate-sensitive real estate sector was the top gainer, rising 2%, which was followed by the energy sector which was boosted by a 3% rise in the crude oil price. Meta Platforms (META:xnas) gained 4.7% as Republican Senator Rubio is seeking a pass a bi-partisan bill to ban Tik Tok from operating in the U.S. Moderna (MRNA:xnas) soared 19.6% on news of positive trial data from an experimental skin cancer vaccine in collaboration with Merck (MRK:xnys). Merck climbed 1.8%. Airlines were notable laggards on Tuesday. A 3% drop made airfares one of the largest items contributing to the softness in the CPI report. In addition, Alsska Air (ALK:xnys) warned about slowing corporate travel and JetBlue (JBLU:xnas) which was more leisure travel-focused, mentioned weaker bookings in Q4. US Treasury yield curve (TLT:xnas, IEF:xnas, SHY:xnas) bull steepened on soft CPI data Immediately after the release of the soft CPI data which increased the chance of further downshift to a 25bp hike instead of 50bps in February, the whole yield curve shifted down with the 2-year at one point shedding 24bps to 4.13% and the 10-year 20bps richer to as low as 3.41%. The money market curve now prices the terminal rate at around 4.82% in 2023, down from 4.98%. The long-end however did not manage to keep their gains after some large block selling in the 10-year contracts and a weak 30-year auction. The 10-year gave back nearly half of the gain to close the session 11bps richer at 3.50%. The 2-10-year curve steepened to 72bps. The yield on the 30-year long bonds finished the day only down 4bps at 3.53%. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hang Seng Index advanced by 0.7% after Hong Kong lifted all travel restrictions on visitors arriving in the city and relaxed the QR code scanning requirements for residents.  Catering and retailer stocks outperformed. Cosmetic chain operator Sa Sa (00178:xhkg) jumped 14.2%. Local developers and commercial landlord stocks rose by 3% to 4%. Cathay Pacific climbed 3.2%. Macau casino operators gained between 1% and 4%. Shares of the semiconductor industry jumped on media reports suggesting that the Chinese Government is going to spend RMB 1 trillion to support the industry. SMIC (00981:xhkg) gained 9.7% and Hua Hong Semiconductor (01347:xhkg) soared 17.4%. In A-shares, the CSI300 index was little changed. Farming, textile, and transportation stocks outperformed. FX: USDJPY dipped below 135 before a recovery in Asian hours The US dollar sold off on Tuesday following the softer November CPI print in the US saw US yields plunge lower. AUDUSD was however seen paring some of the gains in early Asian trade and slid below 0.6840 amid concerns on China’s Covid cases ramping up further which also led to the postponement of the Central Economic Work Conference. USDJPY took a brief look below 135 after the CPI release but some of the move was erased later. EURUSD surged to 1.0673 and remains supported above 1.0620 ahead of Fed meeting today and ECB meeting tomorrow. Crude oil (CLF3 & LCOF3) pauses after two days of gains Crude oil prices gained further on Tuesday after a softer-than-expected US CPI print for November spurred hopes that the Fed will slow down its pace of rate hikes. Supply side issues were also supportive. TC Energy Corp has yet to submit a restart plan for the Keystone pipeline following a leak last week, and plans have been delayed by bad weather. Russia’s President Putin is planning to sign a decree banning the sale of Russian oil through any contract that specifies the recipient as a nation that joined the G7 price cap. OPEC urged caution as its members implement the recent 2mb/d production cut. It now expects to see a finely balanced market in Q1 2023, instead of the deficit implied by its forecasts a month ago. It sees demand increasing by 2.2mb/d next year to average 101.77mb/d. Demand concerns may pick up further in Asia today as Covid cases in China continue to rise and impede the reopening trade, but caution will prevail ahead of Fed meeting later today.   What to consider?   Another softer US CPI print is still not enough The November CPI report was cooler-than-expected across the board, highlighted by the headline cooling to 7.1% from 7.7% (exp. 7.3%), with a M/M gain of 0.1%, slowing from the prior 0.4% and beneath the expected 0.3%. Core metrics saw Y/Y print 6.0% vs 6.3% prior and beneath the 6.1% expectation, while the M/M saw a 0.2% gain, lower than the prior and expected 0.3%. The market pricing has shifted towards a 25bps rate hike for February after we potentially get a 50bps today, while the terminal rate forecast has drifted lower to 4.82%. If we dig into the details, the disinflation is clearly driven by goods and energy, while services prices continue to rise further. This means wage pressures will continue and provides room for the Fed to continue to beat the drum on rates being higher-for-longer.  December FOMC and dot plot may have little new to offer, so focus remains on Powell’s press conference The Fed is expected to lift its Federal Funds Rate target by 50bps to 4.25-4.50%, according to the consensus as well as the general commentary from Fed officials signalling a downshift in the pace of rate hikes. The updated economic projections will also be released, and are expected to show a higher terminal rate than the September projections (4.6%), as has been alluded to by Chair Powell at the November FOMC and in remarks made in December. Easing financial conditions and expected China stimulus could mean Fed continues to chase the inflation train from the back into the next year as well, so Powell’s press conference remains key to watch. There will have to be a lot of focus on pushing out the rate cuts of ~50bps that are priced in for next year, and emphasise that the Fed will not ease prematurely if Powell and committee want to avoid further easing of financial conditions. China’s Central Economic Work Conference is reportedly postponed According to Bloomberg, which cites unnamed sources, the Chinese Communist Party is postponing the Central Economic Work Conference that was previously scheduled for this week due to the spread of Covid-19 inflections in Beijing. No signs, however, show that the Chinese authorities are reversing the recent trend of relaxing pandemic restrictions. New Zealand forecasts a recession starting Q2 2023 New Zealand Treasury Department issued 2022 half-year economic and fiscal update, forecasting three quarters of negative GDP growth from Q2 2023. Overall, the forecast calls for 0.8% contraction in 2023. Still, comments from RBNZ this morning suggested inflation focus will continue to drive more rate hikes, even as spending slows and unemployment levels increase as more people join the workforce over the coming year, partially helped by improving migration levels. Bank of Japan’s Tankan shows weakening business sentiment Sentiment among Japan's large manufacturers deteriorated slightly in the three months to December amid concerns over the global economic slowdown. The main index for sentiment among large manufacturers was +7, compared with +8 in Q3, according to the Bank of Japan's quarterly Tankan survey. Non-manufacturers still took a more positive view as the economic reopening gathered momentum, and large non-manufacturer index rose to 19 in Q4 from 17 previously.     Detailed FOMC Preview – read here. Sign up for our Outrageous Predictions 2023 webinar - APAC edition: Wed, 14 Dec, 11.30am SGT For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Softer-than-expected US CPI puts the focus on FOMC dot plot and Powell’s comments – 14 December 2022 | Saxo Group (home.saxo)
The Commodities Feed: China's 2023 growth target underwhelms markets

Many Investors Are Bullish On The Chinese Stocks For 2023

Saxo Bank Saxo Bank 14.12.2022 08:52
Summary:  As China reopening from Covid-zero and continued moves to ease policy, many investors are bullish on the Chinese stocks for 2023. Chinese equities are at attractively cheap valuation. With China loosening Covid curbs, more malls and restaurants reopened and it creates positive impact on the consumer staples and consumer discretionary industries. As China reopening from Covid-zero and continued moves to ease policy, many investors are bullish on the Chinese stocks for 2023. MSCI China Index has rallied 34% from the low on 31 October after China reopening hopes. Many investors are looking at Chinese equities as they are sitting at attractively cheap valuation. With China loosening Covid curbs, more malls and restaurants reopened and it creates positive impact on the consumer staples and consumer discretionary industries. Global X MSCI China Consumer Staples ETF (CHIS)The ETF invests in large and mid capitalization segments of the MSCI China Index that are classified in the Consumer Staples Sector as per the Global Industry Classification System (GICS). It tracks the performance of the MSCI China Consumer Staples 10/50 Index. The index includes China A, B and H shares, Red chips, P chips and foreign listings. The ETF has a market cap of USD 21.8 million, average P/E of 25.83 and expense ratio of 0.65%. Top 5 holdings are Kweichou Moutai, China Resources, China Mengniu Dairy, Nongfu Spring and Tsingtao Brewery, which makes up 40.58% of the total net assets. It has high exposure in beverage and food industries, 53.34% exposure in beverages industry and 25.87% in food industry. The ETF provides semi-annual distribution, 0.94% yield per year. Global X MSCI China Consumer Discretionary ETF (CHIQ) The ETF targets play on the Consumer Discretionary Sector in China and tracks the MSCI China Consumer Discretionary 10/50 Index. The ETF has a market cap of USD 289.6 million with an average P/E of 42.31 which is relative high compared to the MSCI China Index average P/E of 11.1 as it consists of more e-commerce stocks in the ETF. The top 5 holdings make up 38.44% of the total net assets, which consists of Meituan, Alibaba, JD.com, Pinduoduo and Yum Chin. The ETF has 40.62% exposure in internet industry, 21.01% exposure in retail industry and 20.07% in auto manufacturers.
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Headwinds Are Mounting For Tesla As EV Demand Is Coming Down In China | Risk Sentiment Rushed Higher

Saxo Bank Saxo Bank 14.12.2022 08:57
Summary:  Risk sentiment rushed higher on the soft US November CPI data yesterday, although sentiment rapidly turned more cautious as traders recognize the risk that the Fed may be less willing to react as quickly to signs of easing inflation as the market in today’s FOMC meeting, which will refresh the Fed’s latest economic projections and the “dot plot” of projected Fed rates for coming years. Four G10 central bank meetings follow tomorrow, including the BoE and ECB.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The US November CPI report was exactly what the market was hoping for, sending S&P 500 futures on a rally to the 4,180 level before being sold off declining 3% from the high to the close. This rejection indicates that the market is doubting itself despite the lower US core inflation print. A weak session by Tesla suggests that while inflation fears might be disappearing growth fears will begin to take hold instead posing a new threat to the equity market. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hong Kong and Chinese stocks edged up higher. The news about a delay in China’s central economic work conference due to a surge in Covid inflections in Beijing. Investors are encouraged by signs that the Chinese authorities are not reversing course despite outbreaks after the easing of restrictions. China will stop reporting infections without symptoms as mandatory testing has been dropped. Hang Seng Index climbed 0.7%, led by technology names. Chinese educational services providers were among the top gainers. In A-shares, CSI 300 gained 0.3%, with tourism, lodging, Chinese liquor, and semiconductor outperforming. FX: USD dumped after another soft CPI print The US dollar sold off on Tuesday on the softer November CPI print in the US taking US treasury yields sharply lower. AUDUSD pared some of the gains in early Asian trade and slid below 0.6840 amid concerns on China’s Covid cases ramping up further which also led to the postponement of the Central Economic Work Conference. USDJPY took a brief look below 135 after the CPI release but some of the move was erased later. EURUSD surged to 1.0673 and remains supported above 1.0620 ahead of the FOMC meeting today and ECB meeting tomorrow. Crude oil (CLF3 & LCOG3) pauses ahead of FOMC Crude oil trades softer ahead of FOMC after rallying 6% over the previous two sessions, driven by an improved risk appetite following Tuesday's CPI print and encouraging signs from China where easing restrictions eventually will boost demand. The rally however slowed after the API reported a 7.8 million barrel rise in crude inventories versus expectations for a +3 million barrel draw from EIA later, and OPEC urged caution as it cut its Q1 23 oil demand forecast. The IEA will publish its monthly report later today. Goldman cut its Q1 price forecast by $20 to $90/bbl siting weak demand while saying “The structural oil cycle has taken a pause this year”. Apart from IEA, also focus on a potential Russian response to the price cap and not least today’s FOMC result. Gold (XAUUSD), silver (XAGUSD) and copper (HGH3) all rallied strongly following the lower-than-expected US CPI print Gold closed at its highest level since July above $1808 while silver reached an 8-month high above $24. The recovery in silver has been impressive with the market only requiring 15 weeks to recover half of what it lost during an 82-week period from Feb 2021 to Sept this year. Copper meanwhile briefly traded above its 200-day moving at $3.913/lb before finding stiff resistance ahead of the $4/lb area. All metals finding support from a weaker dollar and lower bond yields on signs that the worst inflation has likely passes, suggesting the Fed could further slow the pace of rate hikes next year. US 10-year treasury benchmark rebounds further (TLT:xnas, IEF:xnas, SHY:xnas) Immediately after the release of the soft CPI data which increased the chance of further downshift to a 25bp hike instead of 50bps in February, the whole yield curve shifted down with the 2-year at one point shedding 24bps to 4.13% and the 10-year 20bps richer to as low as 3.41%. The money market curve now prices the terminal rate at around 4.82% in 2023, down from 4.98%. The long-end however did not manage to keep their gains after some large block selling in the 10-year contracts and a weak 30-year auction. The 10-year gave back nearly half of the gain to close the session 11bps richer at 3.50%. The 2-10-year curve steepened to 72bps. The yield on the 30-year long bonds finished the day only down 4bps at 3.53%. What is going on? Another softer US CPI print The November CPI report was cooler-than-expected across the board, highlighted by the headline cooling to 7.1% from 7.7% (exp. 7.3%), with a M/M gain of 0.1%, slowing from the prior 0.4% and beneath the expected 0.3%. Core metrics saw Y/Y print 6.0% vs 6.3% prior and beneath the 6.1% expectation, while the M/M saw a 0.2% gain, lower than the prior and expected 0.3%. The market pricing has shifted towards a 25-bp rate hike from the Fed for February after we are nearly certain to get a 50bp hike today, while the terminal rate forecast has drifted lower to 4.82%. If we dig into the details, the disinflation is clearly driven by goods and energy, while services prices continue to rise further. This means wage pressures will continue and provides room for the Fed to continue to beat the drum on rates being higher-for-longer. Tesla shares down another 4% Headwinds are mounting for Tesla as EV demand is coming down in China and VW CEO said yesterday that EV sales in Europe is slowing down due to high price points and elevated electricity prices. Tesla shares closed just above the $160 level, which is just below the 200-day moving average at $164, the lowest levels since November 2020. High battery materials prices are also weighing on the outlook for EV makers. Finally, CEO Elon Musk’s endeavour at Twitter is potentially pressuring Tesla shares as he might be forced to put up Tesla shares as collateral for refinanced Twitter debt. Inditex Q3 results in line with estimates The European fast fashion retailer has delivered nine-months results (ending in October) with revenue at €23.1bn and EBIT at €4.2bn in line with estimates. Apple to allow alternative App Stores on its devices This move is a response to new European Union requirements under the Digital Markets Act that are set to go in effect in 2024. The move will initially only apply to the European market unless regulators elsewhere make similar moves. This will allow app developers to avoid paying Apple up to 30% of revenues for payments made through Apple’s app store. Several large app makers’ shares, including those for streaming service Spotify and dating services app Match group jumped on the news. New Zealand forecasts a recession starting Q2 2023 New Zealand Treasury Department issued 2022 half-year economic and fiscal update, forecasting three quarters of negative GDP growth from Q2 2023. Overall, the forecast calls for 0.8% contraction in 2023. Still, comments from RBNZ this morning suggested inflation focus will continue to drive more rate hikes, even as spending slows and unemployment levels increase as more people join the workforce over the coming year, partially helped by improving migration levels. Bank of Japan’s Tankan survey shows weakening business sentiment Sentiment among Japan's large manufacturers deteriorated slightly in the three months to December amid concerns over the global economic slowdown. The main index for sentiment among large manufacturers was +7, compared with +8 in Q3, according to the Bank of Japan's quarterly Tankan survey. Non-manufacturers still took a more positive view as the economic reopening gathered momentum, and large non-manufacturer index rose to 19 in Q4 from 17 previously. US places 30 additional Chinese companies on Entity List, a trade blacklist The companies included Yangtze Memory Technologies, China’s top memory chip producer and others and will prevent them from purchasing selected American components. This expands the original Entity List of companies that were blacklisted back in October for their connection with China’s military. What are we watching next? December FOMC and dot plot may have little new to offer, so focus remains on Powell’s press conference The Fed is expected to lift its Federal Funds Rate target by 50bps to 4.25-4.50%, according to the consensus as well as the general commentary from Fed officials signalling a downshift in the pace of rate hikes. The updated economic projections will also be released, as will the latest “dot plot” projections of the Fed policy rate, which are expected to show a median terminal rate that is higher than the September projections (4.6%, with the market currently projecting 4.32%), as has been alluded to by Chair Powell at the November FOMC and in remarks made in December. Easing financial conditions and an anticipated China stimulus could see the Fed Chair Powell remaining in hawkish mode, so Powell’s press conference remains key to watch. There will have to be a lot of focus on pushing back against the market’s anticipation that the Fed will be trimming rates by Q4 of next year, emphasising that the Fed will not ease prematurely if Powell and committee want to avoid further easing of financial conditions. Four more central bank meetings tomorrow The Swiss National Bank, Norway’s Norges Bank, Bank of England and the European Central Bank will all meet tomorrow, with the Norges Bank expected to hike 25 basis points and the three others expected to hike 50 basis points.  Markets will look for the relative degree to which the central banks signal that they are ready to declare at least a pause in the hiking cycle soon. The Norges Bank has hinted that it sees its tightening cycle near an end and the BoE has said that the peak rate will likely prove lower than the market was forecasting around the time of its last meeting. With the late dollar weakness, a dovish shift is more likely. Earnings to watch Inditex has reported its Q3 results in early European hours (see review above) which extends today’s earnings focus to the US session where our focus will be on Lennar, a US homebuilder. Lennar is expected to show 20% revenue growth y/y in its FY22 Q4 period (ending November), which is expected to decline to 5% y/y in FY23 Q1 (ending February). Today: Lennar, Trip.com, Nordson, Inditex Thursday: Adobe Friday: Accenture, Darden Restaurants Economic calendar highlights for today (times GMT) 0900 – IEA's Monthly Oil Market Report 1000 – Euro Zone Oct. Industrial Production 1330 – Canada Oct. Manufacturing Sales 1530 – EIA's Weekly Crude and Fuel Stock Report 1900 – US FOMC Meeting 1930 – US Fed Chair Powell Press Conference 2145 – New Zealand Q3 GDP 0030 – Australia Nov. Employment Change / Unemployment Rate 0120 – China Rate Decision 0200 – China Nov. Retail Sales 0200 – China Nov. Industrial Production Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – December 14, 2022 | Saxo Group (home.saxo)
USA: Final Q3 GDP amounts to 3.2%. Subtle Micron earnings

Meta Platforms (META) rose 4.74%, Amazon.com (AMZN) gained 2.14%, Alphabet (GOOGL) climbed 2.49%

Intertrader Market News Intertrader Market News 14.12.2022 10:10
DAILY MARKET NEWSLETTER December 14, 2022                 Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,476.00 -11.00 (-0.08%) Read the analysis 14,530.00 14,310.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,517.00 7,462.00     S&P 500 (CME) 4,068.25 +13.00 (+0.32%) Read the analysis 4,088.00 4,025.00     Nasdaq 100 (CME) 12,001.00 +42.25 (+0.35%) Read the analysis 12,100.00 11,850.00     Dow Jones (CME) 34,492.00 +104.00 (+0.30%) Read the analysis 34,750.00 34,200.00     Crude Oil (WTI) 75.21 -0.18 (-0.24%) Read the analysis 76.40 74.00     Gold 1,809.93 -0.87 (-0.05%) Read the analysis 1,824.00 1,800.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Tuesday, U.S. stocks closed higher as market sentiment was lifted by softer-than-expected inflation data. The Dow Jones Industrial Average rose 103 points (+0.30%) to 34,108, the S&P 500 increased 29 points (+0.73%) to 4,019, and the Nasdaq 100 gained 127 points (+1.09%) to 11,834.In fact, stocks pared gains ahead of the Federal Reserve's interest-rate decision on Wednesday. The S&P 500 once jumped over 2.7% within the session.U.S. data showed that consumer prices grew only 7.1% on year in November, slower than +7.6% expected and +7.7% in October. Monthly inflation rate was only 0.1% (vs +0.3% expected, +0.4% in October)..The U.S. 10-year Treasury yield sank 10.8 basis points to 3.503%.Media (+2.15%), real estate (+2.04%), and semiconductors (+1.85%) sectors led the market higher.Meta Platforms (META) rose 4.74%, Amazon.com (AMZN) gained 2.14%, Alphabet (GOOGL) climbed 2.49%, Apple (AAPL) edged up 0.68%, while Tesla (TSLA) slid 4.09%.Moderna (MRNA) surged 19.63%, and Merck & Co (MRK) rose 1.78%. A treatment developed by both company proved to reduce melanoma deaths in a mid-stage trial.United Airlines (UAL) fell 6.94% after the company announced an order of 100 Boeing 787 jets.European stocks also closed higher. The DAX 40 rose 1.34%, the CAC 40 increased 1.42%, and the FTSE 100 was up 0.76%.U.S. WTI crude futures advanced $2.10 to $75.25 a barrel.Gold price jumped $28 to $1,810 an ounce.Market Wrap: ForexThe U.S. dollar dropped sharply against other major currencies as softer-than-expected inflation data led investors to anticipate slower interest-rate hikes by the Federal Reserve. The dollar index fell to 104.04.USD/JPY sank 206 pips (-1.50%) to 135.61.EUR/USD jumped 93 pips to 1.0630. In Germany, the ZEW economic sentiment index improved to -23.3 in December (vs -27.0 expected).GBP/USD increased 94 pips to 1.2363. In the U.K., the latest jobless rate edged up to 3.7% (as expected). The number of jobless claims increased 30,500 in November (vs +3,300 expected).AUD/USD climbed 109 pips to 0.6854.USD/CHF fell 72 pips to 0.9291, and USD/CAD slid 88 pips to 1.3548.Bitcoin gained over 3% to $17,700.Morning TradingIn Asian trading hours, the Bank of Japan reported that its Tankan large manufacturers index fell to 7 (vs 6 expected) in the fourth quarter, while the Tankan large non-manufacturers index rose to 19 (vs 16 expected). Also, core machine orders grew 5.4% on month in October (vs +2.4% expected).USD/JPY remained subdued at 135.52.EUR/USD dipped to 1.0623, GBP/USD traded lower to 1.2348, and AUD/USD fell to 0.6827.Gold price was stable at $1,810 an ounce.Bitcoin advanced further to $17,820.Expected TodayIn the U.K., the inflation rate is expected to tick down to 11.0% on year and 0.7% on month in November. The retail price index is expected to increase 0.6% on year in November.The Eurozone's industrial production is expected to decline 1.2% on month in October.In the U.S., the Federal Reserve is expected to raise its key interest rates by 50 basis points to 4.25-4.50%.The U.S. Energy Department is expected to report a reduction of 3.595 million barrels in the crude-oil stockpiles.           UK MARKET NEWS           U.K. data showed that the inflation rate slowed to 10.7% on year (vs +11.0% expected) and 0.4% on month (vs +0.7% expected) in November.Auto & Parts, retail and basic resources shares fell most in London on Monday.From a relative strength vs FTSE 100 point of view, BAE Systems (-1.2% to 821p), Compass Group (-0.18% to 1899p) crossed under their 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   02:00 Core Inflation Rate MoM (Nov) 0.6% HIGH     02:00 Inflation Rate MoM (Nov) 0.7% HIGH     02:00 Inflation Rate YoY (Nov) 11% HIGH     02:00 Core Inflation Rate YoY (Nov) 6.6% MEDIUM     07:00 MBA 30-Year Mortgage Rate (Dec/09)   MEDIUM     08:30 Export Prices MoM (Nov) -0.4% MEDIUM     08:30 Import Prices MoM (Nov) -0.4% MEDIUM     10:30 EIA Gasoline Stocks Change (Dec/09) 2.714M MEDIUM     10:30 EIA Crude Oil Stocks Change (Dec/09) -3.595M MEDIUM     14:00 Fed Interest Rate Decision 4.5% HIGH     14:00 FOMC Economic Projections   HIGH     14:00 Interest Rate Projection - Longer   MEDIUM     14:00 Interest Rate Projection - 3rd Yr   MEDIUM     14:00 Interest Rate Projection - 2nd Yr   MEDIUM     14:00 Interest Rate Projection - 1st Yr   MEDIUM     14:00 Interest Rate Projection - Current   MEDIUM     14:30 Fed Press Conference   HIGH                                     NEWS SENTIMENT           Legal & General Group PLC LGEN : LSE 258.20 GBp +1.89% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   HSBC Holdings PLC HSBA : LSE 500.10 GBp +1.27% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Barclays PLC BARC : LSE 161.78 GBp +2.76% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Deutsche Lufthansa AG LHA : XETRA 7.989 EUR +4.58% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Deutsche Bank AG DBK : XETRA 10.248 EUR +2.83% In the last 5 days         NEWS SENTIMENT (24H) Neutral       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Rio Tinto PLC RIO : LSE 5,747.00 GBp +2.33% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: the bias remains bullish.   Pivot: 1.0600   Our preference: Long positions above 1.0600 with targets at 1.0655 & 1.0675 in extension.   Alternative scenario: Below 1.0600 look for further downside with 1.0580 & 1.0550 as targets.   Comment: The RSI shows upside momentum.                     Euro Stoxx 50 (Eurex)‎ (Z2)‎ Intraday: choppy.   Pivot: 3941.00   Our preference: Long positions above 3941.00 with targets at 3995.00 & 4017.00 in extension.   Alternative scenario: Below 3941.00 look for further downside with 3919.00 & 3903.00 as targets.   Comment: The RSI is mixed.                     Brent (ICE)‎ (G3)‎ Intraday: bullish bias above 79.25.   Pivot: 79.25   Our preference: Long positions above 79.25 with targets at 81.30 & 82.30 in extension.   Alternative scenario: Below 79.25 look for further downside with 78.50 & 77.40 as targets.   Comment: The next resistances are at 81.30 and then at 82.30.        
It Was Possible That Tesla Would Move Closer To Resistance

Tesla Trades At Cheapest, Crude Oil Rallied More Than 2.50%

Swissquote Bank Swissquote Bank 14.12.2022 11:19
Yesterday’s inflation report in the US filled investors with joy and further hope that inflation in the US may have peaked this summer and we will be heading lower from here, and that the Federal Reserve (Fed) will adopt a softer monetary policy stance and hike, yes, by 50bp today, but certainly not more than another 25bp in February. Powell  But Powell could also stress the fact that inflation remains significantly high compared with the 2% policy target, and that relaxing the tightening measures prematurely is not a good idea. US Dollar In the FX, the US dollar index fell following the softer-than-expected CPI print, and hit a fresh low since summer. Markets The softer US dollar, and stronger euro sent the European indices to fresh highs since summer. The DAX flirted with the June peak, and the Eurostoxx50 traded at the highest level since FebruaryCrude oil rallied more than 2.50% yesterday, on hope that the Fed could slow down the rate hikes, and not push the US into a deep recession to fight inflation. The FTX drama In cryptocurrencies, the FTX drama continues with the arrestation of Sam Bankman-Fried in the Bahamas, news that investors withdrew $3.7 billion worth of funds from Binance since last week, and that Binance reportedly stopped the stablecoin USDC withdrawals. Bitcoin But Bitcoin couldn’t care less. The price of a coin advanced more than 3% yesterday, showing that the FTX drama has been priced in and out and further drama should not hit the coin harder. Watch the full episode to find out more! 0:00 Intro 0:27 How does the Fed will about falling US inflation? 5:24 US dollar falls, majors & global equities rally 6:45 Crude oil tests short-term resistance 7:35 Bitcoin up despite unideal sector news 8:33 Tesla trades at cheapest ever PE Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FOMC #Fed #rate #decision #dotplot #USD #CPI #inflation #data #EUR #GBP #JPY #XAU #crudeoil #DAX #EU50 #Bitcoin #SamBankmanFried #FTX #Binance #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

Saxo Bank Podcast: Look At Tesla Posting New Cycle Lows, Equity Market Upside Fading Quickly And More

Saxo Bank Saxo Bank 14.12.2022 13:06
Summary:  Today we look at yesterday's reaction to the softer than expected US November CPI data, with equity market upside fading quickly even as the reaction in US yields and the US dollar was stickier. We also discuss today's upcoming FOMC meeting, with the Fed facing a tough task if it wants to push back against easing market conditions and policy expectations today. We also look at Tesla posting new cycle lows and concerns for the stock and EV market, Apple, Inditex, crude oil, precious metals, and more. Today's pod features Peter Garnry on equities, Ole S Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: FOMC will have a hard time moving the needle today | Saxo Group (home.saxo)
FX Market Update: Dollar Strengthens on Higher-For-Longer Narrative Amid US Data Resilience

"Candid Stories" - Instagram like BeReal? Supermarkets Are Doubling The Number Of Their Own Product Lines

Kamila Szypuła Kamila Szypuła 14.12.2022 12:46
After losing ground to branded products during the pandemic, private label sales have regained momentum this year. Also, Instagram updates come as young people flock to newer apps like BeReal and TikTok. Own brands of stores are becoming more and more attractive Growing inflation has made consumers pay attention to the price and prefer to take advantage of cheaper sukpermaket products instead of their branded counterparts. A recent survey of food retailers by FMI, a food retail group, revealed that more than 80% of respondents plan to moderately or significantly increase their investment in private labels over the next two years. Supermarkets tend to make a higher profit margin on private label goods than on the sale of branded products made by consumer giants. Large supermarket operators such as Kroger Co. in the US and Carrefour S.A. in Europe say they are investing to expand their internal offerings in more price ranges and product categories. Kroger's private label sales increased more than 10% year-on-year in the third quarter, which saw the launch of 147 new store-brand products. Kroger launched a new bargain line called Smart Way in September, which has been purchased by two million households. As the data shows, KR share prices have increased the most this year since the beginning of the pandemic. In the recent period, prices have been in a downward trend, and today their level is 45.45 Kroger shere chart Walmart Inc. it also develops its private label products and tracks growing consumer demand as revenues are squeezed. The Dutch group Koninklijke Ahold Delhaize NV manages supermarket chains in Europe and the US, where its brands are Food Lion and Stop & Shop. The company says its store brands account for half of its sales in the Netherlands and Belgium compared to 30% in the US. The picture is similar in some other parts of Europe, where shoppers tend to buy more branded goods than their American counterparts. Read next: $1 Trillion As Part Of Barclays Efforts To Accelerate The Transition To A Low-Carbon Economy | FXMAG.COM Instagram new feature The photo-sharing app owned by Meta Platforms Inc (Instagram) has been testing a new feature in South Africa since Tuesday. Over two billion people use Instagram every month, says Meta. The app and its parent company had concerns about its impact on younger users. At the same time, some users — including celebrities who have long been champions of the platform — urged the company to "turn Instagram back to Instagram" by prioritizing friends' posts over paid posts. Candid Stories gives users a daily notification to take and share two unfiltered photos using the front and rear camera lenses - similar to the prompts sent by BeReal, which has recently garnered millions of users. Instagram did not say when or if Candid Stories will go global. If Candid Stories goes mainstream, Instagram could have an advantage over BeReal in terms of scale and business model. For Meta critics, Candid Stories will be the latest example of Instagram emulating the features of other popular apps to grow and maintain its user base. Previous examples include Stories, a Snapchat hallmark, and Reels, short TikToks-like videos. Instagram is testing other friend-centric tools. Group Profiles, a new type of profile, allow members to share posts and stories with each other rather than with all of their followers. Group profiles have already started testing in Canada, Chile and Taiwan. The new features are intended to give users more ways to interact with people. After a year-low, Meta shares rose at first but then fell and held its price in the 114-115 range. Today's share price is at 114.71 Source: wsj.com, finance.yahoo.com
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Analytical Report- Molecure – WSE:MOC

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 14.12.2022 15:00
Two programs in the clinical phase In this report, we update our valuation for Molecure. Our new FV is PLN 17.4ps, implying 7% upside vs. the current price. We maintain a HOLD recommendation. Molecure has reached an important milestone in the development of the OATD02 as the project has been approved to enter the clinical phase. In our opinion, OATD-02 is the most valuable asset in Molecure's pipeline, on our forecasts accounting for approximately 60% of the company's FV. By late 2023, Molecure should be able to provide early efficacy data, while we believe the partnering window for this project is already open. On the other hand, for OATD-01, we don't expect any major efficacy or partnering news anytime soon. In our view, the risk of uncertainty for this compound is likely to persist until the clinical trial report in 2025E, and it should be difficult to partner on this project before this milestone is reached. The uncertainty and lack of a short-term partnering perspective on this project limits the upside potential of the share price. OATD-01 to start phase II trial in sarcoidosis in 2023E. We assume that OATD-01 Phase II clinical trials in sarcoidosis will start next year and will last until 2025E. We assume a partnership contract in 2025E based on the results of Phase II clinical trials, with an upfront payment of USD 45m. We assume a probability of success of 10% due to the uncertainty surrounding Galapagos’ termination. The eventual success of Phase II clinical trials could remove the large discount from the OATD-01 valuation and unlock a large upside potential for the stock. OATD-02 has been given the green light for starting clinical trials. In November, Molecure received regulatory approval to begin clinical trials of OATD-02. The company plans to conduct a Phase I, dose-escalation study, on up to 30-40 patients recruited at three Polish centers with advanced or metastatic solid tumors. The company said that the cost of the study should amount to approximately PLN 11m, depending on the number of cohorts and patients. We assume that Molecure will sign a partnership agreement in 2024E after the completion of Phase I (cumulative success probability: 69%). However, in our opinion, the partnering window is already open and the company could commercialize OATD-02 earlier, in Phase I, which we see as a potential upside to our valuation. Share issue risk looms in the mid-term. During the last quarterly presentation, Molecure said that it has secured funding for 20 months, until May 2024, i.e. before the expected completion of the next clinical phases of OATD-01 and OATD-02. We believe that Molecure will first look for non-dilutive financing: grants for the OATD-01 clinical trial, venture capital financing or partnering (OATD-02 or one of the early projects), while a new share issue is the last resort. Recommendation and valuation. We reiterate our HOLD rating for Molecure with a new FV set at PLN 17.4, implying 7% upside vs. the current price. Analyst: Łukasz Kosiarski lukasz.kosiarski@ipopema.pl + 48 882 108 382 GPW’s Analytical Coverage Support Programme 3.0  
Sygnity Stock Faces Headwinds Despite New Government Contracts

Analytical Report – Synektik - Results momentum in 1Q22/23 – WSE:SNT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 15.12.2022 08:00
In this report, we update our forecasts and valuation of Synektik following the 4Q21/22 results release. Based on new forecasts of financial results and FX rates and the current risk-free rate, we set our Fair Value at PLN 42.0ps, which implies 23% upside potential to the current share price. We maintain our Buy recommendation. Synektik is one of our top picks in the healthcare & biotech sector; the company is entering a period of soaring financial results, in 2022/23 we assume PLN 44m in adjusted EBITDA, and a significant improvement in cash generation thanks to higher profits and lower working capital requirements. Synektik is currently valued at 5.9x EV/EBITDA for 2022/23E, which in our opinion is an undemanding level for a growing business with an increasing share of recurring revenues and development prospects for surgical robots, especially on the Polish market. Accumulation of contracts for da Vinci robots. Over the past few months, Synektik has issued a number of announcements concerning the submission of offers and signing of contracts for the supply of da Vinci surgical robots in all three of its markets. In 4Q21/22 the company booked four deliveries, while another seven systems should be booked in 1Q22/23. The high demand on the Polish market, but also from the commencement of reimbursement of procedures using robots by the National Health Fund from April 2022. On the other hand, on the Czech market, where the average utilization of devices is much higher than in Poland and close to its maximum level, the growth in the number of treatments results in further purchases from new as well as existing users. Results momentum in 2022/23. Following the release of 4Q21/22 results with stronger than expected EBITDA margins in the medical equipment and IT segments, we upgraded our forecasts for 2022/23. In 1Q22/23, we assume the sale of seven da Vinci devices and the completion of a large contract for delivery of a ZAP-X system to a hospital in Olsztyn, which, according to our preliminary estimates, should translate into over PLN 125m in revenues and approximately PLN 20m in adjusted EBITDA. For the entire FY22/23, we estimate PLN 299m in revenue, PLN 43.8m in adjusted EBITDA and PLN 17.6m in net profit. Valuation. We value Synektik using a 10-year DCF model. Taking into account the new financial and FX forecasts and the current risk-free rate, we are upgrading the company's Fair Value to PLN 42.0ps from PLN 39.9ps. The new valuation implies 23% upside potential relative to the current share price, and therefore we maintain our Buy recommendation. Analyst: Łukasz Kosiarski lukasz.kosiarski@ipopema.pl + 48 882 108 382 GPW’s Analytical Coverage Support Programme 3.0  
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Report – Pointpack- P2A: Only Partially Sweet Fruit – WSE:PNT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 15.12.2022 08:03
We expect Pointpack to experience significant changes in 2023E, with the recognition of a substantial part of the P2A contract with Polish Post in the firm’s financial consolidated results, effectively boosting revenues, EBITDA and the bottom line. The uptick is likely to look spectacular on a y/y nominal basis (as well as on standalone 2023E multiples with 2023E EV/EBITDA at 1.0x) and may attract some attention. However, we expect the overall effect to be quite limited (we estimate the total NPV of the P2A deal at only PLN 0.5m). Due to elevated costs in 2022E we have cut our net profit forecast to PLN 3.5m (-43% y/y) for 2022E. On the other hand, we have increased our net profit forecasts to PLN 11.0m for 2023E and PLN 10.2m for 2024E (up from PLN 8.5m and PLN 9.5m previously). Our base-case scenario does not assume an extension of the P2A contract with Polish Post, hence we still expect to see the first dividend in 2024E and we have increased our 2024E DPS forecast to PLN 9.86ps (DY of 30.9%), up from PLN 7.60ps previously. Moreover, we highlight the end of the pilot program between Zabka and InPost, which we believe dispels the risks related to InPost’s entrance to the PUDO segment. With our positive outlook on the core business, we maintain a BUY rating and set our FV at PLN 65.00ps (vs. PLN 55.00ps previously), which implies 104% upside. On our forecasts, Pointpack trades at a P/E of 3.2x/3.5x for 2023E/2024E. ‘ Two sides of the P2A coin. The contribution from P2A to Pointpack’s 2023E results look astonishingly strong: we estimate the P2A’s revenues at PLN 131.9m and EBITDA at PLN 14.4m next year (after some delays from 2022E). We think P2A’s contribution should be considered in a broader context, namely: 1) the effective price paid for a 51% stake (i.e. PLN 10m paid to one of P2A’s stakeholders for bonds issued by P2A on top of an immaterial few PLN k for equity); 2) Pointpack’s roughly 51% stake in P2A, which means that consolidated EBITDA is not the best proxy for the project’s results attributed to Pointpack; there is also the consideration of dividend payments to P2A’s minority stakeholders; and 3) the surprisingly high cost of financing (i.e. a fixed 15% on loans drawn by Pointpack). In total, we estimate the P2A project’s NPV (excluding working capital changes) for Pointpack at only PLN 0.5m, assuming no extension of the contract with Polish Post; this fades in comparison with our forecast for the P2A project’s consolidated EBITDA at PLN 14.4m for 2023E. Improving trend of parcel volumes is a good sign. The volume of parcels handled by PUDO points within Pointpack’s network amounted to 6.8m in 3Q22, which implies +37% growth in the period versus +29%/+11% y/y in 2Q22/1Q22 (1Q22 was not fully comparable as it was negatively affected by the Russian invasion of Ukraine). Pointpack’s CEO noted recently that he expects to see record volumes in 4Q22E, which should also translate into a decent y/y dynamic. With the slight slowdown in the macro environment, we would be positive about any potential improvement in the dynamics. Analyst: Marcin Nowak marcin.nowak@ipopema.pl + 48 22 236 92 44 GPW’s Analytical Coverage Support Programme 3.0  
Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges

Report - ATM Grupa - Delay driven 2023E outlook – WSE:ATM

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 15.12.2022 08:05
Although we still perceive ATM Grupa as a good long-term premium content exposure, there are limited positive triggers within the core business in the short term. We expect the company’s core media business to adapt to the curbed pipeline of premium TV series content and lower comparable demand for usual TV content anticipated in 2023E. Moreover, after the payment of a PLN 0.08ps advance dividend in December, our forecast of a total 2023E DPS of PLN 0.31ps (DY of 8.8%) looks neutral vs. the total paid 2022 DPS of PLN 0.28ps (combined with the advance payment). On the other hand, we are negative about the company’s decision to expand its real estate operations with the purchase of a SPV in Sweden for SEK 25.7m. The company now owns a land plot that will allow the construction of a project roughly five times the size of the one that recently ended, to be realized in three to five stages. The company is also contributing PLN 16.5m to the ATM Baltic SPV (ATM Grupa holds a 50% stake) for the Sianozety project on the Baltic Sea coast. In our view focusing on the core business might be more beneficial over the long term and would be welcomed by investors. Overall, we forecast revenues at PLN 238m/271m (-10%/+14% y/y) in 2023E/2024E (excluding estimated PLN 46m from the Swedish project in 2022E we forecast 2023E adj. top line dynamic at +9% y/y) and net profit at PLN 37m/44m (-5%/+21% y/y), down from PLN 43m/51m assumed earlier. We maintain our BUY recommendation and increase our FV to PLN 4.50 per share (implying 27% upside) from PLN 4.40ps. On our forecasts, ATM Grupa trades at a P/E of 8.1x/6.7x for 2023E/2024E. Dark clouds gather on the premium pipeline. We remain optimistic about the demand for premium content over the long term, as we believe OTT platforms in general will gradually increase in the mix of local market content. However, the outlook for 2023E seems uninspiring. With the completion of “Lovzone” in 2022 (ordered by Netflix) and the uncertain timing of the “Black Dog” TV series for Viaplay (delayed from 2022) the company’s short-term pipeline of TV series looks relatively thin on the ground in terms of anchor projects. Within movies, ATM Grupa has one movie scheduled for release in 1Q23, but the subsequent pipeline is limited according to management comments made after the 2Q22 results. Overall we have reduced the number of premium TV series to be produced from 1.6x/2.8x to 1.3x/2.0x in 2023E/2024E respectively, but we maintain our longterm assumption of 5x premium TV series annually. Potential disposal of Boombit remains uncertain. In our base scenario we do not include the potential disposal of ATM Grupa’s stake in Boombit (4.0m shares, 29.63% of Boombit’s equity; the strategic review process started in November 2021). The likelihood of the disposal taking place declines with each passing month, in our view, and the company does not have to push for the transaction if the conditions are not ideal, as ATM Grupa has a healthy balance sheet and a relatively low need for cash to finance core content operations. Analyst: Marcin Nowak marcin.nowak@ipopema.pl + 48 22 236 92 44 MichaÅ‚ Wojciechowski michal.wojciechowski@ipopema.pl + 48 22 236 92 69 GPW’s Analytical Coverage Support Programme 3.0
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Report - Ultimate Games - The year of back catalogue -WSE:ULG

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 15.12.2022 08:06
In 2022 the company released 66 games, down from 83 titles released in 2021; however, likely thanks to a still strong back catalogue, Ultimate Games will be able to increase revenue to PLN 31.8m this year (up 26% y/y), according to our forecast. We also expect a slight decline in profitability (EBIT margin at 20%, down 4pp) driven by expanding costs of brought-in services (likely driven by the developers’ revenue share and in general higher costs of work). In the forecast for the next year, we tentatively assume no breakout hit (we believe both Ultimate Hunting and Thief Simulator 2 could arrive in 2024E); nevertheless, with expected multiple smaller releases and a solid back catalogue, we expect Ultimate Games to improve revenues by 5% y/y, up to PLN 33.4m and adj. net profit to PLN 6.4m, up 9% y/y. On our forecasts, the company trades at a P/E of 14.6x/13.3x in 2022E/23E, at a high, double digit discount to foreign peers. We maintain our HOLD recommendation and decrease our FV to PLN 15.5 (5% downside), due to weaker than expected performance of games, anticipated longer production cycles as well as lower profitability. Ultimate Fishing Simulator 2. On 22 August Ultimate Games released Ultimate Fishing Simulator 2 Early Access. The game reached 19th place on Steam’s Top sellers list and achieved the peak of concurrent players at 924, which represents an 140% increase over performance of its predecessor released in November 2017. What’s important, following its launch, the game has been systematically improving its reception – as of now the average user rating is at 79% positive on Steam with the most recent ratio at 94% positive (vs. 90% for UFS1). We believe this suggests its potential for a long lifecycle. In our forecast for 2023E, we assume UFS2 to sell 60k copies. Ultimate Hunting and Thief Simulator 2. We move our expectations for one top selling title from the group to be released in 2024E and subsequent years and achieve 150k copies sold in the initial 12M (vs. previously expected as of 2023E). We believe that among the potential top performing titles are Ultimate Hunting as well as Thief Simulator 2 (however, in the case of this title, Ultimate Games will be more beneficial on a console port than on the PC version). Potential Switch port deals for top performing PlayWay titles remains an upside story for the company. Dividend. We expect Ultimate Games to keep high dividend payments with DPS of PLN 0.85/0.92 in 2022E/23E (DY of 5.2%/5.6% respectively). Analyst: MichaÅ‚ Wojciechowski Michal.Wojciechowski@ipopema.pl + 48 22 236 92 69 Marcin Nowak Marcin.Nowak@ipopema.pl GPW’s Analytical Coverage Support Programme 3.0  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

Technical Analysis Of Nasdaq 100 Index By Arief Makmur

InstaForex Analysis InstaForex Analysis 15.12.2022 08:24
Although on its 4 hour chart Nasdaq 100 index seems move in a ranging condition but with the appearance of: 1. The deviation between price movement with CCI indicator. 2. The appearance of Bearish 123 pattern. 3. Followed by the appearance of Ross Hook (RH). Based on three things above then in a nearest term #NDX has a potential to try to go down to test the Bearish Ross Hook level at 11608.9 if this level is successfully broken then the next level to go to is 11410.1 but if on the way to these levels there is a sudden upward correction to pass the 12007.9 level then the scenario of a decline has been described earlier will cancel by itself.   Relevance up to 04:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115775
At The Close On The New York Stock Exchange Indices Closed Mixed

The S&P500 Index Still Has The Potential To Fall

InstaForex Analysis InstaForex Analysis 15.12.2022 08:25
If we look at the 4-hour chart, the S&P500 index looks: 1.The price has dropped out of its Bullish Pitchfork channel. 2. There are deviations between price movements and the CCI indicator. 3. The appearance of the Bearish 123 pattern is followed by the Bearish Ross Hook. So based on the 3 things above, it can be concluded that in the near future #SPX will try to break below the Bearish Ross Hook level at 3963.49. If this level is successfully broken, then #SPX still has the potential to fall to the level of 3931.08 but please pay attention too because price movements are still above and stuck at the 100 MA if there is an upward correction past the 4059.42 level then it is very likely that the decline scenario described earlier will become invalid. Relevance up to 04:00 2022-12-16 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/115771
Weekly Commitment of Traders update - Buying of crude oil moderated, ICE gas oil net long reduced to a 30-month low

Overall Crude Consumption Is Expected To Rise Next Year | The ECB And The Bank Of England Are Expected To Follow The Fed

Saxo Bank Saxo Bank 15.12.2022 08:50
Summary:  The widely expected 50bps rate hike by the Fed came along with hawkish revision of the dot plot in which the terminal rate projection was increased to 5.1% from September’s 4.6%. Equities and bonds fell but the reaction faded later at Chair Powell’s presser where he hinted that policy is close to “sufficiently restrictive”. Dollar ended the day lower. Meanwhile, China’s plan to go ahead with the Central Economic Work Conference despite the surge in cases boosted sentiment. Crude oil prices were firmer on IEA expecting higher prices next year. A plethora of G10 central banks, including the BoE, ECB, SNB, & Norges Bank, meet today. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) erase part of the post-FOMC announcement declines Equity markets were in a whipsaw falling sharply after the announcement of a 50bps rate hike which was accompanied by a hawkish shift in the dot plot which brought the terminal rate projections to 5.1% for end-2023 from 4.6% at the September meeting. Some of the decline was however reversed later as Chair Powell press conference went underway. Fed Chair Powell started the press conference with a hawkish tone in which he noted there is still some ways to go and the Fed needs to see substantially more evidence to have confidence inflation is on a sustained downward path back to target, although there was some reprieve after Powell stated during the Q&A that he thinks policy is getting to a pretty good place and close to sufficiently restrictive. S&P 500 ended the session down 0.6% and Nasdaq 100 was down close to 0.8%. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) edged higher in a lackluster session Hong Kong and Chinese stocks edged up higher. The Bloomberg story speculating about a delay in China’s annual Central Economic Work Conference due to a surge in Covid inflections in Beijing did not worry investors much. Investors were encouraged by signs that the Chinese authorities were not reversing course despite outbreaks after the easing of restrictions. China will stop reporting infections without symptoms as mandatory testing has been dropped. Hang Seng Index climbed 0.4%. CSPC Pharmaceutical (01093:xhkg), rising 6.5%, was the best performer in the benchmark index. Hengan (01044:xhkg), Sunny Optical (02382:xhkg), Techtronic Industries (00669:xhkg), Li Ning (02331:xhkg), and Baidu (09888:xhkg) were other outperformers, gaining between 3% and 6%. Previously battered Chinese educational services providers soared while online healthcare names pulled back from recent strength on profit-taking. Alibaba Health (00241) slid 7%. In A-shares, CSI 300 gained 0.3%, with semiconductor, tourism, lodging, and Chinese liquor stocks advancing. FX: Hawkish Fed unable to provide a lasting bid to the dollar The USD eventually settled lower on Wednesday following the FOMC rate decision and the press conference by Chair Powell. Initial positive reaction following the upside adjustment in the dot plot was erased as Chair Powell said he thinks policy is getting to a pretty good place and policy is getting close to sufficiently restrictive. GBPUSD tested the critical 1.2450 with UK CPI also coming in softer than expected at 10.7% and cooled from the prior 11.1%. EURUSD got in close sight of 1.0700 while USDJPY fluctuated between 135-136. Crude oil (CLF3 & LCOG3) extended the rally on IEA outlook Crude oil prices surged higher again on Wednesday with the IEA warning that prices may rise next year as sanctions squeeze Russian exports. It expects its output will fall by 14% by the end of the first quarter. It also increased estimates for global demand by 300kb/d, in a nod to China’s reopening. Overall crude consumption is expected to rise 1.7mb/d next year to average 101.6mb/d. A weaker US dollar despite the Fed’s hawkish shift in the dot plot also underpinned, while the unexpectedly large increase in US inventories was shrugged off. WTI futures rose above $77/barrel while Brent touched $83.  Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM What to consider? FOMC sets the terminal rate forecast at 5.1%, above market expectations The Fed voted unanimously to lift the Federal Funds Rate target by 50bps to 4.25-4.50%, as expected, downshifting the pace of rate hikes. While the statement was broadly unchanged, the updated economic projections showed Fed Funds at 5.125% by December 2023 and core PCE still at 3.5% by that time. That implies 75bps of more tightening in this cycle, which will be seen in 2023, but the markets are still pricing in a peak rate of 4.87%. After that point, the dot plot is far more distributed, but the median projects the Federal Funds Rate target at 4.1% by the end of 2024, suggesting 100bps of rate cuts. Equities did see a negative reaction to the upside surprise in terminal rate projections, but this may remain short-lived as markets remain focused on incoming data. Bond markets had little reaction to the Fed’s updated dot plot. Dollar fell. Australia employment report better-than-expected Australia’s November employment rose 64k, higher than the +19k estimate and more than the revised +43k gains for October. Jobless rate was steady at 3.4% and participation rate came out higher to return to the record highs of 66.8% (vs. estimate 66.6%). The strength in the labor market will continue to provide room to the Reserve Bank of Australia to continue with its modest rate hikes, after it has already downshifted to a smaller rate hike trajectory. A weak set of Chinese activity data is expected Economists surveyed by Bloomberg are forecasting that China’s retail sales shrank sharply by 3.9% Y/Y in November. The potential weakness is likely attributed to poor performance of auto sales, dining-in activities, and sales during the “double-11” online shopping festival in the midst of Covid-19 lockdowns during the best part of November. November auto sales in China fell by 9.2 %Y/Y and by 10.5% M/M. Courier parcels processed on Nov 11 fell 20.7% Y/Y. The growth in industrial production is expected to fall to 3.7% Y/Y in November from 5% to 3.7%, following a weak November NBS manufacturing PMI and soft high-frequency data of steel production. Year-to-date fixed asset investment is expected to edge0 down to 5.6% from 5.8%, dragged by stringent pandemic control practices. ECB also likely to downshift to a smaller rate hike The European Central Bank (ECB) is also expected to slow down its pace of rate hikes to a 50bps increase this week. Headline inflation eased slightly in November, coming in at 10.0% YoY (exp. 10.4%), but was overshadowed by an unexpected rise in core inflation 6.6% YoY (exp. 6.3%, prev. 6.4%). While there is likely to remain some split in ECB members at this week’s meeting, the central bank’s Chief Economist Lane remains inclined to take into account the scale of tightening done so far. There is also uncertainty on the announcement of quantitative tightening. Bank of England may remain more divided than the other major central banks The Bank of England is also expected to follow the Fed and the ECB and downshift to a smaller rate hike this week, but the decision will likely see a split vote. A host of key data, including GDP, employment and inflation will be due this week in the run up to the BOE decision, and significant positive surprises could tilt the market pricing more in favour of a larger move which also creates a bigger risk of disappointment from the central bank. Headline annualised inflation advanced to 11.1% Y/Y in October, while the core rate remained at an elevated level of 6.5%. Consensus expects inflation to cool slightly to 10.9% Y/Y in November, but the core to remain unchanged at 6.5% Y/Y. Wage pressures are also likely to be sustained, and the cooling in the labor market will remain gradual. The U.S. is adding China’s top memory chips maker to the trade blacklist The U.S Department of Commerce is reportedly moving Yangtze Memory Technologies, a leading memory chip maker in China, together with 30+ other Chinese companies, from the Unverified List to the Entity List, after the expiry of a 60-day period for the company to answer requests for information about its business and customers. The Entity List is the official export control blacklist that restricts companies from access to American technologies. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM New Zealand Q3 GDP comes in above expectations A big positive surprise in NZ Q3 GDP which came in at 2.0% Q/Q sa vs expectations of 0.9% and higher than last quarter’s revised 1.9%. With the possibility of a recession in 2023 highlighted yesterday, this print suggests that there is a substantial amount of work left to be done by the Reserve Bank of New Zealand to dampen demand in order to curb inflation. Bank of Japan policy review speculation gathers further pace Some reports suggested that the BOJ could review policy next year, after pay growth and any slowdown in the global economy are closely examined. The results of spring wage negotiations come in mid-March, after Governor Haruhiko Kuroda's final policy meeting, so an assessment would probably be done after he departs. The review could reaffirm the existing ultra-loose framework, but possibility of some tweaks to the yield curve control policy remains as inflationary pressures remain a concern.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: FOMC’s hawkish dot plot; more G10 central bank meetings ahead – 15 December 2022 | Saxo Group (home.saxo)
Tesla (TSLA) slumped 8.88% after the electric-car maker offered a higher discount of $7,500 on Model 3 and Model Y vehicles in the U.S

Tesla (TSLA) sank a further 2.58% after Goldman Sachs lowered its price target on the stock

Intertrader Market News Intertrader Market News 15.12.2022 08:51
DAILY MARKET NEWSLETTER December 15, 2022                 Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,399.00 -65.00 (-0.45%) Read the analysis 14,350.00 14,505.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,461.00 7,509.00     S&P 500 (CME) 4,030.50 -0.25 (-0.01%) Read the analysis 4,070.00 3,997.00     Nasdaq 100 (CME) 11,854.50 -14.50 (-0.12%) Read the analysis 12,060.00 11,730.00     Dow Jones (CME) 34,258.00 +19.00 (+0.06%) Read the analysis 34,620.00 33,960.00     Crude Oil (WTI) 76.63 -0.65 (-0.84%) Read the analysis 77.80 75.70     Gold 1,795.33 -11.995 (-0.66%) Read the analysis 1,785.00 1,805.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Wednesday, U.S. stocks posted an intraday reversal to the downside after investors digested Federal Reserve Chair Jerome Powell's hawkish post-rate-hike comments. The Dow Jones Industrial Average closed 142 points lower (-0.42%) to 33,966, the S&P 500 fell 24 points (-0.61%) to 3,995, and the Nasdaq 100 slid 93 points (-0.79%) to 11,740.As widely expected, the Federal Reserve raised its key interest rates by 50 basis points to 4.25-4.50%. The Fed now projects the key rate to reach 5.10% by the end of 2023.And Jerome Powell pointed out the central bank will not cut interest rates until its inflation target of 2% is reached.The U.S. 10-year Treasury Yield dropped 2.9 basis points to 3.472%.Automobiles (-2.14%), diversified financials (-1.56%), and semiconductors (-1.49%) sectors lost the most.Tesla (TSLA) sank a further 2.58% after Goldman Sachs lowered its price target on the stock.Marriott International (MAR) fell 2.32% as the hotel operator was downgraded to "neutral" at Citi.On the other hand, Delta Air Lines (DAL) rose 2.79% as the airline gave a better-than-expected full-year guidance on adjusted earnings per share.Pfizer (PFE) gained 2.66% on reports that the drugmaker has been allowed to import and distribute antiviral drug Paxlovid in China.European stocks also closed lower. The DAX 40 fell 0.26%, the CAC 40 dropped 0.21%, and the FTSE 100 dipped 0.09%.U.S. WTI crude futures added $2.00 to $77.38 a barrel. The U.S. Energy Department reported an addition of 10.23 million barrels in crude-oil stockpiles, in contrast to a reduction of 3.59 million barrels expected.Gold price declined $3 to $1,807 an ounce.Market Wrap: ForexThe U.S. dollar softened against other major currencies. The dollar index declined to 103.62.EUR/USD rose 52 pips to 1.0685. Data showed that the Eurozone's industrial production declined 2.0% on month in October (vs -1.2% expected).GBP/USD gained 64 pips to 1.2430. In the U.K., the inflation rate slowed to 10.7% on year in November (vs +11.0% expected).USD/JPY dropped 16 pips to 135.43.AUD/USD added 9 pips to 0.6864. This morning, Australia's data showed that the jobless rate remained stable at 3.4% in November with employment rising by 64,000 (vs +25,000 expected).USD/CHF declined 44 pips to 0.9240, and USD/CAD was little changed at 1.3544.Bitcoin once broke above $18,000 before retreating to $17,800 after the 50-basis-point rate hike was confirmed.Morning TradingIn Asian trading hours, Japan's data showed that trade deficit narrowed to 2.03 trillion yen in November (vs 1.80 trillion yen expected) with exports increasing 20.0% on year (vs +24.0% expected).USD/JPY was stable at 135.53.Australia's data showed that the jobless rate remained stable at 3.4% in November with employment rising by 64,000 (vs +25,000 expected).AUD/USD declined to 0.6839.EUR/USD retreated to 1.0655, and GBP/USD traded lower to 1.2392.Gold price lost again the handle of $1,800 an ounce.Bitcoin declined further to $17,720.Expected TodayIn the U.K., the Bank of England is expected to raise its key interest rate by 50 basis points to 3.50%.The European Central Bank is expected to increase its key interest rates by 50 basis points to 2.0-2.5%.In the U.S., retail sales are expected to grow 0.2% on month in November. The latest number of initial jobless claims is expected at 235,000.The New York State manufacturing index is expected to fall to 1.0 in December, while the Philadelphia Fed manufacturing index is expected to improve to -7.0 in December.           UK MARKET NEWS           AstraZeneca, a global biopharmaceutical company, said the U.S. Food and Drug Administration (FDA) will extend the Prescription Drug User Fee Act (PDUFA) date by three months to provide further time for a full review of the supplementary new drug application (sNDA) for Lynparza (olaparib) in combination with abiraterone and prednisone or prednisolone for the treatment of metastatic castration-resistant prostate cancer (mCRPC).Auto & Parts, chemicals and insurance shares gained most in London on Tuesday.From a relative strength vs FTSE 100 point of view, BAE Systems (+1.61% to 834.2p), Compass Group (+1.37% to 1925p), Croda International (+0.29% to 7016p) crossed above their 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   07:00 BoE Interest Rate Decision 3.5% HIGH     07:00 MPC Meeting Minutes   MEDIUM     07:00 BoE MPC Vote Cut 0/9 MEDIUM     07:00 BoE MPC Vote Unchanged 0/9 MEDIUM     07:00 BoE MPC Vote Hike 9/9 MEDIUM     08:30 Retail Sales MoM (Nov) 0.2% HIGH     08:30 Initial Jobless Claims (Dec/10) 235k MEDIUM     08:30 NY Empire State Manufacturing Index (Dec) 1 MEDIUM     08:30 Retail Sales Ex Autos MoM (Nov) 0.5% MEDIUM     08:30 Philadelphia Fed Manufacturing Index (Dec) -7 MEDIUM     09:15 Industrial Production YoY (Nov) 2.7% MEDIUM     09:15 Industrial Production MoM (Nov) -0.2% MEDIUM     10:00 Business Inventories MoM (Oct) 0.3% MEDIUM     16:00 Net Long-term TIC Flows (Oct)   MEDIUM     19:01 GfK Consumer Confidence (Dec) -43 HIGH                                     NEWS SENTIMENT           HSBC Holdings PLC HSBA : LSE 497.70 GBp +0.48% In the last 5 days         NEWS SENTIMENT (24H) Neutral       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Uniper SE UN01 : XETRA 3.044 EUR -7.25% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   RWE AG RWE : XETRA 42.73 EUR +2.08% In the last 5 days         NEWS SENTIMENT (24H) Neutral       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Rio Tinto PLC RIO : LSE 5,622.00 GBp -2.73% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Deliveroo PLC ROO : LSE 86.90 GBp -4.06% In the last 5 days         NEWS SENTIMENT (24H) Very Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Barclays PLC BARC : LSE 160.26 GBp +2.21% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: the upside prevails.   Pivot: 1.0635   Our preference: Long positions above 1.0635 with targets at 1.0700 & 1.0725 in extension.   Alternative scenario: Below 1.0635 look for further downside with 1.0610 & 1.0585 as targets.   Comment: The RSI lacks downward momentum.                     Euro Stoxx 50 (Eurex)‎ (Z2)‎ Intraday: under pressure.   Pivot: 3984.00   Our preference: Short positions below 3984.00 with targets at 3944.00 & 3921.00 in extension.   Alternative scenario: Above 3984.00 look for further upside with 3995.00 & 4017.00 as targets.   Comment: As long as the resistance at 3984.00 is not surpassed, the risk of the break below 3944.00 remains high.                     Brent (ICE)‎ (G3)‎ Intraday: bullish bias above 81.20.   Pivot: 81.20   Our preference: Long positions above 81.20 with targets at 83.60 & 85.20 in extension.   Alternative scenario: Below 81.20 look for further downside with 80.10 & 78.60 as targets.   Comment: Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.        
Serious liquidity crisis? According to Franklin Templeton, a massive, but unlikely deposit flight from Credit Suisse would have to happen

The Swiss National Bank Is Expected To Hike Another 50bp | The BOJ Could Review Policy Next Year

Saxo Bank Saxo Bank 15.12.2022 08:55
Summary:  The FOMC meeting and accompanying economic and Fed Funds projections saw the Fed attempting to bolster its inflation fighting credibility with forecasts of a weaker economy and higher inflation and policy projections than in September. But after some back-and-forth churning, the market decided it was largely a non-event, with very minor shifts in the USD and US yields. Today, we have four more G10 central banks on the menu.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The market initially took the hawkish FOMC rate and inflation projections at face value last night, plunging sharply, if briefly, before rebounding slightly into the close. The trading ranges for the main indices are generally sandwiched in a narrow zone between important support and resistance. In the case of the S&P 500, the upside range high is clearly marked at just above 4,100, while the downside support level comes in the 3,900-20 area. FX: The USD merely churned around with little conviction on latest hawkish Fed blast The new FOMC monetary policy statement and economic and policy projections (more below) were hawkish as the Fed raised the median policy forecast for the end of next year to above 5%, but after a volatile reaction, traders decided they were unimpressed and the US dollar largely fell back to where it was trading ahead of the meeting as only the shortest part of the yield curve was marked slightly higher in recognition of the Fed’s hawkishness and risk sentiment stabilized. If the market is willing to ignore Fed guidance, what should we expect from the market’s treatment of today’s central bank meetings? Watching USDJPY cycle lows and the 200-day moving average where the pair is sticky (currently near 135.65) and the cycle top in EURUSD just ahead of 1.0700 after yesterday’s stab at posting new highs. Crude oil (CLF3 & LCOG3) Crude oil trades softer ahead of the reopening of a key pipeline in the US and following a strong session on Wednesday where prices found support after the IEA warned that prices may rise next year as sanctions squeeze Russian exports. It expects its output will fall by 14% by the end of the first quarter. It also increased estimates for global demand by 300kb/d, in a nod to China’s reopening and more gas-to-oil switching. Overall crude consumption is expected to rise 1.7mb/d next year to average 101.6mb/d. China’s reopening and a weaker US dollar despite the Fed’s hawkish shift in the dot plot also underpinned prices, while the unexpectedly large 10mb increase in US inventories and signs of slowing demand for gasoline and diesel were shrugged off. Both Brent and WTI are now facing resistance at the 21-day average, at $83.25/b and $77.80/b respectively. Gold (XAUUSD) was little changed after the FOMC raised its terminal rate forecast ... and Fed Chair Powell said the central bank isn’t close to ending its battle against inflation. Supported by ten-year US yields holding steady around 3.5%, the most inverted yield curve in four decades on recession angst and the dollar trading near a six-month low. However, following a 180-dollar rally during the past five weeks and after struggling to break resistance around $1808 this week, the metal increasingly looks ripe for a period of consolidation which may see it drift lower towards $1745, the 38.2% retracement of the run up since early November. A correction of this magnitude may setup an eventual and potential healthier and robust attempt to break higher. US treasury yields underwhelmed by FOMC meeting (TLT:xnas, IEF:xnas, SHY:xnas) The FOMC accompanying projection materials saw the Fed projecting significantly higher inflation for 2023 than expected, and a higher median Fed Funds rate projection just north of 5%. This sparked a sharp reaction in Treasury yields, with the 2-year rising more than 10 basis points briefly before sawing that move in half, while the 10-year yield only rose about 5 bps before wilting back just below 3.50%. Incoming data will set to the tone from here as the market was largely unmoved by the Fed’s rather bold rate projections of its policy rate and inflation for 2023 in last night’s FOMC meeting. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM What is going on? FOMC sets the terminal rate forecast at 5.1%, above market expectations The Fed voted unanimously to lift the Federal Funds Rate target by 50bps to 4.25-4.50%, as expected, downshifting the pace of rate hikes. While the statement was broadly unchanged, the updated economic projections showed Fed Funds at 5.125% by December 2023 and core PCE still at 3.5% by that time. That implies 75bps of more tightening in this cycle, which will be seen in 2023, but the markets are still pricing in a peak rate of 4.87%. After that point, the dot plot is far more distributed, but the median projects the Federal Funds Rate target at 4.1% by the end of 2024, suggesting 100bps of rate cuts. Equities did see a negative reaction to the upside surprise in terminal rate projections, but this may remain short-lived as markets remain focused on incoming data. Bond markets had little reaction to the Fed’s updated dot plot. The dollar fell. Australia employment report better-than-expected Australia’s November employment rose 64k, higher than the +19k estimate and more than the revised +43k gains for October. The jobless rate was steady at 3.4% and participation rate came out higher to return to the record highs of 66.8% (vs. estimate 66.6%). The strength in the labor market will continue to provide room to the Reserve Bank of Australia to continue with its modest rate hikes, after it has already downshifted to a smaller rate hike trajectory. New Zealand Q3 GDP comes in above expectations A big positive surprise in NZ Q3 GDP which came in at 2.0% Q/Q sa vs expectations of 0.9% and higher than last quarter’s revised 1.9%. With the possibility of a recession in 2023 highlighted yesterday, this print suggests that there is a substantial amount of work left to be done by the Reserve Bank of New Zealand to dampen demand in order to curb inflation. What are we watching next? The Bank of England may remain more divided than the other major central banks The Bank of England is also expected to follow the Fed and the ECB and downshift to a smaller rate hike this week, but the decision will likely see a split vote. A host of key data, including GDP, employment and inflation will be due this week in the run up to the BOE decision, and significant positive surprises could tilt the market pricing more in favour of a larger move which also creates a bigger risk of disappointment from the central bank. Headline annualised inflation advanced to 11.1% Y/Y in October, while the core rate remained at an elevated level of 6.5%. Consensus expects inflation to cool slightly to 10.9% Y/Y in November, but the core to remain unchanged at 6.5% Y/Y. Wage pressures are also likely to be sustained, and the cooling in the labor market will remain gradual. ECB is also likely to downshift to a smaller rate hike The European Central Bank (ECB) is also expected to slow down its pace of rate hikes to a 50bps increase this week. Headline inflation eased slightly in November, coming in at 10.0% YoY (exp. 10.4%) but was overshadowed by an unexpected rise in core inflation of 6.6% YoY (exp. 6.3%, prev. 6.4%). While there is likely to remain some split in ECB members at this week’s meeting, the central bank’s Chief Economist Lane remains inclined to take into account the scale of tightening done so far. There is also uncertainty on the announcement of quantitative tightening. Bank of Japan policy review speculation gathers further pace Some reports suggested that the BOJ could review policy next year, after pay growth and any slowdown in the global economy are closely examined. The results of spring wage negotiations come in mid-March, after Governor Haruhiko Kuroda's final policy meeting, so an assessment would probably be done after he departs. The review could reaffirm the existing ultra-loose framework, but possibility of some tweaks to the yield curve control policy remains as inflationary pressures remain a concern. Norges Bank and Swiss National Bank also up this morning The Swiss National Bank is expected to hike another 50 basis points, taking its policy rate to 1.00%, with little anticipation of pointed guidance coming into this meeting as Swiss inflation has peaked at 3.50% for the cycle and was 3.0% for the most recent print. The Norges Bank, meanwhile, seems more interested in signaling that policy tightening is set to cease and may indicate that today’s expected 25 basis point hike to 2.75% could be the last for now as it is concerned about weakness in the “mainland” (non-oil & gas) economy after the worst Regions Survey outlook since the global financial crisis. Earnings to watch The big name reporting today is Adobe Inc., the former high-flyer that trade north of 700 before rolling over to below 300 on the rise in interest rates and as its steady pace of top-line growth decelerated in recent quarters. The stock closed yesterday at 339. Many highly-valued growth stocks have been extremely sensitive to both execution for the current quarter and revenue expectations for the coming quarter, so traders should brace for this earnings report after market hours today. Today: Adobe Friday: Accenture, Darden Restaurants Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Economic calendar highlights for today (times GMT) 0830 – Switzerland SNB Policy Rate Announcement 0900 – Switzerland SNB press conference 0900 – Norway Norges Bank Deposit Rate announcement 1200 – UK Bank of England Rate Announcement 1315 – Eurozone ECB Rate Announcement 1315 – Canada Nov. Housing Starts 1330 – US Dec. Empire Manufacturing 1330 – US Nov. Retail Sales 1330 – US Weekly Initial Jobless Claims 1330 – US Dec. Philadelphia Fed Business Outlook 1345 – Eurozone ECB Press Conference 1415 – US Nov. Industrial Production 1530 – EIA's Natural Gas Storage Change 1900 – Mexico Rate Announcement 0001 – UK Dec. GfK Consumer Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source:Financial Markets Today: Quick Take – December 15, 2022 | Saxo Group (home.saxo)
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

The European Central Bank (ECB), The Bank Of England (BoE) And The Swiss National Bank (SNB) Are Also Expected To Hike The Rates By 50bp

Swissquote Bank Swissquote Bank 15.12.2022 10:46
As expected, the Fed raised its interest rates by 50bp to 4.25/4.50% range, the dot plot showed that the Fed officials’ median forecast for the peak Fed rate rose to 5.1%. Forecasts Plus, the distribution of rate forecasts skewed higher, with 7 officials out of 19 predicting that the rates could rise above 5.25%. Moreover, the inflation forecast for next year was revised higher DESPITE the latest decline in inflation. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM And the median rate forecast for 2024 was revised higher to 4.1%. In summary, the FOMC message was very clear: the Fed is not ready to stop hiking rates - even though they will be hiking by smaller chunks. Today's decisions Today, the European Central Bank (ECB), the Bank of England (BoE) and the Swiss National Bank (SNB) are also expected to hike the rates by 50bp to tame inflation in Europe. Watch the full episode to find out more! 0:00 Intro 0:36 Powell dashes dovish Fed hopes 2:40 Stocks fell, and could fall lower 4:30 USD gained, but may not gain much 5:33 ECB to hike by 50bp 7:27 BoE to hike by a dovish 50bp 8:50 SNB to hike by 50bp, as well! But a 50bp hike is not the same for all, as they don’t have the same inflation levels! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM #ECB #BoE #FOMC #Fed #SNB #rate #decision #dotplot #USD #EUR #GBP #CHF #CPI #inflation #growth #forecasts #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Doubts Surround Euro Amid European Economic Concerns and Political Speeches

Vietnamese Warehouse Equipment Maker Sues Amazon, Musk once again sold Tesla shares, Warner Bros. Discovery Inc Has Problems With High Costs

Kamila Szypuła Kamila Szypuła 15.12.2022 12:29
Warner Bros. Discovery Inc continues to cut costs and expects restructuring costs to increase by up to $1 billion than anticipated less than two months ago. Amazon sued for breach of contract. Once again, Elon Musk decided to sell Tesla shares, leaving himself 13.4%. Amazon is sued The Vietnamese warehouse equipment maker says in a lawsuit filed in New York on Tuesday that it has dramatically expanded its operations in eight years to accommodate Amazon's rapid growth. This included setting up more manufacturing facilities, more than doubling the workforce, and cutting ties with other large retail clients such as IKEA, Columbia Sportswear Co. and Decathlon S.A. Gilimex said Amazon scaled up its purchases in 2020 and 2021, when e-commerce sales were booming as the pandemic shifted consumer behavior, then sharply pulled back orders this year as online sales growth slowed. Gilimex said the partnership was built on "trust" and Gilimex relied on the accuracy of Amazon's forecasts to make appropriate investments to meet demand, including purchasing materials and arranging capacity and manpower to meet the US company's needs. The lawsuit, which alleges breach of contract, breach of fiduciary duty, unfair trade practices and negligent misrepresentation, was filed in the New York State Supreme Court. The lawsuit said the change resulted in "immediate and virtually complete destruction of Gilimex's business." Gilimex seeks approximately $280 million in damages to recover costs. Read next: From the fundamental point of view, these facts may become a game changer, sending the EUR/USD pair to the parity level | FXMAG.COM Warner Bros. Discovery Inc and cost problems Warner Bros. Discovery Inc, whose holding companies include film and television studios, CNN and HBO, and Discovery channels such as Food Network and HGTV, said in a statement Wednesday that it expects to incur pre-tax restructuring costs of as much as $5.3 billion by 2024. In October, it said it anticipated as much as $4.3 billion in restructuring fees. Since the conclusion of the Discovery and WarnerMedia merger earlier this year, there have been significant layoffs, including executives at the major units. Many high-profile projects and programs have also been killed or cancelled. Warner Bros. Discovery said it still expects restructuring initiatives to be completed by the end of 2024. Last month, the company raised its cost synergy target to $3.5 billion from $3 billion. It also has debt of about $50 billion. The company's shares fell 1.1% in Wednesday's after-hours trading. Musk holds 13.4% of Tesla shares Musk sold nearly 22 million Tesla shares in the three days ending December 14. This week's sale means Tesla's CEO has sold more than $39 billion worth of Tesla shares since the company's shares peaked in November 2021. Tesla, still the world's most valued carmaker by value. Tesla's CEO previously sold the company's shares in April, August and November this year, linking the last two batches of sales to Twitter. This month's sale leaves Musk with about 13.4% of Tesla, meaning he remains by far the company's largest shareholder. Still, the sale of shares could weaken his control over Tesla. It wasn't clear what prompted Musk to sell the extra Tesla shares. Mr Musk's focus on Twitter has irked some Tesla investors as the company tracks its worst annual stock price performance ever. Read next: Given the peculiarities of the US labor market and the high labor mobility, the acceptable unemployment rate is considered to be 5.0%| FXMAG.COM Tesla shares closed up 2.58% on Wednesday at $156.80, their lowest level in more than two years. The company's stock price drop of around 55% in 2022 overshadowed that of the Nasdaq Composite, which has fallen around 29% since the beginning of the year. Source: wsj.com, finance.yahoo.com
At The Close On The New York Stock Exchange Indices Closed Mixed

On The New York Stock Exchange 2,473 Shares Declined More Than The Gain Of 595

InstaForex Analysis InstaForex Analysis 16.12.2022 08:00
At closing bell on the New York Stock Exchange, the Dow Jones fell 2.25 percent to a one-month low, the S&P 500 index shed 2.49 percent and the NASDAQ Composite fell 3.23 percent. Dow Jones The leaders among Dow Jones index components in Thursday trading were shares of Verizon Communications Inc. which gained 0.32p (0.85%) to close at 37.77. Chevron Corp dropped 1.29p (0.75%) to close at 171.04. Walmart Inc shares shed 1.31p (0.89%) to close at 145.36. International Business Machines were the least gainers, with shares falling 7.50p (5.00%) to close the session at 142.36. Shares of Apple Inc soared 6.71p (4.69%) to 136.50, while Intel Corporation dropped 1.11p (3.93%) to 27.15. S&P 500 The gainers among S&P 500 index components in today's trading were Lennar Corporation shares, which gained 3.82% to 94.29, DR Horton Inc. which gained 3.49% to close at 90.45 and Align Technology Inc. which gained 3.15% to close the session at 201.97. Western Digital Corporation shares were the least gainers, dropping 10.10% to close at 32.21. Shares of Nucor Corp lost 9.35% and closed the session at 134.10. Warner Bros Discovery Inc. dropped 8.93 percent to 10.00. NASDAQ The top gainers among NASDAQ Composite index components in today's trading were Core Scientific Inc, which gained 72.00% to 0.43, Imv Inc, which gained 66.55% to close at 3.64, and Scopus Biopharma Inc, which gained 44.85% to close the session at 0.34. Third Harmonic Bio Inc shares were the least gainers, down 78.28% to close at 4.30. Shares of Axcella Health Inc lost 50.78% and closed the session at 0.44. Novavax Inc's stock declined 34.30% to 11.32. Numbers On NYSE, 2,473 shares declined more than the gain of 595, while 113 remained almost flat. On NASDAQ, 2,775 stocks declined, while 961 gained and 197 remained flat. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 7.99% to 22.83. Gold Gold futures for February delivery lost 1.75% or 31.80 to hit $1.00 a troy ounce. In other commodities, WTI crude for January delivery fell 1.37%, or 1.06, to $76.22 a barrel. Futures for Brent crude for February delivery fell 1.58%, or 1.31, to $81.39 a barrel. Forex Meanwhile, in the Forex market, EUR/USD fell 0.53% to hit 1.06, while USD/JPY edged up 1.74% to hit 137.82. Futures on the USD index rose 0.79% to 104.23. Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/305167
FX Daily: Testing the easing pushback

The Euro May Complete Its Preparation For The Downward Movement

InstaForex Analysis InstaForex Analysis 16.12.2022 08:06
The European Central Bank meeting was held yesterday. The rate was raised by 0.50%, and the ECB decided to reduce its holdings in the APP program. The decline will amount to €15 billion per month on average until the second quarter of 2023. The Committee expects at least two more raises of 0.50%. The euro jumped more than 100 points on such news. But then active investors saw oil falling, the U.S. stock market going down a bit late for the previous Federal Reserve meeting, and the euro closed the day with a loss of 53 points. The market went with our scenario, as the stock market fell and the euro along with it. The S&P 500 is down 2.49%. Take note that the European stock indices started falling right from the opening, which means that they showed even more weakness for the rate hike (as representatives of the weaker economy) than the U.S. market. The European Euro Stoxx 50 collapsed by 3.51%. The reversal of the single currency is coming hard. It has not reached the target range of 1.0758/87, but the readings of the Marlin oscillator, which is persistently declining, confirming the divergence, suggests a new historical extreme of 1.0736. The price is now pondering in the range of 1.0615/42. A consolidation under it opens the way to 1.0470, the low of April 28. On the four-hour chart, the price is settling in the range of 1.0615/42. A reverse consolidation above the range will complicate and slow down the reversal. The MACD line, which is just below this range (1.0567), is also slowing the decline. The Marlin oscillator did not get ahead of events this time and returned to the positive area. We are waiting for the euro to complete its preparation for the downward movement. Relevance up to 03:00 2022-12-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/329993
Gold Stocks Have Performed Very Well Under Pressure

Oil Prices Fell, Gold Will Also Weaken Due To The Increase In US Dollar

Saxo Bank Saxo Bank 16.12.2022 08:51
Summary:  Equities tumbled across the world after the ECB and the Bank of England followed the footstep of the Fed in hiking 50bps, but the ECB gave a hawkish surprise by pulling forward QT and warning of more rate hikes to come as inflation remains high. The US dollar regained strength amid risk-off sentiment as US economic data deteriorated further but labor market strength was sustained. The US accounting regulatory body, PCAOB, successfully concluded an inspection on the audit work of eight U.S. listed Chinese companies and removed the delisting risks of Chinese ADRs for now. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) plummeted on Fed follow-through and hawkish ECB Nasdaq 100 tumbled 3.2% and S&P 500 declined by 2.5% on Thursday, as a rate hike plus hawkish comments from the ECT, and follow-through from a higher terminal rate on the Fed’s projection dot plot the day before weighed on equities. The decline in stocks was broad-based and all 11 sectors of the S&P 500 fell. The decline was led by the communication series, information technology, and materials sectors. Alphabet (GOOGL:xnas) declined 4.4%. Netflix (NFLX:xnas) tumbled 8.6%, following a media report saying the streaming giant is refunding advertisers because it missed viewership guarantees. Lennar (LEN:xnys) gained 3% and was among the top gainers in the S&P 500 on Thursday after the home builder said the cancellation rate for new homes had peaked in October and declined significantly in November. Adobe (ADBE:xnas) surged 4.7% in extended-hour trading on earnings beat. US Treasury yield curve (TLT:xnas, IEF:xnas, SHY:xnas) turned more inverted on hawkish central banks and weak data Following a hawkish rate path dot plot from the Fed the day and hawkish remarks from ECB President Lagarde and pull-forward of QT by the ECB on Thursday but a weak U.S retail sales report, the Treasury yield curve flattened. The 2-year yield rose 3bps to 4.24% while the 10-year yield shed 3bps to 3.45%, bringing the 2-10-year inversion to more negative to -79bps. After Lagarde pledged Eurozone “interest rates will still have to rise significantly higher at a steady pace”, the German 2-year yields jumped as much as 30bps and closed 24bps higher at 2.36%, a 14-year high. The Treasury Department announced a USD12 billion 20-year auction and a USD19 billion 5-year TIPS auction next week. In the futures pit in Chicago, large-size curve flattening trades were seen on selling the five-year contracts versus buying the ultra-10-year contracts. The money market curve is pricing a terminal rate of 4.9% in 2023, significantly lower than the Fed’s dot plot of 5.1%. Hong Kong’s Hang Seng (HIZ2) retreated on Fed rate hike; China’s CSI300 (03188:xhkg) little changed Hong Kong opened sharply lower after the U.S. Fed raised the target Fed Fund rate the day overnight and traded sideways throughout the day to finish 1.6% lower. HSBC (00005:xhkg), down 1.8%,  raised its prime rate by 25bps to 5.625%, and Standard Chartered (02888:xhkg), down 1.4%, lifted its prime rate by 25bps to 5.875%. Other leading banks in Hong Kong also raised their prime rates by 25bps. Shenzhou (02313:xhkg), Wuxi (02269:xhkg), Baidu (09888:xhkg), and Alibaba (09988:xhkg), each declining more than 4%, were the top losers with the benchmark. China’s industrial production, retail sales, and fixed asset investments all came in worse than expected and pointed to Covid containment restrictions’ severe disruption to the economy in November. Investors tend to look beyond the weakness in November as the Chinese authorities have eased the pandemic containment practices substantially in December. China’s CSI300 (03188:xhkg) was little changed on Thursday. Semiconductor and new energy names gained. FX: Dollar strength returned amid weakness in risk sentiment After the markets reacting in a limited way after the hawkish shift of the dot plot by the FOMC on Wednesday, the USD strength returned the following day. Concerns that Fed will be hiking into a recession gathered pace as US economic data deteriorated further but labor market resilience prevailed. Money market pricing for the Fed has still not budged to catch up with the dot plot, suggesting that it is likely the risk sentiment weakness that led to the dollar surge. AUDUSD was the biggest loser on the G10 board, sliding lower to 0.67 from 0.6850+ as weak China activity data offset the impact from positive employment numbers in Australia yesterday. GBPUSD also plunged below 1.22 and EURGBP rose above 0.87 amid relative ECB hawkishness. USDJPY touched 138 again despite a lower in US yields. Crude oil (CLF3 & LCOG3) prices dip on global rate hikes and partial restart of Keystone pipeline Crude oil prices fell on Thursday after the fed’s hawkish tilt was followed by a slew of other G10m central banks especially the ECB which highlighted the struggle to get inflation under control and hinted at more rate hikes and QT was to come. Along with that, a partial restart of the Keystone Pipeline after last week’s oil spill eased some supply concerns. WTI futures tested the $76/barrel support while moved towards $81. However, there are tentative signs that key Russian oil exports from a port in Asia are dipping following G7 sanctions, and this may impede the supply relief, but demand weakness concerns still continue to remain the biggest worry as of now with China’s full reopening demand also likely to be delayed due to the vast spread of infections. Gold (XAUUSD) back below 1800 on central banks hawkishness The return of the strength of the US dollar on Thursday meant weakness in gold. Fed’s message from a day before finally seemed to have been understood by the markets, and hawkishness from other central banks, especially the ECB, further sounded the alarm on rates remaining higher for longer globally. Gold broke below the 1800-mark in the Asian session on Thursday, and the lows extended further to sub-1780 in the European/NY hours. Silver plunged as well to move back towards $23.   What to consider? Bank of England followed the Fed with a 50bps hike, likewise for SNB and Norges Bank The Bank of England opted to step down the pace of its rate hiking cycle to 50bps from 75bps, taking the Base Rate to 3.5%. The decision to move on rates was not a unanimous one with two dovish dissenters and one hawkish dissenter. The markets are pricing in a peak for the BOE at 4.25% in H1 2023, as inflation continues to cool. The MPC is of the view that CPI inflation has reached a peak, but is expected to remain high in the coming months. The Norges Bank and SNB also hiked 50bps, in-line with expectations. ECB surprises with a hawkish tilt The European Central Bank (ECB), much in line with the Fed and the BOE, stepped back from its 75bps rate hike trajectory and announced an increase of 50bps, taking the Deposit rate to 2.0%. It was reported that a third of the Governing Council favored a 75bps increase, and Christine Lagarde warned investors to expect more 50bps moves and not to see this as a ‘pivot’. The commentary was hawkish saying that "interest rates will still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive". Moreover, the bank announced a start of QT in the first quarter of 2023, even though with a small amount. The APP portfolio will decline at an average pace of EUR 15bln per month until the end of Q2 with its subsequent pace to be determined over time. The inflation forecast also came as a surprise, with 2023 HICP raised to 6.3% from 5.5%, and 2024 and 2025 seen at 3.4% and 2.3% respectively and therefore indicative that further tightening will be required to bring inflation back to target over the medium term. On the growth front, 2022 GDP was upgraded to 3.4% from 3.1% and 2023 now seen at just 0.5% (prev. 0.9%) with the upcoming recession likely to be shallow and short-lived. US economic slowdown concerns continue to be offset by a strong labor market Several economic indicators in the US pointed to concerns of an economic slowdown. Headline retail sales declined 0.6% in November, deeper than the 0.1% expectation and paring from October's gain of 1.3%. The December NY Fed Manufacturing survey fell into contractionary territory at -11.2, deeper than the expected -1.0 from the prior +4.5. US manufacturing output fell -0.6% in November, well beneath the expected 0.1% decline and against October's rise of 0.3%, which was upwardly revised from +0.1%. However, labor market resilience was confirmed by jobless claims unexpectedly dropping to 211k from a revised 231k last week, well below the expected 230k. PCAOB concluded its inspection and removed the delisting risks of Chinese ADRs for now The Public Accounting Oversight Board (PCAOB) announced on Thursday that the U.S, accounting regulatory body has “conducted inspection field work and investigative testimony” of the audit work of KPMG Huazhen LLP in mainland China and PwC in Hong Kong on eight Chinese ADR issuers, “in a manner fully consistent with the PCAOB’s methodology and approach to inspections and investigations in the U.S. and globally.” The PCAOB was satisfied that its “investors and investigators were able to view complete audit work papers with all information included, and the PCAOB was able to retain information as needed” without consultation with, or input from Chinese authorities. The PCAOB’s conclusion removes the risk of forced delisting of Chinese ADRs for now. The PCAOB will continue to do regular inspections starting in early 2023. China’s retail sales, industrial production, and fixed asset investment were weak in November November activity data in China came in worse than the already low expectations. Retail sales shrank by 5.9% Y/Y in November (Consensus: -4.0%; Oct: -0.5%). The weakness partly reflected the high base last year and mostly as a result of the outbreaks of Covids and the relevant containment restrictions then were still the modus operandi. Revenue growth tumbled to -6% Y/Y for merchandise, -4.2% Y/Y for auto, and -8.4% Y/Y for catering. Industrial production growth slowed to 2.2% Y/Y in November (consensus: 3.5%; Oct: 5.0%). The manufacturing and utility sectors were weak while the mining sector improved in growth. Smartphone volume shrank by 19.8% Y/Y in November as Foxconn’s factory in Zhengzhou experienced disruption from Covid restrictions and labor unrest. The growth of fixed asset investment plummeted to 0.8% Y/Y in November from 5.0% Y/Y in October. The weakness of fixed asset investment was mainly in the manufacturing and property sectors. Infrastructure fixed asset investment climbed to 13.9% Y/Y in November from 12.8% in October. Adobe delivered earnings and guidance beating expectations Adobe (ADBE:xnas) reported a fiscal Q4 net income of USD1.176 billion, a 4.6% increase from last year and above the USD1.158 billion expected by analysts. Adjusted earnings per share came in at USD3.60, beating the USD3.50 consensus forecast. Revenues increased 10% from a year ago to USD4.525 billion, in line with expectations. The software giant gave an upbeat fiscal Q1 EPS guidance of USD3.65 to USD3.70 on revenue of USD4.60 to USD4.64 billion, above analysts’ estimates of USD3.64 on revenue of USD4.26 billion.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Fed’s message comes through; ECB outpaces other central banks on hawkishness – 16 December 2022 | Saxo Group (home.saxo)
Market Reaction to Eurozone Inflation Report: Euro Steady as Data Leaves Impact Limited

Adobe Earnings For The Fiscal Fourth Quarter Was Strong, Changes In Loyalty Programs Of American Airlines

Kamila Szypuła Kamila Szypuła 16.12.2022 10:53
Adobe showed very good results, better than expected. Airlines have started tightening requirements again in an attempt to find the right balance to ensure programs remain attractive. Adobe gain profits Business software companies indicated that customers are more cautious in their spending plans due to the difficult economic situation. On Thursday, Adobe also released its earnings forecast for the current quarter, which was better than Wall Street analysts had predicted. The company forecasts fourth-quarter revenue up 10% thanks to continued strong demand for its software and services. Overall, Adobe reported earnings of $1.18 billion, or $2.53 per share, for the quarter ended Dec. 2, compared to $1.23 billion, or $2.57 per share, in the prior year. While Adobe left its forecast for the current fiscal year unchanged, it said it expects adjusted profits of $3.65 to $3.70 for the current quarter. The software company announced a plan to buy hot startup Figma in the quarter. Adobe hopes the deal will be finalized in the coming months. Adobe shares, which have fallen 42% this year to Thursday's close, are up 5.7% in after-hours trading. Read next: The BoE And The ECB Raised Rate By 0.50% To 3.50% Today, Australian Dollar Falls After Disappointing Data From China| FXMAG.COM Airlines Loyalty Programs Many airlines offer loyalty programs to their customers. Thanks to such programs, they encourage the use of their services by offering additional services as part of the points earned in the program. The most common practice of awarding points is to charge them for the cost of the ticket. Airlines have relied heavily on their frequent flyer programs during the pandemic. Co-branded credit cards remained a stable source of revenue as customers swiped even when they weren't buying airline tickets. And airlines used their frequent flyer programs as collateral for billions of dollars in loans as they scrambled for cash as their appetite for travel dried up. Carriers have made it easier for people to maintain and gain status during the pandemic in an effort to keep customers. But programs have also grown, with some customers complaining that providing premium cabin and lounge seats has become more competitive. American Airlines Group Inc. raised the bar in achieving Gold status. Starting in March, members of American’s AAdvantage program will need to earn 40,000 “loyalty points” to reach Gold, its lowest tier of status, up from 30,000. That level includes benefits such as a free checked bag, earlier boarding and access to free upgrades if there is availability. American also introduced new perks for people who have 15,000 points and haven’t yet earned status, are between tiers or who have already reached the upper level. Requirements to qualify for other status tiers will remain unchanged. Delta Air Lines Inc. is also reviewing requirements for frequent flyers to access luxury lounges to reduce overcrowding. Starting next year, Delta travelers will need to spend 33% more on flights to qualify for Gold, Platinum and Diamond Medallion status in 2024. Delta has not made any changes to its requirements for the number of miles and distances a person must travel. American Airlines Group Inc shares has been quite low for the last two quarters. The current low was last recorded in the second half of June. Looking at the broader timeframe, the current stock price resembles the level of the pandemic (2020). A similar stock price move is for Delta Air Lines, Inc. (DAL). The current price level of 33.25 is also reminiscent of the 2020 pandemic period American Airlines Group Chart Delta Air Lines Inc. Chart Source: wsj.com, finance.yahoo.com
Tesla Will Struggle To Recover In The Coming Years

Knorr-Bremse Strengthens Its ESG Measures In Partnership With Deutsche Bank | Arizona Is Attractive For The EV Market

Kamila Szypuła Kamila Szypuła 16.12.2022 11:54
The electric vehicle market has a bright future, but is currently struggling with the lack of chip supplies and difficulties in the investment market. Many companies use partnerships with financial institutions, and some such as Knorr-Bremse and Deutsche Bank develop their partnerships. In this article: Arizona and EV market Investments in EV start-ups are not so attractive anymore Preparing for the new tax year Knorr-Bremse and its Partnership With Deutsche Bank Electric Vehicles And Self-Driving Technology Have The Potential To Grow In Arizona Problems in the delivery of chips from China have become one of the problems in the United States. Companies producing electric cars are looking for solutions. Arizona quickly became the epicenter of electric vehicles and self-driving technology and is now the site of three major new semiconductor plants. The Arizona Commerce Authority says it helped 634 companies relocate or expand in Arizona between 2015 and 2020. Thus, many new residents who are qualified in this field have flowed into this region. Arizona has rapidly become an epicenter for EV and self-driving tech — and now it's the site of 3 big new semiconductor factories. Watch the full video here: https://t.co/N6fsv8kiZt pic.twitter.com/UublHC3Wnz — CNBC (@CNBC) December 16, 2022 Read next: Adobe Earnings For The Fiscal Fourth Quarter Was Strong, Changes In Loyalty Programs Of American Airlines| FXMAG.COM Investments in EV start-ups are not so attractive anymore The automotive industry is investing over $1 trillion in the revolutionary transition from combustion engines to software-controlled electric vehicles. From Detroit to Shanghai, automakers and government policy makers have embraced the promise that electric vehicles will deliver cleaner, safer transportation. Industry executives and forecasters disagree on how quickly electric vehicles could take over half of the global vehicle market, let alone the entirety. Industry officials and analysts said that among the barriers to EV adoption were the lack of public fast-charging infrastructure and the rising cost of EV batteries. Difficulties arose not only in the production area. Investors who eagerly watched and invested in Tesla Inc and competing electric vehicle start-ups that hoped to emulate Tesla's success. This year has shown that nothing is complete and economic situations also hit the giants. With interest rates rising and financial markets swirling, stakes in many EV startups have declined. WATCH: The past year was sobering for investors who poured money into Tesla and rival electric vehicle startups that hoped to emulate the success of Elon Musk's company https://t.co/1ZAIf7TV8i $TSLA pic.twitter.com/gmlWlMIoEJ — Reuters Business (@ReutersBiz) December 16, 2022 Preparing for the new tax year With the end of the year, financial institutions in their tweets and articles will draw attention to what you need to prepare from the financial side. Before the new year, it's worth looking back at your expenses, general cash flow to be able to prepare better for the new year. Financial security is important, but you should also remember about taxes. There is no doubt that taxes are a nightmare for everyone, whether for an individual taxpayer or for entrepreneurs. There may be changes in tax regulations that are worth paying attention to. Preparing for the new tax year can help you not to lose too much on taxes. An important part of this process is knowing the likely tax bracket you'll fall into, the limits that may affect you, and the potential deductions available. With the year rapidly coming to a close, it might pay to prepare in advance for Tax Day. Here are 8 things to keep in mind as you prepare to file your 2022 taxes. https://t.co/vTPSg1p4cH — Charles Schwab Corp (@CharlesSchwab) December 15, 2022 Knorr-Bremse and its partnership With Deutsche Bank Knorr-Bremse strengthens its ESG measures in partnership with Deutsche Bank and expands its supply chain finance program to include sustainability aspects. For 15 years, Knorr-Bremse suppliers have been using the Supply Chain Finance program run by Deutsche Bank. For example, they get their money faster because the bank pre-finances at attractive interest rates until Knorr-Bremse pays the invoice. Financing costs for suppliers are based on the creditworthiness of Knorr-Bremse, which usually reduces financing costs for suppliers. Deutsche Bank supports @KnorrBremseAG in strengthening its ESG measures and expanding its supply chain finance programme to include sustainability aspects. Suppliers with good sustainability performance benefit from more attractive financing terms. https://t.co/pEvfnF0Zk0 — Deutsche Bank (@DeutscheBank) December 16, 2022
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

Surprise Hawkishness From Christine Lagarde | Netflix Ad-Supported Versions Have Poor Demand

Swissquote Bank Swissquote Bank 16.12.2022 12:28
The European Central Bank (ECB) raised its interest rates by 50bp as expected yesterday, and President Christine Lagarde said that the ECB will raise the rates by another 50bp at the next meeting. Then by another 50bp in the meeting after that. And another 50bp in the meeting after that. Then another one! Markets European yields spiked during Madame Lagarde’s speech. The DAX and the CAC fell more than 3%. The S&P500 slipped below its 100-DMA, as Nasdaq fell below its 50-DMA. The EURUSD spiked to 1.0736, the highest level since April. EU The significant hawkish shift in ECB’s policy stance, and the determination of the European leaders to shot inflation to the ground should continue giving some more support to the euro, therefore, price pullbacks in EURUSD could be interesting dip buying opportunities for a further rally toward the 1.10 mark. US And if the US dollar strengthened yesterday, it was certainly due to a heavy selloff in stocks and bonds that ended up with investors sitting on cash. Other than that, the data released in the US yesterday was not brilliant! The retail sales fell by most in a year; holiday shopping apparently didn’t help improve numbers. The Empire Manufacturing index tanked from 4.5 to -11, versus -1 expected by analysts. Both data hinted at a slowing economic growth in the US, which should normally boost recession fears and keep the Fed hawks at bay. And that could mean a further downside correction in the dollar in the run up to Xmas. Netflix In Individual stock news, Netflix slumped more than 8.5% on news that its new ad-supported versions didn’t kick off well, as most people preferred keeping ads away when they were in the middle of the Meghan and Harry drama! Watch the full episode to find out more! 0:00 Intro 0:35 Surprise hawkishness from Christine Lagarde 3:09 … sent sovereign bonds & stocks tumbling 5:13 … should help the euro recover 7:01 … at least against the British pound 8:14 Netflix falls as ad-supported versions sees weak demand Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #hawkish #ECB #Lagarde #speech #BoE #FOMC #Fed #SNB #rate #decisions #USD #EUR #GBP #CHF #DAX #CAC #SMI #EuroStoxx50 #Netflix #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
August CPI Forecast: Modest Inflation Increase Expected Amidst Varied Price Trends

Even if Santa Rally delivers us with ca. 1% gains, remember we're about 17% below-the-line so far this year

Jing Ren Jing Ren 16.12.2022 14:49
Stocks are down substantially this year, even including indices which had a bit of a rally through the last month or so. There has been a split in trend, which is worthy of note. The DJIA moved higher, while the Nasdaq remained relatively steady. In Europe, indices don't concentrate in certain sectors like they do in the US, but a similar trend has emerged when considering certain types of firms. The Dow Jones consists mostly of lower valuation, so called "value stocks", which have been outperforming. Tech stocks have continued to underperform, even in periods of recovery. This is often attributed to their relatively high valuations, meaning that they are more speculative. The Fed's tightening contributes to reducing interest in higher valuation stocks, and now the Fed is expected to slow its rate hikes. This could be an indication of which sectors/stocks could benefit the most from a Santa Rally. What are the chances this time? In order to make an educated guess about whether we can expect a rally this year or not, we need to have a better understanding of why it happens. Which is a bit of a problem, because there isn't much agreement on the causes of the rally. Not only that, but there also isn’t even an agreement on when it happens. Some say it's in the week before Christmans, others say it's the week between Christmas and New Year, and still others say it's both. So far this month, stocks have been trending higher thanks to an expectation that the Fed won't keep hiking rates so much. Now that they have delivered, the expectation is that US stocks can continue to rise. Across the Atlantic, the situation is a little more complicated, as the UK is expected to fall further into recession. Even if the BOE slowed the pace of hiking, there might not be as much room for optimism. Meanwhile, the ECB threatened to keep raising rates. That is expected, however, since the shared central bank was one of the last to join the hiking movement, so would likely be one of the last to end its tightening cycle. Read next: In December, the Fed maintained a tougher rhetoric than the market consensus, playing on the bears' side| FXMAG.COM What can we expect? Santa rallies happen about 2 out of 3 years, on average gaining about 1.3% over the period from Christmas to the Jan 2 of the next year. It's positive, sure, but not a blow-out growth. Particularly not in the context of the market losing around 17% since the start of the year. Another difficulty is that the final two weeks of trading for the year see dwindling liquidity as major traders go on holiday. Usually, starting with the final meeting of the Fed, activity starts to drop off, reaching a minimum between Christmas and New Years. That means that volatility tends to increase, with more erratic moves in the markets as relatively small trades can cause bigger moves. Other factors In general, markets tend to average higher through December. But in the case of the US in particular, they tend to do even better in an election year. 2018 was a notable exception, as the Fed was tightening though that period. After stocks performed better in the run-up to the Fed, investors might have some time to digest the results. They could pay more attention to how the market is currently pricing in a terminal rate of 4.85%, but the average of forecasts from the Fed is 5.1%. That could lead to a revaluation of where the Fed could go in the first quarter of next year and let the Grinch into steak the Christmas cheer.
Twitter And Elon Musk Faced A Growing List Of Claims

Elon Musk Has Reinstated The Twitter Accounts Of Several Journalists | According To Jim Cramer, Caterpillar Stocks, Illinois Tool Works And CSX Are Noteworthy

Kamila Szypuła Kamila Szypuła 18.12.2022 20:34
With the end of the year, I look at what may happen in 2023. JP Morgan looks at finance from the economic side and what affects it, and Jim Cramer traditionally focuses on the stock market. In this article: Outlook Of 2023 by JP Morgan Jim Cramer’s look at stock market Elon Musk And Twitter Outlook 2023 Most of the things that could go wrong for investors happened in 2022, driven by high inflation, an aggressive cycle of interest rate hikes around the world, and the war in Ukraine. Remarkably, both stocks and bonds suffered heavy losses in 2022 – one of the worst years in the history of a balanced portfolio. Lower stock valuations and higher bond yields offer investors the most attractive entry point into a traditional portfolio in more than a decade. All this will be reflected in the new year. JP Morgan takes into account key economic and market factors in this year's forecast - the consequences of monetary policy tightening, the weakening of the global economy, market prices and valuation resets Higher rates. Weaker growth. Valuation resets. Explore what these key economic and market forces may mean for investors. — J.P. Morgan (@jpmorgan) December 16, 2022 Read next: Rise Of The Attractiveness Of Living In Cities – Urbanization| FXMAG.COM Jim Cramer’s look at stock market Jim Cramer looks at market action, this time specifically industrial stocks. The specialist looks at the situations of individual companies and assesses their attractiveness. His tips can be helpful for investors, especially those who are starting their adventure with this market. Jim Cramer on Friday identified three industrial stocks that he believes are worth owning next year “CAT has much more exposure to infrastructure, and I think they’ve got a boost from the oil and gas industry coming,” Cramer said. According to a specialist, companies such as Caterpillar, Illinois Tool Works and rail operator CSX are noteworthy. Here is why @JimCramer sees more upside ahead for Caterpillar in 2023. https://t.co/CmEl3RctII — Mad Money On CNBC (@MadMoneyOnCNBC) December 17, 2022 Elon Musk And Twitter For the past two months, Elon Musk's attention has been focused on the development of Twitter, which he purchased in late October. Since then, his activities on this social networking site have been watched with special attention. Not only on Twitter, but also after it. One such action was blocking the accounts of journalists. The suspensions stemmed from disagreements over a Twitter account called ElonJet that tracked Musk's private jet using publicly available information. On Wednesday, Twitter suspended the account and others that tracked private jets, despite Musk's earlier tweet saying he would not suspend ElonJet in the name of free speech. Soon after, Twitter changed its privacy policy to prohibit the sharing of "live location information." Then on Thursday night, several journalists, including those from the New York Times, CNN and the Washington Post, were suspended from Twitter without notice. The episode, which one high-profile security researcher called a "Thursday night massacre," is regarded by critics as new evidence that Musk considers himself a "free speech absolutist," eliminating speech and users he personally dislikes. Now it has been reported that Elon Musk has reinstated the Twitter accounts of several journalists who had been suspended for a day in connection with the controversy over publishing public data about the billionaire's plane. The reinstatement came after unprecedented suspensions prompted heavy criticism on Friday from government officials, advocacy groups and journalistic organizations in several parts of the world, with some saying the microblogging platform threatened press freedom. Elon Musk reinstated the Twitter accounts of several journalists that were suspended in a controversy over publishing public data about the billionaire' s plane https://t.co/MPaQFmEp3Q pic.twitter.com/V6ipgraOpY — Reuters Business (@ReutersBiz) December 18, 2022
At The Close On The New York Stock Exchange Indices Closed Mixed

The US Stock Market Finished Trading On The Back Of Negative Dynamics

InstaForex Analysis InstaForex Analysis 19.12.2022 08:07
US stocks closed lower, Dow Jones down 0.85% The US stock market finished trading Friday lower on the back of negative dynamics from the sectors of utilities, consumer goods and oil and gas. Dow Jones At the close of the New York Stock Exchange, the Dow Jones fell 0.85% to a one-month low, the S&P 500 fell 1.11% and the NASDAQ Composite index fell 0.97%. Caterpillar Inc was the top performer among the components of the Dow Jones in today's trading, up 0.89% or 2.06 points to close at 232.72. Boeing Co rose 0.98 points (0.53%) to close at 184.70. Dow Inc rose 0.27 points or 0.55% to close at 49.80. The least gainers were American Express Company shares, which lost 3.92 points or 2.61% to end the session at 146.30. Nike Inc was up 2.36% or 2.56 points to close at 105.95 while McDonald's Corporation was down 2.06% or 5.61 points to close at 266.12.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Adobe Systems Incorporated, which rose 2.99% to 338.54, Meta Platforms Inc, which gained 2.82% to close at 119.43, and also shares of Universal Health Services Inc, which rose 2.49% to close the session at 135.83. The least gainers were shares of Ford Motor Company, which fell 6.98% to close at 12.12. Shares of Moderna Inc shed 6.74% to end the session at 193.29. Quotes of CarMax Inc decreased in price by 6.04% to 61.44. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Cosmos Holdings Inc, which rose 178.91% to hit 23.01, Nanthealth LLC, which gained 98.95% to close at 5.70, and shares of Trean Insurance Group Inc, which rose 91.51% to end the session at 5.97. Shares of Synaptogenix Inc became the least gainers, which decreased in price by 74.63%, closing at 1.20. Shares of Agrify Corp lost 69.87% and ended the session at 0.25. Quotes of Axcella Health Inc decreased in price by 63.08% to 0.16. Numbers On the New York Stock Exchange, the number of securities that fell in price (2161) exceeded the number of those that closed in positive territory (893), and quotes of 105 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,231 companies fell in price, 1,478 rose, and 188 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.92% to 22.62. Gold Gold futures for February delivery added 0.84%, or 15.05, to $1.00 a troy ounce. In other commodities, WTI futures for January delivery fell 2.34%, or 1.78, to $74.33 a barrel. Futures for Brent crude for February delivery fell 2.64%, or 2.14, to $79.07 a barrel. Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.37% to 1.06, while USD/JPY fell 0.78% to hit 136.68. Futures on the USD index rose by 0.23% to 104.44 Relevance up to 03:00 2022-12-20 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/305334
Saxo Bank Podcast: The Bank Of Japan Meeting And More

The Japanese Authorities May Be Considering A Policy Review In 2023 | Elon Musk Is Seeking New Investors For Twitter

Saxo Bank Saxo Bank 19.12.2022 09:01
Summary:  A chorus of hawkish Fed speak and weakening US PMI data, together with global tightening concerns elevating further last week, continued to weigh on risk sentiment. The Japanese yen will remain in focus amid BOJ policy review chatter as the central bank meets this week. Musk’s Twitter saga continues, weighing further on Tesla. China’s reopening concerns also remain as the Covid waves spreads rapidly, but a steady economic growth focus by the authorities is seen. Oil and gold start the week being bid. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated for the third day on concerns about the Fed’s rate path in 2023 On Friday, the U.S, stock market continued to slide for the third day in a row since Fed Chair Powell’s hawkish leaning comments on the post-FOMC presser on Wednesday. Remarks from several other Fed officials reiterating that the Fed may have a long way to go and may need to raise rates beyond the 5.1% peak projected added to the risk-off sentiment. S&P 500 shed 1.1% and Nasdaq 100 declined 0.9%. All sectors within the S&P 500 lost, with real estate, consumer discretionary, and utilities falling the most. Ford Motor (F:xnys) was the biggest losing stock within the S&P500. The automaker dropped nearly 7% on Friday after it announced a price increase for its electric truck due to rising material costs and supply chain issues. Tesla (TSLA:xnas), falling 4.7%, was the second biggest laggard with the Nasdaq 100, following Moderna (MRNA:xnas) which declined 6.7%. Adobe, gaining 3% after reporting an earnings beat, was the best performer within Nasdaq 100, followed by Meta (META:xnas) which rose 2.8% on an analyst upgrade. US Treasury yield curve (TLT:xnas, IEF:xnas, SHY:xnas) steepened as the 2-year yield fell and the 10-year yield rose The 2-year notes were well bid and finished the Friday session 6bps richer at 4.18%. The 2-year notes are now yielding not only less than the 3-month Treasury bills but also the lower bound of the Fed Fund target rate. Softer than expected S&P Global US manufacturing as well as services PMI added fuel to the demand for the front end of the Treasury curve. Hawkish comments from the Fed’s Williams, Daly, and Mester might have contributed to the selling in the long end of the curve. Yields on the 10-year notes rose 4bps to 3.48%. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hong Kong and mainland Chinese stocks had a morning session on Friday. Hang Seng Index opened lower on the back of tumbling overseas markets overnight despite the positive news from the US accounting regulatory body removing the delisting risk of Chinese companies listed in the U.S. bourses for now. Stocks had a rally on market chatter of reopening of the border between Hong Kong and the mainland earliest next month before the gains waned and the Hang Seng Index was 0.4% higher. The front page editorial at the mouthpiece People’s Daily this morning is upbeat about growth in China but it does not catch much attention from investors. Leading Chinese property developers outperformed, gaining 2% to 6%.  In A-shares, CSI300 was modestly lower, driven by profit-taking in semiconductor names and weaknesses in autos. Real estate and educational services outperformed. In the evening, a readout was released setting out the key results of the Central Economic Work Conference. FX: Dollar starts the new week on a weaker footing as JPY gains on 2023 policy review speculations The US dollar ended last week lower again, albeit modestly, with majority of weakness against the NOK. EURUSD also took a brief look above 1.07 on ECB hawkishness but is heading below 1.06 this morning as peripheral spreads remain a concern and continue to cast doubts on how far ECB’s hawkishness can run. USDJPY had a volatile week as a drop below 135 was not maintained despite US yields remaining capped. A fresh bout of strength in coming to JPY this morning on reports of Japan PM Kishida considering a tweak in BOJ’s 2% inflation goal next year (read below). GBPUSD also reversed back below 1.2200 after a look above 1.2400 last week. AUDUSD traded close to 0.67 to start the new week, with one eye on RBA minutes due this week but another on China reopening delays resulting from a large number of workers calling in sick. Crude oil (CLF3 & LCOG3) prices advance on China’s growth push and US refilling SPR Oil prices started the week on a firmer footing, with WTI rising towards the $75/barrel mark and Brent heading back towards $80. While there are unconfirmed reports of massive number of cases and fatalities in China from the spread of Covid, the government’s official message continues to stress upon the need to expand consumption as the key economic priority for 2023. This helps paint a better demand outlook for oil, as global demand slowdown concerns continue to mount. Moreover, it was reported that the US is starting to replenish the Strategic Petroleum Reserve (SPR), starting with a 3-million barrel, fixed-price purchase.   What to consider? Hawkish Fed speak continues A number of Fed speakers on Friday continued to highlight the case for higher-for-longer inflation as investors give too much weight to peaking inflation in the US. Fed’s Daly (non-voter in 2023) said she was prepared to hold peak rates for more than 11 month if necessary, and highlighted the core services ex-housing inflation which is still quite elevated. Mester (non-voter in 2023) said she expected the Fed to hike more than its median forecast, and the Fed will need to maintain rates for an extended period once hikes are done. Williams (2023 voter) said it is possible that Fed hikes more than terminal rate forecast. US flash PMIs send warning signals Flash December PMIs for the US slumped to fresh lows, sending more warning signals about the economic momentum going into 2023. Manufacturing PMI came in at 46.2, below last month’s 47.7 and the expected 47.8, while the services PMI receded to 44.4 from 46.2 previously. Markets have however understood the Fed’s message on hiking rates into a possible recession, and do not take bad news as good news anymore. Japan PM Kisihda hinting at altering inflation goal for central bank Reports suggested that Japan PM Kishida plans to revise a ten-year-old accord with the BOJ and will consider adding flexibility to the agreement's 2% price goal. Kishida will discuss the matter with the next central bank governor, who'll take office in April. Furthermore, some more comments from officials this morning continued to signal that the authorities may be considering a policy review in 2023, and more hints are awaited at the BOJ meeting tomorrow. Ex-BOJ Deputy Governor Yamaguchi said that the BOJ must stand ready to tweak YCC next year if Japan's economy can withstand overseas economic risks, while also warning that once inflation expectations become entrenched, it is very hard to control them. China’s Central Economic Work Conference emphasized economic stability and had a conciliatory tone towards platform companies The Chinese Communist Party held its annual Central Economic Work Conference (CEWC) on Dec 15 and 16 to formulate China’s macroeconomic policy frameworks for 2023. According to the readout released, the CEWC emphasized policy priorities as being economic stability and high quality of development. Fiscal policies will be expansionary and monetary policies will be forceful and precise. The focus is however more on quality than quantity and the choice of words tends to imply “best effort” rather than hard targets. Mainland economists are expecting the GDP growth target, which will not be released until the two-session meetings in March 2023, to be around 5% for 2023. While there will be supportive measures to ensure stability in the housing markets, the rhetoric of “housing is for living in, not for speculation” is once again in the readout. Domestic consumption is a key focus. In industrial policies, weak links in manufacturing technology, energy, mining, agriculture, new energy, AI, biomanufacturing, green and low carbon, quantum computing, and the digital economy are priorities. Encouragingly, the CEWC removes last year’s “preventing the disorderly growth and expansion of capital” from its readout this year and instead pledges “support to platform enterprises in leading development, creating employment, shining in competing globally” and “support the development of the private sector and private enterprises”. EU considering cutting the proposed natural gas price The EU nations are likely to discuss cutting the gas price cap by almost a third today after the EUR275 per megawatt-hour was proposed last month. As energy crisis continues to threaten a fresh surge in inflation and growth slowdown in the region, it is also stretching government budgets to maintain popularity. But this will eventually be inflationary again, as price caps hardly work effectively. Elon Musk hinting at stepping down from Twitter Elon Musk is seeking new investors for Twitter at the same price he paid when he took the company private in October, Semafor reported. Musk is asking on Twitter the question that “should I step down as head of Twitter? I will abide by the results of this poll”. He said he is going reverse his prior decision to suspend the Twitter accounts of several journalist and reinstate them based on the results of a Twitter survey. Meanwhile, Musk's actions are weighing heavily on Tesla shares — and the selloff may continue.   For a global look at markets – tune into our Podcast. Source: Market Insights Today: Fed’s hawkish speak; BOJ’s policy review hints – 19 December 2022 | Saxo Group (home.saxo)
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The Energy Crisis Continues To Threaten A Fresh Surge In InflationAand Growth Slowdown In The Eurozone

Saxo Bank Saxo Bank 19.12.2022 09:14
Summary:  Markets stumbled into the close last week, shaken in Europe by a resolute, and possibly unrealistic ECB stance at last Thursday’s ECB meeting, while a heavy calendar of event risks combined with trillions in options expiries roiled US markets last week. The two final weeks of a remarkable 2022 await. Are traders willing to put any risk to work here after an exhausting year or hanging up their spikes until 2023?   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Following a close at the 50-day moving average on Friday, S&P 500 futures are attempting to rebound this morning trading around the 3,885 level driven by fresh sentiment change over China’s alleged move to enact pro-business policies and stimulus in 2023. There are no meaningful earnings or macro releases expected today so we expect a calm trading session with Friday’s low in S&P 500 at the 3,855 level being the key level on the downside and the 100-day moving average at the 3,935 level being the key upside level to watch. Euro STOXX 50 (EU50.I) European equities are still digesting their decline last week, biggest decline in many months, as the ECB delivered a more hawkish message than expected. STOXX 50 futures are trading around the 3,818 level getting a little bit of tailwind electricity prices coming down from excessive levels. The IFO December survey out at 0900 GMT is today’s main macro release that could jolt market sentiment. Analysts expect an improvement in the IFO survey for December. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hong Kong and Chinese stocks pared all the early gains and turned lower as investors turned cautious during a surge in media reports of rises in Covid inflections and death tolls. The lack of commitment to more large-scale economic stimulus measures from the Central Economic Work Conference was considered underwhelming. Nonetheless, a shift to a more conciliatory stance towards the private sector from the meeting may be a positive that will contribute to growth and reduce risk premium in the medium-term. More details about the Central Economic Work Conference can be found here. Hang Seng Index dropped 0.9% and the CSI300 Index tumbled 1.8%. FX: Dollar off to a weak start to the week as JPY gains on 2023 policy review speculation EURUSD has rebounded slightly from the Friday close as the market must decide whether the ECB can maintain the hawkish bluster on display at last Thursday’s meeting, which initially supported the euro, but subsequently saw doubts emerging as peripheral EU spreads widened sharply. USDJPY had a volatile week as a drop below 135 was not maintained despite US yields remaining capped, but a fresh bout of JPY strength arrived overnight on reports that Japan PM Kishida is considering a tweak in BOJ’s 2% inflation goal next year (read below). Crude oil (CLF3 & LCOG3) prices advance on China’s growth push and US refilling SPR Oil prices started the week on a firmer footing, with WTI rising towards the $75/barrel mark and Brent heading back towards $80. While there are unconfirmed reports of massive number of cases and fatalities in China from the spread of Covid, the government’s official message continues to stress upon the need to expand consumption as the key economic priority for 2023. This helps paint a better demand outlook for oil, as global demand slowdown concerns continue to mount in the US and Europe and Russian flows show no signs of slowing. Moreover, it was reported that the US is starting to replenish the Strategic Petroleum Reserve (SPR), starting with a 3-million barrel, fixed-price purchase. In week to Dec 13 funds cut bullish Brent and WTI bets to lowest since April 2020. Gold (XAUUSD) trades near $1800 as it continues to find support Since the current run up in gold started in early November, the price has not dipped below its 21-day moving average, today at $1775. Speculators increased bullish gold and silver bets by 50% in the week to December 13 when prices briefly spiked in response to a softer dollar and CPI print. The subsequent setback following Wednesday’s hawkish FOMC, however, was not big enough to rattle recent established longs. For that to happen the price in our opinion as a minimum need to break below $1765. The risk of a recession and the FOMC hiking into economic weakness – potentially without succeeding getting inflation under control - continues to strengthen the upside risk for investment metals in 2023.  US Treasury yield curve (TLT:xnas, IEF:xnas, SHY:xnas) steepens as market refuses to price Fed rate projections Soft US preliminary PMIs on Friday and weak risk sentiment kept treasuries supported and the 2-year benchmark yield remains near recent lows as the market refuses to price in the projected Fed Funds rate projections from last week’s FOMC meeting, as the market persists in pricing in high odds of Fed rate cuts late next year. At the longer end of the curve the 10-year yield remains pinned near the 3.50% level and the 2-10 slope steepened to –67 basis points this morning, near the highest reading in a month. What is going on? New Zealand Q4 Westpac Consumer Confidence plunges to lowest ever measured The survey reading was 75.6, a huge drop from 87.6 in Q3 and the lowest reading in the 34-year history of the survey and below the 78.7 former record low from Q2 of this year and the 81.7 trough during the global financial crisis. NZD gapped lower after another strong week on the recent relative hawkishness of the RBNZ, a stance that may soften in coming weeks. AUDNZD hit lows since late 2021 over the last couple of weeks after trading at the highest in years as recently as last September. EU considering cutting the proposed natural gas price The EU nations are likely to discuss cutting the gas price cap by almost a third today after the EUR275 per megawatt-hour was proposed last month. As the energy crisis continues to threaten a fresh surge in inflation and growth slowdown in the region, it is also stretching government budgets to maintain popularity. But this will eventually be inflationary again, as price caps hardly work effectively. US flash PMIs send warning signals. Flash December PMIs for the US slumped to fresh lows, sending more warning signals about the economic momentum going into 2023. Manufacturing PMI came in at 46.2, below last month’s 47.7 and the expected 47.8, while the services PMI receded to 44.4 from 46.2 previously – that survey has shown little correlation with the ISM Services survey, which continues to suggest an expanding US services sector. Japan PM Kishida hinting at altering inflation goal for central bank Reports suggested that Japan PM Kishida plans to revise a ten-year-old accord with the BOJ and will consider adding flexibility to the agreement's 2% price goal. Kishida will discuss the matter with the next central bank governor, who'll take office in April. Furthermore, some more comments from officials this morning continued to signal that the authorities may be considering a policy review in 2023, and more hints are awaited at the BOJ meeting tomorrow. Ex-BOJ Deputy Governor Yamaguchi said that the BOJ must stand ready to tweak YCC next year if Japan's economy can withstand overseas economic risks, while also warning that once inflation expectations become entrenched, it is very hard to control them. Speculators bought investment metals and sold dollars ahead of FOMC The latest Commitment of Traders report covering the week to December 13, when the market responded to a softer dollar and CPI print, showed speculators increase their dollar short against nine IMM currency futures to a 17-month high. The selling of CAD being more than offset by short covering in AUD, GBP, and not least the JPY. Since the turn of the dollar in early November, the speculative short in JPY has almost halved. In commodities, the net longs in gold, silver and platinum all increased strongly. Crude oil was mixed with the Brent long being cut to a 26-month low, the natural gas short was cut in half. Across the agriculture sector, the soymeal long hit a 4-½ year high, the cocoa position flipped back to long while buyers returned to coffee. What are we watching next? The calendar roll after a volatile 2022 Many long only equity funds have suffered their worst year since 2008, and “balanced” stock-bond funds have put in their worst year in modern memory on the surge in bond yields this year that has seen the 2022 calendar year providing nowhere for the passive investor to run and hide. On the flip side, some hedge funds and volatility traders enjoyed the market environment of the last 12 months. As we wind down 2022, note that new themes can quickly develop in 2023, as many have closed their books on taking risk as liquidity thins out for the holiday time frame and may be set to put on significant risk on the rollover into the New Year. Earnings to watch This week’s earnings focus is Nike, FedEx, and Carnival which we previewed in the earnings watch note on Friday. The bar is set high for Nike earnings as sell-side analysts have recently hiked their price target on the stock and increased their expectations for 2023 on margins. Today’s earnings focus is HEICO which sells aerospace products to the airline industry and defense contractors. Analysts expect FY22 Q4 (ending 31 October) revenue growth of 18% y/y and EPS of $0.70 up 12% y/y. Today: HEICO Tuesday: Nike, FedEx, General Mills, FactSet Research Systems Wednesday: Toro, Micron Technology, Cintas, Carnival Thursday: Paychex, CarMax Friday: Nitori Economic calendar highlights for today (times GMT) 0900 – Germany Dec. IFO Survey 1330 – Canada Nov. Teranet/National Bank Home Price Index 1500 – US Dec. NAHB Housing Market Index Bank of Japan meeting (Asian hours Tuesday)   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – December 19, 2022 | Saxo Group (home.saxo)
CHF/JPY Hits Fresh All-Time High in Strong Bullish Uptrend

The Disney Challenges Now Belong To Iger, Ford And Arguments For A New Trial In A Truck Overturning Case

Kamila Szypuła Kamila Szypuła 19.12.2022 11:48
The issue of roof strength in rollover accidents has been the subject of much contention in the automotive industry for several decades, prompting lawsuits against many automakers, including Ford. Ford and new trial? Ford on Monday to present arguments for a new trial in a truck overturning case. If granted a new trial, Ford plans to provide evidence that the roofs used on these trucks were safe by design. The lawsuit in Georgia stems from a 2014 rollover accident that killed an elderly couple driving a Ford F-250 pickup truck. Lawyers for the plaintiffs say the victims were crushed inside the truck when the roof collapsed during the incident. In the spring of 2014, Melvin and Voncile Hill - a couple who had been married for 48 years - were driving their 2002 Ford F-250 pickup truck from their farm in Georgia when a tire burst, causing the truck to overturn. Ford introduced a new line of heavy trucks in the late 1990s, a design that included the F-250, F-350 and F-450 Super Duty trucks, models of various displacements that are among the largest and heaviest cars. Ford disputed Georgia's $1.7 billion verdict, saying the trucks were safe and the roof in question was stronger than the competition. The company also argued that other factors could cause injuries in the event of a violent rollover. Ford's lawyers argued that the tire fitted to the pair's truck had the wrong load capacity, causing it to burst. Read next: Elon Musk Has Reinstated The Twitter Accounts Of Several Journalists | According To Jim Cramer, Caterpillar Stocks, Illinois Tool Works And CSX Are Noteworthy| FXMAG.COM For nearly two decades, Ford has settled dozens of similar lawsuits brought by plaintiffs alleging that people were killed or seriously injured in a truck overturn that caused the roof to collapse. A point of contention was the roof strength of older Super Duty pickup models sold by the company for roughly 17 years. Of these lawsuits, 43 were settled in contracts where terms were largely kept secret or not made public, according to court records and plaintiffs' attorneys involved in the cases. The lawsuits are similar in that they relate to heavy-duty trucks sold by Ford from model years 1999 to 2016 under its Super Duty line. Ford ended the week in the red despite the company announcing some major news this week. Its F-150 Lightning EV received the prestigious MotorTrend Truck of the Year award for 2023 earlier this week. Shares have fallen to near daily lows. On the Pre-Market, stocks showed a slight increase to 12.22$ Disney: about how Iger replaced his successor The former Disney chairman and CEO, who led the company for 15 years, stayed with the company long after Chapek took over the top job in February 2020. That Iger was unhappy with Chapek is well known. Iger, then still under contract as executive chairman, did not move out of the office he had at Disney's headquarters in Burbank, California. He called strategic meetings with Chapek's subordinates without inviting the new CEO. In late 2021, Mr. Iger finally left Disney after postponing his retirement four times over the years. His comeback began with a call 11 months later on November 16. For nearly three years, Iger's chosen successor at Disney, Bob Chapek, has faced one crisis after another: a pandemic that closed theme parks and movie theaters, a bitter battle with the Florida governor, and a previously unreported board clash with his chief financial officer. One by one, Chapek lost the support of Disney fans, studio talent, executives, employees, Wall Street, and finally the company's board of directors. B. Chapek's presentation showed a loss of $1.47 billion in Disney's streaming division. McCarthy, Disney's chief financial officer, was fed up with Chapek's performance and leadership. McCarthy called to ask Iger if he would consider returning. He said yes. Two days later, CEO Susan Arnold offered him the job, knowing he was likely to take it. The move ended a years-long power struggle worthy of a company known as the leading storyteller in the entertainment industry. The Disney challenges now belong to Iger. Stocks are at their lowest level in nearly three years. In discussions with investors following Iger's return, Disney's directors of investor relations described the company's status as weak. And in the last month they will write off the year for the continuation of the downward trend. Source: wsj.com
Oil Prices Soar on Prospect of Soft Landing, Eyes Set on $80 Breakout

On The New York Stock Exchange, Most Of Securities Fell In Price

InstaForex Analysis InstaForex Analysis 20.12.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones fell 0.49% to a one-month low, the S&P 500 fell 0.90%, and the NASDAQ Composite fell 1.49%.  Dow Jones The leading performer among the Dow Jones index components in today's trading was Walgreens Boots Alliance Inc, which gained 0.27 points (0.69%) to close at 39.32. Chevron Corp rose 1.16 points or 0.69% to close at 169.88. JPMorgan Chase & Co rose 0.77 points or 0.60% to close at 130.06. The least gainers were Walt Disney Company, which shed 4.30 points or 4.77% to end the session at 85.78. Nike Inc was up 2.74% or 2.90 points to close at 103.05, while Home Depot Inc was down 1.86% or 6.01 points to close at 317. 33.  S&P 500  Leading gainers among the S&P 500 index components in today's trading were NRG Energy Inc, which rose 1.58% to 31.54, Wells Fargo & Company, which gained 1.53% to close at 41.82. as well as Quest Diagnostics Incorporated, which rose 1.48% to end the session at 151.45. The least gainers were Warner Bros Discovery Inc, which shed 6.66% to close at 9.25. Shares of Under Armor Inc A shed 6.01% to end the session at 9.54. Quotes of CarMax Inc decreased in price by 5.45% to 58.09. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Madrigal Pharmaceuticals Inc, which rose 268.07% to hit 234.83, Axcella Health Inc, which gained 165.27% to close at 0.43, and also shares of Soleno Therapeutics Inc, which rose 103.86% to end the session at 1.85. Shares of Cosmos Holdings Inc became the drop leaders, which fell in price by 67.01%, closing at 7.59. Shares of Pingtan Marine Enterprise Ltd shed 11.72% to end the session at 0.58. Quotes of Schmitt Industries Inc decreased in price by 44.88% to 0.46. Numbers On the New York Stock Exchange, the number of securities that fell in price (2222) exceeded the number of those that closed in positive territory (876), while quotes of 90 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,698 companies fell in price, 1,051 rose, and 177 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.93% to 22.41. Gold Gold futures for February delivery lost 0.21%, or 3.85, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 1.85%, or 1.38, to $75.84 a barrel. Futures for Brent crude for February delivery rose 1.45%, or 1.15, to $80.19 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.21% to 1.06, while USD/JPY rose 0.19% to hit 136.95. Futures on the USD index practically did not change 0.00% to 104.33 Relevance up to 03:00 2022-12-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/305503
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

The Bank Of Japan Remains Focused On Achieving Wage Inflation | European Nations' Deal To Cap Natural Gas Prices at €180 Per MWh

Saxo Bank Saxo Bank 20.12.2022 08:55
Summary:  US equities declined on rise in bond yield with noted weaknesses in big tech, even though the USD remained range-bound. The announcement from the Bank of England to include long-maturity gilts in the winding down of QE portfolio in Q1 pushed up yields. Bank of Japan decision will the focus today in Asia, along with China’s Loan Prime Rates, and the US PCE is due later in the week. Earnings from Nike and Fedex today may give investors insights into consumer spending and global economic activities. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) were dragged down by higher bond yields and tech weaknesses U.S. equities declined for a fourth consecutive session. Nasdaq 100 dropped 1.4% and S&P 500 was 0.9% lower on Monday. All sectors, except energy, within the S&P 500 declined, led by communication services, consumer discretionary, and information technology. The 10bp jump in the 10-year yield weighed on growth stocks. The NAHB Housing Market Index plunged to 31, approaching the March 2020 Covid-19 recession low. Key U.S. stock movers Warner Brothers (WBD:xnas), down 6.6%, Meta (META:xnas), down 4.1%, and Amazon (AMZN:xnas) were among the top losers in the Nasdaq 100. Warner Brothers said the entertainment company is to record a large restructuring charge. Meta was hit by news that the European Union antitrust regulators were probing the company for allegedly unfairly squeezing out rivals. Walt Disney (DIS) slid 4.8% after releasing the debut weekend box office of Avatar: the Way of Water, below expectations. Supported by the possibility that Musk stepping down from Twitter, the shares of Tesla were little changed despite general market weakness and a probe by German prosecutors on suspected illegal storage of hazardous materials. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) cheapened as UK yields surged on BOE QT The surge in yield across the pond in the U.K. and Eurozone dragged U.S. Treasury yields higher, with the yield on 2-year notes 8bps higher to 4.26% and that on 10-year notes up 10bps to 3.58%. At the futures trading pits, large selling was on the 10-year (ZNH3) and the ultra 10-year (TNH3) contracts. The 2-10-year curve steepened by 3bps to -68bps. The move was triggered by a 17bp jump in the yield on the U.K. 10-year Gilts after the Bank of England announced the Q1 2023 bond selling schedule for its Asset Purchase Facility portfolio (i.e. bonds accumulated during QE) starting from January 9, 2023, in five auctions for a total of GBP9.75 billion, dividing equally in short, medium, and long-maturity bonds (including the first time). Adding further to the upward pressure on yields were the remarks from ECB’s Simkus and Guindos on more 50bp rate hikes in the Eurozone. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) slid on surge of Covid cases in mainland China Hong Kong and Chinese stocks pared all the early gains and finished the session lower as investors turned cautious following media reports of rises in Covid inflections and death tolls across large cities in China. The lack of commitment to more large-scale economic stimulus measures from the Central Economic Work Conference was considered underwhelming by investors who had higher expectations ahead of the meeting. The positive development of shifting to a more conciliatory stance towards the private sector was buried in the risk-off sentiment. Alibaba (09988:xhkg), Tencent (00700:xhkg), and Meituan (03690:xhkg) gained between 0.7% and 1.7%. Online healthcare providers were among the largest losers, Alibaba Heath (00241:xhkg), JD Health (06618:xhkg), and Ping An Healthcare tumbled by 4% to 8%. Chinese pharmaceuticals and Macao casino operators were among the largest losers. In A-shares, pharmaceutical and biotech names led the decline while the new energy space bucked the broad market and rise. FX: Dollar range-bound ahead of key PCE data this week The US dollar saw mild selling on Monday in thin markets and lack of any tier 1 data or Fed speak. Focus remains on US PCE data due later in the week which remains the Fed’s preferred inflation gauge. EURUSD rose above 1.06 again supported by hawkish commentary from ECB's Kazmir. Kazmir noted rates will not only need to go to restrictive territory but they will need to stay there much longer, noting inflation requires a strong policy response. Meanwhile, Germany's IFO Business climate data came in better than expected on the headline, led by a rise in both expectations and current conditions. USDJPY saw a modest uptick to 137+ levels in the Asian morning hours on Tuesday as the BOJ policy announcement was awaited, and expected to remain dovish (read preview below). GBPUSD testing a break below 1.2150 following the BOE’s long-end QT announcement. AUDUSD was little changed ahead of the RBA minutes. Crude oil (CLF3 & LCOG3) prices modestly higher Crude oil prices continue to find it challenging to balance the varied narrative around the demand outlook. China demand faces short-term headwinds as the Covid wave spreads, but is likely poised for a rebound in the medium term as authorities remain committed to driving up consumption recovery. Meanwhile, global demand outlook faces headwinds amid the massive tightening seen by global central banks this year. Supply side volatilities also persist with US refilling its SPR and sanctions on Russian oil. Crude oil prices were slightly higher, with WTI futures above $75/barrel and Brent futures getting close to $80.   What to consider? BOE announces restart of long-end bond selling, triggering another sell-off in Gilts After pausing the sales of long-end bonds recently to help the market to stabilize after the September rout, the Bank of England has announced that it will now start selling evenly across short, medium and long maturity bonds starting from Jan 9, as part of its QT. 2yr gilt yields up 20bps and 10yr up 17bps. Still, gilt yields are well below the peaks near 5% struck in late September and early October, when prices slumped in response to plans for tax cuts and extra spending from former British Prime Minister Liz Truss's short-lived government. Further pressure on gilts cannot be ignored as BOE likely to raise rates by another 50bps at the Feb 3 meeting. EU energy ministers lower gas price cap European nations reached a deal to cap natural gas prices at €180 per MWh, in a measure that will be applicable for a year from Feb 15. The price cap is significantly lower than an earlier proposal by the European Commission, and will only take effect if the benchmark Dutch TTF gas prices are above €180 per megawatt-hour, and their price difference with global LNG prices is greater than €35 per megawatt-hour. While this may take the immediate pressure off the consumers who are reeling under the energy crisis, we think price caps rarely work and only transfer the pressure somewhere else. Watch for Bank of Japan’s policy review hints The Bank of Japan is set to announce its policy decision today, and no change is expected in its monetary policy stance. The BOJ is expected to keep rates unchanged at -0.1% while maintaining its cap on the 10-Year JGB at 0.25%. Even as inflation increased to 3.6% YoY in October, the BOJ remains focused on achieving wage inflation before it considers a shift in policy stance. However, keep an eye out for any comments about a monetary policy review, which can trigger a strong JPY correction. There have been some mentions by BOJ members regarding a review of how monetary policy is conducted, they have generally been dismissed. While the timeline is still expected to be closer or after Governor Kuroda’s retirement in spring, any notes on who will succeed him or what policy change can be expected would be critical. US December NAHB housing market index slips further The NAHB housing index fell for a 12th straight month from 84 in December 2021 to 31 this month. However, the rate of decline moderated to its slowest in 6 months, indicating that we are possibly nearing the bottom of the cycle for builder sentiment. Of the index’s three components, current sales conditions fell 3 points to 36, buyer traffic was unchanged at 20, but sales expectations in the next six months increased 4 points to 35, also indicating an improved outlook. Better German business climate than expected in December The headline German IFO business climate index, which is based on 9,000 monthly survey responses from firms in the manufacturing, service sector, trade and construction, was out better than expected in December. It climbed to 88.6 versus prior 86.3 and expected 87.2. The current economic assessment and the expectations also improved to 94.4 and 83.2, respectively. Companies are slightly less pessimistic about the macroeconomic trajectory. Though a recession is certainly unavoidable in Germany, the impact of the energy crisis has been so far more limited than initially feared. On a flip note, ECB policymaker Gediminas Simkus, who serves as the Chairman of the Bank of Lithuania, indicated that a 50 basis points rate hike in February is a done-deal. This is aligned with comments from ECB president Christine Lagarde at last week’s ECB press conference. The market reaction was muted. Nike and FedEx earnings on watch today Recently sell-side analysts have raised their price targets on Nike (NKE:xnys), citing potential margin recovery. The sportswear giant reports FY23 Q2 (ending Nov 30, 2022) today and the street consensus is expecting its revenue to grow 11% Y/Y to USD12.6 billion. Peter Garnry suggests in his note that the focus will be on the outlook for the holiday season quarter ending in February 2023 which can give investors some ideas if consumers are still keeping up their spending on discretionary items. Analysts covering Nike seem more optimistic about consumer spending in 2023 than the US bank CEOs who recently suggested that US consumer spending has been coming down. FedEx (FDX:xnys) earnings are also key to watch today. FedEx is now on the other side of the pandemic boom in logistics and expectations for revenue growth have collapsed to zero revenue growth over the next two quarters which in real terms are very low given the inflation. This means that the bar is set low for FedEx when its earnings hit the wire today.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Markets grinding lower; BOE to restart long-end QT; Eyes on BOJ – 20 December 2022 | Saxo Group (home.saxo)
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

The Bank Of England Will Now Start Selling Bonds | A Shift In Bank Of Japan Policy Overnight

Saxo Bank Saxo Bank 20.12.2022 09:08
Summary:  The Bank of Japan surprised global markets overnight with a tweak to their yield curve control policy that came as a large shock to currency traders and even shook risk sentiment more broadly. Not only did the JPY surge broadly, especially against non-USD major currencies, but global yields jumped on the news as yields on Japanese government bonds rose in step-wise fashion on the shift higher in the yield cap on 10-year JGB’s from 0.25% to 0.50%.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) After a weak session yesterday that saw the major indices losing about a percent, futures traded lower still overnight after the Bank of Japan decision to tweak its policy (more below) took US long yields sharply higher overnight. The next technical focus lower could be the 61.8% retracement of the rally from the October low – which is at a rather lower level for the cash index at 3,724 because the wild spike higher in US equity futures on the CPI release last week was not traded in the cash market. Equity traders will keep at least one eye on treasury yields after the surge overnight. Euro STOXX 50 (EU50.I) STOXX 50 futures are some 1.5% lower this morning from yesterday’s close after the surprise BoJ policy shift overnight cratered sentiment and have tumbled over 5% since the ECB’s hawkish meeting last week. The next technical focus lower could be the 200-day moving average, which for the cash index comes in near 3,675. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Overnight U.S. stock market weaknesses, concerns about spreading of Covid-19, and the upward adjustment of yield cap by the Bank of Japan contributed to the risk-off sentiment in the Hong Kong and mainland Chinese stock markets.  Both the Hang Seng Index and CSI300 Index plunged around 2%. Technology stocks underperformed. Hang Seng TECH Index tumbled 4%, with Alibaba (09988:xhkg) and Tencent (00700:xhkg) dropping by more than 4% and Bilibili (09626:xhkg) tumbling more than 8%. Placement of shares at discount from two Hong Kong listed Chinese developers weighed on the property sector. Chinese banks fixed their 1-year and 5-year loan prime rates unchanged. FX: BoJ move sees massive JPY surge, particularly in the crosses The market was surprised to see a shift in BoJ policy overnight, as Governor Kuroda and company shifted the cap on the 10-year JGB to 0.50% from 0.25%, even as they left the base policy rate of -0.10% alone. The move took the JPY sharply higher, with USDJPY trading some 3% lower to new cycle lows below 133.00, while non-USD JPY crosses surged somewhat more as the BoJ’s move triggered a global surge in bond yields and took risk appetite down a few notches, helping support the US dollar elsewhere. Crude oil (CLF3 & LCOG3) prices modestly higher Crude oil prices continue to find it challenging to balance the varied narrative around the demand outlook. China demand faces short-term headwinds as the Covid wave spreads but is likely poised for a rebound in the medium term as authorities remain committed to driving up consumption recovery. Meanwhile, global demand outlook faces headwinds amid the massive tightening seen by global central banks this year. Supply side volatilities also persist with US refilling its SPR and sanctions on Russian oil with a government response close to being completed. In week to Dec 13 funds cut bullish Brent and WTI bets to lowest since April 2020 and it highlights the risk of large price swings as the short-term outlook remains very clouded. Crude oil prices were slightly higher, with WTI futures above $75/barrel and Brent futures getting close to $80. Gold (XAUUSD) maintains a bid near $1800 ... after Bank of Japan’s surprise tweak of its yield cap sent mixed signals for bullion as the dollar dropped and bond yields rose. Overall, however, the prospect of higher yields in Japan following years of artificially low rates could potentially be seen as gold negative given that the BOJ’s steadfast commitment to defending its 10-year yield cap has served as an anchor indirectly helping keep borrowing costs low around the world. Since the current run up in gold started in early November, the price has not dipped below its 21-day moving average, today at $1777. With momentum showing signs of slowing a break below may signal a period of consolidation ahead of yearend while a close above $1815 is needed for that risk to fade. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) drop on BOE and BOJ actions The surge in yield across the pond in the U.K. and Eurozone as well as the surprise announcement from the BOJ that it will lift the yield cap on 10-year JGB’s from 25 bps to 50 bps has driven U.S. Treasury yields higher, with the yield on 2-year notes rising to 4.27% and that on 10-year notes to 3.68%. In futures, large selling was seen on the 10-year (ZNH3) and the ultra-10-year (TNH3) contracts. The 2-10-year curve steepened to -60bps from the recent peak at -84bps. The move was supported on Monday by a 17bp jump in the yield on the U.K. 10-year Gilts after the Bank of England announced the Q1 2023 bond selling schedule for its Asset Purchase Facility portfolio. What is going on? Bank of Japan surprises with lift of yield cap on 10-year JGB’s The BoJ left the policy rate unchanged at -0.10%, but lifted the cap on 10-year JGB’s to 0.50% from 0.25%, triggering an avalanche of JGB selling that immediately took the 10-year JGB yields close to the new target. The market was caught very off-guard despite recent rumblings that the BoJ would likely eventually shift policy. Most observers assessed, given Governor Kuroda’s constant stout defense of the BoJ’s policy mix, that a change to BoJ policy would take place after Kuroda’s exit on April 8 of next year. This decision overnight finally shows a willingness to move that will have the market more likely to anticipate follow up moves after next April, even hikes of the policy rate. For now, this decision took the JPY some 3% higher overnight and sent global bond yields sharply higher and risk sentiment broadly lower as the tightening move comes at a time when many other central banks are shifting to a deceleration of their respective tightening regimes. Better German business climate than expected in December The headline German IFO business climate index, which is based on 9,000 monthly survey responses from firms in the manufacturing, service sector, trade and construction, was out better than expected in December. It climbed to 88.6 versus the prior 86.3 and expected 87.2. The current economic assessment and the expectations also improved to 94.4 and 83.2, respectively. Companies are slightly less pessimistic about the macroeconomic trajectory. Though a recession is certainly unavoidable in Germany, the impact of the energy crisis has been so far more limited than initially feared. On a flip note, ECB policymaker Gediminas Simkus, who serves as the Chairman of the Bank of Lithuania, indicated that a 50-basis points rate hike in February is a done deal. This is aligned with comments from ECB president Christine Lagarde at last week’s ECB press conference. US December NAHB housing market index slips further The NAHB housing index fell for a 12th straight month from 84 in December 2021 to 31 this month. However, the rate of decline moderated to its slowest in 6 months, indicating that we are possibly nearing the bottom of the cycle for builder sentiment. Of the index’s three components, current sales conditions fell 3 points to 36, buyer traffic was unchanged at 20, but sales expectations in the next six months increased 4 points to 35, also indicating an improved outlook. BOE announces restart of long-end bond selling, triggering another sell-off in Gilts After pausing the sales of long-end bonds recently to help the market to stabilize after the September rout, the Bank of England has announced that it will now start selling evenly across short, medium and long maturity bonds starting from Jan 9, as part of its QT. 2yr gilt yields up 20bps and 10yr up 17bps. Still, gilt yields are well below the peaks near 5% struck in late September and early October, when prices slumped in response to plans for tax cuts and extra spending from former British Prime Minister Liz Truss's short-lived government. Further pressure on gilts cannot be ignored as BOE likely to raise rates by another 50bps at the Feb 3 meeting. European nations reached a deal to cap natural gas prices at €180/MWh The deal that will apply for one year from February 15 have no impact on markets this winter given the timing of the implementation and ample supply with stock levels still up 290 TWh year-on-year, the equivalent of 39 days of peak winter demand. The Dutch TTF benchmark gas contract trades near €100/MWh in response to milder weather during the next week and increased power production from renewables reducing demand for gas. The price of gas for the winter 2023/24 period meanwhile has slumped to €110, further reducing the outlook for economic pain next year. Gas consumption in Europe is set to shrink by more than 50 billion cubic meters in 2022, a 12-15% drop and “the sharpest decline in history,” led by price-driven demand destruction and mild weather according to Bloomberg Intelligence. What are we watching next? Follow-on from Bank of Japan move overnight The Bank of Japan move overnight was an uncomfortable one for global markets as it sent global bond yields sharply higher, including the US 10-year yield, which jumped over 10 basis points at one point overnight. Yields also rose elsewhere and this sudden new development in less liquid markets here toward the end of the calendar year could aggravate volatility risks across equity and bond markets. Earnings to watch The bar is set high for Nike earnings as sell-side analysts have recently hiked their price target on the stock and increased their expectations for 2023 on margins. The stock recently tried to retake the 200-day moving average above 110.00, but that effort failed and closed yesterday near 103 ahead of today’s earnings report after today’s close. FedEx will also report after the close. Today: Nike, FedEx, General Mills, FactSet Research Systems Wednesday: Toro, Micron Technology, Cintas, Carnival Thursday: Paychex, CarMax Friday: Nitori Economic calendar highlights for today (times GMT) 1330 – US Nov. Housing Starts and Building Permits 1330 – Canada Oct. Retail Sales 1500 – Eurozone Dec. Consumer Confidence 2100 – New Zealand Dec. ANZ Consumer Confidence 2130 – API's Weekly Report on US Crude and Fuel Inventories  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – December 20, 2022 | Saxo Group (home.saxo)
UK Manufacturing Surge Lifts Q2 Growth: Insights and Outlook

The FCC Seeks More Than $200 Million From Four Cellphone Carriers

Kamila Szypuła Kamila Szypuła 20.12.2022 10:50
Federal Communications Commission law enforcement has ordered the country's top mobile operators to pay more than $200 million in fines for allegedly mishandling sensitive location data. AT&T, T-Mobile among companies facing hundreds of millions of dollars in fines, though likely to fight decision. Cellphone carriers facing roughly millions in fines The Federal Communications Commission is seeking hundreds of millions of dollars in fines from the country’s top cellphone carriers after officials found the companies failed to safeguard information about customers’ real-time locations. The penalties remained in limbo until August, when Rosenworcel moved to enforce them. Some privacy advocates criticized the FCC's actions as being overdue. FCC Chairwoman Jessica Rosenworcel, a Democrat, in August circulated four forfeiture orders penalizing AT&T Inc., Sprint, T-Mobile US Inc. and Verizon Communications Inc. for allegedly mishandling access to the real-time whereabouts of their subscribers. Cell phone companies need to know the coordinates of their subscribers to direct calls and data to the right place. This gives them a more consistent view of customer movements than app developers who use global positioning systems, Wi-Fi and other data sources that users can disable via smartphone settings. Wireless carriers also sell anonymous location data to marketers. The U.S. telecom regulator currently has four commissioners—two Democrats and two Republicans—and needs at least three votes to move forward with fines it proposed years ago on the biggest wireless-service providers. The FCC can’t issue the orders without approval from at least three commissioners. The FCC first outlined the penalties for cellphone carriers in early 2020. Read next:EUR/USD Pair Looks Reasonably Well Supported | The Japanese Yen Galloped Higher In The Morning| FXMAG.COM The commission investigated mobile operators after public reports that data brokers with access to subscribers' real-time locations were sharing this information with dozens of third-party companies allegedly mishandling the data. Cellphone carriers facing roughly $200 million in fines. The FCC said the proposed penalty amounts reflect the length of time each carrier shared information without appropriate safeguards and the number of entities that had access to the data. The FCC has not offered any settlements to the carriers, one person said. This could prompt some carriers to fight the allegations against them through the commission's administrative process. T-Mobile said that it would contest the regulators’ findings. AT&T shares were down 4.1%. Calling the telecom's gains over the past few months a "dramatic bounce," analyst Craig Moffett said he thinks AT&T is now overvalued. He sees rival Verizon as the better pick of the two, though he believes T-Mobile is the best of the three main U.S. carriers. The telecommunications industry is not known for its staggering growth, but according to specialists, T-Mobile should see a significant acceleration in free cash flow next year. That's because 2022 should mark the peak of T-Mobile's integration spending after the 2020 acquisition of Sprint. This merger gave T-Mobile an advantage in the mid-range 5G band, catapulting T-Mobile's network ahead of its rivals. This is a contrast to the 4G era, in which T-Mobile was a network straggler. AT&T still has massive debt on its balance sheet, finished third quarter with debt of $134 billion and goodwill of $93 billion. Verizon's business during this period is simpler and unchanged as it did not make the same major changes as AT&T. But these companies are now easier to compare, and each focuses primarily on Internet and phone plans. Keep in mind that AT&T and Verizon are not fast-growing tech companies; they are mature companies. Source: wsj.com
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

Saxo Bank Podcast: The Bank Of Japan Shocking Markets, The Japanese Yen Rose

Saxo Bank Saxo Bank 20.12.2022 12:27
Summary:  Today we look at the Bank of Japan shocking markets overnight with a surprise shift in its yield-curve-control policy, as it lifted the cap on 10-year JGB's to 50 basis points from 25 basis points. The JPY rose in stepwise fashion together with the jump in longer Japanese yields and global yields were also impacted, taking risk sentiment lower. In commodities, we discuss metals and natural gas. In equities, we discuss the outlook for European defense stocks, including Rheinmetall and cover upcoming earnings reports from Nike, where the bar of market expectations looks high, and from FedEx, where the bar of expectations is quite low. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Bank of Japan roils markets with a surprise policy tweak | Saxo Group (home.saxo)
The USD/JPY Price Seems To Be Optimistic

The Japanese Yen (JPY) Soared More Than 3% Versus Major Currencies

Saxo Bank Saxo Bank 21.12.2022 09:23
Summary:  The top story of the day was the unexpected decision from the Bank of Japan to raise its cap on the 10-year government bond yield to 0.50% from 0.25%. The Yen jumped versus all major currencies and strengthened by 3.7% to 131.80 versus the U.S. dollar. The U.S. 10-year Treasury yield surged 10bps to 3.68% while the S&P 500 managed to snap a four-day losing streak to finish slightly firmer. In extended-hour trading, Nike and FedEx gained on earnings beats. Chinese and Hong Kong stocks declined in a risk-off session. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) finished the session mixed S&P 500 pared the post-BOJ upward yield cap adjustment loss and managed to snap a four-day losing streak to finish 0.1% higher on Tuesday. Nasdaq 100 edged down by 0.1%. Energy, rising 1.5%, was the top gainer within the S&P500 as the WTI crude gained 1%. Consumer discretionary, dropping by 1.1%, was the biggest losing sector. On single stocks, Tesla (TSLA:xnas) was the biggest loser within both the S&P500 and Nasdaq 100. The electric vehicle maker tumbled 8% on Tuesday, following analyst downgrades. The stock shed 23.8% in December, significantly underperforming the 3.8% decline in Nasdaq 100 and the 3.4% loss in S&P 500. Nike (NKE:xnys) jumped nearly 12% in the extended-hour trading after the sportswear company reported revenue and earnings beats. Yields on 5-30-year US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) surged on the hawkish BOJ surprise From the Intermediate through the long-maturity Treasuries sold off on the Bank of Japan’s decision to move its cap on 10-year Japanese government yields to 0.5% from 0.25%. Large blocks selling came in the five-year and 10-year futures contracts. The 10-year yield jumped 10bps to 3.68%, breaking the upper bound (in yield) of the trading range in December. Yields on the 2-year, anchored by the Fed’s rate path, finished the session unchanged. The 2-10-year yield curve steepened by 9bps to 58bps. The housing data released on Tuesday was mixed. Housing starts shrank by 0.5% M/M, less than the -1.8% expected but housing permits were down 11.2% M/M in November, much weaker than the -2.1% consensus in the Bloomberg survey. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) declined in a risk-off day Overnight U.S. stock market weaknesses, concerns about the spreading of Covid-19 in mainland China, and the upward adjustment the of yield cap by the Bank of Japan contributed to the risk-off sentiment in the Hong Kong and mainland Chinese stock markets.  Hang Seng Index declined 1.3% and CSI300 Index plunged 1.7%. Technology stocks underperformed. Hang Seng TECH Index tumbled 3.1%, with Alibaba (09988:xhkg) and Tencent (00700:xhkg) dropping by around 3.4% each and Bilibili (09626:xhkg) tumbling 6.7%. Placement of shares at discount from two Hong Kong-listed Chinese developers, Agile (03383:xhkg) down 17.4%, and CIFI (00884:xhkg) down 16.5% weighed on the property sector. Country Garden (02007:xhkg) shed 8.8%. FX: USDJPY tumbled 3.7% to 131.80 on BOJ’s 25-bp hike to the 10-year JGB cap The Bank of Japan surprised with a 25 basis point hike to the 10-year JGB cap, even as Governor Kuroda tried to ease the impact of the move on markets in his post-meeting press conference with statements suggesting that was “not a rate hike” and that it is too early to consider a general exit from or review of its Yield Curve Control (YCC) policy framework. USDJPY shed 3.7% to 131.80. The Japanese Yen soared more than 3% versus major currencies. Saxo’s Head of FX Strategy, John Hardy notes that the scale of the JPY reaction and its more than 12% rally off the lows against the US dollar, together with far lower commodity prices help ensure that we are very unlikely to see further policy tweaks under Governor Kuroda’s leadership. The ability of the JPY to continue higher after this step-wise reset will depend on the follow-up direction in global yields. FedEx (FDX:xnys) surged 4.3% in the extended hours on results beating earnings estimates. Crude oil (CLF3 & LCOG3) bounced on API inventory drawdown WTI crude oil gained 1% to USD76.1 as the American Petroleum Institute (API) said crude oil inventories in the U.S. dropped by 3.1 million barrels last week. What to consider? BOJ’s surprise policy tweak Bank of Japan tweaked its long-held Yield Curve Control (YCC) policy in a surprise announcement after the December 19-20 meeting. The central bank widened the band in which it would allow rates for 10-year Japanese government bonds to move to -/+ 0.5% from -/+ 0.25% previously. The rest of the monetary policy levers were left unchanged, including the 10-year target still being held at 0%. In her notes, Charu Chanana suggests that the run higher in Japanese yields is likely to create further volatility in global equity and bond markets. As the market once again pressures the BOJ to move towards an eventual exit, the short JGB or long yen trades could potentially have more room to run. This is not just yen positive, but also negative for foreign assets. In terms of equities, this could mean a favourable stance towards Japanese financials vs. exporters and technology companies. For more details about the BOJ policy change, please refer to Charu’s notes. Results from Nike and FedEx beat expectations Nike reported results from FY23 Q2, that ended on Nov 30, beating analyst estimates in sales and margins. Adjusted EPS came in at USD0.85, well above the US0.65 forecasted by analysts. Although inventories increased by 43% Y/Y, the management attributed the buildup to “abnormally low levels” resulting from supply chain disruption a year earlier. The company’s management gave an upbeat assessment of the holiday season sales momentum. FedEx reported FY23 Q2 Adjusted EPS at USD3.18, beating the USD2.8 expected. The positive surprise resulted from a combination of price increases and cost cuts despite a decline in package volume. The logistics giant guided an additional USD1 billion of projected cost cuts in fiscal 2023.   For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: – Yen soared to 131.80 versus the dollar and global bond yields rose after the BOJ raised its yield cap on 10-year bonds - 21 December 2022 | Saxo Group (home.saxo)
The Commodities: In The Near Term The Oil Market Remains Relatively Well Supplied

OPEC+ Will Remain Proactive And Pre-emptive In Managing The Global Oil Market

Saxo Bank Saxo Bank 21.12.2022 09:27
Summary:  The US equity market found its feet again yesterday, pulling itself off the lowest levels in over a month and closing approximately unchanged as traders mull whether there is more to wring out of this calendar year before capital is put to work in the New Year. The soaring JPY found resistance ahead of 130.00 in USDJPY, with higher US global yields pushing back against further upside after the big reset higher for the yen. Elsewhere, gold has pulled up to cycle highs.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures rebounded yesterday from the intraday lows of 3,803 and the rebound has continued this morning with the index futures trading around the 3,867 level. Nike posted stronger than expected earnings and an optimistic outlook for the new year bolstering the view that US consumer spending is still going strong. Tesla is a key stock to watch today as shares were down 8% yesterday despite a positive session suggesting big flows are adjusting the price to the new reality of lower EV demand and demanding prices input materials for batteries. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) Hong Kong and China stocks started the session firmer but fizzled out and were about flat at the time of writing. Chinese property developers continued to trade weak after recent rounds of placements and headlines in state-owned media reiterating the “housing is not for speculation” rhetoric. Tech names outperformed with Hang Seng TECH Index climbed 0.6%. In A-shares, consumption, lodging, and banking stocks gained while solar, auto and machinery underperformed. FX: JPY finds resistance as global yields reset higher There is some irony at work here as global yields jumped on the Bank of Japan decision to reset the yield cap on 10-year JGB’s to 0.50% yesterday, in that global yields reset higher. But if the BoJ is seen standing pat with its new policy, any further rise in yields can also serve to push back against follow-on JPY strength after the one-off reset (for now, at least.) that fell short of taking 130.00 to the downside in USDJPY before a significant bounce from yesterday’s lows. Elsewhere, the USD is mixed and not the focus, stuck in a tight range versus the euro, but with EURUSD having run out of upside momentum. Elsewhere in G10, the Aussie rallied against a weak NZD as another New Zealand confidence survey, the ANZ Consumer Confidence, slipped badly to 73.8 versus 80.7 and far and away the worst reading of the survey since its inception in 2004. Crude oil (CLG3 & LCOG3) holds onto its recent gains ... supported by a drop in US crude stocks, data pointing to a notably drop in Russian seaborne oil shipments this month and Saudi Arabia warning that OPEC+ will remain proactive and pre-emptive in managing the global oil market. Having been vindicated in the necessity of their November production cut as demand slowed, the comment from the Saudi oil minister points to a soft floor under the market below which additional cuts could be implemented if necessary to support the price. The risk of large price swings as liquidity dries up ahead of yearend cannot be ignored with focus today on EIA’s stock report. Crude oil prices were slightly higher, with WTI futures above $76/barrel and Brent futures above $80. Gold (XAUUSD) and silver (XAGUSD) surged higher on Tuesday ... after the Bank of Japan surprised the market by revising its yield-curve-control policy. The move saw the dollar weaken sharply against the Japanese yen while an accompanying rise in bond yields played no role as a potential headwind. Silver reached an eight-month high before running into some profit taking while gold closed saw its highest close since June above $1800. The extent of the move surprised the market and may signal some trigger happy investors not waiting for the new year to get involved amid expectations for an investment metal friendly 2023.  Yields on US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) surged on the hawkish BOJ surprise From the Intermediate through the long-maturity Treasuries sold off on the Bank of Japan’s decision to move its cap on 10-year Japanese government yields to 0.5% from 0.25%. Large block selling came in the five-year and 10-year futures contracts. The 10-year yield jumped 10bps to 3.68%, the highest close this month. Yields on the 2-year, anchored by the Fed’s rate path, finished the session unchanged. The 2-10-year yield curve steepened by 9bps to 58bps. The housing data released on Tuesday was mixed. Housing starts shrank by 0.5% M/M, less than the -1.8% expected but housing permits were down 11.2% M/M in November, much weaker than the -2.1% consensus in the Bloomberg survey. What is going on? Tesla shares slide another 8% even as Musk promises new Twitter CEO Tesla CEO Elon Musk promised to abide by the results of a Twitter poll to step down as the Twitter CEO, and yet the prospect of fewer distractions for Musk failed to help Tesla’s shares, which stumbled badly yesterday, also as two analysts cut their targets for the company. One could speculate that Elon Musk has engineered an escape route out of Twitter because things are deteriorating fast at Tesla and that Tesla is ultimately more important for his personal wealth and other money losing assets. Results from Nike and FedEx beat expectations Nike reported results from FY23 Q2, that ended on Nov 30, beating analyst estimates on sales and margins. Adjusted EPS came in at $0.85, well above the $0.65 forecasted by analysts. Although inventories increased by 43% y/y, the management attributed the buildup to “abnormally low levels” resulting from supply chain disruption a year earlier. Nike’s management gave an upbeat assessment of the holiday season sales momentum. FedEx reported FY23 Q2 Adjusted EPS at $3.18, beating the $2.8 expected. The positive surprise resulted from a combination of price increases and cost cuts despite a decline in package volume. The logistics giant guided an additional $1bn of projected cost cuts in fiscal 2023. Housing weakness continues in the United States Housing starts were mostly flat in November (minus 0.5 % month-over-month) while building permits continued to tumble (drop of 11.2 % month-over-month). Permits are now at their lowest level since June 2020. Many analysts consider that such a drop is consistent with an imminent recession. However, there are other signals showing the U.S. economy is still very resilient despite several headwinds (such as widespread inflation, tight labor market and high level of private debt). Nonetheless, we agree that the evolution of the housing market in the coming months will determine the pace of economic activity in the United States in 2023. This is the most important economic sector to monitor at the moment. What are we watching next? US Dec. Consumer Confidence This survey of US consumer confidence tends to correlate most closely with the labor market prospects in the US historically, although the impact of the massive inflation spike this year was felt in this survey during the spring and summer months despite the strong jobs market as confidence dropped from 128.9 in late 2021 to as low as 95.3 in July, before stabilizing, perhaps on gasoline prices in the US retreating sharply after June. The November survey came in at 100.2, a four-month low, and is expected flat at 101 for the December release later today. Earnings to watch Today’s US earnings focus is Micron and Carnival. Analysts expect Micron to report FY23 Q1 (ending 30 November) negative revenue growth of 46% y/y and adjusted EPS of $-0.01 down from $2.10 a year ago. The memory chip industry is going a tough period with falling prices and lower demand. Carnival is still cruising the high wave of travel and leisure post the pandemic with FY23 Q4 (ending 30 November) revenue expected to increase 205% y/y but still delivering negative earnings with adjusted EPS expected at $-0.87 improving from $-1.72 a year ago. Today: Toro, Micron Technology, Cintas, Carnival Thursday: Paychex, CarMax Friday: Nitori Economic calendar highlights for today (times GMT) 1100 – UK Dec. CBI Reported Sales 1330 – US Q3 Current Account 1330 – Canada Nov. CPI 1500 – US Nov. Existing Home Sales 1500 – US Dec. Consumer Confidence 1530 – EIA's Weekly Crude and Fuel Stock Report Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – December 21, 2022 | Saxo Group (home.saxo)  
CHF/JPY Hits Fresh All-Time High in Strong Bullish Uptrend

CEO Bob Chapek: "2022 Was A Strong Year For Disney"

Conotoxia Comments Conotoxia Comments 21.12.2022 09:58
"Avatar", which premiered in 2009, earned $2.74 billion worldwide, becoming the highest-grossing film in history. It seemed that the latest instalment of this film, 'Avatar: The Way of Water', which is over three hours long, would be similarly or even more successful. The studio predicted that the film would earn between US$ 135 million and US$ 150 million on its opening weekend. In the meantime, it stood at around USD 100 million. Disney (Disney) shares have fallen by more than 4.5% since the beginning of the week. Is this a buying opportunity? History of the Walt Disney Company Disney is one of the world's most famous and respected entertainment companies, founded in 1923 by brothers Walt and Roy Disney. The company began as a small film studio, but quickly grew to produce animated films, television series and children's programmes. In 1955, Disney opened its first theme parks, Disneyland in California, and a few years later, in 1971, it opened Walt Disney World in Florida. Today, Disney owns several theme parks around the world, as well as many other companies in the entertainment industry, such as film studios, television and radio stations, and companies that produce toys and other children's products, valued for their quality and for inspiring and cheering up people around the world. In November 2019, the company launched the 'Disney+' streaming platform, which provides access to a variety of film and TV content. It includes films, series, TV shows and animation from a number of well-known brands such as Disney, Marvel, Star Wars, National Geographic and Pixar. It appears that the company has now set its sights on significant growth on this platform. The service has more than 164.2 million subscribers compared to Netflix's (Netflix) 223 million subscriptions, which now seems to be the company's biggest competitor. Source: Conotoxia MT5, Netflix, Weekly Financial situation The company's revenue grew by 23% year-on-year. The number of new subscribers on the 'Disney+' platform grew by more than 39% year-on-year, compared to Netflix, for which this growth was 4.2% year-on-year. According to the company's CEO Bob Chapek: "2022 was a strong year for Disney. We saw sizable subscription growth in the fourth quarter, adding 14.6 million total subscriptions, including 12.1 million Disney+ subscribers. Disney+ in just three years since launch is a direct result of our strategic decision to invest heavily in creating incredible content and rolling out the service internationally, and we expect our DTC (direct-to-consumer) operating losses to narrow going forward and that Disney+could still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate." It appears that Disney could not return to previous levels of profitability since the launch of the service. Currently, the company's net margin ratio is 3.8% (it was 22% in 2019) compared to Netflix's 16%. One could conclude that the company is currently focused on growing the platform even at the expense of profitability. However, it is hard to predict when this trend would change and what results we could expect. What does Wall Street think of Walt Disney's share price? According to the Market Screener portal, the company has 30 recommendations, and among them, the predominant one reads: "Buy". The average target price is set at USD 124.05, 44% below the last closing price. The highest target price is at USD 177 and the lowest is USD 94, which is below the last closing price. Source: Conotoxia MT5, Disney, Weekly Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Kuroda Stayed On The Sidelines And The Yen Responded With Losses

The Japanese Have Allowed A Larger Bond Sell-Off And An Increase In The Yield On Their Debt

Conotoxia Comments Conotoxia Comments 21.12.2022 10:01
The Bank of Japan's decision, described yesterday, to raise the range for interest rate fluctuations on Japanese 10-year bonds to 0.5 percent may still have its consequences for financial markets. These may no longer just be looking at a change in the control of the yield curve, but may increasingly assume a change in interest rates. Since the beginning of 2016. The Bank of Japan has held its main interest rate at -0.1 percent and holds the world record for this. Nowhere else, in any other country, are interest rates as low as in Japan. Even the Swiss have abandoned this and raised their main interest rate to 1 percent, while the Japanese, for the moment, have allowed a larger bond sell-off and an increase in the yield on their debt, under what is possible to be an onslaught of global interest rate increases. At present, however, the market seems to expect that this is only the beginning of the BoJ's actions. The next step the Bank of Japan may take is to change the interest rate itself. Investors in this market seem to expect it to rise to 0.3 percent in a year. Adding to this the expectation of a slow end to interest rate hikes in the U.S., it could turn out that in 2023 Japan would lead expectations for interest rate hikes. This could significantly affect the yen or the Japanese stock market. Yen exchange rate and Nikkei The Japanese yen oscillated around the 132-per-dollar level on Wednesday, after rising nearly 4% during the previous session to reach levels not seen in more than four months. Overall, after the second intervention in the foreign exchange market, which took place in October, the USD/JPY exchange rate fell by 14 percent. This was a retreat from levels last seen in 1990. Going back to that history, and especially to 1998, where the Bank of Japan also intervened in the market at JPY 147-148, the USD/JPY exchange rate fell to JPY 102 the following year. If the Fed ended the hike cycle in the first half of 2023, such a scenario could be repeated. Source: Conotoxia MT5, USDJPY, Weekly The Nikkei 225 index fell 0.68% to close at 26388, while the Topix index lost 0.64% and fell to 1893 on Wednesday, extending the sharp decline triggered by the Bank of Japan's surprise policy change. Technology stocks led the market lower. Meanwhile, Japanese banks extended gains in anticipation of better returns from rising interest rates, including Mitsubishi UFJ (3.9%). Sumitomo Mitsui (4.1%) and Mizuho Financial (2.2%). Source: Conotoxia MT5, Mitsubishi UFJ, Weekly Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The ECB's Rate Hike: EUR/USD Rally in Question

Nike Saw Strong Demand And Raised Its Revenue Forecast

Kamila Szypuła Kamila Szypuła 21.12.2022 10:33
Efforts by the sneaker giant to use discounts to clear excess merchandise. Nike raised its revenue forecast and said inventory challenges are diminishing, it raised its revenue forecast and said inventory challenges are diminishing. Consumer sentiment Analysts have been watching Nike and other retailers for progress in reducing inventory, as many Rising prices of food, fuel and many other goods and services weakened consumer sentiment. Shoppers buy but pay more for less goods. They also prioritize food purchases and other necessities over garden furniture and gadgets. Retailers are running overstock and cutting prices to free up space for holiday goods. Many companies have already lowered their profit expectations for this year and are working to reduce costs as consumers pull back spending in categories such as apparel and homeware ahead of the key year-end shopping season. Companies are trying to balance serving consumers who are willing to spend despite rising prices, while being sensitive to shoppers who need or want to be more budget conscious. As a result, retail executives and consultants are predicting the slowest November-January sales growth in years. Read next: The Bank Of Japan's Decision To Allow 10-Year Government Bonds Caused Turmoil In The Financial Markets, USD/JPY Trading Below 133| FXMAG.COM Nike deals better Nike is deviating from the trend, as the company's current results show. The company said second-quarter revenue was up 17% on a year-on-year basis and profits were about the same, a better result than analysts had expected, helping the stock gain more than 11% in trade outside working hours. Nike has reduced inventory levels from the first quarter, but they remain elevated. The company said its inventory was worth $9.3 billion in the quarter ended Nov. 30, up 43% over the previous year. Directors said they saw strong demand, but the company is aware that the economic woes facing consumers have not subsided. On top of that, Nike now expects full-year revenue to grow by a percent below teens, excluding currency fluctuations, up from its September forecast of low double-digit percentage growth. The most optimistic forecast reflects what Nike has seen from consumers starting in August through the first few weeks of December. The past For the past two years, supply chain turmoil has held back Nike's growth as the company has struggled with stock shortages due to Covid lockdowns and factory closures in Vietnam and China. The company then sought to increase orders to both meet consumer demand and stay ahead of transit constraints. Nike executives said the company began increasing discounts this summer, but was more aggressive in trying to get rid of items in the fall quarter. A year ago, Nike went from having a tight inventory and being able to charge full prices for its goods to having to reduce inventory in a market where products are sold at a discount. Some items can still be sold without significant discounts. As a result, sales in North America increased by 30% compared to the previous year. Retailers that sell Nike products, such as Dick's Sporting Goods Inc. and Foot Locker Inc., have reported better-than-expected sales in recent quarters, in part because they have had access to products that have been hard to come by for the past two years. Nike share price In the most recent quarter, Nike reported net income of $1.33 billion, or 85 cents a share, compared with $1.34 billion, or 83 cents a share, a year earlier. Revenue rose to $13.32 billion from $11.36 billion a year earlier. Currently, the share price in December is even higher and exceeded 100. It seems that December will be the best month of this quarter due to the Christmas mood. Source: wsj.com, finance.yahoo.com
US Corn and Soybean Crop Conditions Decline, Wheat Harvest Progresses, and Weaker Grain Exports

Tesla (TSLA) slumped 8.05% after brokerages Evercore ISI and Mizuho cut their price targets on the stocks

Intertrader Market News Intertrader Market News 21.12.2022 11:36
DAILY MARKET NEWSLETTER December 21, 2022               Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,044.00 +105.00 (+0.75%) Read the analysis 13,850.00 14,080.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,364.00 7,419.00     S&P 500 (CME) 3,870.50 +21.25 (+0.55%) Read the analysis 3,884.00 3,834.00     Nasdaq 100 (CME) 11,242.75 +67.00 (+0.60%) Read the analysis 11,310.00 11,120.00     Dow Jones (CME) 33,259.00 +206.00 (+0.62%) Read the analysis 33,350.00 33,000.00     Crude Oil (WTI) 76.39 +0.16 (+0.21%) Read the analysis 76.90 75.40     Gold 1,815.80 -2.133 (-0.12%) Read the analysis 1,821.00 1,806.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Tuesday, U.S. stocks pared early-session losses to close mixed. The Dow Jones Industrial Average rose 92 points (+0.28%) to 32,849, the S&P 500 added 4 points (+0.11%) to 3,821, while the Nasdaq 100 declined 12 points (-0.11%) to 11,072.The U.S. 10-year Treasury yield jumped 10.5 basis points to 3.690% after the Bank of Japan surprised markets by allowing long-term government bond yields to rise.Energy (+1.52%), insurance (+1.09%), and media (+0.83%) sectors were the top performers, while automobiles (-6.27%), transportation (-1.42%), and semiconductors (-0.73%) sectors lost the most.Tesla (TSLA) slumped 8.05% after brokerages Evercore ISI and Mizuho cut their price targets on the stocks.Wells Fargo (WFC) fell 2.01% after the bank agreed to a $3.7 billion settlement with authorities over mismanagement of automobile loans, mortgages and deposit accounts.From a technical point of view, Walmart (WMT) crossed above its 50-day moving average.Regarding U.S. economic data, the number of housing starts posted at an annualized rate of 1.427 million units (vs 1.40 million units expected).European stocks closed mixed. The DAX 40 fell 0.42%, the CAC 40 dropped 0.35%, while the FTSE 100 edged up 0.13%.U.S. WTI crude futures rose $0.6 to $75.96 a barrel.Gold prices jumped $31 to $1,818 an ounce.Market Wrap: ForexAs expected, the Bank of Japan kept its benchmark interest rate unchanged at a negative level of -0.10%. However, the central bank shocked markets with a tweak to its yield curve control, allowing 10-year government bond yield to move 50 basis points either side of its 0% target, wider than the previous 25 basis point band.USD/JPY then plunged 521 pips (-3.81%) to 131.70, the lowest level since August.The U.S. dollar index then fell to 103.99.EUR/USD rose 17 pips to 1.0624. Germany's data showed that producer prices fell 3.9% on month (vs -2.0% expected) but rose 28.2% on year (vs +30.8% expected) in November.GBP/USD added 28 pips to 1.2177.AUD/USD declined 22 pips to 0.6678.USD/CHF fell 20 pips to 0.9266, and the USD/CAD was down 40 pips to 1.3608.Bitcoin rebounded over 2% to $16,850.Morning TradingIn Asian trading hours, USD/JPY rebounded to 132.07 from a prior low near 130.56.Meanwhile, EUR/USD eased to 1.0615 and GBP/USD fell to 1.2165.Gold was steady at $1,816.Bitcoin held gains at $16,827.Expected TodayGermany's January GfK consumer confidence index is estimated at -36.0.In the U.S., December Conference Board consumer confidence index is expected at 100.1, while third quarter current account deficit is estimated at 230 billion dollars. Also, existing home sales are anticipated at an annualized rate of 4.3 million units.           UK MARKET NEWS           Bunzl, a distribution and outsourcing company, said 2022 revenue is expected to increase year-on-year by 10% at constant exchange rates, while 2023 revenue is anticipated to be slightly higher than in 2022 and adjusted EPS is estimated to be moderately lower year-on-year due to higher interest rates and an increased effective tax rate.AstraZeneca, a pharmaceutical group, said its Imfinzi has been approved in the European Union for the 1st-line treatment of adult patients with unresectable or metastatic biliary tract cancer in combination with chemotherapy, while its Lynparza in combination with abiraterone has also been approved as 1st-line treatment for patients with metastatic castration-resistant prostate cancer.Oil & Gas, construction & materials and auto & parts shares gained most in London on Monday.           ECONOMIC CALENDAR           Time Event Forecast Importance   06:00 CBI Distributive Trades (Dec) -23 MEDIUM     07:00 MBA 30-Year Mortgage Rate (Dec/16)   MEDIUM     08:30 Current Account (Q3) -230B MEDIUM     10:00 Existing Home Sales MoM (Nov) -3% MEDIUM     10:00 Existing Home Sales (Nov) 4.3M MEDIUM     10:00 CB Consumer Confidence (Dec) 100.1 MEDIUM     10:30 EIA Gasoline Stocks Change (Dec/16) 2.14M MEDIUM     10:30 EIA Crude Oil Stocks Change (Dec/16) -1.657M MEDIUM                                     NEWS SENTIMENT           Verona Pharma PLC VRNA : NASDAQ 18.59 USD +43.11% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   MorphoSys AG MOR : XETRA 12.72 EUR -15.43% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Siemens Energy AG ENR : XETRA 16.835 EUR -4.07% In the last 5 days         NEWS SENTIMENT (24H) Neutral       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Phoenix Group Holdings PLC PHNX : LSE 594.00 GBp -3.48% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Purplebricks Group PLC PURP : LSE 9.275 GBp +3.06% In the last 5 days         NEWS SENTIMENT (24H) No Data       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Bayerische Motoren Werke AG BMW : XETRA 83.35 EUR -0.60% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: intraday support around 1.0595.   Pivot: 1.0595   Our preference: Long positions above 1.0595 with targets at 1.0640 & 1.0660 in extension.   Alternative scenario: Below 1.0595 look for further downside with 1.0575 & 1.0555 as targets.   Comment: The RSI lacks downward momentum.                     Euro Stoxx 50 (Eurex)‎ (H3)‎ Intraday: watch 3767.00.   Pivot: 3856.00   Our preference: Short positions below 3856.00 with targets at 3767.00 & 3739.00 in extension.   Alternative scenario: Above 3856.00 look for further upside with 3889.00 & 3919.00 as targets.   Comment: The upward potential is likely to be limited by the resistance at 3856.00.                     Brent (ICE)‎ (G3)‎ Intraday: the bias remains bullish.   Pivot: 79.10   Our preference: Long positions above 79.10 with targets at 80.80 & 81.30 in extension.   Alternative scenario: Below 79.10 look for further downside with 78.70 & 78.30 as targets.   Comment: The RSI lacks downward momentum.        
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

The Outlook 2023: Which Scenarios For 2023 On Stocks And Indices?

Swissquote Bank Swissquote Bank 21.12.2022 12:42
2022 has been a volatile year for stock markets worldwide: with a 10-month decline and a recovery in the last two months, we are a long way from the highs. So what can we expect for 2023 on stocks and indices? Enjoy the viewing! 0:00 Intro 00:39 How severe is the 2022 bear market compared to previous bear markets? 1:35 How do our feelings change through an equity market cycle? 2:41 Being in drawdown is not unusual 4:23 Bear market comparisons: are we close to a bottom in equities, or do we have more to suffer? 5:29 The era of easy money is over! 7:16 What to expect next year regarding monetary policy and interest rates? 8:00 Why has inflation been so sticky? What could make inflation persist in 2023? 11:12 Best and worst sectors in case of a recession in 2023 14:05 Best trade idea for 2023   The second part of Outlook 2023: forex and commodities: https://youtu.be/kod851_Yx2Y Glenn began his investment management career in 1997 and has managed private client and family office wealth ever since. Glenn is the Founder & Managing Director of Harver Capital, an active macro investment manager at www.harvercapital.com. Ipek Ozkardeskaya has begun her financial career in 2010 at the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst at the London Capital Group in London and in Shanghai. She returned to Swissquote Bank as a Senior Analyst in 2020. #swissquote #investing #stockmarket #indices #bearmarket #inflation #tradingideas #spx #outlook #outlook2023 #recession _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars, and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

A Positive Close On The New York Stock Exchang, 2414 Securities Rose In Price

InstaForex Analysis InstaForex Analysis 22.12.2022 08:00
At the close of the day on the New York Stock Exchange, the Dow Jones rose 1.60%, the S&P 500 rose 1.49%, the NASDAQ Composite index rose 1.54%. Dow Jones The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 12.57 points or 12.18% to close at 115.78. Quotes Boeing Co rose by 7.71 points (4.09%), ending trading at 196.00. Caterpillar Inc rose 2.80% or 6.59 points to close at 241.73. The leaders of the fall were Walgreens Boots Alliance Inc, which shed 0.93 points or 2.35% to end the session at 38.60. The Walt Disney Company rose 0.10 points (0.11%) to close at 86.92, while McDonald's Corporation rose 0.91 points (0.34%) to close at 268. 16. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Nike Inc, which rose 12.18% to 115.78, APA Corporation, which gained 5.76% to close at 46.67, and Etsy Inc, which rose 5.69% to end the session at 134.33. The leaders of the fall were Host Hotels & Resorts Inc, which shed 6.09% to close at 15.88. Shares of Walgreens Boots Alliance Inc shed 2.35% to end the session at 38.60. Quotes Western Digital Corporation fell in price by 2.18% to 31.38. NASDAQ The top gainers among the components of the NASDAQ Composite in today's trading were Gorilla Technology Group Inc, which rose 69.79% to 4.74, SINTX Technologies Inc, which gained 57.16% to close at 11.74. as well as shares of Rekor Systems Inc, which rose 56.45% to close the session at 0.93. The leaders of the fall were Meiwu Technology Co Ltd, which shed 83.43% to close at 0.32. Shares of Core Scientific Inc lost 75.53% and ended the session at 0.05. Quotes Icecure Medical Ltd fell in price by 46.92% to 1.38. Numbers On the New York Stock Exchange, the number of securities that rose in price (2414) exceeded the number of those that closed in the red (679), while quotes of 99 shares remained virtually unchanged. On the NASDAQ stock exchange, 2469 companies rose in price, 1219 fell, and 186 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 6.56% to 20.07. Gold Gold futures for February delivery lost 0.04%, or 0.65, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 2.90%, or 2.21, to $78.44 a barrel. Futures for Brent crude for February delivery rose 2.91%, or 2.33, to $82.32 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.08% to 1.06, while USD/JPY was up 0.47% to hit 132.32. Futures on the USD index rose 0.24% to 103.85. Relevance up to 03:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/305885
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

Analysis Of The Dow Jones Industrial Average Index

InstaForex Analysis InstaForex Analysis 22.12.2022 08:20
If we look at the 4-hour chart, the Dow Jones Industrial Average index seems to be corrected upwards to test the SBR (Support Become Resistance) level which also happens to be the Daily Breaker Block from #INDU, namely level 33415.9 where this level also happens to be in the Bearish Fair Value Gap area. even though the upward correction of the rally has been confirmed by the appearance of deviations between the #INDU price movement and the Stochastic Oscillator indicator, if the Resistance levels previously described are strong enough to withstand the upward correction rally and/or as long as it does not break above the 33756.6 level, then #INDU has the opportunity to fall back down to the level area 32612.4-32241.9 as the first target and the area level 31761.6-31240.1 as the second target. Relevance up to 05:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116177
Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

InstaForex Analysis InstaForex Analysis 22.12.2022 08:39
Tesla continues to decline as expected. By breaking nicely below the S/H/S neckline, we should see a continuation lower toward support in the 88-90 area. Tesla is currently trading near support, so a temporary corrective rally should not come as a surprise, but mark the words temporary. Renewed downside pressure should ultimately set the stage for the continuation lower to the 88-90 support area from where a final impulsive rally remains probable towards new all-time highs.   Relevance up to 07:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305922
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Apple Is Likely To Be Lower In The Longer Term

InstaForex Analysis InstaForex Analysis 22.12.2022 08:41
Apple is currently sitting on the S/H/S top neckline. Eventually, this neckline should be broken for a continuation lower towards at least 113.08 and likely closer to the 50% corrective target at 91.50 to complete point 13 in Livermore's Accumulation Cylinder. However, even stronger downside pressure should ultimately be expected to fulfil point 14 and maybe even point 15 which time will show. A break below support at 129.81 will activate the S/H/S top for the decline to 91.50 and likely lower in the longer term. Relevance up to 07:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/305924
The Commodities Feed: China's 2023 growth target underwhelms markets

The China-Australia Comprehensive Strategic Partnership: The Removal Of China’s Trade Sanctions On Australian Goods

Saxo Bank Saxo Bank 22.12.2022 08:50
Summary:  The S&P 500 and Nasdaq 100 jumped by 1.5% on the Conference Board Consumer Confidence index rising to an 8-month high and 12-month inflation expectations sliding to the lowest since Sep 2021. Energy stocks led the gains as crude oil prices rose by nearly 3% on a larger-than-expected EIA crude oil inventories drawdown. USDJPY stabilized at 132.40 after the sharp decline the day before. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) rallied 1.5% on consumer confidence survey US equities jumped on a bullish combination in the Conference Board Consumer Confidence survey with consumer confidence improving to an 8-month high and inflation expectations for the next 12 months falling to 6.7% in December from 7.1% in November. S&P 500 and Nasdaq 100 each climbed 1.5%. Nike (NKE:xnys), soaring 12.2% on an earnings beat and upbeat assessment of demand, was the best-performing stock within the S&P500 on Wednesday. All 11 sectors of the S&P500 gained, with energy, industrials, and financials leading. Energy stocks were boosted by a 2.9% rise in crude oil prices. APA (APA:xnys) gained 5.8%. Shares of FedEx climbed 3.4% after reporting a decline in earnings less than feared and plans to cut costs. Carnival rose by 4.7% after the cruise liner reported a smaller-than-expected loss. In extended-hour trading, Micron (MU:xnas) shed 2.1% following the chipmaker reporting FY23 Q1 earnings and Q2 revenue guidance weaker than expectations. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) finished firmer with the 2-year outperforming Yields on the 2-year shed 4bps to 4.21% and the 10-year was 2bps richer to 3.66%. The 20-year auction went well with a decent demand from investors. Hong Kong’s Hang Seng (HIZ2) edged up modestly; China’s CSI300 (03188:xhkg) was flat Hong Kong stocks started the session firmer but fizzled out to finish the session only 0.3% higher in light volume. Textiles manufacturer Shenzhou (02313:xhkg), which supplies to Nike (NKE:xnys) surged 6.7% following Nike’s upbeat outlook guidance, making the stock the top gainer in the Hang Seng Index. Chinese catering stock Haidilao (06862:xhkg) gained 4%; white goods home appliances manufacturer Haier Smart Home (06690:xhkg) climbed 2.9%. In A-shares, CSI300 closed nearly unchanged from the day before. Consumption, lodging, tourism, catering, food and beverage, and Covid drugs gained. FX: bids for the dollar returned somewhat with USDJPY stabilized at 132.40 After sliding 3.7% on Tuesday after the BOJ decision, the USDJPY stabilized at around 143.40 for now. EURUSD edged down modestly to 1.0600. AUDUSD gained, rising to 0.6710. Crude oil (CLF3 & LCOG3) rallied 2.9% to USD78.50 on EIA inventory drawdown WTI crude jumped 2.9% to USD78.50 following a 5.9 million barrel drawdown on U.S. inventories reported by the EIA. The Biden administration’s plan to replenish the strategic petroleum reserve in February also helped the market sentiment. What to consider? Mixed U.S. data: weaker home sales, higher consumer confidence, lower inflation expectations Economic data were mixed. The 1-year-ahead inflation expectation in the Conference Board Consumer Confidence survey softened from 7.1% in November to 6.7% in December, the lowest since September 2021. Existing home sales shrank 7.7% M/M in November, the 10th consecutive month of decline. On the other hand, Headline consumer confidence as well as the present situation and expectations components rose in the Conference Board Consumer Confidence survey. The headline consumer confidence improved to 108.2, (vs consensus 101.0; Nov: 101.4), the highest level since April this year. China and Australia seek to improve the relationship between the two countries During a phone call to mark the 50th anniversary of the official diplomatic relationship between China and Australia, Chin’s President Xi told Australian Prime Minister Anthony Albanese that China would seek to “promote a sustainable development of the China-Australia comprehensive strategic partnership”. Meanwhile, Australian Foreign Minister Penny Wong told reporters that China and Australia agreed to continue high-level dialogue on issues including the removal of China’s trade sanctions on Australian goods. For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: U.S. stocks rallied on stronger consumer confidence and lower inflation expectations – 22 December 2022 | Saxo Group (home.saxo)
Saxo Bank Podcast: The Bank Of Japan Meeting And More

The Rally In The Japanese Yen (JPY) Will Help Moderate The Relative Inflation Risks For Japan

Saxo Bank Saxo Bank 22.12.2022 08:57
Summary:  Risk sentiment bounced yesterday after December US Consumer Confidence came in far stronger than expected, jumping to an eight-month high. And yet, US Treasury yields fell gently all along the curve yesterday, in part as the same US confidence survey showed inflation expectations dropping more quickly than expected and on a strong 20-year US treasury auction. In FX, the Aussie has rebounded sharply on hopes for stimulus measures in China and a friendly diplomatic tone in recent talks between Australian and Chinese leaders.   Note: This is the final Saxo Market Quick Take until Monday January 2, 2023. What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures rallied 1.5% yesterday closing above the 50-day moving average as positive earnings from Nike helped lift sentiment yesterday and provided a positive assessment of the US consumer. Equity trading will slowly enter hibernation as the holiday period approaches so expect little price action today and tomorrow. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) rallied on stimulus rhetoric and talk of shortening quarantine The Hang Seng Index rallied 2.4% and CSI 300 climbed 0.4% as of writing, after China’s State Council, the People’s Bank of China, and the China Securities Regulatory Commission separately released meeting readout or statements to pledge to implement the decisions from the recent Central Economic Work Conference to boost the economy, support the property sector, and the internet platform companies. Adding to the risk-on sentiment is market chatter about the shortening of quarantine to three days. Mega-cap China internet stocks surged 3% to 6%. Leading retail and catering stocks jumped by 2% to 11%. FX: choppy markets as USD starts day on a weak footing Some gentle back and forth in FX yesterday as the USD put on a show of rallying, while most of the action has been in the crosses and the greenback has eased back lower after a strong session for risk sentiment yesterday and lower US treasury yields helping USDJPY back lower after its traumatic sell-off and broad JPY rally on Tuesday’s surprise tweak of BoJ policy. The biggest mover to the upside has been the Aussie, which is enjoying the more friendly diplomatic tone with China and has suddenly rallied in the crosses, especially in AUDNZD, on more rhetoric overnight from China on its intent to boost growth. Crude oil (CLG3 & LCOG3) rally extends on US inventory data Crude oil closed at the highest level since December 5 after the US DoE inventory reports showed a nearly 6M barrel draw on crude oil stocks, while gasoline inventory levels rose nearly 2.5M barrels, a half million more than expected, and distillates inventories fell –242k vs. A rise of 1.5M barrels expected. Gasoline and distillate stocks have been generally building of late, but the latter remains slightly below the inventory range of the past 5 years. Gold (XAUUSD) and silver (XAGUSD) remain near recent highs ... after surging in the wake of the Bank of Japan policy tweak on Tuesday and despite yields easing lower yesterday in the US. BOth 2020 and 2021 saw gold ending the year on a strong note and then sharp follow-on rallies in January were quickly reversed. Yields on US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) remained subdued despite surge in US Consumer Confidence US Treasury yields eased lower all along the curve yesterday despite a large and unexpected surge in US Consumer Confidence as that same survey’s drop in inflation expectations may have received more attention. Later in the day, a strong US 20-year auction, where bidding metrics were the firmest since this spring. End-of-year portfolio rebalancing may obscure the next bigger move for treasuries until we roll into the New Year. What is going on? Mixed U.S. data: weaker home sales, higher consumer confidence, lower inflation expectations Economic data were mixed. The 1-year-ahead inflation expectation in the Conference Board Consumer Confidence survey softened from 7.1% in November to 6.7% in December, the lowest since September of 2021. On the other hand, Headline consumer confidence as well as the present situation and expectations components rose in the Conference Board Consumer Confidence survey. The headline consumer confidence improved to 108.2, (vs consensus 101.0; Nov: 101.4), the highest level since April this year. Elsewhere, the annualized rate of existing home sales fell -7.7% in November, the 10th consecutive month of declines as the historic surge in US mortgage rates this year continues to pressure the US housing market. Micron shares down 2% as glut in memory chips continues The US memory chip manufacturer delivered last night a positive surprise on FY23 Q1 (ending 1 December) adjusted EPS at $0.04 vs est. $-0.88 and announced a 10% headcount reduction to reduce costs. The real negative surprise was the Q2 revenue outlook of $3.6-4bn vs est. $3.9bn and the Q2 adjusted gross margin of 6-11% vs est. 17.8% suggesting significant pricing headwinds compared to market expectations. Micron is also drastically reducing its 2024 capex plans. China and Australia seek to improve the relationship between the two countries During a phone call to mark the 50th anniversary of the official diplomatic relationship between China and Australia, China’s President Xi told Australian Prime Minister Anthony Albanese that China would seek to “promote a sustainable development of the China-Australia comprehensive strategic partnership”. Meanwhile, Australian Foreign Minister Penny Wong told reporters that China and Australia agreed to continue high-level dialogue on issues including the removal of China’s trade sanctions on Australian goods. What are we watching next? Japan’s November Inflation data up tonight After an historic move in the JPY this week, the market will be watching the latest batch of Japan’s CPI data, which has surged to multi-decade highs recently and is expected in at +3.9% YoY for the headline and +2.8% YoY ex Fresh Food and Energy. The rally in the JPY by some 12% from its lows of two months ago will help moderate the relative inflation risks for Japan. US PCE inflation data for November out tomorrow This is arguably the last interesting macro data point out of the US until the first week of the New Year. The PCE data is expected to show that core inflation will drop sharply to 4.6% YoY vs. 5.0% in October, while the headline is expected in at 5.5% versus 6.0% in October. Hotter than expected inflation readings will be an interesting test for markets in coming months as the market has a strong view that the Fed is poised to halt rate hikes as soon as Q2 of next year and will be cutting by year end, despite the Fed “dot plot” projections suggesting the Fed will have a policy rate at the end of next year of above 5% (versus 4.25%-4.50% now). Earnings to watch The earnings calendar is winding down for the year, with payroll and HR-services company Paychex reporting today before the market opens and struggling US used car seller and servicer CarMax, which is trading near its lows for the year, likewise reports before the market open today. Today: Paychex, CarMax Friday: Nitori Economic calendar highlights for today (times GMT) 1100 – Turkey Rate Announcement 1330 – US Weekly Initial Jobless Claims 1530 – US Weekly Natural Gas Storage Change 2330 – Japan Nov. CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app:   Source: Financial Markets Today: Quick Take – December 22, 2022 | Saxo Group (home.saxo)
Asia Market: Optimistic Headlines From Regional Leaders China And Japan

Asia Market: Optimistic Headlines From Regional Leaders China And Japan

TeleTrade Comments TeleTrade Comments 22.12.2022 09:28
Asia-Pacific markets pare BOJ-linked losses despite mixed news from China, Japan. Pullback in Treasury bond yields, hopes of more stimulus add strength to the positive mood. Hong Kong braces for best run-up in two weeks as China unveiled pro-growth policies. RBI’s rejection to an abrupt pause to the rate hike trajectory weighs on Indian shares. Asian shares grind higher, mostly positive, as traders cheer softer Treasury yields and upbeat headlines from the regional leaders China and Japan. In doing so, the equity traders also benefit from a lack of major data/events while ignoring the Covid-linked market fears. While portraying the mood, MSCI’s Index of Asia-Pacific shares outside Japan extends the previous day’s rebound, up near 1.0% intraday, whereas Japan’s Nikkei 225 adds half a percent to 26,505 ahead of Thursday’s European session. Japanese government revises growth forecasts for the fiscal year 2023. “Japan's real gross domestic product (GDP) is expected to expand 1.5% in the fiscal year beginning in April 2023, the government said in its new semi-annual projection, up from 1.1% in the previous forecast made in July,” mentioned Reuters. On the same line were comments from Japanese Prime Minister (PM) Fumio Kishida who pushed local industries for 100 trillion Japanese Yen investment as soon as possible. On the other hand, policymakers in China brace for pro-growth steps as hospitals in Shanghai eye more virus cases. On the same line could be the People’s Bank of China’s (PBOC) pledge to help overcome a slump in the local property market. With this in mind, Hong Kong’s Hang Seng rises 2.55% intraday to lead the region’s gainers while India’s BSE Sensex drops 0.40% on a day to buck the trend. Stocks in Australia ignore fears of a slowdown in spending, as conveyed by local banks, whereas those from New Zealand cheer optimism in Beijing to print daily gains. On a broader front, the S&P 500 Futures rise 0.30% intraday to 3,916 whereas the US 10-year Treasury yields remain depressed around 3.65%, extending the previous day’s pullback from the monthly high. Given the holiday mood, the markets may witness lackluster moves but final prints of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditure (PCE) details for the third quarter (Q3) could entertain traders ahead of Friday’s US Core PCE Price Index for November, also known as the Fed’s preferred inflation gauge. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE is anticipated to also meet the initial forecasts of 4.6% QoQ during the stated period.
Equity Markets Rise, VIX at 12 Handle After ECB Rate Hike and US Economic Resilience

The Saxo 2023 Outrageous Predictions For 2023 In Special Edition Of The Podcast

Saxo Bank Saxo Bank 22.12.2022 11:24
Summary:  In this Special Edition of the podcast, we discuss the Saxo 2023 Outrageous Predictions for 2023, based on the theme of The War Economy. Our Outrageous Predictions are a yearly exercise in looking at possible, if improbable events that may unfold in the year ahead and will alter the investment landscape if they do come to pass. This Special Edition podcast features Editor-in-Chief of the 2023 Outrageous Predictions John J. Hardy and major contributor Peter Garnry. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Special Edition - Saxo Outrageous Predictions for 2023 | Saxo Group (home.saxo)
EUR/USD Fragile Amidst Strong US Data and Bleak Eurozone News

Netflix Wants You To Pay For Sharing Your Password With Others

Kamila Szypuła Kamila Szypuła 22.12.2022 11:15
A challenge for both viewers and the streaming giant. Netflix as a leader in the video streaming industry, with 223 million subscribers worldwide and a market capitalization of approximately $128 billion, Netflix is the industry's first to tackle password sharing, but it likely won't be the last. Two perspectives Netflix is one of the biggest streaming platforms. Netflix gained popularity thanks to the attractive offer of movies and series, as well as the possibility of sharing an account with others. More than 100 million Netflix viewers now watch the service using passwords they borrow - often from family members or friends, the company says. From the customer's point of view, this option is used because several people can subscribe to one subscription. From the point of view of the platform, this is not a good solution. Password sharing was the top issue eating up subscriptions in 2019, but the company was concerned about how to solve the problem. The effort has waned as a cause for concern as the pandemic accelerated the company's growth in 2020. While cinema, arena and restaurant closures left users seeking entertainment at home, Netflix added nearly 16 million new subscribers in the first quarter of this year alone. Read next: The EUR/USD Pair Keeps Trading Above $1.06, The USD/JPY Is Below 132 | FXMAG.COM No more password sharing on Netflix coming soon Netflix said it would end this deal starting in 2023, asking those who share accounts to pay for it. The company expects to begin rolling out the changes in the United States early this year. It's a radical change for a company that once tweeted, "Love is sharing a password." Netflix's crackdown could waste years of goodwill the company has built up over the years and anger consumers who have plenty of other streaming services to choose from. Netflix's terms of service have long said that the person paying for the account should keep control of the devices using it and not share passwords, but the company has never enforced this rule strictly. Drawing a hard line on who should be able to share passwords has proven difficult. Instead of blocking password borrowers from accessing someone else's account, Netflix asks them to enter a verification code for their device. The code is sent to the primary account holder and must be entered within 15 minutes. Netflix updated its customer help pages this year to add that accounts can only be shared with people who live together. The company said it would enforce its policies based on IP addresses, device IDs, and account activity. To assuage consumer backlash, Netflix discussed gradually increasing the pressure to share passwords. Netflix has considered allowing users to rent pay-per-view content through their subscriptions, as Amazon Prime Video customers can, as it may make users wary of sharing their login information with others who may be billed, people familiar with have said with internal discussions. The test While Netflix has not announced its plans for the US, it has been testing in Latin American countries, one of the regions where password sharing is most prevalent. In these tests, Netflix allows subscribers to pay to share accounts with up to two people outside their home. Netflix has received complaints from consumers about efforts in Latin America, but according to some people, many users choose to pay to share. The main challenges One of the main challenges is that Netflix has difficulty determining when an account holder is traveling and accessing the service from somewhere else, such as a second home or hotel, and when another person is borrowing their password, said people familiar with the internal discussions. Not only Netflix Other streaming rivals are taking a hit as well, and over time the pressure to make money and continue to grow may prompt services like Disney+, HBO Max and Paramount+ to take a close look at password sharing as well. Netflix share price As a result of inflation, many people decided to unsubscribe, which contributed to the decline in the price quotes on the stock exchange. From April to the first half of October, trade was in the range of 166-249. From the second half of October, the situation seems to be improving and the price has increased. The last quarter of the year turns out to be positive, and at the time of writing the Netflix share price is 298.20. Source: wsj.com, finance.yahoo.com
At The Close On The New York Stock Exchange Indices Closed Mixed

Declines In Most Sectors In The US Stock Marker, Only The Energy Sector Rose. The Cryptocurrency Market Has Stagnated.

Conotoxia Comments Conotoxia Comments 22.12.2022 14:31
After a week full of interest rate rises, it seems that markets may finally be catching their breath, or at least most of them. The exception may be Japan, where the central bank there has announced a turnaround in financial policy. Macroeconomic data Monday saw the publication of several important macroeconomic data, including the German Ifo Business Climate Index for December, the RBA meeting minutes, the PBoC Loan Prime Rate and a statement and the Bank of Japan. The German Ifo Business Climate Index is an important index that measures business sentiment in Germany. The reading for December was 88.6 points, which was better than expected (87.4 points) and may signal an improvement in business sentiment in Germany. The previous reading for November was 86.4 points. The result may indicate that the German economy is in better shape than expected and could be a positive signal for other economies in Europe. The minutes of the RBA (Reserve Bank of Australia) meeting did not bring any surprises and contained no significant changes to the central bank's monetary policy, which is expected to continue to raise interest rates. The PBoC (People's Bank of China) interest rate remained at 3.65%, which was expected by the market. The Bank of Japan (BoJ) released its monetary policy statement and held a post-meeting press conference. The first steps were taken to tighten monetary policy, announcing a rate hike and increasing the level of government bond purchases. Because of this, the Nikkei index (JP225) may have fallen by more than 3% since the start of the week. Source: Conotoxia MT5, JP225, Daily On Tuesday, we learnt about the number of new building permits in the US, the reading for November was 1.342 million, worse than expected (1.485 million) and a decrease in permits compared to the previous month (1.512 million). The reading may indicate that the construction sector in the US is less active than expected, which could have a negative impact on the economy, potentially contributing to higher unemployment in the sector in the future. Wednesday brought the publication of more data. We learned about Canada's core inflation reading (excluding food and energy prices). The reading for November was 0.0% m/m, while 0.2% m/m was expected. This represents no change in the price level compared to the previous month (0.4% m/m.). On the same day, we learned the reading of the Consumer Confidence index, which measures consumer sentiment in the US. The reading for December was 108.3 points, which is better than expected (101.0 points) and represents an improvement in consumer sentiment compared to the previous month (101.4 points). This good result could be attributed to the pre-Christmas period. The last of the important publications concerned US crude oil inventories. The reading for last week was -5.894 million barrels (previously 10.231 million b.). Which could suggest a return to a further shortage of this crude. On Thursday, we learned of signs of a slowdown in the UK economy. The GDP reading for the third quarter of this year was 1.9% y/y. (2.4% y/y was expected). This is down from the previous reading of 4.4% y/y. Due to the holidays starting on Friday's session, some stock exchanges will close earlier than usual, which should be taken into account in investment intentions. The stock market Declines in most sectors in the US are unlikely to represent optimism about the 'Father Christmas rally' starting. We could see the largest in the new technology sector. TheTechnology Select Sector SPDR Fund (XLK), which tracks the sector's quotations, fell by 4.8%. Only the energy sector rose. This seems to have had something to do with rising energy commodity prices this week. Source: Conotoxia MT5, XLK, Daily This week gave us the last of this year's Q3 figures. Tuesday brought the release of financial results from Nike (Nike), the global footwear and apparel giant, among others. The company reported Q3 EPS of $0.85, better than expected ($0.65). Next is General Mills (GnrlMils), the food manufacturer reported EPS of 1.1, a reading that came as a positive surprise to analysts (1.06 was expected). Next is FactSet Research (FactSet), a data and analytics solutions company, reported Q3 earnings of 3.99 per share, 3.62 was expected. On Wednesday, we learned the results of Micron (Micron), a computer memory manufacturer, which reported an EPS loss of 0.04 in Q3 (-0.01 expected). On the same day, Cintas (Cintas), an apparel services company, reported Q3 earnings per share of 3.12, expected (3.03). Carnival Corp (Carnival-US), the cruise company, reported a loss of $0.85 per share in Q3, better than expected (-$0.88). Currency and cryptocurrency market After a week of decisions by as many as 11 central banks, we saw numerous interest rate rises. These seem to have changed some global currency market trends. The EUR/GBP pair saw the biggest increase, up 1%, but we saw the biggest changes in pairs linked to the Japanese yen. The USD/JPY exchange rate has fallen by more than 3% over the course of this week and now stands at around 132. This is a drop of more than 13% from its peak, and appears to have been triggered by Monday's announcement of a change in monetary policy by the central bank of Japan. Source: Conotoxia MT5, USDJPY, Daily The cryptocurrency market has stagnated. The price of bitcoin (BTCUSD) was virtually unchanged over the course of this week, rising by just 0.3%. One of the strongest gaining cryptocurrencies was ethereum (ETHUSD), which increased in value by 2%. The digital currency market appears to continue to remain in its sideways course, showing no signs of changing. It's time for Christmas to begin! As we begin the festive period, we will not know any more key data until the end of the year, and the markets have to accept that this year would probably do without the usual 'Father Christmas rally' during this period. Nevertheless, we would like this period to be the best it can be for all of us. The Conotoxia team sends its regards. Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
USA: Final Q3 GDP amounts to 3.2%. Subtle Micron earnings

Franklin Templeton expect companies to maintain Digital Transformation in 2023

Franklin Templeton Franklin Templeton 22.12.2022 20:35
Franklin Equity Group believes the Digital Transformation is still in its early stages, with long-term secular growth tailwinds that we believe extend well beyond the current economic cycle. Rising interest rates, slowing economic activity and a normalization of COVID-19-era consumption habits pressured the technology sector in 2022. While the past year has been difficult, we remain optimistic because we continue to see signs of enduring quality, sustainable growth and supportive valuations. Looking to 2023, we expect enterprises to continue many of their Digital Transformation initiatives, albeit at a slower pace, even in the face of moderating rate increases and slowing economic activity. This is because these investments are driving needed productivity gains, especially in an inflationary environment. We have found opportunities in high-quality platform-like companies—that are essential to their customers’ operations—in enterprise software and information technology (IT) services companies and the sub-themes of Secure Cloud and Software-as-a-Service (SaaS), Artificial Intelligence (AI)/Machine Learning, Future of Work and Cybersecurity. Read next: Nike (NKE) jumped 12.18% and Fedex (FDX) rose 3.43%, as both companies' quarterly earnings exceeded expectations | FXMAG.COM Conversely, we anticipate greater uncertainty in consumer technology as COVID-19 tailwinds continue to abate, energy prices rise in Europe and global economic activity slows. We believe areas such as consumer IT hardware, gaming, eCommerce, and digital advertising may have a slightly longer road to recovery. We also expect consumer discretionary spending to weaken as unemployment rises and as excess household savings that had built up during the pandemic decline amid persistently high inflation. In fact, this began to play out during the second half of 2022, which led to negative estimate revisions across the semiconductor, consumer personal computer (PC), gaming and internet industries. While we believe below-trend growth will likely continue for these industries into 2023, we also think we are nearing the point at which valuations incorporate this view. In these consumer-facing categories, we remain focused on businesses that have achieved meaningful scale and are levered to sub-themes such as Digital Media Transformation, New Commerce and Electrification and Autonomy. In our analysis, our strategy is well positioned for a recovery once rates stabilize and investors return to more enterprise-centric technology names. These are high-quality companies that demonstrate superior long-term growth potential, de-risked estimates and improved valuations. In our opinion, for investors who share our long-term mindset, the risk/reward profile in the technology sector is likely the best it has been in several years. If rates stabilize in the coming months, we believe the technology sector can offer an appealing combination of “offense” and “defense” in this environment, given higher levels of durable secular growth and strong balance sheets and margins. Compelling Long-Term Potential for Innovation US Venture Capital (VC) Investment, Company Formation, and the Digital Economy’s Share of Gross Domestic Product (GDP)1999-2021 Sources: Bureau of Economic Analysis, Pitchbook.US Venture Capital (VC) Investment in $USD billions based on annual dataDigital economy’s share of GDP as defined and measured by the Bureau of Economic Analysis. Ultimately, we think Digital Transformation is still in its early stages, with long-term secular growth tailwinds, which we believe extend well beyond the current economic cycle. As seen in the chart above, Digital Economy businesses have steadily outpaced overall gross domestic product (GDP) growth in the United States for the last 20 years, due to steady venture capital (VC) investment across cycles. Yet, these businesses still only account for roughly 10% of total GDP. In our analysis, this will continue to trend much higher across all geographies for the foreseeable future, and we will likely continue to own what we think are high-quality businesses that are best positioned to capture this growth. WHAT ARE THE RISKS? All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Growth stock prices reflect projections of future earnings or revenues, and can, therefore, fall dramatically if the company fails to meet those projections. To the extent a strategy focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a strategy that invests in a wider variety of countries, regions, industries, sectors or investments. Investments in fast-growing industries like the health care or technology sectors (which historically have been volatile) could result in increased price fluctuation, especially over the short term, due to the rapid pace of product change and development and changes in government regulation of companies emphasizing scientific or technological advancement or regulatory approval for new drugs and medical instruments. Source: Technology sector 2023 outlook | Franklin Templeton
Asia Morning Bites: Focus on Regional PMI Figures, China's Caixin Manufacturing Report, and Upcoming FOMC Minutes and US Non-Farm Payrolls"

Thursday Brought Declines At The Close In The New York Stock Exchange

InstaForex Analysis InstaForex Analysis 23.12.2022 08:01
At the close in the New York Stock Exchange, the Dow Jones fell 1.05%, the S&P 500 index fell 1.45%, the NASDAQ Composite index fell 2.18%. Dow Jones The leading gainer among the components of the Dow Jones index today was Verizon Communications Inc, which gained 0.53 points (1.40%) to close at 38.31. Nike Inc rose 0.93 points (0.80%) to close at 116.71. Procter & Gamble Company rose 0.35 points or 0.23% to close at 152.19. The least gainers were Boeing Co shares, which fell 7.75 points or 3.95% to end the session at 188.25. Intel Corporation was up 3.21% or 0.86 points to close at 25.97, while Microsoft Corporation was down 2.55% or 6.24 points to close at 238.19.  S&P 500 Leading gainers among the S&P 500 components today were FedEx Corporation, which rose 3.35% to 175.69, VF Corporation, which gained 2.95% to close at 26.21, and Warner Bros Discovery Inc, which rose 2.10% to end the session at 9.23. The least gainers were shares of Tesla Inc, which decreased in price by 8.88%, closing at 125.35. Shares of Lam Research Corp lost 8.65% and ended the session at 409.11. Quotes of Applied Materials Inc decreased in price by 7.84% to 97.60. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were IsoPlexis Corp, which rose 102.87% to hit 1.40, E-Home Household Service Holdings Ltd, which gained 91.76% to close at 1, 35, as well as Core Scientific Inc, which rose 72.94% to end the session at 0.09. The least gainers were Akso Health Group DRC shares, which were virtually unchanged at 0.00% to close at 0.39. Shares of Dragonfly Energy Holdings Corp lost 40.75% to end the session at 14.86. Quotes Pacifico Acquisition Corp fell in price by 35.06% to 1.13. Numbers On the New York Stock Exchange, the number of securities that fell in price (2,350) exceeded the number that closed on the plus side (735), while 101 stocks were virtually unchanged. On NASDAQ, 2,439 stocks were down, 1,256 were up, and 189 remained flat. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 9.47% to 21.97. Gold Gold futures for February delivery shed 1.41%, or 25.65, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery fell 0.03%, or 0.02, to $78.27 a barrel. Brent oil futures for February delivery fell 0.56%, or 0.46, to $81.74 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.09% to 1.06, while USD/JPY fell 0.08% to hit 132.37. Futures on the USD index rose 0.25% to 104.11. Relevance up to 03:00 2022-12-24 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/306064
Market Insights with Nour Hammoury: S&P 500 and Bitcoin Projections for H2 2023

US Inflation Is Cooling, Japan Headline CPI Ticked Up To 3.8% Y/Y

Saxo Bank Saxo Bank 23.12.2022 08:55
Summary:  Summary: S&P500 shed 1.5% and Nasdaq 100 tumbled 2.2% following an upward revision to the U.S. Q3 GDP data that dashed investors’ optimism of goldilocks of moderation of inflation and a potential soft landing. Among today’s several economic data releases from the U.S., all eyes will be on the November PCE report which has the most potential to shape expectations on the Fed’s policy path. This is the last Market Insights Today for 2022. Our first edition for 2023 will be on 3 January. We would like to wish all our readers a joyous festive season and happy New Year.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) reversed and fell on upward revision in Q3 GDP U.S. equities reversed the gains from the previous session and tumbled on an upward revision in the Q3 GDP to 3.2% from the previously reported 2.9%. Coming in at 216K, the initial jobless claims increased less than the 222K expected. Investors were whipsawed by the hope of goldilocks of moderation of inflation and a soft landing and the fear of the persistent strength in the labor market and the economy preventing the Fed from lifting its foot from the brake. A day after the hope on Wednesday, investors succumbed to fear on stronger than expected economic data that were taken as bad news for the market. S&P500 fell by 1.5% and Nasdaq 100 shed 2.2% on Thursday. All 11 sectors within the S&P 500 declined, with laggards of consumer discretionary, information technology, and energy falling over 2% each. Tesla (TSLA:xnas), plunging 8.9% was once again the top loser in the S&P 500 as well as the Nasdaq 100. Please refer to Peter Garnry’s notes on more about the harsh reality that Tesla is facing. Following the gloomy demand outlook from Micron (MU:xnas), the semiconductors were sold off, with Lam Research (LRCX:xnas) falling 8.7%, Applied Material (AMAT:xnas) down 7.8%, Nvidia (NVDA:xnas) down 7%, and Advanced Micro Devices (AMD:xnas) down 5.6%. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) cheapened on strong economic data Q3 GDP was revised up to 3.2% from the previously reported 2.9%. The personal consumption component was revised up to 2.3% from the previously reported 1.7% on firmer services consumption. The quarterly core PCE in the Q3 GDP report was revised up to 4.7% from the previously reported 4.6%. The monthly PCE and core PCE for November are scheduled to release today. The stronger-than-expected GDP revision saw yields on the 2-year Treasuries 6bps cheaper to 4.27%. The long-end’s reaction to the data was muted with yields on the 10-year 2bps higher to 3.68%. The demand in the 4-week and 8-week bill auctions was good while the demand in the 5-year TIPS auction is relatively subdued. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) rallied on stimulus rhetoric and talk of shortening quarantine The Hang Seng Index rallied 2.4% and CSI 300 climbed 0.4% as of writing, after China’s State Council, the People’s Bank of China, and the China Securities Regulatory Commission separately released meeting readouts or statements to pledge to implement the decisions from the recent Central Economic Work Conference to boost the economy, support the property sector, and the internet platform companies. Mega-cap China internet stocks surged, with Alibaba (09988:xhkg) up 4.1%, Tencent (00700:xhkg) up 4.1%, Meituan (03690:xhkg) up 6.8%, and Bilibili (09626:xhkg) up 9.6%. Adding to the risk-on sentiment is market chatter about the shortening of quarantine to three days. Leading retail and catering stocks soared. Xiabuxibu (00520:xhkg) jumped 15.7% and Haidilao (06862:xhkg) rose by 7.6%. Li Ning (02331) surged 7.4%. Educational services providers continued to rise in anticipation of potential loosening restrictions over the sector. FX: US dollar little changed versus major currencies The U.S. dollar tread water in thin trading ahead of a busy economic calendar today in the U.S. with the closely watched PCE deflators, plus personal spending, durable goods, new home sales, and the U. of Michigan Consumer Sentiment Survey. USDJP and EURUSD were nearly unchanged at 132.30 and 1.0600 respectively. GBPUSD was moderately lower at 1.2030, down 0.4% and AUDUSD was down 0.5% to 0.6670. What to consider? Japan’s November CPI in line with expectations Japan’s national CPI released this morning came in basically in line with expectations. The headline CPI ticked up to 3.8% Y/Y from 3.7% in October but below the 3.9% consensus forecast. CPI excluding fresh food and CPI excluding fresh food and energy were as expected, being at 3.7% Y/Y (vs consensus: 3.7%, Oct: 3.6%) and 2.8% Y/Y (vs consensus: 2.8%, Oct: 2.5%) respectively in November. US November PCE may be on course for further easing for now US inflation is cooling, but we argue that the debate at this point needs to move away from peak inflation to how low inflation can go and how fast it can reach there. Fed’s preferred inflation gauge, the Core PCE, will continue t,o remain in focus especially after Powell has highlighted it a key metric recently at both the Brookings Institute and the December FOMC press conference. However, PCE may now slow as rapidly as CPI with the two key restraining components – goods and energy – likely to play a smaller part in PCE. Expectations are for a November reading of 5.5% Y/Y reading vs a previous reading of 6.0% Y/Y while the core is expected to come in at 4.6% Y/Y from 5.0% Y/Y in October. Still, risks to inflation remain tilted to the upside going into 2023 as financial conditions have been easing and China’s reopening brings a fresh wave of inflation risks. For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: U.S. stocks reversed and fell on upward Q3 GDP revision ahead of today’s November PCE deflator – 23 December 2022 | Saxo Group (home.saxo)
The Euro Dips as German Business Confidence Weakens Amid Soft Economic Data

Migration Of Sports From Traditional Television To Streaming Is Chugging Ahead- The NFL Sunday Ticket On YouTube

Kamila Szypuła Kamila Szypuła 23.12.2022 11:18
The deal with The NFL Sunday Ticket cements YouTube, a division of Google, as a growing force in online and TV streaming. The agreement The company that started out as a website offering user-generated clips with little curation now also sells cable bundles and the best sports shows it was once meant to supplant. On Tuesday, the National Football League was in advanced talks to grant YouTube exclusive rights to the NFL Sunday Ticket, a subscription-only package that allows football fans to watch most Sunday afternoon games. YouTube will pay an average of around $2 billion a year to secure the rights to the NFL Sunday Ticket franchise. What is The Sunday Ticket? The Sunday Ticket is a subscription-only package that gives customers access to all Sunday afternoon matches from non-market teams. The NFL is eager to form media partnerships with tech companies, which broadens the pool of potential bidders whenever rights deals come up. YouTube will offer the Sunday Ticket as an add-on to YouTube TV and on the video platform's main app through a service called Primetime Channels, which allows viewers to subscribe to individual channels. Current owner of rights DirecTV currently pays the National Football League an average fee of $1.5 billion per season for both residential and commercial rights. His contract expires at the end of this season. The current rights holder DirecTV has approximately 13.5 million subscribers. However, like all other cable and satellite providers, it has been hit hard by cable cuts as more and more consumers turn to streaming. Major sports are migrating The potential move of the Sunday Ticket to YouTube is further evidence that major sports are migrating from traditional television, which has been hit by cable cuts, to streaming and tech companies willing to spend a lot on content. Amazon.com Inc. has its own NFL deal while Apple Inc. broadcasts some Major League Baseball games and has a new Major League Soccer deal. Amazon and Apple also kicked the Sunday Ticket tires. Even Netflix, which has said it has no interest in acquiring major sports rights to its streaming service, has explored acquiring rights to niche sports and even taking stakes in leagues. Read next: According To The Economist Intelligence Unit (EIU), Cities In Europe And Canada Are The Best To Live In| FXMAG.COM Why is it good deal for YouTube? The addition of a Sunday ticket would provide a boost to YouTube streaming as the video platform tries to expand beyond ad sales to subscription revenue. YouTube's advertising business fell year-on-year for the first time in the third quarter after a series of rapid growth during the pandemic. YouTube situation YouTube has recently become a go-to destination for TV viewers, surpassing Netflix Inc. as the most watched streaming service on TV for the first time earlier this year, according to Nielsen data. YouTube TV, an online bundle of cable channels for $64.99 a month, surpassed more than 5 million subscriptions and trial accounts in June. The Primetime channels, which launched in November, allow viewers to subscribe individually to more than 30 streaming services, and the Sunday Ticket would be offered as an add-on to both services. Problems for traditional television Traditional TV networks continue to make big NFL rights deals. CBS and Fox air Sunday games, while NBC and ESPN air prime-time games on Sunday and Monday, respectively. The NFL has signed long-term deals with its partners that collectively are valued at over $100 billion. There are signs some traditional media companies are struggling to keep up with the rising costs of sports rights deals, especially given the high amounts tech companies are willing to pay. Google share prices Google should see higher stock prices due to increasing internet usage and ad revenue. This week, stock prices fell from 90.25 to 88.26. Thus, this is the worst week in the current month. Source: wsj.com, finance.yahoo.com
For What It Is Worthy To Pay Attention Next Week 23.01-29.01

Saxo Bank Podcast: Discussing These Pressing Wish List Items For The New Year

Saxo Bank Saxo Bank 23.12.2022 11:32
Summary:  In this Special Edition of the podcast, we discuss what investors are hoping to see in 2023 after the most traumatic year for "balanced" portfolios in modern memory. Items on the Wish List include hopes for a soft landing, easing pressure from central banks as inflation fades, a weaker US dollar, Chinese demand returning and more. But is this what investors will get? Discussing these pressing wish list items for the New Year on this special edition podcast are Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Read next:Migration Of Sports From Traditional Television To Streaming Is Chugging Ahead- The NFL Sunday Ticket On YouTube| FXMAG.COM Source: Podcast: Special Edition - Investors' Wish List for 2023 | Saxo Group (home.saxo)
Outlook 2023: The Major Trends And Themes For The Coming Year

Outlook 2023: The Major Trends And Themes For The Coming Year

Swissquote Bank Swissquote Bank 23.12.2022 11:38
DISCLAIMER: The opinions and comments of the speakers provided in this video do not constitute investment advice. You are responsible for your trades. All investments involve risk. 2022 has been very difficult for financial markets, equities, crypto, and bonds went down. Investors were hardly finding a safe place. In this chaotic environment, Peter Rosenstreich, head of investment products at Swissquote, and Ipek Ozkardeskaya, senior analyst, discuss the major trends and themes for the coming year and the way to invest for private clients with managed and balanced portfolios.   00:00 Intro 00:24 How to hedge or benefit from inflation 02:36 Shorting the global markets 06:54 Promising sectors for 2023? 08:32 Sustainable energy & decarbonization 09:10 Metaverse counter-performance 10:30 Global cybersecurity needs growing 11:57 Low point of semiconductors? 12:45 China: economic growth vs equity valuation 14:27 Themes Trading: how to invest in megatrends Peter Rosenstreich is the head of investment products at Swissquote. He identifies and analyses opportunities in structural and sustainable change, which includes new business models, disruptive technology, and impacts from sustainable investment. Ipek Ozkardeskaya began her financial career in 2010 at the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high-net-worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst at the London Capital Group in London and in Shanghai. She returned to Swissquote Bank as a Senior Analyst in 2020. #swissquote #megatrend #themestrading #inflation #sustainability #decarbonisation #investing #investingtips #metaverse #cybersecurity #chinastocks _____ Themes Trading is a product issued by Swissquote Bank SA based in Switzerland and regulated by FINMA. _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars, and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Forex: US dollar against Japanese yen amid volatility and macroeconomics

Signals of softening inflation make US stocks come back from below-the-line levels

Ed Moya Ed Moya 23.12.2022 19:03
US stocks pared earlier losses as traders digest a wide range of mixed economic data that overall supports the story that inflation is coming down.  Wall Street had a tale of two rounds of economic readings.  The first wave, before the opening bell showed CAPEX is weakening and softer consumer demand.  The second round of data was rather upbeat as consumer sentiment improved and inflation expectations dropped even further.  New Home Sales also unexpectedly improved, but no one is betting that the bottom is in place.  US Data Disinflation trends are firmly in place after durable goods orders slumped and as personal spending softened.  Demand destruction should only continue and that will be well received by the inflation fighting Fed.  The preliminary November look at durable goods orders fell 2.1%, a bigger decline than the eyed 1% drop, and much worse than the downwardly revised 0.7% prior reading.  Core capital goods still have plenty of room to soften and that should be more noticeable in the coming months. Last month’s personal income rose by 0.4% and spending softened to 0.1%.  The Final look at the University Michigan sentiment showed inflation expectations were revised lower.  The 1-year inflation expectations fell from 3.0% to 2.9%, reaching the lowest levels since June 2021. The Fed’s tightening path is getting vindicated here as the narrative that personal and business spending will continue to slow appears to be firmly in place. Oil Crude prices are rallying after Russia threatened to cut oil output up to 7% over the price cap that has been put in place.  Thin trading conditions are quickly approaching but some traders are giving the oil market a lot of attention.  The oil market is vulnerable to a couple of shocks that could keep the recent rebound going into the New Year.  China’s Covid reopening is a big question mark, but it seems they will keep moving forward with it despite the estimate that 37 million a day could get infected with this current surge.  Read next: Canadian inflation report was mixed but there is a strong likelihood that the BoC will raise rates by 25bp| FXMAG.COM Gold Gold hovers around the $1800 as Wall Street becomes more confident that disinflation trends will continue.  Another round of economic data is painting a picture that consumers and businesses are weakening and that should help keep pricing pressures coming down.  The economy is still recession bound and if inflation continues to cool, gold demand should improve in the New Year.  Crypto A positive story in the crypto space is the court approval of a $37.5 million bankruptcy loan for Bitcoin miner Core Scientific.  The crypto miner shares are poised to rally which shows you that investors believe in the restructuring support agreement and are still willing to invest in some of the distressed parts of the cryptoverse.    Bitcoin looks like it might be finding a home between the $16,000 and $17,000 zone.  Stocks are heading lower and Bitcoin is somewhat stable today.  This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Mid-Market Update: Mixed Economic Data keeps stocks volatile, Oil rallies as Russia hints at output cut, Gold rallies, Cryptos edge higher - MarketPulseMarketPulse
French Industrial Production Rebounds in July Amid Weak Demand and Gloomy Outlook

Shopping On Etsy Continues To Be Popular

Kamila Szypuła Kamila Szypuła 27.12.2022 10:33
The world of online commerce is facing a brutal reality: during the pandemic, when many people were stuck at home, they went shopping online. Now that everything is back to normal, e-commerce sales are slowing down or falling. Online shopping still popular Buyers also did not give up shopping, even though they have been able to return to brick-and-mortar stores for a long time. Unlike Amazon, Etsy makes shopping personal - goods often come with a handwritten note. Unlike eBay, Etsy has a platform that feels up-to-date because many consumers have only recently discovered it. Once a fringe online marketplace for crafters, Etsy gained widespread popularity during the pandemic. But unlike many Covid beneficiaries in the e-commerce space, Etsy has achieved gains that have thus far proven durable. Etsy reported more than 94 million active buyers as of the end of the third quarter—down less than 2% from its peak at the end of last year and roughly double the number it counted prepandemic. Data In November, Etsy reported that gross merchandise sales fell 3.3% in the third quarter compared to a year earlier - better than the 5.5% decline expected by analysts polled by Visible Alpha. It was also milder than the 11% drop eBay reported on the same day. Adjusted earnings before interest, taxes, depreciation and amortization margin was 28% better than expected. Etsy added 6 million new buyers during this period, which was higher than the rate of adding new buyers before the pandemic. That's impressive considering the number of active Etsy buyers has more than doubled in the last three years to around 94 million in the last quarter. This growth has been handsomely rewarded in the stock market, with stocks still up more than 40% over the last three years. Etsy raised its transaction fee earlier this year by about 30%, but has since lost less than 4% of its sellers - numbers that speak to the exceptional value sellers seem to find on their platform. Not everyone is convinced that Etsy's fortune will last. Following last month's third-quarter earnings, Morgan Stanley wrote that Etsy's growth outlook now appears "significantly different" from how it has been over the past three years, suggesting the stock now deserves a lower multiplier. Read next: The Cable Market (GBP/USD) In The Week Leading Up To Christmas Drops Significantly| FXMAG.COM Forecast Etsy said in a Q3 conference call that it expects gross merchandise sales in the fourth quarter to decline by about 10% from a year earlier in the middle of the forecast, reflecting a "dynamic and somewhat unpredictable" market environment. However, there is a good chance that the forecasts are conservative and the company may still surprise on the plus side. Etsy said business in October was even better compared to the same period before the pandemic than in Q3 on the same basis. Development The company is constantly investing in its website and app. The latest version is a feature that allows iOS users to upload a photo of an item they like - such as a cup of a certain shape - and search for similar ones. Meanwhile, the company has taken a slow and steady approach to hiring during the pandemic. This pace has no doubt helped Etsy retain talent as some other tech companies are shrinking fast. Etsy share price Since the pandemic, Etsy stock has been on the rise. There has been a decline this year. Although this year prices have fallen below 200, they are at a fairly high level, staying above 100 for a significant part of the year. Before the pandemic, prices were well below 100, trading around 50. For this reason, drops below 200 this year do not make the firam less attractive to investors. Currently, the Etsy share price is at 126.94. Source: wsj.com,finance.yahoo.com
Turbulent Times Ahead: Poland's Central Bank Signals Easing Measures

PayPal Has Not Had A Quarter With A Decline In Revenue Since 2015 And Is Leveraging Its Advantage Over Its Competitors

Conotoxia Comments Conotoxia Comments 27.12.2022 14:20
“I think the environment that we are in, as difficult as it is, is an opportunity for us in many ways. I’d rather the economy be booming along but if you are going into a difficult time, this is the time where market leaders have the opportunity to improve their position coming out of a difficult economic cycle. You’ve got a rising interest rate environment. That’s clearly a tailwind for us [given that with higher interest rates we earn higher interest on customer balances held on our platform].” - With these words, Dan Schulman, CEO of PayPal (Paypal), opened the recent conference. What could this mean for the future of this company and is it really an opportunity? A few words about PayPal PayPal is a financial services company best known for one of the world's largest and most popular online payment platforms. PayPal allows users to make payments for purchases in online shops, transfers of money between people and other financial operations. It also offers: credit cards, bank accounts and other financial tools. The company operates in more than 100 countries and serves more than 400 million active users worldwide. The company's business model is mainly based on fees for using the platform to make online payments. Users who meet conditions regarding the number of transactions or the level of turnover are exempt from these. PayPal also earns fees for the use of the credit or debit cards it makes available to its users. The company also gets fees from merchants for allowing them to accept payments through its platform. Overall, PayPal's business model is based on fees for using its services and exchange rate differences. PayPal financial results The company has not had a quarter with a decline in revenue since 2015, while the average annual growth was 16% year-on-year (21% year-on-year. after excluding E-Bay). We learned from the Q3 report that this growth has now dropped to 10% y/y. Similarly, the company's situation is similar for organisational profit, which increased by 7.19% y/y. The net profit margin for the company currently stands at 8.5% and has seen a noticeable decline since the beginning of 2021, when it stood at 22.8%. However, it seems that the company is nevertheless leveraging its advantage over its competitors, where the average net profit margin is 7.45%. However, given the nature of this type of business, let's look at operating cash flow and the amount of funds held. Operating income appears to be strongly seasonal, which may be linked to the customer buying cycle. The company's cash inflow values are highest in recent quarters. Currently, cash flow growth from its core business has increased by 28% year-on-year. The company currently holds more than USD 10 billion in cash and cash equivalents, representing 14% of its market value. What does Wall Street think of PayPal's share price? According to the Market Screener portal, the company has 47 recommendations, and among these, the predominant one reads: "Buy". The average target price is set at USD 105.62, 53% below the last closing price. The highest target price is at USD 160 and the lowest is USD 75, which is below the last closing price. Source: Conotoxia MT5, PayPal, Weekly Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.    
Taming the Dollar: Assessing Powell's Hawkish Tone Amidst BRICS Expansion

USA: The weakest year since 1990 - IPO market acquired "only" $7bn

Pawel Zapolski Pawel Zapolski 27.12.2022 14:02
Debuts for a cure, IPO quotes down. This is what 2022 looked like on the US stock market, and all because of the Fed 's hawkish policy. There hasn't been a year as weak as 2022 on the IPO market in the US since... 1990! Only 37 companies conducted IPOs, raising only USD 7 billion. A very weak year on the US IPO market Only 37 companies conducted an initial public offering (IPO) on Wall Street in 2022, raising a total of $7 billion from the market. This is the lowest amount raised annually in the US as part of an IPO since 1990, when debutants raised USD 4.3 billion - points out prof. Jay Ritter from the University of Florida. The data provided by Ritter does not include SPACs, REITs and various types of funds. The year 2022 was poor in terms of IPOs on the American stock exchange, not only in terms of quantity or value, but also in terms of quality. The most famous and significant company that carried out an IPO in the past year was Mobileye Global. It is a producer of software for autonomous cars, which has been controlled by Intel since 2017. Read next: I expect consumer spending to remain strong for most of 2023 with savings not running out until near the end of the year says Ivan Brian, Chief Equity Analyst at FXStreet | FXMAG.COM Mobileye Global quotes against the Nasdaq 100 Source: TradingView The behavior of the listings of companies that debuted in 2022, against the background of the S&P500, also looks tragic. This is shown by the Renaissance IPO Index, which until December 23 this year. since the beginning of the year has fallen by almost -60%, while the S&P500 index has fallen by -20%. Renaissance IPO Index against the S&P500 in 2022 Source: Renaissance Capital The queue to the floor will move after rate cuts Why was 2022 so weak for IPOs? Because the US Federal Reserve began to pursue a rather hawkish monetary policy in the fight against rising inflation. It started to raise rates, so the cost of money started to go up, which reduces the value of future cash flows, pushing capital out of the stock market. As long as interest rates in the US continue to rise, IPOs will be fragile. Some experts already see various interesting businesses on the horizon that can and want to enter the American stock market in 2023. Such a list was recently prepared by the Kiplinger portal. The list includes i.a.: TripActions platform (business travel service, value of USD 12 billion), Databricks platform enabling easy commercialization of software projects, company Versa Networks, online payment giant Stripe (valued at around $74 billion).
August CPI Forecast: Modest Inflation Increase Expected Amidst Varied Price Trends

At The Close On The New York Stock Exchange All Indices Fell

InstaForex Analysis InstaForex Analysis 28.12.2022 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 0.11%, the S&P 500 index fell 0.41% and the NASDAQ Composite fell 1.38%.  Dow Jones The gainers among Dow Jones index components in today's trading were shares of Verizon Communications Inc. which gained 0.84p (2.19%) to close at 39.25. Caterpillar Inc. gained 3.27p (1.36%) to close at 243.14. Chevron Corp. gained 2.23 pct (1.26%) to close at 179.63. Shares of the Walt Disney Company were the least gainers, with their price dropping 1.64p (1.86%), ending the session at 86.37. Shares of Apple Inc soared 1.83p (1.39%) to close at 130.03, Goldman Sachs Group Inc dropped 3.54p (1.02%) and closed the session at 341.97.  S&P 500 index The top gainers among the S&P 500 index components in today's trading were shares of Wynn Resorts Limited, which gained 4.47% to 84.33, VF Corporation, which gained 4.18% to close at 27.16, and Las Vegas Sands Corp, which gained 4.17% to close the session at 48.46. Shares of Tesla Inc were the least gainers, down 11.41% to close at 109.10. Moderna Inc shares lost 9.50% and closed the session at 180.17. NVIDIA Corporation shares were down 7.14% to 141.21. NASDAQ  The top gainers among NASDAQ Composite index components in today's trading were shares of Elys Game Technology Corp, which gained 111.91% to 0.37, Lightjump Acquisition Corp, which gained 100.00% to close at 19.00, and shares of Quotient Ltd, which gained 94.74% to close the session at 0.37. The least gainers were shares of Tuesday Morning Corp, which fell 46.12% to close at 0.83. Shares of Mingzhu Logistics Holdings Ltd lost 44.57% and closed the session at 0.97. Lion Group Holding Ltd. was down 36.45 percent to 0.68. Numbers On NYSE the number of securities, which fell in price (1697) exceeded the number of securities, which closed on the plus side (1401). On NASDAQ, 2,517 stocks were down, 1,251 were up, and 139 remained flat. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.74% to 21.65. Gold Gold futures for February delivery added 0.98%, or 17.65, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 0.16%, or 0.13, to $79.69 a barrel. Futures for Brent crude for March delivery rose 0.43%, or 0.36, to $84.86 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.05% to 1.06, while USD/JPY was up 0.49% to hit 133.51. Futures on the USD index fell 0.12% to 103.89. Relevance up to 03:00 2022-12-29 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/306511
The Crude Oil Market Situation Is Stable Despite Russia's Production Cuts

Russia Responded To The Europeans' Price Cap, China Reopening Story Is Not All Rosy!

Swissquote Bank Swissquote Bank 28.12.2022 10:24
Yesterday, Russia finally responded to the EU’s price cap on its oil exports, saying that they will simply stop exporting their oil to parties that ‘directly or indirectly use the mechanism of setting a price cap’. Crude Oil The latter announcement gave a minor boost to crude oil yesterday, but the barrel of American crude remained offered into the 50-DMA, near $81.60pb, and the price is back below the $80pb this morning. BUT, an eventual decrease in Russian oil supply gives support to the oil bulls’ in the medium run, along with other factors as China reopening and cold winter in America. China reopening news IMPORTANT to note: If the Chinese reopening story is positive for oil and commodity prices - and for the massively battered Chinese stocks, it’s bad news for global inflation. This is why we don’t see the US stocks gain on China reopening news, but we rather see them under a decent pressure, as the surge in Chinese demand will certainly boost inflation through higher energy and commodity prices. Inflation And in response to higher inflation, the central banks will continue hiking rates. As a result, the sovereign bond yields are higher, the stocks are lower, while the US dollar is mixed. Apple And Tesla Apple is down to lowest levels since summer 2021, and Tesla’s deep dive deepens by the day. Watch the full episode to find out more! 0:00 Intro 0:44 Russians won't sell oil to parties involved in price cap 3:32 China reopening story is not all rosy! 6:03 Bitcoin hash rate rings alarm bell 7:30 Tesla races to the bottom Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Russia #oil #ban #China #Covid #reopening #crudeoil #rally #inflation #expectations #USD #EUR #AUD #XAU #Bitcoin #Apple #Amazon #Tesla #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH  
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

The Crisis Of The Semiconductor Industry, Chip Inventory Levels Are Well Above Our Target Level

Kamila Szypuła Kamila Szypuła 28.12.2022 10:45
Consumer appetite for electronics has waned against a backdrop of rising interest rates, falling stock markets, and recession fears. Problems Nvidia and other chipmakers have been hit hard by increasing pressure on consumer spending, including high inflation and rising interest rates, which has triggered a wave of industry-wide cost cuts and layoffs. They are also struggling with the reversal of the surge in demand for electronics caused by the pandemic, which has driven the shift to working and learning from home. In recent months. HP Inc. and Dell Technologies Inc., two of the biggest PC makers, say their products, which disappeared from shelves at the start of the pandemic, are now on the shelf longer. Rival Advanced Micro Devices Inc., which also makes central processing units that go into personal computers, warned of elevated stock levels. Nvidia situation Graphics chip maker Nvidia Corp. issued a muted forecast in November and reported a sharp decline in quarterly sales, driven by weakening consumer demand for its video game chips after a pandemic-fueled boom and the onset of crypto winter. America's largest chip company by value said revenue fell 17% to $5.93 billion after gaming segment sales more than halved in the fiscal third quarter. Net profit was $680 million. Smartphone sales are also declining It's not just PC shipments poised for their biggest drop in more than two decades that chipmakers are destroying the fortune of. Smartphone sales are also declining. Micron said it lowered its forecast for phone shipments this year from a forecast just three months earlier. Qualcomm Inc., which supplies the chips that go into Samsung Electronics Co.'s flagship smartphones. and Apple Inc., has repeatedly lowered its sales forecasts this year. The company in November said it expected a persistently weak phone market and elevated chip inventories. Negative effects on employees Computer memory manufacturer Micron Technology Inc. is cutting jobs and expenses in response to a further weakening in demand for electronics and the chips it supplies, as it reported a sharp drop in sales and a net loss in the last quarter. Two sides What happens in chips is good news for consumers, who can get their hands on products from washing machines to laptops faster and sometimes cheaper than a year ago. For chipmakers, the change has sparked a wave of layoffs and capital spending cuts as companies try to restore profitability levels that have eroded in recent months. Some chipmakers see stockpiling as an opportunity. While developers of the processors that are at the heart of the personal computer must deliver their product before a new, more powerful version is introduced, others create chips that will essentially remain the same for years. Read next: GBP/USD Is Struggling, The Aussie Pair Have Good Day And Is Trading Above 0.67$, The EUR/USD Is Trading Above 1.0650| FXMAG.COM Expectations Chip executives said they expect a gradual recovery next year, although there is still uncertainty as to when an industry known for its sharp ups and downs cycles will be ready for another recovery. Despite the short-term glut, chip directors are bracing for a long-term surge in demand for chips that will require them to build more factories. Industry executives expect chip sales to double by 2030, exceeding $1 trillion globally. Micron Micron's revenue fell 47% year-on-year in its fiscal first quarter, which ended December 1. Bit shipments fell by double-digit percentages from the previous quarter across Micron's entire product lineup, and average selling prices fell more than 20%. Micron is aggressively cutting costs and capital spending to deal with this crisis. Total capital expenditures for fiscal year 2023 are expected to be a maximum of $7.5 billion, and the company expects capital expenditures for wafer equipment to decline by approximately 50% year-on-year. The Share Price is practically the lowest of the year, and the current month is one of the weakest of the year. The price is currently just over $50. Source: wsj.com, finance.yahoo.com
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Leading Used Tesla Prices Fall Faster Than The Market

Kamila Szypuła Kamila Szypuła 28.12.2022 11:31
The electric car market is mainly associated with Tesla, its situation is also observed by investors. The stock markets are still attracting new investors, the current year is coming to an end, so it is worth checking what should be confessed to this market in 2023. In this article: US Treasury yields fell Morningstar look at stocks market Tesla news US Treasury yields fell Investors are bracing themselves for the potential pressures of a recession, persistent inflation and what this could mean for Federal Reserve policy, especially with regard to interest rates, in 2023. They will be scouring the latest economic data releases this year for clues. Many investors are hoping the data will signal an easing of inflationary pressures, as it would suggest the Fed may slow down further or stop rate hikes altogether. These factors affect the market situation of bonds. US Treasury yields fell on Wednesday as investors became concerned about economic growth and the direction of monetary policy for 2023. Treasury yields slip as investors gauge 2023 Fed policy https://t.co/uR6xgrxlPy — CNBC (@CNBC) December 28, 2022 Read next: The Crisis Of The Semiconductor Industry, Chip Inventory Levels Are Well Above Our Target Level| FXMAG.COM Morningstar look at stocks market The new year is getting closer. Everyone prepares as best they can to start it in the best possible way, makes plans. The stock market is under the watch of Morningstar analysts. How it presented itself this year and what it is heading for in 2023 is detailed in the following tweet. Early in the year, Morningstar analysts deemed many of the stocks they cover to be overvalued. But after the broad market has fallen more than 20 percent since the start of the year, analysts believe valuations have moved too far in the opposite direction. Over the last 20 years, Morningstar analysts found that US stocks were undervalued only 10 different times, or about 36% of the time. According to Morningstar, among the most underrated industries today are online content and information, including stocks like Alphabet (GOOGL), Google's parent company, and Meta Platforms (META), Facebook's parent company. Where are stocks looking cheap or expensive as we head into 2023?Here are 7 charts detailing our analysts' latest stock market valuations: https://t.co/UZMK7Ygufy pic.twitter.com/uUsnYGWKZI — Morningstar, Inc. (@MorningstarInc) December 28, 2022 Tesla Tesla is the most popular manufacturer of electric cars. Sales have increased in recent years, but many factors affect car prices. Fuel prices are easing, interest rates are rising, Tesla output is increasing, and EV competition is growing, all of which have implications for the price of used Teslas. Soaring gasoline prices as a result of the war in Ukraine have boosted demand for the Tesla, one of the few long-range electric vehicles on the market. Buyers of some new Teslas took advantage of the booming market to sell their relatively new cars at a profit and then order new ones, fueling the demand for new Tesla cars. Used Tesla prices are falling faster than those of other automakers, and clean energy status symbols languish in dealerships longer, according to the information. WATCH: Fuel prices are easing, interest rates are rising, Tesla output is increasing, and EV competition is growing, leading used Tesla prices to fall faster than the market. It's creating a cascading effect on new Tesla prices https://t.co/jCLZphpcRX pic.twitter.com/ZgXRr3d2Fc — Reuters Business (@ReutersBiz) December 28, 2022
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

DAX And CAC40 Seems To Test Key Supports, AEX25 Is In A Bearish Trend, FTSE 250 Is In A Downtrend

Saxo Bank Saxo Bank 28.12.2022 11:49
Summary:  DAX, AEX and CAC40 seems to be heavy testing key supports. BEL20 still holding up. FTSE 100 could seems strong and could test all-time highs. FTSE 250 in falling channel but indicators point to bullish break out. But will it? DAX got rejected at the previous support at 14,149 last week (now a resistance level) and seems set for lower levels. Strong support at around 13,564 is likely to be tested withing the next week or so.However, RSI hasn’t yet broken below 40 threshold i.e., still showing positive sentiment. If DAX manages to close above 14,160 we would be likely to see a move towards 14,500 possibly also December highs.Look out for a move below last weeks lows 13,791. If that occurs RSI is likely to break below 40 supporting the bearish trend.   All charts and data : Saxo Group AEX25 is in a bearish trend after closing below 715 last week. Bouncing from around the 0.382 selling seems to be picking up. RSI still above 40 however, but a close below is likely to fuel further selling. A close below 690 on AEX will confirm the bearish outlook with no strong support until around 661-654.For AEX to reverse the bearish picture a close above 715 is needed.   BEL20 seems indecisive. The index broke support at 3,670 only to jump back above but has so far failed to resume uptrend by breaking above 3,777 which is needed for further upside.If BEL20 closes back below support at 3,670 followed by new low below 3,631 BEL20 is likely to experience a sell off down to 3,569 possibly 3,497.RSI indicator is still showing positive sentiment but there is divergence indicating the uptrend has weakened. CAC40 bounced from 55 daily SMA last week but is in a bear trend supported by negative RSI. RSI closed below 40 16th December. The support at around 6,363 could prove not be that strong if tested. If that scenario plays out a sell off down to around 6,200 should be expected. For CAC40 to reverse to uptrend a close above 6,615 is needed. Read next: Leading Used Tesla Prices Fall Faster Than The Market| FXMAG.COM FTSE 100 bounced strongly from 7,300 after breaking support at 7,423. FTSE seems likely to resume uptrend. RSI is not showing divergence and if RSI closes back above 40 it could be a good indicator FTSE 100 will test previous highs at around 7,600 potentially take it out for at move to all-time highs at 7,687.However, a possible scenario is that FTSE 100 could be caught in a range between 7,300 and 7,578. Break out is needed for direction. FTSE 250 is in a downtrend and seems for trade in a falling channel pattern. Support at 18,493 seems to hold for now. If FTSE250 breaks above its show term falling trendline a move to November highs at around 19,615 could be seen.No divergence on RS and still showing positive sentiment indicates we could see a bullish breakout of the falling channel.However, a close below 18,422 is likely to push the Index to next support at around 17,822. RSI divergence explained: When  price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend Source: Technical Update - DAX, AEX25, BEL20, CAC40, FTSE100 & FTSE250 | Saxo Group (home.saxo)
US Corn and Soybean Crop Conditions Decline, Wheat Harvest Progresses, and Weaker Grain Exports

Stock market: Where could Ford stock price go? Alexandros Yfantis comments

InstaForex Analysis InstaForex Analysis 28.12.2022 16:13
Red line- neckline support Blue line- resistance Ford stock price is trading around $11,20. Price recently got rejected at the resistance trend line at $14,10 and as expected is now testing the major horizontal support around $11. If bulls manage to hold support, then we could see a bounce towards $13.50 if not higher. As long as bulls hold above the neckline support, they have hopes for a bigger reversal to the upside. We have talked before about the long-term Head and Shoulders pattern in play in this stock chart. The bearish formation has not been enabled yet as price continues to respect the neckline support. A break below the red neckline support would be a major sign of weakness. Relevance up to 14:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306609
At The Close On The New York Stock Exchange Indices Closed Mixed

On The New York Stock Exchange, The Number Of Securities That Fell Was Much Higher Than Those That Rose

InstaForex Analysis InstaForex Analysis 29.12.2022 08:00
At the close of the New York Stock Exchange, the Dow Jones was down 1.10%, the S&P 500 was down 1.20% and the NASDAQ Composite was down 1.35%. Dow Jones JPMorgan Chase & Co was the top gainer among the components of the Dow Jones in today's trading, up 0.72 points (0.55%) to close at 132.46. Quotes of Goldman Sachs Group Inc fell by 1.10 points (0.32%) to close at 340.87. Johnson & Johnson shed 0.77 points or 0.43% to close at 176.66. Shares of Apple Inc were the least gainers, the price of which fell by 3.99 points (3.07%), ending the session at 126.04. The Walt Disney Company was up 2.55% or 2.20 points to close at 84.17, while Dow Inc was down 2.34% or 1.20 points to close at 49. 99.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Generac Holdings Inc, which rose 5.61% to 96.26, Tesla Inc, which gained 3.31% to close at 112.71, and shares of Illumina Inc, which rose 1.08% to end the session at 190.81. The least gainers were SolarEdge Technologies Inc, which shed 5.87% to close at 275.84. Shares of APA Corporation shed 5.16% to end the session at 45.18. Quotes of Southwest Airlines Company decreased in price by 5.16% to 32.19. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Kala Pharmaceuticals Inc, which rose 218.37% to hit 12.48, Minerva Surgical Inc, which gained 66.15% to close at 0.27, and also shares of Transcode Therapeutics Inc, which rose 51.82% to end the session at 0.61. The least gainers were Minerva Neurosciences Inc, which shed 39.15% to close at 1.43. Shares of Model Performance Acquisition Corp lost 35.54% to end the session at 8.78. Quotes Lightjump Acquisition Corp fell in price by 37.11% to 11.95. Numbers On the New York Stock Exchange, the number of securities that fell in price (2407) exceeded the number of those that closed in positive territory (717), while quotes of 69 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,412 companies fell in price, 1,348 rose, and 156 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.26% to 22.14. Gold Gold futures for February delivery lost 0.59%, or 10.70, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery fell 1.08%, or 0.86, to $78.67 a barrel. Futures for Brent crude for March delivery fell 1.20%, or 1.02, to $83.66 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.24% to 1.06, while USD/JPY edged up 0.72% to hit 134.45. Futures on the USD index rose 0.34% to 104.24.     Relevance up to 03:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/306666
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Analysis Of Situation Of The S&P 500 Index

InstaForex Analysis InstaForex Analysis 29.12.2022 08:01
If we look at the 4-hour chart, the S&P 500 index shows a number of interesting things : 1. Price movement below its 100 period Moving Average. 2. There is a deviation between #SPX price movement with CCI indicator. 3. There was a failure to level 100 and turned down level 0 again on the CCI indicator. 4. the formation of a Bearish 123 pattern followed by the shooting of Ross Hook (RH) several times. Based on thefew things above, we have an indication that the #SPX condition is still dominated by sellers where in the near future #SPX will try to break below the nearest Ross Hook (RH) level, namely at the 3763.04 level if this level manage to broke then most likely of the next level to go to is in the range of the area level 3749.12-3717.75, but if on the way to the target levels mentioned earlier a correction suddenly occurs upwards past the 3891.04 level then the decline scenario described earlier will become invalid and cancel automatically.   Relevance up to 03:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116565
Market Risk Sentiment Adjusts as Investors Eye US Inflation Data

Analysis Of The Nasdaq 100 Index Price Movements

InstaForex Analysis InstaForex Analysis 29.12.2022 08:06
With the appearance of the deviation between Nasdaq 100 index price movements with the indicator as well as the price movement which is below the 100 Moving Average and the appearance of the Bearish 123 pattern which is followed by a break of Ross Hook (RH), it is certain that the #NDX condition is in a bearish situation which in the near future seems to be experiencing a slight upward correction to test the Vaccum Block area level the range 10993.7-11028.6 which happens to be also within the Bearish Fair Value Gap level area if the levels in this area function as resistance quite well and as long as the upward correction does not exceed above the 11233.6 level then #NDX will continue its decline back to the 10616.1 level as the first target and level 10433.8 as the second target.   Relevance up to 03:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/116567
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

The High Risk That Tesla Will Continue Trading Lower

Torben Melsted Torben Melsted 29.12.2022 08:31
In our last update of Tesla, we called for a dip to 126.60, which was seen and even broken as the low was seen at 108.24 close to our ideal target near 90.00. We do think the downside action is a bit overdone at the moment, which is also seen in the RSI making all-time lows. This could mean a period of sideway consolidation before renewed downside pressure towards the 90 target. That said, this is not the time to try and catch a falling knife, and the risk that Tesla will continue trading lower is too big as a break below 90.00 would call for a move closer to 63.00. Relevance up to 07:00 2022-12-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/306689
FX Daily: Upbeat China PMIs lift the mood

China Reopening Starts Worrying, The British And The Turkish Stocks Did So Well This Year

Swissquote Bank Swissquote Bank 29.12.2022 11:55
The good news with China’s reopening is that it should boost global growth. China and Covid The bad news with China’s reopening is that it will not only boost global growth, but also energy and commodity prices - hence inflation, the interest rate hikes from central banks and potentially the global Covid cases – which could then give birth to a new, and a dangerous Covid variant, which would, in return, bring the restrictive Covid measures back on the table, and hammer growth. Note that the reasoning stops here right now, the risky markets are painted in the red, but we could eventually go one step further and say that if the Chinese reopening hits the global health situation – hence the economy badly, the central banks could become softer on their rate hike strategies. But no one is cheery enough to see silver lining anywhere. This year really needs to end, now!   European and US markets So, Wednesday was marked by further selloff across European and US markets. The S&P500 slid 1.20% and Nasdaq lost another 1.32%. The DAX struggles to keep its head above the 50-DMA, but the FTSE 100 index is about to close the year with slight gains! Why? Also Turkish BIST 100 shot up to 188% at some point this year, making investors wonder whether Turkish stocks good performance could last and what happens if the lira dropped. Watch the full episode to find out more! 0:00 Intro 0:34 China reopening starts worrying 2:33 Why FTSE 100 outperformed in 2022? 5:00 What made Turkey’s BIST 100 rally 188%? Could it last? 7:37 Chinese stocks could outperform next year Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FTSE #BIST #outperform #China #Covid #reopening #inflation #expectations #energy #mining #stocks #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

The First Technical Problems Of Twitter Under The Leadership Of Elon Musk, Tesla Shares Worst Of The Year

Kamila Szypuła Kamila Szypuła 29.12.2022 11:46
The companies of a business magnate and investor Elon Musk have been struggling with problems lately. Tesla has a problem with listing on the stock exchange and Twitter with technical problems. Around 10,000 people reported Twitter going down Wednesday night. Twitter Twitter's performance has been under scrutiny since Musk completed his takeover of the company in late October. He then downsized the company's workforce, leading some former employees and outside observers to question whether the cutbacks would hamper Twitter's operations. Users who tried to log in via their desktop browsers on Wednesday received an error message. The Twitter Spaces tab, which allows users to join real-time conversations with others, also did not work on the platform's mobile app version. Other aspects of the Twitter app seemed to work well for users, including the ability to tweet. The problems were solved after about two hours. Musk, when asked on Twitter if there had been a service disruption, tweeted "It's working for me." It wasn't clear from which Twitter function Musk sent the message. Twitter, like many online platforms, has had occasional outages in the past due to technical glitches, including one in July. The outage occurs amidst a brawl between Twitter and Elon Musk, the world's richest man. Internet outages are quite common and have affected many tech companies over the years, although the length of the outages can vary greatly. They can affect people's ability to do business or connect with friends and family. Twitter shares hold their level above 50.0. Thus, they have the best month of the year. Read next: The US Will Require PCR Testing For Travelers From China, BRF Agree To Pay $111 Million To The Government| FXMAG.COM Tesla Elon Musk's electric vehicle maker is nearing its worst December stock performance and endured a seven-day streak after Tuesday's close. It was Tesla's longest streak since September 2018, when the company struggled to get its new Model 3 into the hands of customers. Tesla has lost almost a third of its value in the past seven days of losses, returning to August 2020 levels. The stock rebounded slightly on Wednesday, closing 3.3% higher. Musk Twitter call Spaces signaled that he would not be selling any Tesla stock for at least 18 to 24 months. The chief executive has liquidated more than $39 billion in the company's stock since the stock peaked in November 2021. The billionaire's comments on Twitter Spaces were among his most expansive responses to Tesla investor concerns that he had been distracted since he bought Twitter in October in a $44 billion deal. Tesla shares have fallen more than 60% this year, underperforming the broader market. Some of Musk's actions on Twitter and his political comments on the platform have raised concerns that Tesla's brand could suffer. The company's image has deteriorated in recent months, in part because of Musk's Twitter involvement, according to brand surveys. The Tesla boss also said the car company will continue to invest as part of its growth plans. He said the company was "close to choosing a location for its next Gigafactory", without giving details. He said Tesla also plans to start refining lithium for batteries at its Corpus Christi, Texas facility in about two years to help the electric vehicle maker meet demand for materials needed for power cells. As mentioned above, Tesla shares are the worst of the year. Such low levels of the electric car manufacturer has been recorded since 2020. Source: wsj.com, finance.yahoo.com
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

Special Edition Of The Podcast: A Look Back At A Remarkably Brutal Year For Investors

Saxo Bank Saxo Bank 29.12.2022 12:15
Summary:  This Special Edition of the podcast features an interview with Saxo CIO Steen Jakobsen, who looks back at a remarkably brutal year for investors on the double whammy of bear markets in both bonds and equities, and looks ahead at 2023. In particular, the conversation considers the misguided optimism for next year that is ironically based on a base case of disinflation, recession and an eventual return of central bank easing. Are markets ready for a more positive outcome for the real economy? John J. Hardy hosts. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: Special Edition: Special Edition: A look ahead at 2023 with Steen Jakobsen | Saxo Group (home.saxo)
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

At The Close On The New York Stock Exchange All Indices Rose

InstaForex Analysis InstaForex Analysis 30.12.2022 08:01
At the close on the New York Stock Exchange, the Dow Jones rose 1.05%, the S&P 500 index rose 1.75%, the NASDAQ Composite index rose 2.59%. Dow Jones The leading performer among the components of the Dow Jones index today was Walt Disney Company (NYSE:DIS), which gained 3.01 points or 3.58% to close at 87.18. Salesforce Inc rose 4.07 points or 3.17% to close at 132.54. Apple Inc rose 2.83% or 3.57 points to close at 129.61. The least gainers were Walgreens Boots Alliance Inc, which lost 0.11 points (0.29%) to 37.47 by the end of the session. Merck & Company Inc. shares rose 0.26 points (0.23%) to close at 110.82, while Boeing Co rose 0.53 points (0.28%) to close at 188. .91. S&P 500  Leading gainers among the S&P 500 index components in today's trading were SVB Financial Group, which rose 8.40% to 234.63, Tesla Inc, which gained 8.08% to close at 121.82, and shares of Warner Bros Discovery Inc, which rose 6.31% to end the session at 9.43. The least gainers were shares of Cardinal Health Inc, which shed 1.12% to close at 77.72. Shares of CF Industries Holdings Inc shed 0.96% to end the session at 85.51. AmerisourceBergen fell 0.78% to 166.05. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Hoth Therapeutics Inc, which rose 143.64% to hit 10.72, Kala Pharmaceuticals Inc, which gained 99.04% to close at 24.84, and also Palisade Bio Inc (NASDAQ:PALI), which rose 77.90% to close at 3.22. The least gainers were FStar Therapeutics Inc, which shed 40.38% to close at 4.09. Shares of Jasper Therapeutics Inc lost 21.97% to end the session at 0.46. Quotes of Th International Ltd decreased in price by 20.00% to 2.60. Numbers On the New York Stock Exchange, the number of securities that rose in price (2651) exceeded the number of those that closed in the red (450), while quotes of 73 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,095 companies rose in price, 646 fell, and 141 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.16% to 21.44. Gold Gold futures for February delivery added 0.34%, or 6.15, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery fell 0.37%, or 0.29, to $78.67 a barrel. Futures for Brent crude for March delivery fell 0.31%, or 0.26, to $83.73 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.56% to 1.07, while USD/JPY shed 1.12% to hit 132.96. Futures on the USD index fell 0.48% to 103.68. Relevance up to 03:00 2022-12-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/306809
Markets under Pressure: Rising Yields, Strong Dollar, and Political Headwinds Weigh on Stocks"

US tech stocks losses are huge - Netflix and Facebook are more than 70% down from Autumn peaks

Ipek Ozkardeskaya Ipek Ozkardeskaya 30.12.2022 10:18
US indices rallied yesterday, in an effort to recover a part of the past few session losses, rather than a fresh move, on fresh news, as there was no fresh news yesterday.   But yesterday's jump in US indices was relatively strong, perhaps due to thin trading volumes that make look the year-end moves impressive, while they are not.   Anyway, the S&P500 gained 1.75% yesterday, and could maybe finish the year with less than a 20% loss, while Nasdaq jumped more than 2.50%, but will still end the year with more than a 30% drawdown.   Things have changed so much in one year!  The Pivot  Remember, last year at this time, we were about to see Apple become the world's first $3 trillion company. The S&P500 and Nasdaq were running from record to record, and no one imagined how bad the hangover would be.   We didn't know it at that time but the 2022 bear market officially kicked off just a couple of days after the year started, when the first FOMC minutes release of the year showed that the Federal Reserve (Fed) was no kidding about the rate hikes, and that the financial conditions would get real tighter over the year.   And man, they got tighter... way tighter than we expected a year ago, with the Fed raising its interest rates 425bp starting from March.   As a result, Apple lost a third of its value, Amazon lost half of its valuation since the beginning of the year and, this month, became the first US big cap to lose more than $1 trillion in valuation. Netflix lost up to 75% of its value compared to November 2021 peak, and Facebook scraped 77% of its value since September 2021 peak.  Read next: 2023 predictions: All in all I forecast the S&P to fall 5% on the year but the Nasdaq will fall 10% says Ivan Brian, Chief Equity Analyst at FXStreet | FXMAG.COM It has been a terrible year for chipmakers as well. Nvidia, one of the most promising and hyped chipmakers in the US has also lost half of its valuation as, on top of slowing post-pandemic demand, the US blocked exports to the fructuous Chinese market.  And last but not least, Tesla contributed greatly to the fall of the S&P500, losing almost half of its valuation only since the start of the year. And the share price is down by more than 70% since its November 2021 peak, as Elon Musk made the headlines again this year, but not for good reasons. Twitter has in fact taken a huge toll on man's reputation. 2022 hasn't been his year.   A bad year...  In reality, 2022 hasn't been the year of no one, I guess. A was started in Ukraine as soon as end February and wreaked havoc in the markets. The Western nations imposed sanctions on Russia in March. Ruble lost half of its value against the dollar at the wake of its first attack in Ukraine, but only to close the year flat, and even slightly stronger against the dollar compared to before the war, as the skyrocketing oil prices filled the country's coffers.   Oil on the other hand soared to $130pb at the wake of Russia's first attacks on Ukraine. We had all kind of speculation that it would rally to the $180-200pb area. But Thank God that didn't happen. We are preparing to end the year below $80pb instead, as the recession fears took a toll on bullish bets.   But energy stocks had a great year. Exxon Mobil, Chevron, BP, Shell did so great that the desperate Western governments watching inflation cause a huge cost of living crisis decided to impose windfall taxes on these companies who announced jaw dropping earnings throughout the year and Exxon ended up suing the EU for this decision just a couple of days ago.  While all this was happening, the US' national debt went above the $30 trillion mark.   But the US dollar gained, as the Fed raised rates. Others raised rates as well, but the dollar kept rising.   Cryptocurrencies saw massive outflows, and the outflows revealed the cracks in the system, causing the collapse of the major institutions like Terra Luna, and FTX lately.   And gold hasn't been great in tempering inflation, but at the end of the year, and despite the soaring yields, the yellow metal managed to recover yearly losses, and is even preparing to end the year around 1% higher than where it started in US dollar terms.   So voilà. Everything looked ugly this year, except for energy and the US dollar.   The major take of 2022  The most important take of the year is: the era of easy money ended, and ended for good. It means that the financial markets won't look like anything we knew since the subprime crisis.   This is the beginning of a new era, when central banks will be playing a more subdued role in the markets, with less liquidity available to fix problems – a more than necessary move that came perhaps too late, and too painfully.   And given that there is still plenty of cheap central bank liquidity waiting to be pulled back, the situation may not get better before it gets worse in the first quarters of next year. Recession, inflation, stagflation will likely dominate headlines next year.   Happy New Year!
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Analytical Report – Mirbud - 3Q22 Results Overview - WSE:MRB

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 30.12.2022 11:13
Building back better According to our forecasts, Poland’s economy is set to flip into recession in 2023, which, besides all the negative aspects, will bring relief for construction companies’ cost base. This means preserving or slightly increasing profitability in 2023 on a y/y basis: now we expect Mirbud’s gross margin to inch slightly higher, from 7.78% in 2022E to 7.93% in 2023E. This is likely to happen due to stabilization or lowering in some costs items. According to PUDS data (Polish Union of Steel Distributers), the price of rebar fell by 22% over the last three months (most of 4Q22 data included). This means a further decrease of this cost group after 3Q22 where, according to Cognor data, steel rebar prices declined by 19% q/q. Results for 3Q22 were supported by revaluation of road contracts with the general directorate (GDDKiA) and the ending of low profitability contracts for warehouse construction for Panattoni. All in all, we increase the EBITDA forecast by 23.8% for 2022E, by 26.9% for 2023E and by 27.2% for the 2024E period to PLN 182.9m (down 2.7% y/y) in 2022E, PLN 184.9m (up 1.1% y/y) in 2023E and PLN 186.1m (up 0.6% y/y) in 2024E. We increase our Fair Value by 43.4% to PLN 5.06, which provides 13.2% upside and an upgrade of our recommendation from HOLD to BUY. 3Q22 results overview and 4Q22 results preview Our main takeaway after the 3Q22 call with the management was that profitability is likely to be preserved in the latter part of 2022 and early 2023, with a possible upward trajectory in 2H23. We however err on the side of caution and expect the gross profit margin to fall from 8.67% in 3Q22 to 7% in 4Q22. Overall we forecast EBITDA in 4Q22E at PLN 43.8m, -14.8% y/y and -33.7% q/q. We expect the revenue level to arrive at PLN 801.8m, -6.6% y/y and -15.8% q/q. The gross profit line is expected to come in at PLN 56.2m, -21.1% y/y and -31.9% q/q. The bottom line is likely to arrive at PLN 25.8m, -26.6% y/y and -46.5% q/q. Backlog still strong Mirbud is systematically building a portfolio of orders. At the end of 3Q22, Mirbud had orders worth PLN 5.25 bn. For the company it is crucial that the value of the portfolio should stay over PLN 5 bn in each period. The main part of orders (75%) for now is road investments, 12% public buildings, 11% production and warehouse construction and approx. 2% residential buildings. Higher multiple warranted Mirbud trades at a 2022E EV/EBITDA of 3.1x, which constitutes a 37.3% discount to international peers and a 52.6% discount to the most prominent Polish construction company, which is Budimex. Budimex is recognized due to its high dividend payout track record; however, we still feel the premium to Mirbud should be smaller due to Mirbud’s continued inking of new contracts which we believe will allow the company to increase margins going forward. 3Q22 results overview/4Q22 results preview Our main take away after the 3Q22 call with the management was that the profitability is likely to be preserved in the year end of 2022 and early 2023 with possible upward trajectory in 2H23. We however err on the side of caution and expect the gross profit margin to fall from 8.67% in 3Q22 to 7% in 4Q22. Overall we forecast EBITDA in 4Q22E at PLN 43.8m, -14.8% y/y and -33.7% q/q. We expect the revenue level to arrive at PLN 801.8m, -6.6% y/y and -15.8% q/q. The gross profit line is expected to come in at PLN 56.2m, -21.1% y/y and -31.9% q/q. The bottom line is likely to arrive at PLN 25.8m, -26.6% y/y and -46.5% q/q. Changes in forecast Valuation Our valuation approach for construction companies uses two methods: the discounted cash flow (DCF) and the dividend discount model (DDM). We calculate our Fair Value for Mirbud by taking the average of the two results. The two methods are aligned, as they are both based on the same financial model. The model assumes cashflow projections over a 10-year period for the firm based on our forecasts for the construction market, GDP in Poland as well as other parameters including volume growth, product mix changes, changes in the financing model, efficiency gains, production cost increases, capital expenditures and working capital needs. Our dividend projections are a derivative of the earnings forecasts in our financial model. Payout levels are determined by corporate policy in the short-term (15%) and then drift towards a target payout ratio of 50% in the long-term. The DDM is also a useful tool for understanding P/E multiples [P/E = (D/E)/(k-g)], with differences explained by a combination of earnings growth and dividend payout. Both our DCF and DDM models have terminal values with a growth rate of 1%. Our assumptions for cost-of-equity were established by using a variable risk-free rate (equal to the 12-month forward interest rate) and adding a 5.5% equity risk premium each year. The 12-month forward interest rates were derived from the yield curve of the 2022-2031 period. We also consistently use a beta of one (1) so as not to distort the WACC and the comparability of our valuations. Relative valuation Mirbud trades at a 2022E EV/EBITDA of 3.1x, which constitutes a 37.5% discount to international peers and a 38.2% discount to the most prominent Polish construction company, which is Budimex. Budimex is recognized due to its high dividend payout track record; however, we still feel the premium to Mirbud should be smaller due to Mirbud’s continued inking of new contracts which we believe will allow the company to increase margins going forward. ESG Section Environment Mirbud takes environmental concerns very seriously. The company has implemented several measures to control its dust emissions and to prevent it producing excessive waste. The company is enhancing its environmental policy by reducing its use of natural resources. Furthermore, the company has endeavoured to optimise its use of resources by focusing on recycling, waste control and water circulation. Governance Mirbud maintains transparent and continuous communications with its employees and shareholders. Regular meetings are held between employees and managers to provide updates and consolidate the company’s strategy. It publishes quarterly and annual reports in a timely manner. Risks to fair value Demand volatility With its asset-heavy business model, Mirbud is fully exposed to local demand for construction services. Weak demand may lead to sharp declines in profitability. Unfavourable trend in prices of materials and services Adverse trends such as rising raw material costs or inflation of transport service costs may hamper the company’s profitability. Potential rise in competition Given the company’s superior profitability, arising from complex solutions and a growing scale of operations, several local competitors might attempt to copy Mirbud’s business model, which could potentially increase competition in the company’s most important segments. Workforce shortages A shortage of skilled labour in the construction industry could result in Mirbud having insufficient employees to operate its business. There are no shortages at the moment, which would likely allow the company to lower its cost base and cost of third parties in quarters ahead. Rise in receivables The biggest threat to Mirbud would be a rapid increase in receivables stemming from construction contracts, which would cast a shadow over the profitability of the executed contracts. Economy slowdown Estimates for the Polish economy point to lower growth rates going forward. As a result, some investments could be suspended, which would raise questions about the level of Mirbud’s future backlog. Decreasing EU funds are likely to accentuate the problem. Financials Analyst: Robert Maj robert.maj@ipopema.pl + 48 22 236 92 90 GPW’s Analytical Coverage Support Programme 3.0  
Analysis Of Crude Oil Futures, WTI Prices Recorded A Slight Decline

TC Energy Corp Has Announced That It Is Aiming To Fully Reactivate The Keystone Oil Pipeline System After The Largest Reported Spill In The Pipeline's History

Kamila Szypuła Kamila Szypuła 30.12.2022 11:46
Keystone comes from the Canadian province of Alberta and supplies approximately 622,000 barrels of oil per day to refineries in the Midwest and the Gulf Coast. It is one of nearly twenty pipelines that pass through the oil storage complex in Cushing - the center for pricing US West Texas Intermediate crude oil and the physical delivery point for benchmark oil futures on the New York Mercantile Exchange. The company partially reactivated the pipeline earlier this month, but the so-called Cushing extension remained offline. Repairs completed Oil pipeline operator Keystone TC Energy Corp said on Thursday that it had completed repairs, inspections and testing of the pipeline and that the system was now operational at all delivery points. Last week it said it had received approval from the U.S. Pipeline and Hazardous Materials Safety Administration to restart a 300-mile branch linking Steele City, Nebraska, with a major U.S. oil storage facility in Cushing, Oklahoma. The company said it would operate the line at reduced operating pressure. Previously, regulators allowed the pipeline to operate at a higher pressure than otherwise allowed, saving costs for the operator. Read next: Japan Is Trying To Maintain Cover For LNG Vessels In Russian Waters, How Digital Money Could Look Like According To The IMF| FXMAG.COM What happened? According to TC Energy, the 2,700-mile Keystone pipeline was shut down on December 7 after a rupture in Kansas spilled about 14,000 barrels of crude oil - the largest reported spill in the pipeline's history. TC Energy said it shut down the pipeline, a key conduit for Canadian oil to the US, at around 8pm local time on Wednesday after detecting a pressure drop in its systems. The company said it has since mobilized teams to stop oil spilling into a stream about 20 miles south of Steele City, Nebraska. The affected segment was isolated and outriggers were deployed to control the downstream migration of versions. The system remained disabled as crews actively responded and worked to contain and recover the oil. Despite the scarcity of oil entering Cushing, there were about 25 million barrels in storage tanks in the week ending December 23, according to the Energy Information Administration, about a million more than at the start of the month. The buildup was partly attributed to traders shipping more oil from the Gulf Coast to Oklahoma as they sought to store and sell barrels at a profit at a later date. TC Energy did not say what caused the spill, prompting stream cleanup operations involving hundreds of people. Cleaning continues. As of December 20, TC Energy had extracted 7,599 barrels of oil from the stream, according to the company's records. It has not been stated when the repair and repair operations will be completed. How has this affected oil prices? U.S. oil prices rose more than 2% on Thursday morning (8th druph) after the Keystone Pipeline initiated an emergency shutdown to contain a spill near the Nebraska-Kansas border. On the other hand, West Texas Intermediate futures fell to $78.40 a barrel on Thursday after announcing the end of the repair. TC Energy Corp Share Prices The company's shares are the worst of the year at 39.65. A sharp drop from 43.20 occurred a few days after the pipeline leak. Source: wsj.com, finance.yahoo.com
A Further Rise In Gold Is Very Likely, The Dovish Expectations Are Feeding Well Into The Bond Markets

Gold Tends To Respond To Relative Dollar Strength As Well As Changes In Bond Yields

XTB Team XTB Team 30.12.2022 13:01
Markets worth watching US stock indices: US500, US100 There is an ongoing debate about the relationship between stock markets and inflation. Stocks are holding instruments covered by the real assets of the companies that issued them. Because inflation reflects increase in the prices of goods and services, should eventually translate into revenues of companies selling these goods and services. From this perspective, stocks can be seen as a hedge against inflation. However, looking at history, we can confidently say that there is no linear relationship between company earnings and stock prices. So-called the price-to-sales ratio can fluctuate significantly for a number of reasons. After first, even if higher prices translate into higher revenues, costs can increase in even faster pace. A period of high inflation creates a lot of uncertainty and some companies can not be able to maintain the current profit margin. Second, the stock market is always trying discount the future. And if that discounting is done using higher rates interest rates - typical of higher inflation - the present value of future gains will be lower. Because periods of high inflation in the US are rare and far apart in time, there is no such thing confirmed relationship. The S&P 500 hit a ten-year low in October 1974, just before the peak of inflation that year. However, the markets were much more overvalued back then - the index fell from the peak (in 1973) to the trough of 50%, and the price-earnings ratio was below 8 - almost 3 times lower than today. Moreover, the Fed has started to cut interest rates in November 1974, thus supporting the bull rally. Precious metals: GOLD, SILVER Commodities are considered a leading indicator of inflation as the prices of goods and even services are in highly dependent on raw material costs. Therefore, there is a belief that raw materials are a good hedge against inflation, and the first example that comes to mind is gold. Is it really so? Gold is an excellent diversifier for an investment portfolio due to its low and even negative correlation with other asset classes. But what about inflation? Gold tends to respond to relative dollar strength as well as changes in bond yields. We can see a very strong negative correlation between gold price changes and profitability bonds in the long term. Therefore, we are dealing with a relatively weak sentyment against gold in an environment of the highest inflation in the US in 40 years. Of course, gold can too respond to other risk factors, such as natural disasters or war, which the world unfortunately experienced this year, which for a short time pushed gold prices to historical levels maxima. As mentioned earlier, the key factors for the price of gold are changes in the level yields and valuation of the dollar. Further changes are the most important for the dollar and bond yields Fed interest rates. The dollar already seems to be very overbought, especially if we will look at historical standards and this could be an opportunity for gold. Of course, gold is still there relatively expensive in nominal terms, but high bond yields led to a significant drop in gold prices from near historical highs. Moreover, correcting prices for inflation, gold is not extremely expensive compared to the 1970s or even 1970s 2011. It is also worth mentioning that gold often retains its value during periods of recession, especially when compared to more volatile assets such as stocks.
Factors Impacting Selena FM: Exchange Rates, Competitive Pressures, Raw Material Prices, Construction Market, and M&A Risks

Analytical Report – Unimot - WSE:UNI

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 02.01.2023 09:30
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0 Event: Cancelling of publication of management EBITDA guidance for 2023. The Company informed that it will not publish an EBITDA guidance for 2023 due to the lack of ability to estimate external factors and given the unknown deadline of the acquisition of Lotos logistic assets.  Expected impact: Neutral. In our view, financial estimates are extremely risky in the current unstable macro environment and it should not be a big surprise that the Company refrains from management guidance publication. Analyst: Łukasz Prokopiuk, CFA GPW’s Analytical Coverage Support Programme 3.0  
The South America Are Looking For Alternatives To The US Currency

The US Dollar Is Trading On Its Back Foot Despite A Solid Back Up In US Treasury Yields

Saxo Bank Saxo Bank 02.01.2023 10:51
Summary:  Equity markets churned back and forth in the last week of 2022 and we start 2023 off with a holiday for UK and US markets today as traders get their bearings in the New Year. The US dollar is trading on its back foot despite a solid back up in US treasury yields in the final weeks of 2022 and ahead of the first important macro data this Friday in the form of the December US jobs report.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) It is a US holiday today so US equity markets will be closed. US equities fell the most in 2022 since 2008, ending a year that saw inflation and interest rates coming back to haunt excessive equity valuations. The first two weeks of the year are going to be very exciting to see whether last year’s momentum in commodities and defence stocks continues or new trends in our theme baskets will start to emerge. Stoxx 50 (EU50.I) First day of trading under way in Europe with STOXX 50 futures up 0.7% despite several recent remarks from ECB members that policy rates must remain high or go even higher to curb inflation. STOXX 50 futures remain in a tight trading range established since mid-December with the 3,782 level being the key level to watch on the downside and the 3,875 level on the upside. FX: USD trades near multi-month lows as 2023 gets under way Interesting to see the USD weakness despite a solid surge in US treasury yields, especially at the long end of the yield curve, as 2022 drew to a close. The first week or two of this year will be needed to see if some portion of the USD’s weakening was down to end-of-year effects. USDJPY trades not far above the important 130.00 level as investors anticipate that the new Bank of Japan leadership change in April will finally bring some tightening, while the market still predicts that the Fed will quickly reach its “terminal” high in the policy rate and eventually ease policy before the year is over. But will the first data points of the year, starting with this Friday’s December US jobs data, support this view? Crude oil (CLG3 & LCOH3) Crude oil futures ended a volatile 2022 close to unchanged after having traded within the widest range since 2008. Another volatile year undoubtedly lies ahead with multiple uncertainties still impacting supply and demand. The two biggest that potentially will weigh against each other in the short term remain the prospect for a recovery in Chinese demand being offset by worries about a global economic slowdown. Covid fears, inflation fighting central banks, lack of investments into the discovery of future supply, labour shortages and sanctions against Russia will also play its part in the coming months. Ahead of yearend, hedge funds raised bullish Brent crude oil bets by the most in 17 months. At 144k contracts, however, it remains around half the five-year average. Gold (XAUUSD) and silver (XAGUSD) ended 2022 on a high note Having closed 2022 near unchanged despite massive headwinds from a stronger dollar and surging treasury yields, the outlook for 2023 looks more price friendly with recession and stock market valuation risks, an eventual peak in central bank rates combined with the prospect of inflation not returning to the expected sub-3% level by yearend all adding support. In addition, the de-dollarization seen by several central banks last year, when a record amount of gold was bought look set to continue, thereby providing a soft floor under the market. As always, the dollar and yield movements will be a key focus while in the short term the market will look ahead to Wednesday’s FOMC minutes and Friday’s US job report. Yields on US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) start the year near multi-week highs US Treasury yields backed up higher as 2022 drew to a close, particularly at the longer end of the yield curve, helping to steepen the yield curve from its most inverted levels in some four decades earlier in December, but still starting the year with an inversion for the 2-10 yields of around –50 basis points as market participants figure that a recession is on the way this year that will see the Fed chopping rates by year end. The 10-year yield level to watch to the upside is perhaps the 4.00% area ahead of the 4.34% high from October, which is a 15-year high. Read next: Walmart Has Ambitions To Become An E-Commerce Leader| FXMAG.COM What is going on? 2022 was the worst year for combined stock and bond portfolios in modern memory The year of 2022 was so unusual as bonds failed to provide any diversification in what investors have traditionally seen as “balanced” portfolios of, for example, 60 percent stocks and 40 percent bonds. An FT article calculated that 2022 was the worst year, in nominal terms, for combined equity and stock portfolios, since 1871. China official December Non-manufacturing PMI plunges to 41.6 ... as December was the month (December 7 seen as the major turning point) that China finally backed away from its zero Covid policy, ironically meaning that in the short term, activity levels have plunged as the virus spreads rapidly throughout the country rather than due to official restrictions on activity. In a New Year’s address, President Xi Jinping discussed the “new phase of Covid response”. Hedge funds increased commodities exposure ahead of year-end Speculators went on a buying spree ahead of yearend with broad demand lifting the combined net long across 24 major commodity futures contracts by 16% to a six-month high of 1.4 million lots. Except for natural gas all other contracts saw net buying led by Brent crude which saw the net long jump by the most in 17 months. The other main contributors were gas oil, gold, grains led by corn, as well as sugar and cocoa. Combined with the prospect of a recovery in demand from China, continued dollar weakness ahead of yearend may have played a role supporting demand. Speculators exited 2022 with the biggest dollar short since July 2021, but it is worth noting the bulk being against the euro where the €18.5 billion long is the biggest in 23 months. What are we watching next? US Data this week relative to market expectations for Fed policy The market continues to express the view that inflationary pressures will decelerate and that the labour market will loosen up sufficiently for the Fed to begin chopping rates before year-end. Last week’s US Consumer Confidence survey for December showed a strong surge in confidence, a development that is at odds with past patterns for the survey if the country is tilting into a recession. Further strong US data for December and the next month or two would be an interesting challenge of the market expectations. This week sees the release of the December ISM manufacturing survey on Thursday and the December jobs report on Friday. Earnings to watch The earnings calendar is light in the first week of the new year, but in a couple of weeks the first Q4 earnings releases will begin to be released. The Q4 earnings season will continue its focus on margin pressures related to input costs on employees and raw materials including energy. Thursday: Walgreens Boots Alliance, Conagra Brands, Lamb Weston, Constellation Brands, RPM International Friday: Naturgy Energy Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Final Manufacturing PMI UK Markets Closed US Markets Closed 0145 – China Dec. Caixin Manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 2, 2022 | Saxo Group (home.saxo)
Twitter And Elon Musk Faced A Growing List Of Claims

Twitter Did Not Pay $136,260 Rent, Microsoft Reported Its Worst Quarterly Results In Years

Kamila Szypuła Kamila Szypuła 02.01.2023 12:04
Twitter has been struggling with new problems since the beginning of the year. This time he was accused of not paying the rent. Other tech companies are also having problems. 2022 was not the best year for Meta or Mircrosoft stocks. Twitter has another problem While Elon Musk has been working to cut costs on Twitter since he took over the company in October. More problems arise. Recently there has been an inflromation that the social platform will experience technical difficulties in using the computer version. Today there was information about financial problems. The owner, Columbia Reit-650 California LLC, says the social media company failed to pay $136,260 in owed rent for office space at 650 California St. The lawsuit alleging breach of contract was filed in the California Supreme Court in San Francisco. Other companies, including a software provider and a transportation company, have also sued Twitter in recent weeks in an effort to recover overdue payments. Can this prove that under the leadership of a businessman, Twitter is struggling with serious financial problems. What's more, according to Twitter data, hasn't booked an annual profit since 2019. Even though the new year has brought some shocking news about Twitter, its shares are above 50 and thus are the highest. Read next: Walmart Has Ambitions To Become An E-Commerce Leader| FXMAG.COM It was a tough time for tech stocks The future outlook is an important aspect when buying stocks, especially if you are an investor looking for growth in your portfolio. For most of the past decade, investors have focused on high-growth tech stocks whose strong year-over-year returns have convinced them they have no choice but to grow. Soaring stocks like Facebook's parent company Meta Platforms Inc., Amazon.com Inc., Apple Inc., Netflix Inc. and owner of Google Alphabet Inc. caused the major indices to hit dozens of new highs. The trade has become so popular that it has its own acronym: FAANG. Meta dropped 64% in 2022; Netflix dropped 51%; the other three shares fell at least 27%. Together, FAANG shares have lost more than $3 trillion in market value, helping to pull the wider stock market down with it. As consumers and businesses tighten their belts to prepare for a potential recession, tech companies that seemed immune to the economic woes of the pandemic have seen their revenues plummet. Companies like Microsoft reported their worst quarterly results in years. Amazon and Meta announced layoffs. When interest rates were close to zero, investors were more willing to pay for growth stocks and risky assets in search of higher returns. However, with the Fed raising interest rates at the fastest pace since the 1980s, the market environment began to favor investments, which now generate cash for the holder. Even after tech stocks ran out last year, the sector still looks expensive compared to the wider market. Although the tech stock market has not been positive lately, MSFT prices have kept their prices above 200. The second half of last year was quite weak for this company's stock and mostly in a downtrend, but prices remained mostly above 225. MSFT share price Meta shares also had their worst period recently, with the price mostly staying around 120. Meta share price Source: wsj.com, finance.yahoo.com
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

An Overall Bullish View Maintain On Commodities, U.S. Economy May Turn Out To Be More Resilient Than The Market Is Expecting

Saxo Bank Saxo Bank 03.01.2023 08:38
Summary:  Both stocks and bonds declined substantially in 2022 on the surge of inflation and monetary tightening in the U.S. Looking ahead to 2023, the U.S. economy may turn out to be more resilient than the market is currently expecting and inflation is not falling to 2% but staying at or above 4%. Commodities may have another bull run and the U.S. equity market may register positive returns driven by the tangible industries in 2023. China’s reopening from Covid containment and support to its property sector benefit Chinese stocks as well as boost demand for commodities globally. What’s happening in markets? Nasdaq 100 (NAS100.I) dropped 33% S&P 500 (US500.I) slid 19% in 2022 U.S. equities were closed on Monday. Last Friday, Nasdaq 100 edged down 0.10% to finish the year of 2022 with a 33.1% decline, its worst since 2008. S&P500 was off 0.3% on Friday and slid 19.4% on the year. In 2022, energy stood out as the lone gaining sector with the S&P500 and rose a stunning 59%. All the other 10 sectors declined and communication services, down 40.4%, consumer discretionary, down 37.6%, information technology, down 28.9%, and real estate, down 28.5%, were the laggards. Throughout the year, the stock market was driven down by higher interest rates which resulted from the Fed slamming hard on the brake after waking up to the fact that the inflation genie had been out of the bottle. Stocks bounced from their October lows in November as the Fed’s hawkish rhetoric peaked and investors started positioning for a pause of the Fed in tightening in Q2 2023 but the rally lost momentum in December. The outlook for equities remains challenging as inflation may not be falling as much as investors are hoping for in 2023. For a detailed review of 2022 from a wider perspective of the structural shifts beyond interest rates, we refer you to our Head of Equity Strategy, Peter Garnry’s brilliant article, Equites in 2022: a fork  in the road for globalization. You can also find the technical analysis of major equity indices from Kim Cramer Larsson, Saxo’s Technical Analyst, on his note, Quarter Technical Outlook – S&P 500, Nasdaq 100, DAX, FTSE 100, FTSE 250 and Hang Seng Index. For a summary of Peter and Kim’s views on the equity outlook for 2023, you can listen to this special edition of the Saxo Market Call here. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) had a huge down year not seen for decades The U.S. Treasury market was closed on Monday. In 2022, yields on the 2-year soared 372 basis points to 4.43% from 0.72% in 12 months. Yields on the 10-year jumped 237 bps to 3.87% from 1.51%. The iShares 20+ Treasury Bond ETF (TLT:xnas) plunged 32.7% in 2022. The sharp rise in yields and decline in prices in Treasury notes and bonds meant that investors had few placed to seek safety and the popular 60-40 portfolio, which protected investors well in the Great Financial Crisis in 2008 did not work this time in 2022 as both bonds and stocks were dragged down by the rise in inflation and therefore interest rates. As yields have risen to levels that provide more meaningful returns and the Fed has signaled a shift to a data-dependant risk management mode of operation, we argue that bonds will be a valuable component again in diversified investment portfolios. Nonetheless, as inflation, while its growth may be slowing, will likely stay at elevated levels, there are likely to be opportunities again for investors to pick up bonds at yields higher than the current levels in 2023. Treasury inflation-protected securities (TIPS) look attractive at 1.6% real yields plus inflation compensation (currently at 7.68% p.a.; likely to fall towards 4% in 2023) in the form of indexation of the principal to the consumer price index. For details, please refer to our recent Fixed Income Updates: Bonds to shine in 2023 as the U.S. economy slows and the Fed moves into a risk management mode, and Elevated inflation and Fed downshift could potentially be a sweet spot for Treasury Inflation-protected Securities (TIPS). Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) rallied since November 2022 on China’s shift in Covid containment policy The Hong Kong and China equity markets were closed for holiday on Monday. Over the year of 2022, the Hang Seng Index was down 15.5% and the CSI300 Index slid 21.6%. Over the past two months, stocks traded in Hong Kong and mainland China rallied as the China has effectively abandoned its stringent Dynamic Zero-Covid policy and moved to reopen the economy despite the surge in cases of infection. While it is inevitable to see further surges and more widespread in inflection at the initial stage of opening, the outlook for the Chinese economy has brightened for 2023.  In addition to the reopening, China has intensified its effort to support the distressed property sector and given property developers access to credits and equity financing which had been denied to them for the most part of 2022. The Chinese authorities have also shifted to more friendly gesture towards private enterprises, in particular the internet platform companies in the recent Central Economic Work Conference.  This new development, together with improvement in the credit impulse since last summer, the outlook for Hong Kong and mainland Chinese equities have gained a more positive tendency for 2023. FX: US dollar stumbles into the New Year In his latest note, Saxo’s Head of FX Strategy wrote that the year 2023 is starting off with the US dollar on its back foot even as US treasury yields rose into year-end as the market continues to believe that we are nearing the end of the Fed rate hike cycle, with easing to follow, while the ECB has grown increasingly hawkish and the Bank of Japan is seen further adjusting its policy mix under new leadership from early Q2. Will the first key data of 2023 on Friday, the U.S. employment report, play well with the market’s strong convictions? Commodities’ continue to have a positive outlook in 2023 We maintain an overall bullish view on commodities, especially in energy, industrial metals, and precious metals for 2023 despite the near-term price volatilities that will be driven by the state of the U.S. economy and the development in the reopening of China from Covid containment. Saxo’s Head of Commodity, Ole Hansen, discussed the outlook for commodities in this special edition of the Saxo Market Call podcast. What to consider? U.S. recession is unlikely to come anytime soon as the market is expecting In his latest Macro Digest: Powell just started the next bull run in commodities, and a special edition of the Saxo Market Call podcast: A look ahead at 2023 with Steen Jakobsen, Saxo’s Chief Investment Officer, Steen Jakobsen argues that the U.S. economy is going to run hot in Q1 2023, as opposing to the market’s expectation of a recession. The U.S. services sector and the labor market are resilient and the fall in gasoline prices since last summer is a tailwind to consumer spending. The long-term equilibrium of U.S. inflation is likely to be 4% than 2%. While the growth of the headline inflation may slow somewhat, the structural inflationary force of deglobalization means the long-term equilibrium of inflation in the U.S. will more likely to be at around 4% rather than the 2.25% that the bond market and inflation derivative market are currently pricing in and many other asset prices base their valuation on. The Fed may not be able to deliver rate cuts as the market is hoping to get As the U.S. economy is resilient and not falling into a recession and inflation stays well above the Fed’s on average 2% target, the Fed is unlikely to be able to cut rates in the first half of 2023 or may not even be able to do some in the whole year of 2023. The Fed may pause and become data dependent and focus on risk management including ensuring proper market functioning and the U.S. federal government’s ability to service its mounting debt burdens. In the equity space, the tangibles are likely to do well in 2023 A resilient U.S. economy, elevated inflation, higher costs of capital due to high interest rates and more realistic equity valuation, and China reopening provide the backdrop for the tangible industries, such as defense, mining, energy, and biotech to outperform in 2023. The board equity markets may retrace as the disappointment of Fed easing kicks in but 2023 may turn out to be a positive year for equities driven by the tangible industries and companies that can improve productivity or be innovative. China’s PMIs declined further in December China’s Official NBS manufacturing PMI fell to 47.0 (consensus: 47.8; Nov: 48.0) and non-manufacturing PMI slid to 41.6 (consensus: 45.0; Nov: 46.7), further into contraction. The weakness was board-based and seems to be a result of the surge and widespread of Covid inflections during the initial stage of abandoning stringent containment measures. For a global look at markets – tune into our Podcast. Source: Market Insights Today: – Tangible industries to outperform in the U.S. and China to pick up momentum in 2023 - 3 January 2023 | Saxo Group (home.saxo)
UK GDP Already Falling And Continuing To Do So For This Calendar Year, Copper Is Still Within A Tightening Range

UK GDP Already Falling And Continuing To Do So For This Calendar Year, Copper Is Still Within A Tightening Range

Saxo Bank Saxo Bank 03.01.2023 09:36
Summary:  While Japan, the UK and the US have yet to start trading this year, markets are on the move elsewhere, as mainland European stocks put in a strong session yesterday and the Hang Seng in Hong Kong is making a bid at multi-month highs overnight. Despite Japan’s closed markets, the JPY is surging, as are the Chinese renminbi and gold, which rose overnight to a six-month high in USD terms.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures opened 0.7% higher on the first print of the year but have since retreated lower up 0.3% for the session compared to the last day of trading in 2022. The positive sentiment from yesterday’s European equity session and positive trading session in Asia, despite a slightly weaker than estimated China PMI manufacturing figures for December, are carrying over into US equity futures. We still expect equity markets to be quiet and not reveal anything meaningful in terms of information of positioning and flows until early next week. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) On its first day of trading in 2023, Hang Seng Index opened lower but rallied to post a 2% gain as of writing. China telcos, electricity generating companies, pharmaceuticals, autos, and Macao casino operators led the charge higher. It is widely expected that the border between the mainland and Hong Kong will be reopened as soon as January 8, 2023. Investors brushed the weak December NBS PMI reports released during the holiday and the Caixin PMI today and the inevitable surge and spread of Covid inflections during the initial stage of relaxation of pandemic containment in China to focus on the improved economic outlook in mainland China and Hong Kong for 2023. China’s CSI 300 Index gained 0.5%. FX: The action in FX remains firmly centred on Asia … with the Japanese yen surging to new highs overnight versus the rest of G10 currencies as the 130.00 level in USDJPY gave way without much fight and EURJPY is poking below 138.50, its lowest level since September of last year as the market has grown increasingly convinced that the Bank of Japan is set for a further policy tightening this year and despite the ECB’s overt hawkishness. The Chinese renminbi is also off to a strong start in 2023 despite dramatic disruptions to activity on the ground from Covid as a further CNH rally overnight has taken USDCNH to within striking distance of its 200-day moving average near 6.86. The USDJPY performance is particularly interesting, given the tight correlation of USDJPY with US treasury yields over the last 12 months and more, as US yields backed up sharply to end 2022 and have yet to trade this year. Crude oil (CLG3 & LCOH3 ) Crude oil futures fluctuated around unchanged as a new year got underway overnight in Asia. Another volatile year undoubtedly lies ahead with multiple uncertainties still impacting supply and demand. The two biggest that potentially will weigh against each other in the short term remain the prospect for a bumpy recovery in Chinese demand being offset by worries about a global economic slowdown. Covid fears, inflation fighting central banks, lack of investments into the discovery of future supply, labour shortages and sanctions against Russia will also play its part in the coming months. Sentiment, however, did improve ahead of yearend after hedge funds raised bullish Brent crude oil bets by the most in 17 months. Gold (XAUUSD) and silver (XAGUSD) strongly out of the starting blocks Gold trades at a fresh six-month high above $1840 and silver an eight-month high at $24.50 as the positive momentum from December gets carried over into the new year. The US treasury market opens later today but futures are signalling softer yields from where we left off on Friday while the dollar trades soft led by a strong yen. In general, we are looking for a price friendly 2023 supported by recession and stock market valuation risks, an eventual peak in central bank rates combined with the prospect of a weaker dollar and inflation not returning to the expected sub-3% level by yearend all adding support. In addition, the de-dollarization seen by several central banks last year, when a record amount of gold was bought look set to continue, thereby providing a soft floor under the market. In the week ahead we focus on Wednesday’s FOMC minutes and Friday’s US job report. Above $1842, the 50% of the 2022 correction, gold will be looking for resistance at $1850 and $1878 next. Copper jumps despite short-term headwinds HG copper trades up more than one percent at the start of a new trading year, but still within a tightening range, currently between $3.8 and $3.94 per pound. We expect to see a bumpy start to the year with China’s reopening process potentially being delayed by virus outbreaks and companies shutting down early ahead of the Lunar New Year, starting already on January 23 this year.  In addition, the risk of a global economic slowdown as highlighted by the IMF in its latest update may also weigh at the start of a year. Overall, however, the medium term offers further upside driven by reduced mining supply and increased focus on the electrification of the world, a copper intensive process that may offset weakness from the housing sector. Yields on US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) start the year near multi-week highs US Treasuries have just started trading for 2023 this morning in Europe, opening some five basis points lower for the 10-year benchmark at 3.82% after backing up sharply as 2022 drew to a close, particularly at the longer end of the yield curve, helping to steepen the 2-10 portion of the treasury yield curve from its most inverted levels in some four decades earlier in December at around –80 basis points, to closer to –50 basis points as market participants figure that a recession is on the way this year that will see the Fed chopping rates by year end. The 10-year yield level to watch to the upside is perhaps the 4.00% area ahead of the 4.34% high from October, which is a 15-year high. What is going on? ECB President Lagarde out with fresh hawkish rhetoric yesterday … warning of a further rise in borrowing costs to fight inflation - “It would be even worse if we allowed inflation to become entrenched.” Bundesbank president Joachim Nagel was also out yesterday warning of a “significant increase in long-term inflation expectations”. European yields surged in the wake of the December 15 ECB meeting on Lagarde’s hawkish blast at the press conference, with German 2-year yields, for example, rising from 2.13% before that meeting to as high as 2.77% last Friday before easing a few basis points yesterday. Tesla deliveries for Q4 fell short of estimates, despite incentives The company delivered 405.3k vehicles in the fourth quarter, which fell short of consensus expectations for over 420k. Still, the number was a record for quarterly deliveries and strongly higher from the 308.7k vehicles Tesla sold in Q4 of last year. Tesla shares lost 65% last year, though they did surge over 10% off late December lows just ahead of year-end. UK Economy may face worst recession in 2023 An FT poll of over 100 economists suggested that four out of five respondents think that UK growth will fall short of global peers, with GDP already falling and continuing to do so for this calendar year, after the inflationary shocks of the last two years will required that the Bank of England continues to raise borrowing costs and as the new Sunak-Hunt government is bent on stabilizing the country’s debt trajectory with a more austere fiscal regime than its predecessors. Recession will hit a third of the world this year The new year has kicked off with a warning from the IMF head that a third of the global economy will be hit by recession this year. In their latest update Kristalina Georgieva warned that the world faces a “tougher” year in 2023 than the previous 12 months as the US, EU and China are all slowing simultaneously. China could see its annual growth in line with global growth for the first time in 40 years and potentially acting as a drag on instead of a driver of worldwide growth. She did sound more optimistic on the prospects for the US saying it may avoid recession because unemployment is so low. What are we watching next? US data this week relative to market expectations for Fed policy The market continues to express the view that inflationary pressures will decelerate and that the labour market will loosen up sufficiently for the Fed to begin chopping rates before year-end. Last week’s US Consumer Confidence survey for December showed a strong surge in confidence, a development that is at odds with past patterns for the survey if the country is tilting into a recession. Further strong US data for December and the next month or two would be an interesting challenge of the market expectations. This week sees the release of the December ISM manufacturing survey and the December jobs report, both on Friday. US Debt Ceiling issue as the new 118th US Congress convenes today in Washington D.C. The perennial debt ceiling issue was largely skirted over the last couple of years as pandemic priorities may have prevented partisan grandstanding. But Republican lawmakers have promised a fight to extract concessions from the Biden administration. Watching for how hard the Republicans are willing to take this issue as the debt ceiling will be reached by summer of this year. Earnings to watch The earnings calendar is light in the first week of the new year, but in a couple of weeks the first Q4 earnings releases will begin to be released. The Q4 earnings season will continue its focus on margin pressures related to input costs on employees and raw materials including energy. Thursday: Walgreens Boots Alliance, Conagra Brands, Lamb Weston, Constellation Brands, RPM International Friday: Naturgy Energy Economic calendar highlights for today (times GMT) 0855 – Germany Dec. Unemployment Change 0930 – UK Dec. Final Manufacturing PMI 1300 – Germany Dec. CPI 1430 – Canada Manufacturing PMI 1445 – US Dec. Final Manufacturing PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 3, 2023 | Saxo Group (home.saxo)
Tesla Is Expected A Temporary Rally

New Record For Electric Car Manufacturer - Tesla Deliveries Increased By 40% Year-On-Year

Kamila Szypuła Kamila Szypuła 03.01.2023 11:58
Tesla survived a difficult year, losing about $ 675 billion in market valuation. Car sales The company expected to "sell every car we make as far in the future as possible," Musk said as Tesla posted a near-record quarterly profit. Elon Musk's electric vehicle maker said Monday it delivered about 1.31 million vehicles last year, about 40% more than in 2021. The company would need to deliver more than 1.4 million vehicles to meet its initial target of increasing deliveries by 50% or more. From analyst estimates compiled by FactSet, as of December 31, 2022, Wall Street expected Tesla to report deliveries of around 427,000 in the final quarter of the year. Estimates updated in December and included in the FactSet consensus ranged from 409,000 to 433,000. Tesla said changes to manufacturing and distribution practices to help lower vehicle costs led to more cars in transit at the end of the quarter. Tesla car prices Strong vehicle prices helped Tesla generate nearly $3.3 billion in quarterly profit for the three months ended September, beating the expectations of analysts surveyed by FactSet. That's not much compared to the company's record quarterly profit of over $3.3 billion, set in the first quarter. Tesla has repeatedly raised the price of its vehicles as parts have become more expensive and new cars hard to come by due to supply chain bottlenecks. Tesla cars averaged about $57,000 in the third quarter, up from about $49,000 a year earlier, analysts polled by FactSet estimated, boosting company revenue and mitigating lower-than-expected third-quarter deliveries. Moreover, the automaker may have to cut vehicle prices by $1,800 to $4,500 from Q3 2022 levels. Shareholders Musk, Tesla's largest shareholder, sold over $15 billion in Tesla stock this year, indicating that at least some of the proceeds will be used to fund his $44 billion Twitter deal. Some investors fear he may have to sell more to close the deal. The billionaire entrepreneur said the company's board of directors is considering the idea of buying back Tesla shares and it is likely that the company will pursue a "significant buyout". He put forward the idea of a buyout of around $5 billion to $10 billion in 2023. Read next: The Korea Fair Trade Commission (KFTC) Will Impose A Fine Of $2.2 Million On Tesla Inc| FXMAG.COM Problems The company idled its car factory in Shanghai on multiple occasions, early on because of local pandemic restrictions, then again in December as it faced a wave of Covid-19 infections among workers and suppliers. In October, Musk characterized Tesla as "recession-proof", saying, "We're going to pedal to the metal whether it's raining or shining. So we're not reducing our production in any significant way, whether in a recession or not." But now, Musk suggested exacly last month that the higher interest-rate environment was hurting vehicle demand. In a year-end sales push, Tesla offered discounts to many buyers who agreed to take delivery of vehicles before January. Demand problems will continue until Tesla introduces a cheaper vehicle in large numbers, which is not on the horizon any time soon. Tesla share price Shares have been falling since December 9. The biggest decrease in the month and the beginning of the year was recorded on December 27, 110, at the level of 109.10. It then surged to above 120. The new year started with Tesla stock price below 120 (118.93). So the trade will be on the tenth day around 120. Source: wsj.com, finance.yahoo.com
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

European Stocks Rose And U.S. Futures Showing Gains

InstaForex Analysis InstaForex Analysis 03.01.2023 14:47
Stocks rose, with U.S. futures showing gains on the first day of trading in 2023. The yen lost ground, while gold traded at its highest level in more than six months. Contracts on the S&P 500 rose, and European stocks rose after sluggish trading at a low Tuesday. Stocks in Hong Kong and mainland China rose after initial declines. European stock indices are growing more actively than American ones against the backdrop of a strengthening dollar: Investors start 2023 with subdued expectations after a sharp swing last year when global stocks lost 20% in value, the worst performance since the financial crisis. Bonds lost 16%, the biggest drop since at least 1990 for a single leading measure, as central banks raised interest rates to slow inflation. "We are starting the year in challenging financial conditions, with potential inflation momentum coming from China and more broadly this means we may need to approach the start of this calendar year with relative caution across the portfolio." – Marc Franklin, Senior Portfolio Manager at Manulife Investment Management. Relevance up to 11:00 2023-01-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/331369
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

Would PBOC cut rates? Tesla faces poor deliveries in the fourth quarter and more

Ed Moya Ed Moya 03.01.2023 23:06
US stocks were unable to hold onto earlier gains as restrictive policy and recession fears remained front and center for investors. Discount buying triggered another bear market rebound that didn’t last long at all. It is too early to start betting on a Fed pivot this year and that should make this a difficult environment for stocks. China China’s reopening and bets that PBOC will cut rates in the first half of the year should help keep Chinese stocks supported. ​ After a couple of bad years, Wall Street is wondering if Chinese stocks could outperform if their Covid reopening continues without any major disruptions. ​ China still has to deal with a struggling property market, but hopefully, it will show signs of improving on more support measures. Tesla Demand woes are killing Tesla shares. ​ The fourth quarter update was very disappointing as they are struggling to deliver cars. ​ Tesla is battling rising competition, a weakening consumer, and lower gas prices. ​ Tesla might be a long-term hold for many investors, but right now it seems the path of least resistance is lower for Tesla’s stock price. Bitcoin Happy Birthday, Bitcoin! It should come as no surprise that this teenager of an asset class has constant mood swings. ​ Much attention is going to Sam Bankman-Fried’s day in court which is expected to have him plead not guilty to an eight-count fraud and conspiracy indictment. Read next: 2023 Predictions: Peter Garnry - Our target for S&P 500 is still around the 3,200 level sometime during the year leading to an overall drawdown of around 33% from the peak in early 2022 | FXMAG.COM This is still a difficult time for crypto as everyone waits to see which will be the next crypto company to fail. ​ Regulation is taking its time but guidelines should start to take hold this year. ​ A top US regulator delivered a joint warning on crypto activities, which did not contain any new risks. ​ Bitcoin appears anchored but it is still not clear when we will test and possibly make a new bottom. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The Current War Between China And The United States Over Semiconductor Chips Is Gaining Momentum

Concerns Among Investors About The Demand Outlook For The Products Of Apple

Saxo Bank Saxo Bank 04.01.2023 08:57
Summary:  The share price of Tesla plunged 12% following releasing weak deliveries in December. Apple’s market value fell below US2 trillion for the first time since March 2021 on weakening demand for its MacBooks, the Apple Watch and Airpods. The USD bounced by 1% against EUR and GBP. Crude oil slid by 4% on higher OPEC daily production. On Wednesday, all eyes are on the US ISM Manufacturing Index, JOLTS job openings, and the December Fed minutes. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) slid with significant weakness in Apple and Tesla U.S. equities started the year weaker on Tuesday. S&P 500 slid 0.4% and Nasdaq 100 lost 0.8%. Energy, plunging 3.6% on a 4% decline in crude oil, was the worst-performing sector within the S&P 500 Index. Communication Services, up 1.4%, advanced the most, with Meta (META:xnas) up 3.7% and Alphabet (GOOGL:xnas) up 1.1%. Nasdaq 100 was dragged down particularly hard by the declines in the share prices of Apple (AAPL:xnas) which accounts for 13% index weighting and Tesla (TSLA:xnas) which accounts for 2.5% index weighting. Tesla fell by 12.3% after releasing weak December delivery data. Apple slid 3.4% on a Nikkei report suggesting potential weak demand for the company’s products, taking the company’s market value down below USD2 trillion, the first time since March 2021. Apple accounted for 13% in Nasdaq 100 weighting. Tesla plunged 12.3% on weak December deliveries Tesla announced Q4 deliveries of 405.3K coming short of the estimate at 420.8K and significantly below the 439.7K units produced in Q4. In this article, Peter Garnry suggests that Telsa is facing problems of elevated battery costs that forced the EV maker to raise prices and excessive electricity costs in Europe that weighs on demand. Some demand in the U.S. in Q4 might have been pushed into Q1 2023 by the EV purchase tax credit in the Inflation Reduction Act. The share price of Tesla plunged 12.3% on Tuesday, its largest decline by percentage since September 2020. Apple fell by 3.4% on reportedly weakening demand for its MacBooks, the Apple Watch and Airpods A Nikkei article reported that “Apple has notified several suppliers to build fewer components for Airpods, the Apple Watch and MacBooks for the first quarter, citing weakening demand”. The article stirred up concerns among investors about the demand outlook for the products of the consumer electronics giant. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied with yields on the 10-year 14bps richer to 3.74% Bids returned to Treasuries as German Bunds jumped in price following German CPI coming in softer than expectations.  Yields on 10-year German bunds fell by 6bps on Tuesday and by 18 bps since the New Year. On the tape, former Fed Chair Aland Greenspan and former New York Fed President Bill Dudley said a not-too-severe U.S. recession was the most likely outcome. The 10-year segment led the rally, with yields 14bps richer to 3.74%. Yields on the 2-year fell by 6bps to 4.37%. The corporate issuance calendar was busy with 19 investment grade bonds for a total of over 30 billion issued on Tuesday. Hong Kong’s Hang Seng (HIZ2) and China’s CSI300 (03188:xhkg) On its first day of trading in 2023, Hang Seng Index opened lower but rallied to post a 1.8% gain. Hang Seng TECH Index (HSTECH.I) climbed 1.9%. Chinese telco, consumer, electricity utilities, pharmaceuticals, autos, and Macao casino operators led the charge higher. It is widely expected that the border between the mainland and Hong Kong will be reopened as soon as January 8, 2023. In addition, a rebound in mobility data in some large Chinese cities, such as Guangzhou, Chongqing, Shanghai, and Beijing helped market sentiment. Investors brushed off the weak December NBS PMI reports released during the holiday and the Caixin PMI on Tuesday and the seemingly inevitable surge and spread of Covid inflections during the initial stage of relaxation of pandemic containment in China to focus on the improved economic outlook in mainland China and Hong Kong for 2023. Southbound flows into Hong Kong amounted to a decent HKD4.25 billion, of which buying in Tencent (00700:xhkg) accounted for HKD1.58 billion. Following the release of strong December sales, BYD rose by 4.7%, Li Auto by 10.5%, and Xpeng by 7.8%.  China’s CSI 300 Index gained 0.4%, with computing, communication, media, and defense names gaining the most. FX: the dollar gained 1% versus EUR and GBP As Saxo’s Head of FX Strategy, John Hardy, put it in his note, USD wakes up with a bang ass US market come back on line. Softer CPI prints from Germany triggered selling in the Euro and saw EURUSD down 1%. The pound sterling also slid 1% versus the dollar. The Yen held on relatively well, after briefly strengthening to 129.52, finished the day little changed at around 131. Crude oil fell nearly 4% on higher OPEC production WTI crude fell 3.9% on Tuesday following production by OPEC countries increased by 150,000 barrels to 29.14 million barrels a day, partly due to higher output from Nigeria. The warmer-than-normal weather in the U.S. and Europe also weighed on the market sentiment. What to consider? German December CPI softer than expectations Germany released headline CPI at 8.6% Y/Y below the street estimate of 9.0%Y/Y and November’s 10.0%. Germany’s EU Harmonized CPI came in at 9.6% Y/Y, falling from the 10.2% expected and 11.3% in November. U.S. ISM Manufacturing Index, JOLTS Job openings, and the December FOMC minutes to focus on Wednesday We have a busy economic calendar in the U.S. on Wednesday. The ISM Manufacturing Index is generally considered by investors as one of the key indicators in the recession question. The Bloomberg consensus estimate is calling for a further decline into the contractionary territory to 48.5 in December from 49.0 in November. JOTLS job openings (consensus 10.05 million; Nov 10.33 million) will also be closely monitored as the data series was highlighted by Fed Chair Powell almost every time in his assessment of the state of the labor market and monetary policies. Finally, at 2pm US EST, we will have the minutes from the Fed’s December FOMC meeting. For a global look at markets – tune into our Podcast. Source: Market Insights Today: – Apple and Tesla plunged; ISM, JOLTS, and Fed minutes the focus on Wednesday - 4 January 2023 | Saxo Group (home.saxo)
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Tesla Had A Bad Start To 2023, US Treasury Yields Fell Sharply

Saxo Bank Saxo Bank 04.01.2023 09:10
Summary:  US equities got off to a choppy start in 2023 with a slightly weak session yesterday, but with notable weakness in high profile companies like Tesla after it reported weak Q4 deliveries, while market cap leader Apple posted a new cycle low. The US dollar traded was choppy in volatile trading but generally ended the day on the strong side, even as US treasury yields dropped. Gold chopped back and forth but surged back toward yesterday’s highs overnight.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures started the year’s first day of trading yesterday with the element that they had plenty of in 2022, namely volatility. The index futures started rallying in the beginning of the session helped by positive sentiment in Europe and China trading up as much as 1.2% at the intraday high, but spillover effect on sentiment from the slide in Tesla shares and related technology stocks took S&P 500 futures down 0.4%. The intraday price range in S&P 500 futures was more than 2%. The first important macro events of the year are the ISM Manufacturing and the JOLTS Job Openings report for December which could move interest rates and inflation expectations and thus US equity futures later in the session. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hang Seng Index rallied for the second straight session in 2023 rising by 1.8%. Hang Seng TECH Index surged 3.4%, led by Alibaba (09988:xhkg)  soared more than 7% following the news that the Chinese authorities approved an increase in registered capital of the consumer finance unit of Ant Group. Shares of Chinese developers and management services providers climbed on anticipation of state support from the state-owned Economic Daily emphasizing the importance of the real estate sector to the economy in its editorial. Longfor (00960:xhkg) and Country Garden Services (06098:xhkg) each jumped around 10%, being the top performers of the Hang Seng Index. Sunny Optical (02382:xhkg), a supplier to Apple (AAPL:xnas), plunged 12% on analyst downgrades and a Nikkei report that “Apple has notified several suppliers to build fewer components for Airpods, the Apple Watch and MacBooks for the first quarter, citing weakening demand”. CSI 300 is unchanged. FX: Yesterday’s USD rally moderates. AUD surges on possible end of Chinese coal ban The US dollar surged yesterday for no readily apparent reason, even as US treasury yields dropped and risk sentiment was strong early in the day. The rest of the day saw very choppy action that suggests currency traders are struggling to find their feet in 2023, although the greenback generally ended the day stronger than where it started ahead of the first important macro data of the year this Friday. Overnight, the Aussie surged sharply, erasing the AUDUSD losses yesterday and seeing AUDNZD to new local highs as Chinese authorities discussed a partial lifting of the Australia coal import ban. Crude oil (CLG3 & LCOH3) Crude oil futures, led by gasoline and diesel, turned sharply lower during its first full day of trading with the early 2023 focus being centred around a short-term deterioration in demand as China struggles with Covid-19, milder weather reduces demand for heating fuels and the IMF’s latest warning that one third of the world may suffer recession in 2023. OPEC increased production by 150k b/d last month according to a Bloomberg survey as Nigeria, currently producing below its quota, ramped up production. US production meanwhile is expected to rise by just 600k b/d in 2023, with the pre-pandemic record peak at 13m b/d remaining out of sight. On the supply side Russia’s December shipments of oil slumped to the lowest for 2022 driven by storm disruptions and a shortage of vessels. In Brent, the uptrend from early December looks challenged with a break below $81 signalling further loss of momentum, initially towards $79.65.  Gold (XAUUSD), silver (XAGUSD) and platinum (XPTUSD) This trio of investment and semi-industrial metals, led by gold’s break higher, are the only commodities trading in the black this week. On Tuesday, sudden dollar strength was being offset by a sharp fall in US treasury yields, both highlighting weak risk sentiment at the beginning of a new trading year. In general, we are looking for a price friendly 2023 for investment metals supported by recession and stock market valuation risks, an eventual peak in central bank rates combined with the prospect of a weaker dollar and inflation not returning to the expected sub-3% level by yearend. However, in the short-term continued dollar strength - as risk appetite elsewhere suffers - may prove too hard to ignore, thereby raising the prospect for a correction and better buying levels. Focus on today’s FOMC minutes and Friday’s US job report. Key support in gold at $1801 with trendline resistance at $1852 being followed by $1878. Yields on US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) fall sharply on US first trading day of 2023 US Treasury yields fell sharply all along the curve, but fell the most at the longer end of the curve, with the 10-year yield benchmark down almost 15 basis points to 3.73%. Some of the move was in sympathy with European yields, which dropped on a much softer than expected German CPI print.  The 10-year US Treasury yield level to watch to the upside is perhaps the 4.00% area ahead of the 4.34% high from October, which is a 15-year high. To the downside, the cycle lows below 3.50% (intraday cycle low was 3.40%) are the focus, with the first major test of the US Treasury market up this Friday on the release of US jobs data and the December ISM Services index and next week on the December CPI report on Thursday, January 12. What is going on? US House Republicans so far failing to elect new Speaker of the House A minority of more Trumpist-leaning Republicans are holding back the election of Kevin McCarthy to become the next Speaker, as he failed to win approval after three rounds of voting yesterday. The House is unable to conduct any kind of business until a new Speaker is elected, and the degree of dysfunction in the House over the next two years will likely be determined by the identity of the leader in the house. Inflation is cooling down in Germany Germany December CPI rose 8.7 % year-over-year against prior 10.4 %. The monthly decline is astounding: minus 1.0 % from November to December. In parallel, inflation also slowed down in Germany’s largest state by population – North Rhine Westphalia – with CPI out at minus 1.0 % month-over-month. This matters because it is one of the major industrial states. The drop is partially explained by the drop in energy prices and the one-time government support to reduce the gas bills of households and SMEs. This means the decline in inflation may not last. It will highly depend on the evolution of energy prices this winter. But this is a welcome figure as we kick off the new year. Officials in China discuss easing Australia coal import ban Bloomberg is breaking this story, citing sources familiar with the matter, which claim that bureaucrats are proposing allowing a few major coal consumers in China to resume imports as soon as April 1. The Australian dollar jumped sharply in response, as did Australian coal exporters, and even major miner BHP Billiton posted a strong session overnight. Tesla shares plunge 12% to lowest levels since August 2020 Tesla had a bad start to 2023 as the EV maker reported worse than expected Q4 deliveries Tuesday night trailing the productions figures for the quarter expanding the gap between production and deliveries to a new high. Investors are speculating whether Tesla is facing a demand issue and the recent implemented discounts to entice buyers are still in place suggesting Tesla is willing to sacrifice its operating margin at the expense of keeping up demand to maintain high utilization of its factory capacity. Read our take on Tesla in yesterday’s equity note. What are we watching next? November JOLTS Job openings up later, FOMC Minutes up tonight The JOLTS survey of job openings dropped in October back toward the low for 2022 at just above 10.3M as the November release today is expected to post a new cycle low near 10.0M. Still, these numbers are far north of the previous pre-pandemic record near 7.5M. The FOMC minutes tonight may not move markets much, but are worth watching for where FOMC members are expressing their inflation concerns. Earnings to watch The earnings calendar is light in the first week of the new year, but in a couple of weeks the first Q4 earnings releases will begin to be released. The Q4 earnings season will continue its focus on margin pressures related to input costs on employees and raw materials including energy. This week’s earnings focus is Walgreens Boots Alliance (WBA) and Conagra Brands, with WBA expected to -3% revenue growth y/y for the quarter that ended on 30 November adding to the series of quarters with negative revenue growth. Conagra Brands is expected to deliver 7% revenue growth y/y for the quarter that ended on 30 November as the manufacturer of packaged foods is able to pass on inflation to its customers. Thursday: Walgreens Boots Alliance, Conagra Brands, Lamb Weston, Constellation Brands, RPM International Friday: Naturgy Energy Economic calendar highlights for today (times GMT) 0745 – France December Flash CPI 0815-0900 – Eurozone final December Services PMI 0930 – UK Nov. Consumer Credit/Mortgage Approvals 1500 – US Dec. ISM Manufacturing  1500 – US Nov. JOLTS Jobs openings 1900 – US FOMC Minutes 2130 – API's Weekly Crude and Fuel Inventory Report 0145 – China Dec. Caixin Services PMI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 4, 2023 | Saxo Group (home.saxo)
The Commodities Feed: OPEC+ meeting ahead

Exxon And Chevron Abandon The Global Market And Focus On The Americas

Kamila Szypuła Kamila Szypuła 04.01.2023 12:29
The two fossil fuel giants plan to spend most of their annual budgets in the both Americas this year. Focus on Noth and South America For much of their modern history, Chevron and Exxon have scoured the world for oil to add to their reserved reserves. Chevron saying it will pour 70% of the capital allocated for production into oil fields in the U.S., Argentina and Canada, and Exxon saying it will spend a similar portion of its budget in the Permian Basin of New Mexico and West Texas, Guyana, Brazil and liquefied natural-gas projects. Their focus on the Western Hemisphere is expected to continue for years as they give priority to growing shareholder returns and cut costly frontier drilling projects. The Chevron planned to sell off at least $15 billion in assets as of 2018, reducing its global reach and focusing on its most valuable assets. Last year, Irving, Texas-based Exxon sold or proposed to sell assets in Chad, Cameroon, Egypt, Iraq and Nigeria. Read next: New Record For Electric Car Manufacturer - Tesla Deliveries Increased By 40% Year-On-Year| FXMAG.COM Exxon and Chevron Situation The company's oil and gas production is down nearly 18% in 2021 from its annual peak in 2011. Around this time, Exxon had dozens of projects around the world and made most of its money outside the United States. Meanwhile, Chevron's international production fell 3% last year after concessions in Thailand and Indonesia expired. Last year, she promised to leave Myanmar, citing human rights violations. Chevron has kept some international assets close to home. The US re-granted it a new license to pump oil in Venezuela after years of sanctions. So far it has said it will not make new investments in the country, but will only hold existing assets while it collects debt from its state-owned joint venture partner. The involvement of Venezuela In October last year, information appeared about the possibility of easing the sanctions imposed by the US on Vezeuela. The Biden administration has taken steps to reduce the sanctions imposed on the regime in Venezuela, provided authoritarian President Nicolás Maduro agrees to negotiate with the US-backed opposition to hold a free and fair presidential election in 2024 on the matter. Venezuela was once a major oil producer, pumping more than 3.2 million barrels a day in the 1990s, but the state-owned industry has collapsed over the past decade due to underinvestment, corruption and mismanagement. The sanctions imposed by the Trump administration have further curtailed production and forced Western companies out of the country. Chevron wrote off its Venezuelan assets in 2020, charging a $2.6 billion fee, just months after the Trump administration tightened sanctions that barred U.S. companies from drilling, transporting or selling Venezuelan oil. The speed at which Chevron can resume operations in Venezuela, mainly in the Orinoco belt to the east, will depend largely on how quickly modifications to the Trump-era sanctions can be implemented. Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM Chevron will have to deal with everything from fuel shortages to an accident-prone oil infrastructure to security threats and corruption that could hamper its efforts to revitalize the country's gutted oil industry. The involvement of Venezuela, which sits on top of some of the world's largest oil reserves, could serve as a long-term strategy for the United States and European countries trying to secure new energy sources as Russia's war in Ukraine drags on and overturns commodity markets. Chevron share price The war in Ukraine has mainly hit the goods market, which has made energy companies gain. Chervron gained over 40% last year. The share price last year was mostly above 150, and this year it started the year with levels above 170. Exxon share price Exxon's stock didn't do as well as Chevron's, but it was on the rise and in 2022 it was trading above 85. Currently, the company's stock is above 100. Source: wsj.com, finance.yahoo.com
Russia's Weekend Mutiny and Gold's Bounce off Support Raise Concerns; Verbal Intervention in USD/JPY and US Banking Stocks Tumble Ahead of Fed's Stress Test Results

Saxo Bank Podcast: Lifting Risk Sentiment And Seeing A Weaker US Dollar

Saxo Bank Saxo Bank 04.01.2023 12:45
Summary:  Today, we note that today's inter-market picture makes far more sense than what we saw yesterday as some low inflation data in Europe is helping to drive global bond yields lower, lifting risk sentiment and seeing a weaker US dollar. This came after a volatile and confusing day yesterday. The biggest winner of the first couple of days this year has been gold, which has soared above major resistance. We also look at the latest Tesla plunge and some of the network effects that may be aggravating its decline, discuss the reversal in crude oil prices and new lows in natural gas prices and how markets may continue to flourish on signs of a weakening economy. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Read next:Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM Source: Podcast: Global markets getting back in synch today | Saxo Group (home.saxo)
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

European Investors Got An Energy Boost From Lower Inflation Reads

Swissquote Bank Swissquote Bank 04.01.2023 12:59
European investors got an energy boost from lower inflation reads, and the falling nat gas futures, but US investors didn’t follow up on the cheery market mood. However, US sovereign bonds gained yesterday as an indication that the latest market moves were backed by recession fears, rather than hawkish Federal Reserve (Fed) expectations… The risk-off investors will likely continue And if the first trading day of the year is any indication, we could see the holy negative correlation between stocks and bonds come back in 2023. This is what many investors think will happen. The risk-off investors will likely continue exiting stocks on profit recession – and not on hawkish Fed expectations, and they could go back to bonds and to gold instead. US economy Due today, the ISM manufacturing index will reveal if and how fast US manufacturing contracted last month. If yesterday’s PMI is any hint, we could see a fastening contraction in ISM manufacturing, which would then boost recession worries, hit the stocks, but not necessarily the bonds and gold. Also, JOLTS data will show if, and by how much the US job openings fell in November. Read next: Exxon And Chevron Abandon The Global Market And Focus On The Americas| FXMAG.COM But regardless of the ISM data, and the US job openings, the FOMC minutes will likely confirm that the Fed remains serious about further tightening policy, even if it slows the pace of interest rate hikes. Remember, if the Fed decided to go slower on its rate hikes, it’s to be able to go higher! And the more resilient the US economy and the US jobs market, the more eager the Fed will be to continue its journey north… Watch the full episode to find out more! 0:00 Intro 0:35 European stocks rally but… 3:04 US stocks fall, as bonds rise… 4:08 … hinting at the eventual return of negative correlation btw stocks and bonds? 5:51 …from which Gold could also benefit? 6:30 What to watch today? 7:38 Oh Tesla, Apple and Exxon… 9:06 Do you dare going back to Chinese stocks? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Stock #bond #correlation #USD #EUR #JPY #XAU #economic #data #recession #pricing #Tesla #Apple #Exxon #crude #oil #DAX #CAC #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

Apple (AAPL) fell 3.74% as the stock was downgraded to "neutral" from "outperform" at Exane BNP Paribas

Intertrader Market News Intertrader Market News 04.01.2023 14:33
DAILY MARKET NEWSLETTER January 4, 2023               Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,304.00 +46.00 (+0.32%) Read the analysis 14,360.00 14,210.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,618.00 7,510.00     S&P 500 (CME) 3,850.25 +4.25 (+0.11%) Read the analysis 3,883.00 3,820.00     Nasdaq 100 (CME) 10,970.50 +25.00 (+0.23%) Read the analysis 11,070.00 10,850.00     Dow Jones (CME) 33,297.00 +19.00 (+0.06%) Read the analysis 33,460.00 32,980.00     Crude Oil (WTI) 76.66 -0.27 (-0.35%) Read the analysis 75.80 77.40     Gold 1,845.83 +6.34 (+0.34%) Read the analysis 1,872.00 1,839.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Tuesday, major U.S. stock indexes closed lower dragged by Tesla (TSLA) and Apple (AAPL). The S&P 500 fell 15 points (-0.41%) to 3,823, and the Nasdaq 100 slid 77 points (-0.70%) to 10,862, while the Dow Jones Industrial Average dipped 10 points (-0.03%) to 33,136.The U.S. 10-year Treasury yield dropped 11.3 basis points to 3.761%.Automobiles (-8.73%), energy (-3.63%), and technology hardware & equipment (-2.8%) sectors lost the most, while consumer durables & apparel (+1.52%), media (+1.42%), and telecoms services (+1.28%) sectors posted gains.Tesla (TSLA) plunged 12.24% as the market viewed the electric-vehicle maker's fourth-quarter deliveries as lower than expected.Apple (AAPL) fell 3.74% as the stock was downgraded to "neutral" from "outperform" at Exane BNP Paribas.On the other hand, Wynn Resorts (WYNN) rose 3.81% as the stock was upgraded to "overweight" from "equal-weight" at Wells Fargo. Regarding U.S. economic data, construction spending rose 0.2% on month in November (vs -0.4% expected).European stocks closed higher. The DAX 40 rose 0.80%, the CAC 40 gained 0.44%, and the FTSE 100 was up 1.37%.U.S. WTI crude futures fell $3.10 (-3.86%) to $77.13 a barrel.Gold price climbed $15 to $1,839 an ounce.Market Wrap: ForexThe U.S. dollar strengthened against other major currencies. The dollar index rose to 104.64. The Federal Reserve will release minutes of its December monetary-policy meeting later on Wednesday.EUR/USD declined 114 pips to 1.0553. Germany's data showed that the inflation rate slowed to 8.6% on year in December (vs +9.1% expected), and the jobless rate was stable at 5.5% (vs 5.6% expected).GBP/USD slid 75 pips to 1.1971.USD/JPY rose 13 pips to 130.93. The pair hit a six-month low of 129.51 within the session.AUD/USD dropped 75 pips to 0.6727.USD/CHF added 98 pips to 0.9359, and USD/CAD jumped 99 pips to 1.3672.Bitcoin traded slightly lower to $16,660.Morning TradingIn Asian trading hours, USD/JPY retreated to 130.75 from an intraday high near 131.44.Meanwhile, EUR/USD rebounded to 1.0565 and GBP/USD climbed to 1.1985.Gold rose to $1,844.Bitcoin edged up to $16,726.Expected TodayFinal readings of December S&P Global services purchasing managers index is expected at 49.1 for the eurozone, 49.0 for Germany and 48.1 for France.France's December consumer price index is expected to be up 6.3% on year.U.K. mortgage approvals are estimated at 56,500.In the U.S., December ISM manufacturing purchasing managers index is expected at 49.0, while November JOLTS job openings are estimated at 10.1 million. Also, the Federal Reserve will release its latest FOMC meeting minutes.           UK MARKET NEWS           RS Group, a distributor of industrial and electronics products, announced that it has completed the acquisition of Risoul.Auto & Parts, telecom and industrial goods & services shares fell most in London on Friday.From a technical point of view, CRH (+4.49% to E38.67) crossed above its 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   04:30 BoE Consumer Credit (Nov) 820M MEDIUM     04:30 Mortgage Approvals (Nov) 56.5k MEDIUM     04:30 Mortgage Lending (Nov) 3.5B MEDIUM     07:00 MBA 30-Year Mortgage Rate (Dec/23)   MEDIUM     07:00 MBA 30-Year Mortgage Rate (Dec/30)   MEDIUM     10:00 ISM Manufacturing PMI (Dec) 49 HIGH     10:00 JOLTs Job Openings (Nov) 10.1M HIGH     10:00 ISM Manufacturing Employment (Dec) 48 MEDIUM     14:00 FOMC Minutes   HIGH     16:30 API Crude Oil Stock Change (Dec/30)   MEDIUM                                     NEWS SENTIMENT           Barclays PLC BARC : LSE 163.60 GBp +2.97% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Cineworld Group PLC CINE : LSE 3.671 GBp -1.16% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Rolls-Royce Holdings PLC RR. : LSE 98.91 GBp +6.77% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Deutsche Bank AG DBK : XETRA 11.112 EUR +4.53% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Standard Chartered PLC STAN : LSE 640.20 GBp +1.75% In the last 5 days         NEWS SENTIMENT (24H) Very Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Bayerische Motoren Werke AG BMW : XETRA 85.83 EUR +3.09% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: rebound.   Pivot: 1.0540   Our preference: Long positions above 1.0540 with targets at 1.0615 & 1.0645 in extension.   Alternative scenario: Below 1.0540 look for further downside with 1.0515 & 1.0480 as targets.   Comment: The RSI shows upside momentum.                     Euro Stoxx 50 (Eurex)‎ (H3)‎ Intraday: intraday support around 3869.00.   Pivot: 3869.00   Our preference: Long positions above 3869.00 with targets at 3927.00 & 3959.00 in extension.   Alternative scenario: Below 3869.00 look for further downside with 3840.00 & 3815.00 as targets.   Comment: The immediate trend remains up but the momentum is weak.                     Brent (ICE)‎ (H3)‎ Intraday: under pressure.   Pivot: 82.70   Our preference: Short positions below 82.70 with targets at 80.80 & 80.10 in extension.   Alternative scenario: Above 82.70 look for further upside with 84.30 & 84.35 as targets.   Comment: The RSI is bearish and calls for further decline.        
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Deep Correction Of The S&P 500 Index Will Be Shorter In Duration

Torben Melsted Torben Melsted 05.01.2023 08:23
As we are at the beginning of the year, let's try to get a feel for the possible price action for 2023. The S&P 500 index hit the top of the rising price channel at the beginning of 2022 indicating possible exhaustion of the impulsive rally from March 2009. Looking back in time, we can see three major corrections unfolding. The first after the 1937 peak was a decline lasting 5 years to 1942, but it was a very deep correction, correcting 78.6% of the rally from 1932 to 1937. The second correction lasted from 1966 to 1974, a very shallow correction, that only corrected 38.2% of the impulsive rally from 1937 to 1966. Finally, the third impulsive rally running from 1974 to 2000 was corrected from the 2000 peak to the 2009 bottom which is an almost 61.8% correction of the 1974 - 2000 rally. The last two corrections both took 8-9 years to complete. If this is the case too this time, then we can expect a bottom around 2029 - 2030 and close to support near 2,365. Let's be clear, that a correction unfolding through to 2029 doesn't mean we can't see a new all-time high during the period, but it's no guarantee. Yes, we did see a new all-time high during the 1966-1974 correction and we also did see a new all-time high during the 2000-2009 correction, but we didn't see one during the 1937 - 1942 correction, but this correction was also shorter in duration. Read next: The EUR/USD Pair Is Trading Above 1.06 Again, The USD/JPY Pair Is Close To Level Of 131| FXMAG.COM Therefore, our conclusion is that a deep correction will be shorter in duration, but not in price points, while a more shallow sideways correction will take up more time and fewer price points. All in all, we are looking into some tough years ahead as we correct the excessive liquidity creation of central banks and governments in the last 13 years and especially in the last two years due to the coronavirus pandemic.     Relevance up to 07:00 2023-01-06 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307432
Supply Trends Resurface: Analyzing the Impact on Market Dynamics

The Australian Dollar (AUD) Was The Best Performer Among Major Currencies Against The Dollar

Saxo Bank Saxo Bank 05.01.2023 08:51
Summary:  European and U.S. equities as well as bonds gained on a large-than-expected decline in the rate of inflation in France. Hong Kong stocks had a strong day in anticipation of more economic stimulus, support to the real estate sector, and relation on regulations over the internet sector in mainland China. The U.S. JOLTS job openings report shows the Fed has more work to do to cool off the labor market. The December FOMC minutes sent mixed signals of warning against an easing of financial conditions and concerns about two-sided risks of under- and over-tightening. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) ended higher in a choppy session U.S. stocks had a strong start on Wednesday through the morning and then oscillated after the release of the FOMC minutes in the afternoon digesting the hawkish warnings from the Fed about an unwarranted easing in financial conditions and the dovish signal of an increasing number of Fed FOMC members being concerned about two-sided risks. S&P 500 ended the session 0.8% higher and Nasdaq 100 climbed 0.7%. The rally was broad-based as all 11 sectors within the S&P 500 gained. The interest rate-sensitive real estate sector was the best performer while the energy sector was close to flat as crude oil slid nearly 5%. Tesla (TSLA:xnas) rebounded 5%. Micorsoft (MSFT:xnas) plunged 4.4% on analyst downgrades and concerns about the company’s cloud computing business. The next key focus of investors will be the employment report this Friday. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) gained on softer French CPI prints, and the FOMC minutes showed more Fed officials concerned about two-sided risks Treasuries caught some strong bids in tandem with the European bond markets that rallied on softer-than-expected CPI prints from France. The market pared some gains after a stronger-than-expected JOLTS job openings report and position squaring ahead of the release of the FOMC minutes. Yields, in particular, those in the longer-end segment, fell again after the FOMC minutes. The 10-year finished Wednesday 6bps richer to 3.68% which yields on the 2-year falling only 2bps to 4.35%. The December FOMC minutes highlighted Fed officials’ worries about “an unwarranted easing in financial conditions” due to a misinterpretation by the market of the Fed’s downshift from 75bp to 50bp hike as a pivot. Nonetheless, the minutes showed that “many participants” argued for balancing the two-sided risks of under- and over-tightening in the December meeting. Minneapolis Fed President Kashkari said in an article that he saw rate hikes “at least at the next few meetings”, leading to a terminal rate of 5.375%. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hang Seng Index rallied for the second day in a row in 2023, registering an impressive gain of 3.2% and rising to above its 250-day moving average. A pledge of fiscal expansion from China’s Finance Minister fueled investors’ optimism in more economic stimulus measures. Hang Seng TECH Index surged 4.6%, led by Alibaba (09988:xhkg) which soared 8.7% following the news that the Chinese authorities approved an increase in registered capital of the consumer finance unit of Ant Group. Shares of Chinese developers and property management services providers climbed on anticipation of state support, following the state-owned Economic Daily emphasizing the importance of the real estate sector to the economy in its editorial, a recent message from the Financial Stability and Development Committee to support “systematically important” property developers, and Asset Management Association of China’s decision to resume approvals for private equity funds investing in property projects. Longfor (00960:xhkg) and Country Garden Services (06098:xhkg) each jumped more than 11%, being the two biggest gainers within the Hang Seng Index. Sunny Optical (02382:xhkg), a supplier to Apple (AAPL:xnas), plunged 10% on analyst downgrades and a Nikkei report that “Apple has notified several suppliers to build fewer components for Airpods, the Apple Watch and MacBooks for the first quarter, citing weakening demand”. Semiconductors names were among the laggards as China was reportedly going to slow its investment push for developing the country’s chip-making industry due to pressures on its fiscal budget. In A-shares, CSI 300 finished the day little changed, with real estate and financials outperforming and weakness in semiconductors and new energy. FX: AUD gained 1.6% to 0.6840 as China is considering resuming coal imports from Australia The Australian dollar was the best performer among major currencies against the dollar following news headlines saying that China is considering ending its import ban on Australian coal. EUR and GBP also rebounded from the loss the day before and each up about 0.7% against the dollar. The Japanese yen was the laggard among major currencies and weakened to 132 against the dollar. Crude oil fell nearly 5% to USD73.17 WTI crude oil fell 4.9% to US73.17 on concerns of a slowing global economy and higher-than-average temperatures in Europe and the U.S. Read next: The EUR/USD Pair Is Trading Above 1.06 Again, The USD/JPY Pair Is Close To Level Of 131| FXMAG.COM What to consider? FOMC minutes warned about an unwarranted easing in financial conditions while highlighting a shift toward risk management The FOMC minutes sent out mixed messages. FOMC participants worried that the downshift from a 75bp hike to a 50-hike would be interpreted by the market as the signal of a pivot and warned that “an unwarranted easing in financial conditions, especially if driven by a misperception by the public of the committee’s reaction function, would complicate the committee’s effort to restore price stability”. Nonetheless, the minutes showed that “many” participants argued for balancing two risks: the risk “insufficiently restrictive monetary policy could cause inflation to remain above the Committee’s target for longer than anticipated” and the other risk of “the lagged cumulative effect of policy tightening could end up being more restrictive than is necessary to bring down inflation to 2 percent and lead to an unnecessary reduction in economic activity”. That points to a data-dependent risk management approach going forward. Fed’s Kashkari expects the Fed to raise the policy rate another 100 basis points Saying in an article, Minneapolis Fed President Neel Kashkari said that “it would be appropriate to continue to raise rates at least at the next few meetings” and indicated that he saw the ultimate rate going 100 basis points higher to 5.25%-5.50%, in 2023. He suggests that any sign of slow progress that keeps inflation elevated for longer will warrant the policy rate potentially much higher. Softer-than-Expected French CPI A day after a softer-than-expected German CPI report, December CPI in France also came in softer. French December headline CPI decelerated to 5.9% Y/Y from 6.2% in November as opposed to the expectation of a rise to 6.4% Y/Y.  French CPI EU Harmonized slowed to 6.7% Y/Y in December (consensus estimate: 7.3%) from 7.1% in November. U.S. JOLTS job openings stronger than expected U.S. JOLTS job openings declined to 10.46 million in November, above the consensus estimate of 10.01 million, from a revised 10.51 million (previously reported 10.33 million) in October. It implies that the ratio of vacancies to unemployment is 1.74, above the pre-pandemic level and the labor market will be considered by the Fed as being too tight. U.S. ISM Manufacturing Index fell to 48.4, slightly below expectations The ISM Manufacturing Index slid more than expected to 48.4 in December (consensus: 48.5) from 49.0 in November. New orders were weak, falling to 45.2 from 47.2. The price-paid sub-index decelerated to 39.4 in December (consensus: 42.9) from 43.0 in November. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Softer inflation prints from France, solid JOLTS job openings report, mixed messages from the FOMC minutes – 5 January 2023 | Saxo Group (home.saxo)
Russia Look Set To Double Its Exports For The First Half Of 2023

Russia Look Set To Double Its Wheat Exports For The First Half Of 2023

Saxo Bank Saxo Bank 05.01.2023 09:00
  Summary:  Equity markets managed to keep an even keel yesterday, with a lack of direction in US equity markets continuing well into its third week. Late yesterday, the minutes from the last FOMC meeting offered the latest pushback against market expectations for rate cuts as soon as year-end, while gold and especially the JPY eased back lower from their recent strength on treasury yields halting their slide. Tomorrow’s US jobs report for December offers the next test for global markets.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) The US equity market once again chopped back and forth yesterday as the action has been bottled up in a range in the S&P 500 for nearly three weeks. The market may be waiting for the next batch of US data and the impact on treasury yields for choosing a direction, with tomorrow’s batch of data the next important hurdle for markets. The technical focus for S&P 500 traders is the range low and the 61.8% Fibonacci retracement near 3,780 for the March futures contract. For Nasdaq 100 trader, the cycle low near 10, 750 and the nominal intraday lows from last October a bit lower still are the key focus. Ironically, strong US economy data may be the most negative for equity markets in the short run if yields jump. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hang Seng Index climbed more than 1% and CSI300 surged nearly 2% as China continue to roll out additional reopening measures and supports to the economy. On Thursday, China announced the much-anticipated gradual reopening of the border between Hong Kong and the mainland starting from January 8, 2023. Internet platform giants Alibaba (09988:xhkg) and Meituan (03690:xhkg), China restaurant chain Haidilao (06862:xhg), beer brewers China Resources Beer (00291:xhkg) and Budweiser (01876:xhkg) were among the top gainers within the Hang Seng Index. In A-shares, baijiu (Chinese white liquor) surged in anticipation of rebound in consumption. Electric equipment, household electronic appliances, and logistics stocks also outperformed. FX: JPY rally reversed, USDCNH testing key levels The US dollar found a modicum of support yesterday as treasury yields stabilized and as the Fed delivered the expected message in its latest set of meeting minutes – a pushback against market expectations for the Fed to cut rates as soon as this year. The next important step for the USD will be on tomorrow’s December jobs report and next Thursday’s December CPI release. USDJPY bounced well above 132.00 after its recent test below 130.00 on signs that the yen’s recent surge may need more support from new developments (a larger drop in global yields in particular) after resetting from 150.00+ in USDJPY terms. The Chinese yuan continued its resurgence on hopes for a boost to Chinese growth on the other side of the current Covid trauma, with USDCNH testing its 200-day moving average near 6.87 for the first time since April. Crude oil (CLG3 & LCOH3) Crude oil found a bid on Wednesday following a two-day tumble of more than 9% tumble on China demand and global growth worries. The bounce has so far primarily been driven by short covering while also signalling an end to selling from funds who bought the market aggressively ahead of yearend. For now, a surge in Covid-19 cases across China is clouding the near-term demand outlook, overshadowing optimism and delaying the timing of when commodity consumption in the world’s top importer will eventually rebound. The API reported a 3.3-million-barrel increase in US crude stocks with gasoline stocks also rising while distillates dropped. The EIA will release its weekly report later today. Gold (XAUUSD) sees increased two-way action after hitting fresh six-month high Gold’s run of gains extended to a fourth day on Wednesday but after touching $1865 some two-way actions emerged potentially signalling traders have started to book profit. Gold, silver and platinum have been favoured by traders during the first days of trading, with momentum from last year being carried over. Driven by recession and stock market valuation risks, an eventual peak in central bank rates combined with the prospect of a weaker dollar and inflation not returning to the expected sub-3% level by yearend. It is worth remembering that traders' conviction at the beginning of a new year always tends to be low for fear of catching the wrong move. At the same time, however, the fear of missing out can also drive a rapid build-up in positioning which subsequently can be left exposed should a change in direction occur. Focus on Friday’s US job report with resistance at $1865 & $1878 while the current strong uptrend may not be challenged unless the price breaks below $1800 Europe’s gas price (TTFMc1) slump continues Europe’s gas prices have fallen by more than 50% during the past month and on Wednesday the Dutch TTF futures contract closed at €65/MWH ($20/MMBtu), the lowest since October 2021. The slump has been driven by a combination of mild weather and at times strong production from renewables as well as reduced industrial consumption resulting in an unusual seasonal increase in inventories. Gas held in storage across Europe is currently 164 TWh above the five-year average and close to a full month of peak winter withdrawals. With LNG imports still strong and demand down by more than 10% the continent has now ended up in a situation, unthinkable just a couple of few months ago, where prices need to stay low in order to divert LNG shipments away from Europe in order not to overwhelm storage facilities. Wheat (ZWc1) tumbles on ample Black Sea supply. The Chicago wheat contract has lost more than 5% during the first trading days to trade near a one-month low. Forced lower by an abundance of low-price wheat from Russia and Ukraine providing stiff competition to U.S. exporters where production has been hit by drought, and recently, by severe cold. Russia, the world's largest wheat exporter, look set to double its exports to a record 21.3 million tons for the first half of 2023. This following a record grain crop of 151.0 million tons last year, including 102.7 million tons of wheat. In addition to strong Russian shipments, European Union soft-wheat exports are running about 6% higher than a year earlier, and Australia’s top shipper loaded a monthly record 2.18 million tons of grain in December. Yields on US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) stabilized after their steep fall to start the year US Treasury yields arrested their descent yesterday after the 10-year benchmark hit 3.66%, rising a few basis points. At the short end of the curve, yield pulled back slightly higher as well, perhaps lifted at the margin by a strong JOLTS survey for November and the ISM Manufacturing survey showing a stronger employment sub-index. The price action was little affected by the FOMC minutes release, which saw the Fed continuing its pushback against market expectations for easing as soon as year-end. Tomorrow’s US data, including the December jobs report and ISM Services Index, offer the next test for the treasury market. Read next: The EUR/USD Pair Is Trading Above 1.06 Again, The USD/JPY Pair Is Close To Level Of 131| FXMAG.COM What is going on? France’s inflation is cooling down BUT… Inflation is cooling down in several eurozone countries. France is the last example. In December, the EU-harmonized CPI rose 6.7 % year-over-year versus expected 7.3 %. On a monthly basis, inflation decreased 0.1 % versus expected +0.4 %. This is positive, of course. But it will likely not be sufficient for monetary policy to shift out of tightening mode just yet. There is a high risk that inflation will increase again in Spring/Summer this year due to higher energy prices. This could be fueled by a deficit in the oil market due to OPEC+ cuts and EU ban on Russian oil and difficulties filling gas inventories for next year in the EU. Therefore, it is too early to believe the peak in inflation is effectively behind us in the eurozone. The FOMC minutes sent out mixed messages FOMC participants worried that the downshift from a 75bp hike to a 50-hike would be interpreted by the market as the signal of a pivot and warned that “an unwarranted easing in financial conditions, especially if driven by a misperception by the public of the committee’s reaction function, would complicate the committee’s effort to restore price stability”. Nonetheless, the minutes showed that “many” participants argued for balancing two risks: the risk “insufficiently restrictive monetary policy could cause inflation to remain above the Committee’s target for longer than anticipated” and the other risk of “the lagged cumulative effect of policy tightening could end up being more restrictive than is necessary to bring down inflation to 2 percent and lead to an unnecessary reduction in economic activity”. That points to a data-dependent risk management approach going forward. Separately, Minneapolis Fed President Kashkari said in an article that he saw rate hikes “at least at the next few meetings”, leading to a terminal rate of 5.25-5.50%. UK Mortgage Approvals plunged in November A clear sign that higher interest rates are impacting the UK housing market, approvals plunged to 46.1k in November, a stunning drop from 59k in October and for wider perspective, a sign of very weak activity relative to the average of well over 60k approvals per month in the years before the pandemic outbreak. Amazon to lay off over 18k employees This was more than previously expected as the company over-expanded its warehouse and logistics infrastructure after the wild increase in demand from pandemic-era stimulus. Shares rose some 1.7% after hours yesterday. US House of Representatives still has no speaker The narrow Republican majority in the House after the mid-term elections last November means that nearly all Republicans must agree on a candidate, with a small cabal of Trumpist-leaning Republicans continuing to block the candidacy of Keven McCarthy, who failed three more votes yesterday in his effort to become the next Speaker of the House. This issue could gain considerable importance for the debt ceiling issue in the US if a more confrontational figure acceptable to the GOP extremists is eventually found. What are we watching next? US data today and tomorrow Today we will get the latest weekly US jobless claims number as this data series has yet to show material weakening in the US labour market, market bets of Fed cuts by year-end notwithstanding. The December ADP Private Payrolls data is also up today, with that data series showing a rather persistent decline in payrolls growth since Q2 of last year. It is expected at +150k after +127k in November. Tomorrow’s calendar is important as the Fed has clearly expressed the most uncertainty on the inflationary pressures from the employment-intensive services side of the economy. This could make the market sensitive to strong surprises in the Nonfarm payrolls change number (expected around +200k, with considerable recent attention on the divergence in this survey relative to the far weaker household survey used to calculate the overall unemployment rate) and average hourly earnings. Ninety minutes after the jobs data, we’ll have a look at the December ISM Services survey after November saw a surprising improvement in the survey to 56.5 after the cycle low of 54.4 in October. Earnings to watch The earnings calendar is light in the first week of the new year, but in a couple of weeks the first Q4 earnings releases will begin to be released. The Q4 earnings season will continue its focus on margin pressures related to input costs on employees and raw materials including energy. Today’s earnings focus is Walgreens Boots Alliance (WBA) and Conagra Brands, with WBA expected to -3% revenue growth y/y for the quarter that ended on 30 November adding to the series of quarters with negative revenue growth. Conagra Brands is expected to deliver 7% revenue growth y/y for the quarter that ended on 30 November as the manufacturer of packaged foods is able to pass on inflation to its customers. Today: Walgreens Boots Alliance, Conagra Brands, Lamb Weston, Constellation Brands, RPM International Friday: Naturgy Energy Economic calendar highlights for today (times GMT) 0900 – Poland Dec. Flash CPI 0930 – UK Final Dec. Services PMI 1000 – Eurozone Nov. PPI 1000 – Italy Dec. CPI 1230 – US Dec. Challenger Job Cuts 1230 – US Fed’s Harker (2023 FOMC voter) to speak 1315 – US Dec. ADP Private Payrolls change 1330 – Canada Nov. International Merchandise Trade 1330 – US Nov. Trade Balance 1330 – US Weekly Initial Jobless Claims 1400 – Poland National Bank Governor Glapinski press conference 1530 – EIA Natural Gas Storage Change 1600 – EIA Weekly Crude and Fuel Stock Report 1830 – US Fed’s Bullard (non-voter) to speak 2330 – Japan Nov. Labor Cash Earnings Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 5, 2023 | Saxo Group (home.saxo)
UK Manufacturing Surge Lifts Q2 Growth: Insights and Outlook

Samsung Suffers From Weakening Demand, Amazon Will Increase The Total Number Of Layoffs To Over 18,000

Kamila Szypuła Kamila Szypuła 05.01.2023 10:36
The remaining cuts in Amazon will bring the total number of redundancies to over 18,000 and will be implemented in the coming weeks. Samsung also has problems and suffers from a lack of demand for its products. Samsung Macroeconomic challenges hit Samsung hard last year as companies and consumers cut back on electronics spending after a shopping boom in the early stages of the pandemic. Demand for tech will remain weak as high inflation, rising interest rates and a strong dollar weigh on sales. This led to a sharp decline in demand for goods from Samsung, the world's largest manufacturer of smartphones, televisions and semiconductors. The drop in demand is a constant challenge for Smanung. According to analysts surveyed by data provider FactSet, Samsung's operating profit for the quarter ended December 31 was projected to be almost half as much as a year earlier. Currently, Samsung leads the global smartphone market in terms of total shipments, but Apple dominates the premium smartphone market. In recent years, Samsung has battled rival Apple to defend its share of the premium smartphone market, where most of the industry's profits are generated. Apple has created an exclusive ecosystem of connected products and services that helps attract new consumers and increase their retention. Samsung plans to overcome current market challenges by strengthening the integration of connected devices and related software, an area where it has previously lagged behind rivals such as Apple Inc. For now, Samsung smartphone users can set the washing machine to complete its cycle when they get home and turn on music on the Samsung TV, and the stereo speakers will automatically turn on to the beat of the music. The user can also scan the barcode on a package of frozen hot dogs with a smartphone, and Samsung's microwave oven will heat the product according to the instructions. Samsung has created a new umbrella team made up of employees from each product unit to work to improve the user experience across multiple devices, said Han Jong-hee, vice president and general manager of the South Korean tech company. The team office includes rooms imitating real houses and other spaces where connected devices are tested and developed in many scenarios. Since October 2021, Samung shares have skyrocketed significantly. After peaking at 88,800, it declined. The year 2022 was in a downward trend. This year, the company's shares started at 55,500 and began to grow. Currently, Samsung shares are trading at 58,200. Read next: How Dream Sports Built Its Value, High Inflation And Its Impact On The Hedge Fund| FXMAG.COM Amazon The Seattle-based company said in November it was starting layoffs, with the cuts focused on its appliance, recruitment and retail business. More than 18,000 workers will be affected, the biggest cut recorded last year at a major tech company as the industry recoils amid economic uncertainty. The layoffs are concentrated within the company's corporate ranks and account for about 5% of that portion of its workforce and 1.2% of its 1.5 million employees as of September. Amazon was one of the biggest beneficiaries of the Covid-19 pandemic as customers flocked to shop online. The rush into Amazon's various businesses, from e-commerce to groceries and cloud computing, has accelerated the company's years of growth. To keep up with demand, Amazon doubled its logistics network and added hundreds of thousands of employees. When demand began to wane and customers returned to in-store shopping, Amazon initiated an extensive cost-cutting review to cut back on units that were unprofitable. In the spring and summer, the company made targeted cuts to lower costs by closing physical stores and business units such as Amazon Care. Amazon later announced a company-wide hiring freeze before opting to lay off employees. Many tech companies cut jobs as the economy worsened. Last time, ending 2022, Amazon shares were below 90. They ended the year at 84.18, and are now slightly up to 87.19. Source: wsj.com, finance.yahoo.com
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

Tesla rebounded 5.12%, General Motors rose 2.57%, Micron Technology traded 7.6% higher, and Meta Platforms rose 2.11%

Intertrader Market News Intertrader Market News 05.01.2023 11:22
DAILY MARKET NEWSLETTER January 5, 2023               Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 14,524.00 -26.00 (-0.18%) Read the analysis 14,580.00 14,380.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,600.00 7,510.00     S&P 500 (CME) 3,871.25 -3.25 (-0.08%) Read the analysis 3,894.00 3,843.00     Nasdaq 100 (CME) 10,977.75 -21.50 (-0.20%) Read the analysis 11,050.00 10,850.00     Dow Jones (CME) 33,384.00 -32.00 (-0.10%) Read the analysis 33,550.00 33,170.00     Crude Oil (WTI) 73.70 +0.86 (+1.18%) Read the analysis 72.70 74.30     Gold 1,851.36 -3.20 (-0.17%) Read the analysis 1,865.00 1,846.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Wednesday, U.S. stocks closed higher. The Dow Jones Industrial Average rose 133 points (+0.40%) to 33,269, the S&P 500 climbed 28 points (+0.75%) to 3,852, and the Nasdaq 100 was up 52 points (+0.48%) to 10,914.Minutes of the Federal Reserve's December monetary-policy meeting showed no surprise or new information about the central bank's latest rate-hike decision.Regarding U.S. economic data, the Institute for Supply Management (ISM) manufacturing purchasing managers index fell to 48.4 in December (vs 49.0 expected). The U.S. Labor Department reported that the number of job openings declined to 10.458 million in November (vs 10.100 million expected).The U.S. 10-year Treasury yield fell a further 5.2 basis points to 3.687%.Automobiles (+4.42%), semiconductors (+2.61%), and consumer services (+2.31%) sectors were the top performers.Tesla (TSLA) rebounded 5.12%, General Motors (GM) rose 2.57%, Micron Technology (MU) traded 7.6% higher, and Meta Platforms (META) rose 2.11%.Also, Bath & Body Works (BBWI) jumped 10.51%, and Salesforce.com (CRM) gained 3.57%.Alibaba (BABA) jumped 12.98% after Jack Ma, the company's founder, was allowed by the Chinese government to raise funds for his financial unit Ant Group.On the other hand, Microsoft (MSFT) fell 4.37% after the stock was downgraded to "neutral" from "buy" at UBS.European stocks also closed higher. The DAX 40 rose 2.18%, the CAC 40 increased 2.30%, and the FTSE 100 was up 0.41%.Oil prices dropped further as investors kept worrying about fuel demand amid a slowing global economy and surging Covid cases in China. U.S. WTI crude futures sank $3.80 (-4.94%) to $73.15 a barrel.Gold price increased $15 to $1,855 an ounce.Market Wrap: ForexThe U.S. dollar softened against other major currencies. The dollar index retreated to 104.24.AUD/USD surged 113 pips (+1.68%) to 0.6840 after the Chinese government allowed coal imports from Australia, the first time since 2020.EUR/USD gained 59 pips to 1.0607. France's data showed that the inflation rate slowed to 5.9% on year in December (vs +6.3% expected).GBP/USD climbed 89 pips to 1.2057.USD/JPY jumped 167 pips to 132.69.USD/CHF fell 59 pips to 0.9301, and USD/CAD slumped 191 pips to 1.3480.Bitcoin traded higher along with other risky assets, climbing to $16,800.Morning TradingIn Asian trading hours, AUD/USD eased to 0.6812 from 0.6840 in the prior session. China's Caixin services purchasing managers index rebounded to 48.0 in December from 46.7 in November, above 44.5 expected.Meanwhile, EUR/USD rose further to 1.0615 while GBP/USD slipped to 1.2050.USD/JPY retreated to 132.00.Gold was steady to $1,855.Bitcoin held gains at $16,830.Expected TodayFinal readings of December S&P Global services purchasing managers index is expected at 50.0 for the U.K. and 44.4 for the U.S.The eurozone's November producer prices index is estimated to be up 28.2% on year.Germany's November trade surplus is estimated at 4.5 billion euros.In the U.S., December ADP private jobs are expected to increase by 150,000, while weekly initial jobless claims are estimated at 230,000. Also, November trade deficit is anticipated at 72 billion dollars.           UK MARKET NEWS           Next, a retailer, reported that full price sales were up 4.8% on year in the nine weeks to December 30, better than its previous guidance of 2.0% decline for the period. The company has lifted its full-year profit before tax guidance by 20 million pounds to 860 million pounds.B&M European Value Retail, a variety store chain, posted third quarter revenue of 1.57 billion pounds, up 12.3% on year. The company said full-year adjusted EBITDA is now expected to be in the range of 560 - 580 million pounds, "ahead of current analysts' consensus estimate of 557 million pounds".Ryanair, an airline group, said it expects to report a stronger than expected third quarter profit after tax of close to 200 million euros, and has raised its full-year net profit guidance (pre-exceptionals) from a current range of 1.00 - 1.20 billion euros to a new range of 1.325 - 1.425 billion euros.Construction & Materials, banks and retail shares gained most in London on Tuesday.From a relative strength vs FTSE 100 point of view, Aviva (+1.76% to 456.8p) crossed above its 50-day moving average.From a relative strength vs FTSE 100 point of view, Anglo American (-2.66% to 3180p) crossed under its 50-day moving average.From a technical point of view, Ashtead Group (+2.29% to 4910p), BT Group (+5.05% to 120.6p) crossed above their 50-day moving average.From a technical point of view, BP (-3.62% to 465.85p) crossed under its 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   04:30 S&P Global/CIPS UK Services PMI Final (Dec) 50 MEDIUM     08:15 ADP Employment Change (Dec) 150k MEDIUM     08:30 Balance of Trade (Nov) -72B HIGH     08:30 Initial Jobless Claims (Dec/31) 230k MEDIUM     08:30 Exports (Nov) 251.4B MEDIUM     08:30 Imports (Nov) 323.4B MEDIUM     09:20 Fed Bostic Speech   MEDIUM     09:45 S&P Global Composite PMI Final (Dec) 44.6 MEDIUM     09:45 S&P Global Services PMI Final (Dec) 44.4 MEDIUM     11:00 EIA Gasoline Stocks Change (Dec/30) -486k MEDIUM     11:00 EIA Crude Oil Stocks Change (Dec/30) 1.154M MEDIUM     13:20 Fed Bullard Speech   MEDIUM                                     NEWS SENTIMENT           Glencore PLC GLEN : LSE 506.60 GBp -9.26% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Standard Chartered PLC STAN : LSE 660.40 GBp +4.86% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Prudential PLC PRU : LSE 1,239.50 GBp +9.30% In the last 5 days         NEWS SENTIMENT (24H) Very Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   GSK PLC GSK : LSE 1,447.80 GBp +0.22% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Bayerische Motoren Werke AG BMW : XETRA 87.88 EUR +4.83% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Rio Tinto PLC RIO : LSE 5,845.00 GBp +0.19% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: supported by a rising trend line.   Pivot: 1.0580   Our preference: Long positions above 1.0580 with targets at 1.0645 & 1.0670 in extension.   Alternative scenario: Below 1.0580 look for further downside with 1.0560 & 1.0540 as targets.   Comment: The RSI shows upside momentum.                     Euro Stoxx 50 (Eurex)‎ (H3)‎ Intraday: bullish bias above 3928.00.   Pivot: 3928.00   Our preference: Long positions above 3928.00 with targets at 3990.00 & 4024.00 in extension.   Alternative scenario: Below 3928.00 look for further downside with 3894.00 & 3869.00 as targets.   Comment: Investors have to remain cautious since these levels may trigger profit taking.                     Brent (ICE)‎ (H3)‎ Intraday: key resistance at 79.30.   Pivot: 79.30   Our preference: Short positions below 79.30 with targets at 77.70 & 76.60 in extension.   Alternative scenario: Above 79.30 look for further upside with 80.60 & 81.90 as targets.   Comment: As long as 79.30 is resistance, look for choppy price action with a bearish bias.        
At The Close On The New York Stock Exchange Indices Closed Mixed

At The Close Of The New York Stock Exchange, The NASDAQ Composite Had The Biggest Growth

InstaForex Analysis InstaForex Analysis 09.01.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 2.13%, the S&P 500 rose 2.28%, and the NASDAQ Composite rose 2.56%. Dow Jones The leading performer among the Dow Jones index components in today's trading was Intel Corporation, which gained 1.17 points or 4.25% to close at 28.73. Walgreens Boots Alliance Inc rose 1.42 points or 4.04% to close at 36.61. Dow Inc rose 2.11 points or 3.99% to close at 55.02. The biggest losers were UnitedHealth Group Incorporated, which gained 0.04 points (0.01%) to end the session at 490.00. Home Depot Inc was down 0.65% or 2.06 points to close at 317.53, while Chevron Corp was up 0.75% or 1.32 points to close at 176. 56. S&P 500 The leading performers in the S&P 500 index today were Costco Wholesale Corp, which rose 7.26% to 482.87, Old Dominion Freight Line Inc, which gained 6.83% to close at 300.70. , as well as shares of IDEXX Laboratories Inc, which rose 6.82% to close the session at 447.77. The biggest losers were Baxter International Inc, which shed 7.84% to close at 48.45. Shares of Waters Corporation shed 7.15% to end the session at 322.21. Quotes of Thermo Fisher Scientific Inc decreased in price by 3.94% to 535.00. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Swvl Holdings Corp, which rose 115.36% to hit 0.30, Medavail Holdings Inc, which gained 80.19% to close at 0.56, and also shares of Golden Sun Education Group Ltd, which rose by 77.78%, ending the session at around 2.24. The biggest losers were Fate Therapeutics Inc, which shed 61.45% to close at 4.24. Shares of Nabriva Therapeutics AG shed 44.84% to end the session at 1.30. Quotes of Graphite Bio Inc decreased in price by 39.54% to 1.85. Numbers On the New York Stock Exchange, the number of securities that rose in price (2655) exceeded the number of those that closed in the red (459), while quotes of 79 shares remained virtually unchanged. On the NASDAQ stock exchange, 2689 companies rose in price, 1087 fell, and 190 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 5.92% to 21.13. Gold Gold futures for February delivery added 1.66%, or 30.50, to hit $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 0.14%, or 0.10, to $73.77 a barrel. Futures for Brent crude for March delivery fell 0.14%, or 0.11, to $78.58 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 1.18% to 1.06, while USD/JPY shed 0.99% to hit 132.09. Futures on the USD index fell 1.12% to 103.65.       Relevance up to 03:00 2023-01-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/307765
FX Daily: Upbeat China PMIs lift the mood

The Chinese Authorities Are Considering To Relax Restrictions On Highly-Leveraged Property Developers

Saxo Bank Saxo Bank 09.01.2023 08:32
Summary:  U.S. stocks surged over 2% following the ISM services index shrinking to 49.6 and average hourly earnings growth slowing to 0.3% M/M in December from a downward revised 0.4% in November (previously reported 0.6%). Investors became more optimistic about inflation having peaked because of these unexpected weaknesses in services and wages. Yields on 10-year Treasury notes plunged 16 basis points to 3.56%. The dollar fell against all G10 currencies with the Dollar Index shedding 1.1%. Gold and copper advanced. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) surged more than 2% on slowing wage growth and activities in services in contraction Bad news once again was good news for equities last Friday when the U.S. released slower wage growth in December as well as in November (a downward revision) and the ISM services index plunged unexpectedly by 6.9 points to 49.6 and into the contraction territory.  Investors noted that Fed Chair Powell had emphasized in his recent speeches that the price of core services other than housing, which was driven by wages and service sector activities, is the most important price category to consider for understanding the future evolution of inflation. Despite the higher-than-expected prints in non-farm payrolls and a lower unemployment rate, Nasdaq 100 rose 2.8% and S&P 500 climbed 2.3%. All 11 sectors within the S&P500 gained, with materials, up 3.4%, leading, followed by information technology, and real estate. Tesla recovered from early losses on cutting prices in China and bounced 2% Tesla China has cut again the price of its Model 3 by 13.5% to RMB 20,990 (USD3,350) and Model Y by 10% to RMB 25,990 (USD3,790) in China within three months from the prior price cut.  Following the news, shares of Tesla (TSLA:xnas) plunged as much as 7.7% in early trading but recovered throughout the day and managed to finish the Friday session 2% higher. Costco (COST:xnys) surged 7.2% on strong December sales Costco reported U.S. comparable sales rose 6.4% in December 2022, above the 5% expected by street analysts. The strong holding sales performance saw the bulk retailer’s share price advance 7.2% last Friday. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) soared with yields on the 10-year notes 16bps richer to 3.56% Treasuries were bid following the growth in average hourly earnings slowed to 0.3% M/M and 4.6% Y/Y from a revised down 0.4% M/M (previously reported 0.6%) and 4.8% Y/Y (previously reported 5.1%). Yields oscillated for a while as investors weighed the soft wage growth against the solid payrolls and fall in unemployment rates. Decisive declines in yields came after the release of the ISM Services Index which unexpectedly collapsed to 49.6 in December from 56.5 in November, indicating contracting activities in the service sector. A service sector in contraction may help cool down inflation in core services excluding housing which is the focus of Fed Chair Powell. Yields on the 2-year notes fell by 21bps to 4.25% and those on the 10-year notes became 16bps richer to 3.56%. What should you be watching today in equities across APAC; Copper, gold, iron ore The Australian share market (ASXSP200.I) opened 1% higher today, following the stellar close of US shares. This week we could also see some money deployed that was removed from the market from the end of US financial year two weeks ago. In terms of key pockets of potential gains to watch; Commodity stocks could likely to do well as there is room for the Fed to not be as hawkish. The copper price rose 2.4% to its highest level since November, which will could likely boost copper stocks today and this week, and spot gold price jumped 1.8% to a range it last traded in June last year. Also keep an eye on coal stocks this week, as coal demand usually peaks in January and Chinese authorities are in discussion on a partial end to the Australian coal ban. So keep an eye on Whitehaven Coal and New Hope. Meanwhile, iron ore equities may be possible laggards. Vale, Champion Iron, Fortescue Metals, BHP and Rio will be on watch as the Iron ore price (SCOA) has fallen 1.3% from its five month high as buying of iron ore is expected to grind lower as China heads to lunar new year holidays. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hong Kong stocks consolidated in a choppy session. Shares of Chinese developers surged in the morning session, following China’s central bank and bank regulator jointly issued a directive to allow banks in cities with declining home prices to lower mortgage interests below the floor dictated current policies. Adding to fuel the rally in property developers was the comment from China’s Minster of Housing and Urban-Rural Development in an interview with the People’s Daily, pledging support to the financing needs of developers and reports suggesting that China is considering relaxing the “three red lines” that constraining highly leveraged developers from getting new financing. Stocks however turned to the south after the lunch break. President of the China Society of Economic Reform said the Chinese Government will roll out “some forceful measures” to redistribute income and “establish a mechanism to regulate wealth accumulation” in order to advance “common prosperity”.   Hang Seng Index finished last Friday 0.3% lower. Alibaba Health (00241:xhkg), Meituan (03690:xhkg), and Haidilao (06862:xhkg) were among the biggest losers with the Hang Seng Index. EV stocks fell, following the news that Tesla China has cut again the price of its Model 3 and Model Y in China within three months from the prior price cut. In A-shares, China’s CSI300 advanced by 0.3% with solar names, lithium battery makers, electric equipment, non-ferrous metal, petrochemicals, and basic chemicals leading. FX: the dollar declined versus G10 currencies on Friday The USD posed a bullish breakout from the three-week range at the start of 2023 but aggressively snapped back after a disappointing PMI release on Friday as 10-year yields dipped back towards 3.55%. NOK, AUD and NZD were the biggest gainers against the USD on Friday, with AUD also benefitting from China reopening. AUDNZD remains supported above 1.0800 with USDCNH testing support at 6.8200 on the Chinese reopening wave with extra vigour via strong PBoC midpoint fixes and measures aimed at propping up the ailing real estate sector. USDJPY slid to 132 with BOJ Governor Kuroda sticking to dovish intentions but PM Kishida once again saying over the weekend that he will have 'discussions' with new BOJ governor. The Aussie dollar flagged a bullish signal, crossing above the 200-day moving average The US dollar suffered its longest streak of weekly falls in two months. So that’s supporting other currencies higher. In particular, the commodity currency, the Aussie dollar broke above its 200-day moving average, which could be seen as a bullish sign. The Aussie dollar trades at two-month highs of 68.85 US cents. What's also supporting the Aussie dollar is that China’s reopening is expected to add considerably to Australia’s GDP. Some economists predict a 0.5% addition to GDP in a year once Chinese students and tourists return. JPMorgan thinks over the next two years Aussie GDP will grow near 1% thanks to inbound Chinese students and holiday makers likely returning. Crude oil (CLG3 & LCOH3) remains volatile amid China’s chaotic reopening The first week of 2023 was tough for crude oil, with global demand concerns weighing and China outlook remaining mixed. Despite removing most virus-related restrictions, a surge in cases across the country could stifle economic activity. Meanwhile, the IMF warned that a third of the global economy could be in recession in 2023. Supply side concerns are also seen with European sanctions on Russian oil having kicked in, while OPEC has reiterated that it is willing to step in with further production cuts. WTI futures traded slightly higher to $74/barrel in Asian morning while Brent was close to $78.90. Gold (XAUUSD) advanced over 2% on weaker USD Gold is off to a positive start in 2023, and a further boost was seen on Friday after the mixed jobs report and weakness in ISM services saw a plunge in the USD. However, demand ahead of Lunar New Year is likely to stay strong, and central banks are also active in the physical market. People’s Bank of China bought another 30 tonnes of gold in December 2022, following 32 tonnes in November, boosting the country's stash of gold to 2,010 tonnes. Speculation remains rife that these are steps for China to move away from dollar-based trading as geopolitical tensions remain high. Gold prices are testing $1870 this morning and support at $1808 will be key to hold to maintain the uptrend. US CPI data due this week remains key. Copper getting in close sight of $4 as China stimulus continues Copper is leading a rebound in base metals as China looked to support its property sector. Beijing may allow some firms to add leverage by easing borrowing caps and push back the grace period for meeting debt targets. These were part of the “three red lines” policy that contributed to the downturn in recent years. HG Copper broke above resistance at the 200-day at $3.8525, and will be targeting the $4 per pound next.  Read next: The U.K. Economy Is In Trouble, Fall Of GDP Is Expected!| FXMAG.COM What to consider? US macro: Big miss in ISM services overshadows NFP gains The ADP report from last week had set up expectations for a stronger NFP print on Friday, and while the headline came in stronger and with a drop in unemployment but the market instead focused on significantly slower wage growth and the reaction was dovish, with the US dollar sagging. Still, the report doesn’t change the fact that US labor market remains tight and WSJ’s Timiraos also noted that Friday’s employment report does little to clarify how much the Fed will raise interest rates at its next policy meeting. Nonfarm payrolls showed US employers added 223,000 jobs last month, from a downwardly revised 256,000 in November, with the unemployment rate hitting a cycle low of 3.5% again. Wage growth however slowed to 4.6% YoY (0.3% MoM) in December from a revised 4.8% YoY (0.4% MoM) in November, keeping the market reaction to the overall jobs report mixed, before the big disappointment from ISM services which surprisingly dipped into contraction for the first time since May 2020 to 49.6 vs. expected 55. The forward-looking sub-indicator, new orders, fell 10.8 pts to 45.2 but details were still mixed with 11 of the 18 services sector remaining in expansion. Fed speakers continue to highlight inflation concerns A host of Fed speakers were on the wires on Friday, and key message was the need for more rate hikes still despite signs of price pressures cooling. Cook (voter) said inflation is "far too high" and "of great concern" despite recent encouraging signs, while Bostic (non-voter) said the Fed needs a target rate above 5% and he expects Fed to hold at a peak policy rate for an extended period, "well into 2024". Barkin, another non-voter, touched more on inflation saying that that the Fed is still resolute on inflation, and needs to stay on the case until inflation is sustainably back to the 2% goal. Retiring member Evans however called for a slower pace of rate hikes. The eurozone inflation is cooling down It was largely expected that the eurozone inflation would cool down in December. But the first estimate is actually much lower than forecasted, at 9.2 % versus prior 10.1 % in November. This is a positive development and it goes in the right direction, of course. But this is still a high number. Looking at the main components, energy had (without surprise) the highest annual rate in December at 25.7 %), followed by food, alcohol and tobacco (13.8 %), non-energy industrial goods (6.4%) and services (4.4%). What is worrying is that core CPI continues to increase at 5.2 % versus prior 5.0 % and expected 5.1 %. This will push the European Central Bank (ECB) to keep hiking interest rates in the short-term. But the peak in interest rates is getting closer (Mario Centeno) and the eurozone macroeconomic outlook is not that bad actually (if there is a recession underway, it is at the mild end according to the ECB chief Philip Lane). Alibaba’s Jack Ma cedes his control of Ant Group According to a statement released by the company on 7 January, Jack Ma terminated his acting-in-concert arrangement with other individuals. Under the new structure, 10 individuals, including Mr. Ma, have independent voting rights in the management of the company, as opposed to the prior arrangement that gave Mr. Ma indirect control of 53,46% of the voting rights. Mr. Ma’s stake in Ant Group is reduced to 6.2% from 10.6%. China’s government think-tank said China is launching measures to regulate wealth accumulation President of the China Society of Economic Reform, which is under the National Development and Reform Commission (NDRC), said in a reform forum that the Chinese Government is launching “some forceful measures” to redistribute income, increase taxes, social security, and transfer payments, and “establish a mechanism to regulate wealth accumulation” in order to advance “common prosperity”. Establishing a mechanism to regulate wealth accumulation was first mentioned in President Xi’s work report delivered at the Chinese Communist Party’s 20th National Congress as a means to advance common prosperity. China is reportedly considering to relax the three red-line policy that restrained developers from borrowing According to Bloomberg, the Chinese authorities are considering to relax restrictions on highly-leveraged property developers from increasing their borrowings. The uplift of the restrictions would be important addition to the recent support measures to the real estate sector in China. The three red lines that were introduced in 2020 restrict developers’ ability to borrow if their debts have gone beyond the stipulated limits relative to assets, net debt, or cash. For our look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Contraction in US ISM services and soft wage growth overshadows strong jobs numbers – 9 January 2023 | Saxo Group (home.saxo)
Sterling Slides as Market Anticipates Possible Final BOE Rate Hike Amidst Weakening Consumer and Housing Market Concerns

The Market Is Betting On A Shallow Recession In Some Parts Of The World

Saxo Bank Saxo Bank 09.01.2023 09:58
Summary:  Markets jumped higher on Friday after a mixed December jobs report from the US, mostly reacting a bit later in the session to the very weak December ISM Services survey, which suggests a rapidly decelerating services sector. US rates plunged all along the curve and the USD tanked as the market lowered Fed rate hike expectations, and risk assets rallied, with a further tailwind from China’s huge policy shifts in recent weeks.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) On Friday, it seems the market was looking past the strong labour market data focusing on the miss on the ISM Services Index in December at 49.6 vs 55. This bolsters the view that bad news is good news as it will cause the Fed to halt its monetary tightening sooner rather than later. Our view is still the same that inflation will remain stickier than what the market expects and thus even a mild slowdown in the economy will not lead to substantially lower interest rates. When the market recognizes this, it will begin to price equities more on slowing growth not offset by lower interest rates. Nevertheless, the US equity market is picking up momentum with S&P 500 futures extending their gains up 0.2% trading around the 3,924 level and above the upper level of the recent trading range. If momentum extends and the news flow remains supportive then the 3,950 level could quickly come into play. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Alibaba (09988:xhkg), surging 7.6%, was the best performing stock within the Hang Seng Index on Monday, following Ant Group announcing a new arrangement in which Alibaba’s founder Jack Ma cedes his indirect control of Ant Group. The new arrangement, which apparently has the blessing of the Chinese authorities, signals that Alibaba and its affiliates may be close to an end of the government-imposed reorganization and return to relative normal business.  Separately, Chairman of the China Banking and Insurance Regulatory Commission said that the rectification of the financial arms of internet platform companies had basically finished. Hang Seng Index surged 1.4% as of writing. China’s CSI300 gained 0.7% with non-ferrous metal, education services, and poultry farming leading. FX: USD sells off on weak ISM Services survey The US dollar sold off after a mixed jobs report delivered not signal, but then a shocking drop in the December ISM Services (more below) took down US treasury yields sharply all along the curve. By this morning’s trade, the move sent EURUSD back above 1.0675 and within reach of the 1.0700+ highs from December, while AUDUSD jumped to new cycle highs above 0.6900 on the weaker greenback together with surging metals prices on China’s policy shift (more below.). Despite the big drop in yields, USDJPY reacted less than other USD pairs as the strong rally in risk sentiment saw flows focusing on more pro-cyclical currencies, like AUD, NZD and NOK. Crude oil (CLG3 & LCOH3) remains volatile amid China’s chaotic reopening The first week of 2023 was tough for crude oil, driven by global growth concerns, a very mild winter across the Northern Hemisphere dampening demand, and a mixed outlook for China. Despite removing most virus-related restrictions, a surge in cases across the country has hit the short-term demand outlook while at the same time setting the economy on a path to recovery. Meanwhile, the IMF warned that a third of the global economy could be in recession in 2023. Supply side concerns are also seen with European sanctions on Russian oil having kicked in, while OPEC has reiterated that it is willing to step in with further production cuts. Short-term resistance being the 21-day moving at $75.65 in WTI and $81.15 in Brent. Gold (XAUUSD) surged higher on weak US ISM Gold’s already positive start to 2023 received a further boost on Friday after the mixed jobs report and very weak ISM services (see below) triggered a plunge in yields and the dollar. Total ETF holdings reached a one-month high while central banks remain active with the PBoC saying that it bought another 30 tonnes of gold in December 2022, following 32 tonnes in November, boosting the country's stash of gold to 2,010 tonnes. Speculators started the new year by boosting their net futures long to a seven-month high, supported by the current strong momentum and a general gold friendly outlook for 2023 driven by recession risks and peak dollar and yields. The next major hurdle for gold being $1896, the 61.8% retracement of the 2022 correction, with a break above confirming the change in direction that has been under way since November. Copper trades near key $4 level as China stimulus continues Copper jumped to a six-month high in Asia on Monday, driven by a general rebound in base metals as China looked to support its property sector. Beijing may allow some firms to add leverage by easing borrowing caps and push back the grace period for meeting debt targets. These were part of the “three red lines” policy that contributed to the downturn in recent years. Copper has advanced since November after lockdown protests led to an abrupt change in direction towards reopening the economy following months of fruitless lockdowns. The change in direction set by the government has bolstered the outlook for demand beyond the first quarter. Having broken above its 200-day moving average on Friday, now support at $3.8475, HG copper almost touched the key $4 level overnight. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) soared with yields on the 10-year notes 16bps richer to 3.56% Treasuries were bid Friday following the news of slowing average hourly earnings. Yields oscillated for a while as investors weighed the soft wage growth against the solid payrolls and fall in unemployment rates. Decisive declines in yields came after the release of the shockingly wevak December ISM Services Index (more below on the ISM and US jobs report), indicating contracting activities in the service sector. Two-year yields fell 21bps to 4.25% and those on the 10-year notes dropped some 16 bps to 3.56%. What is going on? Asian and EM equities enter bull market The leading MSCI indices tracking these two segments of the global equity market have entered a bull market up 20% since their lows in October fueled a more positive narrative. The market is betting on a shallow recession in some parts of the world, while inflation keeps coming down, and on top of a successful kickstart of the Chinese economy. All three wishes may not be able to be fulfilled simultaneously and our view is that the market is getting too excited about growth too early as a lot of uncertainty persists. Eurozone inflation is cooling off It was largely expected that the eurozone inflation would cool in December. But the first estimate was much lower than forecasted, at 9.2 % versus 10.1 % in November. This is a positive development and goes in the right direction, but this is still a high number. Looking at the main components, energy had (without surprise) the highest annual rate in December at 25.7 %), followed by food, alcohol and tobacco (13.8 %), non-energy industrial goods (6.4%) and services (4.4%). What is worrying is that core CPI continues to increase at 5.2 % versus prior 5.0 % and expected 5.1 %. This will push the European Central Bank (ECB) to keep hiking interest rates in the short term. But the peak in interest rates is getting closer (Mario Centeno) and the Eurozone macroeconomic outlook is not as bad as feared (if there is a recession underway, it is at the mild end according to the ECB chief Philip Lane). US macro: big miss in ISM services overshadows NFP gains The ADP report from last week had set up expectations for a stronger NFP print on Friday, and while the headline came in stronger than expected at ´+223k and the unemployment rate dropped back to the cycle low of 3.5%, the market instead focused on significantly slower wage growth than expected. The Average Hourly Earnings in December slowed to 4.6% YoY (0.3% MoM) from a revised 4.8% YoY November, keeping the market reaction to the overall jobs report mixed. Ninety minutes later, the December ISM services survey saw a shocking drop into contraction for the first time since May 2020 at 49.6 vs. expected 55 and 56.5 in November. The forward-looking New Orders sub-index fell over 10 points to 45.2 but details were still mixed with 11 of the 18 services sectors remaining in expansion. AUDUSD jumps to new 4-month high, clears 200-day moving average With the US dollar suffering its longest streak of weekly drops in two months, the Aussie dollar broke above its 200-day moving average for the first time since last April, and traded above 0.6900 for the first time since last August. Also supporting the currency is that China’s reopening is expected to add considerably to Australia’s GDP. There’s a potential 0.5% addition to GDP in a year once Chinese students and tourists return, and an anticipated rise in commodity exports to China, especially coal after a prior ban, could add an extra boost to GDP. JPMorgan thinks that over the next two years, Aussie GDP will grow 1% alone thanks to inbound Chinese students and holiday makers likely returning. The next catalyst for the currency is inflation (CPI) data out on Wednesday Jan 11. Core or trimmed CPI is expected to have risen from 5.3% YoY to 5.5% YoY. Fed speakers continue to highlight inflation concerns A host of Fed speakers were on the wires on Friday, and key message was the need for more rate hikes still despite signs of price pressures cooling. Cook (voter) said inflation is "far too high" and "of great concern" despite recent encouraging signs, while Bostic (non-voter) said the Fed needs a target rate above 5% and he expects Fed to hold at a peak policy rate for an extended period, "well into 2024". Barkin, another non-voter, touched more on inflation saying that that the Fed is still resolute on inflation, and needs to stay on the case until inflation is sustainably back to the 2% goal. Retiring member Evans however called for a slower pace of rate hikes. Read next: Plans To Sell FTX Assets Met With Opposition From US Trustee Andrew Vara| FXMAG.COM What are we watching next? How long will market celebrate any additional signs of a slowing US economy? The market’s primary focus on Friday after a very weak US ISM Services survey was the celebration of lower US treasury yields as weak data drives expectations that the Fed can ease its policy tightening more quickly than previously expected, but typically, a weaker economy would mean falling earnings and a credit crunch, which drives markets lower. Only hopes for a benign “soft landing” can continue to see the market celebrating signs of a weakening economy, if that is indeed what we get. This week includes very little in the way of important US data outside of Thursday’s December CPI (perhaps less focus there than previously, given we have seen a number of softer inflation-related data of late). Q4 Earnings season begins this Friday with the largest US financial institutions reporting and the reports and guidance coming over the following couple of weeks will bear close watching. Earnings to watch The Q4 earnings season kicks off this Friday with banking earnings from Bank of America, JPMorgan Chase, and Citigroup with consensus expecting earnings to continue contracting among US banks before coming back to growth this year. The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession or maybe no recession at all in the US economy. With higher interest rates level expectations are that banking revenue will slowly begin to accelerate and if high interest rates persist for an extended period, the longer-term growth for banks could be quite attractive. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Tuesday: Albertsons Thursday: Fast Retailing, Seven & I Friday: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Economic calendar highlights for today (times GMT) 1000 – Eurozone Nov. Unemployment Rate 1200 – Mexico Dec. CPI 1330 – Canada Nov. Building Permits 1530 – UK Bank of England Chief Economist Huw Pill to speak 1730 – US Fed’s Bostic (non-voter) to speak 1730 – US Fed’s Daly (non-voter) to speak 2000 – US Nov. Consumer Credit 2330 – Japan Dec. Tokyo CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 9, 2023 | Saxo Group (home.saxo)
The UK Contracts Faster Than Expected in July, Bank of England Still Expected to Hike Rates

Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off

Kamila Szypuła Kamila Szypuła 09.01.2023 12:22
Salesforce said about 80 Fortune 100 companies use Slack. The move to combine an ever-widening range of IT software and services into a single platform could backfire. Salesforce acquired Slack Salesforce, which confirmed plans to acquire Slack in December 2020, was a pioneer in selling cloud-based customer relationship management software on a subscription basis. Salesforce.com Inc has agreed to buy Slack Technologies Inc., a $27.7 billion messaging company, shows how the biggest players in cloud computing are racing to get stronger in the face of the remote work boom during the pandemic. It was the biggest move ever made by Salesforce CEO Marc Benioff, a pioneer in selling software subscriptions that run on remote servers, to transform the company he founded 21 years ago into a broadly established powerhouse in enterprise technology tools. The deal is almost twice the size of Salesforce's largest acquisition to date. It was intended to turn the combined company into a more threatening competitor to Microsoft Corp. The acquisition was aimed at taking over the fast-growing market for communication and collaboration software during the Covid-19 pandemic as employers sent employees home and switched to remote systems. Currently, companies in the market for customer relationship management software - Salesforce's flagship product - do not seem to be thrilled with the addition of messaging and collaboration. Slack can still be purchased as a standalone app, outside of Salesforce CRM tools. Dark side Since the acquisition, Slack's revenue growth has steadily declined. Salesforce reported approximately $402 million in revenue from Slack subscriptions and support in the fiscal third quarter ending Oct. 31. That's an increase of 6.9% quarter-over-quarter, but reflects a slowdown from 9.3% growth in the second quarter and 11.7% growth in the first quarter, based on revenue data from the company's earnings reports. Meanwhile, on Wednesday, Salesforce said it would lay off 10% of its workforce as customers take a more cautious approach to spending. What's more, CIOs also take care of uncertain markets by reducing cloud spending and removing unused applications. Wong said that incorporating Slack and other apps into the CRM platform could actually put buyers off. The CIO and other corporate tech leaders will take a closer look at spending. As the number of functions increases, companies are increasingly forced to hire more technical staff to manage an ever-wider range of tools, which can be prohibitively expensive during economic downturns. Read next: After The Correction, Jacek Ma's Share In Shareholder Votes Will Fall To 6.2%| FXMAG.COM Salesforce and Slack vs. Microsoft Salesforce and Slack, both based in San Francisco, have long been competing with Microsoft. In 2016, Salesforce, after losing to a larger rival in the purchase of LinkedIn Corp., urged regulators to investigate the proposed deal for antitrust laws. The transaction eventually passed regulatory scrutiny. This summer, Slack filed a complaint with the European Union over Microsoft's alleged antitrust behavior, which was using its market dominance to pressure Teams. Salesforce share price As with most tech companies, Salesforce's shares also had a downward trend last year. The lowest share price appeared last month. Salesforce ended 2022 with a price of 132.59. The beginning of the new year brings positive signals. Share prices have increased and are now at 140.51 Source: wsj.com, finance.yahoo.com
Unraveling the Resilience: US Growth, Corporate Debt, and Market Surprises in 2023

DAX Could Make An All-Time High, Euro Stoxx 50 Testing Key Resistance Levels

Saxo Bank Saxo Bank 09.01.2023 13:03
Summary:  DAX and Euro Stoxx 50 testing key resistance levels. A close above is likely to push Indices higher 3-4% higher short-term DAX is testing resistance at 14,654. RSI is back above 60 indicating higher levels are likely. However, there is still divergence but if RSI closes above its falling trendline will indicate DAX is likely to move higher and test key resistance at 14,901.However, 14,901 is not a strong resistance and if DAX closes above December 20222 peak at 14,676 uptrend has been confirmed both short- and medium-term. 15K is a very psychological level so a close above will give the market the feeling that all crisis talk is over and we are back to the “good old days” of Bull Market. We will most likely see stories about DAX could make an all-time high. But reality can easily return. However, a move above 15K is in the cards and a 1.618 Fibonacci Projection at around 15,222 could be seen before weakness will spread across the market. For DAX to reverse this uptrend a close below 13,791 is needed. First indication of this scenario to play out could be a break back below 14,149   Source all charts and data: Saxo Group sa Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM   Euro Stoxx 50 is at the time of writing above key resistance at around 4,025. If closing above and if RSI is closing above its falling trendline further uptrend should be expected. 4,165 is 0.786 retracement of the entire down trend since 2021 peak. However, a move to 1.618 Fibo Projection of the December correction at around 4,200 seems likelyIF Euro Stoxx fails to close above 4,025 the Index is likely to slide lower. But it needs to close below 3,767 to reverse the uptrend.      Source: Technical Update - European Equities higher. DAX and Euro Stoxx 50 testing key resistance | Saxo Group (home.saxo)      
At The Close On The New York Stock Exchange Indices Closed Mixed

At The Close On The New York Stock Exchange Only The NASDAQ Composite Index Rose

InstaForex Analysis InstaForex Analysis 10.01.2023 08:04
On Thursday this week, investors will be waiting for the publication of data on consumer prices in the US. Analysts believe that annual inflation in the country slowed down to 6.5% in December from 7.1% per annum recorded in November. The statistics may give traders a hint as to what to do next with the US Federal Reserve, whose next two-day meeting will take place on January 31 and February 1. About 77% of analysts expect the regulator's discount rate to increase by 25 basis points to 4.5-4.75%. In addition, as early as this Friday, the largest US banks will report on their financial results for the previous year. At the close on the New York Stock Exchange, the Dow Jones fell 0.34%, the S&P 500 index fell 0.08%, the NASDAQ Composite index rose 0.63%.  Dow Jones The leading performer among the Dow Jones index components today was Salesforce Inc, which gained 6.59 points or 4.69% to close at 147.10. Quotes of Intel Corporation rose by 0.58 points (2.02%), closing trading at 29.31. Goldman Sachs Group Inc rose 4.92 points or 1.41% to close at 353.00. The least gainers were Merck & Company Inc, which shed 4.46 points or 3.88% to end the session at 110.38. Johnson & Johnson rose 2.59% or 4.67 points to close at 175.58 while The Travelers Companies Inc shed 2.45% or 4.75 points to close at 189.12. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Tesla Inc, which rose 5.93% to 119.77, Norwegian Cruise Line Holdings Ltd, which gained 5.90% to close at 13.81. as well as shares of NVIDIA Corporation, which rose 5.18% to close the session at 156.28. The least gainers were Baxter International Inc, which shed 7.74% to close at 44.70. Shares of Regeneron Pharmaceuticals Inc shed 7.69% to end the session at 680.49. Quotes of Northrop Grumman Corporation decreased in price by 4.99% to 495.41. NASDAQ  The leading gainers among the components of the NASDAQ Composite in today's trading were CinCor Pharma Inc, which rose 143.97% to 28.74, Amryt Pharma Holdings Ltd, which gained 107.29% to close at 14.51. as well as Albireo Pharma Inc, which rose 92.16% to end the session at 43.85. The least gainers were shares of Calithera Biosciences Inc, which shed 81.77% to close at 0.66. Shares of Peak Bio Inc shed 27.27% to end the session at 2.56. Quotes of Cerus Corporation decreased in price by 28.04% to 2.72. Numbers On the New York Stock Exchange, the number of securities that rose in price (1868) exceeded the number of those that closed in the red (1202), while quotes of 102 shares remained practically unchanged. On the NASDAQ stock exchange, 2192 companies rose in price, 1561 fell, and 172 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 3.98% to 21.97. Gold Gold futures for February delivery added 0.33%, or 6.10, to hit $1.00 a troy ounce. In other commodities, WTI crude futures for February delivery rose 1.42%, or 1.05, to $74.82 a barrel. Futures for Brent crude for March delivery rose 1.46%, or 1.15, to $79.72 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.82% to 1.07, while USD/JPY shed 0.19% to hit 131.82. Futures on the USD index fell 0.68% to 102.94. Relevance up to 03:00 2023-01-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/307907
Tesla Is Expected A Temporary Rally

Tesla Is Expected A Temporary Rally

Torben Melsted Torben Melsted 10.01.2023 08:19
Tesla has already reached the 78.6% corrective target at 97.98 but a firm bottom doesn't look to be in place just yet. We expect a temporary rally towards the 145-146 area from where a new attack on the downside is expected. We don't see Tesla making any major progress towards the downside, but we should see a new low below the former low at 101.81. Short-term we expect minor resistance at 124.50 to be able to cap the upside for a minor setback to the 110-112 area before a new attempt to break above 124.50 for a rally towards the 145-146 target area. Relevance up to 07:00 2023-01-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/307925
China: PMI positively surprises the market

The China Government Considering CNY3.81trn Of Local Government Bond Issuance In 2023

Saxo Bank Saxo Bank 10.01.2023 08:54
Summary:  While the US markets remained mixed overnight with the post-wage growth and ISM gains cooling off, focus in Asia shifts back to China’s reopening and policy measures. A fresh round of fiscal boost and a likely higher budget deficit target could mean more infrastructure spending, and hence further gains for industrial metals. Copper broke the key $4/lb mark. Furthermore, higher import quotas for crude oil were also announced. Tesla charged ahead, but remains in a technical long-term downtrend. What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) consolidated, waiting for the Fed and upcoming earnings U.S. equity benchmark indices pared their over 1% gains in the morning and finished the Monday session mixed. Nasdaq 100 gained 0.6% while S&P 500 was nearly flat. Among S&P 500 sectors, information technology was the top winner and advanced 1.1%, led by the strong performance of Nvidia (NVDA:xnas) and Advanced Micro Devices (AMD:xnas). Tesla (TSLA:xnas), rallying 5.9%, was the best-performing stock within S&P 500. The stock however is still in a long-term downtrend. Healthcare was the worst-performing sector. Lululemon Athletica plunged 9.3% after saying the company expected lower profit margins in Q4. Uber gained 3.8% on an analyst upgrade. Apple plans to drop Broadcom chips and Qualcomm modem Apple (AAPL:xnas) plans to drop Broadcom (AVGO:xnas) chips from its devices and use in-house chips. Apply also aims to replace the modems from Qualcomm (QCOM:xnas) with in-house designs. Shares of Broadcom fell nearly 2% and those of Qualcomm shed 0.6%. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) extended gains After a strong session last Friday, Treasuries extended their gains to finish 2 to 4 bps richer across the curve. Yields on the 10-year edged down 3bps to 3.53% and those on the 2-year slid by 4bps to 4.21%. The market is pricing a 77% chance of a 25bp hike at the February FOMC. Comments from Fed’s Bostic and Daly, both non-voter this year, did not offer new insights. Bostic said he was in favor of “raising rates to the 5%-5.25% range”. Fed Chairman Powell will speak in a panel discussion on central bank independence at a Riksbank event today. The New York Fed survey showed U.S. consumers expecting 1-year, 3-year and 5-year inflation expectations at 5%, 3% and 2.4% respectively. What should you be watching today in equities across APAC? The Australian share market (ASXSP200.I) opened slightly lower on Tuesday down 0.2%, while Japan’s market is suggested to outperform in APAC today, with the futures suggesting the Nikkei could rise 0.9%. Keep an eye on coal stocks particularly as China’s National Development and Reform Commission has issued three notices urging parties to secure and speed up the process of locking in medium and long-term supply deals, to ensure China does not run out of power. China banned the imports of Australian coal for over two years, however yesterday, reports suggested BHP struck a deal, and sold two shipments of met coal to China. This highlights that trade relations are improving but also means the price of coal is likely to remain supported as demand is increasing. Keep an eye on Coronado (CRN) Whitehaven Coal (WHC), and New Hope (NHC). In Australia and Asia today, Copper stocks are in focus after the copper price rose 2.4% to over $4, which is a six month high. Copper stocks to potentially watch include BHP, Oz Minerals. It’s also worth watching the Bloomberg Commodity Index which jumped 1.1%. There also affiliated ETFs that are worth watching given China is easing restrictions and likely to ramp up commodity buying after the lunar new year. Iron ore (SCOA) trades flat today, but holds a five month high, as buying of iron ore is expected rise after the new year holidays as it typically does. This notion is also supporting iron ore stocks in the industry like Vale, Champion Iron, Fortescue Metals, BHP and Rio. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) advanced in anticipation of a less uncertain regulatory environment Alibaba (09988:xhkg), surging 8.7%, was the best-performing stock within the Hang Seng Index on Monday, following Ant Group announcing a new arrangement in which Alibaba’s founder Jack Ma cedes his indirect control of Ant Group. The new arrangement, which apparently has the blessing of the Chinese authorities, signals that Alibaba and its affiliates may be close to the end of the government-imposed reorganization and return to relatively normal business. Separately, Guo Shuqing, who is Party Secretary of the People's Bank of China (PBOC) and Chairman of the China Banking and Insurance Regulatory Commission, said that the rectification of 14 internet platform companies' financial businesses had basically been completed and China will support platform companies to play a bigger role in job creation and global competition. Hang Seng Index climbed 1.9% and Hang Sang TECH Index surged 3.2%. In A-shares, CSI300 gained 0.8% with non-ferrous metal, non-bank financials, food and beverage, beauty care, education services, and poultry farming being top gainers. FX: Post-ISM dollar selling extended The USD was further lower on Monday continuing the post-NFP and ISM Services decline as risk assets enjoyed a bid on the back of China reopening optimism, seen throughout Asia, Europe, before paring in the US afternoon. The latest NY Fed consumer inflation expectations were mixed, but the cooling in 1yr ahead expectations gained the most attention. Fed speakers failed to add anything new, but clearly opened the door for a 25bps in February resulting in some dovish Fed repricing, and focus is now on Chair Powell and US CPI. EURUSD continues to look stretched as it rose to 7-month highs of 1.0761. AUDUSD capped at 0.6950 for now but China optimism continues to underpin with USDCNH now below 6.8000. Crude oil (CLG3 & LCOH3) prices higher on China hopes Crude oil prices opened the week with gains on continued China optimism as fiscal stimulus measures bode well for the demand outlook in China. China also issued a fresh batch of import quotas, of about 112 million tons in its second allocations for 2023, in a signal that the world’s largest importer is ramping up to meet higher demand. The upcoming Lunar New Year is also keeping the travel demand robust. Meanwhile, Russian oil exports are likely suffering on the back of sanctions (read below). WTI futures traded close to $75/barrel in the Asian morning while Brent was close to $80. Copper breaks the $4/lb mark With the China government considering CNY3.81trn of local government bond issuance in 2023, there is expectations of a further push to infrastructure spending which will continue to bump up industrial metals prices. Beijing may also bump the budget deficit to 3% of GDP, up from 2.8% last year. Meanwhile, copper inventories for immediate withdrawal from LME warehouses fell 2.8%, the most since 8 December. That leaves stockpiles at just above a 17-year low. Having touched the $4.05 level overnight, HG copper prices are now back the $4 mark, and support is seen at $3.8475.  Read next: The Aussie Pair Is Trading Above 0.69$, The Euro Above 1.07, The British Pound Also Benefits From A Weak Dollar| FXMAG.COM What to consider? China likely to add fiscal stimulus China exempts value-added tax (VAT) among small businesses with monthly revenues less than RMB100,000 a month till the end of 2023, according to Bloomberg. China is also considering a record special debt quota and a wider budget deficit with a new special bond quota of up to CNY 3.8tln and a deficit ratio of around 3% for the year. China is on track to spend more on infrastructure and support the real estate sector, both will bump up demand for industrial metals. Japan’s December Tokyo CPI touched the 4% mark Tokyo CPI for December was released this morning, with the headline coming in at 4.0% YoY as expected from a revised 3.7% YoY in November, suggesting price pressures in Japan haven’t started to cool off yet. Tokyo core CPI (ex-food) was higher than expected at 4.0% YoY from 3.6% YoY previously while the core-core measure (ex-food and energy) was also higher at 2.7% YoY from a revised 2.4% YoY in Nov. With Tokyo CPI numbers leading the broader print, there are clear signs that further upside pressures are likely to stay and continue to keep a policy tweak option alive for the BOJ. Asian and EM equities enter bull market The leading MSCI indices tracking these two segments of the global equity market have entered a bull market up 20% since their lows in October fuelled by gains in China and a weaker USD. The market is betting on a shallow recession in some parts of the world, while inflation keeps coming down, and on top of a successful kickstart of the Chinese economy. All three wishes may not be able to be fulfilled simultaneously and our view is that the market is getting too excited about growth too early as a lot of uncertainty persists. The rally has been fast and furious, so it is only natural to expect some profit-taking. There are also some risks to keep a tap on, such as BOJ's hawkish shift and company earnings. But that being said, there is still room for Asian markets to outperform its global peers in 2023. The labour market remains tight in the eurozone There is not much on the eurozone calendar this week. According to the latest Eurostat figures, the labour market remains well-oriented both in the eurozone and in the European Union (EU). The eurozone unemployment was at 6.5 % in November and at 6.0% in the EU. The figures are stable compared to October. Within the EU, Spain scores the highest official unemployment rate (12.4%) and Germany and Poland the lowest one (3.0%). In a working paper published yesterday, ECB economists pointed out the risk of high wage growth in the coming quarters – way above historical patterns. This reflects robust labour markets that so far have not been substantially affected by the slowing of the economy, increases in national minimum wages and some catch-up between wages and high rates of inflation. We tend to disagree with this assessment. Wage growth is of course fuelling inflation in the CEE area. But this is clearly not the case in Western Europe. The likelihood that wages will increase significantly, thus becoming an issue in regard to the fight against inflation, is rather low in our view. The United Kingdom is certainly the only European country (but not belonging to the EU) which may potentially face a wage-price spiral this year.  Russian crude exports coming under pressure Russia’s Urals grade, a far bigger export stream than any other crude that Russia sells, was $37.80 a barrel at the Baltic Sea port of Primorsk on Friday, according to data provided by Argus Media. Global benchmark Brent settled at $78.57 on the same day. Combined flows to China, India and Turkey hit the lowest last week since October, suggesting sanctions and EU embargo may be impacting Russia’s key exports.   For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: China’s fiscal boost charges Copper; Can Tesla gain further? – 10 January 2023 | Saxo Group (home.saxo)
Gold Is Showing A Good Sign For Further Drop

Gold Received Support From A Weaker Dollar And Softer Yields

Saxo Bank Saxo Bank 10.01.2023 09:29
Summary:  A further squeeze in US equities yesterday, perhaps inspired by the recent drop in US treasury yields, peaked out mid-session and was entirely erased by the end of the day, establishing an important line in the sand on charts ahead of the next important macro event risk on the US economic calendar, the Thursday December CPI release. Interesting session ahead for European equities after yesterday saw major indices in Europe closing at their highest levels since Russia invaded Ukraine.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures erased all of their gains in yesterday’s session, declining 1.5% from the intraday highs. The culprit was Fed member Mary Daly’s comments that she expects the policy rate to move to 5% or a bit above. Despite these comments, the US 10-year yield declined downplaying the comments from Daly suggesting the market keeps betting that the Fed will pivot before reaching the 5% level. S&P 500 futures are trading lower again this morning hovering just above the 3,900 level taking the futures back into the upper part of the trading range established since mid-December. The next important event for US equities is the December CPI report on Thursday. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hong Kong and Chinese equities retraced after a strong start in the new year. Hang Seng Index edged down 0.3% and CSI300 was nearly flat as of writing. China is exempting value-added tax (VAT) among small businesses till the end of 2023 and is considering a record special debt quota and a wider budget deficit. The news stirred little excitement among investors as expectations for stimulus measures are already high. Chinese leading EV maker, BYD (01211:xhkg) slid 2% following Berkshire Hathaway reduced its stake to 13.97% from 14.06%. FX: Currencies swing with risk sentiment, USDCNH rejects new lows after huge slide The US dollar found support late yesterday after an extension of its recent sell-off on a squeeze higher in equities. EURUSD spilled over to a new high since last June, posting a 1.0761 high water market before easing back as risk sentiment weakened late in the US yesterday, supporting the greenback. A good portion of the EURUSD upside was on a firmer euro, as other USD pairs remain within recent trading ranges, including USDJPY, trading mid-range this morning just below 132.00. Elsewhere, USDCNH extended its remarkable run lower in the Asian session but was quickly gathered up after hitting new lows since last August at 6.76. Several central bankers are out speaking at a conference in Stockholm, Sweden today, while the market awaits the next major US macro event risk, Thursday’s December CPI release. Crude oil (CLG3 & LCOH3) trades steady with Brent hovering around $80 Gains being driven by excitement over a rapid reopening in China with the upcoming Lunar New Year driving a pickup in demand for travel. Near-term weakness in demand will be discussed when the OPEC+ monitoring committee (JMMC) meets on February 1 and despite a drop in Russian exports, due to sanctions, forcing the price of its flagship Urals below $40 per barrel last Friday, the committee could still spring a surprise and recommend another production cut. China meanwhile issued another generous quota for crude imports that will allow 44 non-state-owned refiners to import a total 132 million tons compared with 109 this time last year. Brent trades within a small uptrend with resistance being the 21-day moving average, today at $81.30 and support at $78. Gold (XAUUSD) holds onto its gains Supported by a weaker dollar and softer yields despite comments on Monday from two Fed officials that rates may rise above 5% before pausing and holding for some time. The metal has also been buoyed by the reopening in China with pictures of very crowded gold markets seeing pre-Lunar demand and the PBoC announcing it bought 62 tons of gold during the last two months of the year. However, following two back-to-back weeks of ETF buying, total holdings dropped slightly on Monday as some investors remained cautious. Focus this week on Thursday’s US CPI print with the next major hurdle for gold being $1896, the 61.8% retracement of the 2022 correction, with support now at $1830. HG Copper breaks higher on China demand optimism With the China government considering CNY3.81trn of local government bond issuance in 2023, there is expectations of a further push to infrastructure spending which will continue to bump up industrial metals' prices. Beijing may also bump the budget deficit to 3% of GDP, up from 2.8% last year. Meanwhile, copper inventories for immediate withdrawal from LME warehouses fell 2.8%, the most since 8 December. That leaves stockpiles at just above a 17-year low. HG copper reached $4.05 on Monday with the 50% retracement of the 2022 correction now offering resistance at $4.0850, with support being the 200-day moving average at $3.84. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) yields ease lower, 10-year close to 3.50% Ahead of three days of treasury auctions starting with today’s auction of 3-year notes, US treasury yields dropped a few basis points all along the curve. The two-year yield is nearing the range low since last September just below 4.15%, while the 10-year benchmark yield has another 10 basis points of range to work with into the cycle low near 3.40%. A 10-year auction is up tomorrow and 30-year T-bond auction on Thursday, with prior auctions for those maturities rather weak. Read next: The Aussie Pair Is Trading Above 0.69$, The Euro Above 1.07, The British Pound Also Benefits From A Weak Dollar| FXMAG.COM What is going on? The labour market remains tight in the Eurozone The Eurostat figures for Eurozone unemployment were out at 6.5 % in November and at 6.0 % for the EU. The figures are stable compared to October. Within the EU, Spain scores the highest official unemployment rate (12.4 %) and Germany and Poland the lowest one (3.0 %). In a working paper published yesterday, ECB economists pointed out the risk of high wage growth in the coming quarters – way above historical patterns.  “This reflects robust labour markets that so far have not been substantially affected by the slowing of the economy, increases in national minimum wages and some catch-up between wages and high rates of inflation”. We tend to disagree with this assessment. Wage growth is of course fuelling inflation in the CEE area. But this is clearly not the case in Western Europe. The likelihood that wages will increase significantly, thus becoming an issue regarding the fight against inflation, is rather low in our view. The United Kingdom is certainly the only European country which may potentially face a wage-price spiral this year.  Commodities supported on optimism over a speedy reopening in China  China will return to “normal” growth soon as Beijing steps up support for households and businesses, according to party secretary of the China’s central bank. That adds to hopes that the government will expand measures to steady the economy and potentially roll out more infrastructure spending that could support industrial metals prices. The HG copper price rose over $4 at on one point, for the first time in six months, with demand likely to rise while inventory stockpiles remain near 17-year lows while the Iron ore (SCOA) price surged 2.4% to a new six month high, $119.80 on expectations for a seasonal post-Lunar new year ramp up in demand.  China reopening, authorities are anxious the nation could run out of power China’s National Development and Reform Commission has issued three notices urging parties to secure and speed up the process of locking in medium and long-term supply deals, to ensure China does not run out of power. China had banned imports of Australian coal for over two years, however, yesterday reports suggested BHP struck a deal and sold two shipments of met coal to China. This highlights that trade relations are improving but also means the price of coal is likely to remain supported as demand is increasing. Japan’s December Tokyo CPI touched the 4% mark Tokyo CPI for December was released this morning, with the headline coming in at 4.0% YoY as expected from a revised 3.7% YoY in November, suggesting price pressures in Japan haven’t started to cool off yet. Tokyo core CPI (ex-food) was higher than expected at 4.0% YoY from 3.6% YoY previously while the core-core measure (ex-food and energy) was also higher at 2.7% YoY from a revised 2.4% YoY in Nov. With Tokyo CPI numbers leading the broader print, there are clear signs that further upside pressures are likely to stay and continue to keep a policy tweak option alive for the BOJ. Russian crude exports coming under pressure Russia’s Urals grade, a far bigger export stream than any other crude that Russia sells, was $37.80 a barrel at the Baltic Sea port of Primorsk on Friday, according to data provided by Argus Media. Global benchmark Brent settled at $78.57 on the same day. Combined flows to China, India and Turkey hit the lowest last week since October, suggesting sanctions and EU embargo may be impacting Russia’s key exports. Microsoft considers $10bn investment into OpenAI The recently published ChatGPT has surprised the world by being quite good at answering all sorts of questions whether they are simple or complex. ChatGPT reached a 1mn users in just one week of beta testing. There have been serious talks about that ChatGPT might be something that could one day upend Google’s classic and very profitable search engine business. This might be the exact opportunity Microsoft is pursuing. What are we watching next? US December CPI up on Thursday The latest CPI data out of the US is the next important test for global markets, which have grown perhaps over-confident that the Fed will not only halt its policy tightening soon after perhaps 50 basis points of further tightening, but will be signalling rate cuts by year-end. The US CPI releases have triggered considerable volatility in recent months, particularly in equity markets on aggressive trading in very short-dated options. The market expects that inflation will actually fall month on month by –0.1% and only rise 6.5% year-on-year versus +7.1% in November. The core, ex Food and Energy number is expected to rise +0.3% MoM and +5.7% YoY vs. +6.0% YoY in November and a peak rate of 6.6% in September. Earnings to watch The Q4 earnings season kicks off this Friday with banking earnings from Bank of America, JPMorgan Chase, and Citigroup with consensus expecting earnings to continue contracting among US banks before coming back to growth this year. The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession or maybe no recession at all in the US economy. With higher interest rates level expectations are that banking revenue will slowly begin to accelerate and if high interest rates persist for an extended period, the longer-term growth for banks could be quite attractive. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Today: Albertsons Thursday: Fast Retailing, Seven & I Friday: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Economic calendar highlights for today (times GMT) 1000 – Sweden Riskbank Governor Thedeen to speak 1010 – Bank of England Governor Bailey, Bank of Canada Governor Macklem, ECB’s Schnabel speak Stockholm 1100 – US Dec. NFIB Small Business Optimism 1400 – US Fed Chair Powell to speak at Riksbank even in Stockholm 1535 – ECB's de Cos, Knot to speak in Stockholm 1700 – EIA's Short-term Energy Outlook (STEO) 1800 – US 3-year Treasury Auction 2130 – API's Weekly US Oil and Fuel Inventory Report 0030 – Australia Nov. Retail Sales 0030 – Australia Nov. CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – January 10, 2023 | Saxo Group (home.saxo)
According to Althea Spinozzi, it's clear that inflation remains Fed most significant focus

US stock market optimism diminished by Fed rhetoric hinting at keeping rates at 5%. S&P 500 didn't exceed 3900, Nasdaq finished a bit higher

Ipek Ozkardeskaya Ipek Ozkardeskaya 10.01.2023 09:51
Good news is that Asian stocks entered bull market. Bad news is that the Federal Reserve (Fed) President Jerome Powell could hammer the post-NFP stock rally in US stocks. Sentiment is mixed and investors are tense before Powell's speech, and Thursday's US inflation data.  Asia enters bull market  Asian stocks entered the bull market, as China's post-covid reopening, the weakening US dollar, and stimulus from the Chinese government and central bank supported a sustained rally in Chinese, and the Asian stocks since last October.   As a result, the MSCI Asia Pacific index gained more than 20% since the October dip.   Plus, China announced that it will continue supporting growth with unheard amounts of stimulus packages. It is on the news that the Chinee officials are discussing a record 3.8 trillion yuan quota for local government bond issuance this year – it equals $561 billion US dollars.   Many investors expect the Asian equities to diverge positively from their Western peers through this year.  Tense before Powell  In the US, the good mood is more difficult to justify and to extend. The euphoria around Friday's jobs data faded on Monday, when Fed officials came up and said that... the Fed rates will go above the 5% level and stay there for some time.   Sounds familiar? Yes, it does, because the Fed officials have been saying that they will push the rates above 5% and keep them there for a long time to make sure that inflation is on a solid path toward the 2% target.   The S&P500 was unable to extend gains above the 3900, rapidly started erasing early-session gains and ended the session 0.08% lower. Nasdaq also gave back early-session gains, though closed the session 0.60% higher.  Read next: Tesla Is Expected A Temporary Rally| FXMAG.COM US equity futures are in the negative this morning, as the King of market disappointment, the Fed Chair Jerome Powell, will be speaking at an event in Stockholm today, and he will probably not pop the champagne just because the wages grew less than expected last month, especially when you think that the US economy added a near record 4.5 million jobs last year, and that the unemployment rate fell to 3.5%.   Looking at the activity on Fed funds futures, the pricing suggests that the Fed will raise the rates by 50bp at the beginning of February. This means that there is a good margin for hawkish pricing in the coming weeks, into the Fed decision. Thursday's inflation read will be key in tilting the balance to one side, or to the other. A soft enough inflation figure could get investors to further go against the Fed.  In the FX   The US dollar index remains under a decent selling pressure, as a result of the dovish Fed expectations since last Friday's US jobs data. While any hawkish readjustment could give a minor boost to the dollar, the US dollar is set for further weakness this year. If the Fed shifts to a more dovish tone, the dollar should weaken, and if not, the dollar should still weaken on rising recession odds.   The EURUSD advanced to 1.0760 yesterday, which is the highest levels since last summer, while Cable flirted with 1.22 this morning. Gold consolidates gains above $1870, while we are about to see a golden cross formation on the daily chart, where the 50-DMA will shortly go past the 200-DMA.   Other supportive factors of gold prices these days are the softening US yields, and the cheapening US dollar. A softer inflation report on Thursday could get the bulls to target a rally above $1900.  Read next: 2023 Predictions: Central banks were buying gold at the end of the year at the highest rate since 1955 | FXMAG.COM In energy, crude oil remains under pressure despite the Chinese reopening talk, and the falling Russian supply. We see that the European sanctions weigh on Russian oil supply, as the 4-week average shipments decline despite a small gain posted last week. That means that the lower Russian supply will be another supportive factor of oil prices, besides the Chinese reopening, the tight global supply, the rising global demand defying recession odds, the fact that the Americans will have to refill their reserves, and the fact that oil companies underinvest to increase capacity. Despite the actual selling pressure, levels into $70 could be interesting dip buying opportunities for those looking for a sustainable recovery.   Likewise, commodities see a decent boost thanks to the Chinese recovery story. Copper futures – which are a barometer for global economy, are on a strong positive trend since the beginning of October, but they remain vulnerable to any deterioration in the global outlook. In this respect, the World Bank is expected to release its latest global economic prospect report this Thursday, and the projections may not be rosy. 
Key Economic Events and Corporate Earnings Reports for the Week Ahead – September 5-9, 2023

The Weather-Driven Crash Showed The Southwest Airline's Bigger Problems

Kamila Szypuła Kamila Szypuła 10.01.2023 11:04
Southwest said it canceled more than 16,700 flights from December 21 to 31. Poor weather conditions showed Southwest's major problems. Background of events Southwest Airlines Co. canceled nearly two-thirds of its flights over the Christmas period and planned to cut schedules. Southwest planned to operate just over a third of its typical schedule on consecutive days to give the crews leeway to get into the right positions. Southwest's more than 2,800 scrapped flights he highest of any major U.S. airline, came as the Dallas-based airline proved unable to stabilize its operations amid the past week's storm. Southwest's chief commercial officer said in an interview that the airline is taking steps such as covering customers' reasonable travel costs - including hotels, rental cars and tickets with other airlines, and will keep customers informed of the reimbursement process. He also said customers whose flights are canceled while the airline is recovering are entitled to a refund if they choose not to travel. Read next: The Aussie Pair Is Trading Above 0.69$, The Euro Above 1.07, The British Pound Also Benefits From A Weak Dollar| FXMAG.COM Cause The airline said the severity and extent of the severe winter storm that swept across much of the country before Christmas overwhelmed the crew planning system it uses to reassign pilots and stewards after the disruption, pointing to inadequate technology systems, most notably SkySolver. SkySolver was overwhelmed by the scale of the task of figuring out which pilots and flight attendants could operate which flights, Southwest executives said. Crew planners had to manually comb records instead. This is one reason the airline was taken off track for over a week. The crews and planes were out of place. Telephone lines jammed, and Southwest pilots and flight attendants trying to get assignments could not reach the planning department. This isn't the first time disruption has been mounting in Southwest, and the carrier's struggle to reconnect operations shows how its increasingly complex network needs a better technological foundation. Union leaders criticized the airline for being too slow to make changes, and Southwest executives said their systems were being updated. The Southwest Pilots Union has complained over the years that SkySolver often spits out fixes that don't make much sense, sending crews on round trips around the country. This Christmas, SkySolver not only solved little, but also helped trigger the worst industry crash in recent memory. Current developments The airline has taken immediate action to mitigate the risk of another disruption and is re-prioritizing work already underway to improve crew planning platforms. The Southwest has taken steps to prevent further similar incidents as it works to investigate the root causes and explores long-term solutions. Jordan told employees in a Monday announcement that the airline was working to understand what went wrong and prevent similar situations from happening in the future. Jordan told staff on Monday that about 98% of bags caught in the disruption had been returned to customers or were on their way, and the airline had processed more than 75% of refund requests, with an average turnaround time of around three days. Read next: Incorporating Slack And Other Apps Into The Salesforce Platform Can Actually Put Buyers Off| FXMAG.COM Southwest share price Not only the carrier's image suffered, but also its share price. As a result of these events, the stock fell sharply from 36.09 to 32.19. By the end of 2022, it managed to make up for some losses and increase to 32.60, and Southwest stocks ended the year at this level. this year the LUV is increasing and the stock is currently at 35.61. Source: wsj.com, finance.yahoo.com
Pound Slides as Market Reacts Dovishly to Wage Developments

Saxo Bank Podcast: The Major European Equity Markets, The Future Of Internet Search And More

Saxo Bank Saxo Bank 10.01.2023 11:17
Summary:  Today we note that the major European equity markets have come full circle since the Russian invasion of Ukraine last February, in part driven by a near freefall in natural gas prices over the last few weeks on mild weather. How much more can the market wring out of this development? We also note the reversal in the US equity market rally yesterday ahead of the important CPI data on Thursday. In equities, focus toward the end of the week on the major US banks reporting, but in the meantime, we have the important news for Google of a $10 billion investment in OpenAI as the future of internet search is heating up for the first time in many years. This and more on today's pod, which features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Read next: The Weather-Driven Crash Showed The Southwest Airline's Bigger Problems| FXMAG.COM Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next:The Aussie Pair Is Trading Above 0.69$, The Euro Above 1.07, The British Pound Also Benefits From A Weak Dollar| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com   Source: Podcast: European equities have come full circle since Russian invasion | Saxo Group (home.saxo)
Warsaw Stock Exchange SA Approves Dividend Payout: Neutral Impact Expected

US Dollar Is Under Pressure, Russian Crude Shipments On Falling Trend

Swissquote Bank Swissquote Bank 10.01.2023 11:25
Good news is that Asian stocks entered bull market. Bad news is that the Federal Reserve (Fed) President Jerome Powell could hammer the post-NFP stock rally in US stocks. Sentiment is mixed and investors are tense before Powell’s speech, and Thursday’s US inflation data. S&P500 The S&P500 was unable to extend gains above the 3900, rapidly started erasing early-session gains and ended the session 0.08% lower. Nasdaq also gave back early-session gains, though closed the session 0.60% higher. US makret US equity futures are in the negative this morning, as the King of market disappointment, the Fed Chair Jerome Powell, will be speaking at an event in Stockholm today, and he will probably not pop the champagne just because the wages grew less than expected last month, especially when you think that the US economy added a near record 4.5 million jobs last year, and that the unemployment rate fell to 3.5%. Forex In the FX, the US dollar index remains under a decent selling pressure, as a result of the dovish Fed expectations since last Friday’s US jobs data. The EURUSD advanced to 1.0760 yesterday, Cable flirted with 1.22 this morning, and gold consolidates gains. Energy market In energy, crude oil remains under pressure despite the Chinese reopening talk, and the falling Russian supply. We see that the European sanctions weigh on Russian oil supply, as the 4-week average shipments decline despite a small gain posted last week. That means that the lower Russian supply will be another supportive factor of oil prices. Watch the full episode to find out more! 0:00 Intro 0:27 Asian stocks enter null market 1:25 Powell could shoot Fed doves down 5:18 Another big S&P500 is possible 7:11 US dollar under pressure 8:32 Russian crude shipments on falling trend 9:32 Copper futures rally, but risks prevail Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #Powell #speech #Fed #expectations #USD #EUR #GBP #XAU #earnings #season #Lululemon #banks #MSCI #AsiaPacific #bull #market #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Analytical Report – Unimot – WSE:UNT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 10.01.2023 12:53
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Event: Preliminary conditional agreement to purchase shares in Olavion. The Company signed a preliminary conditional agreement to purchase 100% of shares of Olavion. According to the agreement two deals are to be signed. The first will concern the purchase of 90% of shares of Olavion from 2 individuals, while the second agreement will concern the purchase of the remaining 10% from the management of Olavion. The agreements will be valid depending on several conditions, including the securing of a green light for the merger from UOKiK, the signing of a long term transport deal between Olavion and Unimot Paliwa, the shares of Olavion are not negatively burdened by additional debt and if nothing negative happens to Olavion financial condition. The conditions are to be met before June 30th 2023. Additional conditions concern the current management of Olavion: management is to remain in Olavion and it is required to conduct financial reports for 2023 and 2025. The purchase of the 10% of Olavion shares is to be executed not later than July 7th, 2025. Expected impact: Neutral. The preliminary agreement was previously announced and it was surely expected. Analyst: Łukasz Prokopiuk GPW’s Analytical Coverage Support Programme 3.0  
Markets under Pressure: Rising Yields, Strong Dollar, and Political Headwinds Weigh on Stocks"

Global stocks lost over 18% in 2022, Barclays Global Aggregate Bond Index decreased by 14%

Pawel Zapolski Pawel Zapolski 10.01.2023 13:01
Turkey was the best-earning stock market in 2022. In the US, energy stocks went up in price and growth stocks fell out of favour. 2022 has not been a good year for stocks or bonds. It was downright devastating for a 60/40 portfolio (60% stocks, 40% bonds). It was the worst year for risky assets since 2008. A disastrous year for the 60/40 portfolio The global stock market fell by -18.2% in 2022, according to Lazard Asset Management. Interestingly, emerging equity markets showed a slightly better result (-17.8%) than the US stock market (-18.1%). Let's note that taking into account the inflation rate of over a dozen percent, it was really difficult to protect capital in 2022. Stock Market Returns in 2022 Source: Lazard AM Bonds also performed badly. According to the aggregated Bloomberg index , they became cheaper by -16% . Barclay's Global Aggregate Bond Index fell -14%, posting its worst year ever. Hence, it is no wonder that the 60/40 portfolio recorded the worst result in the last… 100 years! It is reassuring that such a disastrous year, historically speaking, promises many years of much better results. What was wrong was about to happen. Portfolio performance 60/40 on an annualized basis Source: BoAML Rates of return on selected assets in 2022 Source: BlackRock When it comes to individual markets, it was possible to earn the most and the easiest in Turkey. The BIST100 index grew by 197% in 2022. It was significantly ahead of the Argentinian MERVAL (142%), and the Chilean IPSA and several lengths (22.1%). Interestingly, only 7 more national indices ended 2022 above the mark, usually showing a result of around 3-4%, including the Brazilian and Indian indices. When it comes to the world's worst indices, it's no wonder that Russia's MOEX (-43%) is at the bottom of the list, because Russia is a country that has started a long-unseen war in Europe, and has been burdened with gigantic sanctions that hit its mark. economy and struggling with the flight of valuable human capital. However, in the penultimate place, the Nasdaq index dropped by as much as -33%. Composite , grouping technology companies listed on the American stock exchange. Read next: 2023 Predictions: Central banks were buying gold at the end of the year at the highest rate since 1955 | FXMAG.COM USA: energy and value prevail, growth technology in disgrace When it comes to American indices, the one grouping industrial companies turned out to be the strongest, as it fell by only -8.8%. The S&P500 index fell by -19.44%, and its companies lost USD 8.2 trillion in capitalization. When it comes to sectors on the US stock market, only two ended 2022 above the mark, with the energy sector definitely standing out (+59%), while the utility sector grew by a modest +1.6%. US indices in 2022 Source: CNBC US indices performance Source: S&P Global Now let's look at returns, excluding small caps. Most last year capitalization was increased by the ExxonMobil fuel company , by as much as 80%. McKesson, a company distributing medical equipment, did almost as well (+50%). Among the biggest losers are the cryptocurrency exchange Coinbase (-86%) and Meta, the former Facebook (-64%). It is worth taking a look at the table below showing how much capital hated technology companies in 2022. S&P500 companies with the largest loss of market value in 2022 Source: Visual Capitalist Consequently, value companies (low-valued companies from traditional sectors, boasting regular profits and often paying dividends) performed much, much better as assets in 2022 than growth companies (growth companies, most often technology companies). The relationship between the result of the S&P Value index and S&P Growth was the largest to the detriment of growth companies since 2000. S&P Growth vs. values Source: Bloomberg/Edward Jones
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

The Commentary From Fed Officials Was More Hawkish Than What Investors Wanted

Craig Erlam Craig Erlam 10.01.2023 15:26
European stock markets are softer in early trade on Tuesday following a similar session in much of Asia as investors turn more cautious ahead of Thursday’s US inflation data. The commentary from Fed officials at the start of the week was more hawkish than what investors wanted to hear following a knockout jobs report. Considering the rhetoric in the weeks leading up to Friday, it shouldn’t have come as a great surprise that policymakers are sticking to the “higher for longer” narrative. There has been a determination to not allow financial conditions to loosen on the expectation of lower rates down the road as it undermines tightening efforts now. While the central bank’s assessment of future rates may be more hawkish than the markets, it’s also possible that they’re being intentionally overly hawkish now in an attempt to stop investors from getting carried away. The jobs report may not have been enough to warrant a shift in the language, but that doesn’t mean we aren’t close and any change could be quite stark. The inflation report on Thursday could further justify such a move although investors will be very wary that a bad one could ensure policymakers dig their heels in for a while longer yet. Tentatively higher Bitcoin is marginally higher after breaking back above $17,000 yesterday, buoyed by an improvement in risk appetite. That remains fragile though and a nasty surprise this Thursday from the US inflation report could send risk assets into reverse. The broader crypto environment remains the dominant driver though and it’s gone a little quiet on that front which will be welcome. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

The World Bank Cut Its Global Growth Forecast To 1.7%, Copper Continues To Get Support From China’s Reopening

Saxo Bank Saxo Bank 11.01.2023 09:05
Summary:  Despite Powell’s relative silence on policy outlook, there were other Fed and non-Fed speakers that continued to sound hawkish and raising alarms on inflation. Bonds slumped although equities and USD struggled to find direction in pre-US CPI positioning moves. Some optimism seen on European growth outlook while the World Bank still cautious about a global recession. Australia’s November CPI was hotter-than-expected, aiding further gains for the AUD which is underpinned by China’s reopening and policy stimulus.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) rise and trade near key technical levels After two Fed speakers reminding markets US rates could rise to over 5%, JPMorgan CEO Jamie Dimon joined the party, saying there’s 50% chance rates could go to 6%, while money managers BlackRock and Fidelity (among others) warned that markets are underestimating the ultimate rate peak. The World Bank slashed growth forecasts in half, saying new adverse shocks could tip the global economy into a recession. It estimates GDP will rise 1.7% this year, (that’s almost half the pace forecast in June). So this sets the stormy tone for the major indices in 2023. That said, JPMorgan's trading desk says there a two-in-three chance Thursday’s inflation data for December (released on US Thursday), could be on the soft side and spark a 1.5-2% S&P500 rally. On Tuesday the major US indices rose in choppy conditions; the Nasdaq 100 (USNAS100.I) rose for the third day, adding 0.9%, edging closer toward its 50 day moving average, the S&P 500 (US500.I) fluctuated around 3,900, which is a possible technical key resistance level. Others signs of caution were see in bonds, as the two-year US Treasury yield rose to 4.25%, the 10-year jumped 9 bps to 3.62%, while gold nudged up, to 8-month highs, $1,881, while the US dollar advanced modestly. Ten of the 11 sectors within the S&P 500 gained on Tuesday, led by communication services, consumer discretionary, and materials. The only sector that declined was consumer staples. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) sold off on supply Fed Chair Powell’s speech did not have much impact on Treasuries as he did not discuss U.S. monetary policy specifically and only noted generally “restoring price stability when inflation is high can require measures that are not popular in the short term”. Yields on Treasuries rose as European government bonds sold off on supply from Italy and Belgium and ahead of today’s supply from Germany. Yields on 10-year bunds rose 8bps. Traders also sold Treasuries going into the auction of USD40 billion 3-year Treasury notes, bringing yields to the intraday high right before the auction. The 3-year auction went well with strong demand and saw Treasury yields off their intraday highs afterward. Yields on the 2-year finished the session 4bps higher at 4.25% and those on the 10-year were 9bps cheaper at 3.62%. What should you be watching in equities across APAC? As in what's the big picture with China's reopening and what does it mean to investors? The Australian share market (ASXSP200.I) opened 0.7% higher, with other APAC markets expected to also open most higher. Japan’s futures suggest the Nikkei could rise the most across APAC today. But big picture, we think the most important thing for investor right now, is to consider, that… China’s economic recovery could be the dictator for the course of commodity assets, travel, and property. Not just China tech and consumer spending. China’s pivot away from its Covid Zero stance, led by a sooner-than-expected January 8 lifting of quarantines for cross-border travel, is poised to fast track its international air-transport recovery in 2023. But China’s recovery is not just about travel reviving. Chinese developers have also been seen kicking off recoveries in early 2023, having hit a bottom for contracted sales last year. As China’s economic recovery surges, stocks remain supported and are indeed rallying. A similar trend occurred in 2020 when mainland China reopened after a series of lockdowns following a breakout in Wuhan. But, reflecting on global trends, you’d think China has a better chance of putting Covid behind it this time around… which could support commodities and travel in particular. But, let’s see. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) trod water After a strong first week in the new year, Hong Kong and China stocks trod water on Tuesday. Hang Seng Index edged down 0.3% and CSI300 was nearly flat. Bilibili (09626) fell 4.3% after the company issued ADSs at a 7% discount to buy back convertible bonds. Chinese automakers rallied, especially EV names. Li Auto (02015:xhkg), Nio (09866:xhkg), and XPeng (09868:xhkg) surged each surged over 6%. BYD (01211:xhkg) pared all its initial weaknesses following the news that Berkshire Hathaway had reduced its stake to 13.97% from 14.06% and gained 2.9%. According to its CEO, Li Auto’s Model L7 is gaining market shares from Tesla’s Model 3 and Model Y. BYD reportedly will raise the prices of its EVs, as opposed to Tesla’s price cuts in China. Social media stories speculate that some Chinese cities are going to relax passenger car licensing restrictions in order to boost consumption. Shares of Geely (00175:xhkg) were up 6%, GAC (02238:xhkg) +3.1%, and BAIC (01958:xhkg) up 2.2%. Macao casino operators outperformed with Sands (01928:xhkg) rising 4.8%, MGM (02282:xhkg) up 3.6%, and SJM (00880:xhkg) up 3.1%. In A-shares, automakers, retailing, electric equipment, and beauty care names gained while financial, petrochemical, and steeling makers were among the biggest losers. FX: Dollar range-bound as it eyes the US CPI Lack of data and anu relevant commentary from Fed Chair Powell left the USD struggling to find direction in the pre-CPI trade. EURUSD was the outperformer, with better growth outlook underpinning, but it continued to find resistance at 1.0760. USDJPY is back above 132 amid higher yields, while AUDUSD rose back above 0.69 following the higher-than-expected November CPI. USDCNH also still below 6.7900. The Aussie dollar rallies after hotter than expected CPI and retail data The Aussie dollar rose 0.3% to 0.6911 US, with inflation and retail sales coming in hotter than expected, which shows the RBA has room to keep rising rates, and as such this theoretically supports the AUD. Core or trimmed CPI (which the RBA looks at) rose from 5.3% YoY to 5.6% YoY in November - hotter than 5.5% YoY expected. Retail sales rose 1.4% in November, beating the 0.6% expected, while also importantly showing Aussie retail sales strongly recovered from the October drop in sales. Some traders have a view the Aussie dollar will push up over the medium term, in lieu of China’s reopening notion which is likely to add to Australia’s GDP, with hot sauce coming from China buying Australian coal for the first time in two years. Crude oil (CLG3 & LCOH3) choppy amid China optimism and inventory build Crude oil prices wobbled on Tuesday as the market remained buoyed by optimism of China demand recovery. European session was supported by upbeat Eurozone outlook. Meanwhile, EIA raised its forecast for demand growth in 2023 to 1.05mb/d. However, it also expects US output to rise to meet this demand, with US shale oil providing the bulk of the gains. The API report showed a strong inventory build of 14.9mn barrels in crude as against expectations of a 2.2mn draw, and focus now turns to EIA figures today. WTI futures touched $76/barrel before sliding back below $75, while Brent reversed from $81. Copper continues to march higher Copper continues to get support from China’s reopening and policy support to fuel economic recovery. Gains were further boosted by Chair Powell staying away from a pushback on easing financial conditions, and the weaker USD as a result. Having retraced close to 50% of the 2022 sell off, HG copper is now seeing resistance ahead of $4.08 (LME $8900), potentially opening up some scope for a correction to check the strength of support. Focus in that regard being $3.84, the 200 DMA, the break above which started this latest runup.  Read next: The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed| FXMAG.COM What to consider? Powell stays away from policy guidance With some expectations that Powell would likely pushback on the easing financial conditions, equity markets celebrated the lack of any clear guidance on policy direction. Fed Chair Powell did not comment on the current US economic or monetary policy outlook in his prepared remarks, only stating that restoring price stability when inflation is high can require measures not popular in the short term. The pushback on market’s rate cut expectations from Kashkari (voter) was more direct, saying that "They are going to lose the game of chicken." Bowman, also a voter, was also relatively hawkish with comments hinting at more work to do on inflation. When a sufficiently restrictive rate level is reached, the Fed needs to hold the policy rate there "for some time". The story is shifting on Europe Softer energy prices, the lack of black-out and resilient hard data (notably in Germany) are pushing forecasters to review their 2023 recession calls. Goldman Sachs is the first international bank to drastically revised upward its growth forecasts, from minus 0.1 % in 2023 to 0.6 %. Said differently, the U.S. based bank does not expect a recession in the eurozone this year anymore. Early Q4 indications are out this Friday with the preliminary 2022 FY growth estimate. This should certainly confirm a milder-then-expected economic downturn. A mild recession (meaning drop in GDP of 0.1 or 0.2 %) is still our baseline this year. But we agree that the economy is surprisingly resilient. We also believe there will be no extreme macro and market events in 2023 – which could be positive from a growth perspective. If the economy performs much better, this will however give ECB policymakers more confidence in hiking rates as laid out in December by Christine Lagarde. World Bank warns of a global recession The World Bank cut its global growth forecast to 1.7% this year, down from an estimate of 3.0% in June. This marks the third weakest pace of global growth in nearly 30 years, overshadowed by only the 2009 and 2020 downturns. Growth estimate for 2024 was also slashed, down to 2.7%, as persistent inflation and high interest rates weigh. Meanwhile, the agency urged for global action to mitigate the risks of a global recession and debt distress. Growth of aggregate financing slowed to 9.6% Y/Y in China while loans to corporate picked up In December, the growth of outstanding aggregate financing, the broad measure of credit in China, decelerated to 9.6% Y/Y from 10.0% Y/Y in November. New aggregate financing declined to RMB1,310 billion in December (below consensus RMB1,850 billion) from RMB1,987 billion in November, dragged by a decline in new bond issuance from local governments and a net bond redemption by corporate. New RMB loans rose to RMB1,400 billion (above consensus RMB1,200 billion) from RMB1,214 billion in November and were also above RMB1,130 billion in December 2021. The growth of RMB loans picked up to 11.1% Y/Y in December from 11.0% in November. The better-than-expected growth in RMB loans was driven by new loans to the corporate sector which rose to RMB1,264 billion in December from RMB884 billion in November and above RMB 662 billion a year ago, as the Chinese authorities had asked banks to extend credits to support the housing market and other key industries. New loans to households came in weak, falling to RMB175 billion in December from RMB263 billion in November and RMB372 billion in December a year ago. The daily number of domestic flights in China rose to over 10,000, the first time since August China’s Lunar New Year travel season started last Saturday 7 January with 9,454 flights or a 2.26% growth from the first day of the same travel season last year. The number of daily flights increased to 10,123 on 8 January, an 13.65% increase from the same period last year and above 10,000 for the first time since August 2022. China suspends short-term visas for visitors from Japan and South Korea In retaliation to travel restrictions imposed on visitors from China, China stops issuing short-term visas for visitors from Japan and South Korea. Restrictions from both sides could be a temporary setback to the trend of the reopening of the Chinese economy but it is likely to be resolved in the near term. Microsoft may invest USD10 billion in OpenAI Microsoft is reportedly in discussion to make an investment of USD 10 billion in Open AI, the creator of AI bot ChatGPT. This would be Microsoft’s second investment, after acquiring a USD1 billion stake in 2019. Microsoft is expected to integrate ChatGPT into the software giant’s search engine.   For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: Powell’s silence on policy puts the focus back on US CPI – 11 January 2023 | Saxo Group (home.saxo)
UK Manufacturing Surge Lifts Q2 Growth: Insights and Outlook

Apple Is Aiming To Replace Screens From Samsung By 2024

Saxo Bank Saxo Bank 11.01.2023 09:11
Summary:  Risk sentiment found its feet yesterday after the prior day’s reversal ahead of the important December US CPI release tomorrow, though markets seem confident that the trajectory of inflation is not a threat in the near term. The US dollar hovers near multi-month lows in many USD pairs ahead of that data and gold has notched new eight-month highs overnight, while copper is cementing its move higher above four dollars per pound.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures rallied 0.7% after a weak Tuesday’s session in a strong signal that the market remains upbeat about growth prospects and inflation cooling. US equities are still stuck in an odd range with moving averages of different lengths pointing in all directions. The key trading focus is tomorrow’s CPI report and whether the market dares to extend momentum into the report. Tuesday’s intraday high in S&P 500 futures at 3,973 is naturally the hard resistance level on the upside. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) The Hang Seng Index resumed its uptrend to make a new recent high to trade above 21600, up more than 1% from yesterday and a level last seen in July last year. China’s Lunar New Year travel season started last Saturday 7 January with 9,454 flights or a 2.3% growth from the first day of the same travel season last year. The number of daily flights increased to 10,123 on 8 January, a 13.7% increase from the same period last year and above 10,000 for the first time since August 2022. Other high frequency data also showing increases in inter-city travelling. Chinese mega cap internet names led the charge higher, with Alibaba (09988:xhkg) and Tencent (00700:xhkg) gaining over 3%. Coal miner, China Shenhua Energy (01088:xhkg), rising by 5.6%, was the top winner within the Hang Seng Index. Mainland China’s CSI300 was flat. Coal mining, oil and gas exploration and development, and property management services stocks gained. FX: USD dips on rebounding risk sentiment ahead of December CPI data Thursday Lack of data and any relevant commentary in Fed Chair Powell’s short comments at a conference of central bankers yesterday saw the USD easing lower by this morning as risk sentiment rebounded. EURUSD was the outperformer, with better growth outlook underpinning, but it continued to find resistance at 1.0760. USDJPY is back above 132 amid higher yields, while AUDUSD rose back above 0.69 following the higher-than-expected Australian November CPI print released overnight. USDCNH also still below 6.7900. Tomorrow’s US December CPI release will prove important in confirming or rejecting the recent USD weakening move. Crude oil (CLG3 & LCOH3) choppy amid China optimism and inventory build Crude oil prices continue to pivot around $80 per barrel in Brent and $75 in WTI as the market remained buoyed by optimism of China demand recovery while yesterday’s European session was supported by upbeat Eurozone outlook. Meanwhile, EIA raised its forecast for demand growth in 2023 to 1.05mb/d. However, it also expects US output to rise to meet this demand, with US shale oil providing the bulk of the gains. The API report showed a strong inventory build of 14.9mn barrels in crude as against expectations of a 2.2mn draw and focus now turns to EIA figures today. Near-term futures spreads meanwhile are holding in a bearish contango structure, signalling ample supply. Resistance around the 21-day moving average in Brent at $81.50 and $76 in WTI Gold (XAUUSD) pushed higher overnight ... supported by general metal strength amid the current focus on the reopening of the Chinese economy and pent-up seasonal demand ahead of the Lunar New Year holiday. Developments that are being supported by a softer dollar and a drop in US bond yields ahead of tomorrow’s US CPI print, which is expected to show further softening, leading to speculation the FOMC may slow the pace of future rate hikes. While momentum supports technical and speculative buying, for now primarily through short covering, activity in ETF market from longer-term investors remain tepid, raising the short-term risk of a correction. The next major hurdle for gold being $1896, the 61.8% retracement of the 2022 correction, with support now at $1865 and $1830. Copper continues to march higher Copper continues to gain momentum as it remains buoyed by the reopening of Chinas economy and increased policy support to fuel an economic recovery to offset the economic fallout from President Xi’s failed and now abruptly abandoned covid-zero policies. Gains were further boosted by Chair Powell staying away from a pushback on easing financial conditions, and the weaker USD as a result. While the metal increasingly looks ripe for a correction, the sharply improved technical outlook and limited investor positioning may drive it higher in the short term. Overnight futures prices in London and New York managed to retrace 50% of the 2022 sell off, in HG copper at $4.0850 and LME at $8900. Support at $3.96 followed by the 200 DMA at $3.84 US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) edge higher, 10-year auction up today After nearly touching 3.50% at the start of the week, the US 10-year benchmark yield rebounded above 3.60% yesterday before settling slightly lower as risk sentiment improved. An auction of 3-year treasuries saw strong demand yesterday, with a 10-year auction up later today after a string of weak auctions for longer maturity US paper in late 2022. Read next:According To Analysts, Russia May Collapse Within A Decade, Guaranty Trust Bank Has Fined| FXMAG.COM What is going on? The Aussie dollar rallies after hotter than expected Australian CPI and retail data The Aussie dollar nudged up 0.3% to 0.6906 US, with local inflation and retail sales coming in hotter than expected, reflect that the RBA can continue to tighten, as inflation remains above the RBA target. Today's data also reflects stagflation could hit the nation in 2023; with unemployment likely to rise, and real GDP to fall to 2% (consensus). The biggest contributors to inflation (housing price rises, food and transport (petrol costs)) are also sticky and are not expected to subside in the near term. (Core CPI rose from 5.3% YoY to 5.6% YoY in Nov (beating 5.5% expected). Moving to retail sales in November, which jumped 1.4%, boosted by Black Friday, also reflect Australian's are not perturbed by rate hikes. Over the medium term, the Aussie could remain supported amid China’s reopening, with GDP to also benefit from China buying Australian coal for the first time in two years.    The story is shifting on Europe Softer energy prices, the lack of black-out and resilient hard data (notably in Germany) is pushing forecasters to review their 2023 recession calls. Goldman Sachs is the first international bank to drastically revise its growth forecasts upward, from minus 0.1 % in 2023 to 0.6 %. Said differently, the U.S. based bank does not expect a recession in the eurozone this year anymore. Early Q4 indications are out this Friday with the preliminary 2022 FY growth estimate. This should certainly confirm a milder-then-expected economic downturn. A mild recession (meaning drop in GDP of 0.1 or 0.2 %) is still our baseline this year. But we agree that the economy is surprisingly resilient. We also believe there will be no extreme macro and market events in 2023 – which could be positive from a growth perspective. If the economy performs much better, this will however give ECB policymakers more confidence in hiking rates as laid out in December by Christine Lagarde. China’s aggregate financing slowed to 9.6% y/y while loans to corporate picked up In December, the growth of outstanding aggregate financing, the broad measure of credit in China, decelerated to 9.6% y/y from 10.0% y/y in November. New aggregate financing declined to RMB1,310bn in December (below consensus RMB1,850bn) from RMB1,987bn in November, dragged by a decline in new bond issuance from local governments and a net bond redemption by corporate. New RMB loans rose to RMB1,400bn (above consensus RMB1,200 billion) from RMB 1,214bn in November and were also above RMB1,130bn in December 2021. The growth of RMB loans picked up to 11.1% y/y in December from 11.0% in November. The better-than-expected growth in RMB loans was driven by new loans to the corporate sector which rose to RMB1,264bn in December from RMB884bn in November and above RMB 662bn a year ago, as the Chinese authorities had asked banks to extend credits to support the housing market and other key industries. New loans to households came in weak, falling to RMB175bn in December from RMB263bn in November and RMB372bn in December a year ago. Apple aims to start using own screens by 2024 replacing Samsung Apple is accelerating its vertical integration with the news yesterday that it plans to replace Broadcom chips by 2025 and today it is aiming to replace screens from Samsung by 2024. It is a classic move for a big company increase profit margins by insourcing parts of the value chain, but the key risk long-term is the potential loss of innovation and lower prices. The alternative to integrating components is to let a competitive market supplying what you need as Samsung and LG do today in fierce competition. French labor unions call for strike to start Jan 19 on Macron pension plan French president Macron unveiled a plan to raise France’s minimum retirement age to 64 by 2030 from the current level of 62. France has one of the highest pension costs as a percentage of GDP in the EU (nearly 14%) and the ranks of the retired are set to grow for at least another 15 years if no changes are made. Iron ore price above $120 The iron ore futures traded in Singapore reached a 5-month high overnight, underpinned by China reopening and stimulus for the property sector. Look for a reversal as China had warned of tightening the supervision on iron ore pricing on Friday to crack down on speculators. Supply outlook is also relatively better, with an estimated 40 million tons of additional supply in 2023, while demand will likely be suppressed due to constraints on crude steel production in China. Wages set to rise in Japan? The fast-fashion Japanese retailer Uniqlo is set to hike pay for many full-time staff in Japan by as much as 40% and will raise the salary for newly hired graduates by over 17%. Bank of Japan Governor Kuroda has long stated that inflation is only rising sustainably if Japanese wages also begin to rise in line with commodity- and other input costs. What are we watching next? US December CPI up on Thursday The latest CPI data out of the US is the next important test for global markets, which seem confident that the Fed will not only halt its policy tightening soon after perhaps 50 basis points of further tightening but will even be signalling rate cuts by year-end. The US CPI releases have triggered considerable volatility in recent months, particularly in equity markets on aggressive trading in very short-dated options. The market expects that inflation will actually fall month on month by –0.1% and only rise 6.5% year-on-year versus +7.1% in November. The core, ex Food and Energy number is expected to rise +0.3% MoM and +5.7% YoY vs. +6.0% YoY in November and a peak rate of 6.6% in September. Earnings to watch The Q4 earnings season kicks off this Friday with banking earnings from Bank of America, JPMorgan Chase, and Citigroup with consensus expecting earnings to continue contracting among US banks before coming back to growth this year. The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession or maybe no recession at all in the US economy. With higher interest rates level expectations are that banking revenue will slowly begin to accelerate and if high interest rates persist for an extended period, the longer-term growth for banks could be quite attractive. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Thursday: Fast Retailing, Seven & I Friday: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Economic calendar highlights for today (times GMT) 0800 – Czech Dec. CPI 1530 – EIA’s Weekly Crude and Fuel Stock Report 2350 – Japan Nov. Current Account data 0030 – Australia Nov. Trade Balance 0130 – China Dec. PPI, CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – January 11, 2023 | Saxo Group (home.saxo)
The US PCE Data Is Expected To Confirm Another Modest Slowdown

Saxo Bank Podcast: The Conflicting Signals From Expanding US Credit, Apple's Deepening Vertical Integration Moves, Strong Metals Markets And More

Saxo Bank Saxo Bank 11.01.2023 10:22
Summary:  Today we discuss the bounce-back in US equity markets as we are all supposedly holding our breath for a CPI release tomorrow when the last soft CPI release in December drove zany intraday volatility and a rally that was quickly erased - etching out a market top at the time. Elsewhere, we discuss the conflicting signals from expanding US credit while another sentiment survey disappoints, look at strong metals markets as a clear expression of hopes for a China-driven recovery, Apple's deepening vertical integration moves as it looks to ditch Samsung screens, and much more. Today's podcast features Peter Garnry on equities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next:The EUR/USD Pair Is Still Above 1.0700$, The USD/JPY Pair Was Little Changed| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Metals are sending loud signals as US equities in limbo | Saxo Group (home.saxo)
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

The Euro, The Aussie Gain On Hawkish Central Bank Expectations, Crude Oil Under Pressure

Swissquote Bank Swissquote Bank 11.01.2023 12:29
US equities first struggled to find direction, as the Federal Reserve (Fed) Chair Jerome Powell kept mum on monetary policy in Stockholm yesterday, worried about the World Bank’s morose growth projections, but then turned north on hope that a softer US inflation print tomorrow could boost the Fed doves and enhance appetite in US equities. Gold Gold benefits from softer US yields, and softer dollar on expectation that a softer inflation could soften the Fed’s policy stance. World Bank The World Bank predicts a global growth of about 1.7% this year, about half the pace it predicted last summer. Although the slowing economic growth softens the rate expectations – and boost equities, a weaker global economy should weigh on corporate profits and should not let the rally run too far. Forex In the FX, European Central Bank (ECB) officials stand behind their hawkish view despite the latest softening in inflation. The EURUSD pushes higher as the positive pressure is the fruit of the divergence between softening Fed expectations and hawkish ECB bets. Australia In Australia, inflation advanced more than expected to 7.3% in Q4 fueling the expectation that the Reserve Bank of Australia (RBA) could opt for another 25bp hike in its February meeting. Energy Finally, in energy, crude oil is dragging its feet below the $75 this morning and will likely remain under pressure as yesterday’s API data showed that the US oil inventories rose by a little less than 15 mio barrels last week as the refining activity returned to normal following weather-related shutdowns. Watch the full episode to find out more! 0:00 Intro 0:23 Stocks rallied on softer US inflation bets 1:58 ‘Be careful what you wish for!’ 3:20 World Bank cuts growth forecasts… 3:53 … but Goldman calls off the Euro recession!? 5:48 Euro, Aussie gain on hawkish central bank expectations 6:55 Crude oil under pressure on 15-mio US stockpile build 7:34 Gold benefits from softer dollar, yields 7:56 Microsoft could be on a good path with ChatGPT! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #inflation #expectations #USD #EUR #GBP #XAU #earnings #season #Microsoft #ChatGPT #tech #stocks #World #Bank #Goldman #Sachs #growth #forecast #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH        
Rates Spark: Italy's Retail Bonds and Their Impact on Government Funding

Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian

Kamila Szypuła Kamila Szypuła 11.01.2023 11:30
Pietro Beccari will replace Michael Burke, Louis Vuitton’s CEO of 10 years, and Delphine Arnault has been named CEO and chairman of Dior. Also known to occur in Rivian. Top executives leave the start-up. Louis Vuitton and reshuffling of top management positions Louis Vuitton starts 2023 with one of the biggest personnel changes in years. Moët Hennessy Louis Vuitton has announced a major reshuffling of top management positions. Beccari, who took over as president and CEO of Dior Couture in 2018, could replace Michael Burke, the current CEO. Beccari will return to the brand he previously worked for, joining the leather goods giant in 2006. In recent years, the Italian managing director has overseen Dior's remarkable growth, where analysts estimate revenue has more than tripled in the past five years. At Dior, Beccari's achievements include the opening of a massive new flagship store in Paris' luxury shopping district, which spans five levels. Revenue rose from €2.2 billion in 2017 to €8.8 billion in 2022, according to HSBC estimates. Sales grew 35 percent in 2022, beating the industry average. Meanwhile, Michael Burke, who has led the fashion brand for a decade and is one of Arnault's most trusted lieutenants - LVMH's CEO and majority shareholder - who has worked with him since the 1980s, will now take on new responsibilities reporting directly to Arnault. During his 10-year tenure at Louis Vuitton, Burke, who had worked with Arnault for decades, managed to nearly triple the size of the brand. In 2013, sales amounted to EUR 7.1 billion. According to HSBC estimates, in 2022 they amounted to EUR 20.6 billion. Beccari currently heads Dior and will be succeeded by Delphine Arnault, the eldest of Mr Arnault's five children. The management changes mark a sort of homecoming for Arnault, who worked at Dior for 12 years before joining Louis Vuitton as No. 2 in 2013. It is also the first time that he takes up the position of CEO of one of the LVMH brands. Delphine Arnault, the executive vice president of Louis Vuitton, who oversees all of its product-related activities, has been named chairman and CEO of Christian Dior Couture, while Charles Delapalme, currently Dior’s executive vice president in charge of commercial activities, will become managing director. Changes are effective 1 February. Since the beginning of the year, LVMH's share price has skyrocketed after it closed 2022 at 679.90. Currently, LVMHs are above 750 and have been at an all-time high for over 5 years. Rivian’s problems The electric car market has been having a difficult time lately. Especially startups suffer from this. Rivian Automotive Inc is a perfect example of this. Start-up EV will end a year in which it failed to meet its production targets. Last year, Rivian failed to produce 25,000 vehicles. The company said it missed its target by about 700 vehicles, partly due to difficulties obtaining parts. This is not the end of the problems of the star-up. Several top executives have left Rivian. The departing directors are some of Rivian's long-time employees. These include Randy Frank, VP of Exterior and Interior Engineering and Steve Gawronski, VP of Parts Procurement. They both left around the beginning of this year. Another employee, Patrick Hunt, a senior director on the strategy team, left the company late last year. Mr Hunt joined Rivian in 2015.Rivian's general counsel, Neil Sitron, left in September after 4.5 years with the firm, which was founded in 2009. Changes at the top of Rivian come as the company tries to transform itself from a start-up looking to raise capital to a mass-producer with ambitions to become one of the world's largest carmakers. RIVIN shares are at their lowest level. The company ended 2022 with a price of 18 430, but the new year did not bring an increase, but a decrease, as shown by its current price of 16 590. Source: wsj.com, finance.yahoo.com
At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

At The Close Of The New York Stock Exchange 728 Securities Closed In The Red

InstaForex Analysis InstaForex Analysis 12.01.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones was up 0.80%, the S&P 500 was up 1.28% and the NASDAQ Composite was up 1.76%. According to forecasts, annual inflation in the US slowed to 6.5% from 7.1% in November. Analysts note that the expected slowdown in inflation, coupled with an improvement in the situation in supply chains and an easing of covid restrictions in China, creates the basis for optimism in the markets. The publication of the consumer price index is expected on Thursday. Dow Jones The leading performer among the Dow Jones index components in today's trading was Microsoft Corporation, which gained 6.92 points or 3.02% to close at 235.77. Quotes of Home Depot Inc rose by 8.37 points (2.61%), closing the auction at 329.00. Apple Inc rose 2.76 points or 2.11% to close at 133.49. The least gainers were shares of Verizon Communications Inc, which shed 0.77 points or 1.84% to end the session at 41.18. Salesforce Inc was up 1.72% or 2.54 points to close at 144.90, while Procter & Gamble Company was down 0.81% or 1.23 points to close at 150. .66.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Bio-Rad Laboratories Inc, which rose 6.53% to 461.17, Etsy Inc, which gained 6.11% to close at 134.69. as well as SolarEdge Technologies Inc, which rose 5.84% to close the session at 302.15. The least gainer was Teleflex Incorporated, which shed 7.60% to close at 239.77. Shares of DexCom Inc lost 4.26% and ended the session at 106.16. Quotes of Intuitive Surgical Inc decreased in price by 4.20% to 259.96. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Atlis Motor Vehicles Inc, which rose 276.12% to 10.08, Broadwind Energy Inc, which gained 96.90% to close at 4.45. as well as shares of Bed Bath & Beyond Inc, which rose 68.60% to close the session at 3.49. The least gainers were Tantech Holdings Ltd, which shed 28.10% to close at 2.20. Shares of American Virtual Cloud Technologies Inc lost 24.65% to end the session at 1.07. Quotes of Kala Pharmaceuticals Inc decreased in price by 20.27% to 21.00. Numbers On the New York Stock Exchange, the number of securities that rose in price (2,342) exceeded the number of those that closed in the red (728), while quotes of 101 shares remained virtually unchanged. On the NASDAQ stock exchange, 2499 companies rose in price, 1223 fell, and 181 remained at the level of the previous close. Broadwind Energy Inc (NASDAQ:BWEN) rose to a 52-week high, up 96.90% or 2.19 points to end at 4.45. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.48% to 9/21. Gold Gold futures for February delivery added 0.23%, or 4.35, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 3.30%, or 2.48, to $77.60 a barrel. Futures for Brent crude for March delivery rose 3.47%, or 2.78, to $82.88 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.21% to 1.08, while USD/JPY rose 0.14% to hit 132.43. Futures on the USD index fell 0.01% to 102.97.     Relevance up to 03:00 2023-01-13 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/308278
Commodity: The World's Two Biggest Commodity Consuming Nations, Both Delivered Price Softening News

Aluminium, Copper And Iron Ore Rose To New Highs, The EUR/USD Pair Broke Above 1.0760

Saxo Bank Saxo Bank 12.01.2023 09:32
Summary:  US stocks rallied as yields fell ahead of the CPI release later today where a softer reading is widely expected. Key to watch in the inflation release will be the services ex-housing print, and significant volatility can be expected due to large hedging flows. Oil prices higher despite inventory builds. Meanwhile, the metals space continues to run hot amid positive sentiment from China’s reopening and policy stimulus, with Aluminum, Iron Ore and Copper all rising to fresh highs. Gold also held onto its recent gains, but could be ripe for a temporary correction with CPI on the radar.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) rallied on lower bond yields, short covering, and optimism of upcoming CPI data potentially soft With relatively quiet corporate headlines, S&P 500 gained 1.3% and Nasdaq 100 advanced 1.8% as bond yields slid. The interest rate-sensitive real estate sector, up 3.6%, was the top winner within the S&P 500 Index, followed by consumer discretionary and information technology. Traders notably covered some of their shorts ahead of today’s CPI as the most-shorted names were among the best performers on Wednesday. The Nasdaq 100 closed above its 50 day moving average. Meanwhile, the S&P 500 (US500.I) rose for the second day and closed at the high of the day. Tesla and Amazon shares trade at key levels; but caution is thick in the air Indeed these were some of the standouts share on Wednesday with Tesla shares up 3.7% after failing to move above a key resistance level. It appears there is some skepticism about the rally as Tesla is selling less EVs than its making and is cutting prices in China. Amazon meanwhile, gained 5.8%, closing near its high of the day and around 15% up from its low last Friday, and moved further above its 50-day moving average. These are positive signs. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied on dovish ECB comments, strong 10-year auction U.S. Treasuries were well bid through European hours in tandem with German bunds which rallied on dovish remarks from a typically hawkish Holzmann, an ECB Governing Council member. Treasuries held on to their gains and traded sideways for the most part of the New York session before rallying further with yields on the long-end falling further on a strong 10-year note auction. Yields on the 10-year were 8bps richer to 3.54%. Yields on the 2-year were off by 3bps to 4.22, bringing the 2-10-year curve 5bps more inverted to -68. Boston Fed’s Collins (non-voter) said she would “lean at this stage to 25 [basis point hike], but it’s very data-dependent.” Traders’ focus is now on the CPI data scheduled to release today. What to watch in Australia and Asia: Oil rises for 5th day, Iron ore clears $120, copper rises to six month high entering a bull market The Australian share market (ASXSP200.I) rose 1% in early trade, with Hong Kong’s market futures in the positive, as well as Japan’s futures. A major focus will be on resources, with the oil price jumping 3% to $77.41, as well as focus on industrial metal equites, that will likely rally again on optimism of China’s reopening, which has pushed some commodities into bull markets. The Copper price rose to $4.18 on the Comex market, rising 2.5% in New York, taking its rally of its July 2022 low to 29%. With copper at $9000 per tonne for the first time since June, Goldman thinks it could hit $11,500 by year-end. Copper remains Saxo’s preferred metal for its use in electrification and urbanisation (for more click here). Popular copper equities include BHP, Oz Minerals, Rio Tinto. Meanwhile, iron ore (SCOA) cleared $120 for the first time in 6-months, with the iron ore price up 54% from its October low. BHP is trading at its highest level in history. It makes 48.7% of its revenue from iron ore, 26.7% from copper and the remainder from coal. It has a PE of 8 times earnings, and a dividend yield of 13.8%. Rio Tinto also trades near its all-time high and it’s also involved in the key metals mention too; making 58% of its revenue from iron ore, 11% from copper, and the rest from aluminum and others. Rio’s PE is 6.8 times earnings, its dividend yield is 8.6%. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) pared gains after making a 6-month high After having taken out the top of trading range resistance and making a six-month new high, Hang Seng Index pared most of the gains to finish the Wednesday session up only 0.5%. Alibaba (09988:xhkg) gained 3.1% on the news report that the eCommerce platform giant entered into a strategic cooperation agreement with the municipal government of Hangzhou and a People’s Daily article sounded complimentary to the Ant Group. Air China (00753:xhkg) dropped by 1.2% and China Southern Airlines (01055:xhkg) shed 1.5% following China suspended issuing visas to visitors from South Korea and Japan. EV names gained even though the China Passenger Car Association (CPCA) dismissed the speculation on the relaxation of licensing restrictions in Beijing. EV maker BYD (01211:xhkg) and coal miner China Shenhua Energy (01088:xhkg), each rising around 4.7%, were the two top winners within the Hang Seng Index. Mainland China’s CSI300 was down 0.2%. Stocks in coal mining, oil and gas exploration, and development industries gained. FX: USDJPY drops below 132 on possible BOJ action next week The USD was range-bound on Wednesday as it awaited the key US CPI release, despite a drop in yields taking the 10-year yields closer to 3.50% support once again. Fed member Susan Collins, although a non-voter, she is leaning towards a 25bps hike at the February 1st meeting although the data will help guide her decision, adding further dovish hints in the day. However she still favoured rates above 5% and a pause thereafter throughout 2023. EURUSD broke above 1.0760 and EURCHF rose above parity for the first time since July. ECB’s De Cos said he sees “significant” rate hikes at the upcoming meetings. USDJPY saw a big move lower in the Asian morning to drop below 132 from highs of 132.88 yesterday with expectations of BOJ likely considering further tweaks to its YCC policy (read below). FX watch: Australian trade data surged beyond expectations. US CPI next catalyst for AUDUSD Australia’s trade balance data released today, rose well beyond expectations, with the trade balance surging to $13.2 billion, when consensus expected exports and imports to have fallen considerably in November, with the market expecting the surplus would fall from $12.2 billion to $11.3 billion. This data shows that trade has been improving, well ahead of China’s easing of restrictions – which is a positive sign. The AUD rallied to 69.18 US, which is the level it hit yesterday after Australian inflation and retail data came out hotter than expected. The next resistance level is a psychological one, 0.700 for the AUD vs the USD. However, if core US CPI comes out hotter than expected (5.7% YoY), then a hotter USD may pressure the AUD back down. Our Head of FX Strategy suggests if that happens the AUD could drop back to another support level. However the next few days are pivotal. Click for more on FX. Crude oil (CLG3 & LCOH3) prices continue higher on China story Crude oil prices rallied again overnight as signs of improving Chinese demand boosted sentiment. Chinese buyers have become active in the physical market, with Unipec snapping up about 3-4mbbl of US crude for March and April in recent days. This comes following news that China had issued a fresh batch of import quotas as it reopens following years of COVID-19 restrictions. Supply was supported by a huge build in US inventories, but could not dampen the price sentiment as higher inventories was expected. US crude oil stocks jumped 19m barrels last week, the biggest since Feb 2021, driven by a 2m b/d drop in exports to 2.1m b/d. WTI futures rose above $77.50/barrel while Brent got in close sight of $83. No stopping the gains in metals space, yet Industrial metals continued to march higher on positive signals from China on Zero Covid and policy stimulus. An apparent peak in infections follow the sudden dropping of COVID-19 restrictions has raised the prospect of an earlier than expected jump in industrial activity. Pent up consumer demand is likely to add to the clamour for metals. Aluminium, copper and iron ore, all rose to new highs. Iron ore (SCOF3) could be potentially ripe for a reversal, given China’s warning on tightening the supervision on iron ore pricing on Friday to crack down on speculators. Meanwhile, Copper’s gains to $4.16 have also been fast and could see scope for a correction, but the sharply improved technical outlook and limited investor positioning may drive it higher still in the short term. Gold (XAUUSD) sees correction risks ahead of CPI Gold prices are hovering around an 8-month high, but our Head of Commodity Strategy sees risk of correction even if ‘lower-than-expected’ CPI print sends gold higher to test the resistance level around $1900. He sees potential of profit taking emerge. He says, “Gold’s price action during the past week has in my opinion showed us the correct direction for 2023, but while the direction is correct, I believe the timing could be wrong.”  Read next: The EUR/USD Pair Maintains A Steady Upward Trend, The Aussie Pair Keeps Close To 0.69| FXMAG.COM What to consider? US CPI remains the most key data point to watch There is enough reason to believe that we can get some further disinflationary pressures in the coming weeks. Economic momentum has been weakening, as highlighted by the plunge in ISM services last week into contraction territory, particularly with the forward-looking new orders subcomponent. An unusually warm winter has also helped to provide some reprieve from inflation pains. Bloomberg consensus forecasts are pointing to a softening in headline inflation to 6.5% YoY, 0.0% MoM (from 7.1% YoY, 0.1% MoM prev) while core inflation remains firmer at 5.7% YoY, 0.3% MoM (from 6.0% YoY, 0.2% MoM). Still, these inflation prints remain more than three times faster than the Federal Reserve’s 2% target. Fed officials have made it clear they expect goods price inflation to continue to ease, expecting another big drop in used car prices. But officials are seemingly focused on services ex-housing which remains high. So even a softer inflation print is unlikely to provide enough ammunition for the Fed to further slow down its pace of rate hikes. Volatility on watch if US CPI sees a big surprise The last two months have shown that big swings in US CPI can spark significant volatility in the equity markets, given the large amounts of hedging flows and short-term options covering. With a big focus on CPI numbers again this week, similar volatility cannot be ruled out. Volume might be thin still this week as many are still on holidays, so moves in equities could be amplified in either direction. Meanwhile, FX reaction to CPI has been far more muted, but some key levels remain on watch this week. A higher-than-expected CPI print could keep expectations tilted towards a 50bps rate hike again in February, while a miss could mean expectations of further slowdown in Fed’s tightening pace to 25bps in February could pick up which can be yield and dollar negative. Apple plans to use its own displays in mobile devices Apple (AAPL:xnas) aims to its own custom displays in the consumer electronic giant’s mobile devices starting in 2024, as opposed to procuring from Samsung and LG. It is the latest move in a series of initiatives from Apple to reduce reliance on sourcing components from partners, including chips from Broadcom and modems from Qualcomm. China’s CPI expected modestly higher, PPI less negative Economists surveyed by Bloomberg had a median forecast of China’s December CPI at an increase of 1.8% Y/Y, edging up from 1.6% in November, mainly due to base effects, as food prices are likely to be stable and higher outprices in the manufacturing sector might be offset by a fall in services prices. PPI in December is expected to be -0.1% Y/Y, a smaller decline from -1.3% Y/Y in November, benefiting from base effects. The decline in coal prices was likely to be offset by an increase in steel prices. Signs of wage growth in Japan; could we see more action from BOJ next week? The fast-fashion Japanese retailer Uniqlo (owned by Fast Retailing) is set to hike pay for many full-time staff in Japan by as much as 40% and will raise the salary for newly hired graduates by over 17%. Bank of Japan Governor Kuroda has long stated that inflation is only rising sustainably if Japanese wages also begin to rise in line with commodity and other input costs. Meanwhile, Yomuiri reported that BOJ officials will review the side effects of the ultra-easy monetary policy at their policy meeting next week, opening the door for further adjusting the yield curve control policy or the bond-buying as the central bank continues to see 10-year yields testing the new upper limit of 0.5%. Fast Retailing (9983:xtks) reports earnings today and a 10th straight quarter of operating profit growth is seen, although the pace of growth is likely to slow amid China’s lockdowns in the November-ended quarter and fading FX benefits. TSMC (TSM:xnys) reporting Q4 results, 1H23 outlook and overseas expansion plans key to watch Given the industry-wide inventory overhang, investors will be closing monitoring the world’s largest foundry’s 1H2023 revenue outlook when TSMC reports Q4 2022 results today. Investors will also pay much attention to the management’s comments on TSMC’s plans for building manufacturing capacities outside of Taiwan and mainland China which have implications on margins and capex spending. For Q4 results, analysts surveyed by Bloomberg, on average, are forecasting revenues coming at TWD636 billion and adjusted earnings at TWD11.087 per share. For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: US CPI day, Bank of Japan policy tweak speculation – 12 January 2023 | Saxo Group (home.saxo)
Czech National Bank Prepares for Possible Rate Cut in November

CPI In China Rose, US CPI Print Are For A Rise For The Year-On-Year At 6.5%

Saxo Bank Saxo Bank 12.01.2023 09:40
Summary:  Markets have charged higher again, seemingly confident that today’s US December CPI data won’t provide any pushback against this rally, which is pulling up into the psychologically important 4,000 area in the US S&P 500 Index. Elsewhere, the USD remains on its back foot on hopes for a soft CPI print, while EURCHF has suddenly pulled above parity for the first time in over six months in a delayed reaction to ECB hawkishness. Oil jumped.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended momentum all the way up to the falling 200-day moving average closing at 3,990 and in early trading this morning the index futures are hovering around the 200-day moving average. This average was hit back in mid-December before US equities were weighed down by hawkish central bank comments and sold off into New Year. Today’s US December CPI report is naturally the key report to watch today as the previous three inflation reports have caused significant volatility over the release. If the market gets it lower inflation print then S&P 500 futures might push above 4,000 and even all the way up to 4,050. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) After making a new six-month high this morning, Hang Seng Index reversed and pared gains. Profit-taking weighed on recent policy beneficiaries, such as mainland Chinese property developers, domestic consumption names, mega-cap internet stocks, and Macao casino operators. Shares of EV makers bucked the market trend of retracement to advance, led by BYD (01211:xhkg) up 5.7%. FIT Hong Teng (06088:xhkg), a subsidiary of Foxconn, soared 23% on speculation that the company might replace GoerTek (002241:xsec) to assemble AirPods for Apple. In A-shares, defense, aerospace, auto industrial equipment and wind power outperformed as the domestic consumption space retraced. As of writing, Hang Seng Index and CSI300 edged up around 0.3%. FX: USD still low, JPY resurgent. EURCHF blasts higher The greenback remains on its back foot coming into today’s US December CPI release, with market players likely very unclear around the reaction function (more on that below in What’s Next?) to in-line or even soft data today. EURUSD etched marginal new highs above 1.0760 yesterday, but clearly faces a test over today’s data and may have been driven yesterday by flows in EURCHF, which suddenly bursts out of its range and traded well above parity – likely on the hawkish ECB outlook finally sending the pair over the edge. ECB’s De Cos said he sees “significant” rate hikes at the upcoming meetings, while ECB’s Holzmann soft-pedaled the message on QT, saying he was very cautious on moving too fast.  USDJPY dipped on the news flow overnight as described below, and many other USD pairs are still within recent ranges, if toward important USD support in places, especially AUDUSD. Crude oil (CLG3 & LCOH3) remains supported by China recovery story Crude oil prices rallied strongly on Wednesday with the improved outlook for Chinese demand and the softer dollar driving a fifth day of gains. Chinese buyers have become active in the physical market, with Unipec snapping up about 3-4mbbl of US crude for March and April in recent days. This comes following news that China had issued a fresh batch of import quotas as it reopens following years of COVID-19 restrictions. Supply was supported by a huge 19m barrels build in US inventories, the biggest since Feb 2021, but it could not dampen the positive price sentiment as higher inventories was expected after the late December cold blast reduced exports while temporarily shutting down some refineries. Fresh momentum was seen in both WTI and Brent after breaking their 21-day moving averages, now offering support at $76.35 and $81.65 respectively. Gold sees raised correction risk as US CPI looms Gold’s price action and gains during the past week has in our opinion showed us the correct direction for 2023, but while the direction is correct, we believe the timing could be wrong, and with momentum showing signs of slowing ahead of key resistance around $1900, and a potential weaker-than-forecast US CPI print today having been priced in, the risk of correction has risen. Pent-up demand in China ahead of the Lunar New Year may soon fade, while India’s demand may slow as traders adapt to the higher price level. In addition, we have yet to see demand for ETF’s, often used by long-term focused investors, spring back to life with total holdings still hovering around a near two-year low at 2923 tons. The next major hurdle for gold being $1896, the 61.8% retracement of the 2022 correction, with support around $1865 followed by $1826, the 21-day moving average. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) yields drop, strong 10-year auction supports The US 10-year yield dropped back toward 3.50% support overnight after falling some 7-basis point yesterday, supported in part by a solid US 10-year auction, with bidding metrics sharply improving relative to the prior couple of weak auctions. The 2-10 year yield slope inverted back toward –70 basis points. Treasuries may find additional support if today’s December US CPI report proves softer than expected. Read next: Discussion Of Bank Representatives On Financing The Ecological Transformation | FXMAG.COM What is going on? The Eurozone economy is more resilient than forecasted Economic surprises are improving significantly in the eurozone. The consensus forecasts a drop in GDP of minus 0.1% this year. Based on hard data, this seems excessively conservative. It is bound to be revised up, in our view. The German economy is especially very resilient. While gas consumption has collapsed by double digits, industry output has remained largely flat. This is a remarkable achievement. Based on the latest data on industrial production (for the month of November), it looks like there will be no recession in German industry in Q4. However, the year 2023 will be challenging in the eurozone: credit stress is on the rise (this is the first time in a decade we start the year with European IG credit yield above the 4 % level), and the market will need to absorb about 700bn euros of liquidity due to the ECB quantitative tightening. Metals pause after powering higher on China optimism Industrial metals are pausing ahead of today’s CPI print and after having marched higher on positive signals from China on Zero Covid and policy stimulus. An apparent peak in infections follow the sudden dropping of COVID-19 restrictions has raised the prospect of an earlier than expected jump in industrial activity. Pent up consumer demand is likely to add to the clamour for metals. Aluminium, copper and iron ore, all rose to new highs on Wednesday. Iron ore (SCOF3) could be potentially ripe for a reversal, given China’s warning on tightening the supervision on iron ore pricing on Friday to crack down on speculators. Meanwhile, Copper’s year-to-date gain of 9% to near $4.20 has also been fast and could see scope for a correction, but the sharply improved technical outlook and limited investor positioning may continue to provide some support in the short term. USDJPY drops below 132 on possible BOJ action next week The Bank of Japan meets next Wednesday and may be set to guide for further policy tweaks after a regional Bank of Japan report released overnight . In other news in Japan, the Yomiuri newspaper reported that the BoJ will review the side effects of its policy at next week’s meeting and a quarterly Bank of Japan report raised its assessment of the economy in four of Japan’s nine regions, noting that in “there were many cases where companies were increasing winter bonus payments, or plan to hike wages.” Also JPY-supportive, preliminary data from Japan’s Ministry of Finance suggest that Japan’s life insurers sold a record amount of foreign bonds last month. CPI and PPI inflation remained low in China CPI in China rose to 1.8% y/y in December from 1.6% in November, in line with expectations. The rise was due to a low base and on CPI was unchanged m/m. Excluding food and energy, core CPI came in at 0.7% y/y in December, edging up slightly from 0.6% y/y in November. The change in PPI however rebounded less than expected to -0.7% y/y versus -0.1% expected and -1.3% y/y in November. TSMC Q4 earnings beat estimates The world’s largest foundry of semiconductors beat on net income in Q4 driven by gross margin at 62.2% vs est. 60.1%. TSMC says company to face margin headwinds in 2023 with revenue growth slowing down. CAPEX in 2023 is expected at $32-36bn vs est. $35bn against $36bn in 2022. The company is considering a second manufacturing plant in Japan and a new automotive chips plant in Europe. It has also expanded its 28nm production in China and is planning to mass produce its new 2nm in 2025 in its facilities in Taiwan. Fast Retailing sees big miss in Q1 operating income The parent company behind the Japanese fashion retailer Uniqlo reports Q1 operating income of JPY 117bn vs est. JPY140bn but maintains its outlook for profit and revenue growth amid its commitment from yesterday to raise wages up to 40% for its Japanese retail workers. KB Home outlook hit by interest rates When the price of capital goes up the demand on homes often goes down, and this is exactly what KB Home is experiencing. The US homebuilder reported Q4 EPS of $2.47 vs est. $2.86, but it was the FY23 outlook of revenue between $5bn and $6bn missing the consensus of $6bn in revenue, but with new orders down 80% more profit warnings could come during the year. What are we watching next? WASDE report on tap with grain traders watching stock levels The Bloomberg Grains Index, rangebound for the past six month has opened a new trading year with a loss of 3.5% primarily driven by lower wheat prices on ample supply from the Black Sea region, will receive some fundamental input later today when the US Department of Agriculture releases its monthly supply and demand report. Market estimates point to a trimming of the global corn and soybeans inventories, while wheat is expected to show a small rise. US inventories, meanwhile, is expected to rise across the board driven by weakness in Chinese demand and strong competition from overseas supplies, in part due to the dollar. Also focus on Argentina where an ongoing drought may drive a 6% reduction in the country's soy and corn output. US December CPI up today – what is the reaction function? The latest CPI data out of the US is the next important test for global markets, which seem confident that the Fed will not only halt its policy tightening soon after perhaps 50 basis points of further tightening but will even cut rates cuts by year-end. The US CPI releases have triggered considerable volatility in recent months, and the November CPI release on December 13 ullustrates the potentially treacherous reaction pattern to this data points, as softer than expected inflation levels reported saw risk asset jump aggressively as US treasury yields eased, only for the equity market move to get erased within hours and the US yields to bottom out on the following day. Consensus expectations for today’s CPI print are for a fall in the month-on-month headline data of –0.1% and a rise for the year-on-year at 6.5% versus +7.1% in November. The core, ex Food and Energy number is expected to rise +0.3% MoM and +5.7% YoY vs. +6.0% YoY in November and a peak rate of 6.6% last September. Earnings to watch The Q4 earnings season kicks off tomorrow with banking earnings from Bank of America, JPMorgan Chase, and Citigroup with consensus expecting earnings to continue contracting among US banks before coming back to growth in 2023. The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession or maybe no recession at all in the US economy. With higher interest rates level expectations are that banking revenue will slowly begin to accelerate and if high interest rates persist for an extended period, the longer-term growth for banks could be quite attractive. In addition, US banks have extended credit at the fastest pace in 2022 since the year leading up to the Great Financial Crisis. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Today: Fast Retailing, Seven & I Friday: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Economic calendar highlights for today (times GMT) 1330 – US December CPI 1330 – US Weekly Initial Jobless Claims 1345 – US Fed’s Harker (voter 2023) to discuss economic outlook 1530 – EIA Natural Gas Storage Change 1630 – US Fed’s Bullard (non-voter) to speak 1700 – UK Bank of England’s Mann to speak 1700 – USDA's World Agriculture Supply and Demand Estimates (WASDE) Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher
EUR/USD: Looking beyond the market’s trust issues with the Fed and ECB

Saxo Bank Podcast: Why The Euro Is Strong, Weak Housing News And More

Saxo Bank Saxo Bank 12.01.2023 10:40
Summary:  Today we look at global equity markets gunning for more to the upside, apparently expecting a benign US CPI release today and pricing in a soft landing scenario as long treasury yields settled back lower after a strong US 10-year treasury auction yesterday. We also look at a resurgent JPY, why the euro is strong, but some thoughts on longer term caution, coffee and grains in commodities, the latest expansion plans abroad from TSMC, weak housing news but strong housing stocks & more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Market showing no fear ahead of US CPI | Saxo Group (home.saxo)
Persistent Stagnation: German Economy Confirms Second Quarter Contraction

The New Disney Drama: Disney Is Opposing Activist-Investor Nelson Peltz

Kamila Szypuła Kamila Szypuła 12.01.2023 11:42
Nelson Peltz plans to stage a fight for a spot at Walt Disney Co. Activist investor Nelson Peltz is pushing for a seat on Disney's board, the company confirmed Wednesday, saying it had recommended shareholders vote against his efforts. Disney Drama The company's board of directors is asking shareholders to vote against it at its upcoming annual meeting. Disney said that while members of its senior management team have contacted Peltz on numerous occasions over the past few months. Peltz's Trian Fund Management executives met in California on Tuesday with top Disney executives, including Iger and CFO Christine McCarthy, in an attempt to reach an agreement with the company and avoid a proxy battle, but the talks were fruitless. Arnold called Peltz on Wednesday morning to offer him the role of board observer and ask him to sign a cease and desist agreement. The proposal was met with Peltz's refusal. Mark Parker would become president Disney revealed the activist's intentions Wednesday afternoon in a statement saying it was opposed to him being added to the board. It was also stated that current director Mark Parker would become president, succeeding Susan Arnold. Disney said its new CEO, Parker, will lead a newly formed succession planning committee that will advise the board on a new CEO and look at internal and external candidates. The company added that it was constantly refreshing its board of directors, focusing on directors with industry experience. Iger's mandate is to serve a full two-year term with the company. Read next: Pietro Beccari Will Be The Louis Vuitton’s CEO, Departures Several Top Executives At Rivian| FXMAG.COM Trian's intentions Almost two months ago, Trian bought a stake in the company worth about $800 million and began looking for a place on the board. Trian is looking to make operational improvements and cut costs, according to the company's announcement on Wednesday. Trian believes Disney has excessive compensatory practices and lacks cost discipline. Peltz has repeatedly criticized Iger for orchestrating Disney's $71.3 billion acquisition of 21st Century Fox's assets in 2019. This acquisition, along with the pandemic, left Disney with approximately $45 billion in debt. According to Peltz, Disney drastically overpaid. Trian also said he did not want to replace Bob Iger as CEO. Instead, Trian said, he wants to work with Iger to ensure a successful CEO change over the next two years. Iger's stunning comeback in November brought the promise of a two-year apprenticeship that would spark a renewed growth. The CEO also plans to help find another successor after the term of his previously elected successor, Bob Chapek, fell apart Disney share price The new Disney drama comes after a difficult year for the entertainment giant's stock as soaring streaming costs and a small number of theatrical releases have eaten away at profits. Disney has a market capitalization of over $175 billion. The stock plummeted from a high of around $200 in early 2021 to a 52-week low of $84.07 on December 28. The stock closed at $96.33 on Wednesday. Which shows that in the new year the shares have improved. Source: wsj.com, finance.yahoo.com
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange The Dow Jones Rose 0.64% To Hit A Monthly High

InstaForex Analysis InstaForex Analysis 13.01.2023 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 0.64% to hit a monthly high, the S&P 500 index rose 0.34%, the NASDAQ Composite index rose 0.64%. Dow Jones The leading performer among the components of the Dow Jones index today was Walt Disney Company, which gained 3.48 points or 3.61% to close at 99.81. Salesforce Inc rose 4.70 points or 3.24% to close at 149.60. Boeing Co rose 6.29 points or 3.02% to close at 214.32. Shares of Coca-Cola Co were the leaders of the fall, the price of which fell by 0.80 points (1.29%), ending the session at 61.21. Walgreens Boots Alliance Inc was up 1.24% or 0.46 points to close at 36.66, while Walmart Inc was down 0.90% or 1.32 points to close at 144. 81. S&P 500 The top gainers among the S&P 500 index components in today's trading were American Airlines Group, which gained 9.71% to 16.83, United Airlines Holdings Inc, which gained 7.52% to close at 51.30, and Cognizant Technology Solutions Corp Class A shares, which gained 5.85% to close the session at 65.10. The least gainers were Charles River Laboratories, which shed 5.95% to close at 232.25. Bio-Techne Corp lost 5.14% to end the session at 82.17. Quotes of Illumina Inc decreased in price by 5.05% to 193.75. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Arrival Vault USA Inc, which rose 100.00% to hit 0.54, Akerna Corp, which gained 66.67% to close at 1.65, and also shares of Moxian Inc, which rose by 73.32%, ending the session at around 1.04. The leading gainers were Oramed Pharmaceuticals Inc, which shed 76.46% to close at 2.54. Atlis Motor Vehicles Inc lost 35.32% to end the session at 6.52. Quotes of Universe Pharmaceuticals Inc decreased in price by 25.30% to 0.90. Numbers On the New York Stock Exchange, the number of securities that rose in price (2353) exceeded the number of those that closed in the red (733), while quotes of 91 shares remained virtually unchanged. On the NASDAQ stock exchange, 2633 companies rose in price, 1063 fell, and 181 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 10.72% to 18.83, hitting a new 6-month low. Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM  Gold Gold futures for February delivery added 1.17%, or 22.05, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 1.20%, or 0.93, to $78.34 a barrel. Futures for Brent crude for March delivery rose 1.50%, or 1.24, to $83.91 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.91% to 1.09, while USD/JPY shed 2.43% to hit 129.24. Futures on the USD index fell 0.94% to 101.96.   Relevance up to 03:00 2023-01-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/308486
Gold Traded Softer In Response To Dollar Strength, The Bank Of Japan Left Its Policy Levers Unchanged

A Softer US Inflation Data Helps Gold, The Japanese Yen Was The Biggest Gainer

Saxo Bank Saxo Bank 13.01.2023 09:03
Summary:  A Fed downshift to 25bp hikes may be firmer in the cards with the in-line 0.3% M/M increase in the core CPI bringing the measure to 3.1% on a three-month annualized basis. Yields on the 10-year Treasury notes plunged 10bps to 3.44% and the S&P 500 closed just below its 200-DMA. The Japanese Yen was the biggest winner in the currency space on speculation for further policy shifts by the BOJ next week. Bank of America, JPMorgan Chase, and Citigroup report Q4 earnings today.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) advanced on CPI prints supporting a Fed downshift U.S. stocks climbed, following CPI data that support the Fed to slow the pace of rate hike to 25bps in February. Nasdaq 100 gained 0.5% and S&P 500 edged up 0.3%. Closing at 3983.17, the S&P 500 has its 200-day moving average of 3,984.39 within reach. Energy, rising 1.9, was the best-performing sector within the S&P 500 as WTI crude oil climbed over 1% to USD78.29. Interest rate-sensitive REITS was the other top winning sector. American Airlines (AAL:xnys) surged 9.7% on upbeat revenue growth and earnings guidance and a debt reduction plan.   US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) rallied, yields on the 10-year sliding to 3.44% After choppy initial reactions when traders digested the CPI prints, U.S. Treasuries advanced and their yields slid decisively. The headline and core CPIs in December were in line with expectations. Investors noted the decline of the core inflation on a three-month annualised basis to 3.1% and the softness in core services excluding shelter and concluded that the Fed is on track to downshift to a 25bp hike in February. Comments from Fed’s Harker (voter) that “hikes of 25bps will be appropriate going forward” added conviction to the notion. The strong results from the USD18 billion 30-year auction saw yields on the long end richer further. Yields on the 10-year finished the session 10bps lower to 3.44% and those on the 2-year were 4bps lower to 4.12%. In Australia and Asia today focus is on; risk-on assets, Oil, Iron Ore and Copper charging The Australian share market (ASXSP200.I) opened 0.8% higher, with most other Asian markets are set to open in the positive. Ahead of Australia’s company reporting season kicking off next month, we’re thinking we could likely see many commodities companies upgrade their outlooks for 2023, expecting higher earnings as many resources prices have quickly entered bull markets amid China easing restrictions sooner than expected. However today, eyes will once again be on commodities and affiliated equites; as the oil price jumped for the 6th day, moving up to $78.30, after rising 1.1%, The copper price rose 0.1% to $4.17 on the COMEX market in New York. Iron ore (SCOA) is 0.6% higher at $123, a new 6-month high. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) traded sideways on profit taking After making a new six-month high, Hang Seng Index reversed and pared gains to finish Thursday only 0.4% higher. Profit-taking weighed on recent policy beneficiaries, such as mainland Chinese property developers, domestic consumption names, mega-cap internet stocks, and Macao casino operators. Country Garden, down 6.3%, was the biggest loser within the Hang Seng Index. Shares of EV makers bucked the market trend of retracement to advance, led by BYD (01211:xhkg) which was up 5.3% and was the top winner among Hang Seng Index constituents. NetEase (09999:xhkg) outperformed other China internet names with a 3.7% gain on collaborating with the state-owned CCTV to broadcast the Lunar New Year gala on the company’s metaverse platform. FIT Hong Teng (06088:xhkg), a subsidiary of Foxconn, soared 17.2% on speculation that the company might replace GoerTek (002241:xsec) to assemble AirPods for Apple. In A-shares, telecommunication, electric equipment, EV, non-bank financials, and new energy outperformed as the domestic consumption space retraced. CSI300 climbed 0.2%. FX watch; Australian dollar is on the heels of 0.70 US After US CPI data showed US prices have continued to fall, the US dollar vs the AUD continued to fall, taking its fall from its peak to 10%. Inversely, Australia's trade balance data released yesterday, as well as Aussie retail and Aussie CPI earlier in the week, plus the all-important easing of China’s restrictions sooner than expected, all support upside in the AUD. As such the Aussie versus the US rallied to new four-month highs, 69.67 US. The next resistance level, the psychological 70.00 US is the next hurdle to get over. Aussie home loan data released today is the next catalyst to watch. If it’s stronger than expected, the AUDUSD could march on up. FX: USDJPY crumbles on weaker USD and BOJ speculation The Japanese yen was the biggest gainer on Thursday, boosted both by lower US yields as well as speculation around a policy tweak by the Bank of Japan at the next week’s meeting. USDJPY slid from 132.50 to 129 handle. Japanese 10-year bonds continued to test the upper limit of the permitted trading band, and rose higher to 0.53% in early Asian hours testing the central bank’s resolve on a dovish policy. EURUSD broke above 1.08 to fresh highs of 1.0867 with expectations of Fed-ECB divergence setting a bullish tone. Crude oil (CLG3 & LCOH3) rounding in at about 6% gains for the week Crude oil prices gained further on Thursday amid the risk on tone set by further softening in inflation pressures. China’s steady commitment to reopen the economy and provide a stimulus to the economy continued to support sentiment this week, along with Chinese buyers become more active in the physical market as import quotas were increased. WTI futures rose to $79/barrel while Brent moved above $84/barrel. Gold (XAUUSD) reached $1900 on expectations of Fed downshift Gold saw another rally with a softer inflation print in the US bolstering the case for a further downshift in the Fed’s rate hike trajectory. A broadly dovish tone from the Fed members also saw a plunge in US yields and weighed on the USD, helping support gains in Gold as well. Silver outperformed gold, and platinum and palladium gained as well.    Read next: GM, Ford, Google And Solar Producers Would Work Together To Set Standards For Increasing The Use Of VPPs| FXMAG.COM What to consider? US CPI boosts the case for a Fed downshift A further slowdown was seen in US CPI last night, with the headline sliding to 6.5% YoY as expected from 7.1% YoY in November, stepping into the disinflationary territory on a m/m basis with a negative 0.1% print from +0.1% previously. Core inflation also eased in-line with expectations to 5.7% YoY in December from 6.0% YoY previously but still higher on m/m basis at 0.3% from 0.2% in November. Services inflation was still higher, being the more sticky component of inflation, but with six consecutive months of softening in inflation, the Fed could take some comfort that its tightening moves are working. Market is pricing in another step down at the Fed’s next decision on Feb 1 to 25bps rate hike, but the terminal rate pricing still stands at sub-5% levels compared to a unanimous voice from the FOMC members calling for rates over 5%. Meanwhile, US jobless claims unexpectedly fell to 205,000 from a revised 206,000 the previous week, suggesting labor market is still tight. Continuing claims also surprisingly improved, dropping to 1.63 million from 1.7 million. Fed members also signal a further downshift Patrick Harker (voter) said 25-bp increases "will be appropriate going forward" after data showed inflation moderating. Thomas Barkin (non-voter) also emphasised that Fed has more work to do, although he signalled that "it makes sense to steer more deliberately." Bullard was relatively more hawkish, but he also doesn’t vote this year. He said that he favors getting the benchmark above 5% as soon as possible before holding. US Bank earnings kickstart today US banking earnings kick off the Q4 earnings season today, most notably from Bank of Bank of America, JPMorgan Chase, and Citigroup. Analysts remain muted on US banks with earnings expected to show another quarter of negative growth compared to a year ago. Peter Garnry, Saxo’s Head of Equity Strategy, wrote in his recent article that the interest rate shock had been bad for banking earnings and activity levels across the investment banking division. As credit portfolios have an average maturity of around seven years banks will slowly begin rolling their assets into higher interest rate levels which will begin to accelerate their net revenue figures improving profitability over time. If the US economy just experience a shallow recession in real terms and strong nominal growth then US banks should be considered as a good tactical trade over the coming years. CPI and PPI inflation remained low in China CPI in China rose to 1.8% y/y in December from 1.6% in November, in line with expectations. The year-on-year growth was due to a low base. On a month-on-month basis, CPI was unchanged in December. Excluding food and energy, core CPI came in at 0.7% y/y in December, edging up slightly from 0.6% y/y in November but remaining subdued. The change in PPI rebounded less than expected to -0.7% y/y versus -0.1% expected and -1.3% y/y in November. Deflation in the processing sector narrowed to -2.7% Y/Y in December from -3.2% Y/Y in November. The mining component in the PPI swung to 1.7% Y/Y in December from -3.9% Y/Y in November. TSMC (TSM:xnys) Q4 earnings beating estimates, expecting revenue decline and CAPEX cuts in 2023 The world’s largest foundry of semiconductors beats on net income in Q4 driven by a gross margin of 62.2% versus the 60.1% expected. TSMC says the company is to face margin headwinds in 2023 with revenue growth slowing down. For Q1 2023, the management expects revenues to fall to between USD16.7 billion and USD17.5 billion from USD17.57 billion in Q1 2022. CAPEX in 2023 is expected to be between USD32 billion and USD36 billion, against $36bn in 2022. The company is considering a second manufacturing plant in Japan and a new automotive chips plant in Europe. It has also expanded its 28nm production in China and is planning to mass produce its new 2nm in 2025 in its facilities in Taiwan. TSMC expects that revenues of the global semiconductor industry, excluding memory chips, to fall 4% in 2023. UK November GDP to signal an incoming recession UK’s monthly GDP numbers are due this week, and consensus expects a contraction of 0.3% MoM in November from +0.5% MoM previously which was boosted by the favourable M/M comparison vs. September, which was impacted by the extra bank holiday for the Queen’s funeral. The economy is clearly weakening, and another quarter of negative GDP print remains likely which will mark the official start of a recession in the UK.   For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Softer US CPI supports Fed downshift, Bank earnings ahead - 13 January 2023 | Saxo Group (home.saxo)
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

CPI In The US Slowed Down Further, Falling To 6.5% y/y With Expectations

Saxo Bank Saxo Bank 13.01.2023 09:13
Summary:  The market churned wildly in the wake of perfectly in-line US CPI data yesterday after perhaps hoping for even stronger signs of decelerating inflationary pressures than the data delivered. Alas, in the end the market celebrated the data, sending US treasury yields and the USD lower and risk sentiment higher, with the S&P 500 testing its 200-day moving average. Gold touched $1,900 per ounce.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities chopped around after the in-line December CPI data release, with the S&P 500 index taking a stab at trading above the 4,000 level and the 200-day moving average just above that level for the March future (and at 3,984 for the cash index – the cash index never traded north of 4,000 yesterday, peaking at 3997). For its part, the Nasdaq 100 has been interacting with the prior support areas now resistance around 11,550. Interesting days and weeks ahead as we trade up into pivotal technical levels just ahead of earnings season. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Hang Seng Index had a lackluster session on Friday trading sideways around yesterday’s close. Mainland’s CSI300 advanced 0.8% led by a bounce in domestic consumption, brokerage, and insurance names. China’s exports in December fell 9.9% in U.S. dollar terms from a year ago and imports declined 7.5%. The Chinese authorities have reportedly drafted an action plan to help “quality” property developers to strengthen their balance sheets. Shares of Chinese developers however have generally retraced and registered modest losses. The three Chinese state-own oil companies traded in Hong Kong advanced between 1% and 3% on higher oil prices. NetEase, rising 3%, stood out among China internet names. FX: USD drops on in-line CPI data. JPY strongest on BoJ expectations, falling yields The US dollar fell after a chaotic knee-jerk reaction to in-line CPI data, as the market may have been leaning for a softer-than-expected surprise. In the end, US yields dropped and risk sentiment rallied anew, the ideal combination for USD bears. The selling was most intense for the balance of the day in USDJPY, which probed new cycle lows below 129.00 and much of the move coming ahead of the US data as the market was busy absorbing the news flow from earlier in the day on the potential for a shift in BoJ policy at next Wednesday’s BoJ meeting. Japanese 10-year bonds continued to test the 0.50% upper limit of the permitted trading band, rising to above 0.57% by late Asian hours hours and testing the central bank’s resolve. EURUSD broke above 1.08 to fresh highs of 1.0867 with expectations of Fed-ECB divergence setting a bullish tone. EURUSD also cleared the prior highs and traded as high as 1.0868, while AUDUSD touched a new high of 0.6983, just ahead of the key 0.7000 level. Crude oil (CLG3 & LCOH3) seen heading for a 6% weekly gain Crude oil has rallied strongly this past week on China’s improving outlook and after US inflation continued to cool, thereby supporting the general level of risk appetite, not least through a weaker dollar. China, the world's biggest importer is expected to hit record consumption this year, a development already gathering pace with Chinese buyers becoming more active in the physical market as import quotas are increased. Gains in the energy sector being led by gasoline after its premium over WTI rose to the highest since August. In the short-term WTI may now find some resistance at $80, where the 50-day moving average is lurking while in Brent that level can be found at $84.75. Gold trades near $1900 as cooling inflation softens up the dollar Gold is heading for a fourth weekly gain as US inflation continues to ease thereby supporting a further downshift in the Fed’s rate hike trajectory. A broadly dovish tone from Fed members also supported gold as the dollar and bond yields softened. Trading just below $1900 and within an area of resistance, today’s price action ahead of the weekend will be important in order to gauge the underlying strength. Physical demand may struggle in the short term as traders warm to higher prices, not least in India where demand according to Reuters plunged by 79% in December from a year earlier. In addition, we have yet to see demand for ETF’s, often used by long-term focused investors, spring back to life with total holdings still hovering near a two-year low at 2923 tons. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) drop, long yields perched near cycle lows The in-line US CPI data release yesterday saw a choppy market but eventually saw treasuries strongly bid later in the session, sending the 2-year to a test just below the prior 4.13% low at one point and the US 10-year yield toward the 3.40% pivot low from back in early December. A 30-year T-bond auction saw the strongest bidding metrices since last March. Read next: GM, Ford, Google And Solar Producers Would Work Together To Set Standards For Increasing The Use Of VPPs| FXMAG.COM What is going on? US December CPI in-line with expectation, boosts the case for a Fed downshift A further slowdown in US CPI as expected yesterday, as the headline slid to 6.5% YoY as expected from 7.1% YoY in November, stepping into the disinflationary territory on a m/m basis with a negative 0.1% print from +0.1% previously. Core inflation also eased in-line with expectations to 5.7% YoY in December from 6.0% YoY previously but still higher on m/m basis at 0.3% from 0.2% in November. Services inflation was still higher, being the stickier component of inflation, but with six consecutive months of softening in inflation, the Fed could take some comfort that its tightening moves are working. The market is pricing in another step down at the Fed’s next decision on Feb 1 to 25bps rate hike, but the terminal rate pricing still stands at sub-5% levels compared to a unanimous voice from the FOMC members calling for rates over 5%. Meanwhile, US jobless claims point to a tight labour market, unexpectedly falling to 205,000 from a revised 206,000 the previous week. Continuing claims also surprisingly improved, dropping to 1.63 million from 1.7 million. Resources companies: earnings upgrades could be on the cards Commodities companies are likely to start to upgrade their outlooks for 2023, ahead of reporting full year results in February. Iron ore, copper and aluminium companies in particularly are likely to upgrade their 2023 earnings as these respective commodity prices quickly entered bull markets +64%, +30%, and +20% respectively from their lows as China eased restrictions sooner than expected. The Iron ore (SCOA) price as an example, rose 2% alone in Asia today, hitting a new 6-month high. BHP shares in Australia hit a new record high of A$49.64 while Rio Tinto trades about 3% shy of its record, with both iron ore, and copper giants trading higher in anticipation of higher free cashflow in 2023. WASDE report sees corn prices jump the most since September The USDA on Thursday unexpectedly cut its outlook for US domestic production and available stocks of both corn and soybeans, a sign that an ongoing drought from last year may continue to underpin prices. The worst Argentinian drought in 60 years also led to a downgrade in the outlook for soybeans and corn production, some of that being partly offset by an expected bumper harvest in Brazil. One bright spot was wheat where the USDA raised its outlook for global production. Following the WASDE report corn (ZCH3) rose 2.5%, soybeans (ZSH3) 1.8% while wheat (ZWH3) was up by less than 1%. Sweden December CPI hits new cycle highs as weak krona aggravates inflation The December headline number came in at +2.1% MoM and +12.3% YoY vs. 1.8%/12.0% expected, respectively and vs. 11.5% YoY in Nov. The core data was +1.9% MoM and +10.2% YoY vs. +1.6%/+9.8% expected, respectively and vs. +9.5% YoY in Nov. What are we watching next? Bank of Japan meeting next Wednesday shaping up as major event risk The recent news flow and rumor mill sees the Bank of Japan announcing further tweaks to its policy next Wednesday at its meeting. Ironically, the anticipated further widening of its yield curve control “band” (de facto more of a “cap”) on 10-year JGB’s comes as long yields are dropping sharply elsewhere, accentuating the tightening of spreads between Japanese yields and those in, for example, Europe and the US. Earnings to watch The Q4 earnings season kicks off today with banking earnings from Bank of America, JPMorgan Chase, and Citigroup with consensus expecting earnings to continue contracting among US banks before coming back to growth in 2023. The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession or maybe no recession at all in the US economy. With higher interest rates level expectations are that banking revenue will slowly begin to accelerate and if high interest rates persist for an extended period, the longer-term growth for banks could be quite attractive. In addition, US banks have extended credit at the fastest pace in 2022 since the year leading up to the Great Financial Crisis. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. Today: DiDi Global, Aeon, Bank of New York Mellon, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, UnitedHealth, BlackRock, Delta Air Lines, First Republic Economic calendar highlights for today (times GMT) 1000 – Eurozone Nov. Trade Balance 1000 – Euro zone Nov. Industrial Production 1330 – US Dec. Import Price Index 1500 – US Fed’s Kashkari (Voter 2023) to speak 1500 – US Jan. Preliminary University of Michigan Sentiment 1520 – US Fed’s Harker (Voter 2023) to speak Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – January 13, 2023 | Saxo Group (home.saxo)
Energy Companies Will Likely Reveal Another Excellent Quarter

Energy Companies Will Likely Reveal Another Excellent Quarter

Swissquote Bank Swissquote Bank 13.01.2023 10:44
US inflation came in line with expectations. The kneejerk market reaction to the data was surprisingly negative, but the major US stock indices extended rally, while the US dollar dropped sharply. S&P500  The S&P500 ended the session at a very important technical level – the index is now testing the ceiling of the 2022 bearish trend and the 200-DMA to the upside. The 200-DMA has not been broken since April 2022, and has, so far, acted as a sign to sell the top. It could take more (…better-than-expected earnings) to clear resistance around 3990-4000 range. Tech stocks will likely deliver their second straight quarter of negative growth From now, investors’ focus will shift to earnings. According to FactSet, the S&P500 companies could post earnings growth of -4.1% for the Q4. Energy companies and tech stocks are an exception to this, of course. Energy companies will likely reveal another excellent quarter due to high energy prices, while tech stocks will likely deliver their second straight quarter of negative growth, with a decent 9.5% contraction expected across the sector. But don’t forget that high expectations are difficult to beat, while low expectations are easier to beat, and the prices move regarding where the results fall compared to expectations. Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM Q4 results Today, big US banks including JP Morgan, Citigroup, Bank of New York, Bank of America and Wells Fargo will reveal their Q4 results. Watch the full episode to find out more! 0:00 Intro 0:27 US inflation in line with expectations… 3:47 … boost expectation of slower Fed rate hikes 4:34 USD depreciates 6:29 S&P500 tests key resistance, but needs more to extend gains 8:07 S&P500 earnings are expected to fall in Q4 Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #CPI #inflation #Fed #expectations #USD #EUR #GBP #JPY #XAU #crude #oil #earnings #season #US #big #banks #TSM #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH        
Brazilian President suggesting replacing US dollar with own currencies of developing countries

2023 predictions: At the moment, we see numerous factors that have a negative impact on S&P 500 and Nasdaq Composite – lowering money supply in the US and increasing interest rate environment to name a few

Santa Zvaigzne Sproge Santa Zvaigzne Sproge 12.01.2023 19:49
This year may turn out to be absolutely outstanding. To shed a light on a gloomy future of markets in 2023, we asked analysts to share their predictions. Today, we publish predictions of Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd., related to S&P 500, Nasdaq, certain sectors and industries. For S&P 500 major support levels may be 3500, 3375, 3200, and even 3000 before starting to recover At the moment, we see numerous factors that have a negative impact on S&P 500 and Nasdaq Composite – lowering money supply in the US and increasing interest rate environment to name a few. As the Fed has indicated that possibly there will not be interest rate reductions in 2023, it may suggest that the stock market in general and the two indices could continue losing value also in 2023 despite what seems to be a very optimistic beginning of the year. For S&P 500 major support levels may be 3500, 3375, 3200, and even 3000 before starting to recover. As Nasdaq Composite if compared to S&P 500 overweighs two sectors – technologies and consumer discretionary – that perform poorly during turbulent market conditions (as they have already in 2022), it may suggest that Nasdaq Composite may perform worse than the S&P 500 as long as the economic conditions don’t improve. Surely, investors’ eyes are closely monitoring each move by the Fed looking for a sign of a potential policy pivot. In case the Fed officials decide to abandon their hawkish stance sooner than expected, S&P500 and the overall stock market may experience a recovery accordingly. Will we see greater positive dynamics of price changes in the sector of small, medium, or large companies? Generally, the best-performing companies during turbulent market conditions are those with a healthy balance sheet (leverage ratios in particular) and stable income. These features are more common among large companies. Meanwhile, the small, more risky companies are generally the first ones to indicate the turnaround in the economic sentiment. As in 2022, the growth stocks were hit the hardest, they may have approached (or are close to) their normal valuation levels. And as stock prices look forward, growth stocks could be the winners as soon as the earnings prospects start to improve in the following year. Although, it would be too risky to assume that the turning point has already come. Read next: 2023 Predictions: Peter Garnry - Our target for S&P 500 is still around the 3,200 level sometime during the year leading to an overall drawdown of around 33% from the peak in early 2022 | FXMAG.COM Which sectors and industries are worth focusing on in 2023 and why? As long as investors keep looking for safer investments, commodities and companies whose earnings are highly dependent on commodity prices may provide such a safety net. Industrial metals may benefit from the reopening of the Chinese economy, defense industry and its materials may continue benefiting from the aggravation of geopolitical conflicts around the world. Lithium and other raw materials such as graphite used for batteries in electric vehicles and other products may continue benefiting from heightened current and expected demand combined with insufficient supply. Energy companies are known to pay strong dividends – a stream of income that may partially offset deteriorating portfolio value during a market downturn Although energy stocks have already earned impressive returns in 2022, the Western price cap and EU ban on seaborne imports of Russia’s crude oil may pose further profit opportunities to Western oil companies as long as the conflict situation is not resolved. It may be beneficial to wait for a drop in prices for these companies to add them to the portfolio at discounted prices. Furthermore, energy companies are known to pay strong dividends – a stream of income that may partially offset deteriorating portfolio value during a market downturn.
All EMs In Latin America Rose, Colombia Being The Top Performer In The Region

All EMs In Latin America Rose, Colombia Being The Top Performer In The Region

Franklin Templeton Franklin Templeton 14.01.2023 09:33
Emerging Market Insights Three things we’re thinking about today We are optimistic that emerging markets, in particular Chinese equities, can post positive returns in 2023. Drivers of our optimism include: China dismantles its zero-COVID policies: The removal of almost all COVID-19 restrictions in China is resulting in a wave of infections, with up to 80% of people in urban areas contracting the virus. As the wave subsides, economic activity is expected to normalize. Durable goods and financial services are likely beneficiaries of a resumption in normal patterns of human interaction and trade. A recovery in outward-bound tourism is expected to benefit economies in Asia, which prior to 2020 were the prime beneficiaries of the large number of Chinese tourists. Peak in US interest rates: Consensus expectations point to two further increases in the US federal funds rate in 2023. While the timing of eventual rate cuts remains uncertain, the peak in rate hikes is the first step on this journey. The US dollar has already reacted to expectations of a peak in interest rates in 2023, trending lower in recent months. US dollar weakness should benefit emerging market fund flows, reversing the outflows of recent years, which in turn is supportive of emerging market equities Acceleration in renewable energy investments: The “new normal” of elevated fossil fuel prices is likely to incentivize emerging markets to accelerate decarbonization efforts in order to reduce energy costs and meet their Paris Climate accord targets. This will create potential opportunities for emerging market investors. The battery industry—for both electric vehicles and battery electric storage systems—as well as the solar industry, stand out. China and South Korea are at the forefront of new battery technologies, commanding 83% global market share between January-October 2022. India is also investing heavily in the solar industry as it seeks to become self- sufficient in photovoltaic panel production. Outlook As we head further into 2023, we find many reasons to be constructive about emerging markets (EMs). Markets such as Chile and Indonesia have started to pause interest-rate hikes or scale back the magnitude of their rate hikes. We expect a policy pivot to revive consumption and spur economic growth as inflation slows. In addition, after a slowdown in earnings in 2022, there is a prospect for a recovery in earnings growth in 2023. We view China as a leader with a near-15% estimated growth, based on consensus expectations.However, we are of the view that earnings may continue to still be relatively weaker in China in the near term, with a recovery timed toward the end of 2023 instead. Nonetheless, a pickup in earnings revisions in EMs would signify better times ahead for earnings and in turn, equities. Although a weakening global outlook appears to be on the horizon, economies with a greater focus on domestic demand are better placed to weather a challenging environment. These markets include EM countries such as India, Brazil and Indonesia. India has attracted investors looking to diversify their manufacturing bases from China. Similarly, the Middle East is experiencing an upturn in consumption, due to a spillover from high energy prices. China’s recent policy changes and low equity valuations have created opportunities locally as well as in Asia more broadly, as China is the largest driver of economic activity in the region. China’s reopening could benefit EMs outside of Asia as well. As mobility in China bounces back to pre-pandemic levels, its demand for oil will also likely increase. This benefits several non- Asian EMs which supply crude oil to China, including Saudi Arabia, Kuwait and Colombia. While the risks of 2022 have abated slightly, we remain watchful for developments that could change our overall EM outlook, including China’s relationship with Taiwan and the United States. As the investment environment evolves, an important feature that we seek in EMs is resilience, in terms of both economies and companies. A particular area of focus for us is the sustainability of corporate earnings, whether in the face of COVID-19, policy changes, technology disruption or other challenges. We see companies with structural growth drivers aligned with digitalization, decarbonization and premiumization emerging as long-term winners. Emerging markets key trends and developments The combination of a weaker US dollar, receding inflation and China’s pivot away from zero-COVID spurred investor confidence in the latter months of 2022. The release of third-quarter corporate earnings results and confidence in the growth outlook for several EM economies also buoyed returns. However, political uncertainties capped gains—the Chinese equity market’s selloff after the 20th National Congress and a lack of policy clarity in the wake of Brazil’s presidential elections are two examples. Nonetheless, global equities still rose over the fourth quarter of 2022 (4Q22), with both EMs and developed markets performing on par. The MSCI Emerging Markets Index rose by 9.8%, while the MSCI World Index advanced by 9.9%, both in US dollars in 4Q22. The most important moves in emerging markets in the fourth quarter of 2022 Emerging Asian stocks finished the quarter higher. Stocks in China contributed to regional gains after policymakers dismantled their zero-COVID policies. The long-embattled property sector also received a boost from support measures, with leading Chinese institutions extending loans to the sector. India’s equity market also advanced amid softening inflation and lower oil prices. Indonesia’s market, the sole laggard within emerging Asian economies, fell as its central bank raised its policy rate again.5 The policy rate was most recently raised by 25 basis points (bps)—a smaller magnitude than past hikes—reaffirming that inflation was easing. Latin American EM equities also swung higher in 4Q22. All EMs in Latin America rose during the quarter, with Colombia being the top performer in the region. Market-watchers welcomed Colombia’s aim to take advantage of higher energy prices by targeting a 15% increase in crude oil output. Heavyweight Brazil’s equity market also advanced, albeit at a more moderate 2.5% for the quarter, as consumer prices rose less than expected. EMs in the Europe, Middle East and Africa (EMEA) region saw mixed results, although the region as a whole managed to eke out gains. Saudi Arabia’s market declined, capping gains for the region, as soft oil prices and a weaker US dollar weighed on sentiment—the Saudi riyal is pegged to the US dollar. Turkish equities led gains as investors increased their equity allocation to hedge against inflation and a low-yield environment. Source: Emerging Market Insights (widen.net)
Belgian housing market to see weaker demand and price correction

The Swedish Real Estate Market Will See Significant Price Drops

Kamila Szypuła Kamila Szypuła 15.01.2023 18:13
The year 2022 hit the economy significantly. The real estate and equity markets suffered as a result of the fight against inflation and the real estate crisis. In this article: Banco BTG Pactual SA The real estate market IMF and the Minister of Finance in Bangladesh The 11 most undervalued stocks in the Morningstar Defensive Super Sector Index Banco BTG Pactual SA Brazilian bank Banco BTG Pactual SA appealed the court order on Friday. The bank protected Americanas retailer.In an appeal filed on Saturday, BTG's lawyers argue that the court order unlawfully orders the reversal of a payment made by Americanas to BTG. Brazil's BTG Pactual appeals decision protecting billionaire-backed Americanas from creditors https://t.co/eJ9Ej81qmE pic.twitter.com/Kddyoc9GRQ — Reuters Business (@ReutersBiz) January 15, 2023 The real estate market  The real estate market remains tense. The situation in Sweden shows this. House prices in Sweden have grown quite solidly over the last decade, but are now falling.House prices in Sweden have risen quite reliably over the last decade. This has been reinforced by very low interest rates in a system where about half of mortgages are financed using variable interest rates and many of the rest are based on short-term fixed interest rates. House prices across Europe continued to rise during the Covid-19 pandemic, and Sweden was no exception. The demand for real estate has skyrocketed as working from home and preferring vacations at home have driven people to expand their spaces. In 2022, the Swedish central bank launched an aggressive cycle of interest rate increases, which backfired on the real estate market. Currently, property prices in Sweden are facing a serious decline as the former governor of the country's central bank warns of high levels of household debt.Some economists predict a 20% drop in house prices from peak to trough. House prices in Sweden have risen fairly reliably over the last decade, but now they are tumbling. https://t.co/8xXlMfr7Cc — CNBC (@CNBC) January 15, 2023 IMF and the Minister of Finance in Bangladesh After World War II, there was a need for action aimed at leveling the changes that had taken place in many war-torn countries, through e.g. creation of an international organization counteracting perturbations on the international currency market. So today we see how the IMF, created for this purpose, works all over the world. Trying to mix the roses. Currently, the IMF on its twitter informed about a fruitful meeting with the Minister of Finance in Bangladesh. the IMF and Minister of Finance discuss can support Bangladesh's efforts to foster strong, inclusive and green growth. Joint actions can contribute to the development of this country. DMD Sayeh: Enjoyed meeting with #Bangladesh's Minister of Finance and @Bangladesh_Bank governor to discuss how the IMF can support Bangladesh’s efforts to foster strong, inclusive and green growth. Learn more at: https://t.co/AeUnrJTm5S pic.twitter.com/04mjrlkcGQ — IMF (@IMFNews) January 15, 2023 The 11 most undervalued stocks in the Morningstar Defensive Super Sector Index Last year was tough for the stock market, but 2022 was a good year for defensive stocks. Defensive stocks tend to be resilient to economic cycles because their products are essential in good times and bad.Morningstar analysts are looking at several such stocks. The most underrated defensive company is Veeva Systems, trading at a 39% discount to its estimated fair value as determined by Morningstar analysts. Veeva, Clorox, and Kellogg are among the defensive stocks trading below our analysts’ fair value estimates. These were the 11 most undervalued stocks in the Morningstar Defensive Super Sector Index as of Jan. 2: https://t.co/QQICMS3TvA — Morningstar, Inc. (@MorningstarInc) January 15, 2023
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The Positive Close In The New York Stock Exchange, All Indices Rose

InstaForex Analysis InstaForex Analysis 16.01.2023 08:00
Also on Friday, the largest US banks published their financial results for the fourth quarter and all of last year. The net profit of all four banking giants decreased in 2022. In this regard, shares of Wells Fargo are depreciating by 3.8%, Bank of America - by 2.8%, JP Morgan - by 1.3%, Citigroup - by 0.8%. At the close in the New York Stock Exchange, the Dow Jones rose 0.33% to hit a monthly high, the S&P 500 index rose 0.40%, the NASDAQ Composite index rose 0.71%. Dow Jones The leading performer among the components of the Dow Jones index today was JPMorgan Chase & Co, which gained 3.52 points or 2.52% to close at 143.01. Quotes of Caterpillar Inc rose by 3.39 points (1.33%), closing the session at 258.46. Apple Inc rose 1.33 points or 1.00% to close at 134.74. The least gainers were UnitedHealth Group Incorporated (NYSE:UNH), which shed 6.10 points or 1.23% to end the session at 489.57. Shares of Intel Corporation rose 0.18 points (0.59%) to close at 30.11, while Walt Disney Company shed 0.41 points (0.41%) to close at 99. 40. S&P 500  Leading gainers among the components of the S&P 500 in today's trading were Illumina Inc, which rose 3.80% to 201.11, Wells Fargo & Company, which gained 3.25% to close at 44.22, and also shares of Stanley Black & Decker Inc, which rose 3.06% to end the session at 88.91. The least gainers were Northrop Grumman Corporation, which shed 5.44% to close at 461.43. Shares of Ford Motor Company lost 5.29% to end the session at 12.72. Quotes of General Motors Company decreased in price by 4.75% to 36.51. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were iPower Inc, which rose 50.42% to hit 0.77, Moxian Inc, which gained 45.21% to close at 1.51, and shares SmileDirectClub Inc, which rose 46.77% to end the session at 0.70. The least gainers were Catalyst Biosciences Inc, which shed 32.69% to close at 0.26. Shares of Bed Bath & Beyond Inc shed 30.15% to end the session at 3.66. Quotes of AGBA Acquisition Ltd decreased in price by 21.52% to 4.12. Numbers On the New York Stock Exchange, the number of securities that rose in price (1848) exceeded the number of those that closed in the red (1178), while quotes of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2343 companies rose in price, 1320 fell, and 185 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.55% to 18.35, hitting a new 52-week low. Gold Gold futures for February delivery added 1.25%, or 23.75, to $1.00 a troy ounce. In other commodities, WTI crude for February delivery rose 2.03%, or 1.59, to $79.98 a barrel. Futures for Brent crude for March delivery rose 1.64%, or 1.38, to $85.41 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.12% to 1.08, while USD/JPY fell 1.06% to hit 127.85. Futures on the USD index fell 0.10% to 101.89.   Relevance up to 03:00 2023-01-17 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/308651
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Tesla Cut Prices Across Models In The U.S., The BOJ Bought Roughly 10 trillion yen In JGBs Over The Past Two Days

Saxo Bank Saxo Bank 16.01.2023 09:09
Summary:  U.S. equities charged higher with the S&P 500 rising above its 200-day moving average despite bond yields surging higher on profit-taking. The four biggest U.S. banks reported Q4 earnings, beating expectations but the weaker outlook for net interest income and higher provision for credit losses weighed on share prices initially before reversing and finishing the session higher. Stocks in Hong Kong and mainland China gained as the Chinese Government took up “special management shares” in local units of Alibaba and Tencent. The Japanese Yen strengthened to 127.87 against the dollar on mounting speculation on BOJ policy adjustment at this week’s meeting.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) gained as bank stocks bounced U.S. equities opened lower as shares of banking stocks initially got hit by disappointing guidance on net interest income and credit loss provision, despite reporting Q4 earnings beating expectations. Shares of JP Morgan, (JPM:xnys), Bank of America (BAC:xnyg), Citigroup (C:xnys), and Wells Fargo (WFC:xnys) recovered fully from early losses and more, having finished Friday between 1.7% and 3.3% higher. Consumer discretionary names gained, with Target (TGT:xnys) and Amazon.com (AMZN:xnas) each rising around 3%. The S&P 500 Index edged up 0.4% to close at 3999.09, breaking to the upside its 200-day moving average (currently at 3981.22). The Nasdaq 100 Index rose 0.7% to 11,541.48, above its 100-day moving average (currently at 11523.33). Tesla (TSLA:xnas) fell 0.9% after the EV giant cut prices in the U.S. and Europe. Share of General Motors (GM:xnys) slipped 4.8% and Ford (F:xnys) plunged 5.3%. Delta Airlines (DAL:xnys) declined 3.5% on Q1 guidance which was below analyst estimates. Yields on US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) jumped on profit-taking Yields on Treasuries bounced from their lows and finished the Friday session cheaper on profit-taking. Selling concentrated in the front end and saw the yields on the 2-year jump 9bps to 4.23%. Yields on the 10-year rose 6pbs to 3.50%. The 2-10 year curve went more inverted at -73bps. The University of Michigan survey’s inflation expectations came in mixed. A softer print in the 1-year inflation expectation, falling to 4.0% Y/Y in January from 4.4% Y/Y in December was offset by the ticking of 5-year inflation expectation to 3.0% Y/Y from 2.9% Y/Y a month ago. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) continued to rally Hong Kong and mainland Chinese stocks rallied last Friday afternoon. Hang Seng Index gained 1%, bringing its advance to nearly 10% since the beginning of the year. China’s CSI 300 climbed 1.4% last Friday and gained 5.2% so far in 2023. Within the Hang Seng Index, healthcare and consumer stocks gained the most. Wuxi Biologics (02269:xhkg), up 6.4%, was the best performer, followed by Chow Tai Fook Jewellery (01929:xhkg), up 4.8%. Hang Seng TECH Index gained 1.5% on further signs that the regulatory crackdown against Chinese internet platform companies is being replaced by institutionalized and hopefully more predictable supervision and regulation. The Chinese authorities have taken up “special management shares” in local units of Alibaba (09988:xhkg), up 1.7%, and Tencent (00700.xhkg), up 2%. Didi is reportedly to gain approval for relaunching its ride-hailing app at app stores. The People’s Bank of China has reportedly drafted an action plan to help “quality” property developers to strengthen their balance sheets. Trade in shares of Chinese developers was mixed. The three Chinese state-own oil companies traded in Hong Kong advanced between 1% and 2% on higher oil prices. NetEase, rising 4.7%, stood out among China internet names. Australia’s share market is a touch away from a record high; gold stocks charge in 2023 The Australian share market (ASXSP200.I) opened 0.5% higher on Monday with interest rates sensitive stocks charting the most, in anticipation of the Fed’s likely downshift in policy following on from last week's roll over in monthly CPI. The Aussie share market is trading at a two week highs, just a puff or 2.6% from its record high. The most momentum in 2023 is from the Mining sector, up 9%, in anticipation of higher earnings from China’s reopening. Gold stocks are the biggest shiners this with the most momentum, in anticipation of a higher gold price as global growth moderates, while the US dollar and bond yields retreat. At Saxo, we believe Gold may be likely to have a correction in the shorter term, but in 2023 gold should see a strong year of buying amid appetite from global central banks, as our head of Commodity Strategy mentioned.  Silver Lake Resources, De Grey Mining , Remelius Resources, up 18-23% so far in 2023. FX: JPY takes centre stage this week The Japanese yen gained by over 3% against the USD last week, moving from highs o f132.87 to lows of 127.46 on Friday. The yen was also stronger on all the crosses amid Bank of Japan’s unscheduled bond buying operations as the markets continued to test the policy yield cap of 0.5%. USDJPY and yen crosses will remain key this week as well as BOJ meets for the first time this year and speculation about a further policy tweak is rife. EURUSD gained to 1.080+ levels amid better growth prospects for Eurozone and a dovish bent in US CPI and Fed communications that has shifted the February rate hike pricing towards 25bps. AUDUSD has been basking in China’s reopening glory, testing 0.7000, but Australia’s employment data will be key this week. GBPUSD also has a host of UK data from CPI to retail sales to labor market to consider which could bring the 200DMA of 1.2000 in focus. Crude oil (CLG3 & LCOH3) opens steady after last week’s gains Crude oil prices were steady in the Asian morning hours after recording over 8% gains last week on China’s reopening optimism. WTI traded near $80/barrel while Brent was close to $85.50. China’s road traffic levels are continuing to rebound from record low levels following the easing of COVID-19 restrictions. A congestion index comprising the 15 cities with the most vehicles registrations has risen by 31.3% vs a week earlier. China’s crude oil imports rose to 48mt in December, up by 2.8% m/m. Meanwhile, increased import quotas by China saw oil demand pick up in the physical market. Sentiment was also bolstered by expectations of the Federal Reserve slowing its interest rate hikes, following lower than expected inflation. Higher inventory levels were to be expected, driven by the late December cold blast reducing exports while temporarily shutting down some refineries. Iron ore (SCOA) reverses amid China pledging crackdown Iron ore fell in Singapore back to $120.90 a ton from highs of $126 last week after China’s National Development and Reform Commission (NDRC), the top economic planner, said in a statement on Sunday that it would crack down on illegal activities including spreading false information, hoarding and price gouging to keep the iron ore market stable. Corn (ZCH3) closes the week with strong gains following the US crop output report Corn prices recorded their biggest weekly gain since August as droughts curb the world’s supply buffer. The US Department of Agriculture unexpectedly cut its outlook for US domestic production and available stocks of both corn and soybeans, a sign that an ongoing drought from last year may continue to underpin prices. The worst Argentinian drought in 60 years also led to a downgrade in the outlook for soybeans and corn production, some of that being partly offset by an expected bumper harvest in Brazil. Corn prices were up over 3% in the week and Soybeans up over 2%. Read next: The UK Economy Expects A Slightly Fall In Inflation, Expected To Fall By 0.1%| FXMAG.COM What to consider? U.S. bank Q4 earnings beat but guidance on interest income and credit loss provision disappoint The four largest commercial banks in the U.S., JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo reported Q4 earnings beating analyst expectations. Q4 profits grew 6% at JPMorgan and 2% at Bank of America and fell 21% at Citigroup and 50% at Wells Fargo from a year ago. Revenues at JPMorgan Chase, Bank of America, and Citigroup in Q4 came in above analyst estimates while those at Well Fargo missed. Despite the overall solid earnings and revenues, provisions for credit losses were higher than expected and the outlooks guided by the management of these large banks on net interest income were weaker than analyst estimates. JPMorgan Chase made a provision for credit losses at USD 2.3 billion, above the street estimate of USD 2.1 billion.  JPM is guiding net interest income of $73bn in 2023, below the USD74.4 billion analyst estimate. CEO Jamie Dimon says there is still a lot of uncertainty around the impact of the macro headwinds and that the bank’s macroeconomic outlook has deteriorated modestly. Bank of America guided below expectations net interest income at USD 14.4 billion in Q1 2023. Wells Fargo reported a negative surprise on credit provisions ($57mn vs est. $860mn). Wells Fargo’s CFO is also saying that the bank is preparing for the economy to worsen. Bank of Japan prepares to buy more Japanese Government Bonds The Bank of Japan again broke its daily record for Japanese government bond purchases Friday as yields defied its 0.5% cap, in a sign of the rising market pressure for another policy tweak by the central bank as it meets this week in its first meeting of 2023. The BOJ bought roughly 10 trillion yen ($78 billion) in JGBs over the past two days, with a 5 trillion yen purchase on Friday topping the high it had just set Thursday and is preparing to purchase more Japanese government bonds on Monday, according to the Nikkei. China’s exports declined 9.9% Y/Y in December; the import volume of iron ore grew while copper shrank In U.S. dollar terms, China’s exports in December fell 9.9% Y/Y in December, further decelerating from the -8.9% in November but slightly better than the -11.1% feared as per the survey by Bloomberg. In real terms, that is, after adjusting for inflation in export prices, the decline in exports was deeper. The fall in exports was most notable to the European Union, which fell 17.9% Y/Y in December versus -9.3% in November. Export to the US shrank 18.4% Y/Y in December, negative but having improved from -24.7% Y/Y in November. On the other hand, exports to ASEAN grew by 6.6% Y/Y in December, accelerating from 5.9% in November. Imports shrank 7.5% Y/Y in December, less negative than -10.6% Y/Y in November and above the consensus estimate of -10.0%. The improvement however was largely a result of the base effect. In volume terms, the import of crude oil slowed to 4.2% Y/Y in December from 11.8% in November. Coal imports rebounded to almost flat in December from a fall of 7.8% Y/Y in November. Iron ore imports grew 5.6% Y/Y in December, reversing from a 5.8% decline in November. Copper import shrank 12.7% Y/Y versus a rise of 5.8% a month ago. Tesla cut prices in the US and Europe Tesla cut prices across models in the U.S., including shedding the price of its baseline Model Y lower by almost 20% and its high-performance Model 3 by 14%. The price reduction may allow buyers to entitle to federal tax credits. Telsa is also cutting prices in Germany, France, and other European countries by about 13%. Recently, Telsa has cut prices in China. China took up “special management shares” in Alibaba and Tencent The Chinese authorities have taken up “special management shares” also known as “golden shares” in local units of Alibaba and Tencent (00700.xhkg) apparently to exert influence over business decisions far beyond the around 1% equity stake that otherwise represents under normal situations. Investors generally welcome the move as it tends to signal that the Chinese authorities are shifting from a less predictable and heavy-handed crackdown on internet platform companies to more institutionalized, consistent, and predictable regulation and supervision of the industry.  Comments from the Davos forum on watch The World Economic Forum’s annual meeting kicks off in Davos, Switzerland this week. The theme this year is “Cooperation in a Fragmented World’, suggesting deglobalisation trends remain key to watch as has been a regular theme at Saxo. The meeting brings together heads of nineteen central banks and 56 finance ministers. Comments on key global issues, ranging from inflation to recession, as well as energy and food crisis will remain on watch. Geopolitical crisis will also constitute a key discussion as the war in Ukraine rages on and US-China tensions may come back in focus.   For a global look at markets – tune into our Podcast.   Source: Market Insights Today: U.S. bank Q4 earnings beat but weaker outlook; Yen surged on BOJ policy adjustment speculation; US holiday - 16 January 2023 | Saxo Group (home.saxo)
Analysis Of Tesla: A Temporary Corrective Rally Should Not Come As A Surprise

Lowering The Price Of Electric Vehicles Is Supposed To Be Tesla's Unusual Strategy To Generate Demand In The US Market

Kamila Szypuła Kamila Szypuła 16.01.2023 10:40
Tesla has slashed the prices of some of its vehicles sold in the US by nearly 20% to lure in new buyers. The cuts, which include Tesla's deal, are likely to allow some buyers to qualify for the $7,500 federal tax credit. Tesla cut prices Tesla's decision to lower the price of several of its models will allow more buyers to qualify for the $7,500 federal electric vehicle tax credit. Tesla has lowered the price of its entry-level Model Y crossover to $52,990 and lowered the price of the high-performance version of the Model 3 sedan to $53,990. The car company has slashed the price of its entry-level Model Y crossover by almost 20% to $52,990, excluding some fees. This allows buyers to qualify for the tax incentive by placing the vehicle below the $55,000 ceiling. Tesla's 14% cut to the price of the high-performance version of the Model 3 sedan, which currently sells for $53,990. The Model 3 and Model Y are Tesla's best-selling vehicles and account for the bulk of the company's production. The company also lowered the prices of its Model S luxury sedans and Model X sport utility vehicles. The price cuts come a week after Tesla slashed prices in China by as much as about 13% after shipments of cars made in Shanghai fell in December. The company has also lowered prices in Europe. A tax credit reduces your income tax dollar for dollar, so the EV credit is like getting up to $7,500 off the purchase price of your car. The credit is nonrefundable, meaning you won't get a tax refund for any unused portion of the credit, and you can't carry it over to use on a future tax return. The credits are meant to be an incentive for car buyers to switch to electric, but the changes are confusing for buyers to navigate, especially as they keep changing. Read next: The Swedish Real Estate Market Will See Significant Price Drops| FXMAG.COM Tax credits for electric vehicles Tax credits for electric vehicles were created in 2009, but late last year the government changed many of the rules. Removed the limit on the number of vehicles sold per manufacturer and added limits based on vehicle price, manufacturer location, and taxpayer income. Vehicles must be assembled in North America and must have a manufacturer's suggested retail price of $80,000 for vans, SUVs, and pick-ups, or $55,000 for all other vehicles. Taxpayers with a modified adjusted gross income of $150,000 for individuals or $300,000 for joint filers are no longer eligible for the tax credit. Revenue limits apply to vehicles that are "put on the road" from January 1, which is the date of commencement of use. So if you buy an EV this year, income limits apply. If you bought an electric car last year but haven't picked it up by this year, income limits also apply. Tesla share prices Tesla's share price this year rose from 108.10 to 123.22. The first drop occurred on Friday. Tesla shares fell 0.9% on Friday. The stock fell about 65% last year, its worst annual performance. The stock sell-off came amid the temporary closure of Tesla's Chinese car factory, recession fears and Musk's focus on running Twitter, which he bought in October last year.The current price is at 122.40. Source: wsj.com, finance.yahoo.com
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

All Eyes Are On The Japanese Yields, US Crude Oil Rallies

Swissquote Bank Swissquote Bank 16.01.2023 11:00
Earnings season kicked off last Friday when the big US banks reported their Q4 results. The results were mixed. But overall, despite the skyrocketing inflation, and slowing economy, the banks continued raking in the dough… US banks Further good news is that, the major US banks said that they all expect ‘mild recession’, and that unemployment in the US would rise to between 4.9 and 5.5% depending on who is talking- fueling dovish Federal Reserve (Fed) expectations and the equity bulls. Forex In the FX, all eyes are on the Japanese yields, and the yen, as last week saw the 10-year JGB yield go past the Bank of Japan’s (BoJ) 0.50% ceiling, boosting rumours that the BoJ could abandon the YCC policy. In Europe, the euro shines brighter with every ray of sunlight that pushes away the risk of energy shortage and recession. In the US, a warning from Treasury Department that the US will reach the debt limit on January 19th and will need extraordinary measures from Congress to avoid a government default, is weighing on the US dollar, while boosting appetite in gold. Energy And, in energy, US crude cleared the 50-DMA to the upside last Friday. Watch the full episode to find out more! 0:00 Intro 0:48 Mixed US bank earnings support stock rally 4:03 Japanese yen bid on hawkish BoJ expectations 6:14 Fed doves, warnings of US default weigh on USD, boost gold 8:12 US crude rallies past 50-DMA 8:43 Euro shines brighter with every ray of sunlight Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #bank #earnings #BoJ #policy #decision #YCC #Europe #mild #winter #USD #EUR #JPY #XAU #crude #oil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Saxo Bank Podcast: US Equities Continue To Trade Up, Natural Gas In Europe, Bank of Japan Meeting Ahead And More

Saxo Bank Podcast: US Equities Continue To Trade Up, Natural Gas In Europe, Bank of Japan Meeting Ahead And More

Saxo Bank Saxo Bank 16.01.2023 11:13
Summary:  Today, we look at an interesting week ahead as US equities continue to trade up against a pivotal resistance area (just above the 200-day moving average and just below the 4,000 level for the US SP& 500 index) as earnings season set for a big blast next week. Today US markets are closed. The event risk of the week, meanwhile, is the hotly anticipated Bank of Japan meeting on Wednesday, with markets unsure on whether Governor Kuroda and company are set to deliver further policy tweaks. Futures positioning in commodities, especially metals and the latest on natural gas in Europe and more on today's pod, which features Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: The Swedish Real Estate Market Will See Significant Price Drops| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Market bracing for BoJ impact Wednesday | Saxo Group (home.saxo)
DCF Valuation with Assumptions: Risk-Free Rate, Market Premium, Beta, and Growth Rate

Analytical Report – Brand24 – WSE:B24

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 16.01.2023 14:05
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0 Event: Selected 4Q22 KPIs. On January 13 (Friday, after the market close) Brand 24 released selected operating data for 4Q22. At the end of 4Q22 monthly recurring revenues (MRR) stood at PLN 1.854 million which implies c. PLN 482,000 more than a year ago (up 35% yoy) and PLN 52,000 more than a quarter before (up 3% qoq). In US$ terms (as users of the global version who generate the bulk of revenues pay prices denominated in US$) MRR at the 4Q22 end reached US$ 416,000 (up 1.5%/ US$ 6,000 qoq); thus a qoq MRR growth in PLN slowed down just slightly vs the previous 2 quarters (in both, 2Q22 and 3Q22 it was 4%) and significantly vs 1Q22 (then it reached 21% which stemmed from the subscription price upgrades). At the end of 4Q22 ARPU (average revenue per user) reached PLN 483 (US$ 108) which implies a qoq/ yoy increase by PLN 8 (+2%) (in US$ terms an ARPU qoq growth was 0%)/ PLN 131 (+37%; mainly a consequence of introduced from the beginning of .2022 price hikes for the Company’s existing clients). The Company also informed that ARPU per a new subscriber (acquired in 4Q22) (so called Initial ARPU) stood at PLN 515 (US$ 115) which is (i) moderately above (up 7%) the ARPU for all the users (in 1Q, 2Q, 3Q22 Initial ARPU exceeded ARPU for all the subscribers by 15-17%), but (ii) 7% lower than a quarter before (and we remind that the Initial ARPU level is under some impact of a scale and scope of Black Friday discounts). Brand24 has stopped revealing a number of subscribers at the quarter end explaining that this indicator no longer belongs to the important KPIs and instead the Company focuses on such variables as MRR or ARPU. Though the Company’s argumentation is right (that MRR and ARPU are more indicative than a number of subscribers), we believe a showing of the number of subscribers should be continued as it would be a valuable piece of information for at least some investors. The Company informed that in December the churn increased. All in all, we consider the set of KPIs for 4Q22 as marginally negative (increased December churn and rather small qoq MRR growth). Analyst: SobiesÅ‚aw PajÄ…k, CFA https://bossa.pl/analizy/wsparcie-pokrycia-analitycznego-gpw#brand24 GPW’s Analytical Coverage Support Programme 3.0
Technical Analysis: Gold/Silver Ratio Still On The Rise

Optimism Forced Investors To Actively Buy U.S. Stocks, Gold And Silver

InstaForex Analysis InstaForex Analysis 16.01.2023 14:17
Market participants continue to react to the bullish market sentiment created by the CPI report, which was released on Thursday last week. Inflation was 6.5% year-over-year, marking the sixth consecutive month that inflation has declined from a peak of 9.1% in June. According to the U.S. Bureau of Labor Statistics, after a 0.1% increase in November, consumer price index for all urban consumers (CPI-U) fell by 0.1% in December on a seasonally adjusted basis. And the all items index, before seasonal adjustment, increased by 6.5% for the year. Core CPI inflation (excluding food and energy costs) rose 5.7% YoY, up 0.3% from the previous month. Although inflationary pressures have eased, the core consumer price index is still about three times the Federal Reserve's target of 2%. At the same time, optimism forced investors to actively buy U.S. stocks, gold, and silver. However, they did not base market sentiment on recent Fed statements. The caveat is that the Federal Reserve has repeatedly reaffirmed its unwavering determination to keep interest rates high throughout 2023. Many analysts believe that the Fed is bluffing because current rates are not sustainable throughout the year. Others feel that their vows to be transparent simply no longer exists. U.S. equities, gold, and silver have benefited from this sentiment, leading to a strong rally in gold and silver, as well as moderate gains in major stock indices. Dow added 0.33%: S&P 500 added 0.40%: and the NASDAQ Composite Index added 0.70%: Gold up $24.20: Silver up $0.41: If the Fed continues on its course of tightening, it could lead to one of the biggest Fed blunders in recent history. The Fed's days of data dependency only seem to matter when the data supports their assumptions   Relevance up to 10:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/332378
The Results Of The March Meeting Of The Bank Of Japan Are Rather Symbolic

Japan Is Looking To Boost Its 2023 Defence Budget, Copper Fell As Signs Of Weak Demand Persist

Saxo Bank Saxo Bank 17.01.2023 08:19
Summary:  US equity and bond markets were closed on Monday for a holiday. Mainland China stocks surged 1.6% as northbound flows reached over RMB15 billion and were in net buying for the 9th day in a row. Ryan Cohen is building a stake in Alibaba. USD saw a rebound but will likely be driven by the Japanese yen in the next few days as the Bank of Japan meeting kicks off today. While China’s Q4 GDP scheduled to release today was expected to slip to 1.6% Y/Y, more than half of Chinese provinces are setting 2023 GDP growth targets at above 5.5%. The rally in industrial metals paused amid profit-taking ahead of the Lunar New Year.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) Closed for U.S. holiday US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) Closed for U.S. holiday China’s CSI300 (03188:xhkg) gained 1.6%; Northbound net buying for the 9th day CSI300 rose 1.6%, led by brokerage, household appliances, pharmaceuticals, and semiconductor names. Northbound net buying through Stock Connect was RMB15.8 billion on Monday, the 9th day in a row of net buying for a total of around RMB80 billion. Coal miners, autos, and media stocks retraced. Hong Kong’s Hang Seng Index had a choppy session, rising initially to make a new recent high but failing to hold and sliding to losses in the afternoon before closing nearly flat. The news that the Chinese regulators allowed Didi to resume registration of new users failed to boost the sentiment for internet stocks. On the other hand, Meituan (03690:xhkg) slipped 3.3% as investors feared that the company’s ride-hailing business might lose market share as Didi returns. Hardware names, AAC (02018:xhkg) up 11.4%, Techtronic (00669:xhkg) up 6.2%, and Sunny Optical (02382:xhkg) up 4.0%, stood out as top performers. The automaker, Brilliance (01114:xhkg) tumbled 8.2% after announcing a special dividend of HKD0.96 per share from the disposal of its stake in Brilliance BMW below the street estimate of HK$1.5 per share. FX: USDJPY seeing a barrier at 129 USDJPY was seen fluctuating around 128.50 in the Asian morning session as Bank of Japan meeting kicks off with speculations of a further policy tweak continuing to build. GBPUSD also failed at another attempt on 1.2300 while AUDUSD returned below 0.7000 ahead of the key China activity data due today, despite January consumer confidence coming in higher at 84.3 from 80.3 previously. A break above 0.7000 could bring the tough resistance of 0.7125 in focus. NZDUSD testing a break above 0.6400. Crude oil (CLG3 & LCOH3) prices soften Crude oil prices eased on Monday with WTI falling below $79/barrel and Brent back towards $84/barrel as profit-taking emerged after the 8% rally last week. The World Economic Forum’s annual meeting began with warnings of global recession. This was aided by signs of stronger Russian supply. Seaborne crude exports soared by 30% to 3.8mb/d last week, the highest level since April. India was the biggest buyer, snapping up 33 times more crude than a year earlier. There is a lot to digest in the oil markets, with demand concerns and sanctions on Russian supply and risks of OPEC production cuts. Meanwhile, volatility in gas prices also underpins, suggesting crude oil prices can continue to see two-way price action in this quarter. US natural gas higher but European gas prices fall US natural gas settled back above $3.50, higher about 7% on Monday with risks of cold weather at the end of the month. European gas however fell sharply on a strong supply outlook. Dutch front month futures were down more than 15% as full stockpiles in China eased concerns of supply tightness in the LNG market. Chinese importers are trying to divert February and March shipments to Europe amid weak prices at home and high inventories. This is despite a cold snap expected this week. Iron ore selling eases; and respective equities hold record highs shaking off China’s accusations The key steel making ingredient, iron ore (SCOA) has fallen 5.3% from its high, including Tuesday’s 0.4% slide, which takes the price to $118.90. Still the iron ore price holds six months highs and is up 56% from its low. The pullback was triggered by China’s top economic planner, the NDRC accusing market participants of hoarding and price gouging after the iron ore price strongly rallied from October’s low in anticipation of demand picking up from China easing restrictions. Iron ore inventory levels are still lower than they were a year ago, which fundamentally supports iron ore price. And the technical indicators indicate the longer term rally could continue. The 50 day moving average is approaching the 200 day moving average. Historically when the 50DMA cross the 200 DMA buying has picked up. Also consider iron ore majors shares, BHP, Rio Tinto Fortescue are holding in record high territory, as investors remember China has made such accusations in the past of price gouging, and the iron ore price previously recovered over the medium to longer term. Brakes on Copper rally; Aluminium continues to surge higher A slight recovery in the US dollar on Monday paused the strong rally that has been seen in industrial metals so far this year. Copper fell as signs of weak demand persist. The Yangshan copper cathode premium over LME has declined to USD31.50/t, compared with the 10y average of USD72/t. Stockpiles of copper in Shanghai Futures Exchange warehouses are also higher. HG copper dipped back to $4.14 from highs of over $4.20 last week. Aluminium bucked the trend to push higher as inventories continue to fall. Expectations of stronger demand as China reopens also boosted sentiment. Rio Tinto (RIO) reported 4Q iron ore shipments of 87.3mt, +3.8% YoY vs est 86.2mt and still sees 2023 shipments of 320-335mt while mined copper output guidance raised to 650-710kt from 500-575kt previously.   What to consider? China GDP and activity data While the reopening of China from Covid containment is a highly positive development for the Chinese economy, the initial shockwave of infections could be significantly disruptive to economic activities in the near term. The median forecast of economists surveyed by Bloomberg on China’s Q4 GDP growth is 1.6% Y/Y decelerated from 3.9% Y/Y in Q3. Disruption in production activities resulting from infection-induced absence from work is expected to drag the growth of industrial production to 0.1% Y/Y in December from 2.2% in November. Retail sales are expected to shrink 9% Y/Y in December, decelerating further from -5.9% Y/Y in November as dining, retailing, and deliveries were slowed by inflection. Full-year fixed asset investment is expected to come at 5%, down from 5.3% in the first 11 months of the year. More than half of provinces and municipalities in China are targeting above 5.5% GDP growth for 2023 According to China’s Securities Daily, the 28 provinces and municipalities that have released their 2023 GDP targets set them at 6% on average. Hainan is the most aggressive with a 9.5% target. According to data from the Shanghai Securities News, more than half of the 31 provinces and municipalities that have released 2023 work reports, are setting their GDP growth targets above 5.5% for 2023. Economically important provinces of Zhejiang, Jiangsu, Guangdong, and Shandong set their targets at above 5%. BOE’s Bailey comments hint at relief from energy and inflation but worries about labor market The rally in cable has cooled off recently even as the decline in USD has continued. The pair is looking for direction and there may be some key catalysts to watch this week. Bank of England Governor Andrew Bailey spoke on Monday at the Treasury Select Committee hearing, saying that the risk premium on UK assets after the Truss government’s policy shock in September has gone. Still, confidence remains fragile, and risks also remain from China’s chaotic exit from Zero Covid, the continued fallout from the war in Ukraine and the shrinking of Britain’s labor force. Focus will now turn to economic data, with labor market data due today, CPI on Wednesday and retail sales on Friday. Any signs that labor market is cooling or CPI has topped out could mean the BOE could start to consider a slower pace of rate hikes going forward, and that could see the 200DMA in GBPUSD at 1.2000 get threatened. Japan’s military focus supports our optimistic view on the Defence equity basket Japan is looking to overhaul its security policy as geopolitical threats in the region and globally grow. PM Kishida’s G7 tour last week saw multiple deals not just with the US, but focus was also seen on enhancing military ties with Germany, Canada and France, including mutual troop access with the UK and upgrading of defence ties with Italy. The plan to build more nuclear reactors is also a step in that direction. Japan and India also held their first joint air drills as they step up military exercises with other countries amid concerns about China's assertiveness. Japan is looking to boost its 2023 defence budget substantially to a record 6.8 trillion yen, an increase of 20%. This further supports our optimistic view on our Defence equity theme basket as further deglobalization continues to suggest defence spending will remain a key focus. Activist investor Ryan Cohen built a stake in Alibaba According to the Wall Street Journal, Ryan Cohen has built a stake in Alibaba. Cohen is a Canadian investor who is know for investing and attracting a large crowd of retail investors to invest in meme-stocks such as GameStop. His buying into Alibaba may attract retail investors from North America to follow. For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: - China A shares see large Northbound buying, Ryan Cohen building a stake in Alibaba - 17 January 2023 | Saxo Group (home.saxo)
Wage agreement may be game-changing in a way. First meeting of the new BoJ Governor Ueda takes place on April 28th

The Market Is Convinced That Further Tightening Of The Policy Will Take Place At The Latest With The Appearance Of The New President Of The Bank Of Japan

Saxo Bank Saxo Bank 17.01.2023 09:18
Summary:  The US equity market is back on-line today after trading into the pivotal 4,000 area for the S&P 500 Index, as traders wonder whether the recent rally can extend on hopes for a soft landing scenario or whether the bear market will return on downbeat news from the incoming earnings season. But the big event risk of the week is the Bank of Japan meeting up tomorrow, as markets brace for possible further policy tweaks from the Bank of Japan.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) US equities are back on-line today after closing Friday into the key resistance/pivot area around 4,000 in the S&P 500 index (the cash index closed 1 point shy of 4,000 on Friday, the future has traded well above that level), which is also just above the 200-day moving average and near other technical levels. Through next week’s heavy calendar of megacap earnings reports, traders will watch whether the market can clear this key resistance area and make a bid to surpass the December pivot highs near 4,100 for the cash index. The Nasdaq 100 index has more work to do, still trading almost 600 points below its 200-day moving average and the December pivot highs above 12,100. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) The Hang Seng Index pulled back 1.2% and the CSI300 Index retreated by 0.4% as of writing despite China’s Q4 GDP, industrial production, retail sales, and fixed asset investment coming in better than feared. Q4 GDP grew 2.9% Y/Y (consensus 1.9%; Q3: 3.9%). Separately, according to data from the Shanghai Securities News, more than half of the 31 provinces and municipalities that have released 2023 work reports, are setting their GDP growth targets above 5.5% for 2023. Economically important provinces of Zhejiang, Jiangsu, Guangdong, and Shandong set their targets at above 5%. The recent rallies are looking exhausted facing profit-taking pressure. FX: JPY takes centre stage this week as BoJ to meet Wednesday The FX market is bracing for the Bank of Japan meeting up in Asia’s Wednesday session (see preview below) with JPY crosses generally backing up, led by USDJPY pulling all the way above 129.00 at one point overnight after its Friday low just below 127.50. Worth remembering that a BoJ surprise that brings JPY volatility is more of a broad JPY story than a USDJPY story and aggravated volatility that triggers a generalized risk off could support both the yen and the US dollar. Action has generally been sluggish elsewhere, with AUDNZD rolling over a bit and the US dollar finding a some support as the US is back online today. Crude oil (CLG3 & LCOH3) take stock following last week's 8% rally Crude oil trades steady near the top of its current range, after data showed China growing by more than expected in the fourth quarter. Overall, the market has seen a bid this month on China’s reopening optimism. Exports of deeply discounted Russian crude oil soared last week as it continues to circumvent sanctions Later today OPEC will publish its monthly oil market report with the IEA to follow on Wednesday. For now, further upside seems limited with China and parts of Asias about to go dark next week as the Lunar New Year holiday begins. EU gas slumps to 16-month low as supply keeps coming Natural gas prices in Europe slumped on Monday to levels not seen since 2021 as already elevated stock levels look set to get a boost from the resale of LNG previously destined for China. Just like Europe, China has seen mild winter weather and together with increased consumption of coal stockpiles of gas are elevated forcing buyers to send LNG cargoes to Europe instead. The Dutch TTF benchmark future (TTFMc1) closed at €55.5 on Monday, down more than 60% during the past month. EU gas stocks are currently 81.5% compared with a long term average around 62%. Copper rally pauses while aluminum continues higher A slight recovery in the dollar on Monday was all it took to trigger an overdue correction in copper which has surged higher during the past couple of weeks on raised expectations for a pickup in demand as China reopens. However, as we have warned recently, the recovery in demand is unlikely to be felt until well after the Lunar New Year holiday, and following a recent surge in speculative buying, the contract has increasingly been left exposed to profit taking, potentially taking it lower to test key support in the $4 area. Aluminium meanwhile hit its highest since June, up 9% on the month, and with visible inventories being at their lowest since 2002 Goldman Sachs warns about further strong gains in the months ahead. Gold consolidating with the dollar finding a bid Gold trades softer ahead of Wednesday’s BoJ meeting which may trigger an outsizes reaction in the dollar. Following weeks of mostly short covering speculators have now moved to mostly long accumulation, and it's during the early stages of this phase the market remains most vulnerable to a setback as recently established longs are less sticky than long held ones. Given the length gold has travelled in recent weeks a correction all the way back down to $1852 would not alter the overall bullish technical picture. US Treasury yields rebounded slightly Friday (TLT:xnas, IEF:xnas, SHY:xnas) After trading near the cycle lows of late last year into 3.40% for the 10-year benchmark on benign inflation data last week and a series of very strong auctions for especially longer-dated US Treasuries, the 10-year yield rebounded toward 3.50% on Friday and traded slightly higher overnight after coming back from the long holiday weekend. The next US macro data point of note is perhaps tomorrow’s December Retail Sales release. What is going on? Nationwide strike in France on 19 January France is going into a nationwide strike on 19 January as trade unions are protesting the government’s plan to push back the minimum retirement age to 64 and to accelerate a previous reform, called the Touraine reform, which provides for the extension of the required contribution period to 43 years by 2035. Before Covid, the government also tried to implement a pension reform which caused a massive wave of demonstrations across the countries – there was basically almost no public transport in main cities for weeks. This is still uncertain how long the strike will last. But the trade unions are planning to keep fighting as long as needed. Expect a blockage in several sectors (refineries, metro, rail transport, education). At the moment, we don’t think the strike will have a noticeable negative impact on GDP growth this quarter. However, should the strike go beyond Thursday, this could reduce GDP growth by 0.1 or maximum 0.2 point in Q1, in our view. BOE’s Bailey comments hint at relief from energy and inflation but worries about labour market The rally in cable has cooled off recently even as the decline in USD has continued. The pair is looking for direction and there may be some key catalysts to watch this week. Bank of England Governor Andrew Bailey spoke on Monday at the Treasury Select Committee hearing, saying that the risk premium on UK assets after the Truss government’s policy shock in September has gone. Still, confidence remains fragile, and risks also remain from China’s chaotic exit from Zero Covid, the continued fallout from the war in Ukraine and the shrinking of Britain’s labour force. Focus will now turn to economic data, with labour market data due today, CPI on Wednesday and retail sales on Friday. Any signs that labour market is cooling or that CPI has topped out could mean the BOE could start to consider a slower pace of rate hikes going forward, and that could see the 200DMA in GBPUSD at 1.2000 get threatened. China’s population officially shrinking Official Chinese data released today showed an 850,000 drop in the Chinese population to 1.41 billion at the end of last year, the first official population drop since 1961. Births numbered 9.56 million in 2022, down just over a million from the prior year and at the lowest level since 1950, while deaths totalled 10.41 million. UK December claims data improves, November earnings data rises again The UK reported November Employment and earnings data today, with the Unemployment Rate steady for the month at 3.7%, while Employment Change rose 27k vs. 0k expected. Average Weekly Earnings rose more sharply than expected at 6.4% YoY ex Bonus vs. 6.3% expected and 6.1% in Oct. Alsot out this morning were December Jobless Claims data, which rose 19.7k vs. 16.1k in November (revised down from 30.5k, while the Payrolled Employees Monthly Change rose +28k vs. +60k expected and the November number was revised down to +70k from +107k. What are we watching next? Bank of Japan meeting tomorrow shaping up as major event risk The JPY has traded cautiously this week, ahead of the Bank of Japan meeting that has traders bracing for new policy tweaks after the Bank of Japan surprised in December with a widening of its trading “band” (de facto a “cap”) to 0.50% from 0.25%. The market has violated the band several times in recent days, requiring a heroic scale of intervention from the BoJ to enforce it. In question is whether the BoJ is willing to signal a further widening of the band and even an end to the last negative policy rate in the world of –0.10% before Governor Kuroda exits the scene in April after 10 years at the helm of the BoJ. Even if the BoJ fails to unveil new measures, the market may remain convinced that a further tightening shift is slowly under way and will arrive at latest with the arrival of a new BoJ Governor. The market is pricing a policy rate of more than +0.25% by the end of this year. Earnings to watch The Q4 earnings season continues this week, with a relatively light schedule before next week’s mother lode of mega-cap earnings reports. The key uncertainty is credit quality in 2023 as it is linked to the degree of a recession, or even whether there will be a recession at all in the US economy. Overall, the Q4 earnings season is likely going to see an extension of value and tangible companies performing better than intangible-driven companies. The two large US investment banks Morgan Stanley and Goldman Sachs are up today, not particularly good bellwethers for the US economy. On the other hand, Procter & Gamble, the consumer products giant, releases its earnings on Thursday and may offer interesting colour on the US consumer. The fast-growing French biotech lab equipment maker Sartorius Stedim reports today as well. Today: Sartorius Stedim, Morgan Stanley, Goldman Sachs, Interactive Brokers Wednesday: EQT, Charles Schwab, PNC Financial Services, Kinder Morgan Thursday: Procter & Gamble, Netflix Friday: Investor, Sandvik, Ericsson, Schlumberger Economic calendar highlights for today (times GMT) During the day: OPEC’s Monthly Oil Market Report 1000 – Germany Jan. ZEW Survey 1315 – Canada Dec. Housing Starts 1330 – US Jan. Empire Manufacturing 1330 – Canada Dec. CPI 2000 – New Zealand Dec. REINZ House Sales   Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 17, 2023 | Saxo Group (home.saxo)
Saxo Bank Podcast: The Bank Of Japan Meeting And More

Rates Daily: The Bank Of Japan Is Increasingly Expected To Lift The 10Y Japanese Government Bond (JGB) Yield Target Once More

ING Economics ING Economics 17.01.2023 09:56
Bond markets face a number of bearish risks today, which have to be weighed against the underlying bullish tone. Look out for a strong ZEW, bond supply, and pre-BoJ positioning Source: Shutterstock Bearish risks for a strong bond market Germany’s ZEW survey is the first potential banana skin in the European morning. As a survey of investor confidence, calling its direction is relatively straightforward: it should improve. The warmer-than-usual winter weather, reductions in gas prices, and surprising resilience of hard economic data all point in that direction. This is particularly true when compared to the gloom prevailing in the last months of 2022. Bond supply so far this year has been well absorbed Bond supply so far this year has been well absorbed by investors betting on declining inflation, and despite record-breaking volumes in the first two weeks of January (see chart below). However, occasional sovereign and corporate deals, especially the unswapped types, have tended to lead to temporary bond market weakness. Usually, these seem to have been bought into, like the morning sell-off in yesterday’s session, but there is no guarantee that investors would do so today, especially given the event risks later in the week. High bond supply so far this year hasn't caused yields to rise Source: Bond Radar, ING Last chance to position for higher JGB yields This is particularly true due to the proximity of the January Bank of Japan meeting. Today is the last European and US trading session before a meeting where the Bank is increasingly expected to lift the 10Y Japanese Government Bond (JGB) yield target once more. Back in December, when that cap was lifted from 0.25% to 0.50%, 10Y Bund and Treasuries rose by roughly 50% of the sell-off in JGBs. Assuming a 25bp sell-off, one would expect European and US yields to jump by 13bp. Consensus is increasingly shifting to a higher yen With consensus increasingly shifting to higher yen rates - see for example 10Y swap rates hovering around 1% - this means the risk around the meeting is likely two-way, however. Shorting 10Y JGBs comes with a hefty carry and roll cost so a delay in shifting the cap higher may well result in short-covering. Note also that the steady selling of US and European bonds by Japanese investors in 2022 should reduce the foreign impact of higher JGB yields. Japanese investors have sold foreign bonds over the whole of 2022 Source: Japanese Ministry of Finance, ING Economic optimism isn't always good for bonds All this has to be weighed against the underlying strength in bond (and other) markets evident since the start of the year (in fact since late October if one excludes the late December sell-off). At its heart, the ‘everything rally’ is driven by an improvement in macro conditions, especially by the belief that inflation is getting under control. There is no obvious catalyst for a change of tone on today’s calendar but note that investors could at any point wake up to the potentially inflationary consequences of some of the drivers of their economic optimism, for instance better European growth, resilient job markets, or China reopening. Two of these risks were highlighted by Bank of England Governor Andrew Bailey yesterday. Today's events and market view Germany’s ZEW survey should be a good gauge of how much investor sentiment has improved. Based on the market reaction to lower gas prices and inflation, we would guess a lot. In the US session, the Empire Manufacturing Survey is the main release. Germany is scheduled to sell €5bn 5Y bonds. Greece has mandated banks for the sale of a new 10Y benchmark, John Williams, of the Fed, is the only central banker listed on today’s calendar but the World Economic Forum, known informally as Davos after the Swiss mountain resort, is sure to produce a flurry of quotes from economic leaders. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Why India Leads the Way in Economic Growth Amid Global Slowdown

Alibaba And Its Share Buyback Program Which Is Supported By Ryan Cohen, Microsoft Corp. Plans To Incorporate AI Tools

Kamila Szypuła Kamila Szypuła 17.01.2023 11:44
Activist investor Ryan Cohen Activist investor Ryan Cohen is pushing the Chinese e-commerce giant to accelerate and further strengthen its share buyback program. Microsoft Corp. plans to incorporate AI tools such as ChatGPT into all its products and make them available as platforms for other companies. Alibaba Share buybacks Share buybacks can support equities by reducing the supply of traded shares and increasing earnings per share. Investors often treat them as a bullish signal because they suggest that executives are optimistic about their company's prospects and confident about its financial situation. Cohen, with a net worth of over $2.5 billion and a stock portfolio that includes Apple Inc. and Wells Fargo & Co. and Citigroup Inc., first contacted Alibaba's management in August to voice his opinion that the company's stock is deeply undervalued based on his belief that he could achieve double-digit sales and nearly 20% free cash flow growth over the next five years. Cohen also expressed confidence that Apple, in which he owns more than $800 million, could provide a roadmap for Alibaba. The Active Investor also expressed admiration for management's ability to drive earnings growth while accumulating high-quality assets. While the stakes are small compared to Alibaba's market capitalization of nearly $300 billion, Cohen has a large following among individual investors who often follow in his footsteps. Following Cohen's initial announcement, Alibaba announced in November that its board of directors had approved expanding the company's share buyback program by $15 billion to $40 billion. Cohen told Alibaba's board of directors that the share buyback plan could be increased by another $20 billion to about $60 billion. Alibaba shares rose about 67% from a multi-year low in October. At that time, the share price was 63.22. After that, they increased from November, and the new year brought positive signals and the BABA price reached 117.01. OpenAI and Microsoft OpenAI has been at the center of a recent spike in artificial intelligence in the tech industry, and Microsoft is in advanced talks to increase investment in the startup. Speaking on Tuesday at the Wall Street Journal panel at the World Economic Forum's annual event in the Swiss mountains, Nadella said his company will quickly move to commercialize OpenAI tools, the research lab behind the ChatGPT chatbot, as well as the Dall-E 2 image generator. Nadella said in in an interview that the new excitement about tools is due to the rapid growth in their capabilities last year, which he said he expects to continue. Those in office jobs engaged in so-called knowledge-based work should embrace the new tools rather than assume they'll steal their jobs, Nadella said, citing the example of computer software developers now using tools to help them generate some of the code they write. Microsoft's CEO was also optimistic about the wider economic potential of tools like ChatGPT that can quickly generate fluent-sounding text based on short queries or prompts. Microsoft recently said it was giving more customers access to the software behind these tools through its Azure cloud computing platform. After falling to the level of 222.31, Microsoft stock prices are rising and recently reached the level of 239.18. Source: wsj.com, finance.yahoo.com
Gold's Hedge Appeal Shines Amid Economic Uncertainty and Fed's Soft-Landing Challenge

China Posts Encouraging Data, The DAX Extended Its Advance To The Fresh Highs

Swissquote Bank Swissquote Bank 17.01.2023 12:29
European stocks kick off the week on last week’s positive vibes, adding more gains to their best ever start to a year. Dax The DAX extended its advance above the 15000 mark, to the fresh highs since before the war in Ukraine started. French CAC40 And the French CAC40 took over the 7000 resistance and is only around 4% below the 2022 peak. European stock The recovery in European stocks is impressive, yet could it last? China On the data front, China grew 3%, well below the government’s 5.5% target last year, but the Q4 rebound was well above market expectations. Retail sales contracted significantly less than expected as well, while unemployment unexpectedly fell, giving signs that the end of Covid zero measures are feeding into the data. Forex In the FX, the US dollar was better bid yesterday, but price rallies could be good to sell, especially against oil and commodity currencies, that should extend rebound on Chinese reopening story. Watch the full episode to find out more! 0:00 Intro 0:16 Could European stocks extend rally? 2:14 Energy, commodities swing between recession fears & China reopening 4:36 Stay away from meme stocks 5:57 Bitcoin catches up with stocks, but downside risks prevail 7:07 China posts encouraging data 8:18 Selling USD against energy & commodity currencies? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #China #growth #recession #fear #WEF #Fed #ECB #expectations #USD #EUR #JPY #CAD #AUD #crude #oil #copper #DAX #CAC #rally #earnings #season #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
At The Close On The New York Stock Exchange Indices Closed Mixed

At The Close On The New York Stock Exchange Indices Closed Mixed

InstaForex Analysis InstaForex Analysis 18.01.2023 08:00
At the close on the New York Stock Exchange, the Dow Jones fell 1.14%, the S&P 500 fell 0.20%, the NASDAQ Composite index rose 0.14%. Dow Jones McDonald's Corporation was the top performer among the components of the Dow Jones index today, up 5.22 points or 1.94% to close at 274.11. Chevron Corp rose 2.93 points or 1.65% to close at 180.49. Apple Inc rose 1.18 points or 0.88% to close at 135.94. The least gainers were Goldman Sachs Group Inc, which shed 24.08 points or 6.44% to end the session at 349.92. The Travelers Companies Inc (NYSE:TRV) was up 4.60% or 8.92 points to close at 185.00 while Verizon Communications Inc was down 2.41% or 1.01 points. and finished trading at 40.85. S&P 500  Leading gainers among the S&P 500 components in today's trading were Tesla Inc, which rose 7.43% to 131.49, Morgan Stanley, which gained 5.91% to close at 97.08, and NVIDIA Corporation, which rose 4.75% to end the session at 177.02. The least gainers were Emerson Electric Company, which shed 6.82% to close at 91.24. Shares of Goldman Sachs Group Inc lost 6.44% to end the session at 349.92. Mohawk Industries Inc lost 6.30% to 111.18. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Celyad SA, which rose 137.80% to hit 1.90, Calyxt Inc, which gained 90.25% to close at 0.35, and Avenue Therapeutics Inc, which rose 63.11% to end the session at 1.99. Shares of Viveve Medical Inc were the least gainers, losing 70.54% to close at 0.26. Shares of Edesa Biotech Inc lost 42.06% to end the session at 1.46. Quotes of Angion Biomedica Corp fell in price by 30.88% to 0.70. Numbers On the New York Stock Exchange, the number of securities that rose in price (1,579) exceeded the number of those that closed in the red (1,484), while quotes of 99 shares remained virtually unchanged. On the NASDAQ stock exchange, 1960 companies rose in price, 1775 fell, and 168 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.67% to 19.36. Gold Gold futures for February delivery lost 0.53%, or 10.25, to hit $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 1.42%, or 1.14, to $81.25 a barrel. Futures for Brent crude for March delivery rose 2.56%, or 2.16, to $86.62 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.23% to 1.08, while USD/JPY fell 0.28% to hit 128.18. Futures on the USD index rose by 0.18% to 102.13 Relevance up to 03:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/309013
USD/JPY Weekly Review: Strong Dollar and Yen's Resilience in G10 Currencies

Analysis Of The NASDAQ 100 Index Movement

InstaForex Analysis InstaForex Analysis 18.01.2023 08:10
If we look at the 4-hour chart of the NASDAQ 100 index, we can see some interesting facts: 1. #NDX is moving inside the Bullish Pitchfork channel. 2. The price is above the Moving Average. 3. There is a Double Top Pattern (Yellow Circle). Based on the three facts above #NDX has the potential to appreciate the rally up where the 1688.4 level will be tested to be penetrated above and if this level is successfully broken then it is not impossible that the next level to aim for is the 11941.2 level, but please be careful with deviations between movements prices with the Awesome Oscillator indicator which implies a downside potential as well especially if there is a penetration below the 11017.9 level then all scenarios previously described will cancel by themselves.   Relevance up to 05:00 2023-01-19 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/117805
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Sharp Drop In Natural Gas Prices Suggest That Eurozone Can Continue To Expect Lower Inflation, The Bank Of Japan Policy Decision Ahead

Saxo Bank Saxo Bank 18.01.2023 10:13
Summary:  The focus is squarely on the Bank of Japan decision today and significant volatility may be on the cards. Mixed earnings, ranging from a weaker Goldman Sachs report but better-than-expected Morgan Stanley results, kept the US equity markets broadly range-bound. China’s activity data surprised to the upside, but population decline is a concern. Stage is being set for a dovish turn in the ECB, and UK’s CPI will be on the radar today. Industrial metals regained momentum, while Gold continues to face correction risk.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) finished nearly unchanged while the Dow Jones Industrial slipped 1.1% on Goldman’s miss in earnings Nasdaq 100, up 0.1% and S&P 500, down 0.2% were little changed in a choppy session, supported by a 7.4% gain in Tesla (TSLA:xnas) and an increase of 4.8% in Nvidia (NVDA:xnas).  The Dow Jones Industrial however fell 1.1%, dragged by the declines of 6.4% in Goldman Sachs (GS:xnys) and 4.6% in Travellers (TRV:xnys). Goldman Sachs reported a 66% Y/Y fall in Q4 earnings to USD3.32 per share, much below the USD5.56 consensus estimate. On the other hand, Morgan Stanley (MS:xnys) rose 5.9%, after reporting a 40% fall in earnings to USD1.26 per share, beating the USD1.25 expected by street analysts. Among sectors in the S&P, the material sector, falling 1.1%, was the biggest laggard. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) ended mixed as curve steepened A much weaker-than-expected print of the Empire Manufacturing Index, shrinking to -32.9 vs consensus of -8.7, and a Bloomberg report suggesting that the ECB may slow its next rate hike to 25bps in March from 50bps, saw the yields on the Treasury front ends lower. Yields on the 2-year fell 3bps to 4.20%. Yields on the longer ends however rose. The 10-year notes finished 4bps cheaper at 3.55%. On Wednesday, traders are eyeing the outcome from the Bank of Japan. Hong Kong’s Hang Seng (HIF3) retreated and China’s CSI300 (03188:xhkg) was flat despite Q4 GDP better than feared The Hang Seng Index pulled back 0.8% and the CSI300 Index was flat despite China’s Q4 GDP, industrial production, retail sales, and fixed asset investment coming in better than feared. Q4 GDP grew 2.9% Y/Y (consensus 1.6%; Q3: 3.9%). Healthcare names were the biggest drag to the Hang Seng Index as Wuxi Biologics (02269:xhkg) tumbled 6.1% on placement by its majority shareholder. XPeng (09868:xhkg) slipped 2.3% after cutting the prices of its EVs by around 12% and dragged down the share prices of other EV makers. Chinese property names finished the session mixed in a tug-of-war between optimism from supportive policies and continuously sluggish sales data. China’s residential property sales fell 26.7% Y/Y in December. Infant and toddler product stocks fell on the record low 0.677% birth rate released in China. In A-shares, baijiu (Chinese white liquor), food and beverage, bank, media, and pharmaceutical names retreated while electronics, defense, and machinery stocks gained. FX: All eyes on JPY GBPUSD was the best performer in the G10 FX space on Tuesday, rising to test the 1.23 handle, as labor market data came in better than expected. Focus shifts to the UK CPI release today where a further deceleration in price pressures remains likely. NZD and AUD also gained further, bumped higher more so in the US session rather than China’s better-than-expected activity data in the Asian hours. AUDUSD may be looking at another break above 0.7000. EURUSD plummeted from 1.0869 to 1.0775 on dovish ECB expectations (read below). The key focus today however will be on USDJPY and yen crosses with BOJ decision due today. Crude oil (CLG3 & LCOH3) pushes higher Crude oil edged higher as OPEC set a more optimistic tone on demand. Secretary General Haitham Al Ghais said he’s optimistic about the outlook for the global economy. The oil producer group said that a potential slowdown in advanced economies is countered by accelerating growth in Asia. The market is expected to tighten as Russia’s supply suffers from G7 price caps and China’s demand recovery underpins. Meanwhile, the growing case of a soft-landing this year has cooled off global demand slowdown concerns, while reports of ECB’s slowing the path of its rate hikes (read below) also underpinned. WTI futures rose to $81/barrel while Brent was at $86. IEA’s monthly market outlook will be released today. Metals boosted by upbeat China data Better than expected economic data from China helped boost sentiment in the base metal sector. China’s December activity data came in better-than-expected, while protests in Peru continued to cloud the supply outlook for Copper. HG Copper was back above $4.20. Prices for Iron ore also rose in Singapore to back above $120, locking in gains of over 1%. Gold, however, continues to face correction risk as ETF flows and risk reversals have remained flat for weeks with no sign of demand despite the recent rally. We believe the direction in gold is correct but the timing is wrong, raising the risk of a short-term correction driven by recently established speculative longs.  Read next:GBP/USD Is Strengthening And Trading Above 1.2260, Investors Took A Breather Ahead Of The Bank Of Japan Meeting| FXMAG.COM What to consider? Bank of Japan meeting playbook – bracing for volatility The highly-watched Bank of Japan policy decision due Wednesday has spooked tremendous volatility and warrants a cautious stance. But whether we see further policy tweaks this week or not, speculation for BOJ to remove its yield curve control will likely to build into BOJ chief nominations due February 10, spring wage negotiation in March and a change of hands at the helm in April. Read our full preview here or listen to yesterday’s podcast. China GDP and activity data came in better than expected At 2.9% Y/Y, China’s Q4 GDP print was well above the consensus forecast of 1.6% while decelerating from 3.9% Y/Y in Q3. Full-year GDP growth came in at 3% in 2022, higher than the consensus forecast of 2.7%. Retail sales, shrinking 1.8% Y/Y in December (vs consensus: -9.0%, Nov: -5.9%), were better than feared. Nonetheless, the positive surprise largely came from a surge of 39.8% Y/Y in medicine sales and a rise of 10.5% Y/Y in food sales on stockpiling in December when China abandoned Covid-19 containment measures. Industrial production growth slowed to 1.3% in December, above the median forecast of 0.1%, from 2.2% in November. Fixed asset investment growth picked up to 3.1% Y/Y in December from 0.8% Y/Y in November, with infrastructure investment slower to 10.4% Y/Y in December from 13.9% Y/Y in November and manufacturing investment improved to 7.4% Y/Y in December from 6.2% in November. China’s population declined for the first time in six decades According to the National Bureau of Statistics, China’s population fell to 1.4118 billion in 2022, a decline of 0.85 million, from 1.4126 billion in 2021. The birth rate slipped to 0.677%, the lowest since records began in 1949. China is planning new restrictions on live streaming According to the Wall Street Journal, Chinese regulators are planning to impose new regulations to cap internet users’ digital tipping as well as tighter censorship of the content. ECB’s dovish surprise likely as inflation slows The ECB is considering a slower pace of rate hikes than Christine Lagarde indicated in December. While a 50bps increase next month remains the most likely outcome, a 25bps move in March is gaining support. Inflation in the Eurozone is slowing, and a sharp drop in natural gas prices suggest that we can continue to expect lower inflation in the months to come atleast until the 2023 winter risks emerge. The final CPI print for December for the Euro-are will be released today and ECB’s minutes of the December meeting are due tomorrow. Gloomy US survey data – NY Fed manufacturing The NY Fed's Empire manufacturing survey tumbled to -32.9 in January from -11.2 in December, well beneath the consensus -9 and marking the lowest level since mid-2020 and the fifth worst reading in the survey’s history. Both new orders and shipments plummeted sharply, and moderation in input and selling price growth was seen. Fed member Barkin (non-voter) repeated that median CPI is still too high, saying that he needs to see inflation convincingly back to target before Fed pauses rate hikes and that he is not in favour of backing off too soon. UK December claims data improves, November earnings data rises again, CPI up next The UK reported November Employment and earnings data yesterday, with the Unemployment Rate steady for the month at 3.7%, while Employment Change rose 27k vs. 0k expected. Average Weekly Earnings rose more sharply than expected at 6.4% YoY ex Bonus vs. 6.3% expected and 6.1% in Oct. Also out this morning were December Jobless Claims data, which rose 19.7k vs. 16.1k in November (revised down from 30.5k, while the Payrolled Employees Monthly Change rose +28k vs. +60k expected and the November number was revised down to +70k from +107k. UK CPI is due to be released today. Vietnam’s political shakeup The latest political shakeup in Vietnam highlights the stability risks that emerging markets generally face. President Nguyen Xuan Phuc has announced he is stepping down, sparking a potential power shift among the communist-ruled country's leaders. The news that he is quitting comes during an anti-corruption drive led by hard-liners. The shift in power could potentially have repercussions on the ability of Vietnam to continue to capture manufacturing moving out of China.   For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: D-day for Bank of Japan; ECB’s dovishness; China’s growth is a positive surprise but population falls - 18 January 2023 | Saxo Group (home.saxo)
Bank of Japan to welcome Kazuo Ueda as its new governor

The Bank Of Japan Kept Its Below-Zero Interest Rate, S&P 500 Failed To Extend Gains

Swissquote Bank Swissquote Bank 18.01.2023 10:47
The Bank of Japan (BoJ) kept its below-zero interest rate and its faltering yield curve control policy unchanged. No-action sent the Japanese 10-year yield tumbling by up to 14 bp – that’s almost a 30% plunge. The dollar-yen spiked above the 131.50 level, losing more than 2.50% against the greenback. Equities In equities, confusion and lack of direction best described yesterday’s sentiment in the US. US futures US futures were pointing at a negative start, then turned higher in early trading as we heard a lot of talk about "green shoots" and "bright spots" in the economy when Chinese Vice Premier talked in Davos yesterday saying that he expects China's economy to return to normal this year. S&P 500  The S&P 500 shortly traded above the 4000 level, but reality soon hit the fan with mixed earnings from Goldman and Morgan Stanley, and brought the top sellers in. earnings And the top sellers kept selling into the 4000 level to the end of the session. Finally, the index closed the session 0.20% lower, spot on the 2022’s down-trending channel top and above the critical 200-DMA. The first set of earnings doesn’t support a sustainable move above that 200-DMA level. Read next: Alibaba And Its Share Buyback Program Which Is Supported By Ryan Cohen, Microsoft Corp. Plans To Incorporate AI Tools| FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:45 BoJ fights the hawks 3:00 FX update 5:29 S&P500 offered at 4000… 6:59 …as mixed earnings hammer optimism 7:59 Tesla better bid despite Jefferies PT cut 8:36 Meme traders refuse to buy Alibaba Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #BoJ #YCC #JPY #JGB #USD #EUR #GBP #inflation #bank #earnings #Alibaba #Tesla #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Not much relief, after all: Markets React to Political Uncertainties and Hawkish Fed Rhetoric - 05.10.2023

Whirlpool Decided To Transfer Part Of Its Operations In The Europe To Turkish Arcelik AS, Layoffs In Microsoft Will Be Continue

Kamila Szypuła Kamila Szypuła 18.01.2023 11:52
The war in Ukraine is hindering the operation of many companies in the European region. As a result, Whirlpool decided to transfer a significant part of its operations in the region to a new entity controlled by a Turkish equipment manufacturer. Since the beginning of the new year, many tech companies have narrowed their ranks as the pandemic, which has caused an increase in the number of employees, has died down. Concerns about inflation and a slowdown in the global economy have encouraged leaders in the tech sector to prepare for worse times by reducing costs through layoffs. Whirlpool Whirlpool Corp is transferring a significant portion of its regional operations to a new entity controlled by a Turkish equipment manufacturer. The new company, whose majority shareholder will be the Turkish company Arcelik AS, is expected to have total sales of USD 6.5 billion. Benton Harbor, Michigan, equipment maker will own 25% of the new entity after the transaction closes Whirlpool executives said in April they were beginning a strategic review of the company's operations in Europe, the Middle East and Africa, which accounted for 23% of the company's total revenue in 2021. The Russian invasion of Ukraine hurt demand and drove up costs in the region. Whirlpool, like other manufacturers, struggled more broadly with weakening consumer demand and rising material, energy and other costs. The company cut production by 35% in the third quarter of 2022 to reduce inventory, and said its North American operations faced an unspecified fourth-quarter supply chain disruption that has since been resolved. In an announcement of its 2022 financial results, due to be released on January 30, the company said on Tuesday that it expects full-year net sales to fall by 10% from 2021. The deal left Whirlpool with a loss of $1.5 billion in the fourth quarter of 2022, including a $1.1 billion write-down for the company's operations in Europe, Middle East and Africa and $400 million for currency adjustments. The company is expected to hurt its full-year earnings per share in 2022 by $26 to $28. WHR shares in the new year soared until they reached 154. For the last few days, Whirlpool Corp shares have been trading above 154, close to 155, and 154.90 to be exact. Microsoft and layoffs Microsoft had more than one round of layoffs last year, but didn't announce how many jobs it cut. The round, which began in July, affected less than 1% of the total workforce of the company of more than 200,000 people. Sky News previously reported plans to announce layoffs this week. Microsoft's expected move comes a week ahead of the scheduled listing of its latest quarterly earnings. The layoffs affected companies across the industry. Amazon.com Inc. announced it was laying off 18,000 people. This month, business software provider Salesforce Inc. announced plans to cut 8,000 employees, or 10% of the global workforce, marking the largest job cut in the company's history. On Tuesday, Unity Software Inc. said it was laying off 284 employees. The provider of video game and other application development tools had previously announced layoffs in June, when it cut around 225 jobs. Microsoft is seeing positive interest this year as it negotiates to increase investment in its vibrant AI startup OpenAI. Microsoft shares continue to climb this year, reaching 240.35. Today, for the first time this year, they fell to 239.85 Source: wsj.com, finance.yahoo.cm
Bank of England: Falling Corporate Price Expectations May Signal Peak in Rate Hike Cycle

Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively

Kamila Szypuła Kamila Szypuła 18.01.2023 12:53
Attention has recently focused on the World Economic Forum. Many statements were closely followed from economic to political information. Representatives of the United Nations also spoke. Un Secretary General Antonio Guterres calls for a focus on transforming into green energy. The reopening of the Chinese economy is also attracting attention, with speculation on what to expect from the reopening of the world's second largest economy. In this article: China's economy may improve The transformation of world powers into green energy Jim Cramer’s opinion China's economy may improve The reopening of the Chinese economy after several years of strict "zero-Covid" measures has lifted the mood among economists. China's GDP grew by just 3% in 2022, official figures revealed earlier this week, the second slowest growth rate since 1976 and well below the government's target of around 5.5%. However, short-term data point to a faster-than-expected recovery as pandemic measures have been phased out. Reopening has proven difficult as China has reported a massive spike in Covid cases and deaths in recent weeks. Nevertheless, how many economists are positive about the situation in the Chinese economy in the second half of the year. The situation of the Chinese economy is of particular importance for the rest of the economies. China as the second largest in the world is important for many other economies, for example for Australia with which it is related in trade. China's economy will be 'on fire' in the second half of 2023, StanChart chairman says https://t.co/fKyQs1kQpb — CNBC (@CNBC) January 18, 2023 The transformation of world powers into green energy The transformation of world powers into green energy was one of the main topics at the Davos forum. Investments in renewable energy sources may turn out to be crucial for the climate in the coming years. International constraints are increasingly putting pressure on companies to focus on policies that reduce greenhouse gas emissions. Concern for the planet has increased in recent years, but not all countries or companies are so quick to implement ecological changes. While companies are increasingly committed to reducing their greenhouse gas emissions as close to zero as possible, the metrics and criteria they use are often questionable or unclear. That's why UN Secretary-General Antonio Guterres called on business leaders gathered at the World Economic Forum in Davos on Wednesday to follow the rules outlined by a group of experts. The economic situation may make it difficult for companies or countries to implement these principles, but everyone must realize that it is extremely important now to take care of the climate for future generations. Davos 2023: UN chief urges 'credible' net-zero pledges or risk greenwashing https://t.co/ZF1ipes21P pic.twitter.com/U8SAGzai1z — Reuters Business (@ReutersBiz) January 18, 2023 Jim Cramer’s opinion Investors often take into account the opinion of experts about assets in the stock market. Jim Cramer, like an expert, gives valuable tips. This time he expressed opinions on Boeing Co, Biohaven, Flex and more. .@JimCramer also weighed in on Biohaven, Flex and more. https://t.co/fyzGTNUd2U — Mad Money On CNBC (@MadMoneyOnCNBC) January 18, 2023
Rates Spark: Riding the hawkish wave while it lasts

The Fed Is On A More Hawkish Path Than Before

Conotoxia Comments Conotoxia Comments 18.01.2023 13:49
Investors are used to following the changes in interest rates and perceive it as one of the key macro indicators affecting stock market returns and general sentiment. Meanwhile, another less discussed indicator may have an even stronger influence on the stock market returns, especially in the long term. This indicator has a substantial impact on the said interest rates, among other factors. Summary The country’s central bank regulates the money supply in the economy by purchasing or selling debt securities. Higher money supply leads to lower interest rates, higher business activity, and higher sales, positively affecting the stock market. Historically, the US money supply grew at a steady rate of nearly +0.50% per month, which was accelerated to support the economy amid the Covid-19 pandemic – the Fed added about 5 trillion USD to its balance sheet until April 2022. Recently, the Federal Reserve has obtained a money supply reduction policy to remove from its balance sheet value that was amassed during the pandemic and to combat the high inflation while slowing down the economy. The stock market may not be able to change its course as long as the Fed continues to decrease the money supply. Money supply The money supply in the economy is regulated by the country’s central bank (or Federal Reserve in the United States). To increase the money supply, the central bank would purchase government debt securities. For decreasing the money supply – the opposite would happen – the central bank would sell the government debt securities. Higher money supply in the market leads to lower interest rates (cheaper money), higher spending, and higher inflation – all of which typically boost stock returns. M2 money supply appreciated almost linearly until February 2020 at a steady rate of nearly 0.50% per month. As the US Federal Reserve accelerated quantitative easing in order to support the economy due to Covid-19 pressure, the money supply growth rate surged to an average of 1.38% per month and continued until March 2022. Starting from April 2022, the US M2 money supply has been decreasing at an average rate of -0.21% per month.  Source: FRED, graph: Author  Reductions in money supply have taken place in history, although smaller and less consistent. Since January 1959, reductions in money supply have occurred 34 times (4.44% of the 776 readings), with an average decrease of -0.16% (-0.13% if excluding the recent outliers) and a median decline of -0.072%. Meanwhile, four out of the ten most significant reductions within this period occurred this year, with an average decrease of -0.41%. If the Fed aims to return to the money supply level corresponding to the linear growth path characteristic of the period before the Covid-19 pandemic, it would have to reduce the money supply by -0.50% monthly until February 2024, when it would reach 19,764 billion USD. Fed’s balance sheet As the Fed engaged in growing the money supply to support the US economy during the Covid-19 pandemic, its balance sheet blew up more than twice to nearly 9 trillion USD. The Fed’s balance sheet doubled during the 2008 Global Financial Crisis and again in its aftermath by the end of 2014. Now, the same as previously, the Fed wants to reduce its balance sheet to a more stable level. Although, this time, the Fed has chosen a considerably more aggressive strategy. In June 2022, the Fed started its balance sheet normalization process by letting 47.5 billion USD worth of assets mature and roll from its balance sheet. The same happened in July and August. However, in September, the Fed decided to speed up the process and doubled the value of assets to be rolled from its balance sheet to 95 billion USD. Source: https://www.federalreserve.gov/ Total assets of the Federal Reserve, 01.01.2020.-20.12.2022. Based on the data available until December 20, 2022, the Fed kept the pace of removing assets off its balance sheet in October and November. Since its peak on April 12, 2022, the Fed balance sheet has been reduced by 401 billion USD. Jerome Powell and other Federal Bank officials have not stated how far they are planning to extend the balance sheet reduction. However, they have indicated that they don’t see any reason for the reduction slowdown. On November 30, Jerome Powell suggested that the Fed doesn’t want to repeat 2019 when the reserves were drawn down too much, but also that “we are not close to reserve scarcity”. For comparison, let us review the Fed's activities the last time it entered the path of reducing its balance sheet. Last time, the Fed waited almost two years since the first interest rate hike to start reducing its balance sheet – compared to just 3 months this time. Furthermore, previously the Fed chose to gradually increase the assets’ value to be rolled off its balance sheet within 12 months until it reached a 50 billion USD per month peak. This time, the Fed started with almost the same value – 47.5 billion USD – and just after two months, doubled it. Based on the data above, it may be concluded that the Fed is on a more hawkish path than before. Why is this important? As discussed previously, the stock market generally enjoys an elevated money supply and generates corresponding returns to investors. Still, how strongly does the money supply impact the stock market? Based on the end-of-month data for M2 money supply and S&P 500 closing price since the beginning of 2013, the correlation between the two measures is impressive: 97%. Meaning that almost every time the money supply grows, so does the S&P 500. Based on the historical changes of both measures, we see that the S&P 500 index is more volatile – on average, for every 1-point move in money supply, S&P 500 moves 1.47 points. If the money supply were to be reduced by another -7.71% to reach the level corresponding to the linear growth path characteristic of the period before the Covid-19 pandemic, the S&P 500 might follow with a -11.33% drop by the end of 2023. It is crucial to note that the above-described scenario considers only one measure and its impact on the S&P 500 based on historical data to reflect the money supply’s significance in the stock market’s movements. In reality, other predictable and unpredictable events may significantly impact the stock market’s movements this year. Furthermore, the Fed may change its stance at any point based on the prevailing market conditions. Stay safe, stay informed, and be well-diversified. Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)
US Retail Sales Boost Prospects for 3% GDP Growth, but Challenges Loom Ahead

Results From Procter & Gamble And Netflix Will Shed Some Light On Global Consumer Strength

Saxo Bank Saxo Bank 19.01.2023 09:28
Summary:  The deteriorating US retail sales and industrial production data hurt risk sentiment, and US equity markets tumbled despite lower yields. The US dollar was choppy after BOJ’s pushback on market speculation and the announcement to keep policy unchanged, but hotter core CPI in UK supported the sterling. Weaker Australia employment data sent AUDUSD lower to test 0.6900. Crude oil prices plummeted on deteriorating economic outlook and a weaker API inventory build. Focus turns to earnings today with Proctor & Gamble and Netflix due to report.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) reversed and fell over 1% on recession fears U.S. equities opened higher initially as bond yields tumbled on a dovish Bank of Japan and much weaker than expected prints on U.S. retail sales, industrial production, and producer prices. Comments from the Fed’s Bullard in a Wall Street Journal interview about his preference of keeping the pace of rate hike at 50bps at the February FOMC triggered a reversal around mid-day and saw U.S. stocks plunge in the New York afternoon session. The weak economic data and the risk of the Fed overdoing it in rate hikes troubled equity investors. At the close of Wednesday, Nasdaq 100 fell 1.3% and S&P 500 slipped 1.6%. All 11 sectors of the S&P 500 declined, with the consumer staples sector falling the most to finish the session 2.7% lower. In the Fed’s Beige Book released on Wednesday, U.S. retailers said they were having difficulties in passing through costs increases to consumers. On individual stocks, PNC Financial Services (PNC:xnys) fell 6% on a larger-than-expected credit losses provision. Moderna (MRNA:xnas) gained 3.3% following release of positive trial results for a RSV virus vaccine. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) surged on dovish BoJ and weak economic data; the 10-year yield slid to 3.37% Treasuries surged in price and yields collapsed on dovish outcomes from the Bank of Japan’s monetary policy meeting. The BoJ doubled down on monetary easing with an adjustment to its Funds-Supplying Operations against Pooled Collateral which enables it to lend cheaply to banks up to 10 years in maturity from only up to two years previously. Apparently, the BoJ aims at bringing down the elevated swap rates closer to the yields of JGBs. Treasury yields took a further dive in New York morning hours following the release of larger-than-expected declines in retail sales and industrial production as well as a bigger-than-expected 0.5% month-on-month fall in the Producer Price Index in December. The hawkish comments from Fed’s Bullard about keeping the February hike at 50bps did not have much of an impact on Treasuries despite being picked up as a reason to fade the rally in equities by traders. The result from the USD12 billion 20-year Treasury bond auction was strong. Treasury yields finished the Wednesday session with the 2-year 12bps richer at 4.08% and the 10-year 18bps richer at 3.37%, bringing the 2-10 curve more invested to -71bps. Hong Kong’s Hang Seng (HIF3) ticked up and China’s CSI300 (03188:xhkg) traded sideways Hang Seng Index ticked up by 0.5% and CSI300 edged down by 0.2%. Online and mobile gaming names led in both the Hong Kong and mainland bourses. China released 88 new licenses of online/mobile games, including one title from Tencent (00700:xhkg), up 1.7%. and one title from NetEase (09999:xhkg), up 6.5%. Trading in other internet names, however, was mixed. Auto dealers were led lower by an 8.3% decline in Zhongseng (00881:xhkg). EV makers traded weakly, XPeng (09868”:xhkg) down 2.9%. In A-shares, food and beverage, beauty care, and construction materials led the decline while online gaming, computing, media, communication, and non-ferrous metal gained. Northbound net buying was over RMB4 billion, bringing the net buying in January to over RMB90 billion. FX: Choppy dollar after BOJ ECB’s Villeroy dismissed dovish ECB talks and says Lagarde guidance still valid, bumping up EUR higher but the gains were reversed later and EURUSD ended below 1.0800 again. EURGBP meanwhile testing a break below 0.8740 to near 1-month lows as UK core CPI came in hotter-than-expected. AUD and NZD were divergent with AUDNZD falling from highs of 1.0873 to lows of 1.0783. AUDUSD was slightly lower on weaker-than-expected employment data which saw unemployment rate rising to 3.5% while overall employment fell 14.6k compared to expectations of +25k, while last month’s employment gains were revised lower to 58.3k. NZDUSD however saw little reaction to reports of PM Arden’s resignation. USDJPY back below 129 after the BOJ-related volatility yesterday. Crude oil (CLG3 & LCOH3) tumbled on sluggish US data and weak API build Crude oil prices rose to fresh highs earlier on Wednesday before sliding in the NY hours. US data flow turned out to be grim with both retail sales and industrial production disappointing, sending recession concerns soaring. The International Energy Agency was also circumspect. It said the market faces immediate headwinds, with supply exceeding demand by about 1mb/d in Q1. Meanwhile, API reported that US crude stockpiles rose 7.6mn barrels for last week. WTI futures retreated from highs of $82+ to $79, while Brent was back below $85/barrel from highs of ~$88.  Read next: The Japanese Yen (JPY) Weakened, The Aussie Pair Is Trading Above 0.70$| FXMAG.COM What to consider? BOJ maintains policy unchanged, launches new tool to support bond market The Bank of Japan left its policy levers unchanged at the January meeting, defying heavy market speculation of another tweak after the surprise in December. The announcement saw the yen plunge by over 2%, as the central bank said it would continue large-scale purchases of government bonds and increase it on a flexible basis as needed. The central bank, in a new measure to maintain yield control policy, also extended a loan offer to banks for funds of up to 10 years against collateral for both fixed- and variable-rate loans. Meanwhile, the BOJ still sees inflation getting back to sub-2% range this year. Core CPI estimate for FY2022 was only slightly raised to 3.0% for 2.9% previously, while the FY2023 estimate of 1.6% was maintained. In the press conference, BoJ Governor Kuroda said that the sustainable inflation goal is not yet in sight, suggesting low odds that he will declare victory on bringing back inflation before his exit in April. Bad economic news is now bad news for the markets US PPI fell 0.5% M/M in December, a deeper fall than the expected 0.1% decline, while the prior was downwardly revised to +0.2%; PPI Y/Y rose 6.2%, a big fall from the prior (downwardly revised) +7.3%, beneath the expected +6.8%. While slowing inflation continues to be a positive for the markets, concerns around slowing economic growth have started to bite as well. December US retail sales fell 1.1% M/M, deeper than the consensus 0.8% decline with a sizable downward revision for the prior to -1.0% from -0.6%. Industrial production fell 0.7% M/M in December, deeper than the consensus -0.1%, with the prior downwardly revised to -0.6% from -0.2%. Manufacturing output also declined by a larger 1.3%, deeper than expected -0.3% and the prior revised to -1.1% from -0.6%. Fed speakers continue to be mixed, with the non-voters staying hawkish Fed’s Bullard (non-voter) said his dot plot forecast for 2023 is just above the Fed's median of 5.1% at 5.25-5.50% and that Fed policy is not quite in restrictive territory, reiterating it needs to be over 5% at least. Bullard added the Fed should move as rapidly as it can to get over 5% and then react to data, noting his preference is for a 50bps hike at the next meeting (against the consensus 25bps). Loretta Mester (non-voter) said further rate hikes are still needed to decisively crush inflation and we are not at 5% yet, nor above it, which she thinks is going to be needed given her economic projections. She believes the Fed's key rate should rise a "little bit" above the 5.00-5.25% range that the Fed median implies. Harker (voter) said Fed needs to get FFR above 5%, but its good to approach the terminal rate slowly. Dallas President Lorie Logan (voter) spoke later as well, and also hinted at a slower pace of rate hikes. She said she wants a 25bp rate hike, not 50, at the February 1 FOMC meeting. She said if slower rate hike pace eases financial conditions, then the Fed can offset that by gradually raising rates to a higher level than previously expected. UK CPI softens for a second straight month UK Dec. CPI out this morning and slightly hotter than expectations as the headline rose +0.4% MoM and +10.5% year-on-year vs. +0.3%/+10.5% expected, respectively while the core CPI level rose +6.3% YoY vs. +6.2% expected and +6.3% in November. Sterling traded slightly firmer after the data. P&G and Netflix report earnings today On the earnings front, results from Procter & Gamble (PG:xnys) and Netflix (NFLX:xnas) will shed some light on global consumer strength. P&G reports Q4 earnings on Thursday before the market opens with analysts expecting revenue growth of -1.1% y/y and EPS of $1.59 down 4% y/y suggesting that volumes are being hit by inflation and that analysts expect P&G to see their operating margin decline q/q. The potential upside for P&G on its outlook is the reopening of China. Netflix reports Q4 earnings on Thursday after the market close with analysts expecting revenue growth of 1.7% y/y as streaming services are still facing headwinds post the pandemic. EPS is expected at $0.51 down 67% y/y. The things to focus on for investors are user growth, updates on its advertising business, and user engagement figures relative to recent content launches.   For a look ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Sluggish US economic data; P&G and Netflix earnings ahead - 19 January 2023 | Saxo Group (home.saxo)
Reserve Bank of New Zealand: Kenny Fisher says he expects a 25bp rate hike on May 24th

Jacinda Ardern Has Resigned As Prime Minister Of New Zealand, Crude Oil Extended Wednesday's Steep Decline

Saxo Bank Saxo Bank 19.01.2023 09:43
Summary:  Yesterday saw a sharp reversal in risk sentiment across the board, with US equities in a steep slide and the USD higher, even as treasury yields dipped. The slide in sentiment came after weak US Retail Sales and other data - is bad news finally bad news again? The selling came in at a key technical area after the recent rally, making for a compelling bearish reversal. Elsewhere, the Japanese yen bounced back across the board overnight, just after BoJ-inspired weakness.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) fall over 1% on recession fears U.S. equities opened higher initially as bond yields tumbled on a dovish Bank of Japan and much weaker than expected prints on U.S. retail sales, industrial production, and producer prices. Comments from the Fed’s Bullard in a Wall Street Journal interview about his preference of keeping the pace of rate hike at 50bps at the February FOMC triggered a reversal around mid-day and saw U.S. stocks plunge during the afternoon session. The weak economic data and the risk of the Fed overdoing it on rate hikes troubled equity investors. On the close the Nasdaq 100 was down 1.3% while the S&P 500 slipped 1.6%. All 11 sectors of the S&P 500 declined, with the consumer staples sector falling the most to finish the session 2.7% lower. In the Fed’s Beige Book released on Wednesday, U.S. retailers said they were having difficulties in passing through cost increases to consumers. Hong Kong’s Hang Seng (HIF3) and China’s CSI300 (03188:xhkg) Following the decline in U.S. stocks overnight, Hong Kong and mainland Chinese stocks opened lower but managed to pare losses and more. Hang Seng Index and CSI300 edged up modestly in the early afternoon local time. Chinese property developer stocks outperformed while technology names were among the laggards. Hang Seng TECH Index dropped more than 1% on profit taking ahead of the 3-day Lunar New Year holiday next week. Chinese social platform, Kuaishou (01024:xhkg) plunged nearly 6% after a co-founder sold shares. FX: US dollar posts strong rally on weak US data; JPY roars stronger still overnight The weak US data yesterday (more below) took US treasury yields sharply lower all along the curve, but with risk sentiment sliding badly on the news, the USD rallied sharply rather than selling off on the implications for less Fed tightening at coming meetings. This suggests investors may finally be fretting the risk of an incoming recession. The USD strength eased overnight as the Japanese yen, already beginning to reverse to the strong side by late US hours despite the dovish BoJ earlier in the day (the JPY traditionally thrives most on falling global yields and weak sentiment/recession fears) rallied hard, handily outpacing the US dollar and ripping stronger across the board, particularly against the hapless AUD, which was hit by weak December employment data overnight. Crude oil (CLG3 & LCOH3) tumbles badly on sluggish US data Crude oil extended Wednesday’s sharp losses which occurred after poor US economic data triggered fresh growth concerns. The move lower was strengthened by technical and momentum traders getting wrong-footed after having bought an upside break earlier in the day. A reopening of China has been the main supporting focus in recent weeks but with activity there now slowing ahead of the Lunar New Year holiday, traders turned their attention elsewhere and did not like what they saw. Also, the API reported another chunky inventory rise of 7.6 million barrels, well above the 2-million-barrel rise expected by the EIA later today. Finally, IEA delivered a bullish outlook for 2023 demand as China recovers and air travel rebounds. Gold ended lower for a third day, but bids keep coming Gold’s newfound strength continues to be tested but so far, the metal has shown resilience and found fresh bids on any pullback. Yesterday it ended lower for a third day, but still above $1900 with traders (many of which are algorithmic, and machine based) taking their directional input from the US bonds market and not least the dollar. Traders have built positions in the belief we will see peak rates soon in the US, a development that triggered very strong rallies on three previous occasions during the past 20 years. However, as long the market trusts the FOMC will deliver lower inflation, major institutional investors are likely side lined, something that shows up in ETF holdings which remain near a two-year low. Support at $1896 followed by $1855, the 21-day moving average. US Treasury yields lower on weak US data, BoJ standing pat (TLT:xnas, IEF:xnas, SHY:xnas) Treasuries surged in price and yields collapsed on dovish outcomes from the Bank of Japan’s monetary policy meeting. Treasury yields then took a further dive following the release of larger-than-expected declines in US retail sales and industrial production as well as a bigger-than-expected 0.5% month-on-month fall in the Producer Price Index in December. The hawkish comments from Fed’s Bullard about keeping the February hike at 50bps was ignored by Treasuries despite being picked up by traders as a reason to fade the rally in equities. The result from the USD12 billion 20-year Treasury bond auction was strong. The 2-year trades this morning at 4.04% while the 10-year yield has dropped to a four-month low at 3.32%, with the 2-10 curve still very inverted at -72.5 bps. What is going on? US December Retail Sales and other US data disappoint The December US Retail Sales report for December was the second consecutive monthly report to disappoint expectations, with the headline falling –1.1% MoM vs. -0.9% expected and despite the negative November revision to –1.0% (vs. -0.6% originally). The ex Auto and Gas number was also disappointing at –0.7% vs. 0.0% expected and also with a negative revision for November to –0.5% (from –0.2%). These are particularly negative numbers given still high inflation in the US as they are not inflation-adjusted. Elsewhere, the US PPI data was softer than expected at –0.5% MoM and ex Food and Energy at +0.1%, with the YoY dropping to +6.2%/5.5% vs. 6.8%/5,6% expected. Finally, December US Industrial Production fell 0.7% MoM vs. 0.1% expected, with a negative revision of November data to –0.6% from -0.2%. New Zealand Prime Minister Jacinda Ardern shocks with resignation announcement Her resignation was announced after five and a half years in power and came in the context of announcing an October 14 election this year. She will step down no later than February 7. Her Labour Party is trailing the opposition National Party slightly in the polls. Ardern said she hadn’t the energy to continue as PM. Microsoft to lay off 10,000 employees ... as a part of it what it considers a set of cost-cutting measures outlined in a securities filing yesterday. CEO Satya Nadella cited a downward shift in demand for digital services and fears of  a recession. “...we saw customers accelerate their digital spend during the pandemic, we’re no seeing them optimize their digital spend to do more with less.” The layoff are just under 5% of the company’s global workforce. Rising volume of trades on Euronext Paris In recent sessions, we have noticed a strong rise in the volume of trades and a sharp increase of volatility for several small and medium companies listed on Euronext Paris. Target Spot (which connect brands to their audience through a premium portfolio of publishers across digital audio) has experienced a huge rebound in recent sessions (+28 % on a weekly basis) driven by an increase in the volume of trades. This company can be considered as a penny stock (the stock was exchanged at 50 cents two weeks ago). There is also a jump in speculation for companies using dilutive financing in the form of OCABSAs ((bonds convertible into shares with share subscription warrants). In October 2022, the French stock market authorities, the AMF warned against the risks associated to this financing, especially for retail investors. There are several listed companies in that case at the Paris stock market, such as Avenir Telecom (manufacture of mobile phones) and Spineway (implants and surgical instruments). Usually, stay away from any kind of ultra-dilutive funding. Fed speakers continue to be mixed, with the non-voters staying hawkish Fed’s Bullard (non-voter) said his dot plot forecast for 2023 is just above the Fed's median of 5.1% at 5.25-5.50% and that Fed policy is not quite in restrictive territory, reiterating it needs to be over 5% at least. Bullard added the Fed should move as rapidly as it can to get over 5% and then react to data, noting his preference is for a 50bps hike at the next meeting (against the consensus 25bps). Loretta Mester (non-voter) said further rate hikes are still needed to decisively crush inflation and we are not at 5% yet, nor above it, which she thinks is going to be needed given her economic projections. She believes the Fed's key rate should rise a "little bit" above the 5.00-5.25% range that the Fed median implies. Harker (voter) said Fed needs to get FFR above 5%, but its good to approach the terminal rate slowly. Dallas President Lorie Logan (voter) spoke later as well, and also hinted at a slower pace of rate hikes. She said she wants a 25bp rate hike, not 50, at the February 1 FOMC meeting. She said if slower rate hike pace eases financial conditions, then the Fed can offset that by gradually raising rates to a higher level than previously expected. What are we watching next? Norway Central Bank the latest to indicate end-of-cycle hike today? The Norwegian central bank was the first G10 central bank to hike rates back in 2021, but maintained a curiously slow pace of hikes relative to other central banks. The market is divided on whether the Norges Bank is set to hike by 25 basis points today, with most believing that even if it doesn’t, the following meeting in late March will see a hike, probably the last of the cycle for now. Earnings to watch The Q4 earnings season continues today with two big earnings reports from two very different companies: the huge US consumer products company Procter and Gamble (Market Cap $350B) and streaming services provider Netflix, which has enjoyed a more than 100% rally off the lows by rejuvenating subscriber growth and rolling out plans to launch advertising on its platform for the first time. Still, that stock is down more than 50% from the bubble peak in 2021. Today: Procter & Gamble, Netflix Friday: Investor, Sandvik, Ericsson, Schlumberger Economic calendar highlights for today (times GMT) 0900 – Norway Rate decision 1330 – US Dec Housing Starts and Building Permits 1330 – US Initial Jobless Claims 1330 – Philadelphia Fed Business Outlook 1330 – Canada Dec. Terante/National Bank Home Price Index 1530 – EIA Natural Gas Storage Change 1600 – EIA's Weekly Crude and Fuel Stock Report (delayed) 1815 – US Fed Vice Chair Brainard to speak on economic outlook 2330 – Japan Dec. National CPI 0001 – UK Jan. GfK Consumer Confidence Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – January 19, 2023 | Saxo Group (home.saxo)
It Was Possible That Tesla Would Move Closer To Resistance

Elon Musk Is Facing Trial In Fraud Trial Over 2018 Tweets

Kamila Szypuła Kamila Szypuła 19.01.2023 11:47
Elon Musk to face trial in securities fraud lawsuit over 2018 tweets suggesting possible private takeover of Tesla Inc. The case is unusual because securities fraud cases are usually resolved before trial, such as by settlement. Glen Littleton The investor, Glen Littleton, sued Tesla, Musk and then-Tesla board members, claiming that Musk's tweets were fraudulent and cost investors billions by spurring Tesla stock, options and bond prices to fluctuate. He is seeking compensation for these losses. The defendants said the plaintiff would not be able to prove to the jury that the testimony was essentially false. Musk was considering privatizing Tesla, the defendants said, even if some of his claims about the deal may not have been literally accurate. Musk and Tesla Musk said he is indeed considering privatizing Tesla and believes he has the backing of Saudi Arabia's sovereign wealth fund. Lawsuit over Elon Musk's 2018 tweets. Musk and Tesla agreed in 2018 to pay $20 million to settle civil charges brought by the Securities and Exchange Commission over the same tweets. Judge rejects Elon Musk's request to move trial over Tesla's tweets During jury selection on Tuesday, attorneys and Judge Chen focused on potential jurors' personal views on Musk and his acquisition of Twitter Inc., as well as on the extent to which they could put those views aside. Musk and Tesla's attorneys asked Judge Chen to move the case to Texas on the grounds that the Bay Area jurors were exposed to excessive negative publicity about Musk. Judge Chen denied that request late last week. U.S. District Judge Edward Chen held a hearing on the case Friday morning and said the trial will begin next week in San Francisco. Prior to the trial, the court sent questionnaires to about 190 prospective jurors asking for their views on Musk and other issues to help determine if they had prejudices that would prevent them from sitting on a jury. Judge Chen said he reviewed the responses and that about 49 of them reflected Musk's and Tesla's mixed views, about 27 seemed sympathetic to the defendants, and about 76 showed negative attitudes. Other responses seemed neutral. The jury trial in San Francisco is scheduled to continue until February 1. Read next: Un Secretary General Antonio Guterres Encouraged The Transition To Green Energy At The World Economic Forum In Davos, The Chinese Economy May Surprise You Positively| FXMAG.COM Musk in court Musk will take the stand on Wednesday, about two months after he did so in Delaware over his Tesla pay package. Musk last spoke two months ago in a Delaware lawsuit over his Tesla pay package. In 2021, he appeared in a Delaware Commercial Court to defend Tesla's acquisition of SolarCity Corp. for about $2.1 billion in 2016. The judge sided with Musk, finding that Tesla did not overpay because the Tesla group was accused by shareholders. This decision has been appealed. Also on the list of potential witnesses are Tesla's CEO Robyn Denholm, board members Ira Ehrenpreis, James Murdoch and Kimbal Musk, the CEO's brother. You can also call the head of investor relations, Martin Viech. Tesla share prices Meanwhile, Tesla has slashed prices across its entire range of vehicles, with some of last week's US cuts approaching 20% in an effort to boost demand. Tesla's share price started to rise again in the new year, but from Tuesday it started to fall again. During those days, the stock fell from 131.49 to 126.71. Source: wsj.com, finance.yahoo.com
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

The Close Of The New York Stock Exchange Was Red For All Indices

InstaForex Analysis InstaForex Analysis 20.01.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones fell 0.76%, the S&P 500 fell 0.76%, and the NASDAQ Composite index fell 0.96%. Dow Jones UnitedHealth Group Incorporated was the top performer among the components of the Dow Jones index today, up 8.12 points or 1.71% to close at 484.36. Quotes Merck & Company Inc rose by 1.11 points (1.02%), ending trading at 109.90. Chevron Corp rose 1.77 points or 1.00% to close at 179.00. The least gainers were Home Depot Inc, which shed 12.81 points or 3.96% to end the session at 310.88. 3M Company was up 3.52% or 4.32 points to close at 118.43, while American Express Company was down 2.37% or 3.57 points to close at 146. 85. S&P 500 Among the S&P 500 index components gainers in today's trading were Comerica Inc, which rose 5.91% to 69.84, M&T Bank Corp, which gained 5.49% to close at 153.81, and shares of Truist Financial Corp, which rose 4.31% to end the session at 47.71. The least gainers were Enphase Energy Inc, which shed 10.92% to close at 222.97. Shares of SolarEdge Technologies Inc lost 10.32% to end the session at 286.72. Quotes Northern Trust Corporation fell in price by 8.60% to 90.46. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Neurosense Therapeutics Ltd, which rose 76.19% to hit 2.22, Salarius Pharmaceuticals Inc, which gained 52.99% to close at 3.58, and also shares of Cuentas Inc, which rose 40.48% to end the session at 0.59. The least gainers were Jupiter Wellness Inc, which shed 38.81% to close at 0.62. Shares of Aceragen Inc lost 33.33% and ended the session at 5.76. Quotes of SurModics Inc decreased in price by 29.35% to 26.38. Numbers On the New York Stock Exchange, the number of securities that fell in price (1842) exceeded the number of those that closed in positive territory (1204), while quotes of 91 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,337 stocks fell, 1,353 rose, and 190 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.88% to 20.52. Gold Gold futures for February delivery added 1.41%, or 26.90, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 1.22%, or 0.97, to $80.77 a barrel. Futures for Brent crude for March delivery rose 1.51%, or 1.28, to $86.26 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.38% to 1.08, while USD/JPY fell 0.38% to hit 128.38. Futures on the USD index fell 0.28% to 101.82   Relevance up to 03:00 2023-01-21 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/309378
Hungary's Budget Deficit Grows, Raising Concerns Over Fiscal Targets

A Serious Security Vulnerability In T-Mobile Caused Another Hacker Attack

Kamila Szypuła Kamila Szypuła 20.01.2023 10:27
T-Mobile said its initial investigation indicated that data on approximately 37 million current postpaid and prepaid customer accounts had been leaked. Hackers gained access to data again Hackers gained access to data, including dates of birth and billing addresses, of approximately 37 million T-Mobile customers. Hackers have had access to T-Mobile data since November 25, but T-Mobile has since managed to stop malicious activities. The company said in a regulatory filing on Thursday that it discovered the issue on January 5 and is working with law enforcement officials and cybersecurity consultants. The mobile operator said it is now notifying affected customers and believes that the most sensitive types of data, such as credit card numbers, social security numbers and account passwords, have not been compromised. The company says hackers may have obtained names, billing addresses, emails, phone numbers, dates of birth, and account numbers. The company said information such as the number of lines in the account and plan features could also be accessed. On Friday, T-Mobile said it had notified almost every current T-Mobile customer or primary account holder who had personal information stolen. The update did not mention how many affected former or potential customers were notified. T-Mobile has created a website to inform customers about the cyber attack and the steps to take. While this isn't T-Mobile's first data breach, many wireless industry analysts don't expect long-term effects on the carrier in terms of customer retention or attracting switchers. T-Mobile is confident that there is no longer a risk to consumers from the breach. Fixing vulnerabilities In today's update, the company sought to assuage consumer concerns, citing customer outreach efforts and plans to strengthen cybersecurity. The KPMG cybersecurity team will review all of T-Mobile's security and performance policies to find areas that are missing. The problem - weak security T-Mobile admitted to a security flaw in 2021 after personal information relating to more than 50 million of its current, former and potential customers was put up for sale online. A 21-year-old American living in Turkey admitted to the 2021 hack and said the company's security practices had opened up an easy avenue for data theft, including social security numbers, dates of birth and phone-specific identifiers. T-Mobile's chief executive later apologized for the failure and said the company would improve data security. T-Mobile has offered to pay $350 million to settle a class action lawsuit related to the 2021 hack. As part of the settlement, the company also pledged to spend $150 million on security technology in 2022 and this year. In a current situation, the company says its systems were not compromised, but someone was inappropriately accessing data through an API or application programming interface that could provide some customer information. T-Mobile share price Friday the 13th was truly unlucky for T-Moblie stock prices. After a favorable start to the year, prices fell from that date. In the new year, the price increased from around 140.00 to nearly 150.00 (149.91). On Friday the 13th, prices started to fall to the current level of 145.14. Source: wsj.com, finance.yahoo.com
The ECB Has Made It Clear That Rates Will Remain High Until There Is Evidence That Inflation Is Falling Toward The Target

Saxo Bank Podcast: Rebounding Yields On Hawkish ECB Talk, US Jobless Claims Report, Results From Procter And Gamble And More

Saxo Bank Saxo Bank 20.01.2023 11:10
Summary:  Today we note that rebounding yields on hawkish ECB talk and another very strong weekly jobless claims report out of the US have the JPY weakening again, but not supporting the US dollar outside of USDJPY. Elsewhere, we look at stronger than expected results from Netflix and weaker than expected results from Procter and Gamble as volumes drop due to price hikes. A look at crude oil dynamics now that the EU is attempting its embargo on Russian crude, gold maintaining remarkable strength and avoiding notable consolidation, the macro calendar for the week ahead and more. Today's pod features Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: US jobless claims, hawkish ECB halt the slide in yields | Saxo Group (home.saxo)
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

Jing Ren talks Australian dollar against greenback, crude oil and US 30

Jing Ren Jing Ren 20.01.2023 08:35
AUDUSD falls back The Australian dollar softened after an uptick in December’s unemployment rate. A cut through 0.6940 has invalidated this demand zone, elbowing the bulls to the side. This left a shooting star on the daily chart, which may foreshadow a U-turn. 0.6820 near the base of a previous bullish breakout momentum sits on the 30-day moving average, making it an area of confluence. A deeper correction would test the daily low at 0.6720. On the upside, the buy side will need to push back to 0.6950 to relieve their trapped fellows first. USOIL finds support WTI crude bounced back after data showed Chinese demand rose its highest since February. A close above the previous high of 81.30 has been short-lived with the rally hitting a roadblock at 82.20, right under December’s high of 83.00. A break below 79.00 has forced leveraged buyers to bail out. Not all is lost though, this might be a correction after a bearish RSI divergence showed exhaustion on its way up. 78.00 on the 20-day moving average saw renewed interest. 76.00 would be the bulls’ second layer of defence. US 30 breaks support The Dow Jones 30 weakens as fewer jobless claims point to a tight US labour market. The mid-December liquidation point at 34400 has proved to be a tough level to crack. The price’s sharp reversal suggests that the bears could still have the final word. A clean cut through 33700 then 33400 has put the bulls on the defensive, with the latter becoming a fresh resistance. The index is now probing bids at the lower band of a previous consolidation at 32850. The RSI’ oversold condition may attract some bargain hunters.
Central Banks' Rates Outlook: Fed Treads Cautiously, ECB Prepares for Hike

Gas And Oil Prices Are Higher Too Ahead Of The EU Embargo On Russian Products

Saxo Bank Saxo Bank 23.01.2023 09:08
Summary:  Risk on tone supported by lower bond yields and US dollar. Saxo’s equity baskets show the best gains are in sectors benefiting from China’s reopening. If NZ's CPI slows more than expected, the NZDUSD may see profit taking. Chinese New Year brings limited market hours. Australia’s ASX200 to take out a new all-time high, but CPI is in the way. Gold and copper continue to rally up. Oil prices are higher ahead of the EU embargo on Russia. Tech profits expected to dive, but there is room for disappointment. Saxo Spotlight: What’s on investors & traders radars this week, January 23-27: US GDP, AU NZ CPI, Microsoft & Tesla earnings Risk on tone supported for now as bond yields hold near lows, along with US dollar index US Treasury bond yields trading at some of the lowest levels down about 0.8% from the October peak, but yields are up slightly at 3.48%. Yields look set for lower levels and could even head back down and could drop below the 200-day SMA. The next level we’re watching is if yields fall to 3.22%.  If that level is reached, it would theoretically support US equities. We’d also need to see the US dollar remain lower. The US dollar index is now down 10% from its September high, but rose slightly on Friday after hotter than expected US prouder inflation for November, which bolsters the case for the Fed to keep hiking, even if it’s at a slower pace. Most gains in Saxo's equity baskets are in sectors benefiting from China’s reopening The Travel, E-commerce basket of stocks are up the most this month, followed by Energy Storage and China Consumer and Technology basket. However year-on Year, the most growth is from Defence which is up 21%. Economic news brings FX into focus US fourth-quarter GDP data, European PMIs and the Bank of Canada rate decision, as well as CPI for Australia and NZ will all be watched. NZ Consumer prices are expected broadly to have climbed 7.1% in the fourth quarter from a year earlier, which could mark CPI is slowing from the prior 7.2% and, more importantly, less than the 7.5% predicted by the Reserve Bank in its most recent forecasts. Given the NZ dollar was one of the strongest currencies last week, it could face profit taking if the data is weaker than expected. Market hours are limited this week, for Chinese New Year This also means light volume is expected and thus moves could perhaps be amplified on thin trade. China’s market is shut all week (Monday to Friday), Hong Kong’s market is shut for Monday to Wednesday, Singapore’s market is shut for Monday and Tuesday. Australia’s market shut Thursday for Australia Day. Australia’s ASX200 could likely to take out a new all-time high..... this is supported by the rally in commodities and expected higher earnings from mining companies, which make up 25% of the market. However CPI is a focus this week. Our technical analyst backs up this thinking, that the ASX200 is likely to hit a new all high- for more click here. But the danger this week is if Q4 CPI is hotter than expected on Wednesday, then equities could see profit taking. However overall sentiment is bullish for the ASX as demand for copper and iron ore is likely to pick up after CNY. CPI is expected to rise to 5.8% YoY from 5.6% (trimmed Mean CPI). And CPI YoY is expected to rise to 7.7% YoY, from 7.3%. Hotter data could further fuel the AUD and a likely fuel a sell-off in tech stocks and real estate. In company news to watch, iron ore company Champion Iron (CIA) reports quarterly earnings. Given the iron ore price is up 66% from its low, its outlook is expected to be optimistic. In commodities Gold and copper are gaining momentum and oil rallies The precious metal, gold, has been supported by lower yields and the US dollar falling, which has supported gold up 19% from its September low. As Ole Hansen points out we might need to see ETF holdings pick up in Gold, to see longer term investors getting involved, which could support gold higher, or potentially we may see some profit taking. However, gold momentum remains as long as the USD and yields behave. Recall that if the Fed pauses rates and rates peak, we think there is a case for our outrageous prediction of gold hitting $3,000 coming true. Copper trades up 0.5% to $4.25, its highest level since June last year, continuing its 32% rally off its low on expectations that China will increase buying after the Luna New Year holiday. Plus there are also disruptions on copper output in Peru, which could impact 2% of global copper output. So given inventory levels are already lower and demand expectations are picking up, copper prices are underpinned. Gas and oil prices are also higher too ahead of the EU embargo on Russian products which starts on February 5th. Oil (WTI) is up 1.3% to $82.64, at this level since early November, after two weeks of gains. Refinery demand is supporting prices. Tech companies' profits are expected to dive, but earnings estimates could be too optimistic & disappoint In the S&P500(US500.I) tech companies, which make up 26% of the market, are expected to report a quarterly profit drop of 9.2% on average, according to Bloomberg. This could be the biggest tech profit drop since 2016. Forward 12-month earnings of 39% is also expected according to Bloomberg. The danger is that estimates are still too bullish, and markets will likely be disappointed, which would trigger a fall. Overall aggregate S&P500 earnings are expected to have grown 2.12% in the quarter and miners are expected to deliver the most growth, real estate with the least. So far, only 55 companies have reported in the S&P500 and earnings have fallen over 4% on average. So, the bear case is still a factor for some investors, especially in tech. More job cuts are expected with margins being squeezed. EV companies are also facing pressure with higher metal prices. On Tuesday Microsoft kicks off earning season. Defence giants Raytheon and Lockheed Martin report on Tuesday. Tesla reports Wednesday. On Thursday Intel and Mastercard report, and steel giant Nucor. On Friday Chevron. These could be industry proxies to watch with a major focus on their outlooks.   Key economic releases & central bank meetings this week to watch  Monday 23 January China, Hong Kong, Taiwan, South Korea, Indonesia, Malaysia, Singapore Market Holiday Japan BOJ Meeting Minutes (Dec) Tuesday 24 January China, Hong Kong, Taiwan South Korea, Malaysia, Singapore Market Holiday Australia Judo Bank Flash PMI, Manufacturing & Services Japan au Jibun Bank Flash Manufacturing PMI UK S&P Global/CIPS Flash PMI, Manufacturing & Services Germany S&P Global Flash PMI, Manufacturing & Services France S&P Global Flash PMI, Manufacturing & Services Eurozone S&P Global Flash PMI, Manufacturing & Services US S&P Global Flash PMI, Manufacturing & Services Thailand Customs-Based Trade Data (Dec) Germany GfK Consumer Sentiment (Feb) United Kingdom CBI Trends (Jan) Wednesday 25 January China, Hong Kong, Taiwan Market Holiday New Zealand CPI (Q4) Australia Composite Leading Index (Dec Australia CPI (Q4) Japan Leading Indicator (Nov, revised) Singapore Consumer Price Index (Dec) United Kingdom PPI (Dec) Thailand 1-Day Repo Rate (25 Jan) Germany Ifo Business Climate New (Jan) Canada BoC Rate Decision (25 Jan) Thursday 26 January Australia, China, Taiwan, India Market Holiday Japan BOJ Summary of Opinions (Jan) South Korea GDP (Q4) Japan Services PPI (Dec) Philippines GDP (Q4) Singapore Manufacturing Output (Dec) Norway Labour Force Survey (Dec) United Kingdom CBI Distributive Trades (Jan) Canada Business Barometer (Jan) United States Durable Goods (Dec) United States GDP (Q4, advance) United States Initial Jobless Claims United States New Home Sales (Dec) Friday 27 January China, Taiwan Market Holiday Japan CPI, Overall Tokyo (Jan) Australia PPI (Q4) Australia Export and Import Prices (Q4) United States Personal Income and Consumption (Dec) United States Core PCE (Dec) United States UoM Sentiment (Jan, final) United States Pending Home Sales (Dec) Source:Saxo Spotlight: What’s on investors & traders radars this week? | Saxo Group (home.saxo)
It Was Possible That Tesla Would Move Closer To Resistance

There Have Been Concerns That Tesla Price Cut Could Trigger A Price War

Kamila Szypuła Kamila Szypuła 23.01.2023 11:25
Tesla's price cuts sparked mixed reactions from investors and Wall Street analysts. Some suggested the move was made in response to waning demand. Others saw it as Tesla putting pressure on competitors. In addition, in the coming week, investors await quarterly earnings reports from Tesla, Microsoft Corp. , Intel Corp. and other large companies for the latest information on how they are doing in difficult economic conditions. Price war? For now, traditional automakers that don't have Tesla's EV scale have low profit margins or are losing money on their models. Tesla's price cuts are likely to put pressure on car companies to further reduce the cost of electric vehicles and could eventually lead to a price war. Tesla is doing well The number of car buyers researching Tesla surged after a price cut in early January. The Model Y was the second most searched vehicle on the website, with the Model 3 moving up 36 places. The starting price for the Model Y is currently around $53,000, down from around $66,000. That's still more than the entry-level Mach-E model, but below some of Ford's higher-end EVs. The base price of the Model Y is about $10,000 less than the starting price of the General Motors Co Cadillac Lyriq, a similarly sized SUV that the automaker is launching. Shortly after the price cut, applications for financing Tesla vehicles tripled at Tenet, a New York-based start-up that provides financing to buyers of electric vehicles. Which can be summed up by saying that the influx of customers remains at a high level. Read next: SEO’s Program That Aims To Transform The Structure Of The US Market| FXMAG.COM Ford against Tesla Some car dealers say they are worried about losing customers as a result of Tesla's price moves. Ford posted record Mach-E sales last year and has strong demand for its range of electric cars. The company continues to monitor the market to stay competitive, he said. GM CEO Mary Barra and Ford CEO Jim Farley have declared their goal of finally dethroning Tesla as the top seller of electric vehicles in the US, but they are far behind for now. According to sales figures and estimates from research firm Motor Intelligence, Tesla sales accounted for approximately 65% of total U.S. electric vehicle sales in 2022, beating Ford's 7.6% and GM's 3.5%. Tesla share price The Federal Reserve's struggle to tame inflation through aggressive interest rate hikes last year has suddenly changed the outlook for big tech stocks that have pushed major stock indexes to new highs for years. Tesla shares fell 65% in 2022, its worst year ever. Meta Platforms Inc., the parent of Facebook, is down 64% and Netflix Inc. by 51%. Some are betting that technology could take over again if the Fed signals plans to move away from raising interest rates. Net purchases of a basket of eight popular tech companies by individual investors hit a recent peak in November before declining sharply towards the end of the year. Buying has since picked up slightly in the new year as tech stocks have rebounded. As for Tesla, individuals have been regular buyers since late 2021, doubling their numbers as shares slumped in late 2022. On January 10, one-day net purchases of Tesla shares hit a record $316 million. Tesla shares have definitely skyrocketed in the new year. Prices rebounded from 108.10 all the way to 135.50. Source: wsj.com, finance.yahoo.com
Pound Slides as Market Reacts Dovishly to Wage Developments

Technical Update - Correction Time In European Equities

Saxo Bank Saxo Bank 23.01.2023 11:37
Summary:  Correction time in European Equities. But most likely not a correction larger than 3-4% before uptrend is likely to continue Today's Saxo Market Call podcast.Today's Market Quick Take from the Saxo Strategy Team AEX25 formed a Shooting Star candle followed by a bearish candle last week which is an indication of a top and reversal. A correction should be expected. A correction that could take the Index down to around 715. However, the steep rising 55 SMA will provide support and is likely to limit the downside. If AEX closes the gap buyers will try to lift AEX above last week’s peak. If they succeed the uptrend is set to continue with a move to resistance at around 772.There is no divergence on RSI indicating higher levels are likely after a correction. Source all charts and data: Saxo Group   BEL20 was hit last week by massive selling forming a Bearish Engulfing candle followed by a gap at text day’s open. There is no divergence on RSI indicating higher levels are likely after a correction that is under development. A correction that could take BEL 20 down to around 3,800 possibly dipping down to around 3,767 before buyers are likely to regain control.If BEL 20 closes the gap and takes our last week’s peak there is resistance at around 4,012-4,031. CAC40 reached 1.618 projection and 7,100 before selling set in. CAC seems set for a correction down to support at around 6,892 and around the 0.382 retracement at 6,837.No divergn3ce on RSI which is showing bullish sentiment supporting higher levels for CAC after a correction. If CAC closes the gap a move to 7,150 resistance and higher is likely.Medium-term CAC 40 has no strong resistance until previous high at 7,384. RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend   Soucre: Technical Update - AEX25, BEL20 & CAC40 | Saxo Group (home.saxo)
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange More Securities Rose In Prices

InstaForex Analysis InstaForex Analysis 24.01.2023 08:10
At the close of the New York Stock Exchange, the Dow Jones rose 0.76%, the S&P 500 rose 1.19%, and the NASDAQ Composite rose 2.01%. Dow Jones Shares of Intel Corporation led the way among the components of the Dow Jones index today, up 1.05 points or 3.59% to close at 30.27. Salesforce Inc rose 4.62 points or 3.05% to close at 155.87. Apple Inc rose 2.35% or 3.24 points to close at 141.11. The least gainers were Procter & Gamble Company, which shed 1.92 points or 1.34% to end the session at 141.05. Verizon Communications Inc was up 0.93% or 0.37 points to close at 39.63 while Amgen Inc was down 0.86% or 2.27 points to close at 260. 97. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Advanced Micro Devices Inc, which rose 9.22% to hit 76.53, Western Digital Corporation, which gained 8.66% to close at 41.79. as well as shares of Tesla Inc, which rose 7.74% to end the session at 143.75. The least gainers were Xylem Inc, which shed 7.95% to close at 101.42. Shares of SBA Communications Corp shed 3.55% to end the session at 286.27. Schlumberger NV fell 2.60% to 55.86. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Gbs, which rose 293.13% to hit 1.03, Helbiz Inc, which gained 109.13% to close at 0.43, and VERB TECHNOLOGY COMPANY INC, which rose 69.65% to end the session at 0.39. The least gainers were Catalyst Pharmaceuticals Inc, which shed 29.04% to close at 14.76. Shares of Atlis Motor Vehicles Inc shed 25.11% to end the session at 3.40. Quotes of Ontrak Inc decreased in price by 21.23% to 0.83. Numbers On the New York Stock Exchange, the number of securities that rose in price (2196) exceeded the number of those that closed in the red (841), while quotes of 122 shares remained virtually unchanged. On the NASDAQ stock exchange, 2362 companies rose in price, 1346 fell, and 201 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.20% to 19.81. Commodities Gold futures for February delivery added 0.23%, or 4.35, to hit $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 0.01%, or 0.01, to $81.65 a barrel. Futures for Brent crude for March delivery rose 0.57%, or 0.50, to $88.13 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.15% to 1.09, while USD/JPY rose 0.84% to hit 130.65. Futures on the USD index rose by 0.01% to 101.79. Relevance up to 04:00 2023-01-25 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/309717
US CPI Surprises on the Upside, but Fed Expectations Unchanged Amid Rising Recession Risks

Layoff In Spotify, AUD/USD Pair Has Traded Back Above 0.7000

Saxo Bank Saxo Bank 24.01.2023 09:43
Summary:  US equities sprinted to new local highs yesterday, with the S&P 500 crossing back above the 200-day moving average ahead of the heart of earnings season set to swing in motion today on Microsoft and other large companies reporting, with the earnings calendar heavy through next week. The US dollar trades weaker across the board as the Fed enters its quiet period ahead of next week’s FOMC meeting.   What is our trading focus? Equities: Momentum is building with breakout in technology stocks US equities rose yesterday with S&P 500 futures reaching their highest close since mid-December and Nasdaq 100 futures rallied all the way to 12,000 before closing a bit lower. Sentiment is improving on technology stocks due to the significant layoff announcements improving the outlook for profitability. The US leading indicators were weaker than estimated and the level observed fits with a high degree of certainty of a recession, so it feels like the equity market is balancing on a knife-edge. Today is an important earnings session with the key focus being Microsoft after the market close, but ahead of the market open earnings from industrials such as GE and 3M will set the tone on the opening. FX: USD falters again as risk sentiment bulls higher The greenback has traded weaker since yesterday, although yesterday’s high water mark in EURUSD above 1.0900 yesterday has not yet been surpassed as the USD weakness was more pronounced against more pro-cyclical currencies like AUD and SEK within the G10 on the strong surge in risk sentiment, even as the anticipation of Fed rate cuts for late this year and through next year has eased significantly (about 30 basis points for the policy rate priced by end of 2024 from the trough of late last week). The Fed has entered a quiet period ahead of next Wednesday’s FOMC meeting, with little data in the interim save for the December PCE inflation data this Friday. Elsewhere, New Zealand and Australia report Q4 CPI tonight in the Asian session and a Bank of Canada decision is up tomorrow (see preview below). Crude oil (CLH3 & LCOH3) supported by firm diesel prices ahead of sanctions Europe’s diesel market reached a two-month high on Monday with the ICE gasoil (FPc1) contract trading above $1000 per ton. A development being driven by EU’s ban on seaborne imports of Russian fuel products from February 5, and increased demand for jet fuel as travel continues to recover. Overall, the focus stays with China amid hopes of a recovery in fuel demand more than offsetting potential weakness in the US as economic data points to slowdown. National holidays across Asia, especially in China and Singapore kept trading to a minimum. In Brent, traders will now be looking for $90 next while support is in the $84 area. Gold trades higher on US recession concerns Gold reached a fresh nine-month high overnight after US leading indicators saw another sharp fall in December, and together with weak company earnings and layoffs and last week's weak retails sales it raises the risk of a US recession in the near term. A senior director at The Conference Board said: “Overall economic activity is likely to turn negative in the coming quarters before picking up again in the final quarter of 2023”. Developments that raises the potential for just one more US rate hike before the FOMC decides to pause. ETF holdings, which has been drifting lower this month finally saw a small pickup in demand while silver’s plunge remains a concern. At one point on Monday, it dropped 5% on technical selling and long liquidation below $23.20 before recovering to trade $23.60 this am. US Treasuries (TLT:xnas, IEF:xnas, SHY:xnas) yields continue to edge higher US treasuries continue to soften, taking yields modestly higher after the 10-year benchmark’s move below the prior significant 3.40% low was rejected. This morning sees the 10-year benchmark trading back above 3.50% with company earnings and guidance in focus as the heart of earnings season swings into motion today. Yields at the front of the US yield curve have also rebounded from new lows posted last week in the wake of weak US Retail Sales and a dovish BoJ meeting, with the 2-year rising from a low of 4.03% last Thursday to 4.23% currently. The US treasury will hold a 2-year auction today. What is going on? Biden administration confronts China, accusing Chinese companies of supporting Russia’s war effort Citing “people familiar with the matter”, a Bloomberg article claims that the Biden administration has confronted China with evidence that state-owned Chinese companies are supplying “non-lethal” military and other assistance that amounts to a support of Russia’s war effort in Ukraine, while stopping short of “wholesale evasion” of US sanctions. More positive signs the travel sector is roaring back in Asia; on land and in the air Chinese road traffic congestion increased 22% from a year ago, as measured across 15 key cities. This is a positive sign that Chinese residents are striving to return to normalcy. Moving to air traffic, we believe the broader Asian-Pacific regional will likely report stronger numbers for Q4 of 2022 and Q1 of 2023, supporting higher revenue in the travel and tourism sector. Despite airlines travel returning, airlines costs are also rising with fuel costs higher after the oil price has bounced up 17% off its December low. Growth has a high ceiling for domestic Chinese air travel, with passenger traffic in November (the most recent available data point) at some 75% below late 2019 levels. The Aussie dollar above 0.7000. Australia CPI next test AUDUSD has traded back above 0.7000, nearly matching the highest levels since last August. The Aussie initially jumped to 0.7045 today in Asia after Australia’s service sector data improved, even though the Services PMI print remained in contractionary phase. The Q4 Australian CPI report is out tomorrow and is expected to rise to 5.8% YoY from 5.6% (for the important trimmed mean CPI), amid tighter energy markets, and higher metal prices. Spotify to cut 6% of workforce Like the rest of the technology sector Spotify announced yesterday that it is cutting 6% of its workforce to offset the top line weakness and improve profitability. The initial reaction in Spotify shares was strong but was faded during the session. The US Leading Indicator (LEI) fell sharply again in December It continues to signal recession for the US economy in the near term said Ataman Ozyildirim, Senior Director, Economics, at The Conference Board. “There was widespread weakness among leading indicators in December, indicating deteriorating conditions for labor markets, manufacturing, housing construction, and financial markets in the months ahead. Meanwhile, the coincident economic index (CEI) has not weakened in the same fashion as the LEI because labor market related indicators (employment and personal income) remain robust. Nonetheless, industrial production— also a component of the CEI—fell for the third straight month. Overall economic activity is likely to turn negative in the coming quarters before picking up again in the final quarter of 2023.” What are we watching next? Bank of Canada meets tomorrow – most see a 25-basis point hike tomorrow followed by a pause Most observers are looking for the Bank of Canada to hike one last time for this cycle tomorrow to take the policy rate to 4.50% and to indicate a pause to assess inflationary and labor market conditions before deciding on next steps. The Bank of Canada hiked rapidly in 2022 in an attempt to catch up with galloping inflation but has contrasted with the Fed in signalling a pause in the hike cycle before the Fed, which has been slow to signal that peak rates may be nearing. USDCAD trades near the lows since last November at 1.3350 this morning, with the 200-day moving average creeping higher and near 1.3200. Earnings to watch The Q4 earnings season accelerates this week with key earnings from Microsoft, ASML, Tesla, Visa, and Chevron. The aggregate earnings surprise for the S&P 500 companies that have reported earnings is currently 4.1% and the market has responded positively to the Q4 earnings reported so far with Netflix’s 8.5% jump on its strong outlook for its advertising business being the clearest evidence. Today’s key earnings focus is Microsoft (read our earnings preview here) with expectations of lower revenue growth and lower operating margin. Other important earnings today are from J&J, Texas Instruments, GE, and 3M. Today: Nidec, Microsoft, J&J, Danaher, Verizon, Texas Instruments, Raytheon Technologies, Union Pacific, Lockheed Martin, Intuitive Surgical, GE, 3M, Halliburton, DR Horton Wednesday: ASML, Lonza Group, Tesla, Abbott Laboratories, NextEra Energy, IBM, Boeing, ServiceNow, CSX, Freeport-McMoRan, Lam Research, Norfolk Southern Thursday: Tryg, Novozymes, Kone, Nokia, LVMH, Christian Dior, STMicroelectronics, SAP, Diageo, Atlas Copco, Volvo, SEB, Visa, Mastercard, Comcast, Intel, Blackstone, Valero Energy, Archer-Daniels-Midland, Dow, Nucor, L3Harris Technologies, Southwest Airlines, American Airlines Friday: Fanuc, Chevron, American Express, Colgate-Palmolive Economic calendar highlights for today (times GMT) 0810 – ECB’s Klaas Knot to speak 0815-0900 – Eurozone Jan. Flash Manufacturing and Services PMI 0930 – UK Jan. Flash Manufacturing and Services PMI 0945 – ECB President Lagarde to speak 1100 – UK Jan. CBI Business Optimism and Trends in Total Orders/Selling Prices 1300 – Hungary Central Bank Rate Decision 1330 – Philadelphia Fed Non-manufacturing Survey 1445 – US Jan. Flash Manufacturing and Services PMI 1500 – US Jan. Richmond Fed Business Conditions 1800 – US Treasury auctions 2-year notes 2130 – API's weekly report on US oil inventories 2145 – New Zealand Q4 CPI 0030 – Australia Q4 CPI Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: Financial Markets Today: Quick Take – January 24, 2023 | Saxo Group (home.saxo)
Industrial Metals Monthly Report: Challenging Global Economic Growth Clouds Metals Outlook

Salesforce Is Being Tested As Its Growth Slows Down

Kamila Szypuła Kamila Szypuła 24.01.2023 10:33
Salesforce Inc. has gone through a difficult period in recent months as slowing growth and turmoil among employees have dampened enthusiasm for its business. Changes in management and employment In November, Salesforce said co-CEO Bret Taylor was leaving - a departure that came after growing tension with co-founder and co-founder Mark Benioff over their responsibilities and the way they run the company, the daily reported. Prior to Salesforce's announcement that Taylor would be leaving, there was discussion about resolving the issue and arranging Taylor's stay for another year, but this fell through. Rising tensions eventually led to Salesforce's announcement that Taylor would be leaving his position as co-CEO on January 31, and Benioff would once again become sole leader and continue as president of the company. Subsequently, Slack's chief product officer and another director, senior vice president of marketing communications and brand, also leave, though he described it as a coincidence. Salesforce has announced the departure of Stewart Butterfield, CEO of Slack, a workplace communication tool Salesforce acquired in 2021. The Slack acquisition, nearly twice the size of Salesforce's next largest acquisition, was an attempt to move Salesforce beyond its core product, which helps businesses manage customer relationships, to providing software tools that businesses need on a daily basis. The news of Butterfield's departure comes after Salesforce said last week that CEO Bret Taylor would leave the company in January. Butterfield said he was leaving the company in good shape. A spokeswoman said Mr Butterfield will be succeeded by Lidiane Jones, the current cloud director at Salesforce, as the next CEO of Slack. This month, Salesforce said it would cut its workforce of around 80,000 by 10% - the largest round of layoffs to date. Other company problems While tech companies have struggled with slowdowns in recent quarters, Salesforce has been hit harder than many of its peers in the business software industry. Its shares have lost nearly 30% over the past year, worse than rivals. In its financial report for the third fiscal quarter for the three months to October 31, Salesforce missed analysts' expectations regarding billing. Salesforce reported revenue for the fiscal third quarter ended Oct. 31 of $7.84 billion, up 14% from the prior year. This marked a sharp slowdown from 27% revenue growth in the same quarter a year earlier. The company also declined to issue guidelines for the 2024 tax year. The company's costs increased with the number of its employees. It added close to 30,000 employees from the beginning of 2020 to the end of last year, an increase of around 60%. Salesforce had nearly 80,000 employees worldwide as of October 31, up from over 49,000 as of January 31, 2020. In a tightened financial environment, customers have become more careful with their spending, which takes them longer and requires additional approvals before they agree to purchase Salesforce software. New inwestor On Sunday, The Wall Street Journal reported that Elliott Management Corp. invested a multi-billion dollar investment in the company. In October, Starboard Value LP reported that it had acquired a stake in the company. While campaign details could not be known, Elliott, one of the country's largest and most prolific activists, often seeks board representation and pressures companies to make operational improvements and other changes. Elliott has not publicly stated his specific hopes for Salesforce. Analysts said the company's new activist investor will continue to focus on what the company can do to better streamline operations in these challenging times. Saleforce share price Salesforce's stock, which has performed brilliantly for years, has fallen by about half from its highs at the end of 2021 and has given the company a market capitalization of around $150 billion. Salesforce shares were up about 3% on Monday afternoon. Thus, the prices reached the level of 155.87. Source: wsj.com, finance.yahoo.com
US CPI Surprises on the Upside, but Fed Expectations Unchanged Amid Rising Recession Risks

More Job Cuts, Microsoft Is Putting $10 Billion Into The Now-Very-Famous ChatGPT

Swissquote Bank Swissquote Bank 24.01.2023 10:51
The week started with more news of layoffs, and further gains in the S&P500. S&P500 The S&P500 traded above the 200-DMA, yet again. Earnings will decide whether the latest gains will be sustainable. Microsoft All eyes are on Microsoft – not only because it will release Q4 earnings after the bell, but also because it’s been making a great buzz since the start of the year thanks to its bet on ChatGPT. The company confirmed yesterday that is putting $10 billion into the now-very-famous ChatGPT. PMI On the macro front, PMI data released this morning showed that the manufacturing activity in Japan didn’t improve in January, while Australia’s manufacturing PMI slipped below 50, into the contraction zone for the first time in 32 months, but business confidence improved to a three-month high, on China’s reopening. EUR/USD Elsewhere, the EURUSD couldn’t consolidate gains above the 1.09 mark yesterday. But today’s PMI data could help give another boost to the single currency. And, if not, the message from the European Central Bank (ECB) is crystal clear: the rate hikes will continue and that’s positive for the euro. Watch the full episode to find out more! 0:00 Intro 0:31 More job cuts, more S&P500 gains? 2:44 Has Microsoft hit the jackpot with ChatGPT? 5:07 FX roundup: commo-currencies, euro and yen 8:15 Gold’s next bullish target at $1980 per ounce Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #ChatGPT #Microsoft #earnings #PMI #data #USD #EUR #JPY #CAD #AUD #crude #oil #XAU #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Comparative Valuation Analysis: Selena FM vs. Peers in the Construction Materials Manufacturing Sector

Brand24 - Analytical Report - WSE:B24

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 25.01.2023 08:03
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0. Event: IP Box eligibility. On January 20 (Friday), at 1.30 p.m. the Company informed that it obtained a positive individual interpretation with respect to the IP BOX tax relief issued by the tax authority which confirms the Company’s eligibility to apply this tax relief (which means the preferential 5% tax rate for the income (from subscriptions) from the software created and offered in the SaaS mode. Our comment: Positive information. Given that c. 90% of Brand24’s income should fall under the preferential tax rate (IP box tax relief), we estimate the effective income tax rate for the Company will reach 6.5-7%. This assumption, in turn, increases (ceteris paribus) our assessment of the Company’s 12M DCF EFV by the extent from c. PLN 2.0 per share (provided that the eligibility for IP Box tax relief refers to the definite forecast period which is the next decade) to c. PLN 3.7 per share (provided that the eligibility for IP Box tax relief will apply in the residual period as well, which is to infinity). Analyst: SobiesÅ‚aw PajÄ…k, CFA GPW’s Analytical Coverage Support Programme 3.0 https://bossa.pl/analizy/wsparcie-pokrycia-analitycznego-gpw#brand24
Analysis of Q2'23 Results: Revenue Decline and Gross Margin Improvement

Analytical Report – Action – WSE:ACT

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 25.01.2023 08:04
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program. 3.0. Event: Tender offer within buyback program framework announced. Action has invited investors to a tender offer within the buyback program which assumes a purchase of not more than 300,000 own shares with a purchase price proposed at PLN 15.30 per share. Subscriptions will be accepted from January 23 till February 1. On February 3, Action will announce the amount of shares to be purchased in the tender offer. Expected impact: Neutral; a proposed purchase price in the tender offer is by 3.4% higher than the Company’s market close price yesterday. This is still another tender offer announced by the Company, the previous one had a 43.2% rate of reduction. Analyst: Jakub K. Viscardi GPW’s Analytical Coverage Support Programme 3.0  
Canadian Inflation Rises to 3.3%, US Retail Sales Climb: USD/CAD Analysis

The Department Of Justice's Lawsuit Against Google

Kamila Szypuła Kamila Szypuła 25.01.2023 11:34
For years, Google has faced accusations from advertising and media industry executives. Allegations against Google The Department of Justice has accused Google of abusing its role as one of the largest brokers, suppliers and online auctioneers of advertisements placed on websites and mobile applications. The filing promises a protracted legal battle with far-reaching implications for the digital advertising industry. Google also operates the most popular search engine and online video streaming site, YouTube, which raises allegations that it is tilting the market in its favour. Filed in federal court in Virginia, the case concerns Google's abuse of its monopoly position in the advertising industry, harming online publishers and advertisers who try to use competing products. Eight states, including California and New York, joined the Justice Department's lawsuit. The lawsuit asks the court to reverse Google's "anti-competitive acquisitions", such as its 2008 purchase of DoubleClick. Rivals say Google's power in digital advertising stems from a series of acquisitions that Google has used to build its advertising business. While largely invisible to internet users, ad-tech tools controlled by Google make it easy to buy and sell digital ads that help fund online publishers. Google's business includes a tool through which publishers can offer ad space, a product for advertisers to buy these spaces, and an exchange that automatically connects bidders to websites as they load for individual users. 2020 lawsuit The Department of Justice's 2020 lawsuit against Google related to its position in the online search markets, including permission to make Google the default search engine in Apple's Safari browser. Last year, Google offered to split some of its advertising business into a separate company under the Alphabet umbrella to fend off a recent Justice Department investigation. Department of Justice officials declined the offer and instead opted to proceed with the trial. Advertising earnings Alphabet gets about 80% of its business from advertising. A new Justice Department lawsuit targets a subset of this ad business that brokers the buying and selling of ads on other websites and apps. Google reported $31.7 billion in revenue in 2021 from this brokerage business, about 12% of Alphabet's total revenue. Google gives around 70% of these revenues to online publishers and developers. Google's respond Google has attempted to settle claims against its ad technology company. Google said it has no plans to sell or exit the advertising business. He also strongly disputed the claims in a lawsuit filed by state attorneys general led by Texas, with allegations similar to the Department of Justice complaint. As well as offering to carve out some of its advertising business to avoid a Justice Department lawsuit, the company last year talked to the EU about a deal that would allow competitors to broker ad sales directly on the video service. In 2021, the company agreed to give UK antitrust authorities effective veto power over elements of its plans to remove a technology called third-party cookies from Chrome in order to settle an investigation of the plan there. In France, Google agreed to pay a fine of €220 million, equivalent to approximately $239 million, and to improve data access to rival ad firms so as not to use their data in a way that rivals could not reproduce, to settle a similar antitrust investigation in country. Will there be shift in the online advertising industry? Any divestiture of Google's advertising technology business would be a major shift in the online advertising industry. Separating parts of Google's advertising business from the rest of the company can take years of litigation. Depending on the outcome of the case, ad-tech executives said the results could range from a higher share of ad dollars flowing to publishers to lower overall spend as digital advertising would be less efficient without Google's intermediation. Google (Alphabet) share price GOOG shares have seen a significant drop in the last year. They started 2023 at 89.70 and rose until last Monday, where they reached 101.21, but fell to 99.21 on Tuesday. Source: wsj.com, finance.yahoo.com
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange Only The Dow Jones Index Rose

InstaForex Analysis InstaForex Analysis 26.01.2023 08:10
At the close on the New York Stock Exchange, the Dow Jones rose 0.03%, the S&P 500 index fell 0.02%, the NASDAQ Composite index fell 0.18%.  Dow Jones The leading performer among the components of the Dow Jones index today was Walt Disney Company, which gained 2.12 points or 2.00% to close at 108.12. McDonald's Corporation rose 3.44 points or 1.28% to close at 273.00. Walgreens Boots Alliance Inc rose 0.38 points or 1.06% to close at 36.28. The least gainers were 3M Company shares, which lost 2.07 points or 1.80% to end the session at 112.93. The Travelers Companies Inc was up 1.30% or 2.51 points to close at 190.74 while Amgen Inc (NASDAQ:AMGN) was down 1.22% or 3.16 points or ended trading at 256.54. S&P 500 Leading gainers among the components of the S&P 500 in today's trading were MarketAxess Holdings Inc, which rose 10.25% to 363.28, Capital One Financial Corporation, which gained 8.99% to close at 116.09. as well as Warner Bros Discovery Inc, which rose 8.59% to end the session at 14.53. The least gainers were Nextera Energy Inc, which shed 8.71% to close at 76.59. Shares of Nasdaq Inc lost 5.85% and ended the session at 58.30. Quotes of Intuitive Surgical Inc decreased in price by 5.50% to 243.80. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Minerva Surgical Inc, which rose 65.90% to 0.38, Alvarium Tiedemann Holdings Inc, which gained 65.41% to close at 15.40. as well as shares of GeoVax Labs Inc, which rose 58.89% to close the session at 1.11. Shares of Grom Social Enterprises Inc became the leaders of the decline, which fell in price by 35.63%, closing at 2.06. Shares of Helbiz Inc lost 29.76% and ended the session at 0.29. Quotes of Waitr Holdings Inc decreased in price by 27.79% to 0.42. Numbers On the New York Stock Exchange, the number of securities that rose in price (1651) exceeded the number of those that closed in the red (1387), while quotes of 132 shares remained virtually unchanged. On the NASDAQ stock exchange, 1906 companies rose in price, 1745 fell, and 194 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.63% to 19.08. Gold Gold futures for February delivery added 0.60%, or 11.70, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 0.46%, or 0.37, to $80.50 a barrel. Futures for Brent crude for March delivery rose 0.30%, or 0.26, to $86.39 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.28% to 1.09, while USD/JPY fell 0.46% to hit 129.55. Futures on the USD index fell 0.27% to 101.40. Relevance up to 04:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/310098
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Tesla May Have The Possibility Of Correction Being Prolonged

Torben Melsted Torben Melsted 26.01.2023 08:36
Tesla has seen a correction just as we predilected in our article from January 10th. The rally to 144 could be enough, but we are not blind to the possibility of this correction being prolonged closer to 169 before completing and setting the stage for the final decline towards our ideal target near 97.98. This final dip should complete wave 4 and set the stage for a test to move higher in wave 5 which ultimately should eclipse the peak of wave 3 at 414.50. For now, we are interested in locating the termination point of wave 4/ to set the stage for the final dip in wave 5/ of 4. Relevance up to 07:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310127
FX Daily: Upbeat China PMIs lift the mood

Chinese Have Enough Money To Temper Recession, Tesla’s Record Profit

Swissquote Bank Swissquote Bank 26.01.2023 10:56
The S&P500 was flat yesterday, as investors tried to make sense of the deluge of company earnings that hit the fan before, during and after the session. Microsoft didn’t gain on better-than-expected earnings, and Tesla announced record profits, but the share price jumped only 5% in the afterhours. Stocks Latest positive price action in stocks – which is now fading, and the positive price action in bonds suggest that the recession odds became less for stock traders, and more for bond traders since the start of this year. And that’s a risk for stock gains, besides earnings. Bank of Canada In central banks, Bank of Canada (BoC) hiked its bank rate by 25bp yesterday and announced to pause. The BoC decision spurred the expectation that the Federal Reserve (Fed) could do the same: hike by 25bp next week then pause. Bank of England For the Bank of England (BoE), investors are almost sure that the year will end with a 25bp hike due to the slowing economy. Australia But in Australia, the surprise rebound in Australian inflation, spurred the Reserve Bank of Australia (RBA) hawks yesterday. Summary In summary, investors’ hearts will continue to swing between slowing economy and easing inflation, and the bumps in inflation along the way.But the data will tell who is right and who is wrong. All eyes are on US GDP today! Watch the full episode to find out more! 0:00 Intro 0:47 Microsoft sold on slowing revenue warning 1:51 Tesla’s record profit sees limited reaction 3:34 Stock and bonds don’t price the same recession odds 5:11 FX update: USD down, euro, sterling, Aussie up 7:51 Chevron to buy back $75bn stocks! 9:01 Chinese have enough money to temper recession. They just need to spend it! Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Tesla #Microsoft #earnings #Chevron #stock #buyback #US #GDP #data #Fed #ECB #BoE #RBA #BoC #expectations #recession #odds #USD #EUR #GBP #AUD #crude #oil #China #New #Year #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Pound Slides as Market Reacts Dovishly to Wage Developments

In Europe Investors Reacted Positively To Reports

Jakub Novak Jakub Novak 26.01.2023 14:10
The sharp growth of US tech stocks boosted market sentiment amid optimistic earnings forecasts from electric car maker Tesla Inc. Futures contracts on the Nasdaq 100 index rose by about 0.5%. Tesla jumped more than 8% during premarket trading in New York after beating earnings and sales estimates. Futures on the S&P 500 index added 0.3%, and the industrial Dow Jones gained 0.2%. Europe stocks In Europe, investors reacted positively to reports from Nokia Oyj Telecommunications Group and chipmaker STMicroelectronics NV, which helped the Stoxx 600 index gain more than 0.5%. Although companies are not boasting of high figures they are not disastrous either, which keeps the demand for risky assets, including stocks. The January growth is exaggerated given the recession risks. However, next week's Federal Reserve meeting may confirm that the market and investors were right. China The buoyant market sentiment was also linked to China, where data on holiday and tourism spending showed that the country's recovery is gaining momentum. On the first trading day after the Lunar New Year, the Hang Seng Index jumped by 2.4% and closed at its highest level since March 1, 2022. US GBP Expectations of a soft landing of the US economy and that the Federal Reserve is nearing the end of its rate hike cycle are also pushing investors to buy cheaper assets. US GDP reports for Q4 this year are expected today, as well as employment data, which will help determine the Fed's future policy course. Euro The euro is down slightly, but it is getting continued support from statements by European Central Bank officials, who continue to argue in favor of further significant policy tightening in the coming months. Bond yields in the Eurozone rose by several points. Oil and Bitcoin Oil prices continued to rise amid expectations of a rebound in demand in China. Bitcoin fell by more than 2%, wiping out much of Wednesday's gains. S&P 500 index As for the S&P 500 index, the situation remains on the side of bulls. The index may continue to grow but bulls need to protect the support level of $4,010 as well as take control over $4,038. After that, we may expect a more confident spurt to $4,064. At the same time, it would be difficult to reach above $4,091. If the pair declines and we see weak activity from bulls at $4,010, they will have to protect $3,980 and $3,960. Breaking through this level, the index may be pushed to $3,923.   Relevance up to 12:00 2023-01-27 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/333364
It Was Possible That Tesla Would Move Closer To Resistance

It Was Possible That Tesla Would Move Closer To Resistance

Torben Melsted Torben Melsted 27.01.2023 08:23
As we said yesterday, it was possible that Tesla would move closer to resistance near 169 before topping and that's exactly what we now are seeing about Tesla. Despite the strong rally out of the 101.81 low, we will be looking for a final dip closer to our ideal target at 98 to complete the corrective decline in wave 4. This final decline should then set the stage for wave 5 to take over for a rally beyond the former top at 414.50. But for now, we will stay focused on the ongoing corrective rally completing near 169 for a new push lower.   Relevance up to 07:00 2023-01-30 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/310313
Italy Eases Windfall Tax Impact Amid China's Deflation, Focus on US Inflation Report

Another Sector Announced Layoffs, Hasbro Reduced Its Workforce, IBM And SAP Have Joined Technology Companies That Are Reducing Employment

Kamila Szypuła Kamila Szypuła 27.01.2023 11:21
Mass layoffs began to spread beyond the tech sector. Hasbro is joining the wave of companies cutting jobs as the global economy slows in response to rising interest rates and other macroeconomic factors such as a reduction in consumer spending. Dow, IBM and SAP announce they will lay off thousands of workers. Layoffs in Hasbro Economic uncertainty is spreading to sectors beyond technology and media. Hasbro Inc said it will eliminate 15% of its global workforce this year. The toy and entertainment company said the reduction, which will affect around 1,000 jobs, will take effect in the next few weeks. Drop in sales Retail companies have seen their sales decline, especially during the crucial holiday season as consumers cut back on discretionary purchases amid rampant inflation and recession fears. Hasbro also released preliminary results for the fourth quarter, showing that revenue fell 17% to $1.68 billion compared to the previous year. Read next: GBP/USD Pair Is Struggling To Extend Previous Highs, EUR/USD Pair Continued Its Gains| FXMAG.COM Hasbro share price The stock has fallen 29% in the last 12 months. After that in the new year HAS stock price rose, this week saw a significant drop from above 65.0 to 60.50. Layoffs in Dow, IBM and SAP In the US alone, more than 150 tech companies have announced plans to lay off 55,000 jobs since early January. Dow, IBM and SAP have joined a line of companies planning to shed thousands of jobs to prepare for a deteriorating economic outlook. Unlike Microsoft Corp. and Google parent Alphabet Inc., which announced more layoffs this month, the companies did not drastically increase staff numbers during the pandemic. Instead, the leaders of these global giants said they were shrinking to accommodate slowing growth or to respond to weaker demand for their products. Many CEOs say companies are starting to look more closely at hiring. Four companies have cut more than 10,000 jobs this week, a fraction of the total workforce. Still, the decisions mark a shift in sentiment in the executive suites, where many leaders are retaining workers after struggling to hire and retain them in recent years as the pandemic disrupted jobs. Planned layoffs of 3,000 employees at SAP affect about 2.5% of the business software maker's global workforce. Chemical giant Dow said on Thursday it was laying off about 2,000 employees. The Midland, Michigan company says it currently employs about 37,800 people. Management said they intend to cut costs by $1 billion this year and close some assets. According to IBM's latest annual report, the plan to eliminate around 3,900 roles would mean a 1.4% reduction in workforce to 280,000. Not all companies are on layoffs. Walmart Inc., the country's largest private employer, said this week it was raising starting wages for U.S. hourly workers to $14 from $12, amid a still tight labor market for frontline workers. Chipotle Mexican Grill Inc. said on Thursday it planned to hire 15,000 new employees to work at its restaurants, while aircraft maker Airbus SE said it would hire more than 13,000 new employees this year. Airbus said 9,000 new jobs will be located in Europe, with the rest in the US, China and other countries. Dow share prices Dow Inc shares rose in the new year until they finally stopped below 60.00. IBM share prices IBM shares have fallen drastically recently. IBM stock prices are below 135.00. SAP share prices SAP shares similarly to IBM rose in the new year, and recently started its decline. Currently, SAP share prices have fallen from 116.16 to 114.10. Source: wsj.com, finance.yahoo.com
Behind Closed Doors: The Multibillion-Dollar Deals Shaping Global Markets

A Loss Of $48 Billion In Shares Of The Indian Group Adani As A Result Of The Hindenburg Research Report

Kamila Szypuła Kamila Szypuła 29.01.2023 19:13
Companies around the world are constantly assessed by state institutions and those outside. Reports and all kinds of information have a greater or lesser impact on the situation of a given company, but the example of Adani Group shows that one report can generate large losses. In this article: The power nutrient The bond market A Loss Of $48 Billion In Shares The power nutrient Everyone wants to be healthy and matter. On the internet you can find various diets and tips on how to achieve this. Many specialists repeat that the most important thing is a proper diet, and especially taking care of its micronutrients. Fiber is a nutrient superhero, and yet most people don't get enough in their diets. Researchers have found that adequate dietary fiber intake is associated with a reduced risk of heart disease, stroke, high blood pressure, certain gastrointestinal disorders, and type 2 diabetes. There is also evidence that the benefits of fiber extend beyond any specific ailment: eating more fiber can lower human mortality. A study by the National Institutes of Health found that people who consumed higher amounts of fiber, especially from grains, had a significantly lower risk of dying over a nine-year period compared to those who consumed lower amounts of fiber. While you can easily take a fiber supplement, you will miss out on all the other vitamins and minerals that whole foods provide. The best sources of fiber are whole grains, fresh fruits and vegetables, legumes and nuts. It is worth considering whether we consume the right amount of fiber and take care of our health. A dietitian says this is the "power nutrient" she eats for a longer, healthier life—but 95% of Americans lack in their diet. (via @CNBCMakeIt) https://t.co/cEhnURQYOd — CNBC (@CNBC) January 29, 2023 The bond market The bond market is an opportunity for profit, but it is also risky. Last year, an avalanche of events caused the market to collapse - the Russo-Ukrainian war, the tightening of the Federal Reserve, rising inflation and soaring energy prices. High yield bonds did not run away, losing nearly 11% due to recession fears but also due to rising interest rates. In response, investors paid out a record $52.8 billion in the first three quarters of 2022. The good news is that this sale has boosted profitability and could be a buying opportunity. Despite the difficulties on the market, it is worth looking for opportunities, not obstacles. A current yield level of around 9% offers an attractive entry point from an income perspective for high-yield bond fund investors.Here is a closer look at a few of the funds favored by our analysts. https://t.co/kHDE6LCqN1 — Morningstar, Inc. (@MorningstarInc) January 29, 2023 A Loss Of $48 Billion In Shares A report by Hindenburg Research triggered a loss of $48 billion in shares of the Indian group Adani. The Hindenburg Report questioned how Adani Group exploited foreign entities in tax havens such as Mauritius and the Caribbean islands. The company did not leave the case without a competitor. Adani said on Thursday he was considering taking action against Hindenburg. India's Adani Group: Hindenburg report intended to create false market https://t.co/epI05jy6GK pic.twitter.com/0IZ4coQS7V — Reuters Business (@ReutersBiz) January 29, 2023
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The NASDAQ Stock Exchange 2,131 Companies Rose In Price

InstaForex Analysis InstaForex Analysis 30.01.2023 08:07
At the close of the New York Stock Exchange, the Dow Jones rose 0.08%, the S&P 500 rose 0.25%, and the NASDAQ Composite rose 0.95%. Dow Jones The leading performer among the components of the Dow Jones index today was American Express Company, which gained 16.43 points or 10.54% to close at 172.31. Visa Inc Class A rose 6.73 points or 3.00% to close at 231.44. Walgreens Boots Alliance Inc rose 0.67 points or 1.84% to close at 37.17. The least gainers were shares of Intel Corporation, which lost 1.93 points or 6.41% to end the session at 28.16. Chevron Corp was up 4.44% or 8.34 points to close at 179.45 while The Travelers Companies Inc was down 1.74% or 3.35 points to close at 188. .76. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Tesla Inc, which rose 10.99% to 177.88, American Express Company, which gained 10.54% to close at 172.31, and shares of L3Harris Technologies Inc, which rose 7.92% to end the session at 212.10. The least gainers were Hasbro Inc, which shed 8.11% to close at 58.61. Shares of KLA Corporation shed 6.85% to end the session at 399.37. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were BuzzFeed Inc, which rose 85.17% to 3.87, Applied UV Inc, which gained 52.88% to close at 1.59, and shares of Lucid Group Inc, which rose 43.00% to end the session at 12.87. The least gainers were Nemaura Medical Inc, which shed 42.31% to close at 1.65. Shares of Jack Creek Investment Corp. lost 33.79% and ended the session at 12.44. Quotes of Akerna Corp fell in price by 31.46% to 1.22. Numbers On the New York Stock Exchange, the number of securities that rose in price (1,738) exceeded the number of those that closed in the red (1,303), while quotes of 114 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,131 companies rose in price, 1,535 declined, and 173 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.17% to 18.51. Commodities Gold futures for February delivery lost 0.09%, or 1.80, to hit $1.00 a troy ounce. In other commodities, WTI crude for March delivery fell 1.91%, or 1.55, to $79.46 a barrel. Futures for Brent crude for March delivery fell 1.18%, or 1.03, to $86.44 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair was unchanged 0.19% to 1.09, while USD/JPY fell 0.30% to hit 129.82. Futures on the USD index rose 0.08% to 101.72.   Relevance up to 04:00 2023-01-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/310476
FX Daily: Asymmetrical upside risks for the dollar today

USD Weakness May Not Last For Long, Particularly Against AUD

Saxo Bank Saxo Bank 30.01.2023 09:26
Summary:  Further flattening or inversion is possible but with the recent downshift consensus with descending inflation numbers, it would be worth watching for trade setup by buying the spread - buy 2 year futures ZTH3 and sell 10 year futures ZNH3 - with reward risk that could favor a steepener instead. Chinese market returns after a long break but this week is huge with heaps of market events starting with FOMC rate decision followed by the earnings of three trillion market cap stocks – AMZN, GOOGL and AAPL - then of course non farm payroll (est 175k) and unemployment (est 3.6%) to wrap things up.S&P500 has already started the new year with YTD return +6% breaking above psychological level 4,000 where both 200DMA & downtrend (from all time high 4,818) coincided.  As a result of this laggy looking Santa rally, S&P500 PE is nearly 20 times compared to low 17 back in October last year and so far 143 companies reported with +0.9% sales and +2% earnings surprises. Last Friday two stocks stood out in relation to the inflation expectations.  AMEX 4Q results showed record quarterly card spending and indicated 2023 guidance for sales & earnings topping estimates.  Further more, similar to BHP that reached all time high $50 level recently, Caterpillar (CAT) has hit record high $266.04 heading into earnings tomorrow night and the focus is expected to be on the machinery producer’s demand forecast for this year.Another observation is on silver (XAGUSD) that has gained ~40% from last year’s support level $18 while testing big downtrend (from double top $30 that was formed during 2020 – 2021).  Given its industrial uses and half precious metal status, China reopening anticipation seems to be fully priced in and major driver behind the recent base metals that also have rallied and is showing resilience.  This month so far, broad based US dollar weakness coincided with falling VIX below 20 and credit spread declining towards 450bps on the back of falling treasury yields in the range between 20 and 40 bps particularly from 2 years onwards.  However the below graph shows shifts in yield curve of key tenors between now and 15th dec 22 when the last FOMC meeting took place with economic projections including non-accelerating inflation rate of unemployment (NAIRU) at 4% and PCE price index of 2%.  Clearly the big swings – rise in yield – were concentrated on the short end of the curve all the way upto three months while 10 year & 30 year increases were relatively subdued therefore resulting in bear flattener (short end rising faster than long end). Most recent unemployment rate was 3.5% that is the lowest in 50 years and below NAIRU 4% so there is about 0.5% gap in between.  Also last week’s Dec core PCE YoY was 4.4% - the lowest out of four measures of inflation - therefore both of these figures still seem to suggest inflationary condition still exists hence current futures market’s implication of mere two 25bps hikes next two meetings taking the terminal rate at around 4.9% looks to be far from the reality so USD weakness may not last for long – particularly against AUD (S&P500 sensitivity) and JPY (carry trade) that both had the biggest returns of 6% among G10 currencies post last FOMC meeting - with potential reversal being a scenario that shouldn’t be ruled out. Another component of the yield curve other than direction of yield is anticipating whether the curve will steepen or flatten.  Two of the mostly watched spreads – 2y10y (-70bps) and 3m10y (-110bps) - have been extremely inverted for some time hence raising the probability of recession based on the historical correlations.  Major driver behind the inversion of the yield curve has been a significant rise in short end of the curve reacting to Fed’s rate hikes in typical fashion and may continue to see further flattening or inversion but with the recent downshift consensus with descending inflation numbers, it would be worth watching for trade setup by buying the spread - buy 2 year futures ZTH3 and sell 10 year futures ZNH3 while matching duration or DV01 (dollar value of 1 basis point change) - with reward risk that could favor a steepener instead, should the inflation remains elevated above the Fed’s target longer than expected alongside record low level of unemployment while also we have seen AU (7.8%) & NZ (7.2%) with higher than expected CPI last week. e.g. Long 100 lot ZTH3 and short 52 lot ZNH3 with spread ratio of 0.5169 (DV01 of $34.11 / $65.98) in the anticipation of profiting from steepening either by long end yield rising faster than short end yield (bear steepener) or short end yield falling faster than long end yield (bull steepener) but loss from more flattening and breakeven from parallel shift which is probably most unlikely scenario. Yield curve shift 2y10y and 3m10y of yield curve spreads   Source: ST Note - Nothing but yield curve | Saxo Group (home.saxo)
Despite The Improvement In The Outlook Due To Falling Energy Prices, The Economic Environment In Britain Remains Difficult

China Steps Into Bull Market, How Much The Bank Of England Will Be Raising Its Rates?

Swissquote Bank Swissquote Bank 30.01.2023 10:44
The new week kicked off with Chinese equities jumping into a bull market as traders returned from their Lunar New Year holiday. S&P500 and Nasdaq The S&P500 and Nasdaq also freed themselves from the 2022 bearish trend, while global bond markets had their best January since 1990. And if the equity rally is still on a shaky ground – due to fear that the slowing economy could hit company earnings – the future in bonds looks brighter. Policy verdicts In the macro front, the Federal Reserve (Fed), the European Central Bank (ECB) and the Bank of England (BoE) will be announcing their latest policy verdicts, between Wednesday and Thursday. Fed For the Fed, there is extremely little doubt that this week’s rate hike won’t be anything more than a meagre 25bp hike. BoE The ECB is expected to hike by 50bp this month, while we don’t know by how much the BoE will be raising its rates. In one hand, the BoE should continue fighting against inflation – which remains in the double-digit zone in Britain. On the other hand, the economic outlook for Britain is so morose – with country-wide strikes adding salt and pepper to the gloomy picture that Bailey cannot throw a series of 50bp hikes in the middle like Madame Lagarde. Stocks market Elsewhere, the Indian markets are being shaken by the Adani scandal. OPEC will meet this week, and big US companies including Amazon, Apple, Google, Meta, Exxon, Starbucks and Ford are due to announce earnings throughout this week! Watch the full episode to find out more! 0:00 Intro 0:39 China steps into bull market 1:01 S&P500, Nasdaq extend rally into bullish zone 2:04 Bonds record best Jan since 1990 & more gains are in the store 3:18 What to expect from the Fed, US jobs data this week? 6:10 50bp from ECB, and what else? 7:16 Will the BoE dare a 50bp hike? 8:53 Also this week: India shaken by Adani scandal, OPEC to hold fire, Apple, Amazon, Google & Meta to post Q4 results Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #ECB #BoE #OPEC #meeting #Apple #Amazon #Google #Meta #Exxon #earnings #US #inflation #NFP#data #Fed #expectations #USD #EUR #GBP #crude #oil #China #bull #market #Adani #scandal #Nifty #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Toyota's Transition To Electric Will Come With A Change In CEO

Kamila Szypuła Kamila Szypuła 30.01.2023 11:13
Electric vehicles are taking up a growing share of European and American markets, and a fifth of the world's largest car market, China, already consists of electric vehicles. Akio Toyoda Longtime CEO Akio Toyoda called himself the spokesperson for the "silent majority" of people in the auto industry who questioned the focus on electric vehicles. In the automotive world, Toyoda is one of those who advocate slower and more prudent movement. He argued that gasoline-electric hybrid vehicles like Toyota's Prius could be just as environmentally friendly, and said other companies were pushing consumers to switch to electric vehicles they might not be ready for without a full charging infrastructure. The CEO has always said that he is not a skeptic about electric vehicles - he is a realist. The desire to change for the better The transition is a watershed moment not only in the automotive industry, but also in the complicated green energy transition across the business world. Some companies, investors and governments are pushing for big leaps towards renewable energy and green technologies, arguing that consumers and infrastructure will keep up with the changes. Government agencies and investors are encouraging companies to switch to electric vehicles with subsidies and tax breaks. New tax credits for electric vehicles in US law, dubbed the Inflation Reduction Act, do not apply to hybrids that are not pluggable. The European Union has mandated the sale of new zero-emission cars by 2035. The state of California will also only allow the sale of new electric vehicles, plug-in hybrids and hydrogen cell vehicles starting in 2035. Read next: Inflation Is Falling, But Does It Mean That The Fed's February Decision Will Be Dovish?| FXMAG.COM New CEO CEO Motor Corp. Akio Toyoda, who has expressed skepticism about the future of all-electric vehicles, said he would hand over the keys to a junior director. The change in management comes as Toyota transitions to electric, autonomous and connected cars. Koji Sato, a 53-year-old engineer who will take over as Toyota's CEO in April, has provided some details on his plans for the world's best-selling automaker. However, his background in launching the first all-electric Lexus and working on hydrogen-powered cars allows him to face the upcoming car transformation. Sato said on Thursday, without giving details, that his plans for Toyota include accelerating the electrification of the automaker's lineup. Still, echoing Toyoda's position, he said that for the world to become carbon neutral by 2050, it would need more than just electric vehicles for transportation. Toyota will be EV? Last month, Toyoda wondered aloud how much longer he could argue for a more gradual and multifaceted approach. Two generations ago, Toyota was transforming the automotive industry with innovations such as just-in-time manufacturing and an obsession with continuous improvement. By the time Toyoda took the top job in 2009, there were signs the company was moving too fast. His quest for global dominance limited profit margins and caused some to wonder if quality was being sacrificed. But as Tesla overtook Toyota to become the world's most valuable automaker by market capitalization, competition intensified. Currently, Toyota has several electric vehicles in showrooms, and more will appear this year. Toyota's current EV platform - the basic architecture on which various car models can be built - has been partially changed from the existing platform for gasoline-powered vehicles. Even before Toyota's first change at the top in 13 years, some changes to its EV strategy were being considered behind the scenes. The company researched rivals. Meanwhile, Toyota remains the leader in sales of hybrids and plug-in hybrids, two model types that accounted for nearly 30% of its global shipments between 2022 and November. But sales of pure electric vehicles - models that run purely on electricity - are still low. The competitive EV business remains for Toyota as part of a larger strategy to promote and invest in a diversified offering that also includes hybrid and hydrogen vehicles. Toyota share price Toyota shares with the new year soared. They started the year at 138.28 and are now much higher at 147.16. Source: wsj.com, finance.yahoo.com
Australian dollar against US dollar - "It seems that the currency will soon hit a price above 0.68"

Commodities See Short Term Pull Back Risks, The Aussie Dollar Down 0.8%

Saxo Bank Saxo Bank 31.01.2023 09:37
Summary:  Markets see red on concern FAANG’s will bite into markets, while there is worry the Fed won’t cut rates this year like the market expects, this has resulted in traders booking profits ahead of end of month. Commodities see short term pull back risks, with prices already down from fresh peaks; oil is down 5.6%, iron ore, copper and aluminium lose 2% ahead of the Fed meeting. While Australian shares hold steady, defying negative leads from Wall Street. In FX the US dollar picks up, pushing most currencies off course, with the Aussie dollar down 0.8%. What's the short vs long term narrative. Markets see red on concern FAANG’s will bite into markets, while there is worry the Fed won’t cut rates this year as markets has priced in Ahead of the Fed, ECB, and BOE meeting this week, for the first time in 2023, with the central banks potentially setting the course of interest rates for the year, risk management resulted in traders and investors booking profits ahead of end of month, which dragged the S&P500(US500.I) down 1.3% and the Nasdaq 100 (NAS100.I) 2.1%. The worry is that the market believes the Fed will only hike by 0.25% this week and 0.25% next month. Two and done, before cutting in July. There is also a risk the Fed says it has “more work to do”, which could send equities into a tailspin. Our view is given financial conditions have improved, and there is a 20% chance of a recession, the Fed can keep rates higher for longer. This is why we think there could be a short term potential correction, so potentially consider taking profits and buying downside optionality (puts), and consider tight stops. Secondly, the worry is that major tech company earnings will continue to slump, with average overall  earnings down 0.3% this quarter, across the 145 of the S&P500 companies. This is why profit taking in Facebook, Apple, Amazon and Google parent Alphabet is occurring ahead of them reporting results. Ultimately, we think their outlooks could set the tone for equities this year. Consider FAANG names like Facebook/Meta are up 61%, Apple is up 10%, Amazon is up 20% and Google’s parent Alphabet is up 12% from recent lows. Click here for more on US earnings. Read next: Major Currency Pairs Are Waiting For Central Banks Decisions, USD/JPY Pair Rose Above 130.00, | FXMAG.COM Commodity short term pull back risk – with prices already down from fresh peaks; oil down 5.6%, iron ore, copper and aluminium lose 2% ahead of the Fed   On Monday oil dropped 2.4%, while most commodities lost almost 1%, with the markets awaiting further evidence China is picking up demand - just as BHP, Rio and FMG alluded to in their quarterly results. It seems traders are torn between real demand physically rising, but awaiting the Fed’s decision this week, which could result in the US dollar spiking, that would ultimately pressure commodity prices down. So these factors raise the risk of a short-term correction across the board. That said, resources prices have been really strong up 17-70% on from their lows. In 2023 alone iron ore and copper are up 9%, Aluminium up 11%, spot gold up 5%. However, with commodity prices falling, it also raises the alarm that Aussie dollar and the Aussie share market could be at risk of a short term correction or consolidation as well. The key is to watch the US dollar index. However keep in mind, over the longer term, commodity prices are supported higher, underpinned by rising demand over course of the year, and lower physical supply. For more on commodities, see Saxo’s Commitments of Traders report, that highlights broad buying slowed in recent weeks. Australian shares hold steady, defying negative leads from Wall Street. Australian retail sales fall off a cliff, borrowing falls Australia’s share market, as measured by the ASX200(ASXSP200.I) opened 0.3% higher today at 7,501 defying the futures and US markets negative lead. Not only are Australia shares outperforming US shares this year, but also UK’s FTSE. However, given materials prices could be at risk of a shorter term pull-back, it’s worth pointing out the technical indicators suggest the ASX200’s uptrend is weakening. Our Technical Analyst suggests a possible short term correction down to 7,167 should not be ruled out. However, over the longer term, we think upside in the ASX200 is intact with mining companies to report some of the strongest earnings on record, and provide their strongest outlooks in several years amid China reopening. For stocks, ETFs and baskets to watch, click here.  In company news today, Gold Road Resources (GOR) reported a drop in production in the prior quarter and higher costs due to inflationary pressure, but guided for higher grades in 2023. This follows Oz Minerals (OZL) also guiding for higher costs, which paints a picture of what we can expect for full year earnings season next month. In economic news, retail sales fell 3.9% in December, shocking the market, which expected sales to only decline 0.3%. On top of that, borrowing data also missed expectations. Borrowing rose 0.3% in December, vs consensus expecting lending to rise 0.5%. Today’s data is telling as it shows interest rates have taken effect on the consumer, and supports the market thinking that the RBA could potentially pause and then cut rates later this year.   In FX the US dollar picks up, pushing most currencies off course The US dollar index has bounced up off it low and risen 0.5% and pressured most currencies lower, with the Aussie dollar (AUDUSD) falling 0.8% from its high, with the Aussie buying 0.7061 US. The Aussie against the US has fallen under its 200-day moving average, while there is caution the Fed’s Wednesday’s decision could cause the US dollar to rise. Should the Fed only hike by 0.25% as expected and guide for one more hike, or if the Fed mentions its hikes have been effective, or that it sees interest rates having a lag effect, then the AUDUSD could potentially rally back up. Supporting longer term upside in the Aussie is the rise of China’s economy and commodity buying. From a technical perspective, the bulls may like to hear the 50 day moving crossed above the 200, indicating the longer term rally could remain intact, despite the RSI indicating, there are currently more sellers right now, than buyers.  Stay tuned to Saxo's inspiration page for trading and investing ideas. For a global look at markets – tune into our Podcast.   Source: Video: Will FAANGs results bite into markets and what if the Fed says it won’t cut rates this year, like the market thinks | Saxo Group (home.saxo)
Jerome Powell Will Certainly Try To Calm Down Market Joy

Jerome Powell Will Certainly Try To Calm Down Market Joy

Ipek Ozkardeskaya Ipek Ozkardeskaya 31.01.2023 13:18
Stock investors kicked off the week on a cautious note, as the Federal Reserve (Fed) is expected to kill joy when it announced its latest decision tomorrow, and earnings announcements may not save the day.   Some profit taking  US equities kicked off the week on a negative note, as many investors preferred booking profits before the deluge of earnings announcements and the Fed decision.    And they are certainly not wrong to be scared, because the Fed expectations became increasingly dovish in January, as investors saw the easing inflation figures combined with softening economic activity.   The S&P500 gave back 1.30% on Monday. The  index is still above the 2022 bearish trend and above the 200-DMA, but we can't rely on Jerome Powell to keep the party going; only stronger-than-expected earnings, and ideally sufficiently good profit guidance from companies could do it – and spitting out a good guidance won't be a piece of cake for a good amount of them.   Crude oil down despite strong China PMI, encouraging IMF growth forecast   US crude fell 2% yesterday and slipped below the 50-DMA this morning.   Interestingly, however, the latest news on the macro front is not bad, at all. The Chinese reopening is now well reflected through the first set of economic data. Released today, both the manufacturing and services PMI jumped into the expansion zone.   And the cherry on top, the IMF raised its growth forecast for this year by 0.2% to 2.9% citing the resilience of US spending and the Chinese reopening.   This is the kind of news that the energy markets normally cheer. But not this time, apparently.    Read next: The Government Pension Fund Global Suffers Losses| FXMAG.COM Won't call victory over inflation...  The US dollar is gaining some positive momentum into the Fed meeting, as investors know that the Fed won't declare victory over inflation despite the falling inflation, and position accordingly.  Why? Because the trend could reverse suddenly.   The Spanish inflation came as a punch to the Europeans' face yesterday as it advanced to 5.8% in January instead of falling to 4.7% as expected. French and German readings could reveal similar surprises.  And nothing guarantees that the same U-turn won't happen in the US. Gasoline prices surged 12.5% over the past month on the back of winter storms and a rising global demand – partly thanks to the ban on Russian oil and the Chinese reopening, and food price inflation remains high.   So, the Fed will certainly hike by 25bp, but there is little chance it will announce the end of the tightening.   And Jerome Powell will certainly try to calm down market joy – given that the actual market environment suggests that the financial conditions in the US have become as loose as last February, before the Fed started tightening its purse's strings.   And the more the market fights the Fed, the more aggressive the Fed should become to achieve what they need to achieve.   In summary, the Fed will likely reveal that there will be at least one more rate hike, or two more rate hikes to go before pause.  And that simply 's' could make all the difference.   
Aramco's decision to increase its payout is an interesting move that comes despite a sharp drop in oil prices over the last 12 months

Shell has been an exception to the rule of energy companies generally doing better last year, particularly in the final quarter

M4Markets Analysis M4Markets Analysis 31.01.2023 16:42
Naturally this week Google, Apple and McDonald's have been the centre of attention, but we shouldn't forget about Shell - one of energy sector companies, which, in 2022, performed really well. However, according to M4Markets, Shell has been an exception... FXMAG.COM: It's been a good year for energy companies - what do you expect from Shell earnings?  M4Markets: Shell has been an exception to the rule of energy companies generally doing better last year, particularly in the final quarter. The prelude facility suffered an outage that led to a reduction in LNG liquefaction volumes. Additionally, it suffered delays in developing a field in Mexico. Most recently, the company announced a restructuring under its new CEO, Wael Sawwan, to simplify the executive structure and reduce costs, and likely to see some (minor) job cuts. Those moves point towards the company having some cost pressures, particularly in the context of increased windfall taxes from 25% to 35%, which are expected to have a £1.7bn impact on UK and EU profits this quarter but a potentially more prominent impact on the next. Guidance is likely to be in focus, particularly on capital expenditures, as some companies have opted to pass on the windfall gains to their shareholders, helping support stock prices.  Last year's Black Friday was record-breaking, but what about the year 2022 as a whole. Was it good enough to let Amazon exceed earnings expectations?  After Amazon announced several cost-cutting initiatives, including 18000 job cuts, analysts have become less optimistic about the company's sales. Particularly considering retail sales numbers in numerous countries have come in lower than expected in the key holiday month, with growth in North America offset by contraction in its international business; lower expectations means it's easier to have a surprise beat. Read next: Samsung Demand For Semiconductors And Smartphones Remains Weak| FXMAG.COM On the other hand, a hefty share of Amazon's revenue now comes from AWS, its cloud division. Towards the end of last year, the cloud saw a significant slowing in demand, which could be 'the' surprise for Amazon's earnings. But maybe - and this is rather unlikely, rivals saw a drop in demand because there was a significant uptake at AWS, which could provide the surprise beat. Amazon's measures to support profit margins recently suggest the earnings won't be all that good, but that might get rescued by improved guidance if the cost-cutting allows for improved profitability later in the year.
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

The Close On The New York Stock Exchange Was Positive For All Indices

InstaForex Analysis InstaForex Analysis 01.02.2023 08:22
At the close on the New York Stock Exchange, the Dow Jones rose 1.09%, the S&P 500 index rose 1.46%, the NASDAQ Composite index rose 1.67%. Dow Jones The leading performer among the components of the Dow Jones index today was Home Depot Inc, which gained 9.93 points or 3.16% to close at 324.17. UnitedHealth Group Incorporated rose 13.40 points or 2.76% to close at 499.19. Dow Inc rose 1.40 points or 2.42% to close at 59.35. The least gainers were Caterpillar Inc, which shed 9.21 points or 3.52% to end the session at 252.29. McDonald's Corporation was up 3.49 points (1.29%) to close at 267.40, while International Business Machines was down 0.57 points (0.42%) to close at 134. 73. S&P 500 Leading gainers among the S&P 500 components in today's trading were Smith AO Corporation, which rose 13.72% to 67.73, International Paper, which gained 10.66% to close at 41.82, and shares of PulteGroup Inc, which rose 9.42% to end the session at 56.89. The least gainers were Phillips 66, which shed 5.77% to close at 100.28. Shares of Corning Incorporated shed 4.89% to end the session at 34.61. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were Motorsport Gaming Us LLC, which rose 713.69% to hit 21.40, Mobile Global Esports Inc, which gained 161.93% to close at 2.58 , as well as shares of Atlas Technical Consultants Inc, which rose 121.76% to close the session at 12.13. Shares of Sidus Space Inc were the least gainers, losing 53.94% to close at 0.41. Shares of Nuvve Holding Corp lost 40.43% and ended the session at 1.37. Evoke Pharma Inc lost 29.74% to 4.04. Numbers On the New York Stock Exchange, the number of securities that rose in price (2579) exceeded the number of those that closed in the red (477), while quotes of 90 shares remained virtually unchanged. On the NASDAQ stock exchange, 2824 companies rose in price, 865 fell, and 175 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.76% to 19.39. Gold Gold futures for February delivery added 0.27%, or 5.20, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery rose 1.54%, or 1.20, to $79.10 a barrel. Brent oil futures for April delivery rose 1.28%, or 1.08, to $85.58 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.20% to 1.09, while USD/JPY fell 0.23% to hit 130.15. Futures on the USD index fell 0.19% to 101.89.   Relevance up to 04:00 2023-02-02 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/310903
Intel's Cost Reduction Also Includes Executive Compensation

Intel's Cost Reduction Also Includes Executive Compensation

Kamila Szypuła Kamila Szypuła 01.02.2023 11:17
The largest U.S. chip maker by revenue is facing a major industry downturn, fierce competition and an expensive recovery plan. Salary reduction Intel CEO Pat Gelsinger and other executives are cutting salaries days after the company released quarterly results that disappointed Wall Street. Gelsinger, in the top job for two years, will see his base pay cut by 25%, Intel said. The company said other cuts would be staggered, with base salaries set at 15% for executives, 10% for senior managers and 5% for middle managers. Intel said hourly workers and junior workers would not be affected. The Losses The PC market is in a sharp downturn, with device shipments down 28.5% in the last quarter of 2022. Semiconductor companies are now oversupplied with chips as a result of a shortage caused by the pandemic, which has been driven by both supply chain constraints and high product demand digital. Intel is also feeling the pain of belt-tightening by wider corporations, which is affecting sales in its lucrative server business. Revenue from data center customers fell by a third in the fourth quarter. On Thursday, the board said softness is expected to hold for the first half of the year, followed by a slight rebound in the second half as China's enterprise market recovers faster than the cloud computing industry. Intel last week posted a loss for the last quarter and said it expects to stay in the red for three months through March. The company has not suffered consecutive quarterly losses in more than three decades. Intel expects another loss in March quarter. Read next: AUD/USD Pair Remains Under Strong Selling Pressure, The EUR/USD Pair Has Been Falling But Remains Above 1.08$| FXMAG.COM Intel continues to lose market share to rivals such as Advanced Micro Devices Inc. and companies that have adopted semiconductors based on technology from British company Arm Ltd., analysts said on Friday. Intel said development of the new processors is proceeding as planned. Intel's financial turmoil comes at a critical time. The company is investing heavily in chip manufacturing to regain a foothold lost to Asian rivals who are now leading the industry in producing the most advanced chips. Intel CFO David Zinsner said the company's adjusted free cash flow for the first half of the year will be below last year's expectations before improving. Gelsinger’s plan Intel has fallen behind its chip-making competitors in Asia in the race to produce the fastest chips with the smallest transistors, although Gelsinger has outlined plans to return to the lead within a few years. Even as Intel cuts spending, it continues with an unprecedented plan to expand its chip manufacturing plant. Gelsinger has presented an ambitious plan to Intel to reclaim the lead in chip manufacturing that it has ceded to Asian rivals in recent years through multi-billion-dollar investments in factories. The company's capital expenditures rose to a record $24.8 billion last year, up 33% over the previous year. Gelsinger has committed to investing more than $100 billion in new U.S. chip fabs. The company relies on grants from the U.S. government and other countries to help defray the cost of these efforts. Intel executives said they were still committed to major projects, although the company delayed the start of construction of its facilities in Germany amid deteriorating market prospects and took other steps to save money. Intel share prices The troubles in the industry are perfectly illustrated by the movement of ren stocks. Last year, Intel's share price dropped significantly from above 50.00 to below 30.00. Intel shares fell more than 9% in trading on Thursday. But today, prices have gained 3% and are trading at 28.26. Source: wsj.com, finance.yahoo.com
Key Economic Events and Corporate Earnings Reports for the Week Ahead – September 5-9, 2023

Resumption Of Cooperation Between Airbus And Qatar Airways

Kamila Szypuła Kamila Szypuła 02.02.2023 11:41
Airbus has agreed to resume orders for nearly 75 aircraft from Qatar Airways. Amicable and mutually acceptable settlement Airbus and Qatar Airways said in a joint statement on Wednesday that they had reached an amicable and mutually acceptable settlement over the legal dispute. A long-running dispute over paint chipping on wide-body A350 models. The cancelled orders for 23 undelivered A350s and 50 smaller A321neos have been restored under the new deal, which is also expected to see Airbus pay several hundred million dollars to the Gulf carrier. Order cancellation Airbus terminated a billion-dollar deal to supply Qatar Airways' 19 largest aircraft last summer, the latest escalation in a dispute between the European aircraft maker and one of its largest customers. The company has canceled the remaining Qatar Airways orders for the A350 wide-body jet. The 19 aircraft are valued at around $7 billion at list price before the massive discounts aircraft manufacturers usually give to customers. This prompted Qatar Airways to initiate legal proceedings against Airbus in London, in which the airline sought compensation based partly on the impact of the inability to use the aircraft on its operations. The news of the order cancellation comes after a similar move in January, when Airbus dropped a separate deal with Qatar Airways for 50 smaller A321 aircraft valued at $6.35bn before discounts. Qatar Airways CEO Akbar Al Baker, who gained a reputation for publicly chastising Airbus and rival Boeing over manufacturing issues, has signed an order for 25 Boeing 737 MAX 10 aircraft, a direct competitor to Airbus. Paint problem Qatar Airways said peeling and cracking paint on the wings of some A350 aircraft already in service has exposed copper mesh underneath, designed to protect against lightning strikes. The airline alleged in a London lawsuit that the paint issue was a safety risk. Airbus has acknowledged the paint problem, but says it's just a cosmetic issue. The European Union Aviation Safety Agency, the European equivalent of the US Federal Aviation Administration, also refuted Qatari's claims that the case raised safety concerns. The Conflict The situation led to widespread conflict. In August, Airbus completed all new deals with Qatar Airways, canceling more than $13 billion worth of contracts, at the latest available list prices and ahead of the massive discounts aircraft manufacturers usually give to customers. Airbus lawyers claimed that Qatar Airways exaggerated concerns about the issue by trying to claim compensation and refusing to provide an aircraft it did not need as the pandemic hit demand for air travel. The aircraft manufacturer has complained in court that the airline and its watchdog, the Qatari Civil Aviation Authority, failed to provide documentation showing the technical justification for grounding the aircraft. The dispute with Qatar Airways has caused Airbus to look for new buyers for the jets that Gulf Airlines is not taking. Although the aircraft maker said it saw increased customer interest in ordering larger aircraft models, the resurgence in air travel this year was fueled by orders for smaller, short-haul aircraft. Airbus share price Airbus shares hit a pre-coronavirus high of 130.00 in late January, but then fell. In February they rise again but are below 120.00 Source: wsj.com, finance.yahoo.com
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

Essential Factors To Watch For 2023 And Stock Indices Are The Short-Term Bond Yields

Santa Zvaigzne Sproge Santa Zvaigzne Sproge 02.02.2023 14:34
„The future’s so bright, I gotta wear shades”, or about shares and ETFs „The future’s so bright, I gotta wear shades” is the title that, unfortunately, we cannot use to forecast 2023. Although, the new year will have to really work hard to surprise anyone who has lived through the past couple of years. It appears that all investors’ eyes are on China and its success in resuming economic activity. A rebounding China will boost imports of oil, commodities and raw materials while fueling demand for airline tickets, hotel rooms and foreign real estate. „Surely it will push up global inflation if China reopens fully,” says Iris Pang, chief economist for Greater China at ING Group NV. There is a risk that China will act more inflationary in 2023, but this risk seems limited due to the very real likelihood that supply will also improve in many sectors of the economy. Inflation and bond yields are the major risks for 2023 stock indices performance. While a mild recession in 2023 is almost certain, the Fed possibly will slow its rate hikes in case inflation starts to show signs of easing. With slowing growth, wage increases would slow, which, among others, would help stabilize corporate margins. „It’s astonishing,” said Harvard University professor Jeremy Stein, „If you told any one of us a year ago, ‚we’re going to have a bunch of 75 basis-point hikes,’ you’d have said, ‚Are you nuts? You’re going to blow up the financial system.’” Guess what? 75 basis-point hikes are done, and the financial system has not broken – and it is not even near that happening. Stock indices are open to another downward phase (we didn’t have a capitulation yet), but by the end of 2023, they could be back on the upward trend even if the world is in a „mild” recession. Investors should watch the market and remain cautious until the new trend is proven. However, someone may say it might be a good to have some exposure and adjust when your asset allocation gets out of whack. Essential factors to watch for 2023 and stock indices are the short-term bond yields, put/call ratio and bank liquidity. Finally, one should remember that stocks are hostages to the tyranny of round numbers, so it might be good for the support and resistance lines to be always near them. As we move further, let us look at what the companies expect the year 2023 to bring. We have studied the earnings forecasts of all 30 companies that are part of the Dow Jones Industrials index (US30). Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend, The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM It’s going to be tough at first, and then it’s downhill for the Dow Jones Collecting the data of Q1 2023 earnings per share forecasts, we can see that 12 of the 30 companies in this index (40%) are expected to improve their quarterly earnings, resulting in an 11.7% growth in EPS from Q4 2022 to Q1 2023. The average price-to-future earnings ratio within the index is expected to be 16.8, an improvement compared to the current average P/E ratio within the index of 18.5. The most considerable improvement for the upcoming quarter is forecasted by the aircraft and missile manufacturer Boeing Co., which was the only company within the index to record a loss in Q3 2022. In fact, if we exclude Boeing Co. data from the calculations, the estimated EPS growth in the following quarter diminishes to a meagre 2.00%. The second most substantial growth is forecasted by Goldman Sachs Group Inc., which is also expected to report the highest quarterly EPS (9.99) within the index. The investment bank would be able to boost its earnings by taking advantage of the increasing interest rate environment. Two companies expecting their EPS to decrease in the upcoming quarter are Chevron Corp. and McDonald’s Corp. The cumulative annual earnings figures are similarly presented. Cumulative EPS is calculated by summing annual EPS for all companies within the index, allowing us to evaluate the EPS changes between two periods. However, to compare the full annual periods, we have taken the expected results for the last quarter of 2022. The data show that the anticipated annual EPS increase in 2023 within the index would be 10.37% (6.19% if we exclude Boeing Co. as an outlier). Furthermore, 26 of the 30 companies in the index are likely to report year-on-year earnings growth. These results show that analysts are currently predicting a slowdown at a large proportion of companies in the medium term and a slow improvement by the end of next year. The companies’ employee retention activities and job postings share the same relatively gloomy sentiment for the upcoming year. Good morning, but unfortunately you are fired Last year, all major tech companies announced job cuts – some significant, some smaller. The motivation for companies to reduce the employee count comes from various factors, such as changing business models and a slowing economy. However, the biggest reason for the extensive tech firing in 2022 is the growth opportunities in cloud computing services and online shopping upon Covid-19 pandemic that drove people to organize their lives remotely. For example, due to this change in consumer behavior, Amazon doubled its workforce and had its most profitable period in the two years since the pandemic’s beginning. As the pandemic slowed in most of the world, such companies as Amazon were left with the high costs of rapid expansions, slower sales, and high inflation. Amazon’s growth stalled to the lowest rate in 20 years in mid-2022. During the period between April and September, Amazon laid off around 80,000 people around the world. In November, it announced another 10,000-employee layoff (the number was increased to 20,000 in December) and froze hiring. In total, Amazon’s downsizing amount to approximately 6.6% of its total workforce. While this has been the biggest job layoff in the history of Amazon in absolute terms, Amazon is experienced in managing its workforce amid recessions – it cut 1,500 jobs during the dot-com crash (which at that time was 15% of the staff). Besides large tech companies such as Amazon, Meta and Twitter, also startups – especially those emerging in response to the needs of a pandemic-hit world - and cryptocurrency companies are also feeling the pressure of inflation, the difficulty of raising new funding and, in the case of the latter, falling Bitcoin prices and investor sentiment. According to the Crunchbase database of public and private companies in the United States laying off employees, nearly 400 companies have announced layoffs, from which 21 reported a complete shutdown and 15 more fired 40% to 60% of their workforce. The major layoffs took place in Fintech, Crypto, E-commerce and Social media industries If anyone is wondering whether redundancies continue into 2023, they will (at least at Amazon). It has been confirmed by the company’s CEO Andy Jassy. Although, it is relatively safe to say that the layoffs would continue in 2023 for other tech companies and may spread out to other sectors as well. While the US labour market still shows meager unemployment data, if taking a closer look, it is visible that a considerable part of the hiring takes place in those industries trampled by the pandemic. And the downsizing among Tech companies also seems to become a problem for other sector workers. Among other (potentially more logical) factors is that corporate leaders are just people with a sense of herd unity. Therefore, if their competitors announce layoffs to prepare for the coming recession, they would probably consider doing the same. While it is harder to look for the silver lining in getting fired, it may be an absolute necessity for the company to undergo downsizing as part of a strategic restructuring. Downsizing allows companies to save cash, improve efficiency and, if necessary, survive economic slowdown. Nevertheless, it is crucial to do the due diligence and see what other activities the company is performing in order to optimize its operations – no company has earned billions by simply laying off employees. While cutting jobs is not necessarily bad for the company, the overall market typically perceives it as a negative sign, which is clearly reflected in its stock price. Studies involving 141 companies announcing layoffs between 1979 and 1997 and 1,445 companies announcing layoffs between 1990 and 1998 clearly show that downsizing negatively affects the companies’ stock prices following the news and in the longer period after the announcement. Interestingly, even though the key objective for downsizing typically is cost-cutting and optimization, not all companies achieve reliable results in this field. On the contrary, as a result, companies face the risk of losing valuable employees, may need to rehire some of them at a later stage and is likely to deal with a fall in customer service quality, productivity, and innovation due to demoralized workforce. The bottom line is that companies don’t fire employees if they are expecting a high growth period ahead. It is true whether we speak about one particular company or the market in general. Investors should pay attention to employee retention activities, reasons for necessary downsizing, and how the company expects to handle any negative consequences. Based on current market trends, it is safe to say that further downsizing will continue as we officially enter a recession in 2023. Good to watch ETFs Read the full Yearly Outlook 2023 by Conotoxia here!
Markets under Pressure: Rising Yields, Strong Dollar, and Political Headwinds Weigh on Stocks"

At The Close Of The New York Stock Exchange Only The Dow Jones Was Down

InstaForex Analysis InstaForex Analysis 03.02.2023 08:08
At the close of the New York Stock Exchange, the Dow Jones was down 0.11%, the S&P 500 was up 1.47% and the NASDAQ Composite was up 3.25%. Dow Jones  The leading performer among the Dow Jones index components in today's trading was Microsoft Corporation, which gained 11.85 points or 4.69% to close at 264.60. Quotes of 3M Company rose by 4.43 points (3.82%), closing the trades at the level of 120.29. Intel Corporation rose 1.12 points or 3.85% to close at 30.19. The least gainers were UnitedHealth Group Incorporated, which shed 26.17 points or 5.27% to end the session at 470.83. Merck & Company Inc rose 3.29% or 3.52 points to close at 103.46, while Boeing Co was down 2.52% or 5.41 points to close at 209. ,34. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Align Technology Inc, which rose 27.38% to 359.88, Meta Platforms Inc, which gained 23.28% to close at 188.77, and also shares of WW Grainger Inc, which rose 12.96% to end the session at 675.57. The least gainers were Air Products and Chemicals Inc, which shed 7.11% to close at 295.50. Shares of Schlumberger NV lost 6.12% to end the session at 52.29. Quotes of Aflac Inc decreased in price by 5.98% to 68.90. NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Gaucho Group Holdings Inc, which rose 339.02% to hit 5.40, Biophytis, which gained 73.13% to close at 0.71, and shares of Innovative Eyewear Inc, which rose 58.17% to end the session at 2.42. Shares of Versus Systems Inc became the leaders of the fall, which decreased in price by 41.60%, closing at 0.97. Shares of Motorsport Gaming Us LLC shed 37.95% to end the session at 22.96. Quotes of VivoPower International PLC decreased in price by 35.66% to 0.64. Numbers On the New York Stock Exchange, the number of securities that rose in price (2101) exceeded the number of those that closed in the red (957), while quotes of 92 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,703 companies rose in price, 979 fell, and 193 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 4.81% to 18.73. Gold Gold futures for April delivery lost 0.85%, or 16.55, to hit $1.00 a troy ounce. In other commodities, WTI crude for March delivery fell 0.72%, or 0.55, to $75.86 a barrel. Brent oil futures for April delivery fell 0.91%, or 0.75, to $82.09 a barrel. Forex Meanwhile, in the Forex market, EUR/USD fell 0.68% to hit 1.09, while USD/JPY shed 0.21% to hit 128.66. Futures on the USD index rose 0.49% to 101.53.   Relevance up to 04:00 2023-02-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/311260
Nvidia Is Rolling Out Its Own Cloud Service Together With Oracle

Australia’s Tech Sector Is Starting To Pick Up Momentum, The ECB And The BoE Took Dovish Turns

Saxo Bank Saxo Bank 03.02.2023 09:20
Summary:  The US equity markets extended their gains, underpinned by 23% surge in Meta as it announced a leaner and more decisive vision; while German and UK yields slumped after dovish tilts from ECB and the Bank of England. The NFP jobs report in focus as the next test of the US labor market strength. USD was back in gains while commodities reversed the post-FOMC rally as clear signals on China’s reopening demand are also awaited. The tech rally may start to get some jitters with Apple, Amazon and Alphabet missing their earnings forecasts in post-market.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) surged on Thursday, paring gains in Asia Friday morning following Apple, Google, and Amazon misses S&P500 closed at a new five-month high on Thursday, rising 1.5%, taking its move up to 19% from its October low and its 50-day moving average above the 200-day moving average, in what is usually referred as a “golden cross” in technical analysis. The Nasdaq 100 gained 3.6% after Meta shares jumped 23% on cost-cutting which paves the road for a return to profitability. Refer to Peter Garnry’s  article here for more on Meta. On the back of the dovish comments from Fed’s Powell on the previous day about disinflation having started and the optimism boosted by the surge in Meta’s share prices, Alphabet (GOOGL:xnas) and Amazon (AMZN:xnas) jumped more than 7% in the regular session and Apple (AAPL:xnas) climbed more than 3%, driving the benchmark indices higher before they reversed in the extended hour trading following reporting results missing expectations. Post results, Apple and Alphabet fell more than 3% and Amazon plunged more than 4% in after-hours trading, bringing Nasdaq 100 futures by around 1.3% lower in early Asian hours from its Thursday close. Apple, Amazon, Google, and Ford paint a bumpy picture ahead for equities Apple's profit and revenue missed, but it guided for a pickup in revenue from its iPhone this quarter, as well as its services revenues. Amazon's 4th quarter sales beat, but its outlook was on the weaker side. Google-owner Alphabet’s sales were lighter, suggesting lower demand for its core search advertising which is coming under threat. The US Department of Justice called for a breakup of the search giant’s ad-technology business over alleged illegal monopolization of the market. The company’s flagship search business, which drives most of its ad revenue, may also be under attack from new entrants, with Google declaring “code red” last year after in response to Open AI’s popular chatbot, entering the market. Ford guided for the potential of higher earnings in 2023, but missed fourth quarter earnings expectations. That said, its automotive revenue was higher than expected and it will pay a supplemental dividend of $0.65 per share reflecting the cashflow from taking a stake in Rivian. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) edged down, Bund and Gilt yields tumbled on dovish hikes from the ECB and BOE The yield on the 10-year Treasury dropped as much as 9bps following the massive declines in yields on German Bunds and UK Gilts before paring most of the gain (in prices, fall in yields) in the New York afternoon to finish 2bps richer at 3.39%.  Relative to European and UK bonds, the movements in the U.S. Treasuries were relatively muted ahead of the U.S. employment report today. Yields on the 10-year German Bunds dropped 21bps to 2.07%. The ECB raised policy rates by 50bps as expected and signaled another 50bps in March but indicated that the path of interest rate increases would become data-dependent afterward. Likewise, the Bank of England raised its policy rate by 50bps but commented that it had “seen a turning of the corner” and signaled that future rate hikes would be data-dependent. Yields on the 10-year Gilts tumbled a staggering 30bps to 3.01%. U.S. non-farm production improved to 3% (vs consensus 2.4%) in Q4 from 0.8% in Q3 and unit labor costs growth decelerated to 1.1% in Q4 (vs consensus 1.5%) from 2.4% in Q3. Both were good news to the Fed’s disinflation narrative. Interest rate futures are pricing in 60 bps of rate cuts by the Fed in the second half of 2023 after a 25bp hike in March. The Australian share market rallies to its highest level since April last year Australia’s tech sector is starting to pick up momentum, and the technical indicators are looking interesting, suggesting upside on the weekly and monthly charts. Today the market hit new cycle highs, and its highest leveis also reacting to PMIs rising, a sign Australia’s economy is beginning to strengthen. Next week we will receive financial results from one of Australia’s top 10 banks, Suncorp, as well as real estate tech business, REA. In the following week (the third week of February) earnings season ramps up with CBA and Fortescue reporting Feb 15, BHP on Feb 21, followed by Rio the next day, followed by Qantas. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) were mixed The Hang Seng Index pared early gains to finish the Thursday session 0.5% lower on the back of a strong rally in U.S. equities overnight and less upward pressure on domestic interest rates and currencies spilled over from higher U.S. interest rates down the road. Baidu (09888:xhkg), rising 5%, extended its strong recent gains on the ChatGPT concept and following BlackRock raised its stake to 6.6% from 5.4% in the Chinese search engine giant. Baidu was the best-performing stock on the Hang Seng Index for the second day in a row. Li Auto (02015:xhkg) climbed 1.9% after reporting delivery of 15,141 units of EV in January,  up 23% Y/Y. On the other hand, NIO (09866:xhkg) slid 5.3% following a 12% Y/Y decline in delivery to 9,652 units in January and on reports that the Chinese EV maker is cutting prices. Geely (00175:xhkg) dropped 3.3% after its high-end Zeekr brand delivered 12% fewer EVs from the year-ago period. Chinese mobile gaming stocks traded in the Hong Kong bourse soared with Forgame (00484:xhkg) leading the charge and jumping over 75%.  CSI 300 slid 0.4%. Pharmaceuticals, biotech, retailing, beverage, and coal mining advanced while defense, electric equipment, household appliances, and non-bank financials retreated. FX: USD returns to strength as global yields plunge The 30bps plunge in UK yields after the Bank of England kind of hinting at a pause saw GBPUSD back off from 1.24 to 1.2222. ECB also surprised dovish despite some very hawkish expectations being priced in by the markets, taking EURUSD back from 1.10+ to the 1.09 handle. EURGBP however still above 0.89 with ECB still guiding for another 50bps rate hike in March. Australian bonds also joined the global rally, and AUDUSD reversed back below 0.71. JPY was the clear outlier, ignoring the global bond yields plunge, and USDJPY continued to trade steady around 128.50. Crude oil (CLG3 & LCOH3) prices soften Oil prices saw a modest decline as jitters about Chinese demand and Russian sanction continued to underpin. OPEC output also saw a decline of 60kb/d amid reductions in Saudi Arabia and Libya. Meanwhile, a stronger dollar after the dovish tilts from the ECB and Bank of England weighed on the commodity complex in general. The US jobs report becomes the next test for the markets today, and for the US dollar, after Chair Powell’s comments were paid little heed. WTI futures were below $76/barrel while Brent was below $83. Gold (XAUUSD) reversed from $1960 barrier; Largest global gold ETFs sees strong fund flows Gold broke higher to fresh cycle highs in the post-FOMC euphoria, breaking past $1950, but a stronger dollar returned after ECB and BOE also took dovish turns resulting in steep drops in global bond yields. This made the yellow metal lose some of its shine, and it reversed before the test of the 76.4% retracement of the 2022 correction at $1963 to near-1910 levels. Immediate support at $1900, and the US NFP data along with the ISM surveys will continue to be the next key market movers to watch. Meanwhile also consider, the largest gold ETF fund globally GLD, has seen over $2 billion in inflows since the start of the year, suggesting retail buying is starting to ramp up.  Read next: Santander Bank Polska Shareholders Can Expect A Solid Dividend, The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COM What to consider? Bank of England hikes 50bps, but further rate hikes see a high bar As expected, the Bank of England raised rates by 50bps to 4%, with a vote of 7-2 as two of the usual doves opted to keep the rates unchanged. The Bank eased up on its forward guidance, saying that further policy tightening “would be required”, but only “if there were to be evidence of more persistent [inflationary] pressures” and preceding all of that language touting “considerable uncertainties” in the outlook. The previous language was more direct on the need to continue hiking. The latest message with the pre-conditions set for another rate hike suggested that the bank may pause. Accordingly, market pricing moved in a more dovish manner with odds of a 25bps March falling to around 60% from 80% pre-announcement with the chance of a May 25bps move around 12% vs. around 50% pre-announcement. Inflation and growth forecasts also hinted at a dovish turn. The accompanying MPR saw a downgrade to the 2023 inflation forecast to 4.0% from 5.25% with inflation of just 1.5% next year. BoE was less pessimistic on the economy, as peak unemployment was revised down to 5.3% from 6.0% and the peak to trough GDP dip was revised up to -1% from -2.9%. UK 10-year yields saw a massive 30bps drop and the 2-year was also down ~25bps. Dovish ECB despite confirming another 50bps rate hike; German 10-year yields plunge 30bps With very hawkish expectations set in, the ECB had a high bar to surprise hawkish. And it failed to do so. While the European Central Bank raised rates by 50bps to 2.50% and committed to another 50bps rate hike in March; but the statement said that at the March meeting, the ECB will evaluate the subsequent path of its monetary policy. This sent out a message that the most hawkish G10 central bank currently may also be looking at stepping down its pace of rate hikes. Lagarde attempted to stress the longevity of reaching terminal by stating that when the level is reached, rates will need to stay there. However, there was a clear scaling back of hawkish market pricing for 2023 with around 25bps of tightening taken out. Reuters sources later noted that ECB policymakers see at least two more rate hikes, with an increase of 25bps or 50bps in May, which may thrash hopes of a May pause for now. German 10-year yields slumped by 30bps, posting its biggest decline since 2011. Today’s NFP data to be the next big test for US labor market The weekly jobless claims nudged lower again to 183k from 186k for the week ending 28 January, a surprise against the expected rise to 200k. This suggest that the labor market is still tight, as the focus shifts to nonfarm payrolls release later today. Bloomberg consensus expects a modest cooling in the headline NFP gains to 189k from 223k in December. The unemployment rate is also expected to come in a notch higher at 3.6% from 3.5% previously while wage gains may soften slightly to 4.3% YoY from 4.6% YoY previously. A larger-than-expected softness in labor market can further send dovish signals to the market that is still dealing with the post-Powell and ECB/BOE dovishness. Challenges for India’s Adani Group continue to mount The market loss for the Adani Group mounted over $100bn, once again sending concerns of a possible contagion skyrocketing. Challenges for the group continue to mount since the Hindenburg report, with a shock withdrawal of share sales, some banks refusing to take Adani securities as collaterals and then the Reserve Bank of India asking Indian banks for details of the exposure to Adani Group. Furthermore, S&P Dow Jones Indices said that it will remove Adani Enterprises from its sustainability indices effective February 7, which would make shares less appealing to sustainability-focused mutual funds as well and cause foreign outflows. Contagion concerns are widening, but still limited to the banking sector. Focus remains on further risks of index exclusions, while a coherent response on the fraud allegations from the Adani Group is still awaited. Shell beats on Q4 earnings One of Europe’s largest oil and gas majors reported Q4 adjusted profit of $9.8bn vs est. $8.3bn driven by higher-than-expected oil and gas output for the quarter. Q4 dividends are lifted to $0.2875 per share vs est. $0.285.     For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Dovish tilts from ECB and BOE and Meta gains push equities higher; Post-market earnings miss from Apple, Alphabet and Amazon – 3 February 2023 | Saxo Group (home.saxo)
Starbucks is moving forward with its web3 journey, as the company teases public access to Starbucks Odyssey

Starbucks Revenues Are High Despite High Costs

Kamila Szypuła Kamila Szypuła 03.02.2023 10:56
Restaurant companies that have reported quarterly profits in recent weeks have said their U.S. businesses are largely holding up despite economic uncertainty. Record revenues Starbucks achieved record revenue in the last quarter. The Seattle-based chain reported sales of $8.71 billion, up 8% from the prior-year period and slightly below analysts' expectations of $8.79 billion. Starbucks said the effects of currency fluctuations had reduced its revenue by about 3%. For the three months ending January 1, Starbucks reported earnings per share of 75 cents, adjusted for one-time items, below the 77 cents per share expected by analysts surveyed by FactSet. The network reported net income of $855 million, approximately 5% higher than the $816 million generated in the same quarter a year earlier. Overall global sales at the same stores were up 5% compared to the same quarter a year earlier, while the figure fell 29% in the company's key Chinese market. China's performance was four times worse than expected. China are the main problem The sudden lifting of Covid-19 restrictions in China and the resulting spike in cases has hurt Starbucks' business in unexpected ways. Sales in the same stores fell by 42% in December compared to the same month in 2021. The company said it was not yet clear when its operations in China could fully recover. Starbucks executives said they are watching closely as China reopens after the Covid-19 pandemic and remain committed to investing in the country. Eventually, China will become Starbucks' largest market. Read next: USD/JPY Pair Is Trading At 128.48 The Aussie Pair Is Above 0.71$| FXMAG.COM Changes Starbucks is set to change its popular rewards program later this month, requiring users to accumulate more points to redeem for hot brewed coffee, tea, baked goods or other items. Some customers have criticized the change, but analysts expect it to boost the company's profits this year. In addition, Starbucks is in the process of changing its CEO. The company's new chief executive, Laxman Narasimhan, joined the company last year and is expected to take the reins on April 1, when Schultz is due to step down. Narasimhan will inherit a position with a roadmap largely set by Schultz and other Starbucks executives through an ongoing strategic plan, and Schultz will retain a prominent role in the company as a shareholder, board member and cultural custodian. Schultz and other executives spent months developing a strategy to help Starbucks navigate the future. The plan, which is expected to include changes to store operations and more employee allowances, is expected to run until 2025, Starbucks said. Schultz said on Thursday that he and Narasimhan are in daily contact and that the future CEO is the right person to take over the company's helm in the coming weeks. Takeaway sales Starbucks said last month it was expanding the test with DoorDash Inc., as the Starbucks believes it has more room to increase takeaway sales. The courier company is expected to deliver coffee to the chain's US stores by March. Starbucks share price Starbucks said Thursday that the company resumed its share buyback last quarter, buying 1.9 million shares worth $191.4 million. Schultz suspended a share buyback 2021, saying Starbucks needed to reinvest cash in its business. Starbucks has had to grow faster and redesign its stores to be more relevant to consumers, even if it means sacrificing quarterly profits and shareholder returns in the short term. Starbucks previously halted its 2020 share buyback after the pandemic hit its business. Starbucks shares are rising again from November 2022 after starting to fall from January 2022. Currently, Starbucks share price is below 110.00. Source: wsj.com, finance.yahoo.com
US Weekly Jobless Claims Hit Lowest Level Since February; Apple Shares Slide Amid China's iPhone Crackdown; USD/JPY Shows Volatility Amid Interest Rate Fears and Tech Stock Woes

Japanese Startup Aerwins Technologies Will Be On NASDAQ

Kamila Szypuła Kamila Szypuła 03.02.2023 13:03
For a company, a debut on the stock exchange is not only a way to raise capital from investors. For many companies, the presence on the stock exchange means greater credibility in the eyes of current and potential customers. The American stock exchange is the largest, so appearing on it can be very beneficial for a company located there. Japanese Startup Aerwins Technologies achieved its goal and got approved to list on NASDAQ. In this article: Globalization is the answer to inflation ? Ford: “We have to change our cost profile” Aerwins Technologies Globalization is the answer to inflation ? The pandemic, followed by Russia's invasion of Ukraine, has turned supply chains upside down and caused shortages. Rich industrial countries responded to scarcity, inequality and social stress with large fiscal packages. Rising food and fuel prices can spark discontent, protests, and even revolutions and the collapse of governments around the world. Large states are rethinking the benefits of globalization. While globalization has been under attack recently, history suggests that it may be the wrong target for policy renewal and that globalization is an antidote to inflationary spirals. At the same time, we see new technologies that will provide better growth and a better ability to solve a wide range of today's problems - health, energy policy, climate and even security. Today's dynamics of globalization have the potential to revolutionize systems optimization, making the results of previous technical changes cheaper and more accessible. In this sense, it is globalization that is the real law of reducing inflation. How important is international trade when it comes to taming inflation? https://t.co/2KS2E8kXto pic.twitter.com/PgM1J3AFoW — IMF (@IMFNews) February 2, 2023 Read next: Starbucks Revenues Are High Despite High Costs| FXMAG.COM Ford: “We have to change our cost profile” The push to transform Ford is becoming more urgent after the automaker reported adjusted earnings of $10.4 billion in 2022. Costs and supply chain issues hurt Ford's bottom line again. Farley knows his company needs to change. When Farley became Ford's CEO in October 2020, he vowed to quickly lead the automaker into a new phase of growth led by electric models. Although it is not close to catching up with Tesla in many respects he has succeeded. Ford is the number 2 electric vehicle sales in the United States with a market share of just under 8%. Despite all its achievements in switching to electric vehicles, Ford still struggles with internal combustion engine vehicles, which account for almost all of Ford's profits. Farley knows investors are watching and waiting for Ford to finally act. That's why Farley wants Ford to become a much more efficient company, and he needs it to happen quickly. Ford will take steps to reduce costs and make the automaker more efficient and profitable. Ford CEO Jim Farley's frustration builds as he vows to transform the automaker https://t.co/QImZcbdBi1 — CNBC (@CNBC) February 3, 2023 Aerwins Technologies Japanese startup Aerwins Technologies has been approved to list on NASDAQ as part of its merger with blank company Pono Capital Corp. Aerwins, which is taking orders for the XTurismo motorcycle-mounted hovercraft it unveiled last year, estimates the deal to be worth $600 million. Aerwins, which also sells drones and related technology, says its hovercraft can fly for up to 40 minutes and at speeds of up to 100 km/h. Japan startup selling $550,000 Star Wars-inspired hoverbike to list on NASDAQ https://t.co/nzBEDEWOQv pic.twitter.com/AltEt5WvWM — Reuters Business (@ReutersBiz) February 3, 2023
UK Gfk Consumer Confidence index got better fourth month in a row

What To Expect From The Coming Week 06/02 – 10/02/2023? For The Pound The Most Important Will Be UK PMI

Conotoxia Comments Conotoxia Comments 03.02.2023 13:19
A considerably calmer week ahead compared to this week, at least in terms of the economic calendar.  Monday 06.02. 09:30 GMT, UK Construction Purchasing Managers Index (PMI) January UK Purchasing Managers Index provides insight into the activity level within the construction industry as reported by purchasing managers. This measure gives an understanding of the condition of the UK construction industry, as purchasing managers are considered to have access to first-hand data on their company's performance.   A reading above 50 indicates expansion, while a reading below 50 indicates contraction in the construction industry. UK construction companies have signalled a resuming slowdown in business activity growth since the November data came out, reflecting slower demand and reduced risk appetite due to higher borrowing costs and uncertainties about the economic outlook. The forecast for the January PMI is 49.6, indicating a slight contraction in the construction sector.  Higher than expected reading may have a bullish effect on the GBP, while a lower-than-expected reading could be bearish for the GBP.  Impact: GBP Tuesday 07.02. 13:30 GMT, US Trade Balance (Dec) The trade balance measures the difference in value between imported and exported goods and services during the reporting period. A positive figure indicates that more goods and services were exported than imported. The US trade balance has historically been negative, and a worsening trend could be observed over the long term. In March 2022, the US trade balance surpassed -100 billion USD for the first time in history, and since then, it has fallen to -61.50 billion USD, according to the November data. December's data are expected to show a slight deterioration to -68.70 billion USD. A higher-than-forecast reading may be seen as bullish for the USD, while a lower-than-forecast reading (larger negative number) may be interpreted as bearish for the USD. An outflow of USD from the country and lower foreign demand for US products during a trade deficit could lead to a depreciation of the currency, which in turn may boost the country's exports as its goods become cheaper for the rest of the world. Impact: USD Read next: Japanese Startup Aerwins Technologies Will Be On NASDAQ| FXMAG.COM Friday 10.02. 13:30 GMT, Canada Employment Change (Jan) The employment change report shows the change in the number of people employed, which is an essential indicator of consumer spending. While an increase in the number of people in employment usually signals a positive move in economic expansion, market participants may be hoping for a lower number as this would indicate that the central bank's tightening policy is working and further interest rate hikes may not be necessary.  Previous figures for employment changes in Canada have been very volatile. While August saw a decline (-39.7 thousand jobs), September and November showed slight gains (+21.1 thousand and +10.1 thousand jobs, respectively), followed by increases of over 100 thousand in October and December. Friday's data for January are expected to show a possible increase of 8 thousand.  A higher-than-forecast reading may have a bullish effect on the Canadian dollar and a bearish effect on the stock market. In contrast, lower-than-forecast reading may have a bearish impact on the Canadian dollar and a bullish effect on the stock market. Impact: CAD, S&P/TSX Composite Index Stocks to watch Activision Blizzard (ATVI) announcing its earnings results for the quarter ending on 12/2022. Forecast: 0.7946. Positive earnings surprise in 7 out of the last 10 reports. Time: Monday, February 6, after the market closes. Walt Disney (DIS) announcing its earnings results for the quarter ending on 12/2022. Forecast: 1.51. Positive earnings surprise in 7 out of the last 10 reports. Time: Wednesday, February 8, after the market closes. AstraZeneca ADR (AZN) announcing its earnings results for the quarter ending on 12/2022. Forecast: 0.6825. Positive earnings surprise in 7 out of the last 10 reports. Time: Thursday, February 9, before the market opens. PayPal Holdings Inc (PYPL) announcing its earnings results for the quarter ending on 12/2022. Forecast: 1.19. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, February 9, after the market closes. Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement, or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US Inflation Rises but Core Inflation Falls to Two-Year Low, All Eyes on ECB Rate Decision on Thursday

Combination Of Improved Valuations And An Uncertain Near-Term View Leaves Us Moderately Bearish Toward Risky Assets

Franklin Templeton Franklin Templeton 06.02.2023 09:37
Key Points • Valuations reset across most assets in 2022, leading to a rise in expectations for longterm returns for many risky assets, including high-yield bonds and equities. • We view valuations as a better long-term asset allocation signal than a justification for short-term portfolio changes. • Despite improved long-term return expectations, our cautious near-term macro-outlook— with significant recession risk—leads to a less favorable view of risky assets, such as high-yield bonds and equities, over the next several quarters. • Putting it all together, the improvement in valuations currently leaves us moderately bearish on risky assets given our cautious cyclical outlook. Introduction Franklin Templeton Investment Solutions (FTIS) is optimistic about the performance potential for risky assets over the long term, which we consider to be a full business cycle, or about 10 years. However, our short-term preference (over the next 12 months) for risk assets is more cautious, based on our macro outlook. Some might notice these opposing viewpoints and wonder what signals would make an investment manager bearish in the short-term and bullish over the long-term, and how they balance this tension in a portfolio. Here, we attempt to provide the rationale behind these opposing views. While generally applicable to all risky assets, we will focus specifically on high-yield bonds and equities. Long-term return expectations have improved Our long-term return expectations have risen across every asset class, due largely to the market declines in 2022, which have reset valuations (Exhibit 1 on the next page). In equities, lower price-to-earnings (P/E) multiples (and thus higher earnings yield) now mean that valuations are a tailwind over the foreseeable future, rather than a headwind. In fixed income, interest rates have risen across the yield curve. Higher rates and wider credit spreads make high-yield bonds look more appealing to us over the long term. Historically, valuations have been helpful indicators of long-term returns. As an asset class gets cheaper (i.e., yields increase), generally the long-term return expectations increase. However, valuations are much less effective at predicting shorter, one-year returns (Exhibit 2 on the next page). Focusing on the long term We believe it’s hard to argue against the long-term case of high-yield bonds and equities, assuming they fit an investor’s risk parameters and investment horizon. Historically, high-yield bonds have produced a total return somewhere in between US stocks and investment-grade corporate bonds. And they have achieved these returns with less volatility than equities, resulting in what we believe to be strong risk-adjusted returns (see Exhibit 3). High-yield issuers usually have less equity and/or more leverage on their balance sheets, which raises their default risk and leads to a higher credit spread when compared with their investment-grade counterparts. The higher credit spread leads high-yield bond returns to move more in lockstep with the perceived financial strength of their issuers. Thus, they usually respond to the strength of the economy (similar to stocks) more so than changes in interest rates, which tend to impact investment-grade corporate bonds to a greater degree. Put simply, high-yield bonds have more exposure to the economic growth factor, while investment-grade bonds have more exposure to the interest-rate factor. Investors are compensated for this extra credit risk with excess returns—at least when times are good, and the default rates are low. What about when times are bad? Of course, like equities, high-yield bonds are not impervious to downturns. But so far, we have never observed two straight calendar years of negative returns in the high-yield asset class1 (see Exhibit 4). With a streak like that, should investors consider high yield? Our view (short-term vs. long-term) Our near-term macro outlook for 2023 remains cautious. While inflation may have peaked, we believe it will remain above the US Federal Reserve’s (Fed’s) target levels of 2% for some time. The Fed has repeated that it is unconditional in its fight against inflation, with the hope that it can lower job openings (weaken wage inflation) without materially affecting employment. We think this will be difficult to achieve. We also believe that growth and employment need to weaken to fully normalize inflation. FTIS’ odds for a US recession over the upcoming year remain high at 65%. The implications of this viewpoint for asset allocation are straightforward. Risky assets, such as equities and high yield, have performed poorly heading into recessions (see Exhibit 5). During recessions, the high-yield risk premium, or spread over Treasuries, typically spikes up to compensate for anticipated higher defaults. At its peak, the default rate has reached more than 10% in a recession and spreads often widened past 7%. We do not think high-yield bonds are currently pricing in a recession from a spread valuation perspective (see Exhibit 6). In other words, the market, in our view, is not pricing in the much tighter financial conditions and weaker financial performance for issuers that often comes with a market downturn and can lead to an increase in defaults. A volatile year ahead At the opening of 2022, we believed the Fed was walking a tightrope heading into the year.2 Unfortunately, it is still on the same tightrope, in our view, as the central bank tries to engineer a soft landing in 2023. The Fed will likely try to pause its interest-rate hikes at some point in 2023, fearful of driving the US economy into recession. The market is pricing in Fed rate cuts in 2023 due to growth worries. We find this scenario unlikely, and think the Fed is likely to keep rates restrictive throughout 2023. As always, what ultimately happens will depend on a number of variables, many outside the Fed’s control, including the US economy’s sensitivity to higher interest rates, and how geopolitical developments evolve. The performance of risky assets will depend on these variables, among others. Returns at year end don’t reflect the volatility experienced along the way. Prices will likely be volatile until the market has an unobstructed view of clear skies ahead—and that will likely begin with the Fed’s policy actions. This is why we believe that nimble, active management is important, especially in times like these. Our own viewpoint will change as our cyclical outlook changes. Conclusion Improved valuations have increased the long-term expected return outlook for multi-asset portfolios in general. However, in the near term, we weigh our cyclical outlook more heavily, which leaves us defensively positioned given our view of significant US recession risk. This combination of improved valuations and an uncertain near-term view leaves us moderately bearish toward risky assets, such as high yield and equities. Source: ftis-high-yield-0123-us.pdf (widen.net)
DPX Token Registered A 24-Hour Return Of 11.11%

The US Judge Denied The FTC's Request, Giving The Meta An Important Victory

Kamila Szypuła Kamila Szypuła 06.02.2023 10:44
U.S. District Judge Edward Davila in San Jose, California, ruled on the application last Tuesday, but did not make his decision public at the time. People familiar with the verdict told The Wall Street Journal that the judge denied the FTC's request, giving the Meta and its chief executive Mark Zuckerberg an important victory. Court ruling The FTC sought an injunction blocking Meta from buying Within, which makes a popular virtual reality fitness app called Supernatural, arguing that the deal would weaken competition. By court decision, Meta Platforms got permission to acquire a virtual reality start-up. The ruling, which was initially sealed and released late Friday, rejected the FTC's arguments as to why Meta's acquisition of Within Unlimited was anti-competitive. But the judge sided with the FTC on some legal and factual arguments. Judge Davil's now public ruling is based on the finding that Meta would have difficulty competing with Within. Although the judge allowed the deal, he ruled in favor of the FTC on certain points of law and fact. Judge Davila agreed with the FTC that virtual reality fitness products are a separate market. A Meta spokesperson said the company was pleased with the ruling and looked forward to closing the Within deal quickly. Important transaction Meta has long been a dominant player in the virtual reality space, and Meta has long been a dominant player in the virtual reality space. While Within is a relatively small company, the deal was seen as important to Mr. Zuckerberg's strategy of focusing on metaverses or virtual worlds, leading to Facebook's rebranding to Meta in October 2021. Read next: Elon Musk Was Found Not Guilty In The Tweets Case| FXMAG.COM FTC vs. Meta The Federal Trade Commission sought to block Meta Platforms Inc from acquiring Within Unlimited Inc. and its dedicated virtual reality fitness app, Supernatural. In July, when the FTC sued to block the Within deal, it accused Meta of trying to buy its way to the top of the virtual reality fitness market rather than competing on merit. According to the FTC, Meta is already a key player at every level of the virtual reality sector.The FTC claims that Meta and CEO Mark Zuckerberg plan to expand Meta's virtual reality empire by acquiring fitness apps, which would reduce competition in the market and violate antitrust laws. A December trial to decide if Meta could go forward with the relatively small deal was seen as a test of the FTC's bid to head off what it sees as a repeat of the company acquiring small upcoming would-be rivals to dominate a market, this time in the nascent virtual and augmented reality markets. The FTC may still challenge the Meta-Within Transaction by filing an appeal with the Ninth Circuit Court of Appeals or through administrative proceedings before the FTC's internal tribunal. Meta shere price The new year is favorable for Meta shares so far. Since the last week of trading in 2022, the stock has been on the rise, bouncing off levels below 100. Meta shares surged to 188.77 in February, but recently fell to 185.19. Despite the decline, Meta shares remain at high levels that were last seen more than half a year ago. Source: wsj.com, finance.yahoo.com
FX Daily: Lagarde and Powell Address Jackson Hole – Hawkish Expectations and Eurozone Concerns

Uber earnings: For Q4 Uber said it expects to see gross bookings improve to between 23% and 27% year over year

Michael Hewson Michael Hewson 06.02.2023 11:54
Robinhood Markets Q4 22 – 08/02 – it's been a difficult few months for Robinhood Markets although there does appear to be some stabilisation in the share price, having hit record lows last summer. They are still below the peaks seen in November in the lead-up to their Q3 numbers which saw revenues modestly beat forecasts, coming in at $361m, while losses came in at $0.20c a share, or $175m. The move towards crypto is still not showing the returns management would have liked, with $51m in revenue from that part of the business. The shares have seen a modest rebound since the end of last year pushing above $10 a share, however the outlook is set to remain challenging, given the uncertainty around the crypto space and the recent collapse of FTX, and other failures. That $38 IPO price seems a world away right now. Losses are expected to come in at $0.10c a share. Uber Q4 22 – 08/02 – when Uber reported back in November the shares briefly popped higher after the company reported a decent increase in Q3 revenues to $8.34bn, however the gains proved short lived. Losses came in higher than expected at $1.2bn principally due to revaluations of some of Uber's equity investments. EBITDA came in at $516m well above estimates with gross bookings in the quarter rising to $29.1bn a rise of 26%. In respect of their respective businesses' bookings were evenly split at $13.7bn each for mobility. On revenues this saw a split of $3.8bn for mobility and $2.8bn in delivery. For Q4 Uber said it expects to see gross bookings improve to between 23% and 27% year over year with an adjusted EBITDA of $600 million to $630 million. Q4 losses are expected to come in at $0.12c a share.    Read next: Saxo's analyst: While the big tech names have mostly reported, earnings season remains in full gear this week. We will be watching Walt Disney, PepsiCo and Kellogg.| FXMAG.COM    Activision Blizzard Q4 22 – 06/02 –.it was just over a year ago that Microsoft put in its $68.7bn, $95 a share bid for the Activision business in a move that had many expressing concerns about Microsoft restricting new content to its own Xbox platform, and not allow games on its nearest competition, which is Sony's PlayStation, and the PS5. While some have argued that this would be against its own interests and curtail its revenue stream, this wouldn't be unusual given that Microsoft has got itself into trouble by bundling hardware and software previously. Since those peaks Activision shares have slipped back on a combination of a slowdown in gaming revenues as demand for Xbox and online games starts to slow due to shrinking consumer incomes. This perhaps isn't as surprising at first glance as it appears given that game prices have increased quite sharply in recent months. There is also the fact that EU, US and UK regulators are looking into the deal and could block or add conditions to the deal getting approval. In Q3 Activision saw net revenues decline by 13.9% to $1.78bn with game sales accounting for 13% of that total, a decline of 45%. Net income fell almost 32% to $435m. The latest version of Call of Duty – Modern Warfare II is expected to see a pickup in Q4, however given that Vanguard disappointed this is by no means certain. Increased price points may also have a part to play in the recent slowdown in sales. It's been notable that prices for these sorts of marque games are now nearer to the £60 level than they were two years ago when £45 was more the sector average. Profits are expected to come in at $1.52c a share.
The RBA Raised The Rates By 25bp As Expected

China May Increase Demand For Australian Resources

Saxo Bank Saxo Bank 07.02.2023 10:01
Summary:  The commodity-heavy Australian market may have a good start to 2023, as the Chinese focus on growth signals demand for Aussie resources. With China striving for a growth renewal and aiming for 5 percent GDP growth as it reopens after three years, Chinese infrastructure spending will likely get a boost in 2023, as well as the coal-hungry power sector to drive it. Investors have begun increasing exposure to the coal and metal sectors, as they will likely benefit from China, the world’s biggest consumer of commodities, ramping up buying in the first half of 2023. Metal prices have already rallied 20-50 percent and the supply outlook remains constrained. Here we explore what to watch among Australian metal and coal companies. To avoid a power crunch, China has cranked up thermal coal production, aiming to produce a record (4.6 billion tons) this year, while it also started buying Australian coal for the first time in two years, a sign that domestic supplies are tight. Reopening the safety valve of imported coal supplies could cool what has been a hot market in late 2022, with a coal company like Whitehaven Coal seeing the most earnings growth and share price that rose over 300 percent in 2022. This also could mean investors may potentially be taking out excess capital and profits from energy markets, and moving them into metals markets, given the ingredients are there for a strong surge in metals as discussed in Ole’s commodity outlook. Metal prices mount; moving into bull markets, taking mining giants shares to record highs Iron ore, the major ingredient in steel-making, has seen its price gain over 50 percent in China from its October low. Copper, a critical industrial metal and essential in the green transformation and housing, has gained 28 percent in price from its July 2022 low, while aluminium, important for construction, automotive and electronics, has gained 23 percent from its September 2022 low. Many affiliated mining companies are rallying. With strong demand and under-investment in supply fundamentally supporting prices over the medium to longer term, stocks for key producers have already started to rally and boost the return for respective equity markets (like Australia’s ASX). These trends will likely continue in 1H2023. In the first weeks of 2023, shares in commodity juggernaut companies who produce such metals, including BHP, Rio Tinto and Fortescue Metals, hit record high neighbourhoods, in anticipation of higher earnings and cash flow growth on China’s reopening. Another ingredient supporting higher prices in 2023 is the weaker US dollar, which has broadly lost about 10 percent already, as the market expects the Fed to slow its pace of rate hikes and even begin reversing course by later this year. A weaker US dollar supports buying in commodities, as they’re traded in US dollar terms.  Australia’s share market, home to the largest mining companies; could see greater earnings growth than the US in 2023 Just weeks into 2023, the Australian share market (ASXSP200.I) trades a whisper away (~2 percent) from its highest level in history, supported by the strength of the mining sector, which makes up 25 percent of its market cap. Noting Steen and Peter’s focus in this outlook on contrasting tangible assets (Australian mining companies very much dealing in tangible goods) versus intangible ones (the US S&P 500 market cap largely comprised of intangible/tech companies), consensus estimates suggest aggregate ASX200 earnings will grow 32 percent this year, where consensus expects the S&P 500 to produce earnings growth of 21 percent, with 13 percent earnings growth for the tech-heavy Nasdaq 100.  Zeroing in on Australia’s mining sector: earnings growth anticipated over 70 percent. What sub-sectors and companies could benefit? The Australian mining sector’s earnings are expected to rise over 70 percent according to Bloomberg consensus. Although metal prices are volatile, also driving share price volatility, consensus sees the most upside earnings growth potential in lithium producers, followed by gold companies, copper companies, and then iron ore and other metals companies to follow. If you are seeking inspiration or a list of Australia’s largest resources companies, refer to Saxo’s Australian Resources theme basket. However, if you want to keep your focus on copper, iron ore and aluminium, below are Australia’s largest for your reference:  BHP – BHP is the biggest diversified mining company in the world by market size, with an AUD 249 billion valuation. It is future proofing its business, aiming to take over another copper giant, Oz Minerals, and also moving into potash (fertilisers), with plans to be the biggest fertiliser company in the world. BHP has historically generated some of strongest cashflows across the globe. Consensus expects a full-year dividend yield of 9.6 percent. For the last reporting period BHP made about 48.7 percent of its revenue from iron ore, 26.7 percent from copper and 24.6 percent from coal. Rio Tinto – Rio is the second biggest diversified miner in the world, with an AUD 178 billion valuation. Last reporting year, Rio made 58.1 percent of its revenue from iron ore, 21.5 percent from aluminium and 10.9 percent from copper, and the remainder from other metals. Rio is expected to pay a yield of about 7.9 percent for its next full-year dividend (consensus).  Fortescue Metals – Fortescue is the biggest pure-play iron ore company in Australia, with an AUD 68 billion valuation. Fortescue earns about 89 percent of its revenue from iron ore and the remainder from shipping. However, it wants to eventually become a major producer of hydrogen. It also has a $6.2 billion decarbonisation strategy to eliminate fossil fuels from its iron ore business, which includes replacing its diesel fleet with battery electric and green-hydrogen powered long-haul trucks. Fortescue is expected to pay out one of the highest dividend yields in Australia, with a 9.3 percent dividend yield (consensus).       Source: China reopening a boon to Australian assets? | Saxo Group (home.saxo)
Taiwan’s GDP contracted more than expected in first quarter

Taiwan Has Recently Passed A Law That Will Allow Local Semiconductor Companies To Get Tax Credits

Saxo Bank Saxo Bank 07.02.2023 10:13
Summary:  New alliances and collaborations outside of China may lead to prosperous times in Asia. In Asia, the model of dependence on China is breaking, and new supply chain linkages and more regional co-operation will bring the next leg of outperformance for the region in 2023.  Asian stocks have started 2023 with a bang, with the MSCI Asia Pacific Index and the MSCI Emerging Markets Index entering a bull market in January, outpacing the US S&P 500. A lot of this has been driven by China’s policy shifts and a weaker US dollar. However, risks of a slowdown in the global economy as well as inflation remaining higher-for-longer cannot be discounted. The outlook for domestic demand in Asia is also challenged by the rise in interest rates seen in 2022. Meanwhile, geopolitical risks remain in play, clouding the outlook.  The other key thing to consider will be that Asia’s dependence on China is waning, as is evident from the region’s outperformance in 2022 despite China’s slowdown. As China reopens, we are likely to see new supply chain models and more regional co-operation that will push Asia’s relevance higher in the global economy.  Source: Bloomberg, Saxo Markets New supply chain models to increase Asia’s relevance The escalating US-China trade and tech wars have prompted many companies to diversify their supply chains to reduce risks from sanctions. The pandemic had already highlighted the need to address concentration risks as supply chains for everything from basic industrial components to medical supplies and even toilet paper were over-reliant on China. Finally, the invasion of Ukraine and the resulting impact on Europe’s gas supplies has set a clear agenda for many countries traditionally aligned with US foreign policy to think about supply chain resilience and avoid relying too heavily on Russia or China, and instead sourcing from friendly countries.  Japan, for instance, is not just looking to diversify its LNG suppliers and trying to bring its nuclear reactors back online to ensure a resilient energy supply in the long run, but also trying to pivot away from a reliance on China and Russia for food to reduce the risks of getting cut off. More broadly, Japan is on a war footing, as is evident from the surge in defence spending, closer alignment with the US and outright condemnation of Russia’s attacks on Ukraine. This means a new economic and geopolitical order may be in the works in Asia. Winners of China+1  A group of Asian countries is emerging as possible winners of the deglobalisation and decentralisation trends. Investments in India have accelerated, given its attractiveness as a consumer market and a favourable policy stance. Apple has started manufacturing of iPhone14 in India, and it is expected to shift a material share of its iPhone production to India by 2025. If this move is successful and Apple is able to deliver its planned output, that will be a significant endorsement of India’s manufacturing capabilities. However, going into 2023, India’s valuation has become stretched and there are other, relatively cheaper markets that offer better value after deep drawdowns last year. This means India will have to prove its relevance again through continued economic reform to attract foreign investment.  Source: World Bank, Bloomberg, Saxo Markets Vietnam has been another winner of the China+1 strategy, as it has attracted a large share of manufacturing from China. Vietnam still provides relative value going into 2023, being a supplier of key components in broadcasting equipment, integrated circuits, telephones, textile footwear, clothing and furniture to the world.  Indonesia was another outperformer in the Asian markets in 2022 given its high commodity exposure. As most countries struggle to ensure a baseload supply of energy, Indonesian coal could remain in demand in 2023. As well, a refreshed focus on green transformation will continue to push the demand higher for nickel and copper, Indonesia’s key export metals. EV makers like Tesla are looking to set up production facilities in Indonesia, as a step to diversify away from China, but also to locate production closer to raw materials inputs, in order to ensure supply chain resilience. Political uncertainty however will start to cloud the outlook in late 2023 as the race for 2024 presidential elections starts to heat up.  Source: Bloomberg, Saxo Markets Chip wars could decouple South Korea and Taiwan from China The cold war between the US and China could take a strategic shift this year, and if we see continued restrictions on the semiconductor sector, that could potentially force major players in the semiconductor supply chain, such as Taiwan, Korea and Japan, to decouple from China. Taiwan has recently passed a law that will allow local semiconductor companies to get tax credits for up to 25 percent of their R&D expenses. This could be followed up with similar provisions from the US and Europe to better attract investment, and that could mean a potential re-rating of the semiconductor sector in 2023. The early batch of earnings reports in the semiconductor space have seen dismal results and high inventories weighing on sentiment. But there is potential for a demand recovery with China’s reopening, an auto sector bounce-back and further investments in the expansion of data storage centres. Taiwan may be suffering a ‘geopolitical discount’, judging from the MSCI Taiwan valuation, which is far below its five-year average despite the recent surge in equities in the region. This contrasts with MSCI Korea, which has just moved above its five-year average with the gains at the start of 2023, though it has a lot of room to catch up with the 2020 highs. ASEAN’s potential to enjoy a privileged geopolitical position As the world grapples with its over-dependence on China in 2023, China’s trade with ASEAN countries will nonetheless likely grow further in 2023, creating room for more growth in the region. As supply chains relocate out of China, many manufacturers still need to source parts for assembly from there. And China is a major foreign investor in Southeast Asia, accounting for around 8 percent of total FDI flows to the region in 2016-2020, a 65 percent increase over 2011-2015. In addition, China’s strategic shift to move to high value-added manufacturing has seen a lot of low value-added manufacturing move to neighbouring countries with lower wages. China’s exports to Vietnam rose 40 percent over 2019 to 2021, with much of it being inputs and components for Chinese-owned factories in Vietnam, where production there in turn is primarily for export. Recovering Chinese demand should also help restore ruptured supply chains, and improve the demand for ASEAN exports. Tourism demand is also likely to pick up as Chinese tourists return to Southeast Asia with the border reopening. In summary, 2023 brings the perfect combination of positives for Asia. In the short-term, the region gets a bump higher from China’s reopening. Meanwhile, Asia will become a key part of global supply chains in the longer run and enjoy a privileged geopolitical position which is key for both China and the US.   Source: Opportunities in a deglobalising world | Saxo Group (home.saxo)
United Airlines May Be Fined For Allegedly Missing Safety Checks

United Airlines May Be Fined For Allegedly Missing Safety Checks

Kamila Szypuła Kamila Szypuła 07.02.2023 11:52
Interest in air travel has increased over the last few years. Along with this, increased security was put on to avoid unwanted disasters. In America, the Federal Aviation Administration is responsible for safety. The FAA are taking action against United Airlines and they want to steal it. The FAA wants to fine United Airlines Aviation safety regulators want to fine United Airlines Holdings Inc. over $1.1 million for allegedly flying a Boeing 777 without carrying out some of the required fire detection system checks. The Federal Aviation Administration says United removed the 777 fire warning system check from its pre-flight checklists in 2018. A spokesperson for United released a statement saying the pre-flight checklist was changed in 2018 "to account for redundant built-in checks performed automatically by the 777" and that the FAA reviewed and approved the change at that time. An FAA aviation safety inspector determined that an inspection of the fire warning system was not being conducted on April 19, 2021. The FAA alleged that United knowingly operated six aircraft without performing the required inspections during a three-and-a-half hour after the problem was discovered. United said it immediately updated its procedures in 2021 after being informed by the FAA that United's maintenance program requires pilots to conduct pre-flight inspections. United Airlines has 30 days to respond to the FAA after receiving an enforcement letter from the agency. Read next: Adani Group Company's Crisis Is Gaining Momentum, Finland Is The Happiest Country| FXMAG.COM United Airlines maintenance error The FAA said United failed to inspect parts of the wings of about twenty Boeing 777s, leading to the cancellation of flights last September. United discovered that it had failed to perform required panel inspections on the leading edge of the wings of 25 jets and had to take them out of service. As a result, around 18 flights were removed, mostly long-haul international travel. United discovered the problem during an audit and reported it to the FAA. The omitted checks are to examine the area of the wing where the slats extend during takeoff and landing to generate lift. The wing panel inspection that United missed was not related to engine problems and was not part of the plane's return to service, but rather a routine maintenance activity, the FAA said. Some of the planes that missed inspections were still parked and had not yet returned to flying. This incident did not result in the imposition of a fine. Increased security The shift in safety in the United States began after a series of aviation tragedies that culminated in the 1996 summit. Accidents in 1994 involving widely used USAir-operated Boeing and McDonnell Douglas jets, as well as two smaller turboprops, claimed a total of 252 lives life. Regulators and industry representatives recognized that changes were necessary. So executives set to work developing new tactics to counter emerging threats long before they escalated into headline tragedies. Eventually, mechanics and air traffic controllers adopted similar self-reporting programs. Today's travelers are benefiting from another decade of improved US carrier safety, with the fatality rate down to one in 120 million departures. United Airlines share price United Airlines shares rose from 37.21 to 52.50 in the new year, then fell to 50.92. The last time UAL shares saw such a level was at the beginning of May last year. Source: wsj.com, finance.yahoo.com
The Fear of Strong Jobs: How US Labor Market Resilience Sparks Global Financial Panic

The American Airline Company Is Preparing To Cut Jobs In The Financial Department

InstaForex Analysis InstaForex Analysis 08.02.2023 08:17
Atlanta Federal Reserve Bank (FRB) President Rafael Bostic (he does not have a vote on the Federal Open Market Committee this year) believes the Fed may have to raise its benchmark interest rate higher than previously expected as strong data on the US labor market showed that economic activity in the US is slowing down slightly. Bostic said they would have to do a bit more work, and the Fed would have to raise rates higher than forecasts indicate. The US trade deficit in December 2022 increased by 10.5% to $67.4 billion, the country's Department of Commerce said. According to the revised data, in November, the negative trade balance amounted to $61 billion, and not $61.5 billion, as previously reported. The rate was the lowest since September 2020. Experts, on average, expected growth to $68.5 billion from the previously announced November level. By 17:57 GMT+3, the Dow Jones Industrial Average fell by 101.03 points (0.3%) to 33,789.99 points. The Standard & Poor's 500 fell 8.33 points (0.2%) to 4102.75 points. The Nasdaq Composite lost 7.09 points (0.06%) to 11,880.36 points. Aramark shares are down 11.3%. The U.S. company, which supplies food and special clothing to employees of hotels, universities, hospitals and stadiums, increased its net profit and revenue in the first quarter of fiscal year 2023, with revenue growth exceeding market expectations. Shares of Pinterest Inc. are down 5.8%. Internet service visual bookmarks in the fourth quarter received a net profit and revenue worse than expected. Comcast Corp. shares are down 0.2%. The largest U.S. Internet and cable TV provider continued to cut its stake in Internet news company BuzzFeed Inc. Comcast sold 5.1 million BuzzFeed securities between Feb. 2 and Feb. 6, the media company said in a report. It previously reported that it sold more than 5.7 million shares of BuzzFeed in several transactions between Jan. 30 and Feb. 1. Shares of Bed Bath & Beyond Inc. fall by 41.6% after taking off by 92% in previous trading. The American retailer managed to enlist the support of investors, which allowed it to avoid declaring bankruptcy, Bloomberg reports citing informed sources. Papers Centene Corp. down 1.8%. The health insurance and maintenance company ended the fourth quarter with a net loss, but improved its full-year revenue guidance. Share price of DuPont de Nemours Inc. grows by 6.7%. The American chemical company reported a decline in net profit and revenue in the fourth quarter of 2022, although adjusted profit and revenue beat market expectations. Papers Boeing Co. rise in price by 1%. The American airline company is preparing to cut jobs in the financial department and the personnel management service in 2023. It is expected that the cuts will amount to about 2 thousand jobs, mainly in the field of finance and HR.   Relevance up to 04:00 2023-02-09 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/311785
Hawkish Fed Minutes Spark US Market Decline to One-Month Lows on August 17, 2023

Powell’s Interview Yesterday Was Interpreted By The Equity Market As A Positive Thing

Saxo Bank Saxo Bank 08.02.2023 09:35
Summary:  Equity markets rushed back higher despite treasury yields maintaining altitude, with much of the activity on the day around Fed Chair Powell’s interview, which sparked considerable two-way volatility before the market decided that he wasn’t sending too hawkish a message. With strong risk sentiment, the USD was mixed and commodity currencies are trying to stage a comeback from their recent sell-off. Oil posted its strongest rally in weeks yesterday. What is our trading focus? US equities (US500.I and USNAS100.I): growth vs policy rate Powell’s interview yesterday saying the US jobs market is so strong that more rate hikes are needed was interpreted by the equity market as a positive thing. Investors are clearly weighing growth above the discount rate for now, but that is only until rates hit a level in which it slows down the economy. The downside risk to Powell’s comments is that while inflationary pressures are easing in the goods economy, the services sector, which has more sticky inflation components, could underpin high inflation for much longer than anticipated. If S&P 500 futures can break above the 4,200 level again and close above then the cyclical top around 4,300 from back in August is the next major level to watch out for. Chinese equities: Hang Seng (HIG3) and CSI300: (03188:xhkg) tread water Hang Seng Index and CSI300 tread water and are nearly flat as investors wait for signs of recovery in China after the initial month-long rally that has repriced equities higher to reflect the change in policy directions in China. The benchmark Hang Seng Index was dragged by Meituan (03690:xhkg) which tumbled 6.5% on news that Douyin is launching food delivery service in March. In A-shares, northbound flows returned to net buying after three days of net selling. Real estate names outperformed and solid-state battery concept stocks were among the top gainers. FX: Yen steadies, USD choppy to lower as Powell adds little new information The US dollar was choppy as Powell initially reiterated his remarks from last week but later made a comment that the Fed could do more if the data stays hot (see more blow on Powell’s interview). Still, market pricing of the Fed’s path was little changed, and dollar ended the day broadly lower against all G10 currencies. The Japanese yen recouped come strength despite somewhat higher Treasury yields, with USDJPY falling as low as 130.49 before bouncing back higher to as high as 131.50 overnight. AUDUSD, although still waiting for the upturn is Chinese demand, was supported by RBA’s Tuesday guidance to hike more. AUDUSD above 0.6960 in early Asian hours, with AUDNZD moving above 1.1000 to near 3-month highs. EURUSD was a laggard as it took a look below 1.07 before bouncing back to 1.0720+ levels subsequently. GBPUSD tested its 200-day moving average near 1.1950 but managed a rebound back well above 1.2000 yesterday. Crude oil (CLH3 & LCOJ3) prices rise on demand outlook and supply concerns WTI prices jumped 4% and Brent was up 3% after Powell stayed away from turning significantly more hawkish after the bumper jobs report last Friday. Meanwhile, demand outlook continues to improve as signalled by Saudi Aramco’s price increases, and API also suggested a draw in US crude stocks. API reported US crude stockpiles declined by 2.2mm barrels last week, compared to expectations of a 2.5mm barrels increase. Both OPEC and EIA have been upbeat on China’s demand recovery as well. The market shrugged off reports that flows through the 1mb/d Ceyhan oil terminal in Turkey will resume shortly, and supply side issues remained in focus as well. The Energy Information Administration lowered its forecast for US crude oil production in 2024. Gold (XAUUSD) strength sustains Gold remains supported around the $1860 level despite another increase in US yields overnight. Buying by central banks remains buoyant, with China raising its gold reserves for a third straight month in January, up 6.9% MoM. The downside momentum below $1900 has failed to follow through, so far suggesting the move remains a correction in the larger bullish trend. Eyes on next supports at $1845 and $1828 if selling resumes. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) edged up on Powell’s comments and a weak 3-year auction Fed Chair Powell’s comments made at the much-anticipated moderated discussion before the Economic Club of Washington, D.C. were less hawkish than feared as noted below. Yields and markets swung wildly after he started by repeating that the disinflation process had begun, which saw yields on the front end tumbling 10bps before quickly reversing after Powell said that last Friday’s payroll report was “certainly strong-stronger than anyone I know expected” and that inflation going away “quickly and painlessly” is not the Fed’s base case and the Fed has to “do more rate increases”.  More treasury selling came after a weak 3-year action that was awarded 4bps cheaper than the market at the time of the auction, and the bid-to-cover ratio dropped to 2.33 from 2.84 last time. The corporate supply of around USD15 billion of new issues, including USD11 billion from Intel (discussed below) also weighed on the market. The 2-year pared almost all its early gains to settle 1bp richer at 4.46% while yields on the 10-year rose 3bps to 3.67%. Read next: The Court In Munich Decided In Favor Of BMW| FXMAG.COM What is going on? Powell’s balanced narrative unable to spur market caution; Kashkari sees terminal rate at 5.4% Fed Chair Powell’s message last night was only marginally more hawkish compared to last week’s Fed meeting, giving markets enough reasons to continue to give more emphasis to data on the sense that Powell was not pushing back against the market reaction last Wednesday. Powell qualified his ‘disinflationary’ remark from last week’s Fed meeting by saying it is at a very early stage, and only in the goods sector. He was surprised by the strength of the jobs report, and said that the Fed probably needs to hike rates further and they have still not reached a sufficiently restrictive level. Powell expects 2023 to be a year of a significant decline in inflation, but it will certainly take into next year to get down close to 2% - in fitting with the December SEP's. Market’s pricing of the Fed rate path saw no material change following Powell’s comments. Meanwhile, Fed member Kashkari (voter) was more hawkish saying if he had to pick a rate forecast, would not lower it from his Dec SEP forecast of 5.4% but rates may have to be held at a higher level for longer. He added that markets are more confident than he is about inflation falling. Earnings: Fortinet, Maersk, and Vestas Fortinet, one of the largest cyber security companies on revenue, reported Q4 revenue and EPS that beat estimates and the FY23 outlook on operating margins and revenue were in line with analyst estimates. It was clear that investors had lowered their expectations below that of analysts as the FY23 outlook hitting estimates led to a 16% rally in extended trading. Maersk is reporting lower than estimates Q4 revenue and EBITDA in line, but the FY23 outlook on EBITDA of $8-11bn vs est. $13.5bn is a big miss and maybe a bit too conservative if the cyclical upturn gathers steam. Vestas is reporting a FY23 outlook that signals further challenges and weakness in the wind turbine business with FY23 revenue outlook at €14-15.5bn vs est. €14.8bn and adjusted EBIT margin of –2% to +3%. Shares are indicated down 5% in pre-market trading. Weak German industrial production, delayed Jan. preliminary CPI due today Germany’s industrial production for December saw a steeper fall than expected, coming in at -3.1% MoM (vs. estimated -0.8%) while the November print was revised higher to +0.4%. After a technical delay last week, Germany’s inflation prints for January will be released today. Spain and France printed higher-than-expected CPI for the month, while the region-wide printed was softer last week. This suggests Germany’s inflation likely eased due to energy price increases being more subdued than previously expected. Meanwhile, adjustments in the CPI basket could also likely result in a softer print. Bloomberg consensus expects 10.0% YoY from 9.6% YoY in December, with the MoM print also turning positive at 1.3% from -1.2% previously. Biden State of the Union address includes tough rhetoric on China In Biden’s State of the Union address last night, the US President claimed autocratic regimes were growing weaker and suggested that China and its leadership are in a challenged position, shouting at one point “Name me a world leader who’d change places with Xi Jinping. Name me one, name me one.” and later saying that “I am committed to work with China where it can advance American interest and benefit the world....but make no mistake: as we made clear last week [in shooting down purported Chinese spy balloon] if China threatens our sovereignty, we will act to protect our country, and we did.” Intel places $11bn in bonds in a seven-part deal. To fund its expansion of production facilities, funding working capital and refinancing existing debt, Intel has placed some $11 billion in funds via corporate bond issuance yesterday, a series of 7 bonds with maturities of 3-, 5-, 7-, 10-,20-,30- and 40 years. The last of these features a yield that is 2.15% higher than US 30-year T-bonds, some 20 basis points tighter than anticipated (The US 30-year T-bond yield is currently near 3.70%). By comparison, the current dividend yield on Intel stock is near 5.00%. What are we watching next? String of Fed speakers today, 10-year Treasury auction Incoming data may have more primacy for moving US treasury yields than Fed speakers, but we do have a rather heavy schedule of FOMC voters on tap for today, including the NY Fed’s Williams, who will be interviewed at a live WSJ event. Board of Govern’s members Lisa Cook and Michael Barr are also out speaking as noted in the calendar highlights below. The hawkish Minneapolis Fed president Kashkari and Board of Governors member Waller are out speaking later in the day, the latter of these discussing the economic outlook. After the recent resurgence in treasury yields and yesterday’s weak 3-year treasury auction, plenty of attention as well on today’s 10-year treasury auction. Earnings to watch Today’s US earnings focus is Uber Technologies and Walt Disney. The on-demand ride hailing service Uber will report before the market opens with analysts expecting revenue growth of 47% y/y in Q4 with the EBITDA margin expending further into positive territory as the company prepares to become fully profitable in FY23. Disney reporting after the market close is expected to see revenue growth of 7% y/y in Q4 and EBITDA margin bouncing back from the low point in Q3. Wednesday: A.P. Moller – Maersk, Vestas Wind Systems, TotalEnergies, Societe Generale, Deutsche Boerse, Adyen, Equinor, Yara International, Walt Disney, CVS Health, Uber Technologies Thursday: KBC Group, Brookfield, Thomson Reuters, L’Oreal, Vinci, Credit Agricole, Siemens, Toyota Motor, NTT, Honda Motor, AstraZeneca, Unilever, British American Tobacco, ArcelorMittal, DNB Bank, Volvo Car, Zurich Insurance Group, Credit Suisse, AbbVie, PepsiCo, Philip Morris, PayPal, Cloudflare Friday: Enbridge, Constellation Software Economic calendar highlights for today (times GMT) Poland Base Rate Announcement 1415 – US Fed’s Williams (voter) to speak 1500 – US Fed’s Barr (Voter) and Bostic to speak 1530 – US EIA Weekly Crude Oil and Product Inventories 1730 – US Fed’s Kashkari (Voter 2023) to speak 1800 – US 10-year Treasury auction 1830 – Canada Bank of Canada publishes summary of deliberations 1845 – US Fed’s Waller (Voter) to speak 0001 – UK Jan. RICS House Price Balance Source: Financial Markets Today: Quick Take – February 8, 2023 | Saxo Group (home.saxo)
National Bank of Poland Meeting Preview: Anticipating a 25 Basis Point Rate Cut

The Decline In Tech Valuations Continues To Hit SoftBank

Kamila Szypuła Kamila Szypuła 08.02.2023 10:43
After a year of technological failure, Tokyo-based SoftBank is still feeling the effects of peak spending in the market. The losses SoftBank Group Corp. on Tuesday reported a quarterly loss of $5.8 billion in its start-up mutual fund division known as Vision Fund. , most of the company's quarterly loss of $5.9 billion. Investment losses currently piling up in SoftBank's Vision Fund department give a more accurate picture of the company's plight. The results highlight the depth of SoftBank's decline, which spent more than $140 billion in Vision Fund segment between 2017 and last year, an amount that eclipsed Silicon Valley's largest venture capital firms and went to companies like Uber Technologies, DoorDash and WeWork. At its peak, it turned that money into a profit of $66.4 billion. For example, publicly traded shares held by SoftBank's flagship Vision Fund fell 37% from SoftBank's initial investment, representing a loss of $11.5 billion. SoftBank, meanwhile, said its holdings in private firms were yielding a modest 4.6% profit, or $1.6 billion above costs. The recent losses are due in large part to a reporting quirk in the private investment market that has led investment managers to take losses on private start-ups for longer than publicly traded shares. It is not a good time to invest in startups These losses also forced SoftBank to withdraw from its aggressive investing style. SoftBank Group Corp. was the world's largest startup investor in 2021. Now he hardly invests at all. The Vision Fund unit saw approximately $300 million in new investments, down 98% from the $15.6 billion spent in the three months of mid-2021, when SoftBank and its chief executive Masayoshi Son were known to shower money on the foamy market startups. Read next: The Court In Munich Decided In Favor Of BMW| FXMAG.COM SoftBank Group CFO Yoshimitsu Goto told reporters on Tuesday that it simply is not a good time to invest in startups. SoftBank's investment strategy of pouring money into underperforming startups embodied the go-go attitude of the last tech boom. His big loss is a timely reminder of the downsides of this approach – something traders should keep in mind. Investment in ARM The CEO decided late last year that he would not speak at profit meetings for the time being because he said he wanted to focus on Arm, a UK-based chip design company owned by SoftBank. SoftBank continued to push for an IPO of ARM by March 2024 and has made progress. An Arm representative said no decision had been made on where to put the list. Officials in the UK government and the London Stock Exchange pushed hard for Arm to be listed in London, perhaps in addition to a New York listing. SoftBank shere price Between early 2021 and early 2022, the company's share price fell by more than half as higher interest rates and China's crackdown on leading tech companies hit SoftBank's portfolio. Last November, the stock rose to a record high above JPY 7,000, but then fell. Since the new year, the share price has been rising from 5,640 JPY until it breaks above 6,000. This week, the stock traded at 6,332 JPY, but fell back to below 6,000, and is now at 5,948.00 JPY. Source: wsj.com, finance.yahoo.com
EUR/USD Analysis: Continuing Corrections Amidst European Economic Woes

The Nasdaq 100 Index Is Still In A Bullish Condition

InstaForex Analysis InstaForex Analysis 09.02.2023 08:08
As we know, the price movement on the 4-hour chart, the Nasdaq 100 index is still in a bullish condition where all of this can be seen by the price movement moving above the Moving Average and in the channel that is swooping up but with the appearance of the Double Top Pattern in the form of the Bearish 123 pattern giving a hint if in the near future there will be a downward correction to the level of 12411.8 if this level is successfully broken down then #NDX has the potential to continue its downward correction to enter the level area 12285.6-12155.2 as the next target but if it is on its way to the target levels that have been mentioned earlier suddenly the #NDX reverses towards its previous bias especially if it breaks above the 12783.9 level then it is very likely that the downward correction scenario described earlier will become invalid and automatically cancel itself. Relevance up to 03:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/119131
Markets under Pressure: Rising Yields, Strong Dollar, and Political Headwinds Weigh on Stocks"

On The New York Stock Exchange Indices Recorded Losses

InstaForex Analysis InstaForex Analysis 09.02.2023 08:11
As of 20:05 GMT+3, the Dow Jones Industrial Average was down 58.20 points, or 0.17%, to 34,098.49 points, the S&P 500 lost 21.61 points, or 0.52%, to 4142. 39 points, and the Nasdaq Composite - 109.91 points, or 0.91%, to 12,003.88 points. eBay shares are down 0.6% in trading. The day before, the world's largest online auction announced its intention to reduce the global staff by about 4%, laying off about 500 people. Capri Holdings Ltd., which owns fashion brands Michael Kors, Jimmy Choo and Versace, plunged 24% amid weak quarterly earnings and company guidance. US restaurant chain Chipotle Mexican Grill was down 4%. The company increased net profit in the 4th quarter of 2022 by 1.7 times, however, adjusted profit and revenue fell short of analysts' expectations. Uber Technologies rose 2.5%. The taxi and food delivery service company saw a nearly 1.5x increase in revenue in the 4th quarter of 2022 thanks to an increase in orders. Uber's first-quarter guidance beat market expectations. The price of Coty Inc. papers. fell by 3.5%. The cosmetics and perfumery manufacturer's net profit in the 2nd financial quarter grew by 22%, the company's revenue decreased by 3.5%, but exceeded market expectations. In addition, Coty has improved its FY2023 adjusted earnings guidance. CVS Health Corp. share price increased by 4%. The pharmacy chain operator's fourth-quarter revenue rose 9.5% to $83.85 billion, well above the market's consensus forecast of $76.32 billion. CVS also announced the purchase of Oak Street Health Inc., which operates a network of primary care centers for Medicare users, for $10.6 billion. Oak Street rose 4.1%. Fed chief Jerome Powell, who attended an Economic Club of Washington event the day before, said he expects a significant slowdown in US inflation in 2023. At the same time, he noted that the continued stability of the US labor market may serve as a basis for further rate hikes by the Fed. At the same time, Powell said that it is necessary to continue raising rates, and it will also be necessary to maintain a restrictive policy for some time. Saxo Bank A/S Head of Equity Strategies Peter Garnry noted that due to the slowdown in commodity inflation, the growth in consumer prices in the service sector is more stable. This factor may contribute to a longer-than-expected inflation. Wednesday is scheduled to feature New York Federal Reserve Bank (FRB) Governor John Williams, Fed Board members Lisa Cook and Christopher Waller, Fed Vice Chair Michael Barr, and Atlanta and Minneapolis Fed leaders Rafael Bostic and Neil Kashkari. Traders are also evaluating the statement of US President Joe Biden, who proposed to increase by 4 times - up to 4% tax on the repurchase of shares by companies. This, according to Biden, should push the business to increase investment in further development.      Relevance up to 04:00 2023-02-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/311991
Vestas Wind System FY23 Outlook Signaled Further Challenges And Weakness, The Adani Group Plans To Prepay a $500mn Bridge Loan

Vestas Wind System FY23 Outlook Signaled Further Challenges And Weakness, The Adani Group Plans To Prepay a $500mn Bridge Loan

Saxo Bank Saxo Bank 09.02.2023 09:06
Summary:  U.S. equities pulled back by over 1%, led by a selloff in the tech space. Google’s parent Alphabet tumbled 7.7% after Google's newly introduced Chatbot Bard’s reportedly underwhelming performance. The decline in bond yields following a strong Treasury auction failed to boost the stock market. Investors are excited about the prospect of AI generative content and bid up shares related to ChatGPT-like products and on the other hand, have concerns about the potential disruption to the mega-cap technology companies.   What’s happening in markets? US equities (US500.I and USNAS100.I) lower, dragged by tech selloff US stocks retreated led by a selloff in the technology space on concerns about the disruption caused by the technological advancements in AI-generated content. Alphabet (GOOGL:xnas) tumbled 7.7% after reports of the underwhelming performance and erroneous responses from the company’s newly introduced Chatbot Bard. Meta (META) dropped 4.3%. Lumen Technologies (LUMN), tumbling 20.8% on well-below-expected earnings guidance for 2023, was the biggest lower within the S&P500. S&P 500 drifted down 1.1% and Nasdaq 100 plunged 1.7%. Despite the retracement, the S&P500 and Nasdaq are still in their technical uptrends for now. All 11 sectors of the S&P 500 declined, led by communication services, utilities, and information services. Hawkish comments from several Fed officials also weighed on the market sentiment. Fortinet (FINT:xnas) jumped 10.9% after the cyber security company beat revenue and earnings estimates. Uber (UBER:xnys) gained 5% continuing its uptrend since January, with Uber reporting stronger-than-expected quarterly results. Disney (DIS:xnys) rose 5.5% in extended-hour trading, after reporting earnings beating estimates and planning to cut 7,000 jobs for cost saving. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) pulled back on a strong 10-year auction The reaction in the Treasury market was muted to the chorus of hawkish comments calling for higher for longer from Fed’s Williams, Waller, Kashkari, and Cook.  The action came in after a strong 10-year auction which awarded the notes 3bps richer than the market level at the time of auction and a strong bid-to-offer-cover at 2.66 times, increasing from 2.53 times in the previous auction. Yields on the 10-year fell 6bps to finish Friday at 3.61%. Australian equites (ASXSP200.I): This quarter, focus will be on energy companies and companies benefiting from Chinese students returning ASX200 futures suggest a 0.4% fall on Thursday. However, focus will be on energy companies again with oil markets moving up. In company news, Nine Entertainment (NEC): won the rights to the 2024-2032 Olympic Games so that will excite some. Fortescue Metals (FMG) is hoping its iron project in Gabon will one day rival the giant mines of Australia’s Pilbara, with the West African nation giving the go-ahead for digging to start this year. Also keep an eye on travel businesses and educational firms in the quarter ahead with at least 50,000 students from China expected to return to Australia before the start of semester  - with Beijing’s government ruling that degrees earned online will no longer be accredited. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) lacked of direction Hang Seng Index was nearly flat in directionless trading as investors were waiting for more evidence of recovery in China after the initial month-long rally that had repriced equities higher to reflect the radical change in policy directions in China. The benchmark Hang Seng Index was dragged by Meituan (03690:xhkg) which tumbled 6.5% on reports that Douyin was launching a food delivery service in March. Tech stocks overall were laggards. Hang Seng TECH Index dropped 1.9%. Kuaishou (01024:xhkg) plunged 6.2% following the content-sharing and social platform company banned 500,000 accounts for breaching the company’s policies. SenseTime (00020:xhkg) dropped 6.6% as Softbank trimmed its stake in the AI and vision software maker. Baidu (09888:xhkg) retraced 3.1% to pare some recent strong gains despite southbound flow registering a net buying of HKD 671 million on Wednesday. Online knowledge-sharing platform, Zhihu (02390:xhkg) soared 39.6% on the potential of being benefited by ChatGPT application. NetEase (09999:xhkg) climbed 1.1% as the company is planning to roll out a demo online educational product similar to Chat GPT. Ganfeng Lithium (01772:xhkg) gained 5% following the EV battery maker making breakthrough in manufacturing solid-state power batteries. An EV SUV using Ganfeng’s solid-liquid hybrid lithium-ion batter is expected to come to the market in 2023.  In A-shares, northbound flows registered net selling for the fourth day in a row. CSI300 drifted 0.4%. Media, communication, and defense stocks led the decline. Real estate, transportation, and pharmaceutical names outperformed. FX: Aussie gains stall; sterling outperforms After a strong run higher post-RBA, AUDUSD turned lower overnight on hawkish Fed speak. Pair reversed from 0.6996 highs to 0.6920 and will need either a turn in sentiment or another leg higher in commodity prices to sustain this week’s rally. USDCAD also returned back above 1.3400 despite the surge in oil prices. Sterling bounced off 1.2000 support and bounced back to 1.2100 but still staying below the 38.2% Fibo retracement at 1.2120. UK GDP for Q4 will be released tomorrow. Crude oil (CLH3 & LCOJ3) jumps again despite hawkish Fed and inventory build Oil prices rose 1.7% with WTI to $78.50 and Brent above $85 despite a hawkish rhetoric from Fed members as well as higher inventory levels as demand outlook remains upbeat. The EIA reported US crude stocks building 2.4mln bbls in the latest week, contrasting the private data that indicated a draw of a similar magnitude. On the demand side, TotalEnergies sees oil demand will rise to a record this year, in line with the IEA’s messaging. The International Energy Agency expects oil processing will rise to a record 14.4mb/d over the course of the year. That compares with 13.6mb/d in 2022.  Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM What to consider? Fed speakers call for higher rates A slew of Fed speakers were on the wires yesterday. While a broad chorus on higher rates was maintained, much of which has been the Fed’s message throughout, markets perceived the messages as hawkish primarily as the January jobs report is still keeping investors concerned. Importantly, all the four speakers last night are voting this year. Christopher Waller said rates may have to stay higher for longer. John Williams called the December dot plot a good guide, adding that rates are "barely into restrictive" territory. He also hinted at a slightly higher terminal rate of 5.0-5.5%. Lisa Cook said "we are not done yet." Neel Kashkari expects the peak to rise above 5% this year as services side of the economy is still hot. Market pricing of the Fed path still pretty much unchanged, with terminal rate priced in at just over 5.1%. European companies outperformed in earnings growth Saxo’s Head of Equity, Peter Garnry, mentioned in his latest notes that European companies are the big winner in the Q4 earnings season with 4.8% earnings growth Q/Q and the highest growth rate in revenue Q/Q compared to US and Chinese companies. European earnings are actually ahead of S&P 500 earnings since Q3 2019. As Peter writes in Saxo’s Q1 Outlook, the comeback to the physical world is also a comeback to European equities. The Q4 earnings season also show that earnings are holding up better than we expected despite margin pressures are still an ongoing theme and could intensify during the year. Maersk guided a downbeat 2023 outlook A.P. Moller-Maersk (MAERSKb:xcse) reported lower than estimated Q4 revenue and in-line EBITDA, but the FY23 outlook on EBITDA of $8-11bn vs est. $13.5bn is a big miss and maybe a bit too conservative if the cyclical upturn gathers steam. Maersk’s guidance for global container trade in 2023 at -2.5% to +0.5% again is at odds with the market’s cyclical growth bet. Maersk’s CEO says that a significant inventory adjustment is taking place and that the world is generally moving to a more normal world. Vestas signals weakness in the wind turbine business Vestas Wind System (VWS:xcse) reported a FY23 outlook that signaled further challenges and weakness in the wind turbine business with FY23 revenue outlook at €14-15.5bn vs est. €14.8bn and adjusted EBIT margin of –2% to +3%. If the cyclical upturn continues, it will most likely put more pressure on industrial metals making it difficult for Vestas to expand its operating margin in 2023. The outlook is at odds with the narrative that Europe is undergoing a boom in green energy as the revenue in 2023 is expected to be the same as in 2020. Judging from analyst estimates, it seems that growth is expected to pick up in 2024 with revenue growing to €17.9bn. One thing is for sure, the lack of great headlines coming out of wind turbine makers will add steam to the movement and support for nuclear power which seems inevitable as part of the solution toward net zero carbon in 2050. Cybersecurity company Fortinet beat estimates Fortinet (FINT:xnas), one of the largest cyber security companies on revenue, reported Q4 revenue and EPS that beat estimates and the FY23 outlook on operating margins and revenue were in line with analyst estimates. It was clear that investors had lowered their expectations below that of analysts as the FY23 outlook hitting estimates led to a rally in extended trading. The outlook on operating margin also confirms that cyber security companies are experiencing little margin pressure. Auto companies Toyota, Honda and Volvo report earnings A bevy of EV and motor companies report today including Toyota Motor, Honda Motor and Volvo Car. We think there could be a risk they report weaker than expected results, similar to Ford; which sent Ford shares 8% lower on Friday. Ford is struggling to make money on its EV business and blamed supply shortages. Metal commodities are a large contributor to car manufacturers costs. And we’ve seen components of EVs rise significantly in price, amid limited supply vs the expectation China will increase demand.  For example consider the average EV needs about 83 kilos of copper- and its price is up 26%, 250 kilos of aluminium are needed - and its price is up 20% from its low. These are some headwinds EV makers are facing, in a market where consumer demand is restricted amid rising interest rates.   Adani prepays bridge loans, earnings support sentiment The Adani Group plans to prepay a $500mn bridge loan due next month, in order to avoid a refinancing at higher rate after the recent sell-off. The effort to deleverage also appears to be a response to banks that had started to step away from lending against Adani debt or a measure to avoid a potential rating downgrade. Recent earnings from Adani companies have also hinted at slower inorganic growth to avoid the need for fresh borrowing, and this is helping to rebuild investor confidence. Markets will wait to see some more such confidence-boosting measures from Adani before we can comfortably put a floor to the allegation-driven declines. MSCI’s quarterly review today will be key for any risks of exclusion.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Market Insights Today: Alphabet tumbled on underwhelming Chatbot performance – 9 February 2023 | Saxo Group (home.saxo)
Sweden: How the Riksbank has made the krona’s path to recovery even narrower

Unusual Scale Of The Swedish Krona Weakness, Crude Oil Trades Higher

Saxo Bank Saxo Bank 09.02.2023 09:56
Summary:  Choppy markets yesterday as the US market erased the prior day’s sharp rally in the ongoing struggle between bulls and bears after the S&P 500 recently cleared important resistance but has stalled out. Treasury yields also dipped after a very strong US 10-year treasury auction as the US yield curve is near its most severe inversion for the cycle. Elsewhere, oil prices have jumped sharply off recent lows over the last three days. What is our trading focus? US equities (US500.I and USNAS100.I): tight trading range Yesterday’s trading session did not confirm the cyclical growth bets in equities with S&P 500 futures erasing the prior gains on Powell’s tight labour market comments and the need for higher policy rates. It feels like the market is transitioning into a tighter range before getting new information on which to decide whether to continue to uptrend or reverse lower. The signs are leaning towards a cyclical uptrend, but the signal-to-noise level remains low across many macro indicators. Yesterday’s open price in S&P 500 futures at 4,167 is the key level to watch on the upside. Chinese equities: Hang Seng (HIG3) and CSI300 (03188:xhkg) lacked of direction Hang Seng Index and CSI300 bounced over 1% after a week-long consolidation. Xiaomi (01810:xhkg), surging 9.5%, was the biggest winner within the Hang Seng Index. Lei Jun, Chairman and founder of the mobile phone and electronic device maker, announced on Twitter in the form of Q & A with a Chatbot that the company is launching its Xiaomi 13 Series mobile phone on 26 Feb. Mobile phone hardware suppliers Sunny Optical (02382:xhkg) and AAC (02018:xhkg) surged 5.3% and 4.1% respectively. The technology space outperformed overall, with the Hang Seng Tech Index climbing 2.5%. In A-shares, food and beverage, communication, defense, and internet-of-things stocks led the advance. FX: Aussie gains stall; sterling outperforms After a strong run higher post-RBA, AUDUSD turned lower yesterday after taking a stab at 0.7000, but was choppy overnight in the Asian session, perhaps buoyed into early European hours by a bounce in metals prices. The key levels for that pair to the downside are the recent 0.6856 low and the 200-day moving average another 50 pips lower currently. USDCAD also returned back above 1.3400 despite the surge in oil prices, with the line of resistance for that pair near 1.3475. Sterling bounced off 1.2000 support in GBPUSD and managed a poke through 1.2100 but has found resistance in that area. The 38.2% Fibo retracement at 1.2120. UK GDP for Q4 will be released tomorrow. The EURGBP rally, meanwhile, has partially deflated after the pair broke well above the key 0.8900 area, trading near 0.8875 this morning and threatening a full reversal if it closes much lower in coming sessions. Crude oil (CLH3 & LCOJ3) prices rise on demand outlook Crude oil trades higher for a fourth day as last week’s long-liquidation-driven sell-off continues to be reversed as the dollar softens and on renewed optimism about the demand outlook for oil, especially in China and other parts of the world that may narrowly avoid a recession. The EIA reported US crude stocks building 2.4mln bbls in the latest week, contrasting the private data that indicated a draw of a similar magnitude. On the demand side, TotalEnergies sees oil demand will rise to a record this year, in line with the IEA’s messaging. Brent is currently trading above its 21-day moving average, currently at $84.95 - in WTI at $78.25 - with a close above likely to provide additional positive momentum. Gold (XAUUSD) trades steady but risk of further weakness lingers Gold remains supported around the $1860 level but so far the failure to break decisively higher to challenge support-turned-resistance in the $1900 area is raising concerns that a correction floor has yet to be found. The yellow metal erased earlier gains on Wednesday after Fed members reaffirmed the view that interest rates will need to keep rising to contain inflation. Since hitting a $1861 low last Friday, gold has been trading within an 18-dollar rising channel, currently between $1870 and $1888, and a break to the downside carry the risk of an extension towards $1828, the 38.2% retracement of the run up from early November. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) pulled back on a strong 10-year auction The reaction in the Treasury market was muted to the chorus of hawkish comments calling for higher for longer from Fed’s Williams, Waller, Kashkari, and Cook.  The action came in after a strong 10-year auction which awarded the notes 3bps richer than the market level at the time of auction and a strong bid-to-offer-cover at 2.66 times, increasing from 2.53 times in the previous auction. Yields on the 10-year fell 6bps to finish Friday at 3.61%. What is going on? Credit Suisse sees weak 2023 on significant outflows The Swiss bank reports this morning Q4 net income loss of CHF 1.4bn vs est. loss of CHF 1.1bn, but even worse the bank is expecting a substantial loss before taxes in 2023, but also expect to bounce back to profitability in 2024. Outflows in Q4 totalled CHF 111bn but deposits looked positive in January according to Credit Suisse. Walt Disney announces job cuts and $5.5bn cost-cutting plan The Walt Disney Company reported quarterly earnings after hours yesterday, with profits of 99 cents per share well north of consensus estimates of 74 cents and revenue growing 7.8% y/y to $23.5bn, also above estimates. Disney+ streaming service subscribers fell 1% in the quarter, mostly due to their Indian streaming service loosing streaming rights to cricket games. CEO Bob Iger announced a $5.5bn cost saving plan that will include a $3bn reduction in movie-production budgets and the axing of 7,000 jobs. Shares were up over 5% in late trading last night, near $117.80 per share. Uber shares gained 5% yesterday after reporting earnings. The rise in Uber accelerated yesterday, posting a new 10-month high after Uber reporting stronger than expected quarterly results. Uber expects its first ever year of profits, including for its ride and Uber Eats businesses. Uber reported its highest ever number of trips for the quarter at more than 2 billion and nearly 1mn trips per hour. Meanwhile Uber is also receiving more advertising dollars, and on track to achieve its $1bn ad revenue in 2024. A fourth activist investor joins the move to shake up Salesforce Three activist investors, Elliott Investment Management, Starboard Value LP, and ValueAct Capital Partners, have already put pressure on Salesforce’s management to cut costs and improve profitability. Wall Street Journal writes that a new activist investor Third Point LLC has now also taken a stake in the software maker. This group of investors will put enormous pressure on the software maker to improve results over the coming year. UK House Prices continue to drop sharply, according to RICS Survey. The UK RICS Price Balance survey registered a new low for the cycle at –47%, suggesting that nearly 50% more of surveyed estate agents are seeing falling prices than rising prices, the lowest number since 2009, during the financial crisis. This was slightly worse than expected and a drop from –42%, although estate expectations are improving with only 20% believing in a worsening outlook for the next 12 months versus 42% a month ago. European gas settles at 17-month low on mild weather outlook. The Dutch TTF gas futures, Europe’s natural gas benchmark, settled at €53.69 on Wednesday, its lowest close since September 2021, and around 25 euros above the five-year average for this time of year. A cold spell across Europe this past week have had no major impact on prices with ample supplies to meet demand, and forecasters are now looking for milder than expected weather for the rest of the month than previously expected. EU gas in storage remains 69% full and we may enter the injection season in late March near 60% and unprecedented high level, even compared with the recession hit 2020 when the level was 54%. Fed speakers call for higher rates A slew of Fed speakers were on the wires yesterday. While a broad chorus on higher rates was maintained, much of which has been the Fed’s message throughout, markets perceived the messages as hawkish primarily as the January jobs report is still keeping investors concerned. Importantly, all the four speakers last night are voting this year. Christopher Waller said rates may have to stay higher for longer. John Williams called the December dot plot a good guide, adding that rates are "barely into restrictive" territory. He also hinted at a slightly higher terminal rate of 5.0-5.5%. Lisa Cook said "we are not done yet." Neel Kashkari expects the peak to rise above 5% this year as services side of the economy is still hot. Market pricing of the Fed path still pretty much unchanged, with terminal rate priced in at just over 5.1%.  Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM What are we watching next? Sweden’s Riksbank to hike today – watching guidance after krona’s woeful weakness. EURSEK recently touched its highest level since the global financial crisis back in 2009, a rather unusual scale of SEK weakness, given strong global risk sentiment and an improved outlook for Europe. The new Riksbank governor Erik Thedeen warned on the concerns that rate rises and high inflation (which hit over 12% YoY a the headline and 10.2% for core inflation in December) are risks for Sweden’s financial system, suggesting that the central bank may be reluctant to continue hiking much more beyond today’s 50 basis point rate rise, which would take the policy rate to 3.00%. With 10-year Swedish government bonds trading with a yield south of 2.00%, the Swedish yield curve is even more steeply inverted than Germany’s, suggesting strong concerns for economic growth. RBA inflation forecasts due tomorrow as Chinese students set to return to AU The AUDUSD has had a volatile week, sentiment was lifted a bit overnight in Australia as the iron ore (SCOA) and copper prices moved up over 1% each. China recently docked its first Australian coal import shipment in two years. In what can only prove a boost to the Australian economy, almost 50,000 Chinese students are expected to arrive in Australia this month- ahead of the start of semester. This is due to Beijing’s government ruling that degrees earned online will no longer be recognized. Tomorrow, the RBA will issue its quarterly economic forecasts and policy outlook in Australia on Friday. Earnings to watch Today’s US earnings focus is PepsiCo and PayPal with analysts expecting PepsiCo to report revenue growth of 7% y/y and EPS of $1.64 up 7% y/y as the beverage and snacks business is resilient during inflation. PayPal earnings will an interesting to watch as Adyen in Europe yesterday spooked markets with a significant decline in the EBITDA margin on more hiring and investments in infrastructure. Analysts expect PayPal to report revenue growth of 7% y/y and EPS of $1.20 up 41% y/y. Thursday: KBC Group, Brookfield, Thomson Reuters, L’Oreal, Vinci, Credit Agricole, Siemens, Toyota Motor, NTT, Honda Motor, AstraZeneca, Unilever, British American Tobacco, ArcelorMittal, DNB Bank, Volvo Car, Zurich Insurance Group, Credit Suisse, AbbVie, PepsiCo, Philip Morris, PayPal, Cloudflare Friday: Enbridge, Constellation Software Economic calendar highlights for today (times GMT) 0830 – Sweden Riksbank Policy Rate 0945 – Bank of England Governor Andrew Bailey to testify 1330 – US Weekly Initial Jobless Claims 1400 – Poland National Bank Governor Glapinski press conference 1530 – US Weekly Natural Gas Storage Change 1900 – Mexico Rate Announcement 0030 – Australia RBA Monetary Policy Statement 0130 – China Jan. CPI/PPI   Source: Financial Markets Today: Quick Take – February 9, 2023 | Saxo Group (home.saxo)
Microsoft Is Replacing The Metaverse With Artificial Intelligence (AI)

Disney Plans To Cut Costs And Jobs, Google Is Now Rolling Out AI Chatbot

Kamila Szypuła Kamila Szypuła 09.02.2023 10:45
Disney plans to reduce costs and lay off employees. And at the same time, Google and Microsoft implement artificial intelligence into their products. Disney Since 2019, when Disney+ launched, the segment has lost nearly $10 billion as the company has spent a lot on content to attract subscribers. Disney+ is part of Disney's direct-to-consumer business, which includes all video streaming platforms. The direct consumer business lost $1.05 billion in the December quarter. Iger is under pressure to make its streaming business profitable and revive the company's share price, which is down more than 40% from early 2021 highs. Disney plans to reduce the number of TV shows and movies it produces and aggressively manage its general entertainment content, which has become more expensive to produce in recent years due to competition. Moreover, it plans to cut 7,000 jobs and cut costs by $5.5 billion as part of a major corporate reorganization that gives more power to the content company's management and puts more emphasis on sports media at the company. Disney's share price has been rising since the new year. After a weak last two months of 2022 below 100.00, the stock is again above this level. Currently, the stock is close to 120.00, at 118.85. Google At an event in the French capital on Wednesday, Alphabet Inc unveiled a number of AI improvements to its search engine, including plans to start generating long text answers to complex queries with no single correct answer - for example, what constellations are best to look for when stargazing. This came after Google on Monday offered to look at a homegrown rival to the popular ChatGPT chatbot it calls Bard - and inadvertently demonstrated the artificiality of such tools when a screenshot of Bard's answer contained an obvious factual error. Google has unveiled new search and map features powered by artificial intelligence. Read next: The GBP/USD Pair Climbed To Around 1.2100, The EUR/USD Pair Is Above 1.0700| FXMAG.COM Google gave an additional look on Wednesday to its experimental conversational AI chatbot, Bard, which it rolled out to a group of third-party testers earlier this week. The company showed a brief demonstration of how a user can use Bard to suggest criteria to consider when trying to buy a new car or places to visit for a scenic trip. The company also said it is now rolling out a feature that allows Google Maps users to explore 3D representations of destinations - such as inside a restaurant - extrapolated by AI from ordinary 2D photos. And it said it is expanding the availability of a feature that allows users to search for maps for local businesses by pointing the phone to a nearby area. Alphabet shares closed up 7.7% on Wednesday. Microsoft In the midst of Google's announcements, on Tuesday Microsoft unveiled its plans to incorporate the generative AI technology behind ChatGPT into its Bing search engine. It demonstrated how it can process natural language queries to generate answers and suggestions using information such as news, train schedules and product prices. British antitrust authorities announced that Microsoft Corp. proposed to take over gaming giant Activision Blizzard Inc. for $75 billion, which puts Microsoft in a strong position in cloud gaming, and said the merger would hurt UK gamers - creating another major regulatory hurdle for a deal in a large global gaming market. The National Competition and Markets Authority said it would approach both companies to propose ways to alleviate its concerns and made a final decision on whether to allow the deal to go ahead at the end of April. The regulator has offered a list of potential countermeasures that may be hard for Microsoft to swallow. Other major regulators are also investigating the deal. In November, the Federal Trade Commission sued Microsoft to block the deal. Microsoft said the deal would be basically good for gamers, developers and competition. The company also stated that it is not a top console manufacturer or software developer in the video game industry. Microsoft shares fell 0.3%. Source: wsj.com, finance.yahoo.com
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

Equities Fall On Hawkish Fed Comments, Uber, Disney Jump

Swissquote Bank Swissquote Bank 09.02.2023 12:58
US equities fell yesterday on the back of two important factors: hawkish comments from the Federal Reserve (Fed) members, and the unexpected surge in the American used car prices. Stocks market The S&P500 fell more than 1%, while Nasdaq slid around 1.80%. Inside Nasdaq, Google had a particularly rough day, to say the least. The company posted a Tweet showing Bard in action, and the tweet went wrong, as Bard gave the wrong answer! The stock price slumped by more than 9% at some point. Microsoft Microsoft on the other hand was upbeat on the news, and its valuation shortly surpassed the $2 trillion mark. Uber, Disney Elsewhere, Uber jumped more than 5.5% on stronger than expected results. Disney also jumped by more than 5% in the afterhours, after reporting better than expected results, and the promise to slash $5.5 billion in costs, along with 7000 jobs. The US futures are in the positive at the time I am talking here, but the bears are not far away. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM Forex In the FX, the US dollar remains upbeat, but the 50-DMA offers remain a solid resistance to a bullish breakout. Likewise, the EURUSD remains bid at around the 50-DMA, and the dollar-yen remains offered into the 50-DMA. So that 50-DMA mark is the key resistance that must be cleared to set the dollar bulls free for further appreciation, and de-block the situation in the FX space. Energy In energy, US crude extended gains above its own 50-DMA yesterday. Could it extend gains higher, and by how much? Watch the full episode to find out more! 0:00 Intro 0:50 Equities fall on hawkish Fed comments… 3:45 … and sudden jump in used-car prices 5:54 Bard’s gaffe costs Google more than $100bn in market cap 7:22 Uber, Disney jump after earnings 8:29 USD must clear 50-dma for further appreciation 9:00 Crude’s next challenge Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Google #Bard #AI #gaffe #Microsoft #ChatGPT #Fed #hawkish #comments #inflation #jobs #USD #EUR #JPY #XAU #crude #oil #earnings #Uber #Disney #layoffs #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
Tokyo Inflation Slows: Impact on JPY and USD/JPY

Positive Earnings Have A Beneficial Effect On The US Stock Market

InstaForex Analysis InstaForex Analysis 10.02.2023 08:04
At the same time, traders note that the market has recently been trading within fairly narrow boundaries. So, this month the S&P 500 did not rise above 4200 points and did not fall below 4000 points, according to MarketWatch. Saxo Bank's head of equity strategy Peter Garnry suggested that the market is moving into a tighter range in anticipation of new information from which it will be possible to decide whether to continue the uptrend or turn down. The number of Americans who applied for unemployment benefits for the first time increased by 13,000 last week to 196,000, according to a report from the US Department of Labor. Analysts polled by Bloomberg predicted an average increase in the number of applications to 190,000. Dow Jones Industrial Average by 18:00 GMT + 3 increased by 0.65% and amounted to 34169.97 points. Leading gainers among the index components include Walt Disney, as well as Salesforce Inc., which rose 2.9%, Microsoft Corp. - by 1.8% and Intel Corp. - by 1.3%. The value of the Standard & Poor's 500 by this time increased by 0.6% - up to 4144.06 points. The Nasdaq Composite index has risen 0.9% since the market opened and reached 12021.51 points. Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM   Walt Disney Co. share price increased by 4.5% in early trading. The world's largest entertainment and media company increased its net profit and revenue in the first quarter (October-December), largely due to strong performance in the amusement parks segment. The head of the company, Bob Iger, announced a reorganization of the business, which includes cutting costs by $5.5 billion a year and laying off about 7,000 people. He also promised to resume at the end of this year the payment of dividends suspended during the coronavirus pandemic. PepsiCo Inc. increased revenue in October-December by 10.9%, increased dividends by 10%. Shares of one of the world's largest producers of soft drinks are growing by 1.7%. Hilton Worldwide Holdings rose 2.5%. The hotel chain more than doubled its fourth-quarter net income, with its adjusted figure and revenue beating analysts' expectations. Cost of Kellogg Co. rises by 1.2%. The breakfast cereal and snack maker posted a net loss in the fourth quarter, but it was driven by write-downs related to the company's spin-off plan. At the same time, profit excluding one-time factors exceeded the forecasts of experts.     search   g_translate       Relevance up to 04:00 2023-02-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/312167
Uncertain Waters: Saudi's Oil Production Commitment and Global Economic Jitters

Adidas Released A Shockingly Bad Outlook, The US Dollar Traded Weaker

Saxo Bank Saxo Bank 10.02.2023 08:51
Summary:  A downbeat session in the US yesterday took the S&P 500 Index back below the pivotal levels that provided resistance on the way up recently. Long US treasury yields rose again on one of the weakest a weak 30-year T-bond auctions in a year. This helped boost the US dollar again and take gold prices to nearly 1,850 overnight, representing a more than 100-dollar consolidation of the rally since last November. What is our trading focus? US equities (US500.I and USNAS100.I): Failing to hold the line  S&P 500 futures failed yesterday to push higher above that important 4,200 level and lost instead altitude closing below the 4,100 level erasing the gains for February. The US 10-year yield also bounced but the moves are not dramatic, and it feels like the market is waiting for the bond market to make up its mind about long-term yields and inflation. Earnings after the close from PayPal and Lyft that both disappointed also helped lower risk sentiment in US equity futures overnight. FX: USD rolls back higher on weak sentiment. Historic day for SEK The US dollar traded weaker yesterday before firming late in the session as US equities rolled over and posted a weak session, with EURUSD never making a serious challenge of 1.0800  and trading below 1.0725 this morning, while a USDJPY sell-off yesterday quickly aborted on a weak US T-bond auction that sparked a rise in long US yields. This will have USD traders on watch for a follow through higher, which could suggest a proper trending move rathre than a mere consolidation of prior weakness. Elsewhere, an historic day for the Swedish krona yesterday on a powerful broadside to SEK speculators in yesterday’s guidance, but also technical moves to increase liquidity in Sweden’s banking system as noted below. Crude oil (CLH3 & LCOJ3) slides again on US growth concerns Crude oil trades lower for a second day after sentiment across markets received a fresh set back on worries about the US economy's ability to withstand additional Fed rate hikes. Overall, it highlights a market that remains rangebound (since November) with current soft fundamentals likely to remain until the second quarter when, despite concerns about further US rate hikes, improved activity in China should brighten the macro-outlook. Brent trades back below its 21-day moving average, currently at $84.90 - in WTI at $78.40 - with a close above needed to attract fresh buying momentum. Next week, apart from US CPI on Tuesday, the market will look out for monthly oil market reports from OPEC and the IEA. Gold (XAUUSD) weakness resumes with focus on US rates and next week’s CPI print Gold’s attempt this past week to recover from last Friday’s sell-off below support-turned-resistance in the $1900 area received a setback on Thursday when weakness resumed, driving the price down to a $1853 during the Asian trading session. The market had been left vulnerable to further weakness after only managing a small bounce earlier in the week, and with the attention now fully on the prospect for even higher Fed rates to tame inflation, the dollar and Treasury yields have risen to provide some formidable headwind. Furthe weakness carry the risk of an extension towards $1828, the 38.2% retracement of the run up from early November. The main event next week being the US January CPI report on Tuesday. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) back higher on weak 30-year T-bond auction It has been a confusing week for treasury traders this week, as we saw a very weak 3-year auction on Tuesday followed by a robust 10-year auction Wednesday, only to see one of the weakest 30-year T-bond auctions over the last 12 months yesterday, which saw 30-year benchmark yields reversing back higher and posting a new local high close just shy of 3.75%. The 2-10 portion of the yield curve remains near the extreme of its inversion for the cycle, just below –80 basis points, and near the highest since the early 1980s. What is going on? SEK blasts higher on watershed Riksbank meeting The Riksbank met yesterday and impressed the market with its guidance on further rate hikes and additional plans to accelerate the pace of quantitative tightening from April onwards, with additional offerings of “Riksbank certificates” to encourage a rise in rates and foreign investment in Swedish paper. Two-year Swedish rates jumped 10 basis points on the news, and the QT The new Riksbank Governor, Erik Thedeen, also took aim at currency speculators in the press conference yesterday. Ahead of the meeting, EURSEK had risen above 11.40 at one point, its highest level since 2009, in part on concerns that the Riksbank feared the impact of higher rates on Sweden’s housing market, the bottom dropped out yesterday on the Riksbank developments, taking EURSEK all the way back down to range support near 11.10, one of the most powerful strengthening moves in the krona’s history. This was a watershed moment and likely puts a floor under the krona for now. Natural gas lower despite larger-than-expected US draw US natural gas futures (NGH3) only managed a temporary rise on Thursday after the EIA said inventories had declined by 217 billion cubic feet (bcf) last week. This the first above average weekly storage draw this year left total stocks some 5.2% above the long-term average, and despite trading near a two-year low the upside potential remains limited amid robust production, up 6% y/y, and gas demand down y/y by the same percentage. In addition, forecasts are now pointing to much warmer-than-normal weather through February 18 across Central and Eastern states. Adidas reports a disastrous 2023 outlook The German sports clothing maker released yesterday after the market close a shockingly bad outlook. The decision to not sell Yeezy inventory will have an adverse impact on the underlying operating profit which could hit €700mn loss in 2023 with €500mn impact coming from Yeezy items. Adidas also sees €200mn in one-off costs in 2023. Revenue in constant currency terms is expected to decline up to high-single-digit. The shocking revelation is that the majority of Adidas operating profit came from one partnership and design series. PayPal misses Q4 volume estimates but steady Q1 expected The US-based payment company missed on volume in Q4 against estimates but delivered EPS $1.24 vs est. $1.20 in addition to announcing that the CEO Dan Schulman is stepping down by year-end. The Q1 outlook on EPS was $1.08-1.10 vs est. $1.06 and Q1 revenue growth of 7.5% y/y at current spot rates in the currencies. The RBA raised its underlying inflationary forecasts In the RBA’s quarterly economic forecasts and policy outlook (known as the Statement of Monetary Policy) released today in Australia, the Bank increased its “trimmed mean” CPI forecast from 3.8% to 4.3%. The increase was largely driven by sticky consumer durable goods inflation and services inflation. The RBA also upgraded labour costs projections, forecasting wages to rise 4.25% this year versus 3.9% previously. RBA continues to forecast that longer term inflation will ease to within the Bank’s target. Market pricing now suggests the RBA will hike another 75 basis points through the July meeting before a likely pause. US jobless claims rose but still sub-200k Initial jobless claims rose to 196k from 183k, and above the expected 190k. Continued claims also surpassed expectations and printed 1.688mln (exp. 1.68mln), above the prior 1.650mln. While there is a pick-up in claims, it must be noted that it comes from a low level and continues to signal a tight labour market. Hawkish 50 bp hike from Mexico’s central bank Banxico surprised markets with a 50-bp rate hike once again, taking the policy rate to 11.00% and signalled another, smaller hike at the next meeting. Expectations were for a smaller 25-bp hike, followed by a pause. This appears to be in line with what we have seen from RBA and Reserve Bank of India this month, suggesting broad inflation pressures continue to challenge central banks that were hoping to signal a pause.  Read next: USD/JPY Is Below 131.00 Again, The Aussie Is Close To 0.70$| FXMAG.COM What are we watching next? “New” USD CPI next Tuesday as risk sentiment on watch with the break of US S&P 500 Index support. As noted above, the S&P 500 Index broke below the pivotal 4,100 area that was an important resistance line on the way up, suggesting the risk of further consolidation lower from a technical perspective. A more significant level to the downside could be the 200-day moving average coming in near 3,945 on the cash Index, considerably lower, while the Nasdaq 100 Index eyes the important 12,300-12,100 area. What could turn sentiment lower? The most likely source of immediate concern would be any further rise in Treasury yields, but an interesting test awaits the market with next Tuesday’s CPI release, which will be the first release after an overhaul of the calculation methodology, which some argue could engineer a sharper than expected drop. Breaking: Government nominates Kazuo Ueda as new Bank of Japan Governor The name of Kazuo Ueda, an economist and former member of the Bank of Japan’s deliberation committee, was not among the names considered most likely to replace current governor Kuroda on his exit in early April. The first move in the JPY was higher on the announcement. Earnings to watch The earnings calendar is light today with Enbridge, Canada-based energy distributor, being the most interesting to watch. Analysts expect Enbridge to report revenue growth of 3% y/y and EPS of $0.73 down 5% y/y. Next week, the earnings calendar will provide plenty of interesting releases with the three most important releases being Deere, Schneider Electric, and Airbnb. Friday: Enbridge, Constellation Software Next week’s earnings: Monday: Recruit Holdings, DBS Group, Cadence Design Systems, SolarEdge, Palantir Tuesday: CSL, TC Energy, First Quantum Minerals, Toshiba, Norsk Hydro, Boliden, Coca-Cola, Zoetis, Airbnb, Marriott International, Globalfoundries, NU Holdings, Akamai Technologies Wednesday: Commonwealth Bank of Australia, Fortesque Metals Group, Wesfarmers, Shopify, Suncor Energy, Nutrien, Barrick Gold, Kering, EDF, Tenaris, Glencore, Barclays, Heineken, Nibe Industrier, Cisco Systems, Kraft Heinz, AIG, Biogen, Trade Desk Thursday: Newcrest Mining, South 32, Airbus, Schneider Electric, Air Liquide, Pernod Ricard, Bridgestone, Standard Chartered, Repsol, Nestle, Applied Materials, Datadog, DoorDash Friday: Hermes International, Safran, Allianz, Mercedes-Benz, Uniper, Sika, Deere Economic calendar highlights for today (times GMT) 1300 – Poland National Bank releases meeting minutes 1330 – Canada Jan. Net Change in Employment / Unemployment Rate 1400 – UK Bank of England Chief Economist Huw Pill to speak 1400 – ECB’s Schabel in live Q&A on Twitter 1500 – US Feb. Preliminary University of Michigan Sentiment 1730 – US Fed’s Waller (Voter) to speak at Crypto conference 2100 – US Fed’s Harker (Voter 2023) to speak   Source: Financial Markets Today: Quick Take – February 10, 2023 | Saxo Group (home.saxo)
Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Mexico’s Central Bank Surprised Markets With A 50bps Rate Hike Once Again

Saxo Bank Saxo Bank 10.02.2023 08:43
Summary:  Equities erased early gains with S&P500 falling below 4100 as short-end Treasury yields jumped higher and yield curve inversion deepened to a fresh record. Riksbank’s hawkish surprise, along with Banxico’s, is raising concerns that central banks will have to continue to hike rates. Dollar was off its lows, and Gold pulled back to test the $1860 support again. Crude oil prices slid despite risks of lingering supply disruptions, as demand concerns weighed. China’s inflation data due today ahead of more Fed speakers and University of Michigan survey.   What’s happening in markets? US equities (US500.I and USNAS100.I) slide lower on Thursday; Tesla hits a new cycle high The S&P 500 wiped an earlier 1% jump, ending 0.9% lower on Thursday and 1.3% down on the week. It’s the first time in three weeks the benchmark index is in negative territory. That said, the S&P500 hold a gain of about 16% from its October low. On Thursday, options traders piled into bets the Federal Reserve is targeting a peak rate of 6%, nearly a whole percentage point above consensus. The two-year yield traded near 4.5%, and earlier pushed above the 10-year yield rate, by the widest margin since the early 1980s — This is a sign of fading confidence in the US economy’s ability to withstand additional tightening, and weighed on bank stocks. Alphabet (GOOGL) was also a key laggard as the underwhelming chatbot event continued to drag. Walt Disney (DIS) also reversed its gains after reporting earnings and announcing layoffs. Tesla (TSLA) shares were a top performer rising 3% on Thursday, taking its rally to 100% from its January low, bolstered by signs that demand for its EVs are rebounding - particularly with China out of lockdown. Still, Tesla share are down 50% from their record high. The technical indicators on the weekly and monthly charts look interesting – suggesting buying could potentially pick up over the longer term, as reflected in the MACD and RSI.  Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) jump higher The 2-year note Treasury yield rose 6bps to top 4.5% for the first time since November 30th, which means the bond market is beginning to take the Fed more seriously again. The surprise hawkish announcement from Riksbank likely added to concerns that central banks will continue to hike rates. The 10-year yield was up 5bps taking the Treasury yield curve inversion to 86bps, the widest since the 1980s. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) gained as optimism returned Hang Seng Index rallied 1.6% and CSI300 bounced over 1.3% after a week-long consolidation. Xiaomi (01810:xhkg), surging 8.5%, was the biggest winner within the Hang Seng Index. Lei Jun, Chairman and founder of the mobile phone and electronic device maker, announced on Twitter in the form of Q&A with a Chatbot that the company is launching its Xiaomi 13 Series mobile phone on 26 Feb. Alibaba (09988:xhkg) climbed 4% following its announcement of a plan to develop a ChatGPT-like chatbot. The hype on AI-generated content and chatbot spilled over to chip makers with Hua Hong (01347:xhkg) and SMIC (00981:xhkg) each rising over 3%. Mobile phone hardware suppliers Sunny Optical (02382:xhkg) and AAC (02018:xhkg) surged 5.7% and 5.9% respectively. The technology space outperformed overall, with the Hang Seng Tech Index climbing 3.2%. Macao casino operators advanced with MGM, surging 9.2% and other operators gaining 3% to 5%. In A-shares, semiconductors, food and beverage, communication, defense, and internet-of-things stocks led the advance. Northbound flows registered a net buying of over RMB 12 billon. Australian equites (ASXSP200.I) likely to end the week lower, with rate sensitive stocks down the most, while banks and insurers lift ahead of RBA saying more hikes ahead The Energy sector is up the most this week, followed by Materials – with activity in China picking up after Luna New Year holidays. The best ASX200 returns this week so far are from Gold mining giant, Newcrest, up 11%, followed by insurance group Medibank up 5%, while regional bank Suncorp is up 4%. On the downside, Block, also known as Square (SQ, SQ2) fell over 9% this week, after rising for the last 6 weeks. ASX tech logistics giant WiseTech (WTC) fell about 10% so far this week, knock it off its record all time high and ending its four-week strong rally with the logistics industry improving. WiseTech has contracts with global logistics giants including UPS, DHL etc.  FX: SEK outperforms on hawkish Riksbank; JPY awaits new governor The big drag on the USD came from the outperformance of the Swedish krona after Riksbank surprised hawkish (read below). However, the dollar bounced back as Treasury yields picked up in wake of a dismal 30yr auction. Even as EURSEK plunged below 11.20, EURUSD rushed back above 1.0750 and came in close sight of 1.0800, although reversing most of these gains in the wake of dollar strength subsequently. GBPUSD also pushed higher to test the 50DMA at 1.2187 but reversed towards 1.21 later. USDJPY finding it difficult to go below 130 with PM Kishida saying he doesn’t want to surprise the markets with his Governor choice, which is shifting the consensus towards safer bets. AUDUSD failed another attempt at 0.70, awaiting RBA’s quarterly outlook. Crude oil (CLH3 & LCOJ3) dips as investors clip profits WTI oil traded 0.5% lower at $78.06, ending its best three-day rally since December. Some investors moved into profit taking mode, worried about a sagging US economy and that it could drag on oil demand. As the Fed has turned marginally hawkish recently, a large draw in inventories recently is also sending caution about oil demand. This comes despite supply disruptions with exports of Azeri oil from Turkey unlikely to resume until late next week. This has wiped out about 600kb/d of shipments. Meanwhile, Kazakh crude production has been reduced by about 200kb/d due to unplanned maintenance work. Gold (XAUUSD) back lower to test $1860 Gold turned lower again as the surge higher in 2-year yields and the US dollar strengthened, and was testing the $1860 support in early Asian trading hours. A marginally hawkish stance by the Fed members over the last week, coupled with fears from a very strong job market report, continues to bolster the view that interest rates will need to keep rising to contain inflation. Still, if gold manages to stay above the 38.2% retracement of the run up from early November at $1828, the broader uptrend can remain intact.  Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM What to consider? Riksbank’s 50bps rate hike boosts krona The Riksbank hiked the 50 basis points to 3% and guided for “probably” more tightening to come, but importantly also announced an acceleration of bond sales to reduce the balance sheet (QT) in April, which helped boost 10-year Swedish Government bond yields a chunky 20 basis points today, bringing them suddenly close to par against German yields. New Govenror Thedeen’s u-turn on the krona policy helped to bring EURSEK below 11.15, with the 11-handle and 200DMA at 10.81 now in focus. US jobless claims rose but still sub-200k Initial jobless claims rose to 196k from 183k, and above the expected 190k. Continued claims also surpassed expectations and printed 1.688mln (exp. 1.68mln), above the prior 1.650mln. While there is a pick-up in claims, it must be noted that it comes from a low level and still continues to signal a tight labor market. German inflation slows to five-month lows A delayed preliminary inflation print for January was released in Germany yesterday and it retreated to 9.2% YoY from 9.6% in December as government aid to ease the burden on households from soaring energy costs helped ease price pressures. Still, the disinflationary pressure appears to be slower than expected, and the ECB will have to keep its foot on the pedal. Hawkish outcome from Mexico’s central bank Banxico surprised markets with a 50bps rate hike once again and signalled another, smaller hike at the next meeting. Expectations were for a final 25bps rate hike. This appears to be in trend with what we have seen from RBA thins month, as also from the Reserve Bank of India, suggesting broad inflation pressures are still continuing to challenge central banks from considering a pause. China inflation is expected to inch up China’s Inflation may have accelerated as the headline CPI is forecasted to bounce to 2.2% Y/Y in January from 1.8% in December. A surge in in-person service consumption after the reopening may have underpinned some price increases but the upward pressure on the general level of inflation has remained moderate. Rises in vegetable and fruit prices were likely damped by a decline in pork prices. The decline in producer prices is expected to narrow to -0.4% in January from -0.7% in December as industrial metal prices bounced offsetting a decline in coal prices. Australian trade update: Commodity optimism picks up after Lunar New Year, Chinese students to return to AU, RBA inflationary forecasts due today. Could Australian wine tariffs from China be dropped? AUDUSD on watch. Aussie dollar volatility continued this week, with the AUDUSD losing 2% over the last 5 sessions, mirroring commodity prices pulling back. But optimism has started to pick up. The Copper (HG1) price fell 0.6% over the last five sessions, moving up yesterday, while the Iron ore (SCOA) price is 0.6% down on the week, but picked up over the few sessions, with construction kicking off in China - after the Luna New Year break. Plus, a top China economist said interest rates could be cut next quarter. This supports further commodity buying, on top of Fortescue Metals, BHP and Rio Tinto’s quarterly outlooks, hinting China demand will pick up in 2023. China also docked its first Australian coal import shipment in two years yesterday, which supports the Aussie dollar over the medium to long-term, with the market to perhaps see more coal orders. Regardless, the coal export to China will add to quarterly GPD. Supporting Australian GDP this quarter as well - will be the 50,000 influx of Chinese students expected to arrive in Australia this month - ahead of the start of semester. Beijing’s government ruled that degrees earnt online would not be accredited any more. The next catalysts for the AUDUSD might come from the RBA’s quarterly economic forecasts and policy outlook released today. We think the RBA can afford to make upward revisions to its underlying inflation forecasts, given energy prices are expected to pick up later this year - as the AEMO alluded to. Lasty, consider China’s commerce ministry is willing discuss tariffs imposed on Australian wine that began in 2020. Should the tariffs be dropped or reduce, it may encourage China to buy Australian wine again – and add to AU GDP.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Market Insights Today: Yield curve inversion unnerves investors – 10 February 2023 | Saxo Group (home.saxo)
Microsoft Is Replacing The Metaverse With Artificial Intelligence (AI)

AI Divergence Between Microsoft And Google Intensifies

Swissquote Bank Swissquote Bank 10.02.2023 10:34
US stocks failed to keep up with the European optimism on the back of rising bets that the Federal Reserve (Fed) could hike the interest rates to 6%. In fact, option traders are piling into bets that the US rates could peak at 6%. Mexico’s Banxico Plus, the surprise 50bp hike from Mexico’s Banxico, on the back of unexpected – and unwelcomed inflation jump since the end of last year, also raised worries that the US could experience a similar uptick in inflation, and, may have to raise rates higher. Optimism And the strong US jobs market, the latest recovery in energy and commodity prices on the Chinese reopening optimism, and the sudden jump in second-hand car prices are red flags… Stock market The S&P500 fell 0.88% yesterday, and Nasdaq retreated 0.90%. Topsellers will likely remain in charge of the market on the possibility that maybe inflation in the US may have not eased to 6.2% as expected by analysts. But nothing is clear before next Tuesday’s CPI release, in terms of Fed expectations. USD What’s interesting though, is that the hawkish Fed bets don’t translate fully into the US dollar valuation. The US dollar remains under pressure despite the positive pressure on the US yields. And the 50-DMA offers remain particularly solid in the US dollar index. Read next: Twitter Co-Founder Jack Dorsey Comments New Twitter's Owner| FXMAG.COM Bitcoin Finally, Bitcoin fell 5% on news that Kraken stops staking. Negative pressure in tech stocks could further weigh on appetite. Watch the full episode to find out more! 0:00 Intro 0:32 Swiss stocks fell on mixed bag of bad news 2:48 US stocks under pressure as option traders bet for 6% Fed rate 5:25 AI divergence between Microsoft and Google intensifies 5:57 Tesla rallies past $200 but… 6:47 US dollar remains offered at 50-DMA. What are traders waiting for? 7:29 Bitcoin under pressure as Kraken halts staking Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #peak #rate #hawkish #bets #US #inflation #Tesla #Google #Bard #AI #gaffe #Microsoft #ChatGPT #USD #EUR #JPY #Bitcoin #Kraken #CreditSuisse #Trafigura #Swatch #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Saxo Bank Quarterly Outlook: Bullish View On Industrial Metals

Saxo Bank Quarterly Outlook: Bullish View On Industrial Metals

Saxo Bank Saxo Bank 10.02.2023 11:02
Summary:  Our Quarterly Outlook highlighted our significantly bullish view on industrial metals such as copper, aluminium and lithium. We highlight potential stocks to watch ahead, given many of the major metal companies including Albemarle, BHP, Rio Tinto and Pilbara Minerals report financial results and their outlooks in the coming weeks. We believe a theme might be to expect higher commodity prices this year. When picking investments, remember markets are forward looking When assessing sectors and stocks to watch, it’s important to note markets are forward looking.As we are at Saxo - we’re thinking about what markets could look in six to 12 month.With that in mind, and reflecting on Saxo’s quarterly outlook; we wanted to share five stocks to watch; as featured in our Equity baskets and focusing on our bullish view of the commodity sector. Read next: Twitter Co-Founder Jack Dorsey Comments New Twitter's Owner| FXMAG.COM Saxo is bullish on copper, aluminium and lithium    At Saxo, as mentioned in our quarterly outlook, we’re significantly bullish on copper, aluminium and lithium; underpinned by demand from the global green transformation and with hundreds of billions to be invested to achieve climate and car makers goals. Here are three considerations Firstly; The International Energy Agency or IEA – made of 31 countries, including, Australia, the UK, Denmark, the United States and Japan vowed to be emission free by 2050. Some nations plan to end the sale of fuel powered engines by 2035. Meaning - demand for green metals will only increase - while supply is not expected to keep up. This means the trend toward higher commodity prices is likely here to stay. Secondl;  consider how much copper, aluminium and lithium goes into an average EV - 10 kilograms of lithium, 83 kilograms of copper. 250 kilograms of aluminium. But metals are also needed for other battery cells and for building materials as well. Thirdly; consider; investment managers have been increasing their positions into such, metals, given the likes of Tesla, Ford, BMW, Merc, and VW will need to buy more raw materials such as these, to ramping up EVs production. Five stocks to watch; across copper, aluminium and lithium- Albemarle, BHP, Rio, Southern Copper Corp and Pilbara Minerals   These stocks are featured in Saxo equity baskets, to find more click here.  Albemarle (ALB) is the world’s biggest lithium producing company by market size with a US$31.3 billion valuation. It has one the broadest customer groups, selling to Toyota, Ford, Mercedes-Benz, Tesla and GM, and Panasonic. Albemarle is due to report financial results on February 16 as well as its outlook, which will be very telling for the lithium industry. For more on Albemarle head to Saxo’s Lithium or green transformation equity theme baskets. BHP (BHP) is the biggest mining company in the world by market size, with an AUD$243 billion valuation. BHP has historically generated some of strongest cashflows across the globe. Given this – it’s also been able to pay some of the highest dividends in the world, consistently. Consensus expects BHP to pay a full-year gross dividend yield of 14%. For the last reporting period BHP made about 48.7% of its revenue from iron ore, 26.7% from copper and 24.6% from coal. BHP is also attempting to take over copper giant, Oz Minerals, while also moving into fertilisers – with plans to be the biggest fertiliser company in the world. BHP reports full year financial results on February 21 as well as its outlook. Which will give us a further glimpse into future demand for copper, as well as iron ore. For more  on BHP- head to Saxo’s Commodity or Australian Resources basket. Rio Tinto (RIO) is the second biggest diversified miner in the world, with an $178 billion valuation. Last reporting year Rio made 58.1% of its revenue from iron ore, 21.5% from aluminium and 10.9% from copper, and the remainder from other metals. Rio is expected to pay a full-year gross dividend yield of about 11% this year. Rio reports full year financial results on February 22 and its outlook for 2023, which will be interesting given it’s a major aluminium producer. For more on Rio head to Saxo’s Commodity or Australian Resources basket. Southern Copper Corp (SSCO) is another large copper miner. It’s not a large as BHP or RIO in size but it’s market cap size is US$57.3 billion. Last reporting year it made most of revenue from copper. The market expects Southern Copper to pay a full yea gross dividend yield of 5.3% this year. For more on Southern Copper head to Saxo’s Commodity equity basket. Pilbara Minerals (PLS) is Australia largest lithium miner. It has a market value of AU$14 billion. Pilbara’s customers include LG Chem, and China’s Great Wall Motor Company. And believe it or not, one of Pilbara Minerals customers is actually China’s Genfeng Lithium Corp, which is China’s largest lithium company. Pilbara is due to report financial results on February 22. For more, read Saxo’s quarterly outlook at analysis.Saxo.To find out more on the stocks mentioned above, refer to our equity baskets under Research, Stocks.    -- For prior episodes of Stocks Watch  click here.For a global look at markets – tune into our Podcast. Source: Stock watch video: Saxo’s bullish view on industrial metals, copper, aluminium, lithium | Saxo Group (home.saxo)
Federal Reserve splits highlighted by May FOMC minutes

The general misconception about ETF, valuable information for investors and more

David Mann David Mann 10.02.2023 11:22
US market structure was back in the news recently with several stocks experiencing irregular price movements on the morning of January 24. David Mann, Franklin Templeton’s Head of Global Exchange-Traded Funds (ETF) Product and Capital Markets, explains how this event relates to similar events ETFs have seen in the past. On Tuesday, January 24, 2023, the New York Stock Exchange (NYSE) had a problem with its opening auction, which caused the price of many stocks—including names such as McDonald’s and Morgan Stanley—to plummet quickly before recovering shortly thereafter. Like many of you, I’ve been trying to better understand the cause of the issue and possible effects of it, especially as the NYSE considers actions for the impacted trades. I’ve repeatedly read phrases describing the event as: “a trading glitch,” “wild price swings,” “system issues” and a “quick plunge.” But I’ve been completely flabbergasted to not come across the phrase “flash crash.” “Flash crash” are two words that, like “Lord Voldemort,” may send shivers down many spines, particularly for anyone who was part of the ETF ecosystem back in 2010 and 2015. I have discussed the crashes that occurred in those years in some form several times before (also here), mainly to examine how they could happen and what trading strategies could be deployed to avoid them. What was particularly unnerving during those crashes was that, with many of the impacted securities being ETFs, the entire ETF structure was under attack.  Even if no one is calling this the “2023 Flash Crash,” I think that’s exactly what this was. And it happened to some of the most liquid large-capitalization stocks in the United States. With that in mind, here are my two main ETF-related takeaways: Flash crashes have nothing to do with the structure of ETFs In the early days of ETF education, I think there was a general misconception that an ETF would always trade in line with the value of its underlying basket of securities, courtesy of ETF arbitrage. While this is usually the case, it is not always the case. During times of extreme market volatility (or a rare market structure event), an ETF can trade more like a single stock, especially when there is uncertainty in the value of the underlying basket of securities. We saw this occur in March 2020 amid growing instability due to the COVID-19 pandemic. Read next: Twitter Co-Founder Jack Dorsey Comments New Twitter's Owner| FXMAG.COM As for the ETF structure, we now have three decades of proof that these transparent and tax-efficient funds work as designed. Hopefully those days of blaming ETF design are behind us and observers will no longer point at an ETF trade that is not trading perfectly in line with the value of its basket as proof of some fundamental flaw in its structure. A flash crash will happen again After the initial flash crash of 2010, all sorts of protections were put in place by the SEC, including limit up-limit down bands and updated circuit breakers. Despite the measures, the next flash crash occurred five years later. The precautions were tweaked based on new information but even still, those measures didn’t prevent this month’s crash, when some of the most heavily traded stocks in the United States quickly dropped 10% before recovering.  I am sure that some new rules or logic will be put in place once the post-mortem is complete, preventing this opening auction issue from happening again. But whatever the potential rule changes, they will not contemplate the next unimaginable market structure scenario.  So, what should investors do? In my newsletter last year, I surmised that most investors must do a fair amount of due diligence and research prior to purchasing an ETF to get comfortable with the fund’s strategy, management team, etc. This research should extend to the best possible trading strategy. SEC Chair Gary Gensler agreed, noting that “to ensure the best possible price for the investor should be the top priority.” If investors understand the normal trading of an ETF and enter limit orders accordingly, I think they should be fine—even in the middle of a flash crash event. WHAT ARE THE RISKS? All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Generally, those offering potential for higher returns are accompanied by a higher degree of risk. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. For actively managed ETFs, there is no guarantee that the manager’s investment decisions will produce the desired results. ETFs trade like stocks, fluctuate in market value and may trade above or below the ETF’s net asset value. Brokerage commissions and ETF expenses will reduce returns. ETF shares may be bought or sold throughout the day at their market price on the exchange on which they are listed. However, there can be no guarantee that an active trading market for ETF shares will be developed or maintained or that their listing will continue or remain unchanged. While the shares of ETFs are tradable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods of market stress.
TikTok Bans Are Gathering Momentum In The US

Twitter Co-Founder Jack Dorsey Comments New Twitter's Owner

Kamila Szypuła Kamila Szypuła 10.02.2023 10:13
When hours of technical glitches occurred on Twitter on Wednesday, Dorsey expressed frustration on Nostr. Dorsey's comments Dorsey has been posting frequently in Nostr. Twitter Inc. co-founder Jack Dorsey has joined a new social network and is using it to target Twitter's new owner Elon Musk. “Used to be when anything went down, people went to Twitter to talk about it. Now look,”. Dorsey posted on his Nostr profile, which is identifiable by information he posted on his Twitter bio. He added later: “Twitter went from real time to 1 minute delay,” an apparent reference to a glitch that briefly prevented users from tweeting normally but allowed scheduling a tweet to post later. Dorsey's comments are notable as the two businessmen appear to have had a friendly relationship, with Dorsey initially rooting for Musk's takeover. Dorsey has largely not publicly criticized Musk's tenure on Twitter. He only tweeted critically about the renaming of Twitter's fact-checking feature to Community Notes, which Dorsey said was "the most boring Facebook name ever" from Birdwatch. Last year, Dorsey tried to facilitate Musk's takeover of Twitter, according to court documents released as part of a lawsuit over a planned billionaire takeover. Documents show that Dorsey exchanged text messages with Musk and helped arrange a phone call between Musk and Parag Agrawal, who was Twitter's chief executive at the time. Nostra and more Dorsey Nostr's interest is consistent with his recent statements about making social media more decentralized and immune to what he called corporate and government control. In a December blog post, Dorsey said he blamed himself for giving Twitter too much power to regulate speech. Nostr is not the only project recently promoted by Dorsey. He said in a December blog post that he plans to donate $1 million a year to Signal, a messaging app, and will be giving grants to projects focused on open internet and protocol work. Twitter share price Twitter shares have recently gone up and closed at $53.70, Read next: Credit Suisse Reported Its Biggest Annual Loss Since The 2008, Ukrainian President Is Asking For Help And More Weapons In Brussels| FXMAG.COM Ford Ford CEO Jim Farley said in a virtual meeting at City Hall on Thursday morning that he was working to simplify targets and performance metrics for employees, according to those present. Farley told the meeting that tackling broader issues at Ford could not be done on one level and that clearer ways were needed to help individual employees understand what they needed. do to contribute to the overarching objectives of the car manufacturer. Directors said supply chain issues and structural inefficiencies continued to hold back the company's progress. Executives said last week that the automaker plans to tighten its belt more this year and wants to cut costs by more than $3 billion, which it previously tried to cut by mid-decade. Farley also pointed to vehicle quality issues that cost Ford warranty claims and recalls, and said that in some areas the company was employing too many people for the number of cars it produced. In an attempt to streamline the business, Ford laid off thousands of white-collar workers last year, and Ford's chief financial officer, John Lawler, signaled last week in a pay talk that more job cuts could follow. Ford also shut down its Argo AI autonomous driving venture last year, a project that was initiated years ago by another CEO. Ford share price At the beginning of this week, Ford shares fell to 13.14, but in the following days they rose slightly and are now trading at 13.49. Source: wsj.com, finance.yahoo.com
Taming the Dollar: Assessing Powell's Hawkish Tone Amidst BRICS Expansion

And in 2023, many signs are pointing towards China and those economies that benefit from China’s recovery

Stephen Dover, CFA Stephen Dover, CFA 10.02.2023 14:05
What does the concept of inertia have to do with portfolio allocations? Head of Franklin Templeton Institute Stephen Dover explains. Originally published in Stephen Dover’s LinkedIn Newsletter Global Market Perspectives. Follow Stephen Dover on LinkedIn where he posts his thoughts and comments as well as his Global Market Perspectives newsletter. Investors often try to explain the behavior of capital markets through the lens of natural science. If Newton’s Laws of Motion were repurposed into Laws of Investing, we would understand investors “going with the trend” as creating more inertia, increasing the resistance to a change in direction. Newton’s Second Law of Investing would then tell us that the momentum of the price trajectory continues moving in the same direction—unless acted upon by a force. The “second law” is critical: the more inertia, the stronger the force needed to change the direction of the momentum. However, once there is a driving force present, such as the directional force caused by higher interest rates or the random forces of greater economic uncertainty, the trajectory of momentum will inevitably change. When it comes to the merits of a balanced portfolio, investors may find themselves caught up in the inertia of the masses, with most asset classes suffering negative returns in 2022. While equity and fixed markets have broadly rebounded to start 2023, this does not necessarily mean that traditionally diversified portfolios will now deliver on their promise. With the consensus of economists’ forecasts and key market indicators pointing to recession, difficult negotiations to lift the debt ceiling ahead in the United States, and war in Ukraine dragging on, uncertainty continues to dominate the landscape. Diversification still matters We begin with a key point of emphasis—now is not the time for investors to give up on the diversification benefits of holding balanced portfolios, those comprised of stocks, bonds and other asset classes. The extreme outcomes of last year, characterized by large, simultaneous losses on all major asset classes, were an anomaly stemming from unexpectedly high inflation and aggressive monetary policy tightening. In my view, those developments have now largely run their course and, as a result, cross-asset correlations are likely to normalize to historical averages, producing the benefits of diversification. Specifically, the advent of accelerating inflation last year undermined returns across stocks and bonds. Bond yields had to rise to compensate investors in real terms for rising prices. They also had to rise to reflect rapid hikes in short-term interest rates as central banks tightened monetary policies. The result was sharp declines in the prices of government, corporate, and high yield bonds, and emerging market assets. Higher interest rates and greater economic uncertainty also eroded the future value of corporate profits, leading to a compression of stock market valuations. Even though profit growth remained positive last year, falling valuations meant that returns slumped deeply into negative territory. Unexpected inflation always leads to significant setbacks in portfolio returns and, in that sense, 2022 played out exactly as one would have expected. Read next: Policymakers and investors are now acknowledging the benefits of nuclear power and devoting greater research and resources into its development as a sustainable solution| FXMAG.COM But today, as inflation recedes, bonds are bouncing back. Long-term interest rates have fallen nearly a full percentage point from last year’s highest levels, producing positive returns for their holders. Those gains have helped to offset still-mixed performance in US equities, and in the process, offering diversification in balanced portfolios. I believe those diversification benefits, moreover, are likely to endure as inflation continues to fall and as central banks eventually confirm expectations for a pause in rate hikes. Moreover, should economies dip into recession, safer long-dated government bonds and high-quality corporate bonds should provide an important ballast against earnings disappointments for equity markets. In short, while the temptation to give up on diversification is understandable after the wretched performances of stocks and bonds last year, that would be a mistake today. There is probably no better time to be diversified than the present. Why now? The appeal of balanced also reflects an observation I made at the beginning, namely that financial market indicators—such as the yield curve—as well as the consensus of economists, expect a US recession in 2023. And even if an economic recession can be avoided, a profits recession is already underway. According to FactSet, which compiles and analyzes corporate profits, Wall Street analysts anticipate S&P 500 Index corporate profits will fall in the current earnings season (i.e., for the fourth quarter of 2022). Moreover, those same analysts expect negative year-over-year profits growth for the first half of 2023.1 The problem is several-fold. First, most firms are facing higher costs for almost everything—wages, energy, raw materials, transportation, and business services. Despite increasing their own prices over the past year, most are seeing costs rise faster than revenues. As FactSet also notes, S&P 500 Index corporate profit margins have been declining for the past 18 months. Second, growth is beginning to slow, primarily because of tighter monetary policy. Higher interest rates are taking their toll on interest-sensitive sectors of the economy, including housing, commercial construction, capital expenditures and big-ticket consumer items. Given fixed costs, slowing sales increases average total costs, resulting in a further compression of profitability. Third, as firms see their profits squeezed, they begin to cut their expenditures. Hiring is slowing and layoff announcements are increasing. Discretionary purchases are being canceled or cut back. That is one reason why previously high-flying information technology companies are in the spotlight. Search and social media companies are, essentially, advertising platforms and when times get tough, companies slash advertising budgets. Software services and outsourcing of sales services are other candidates for the chopping block. Looking specifically at the United States, the implications across sectors are clear. Large capitalization growth stocks dominate major equity indexes, and these companies are now at the leading edge of the earnings recession. Last year, their poor performance was owed to rising interest rates, which eroded their valuations. This year, their poor performance stems from profits disappointments. Balanced plus Investors content to access equity markets through so-called “passive” indexes that reflect broad market capitalization are likely to see below-average (perhaps even negative) returns in 2023 because they are (passively) over-exposed to those parts of the market where earnings disappointments are likely to be most acute. The answer, however, is not to shun equities. Rather, it is to think more actively about where positive returns are more likely. One possibility is China or, more generally, in equities that benefit from China’s reopening. In the first weeks of 2023, that story is already in plain sight, with equity indexes in mainland China and Hong Kong outperforming the S&P 500 Index. Why China? The answer is macroeconomic momentum. After a disastrous policy of extended and harsh lockdowns, the Chinese government capitulated to COVID-19 late last year, announcing a reopening of the economy. Tragically and yet predictably, infections have skyrocketed, as have deaths (it did not help that vaccination rates are low in China, particularly among the elderly). Yet, for all the human suffering that COVID-19 is presently inflicting on China, infections will soon run their course. Accordingly, economic reopening will proceed. And, just as was witnessed in North America or Europe, reopening will result in a burst of economic activity as pent-up demand is unleashed and productive capacity enhanced. Moreover, unlike any other major economy in the world, China is actively promoting growth via easier credit and fiscal policies. After barely growing in 2022 (officially real gross domestic product grew 3.0%, but the actual rate of growth was probably less), China’s economy is expected to register growth above 5% in 2023.2 What that means is that in a world otherwise characterized by slowing growth and flagging corporate profits, China is an outlier, providing more of both. And it isn’t just China, it is all the economies and companies that do business with China, spanning much of East Asia and Western Europe. Conclusions There are two conclusions I would suggest to investors: diversify and be active. Falling inflation should restore the importance of balance between stocks and bonds in portfolios. And a smarter form of balance is called for. Sticking with past winners is a recipe for disappointment. I think it makes sense to look for where growth and earnings are likely to surprise to the upside. And in 2023, many signs are pointing towards China and those economies that benefit from China’s recovery. Fight inertia as the forces looking to shift the trajectory of the economy and capital markets are gaining momentum. Stephen Dover, CFAChief Market Strategist,Franklin Templeton Institute Endnotes Source: FactSet, “S&P 500 earnings season update,” 20 January 2023. Source: ”China GDP: IMF says 5.2 per cent economic growth possible this year after Covid-battered 2022” South China Morning Post, January 2023. There is no assurance that any estimate, forecast or projection will be realized.   WHAT ARE THE RISKS? All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in an investment portfolio adjust to a rise in interest rates, the value of the portfolio may decline. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio. This is not a complete analysis of every material fact regarding any industry, security or investment and should not be viewed as an investment recommendation. This is intended to provide insight into the portfolio selection and research process. Factual statements are taken from sources considered reliable but have not been independently verified for completeness or accuracy. These opinions may not be relied upon as investment advice or as an offer for any particular security. Source: Quick Thoughts: The dangers of inertia | Franklin Templeton
Markets under Pressure: Rising Yields, Strong Dollar, and Political Headwinds Weigh on Stocks"

Technology Companies Are The Leaders Of The Fall

InstaForex Analysis InstaForex Analysis 13.02.2023 08:00
Technology companies are the leaders of the fall on Friday, which is due to disappointing reports for investors. US consumer price data will be released on Tuesday. Analysts believe that annual inflation in the country slowed down to 6.2% in January from 6.5% a month earlier. On Friday, the US macro statistics were also published. Thus, the consumer sentiment index of the University of Michigan, which reflects the degree of household confidence in the US economy, according to preliminary estimates, increased to 66.4 points in February from 64.9 points in January, while an increase to 65 points was predicted. Dow Jones Industrial Average by 17:47 GMT +3 decreased by 0.16% and amounted to 32645.72 points. Leading losses among the components of the index included Salesforce Inc., down 3.9%, Walt Disney Co. down 1.6% and JPMorgan Chase & Co. - by 1.1%. The value of the Standard & Poor's 500 from the opening of the market fell by 0.27% - to 4070.35 points. The Nasdaq Composite fell 0.7% to 11,706.76. Taxi booking service Lyft Inc. in October-December received record revenue for the second quarter in a row, but the company's forecast fell short of expectations. The share price at the beginning of trading collapsed by more than 35%. Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM Expedia Group's value is down 6.2%. Online travel holding in the fourth quarter reduced its net profit by 2.3 times, while the adjusted figure, as well as revenue fell short of analysts' expectations. Shares of Newell Brands lose 5.8%. The consumer goods maker posted a net loss in October-December and reduced revenue, as well as a weak outlook for the current quarter. Share price of Apple Inc. drops 0.7%, Intel Corp. - by 0.9%, Microsoft Corp. - by 0.8%, Tesla - by 2.7%, Boeing Co. - by 0.2%. At the same time, PayPal Holdings rose 3.5%. The payment system increased its net profit in the fourth quarter by 15%, revenue - by 7%. In addition, the company announced that its chief executive officer, Dan Schulman, intends to leave his post on December 31, 2023. However, he will remain on the board of directors of PayPal. Yelp Inc. online review service. reduced net income by 13% in the last quarter, while revenue grew by a similar amount and exceeded forecasts. Quotes of the company's shares jumped by 7.4%.   Relevance up to 03:00 2023-02-14 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. Read more: https://www.instaforex.eu/forex_analysis/312325
The Commodities Feed: US announces SPR purchase

Crude Oil Prices Surged On Friday After Russia Announced A Production Cut

Saxo Bank Saxo Bank 13.02.2023 08:22
Summary:  U.S. stock markets finished Friday mixed with a small gain in the S&P and weakness in the Nasdaq 100 weighed by higher bond yields. Hang Seng Index and CSI300 Index declined as investors waited for fresh evidence of a recovery in the Chinese economy. Growth in outstanding loans in China picked up to 11.3% YoY in January as banks had been encouraged to lend. The nomination of Kazuo Ueda as the next Bank of Japan governor was a surprise to the market. Crude oil prices surged on Friday after Russia announced a production cut.   What’s happening in markets? US equities (US500.I and USNAS100.I) may be on wobble town this week, with CPI out Tuesday S&P 500 edged up 0.2% in a lackluster session while the tech-heavy Nasdaq 100 slid 0.6% on higher bond yields. Energy was the best-performing sector on Friday, rising nearly 4% as crude oil rose more than 2% on the Russian production cut. Markets seem defensive coming into this week after a 1.1% decline in the S&P last week - worried firstly, the Fed can keep rates higher for longer, triggered by the hot employment report the week before followed by hawkish Fed speaker comments last week. This week, the focus will be on the CPI data on Tuesday. In individual stocks, Lyft (LYFT:xnas) tumbled 36.5% after the ride-hailing company guided Q1 EBITDA at USD5 to USD15 million, far below the consensus of USD83.6 million, noting price cuts to keep customers against completion from Uber (UBER:xnys). Paypal (PYPL:xnas) rose 3% on Q4 results and earnings guidance beating analyst estimates. Spotify (SPOT:xnys) gained 3.5% following activist investment company ValueAct Capital Management took a stake in the music-streaming company. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) bear steepened The long end of the curve led the sell-off in Treasuries, with yields on the 10-year jumping 7bps to 3.73% and those on the 2-year climbed 4bps to 4.52%. The University of Michigan consumer sentiment index came at 66.4, above the 65.0 expected and the highest level in 11 months. One-year inflation expectations edged up to 4.2% from 4.0% while the 5-10-year inflation expectations remained unchanged at 2.9% Y/Y. Traders were cautious ahead of the CPI report on Tuesday and the upcoming supply from a 20-year auction this Wednesday. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) declined for the second week Hang Seng Index dropped 2% on Friday to finish the week with a second weekly loss in a row. Technology stocks, consumer discretionary, and healthcare names led the decline. Hang Seng Tech Index tumbled 4.6%. Baidu (09888:xhkg), plunging 7.4%, was the biggest loser within the Hang Seng Index. JD.Com (09618:xhkg) dropped 6.3% despite the e-commerce giant announcing plans to launch its ChatJD and jump on the ChatGPT-like AI-generated content bandwagon. Sportswear stocks were laggards. Shenzhou ( 02313:xhkg ), Anta ( 02020:xhkg ), and Li Ning (02331:xhkg) slid between 4% and 5.6%. Shares of EV makers tumbled, XPeng (09868:xhkg) down 7.9%, Li Auto (02015:xhkg) down 7.6%, Nio (09866:xhkg) down 6.6%. SMIC declined 4.3% after the chipmaker warned of a gloomy 2023 and guided full-year revenue down 10%-13%. Standard Chartered Bank (02888:xhkg) rose 4.2% in Hong Kong trading but its London-listed shares fell 5% after First Abu Dhabi Bank said it is not evaluating an offer. In A-shares, CSI300 slid 0.6% on Friday and was down 0.8% for the week. Solar, lithium, coal mining, non-ferrous metal, auto, and semiconductors were laggards. Investors are waiting for more evidence of a recovery in the Chinese economy. The stronger-than-expected growth in corporate loans in China was released after the market close. Australian equites (ASXSP200.I) could also wobble street, if employment data is hotter than expected and commodities pair back with a higher US dollar This week investors and traders will be focused firstly – Australian employment data out for January, due on Thursday, expected to show employment rose by 20,000 from the prior drop, with the unemployment rate expected to remain unchanged at 3.5%. Also importantly, consider the Aussie share market, may be potentially vulnerable for a pair back as the Australian 10 year bond yield has moved up aggressive to 3.81%- its highest level since January. The reason for this, is that the market is expecting the RBA to make ~78.6bps of hikes before pausing in August. So this means unprofitable tech companies and those businesses that don’t pay a dividend yield are vulnerable. FX: SEK reverses gains, CAD boosted by strong jobs and oil The US dollar continued to gain amid renewed risk aversion on Friday, but gains were somewhat capped by gains in CAD as oil prices soared after the Russian supply cuts and Canadian jobs report smashed consensus expectations ten times over. USDCAD reversed from 1.3450+ levels to 1.3350. Meanwhile, USDJPY ended the week nearly unchanged and may be looking at further volatility with higher yields, rising oil prices and the new BOJ Governor. Meanwhile, SEK reversed from the highs after a hawkish surprise from the Riksbank last week. EURSEK back above 11.15 and EURUSD down to 1.0670 from 1.087 levels last week. Crude oil (CLH3 & LCOJ3) moves higher on Russian supply falling Oil prices jumped higher on Friday, closing the week with over 8% gains, as Russia said it would lower production in response to western sanctions (read below). The OPEC+ alliance, which Russia is key member, signalled they won’t be increasing output to fill in for the reductions, signalling a tight market may be ahead. WTI rose to $80/barrel and Brent touched close to $87, although some profit taking emerged in early Asian hours on Monday. Oil prices still continue to trade within a range that has prevailed since November. Meanwhile, other supply returned to the market with Tanker loadings of Azeri crude docking at Turkey's Ceyhan terminal. Gold (XAUUSD) has its eyes on US CPI this week Gold continues to consolidate near $1860, despite pressure from rising US yields. This week’s US CPI release continues to be on watch to assess if the disinflationary narrative can continue even with a new methodology of calculating. A rhetoric shift in global central banks has been seen last week with more hawkish surprises, and the CPI will be the latest test if that narrative can continue to build. Gold however still getting support from rising US-China tensions. Further weakness carries the risk of an extension towards $1828, the 38.2% retracement of the run up from early November.  Read next: UK Economy Suggest That Inflation Will Drop| FXMAG.COM What to consider? Bank of Japan picks a dark horse for Governor post Japan PM Kishida in a shocking announcement on Friday nominated a dark horse candidate Kazuo Ueda as the next governor for the Bank of Japan after Kuroda steps down in April. BOJ executive director (in charge of monetary policy) Shinichi Uchida and former Financial Services Agency commissioner Ryozo Himino were also nominated as deputy governors. Ueda is an academic and a former member of the BOJ policy board, and digging his prior speeches has revealed that he has more of a neutral stance, compared to the dovish Amamiya who was reportedly offered the role but rejected it. His appointment suggests we could see some tweaks in BOJ’s ultra-easy monetary policy, but expecting an outright removal of yield curve control policy appears aggressive now. Fed’s Harker highlights higher-for-longer rates Philly Fed President Patrick Harker (voter) said the likelihood of the Fed being able to control inflation without triggering a recession is growing, but stressed that the key rate must get above 5% and stay there to ensure price pressures ease. He also hinted at a “couple” more 25-bps rate hikes being in the pipeline, but said that how far the Fed will need to go above 5% will be determined by the data. He also talked about rate cuts, but dismissed the possibility in 2023. Focus turns to Michelle Bowman who speaks at a banking conference today. Russia’s production cut to further tighten the oil market On Friday, Russia announced a unilateral cut in its March crude oil output by 500,000 barrels a day, apparently without consulting with its OPEC+ partners first. Since the introduction of EU and G7 sanctions on crude oil from December and fuel products from early February, Russia has increasingly been forced to cut its selling price as its client base continued to dwindle. If oil prices continue to charge higher, OPEC may need to fill the gap by ramping up production, especially in light of an expected pickup in Chinese demand this year. China’s CPI rose to 2.1% in January China’s CPI rose to +2.1% Y/Y in January from 1.8% in December, in line with expectations. The increase was largely due to the fact that the Lunar New Year fell into January this year while it was in February last year and a larger than expected 6.2% Y/Y food price inflation in January versus 4.8% in December. Excluding food and energy, core CPI came in at 1.0% Y/Y, edging up from 0.7% in December. In January, services inflation picked up to 0.8% M/M but was still benign on a year-on-year basis, coming at 1.0% Y/Y in January, rising moderately from 0.6% Y/Y. Producer price deflation deepened, with PPI falling 0.8% Y/Y, versus -0.5% Y/Y expected and -0.7% Y/Y in December. The larger decline in CPI was driven by falling crude oil and coal prices. Growth of outstanding RMB loans in China accelerated to 11.3% Y/Y New aggregate financing increased to RMB5,980 billion from RMB1,306 billion (revised down from RMB1,310 billion) in December, above RMB5,400 forecasted in Bloomberg’s survey. However, due to a high base last year, the growth in total outstanding aggregate financing slowed to 9.4% Y/Y in January from 9.6% in December. The strength in credit expansion came from a larger-than-expected increase in new RMB loans to RMB4,900 billion versus RMB4,200 billion expected and RMB1,400 billion in December, as regulators instructed banks to provide more credits to support key industries and the economy. RMB4,680 billion of these new loans were extended to the corporate sector while only RMB257 billion went to households. The RMB257 new loans to households were much below the RMB843 billion a year ago. The growth in M2 accelerated to 12.6% Y/Y in January from 11.8% in December, above the 11.7% expected. Geopolitical tensions rising U.S. officials said an “unidentified object” has been shot down by its military over Lake Huron. This is the third time in as many days, after earlier downings in Alaska and Canada, and it is the fourth this month to be shot down over North America by a US missile. As debris from these is being evaluated, now the Chinese government says it has spotted a mystery object over waters near northern port city Qingdao and it is preparing to shoot it down. Singapore’s DBS Bank announces special dividend Singapore’s largest bank DBS Group (D05:xses) reported Q4 earnings this morning, with net income up 69% at S$ 2.34bn vs. estimate of S$2.17bn. Higher interest rates continued to boost its income and more than offset other declines due to volatility in financial markets. The board has declared a final dividend of 42 cents a share for the fourth quarter, up from 36 cents a year ago, and a special dividend of 50 cents a share. This brings the total payout for the full year to $2 a share. Other banks including Oversea-Chinese Banking Corp (O39:xses) and United Overseas Bank (U11:xses) are due to report results next week.   For a global look at markets – tune into our Podcast.   Source: Market Insights Today: New BOJ chief; Russian crude production cut; Strong loan growth in China – 13 February 2023 | Saxo Group (home.saxo)
Cryptocurrency payments are steadily increasing, particularly as the DeFi market rebounds from the ‘crypto winter’

On Friday, U.S. stocks closed mixed. The Dow Jones Industrial Average climbed 169 points, the S&P 500 rose to 4,090, while the Nasdaq 100 fell 76 points

Intertrader Market News Intertrader Market News 13.02.2023 11:34
DAILY MARKET NEWSLETTER February 13, 2023               Pre-Market Session News Sentiment Technical Views           EUR/USD   Euro Stoxx 50 (Eurex)   Brent (ICE)                 Please note that due to market volatility, some of the key levels may have already been reached and scenarios played out.                     Price Movement Analyst Views Target Pivot   Dax (Eurex) 15,295.00 -36.00 (-0.23%) Read the analysis 15,210.00 15,505.00     FTSE 100 (ICE Europe) 0.00 0.00 (0.00%) Read the analysis 7,817.00 7,880.00     S&P 500 (CME) 4,083.00 -16.75 (-0.41%) Read the analysis 4,106.00 4,079.00     Nasdaq 100 (CME) 12,288.50 -57.75 (-0.47%) Read the analysis 12,240.00 12,420.00     Dow Jones (CME) 33,783.00 -112.00 (-0.33%) Read the analysis 33,920.00 33,740.00     Crude Oil (WTI) 78.83 -0.89 (-1.12%) Read the analysis 78.25 80.00     Gold 1,858.37 -7.206 (-0.39%) Read the analysis 1,853.00 1,868.00                     MARKET WRAP           Market Wrap: Stocks, Bonds, CommoditiesOn Friday, U.S. stocks closed mixed. The Dow Jones Industrial Average climbed 169 points (+0.50%) to 33,869, the S&P 500 rose 8 points (+0.22%) to 4,090, while the Nasdaq 100 fell 76 points (-0.62%) to 12,304.The U.S. 10-year Treasury Yield jumped 8.4bps to 3.742%.Regarding U.S. economic data, the University of Michigan consumer sentiment index rose to 66.4 in February (vs 65.0 expected).Investors are watching closely U.S. inflation data which will be released on Tuesday (February 14). It is expected that the inflation rate ticked down to 6.3% on year in January.Energy (+3.92%), utilities (+2.00%), and food, beverage & tobacco (+1.08%) sectors gained the most, while automobiles (-4.52%), semiconductors (-2.02%), and media (-1.13%) sectors were under pressure.Marathon Oil Corp (MRO) rose 6.20%, Valero Energy (VLO) climbed 6.12%, and APA Corp (APA) was up 6.11%.Tesla (TSLA) fell 5.03%, Ford Motor (F) dropped 5.63%, and Nvidia (NVDA) was down 4.80%. Lyft (LYFT) plunged 36.44% after the ride-sharing company posted lower-than-expected fourth-quarter earnings and gave disappointing sales guidance.Expedia (EXPE) fell 8.55% as the online travel agency's quarterly earnings missed expectations. Read next: Amazon Is Slowly Dismantling Tony Hsieh’s Version Of Zappos, Louis Vuitton Doubled Sales| FXMAG.COMNews Corp (NWSA) slid 9.37%. The media conglomerate reported lower-than-expected quarterly earnings, and announced plans to cut about 1,250 jobs this year, or 5% of its work-force.PayPal (PYPL) rose 3.03%. The online payment firm reported quarterly sales that missed expectations, and said CEO Dan Schulman will retire at the year-end.European stocks closed lower. The Dax 40 fell 1.39%, the CAC 40 dropped 0.82%, and the FTSE 100 was down 0.36%.U.S. WTI crude futures gained $1.80 (+2.31%) to $79.84 a barrel.Gold price added $3 to $1,865 an ounce.Market Wrap: ForexThe U.S. dollar index stepped up to 103.58.EUR/USD dropped 63 pips to 1.0677.USD/JPY fell 21 pips to 131.38.GBP/USD dropped 65 pips to 1.2056. U.K. data showed that the gross domestic product declined 0.5% on month in December (vs -0.1% expected), while industrial production grew 0.3% on month (vs -0.2% expected).USD/CAD slid 111 pips to 1.3343. Canada's data showed that the economy added 150,000 jobs in January, much higher than an addition of 15,000 jobs expected.AUD/USD declined 17 pips to 0.6919.USD/CHF added 15 pips to 0.9238. Bitcoin traded lower to $21,700.Morning TradingIn Asian trading hours, USD/JPY rebounded further to 131.85.Meanwhile, EUR/USD fell to 1.0665 and GBP/USD remained subdued at 1.2048.Gold retreated to $1,861.Bitcoin edged up to $21,767.Expected TodayNo major economic data expected.           UK MARKET NEWS           Health Care, auto & parts and oil & gas shares gained most in London on Thursday.In the oil & gas sector, BP (+2.62% to 560p) closed at a 3-month relative high against the FTSE 100.From a technical point of view, Croda International (-3.67% to 6710p) crossed under its 50-day moving average.           ECONOMIC CALENDAR           Time Event Forecast Importance   08:00 Fed Bowman Speech   MEDIUM     11:00 Consumer Inflation Expectations (Jan) 4.7% LOW     11:30 3-Month Bill Auction   LOW     11:30 6-Month Bill Auction   LOW                                     NEWS SENTIMENT           Allianz SE ALV : XETRA 219.90 EUR +0.27% In the last 5 days         NEWS SENTIMENT (24H) Very Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Standard Chartered PLC STAN : LSE 729.40 GBp +8.64% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Phoenix Group Holdings PLC PHNX : LSE 621.80 GBp -2.11% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   BP PLC BP. : LSE 560.00 GBp +17.07% In the last 5 days         NEWS SENTIMENT (24H) Neutral       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   AstraZeneca PLC AZN : LSE 11,390.00 GBp +7.66% In the last 5 days         NEWS SENTIMENT (24H) Negative       TECHNICAL SCORE Short-Term Medium-Term Long-Term                                   Rio Tinto PLC RIO : LSE 5,967.00 GBp -1.32% In the last 5 days         NEWS SENTIMENT (24H) Positive       TECHNICAL SCORE Short-Term Medium-Term Long-Term                           TECHNICAL VIEWS           EUR/USD Intraday: under pressure.   Pivot: 1.0685   Our preference: Short positions below 1.0685 with targets at 1.0650 & 1.0630 in extension.   Alternative scenario: Above 1.0685 look for further upside with 1.0715 & 1.0740 as targets.   Comment: The RSI is mixed to bearish.                     Euro Stoxx 50 (Eurex)‎ (H3)‎ Intraday: key resistance at 4246.00.   Pivot: 4246.00   Our preference: Short positions below 4246.00 with targets at 4180.00 & 4155.00 in extension.   Alternative scenario: Above 4246.00 look for further upside with 4262.00 & 4279.00 as targets.   Comment: As long as the resistance at 4246.00 is not surpassed, the risk of the break below 4180.00 remains high.                     Brent (ICE)‎ (J3)‎ Intraday: consolidation.   Pivot: 86.60   Our preference: Short positions below 86.60 with targets at 84.75 & 84.00 in extension.   Alternative scenario: Above 86.60 look for further upside with 87.30 & 88.00 as targets.   Comment: The RSI is bearish and calls for further downside.        
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

Saxo Bank Podcast: US CPI Ahead, What Might Happen If The Economy Re-Accelerates And More

Saxo Bank Saxo Bank 13.02.2023 12:04
Summary:  Today we look at the market narrative around the coming "landing" and what might happen if the economy re-accelerates and the market has to price in a "no landing" scenario. The key is the long end of the yield curve, which has remained very anchored for a few months. Elsewhere, we discuss the important US January CPI release coming up tomorrow, discuss Interesting stocks to watch as some vulnerable companies seek liquidity and Lyft craters in contrast to Uber's recent report, and look at earnings reports up today. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: What does a "no landing" scenario look like? | Saxo Group (home.saxo)
Central Bank Policies: Hawkish Fed vs. Dovish Others"

Market Expectations For The Fed Path And Domination Of US CPI In The Rhetoric This Week

Saxo Bank Saxo Bank 13.02.2023 12:12
Summary:  Market expectations for the Fed path has come back in-line with the December dot plot, with Fed speakers turning hawkish at the margin since the bumper January jobs report. While US CPI is key early in the week, focus will shift back to Fed commentaries later in the week. Market narrative has shifted swiftly from recession at the end of 2022 to soft landing in early 2023, and expectations of a re-acceleration in cyclical growth on the back of a strong labor market are now picking traction. Bond markets are starting to reflect this changing perception, with yields rallying strongly. US 2-year yields reached their highest levels since November, above 4.5%. Market pricing of the Fed’s path has also started to converge with the December dot plot, bringing the terminal rate to 5-5.25% and slowly pushing out the two rate cuts priced in for this year. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM A general hawkish tilt has returned in Fed communications, but this week US CPI will dominate the rhetoric in the first half of the week. If inflation is hotter than expected, or even if continues to be sticky, the disinflation narrative started by Chair Powell at the last Fed meeting could continue to come under the scanner. A host of Fed speakers are lined up for the week, and their take on the inflation and jobs data could continue to unnerve the markets.   Source: Fedspeak Monitor: The hawks are lining up again | Saxo Group (home.saxo)
Bitcoin Is Strongly Bearish, So A Further Drop Is Natural

Bitcoin's Further Movement In The Coming Days Will Depend On The Behavior Of The Stock Market

InstaForex Analysis InstaForex Analysis 13.02.2023 14:11
The previous week ended with the beginning of a long-awaited corrective movement for Bitcoin. At the end of Thursday, the cryptocurrency formed the largest red candle from November 9, and the price made a bearish breakdown of the $22k level. Bitcoin spent the weekend calmly consolidating below the $22k area. Buyers managed to stop the fall, and the price consolidated near the $21.8k support area. There are no clear signals for further price movement due to a decline in trading activity. However, this week can be the starting point for a deeper correction and a resumption of the bullish trend. Inflation data The Wall Street Journal reported that investors expect a probable extension of the key rate hike cycle by one month. They also noted the strong labor market as the main argument of the Fed in extending the period of raising the key rate. But there is a possibility that this will not happen if the pace of inflation decline accelerates. That is why the publication of statistical data on the consumer price index this week may become a key signal that will set the medium-term trend for the movement of risky assets. The consumer price index is at 6.5%, and according to the forecasts, the index will fall to 5%. Experts are betting on a further acceleration of the deflationary movement, and if the forecasts do not match the facts, the market reaction could be painful. In addition, the Securities and Exchange Commission is actively taking on the crypto market. The SEC recently succeeded in halting the stacking of a major U.S. crypto exchange. As of February 13, the regulator also influenced Paxos to stop the issuance of BUSD stablecoin. All actions of the SEC at the current stage have clearly negative consequences for the crypto market, as they scare away investors. In the long term, this may be a positive signal due to the likely increase in the level of security in the crypto market, but right now, the SEC policy is destructive for the price of crypto assets. Bitcoin and SPX Bitcoin retains a high correlation with the SPX index, and, as already noted, it was the activation of sellers on the stock market that contributed to the fall of both risky assets. According to Santiment experts, the positive correlation of BTC and SPX complicates the upward movement of the cryptocurrency. In addition, experts from the world's leading banks predict an early completion of the SPX rally and the beginning of a corrective movement to $3,500–$3,600. Morgan Stanley once again said that investor interest in SPX and stock indices reached a peak, after which a sell-off usually followed. BTC/USD Analysis Over the weekend, we saw local attempts by buyers to break through the round level of $22k. These attempts were completely absorbed by the sellers, after which the price returned to the usual area of $21.5k–$21.8k. Much of Bitcoin's further movement in the coming days will depend on the behavior of the stock market, and hence the results of the deflationary movement. If the forecasts correspond to the actual data, we should expect an upward movement of Bitcoin to the levels of $22.5k–$22.7k, where there is a local resistance zone. Subsequently, the cryptocurrency will need to gain a foothold above $23k in order to finally level out the bearish scenario. Otherwise, the price will start to decline, and the expected targets will be Fibo levels. This means that BTC/USD will move to the second stage of correction, which may become deeper. Results In any of the cases, except for fixing the price above $23k, Bitcoin is moving towards the second stage of correction. The estimated targets for the asset will be the $21.4k level and deeper to the $20k area. Below $21k, investor sentiment could drop heavily, which could lead to a breakdown of the $20k round mark. However, if the bullish sentiment persists, which will be visible on the main on-chain metrics, we will see active accumulation in the $20k–$21k area. Subsequently, this will allow Bitcoin to continue its upward movement towards the $24k–$25k levels.   Relevance up to 09:00 2023-02-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/334911
US Inflation Slows as Spending Stalls: Glimmers of Hope for Economic Outlook

Tesla Believes That Revenue Will Grow 28% To A New Record, The Bank Of England Hinted That The 50bps Rate Hike May Have Been Their Last

Saxo Bank Saxo Bank 14.02.2023 08:48
Summary:  Today is the U.S. CPI day which may set the near-term directions of the stock, bond, and forex market. Investors are cautious about the additional uncertainties from the impact of the new CPI compilation methodology and seasonality. U.S. equities rallied and bond yields slipped modestly. Oil prices were lower as US announced plans to sell more crude from its strategic reserves. Japanese Yen extends weakness awaiting the official announcement of the nomination of Ueda as the new BOJ governor. Hong Kong’s Hang Seng was dragged by rights offering from Link REIT.   What’s happening in markets? US equities (US500.I and USNAS100.I) rallied as inflation expectations dropped After S&P500 made its biggest weekly drop in 2023 last week, US stocks started the week in positive territory, with the S&P500 gaining 1.1% and Nasdaq 100 advancing 1.6%, supported by the New York Fed Survey of Consumer Expectations that showed expectations for household income expectations falling from 4.6% to 3.3%. That’s the largest one-month drop in the nearly 10-year history of the series. We’ve seen investors cautious ahead of US inflation data being released on Tuesday and that may be hotter than expected, with a new CPI weighting being used. All but energy within the 11 S&P 500 sectors gained on Monday, led by information technology, consumer discretionary, and consumer staple. Microsoft was one of the best performers, up 3% on Monday as analysts were upbeat on the tech giant’s growth potential. Twilio gained 2.1% following the announcement to cut 17% of its workforce. Tesla flashes red signals after a record rally; meaning some of its gains could be unwound Tesla was one of the weakest in mega caps on Monday, while suffering its biggest two-day fall since January, losing 6.1%. Tesla shares have been bouncing off their lows and were up as much as 100% from their January 2023 lows, but now investors are trimming gains and Tesla is trading 93% above its low. The market believes the Fed will pause rate hikes in Q2 which supported buying in Tesla, while the company pledged to roll-ahead with scaling up production targets. Consensus believes in 2023 Tesla’s revenue will grow 28% to a new record, with EBITDA expected to swell 20% also to a new record, with 12.5% EPS growth. But, from a technical perspective, Tesla’s relative strength index (RSI) is showing the stock is now in the overbought territory - that could signal a potential reversal. The last time Tesla was this overbought was in November 2021 amid tech enthusiasm. The long end of US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) was well bid In a quiet and choppy session, yields on the 2-year finished unchanged while yields on the 10-year were 3bps richer. The terminal Fed Fund rate, as being priced in by the market, edged up to 5.23%. Fed Governor Michelle Bowman said the Fed is “still far from achieving price stability” and she expects that “it will be necessary to further tighten monetary policy”.  Traders are cautiously waiting for the much-anticipated CPI report today. Hong Kong’s Hang Seng (HIG3) pared losses and China’s CSI300 (03188:xhkg) gained on consumer stock strength Hang Seng Index slipped 0.1%, as shares of Hong Kong local property developers tumbled across the board dragged by a 12.8% collapse in Link REIT (00823:xhkg). The largest REIT in Hong Kong that operates shopping centers and real estate retail spaces announced a rights offering for HKD19.3 billion at a 30% discount to its previous close. New World Development (00017:xhkg) plunged 6.7%; Henderson Land Development (00012:xhkg) declined 4.8%; Wharf Real Estate (01997:xhkg) lost 2.9%. The benchmark index clawed back most losses as Chinese consumer names rallied, with China Resources Beer (00291:xhkg) up 4.9%, Haidilao (06862:xhkg) up 4.7%, Budweiser Brewing ( 01876:xhkg) up 3%, and Li Ning (02331:xhkg) up 2.4%, China Mengniu (02319:xhkg) up 2.2%. Chinese hotpot restaurant chain, Xiabuxiabu (00520:xhkg) surged 8.6%. In A-shares, CSI300 advanced by 0.9% led by Chinese white liquor, beverage, beauty care, marine equipment, and construction materials. Kweichow Moutai (600519:xssc) gained 2.6%. FX: Yen weakness extends despite yields cooling off, commodity currencies gain Dollar gains cooled off slightly on Monday as traders positioned for US CPI release due today, and risk assets rallied with gains in US yields cooling off after the recent run higher. Michelle Bowman added to the Fed chorus insisting on more rate increases to rein in inflation, saying "we are still far from achieving price stability. But the Japanese yen was still pressured lower, and USDJPY took a look above 132.50 as expectations of BOJ governor candidate Ueda altering the policy stance retreated. Upbeat risk sentiment lifted NZDUSD to 0.6360 from sub-0.63 levels earlier in the day, while AUDUSD drifted towards the key 0.70 level as well but calls for RBA governor Lowe’s resignation may keep the gains in check. GBPUSD back higher to 1.2150 and labor market data is on tap today. EURUSD back above 1.0720. Aussie dollar moves back toward 0.70 with commodities moving up The Aussie moved up 0.7% after the US dollar fell back, while commodity prices rose - also supporting the Aussie dollar. Notably, metal prices have been declining for week but moved up overnight, with Copper up 1%. The next catalyst for the AUDUSD pair will be if business confidence out today, is strong expected - it could trigger more upside. Plus the market would want to see stronger than expected Australian employment data for January- on Thursday, to also support the risk-on rally. But there is a risk, AU jobs data won’t be as strong as expected by the market, given the lag interest rates effects in Australia. 20,000 jobs are forecast to have been added, with steady unemployment rate. The Australian bond market suggest less caution is in the air, with the Australian 10-year bond yield down to 3.74% (highest levels since January). But the major catalyst will be the strength of the USD - that could change direction for the AUDUSD pair. Crude oil (CLH3 & LCOJ3) prices choppy as supply fears ease Crude oil prices started the day trying to move higher as traders assessed the impact of Russia’s supply cuts. However, the importance of Russia’s energy supplies has gone down over the last year as Europe has diversified its energy sources and Russia’s oil and gas has continued to flow around the world at discounts of well over 30%. This helped ease fears of a supply shock, also helped by US planning to sell 26mn barrels of oil from its strategic reserves. WTI prices dropped from over $80/barrel to ~$79 while Brent was below $87. The UAE said markets remain balanced and OPEC+ producers don't need to intervene. Elsewhere, the US shale industry remains reluctant to ramp up drilling activity despite strong cash flows.  Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM What to consider? Japan’s Q4 GDP comes in below expectations Japan's economy grew an annualised 0.6% in the final three months of 2022, bouncing back from the previous quarter's revised contraction of -1.0% but still coming in below expectations of a 2% gain. The return of inbound tourists offset a slowdown in capital expenditure and exports. With economic momentum still weak, new BoJ governor Ueda will continue to face a challenging task in shifting away from the ultra-loose monetary policy. US CPI on the radar - volatility risks higher with uncertain impact of new methodology While investors firmly believe that inflation is on a downward trajectory, month-on-month variations still remain on watch. More importantly, this month brings a change in methodology, which adds further uncertainty to the release. If we take the last few month’s revisions for core CPI into account based on the new methodology, there is reason to believe that the new weights could mean an upward push to inflation. Average core CPI for the last three months of 2022 has gone up from 3.1% to 4.3% with the new seasonal factors released by the BLS. Fed whisperer Nick Timiraos, a WSJ reporter, is warning of a potential upside surprise in January US CPI data due to seasonality. Moreover, milder weather in January compared to December, as well as an upward swing in jobs, could mean demand pressures picked up further traction. Bloomberg consensus expects headline CPI to soften to 6.2% YoY from 6.5% YoY in December, while the MoM picks up to 0.5% from a revised +0.1% previously. January CPI data will be out today at 2130 SGT. UK labor market data due today The Bank of England hinted at the February meeting that the 50bps rate hike may have been their last. This week’s inflation, jobs and retail sales data will however be key to determine if another hike may be seen in March. Labor data is out on Tuesday, and expected to continue to show a tight labor market. The unemployment rate over the last quarter is likely to remain unchanged at 3.7% as per Bloomberg consensus while the employment gains are expected to pick up to 43k from 27k previously. Wage pressures are also expected to sustain with average weekly earnings up 6.2% YoY in the December quarter from 6.4% before. Singapore’s budget today may look at post-Covid fiscal strategy Singapore’s annual budget will be presented today and measures may be taken to phase out Covid-era stimulus as the economy looks to re-balance spending towards longer-term goals. Still, inflation remains high and the low-income groups will likely continue to get support. Still, long-term focus on green transition and digitization is likely to be a key theme. This could bring companies like Sembcorp and Keppel Corp into favor due to their push to reduce carbon emissions. EV adoption push is also likely, helping ComfortDelGrow due to their increasing fleet of EVs. Lithium giant Albemarle earnings ahead This week, the world's biggest lithium company, Albemarle reports earnings. Given its size and scale - with it selling to most EV makers including - Toyota, Ford, Mercedes, GM, Hyundai, Kia, Nissan, Tesla and Renault – we think Albemarle will be a proxy for what we can expect from lithium companies' earnings. Consensus expects operating profits to have improved and rise to $1.05 billion. EBITDA is expected to grow to $1.22 billion, while net debt is expected to drop, with adjusted EPS forecast to grow to 8.19. Coco-Cola reports today Investors can get more information about the state of U.S. consumers and margin trends in consumer staples from the results and management’s comments on the business outlook from Coco-Cola (KO:xnys) today.   For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.       Source: Market Insights Today: All eyes on US CPI today – 14 February 2023 | Saxo Group (home.saxo)
Albemarle Will Be A Proxy For What We Can Expect From Lithium Companies' Earnings, Tesla Maintains Its Lofty Production Targets

Albemarle Will Be A Proxy For What We Can Expect From Lithium Companies' Earnings, Tesla Maintains Its Lofty Production Targets

Saxo Bank Saxo Bank 14.02.2023 08:55
Summary:  Watch our video in under four minutes or read the text for what’s happening with Tesla shares, and Albemarle, the lithium proxy, plus what to consider if you are investing or trading. Tesla flashes red signals after a record rally; meaning some of its gains could be unwound  Tesla was one of the weakest in mega caps on Monday, while suffering its biggest two-day fall since January, losing 6.1%. Tesla shares have been bouncing off their lows and are up 93% with investors hopeful the Fed will pause rate hikes. However, some investors have been trimming gains, with the Fed hinting it could keep rates higher for longer. However, Tesla’s bulls may argue a potential Fed pause could support higher earnings, while Tesla maintains its lofty production targets. Consensus believes Tesla’s 2023 revenue will grow 28% to a new record, with EBITDA expected to swell 20% to a new high, with 12.5% EPS growth. However, from a technical perspective, Tesla’s relative strength index (RSI) is showing the stock rally is slowing, with Tesla trading in so called overbought territory - a technical level that could signal a potential reversal. The last time Tesla was this overbought was in November 2021. Lithium giant Albemarle reports earnings. Its results will be telling for the lithium sector's outlook   This week, the world's biggest lithium company, Albemarle reports earnings. Given its size and scale - with it selling to most EV makers including - Toyota, Ford, Mercedes, GM, Hyundai, Kia, Nissan, Tesla and Renault – we think Albemarle will be a proxy for what we can expect from lithium companies' earnings. And its outlook could also guide us for what to expect this year from the lithium sector. Consensus expects operating profits to have improved and rise to $1.05 billion in the quarter. EBITDA is expected to grow to $1.22 billion, while net debt is expected to drop, with adjusted EPS forecast to grow to 8.19. Click here to look at more stocks to watch across the metals sector this week. For a list of lithium stocks and EV metal stocks, refer to Saxo's Equity baskets under Research, Stocks.   Read next: GBP/USD Started The New Week In A Calm Way, EUR/USD Is Waiting For US CPI Report| FXMAG.COM For our team's weekly look at markets, click here.  To listen to our global team's take on markets - tune into our Podcast.   Source: Video: Tesla shares flash red and could pull back. Albemarle, the lithium proxy is expected to report higher earnings | Saxo Group (home.saxo)
FX Market Update: Dollar Strengthens on Higher-For-Longer Narrative Amid US Data Resilience

Walmart Plans To Close Offices, Ford Invests In Battery Factories

Kamila Szypuła Kamila Szypuła 14.02.2023 10:26
Walmart Inc plans to close three of its tech centers in the US and require hundreds of employees to relocate to keep their jobs. Ford is seeking to increase its domestic electric car supply chain to produce 2 million electric vehicles a year globally by the end of 2026. Close offices Retail behemoth to close offices, Walmart housing tech workers in Austin, Texas; Carlsbad, CA; and Portland, Oregon. Walmart will pay for employees in those locations to relocate to other major offices, such as San Bruno, California, or the company's headquarters in Bentonville, Arkansas. The company hopes to relocate most of its employees, with some being allowed full-time remote workers. Moreover, those who leave will receive severance pay. Back to the offices Most of Walmart's global tech workforce will be required to be in their assigned office at least two days a week, Kumar said in a memo. Since last year, many employees at Walmart's Bentonville headquarters have had to work in person five days a week. At the beginning of the pandemic, Kumar told the enterprise technology staff that remote working would last longer than in other parts of the organization. The group aimed to make virtual work the new normal for global technology. This change is a sign that even for tech companies that previously used remote working during the pandemic, on-site work and central offices will play a role in the future. Read next: Poland’s President Andrzej Duda Said The Decision To Send Fighter Jets To Ukraine Was “Not Easy To Take”| FXMAG.COM Walmart share price In early February, Walmart shares were falling towards 140.00, but almost a week ago they started to move up again. Currently, the share price is at 145.91. Ford and big investments Automakers are working to secure key minerals and are building battery factories as they push to produce more electric vehicles. Financial incentives for the production of battery cells and materials in North America, contained in the federal Inflation Reduction Act passed last year, accelerated these efforts. Ford is seeking to increase its domestic electric car supply chain to produce 2 million electric vehicles a year globally by the end of 2026. The company has secured approximately 70% of the battery capacity needed to meet its 2026 target. To this end, the company is investing $3.5 billion to build a battery factory in Michigan with the help of Chinese company Contemporary Amperex Technology. The facility, which will be built in Marshall, Michigan, about 100 miles west of Detroit, is expected to create about 2,500 jobs, Ford said on Monday. The automaker said the subsidiary will produce the battery cells using technology and expertise provided by CATL, the world's largest manufacturer of batteries for electric vehicles. Ford considered locations for the battery plant in Mexico and Canada, but ultimately settled on Michigan, partly due to federal subsidies available under the new law Ford’s plans Ford's planned plant in Michigan will produce lithium iron phosphate cells, a type commonly used in China. The so-called LFP chemistry is generally less expensive than the nickel-cobalt combination widely used in North America and Europe. Ford said last summer it planned to add LFP as a way to lower the cost of its electric vehicles. The move allows Ford to reduce its reliance on nickel- and cobalt-based batteries, prices of which have risen over the past year. CATL will start supplying LFP batteries for Ford Mustang Mach-E electric SUVs starting this year and F-150 Lightning EV pickups in 2024. Ford share price At the beginning of February, Ford shares rose above 14.00. This level was last seen in November last year. After that, the stock fell below 13.00 again, but rose and recently closed at 13.11. Source: wsj.com, finance.yahoo.com
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

Saxo Bank Podcast: US CPI Report Ahead, Tightening Financial Conditions In The Corporate Bond Market And More

Saxo Bank Saxo Bank 14.02.2023 12:14
Summary:  Today we look at the odd session yesterday in the US, with no readily apparent proximate cause to the rally outside, perhaps of traders hedging today's US January CPI release, which could trigger considerable volatility, especially on the impact of heavy 0DTE options trading if the release is a big surprise in either direction. We also note tightening financial conditions in the corporate bond market, talk market reaction to incoming earnings data, including from ThyssenKrupp, SolarEdge and Palantir, and look at today's crop of earnings reports, as well as stories impacting FX & more. Today's pod features Peter Garnry on equities, with John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Brazil’s Bank Allows To Pay Taxes Using Cryopto, Ford Will Cut Jobs In Europe| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com. Source: Podcast: Another CPI circus today. Tightening financial conditions? | Saxo Group (home.saxo)
Deciphering the Economic Puzzle: Unraveling Britain's Mixed Signals

In UK Labour Market Figures Showed Wages Excluding Bonuses Rising Once More

Craig Erlam Craig Erlam 14.02.2023 14:52
Stock markets got the week off to a strong start and that optimism is carrying through to the inflation report release, it would appear. European indices are trading around half a percentage point higher early in the day and US futures indicate a slightly positive open as well. Of course, all of that will probably change between now and the opening bell, with the inflation data being released an hour before. As was the case yesterday, I’m quite surprised at the level of optimism we’re seeing in the run-up to the report. The inflation data has a lot of heavy lifting to do in order to alleviate clear concerns over the tightness of the labour market. The January report has heaped more pressure on the CPI to deliver and forecasts are not that hopeful. Time will tell whether investors have been a little bit complacent on this one. A concerning wage number for the BoE UK watchers may be feeling a little less optimistic this morning after labour market figures showed wages excluding bonuses rising once more in December. They were expected to stay flat at 6.5% but instead jumped to 6.7%, a level still far below headline inflation and not consistent with it falling back to target any time soon. Including bonuses, the number was a slightly more modest 5.9% which is still too high but at least a deceleration from the month before. Following the release, UK yields were given a nudge higher, lifting the pound in the process alongside expectations on the terminal rate which is now seen hitting 4.5% and probably not falling this year. Read next: GBP/USD Pair Rose Sharply Above $1.22, EUR/USD Pair Also Rose| FXMAG.COM All hangs on CPI Bitcoin has also consolidated in the run-up to today’s inflation number. This ultimately becomes a case of whether markets go into risk-on or risk-off mode following the release. It has entered into a corrective move but that’s unlikely to continue if today’s inflation print falls short of expectations again. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
UK Jobs Report Strengthens Case for June Rate Hike and Signals Caution on Rate Cuts

Soros Appears To Be Fixated On Gains In The S&P 500 Index

Conotoxia Comments Conotoxia Comments 14.02.2023 15:36
On Monday (13.02) we were able to learn about the SOROS FUND MANAGEMENT fund's 13F report, a periodic report to the US Securities and Exchange Commission (SEC). The Form 13F contains information about the value and number of shares held, as well as the value of investments and the type of investment assets the investor has in its portfolio, for the last quarter. What has George Soros' fund invested in? Who is George Soros? George Soros was born in Budapest in 1930 to a Jewish family. During World War II, his family avoided deportation to concentration camps through false documents and hiding. Soros later studied at the London School of Economics, where he met the philosopher Karl Popper, whose ideas had a strong influence on his thinking. In the 1960s Soros embarked on a career as an investor and founded the Quantum Fund hedge fund, which brought him huge profits and made him one of the richest people in the world. Soros has also gained notoriety for his philanthropic activities, in which he supports projects for, among other things, democracy, human rights and press freedom around the world. One of the most important of these is the Open Society Foundations. Soros has been criticised by many individuals and groups for his influence on politics and the media. Some critics have accused him of manipulating financial markets and even attempting to overthrow state governments. He has also faced criticism for his involvement in migration and refugee issues. Today, Soros is still considered one of the most influential people in the world. SOROS FUND MANAGEMENT LLC is a private investment firm founded by a billionaire in 1969 and specialises in investments in various asset classes including equities, bonds, real estate and commodities. SOROS FUND MANAGEMENT LLC manages investment funds for institutional clients, such as pension funds and hedge funds, as well as for its own family. George Soros is known for his active approach to investing, which involves conducting intensive market analysis and using knowledge of political and economic circumstances to make investment decisions, also taking into account analyses of market trends and the macroeconomic situation. Soros focuses on long-term investments, yet his firm has become known for conducting speculative activities in financial markets, including his involvement in the spectacular sale of the pound sterling in 1992, which appears to have led to the UK not adopting the euro. At the same time, however, it is worth noting that Soros' investment style has evolved, and that SOROS FUND MANAGEMENT LLC itself invests in a variety of asset classes in line with market trends and economic circumstances. What does the SOROS FUND MANAGEMENT fund invest in? Soros' fund currently has as many as 208 positions of various types of assets. In Q4 2022, it concluded as many as 85 new positions in its portfolio. The largest purchase occurred on units of the IBOXX INV CP ETF (LQD), which tracks the iBoxx USD Investment Grade Corporate Bond index. This index contains bonds with a duration of more than one year issued by companies with high credit security. Interestingly, at the same time he bought put options (PUT) on this fund of the same value. This appears to be a hedge against interest rate volatility while receiving a dividend from the fund, which is at 3.4% per annum. The two positions together represent 7%, of the value of the fund's portfolio. In addition, it entered into a short position on units of the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) in the form of a PUT option. The position represents another 2% of the fund's portfolio. This appears to be an attempt to bet on further interest rate rises by the Fed, which could cause declines in bond prices. Read next: GBP/USD Pair Rose Sharply Above $1.22, EUR/USD Pair Also Rose| FXMAG.COM Source: Conotoxia MT5, LQD, Daily The second largest purchase Soros made in the last quarter of 2022 was shares in First Horizon Corporation (1stHorizon), a US-based holding company that offers a variety of banking and financial services to individuals, businesses and institutions in the United States. The investment in the company currently represents 2.9% of the fund's value. Source: Conotoxia MT5, 1stHorizon, Daily Soros appears to be fixated on gains in the S&P 500 (US500) index. In Q4 2022, he purchased units of the SPDR S&P 500 ETF Trust (SPY) representing 1.8% of the portfolio value. Source: Conotoxia MT5, US500, Daily Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The Fear of Strong Jobs: How US Labor Market Resilience Sparks Global Financial Panic

On The New York Stock Exchange Only NASDAQ Composite Index Rose

InstaForex Analysis InstaForex Analysis 15.02.2023 08:00
Traders are evaluating consumer price statistics that were released prior to the opening of trading. Thus, annual inflation in January slowed down to 6.4% from 6.5% a month earlier. Analysts had forecast the figure at 6.2%. On a monthly basis, consumer prices rose 0.5% in January. Dow Jones At the close in the New York Stock Exchange, the Dow Jones fell 0.46%, the S&P 500 index fell 0.03%, the NASDAQ Composite index rose 0.57%. The leading gainer among the Dow Jones index components today was Boeing Co, which gained 2.80 points or 1.30% to close at 218.45. Nike Inc rose 1.05 points (0.84%) to close at 126.20. Chevron Corp rose 1.31 points or 0.77% to close at 172.32. The least gainers were The Travelers Companies Inc, which shed 3.47 points or 1.85% to end the session at 184.13. Coca-Cola Co rose 1.67% or 1.01 points to close at 59.59, while Home Depot Inc shed 1.58% or 5.10 points to close at 318.43. S&P 500  Leading gainers among the S&P 500 index components in today's trading were IPG Photonics Corporation, which rose 11.56% to 125.55, Tesla Inc, which gained 7.51% to close at 209.25, and shares of Aptiv PLC, which rose 7.37% to end the session at 121.10. Leidos Holdings Inc were the least gainers, shedding 5.42% to close at 95.25. Shares of Marsh & McLennan Companies Inc shed 4.02% to end the session at 167.00. Arthur J Gallagher & Co lost 3.57% to 188.25. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Amesite Operating Co, which rose 81.62% to hit 0.51, Boxlight Corp Class A, which gained 39.47% to close at 0.56. as well as shares of United Insurance Holdings Corp, which rose 37.27% to close the session at 1.51. Top Ships Inc was the least gainer, shedding 44.85% to close at 0.91. Shares of Mobiquity Technologies Inc lost 32.77% and ended the session at 0.35. Quotes Pathfinder Acquisition Corp fell in price by 31.61% to 4.24. Numbers On the New York Stock Exchange, the number of depreciated securities (1581) exceeded the number of closed in positive territory (1446), while quotes of 111 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,952 stocks fell, 1,691 rose, and 217 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 7.03% to 18.91. Gold Gold futures for April delivery added 0.11%, or 2.05, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery fell 1.27%, or 1.02, to $79.12 a barrel. Brent oil futures for April delivery fell 1.14%, or 0.99, to $85.62 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.16% to 1.07, while USD/JPY rose 0.49% to hit 133.05. Futures on the USD index fell 0.10% to 103.14.   Relevance up to 16:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/335111
The Challenge to the Dollar: De-dollarisation and Geopolitical Shifts

A Chorus Of Fed Speakers Have Suggested The Fed Isn't Yet Taking Comfort In The Inflation Trends

Saxo Bank Saxo Bank 15.02.2023 09:09
Summary:  US equities ended mixed but bonds were lower after a hot US CPI raised concerns on the pace of disinflation and the Fed comments that followed pushed the market pricing of terminal Fed funds rate higher. Dollar ended the day mostly flat but higher yields saw the yen plummeting. A bumper UK jobs report for January sent the GBP higher but the wait is now on for the January inflation print. US retail sales will also be on tap today.   What’s happening in markets? US equities supported by strong price performance in Tesla and Nvidia U.S. equities had a choppy session as stocks oscillated between gains and losses following a slower-than-expected deceleration in the CPI prints and hawkish-leaning Fedspeak before the broad benchmark S&P500 settled at nearly flat and the tech-heavy Nasdaq 100 gained 0.7%. Most of the strength in the Nasdaq came from Tesla’s (TSLA:xnas) 7.5% jump and NVIDIA’s (NVDA:xnas) 5.4% rise in share price. Tesla gained following rival Ford (F:xnys), down 0.9%, halted production and shipments of its F-150 Lightning electric pickup trucks due to an unidentified problem with the battery. Tesla also raised the price of its Model Y by USD1,000 to USD58,990. Consumer discretionary, up 1.2%, was the best-performing sector in the S&P500 and Tesla was the top winner. Palantir Technologies (PLTR:xnys) soared 21.3% after the data analysis software company reported better-than-expected Q4 earnings and expects to turn profitable for the whole year in 2023. Airbnb (ABNB:xnas) surged 9.2% in extended-hour trading following reported adjusted EPS at USD0.475, beating the USD0.31 consensus estimate and an upbeat outlook on strong travel demand. Coca-cola (KO:xnys) slid 1.7% despite reporting stronger-than-expected revenue growth and inline earnings. The management gave upbeat guidance for revenue growth of 7-8% and EPS growth of 7-9% in spite of continued cost pressure. US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) bear-flattened as yields on the 2-year jumped 10bps Growth in the U.S. CPI came at a slower pace but slowed less than what the consensus forecast expected. After choppy initial reactions, selling emerged in the front end, seeing the 2-year yield finish 10bps cheaper at 4.61%. The SOFR June-Dec 2023 spread narrowed by 10bps to -24bps from -33bps, signaling a further reduction in the bet of rate cuts in the second half of 2023. Hawkish-leaning comments from Fed’s Logan and Barkin, plus the departure of Fed Vice-chair Lael Brainard to join the Biden Administration as head of the National Economic Council added fuel to the higher-for-longer narrative. Brainard is perceived to be the “most persuasive policy dove” at the Fed, as the Wall Street Journal’s Nick Timiraos puts it. Yields on the 10-year rose 4bps to 3.74%, paring some of the rises in yield after a large block buying of nearly 20,000 contracts in the 10-year futures. Across the pond, yields on 2-year Gilts jumped 19bps on a hot employment report. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) traded sideways In a choppy but uneventful session, Hang Seng Index slipped 0.2%. Hong Kong developers recovered from yesterday’s sell-off and bounced by 1%-2%. Sun Hung Kai Properties (00016:xhkg) gained 2.4%; Wharf Real Estate (01997:xhkg) climbed 1.8%. Healthcare names were laggards, with Wuxi Biologics (02269:xhkg) plunging 4% after forecasting 2022 revenues rising 48.4% and profits growing 30%, which failed to meet the high bar of analyst estimates. Alibaba Health Information (00241:xhkg) dropped 2.8%. Tencent (00700:xhkg), down 2.1%, led the internet space lower. Oriental Overseas (00316:xhkg) slipped 2.6% on analyst downgrades citing falling container freight rates. In A-shares, CSI300 was little changed. Non-ferrous metal stocks outperformed, with North Copper (000737:xsec) up 8.7%, Yunnan Copper (000878:xsec) up 5%, and CMOC (603993:xssc) up 3.3%, leading the charge higher. Household appliances names were among the winners with Zhejiang Meida (002677:xsec) advancing by 10%, hitting the upper price limit. Australia equities (ASXSP200.I) fall back to January 16 levels, dragged down by Commonwealth Bank’s cautious outlook Shares in the biggest bank in Australia, the Commonwealth Bank (CBA) sank 5.2% pulling away from record high territory, after reporting half-year results today that paint a cautious tone for banks for the year ahead. CBA’s share price drop pulled back the broad market. CBA's profit results mostly disappointed, although its net interest margin- the main metric analysts look at for banking profitability - came in at 2.1% - on par with expectations. CBA’s cash profit missed expectations with profit up 8.6% YoY to $5.15 billion (vs $5.17 billion Bloomberg consensus), while CBA’s return on equity improved – but also missed market targets. That spooked the market, along with CBA putting aside more capital for bad debts, as higher price pressures continue to hurt consumers, along with falling home prices.  Even though CBA’s results missed, it announced a $1 billion share buy-back as its headline profit after tax moved to a record, which was supported by a surge in business banking profits. The share buy back should theatrically support CBA's shares over the medium to longer term, coupled with the market expecting 2023 profits to hit another record, with margins to improve.  CBA shares gapped down, wiping out a month of gains - with CBA shares moving into oversold territory.  FX: Wobbly dollar as yen slips but AUD, GBP gain A hot inflation data along with Fed officials starting to float the idea of a higher terminal rate saw the dollar being volatile on the day but ended unchanged. Higher yields underpinned as market pricing of the Fed path shifted higher, and that made the yen as the underperformer for the day. USDJPY surged above 133, after Kazuo Ueda being formally nominated as the BOJ chief yesterday and expectations that he won’t be quick with any policy normalization. Meanwhile, AUDUSD was choppy but could not sustain a move above 0.70. GBPUSD also gave up 1.22 despite the strong labor market data questioning the Bank of England’s pause signal, eyes on inflation due today. EURUSD still above 1.0700 with the preliminary readings of the Eurozone Q4 GDP matching 0.1% QoQ and 1.9% YoY forecasts. Lagarde will be on the wires today, and also keep a watch on US retail sales data. Aussie dollar's 50-day moving average continues to limit downside ahead of AU employment The Aussie dollar has continued to track sideways for the last 7 trading sessions, with the Aussie dollar against the US - the AUDUSD pair - being supported by its 50-day moving average ahead of Australian employment on Thursday. Despite hotter than expected US CPI, the pair is steady - also supported by the fundaments - metal prices have moved higher, with Copper and Iron Ore prices back at June 2022 levels. The next catalyst will be Thursday’s Australian employment data, if we see more than 20,000 jobs added, then we will be watching the resistance levels, at perhaps 0.7114 for the Aussie. On the downside, if Australian employment is weaker than expected, we will be watching for a potential pullback. Support for the AUDUSD is perhaps at 0.6879. But, over the medium-to-long term, should the USD continue to track lower, commodity prices stay higher and AU exports continue to grow to China, we see the Aussie dollar doing well. Crude oil (CLH3 & LCOJ3) prices remain pressured While reports of the US release of crude oil from its strategic reserves continued to nudge oil prices lower, a large stockpile built and inflation concerns also added to a weak demand outlook. WTI dropped below $79/barrel while Brent got close to $85. US private inventories, as reported by API, were up by 10.5 million barrels last week. A hot US CPI printed also raised concerns on the disinflation narrative taking hold, suggesting Fed may have to go for a higher terminal rate and pause there for sometime, which raises concerns on the demand outlook. The slide in oil prices however got some support from the OPEC report, which hinted at a tigher oil market as it nudged up the demand estimate and trimmed its supply outlook. IEA monthly report will be on tap today. Read next: Walmart Plans To Close Offices, Ford Invests In Battery Factories | FXMAG.COM What to consider? US CPI sent confusing signals to the markets, but the cooling isn’t enough The US January CPI came in at 0.5% MoM, in-line with estimates, while the core CPI was at 0.4% MoM also as expected. December prints were however revised higher with headline up to +0.1% MoM from -0.1% previously, and core up to 0.4% MoM from 0.3% previously. Markets were wobbly on the release, as the YoY prints came in higher-than-expected at 6.4% for the headline (vs. 6.2% exp) and 5.6% for the core (vs. 5.5% exp). However, a key measure that Powell has highlighted earlier – core services ex shelter – cooled to 0.3% in the month from 0.4% previously. Housing contributed the most to the monthly increase in the CPI, but it is a lagged measure. Meanwhile, disinflation in goods slowed as core goods prices rose +0.1% MoM vs. -0.1% MoM prior. Overall, there wasn’t enough evidence that core inflationary pressures are cooling enough to support calls for the Fed to pivot. Fed speakers send market pricing for Fed path higher A chorus of Fed speakers last night talked about the slow pace of disinflation, suggesting the Fed isn’t yet taking comfort in the inflation trends. NY Fed President Williams repeated there is "still a ways to go" to control inflation and the current levels of inflation are far too high. His views on the terminal rate also differed slightly, in December he suggested rates between 5.00-5.50% is reasonable before last week changing the view to 5.00-5.25%. However, he has now seemingly switched back his views of the higher upper bound for the FFR to 5.50% in wake of the January inflation data. Philly Fed’s Patrick Harker noted that how far above 5% the Fed needs to go depends on incoming data, and Tuesday's inflation report shows inflation is not moving down quickly. Dallas President Logan stressed that tightening policy too little is the top risk. All three are voters this year. Thomas Barkin, a non-voter said it was about as expected and there's going to be a lot more inertia and persistence to inflation than the Fed thought. However he was slightly more dovish saying that if inflation settles, they may not go as far on the terminal but he stressed data dependence. Markets are now pricing in a higher terminal rate of 5.26% in July, and one rate cut has also been driven out of this year’s pricing. Takeaways and quick reflections from hotter-than-expected CPI  Shelter costs were a large contributor to US monthly prices moving up - with rent prices up 8.6%, while large price jumps were seen in airfares costs, up 26%. Airlines are not only seeing more passengers, but also increasing their fares - and this is translating to higher earnings expectations and thus stronger share price performance in airline industry stocks. American Airlines shares are up 40% from their lows, while aircraft maker Boeing is up 80% off its lows. Across other inflation categories, other significant price moves were seen in eggs, butter, fuel, gas, lettuce, cereals, and pet food. This reinforces Saxo’s bullish and overweight view on Commodities as we see higher prices for longer. Companies such as Shell trade 32% up from their lows, while agricultural company Deere is up 40% from its lows. UK employment data points to much firmer than expected labour market The UK saw a strong surge in Monthly Payrolled Employees of +102k, well north of the +15k expected, while the January Jobless Claims dropped -12.9k and the December claims were revised down to -3.2k vs. +19.7k originally reported. The December employment change registered a gain of 74k vs. 43k expected and the Unemployment rate in December was steady at 3.7%. Weekly earnings ex Bonus were +6.7% YoY in December Vs. 6.5% expected and 6.5% in November. Focus shifts to CPI report due today and another double digit print is expected. Hong Kong Monetary Authority bought HKD to defend the peg The Hong Kong Monetary Authority bought HKD14.87 billion (USD1.9 billion) to cap the USDHKD at 7.85, in defence of the SAR’s link-exchange-rate regime for the first time since last November. For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: Choppy markets with a hot US CPI and Fed speak – 15 February 2023 | Saxo Group (home.saxo)
The RBA’s aggressive rate tightening cycle will be continued

CBA’s Stock Drop Pulled The Broad Aussie Shar Market Back To January 16 Levels

Saxo Bank Saxo Bank 15.02.2023 09:14
Summary:  Watch our video or read below on what’s happening in markets with potential trading and investing considerations. The Aussie dollar's 50-day moving average continues to limit downside ahead of AU employment data. The sectors that win from hotter than expected US CPI. CBA shares moved into oversold territory after its results missed expectations, but CBA's pull back from its record highs may encourage investors to buy in. US equities supported by technical levels, despite hotter-than-expected CPI. Fed speakers suggest more rates hikes could be ahead The S&P500(US500.I) closed flat, while the Nasdaq 100 (USNAS100.I) gained 0 6% - with the tech index propped up by a 7.5% jump in Tesla shares, which erased Tesla’s two-day fall. That said, Tesla still remains in overbought territory. The major US indices seem to be supported by their 50, 100, and 200-day simple moving averages (SMAs), suggesting a slow rebound in equities may continue, as the market is still pricing in rate cuts later this year. This is despite the headwinds of hotter-than-expected January CPI, which suggests the Fed can keep rates higher for longer, which would pressure aggregate S&P500 company margins/profits, especially those high PE names, such as non-profitable tech companies. Headline consumer prices rose 0.5% in January - the biggest jump in three months, and 6.4% YoY – while the market expected CPI to slide from 6.5% to 6.2%. Core CPI (ex-food and energy) was also higher than forecast at 5.6% YoY – resulting in two Fed speakers saying the central bank may need to raise rates, more than envisioned. While another Fed speaker says the rate-hike path could be near its end.  Investor reflections from hotter-than-expected US CPI; with airlines costs and commodities up   Shelter costs were a large contributor to US monthly prices moving up -  with rent prices up 8.6%, while large price jumps were seen in airfares costs, up 26%. Airlines are not only seeing more passengers, but also increasing their fares  - and this is translating to higher earnings expectations and thus stronger share price performance in airline industry stocks. American Airlines shares are up 40% from their lows, while aircraft maker Boeing is up 80% off its lows. Across other inflation categories, other significant price moves were seen in eggs, butter, fuel, gas, lettuce, cereals, and pet food. This reinforces Saxo’s bullish and overweight view on Commodities as we see higher prices for longer. Companies such as Shell trade 32% up from their lows, while agricultural company Deere is up 40% from its lows. For more commodity companies, refer to Saxo's Commodity equity basket theme.  Read next: Walmart Plans To Close Offices, Ford Invests In Battery Factories | FXMAG.COM Australia equities (ASXSP200.I) fall back to January 16 levels, dragged down by Commonwealth Bank’s cautious outlook Shares in the biggest bank in Australia, the Commonwealth Bank (CBA) sank 5.2% pulling away from their record high territory, after reporting half-year results today that paint a cautious tone for banks for the year ahead. And CBA’s stock drop pulled the broad Aussie shar market back to January 16 levels. CBA’s profit results mostly disappointed, although its net interest margin- the main metric analysts look at for banking profitability - came in at 2.1% - on par with expectations. CBA’s cash profit missed expectations with profit up 8.6% YoY to $5.15 billion (vs $5.17 billion Bloomberg consensus), while CBA’s return on equity improved – but also missed market targets. That spooked the market, along with CBA putting aside more capital for bad debts, as higher price pressures continue to hurt consumers, along with falling home prices.  Even though CBA’s results missed, it announced a $1 billion share buy-back as its headline profit after tax moved to a record, which was supported by a surge in business banking profits. The share buy back should theatrically support CBA's shares over the medium to longer term, coupled with the market expecting 2023 profits to hit another record, with margins to improve.  CBA shares gapped down, wiping out a month of gains - with CBA shares moving into oversold territory.  Aussie dollar's 50-day moving average continues to limit downside ahead of AU employment  The Aussie dollar has continued to track sideways for the last 7 trading sessions, with the Aussie dollar against the US - the AUDUSD pair being supported by its 50-day moving average-  ahead of Australian employment on Thursday. Despite hotter than expected US CPI, the pair is steady - also supported by the fundaments - metal prices have moved higher, with Copper and Iron Ore prices back at June 2022 levels. The next catalyst will be Thursday’s Australian employment data, if we see more than 20,000 jobs added, then we will be watching the resistance levels, at perhaps 0.7114 for the Aussie. On the downside, if Australian employment is weaker than expected, we will be watching for a potential pullback. Support for the AUDUSD is perhaps at 0.6879. But, over the medium-to-long term, should the USD continue to track lower, commodity prices stay higher and AU exports continue to grow to China, we see the Aussie dollar doing well.   -Click here to look at more stocks to watch across the metals sector this week. For our team's weekly look at markets, click here.  To listen to our global team's take on markets - tune into our Podcast. Source: Commonwealth Bank shares fall further from record highs on results miss, Tesla rip up despite hot CPI | Saxo Group (home.saxo)
Airbnb's Revenue Exceeded Estimates, Growing 24% y/y

Airbnb's Revenue Exceeded Estimates, Growing 24% y/y

Saxo Bank Saxo Bank 15.02.2023 09:29
Summary:  Markets gyrated wildly on yesterday’s US January CPI release, which showed higher than expected inflation on a year-on-year basis, which kept US treasury yields firm as a number of Fed members chimed in with hawkish comments. Elsewhere, has the consumption led Chinese recovery been oversold as many new consumer credit loans are being funnelled to pay down mortgages and on stock speculation rather than on consumption. What is our trading focus? US equities (US500.I and USNAS100.I): the dilemma in equities As we wrote in yesterday’s equity note in a response to the US January CPI report, the initial positive reaction in S&P 500 futures seemed weird and most likely reflected clearing of hedges and other derivatives positions. The market eventually settled on the interpretation that inflation remains stubbornly high, and the trajectory lower might take longer than expected. The dilemma for investors is that if the economy does not slip into a recession hen high inflation will remain and eventually push on bond yields and likely increase the equity risk premium leading to lower equity valuations. In the case the economy slips into a recession, equity valuations will come down to reflect lower growth and hit to margins. In any case, equities could have seen the best for now and investors might consider reducing equity exposure at these levels. S&P 500 futures bounced back during the session from the lows after the inflation report, but this morning the index futures trade lower again around the 4,127 level with the 4,100 level naturally being the key level to watch on the downside. Hong Kong’s Hang Seng (HIG3) slid and pared its 2023 gain to only 5% Hang Seng dropped 1.6% on Wednesday to levels last seen on 4 January and pared its 2023 gain to only 5%. The Hong Kong Monetary Authority intervened in the forex market for the first time since last November to sell USD1.9 billion against buying the Hong Kong dollar to cap the USDHKD from going about 7.85 the upper limit of the special administrative region’s link-exchange-rate regime. Selling was across the board. Baidu (09888) bucked the market decline and rallied over 5% supported by the somewhat return of the hype on the AI-generated content concept. In A-shares, CSI300 fell 0.6%. AI-generated content concept stocks advanced while domestic consumption, financial, healthcare, and non-ferrous metal names retreated. FX: Choppy dollar on CPI release, eventually settles higher as yen slips on yields rising The USD ended largely unchanged after gyrating wildly in the wake of the January CPI release and Fed comments (more below). After US treasury yields ended the day firmer all along the curve, the JPY was the weakest of USDJPY rallied and took out local resistance, trading above 133.00 into this morning. ay but ended unchanged. Elsewhere, AUDUSD was choppy but could not sustain a move above 0.70 yesterday and stumbled badly in late Asian trading. GBPUSD also gave up 1.22 despite the strong labour market data questioning the Bank of England’s pause signal, eyes on inflation due this morning (breaking news below on that). EURUSD has edged lower toward 1. 0700 overnight with the preliminary readings of the Eurozone Q4 GDP matching 0.1% QoQ and 1.9% YoY forecasts. Lagarde will be on the wires today. Crude oil (CLH3 & LCOJ3) prices remain pressured While reports of the US release of crude oil from its strategic reserves continued to nudge oil prices lower, a large stockpile build and inflation concerns also added to a weak demand outlook. WTI dropped below $79/barrel while Brent slid below $85. US private inventories, as reported by API, were up by 10.5 million barrels last week. A hot US CPI printed also raised concerns on the disinflation narrative taking hold, suggesting Fed may have to go for a higher terminal rate and pause there for some time, which raises concerns on the demand outlook. The slide in oil prices however got some support from the OPEC report, which hinted at a tighter oil market as it nudged up the demand estimate and trimmed its supply outlook. IEA monthly report will be on tap today. Gold (XAUUSD) pummelled further by yield rise post-US CPI release Gold dropped further yesterday, taking out the 1,850 level as US treasury yields closed the day firmer after wild gyrations across markets in the wake of the US CPI release and hawkish talk from Fed speakers (more below). The next important levels include the 1,829 level, which is the 38.2% retracement of the rally off the November lows, the 1,809 area which was broken on the way up, and then the 200-day moving average, currently coming in just above 1,775. Treasuries bear-flattened as yields on the 2-year jumped 10bps Growth in the U.S. CPI came at a slower pace but slowed less than what the consensus forecast expected. After choppy initial reactions, selling emerged in the front end, seeing the 2-year yield finish 10bps cheaper at 4.61%. The SOFR June-Dec 2023 spread narrowed by 9bps to -24bps from -33bps, signalling a further reduction in the bet of rate cuts in the second half of 2023. Hawkish-leaning comments from Fed’s Logan and Barkin, plus the departure of Fed Vice-chair Lael Brainard to join the Biden Administration as head of the National Economic Council added fuel to the higher-for-longer narrative. Brainard is perceived to be the “most persuasive policy dove” at the Fed, as the Wall Street Journal’s Nick Timiraos puts it. Yields on the 10-year rose 4bps to 3.74%, paring some of the rises in yield after a large block buying of nearly 20,000 contracts in the 10-year futures. Across the pond, yields on 2-year Gilts jumped 19bps on a hot employment report. What is going on? Worries that China’s consumer rebound will underwhelm as consumers not spending Bloomberg reports that China’s attempt to engineer a consumer-led recovery may be hindered as funds issued by banks for consumer credit are in many cases funnelled to unintended destinations, especially for mortgage prepayments, but also for speculation in stocks. The rates on the new bank lending are often lower than those for mortgages. UK Jan. CPI out this morning undershoots expectations UK headline CPI out this morning at –0.6% MoM and +10.1% YoY vs. -0.4%/+10.3% expected and 10.5% YoY in December. The core figure was 5.8% YoY vs. 6.2% expected and 6.3% in Dec. US CPI sent confusing signals to the markets The US January CPI came in at 0.5% MoM, in-line with estimates, while the core CPI was at 0.4% MoM also as expected. December prints were however revised higher with headline up to +0.1% MoM from -0.1% previously, and core up to 0.4% MoM from 0.3% previously. Markets were wobbly on the release, as the YoY prints came in higher-than-expected at 6.4% for the headline (vs. 6.2% exp) and 5.6% for the core (vs. 5.5% exp). However, a key measure that Powell has highlighted earlier – core services ex shelter – cooled to 0.3% in the month from 0.4% previously. Housing contributed the most to the monthly increase in the CPI, but it is a lagged measure. Meanwhile, disinflation in goods slowed as core goods prices rose +0.1% MoM vs. -0.1% MoM prior. Overall, there wasn’t enough evidence that core inflationary pressures are cooling enough to support calls for the Fed to pivot. Fed speakers send market pricing for Fed path higher A chorus of Fed speakers last night talked about the slow pace of disinflation, suggesting the Fed isn’t yet taking comfort in the inflation trends. NY Fed President Williams repeated there is "still a ways to go" to control inflation and the current levels of inflation are far too high. His views on the terminal rate also differed slightly, in December he suggested rates between 5.00-5.50% is reasonable before last week changing the view to 5.00-5.25%. However, he has now seemingly switched back his views of the higher upper bound for the FFR to 5.50% in wake of the January inflation data. Philly Fed’s Patrick Harker noted that how far above 5% the Fed needs to go depends on incoming data, and Tuesday's inflation report shows inflation is not moving down quickly. Dallas President Logan stressed that tightening policy too little is the top risk. All three are voters this year. Thomas Barkin, a non-voter said it was about as expected and there's going to be a lot more inertia and persistence to inflation than the Fed thought. However he was slightly more dovish saying that if inflation settles, they may not go as far on the terminal but he stressed data dependence. Markets are now pricing in a higher terminal rate of 5.26% in July, and one rate cut has also been driven out of this year’s pricing. Berkshire Hathaway cuts stake at TSMC Warren Buffett’s investment company cut 86% of its stake in TSMC in the previous quarter in a quick reversal that is unusual for the investor. As the rivalry in chips is heating up between the US and China, Berkshire Hathaway is likely finding it uncomfortable to hold exposure to physical manufacturing in a conflict area. Earnings recap: Airbnb, GlobalFoundries, NU Holdings Airbnb delivered Q4 revenue that beat estimates growing 24% y/y and Q4 adj. EBITDA was $506mn vs est. $435mn, but the Q1 outlook took the market by surprise with Q1 revenue guidance at $1.75-1.82bn vs est. $1.68bn as travel demand remains strong. GlobalFoundries beat slightly on revenue and earnings with Q1 revenue guidance also coming out higher than estimated suggesting strong demand for computer chips. NU Holdings, the parent company behind Nubank, reports Q4 total revenue of $1.45bn vs est. $1.28bn and the second straight quarter of positive net income as the Brazilian bank continues to navigate the credit turmoil in Latin America due to the recent interest rate shock. Commonwealth Bank, Australia’s largest lender, issues cautious outlook as its customers feel ‘significant strain’ CBA’s shares sank almost 6%, falling from their record highs to $103, while also dragging down the broader Australian share market (ASXSP200.I). Australia’s biggest bank and lender reported disappointing profit results and guided for a challenging year ahead - putting aside more capital for bad debts, as higher price pressures continue to hurt consumers, along with falling home prices. Its net interest margin came in at 2.1%, which was on par with expectations, but its cash profit missed expectations, despite rising 8.6% YoY to $5.15 billion (vs $5.17 billion Bloomberg consensus). The big Bank announced a $1 billion share buy-back and consensus also expects 2023 profits to hit another record, and for margins to improve. CBA shares gapped down, wiping out a month of gains. Read next: Walmart Plans To Close Offices, Ford Invests In Battery Factories | FXMAG.COM What are we watching next? US January Retail Sales, Housing Survey set for release today -With the January CPI data leaving observers none the wiser on the future course of inflation, the market may remain sensitive to incoming data that offers signs of whether economic activity remains robust. Today’s focus is the January US Retail Sales data, which is expected to rebound sharply from the weak December numbers, possibly in part on out-of-date seasonal weightings. Consensus expectations are for headline Retail Sales to have risen a chunky +2.2% month-on-month, with the core, ex Auto and Gas figure to show +0.9%. Elsewhere, the February NAHB Housing Market Index, one of the more leading indicators on the US housing market, is also up today, expected to show further marginal improvement after bottoming in December at 31 and surprisingly rebounding to 35 in January. Earnings to watch Today’s US earnings focus is Kraft Heinz and Biogen with analysts expecting revenue growth of 8% y/y in Q4 for Kraft Heinz as the consumer staples company’s revenue track inflation. Kraft Heinz is also expected to expand its EBITDA margin in Q4. The biotechnology sector is still under pressure from higher interest rates and slower pipeline of drugs, so the industry is relying on the old guard to delivering results. However, Biogen is expected to report a –11% y/y revenue growth in Q4 and lower EBITDA compared to a year ago. Wednesday: Commonwealth Bank of Australia, Fortesque Metals Group, Wesfarmers, Shopify, Suncor Energy, Nutrien, Barrick Gold, Kering, EDF, Tenaris, Glencore, Barclays, Heineken, Nibe Industrier, Cisco Systems, Kraft Heinz, AIG, Biogen, Trade Desk Thursday: Newcrest Mining, South 32, Airbus, Schneider Electric, Air Liquide, Pernod Ricard, Bridgestone, Standard Chartered, Repsol, Nestle, Applied Materials, Datadog, DoorDash Friday: Hermes International, Safran, Allianz, Mercedes-Benz, Uniper, Sika, Deere Economic calendar highlights for today (times GMT) 0900 – Poland Jan. CPI 1000 – Eurozone Dec. Industrial Production 1330 – US Feb. Empire Manufacturing 1330 – US Jan. Retail Sales 1330 – Canada Dec. Manufacturing Sales 1400 – ECB President Lagarde to speak 1415 – US Jan. Industrial Production & Capacity Utilization 1500 – US Feb. NAHB Housing Market Index 1530 – US DoE Weekly Crude Oil and Product Inventories 0030 – Australia Jan. Employment Change / Unemployment Rate Source: Financial Markets Today: Quick Take – February 14, 2023 | Saxo Group (home.saxo)
Deciphering the Economic Puzzle: Unraveling Britain's Mixed Signals

UK Inflation Must Please Bank Of England, Crude Oil Down

Swissquote Bank Swissquote Bank 15.02.2023 10:29
Looking at the market pricing, you could’ve hardly guessed, but yesterday’s US inflation report was not brilliant. US stocks But US stocks gave a mixed reaction. Why?! Why did people buy equities on strong inflation data yesterday, is the main topic of today’s Market Talk.Still, treasury markets seemed more down to earth, as the US 2-year yield ticked to the highest levels since last November, activity on Fed funds futures gave a little more than 12% probability for a 50bp hike at the next FOMC meeting, versus around 9% at the start of the week. USD index But the dollar index remained stuck below its 50-DMA. Gold Gold extended losses to $1843 on the back of stronger yields and firmer US dollar. EUR/USD The EURUSD found support above the 50-DMA, which stands around the 1.0715 mark. USD/JPY The dollar-yen cleared resistance near its own 50-DMA level, but the risks are still tilted to the downside in USDJPY. Read next: Airbnb Posted A Profit Of $1.9. Billion, Air India And Largest Commercial Aircraft Deal In Aviation History| FXMAG.COM UK CPI and Crude Oil In the UK, inflation in January still eased more than expected to 10.1%. Crude oil remains offered into the 100-DMA, on a massive 10 mio barrel build in US oil inventories last week, while Biden Administration announced there would be further releases from the strategic petroleum reserves of 26 million barrels earlier this week.  Warren Buffett In individual stocks, Warren Buffett sold 86% stake in TSM. Shares plunged more than 4% in Taipei. Watch the full episode to find out more! 0:00 Intro 0:28 US inflation eased less than expected in January 2:55 But who cares? 5:35 FX & yields update 7:05 UK inflation must please BoE, but not sterling 7:36 Crude oil down on massive US inventory build 8:27 Buffett sells TSM. Ouch. Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #GBP #inflation #data #Fed #BoE #BoJ #expectations #EUR #JPY #XAU #US #crude #oil #F13 #TSM #Ford #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Canada Expected to Report 6,400 Job Losses; BoC Contemplates Further Rate Hikes

In The United States The Demand For Warehouse Space Is Still Growing

Kamila Szypuła Kamila Szypuła 15.02.2023 11:26
Online shopping is becoming more and more popular. Sellers, in order to meet the expectations of consumers, look for the best possible solutions. It turns out that online sales require more storage space than brick-and-mortar sales, which is why the demand for warehouse space increases with the growth of online trade. In this article: US CPI and what does it mean for investors? Magazine dominance The largest ever bond issue by India's Housing Development Finance Corp US CPI and what does it mean for investors? After months of good news in the fight against inflation, the January report on the Consumer Price Index showed that progress in bringing down inflation is slower. Although it seems that the trend towards lower inflation is still on track For investors, more sticky inflation means interest rates can stay higher for longer. Increasingly, they expect the Fed to hold off on interest rate hikes until the end of the year, the latest inflation report, coupled with the Good Jobs Report released earlier this month, shows that hopes may be waning. The latest data changed expectations that the Fed will raise interest rates and hold them longer. January's CPI report is potentially difficult news for both bond and equity markets, which have increasingly bet that the Fed will soon stop raising interest rates and start cutting them well before the end of 2023. The January CPI report showed that progress in bringing inflation down is moving more slowly than many in the markets thought.For investors, stickier inflation means interest rates potentially staying higher for longer. Here's what to know. https://t.co/oMMcguky0C — Morningstar, Inc. (@MorningstarInc) February 14, 2023 Read next: Airbnb Posted A Profit Of $1.9. Billion, Air India And Largest Commercial Aircraft Deal In Aviation History| FXMAG.COM Magazine dominance According to CBRE, another nearly 190 million square feet of warehouse space was under construction in North America in 2020, with more than 43% of the buildings pre-leased. This demand is being driven by retailers who are expanding their e-commerce business during the online shopping boom and investing in faster delivery thanks to consumer expectations. Retailers are also securing more US warehouse space to cushion the impact of future supply chain shocks, such as those caused by the coronavirus pandemic. JLL estimates that by 2025, the US may need an additional 1 billion square feet of new industrial space to keep up with demand. This forces industrial developers to get creative and find more unconventional places. The U.S. is facing a warehouse shortage. What does this mean for American consumers and business people from Wall Street to Main Street? Watch the full video here: https://t.co/0frYl0vhY7 pic.twitter.com/lnTxxJroki — CNBC (@CNBC) February 15, 2023 The largest ever bond issue by India's Housing Development Finance Corp India's Housing Development Finance Corp (HDFC) aims to raise at least 50 billion rupees ($603.4 million) through the sale of 10-year bonds on Thursday. If the company raises the full amount, it will also be the largest-ever private debt issuance by an Indian company. Indian lender HDFC's biggest-ever bond issue to see strong demand - bankers https://t.co/3IH1i2XeZR pic.twitter.com/cgZ2ziNKzh — Reuters Business (@ReutersBiz) February 15, 2023
Commodities Update: China's Rate Cut and Potential Impact on Oil and Metals

Airbnb Posted A Profit Of $1.9 Billion, Air India And Largest Commercial Aircraft Deal In Aviation History

Kamila Szypuła Kamila Szypuła 15.02.2023 10:03
Airbnb posted its first ever annual profit last year. Air India Ltd. has ordered 470 jets from Boeing Co and Airbus. Profits The short-term rental company posted a profit of $1.9 billion, slightly beating analyst estimates and its own prior projections, and up 24% from the fourth quarter of 2021. Full-year revenue increased 40% to $8.4 billion. Fourth-quarter profit of $319 million far exceeded analysts' consensus estimate of $171 million. The company said it earned $103 million in interest from its own cash and customer funds in the fourth quarter, up from just $4 million a year earlier. This is equivalent to almost a third of the company's total profit for the quarter. The company said it added 900,000 listings in 2022, excluding China, bringing the global total to 6.6 million. In an effort to increase revenue, Airbnb is increasingly focusing on adding more hosts to its platforms. Pandemic and economic problems vs Airbnb The pandemic has changed the Airbnb business. Guests have started booking longer stays by working remotely. Short-distance trips have also increased, while stays in urban centers have initially been successful. Airbnb said stays of 28 or more nights accounted for 21% of booked nights in the fourth quarter, unchanged from the previous year. Airbnb has also become an unlikely beneficiary of rising interest rates, investing its customers' cash in money market funds and other short-term securities, whose returns have skyrocketed over the past year. Improvement of the situation Airbnb said it benefited from strong demand for travel despite concerns about high inflation and a recession. Americans took advantage of the strong dollar to fly overseas, and European intercontinental travel increased. Airbnb hosts have experienced a growing demand for city center stays, the company said. This was a weak spot earlier in the pandemic and was another sign that travel patterns continued to normalize. Read next: Walmart Plans To Close Offices, Ford Invests In Battery Factories | FXMAG.COM Airbnb share price Airbnb's share price rose 41% from the start of the year to Tuesday afternoon, recouping some of the losses lost last year. The company's shares have fallen by about half in 2022. In mid-2022, the stock fell below 90.00, but it was not the lowest level. At the end of 2022, Airbnb recorded a stock price low of 82.49. With the new year, prices started to rise and are currently at 120.87, the highest level in over 4 months. The deal Air India Ltd. said it had agreed to purchase 250 Airbus aircraft and 220 Boeing aircraft, surpassing a 460 aircraft deal made by American Airlines in 2011. The deal aims to provide more aircraft to suppliers to India, expected to be the fastest growing major aviation market in the world. Boeing orders, based on aircraft list prices, totaled $45.9 billion, including options. Airbus no longer lists list prices for its jets. Based on analyst estimates, the total value of the deal was around $85 billion before discounters. The previous record – a Boeing 777X order from 2013 by Emirates Airlines – was worth around $75 billion. Airlines usually don't pay list prices, instead taking advantage of large, undisclosed discounts. Buoyed by an agreement with Air India, Airbus plans to increase production rates for its two largest models in an attempt to capitalize on the revived demand for long-haul travel. Boeing has pushed back a planned production increase due to supplier shortages, though it still hopes to increase production this year. Boeing share price Boeing shares recovered from last year's losses and rose to 218.45 in the new year. Source: wsj.com, finance.yahoo.com
FX Daily: Resuming the Norm – Dollar Gains Momentum as Quarter-End Flows Fade

Fed expectations have changed a bit. A record-breaking Federal Fund Rate can affect stock market

Michalis Efthymiou Michalis Efthymiou 15.02.2023 14:00
The US Dollar saw a clear trend after yesterday’s inflation rate. However, the price movement of US Indices was less certain as investors were uncertain about the true value of the S&P 500, NASDAQ, and Dow Jones. After yesterday’s announcement, the NASDAQ was the only higher index to end the day but still experienced strong bearish spikes. The Dow Jones saw the worst performance, and the SNP500 saw a slight decline. The price of the SNP500 saw both up and down price movements but mainly saw sellers in control. The lowest daily price was $4,093, which may form a support level over the next week. During this morning’s futures session, the price is declining and is currently hovering at 0.80% lower than the pre-CPI announcement price. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM After yesterday's decline, technical analysis looks very different on smaller timeframes. The price on the 15-minute and 30-minute timeframe is now trading below the Ichimoku Cloud, and the RSI has dropped to 34.00. Both are an indication of a potential decline, and moving averages are also providing a similar indication. However, on larger timeframes, such as the 4-Hour, indications are trading at neutral and are providing no clear up or down direction. S&P500 30-Minutes on February 15th Coca-Cola - Investors were specifically impressed by the Revenue, which came in 3% higher than expected at $10.20 Billion From the fundamental side, the asset is influenced by positive and negative aspects. In general, the SNP500 and the stock market have been supported by recent earnings reports. For example, Coca-Cola has recently released its earnings confirming a higher Revenue and Earnings Per Share. Investors were specifically impressed by the Revenue, which came in 3% higher than expected at $10.20 Billion. Additionally, Airbnb has also confirmed 45% higher earnings per share. The negative influences are mainly related to the monetary policy. Previously market participants expected a 0.25% hike at the next meeting and then a break. However, due to strong inflation data in January, investors are now contemplating whether the Fed will hike 0.50% and continue hiking to 6%. A Federal Fund Rate of 6% will take the monetary policy to its highest in 22 years and can significantly pressure the stock market. Investors are awaiting commentary from members of the Federal Open Market Committee.
InstaForex's Irina Manzenko talks British pound amid latest events

British Pound (GBP) Took A Hit With Cooler Inflation, Crude Oil Prices Still Depressed

Saxo Bank Saxo Bank 16.02.2023 08:15
Summary:  In yet another sign of likely re-acceleration in cyclical growth, US retail sales surprised on the upside. Although Fed rate pricing was unchanged with terminal rate above 5.25%, US equities reversed early losses to close in some gains after a strong European session. Dollar rose to fresh highs before softening later, as AUD was troubled by tumbling metal prices and GBP took a hit with cooler inflation print. Crude oil prices still depressed despite IEA raising the demand outlook, and Gold is close to testing key support levels.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) advanced despite rate fear U.S. equities declined initially following a strong retail sales report that further reduced the probability of any rate cut in 2023 and to the contrary, increased the odds that the Fed may need to hold rates higher for longer. Nonetheless, the stock market was able to walk away from the good-news-is-bad-news script and spent the rest of the day clawing back the early losses and finishing the session higher.  The S&P500 gained 0.3% and Nasdaq 100 advanced 0.8%. Communication services and consumer discretionary, each rising 1.2%, led the advance in the S&P 500. Airbnb (ABNB:xnas) jumped 13.3% after reporting an earnings beat. Devon Energy (DVN:xnys) was the worst performer within the S&P500. The oil and gas producer plunged 10% after reporting a decline in Q4 earnings. The ADR of Taiwan Semiconductor Manufacturing (TSM:xnys) lost 5.3% following filings showing that Warren Buffett’s Berkshire Hathaway reduced its stake in the chip maker. Cisco (CSCO:xnas) gained 3.5% in the extended-hour trading after reporting quarterly revenues and earnings beating estimates and raising guidance for the rest of the year. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) rose further on solid retail sales Yields on the 10-year Treasury notes jumped 6bps to 3.8% following a stronger-than-expected retail sales report and a rebound in the Empire State Manufacturing Index. Headline retail sales jumped by the most in almost two years. While the 20-year Treasury bond auction received decent demand with bid/cover ratio at 2.54, new issuance of around USD30 billion from corporate, including USD24 billion from Amgen weighed on the market. Yields on the 2-year climbed 2bps to 4.63%. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) dragged by property stocks Hang Seng dropped 1.4% on Wednesday to levels last seen on January 4 and pared its 2023 gain to only 5.2%. The aggregate balance held by banks at the Hong Kong Monetary Authority, a proxy of interbank liquidity, fell to HK80 billion, following HKMA’s intervention to sell USD against HKD to cap the USDHKD from going above 7.85 the upper limit of the special administrative region’s link-exchange-rate regime. State-owned Economic Daily in the mainland warns about the re-emergence of speculative activities in properties in some cities and calls for more targeted approaches in support of genuine household demand for housing. Chinese developers retreated, with Country Garden (02007:xhkg) falling 5.6%, China Overseas Land & Investment (00688:xhkg) losing 4.6%, and Longfor (00960:xhkg) down 3.5%. Sportswear company Anta (02020:xhkg) dropped 3.6% on speculation of majority shareholders moving shares to the CCASS clearing system to get ready for a sale. Baidu (09888:xhkg) bucked the market decline and rallied over 3.8% supported by the somewhat return of the hype on the AI-generated content concept. In A-shares, CSI300 fell 0.5%. AI-generated content concept stocks advanced while real estate, domestic consumption, financial, healthcare, and non-ferrous metal names retreated. Australia equities (ASXSP200.I) moved lower to one-month lows, weighted by CBA. Gold miners and coal companies' results ahead Yesterday Commonwealth Bank, Australia’s largest lender, issued a cautious outlook as its customers are feeling ‘significant strain’. Its shares sank about 6%, falling from their record highs to $103, while also dragging down the broader Australian share market (ASXSP200.I). Australia’s biggest bank and lender reported disappointing profit results and guided for a challenging year ahead - putting aside more capital for bad debts, as higher price pressures continue to hurt consumers, along with falling home prices. Its net interest margin came in at 2.1%, which was on par with expectations, but its cash profit missed expectations, despite rising 8.6% YoY to $5.15 billion (vs $5.17 billion Bloomberg consensus). The big Bank announced a $1 billion share buy-back and consensus expects 2023 profits to hit another record, and for margins to improve – that’s good to know for long term investors. However, for potential traders, it’s worthwhile noting, yesterday CBA shares gapped down, meaning the market may fill that gap and buy the dip today or in coming days. Today we will be watching NAB’s quarterly results as well as results from miners, coal giant Whitehaven Coal and gold company Evolution Mining with the market expecting strong results. FX: AUD and GBP lagged, JPY rallies at Asia open Further gains in the dollar were seen last night as yields continued to surge, albeit at a softer pace, after US retail sales also surprised to the upside. AUDUSD was the biggest loser on the G10 board amid tumbling metal prices and RBA governor Lowe refusing to step down. AUDUSD dropped 40bps as January employment data disappointed with a fall of 11.5k vs. expectations of +20k. GBPUSD plunged below 1.2100 on the cooler-than-expected inflation data. EURUSD also touched lows of 1.0660 despite Lagarde reiterating that the ECB intends to hike by another 50bps next month. JPY gains returned in Asia after USDJPY rose to 134+ levels overnight, with Japan export data surprising to the upside with a rise of 3.5% YoY vs. -1.7% expected. Aussie dollar falls as AU jobs data misses. Watching AUDUSD and AUDGBP The Aussie dollar stumbled again, falling 0.4% after Australian employment data came out weaker than expected, with the unemployment rate surprisingly rising to 3.7% (vs the market expecting a steady rate), while jobs surprisingly fell 11,500 when the market expected 20,000 jobs to be added. We saw the AUD lose its footing yesterday after CBA guided for a cautious outlook, setting to the tone for a pull back on spending in Australia. Also consider watching the AUDGBP after the UK received slightly softer than expected UK CPI, which allows the bank of England to sit on their hands for a little longer, while the RBA can keep hiking following hotter than expected CPI.  Crude oil (CLH3 & LCOJ3) lower on inventory build despite IEA’s bullish demand outlook A series of signals from US CPI reported on Tuesday to retail sales print out last night suggest more ammunition for the Fed to raise rates. This has boosted the market pricing of the Fed terminal rate, and dollar strength is back in focus, weighing on commodity prices. Crude oil prices extended their losses after US oil inventories rose 16.3mn barrels to 471mn barrels against expectations of 1.17mn. WTI prices were still below $79/barrel while Brent stayed close to $85. The International Energy Agency (IEA) raised its demand growth estimates by 0.1mb/d to 2mb/d for 2023, but this was overshadowed by swelling US oil inventories. Gold (XAUUSD) close to testing key support Gold prices fell further to $1830/oz as US yields surged higher after the January CPI print, and a hawkish tilt was also seen in Fed commentaries. Last night, US retail sales was also hot suggesting more room for the Fed to hike rates, which boosted the USD. The next important levels include the 1,829 level, which is the 38.2% retracement of the rally off the November lows, the 1,809 area which was broken on the way up, and then the 200-day moving average, currently coming in just above 1,775. Pressure on gold miners to do more deals is rising, despite Newcrest’s rejection of the takeover bid from the world’s biggest gold miner Newmont (more below).  Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM What to consider? US retail sales jump higher January retail sales in the US jumped higher by the most in almost two years, in another signal that the US consumer demand is holding up strongly despite high inflation and interest rate pressures. Retail sales were by 3.0% from a decline of 1.1% in December and above the 1.8% expected. Strength was broad-based, with ex-gas/autos rising 2.6% from the prior -0.7%. The control group, which is a useful gauge of consumer spending data, rose 1.7%, also beating expectations of 0.8% and above the prior -0.7%. Factory output also beat estimates, rising 1.0%, although industrial production was flat vs. +0.5% gains expected, mostly weighed by reduced heating demand in January. Geopolitics on watch keeps Saxo’s Defense basket in focus Russia said its troops had broken through two fortified lines of Ukrainian defenses on the eastern front, as the one-year mark of the invasion approaches. The advances come as Western allies announced more military aid for Kyiv including artillery rounds. The situation may continue to become more tense as Ukraine forces take the time to get trained with the new US equipment. Meanwhile, China is warnings retaliation against US entities involved in the shooting of the balloon. Biden is considering a public address on the downing of an alleged Chinese spy balloon and other unidentified objects. With geopolitical tensions continuing to be on a rise, Saxo’s equity theme basket on Defense remains worth a consideration. Teher were also reports that Germany is poised to increase its defense budget by as much as €10 billion next year, which continues to suggest strong defense focus in the coming years. Newcrest rejects Newmont's takeover bid  Newcrest Mining (NCM) rejected the takeover by Newmont saying it undervalues the company, but kept the door open to a revised offer. Australia’s biggest gold miner reported broadly stronger than expected results – given the rise of the gold price. Half year earnings (EBITDA) hit US$919m, that was 4% above consensus. And the gold giant declared stronger than expected dividends of $0.15 per share for the half-year and a $0.20 special dividend. However, net debt rose far more than expected. NCM retained expectations for a strong 2H operational performance. For what is ahead at markets this week – Read/listen to our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: US retail sales soar in another sign of a hot economy – 16 February 2023 | Saxo Group (home.saxo)
Riksbank's Potential Rate Hike Amid Economic Challenges: Analysis and Outlook

The Aussie Unemployment Rate Rose, China Is Warning Of Retaliation Against US Entities Involved In The Shooting Of The Balloon

Saxo Bank Saxo Bank 16.02.2023 09:18
Summary:  The US equity market put in a solid advance yesterday even as treasury yields remain near recent highs. Sentiment in Asia recovered smartly overnight after a stumble yesterday. In FX, yesterday's sharp USD advance paused, while in commodities, oil is pushing back higher near important resistance levels and gold is nearing major support after a drop of more than a hundred dollars per ounce in just two weeks. What is our trading focus? US equities (US500.I and USNAS100.I): animal spirits remain strong Strong US retail sales figures for January and the NAHB Housing Market Index both showed yesterday that the US economy is humming along despite the interest rate shock. Equities shrugged off the implications for further rate hikes and potentially higher long-term interest rates and rallied with S&P 500 futures closed the session at the highest close price in six sessions above the 4,150 level. The uptrend remains intact at this point with the 4,200 level still in play. The US 10-year yield hit 3.8% on the close yesterday. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) in choppy session Early in China’s equity session, the Hang Seng Index and CSI300 gained sharply after a strong US session, but sentiment rolled over badly into late trading, with the Hange Seng approximately flat and CSI 300 down about 1% as of this writing. Qiushi Magazine, a mouthpiece of the Chinese Communist Party, published an excerpt of President Xi’s speech delivered in December, in which the Chinese leader highlighted insufficient aggregate demand as the paramount challenge so expanding consumption is a top policy priority. FX: GBP weakest after soft CPI, JPY sharply lower on yield rise yesterday, DXY on backfoot overnight AUDUSD fell sharply yesterday and stumbled again overnight on the release of weak Australian jobs numbers, but bounced on a recovery in sentiment in China and bounce in metals prices, also keeping away from the pivot low of 0.6856 of earlier this month. Elsewhere, sterling weakness from yesterday’s soft UK CPI release lingered. EURGBP jumped back higher yesterday and GBPUSD even tested below 1.2000 briefly before recovering very slightly. The focus there is on the 1.1941 low and 200-day moving average just above that level. USDJPY surged further yesterday on a fresh rise in global yields and as the Bank of Japan’s rear-guard actions to defend its yield curve control policy mean the bank is effectively doing aggressive QE even as markets anticipated a coming shift away from this policy. Focus today on US housing-related data after the Feb. Crude oil (CLH3 & LCOJ3) rebounds amid China optimism and IEA’s bullish demand outlook A series of signals from US CPI reported on Tuesday to retail sales print yesterday suggest more ammunition for the Fed to raise rates. This has boosted the market pricing of the Fed terminal rate, and dollar strength is back in focus, weighing on commodity prices. Crude oil prices extended their losses after US oil inventories rose 16.3mn barrels to 471mn barrels against expectations of 1.17mn suggesting demand concerns. But reports of passenger loads picking up at China’s top three airlines added optimism overnight. WTI prices rose back above $79/barrel while Brent was above $85. The International Energy Agency (IEA) also raised its demand growth estimates by 0.1mb/d to 2mb/d for 2023. Gold (XAUUSD) close to testing key support Gold prices fell further to $1830/oz as US yields surged higher after the January CPI print, and a hawkish tilt was also seen in Fed commentaries. Last night, US retail sales was also hot suggesting more room for the Fed to hike rates, which boosted the USD. The next important levels include the 1,829 level, which is the 38.2% retracement of the rally off the November lows, the 1,809 area which was broken on the way up, and then the 200-day moving average, currently coming in just above 1,775. Pressure on gold miners to do more deals is rising, despite Newcrest’s rejection of the takeover bid from the world’s biggest gold miner Newmont. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) rose further on solid retail sales Yields on the 10-year Treasury notes jumped 6bps to 3.8% following stronger-than-expected 3% headline retail sales and 1.7% control group (ex-autos, gasoline, and building materials) prints and a rebound in the Empire State Manufacturing Index to -5.8 from -32.9. While the 20-year Treasury bond auction received decent demand with a bid/cover ratio at 2.54, new issuance of around USD 30 billion from corporate, including USD 24 billion from Amgen weighed on the market. Yields on the 2-year climbed 2bps to 4.63%, bringing the 2-10 curve 5bps less inverted to -83bps. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM What is going on? US retail sales jump far more than expected January retail sales in the US jumped higher by the most in almost two years, in another signal that the US consumer demand is holding up strongly despite high inflation and interest rate pressures. Retail sales expanded 3.0% month-on-month after a decline of 1.1% in December and above the 1.8% expected. Strength was broad-based, with ex-gas/autos rising 2.6% from the prior -0.7%. The control group, which is a useful gauge of consumer spending data, rose 1.7%, also beating expectations of 0.8% and above the prior -0.7%. Factory output also beat estimates, rising 1.0%, although industrial production was flat vs. +0.5% gains expected, mostly weighed by reduced heating demand in January. European earnings: Airbus and Schneider Electric Airbus has had a relatively good year as aviation demand is coming back after the pandemic with fiscal year free cash flow beating estimates and dividends per share set to €1.80 vs est. €1.73. Q4 revenue is €20.6bn vs est. €20bn. Airbus is disappointing a but on its FY23 adjusted EBIT outlook relative to estimates and delays its A320 output target of 75/month to 2026. Schneider Electric reports Q4 revenue that beats estimates driven by strong organic revenue growth and it reports FY23 revenue growth of 9-11% y/y and adjusted EBITA margin up 50-80 basis points. Shopify outlook misses estimates The e-commerce platform reported Q4 revenue of €1.73bn vs est. €1.65bn with gross merchandise volume also beating estimates. The company expects the gross margin to expand in Q1 but the Q1 revenue outlook of high-teen growth rate compared to 20% expected by analysts sent shares lower in extended trading. Geopolitics keeps Saxo’s Defense basket in focus Russia said its troops had broken through two fortified lines of Ukrainian defenses on the eastern front, as the one-year mark of the invasion approaches. The advances come as Western allies announced more military aid for Kyiv including artillery rounds. Meanwhile, China is warning of retaliation against US entities involved in the shooting of the balloon. Biden is considering a public address on the downing of an alleged Chinese spy balloon and other unidentified objects. With geopolitical tensions on the rise, Saxo’s equity theme basket on Defense remains worth a consideration. There were also reports that Germany is poised to increase its defense budget by as much as €10 billion next years. Weak Australian jobs report The Aussie unemployment rate rose to 3.7% in January (vs the market expecting a steady rate of 3.6%), while Australian jobs surprisingly fell 11,5k versus market expectations for +20k, and full-time employment actually fell –43k. Yesterday Australia’s biggest bank Commonwealth Bank also warned that its customers are experiencing ‘significant strain’, amid higher price pressures. What are we watching next? US data, including US Housing Related Data after strong NAHB Housing Market Survey. Yesterday, the US February NAHB Housing Market survey surged 7 points from its January reading, suggesting a fading impact from the mortgage interest rate shock last year. The reading was a 5-month high. Today we get further US housing-related data, including the January Housing Starts and Building Permits figures. We’ll also see the latest weekly jobless claims after a string of four readings below 200k. Earnings to watch Today’s US earnings focus is Applied Materials and DoorDash with analysts expecting Applied Materials to deliver revenue growth of 7% y/y and EPS of $1.94 down 1% y/y. DoorDash, which has been part of our bubble basket, is expected to revenue Q4 revenue growth of 36% and EBITDA of $109mn which seems quite unrealistic given EBITDA was $-147mn a quarter ago. Thursday: Newcrest Mining, South 32, Airbus, Schneider Electric, Air Liquide, Pernod Ricard, Bridgestone, Standard Chartered, Repsol, Nestle, Applied Materials, Datadog, DoorDash Friday: Hermes International, Safran, Allianz, Mercedes-Benz, Uniper, Sika, Deere Economic calendar highlights for today (times GMT) 1300 – ECB's Nagel to speak 1330 – US Jan. PPI 1330 – US Housing Starts and Building Permits 1330 – US Weekly Initial Jobless Claims 1330 – US Philadelphia Fed Business Outlook 1330 – US New York Fed Services Business Activity 1345 – US Fed’s Mester (non-voter) to speak 1500 – ECB Chief Economist Lane to speak 1530 – US Weekly Natural Gas Storage Change 1600 – Canada Bank of Canada Governor Macklem before Parliament 1700 – UK Bank of England Chief Economist Huw Pill to speak 1700 – Norway Norges Bank Governor Wolden Bach to deliver annual address 1830 – US Fed’s Bullard (non-voter) to speak 2230 – Australia RBA Governor Lowe to testify before House   Source: Financial Markets Today: Quick Take – February 16, 2023 | Saxo Group (home.saxo)
Apple May Surprise Investors. Analysts Advise Caution

Apple Is Facing Multiple Lawsuits And Enforcement Actions

Kamila Szypuła Kamila Szypuła 16.02.2023 10:06
The investigation into whether Apple has a monopoly power that it is abusing has intensified in recent months. An investigation The Department of Justice is launching a sweeping antitrust investigation to see if dominant tech companies are unlawfully stifling competition. The review aims to examine the practices of online platforms that dominate online search, social media and retail services.  An investigation into whether Apple has monopoly power. The Department of Justice's investigation is partly about Apple's policies regarding third-party mobile software on its devices, which has been the focus of most criticism of Apple's competing practices. The department is also investigating whether Apple's mobile operating system, iOS, is operating in an anti-competitive manner, favoring its own products over those of third-party developers. The current steps taken by the department would allow the lawsuit to be filed as early as spring, but the process could be delayed or the government may still choose not to pursue legal action. Read next: USD/JPY Is Above 133.30, GBP/USD Droped Form $1.21 to $1.20, The Aussie Pair Is Trading Below $0.69| FXMAG.COM Objective of criticism Apple's rules on its App Store have been the target of critics and government regulators around the world, who have scrutinized whether its power over pricing and distribution of third-party software on mobile devices hurts competition. The Justice Department's investigation, however, is broader than the App Store and is looking into whether Apple used its operating system to favor its own products, including hardware, said people familiar with the investigation. By blocking access to iOS, Apple makes the iPhone stickier and discourages users from switching to Android phones. In the iOS update introduced in 2019, Apple updated its Find My tracking app, which made the company more competitive with Tile. As part of the update, Apple has started asking users if they want to allow Tile devices to track them. Apple's Find My app comes pre-installed on iPhones and doesn't constantly ask for permission to track users. Apple said there are privacy differences between its Find My service and its Tile service. A number of Apple products are integrated with the operating system in a way that competitors do not. These include iMessage, which Android users don't have access to, and AirPods, branded headphones with unique pop-ups and other perks that make them easier to use. Some competitors argue that integration creates an unfair advantage. Apple claims that the close coupling of hardware and software is a unique feature of its products. New law of the European Union and Apple A new European Union law, called the Digital Markets Act, aims to restrict tech companies like Apple from taking advantage of their presence in digital marketplaces like Apple's App Store for iPhone and iPad. The new law, known as the Digital Markets Act, is part of the biggest proposed expansion of global technology regulation in decades. It aims to impose new obligations and bans on a small group of digital giants, whom the European Union defines as watchdogs - backed by fines for non-compliance that could run up to tens of billions of dollars based on early draft legislation. Legislation, commonly, can affect many corners of the tech world. Its purpose is to generally limit the ability of major tech companies to benefit from their strong presence in digital markets. Apple has made efforts to address a new European law that will start to be enforced in 2024. Apple has begun investigating internally how to allow competing app stores and third-party software to be loaded onto the iPhone and iPad in a process known as sideloading . Apple share price Apple shares at the end of last year and the beginning of this year reached the lowest level, which was last recorded in 2021. The share price at the beginning of the year was at 125.07, and now it is more than twice as high at 155.28. Source: wsj.com, finance.yahoo.com
US Inflation Eases, but Fed's Influence Remains Crucial

The US Jobs Data Remains Strong, All Eyes On US PPI Report

Swissquote Bank Swissquote Bank 16.02.2023 10:22
Do you remember we were predicting a recession, that was supposed to hit the US and the global economy at the start of the year? A recession that would hit equities and boost bonds? Well, forget about all that, it’s not happening. US data The US jobs data remains strong, inflation continues coming lower but the downtrend gives signs of slowing. And yesterday’s US retail sales data came as a cherry on top, with an eye-popping 3% rise in retail sales last month; it was the biggest jump in the past two years. Stocks Market The S&P500 ended the session 0.28% higher, while Nasdaq 100 stocks added almost 0.80%. Treasury yields pushed higher, however, on expectation that the Federal Reserve (Fed) will continue its rate hike policy – and quite aggressively, given that the rate hikes don’t seem to do any harm to the economy. Deutsche Bank revised its terminal Fed rate from 5.1% to 5.6%. Citi believes that the Fed will end up pushing the rates all the way up to 6%. Read next: Apple Is Facing Multiple Lawsuits And Enforcement Actions| FXMAG.COM US PPI Today, the US will reveal the latest producer price inflation data. Producer prices are expected to have ticked higher by 0.4% m-o-m in January, versus a 0.4% retreat printed last month. On a yearly basis, the PPI index is expected to have slowed from 6.2% to 5.4%. Normally, I would expect a positive PPI surprise – meaning stronger inflation figures - to impact the market mood negatively, but at this point, I am not even sure that it matters. Watch the full episode to find out more! 0:00 Intro 0:18 What recession?! 2:36 Market update 3:50 US PPI is out today! 4:37 USD up, EUR, JPY and XAU down 7:18 Crude oil rebounds from 50-DMA 8:34 Glencore’s record profit fails to convince but… Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #strong #economic #data #equity #risk #rally #USD #EUR #JPY #XAU #Crude #Oil #inflation #data #Fed #expectations #Glencore #energy #stocks #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH  
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

The outlook for various large companies such as Apple, Tesla, Amazon and so on isn't as negative this year as the trends in prices of their shares would suggest

Michael Stark Michael Stark 14.02.2023 10:25
2023 is underway, but it's still good time to have a look at predictions for the year prepared by analysts around the globe. Today, we publish Michael Stark's (Exness) views on 2023. In this part, Michael talks stock market. Can you forecast how the value of the S&P 500 and Nasdaq will change in 2023? Please justify the indication of a bullish/sideways/bearish trend. Michael Stark (Exness): As of late January, sideways trends or weak uptrends seem to be most likely. The most hawkish expectations for the Fed seem to have been rejected for now and, while the economy around the world might grow less this year, a deep recession is unfavourable. Many of the constituents of both the S&P 500 and the Nasdaq lost a lot of value in 2022 and the enthusiasm of sellers might have been excessive.The main uncertainty there is how severe the current or upcoming recession might be. Expectations at the moment vary significantly between very negative and cautiously optimistic while some large banks even expect recession to be avoided in most major countries except the UK. Monetary policy looks clearer for the time being but there's still a long way to go before inflation is under control in most countries, including the USA. Will we see greater positive dynamics of price changes in the sector of small, medium or large companies? Probably the most positive - or least negative at any rate - would be for large companies simply because these have suffered most since early 2022 from outflows. The outlook for various large companies such as Apple, Tesla, Amazon and so on isn't as negative this year as the trends in prices of their shares would suggest. Large companies also have significantly more options to cut costs and boost dividends, attracting investors whose focus is on value and cashflow. Read next: Bartosz Milczarek, CEO at Cryptiony: Customers settle the crypto tax in annual returns, so our business model is also based on annual subscriptions | FXMAG.COM Which sectors and industries are worth focusing on in 2023 and why? Primarily tech and financial companies are in view this year. Tech shares were some of the biggest losers in 2022, but now that the outlook for the economy and monetary policy seems less gloomy there could be scope for recovery or further recovery, especially if participants rotate away from energy over the next few months. Most major tech companies seem to be reasonably well prepared for a recession and aware that investors are currently stressing sustainable profitability rather than rapid growth. Financial companies - primarily major banks - could also be in view this year because rising rates almost everywhere mean that their profit margins from mortgages will be higher, while as above most large banks are implementing cost-cutting measures, continuing to downsize their networks of physical branches and push online banking. The obvious concern here is rising rates of default among borrowers, especially if the recession proves to be worse than currently anticipated.
Tokyo Inflation Slows: Impact on JPY and USD/JPY

The US 10Y Treasury Yield Is Now Facing Strong Resistance

Torben Melsted Torben Melsted 17.02.2023 08:09
The US 10Y Treasury yield is now facing strong resistance near 3.83. We could see a temporary break followed by a setback close to the 3.50 - 3.60 area. The next move will be a strong rally higher towards the 4.86 target and maybe even closer to the 5.81 target to complete wave 5 and the entire five-wave rally from 0.33. However, for now, let's see the reaction after resistance at 3.83 is tested.   This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313140
EUR/USD Analysis: Continuing Corrections Amidst European Economic Woes

Analysis Of The Nasdaq 100 Index Situation

InstaForex Analysis InstaForex Analysis 17.02.2023 08:12
If we pay attention on the weekly chart of Nasdaq 100 index, then we can see this few things: 1. Sidewinder (SI) indicator in green which means trending and volatile once. 2. Chopzone (CZ) indicator in cyan blue which means NDX100 condition on the weekly chart is Bullish. 3. Zero Line (ZL) Indicator in green which indicates price is above its LSMA 25-(Bull). 4. Bullish 123 pattern appearance followed by Ross Hook (RH). Then according to 4 facts above, Nasdaq 100 index on its weekly chart is on healthy Bullish condition so in a few days ahead has the potential to appreciated up to the level 13720,91 as the first target and 15265,42 as the second target if it manages to break above its Ross Hook on the level 11906,11. But pay attention that if on its way to the described targets before suddenly NDX100 corrected down to the level 10440,64 then all of the Bull scenarios that has been explained before will be invalid and cancel by itself.   This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/119679
Mercedes Is Planning A €4bn Buyback Programme, Copper Prices Rose

Mercedes Is Planning A €4bn Buyback Programme, Copper Prices Rose

Saxo Bank Saxo Bank 17.02.2023 09:14
Summary:  The US equity market stumbled badly yesterday as US treasury yields continue to rise, with another strong weekly claims number and hotter than expected producer prices print weighting. The US dollar is breaking out higher in most USD pairs. A heavy load of options expiry today could aggravate US equity market volatility as weekly futures and single stock options are set to expire. What is our trading focus? US equities (US500.I and USNAS100.I): an echo from a distant past In yesterday’s equity note we wrote about the key risks in equities arguing that the interest rate sensitivity is no longer the dominant risk factor as equity valuations have fallen and interest rates have already got closer to long-term averages. With the US 10-year yield advancing yesterday after comments from Cleveland Fed President Loretta Mester that more rate hikes are needed to tame inflation S&P 500 futures reacted negatively. Higher long-term bond yields do still impact equities through the discount rate on future cash flows, but initial reaction in S&P 500 futures was muted and they fought back during the session before selling off into the close. Higher than expected US PPI figures reported yesterday are also negative for equities as it could indicate margin pressures will continue for companies. S&P 500 futures are continuing selling off this morning trading around the 4,080 level which is at the lower end of the trading range for February. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) pulled back Hang Seng Index slipped 0.6% as investors lowered expectations for a rapid recovery in Chinese consumer spending. Leading Hong Kong jewellers which have large exposure to Chinese tourists as well as stores all over the mainland declined 2-4%. The Chinese traditional medicine names bucked the decline and rose 3-7%. President Xi’s plan to visit Iran and China’s Ministry of Commerce imposing sanctions on Lockheed Martin (LMT:xnys) and Raytheon Technologies (RTX:xnys) also dented the market sentiment. In A-shares, CSI300 dropped 0.7%, with stocks in the tech space retreating while Chinese traditional medicines and childcare products names advancing. FX: Firm king dollar as yields rise; JPY threatens new lows With US yields grinding higher still, the dollar was firmer again and hit fresh highs since 6 January. A hot PPI, still low jobless claims and Fed speakers, together with weakening risk sentiment all supportive for the greenback. It may be a quiet day ahead for macro data, but market volatility elsewhere after yesterday’s unsettling sell-off in risky assets could yet drive significant moves (note options expiry in the US below). USDCAD is pushing on 1.3500 for the first time since mid-January amid weakness in oil prices while AUDUSD rolled over to new lows since the first days of the year, touching below the recent 0.6856 pivot low and threatening the 200-day moving average just above 0.6800. GBPUSD likewise broke below its prior pivot low of 1.1961 and is trading at its 200-day moving average at 1.1940. USDJPY rose above 134.50 overnight, with the 200-day moving average still some distance higher at 136.93. EURUSD broke down through it’s range low of 1.0656 in late Asian trading as well. Crude oil (CLH3 & LCOJ3) heads for a weekly loss amid Fed concerns and inventory build Even as some signs of improving Chinese demand started to appear, the broader inflation and interest rate rhetoric nudging higher again this week weighed on crude oil and the commodity complex more broadly this week. A hot PPI overnight, along with Fed members now starting to open the door for another potential 50bps rate hike has further brought the Fed’s terminal rate pricing higher and US yields continue to rise. WTI prices dipped below $78 in Asia, with Brent around $85. Even as OPEC and IEA reports suggested possible uptick in demand as China reopens, US stockpile reports continued to dampen the demand outlook. Saudi Energy Minister Prince Abdulaziz bin Salman also said the current OPEC+ deal on output levels will remain in place until year-end and that he is wary of forecasts of much higher demand from China. Copper prices fading after posting two-week highs yesterday Copper prices rose higher on Thursday as the dollar rally took a bit of a breather before resuming later, so the new two-week high was only briefly held before prices rolled back down into the range overnight. Copper stockpiles on the Shanghai Futures Exchange fell for the first time in two months, suggesting that the Chinese demand is picking up. Growth in aluminium inventories also slowed, according to data from Shanghai Metals Market. This comes amid ongoing risks of further supply disruptions. Earlier this week, Freeport-McMoRan Inc suspended operations at its Grasberg copper mine in Indonesia due to landslides. This is adding to disruption to Peru’s output caused by social unrest. Copper prices rose to $4.15 before a retreat to $4.09 in Asia. The key $4 handle support continues to be key. Gold (XAUUSD) testing below first key support Gold prices were only corralled briefly by the 1,828 level this week, which is the major 38.2% retracement of the entire rally off the 1614 lows. Overnight, the stronger US dollar and higher US yields are driving new selling below 1,825, with the next levels looming the 1,809 area that was a critical range break level on the way up, and then perhaps the 200-day moving average coming in at 1,776. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) climbed on hawkish Fedspeak and producer price inflation The US 10-year treasury yield surged 6bps yesterday and followed through higher still to the highest level of the year at 3.89% overnight after a large jump in the US PPI in January and hawkish comments from Fed’s Mester and Bullard (see below). The selling during the session concentrated on the longer end of the curve, with the 2-10 yield curve inversion moderating sharply to –78 bps after as low as –90 bps on Wednesday. The $9 billion 30-year TIPS auction had a bid/cover ratio of 2.38, below 2.69 last time. Traders are cautious ahead of next week’s $120 billion supply from the 2, 5, and 7-year Treasury note auction. What is going on? Albemarle –the lithium giant beat earnings expectations and gave an upbeat outlook. Albemarle, the world's largest lithium company – in size, and scale (selling lithium to most EV makers) rose 4.7% after it delivered a stronger than expected sales outlook. It sees net sales growing to $11.3-$12.9 billion, and EBITDA getting as high as $5.1 billion. It expects to maintain positive cashflow even despite increasing capital expenditure. In Q4 - its earnings (EBITDA) swelled to $1.24 billion, beating expectations and marking a massive jump from $229 million last year, as lithium earnings rose more than expected. Adjusted EPS also grew more than consensus expected with EPS, at $8.62. Other lithium producers such as Allkem and Pilbara Minerals report results next week. Tesla shares dive as company to recall 362,000 cars for self-driving crash risks Tesla’s recall affects 362,758 vehicles, including certain Model 3, Model X, Model Y and Model S units manufactured between 2016 and 2023. Although Musk said it’s not a recall, even though Tesla’s full-self driving beta system “may allow the vehicle to act unsafe around intersections”, and increase collision risk if the driver does not intervene, Musk affirmed the issue will be remedied with a software update, by April 15. Tesla shares fell 5.7% to $202.04 on Thursday after trading 15 dollars higher earlier in the session. European earnings: Allianz, Mercedes, Hermes Allianz reports fiscal year operating profit of €14.2bn vs est. €13.7bn and sets the dividend per share to €11.40 vs est. €11.38. On the conference call this morning the CFO of Allianz said that the company does not expect rates to go significantly higher. Mercedes reports this morning Q4 revenue of €41bn vs est. €37.7bn and adjusted EBIT of €5.1bn vs est. €4.5bn as pricing remains strong in the car industry but the German carmaker sees FY23 operating income below the 2022 level. Mercedes is also planning a €4bn buyback programme. Hermes reports this morning Q4 revenue of €3bn vs est. €2.8bn up 23% in constant currency reflecting strong demand for luxury goods. Hermes raised their global prices in January by 7% compared to a year ago. Fed speakers mention idea of 50-basis point hikes Two hawkish Fed members, the St. Louis Fed’s Bullard and the Cleveland Fed’s Mester, neither of whom are voters this year, argued they were in favour of a 50-basis point hike at the Feb 1 FOMC meeting (only 25-bp hike delivered). The market is pricing 28 basis points for the March 22 meeting and a peak Fed Funds rate this year of 5.29%. China’s US Treasury holdings hit a 12-year low in December Data published this week by the US Treasury show that China’s holdings of US treasuries fell for the fifth month in a row and to a 12-year low – to $867 billion and marking a total fall of $173 billion for the 2022 calendar year. What are we watching next? Significant options expiry today, 0DTE options a risk for driving volatility. The options market in recent months has driven significant intraday volatility as options on US S&P 500 futures are available with expiry on all weekdays. It has become increasingly popular to trade the contracts that expire on the same day as they are traded, so called 0DTE, or Zero Days to Expiry options. Such trading in 0DTE options represents nearly half of all traded S&P options, with some noting that this trading represents a significant risk to accelerating market volatility on any given day. With yesterday’s ugly session in the US and other options also up for expiry, including weekly options on single stocks and ETF’s, it is worth noting the background risk that market volatility can drive a reflexive risk of further volatility as options holders rush to hedge their market exposure, which can swell as options move closer to- or deeper into the money. Earnings to watch Today’s US earnings focus is Deere which is expected to report FY23 Q1 (ending 31 Jan) revenue growth of 17% y/y and EPS of $5.53 up 76% y/y as demand remains robust and margins have room to expand. Friday: Hermes International, Safran, Allianz, Mercedes-Benz, Uniper, Sika, Deere Next week’s earnings releases: Monday: BHP Group, Williams Cos Tuesday: Teck Resources, Gapgemini, Engie, HSBC, Walmart, Home Depot, Medtronic, Palo Alto Networks Wednesday: Rio Tinto, Genmab, Danone, Lloyds Banking Group, Iberdrola, Nvidia, TJX, Stellantis, Baidu, eBay Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) 1130 – ECB's Villeroy to speak 1330 – Canada Jan. Teranet/Nationa Bank Home Price Index 1330 – US Fed’s Barkin (Non-voter) to speak 1330 – US Jan. Import/Export Price Indices 1345 – US Fed’s Bowman (Voter) to speak 1500 – US Jan. Leading Index   Source: Financial Markets Today: Quick Take – February 17, 2023 | Saxo Group (home.saxo)
Earnings season: Tesla stock price slipped after yesterday's news. The best selling car in Q1 was Model Y

Tesla Has Been The Most Transacted Stock And CFD At Saxo

Saxo Bank Saxo Bank 17.02.2023 09:59
Summary:  We cover the most traded instruments at Saxo for the third week of February, from what the most traded Futures, Stocks, CFDs, options and FX positions were for the week that was. We touch on how some clients are protecting themselves in case Tesla and or the S&P500 pulls back, plus why some clients are trading Commonwealth Bank of Australia shares. Here are the most traded instruments at Saxo Capital Markets Australia for the week ending February 17, 2023In Futures the most traded instrument for the week ending 17 February 2023 was the S&P500 E-Mini. We have been speaking about the S&P500 rally looking vulnerable of a pull back, so clients are expressing that view with perhaps futures.  Tesla (TSLA) has been the most transacted stock and CFD at Saxo for the week ending 17 February 2023. We have seen buying pick in up TSLA shares, but also in options as well; with clients using optionality to protect themselves in case of a potential pull back.  We've been speaking about Tesla shares trading in overbought territory after Tesla shares have run up over 90% from their lows, so perhaps some clients are using options as a protective cushion. Commonwealth Bank of Australia (CBA) is the second most transacted upon stock/CFD at Saxo this week in Australia. Some buyers swooped in after CBA shares shed about 8% over the week. Market consensus expects CBA earnings to grow in 2023 - even despite the headwinds of CBA guiding for an uncertain year ahead - putting capital aside for bad debts with consumers feeling financial strain from inflationary pressures. And in Foreign Exchange (FX), the Aussie dollar against the US, the AUDUSD pair, was the most transacted upon currency pair after the Australian unemployment rate rose. This week at Saxo, there was more Aussie dollar selling, than buying, as the Reserve Bank of Australia’s (RBA) task in rising rates to slow the pace of inflation - just got a little tougher - given the jobless rate surprisingly rose. This was not expected by the market or the RBA. The RBA previously expected the jobless rate to pick up later this year. However, at Saxo, we saw some clients taking a longer term view on the Aussie dollar (the AUDUSD pair), given commodity companies who reported this week, such as Fortescue Metals (FMG) gave bullish outlooks on China's reopening boosting resources demand, and that would theoretically support the Aussie dollar. For more on our bullish outlook on commodities, read our Quarterly Outlook.  Click here to look at more stocks to watch across the metals sector this week.For our team's weekly look at markets, click here. To listen to our global team's take on markets - tune into our Podcast.   Source: Financial Insights: Sharing the most traded instruments at Saxo for the week, including Tesla options picking up | Saxo Group (home.saxo)
Rates Spark: Escalating into a Rout as Bond Bear Steepening Accelerates

A Mix Of Economic Data Caused Confusion In The Markets

Swissquote Bank Swissquote Bank 17.02.2023 10:18
The equity marathon that kept going on for questionable reasons since Tuesday ended in tears yesterday, with the arrival of a new set of economic data that crushed the optimistic rhetoric of soft landing.  The latest data Released yesterday, the latest data showed that US producer price inflation rose more than expected on a monthly basis, both for headline and core data, and the core PPI eased less than expected – similar to what we saw in the CPI data, BUT the Philli Fed manufacturing index was a disaster with an unexpected drop from -8.9 to -24.3 – the expectation was a -7.4 print. Fed So that crushed the idea that the economy is strong, without however fueling the Federal Reserve (Fed) cut expectations, as the slowdown in inflation needs to be addressed for some more time. And of course, comments from two Fed members were the last nails in the coffin yesterday. Loretta Mester said that she would go for a 50bp hike if she had the right to vote in the latest FOMC meeting. And James Bullard said that he would back a 50bp hike in March, if he could vote this year. The US 2-year yield consolidates a touch below 4.70%, while the 10-year yield hit 3.90% for the first time this year. US Stocks The S&P500 gave back nearly 1.40% yesterday, while the more rate-sensitive Nasdaq fell nearly 2%. European stock US futures hint at further selloff before the weekly closing bell, as in the absence of important data, investors will have to digest the week’s mixed data. And the bad news is, the European stock traders will also have to think whether a further rally in European stocks makes sense, when the EURUSD is trending lower. Watch the full episode to find out more! 0:00 Intro 0:44 Equity investors are victim of mixed economic data 2:33 Rate expectations and yields update 4:35 Equity update 5:16 FX update 6:23 Gold down, Bitcoin up 8:40 There is no such thing as ‘no landing’ Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #mixed #economic #data #Fed #rate #expectations #USD #EUR #JPY #XAU #Crude #Oil #bitcoin #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The Most Sold Company Turned Out To Be Microsoft

Microsoft: Bing With Artificial Intelligence And The First Mistakes And Confusing Answers

Kamila Szypuła Kamila Szypuła 17.02.2023 11:32
Bing with AI and ChatGPT are some of the first major tech releases that show just how persuasive, and sometimes disturbing, new AI chatbots can be. First errors Just over a week after Microsoft Corp. presented its new search engine Bing the first testers point out the errors and disturbing answers generated by this technology. Microsoft unveiled the updated Bing at an event last week at its headquarters in Redmond, Washington. The company says the change enables a new type of search, where people will ask questions to the search engine in natural language, and Bing will generate direct answers and suggestions, as opposed to directing users to different websites. Some parts of the demo were problematic: Microsoft showed how Bing could generate and compare public company leaderboards with regular language prompts, but the information Bing displayed contained errors. In the days that followed, people began sharing their experiences online, with many pointing out mistakes and confusing answers. When a user asked Bing to write a newspaper article about the Super Bowl "this just happened", Bing provided details of last year's soccer championship game. Read next: USD/JPY Is Trading Close To 134.00, EUR/USD Is Remaining Above $1.07| FXMAG.COM Microsoft's answer On its blog, Microsoft said that feedback on the new Bing has been mostly positive so far, with 71% of users giving it a "thumbs up". Microsoft said it has found that Bing starts coming up with weird responses after chat sessions of 15 or more questions, and that it may repeat itself or respond in a way that doesn't match its designed tone. The company said it was trying to train the technology to be more reliable in finding the latest sports scores and financial data. It is also considering adding a toggle that would allow users to decide if they want Bing to be more or less creative in their responses. Microsoft's quick response to user feedback reflects the importance the company sees in people's reactions to the emerging technology looking to capitalize on ChatGPT's groundbreaking success. The company intends to use this technology to ward off the dominance of Alphabet Inc. in a search through your Google entity. In a blog post, Microsoft said it expects the new Bing to improve over time as more people use it. "The only way to improve a product like this where the user experience is so different from anything anyone has seen before is to allow people like you to use the product and do exactly what everyone else is doing," the company said. Not only Microsoft Microsoft isn't the only company that has had trouble launching its new AI tool. When Google followed Microsoft's lead in exposing ChatGPT's rival Bard last week, the tool's answer to one question contained an obvious factual error. He claimed that the James Webb Space Telescope took the "first pictures" of an exoplanet outside the solar system. The National Aeronautics and Space Administration says on its website that the first pictures of the exoplanet were taken in 2004 by another telescope. Microsoft share price After February 14, Microsoft's stock hit its all-time high, the stock fell. MSFT shares fell from 272.17 to 259.72. The price level of 272.17 was last traded in September last year. Source: wsj.com, finance.yahoo.com
The Fear of Strong Jobs: How US Labor Market Resilience Sparks Global Financial Panic

Stock market summary of the week 13-17.02.2023

Conotoxia Comments Conotoxia Comments 18.02.2023 09:29
A surprise in US inflation data, a strengthening US dollar, increased economic activity among consumers and a sharp rally in cryptocurrencies despite their legal woes - these are just some of the events of the past week. What else could we have found out? Macroeconomic data The week started with Japan's GDP data for Q4 2022. It reported growth of 0.2% from the previous quarter, which was lower than economists' forecasts of 0.5% growth. Tuesday saw the release of indicators on the UK labour market situation, including the Average Earnings Index and Claimant Count Change for January 2023. The Earnings Index fell by 0.3 percentage points from the last reading, coming in at 5.9% (6.2% was expected), while the Claimant Count fell by 12.9,000 from the previous month (17,900 was expected). The UK100 Index (UK100) hit new historic peaks this week, reaching 8000 for the time being. Source: Conotoxia MT5, UK100, Daily On the same day, we could learn about the CPI and core inflation readings for January 2023 for the US economy. What seems to have surprised analysts was the higher-than-expected CPI reading of 6.4% (6.2% was expected), while core inflation rose by an expected 0.4% month-on-month. This might imply that the level of disinflation is not going in line with previous assumptions, which could force the Fed to increase interest rates further. Shortly after the release of the data, the S&P 500 Index (US500) fell by 1%, eventually ending the week on a return to the levels seen at the end of last week. Source: Conotoxia MT5, US500, Daily On Wednesday, we learned of the UK's CPI inflation reading. Price dynamics in this economy came in below expectations at 10.1% (10.3% was expected). This is the fourth consecutive month of disinflation in the UK. Indicators of US economic activity, such as the volume of retail sales and core retail sales (excluding car sales), came as a positive surprise on the day. Both indicators beat the most optimistic forecasts, coming in at 2.3% m/m. (0.8% m/m was expected) and 3% m/m. (1.8% m/m. was expected). It seems that, despite the economic slowdown and high inflation, consumers have not stopped their desire to make massive purchases. Thursday brought another batch of data from the United States. First, we learned about the number of new applications for unemployment benefits - 194 000 (200 000 was expected), which may indicate that the US labour market remains in excellent shape. Next, we learned about the sentiment among industrial companies in Philadelphia. The Philadelphia Fed Manufacturing Index turned out to be extremely negative, coming in at minus 24.3 points (minus 7.4 points were expected). This is the worst reading since the pandemic, which may illustrate how much of a slowdown in US manufacturing is expected. Finally, there was another dose of producer PPI inflation, whose reading also came in beating analysts' expectations, at 0.7% m/m in January. (0.4% m/m was expected). This appears to have triggered a correction on expectations for future interest rates, with the spread between 2-year and 10-year bond yields at minus 0.76 percentage points, unseen since 1981. It should be recalled that historically negative values have preceded slowdowns or crises. Source: Fred The stock market The accumulation of negative and positive macroeconomic data may have left the market in dismay. Most sectors ended the week at levels seen seven days ago. The waste sector grew the most, rising 1.5% over the week. We could see this in the performance of the Utilities Select Sector SPDR Fund (XLU). In second place was the energy sector, up 1.3%. Source: Conotoxia MT5, XLU, Daily Key company reports for Q4 2022 included Tuesday's report from beverage maker Coca-Cola (CocaColaHSB). Results came in line with expectations, with earnings per share EPS of 0.45. On the same day, we saw a report from short-term rental platform Airbnb (Airbnb), which reported EPS greater than expectations of 0.48 (0.25 was expected). Source: Conotoxia MT5, AirBNB, Daily On Wednesday, US-based multinational technology company that specialises in computer networking and telecommunications Cisco (Cisco) released better-than-expected financial results. Last year's Q4 EPS was 0.88 (0.85 was expected). The company's shares rose more than 9% during the week. And it was one of the strongest-growing companies in the S&P 500 index. Source: Heat map for the S&P 500 index, https://finviz.com/map.ashx?t=sec&st=w1 Currency and cryptocurrency market In the foreign exchange market, we could see a significant strengthening of the US dollar this week. This was particularly noticeable from the quotations of the USD/JPY pair, which rose by more than 2.7%. Source: Conotoxia MT5, USDJPY, Daily Another strengthening of the US dollar was seen on the EUR/USD pair, which has fallen by 0.4% since the start of the week. This is the third consecutive week of dollar strengthening and declines on this pair. Investors may have been amazed by cryptocurrency listings. Despite high inflation and thus the risk of further interest rate rises, the closure of stacking functionality by the Kraken exchange in the US and the ban on the issuance of new stablecoin BUSD, the value of bitcoin rose by more than 9%. In contrast, the value of the overall stablecoin market may have stalled. Source: Conotoxia MT5, BTCUSD, Daily Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

The German Purchasing Managers' Index, ZEW Economic Sentiment And More Ahead

Conotoxia Comments Conotoxia Comments 19.02.2023 10:20
Investors' eyes may turn to next week's key macroeconomic indicators from the EU, particularly Germany, the region's largest economy. Tuesday 21.02. 08:30 GMT, Germany Manufacturing Purchasing Managers Index (PMI) February The German Purchasing Managers' Index provides insight into the construction industry's activity level as reported by purchasing managers. This measure provides an understanding of the state of the German construction industry, as it is assumed that purchasing managers have access to first-hand data on the performance of their companies.   A reading above 50 indicates expansion, while a reading below 50 indicates contraction. The last time the German manufacturing PMI was above 50 was in June 2022, and the preliminary reading for February 2023 is forecast to be 47.9. Falling factory activity has been linked to lower orders amid weaker demand from both domestic and foreign customers, especially Chinese, due to high stocks, elevated prices and slowing investment activity. A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could be bearish for the EUR.  Impact: EUR Tuesday 21.02. 10:00 GMT, Germany ZEW Economic Sentiment February ZEW Economic Sentiment is one of the leading economic indicators of Germany. It is created based on interviewing experts from banks and other sectors about their expectations regarding interest rates, inflation rates, exchange rates, stock markets and other measures, such as the economic development of the world's major economies, in order to develop a sentiment for the German economy for the next six months. The ZEW Indicator of Economic Sentiment is calculated by comparing the number of experts with positive versus negative sentiment. For example, if 30% hold positive sentiment, 20% have neutral sentiment, and 50% hold negative sentiment,then the ZEW index would result in -20%. January's ZEW Economic Sentiment was positive for the first time since February 2022, suggesting that German experts may be turning away from their negative sentiment. If the February 2023 data are also positive, this could confirm the above statement. However, it would be a better-than-expected surprise as the current forecast for ZEW Economic Sentiment this month is -15%.  A positive or less negative result than the forecast could be seen as bullish for the EUR, while a lower (more negative) result could be seen as bearish for the EUR. Impact: EUR Wednesday 07:00 GMT, German CPI (YoY) (January) While the German Manufacturing PMI and ZEW Economic Sentiment will provide the first indicators of German economic strength, the CPI later in the week will show whether the ECB's hawkish policy is succeeding in the fight against inflation.  The CPI measures the change in prices paid by consumers for a given basket of goods and services over a specified period. This information shows changes compared to a year ago. The CPI is the main measure of inflation - a higher index means higher inflation. The preliminary data for January inflation showed a slight increase in inflation from December 2022 (8.7% versus 8.6%), showing that inflationary pressure may not be over. Economists are suggesting that Germany's broad governmental support schemes may be extending the inflationary pressure, although at a lower level.  Higher-than-expected data may have a bullish impact on the EUR and a bearish impact on the stock market, while lower-than-expected data may have a bearish effect on the EUR and a bullish impact on the stock market.  Impact: EUR, DAX Thursday 10:00 GMT EU CPI (YoY) (January) The preliminary result of the EU CPI data for January fell to 8.5% from 9.2% in the previous month, despite the 1% rise in German inflation. Possibly, the higher German data may be the reason why the EU CPI for January is expected to be 9.2%, 70 bp higher than the preliminary figure. The inflation outlook for the euro area and Germany appears to be influenced by two opposing factors. On the one hand, lower-than-forecast energy prices may push down inflation faster than previously thought. On the other hand, the pass-through pressure of energy and commodities inflation to production costs is not yet over, keeping the overall inflation high. Furthermore, as the geopolitical situation in Europe is not improving, the ongoing price negotiations within the agricultural sector may result in higher-than-expected prices giving an additional boost to the inflation numbers.  Higher-than-expected data may have a bullish impact on the EUR and a bearish impact on the stock market, while lower-than-expected data may have a bearish effect on the EUR and a bullish impact on the stock market.  Impact: EUR, DAX, STOXX Stocks to watch Walmart (WMT) announcing its earnings results for the quarter ending on 01/2023. Forecast: 1.51. Positive earnings surprise in 8 out of the last 10 reports. Time: Tuesday, February 21, before the market opens. Home Depot (HD) announcing its earnings results for the quarter ending on 01/2023. Forecast: 3.29. Positive earnings surprise in 10 out of the last 10 reports. Time: Tuesday, February 21, before the market opens. NVIDIA (NVDA) announcing its earnings results for the quarter ending on 01/2023. Forecast: 0.8102. Positive earnings surprise in 9 out of the last 10 reports. Time: Wednesday, February 22, after the market closes. Alibaba (BABA) announcing its earnings results for the quarter ending on 12/2022. Forecast: 16.63. Positive earnings surprise in 8 out of the last 10 reports. Time: Thursday, February 23, before the market opens. Dell Technologies (DELL) announcing its earnings results for the quarter ending on 01/2023. Forecast: 1.65. Positive earnings surprise in 9 out of the last 10 reports. Time: Friday, February 24, 21:30 GMT. Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Summary Of The Situation Of Equity Markets And Bitcoin

Summary Of The Situation Of Equity Markets And Bitcoin

Craig Erlam Craig Erlam 19.02.2023 11:05
Equity markets are ending the week in the red after finally falling victim to the persistent disappointment of US economic data on Thursday. It’s taken a lot but it would appear investors’ eternal optimism is being shaken, with the latest PPI figures finally driving the message home that bringing the economy in for a soft landing will be extraordinarily challenging and there’ll likely be plenty of turbulence along the way. In reality, the message should have sunk in much sooner but investors were seemingly so convinced that these were just blips in the data that they failed to see how quickly they were stacking up. Don’t get me wrong, I’m still of the view that the data will improve again but I’m not so willing to turn a blind eye to what it’s telling us now. And most importantly, neither is the Fed which has been less willing to get carried away with what came before. Suddenly the topic of conversation has changed from one more 25 basis point hike and then two cuts later in the year, a few weeks back, to perhaps reverting back to 50 in March and hiking by another 75 in total. It was always going to be a rollercoaster ride this quarter and maybe next and the first seven weeks of the year have been just that. Taking off? Bitcoin is in retreat at the end of the week, not immune it seems to the sharp shift in risk appetite throughout the markets. That comes after an immense rally earlier this week that saw it hit an eight-month high on Thursday. While the risk element will no doubt be a key factor, that the correction is occurring in the $24,500-$25,500 zone suggests to me that there’s a coincidental element to it as well, as we could have expected to see some profit-taking around these levels regardless. The risk mood may have just helped that along. Regardless, bitcoin bulls will no doubt be excited by recent developments in the price and may feel more optimistic than they have since 2021. For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/ This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

At The Close On The New York Stock Exchange Only The Dow Jones Rose

InstaForex Analysis InstaForex Analysis 20.02.2023 08:00
At the close on the New York Stock Exchange, the Dow Jones rose 0.39%, the S&P 500 index fell 0.28%, and the NASDAQ Composite index fell 0.58%.  Dow Jones Merck & Company Inc was the top gainer among the components of the Dow Jones in today's trading, up 3.01 points (2.83%) to close at 109.52. Amgen Inc rose 6.31 points or 2.69% to close at 240.53. UnitedHealth Group Incorporated rose 11.73 points or 2.41% to close at 499.08. The least gainers were shares of Chevron Corp, which lost 3.72 points or 2.23% to end the session at 162.85. Intel Corporation was up 2.09% or 0.59 points to close at 27.61, while Salesforce Inc was down 1.75% or 2.94 points to close at 165.17.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Deere & Company, which rose 7.53% to 433.31, Bio-Rad Laboratories Inc, which gained 5.99% to close at 483.23 , as well as shares of Organon & Co, which rose 4.60% to close the session at 26.02. The least gainers were Albemarle Corp, which shed 9.67% to close at 258.00. Shares of Hess Corporation shed 5.73% to end the session at 135.52. Quotes of Halliburton Company decreased in price by 5.39% to 36.50. NASDAQ The leading gainers among the components of the NASDAQ Composite in today's trading were OKYO Pharma Ltd ADR, which rose 62.96% to 3.74, Pathfinder Acquisition Corp, which gained 46.56% to close at 4.69. as well as shares of Apexigen Inc, which rose 44.21% to close the session at 1.37. The least gainers were shares of Arqit Quantum Inc, which shed 42.09% to close at 1.47. Shares of Universal Electronics Inc lost 33.01% and ended the session at 16.38. Quotes Mountain Crest Acquisition Corp III fell in price by 32.72% to 4.97. Numbers On the New York Stock Exchange, the number of securities that fell in price (1689) exceeded the number of those that closed in positive territory (1288), while quotes of 111 shares remained virtually unchanged. On the NASDAQ stock exchange, 1914 companies rose in price, 1686 fell, and 217 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.74% to 20.02. Gold Gold futures for April delivery added 0.00%, or 0.05, to $1.00 a troy ounce. In other commodities, WTI crude for March delivery fell 2.75%, or 2.16, to $76.33 a barrel. Brent oil futures for April delivery fell 2.55%, or 2.17, to $82.97 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.25% to 1.07, while USD/JPY rose 0.18% to hit 134.18. Futures on the USD index rose 0.01% to 103.81.   Relevance up to 03:00 2023-02-21 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313259
US-China Tensions Continue To Ramp Up, Dollar Off Its Highs

US-China Tensions Continue To Ramp Up, Dollar Off Its Highs

Saxo Bank Saxo Bank 20.02.2023 09:14
Summary:  Data was light on Friday and US equity indices ended mixed after markets catching up with the Fed’s December dot plot over the week. Fed speakers Barkin and Bowman were however somewhat less hawkish than Bullard and Mester earlier in the week. Dollar off its highs as US yields retreated lower amid short covering, helping metals regain some footing. US markets remain closed today, and key focus this week on geopolitics as US-China tensions continue to ramp up and one-year anniversary of Russia’s invasion of Ukraine approaches.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) mixed, European indices outperformed in the week The S&P500 was down for the second consecutive week as hot inflation data and steady retail sales supported the case for more rate hikes from the Fed, shifting the market expectations for the Fed path higher. The S&P500 was down 0.3% on Friday, with NASDAQ100 down 0.7%, even though the Dow Jones index recovered later to close 0.4% higher. NASDAQ however closed the week higher, with Tesla notching up gains of ~6% in the week. European indices outperformed in the week, led by France’s CAC 40 (FRA40.I) which was up over 3% and EuroStoxx 50 (STOXX50.I) was up 1.8%. Importantly, US markets are shut on Monday for Presidents Day, however yields remain a key focus this week after the US 2-year yield rose to 4.7%+ levels on Friday and 10-year is getting close to the 4% mark again. Key stock movers On Friday, US farm equipment maker Deere (DE:xnys) led market gains being up 7.5%, Moderna Inc (MRNA:xnas) fell 3.3% after its experimental messenger RNA-based influenza vaccine delivered mixed results in a study. Lithium miners Livent Corp (LTHM:xnys), Albemarle Corp (ALB:xnys) and Piedmont Lithium (PLL:xnas) slumped between 9% and 12% due to concerns about weakness in Chinese prices for the EV battery metal. Agricultural spending bellwether - Deere - drives up, putting the spotlight on the tangible world outperforming and food security Deere was the star performer in the S&P500 on Friday, rising 7.5% after raising its forecasts for the year, and reporting better than expected Q4 results. It reported $6.55 earnings per share from sales of $12.7 billion, beating estimates (of $5.56 per share on sales of $11.28 billion). The bottom line is demand from farmers is strong, and producers are prepared to buy more equipment and upgrade their fleets. Its production and precision ag division which includes autonomous crop planting and harvesting – saw the most sales growth – with quarterly sales up 55% in the quarter, from a year prior. The company has not only evolved from selling ag equipment to automation equipment and farm management systems, which helps farmers optimize their operations using crop data analytics. For the year ahead, Deere sees net income rising to $8.75 billion to $9.25 billion, which is higher than its prior estimate ($8 billion to $8.5 billion). This reinforces Saxo’s bullish view of investments in the physical world outperforming the intangibles. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) suffered a third consecutive week of losses amid regulatory concerns Hong Kong's stocks suffered a third consecutive week of losses, with the Hang Seng Index dropping by 1.3%, weighed down by China's tech and internet shares. The Hang Seng Tech Index fell by 2.5%, and turnover was the lowest in 2023 at HK$89.7 billion. Fears of regulatory crackdowns in China were fueled by the disappearance of high-profile investment banker Bao Fan and speculation that Wu Qing, who was known in the securities industry for iron-fisted handling of market irregularity cases, would be the new chief of the China Securities Regulatory Commission. Fan’s majority-owned China Renaissance took a 28.2% hit while internet giants Alibaba (09988:xhkg), Tencent (00700:xhkg), and Meituan (03690:xhkg), registered loses over 2%. Baidu (09888:xhkg) fell 4.6% as ChatGPT concept stocks retraced in both the Hong Kong bourse and mainland exchanges. Lenovo (00992) slid 3.1% following reporting net income, revenue declines, and job cuts. Hong Kong jewellers with large exposure to Chinese tourists declined 2-4%, while Chinese traditional medicines and childcare products gained. The A-share market in China also closed lower, with CSI300 Index down by 1.4%. Computing, electronics, communication, ChatGPT concept, and electric equipment stocks led the charge lower. Digital China (000034:xsec) and Montnets Rongxin Technology (002123:xsec) plunged over 8%. Meanwhile, Chinese traditional medicine names and COVID-19 drug pharmaceutical stocks bucked the decline. Shangdong Xinhua Pharmaceutical (000756:xsec) went limit up by 10% and its H-shares (00719:xhkg) traded in Hong Kong surged 26.4% following positive comments on a generic drug manufactured by the company. FX: Dollar off its highs, NZD in focus as RBNZ meets this week After a run higher this week with the hawkish tilt in Fed expectations, the US dollar was off its highs on Friday with US 10-year yields turning lower after getting close to the key 4% mark. This helped USDJPY retreat from 2-month highs of 135 but Japan’s CPI due this week along with BOJ governor nominee Ueda’s parliamentary hearings will likely keep the yen volatile. NZD was one of the underperformers last week on slowing 2yr NZ inflation expectations, and remains in focus this week as RBNZ is likely to downshift to a 50bps rate hike with some even considering a 25bps hike amid risks from the recent cyclone. GBPUSD touched lows of 1.1915 but was back above 1.2000 handle on Friday. ECB commentary remains mixed (read below) and EURUSD still close to 1.07. Crude oil (CLH3 & LCOJ3) end last week lower on Fed worries Crude oil prices tumbled over 2% last week amid a hawkish tilt returning in the US data and Fed commentaries, which brought up the prospects of more rate hikes in the current cycle. Moreover, data confirming a pickup in real economic activity in China has been meagre so far, and near-term oversupply fears have pushed WTI prices lower to touch $75/barrel on Friday, while Brent took a look below $82. OPEC and IEA however raised the medium-term demand outlook, but this week’s focus will also be on geopolitics (read below) with US-China tensions ramping up and the one-year anniversary of Russia’s invasion of Ukraine. Copper focusing on supply-side issues Despite the hawkish tilt in Fed expectations, copper ended the week only down 0.4% as the key $4 area continued to provide support. Supply issues also remained in focus. Freeport-McMoRan Inc suspended operations at its Grasberg copper mine in Indonesia due to landslides. This is on the heels of disruptions to output in Peru amid social unrest. Zambia also reported that its copper output fell to a seven-year low in 2022. US yield and dollar trends this week will be key for metals and commodities in general. Gold (XAUUSD) approaching key supports Gold fell to a six-week low last week amid hawkish comments from Fed officials after the CPI report last week and Fed commentaries shifting market expectations for the Fed path higher. Gold took a look below the key support at $1828 on Friday but a subsequent recovery to 1840 was seen as dollar was off its highs. Next key support at $1800 level remains a key focus, followed by the 200DMA at 1776.   What to consider? Fed speakers note inflation and jobs data surprises Fed member Bowman (voter) said she wants to see a consistent decline in inflation and she thought the moderation of inflation before the prior meeting meant we could be seeing the beginning of disinflation, but notes the most recent data however has been surprising. Barkin (non-voter) also said that he does feel the US is making slow progress on inflation. Both also emphasized labor shortages, with Barkin stating clearly that he prefers the 25bps rate hike path. ECB’s mixed messages ECB speakers had mixed messages on Friday with the hawkish Isabel Schnabel saying that investors risk underestimating the persistence of inflation. That bolstered rate-hike bets, with money markets pricing a 3.75% peak in the deposit rate. However, later dovish member Francois Villeroy said that rate are now in restrictive territory and that they may raise above 3% but it’s not automatic. Rainy season in Brazil-putting iron ore supply in question Rainfall at Brazil's largest iron ore mines increased in the second week of February, but remained below historical levels since the start of the year. Despite a dry start to 2023, iron ore supply risks are high ahead of seasonal rainy season peaking in month end. Brazilian Iron ore shipments are down this year, while Australian iron ore shipments are up YTD. We need to see Chinese property stimulus pick up to propel further demand in iron ore which could also act as a catalyst for the next move up in iron ore prices. Vale is the biggest iron ore producer in Brazil. Australia’s largest iron ore producers are BHP and Rio Tinto, who report results over the next two days.  Luxury stocks are the key contributors to the French CAC 40 index’s 2023 performance The French CAC 40 index is recording a strong YTD performance with an increase of +14 %. This is quite astonishing. This is partially explained by the weight of luxury stocks in the index. Kering, L’Oréal, LVMH and Hermès represent about a third of the jump. Other major contributors are Schneider Electric (which directly benefits from China’s economic reopening), BNP Paribas, Vinci (a construction company and operator of toll roads), STMicroelectronics (semiconductors) and Air Liquide (which can be considered as a market maker in his business segment). The French index is now valued at less than 13 times the estimated profits. This is below its 10-year average of 14. This could imply the market can go much higher in the short- and medium-term. The French stock market is the largest one in Europe followed by the UK’s. China’s loan prime rate fixing due today China's loan prime rates will likely stay steady at the fixing today, considering the People's Bank of China's decision to keep its medium-term lending facility rate unchanged earlier this month. The one-year and five-year LPR rates are likely to remain unchanged at 3.65% and 4.3%, respectively. Still, the uncertainty around the rate path is increasing given the increasing focus in China to drive up consumption and growth, and rate cuts remain likely in H1. Geopolitics keeps Saxo’s Defense basket in focus In Saxo’s equity theme baskets, the Defense basket was one of the top performers last week despite the news of China sanctions on US defense companies like Lockheed Martin and Raytheon due to balloon shooting incident. Geopolitical tensions, and therefore the Defense stocks, will remain in focus again this week as we approach the one-year anniversary of Russian invasion of Ukraine on 24 February. Biden will be visiting NATO ally Poland to talk about the importance of the international community’s resolve, and unity in supporting Ukraine, adding that the next weeks and months are going to be difficult for Ukraine’s forces, and the US is going to continue to stand by them. Meanwhile, China’s top diplomat Wang Yi kicked off his week-long tour through Europe in Paris on Wednesday. The diplomat is expected to travel to Italy, Germany, and Hungary – with a final stop in Russia. There were also some reports suggesting that the US has information that China may be considering supplying arms to Russia. Putin will also be giving a state of the nation address, and focus will be on any risks of further escalation noting that 500k Russian troops have been mobilised.   For a global look at markets – tune into our Podcast.   Source: Markets Today: US yields at critical levels – 20 February 2023 | Saxo Group (home.saxo)
National Bank of Poland Meeting Preview: Anticipating a 25 Basis Point Rate Cut

Singapore’s Largest Bank DBS Declared A Special Dividend

Saxo Bank Saxo Bank 20.02.2023 09:26
  Summary:  Earnings focus moves to Asia this week, even though US retail earnings from Walmart and Home Depot will still be key. Outlook from airlines like Singapore Airlines and Qantas, as well as commodity giants like BHP and Rio and Singapore’s agri player Wilmar, will add more colour on the potential pickup in Chinese demand. China’s tech sector and its progress on ChatGPT style products will also be a key focus as Alibaba and Baidu report. Singapore bank earnings also in focus. ChatGPT craze on test in China technology sector Alibaba (BABA:xnys) and Baidu (09888:xhkg) report earnings this week, and the key focus will be on the outlook on the potential for artificial intelligence (AI) as well as the impact from easing crackdown of the Chinese government on the internet companies. While Baidu is likely to see the ongoing recovery in its advertisement business and upside in cloud opportunity become more supportive, key focus for investors will be on any further details on its ChatGPT-style product which the company is expected to launch in March. Alibaba is also likely in the race for an AI Chatbot, but earnings will take some time to capture the real enthusiasm from China’s reopening. Both Alibaba and Baidu have seen a rebound in their share prices this year, market will be focused on evidence of an earnings recovery and a strong outlook to sustain the price momentum. Travel demand outlook from airline stocks on watch Earnings reports from Singapore Airlines (C6L:xses), Qantas Airlines (QAN:xasx) and Air New Zealand (AIZ:xasx) will be key to assess how the Asia reopening theme has been playing out. More importantly, the outlook for the travel and tourism sector will be on watch in anticipation of the return of Chinese tourists. US airlines earnings results for Q4 have been strong amid booming demand and a decline in jet fuel prices, and a similar momentum remains likely from Asian airline results due in the week. Singapore Airlines has recently reported a 400% increase in passenger traffic in January from last year amid year-end traffic and the Lunar New Year holiday, but it is still trading below historical averages and at a discount to its regional peers. Qantas is expected to return to profitability, and also appears undervalued despite being up 55% from its 2022 lows. Air New Zealand also reports this week. Singapore banks remain a key dividend play Singapore’s largest bank DBS (D05:xses) reported bumper Q4 earnings last week, and declared a special dividend. The other two banks, UOB (U11:xses) and OCBC (O39:xses) will be reporting this week and are also likely to show resilient earnings. UOB reports on Thursday pre-market and may be able to garner gains in net interest income and show a greater impact from the acquisition of Citi’s retail banking business, but that will be offset by lower wealth management fee amid continued investor caution. OCBC's profit remains more vulnerable than that of DBS and UOB due to its large wealth-management and insurance businesses, which account for 50% of non-interest income. Commodity giants BHP, Rio Tinto and agricultural producer Wilmar also on tap Resource company BHP Group (BHP:xnys) reports earnings before Australia open on Tuesday, and dividend payout is expected at USD 0.88, well below the USD 1.50 declared in February 2022 amid the Oz Minerals acquisition being in play. Market expects lower revenues and earnings compared to last year due to the weakness in iron ore and copper prices. Rio Tinto (RIO:xlon) reports full year results on Wednesday, and plans for Pilbara (PLS:xasx), its lithium arm, will be key to watch. The focus will also be on BHP and Rio’s upcoming projects and outlook for the year ahead, with supply constraints reigning and expectations of Chinese demand picking up. Another lithium player Allkem (AKE:xasx) also reports results this week. On the agri side, Singapore’s Wilmar (F34:xses) is expected to report record profits for 2022 and outlook is likely to remain positive as well with China demand picking up. Source: Asia: Key earnings this week will add more color on the potential from incoming China demand boost | Saxo Group (home.saxo)
RBA Governor Announces Major Changes at RBA Board as US Inflation Expected to Decline

Meta Is Announcing A New Monthly Subscription Model, Deere Was The Star Performer In The S&P500

Saxo Bank Saxo Bank 20.02.2023 09:33
Summary:  US equity markets bounced on Friday after teasing new lows, maintaining the sense of indecision after more than two weeks of choppy, directionless trading. Treasury yields and the US dollar rolled over sharply on Friday after posting new highs for the cycle and stern US warnings to China against providing military aid to Russia have upped the geopolitical risks by an order of magnitude as markets will nervously await China’s response in coming days and weeks. What is our trading focus? US equities (US500.I and USNAS100.I): gains for February have evaporated Friday’s session was weak ending with the lowest close print for February as the market reacted to higher interest rates and data suggesting inflation pressures remain high. Last week, was still a strong week for bubble stock despite the rising interest rates while commodity related companies and Chinese stocks were the weakest links in the global equity market. S&P 500 futures have opened up this week below Friday’s close trading around the 4,085 level with the key 4,000 level still in play on the downside if S&P 500 futures make another lower close in today’s session. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) rallied with A-shares leading China’s A-shares rallied strongly on Monday with the benchmark CSI300 rising 2.3%. Although the 1-year and 5-year loan prime rates remained unchanged at the monthly fixing this morning, the average mortgage interest in the largest 100 cities fell 6bps M/M to 4.04% in February, or 143bps Y/Y for first-home mortgages and 84bps for second-home mortgages.  Construction materials, electronic appliances and telco names led the charge higher in A-shares. Hong Kong’s Hang Seng Index opened lower but spent the rest of the day climbing to 1.1% higher as of writing. China Hongqiao (01378:xhkg), a leading aluminium products manufacturer, jumped over 10%. FX: Dollar reverses lower on sentiment shift Friday, NZD in focus as RBNZ meets this week After a run higher last week on rising US treasury yields and Fed rate hike expectations, the US dollar was off its highs on Friday with US 10-year yields turning lower after trading close to the key 4% mark. This helped USDJPY retreat from 2-month highs above 135. Note Japan set to report CPI this Friday and BOJ governor nominee Ueda’s parliamentary hearings will likely keep the yen volatile. NZD was one of the underperformers last week on slowing 2yr NZ inflation expectations, and remains in focus this week as RBNZ is likely to downshift to a 50bps rate hike with some even considering a 25bps hike amid risks from the recent cyclone. GBPUSD touched lows of 1.1915 last week but was back above 1.2000 handle on Friday. ECB commentary remains mixed (read below) and EURUSD still close to 1.07. Crude oil (CLH3 & LCOJ3) remains rangebound Crude oil rebounded during Asian hours following last week’s selloff which once again confirmed the market remains rangebound, in Brent between $80 and $89, with a demand pick up in China at this stage not being strong enough to offset macroeconomic concerns that was strengthened last week following hawkish comments from US Federal Reserve members. OPEC and IEA raised the medium-term demand outlook but so far, data from China shows a meagre pickup in economic activity, and it has instead left the market focusing on US stock levels which have been rising well beyond seasonal expectations. This week’s focus will also be on geopolitics (read below) with US-China tensions ramping up and the one-year anniversary of Russia’s invasion of Ukraine. Copper focusing on supply-side issues Despite the hawkish tilt in Fed expectations, copper ended the week only down 0.4% as the key $4 area continued to provide support. Supply issues also remained in focus. Freeport-McMoRan Inc suspended operations at its Grasberg copper mine in Indonesia due to landslides. This is on the heels of disruptions to output in Peru amid social unrest and Panama. Zambia also reported that its copper output fell to a seven-year low in 2022. Some support also coming through via rising aluminum prices after smelters in China’s Yunnan province cut capacity due to energy shortages following a period of weak hydro generation. Gold (XAUUSD) focus on dollar and interest rate trajectory Gold traded steady in Asia near short-term resistance at $1845, after managing to find a bid on Friday following weak of rising dollar and yields-led selling. An uptick in geopolitical tensions potentially adding a small bid into a market that otherwise seems preoccupied with the scope for further interest-rate hikes from the Federal Reserve. Investor sentiment has once again been challenged with bullion-backed ETF holdings falling to a fresh three-year low on Friday while open interest in COMEX gold futures has fallen by 16% during the past month as traders cut their exposure, both long and short. Further dollar-led weakness could see gold target support in the $1792 to $1776 area with resistance at $1872. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) reverse lower Friday ahead of long weekend After US Treasury yields all along the yield curve posted local highs for the cycle, a late wave of buying reversed the slide and yields closed lower for the session, with the 2-year closing at 4.62% after hitting 4.71% intraday and the 10-year retreating to close at 3.81% after hitting 3.92% earlier in the session. Today, US treasury markets are closed for a holiday. Heavy treasury supply is incoming this week with 2-year, 5-year and 7-year auctions Tuesday through Thursday. The US data highlight this week is Friday’s January PCE inflation data. What is going on? US Secretary of State Blinken warns China on lethal aid to Russia At the sidelines of the Munich Security Conference, US Secretary of State Antony Blinken warned of “serious consequences” if China were to provide military support to Russia. Blinken suggested that the US has information that China may be considering supplying arms to Russia. China’s top diplomat Wang Yi spoke earlier in the day at the same conference on the US’ “hysterical” response to charges of Chinese spy balloons. Yi will travel to Italy, Germany, and Hungary and make a final stop in Russia. Putin will also be giving a state of the nation address, and focus will be on any risks of further escalation noting that 500k Russian troops have been mobilised. US President Biden will be visiting NATO ally Poland to talk about the importance of the international community’s resolve, and unity in supporting Ukraine, adding that the next weeks and months are going to be difficult for Ukraine’s forces, and the US is going to continue to stand by them. Saxo’s Defense equity theme baskets was one of the top performers last week despite the news of China sanctions on US defense companies like Lockheed Martin and Raytheon due to balloon shooting incident. Meta launches monthly subscriptions Snap already has it and Twitter is rolling it out, and now Meta is announcing a new monthly subscription model to create a new revenue stream that is more stable that online advertising. The monthly subscription comes with extended account verification, direct customer support, and more protection against impersonation. Apple’s major data privacy change back in late 2021 has been a major factor as well as targeting has become more difficult putting downward pressure on advertising pricing. Luxury stocks are the key contributors to the French CAC 40 index’s 2023 performance The French CAC 40 index is recording a strong YTD performance with an increase of +14 %. This is partially explained by the weight of luxury stocks in the index. Kering, L’Oréal, LVMH and Hermès represent about a third of the jump. Other major contributors are: Schneider Electric (which directly benefits from China’s economic reopening), BNP Paribas, Vinci (a construction company and operator of toll roads), STMicroelectronics (semiconductors) and Air Liquide (which can be considered as a market maker in his business segment). The French index is now valued at less than 13 times the estimated profits. This is below its 10-year average of 14. This could imply the market can go much higher in the short- and medium-term. The French stock market is the largest one in Europe followed by the UK’s. Key US stocks on the move Friday, including Lithium names On Friday, US farm equipment maker Deere (DE:xnys) led market gainers, posting a 7.5% advance. Moderna Inc (MRNA:xnas) fell 3.3% after its experimental messenger RNA-based influenza vaccine delivered mixed results in a study. Lithium miners Livent Corp (LTHM:xnys), Albemarle Corp (ALB:xnys) and Piedmont Lithium (PLL:xnas) slumped between 9% and 12% due to concerns about weakness in Chinese prices for the EV battery metal. ECB’s mixed messages ECB speakers had mixed messages on Friday with the hawkish Isabel Schnabel saying that investors risk underestimating the persistence of inflation. That bolstered rate-hike bets, with money markets pricing a 3.75% peak in the deposit rate. However, later dovish member Francois Villeroy said that rates are now in restrictive territory and that they may raise above 3% but it’s not automatic. The German 2-year Schatz yield posted a new high since 2008 at 2.95% on Friday before falling back and closing unchanged at 2.88%. Deere lifts outlook on strong outlook for agricultural spending Deere was the star performer in the S&P500 on Friday, rising 7.5% after raising its forecasts for the year - and reporting better than expected Q4 results. It reported EPS of $6.55 vs est. $5.56 and revenue of $12.7bn vs est. $11-3bn. The bottom line is demand from farmers is strong, and producers are prepared to buy more equipment and upgrade their fleets. Its production and precision agricultural division which includes autonomous crop planting and harvesting – saw the most sales growth – with quarterly sales up 55% y/y. Deere raised its net income outlook to $8.75-9.25bn compared to previously $8-8.5bn. This reinforces Saxo’s bullish view of investments in the physical world outperforming the intangibles. Sweden CPI jumps more than expected at core – SEK surges Sweden reported January CPI data this morning, with the headline slightly softer than expected at –1.1% MoM and +11.7% YoY vs. -1.0%/+11.8% expected, but the core inflation data was firmer than expected at +0.4% MoM and +8.7% YoY vs. -0.2%/+8.2% expected and 8.4% in December. SEK is surging on the anticipation that the Riksbank will have to continue firming its message on tightening policy. What are we watching next? Critical week for geopolitics as we await China’s response to US warnings on aiding Russia US Secretary of State Blinken’s warning to China on aiding Russia’s military (see above) sets up a moment of maximum danger for geopolitics depending on the nature of China’s response in coming days and weeks. Should the latter move to aid Russia’s military with lethal weaponry, it will likely accelerate the deglobalization theme and US sanctions against the country, creating significant disruption risks for global supply chains. The CFTC will start publishing delayed CoT reports this week Last Friday the CFTC once again postponed its weekly publications of the Commitments of Traders report (CoT), bringing the number of weekly reports to three that has been delayed due to the January cyber-related incident at ION Cleared Derivatives, a third-party service provider of cleared derivatives order management, order execution, trading, and trade processing. The CFTC in a statement on Friday, however said that staff intends to resume publishing the CoT report this Friday, starting with the report that was due February 3 but also that they do not expect the backlog will be cleared and “live” data resume until mid-March. BHP and Rio Tinto earnings will set the course for copper and aluminium companies  BHP and Rio Tinto report this week and, if Fortescue is something to go by with stronger than expected profits, then BHP and Rio could surprise to the upside. The focus will be on their outlooks with both BHP and Rio expected to give optimistic forecasts for the year amid Chinese demand picking up. They may also shed light inflationary pressures remaining sticky, such as wages picking up. Iron ore, and copper and coal giant BHP is expected report 2022 earnings (EBITDA) of $40.6 billion, with free cashflows of $26 billion and declare a full-year gross dividend yield of 14%. Iron ore, aluminium and copper giant Rio is expected to report earnings (EBITDA) of $27.1 billion in 2022, free cash flow of $11.2 billion and declare a full-year gross dividend yield of about 11%. Saxo’s preferred commodity exposures include aluminium, copper, and lithium. Earnings to watch Today’s earnings focus is later tonight when BHP Group reports FY23 1H results (ending 31 Jan) with analysts expecting revenue of $26.7bn down 13% y/y from the same period last year. EPS is expected at $1.37 down 28% y/y as iron ore prices have come down their recent highs. The commodity markets have been very muted in their reaction to the Chinese reopening and as such BHP Group’s outlook will be of key interest to investors. Later this week our earnings focus is one Walmart, Home Depot, and Nvidia. Monday: BHP Group, Williams Cos Tuesday: Teck Resources, Gapgemini, Engie, HSBC, Walmart, Home Depot, Medtronic, Palo Alto Networks Wednesday: Rio Tinto, Genmab, Danone, Lloyds Banking Group, Iberdrola, Nvidia, TJX, Stellantis, Baidu, eBay Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) US markets closed for Presidents’ Day. 0830 – Sweden Riksbank Meeting Minutes 1500 – Eurozone Feb. Preliminary Consumer Confidence 1900 – UK Bank of England’s Woods to speak 0030 – Australia RBA Meeting Minutes   Source: Financial Markets Today: Quick Take – February 20, 2023 | Saxo Group (home.saxo)
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Fed Hawkishness Is Spreading Toward Europe, Rising Geopolitical Tensions

Swissquote Bank Swissquote Bank 20.02.2023 11:09
The planet is boiling. US Dollar Escalating geopolitical tensions combined with the hawkish Federal Reserve (Fed) bets boost demand in the US dollar, while gold sees demand below the $1840 mark. US stock market But the US yields are trending higher on an increasingly hawkish Fed talk, and that could well send the precious metal into the bearish consolidation zone, sooner rather than later. Fed and ECB And the Fed hawkishness is spreading toward Europe. The European Central Bank’s (ECB) Isabel Schnabel warned last week that investors may be underestimating the persistence of inflation, and more importantly the response needed to tame it. Read next: Twitter And Elon Musk Faced A Growing List Of Claims| FXMAG.COM EUR/USD The EURUSD rebounded from the 1.0612 dip on Friday. European stock markets The European stock markets, on the other, continue performing well despite the hawkish ECB expectations. Why? Watch the full episode to find out more! 0:00 Intro 0:27 Rising geopolitical tensions… 2:21 … and Fed hawks support USD bulls 3:10 US stock rally in jeopardy? 4:41 What to watch this week? 5:50 ECB hawks become louder… 6:46 But European stocks push higher! 8:09 Energy under pressure 9:24 Is dovish Chinese monetary policy enough to boost appetite? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #US #China #Russia #North #Korea #Iran #geopolitical #tensions #economic #inflation #data #Fed #ECB #China #rate #expectations #Alibaba #Baidu #earnings #USD #EUR #XAU #Crude #Oil #DAX #CAC #EuroStoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Twitter And Elon Musk Faced A Growing List Of Claims

Twitter And Elon Musk Face A Growing List Of Claims

Kamila Szypuła Kamila Szypuła 20.02.2023 10:54
Tesla and Twitter CEO Elon Musk is struggling with more problems. From the side of Twitter with financial arrears, and from the side of Tesla - from the driver assistance system. List of claims Ever since Elon Musk took over, Twitter Inc. faced a growing list of claims. Owners, consultants and retailers have sought payment in at least nine lawsuits in recent months, with their complaints totaling more than $14 million plus interest. Among the alleged overdue notifications is an invoice for nearly $7,000 for a "gift box for Elon" ordered by Twitter's marketing department days before the $44 billion deal closed on October 27. Twitter obligation Twitter, which is now private, no longer publicly discloses its financial details. The company said last year it owed $239 million mostly for office space and data center facilities in 2023. In a January lawsuit, Canary LLC, a marketing firm that specializes in making items embellished with logos that are ubiquitous among Silicon Valley tech companies, alleged that Twitter owed nearly $400,000 for various Twitter-branded merchandise. Career on Twitter  Musk's pre-Twitter career involved navigating near financial doom, including Tesla Inc. who almost ran out of money. It overcame previous financial challenges by partly putting pressure on suppliers and vendors while saving cash was paramount. Musk inherited the bills when he took over more than three months ago and quickly introduced a more austere spending style as part of his trademark intensity. Twitter has undergone dramatic changes since late October as Musk raced to rework the company's product, which has suffered financial losses and cost-cutting from advertiser withdrawals and transaction-related debt costs. He cut staff sharply and countered spending tweets, including $13 million a year for employee meals at company headquarters. Early on, Musk complained that the company was losing more than $4 million a day and hinted bankruptcy was possible. Since then, he said the company is making progress. Read next: Meta Introduces Paid Verification Subscription Service| FXMAG.COM Twitter share price Twitter shares are trading at $53.70 Tesla Tesla, where Musk is also chief executive, worried its suppliers in 2018 as it struggled to ramp up production of the Model 3 compact car. During this time, the company extended payment terms from 60 days to 90 days. Tesla critical accident US auto safety regulators have stepped up investigations into accidents at the scene involving Tesla. A Tesla driver crashed into a Contra Costa County Fire Protection District truck that was parked in two lanes to block traffic while police officers assisted in towing the vehicle. A Tesla spokeswoman said the Tesla driver died at the scene. A passenger in the Tesla was transported to the hospital in critical condition. The condition of this person could not be immediately determined. The cause of the crash is still being investigated. It is unknown if the vehicle had Tesla's advanced driver assistance systems, known as Autopilot, activated at the time of the accident. Autopilot may be a problem The National Highway Traffic Safety Administration, the auto industry's primary regulator, has been investigating Tesla's advanced driver assistance system for more than a year after multiple crashes in emergency scenes. The NHTSA said Thursday that some Teslas may in rare circumstances violate local traffic laws, potentially increasing the risk of a collision if the driver does not intervene. The agency said it informed Tesla late last month of potential concerns about the system's characteristics specific to certain road environments. Autopilot is designed to help drivers with tasks such as steering and keeping a safe distance from other vehicles on the road. The electric car maker said features like Autopilot are meant to be used by a fully attentive driver. Tesla share price After Tesla's stock fell to 202.41, it bounced back to 208.31. Source: wsj.com, finance.yahoo.com
Markets under Pressure: Rising Yields, Strong Dollar, and Political Headwinds Weigh on Stocks"

Trading Activity In World Markets Is Expected To Be Lower

InstaForex Analysis InstaForex Analysis 21.02.2023 08:01
The composite index of the largest companies in the region Stoxx Europe 600 by 12:33 GMT + 3 fell by 0.05% and amounted to 464.09 points. The British stock index FTSE 100 fell by less than 0.1%, the German DAX - by 0.24%, the French CAC 40 - by 0.31%. The Italian FTSE MIB and the Spanish IBEX 35 lost 0.1% and 0.3% respectively. Trading activity in world markets is expected to be lower than usual on Monday due to the celebration of Presidents Day in the US. Stocks in Shanghai and Hong Kong rose sharply on Monday on news that the People's Bank of China kept its one-year Loan Prime Rate at 3.65% and the five-year lending rate at 4.3%. per annum. People's Bank of China has not changed rates for six meetings in a row. At the same time, many economists believe that in the coming months the rate may be lowered to stimulate economic growth, writes Bloomberg. On Wednesday evening, the minutes of the last Fed meeting will be made public, at which the key interest rate was raised by 25 basis points. Investors are particularly looking forward to the minutes as several Fed officials, including the heads of the Federal Reserve Banks of Cleveland and St. Louis, said last week that they were calling for a sharper rate hike. Shares of Pernod Ricard SA rose 0.1%. One of the world's largest producers of alcoholic beverages announced the start of a new stage of the share buyback program. The purchase of securities in the amount of up to 300 million euros will take place before April 6 and will be carried out as part of a total program of 750 million euros. Stellantis and Pirelli are up 2%, leading gains on the Milan bourse, while Telecom Italia shares are down 2.9%. Capitalization of the British retailer Frasers Group rose by 3.5% after the company announced a share buyback worth up to 80 million pounds ($96.26 million). Quotes of Commerzbank AG fall by 2.7%. As reported, the shares of Germany's second-largest bank will be included in the calculation of the main German stock index DAX 40 from February 27 instead of the papers of the chemical company Linde, according to a report by Deutsche Boerse AG, operator of the Frankfurt stock exchange. French supermarket chain Carrefour jumped 8% in market value to lead growth in the Stoxx Europe 600 index. The retailer reported annual revenue of more than 90 billion euros and recorded an 11% increase in like-for-like sales in the fourth quarter of last year. The decline leader in the Stoxx Europe 600 is Raiffeisen Bank International, shedding 7.6%, while the gainer was led by French medical equipment maker Orpea S.A., which jumped 17.7%   Relevance up to 03:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313412
TikTok Bans Are Gathering Momentum In The US

Analysis Of Meta Platforms Situations

Torben Melsted Torben Melsted 21.02.2023 08:32
Meta Platforms has followed the expected path higher as wave B has unfolded. We have already seen a test of 38.2% corrective target at 201. We expect to see another spike higher towards the 50% corrective target at 236 before wave B completes and wave C takes over for the next downside pressure to below the low of wave A at 88. For the short term, we project support in the 153 - 155 area to protect the downside for the final spike higher.     Relevance up to 07:00 2023-02-22 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313443
Technical Market Outlook: EUR/USD Bounces from Resistance, Eyes 100 MA on H4 Chart

About 20% Of Malawi’s Population Is Already Expected To Face Acute Food Insecurity

Saxo Bank Saxo Bank 21.02.2023 09:48
Summary:  US equity futures as well as most European indices retreated on Monday amid a spike in geopolitical concerns with President Biden in a surprise visit to Ukraine and China’s attempts to stand neutral. The backdrop of inflation concerns in the US is still keeping risks of a tighter than expected monetary policy, and yields remain a key focus as US markets return later today. China demand recovery optimism is however back, providing a bid to crude oil and metals. RBA’s minutes guided hawkish, and focus now on RBNZ meeting tomorrow with potential for volatility amid mixed market expectations.   What’s happening in markets? US markets closed, European indices mostly lower as geopolitical concerns weigh Muted trading overnight with US markets closed for President’s Day but geopolitical tensions at a high with President Biden making a surprise visit to Ukraine to pledge support. Futures for S&P 500 and NASDAQ 100 continue to trade in the red with fears of escalating tensions between US and China, as well as the upcoming anniversary of Russia’s invasion of Ukraine. Geopolitical concerns also spilled over to European markets, with most European indices closing in the red on Monday. EuroStoxx 50 (STOXX50.I) was down 0.09% while France’s CAC 40 (FRA40.I) was down 0.16%. Only UK’s FTSE 100 (UK100.I) closed in a positive territory. China markets led the way on Monday with strong gains of over 2% on potential liquidity injection on Friday and expectations of a recovery in momentum as the earnings season focus shifts to Asia. What to watch ahead? When trade resumes in the US today, focus will be on geopolitics as well as the services and manufacturing read outs - PMIs – expected to show the US economy’s recovery is gathering pace – but with the PMIs still in contractionary phase (to show reads of under 50). FOMC minutes due on Wednesday - will have eagle eyes on them - looking for terminal rate expectation comments – given some members hinted of a potential 50bps rate hike again. Later in the week - Friday’s release of January PCE - the Feds preferred inflation gauge - will be a focus - expected to show core inflation rose 0.4% up from 0.3% in December – with the YoY read expected slow to 4.3% (from 4.4%) - according to Bloomberg consensus. BHP’s numbers disappoint, shares slide 2%. Its 50 day simple moving average offers support Softer commodity prices in the half year drove a decline in BHP profits –greater than expected - with underlying attributable profit falling to $6.6 billion in the six months to December 2022, vs the $6.96 billion expected by consensus. The world’s biggest miner declared an interim dividend of $0.90 per share – marking a drop from last year’s record $1.50 per share - meaning its pay-out ratio dropped to 69% from 78%. We think that’s because the board is taking the proposed Oz Minerals takeover into account. As for production - significant wet weather of its coal business impacted production and unit costs - as did challenges in securing enough staff. As BHP’s outlook - it’s aiming to lift iron ore production to 330 mt/yr. Overall it reinforced its positive demand forecast in the second half of FY23 and into FY24 - with strengthening activity in China. BHP sees China and India demand offsetting the slowdown in trade with the US, Japan and Europe. Mining production costs are expected to be markedly higher than before the Covid-19 pandemic – due higher energy, labor and other input costs. Meanwhile we think BHP should benefit from higher-than-expected iron ore, met coal, and copper prices amid supply issues and the green transformation push. Also note, it started the process of divesting its two coal mines- as the business wants to focus on future facing commodities – copper, nickel and potash. Rio Tinto is expected to highlight similar issues  - slimmer profits and higher costs when it reports results tomorrow. For more, refer to Saxo’s Australian Resources equity theme basket. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) rallied with A-shares leading A-shares rallied strongly on Monday with the benchmark CSI300 rising 2.3%. Although the 1-year and 5-year loan prime rates remained unchanged at the monthly fixing this morning, the average mortgage interest in the largest 100 cities fell 6bps M/M to 4.04% in February, or 143bps Y/Y for first-home mortgages and 84bps for second-home mortgages.  China Securities Regulatory Commission (CSRC)’s announcement on Friday of rules to regulate and effectively revive overseas IPOs of mainland companies added fuel to the optimism. Construction materials, electronic appliances, telco, and brokerage names led the charge higher in A-shares. In Hong Kong, the Hang Seng Index opened lower but managed to finish the Monday session 0.9% higher, led by industrials and financials. . Aluminum Corp of China (02600:xhkg) surged 7.6% and China Hongqiao (01378:xhkg) jumped 9.9% following the Yunnan provincial government told local aluminum smelters to cut production due to power shortage. EV makers gained, led by Nio (09866:xhkg) and XPeng (09868:xhkg). The latest rise in tension between the U.S. and China over alleged Chinese support for Russia’s invasion of Ukraine, China’s increasing role in the day-to-day running of Hong Kong, and the issue of Taiwan are taking a backseat for the time being as investors are shifting their eyes to additional policy stimuli being rolled out at the upcoming two-session meetings to be held from March 4, 2023. FX: RBA’s hawkish minutes, RBNZ meeting keeps kiwi in check After extensive speeches last week from RBA Governor Lowe, focus turned back to AUD today with RBA minutes on tap. Th February meeting saw a 25bps rate hike but the statement had tilted more hawkish. AUDUSD took a brief look below 0.69 ahead of the minutes, but reversed higher as the minutes revealed that a pause was not an option at the February meeting. Focus more so on the RBNZ meeting tomorrow morning in Asia (9am SGT/HKT) with some calls for no rate hikes amid the recent flooding damages. NZDUSD slid below 0.6250 in early trading after being somewhat resilient overnight. USDJPY attempting another move to 134.50 with BOJ Governor Kuroda scheduled to appear in the parliament. Crude oil (CLH3 & LCOJ3) gains momentum on China demand and geopolitics Crude oil prices rebounded on sustained hopes of a recovery in China’s activity levels, especially after PBOC’s liquidity injection on Friday. State-owned enterprises have started ramping up purchases, such as Unipec which has purchased about 10mbbl from the UAE for loading in April. WTI futures traded above $77/barrel while Brent was above $84. The geopolitical backdrop added some worries, with fresh risks of sanctions on Russia that could continue to tighten the oil market. Signs of a commodity recovery gather pace: production ramps up in anticipation of demand picking up Fitch Ratings put out a report on China’s reopening driving a modest recovery in oil - this positive sentiment flowed to other commodities. Secondly – as Ole mentioned on Saxo Market Call Podcast, copper inventory has started to roll over in London, Shanghai, and New York - indicating demand for copper and other commodities would theoretically need to pick up. Copper prices (HGA) gained 1.3% on Monday to $4.18 – taking copper back over its 100-day moving average – to its highest levels since January and June last year. Iron ore (SCOA) prices moved up 1.9% to $130.85 – which is its highest level since June last year on supply concerns - with Brazil heading to peak rainy season at month end. Aluminium prices meanwhile are underpinned by a province in China - the Yunnan province – cutting smelter capacity as ordered by the local power grid amid an energy supply shortfall. Lastly - consider keeping an eye on Wheat prices - as the conflict in Ukraine will raise questions about farmers ability to plant wheat int the coming season, meanwhile France - also a key wheat producer – is suffering drought.  Read next: USD/JPY Pair Is Above 134.00, EUR/USD Pair Holds Below 1.07, GBP/USD Pair Managed To Rebound| FXMAG.COM What to consider? President Biden makes a surprise visit to Ukraine – playbook for geopolitical risks Biden made a surprise visit to Ukraine and met with Volodymyr Zelenskiy, declaring "unwavering support" as Russia's invasion nears the one-year mark. These visits come after Blinken’s rhetoric that the US has information that China is supplying arms to Russia, and VP Kamala Harris’ claim to charge Russia with war crimes against humanity. China is however trying to convince that it remains neutral, and State Councilor Wang Yi is set to visit Moscow in the coming days after floating fresh peace proposal to end the conflict. In Saxo’s view, the playbook for the week should be risk-off given the possibility of any ugly turns in geopolitics. That would mean long JPY, long commodities, long Defense stocks and short risky assets. Once we are past this week with hopefully no further escalations, focus will shift back to inflation concerns and driving Fed rate cut expectations further into 2024. Consider watching the US dollar strength, and Saxo’s Défense basket amid geopolitical tensions rising Amid the geopolitical risks rising - consider watching likely US dollar strength play out in key currency pairs. In equities – consider watching Saxo’s Defence basket. Over the last two days we’ve seen geopolitical tensions escalate. Biden made a surprise visit to Ukraine declaring ‘unwavering support’ and pledging $500 million in new aid. Meanwhile, EU diplomats are looking at pooling 4 billion Euros of ammunition purchases for Ukraine as early as next month, with EU states pushing to ramp up their ability to hit back against those helping Russia circumvent sanctions. Also – today Putin is also expected to give a state of the nation address - potentially focusing on escalations - he also may note that 500k Russian troops have been mobilised. Meanwhile China threw cold water on allegations that it is going to help arm Russia. And finally, the White House is reportedly mulling over increasing sanctions on Russia. We continue to watch this closely - and encourage investors and traders to exercise caution. Food security issues pick up; with fertilizers being used as a weapon A Russian cargo ship held back in the Dutch port of Rotterdam for months- has been escorted out by the United Nations’ World Food Program chartered ship. The Russian cargo, bound for Malawi – contains 20,000 metric tons of Russian fertilizer. And the fact that Russia was allegedly holding back fertilizers - meant the nations food security was at risk, with fertilizers essential in growing crops. About 20% of Malawi’s population is already expected to face acute food insecurity during the “lean season” to March. Moreover it’s not just the lack of supply that’s the issue- costs are too. Malawi is one of 48 nations in Africa, Asia and Latin America identified by the IMF as being most at risk of higher food and fertilizer costs after Russia invaded Ukraine. China and Russia have a foothold of the industry - being the world’s largest producers of fertilizers - including nitrogen, phosphates and potash. These issues in Rotterdam highlight that food security can be used as weapon - and we are concerned should geopolitical tensions escalate - which would pressure food prices higher. Large fertilizer companies to watch include CF industries, Mosaic, Nutrien. Refer to Saxo’s Commodity basket for more. Downshift in RBNZ’s rate hike trajectory could signal NZD weakness The Reserve Bank of New Zealand meets on Wednesday, 22 February and consensus expects a return to 50bps rate hikes after a 75bps in November when even the possibility of a 100bps was debated. Economic data has been soft since the last meeting, with 2-year inflation expectations easing and unemployment rate seeing a slight uptick. However, Cyclone Gabrielle has brought fresh risks of inflation pressures in the short-term. Calls for no rate hikes have also picked up although finmin Robertson was out calling for RBNZ having a responsibility to address inflation yesterday. Still, risks of further kiwi weakness loom large after NZD has weakened 1.7% against the USD so far this year. If RBNZ signals that the peak for the current rate hike cycle is near, the 38.2% retracement of NZDUSD uptrend from the October low at 0.6146 could be challenged. The cost of sea freight is back to pre-Covid levels This is positive news on the inflation front. The cost of sea freight is now back to pre-Covid levels. The drop in prices is both explained by cyclical (1) and structural (2) factors. The U.S. consumer is very resilient, as shown by the recent release of the U.S. retail sales. But this is not the case in other countries. The rise in the cost of living is causing a drop in global consumption (1). In addition, the sea freight market is facing a surplus of containers. And this will get worse in the months to come. The number of container ships under construction represents nearly 30 % of the fleet that is currently operational. That’s three times more than normal. Companies in the sector have misjudged the evolution of global demand in the post-Covid period. Wrongly, they anticipated it will remain unchanged or it will even increase. The fall in prices is likely to continue all this year and perhaps partially in 2024. The market consensus expects a drop in transported volumes of around 4 % this year.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: Geopolitical risks front and centre – 21 February 2023 | Saxo Group (home.saxo)
The Commodities Feed: Supply disruptions persist

BHP Sees Demand Picking Up In China, But Also In India

Saxo Bank Saxo Bank 21.02.2023 10:03
Summary:  BHP, the world’s biggest miner handed down its results showing profits declined greater than expected in the six months to December 2022, but BHP’s CFO told Saxo’s Jessica Amir, BHP sees a recovery in pricing in the second half year and into 2024, with the price recovery having already begun. BHP, the world's largest commodity company guides for a stronger outlook underpinned by higher commodity prices ahead - and readies its balance sheet to become a copper giant  The world’s biggest miner, BHP handed down its financial results today  - showing profits declined greater than expected – in the six months to December 2022 – but BHP’s CFO told Saxo’s Jessica Amir - it sees a recovery in metal pricing in the second half year and into next year - and the price recovery has already begun. This is also our view at Saxo - we also believe 2023 is poised for higher commodity prices amid China's economic revival- as we expressed in our Quarterly Outlook. BHP's half year results to 2022 end were impacted by lower realized prices in copper, iron ore and coal across the last six months of 2022. Wet weather also impacted its coal business’ production and pushed up unit costs – plus there were difficulties in securing enough staff. This resulted in underlying attributable profit falling to $6.6 billion - from continuing operations - vs the $6.96 billion expected by consensus.  BHP’s interim dividend was trimmed to $0.90 per share – down from last year’s record $1.50 per share. Still - BHP’s payout ratio is 69% and that’s BHP’s 5th highest dividend on record. At Saxo we also believe the lower dividend payout reflects that BHP is readying itself for the $9.6 billion takeover of Oz Minerals. If approved by Oz Minerals in April, the takeover will occur in May. Read next: USD/JPY Pair Is Above 134.00, EUR/USD Pair Holds Below 1.07, GBP/USD Pair Managed To Rebound| FXMAG.COM As for BHP’s positive outlook strengthening – it sees demand picking up in China, but also in India - and this offsetting the slowdown in trade with the US, Japan and Europe.All in all, BHP guided for mining production costs to be markedly higher than before the Covid-19 pandemic – amid higher energy, labour and other input costs. But we believe BHP could offset such higher costs - amid rising commodity demand - which would underpin prices in iron ore, met coal, and copper -  while supply issues remain and the green transformation picks up.BHP’s divestment of its two thermal coal mines should also return capital to the business and allow BHP to focus on iron ore, copper, nickel, potash and coking coal.For more on BHP refer to our Quarterly Outlook. Or refer to Saxo’s Australian Resources equity theme basket or Saxo’s broader Commodity equity theme basket. To listen to our global team's take on markets - tune into our Podcast.   Source: Financial Insights on commodity giant BHP - Disappointing HY to Dec 2022, but it sees a turnaround in 2023 and into 2024 | Saxo Group (home.saxo)
Biden Declared Unwavering Support For Ukraine, The Reserve Bank Of New Zealand May Go Back To Raising Rates

Biden Declared Unwavering Support For Ukraine, The Reserve Bank Of New Zealand May Go Back To Raising Rates

Saxo Bank Saxo Bank 21.02.2023 10:10
  Summary:  Markets are quiet as we are now on the other side of a three day weekend in the US and as geopolitical tensions and elevated yields provide a nervous backdrop. Hong Kong’s HSI index is pushing on the lowest levels since the first week of the year. The focus in Europe this morning is on preliminary PMI’s for February as the Eurozone bloc’s economy may show signs of slight expansion in the month. What is our trading focus? US equities (US500.I and USNAS100.I): skating on thin ice US equity futures are picking up from Friday’s weak session after yesterday’s US holiday with S&P 500 futures trading lower at around the 4,066 level putting US equities into negative territory for the month. Today’s key event is naturally the annual speech from Putin as it could ignite fresh geopolitical risks as described in yesterday’s equity note. In the US session earnings from Walmart and Home Depot can also impact sentiment as both companies are expected to show weak revenue growth. Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) The Hang Seng Index slipped 1.3% amid signs that Chinese eCommerce platforms are heating up competition for business. JD.com (09618:xhkg) plunged nearly 8% following launching a subsidy campaign to compete with rivals. Alibaba (09988:xhkg), Tencent (00700:xhkg), and Meituan (03690:xhkg) dropped more than 3%. HSBC (00005:xhgk) pared initial gains from an earnings beat and special dividend and slid 1.6%. Meanwhile, Hang Seng Bank (00011:xhkg) rose 2.9% despite an earnings miss due to a jump in loan loss provision for mainland property loans. In mainland China, the CSI300 is flat. Resource names, such as non-ferrous metal, coal, and steel continued to do well, as did the auto stocks. The consumer and AI generated content space declined. FX: Awaiting USD direction after bearish reversal on Friday and long US weekend As US treasury yields rolled over on Friday, the US dollar did likewise and posted a modest bearish reversal on the same day it was trying to break free of resistance. Given the nervous geopolitical backdrop, headline risk is paramount in coming days as we await further resolution in the USD direction. Overnight, hawkish RBA minutes did little for the Aussie, given downbeat markets in Asia,  while the RBNZ meeting tonight could shake the kiwi in either direction, given the uncertainty of the RBNZ’s stance in the wake of disastrous floods in parts of the country, although NZ yields remain near the highs since early January. Crude oil (CLH3 & LCOJ3) fails to hold onto Monday’s gains Brent crude oil futures dropped back to $83 during Asian hours, thereby reversing Monday’s gain in response to fresh dollar strength and concerns about the near-term direction of US interest rates, and despite sustained hopes of a recovery in China’s activity levels, especially following a fresh liquidity injection by the PBoC last Friday. Geopolitical developments remain a worry but so far, the positive impact on prices have been very limited.  Overall, the oil market remains rangebound, in Brent between $80 and $89 and WTI between $73 and $82, as the market weighs the impact of rising demand in China and India versus a potential slowdown elsewhere. Copper receives a boost from BHP outlook Despite the hawkish tilt in Fed expectations which left other metals on the defensive, copper has managed a strong recovery as the key $4 area continued to provide support. BHP, the world’s biggest miner reported its half-year result today, and according to its CEO the company expects domestic demand in China and India “to provide stabilizing counterweights to the ongoing slowdown in global trade and in the economies of the US, Japan and Europe,”. Also supporting prices are continued threats to supply in Peru, Panama and Zambia. . Some support also coming through via rising aluminum prices after smelters in China’s Yunnan province cut capacity due to energy shortages following a period of weak hydro generation. Gold (XAUUSD) focus on dollar and interest rate trajectory Gold traded softer overnight in response to fresh dollar and yield strength following Monday’s US closed session. The market remains on the defensive after recent US economic data strength and hawkish comments from Fed policymakers led to market to adjust higher the trajectory of US Fed funds rate. Apart from a very uncertain geopolitical situation, the market will be focusing on minutes from the Fed’s last meeting on Wednesday as well as personal spending on Friday. Holdings in ETF’s meanwhile dropped again on Monday with the 3.1 tons reduction to 2882 tons, a three-year low, bringing this year's net sales to 34 tons or 1.1 million ounces. In other words, gold for now needs continued demand from central banks to provide a floor under the market. Support at $1820 followed by $1790. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) after Friday reversal. 2-year auction today US Treasury yields reversed sharply on Friday after posting new local highs. A heavy schedule of auctions lies ahead this week, starting with an auction of 2-year notes today after the benchmark traded within 10 basis points of the 15-year high of 4.80% posted last November. A 5-year auction will follow tomorrow and 7-year on Thursday.  The 10-year benchmark yield tested above the December high of 3.90% on Friday, but trades 3.85% this morning. The US data highlight this week is Friday’s January PCE inflation data. What is going on? The cost of sea freight is back to pre-Covid levels The cost of sea freight is now back to pre-Covid levels, which is positive news on the inflation front. The drop in prices is both explained by cyclical (1) and structural (2) factors. The U.S. consumer is very resilient, as shown by the recent release of the U.S. retail sales. But this is not the case in other countries. The rise in the cost of living is causing a drop in global consumption (1). In addition, the sea freight market is facing a surplus of containers. And this will get worse in the months to come. The number of container ships under construction represents nearly 30 % of the fleet that is currently operational. That’s three times more than normal. Companies in the sector have misjudged the evolution of global demand in the post-Covid period. Wrongly, they anticipated it would remain unchanged or it would even increase. The fall in prices is likely to continue all this year and perhaps partially in 2024. The market consensus expects a drop in transported volumes of around 4 % this year. Downshift in RBNZ’s rate hike trajectory could signal NZD weakness The Reserve Bank of New Zealand meets on Wednesday, 22 February and consensus expects a return to 50bps rate hikes after a 75bps in November when even the possibility of a 100bps was debated. Economic data has been soft since the last meeting, with 2-year inflation expectations easing and unemployment rate seeing a slight uptick. However, Cyclone Gabrielle has brought fresh risks of inflation pressures in the short-term. Calls for no rate hikes have also picked up although Finance Minister Robertson was out calling for the RBNZ to address inflation yesterday. Still, risks of further kiwi weakness loom large after NZD has weakened 1.7% against the USD so far this year. If RBNZ signals that the peak for the current rate hike cycle is near, the 38.2% retracement of NZDUSD uptrend from the October low at 0.6146 could be challenged. AUDNZD broke above 1.1030 and its 200-day moving average yesterday, posting a new 3-month high. BHP guides for a pick up in metals and readies its balance sheet to become a copper giant BHP - the world’s biggest miner saw profits in the six months to December 2022 decline by more than expected but sees the ongoing price recovery extend into the second half year and beyond as it sees demand picking up in China, but also in India - and this offsetting the slowdown in trade with the US, Japan and Europe. All in all, it also guided for mining production costs to be markedly higher than before the Covid-19 pandemic – amid higher energy, labour and other input costs. Its HY results were impacted by lower realised prices in copper, iron ore and coal across the last six months of 2022. Wet weather also impacted on its coal business’ production and pushed up unit costs – and there were difficulties in securing enough staff. This resulted in underlying attributable profit falling to $6.6 billion - vs the $6.96 billion expected by consensus (from continuing operations). BHP’s interim dividend was trimmed to $0.90 per share – down from last year’s record $1.50 per share. Still BHP’s payout ratio is 69% and that’s BHP’s 5th highest dividend on record. We also believe the lower dividend payout reflects that BHP is readying itself for the $9.6 billion takeover of Oz Minerals which, if approved, will occur in May. What are we watching next? Putin speech today. China said to hope broker peace deal over Ukraine after US warns China on lethal aid to Russia Biden made a surprise visit to Ukraine  yesterday and met with President Volodymyr Zelenskiy, declaring "unwavering support" as Russia's invasion nears the one-year mark. China is said to be promoting a peace plan for Ukraine as China’s top diplomat will arrive in Moscow today, but German and US authorities are already declaring themselves sceptical on China’s intentions and accuse it of taking sides. European source familiar with the plan (cited by Bloomberg, the officials asked not to be identified) said it would likely include a call for a cease-fire and the cessation of arms deliveries to Ukraine. Putin is set to make a speech today in Moscow, with added interest given the presence of a top Chinese official. In Saxo’s view, the playbook for the week should be risk-off given the possibility of any ugly turns in geopolitics. That would mean long JPY and USD, long commodities, long defense stocks and lowered exposure or hedging of risky assets. Once we are past this week with hopefully no further escalations, focus will shift back to inflation concerns and driving Fed rate cut expectations further into 2024. Earnings to watch Today’s US earnings focus is Walmart and Home Depot with analysts expecting Walmart to report revenue growth of 4.4% y/y and EPS $1.52 down 1% y/y as volume of goods sold is expected to be under pressure. Analysts expect Home Depot to report revenue growth of 0.6% y/y and EPS of $3.27 up 1.8% y/y reflecting lower volume across US home improvement industry. Tuesday: Teck Resources, Gapgemini, Engie, HSBC, Walmart, Home Depot, Medtronic, Palo Alto Networks Wednesday: Rio Tinto, Genmab, Danone, Lloyds Banking Group, Iberdrola, Nvidia, TJX, Stellantis, Baidu, eBay Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Flash Feb. Manufacturing and Services PMI 0930 – UK Flash Feb. Manufacturing and Services PMI 1000 – Germany Feb. ZEW Survey 1330 – Canada Dec. Retail Sales 1330 – Canada Jan. CPI 1445 – US Flash Feb. Manufacturing and Services PMI 1500 – US Jan. Existing Home Sales 1800 – US 2-year Auction 0030 – Australia Q4 Wage Price Index 0100 – RBNZ Official Cash Rate Source: Financial Markets Today: Quick Take – February 21, 2023 | Saxo Group (home.saxo)
Amazon Will Pay Employees A Lower Salary Due To Lower Stock Prices, Declining Demand For 5G Equipment Will Result In The Loss Of 1,400 Jobs At Ericsson

Amazon Will Pay Employees A Lower Salary Due To Lower Stock Prices, Declining Demand For 5G Equipment Will Result In The Loss Of 1,400 Jobs At Ericsson

Kamila Szypuła Kamila Szypuła 21.02.2023 11:02
Amazon is in the middle of one of the most difficult financial problems in the company's history. In November, the biggest round of layoffs the company has ever carried out began as Amazon adjusted to faltering retail demand coupled with years of mass hiring. Then there's the problem of low pay. Moreover, a manufacturer of telecommunications equipment decides to reduce employment. Lower salary Amazon pays its corporate employees a large portion of their annual wages in capped stock units, and the prolonged decline in the company's stock is putting salaries for 2023 between 15% and 50% below projected targets Amazon has set for employees. Amazon has historically given employees a lower base salary than its big-tech counterparts, but has made up the difference with stock awards that have been purchased over several years. Employees say the longer an Amazon employee stays with the company, the more their pay may depend on stock awards, with stock accounting for 50% or more of total income for some. Amazon share price Over the past year, Amazon shares have fallen more than 35% as a result of a broader tech slowdown and slower growth on Amazon's retail side. When Amazon issues limited shares to employees, it is based on a long-standing assumption shared in compensation talks that Amazon shares will appreciate at least 15% each year. Until recently, this was largely true. From 2017 to the beginning of 2022, the share price increased by an average of about 30% per year. But Amazon stock is currently trading at around $97 a share, and some employee compensation packages are built on the assumption that Amazon stock will cost around $170 a share. Read next: USD/JPY Pair Is Above 134.00, EUR/USD Pair Holds Below 1.07, GBP/USD Pair Managed To Rebound| FXMAG.COM Layoffs and no new jobs By January, Amazon had laid off 18,000 corporate employees, the most of any tech company in this latest wave of layoffs. In addition to eliminating current positions, Amazon also revoked job offers from some applicants who had accepted and had not yet started, and delayed the start date of some new hires by six months. The information previously informed about the canceled offers. Ericsson and layoffs Ericsson plans to cut around 1,400 jobs in Sweden as the telecommunications equipment giant struggles with slowing demand for its 5G equipment in markets such as the US. Ericsson last month reported a lower-than-expected quarterly profit and warned that the start of the new year is uncertain as telecom operators in markets such as the US hold back on placing new orders for 5G equipment amid economic uncertainty. The cuts are part of an effort the company announced late last year to cut costs by SEK 9 billion, equivalent to around $861 million, by the end of 2023 by streamlining processes, closing facilities and reducing the number of consultants. Ericsson has just concluded negotiations with Swedish unions and plans to cut jobs under a voluntary scheme, a spokeswoman said on Monday. In the coming days, managers will share with their employees how this affects each unit. Ericsson share price Ericsson shares are at an all-time low, last seen in 2017. Currently, the share price is at 5.76. Source: wsj.com, finance.yahoo.com
Russia will suspend participation with the new START treaty and that they would test nuclear weapons if the US does it first

Russia will suspend participation with the new START treaty and that they would test nuclear weapons if the US does it first

Ed Moya Ed Moya 21.02.2023 14:25
US stocks are declining after retail earnings suggest margin worries are here and it will only get worse as the Fed is likely to deliver more tightening into early summer. Treasury yields are surging here as a tight labor market will force the Fed to do more tightening.  Retailer earnings are suggesting it is going to be a tough year ahead and that should keep the pressure on stocks.  Geopolitics Russia’s Vladimir Putin’s State of the Union speech suspended participation in a key nuclear arms pact with the US.  Putin said, Russia will suspend participation with the new START treaty and that they would test nuclear weapons if the US does it first. Putin’s speech comes three days before the one-year mark of the Russian invasion of Ukraine. He added that Russia will push farther if longer-range arms are supplied. Ukrainian officials have voiced their concerns that they expect the Russians to increase their offensive.  China China is also pushing back against calls that say Taiwan is next.  China Foreign Minister Qin Gang said, “We urge certain countries to immediately stop fueling the fire, stop shifting blame to China and stop touting Ukraine today, Taiwan tomorrow.” China’s economic outlook if fragile right now and they are trying to avoid any major obstacles as their reopening from COVID continues. Home Depot Home Depot shares tumbled after a tight labor market is making them invest an additional ~$1 billion in annualized compensation for frontline, hourly associates. Wall Street initially could only focus on the added expenses and not the mixed earnings and dividend boost.  While most companies are announcing cost-saving measures, Home Depot is in position that will require them to spend more.  The EPS beat of 3 cents and slight revenue miss of $35.83 billion was accompanied by comparable sales of -0.3%, not as bad as the consensus estimate of -0.87%.  The world’s largest home improvement retailer is going to have a margin problem over the couple of quarters and that could get uglier if the housing market does not bottom out soon.  Walmart Walmart shares tumbled despite a top and bottom line beat as their EPS guidance fell short of the analyst estimates.  Walmart’s earnings slides noted that “general merchandise sales reflected softness in discretionary categories including toys, electronics, home, and apparel.” Walmart’s poor outlook after a strong holiday season is having many investors abandon ship here as rough waters are clearly ahead.  Walmart had the largest sales volume in its history in December. Oil Crude prices are struggling as global growth concerns return after soft European manufacturing activity data is accompanied with a surge in global bond yields. Central banks globally are about to take policy into even more restrictive levels and that is countering China’s reopening momentum. WTI crude is finding a home between the mid-$70s and the $80 a barrel level.      Read next: The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50| FXMAG.COM Gold/FX Gold prices are weakening as investors await the Fed Minutes that could confirm the bank has more work to do. The dollar is getting a bid here as more traders start to price in 75 basis points in more tightening by the Fed. If the bond market selloff gets uglier, gold might soften more, but it probably won’t drop as much as equities.  Rising geopolitical risks will likely drive some flows towards bullion and Wall Street is getting close to pricing in peak Fed tightening.  Bitcoin Bitcoin traders appear to be ignoring a laundry list of bearish macro drivers that include; a return of the stronger dollar as the bond market rally returns, downward pressure on stocks as investors price in more Fed rate hikes, and on worries that stablecoin regulation could put further pressure on cryptos.  It appears that Bitcoin’s correlation with most risky assets is changing.  The crypto winter that saw prices collapse from $68,911 to $15,485 appears to have priced in enough of the bad news.  Bitcoin is still respecting the key $25,500 level, but a break could open the door for momentum traders to target a bigger move higher. Initial resistance would come from the $28,000 level, but most traders may have their eyes for the psychological $30,000 level.  This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.  
Brent hits one-month high! Saudi and Russian cuts supporting recent moves

On The New York Stock Exchange, 2689 Of Securities Fell In Price

InstaForex Analysis InstaForex Analysis 22.02.2023 08:02
Experts note that against the backdrop of the latest macroeconomic statistics for the country, in particular on the labor market and inflation, traders rejected the expectations of the Fed's policy easing, which have recently contributed to the rally in the markets. The next meeting of the US Federal Reserve will be held on March 21-22. According to CME Group, 76% of analysts expect the regulator to raise the discount rate by 25 basis points, to 4.75-5%. It also follows from these data that the proportion of those who expect a 50 basis point increase has recently increased. At the close in the New York Stock Exchange, the Dow Jones fell 2.06% to a one-month low, the S&P 500 fell 2.00%, and the NASDAQ Composite fell 2.50%. Dow Jones Walmart Inc was the top performer among the components of the Dow Jones index today, up 0.89 points (0.61%) to close at 147.33. Procter & Gamble Company fell 0.10 points or 0.07% to close at 139.91. The Travelers Companies Inc shed 0.50 points or 0.27% to close at 185.25. The least gainers were Home Depot Inc, which shed 22.45 points or 7.06% to end the session at 295.50. Intel Corporation was up 5.61% or 1.55 points to close at 26.06, while 3M Company was down 3.31% or 3.74 points to close at 109.25 . S&P 500  The leading gainers among the S&P 500 index components in today's trading were General Mills Inc, which rose 4.42% to 80.16, Organon & Co, which gained 3.94% to close at 27.05, and also shares of Molson Coors Brewing Co Class B, which rose 3.13% to end the session at 53.65. The least gainers were Generac Holdings Inc, which shed 8.72% to close at 115.72. Shares of DISH Network Corporation shed 8.62% to end the session at 12.93. Home Depot Inc lost 7.06% to 295.50. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Atlas Lithium Corp, which rose 51.52% to hit 10.94, Meihua International Medical Technologies Co Ltd, which gained 49.94% to close at 39. 00, as well as Arbe Robotics Ltd, which rose 47.13% to end the session at 6.40. The least gainers were CVRx Inc, which shed 58.84% to close at 7.08. Shares of Aileron Therapeutics Inc lost 37.77% to end the session at 1.46. Quotes of TC BioPharm Holdings PLC decreased in price by 32.62% to 5.02. Numbers On the New York Stock Exchange, the number of securities that fell in price (2689) exceeded the number of those that closed in positive territory (382), while quotes of 57 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,017 companies fell in price, 697 rose, and 149 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 7.72% to 22.87, hitting a new monthly high. Gold Gold futures for April delivery lost 0.35%, or 6.45, to hit $1.00 a troy ounce. In other commodities, WTI April futures fell 0.50%, or 0.38, to $76.17 a barrel. Brent crude for April delivery fell 1.47%, or 1.24, to $82.83 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.34% to 1.06, while USD/JPY advanced 0.56% to hit 134.99. Futures on the USD index rose 0.34% to 104.14.   Relevance up to 03:00 2023-02-23 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/313561
Hungary's Economic Outlook: Anticipating Positive Second Quarter GDP Growth

Domino’s Pizza shares in gapped down in Australia, Putin vowed to press on with his faltering invasion of Ukraine

Saxo Bank Saxo Bank 22.02.2023 09:56
Summary:  Volatility charged higher as economic data continued to push for an upward repricing of the Fed path. US yields surged to fresh YTD highs, pushing S&P500 to close below 4,000 and NASDAQ 100 approaching 12,000. Fed’s terminal rate is now priced in at 5.37%, and dollar pushed higher with geopolitical concerns also still in play. Consumer stock earnings from Walmart and Home Depot sent margin pressure warnings. FOMC minutes will be dated, but may provide cues on what to expect from the March dot plot.   What’s happening in markets? The major US indices, the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) fell ~2% while bond yields rose to new 2023 highs The risk off tone was set by geopolitical tensions picking up, as well as economic prints showing the US services and manufacturing PMIs improved more than expected – with swaps now projecting the Fed can keep pushing rates higher — with the market indicating 25-basis-point hikes are coming at the March, May and June meetings.  Sentiment was also weighed by downbeat outlooks from consumer spending bellwethers – Walmart (WMT) and Home Depot (HD). All while investors await Wednesday's Fed minutes release. Also ahead are earnings results from mining giant Rio Tinto (RIO), tourism and casino giant Ceazers Entertainment (CZR) and smartwatch and gadget business Garmin (GRMN). The three major indices shed at least 2%, with the Dow erasing 2023’s gains. On the weekly chart - the S&P500’s fell below its 50-day moving average –indicating there are more sellers than buyers – while also possibly indicating the market is likely to pull back to a cycle low. Pressuring sentiment - bond yields hit new 2023 cycle highs - with the 10-year note up 14 bps, while the dollar strengthened. Hong Kong’s Hang Seng Index (HIG3) fell amid intensifying competition among China’s eCommerce platforms Hong Kong stocks slipped on Tuesday amid signs that Chinese eCommerce platforms are heating up in competition for business. JD.com (09618:xhkg) plunged 8.5% following the eCommerce giant launching an RMB10 billion subsidy campaign to compete with rival Pinduoduo (PDD:xnas). Meituan (03690:xhkg) dropped more than 4.1% after the mainland food delivery giant announced hiring had started in Hong Kong, paying as much as HKD35,000 a month for delivery riders to prepare for an expansion to Hong Kong. Alibaba (09988:xhkg) and Tencent (00700:xhkg) also fell over 4%. HSBC (00005:xhkg) pared initial gains from an earning beat and special dividend as investors sold the shares of the banking giant citing concerns about a softer 2023 profit guidance and saw the shares down nearly 2% during Hong Kong trading hours. Meanwhile, Hang Seng Bank (00011:xhkg) rose 3.3% despite an earnings miss due to a jump in loan loss provision for mainland property loans. In mainland China, the CSI300 edged up 0.3%. Non-ferrous metals, coal, steel, and auto gained while beauty care, media, food and beverage, and retailing declined. Australia equities (ASXSP200.I) also seem pressured by the RBA’s fresh hawkishness The Australian share market has fallen about 3.5% from its new cycle high that it hit on Feb 3. Pressure on the ASX200 comes after the RBA indicated it has more work to do to keep inflation and wage pressure in order. The ASX200 now appears to be pulling back, with Saxo’s Technical Analyst reinforcing the technical indicators suggest the ASX200 could drop further. However, if the ASX200 closes above 7,477, the uptrend can resume. Today, Origin Energy (ORG) is the best performer in large caps, up 13% after receiving a revised takeover offer from the Brookfield Asset Management-led group following months of due diligence. Meanwhile Domino’s (DMP) is the worst performer down 19% on reporting weaker than expected half year results. Meanwhile, BHP (BHP) shares are up slighted after reporting a stronger outlook yesterday. For more on the world’s biggest mining company, and BHP’s expectations for stronger fundamentals this and next year click here – also note BHP remains in a technical uptrend. Ahead are earnings from Rio Tinto (RIO). FX: Yields and risk sentiment in play The US dollar was modestly higher as US 10-year yields reached a YTD high and in close sight of the key 4% mark, closing at 3.95%. Higher-than-expected PMIs in the US further faded recession concerns, bringing the market expectations of Fed terminal rate to a new high of 5.37%. USD gains were more restrained in that view, which also got a push higher from escalating geopolitical tensions as Putin suspended the Nuke deal with the US. GBP was the outperformer after very strong UK Flash PMIs, which suggested falling near-term recession concerns and pushed higher the odds of a 25bps rate hike from the BOE in March. GBPUSD touched highs of 1.2147 from 1.1987. AUDUSD was hurt by falling risk sentiment despite hawkish RBA minutes out yesterday and fell to 0.6848. AUDNZD still held up above 1.10 with the RBNZ expected to take a dovish turn today. USDJPY again testing 135 with FOMC minutes on tap, while EURUSD unable to sustainably break below 1.0650. Crude oil (CLH3 & LCOJ3) still pressured lower Crude oil prices dipped further with dollar strength in play as the expectations of rate hikes from the Fed continued to ramp up. WTI crude traded close to $76/barrel while Brent was below $83. Geopolitical concerns still running high this week, potentially providing a floor to oil prices. Meanwhile, an expected pickup in Chinese demand is also supporting. Overall, the oil market remains rangebound, in Brent between $80 and $89 and WTI between $73 and $82, as the market weighs the impact of rising demand in China and India versus a potential slowdown elsewhere.   What to consider? Putin suspends Nuclear pact with the US, threatens to push war in Ukraine Putin, in his State of the Nation address, announced a suspension of participation in the New START nuclear arms control treaty with the US. This was the last accord limiting their nuclear arsenals. He also vowed to press on with his faltering invasion of Ukraine. This has spurred the next leg of escalation concerns, invoking a response from President Biden in Poland saying that Russia will never win the war and pledging more support to Ukraine. The focus is now on China which needs to back up its peace treaty words with action after being accused of supplying arms to Russia. Senior Chinese diplomat Wang Yi is now visiting Russia and there are reports that President Xi could be visiting Moscow to meet with Putin in April or May. US S&P PMIs topped expectations, fading recession concerns Flash S&P PMIs for the US were better than expected, with services returning to an expansion territory of 50+. Manufacturing PMI also picked up traction coming in higher at 47.8 from 46.9 previously while Services and Composite both rose back into expansionary territory to 50.5 (exp. 47.2, prev. 46.8) and 50.2 (exp. 47.5, prev. 46.8), respectively. The report further pointed to fading recession concerns, while input price pressures also eased despite a shaper rise in output prices. Australian wage growth and construction data to keep the RBA on its hiking path for now With the RBA now being more hawkish and data dependent, today’s wage growth data and construction work done seemingly validate Australia’s central Bank, can keep on its hiking path for now. Australian wage growth grew 3.3% YoY, up from the revised higher read of 3.2% YoY prior. Despite wage growth growing less than 3.5% expected  - construction work done began to roll over  - falling 0.4% in Q4 – marking a slight fall the prior quarter’s revised jump of 3.7%. So despite both reads being softer than expected – we still need more data to validate core inflation could slow – especially as it’s still well above the RBA’s target. Money markets softened to imply a peak cash rate of 4.2% in August 2023 (down from 4.3%). The next data the RBA will look at - will be next week’s release of retail sales, private sector credit and net exports of GPD. More green shoots in the EZ data but… The EZ February PMIs are quite good at first glance. The French PMI composite was out at 51.6 versus prior 49.1 – this is a 7-month high and the first expansion above the 50 threshold since October 2022. The German PMI composite is in the expansion zone too (at 51.1). But if we dig beneath the surface, this is not as good as expected. In France, the PMI report contains a warning about new export orders: “Overall, this marked a twelfth successive monthly decline in new export orders. Notably, manufacturers recorded the steepest slump since the first COVID-19 lockdown period in the first half of 2020”. We see a similar weakness in German data with a stagnation of exports to non EU countries in January. Basically, in both cases, the order book and the manufacturing side look challenged while the services are the main drivers of the PMI composite. We still expect the eurozone will avoid a recession this year. Overall PMI for the bloc was also pushed higher by services sector outperformance which recorded a PMI of 53.0 (vs. 50.8 last month and 51.0 exp) while manufacturing lagged at 48.5 (vs. 48.8 last and 49.3 exp). Baidu (09888:xhkg) announces Q4 results Baidu is scheduled to announce its Q4 results on Wednesday. Investors are prepared for weaker advertising revenues, slower growth in its cloud business, and some margin compression. Analysts surveyed by Bloomberg are expecting adjusted EPS to fall by 22.4%. Walmart and Home Depot send margin pressure warnings Despite an earnings beat, Walmart’s profit forecast for this year fell short of analyst estimates and a cautious outlook suggested a lingering impact from the inventory buildup of last year as well as shifting consumer demand patterns in light of the higher inflation and interest rates. Meanwhile, home improvement retailer Home Depot missed expectations and gave a dull operating margin guidance – expecting FY operating margin at ~14.5% due to the extra wage costs, compared to an estimate of 15.1%. The results send a warning for other retailers like Target and Lowe’s due to report on March 1. Pizza chain Domino’s Pizza reports weaker than expected earnings amid inflationary pressures In the Australia session today, Domino’s reported underlying EBIT fell 21% Y/Y to A$113.9 million in the HY - with sales growth coming in weaker than expected and inflation also affecting earnings. Its European operations faced significant geopolitical disruptions, and the highest inflation levels across its business- while Asian sales were materially stronger than pre-Covid- but EBIT was lower. All in all, Domino’s financial metrics were down Y/Y, except its store count rose 16% Y/Y to 3,736 stores. The company also cut its half year dividend to A$0.674 per share. As for its - outlook that also disappointed - as customer counts have not met expectations since December - especially in Europe and Asia  - which is lowering store profitability. New store openings will continue to grow in FY23 - but could be below Domino’s medium-term outlook for +8-10% growth. This implies there is less franchisee demand to open stores. That said, management is confident it will return to positive same store sales growth once customer demand increases. Domino’s Pizza (DMP) shares in gapped down in Australia , erasing 2023’s gains – taking DMP to A$57.97 – November 2022 levels. We will also be watching Domino’s in the US – DPZ, as well the London listed business – DOM. The Chinese Communist Party’s Central Committee to hold a plenary session next week The Chinese Communist Party’s Politburo held a meeting on Tuesday and announced after the meeting to hold a Central Committee plenary session from Feb 26 to 28 to decide on key issues in preparation for the “two sessions” meeting of the government scheduled t commence on March 4. FOMC minutes on tap today The minutes of the February 1st Fed meeting will be out later today (3am SGT), and will be key for the cues on inflation expectations and terminal rate forecasts as a gauge for what to expect in the dot plot in March. Still, the hotter than expected inflation print for January (both CPI and PPI) were released after the FOMC meeting and that has shifted the narrative to a hawkish. The criteria for a pause may be on the lookout, and whether that is any push to driving the market’s rate cut expectations further out.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: US yields at fresh highs; FOMC minutes ahead – 22 February 2023 | Saxo Group (home.saxo)
Asia Morning Bites - 04.05.2023

The Risk Off Tone Was Set By Geopolitical Tensions Picking Up, The Australian Share Market Has Fallen

Saxo Bank Saxo Bank 22.02.2023 10:03
Summary:  Extra caution is creeping back into markets, with geopolitical tensions picking up, and hotter than expected economic prints, with swaps now expecting the Fed to hike rates at the March, May and June meetings. Sentiment was also weighed by downbeat outlooks from Walmart and Home Depot. On a weekly chart, the S&P500 fell under its 50 day moving average indicating traders could exercise risk-off trading ahead. Australian listed Domino’s Pizza reported weaker than expected numbers and a soggy outlook, sending its shares down 20%, which will likely impact Domino’s shares listed globally. FOMC minutes and Rio results ahead. The major US indices, the Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) fell ~2% while bond yields rose to new 2023 highs  The risk off tone was set by geopolitical tensions picking up -  as well as economic prints showing the US services and manufacturing PMIs improved more than expected – with swaps now projecting the Fed can keep pushing rates higher — with the market indicating 25-basis-point hikes are coming at the March, May and June meetings.  Sentiment was also weighed by downbeat outlooks from consumer spending bellwethers – Walmart (WMT) and Home Depot (HD). All while investors await Wednesday's Fed minutes release. Also ahead are earnings results from mining giant Rio Tinto (RIO), tourism and casino giant Ceazers Entertainment (CZR) and smartwatch and gadget business Garmin (GRMN). The three major indices shed at least 2%, with the Dow erasing 2023’s gains. On the weekly chart - the S&P500’s fell below its 50-day moving average –indicating there are more sellers than buyers – while also possibly indicating the market could potentially pull back. Pressuring sentiment - bond yields hit new 2023 cycle highs - with the 10-year note up 14 bps, while the dollar strengthened. Australia equities (ASXSP200.I) also seem pressured by the RBA’s fresh hawkishness  The Australian share market has fallen about 3.5% from its new cycle high that it hit on Feb 3. Pressure on the ASX200 comes after the RBA indicated it has more work to do to keep inflation and wage pressure in order. The ASX200 now appears to be pulling back, with Saxo’s Technical Analyst reinforcing the technical indicators suggest the ASX200 could drop further. However, if the ASX200 closes above 7,477, the uptrend can resume. Today, Origin Energy (ORG) is the best performer in large caps, up 13% after receiving a revised takeover offer from the Brookfield Asset Management-led group following months of due diligence. Meanwhile Domino’s (DMP) is the worst performer down 21% on reporting weaker than expected half year results. Meanwhile, BHP (BHP) shares are steady after reporting a stronger outlook yesterday. For more on BHP’s expectations for stronger fundamentals this and next year click here – also note BHP remains in a technical uptrend. Pizza chain Domino’s Pizza reports weaker than expected earnings amid inflationary pressures In the Australia session today, Domino’s reported underlying EBIT fell 21% Y/Y to A$113.9 million in the HY - with sales growth coming in weaker than expected and inflation also affecting earnings. Its European operations faced significant geopolitical disruptions, and the highest inflation levels across its business- while Asian sales were materially stronger than pre-Covid- but EBIT was lower. All in all, Domino’s financial metrics were down Y/Y, except its store count rose 16% Y/Y to 3,736 stores. The company also cut its half year dividend to A$0.674 per share. As for its - outlook that also disappointed -  as customer counts have not met expectations since December - especially in Europe and Asia  - which is lowering store profitability. New store openings will continue to grow in FY23 - but could be below Domino’s medium-term outlook for +8-10% growth. This implies there is less franchisee demand to open stores. That said, management is confident it will return to positive same store sales growth once customer demand increases. Domino’s Pizza (DMP) shares in gapped down in Australia , erasing 2023’s gains – taking DMP to A$57.97 – November 2022 levels. We will also be watching Domino’s in the US – DPZ, as well the London listed business – DOM.  To listen to our global team's take on markets - tune into our Podcast.     Source: Financial Insights: S&P500 falls below 50-day simple moving average on market pricing in more hikes. Domino's Pizza shares sliced | Saxo Group (home.saxo)
The RBA’s aggressive rate tightening cycle will be continued

Australian Wage Growth Rose, UK February PMI Reports Suggested Solid Expansion In The UK’s Services Sector

Saxo Bank Saxo Bank 22.02.2023 10:13
Summary:  Equity markets took it on the chin yesterday, dropping to a new 1-month low on the close and below the bottled-up range of the last few weeks as a fresh lift in the entire US yield curve weighed on sentiment. The S&P 500 Index closed just below the psychologically pivotal 4,000 level and the 200-day moving average lies a percent and a half lower. European equity markets have yet to show signs of contagion, but yields are steadily applying pressure there as well. What is our trading focus? US equities (US500.I and USNAS100.I): wage pressures and inflation pressures haunting again US equity futures moved big yesterday as the US 10-year yield hit 3.95%, the highest level since November, with S&P 500 futures declining 2% closing at 4,005 putting the 4,000 level into as play as we have highlighted for week. If S&P 500 futures decline below the 4,000 level, then the 200-day moving average at the 3,981 level will quickly be tested. Home Depot earnings release was received very negatively by the market sending its shares down 7% as the home improvement retailer indicates that the wage pressures are still excessive. This could accelerate the margin compression theme in equities when the Q1 earnings are out in April and May. FX: USD rebounds as US treasury yields lift to new highs The US dollar was modestly higher as US 10-year yields reached a YTD high and in close sight of the key 4% mark, closing at 3.95%. Higher-than-expected preliminary February PMIs in the US further faded recession concerns, bringing the market expectations of Fed terminal rate to a new high of 5.37%. The USD has also perhaps founds support from escalating geopolitical tensions as Putin suspended the Nuke deal with the US. GBP was the outperformer after very strong UK Flash Feb. PMIs (more belowø). GBPUSD touched highs of 1.2147 from 1.1987 before pulling back. AUDUSD was hurt by falling risk sentiment despite hawkish RBA minutes out yesterday and fell toward the range lows in the low 0.6800’s overnight, with the 200-day moving average a bit lower still. AUDNZD reversed sharply lower on the RBNZ’s surprisingly hawkish turn (more below). FOMC Minutes tonight in focus for the US dollar. Crude oil (CLJ3 & LCOJ3) still pressured lower Crude oil prices dipped further with dollar strength in play as the expectations of rate hikes from the Fed continued to ramp up. WTI crude traded close to $76/barrel while Brent was below $83. Geopolitical concerns still running high this week, potentially providing a floor to oil prices. Overall, the oil market remains rangebound, in Brent between $80 and $89 and WTI between $73 and $82, as the market weighs the impact of rising demand in China and India versus a potential slowdown elsewhere. Gold (XAUUSD) soft as maximum pressure applied by USD and yields Gold is slightly softer but holding up reasonably well, given the pressure from the stronger US dollar and US treasury yields rising to new highs for the cycle. The support zone below the recent lows is critical for the status of the trend in gold, as 1,800-1,810 was pivotal on the way up, and the 200-day moving average looms below at 1,776. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) lift to new cycle high US Treasury yields lifted to new cycle highs all along the curve as the Fed is priced to reach a terminal rate near 5.35% this year now (so effectively three further 25 basis point rate hikes expected from the Fed this year. A two-year auction was middle of the range in terms of bidding metrics, but well below the strong prior auction. The 10-year yield nudged higher to 3.95% yesterday, a new high since November of last year. A 5-year T-note auction is up today, and 7-year auction tomorrow. What is going on? Strong UK Services PMI not cooperating with the recession playbook The preliminary UK February PMI’s were released yesterday and suggest solid expansion in the UK’s Services sector, sparking a strong 17 basis-point surge in 2-year UK rates on the implications for further Bank of England tightening. The February reading for the services sector was 53.3 versus 49.2 expected and 48.7 in January, while the Manufacturing PMI reading was 49.2 versus 47.5 expected and 47.0 in January. More green shorts in the EZ data but… The EZ February PMIs are quite good at first glance. The French PMI composite was out at 51.6 versus prior 49.1 – this is a 7-month high and the first expansion above the 50 thresholds since October 2022. The German PMI composite is in the expansion zone too (at 51.1). But if we dig beneath the surface, this is not as good as expected. In France, the PMI report contains a warning about new export orders: “Overall, this marked a twelfth successive monthly decline in new export orders. Notably, manufacturers recorded the steepest slump since the first COVID-19 lockdown period in the first half of 2020”. We see a similar weakness in German data with a stagnation of exports to non-EU countries in January. Basically, in both cases, the order book and the manufacturing side look challenged while the services are the main drivers of the PMI composite. We still expect the eurozone will avoid a recession this year. Earnings recap: Walmart, Home Depot Despite beating against earnings estimates, Walmart’s profit forecast for this year fell short of analyst estimates and a cautious outlook suggested a lingering impact from the inventory build-up of last year as well as shifting consumer demand patterns considering the higher inflation and interest rates. Walmart shares recovered after gapping lower and closed higher for the session. It was a different story for home improvement retailer Home Depot, which missed expectations and gave a dull operating margin guidance – expecting FY operating margin at around 14.5% due to the extra wage costs, compared to an estimate of 15.1%. Home Depot shares plunge to close almost 7% lower and below the 200-day moving average. The results send a warning for other retailers like Target and Lowe’s due to report on March 1. Domino’s Pizza Enterprises crushed 23% in Australia after reporting earnings Dominos Pizza Enterprises is the Australian based franchise owner of Domino’s Pizza in Australia, New Zealand, Japan, Taiwan and several European countries. Its EBIT fell 21% Y/Y to A$113.9 million in the HY, with sales growth coming in weaker than expected as customers turned away from its higher prices. European operations faced significant geopolitical disruptions and were hit by the highest inflation levels across its business. Asian sales were materially stronger than pre-Covid - but its EBIT was lower. Guidance was weak and it cut its half-year dividend to A$0.674 per share. Domino’s Pizza shares fell 23% to A$54.71, which erased 2023’s gains. Australian wage growth comes in below expectations, AUD weaker Australian wage growth rose 3.3% YoY in Q4, slightly below the 3.5% expected and seen raising few new alarm bells at the RBA after evidence of a more precautionary hawkish shift recently. Construction data was weak in the quarter at –0.4% QoQ vs. +1.5% expected, but the Q3 data was revised up to 3.7% from 2.2%. Australian 2-year yields dropped 10 basis points, with money markets pricing a peak rate near 4.2% in August 2023. AUD weakened overnight, reversing back below 1.1000 in AUDNZD terms on a hawkish RBNZ meeting, while AUDUSD is heavy ahead of the range lows near 0.6800, with the 200-day moving average looming slightly lower still.  The next data the RBA will look at - will be next week’s release of retail sales, private sector credit and net exports of GDP.  RBNZ surprises hawkish, reaffirms expected terminal rate of 5.5% The RBNZ hiked the rate 50 basis points to take the policy rate to 4.75% and reaffirmed a forecast for the peak policy rate to reach 5.5%,  if over a longer period than previously. With recent disastrous floods raising expectations that the RBNZ might go with a smaller hike or no hike at all, this decision read hawkish and NZD sjumped versus the AUD and was somewhat resilient against the firmer US dollar. What are we watching next? FOMC minutes on tap today The minutes of the February 1st Fed meeting will be out later today (3am SGT), and will be key for the cues on inflation expectations and terminal rate forecasts as a gauge for what to expect in the dot plot in March. Still, the hotter than expected inflation print for January (both CPI and PPI) were released after the FOMC meeting and that has shifted the narrative to a hawkish. The criteria for a pause may be on the lookout, and whether that is any push to driving the market’s rate cut expectations further out. Earnings to watch Today’s key earnings release is Nvidia reporting FY23 Q4 earnings (ending 31 Jan) after the US market close with analysts expecting revenue of $6bn down 21% y/y and EPS of $0.81 down 32% y/y. With cryptocurrencies rallying lately there might be an upside surprise in the outlook as crypto mining activity might have increased the demand for GPUs. Wednesday: Rio Tinto, Genmab, Danone, Lloyds Banking Group, Iberdrola, Nvidia, TJX, Stellantis, Baidu, eBay Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) 0800 – Sweden Riksbank Governor Thedeen to speak 0900 – Germany Feb. IFO Business Climate Survey 1800 – US 5-year US T-note auction 1900 – US FOMC Minutes 1910 – New Zealand Governor before parliament committee 2130 – API's Weekly Crude and Fuel Stock Report 2230 – US Fed’s Williams (Voter) to speak on inflation   Source: Financial Markets Today: Quick Take – February 22, 2023 | Saxo Group (home.saxo)
GBP/USD Trading Plan: Bulls Eyeing Further Growth, Resistance Level Holds Key, COT Report Signals Interest Rate Expectations

Reserve Bank Of New Zealand (RBNZ) Hiked Its Interest Rates, USD Gains On Rising Hawkish Fed Bets

Swissquote Bank Swissquote Bank 22.02.2023 10:22
US stocks now join the treasury selloff, and the US dollar pushes higher on the back of the increasingly hawkish Federal Reserve (Fed) bets. The preliminary PMI in the US came in better than expected for February, and the services PMI ticked above the 50 mark, into the expansion zone, for the first time since last July. Walmart and Home Depot  The strong economic data further fueled the Fed hawks. But this time, the stocks sold off as well, despite the strong economic data. The weak outlook from Walmart and Home Depot left the no-landing bets under the dark shadow of higher US yields. The S&P500 dived 2% on Tuesday, below the minor 23.6% Fibonacci retracement on the latest October to February rally, and below the 4000 psychological mark. Fed Today, the FOMC minutes will be closely watched. We know that the Fed officials will sound concerned with the strong jobs market and will point at the resilience of the economy to continue hiking the rates. That could further weigh on equity appetite. Fed hawks are supportive of the US dollar, however. Read next: The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50| FXMAG.COM Reserve Bank of New Zealand Elsewhere, the Reserve Bank of New Zealand (RBNZ) hiked its interest rates by 50bp today, after a three-month break and Nvidia will be reporting Q4 earnings after the bell. Nvidia results may look ugly, but long-term investors could look beyond the potentially ugly results: Here is why: https://medium.com/@swissquote.education Watch the full episode to find out more! 0:00 Intro 0:36 US equities join the treasury selloff 1:46 Walmart, Home Depot beat, but warn of weaker outlook 4:55 USD gains on rising hawkish Fed bets 6:37 RBNZ hikes by 50bp 7:32 FOMC minutes to further weigh on sentiment 8:02 Should you look past potentially ugly Nvidia earnings? Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Walmart #HomeDepot #Nvidia #earnings #FOMC #minutes #Fed #expectations #RBNZ #rate #hike #USD #EUR #NZD #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Rates Spark: Italy's Retail Bonds and Their Impact on Government Funding

Consumers Are Spending More On Food, So Walmart And Home Depot Are Making Cautious Predictions

Kamila Szypuła Kamila Szypuła 22.02.2023 11:32
While inflation has eased in recent months, it remains high and could have a mixed impact on spending as rising prices push sales figures up. Consumer habits were putting pressure on profits. Holiday sales are weaker than expected as shoppers prioritized spending on food and other essentials. Sales situation in the US US holiday sales in 2022 rose 5.3% to $936.3 billion, below the forecast released last year by the National Retail Federation. In January, retail sales rose 3% from the previous month, the biggest monthly increase in almost two years. Walmart and Home Depot Walmart and Home Depot have enjoyed high sales for the better part of the last two years as people are looking for a bargain or repairing their homes. Now with more budgets, consumers are spending more on food and less on electronics, clothing and home improvements as inflation and changing habits reduce the demand for many goods. For Home Depot, which mainly sells home improvement items, this momentum meant steady sales in the last quarter. For Walmart, which relies on groceries for the majority of its sales, this meant a greater-than-expected increase in sales. But executives at both companies said consumer habits were putting pressure on profits and offered a muted outlook for the rest of the year amid economic uncertainty. Walmart’s sales Walmart said comparable US sales, that of stores and digital channels operating for at least 12 months, rose 8.3% in the quarter ended Jan. 27, compared to the same period a year earlier. It beat analysts' expectations. December was the month with the highest sales volume in the retailer's history, the company said. Sales of some non-food items fell in the last quarter as shoppers prioritized spending on daily necessities. Walmart also cut many items to relieve overstock last year. The company's U.S. inventory fell 2.6% in the quarter, but is still up in some categories, such as apparel. Read next: The Pound Gained After The Publication Of PMI Reports, Euro Is Below 1.07, USD/JPY Pair Is Above 134.50| FXMAG.COM Walmart expectations The retailer said it expects comparable US sales to grow 2% to 2.5% for the full year. Walmart expects US inflation to stay roughly at current levels this year. Home Depot Home Depot customers were less sensitive than expected to higher prices throughout 2022. The company reported revenue of $35.83 billion for the fiscal fourth quarter that ended Jan. 29, about the same as a year earlier and less than the $35.97 billion expected by analysts. Home Depot set a cautious tone on Tuesday. Last quarter sales fell slightly after years of pandemic-driven growth. The home improvement retailer said sales this year will be flat. Labor market Job growth accelerated at the beginning of the year. Employers added more than half a million jobs in January and the unemployment rate hit a 53-year low. Both Home Depot and Walmart are navigating a tight labor market for hourly workers, driving up costs. On Tuesday, Home Depot said it would invest $1 billion to raise wages for its hourly workers. Walmart last month said all US workers would be earning a starting wage of $14 an hour, down from $12. Walmart share price After Walmart's prices fell in mid-February, they rose for several days. Walmart shares closed 0.6% higher on Tuesday at $147.33. Home depot share price Home Depot shares have been above 300.00 for the last three months. HD shares recently traded against Walmart shares, and the company's shares fell 7.1% to $295.50. Source: wsj.com, finance.yahoo.com
Turbulent Times Ahead: Poland's Central Bank Signals Easing Measures

General Electrics is undergoing major structural changes in search of a better business model

Conotoxia Comments Conotoxia Comments 22.02.2023 14:29
General Electrics (GE) – a well-known global conglomerate founded by Thomas Edison in 1892 for Edison's incandescent lamps and related products – has expanded over the years through mergers, acquisitions and natural growth. Now it is adapting to a new, more focused business world by splitting into three independent companies. Summary In search of a better business model, GE has decided to split the company into 3 separate entities: GE Healthcare, GE Aerospace and GE Vernova. Breaking up a conglomerate into individual companies can have several benefits, including improved management focus, increased transparency, improved valuation and better capital structure. GE Aerospace division has a well-established and profitable revenue stream. It is currently benefiting from the commercial airline industry's recovery from Covid-19 as well as the US government's emphasis on strengthening the defence sector.  GE Healthcare - the first division to split from the rest of General Electrics - has taken on a significant amount of the company's debt, leaving the conglomerate in a stronger financial position.  GE Vernova - although it may have considerable potential in the future,   currently it seems to be struggling financially due to increased costs of R&D and production.  One of the original 12 Dow constituents has been credited with numerous innovations throughout its rich history, including the first turbine supercharger, engine jet, and gas turbine engines. It was one of the key computer companies in establishing the digital world as we know it today, and two of its employees have been awarded Nobel Prizes for their work within the company.  GE stock price has fallen heavily since its peak of 363 USD during the dot-com bubble. The stock seems to have found ground around the 50 USD level during the pandemic and, since then, has reacted positively to the company's structural changes and overall market growth. Source: TradingView The company is undergoing major structural changes in search of a better business model, including splitting its businesses into independent companies. Before the split, GE had four main segments: Healthcare, Aerospace, Power and Renewables. The first division to separate from the rest of the company was Healthcare - it began operating as an independent company as GE Healthcare in January 2023. The next split is planned for Power and Renewables, which will form a company called GE Vernova. The original company will change its name to GE Aerospace and continue to operate in this segment.  Based on FY2022 revenue streams, GE Aerospace is the largest division of the company - 35%. GE Healthcare accounted for 25% of revenues, Renewables for 18% and Power for 22% (together accounting for 40%).  Source: GE financial statements Conglomerates – not the business model of the 21st century The expansion of GE and many other well-known conglomerates took place at a time when diversification of a business portfolio was seen as an effective way to mitigate risk - when one industry was in a downturn, another might be thriving. Meanwhile, the number of corporate spin-offs over the past decade may suggest that "bigger is better" may not be the current strategy. Breaking up a conglomerate into separate companies can offer several benefits, including improved focus, greater transparency, better resource allocation, improved valuation, better capital structure and increased agility. If we look at recent spin-offs in the healthcare sector, numerous companies, such as Alcon, Envista Holdings, SeaSpine Holdings, and Siemens Healthineers, have managed to separate from their core businesses.  GE can serve as a prime example of the benefits of a break-up, where the value of the individual parts of the company is greater than that of the company as a whole. GE's three main businesses - aerospace, healthcare and power - are very different in nature and therefore have little to gain from being combined. In fact, GE's financial reports suggest that the opposite might be true. The Corporate Items and Eliminations section shows that the company spends a lot of money at the corporate level. For instance, in 2015, the company's earnings from ongoing operations were 1.7 billion USD, while the Corporate Items and Eliminations section totalled 5.1 billion USD. Although these expenses might not be entirely eliminated, creating three separate businesses could save significant money in the long run. Following the separation, each company may be able to focus solely on its core business. Moreover, specialists, analysts and investors could now include each company in their coverage, increasing each company's presence in different investment universes. Although it may not seem like a good reason at first, investor relations, especially with institutional investors, play a crucial role in the success of listed companies.  As the division of the company's business lines is underway, retail investors can also select the business line that corresponds best to their investment strategy, objectives, and views about the most successful sectors in the future.  GE Aerospace – the segment that may have the biggest potential The separation of GE into separate businesses may allow each business to have a clearer focus on its own market position and growth strategy, leading to improved market competitiveness and a clearer focus on its financial performance, leading to improved overall financial performance for each business in the future. Each of the three companies could benefit from the factors discussed, although GE Aerospace may have the greatest potential of the three to outperform as a separate entity.  Firstly, let us review the latest earnings numbers for each division as reported for Q4 2022. The aerospace division had the strongest profit margin for the period. The aerospace division's year-on-year growth may be attributed to the industry's recovery from the pandemic. However, there may be a potential for additional growth as some parts of the world, such as China, are not yet fully recovered. Source: GE financial reports The company predicts continued growth in its aviation engine business. It expects the division's 2023 revenue to jump year-on-year in the "mid-to-high teens" per cent range, with 2023 profits coming in between 5.3 billion USD and 5.7 billion USD. As demand for air travel grows, especially in emerging markets, GE Aerospace could be one of the biggest beneficiaries in the future. According to the International Air Transport Association, global air passenger traffic is expected to double by 2037. As individual airlines and even aeroplane manufacturers, such as Boeing and Airbus, may be significantly affected by economic downturns or such unexpected events as Covid-19, GE Aerospace may also be negatively affected by lower demand. However, GE Aerospace has a strong customer base as it manufactures engines and provides maintenance services to both Boeing and Airbus, which in turn supply aircraft to most major airlines, including United Airlines, Emirates, Delta Airlines and many others.  Even during an economic downturn affecting the commercial aviation industry, GE Aerospace could maintain a stable revenue stream due to its participation in the US government's efforts to bolster the defence sector. As the government emphasises strengthening national security, GE Aerospace stands to benefit from increased demand for defence-related products and services, which could help offset any potential decline in commercial aviation revenue. In addition to already cooperating with Boeing, which is known to receive US government contracts for defence aircraft, GE, on its own, is also receiving contracts from such US government agencies as the Department of Justice, NASA, and Department of Homeland. At the end of 2022, GE Aerospace received a grant of up to 203 million USD to work on new jet engine technologies from the Air Force Life Management Center.  GE Healthcare GE Healthcare had accumulated a large debt burden over the years due to R&D spending and a rather aggressive approach to increasing its market share. Fortunately for the other two segments, this debt has been transferred to the newly formed company and will not weigh on the balance sheet of the remaining business.  The net debt of the newly established company is 8.4 billion USD, which grows to 15 billion USD in case outstanding pension obligations are taken into account. For a company with a market capitalisation of 27 billion USD, 15 billion USD of debt may be a challenge, especially in a rising interest rate environment.   Interestingly, in preparation for the spin-off, GE HealthCare took on debt that was used to buy back 7.23 billion USD worth of debt of the parent company leading to significantly improved capital structure and lowered interest payments for GE (soon-to-be GE Aerospace). Indeed, this put additional pressure on the capital structure of GE HealthCare.  Source: SeekingAlpha GE Renewables Despite its immense potential, the GE Renewables segment may have the most unclear future among the four segments. With revenues lower than a year before and the only division with a net loss, the Renewables segment drives lower the financials of the rest of the company.  Source: GE financial report 4Q 2022  GE Renewables may benefit from the growing demand for renewable energy as more countries adopt renewable energy targets and customers increasingly demand cleaner sources of energy. However, this division faces challenges related to high production costs, limited geographic presence, and potential changes in political and regulatory environments. The production costs of renewable energy technologies are still relatively high compared to traditional energy sources, which could make it more difficult for GE Renewables to compete in certain markets. Furthermore, the many incentives governments offer for adopting renewable energy technologies may become smaller as these technologies become increasingly popular.  Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
EUR/USD Analysis: Continuing Corrections Amidst European Economic Woes

Analysis Of The Nasdaq 100 Index On The Daily Chart

InstaForex Analysis InstaForex Analysis 23.02.2023 08:07
Nasdaq 100 Index on the daily chart seems to be showing the Bearish 123 pattern followed by Ross Hook that managed to be broken. However in a few days ahead there will be upside correction to test the level of 12200,4 if this level become a Resistance level which is strong enough to hold the correction rate #NDX then this index will return downward to test the level 1864,4 as the main target and the 11299,0 level as the next target if the volatility and momentum also supports and if on the way to the targets of these levels there is no upward correction which exceeds the level of 12383.6 because if this level is successfully penetrated above then all the Bearish scenarios previously described will become invalid and cancel automatically.   Relevance up to 05:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120037
Escalated Geopolitical Tensions Are Here To Stay, China And Russia Confirming Stronger Ties

Escalated Geopolitical Tensions Are Here To Stay, China And Russia Confirming Stronger Ties

Saxo Bank Saxo Bank 23.02.2023 09:04
Summary:  Rate hike worries were kept alive by the FOMC minutes, even though these were from the pre-January economic data prints that have been more hawkish than expected. US equities closed mixed as yields stayed near recent highs, while Chinese equities on the backfoot again amid escalating geopolitical tensions. USD strength pressuring AUD despite hawkish RBA. Crude oil prices slumped about 3% and Gold is back to testing key support at $1820 again.   What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) fall for the second session with bond yields remaining at three-month highs US equity markets remain pressured as the US 10-year yields trades in the neighborhood of three-month highs at ~3.92% with the FOMC meeting minutes showing more tightening is on the horizon. The Nasdaq 100 fell for the second day, closing at its lowest level since February 1. The S&P500 also fell the second session - moving under the key 4,000 level, at 3,991, bringing the 200-day moving average just ~1% away - at the 3,941 mark - which will quickly be tested. Intel shares were a laggard down 2.2% after the computer processor giant cut its dividend 66% - declaring a quarterly payout of 12.5 cents a share. This followed on from Intel reporting one of its weakest quarterly earnings forecasts in its history. All in all, this highlights that companies are trying to preserve capital amid margin compression – and that’s been a major theme of earnings seasons and we think it will continue to play out in Q1 earnings reports.  Yesterday, Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) slid with A-shares leading Hong Kong's Hang Seng Index (HSI) fell by 0.5% on Wednesday, with ongoing tensions between the U.S. and China over the latter’s alleged support to Russia, reports about China instructing state-owned enterprise to phase out the big-4 audit firms as their auditors for national security considerations, and overnight U.S. equity market weaknesses weighing on investor sentiment. Shares of banks outperformed but failed to offset losses in technology and industrial stocks. HSBC (00005) surged 5.3% and Hang Seng Bank (00011:xhkg) climbed 2.7%, being the top two gainers in the benchmark Hang Seng Index. Techtronic (00669:xhkg), plunging 6.9%, was the biggest loser. JD.com (9618:xhkg), down 3% led the decline in the China interest space. Hong Kong released its budget for this fiscal year, including HK$5000 per head in consumption vouchers, stamp duty reduction for first-time homebuyers, and support for airline operators. Hong Kong retail and property developer stocks rallied, with Chow Tai Fook (01929) rising 2.2%, Wharf Real Estate Investment (01997:xhkg) up 2%, and Henderson Land (00012:xhkg) up 1.6%. After Hong Kong market close, Baidu (09888:xhkg) reported revenues and earnings beating market expectations despite weaker advertisements in Q4. The search engine giant announced a share buyback programme of up to USD5 billion.  Baidu’s ADR (BIDU:xnas) fell 3.7%. In mainland China, the CSI300 slid 0.9%. Construction materials, media, brokerage, and non-ferrous metals led the decline.  Australian equities (ASXSP200.I) fall for third day -  but reopening stocks in logistics and car dealing seem supported on stronger earnings.  The Australian share market is being pressured by Australian bond yields rising, with the 10-year yield at its highest levels since January 4 - after the RBA affirmed it will continue to hike rates in the months ahead. The ASX200 fell briefly under its 50-day moving average with mining giants BHP and Rio trading lower after Rio reported weaker than expected numbers after the market close yesterday – but guided for a stronger 2023.  Travel stocks are continuing to gain attention on the revival of the travel sector – with a lack of fleet becoming an issue to keep up with strong demand. Qantas posted a record profit of A$1 billion in the six months to Dec 31, and announced A$500 million share buy back – as its sees relentless flight demand in 2023 - underscoring the surge in travel, post the pandemic. In fact, Qantas’ flagged higher than expected spending being needed to buy an extra aircraft, including nine Airbus A220s to keep up with surging passenger demand. Capital expenditure in the financial year ending June will rise by as much as A$400 million to between A$2.6-A$2.7 billion and will get as high as A$3.2 billion in the following 12 months. Despite guiding for strong demand, shareholders didn’t like hearing costs will need to rise – which send Qantas shares down 6% to $6.02, below its 100-day moving average. Qantas’ outlook underscores the pace and intensify of the travel industry’s recovery. Logistics giant, Qube is trading up 10% after its half year profit rose 41% to $125 million and it also noted it sees stronger growth ahead in 2023 – supported by China’s reopening. Car dealership giant, APE is up by about 7% after its results beat expectations, and it guides for a stronger year ahead with demand for new vehicles continuing to outstrip supply. Today’s earnings highlight the reopening trade is gaining pace and also growing beyond market expectations – this could be a driver of the Australian equity market in the half year, while commodity companies continue to guide for a stronger year ahead – backing our bullish commodity outlook. FX: A stronger US dollar – pressures the Australian dollar lower With ‘a few’ FOMC members supporting a larger hike to curb inflation - with James Bullard still favouring hiking rates to 5.375% as fast of possible, the US dollar gained the upper hand, pressuring most G10 currencies lower including the Aussie dollar. The AUD/USD pair closed below trend support, which opens up for a move lower to 0.6629, being the December low. The AUD/NZD pair however made a cleaner break down lower - with the Aussie against the Kiwi falling below its 50-day moving average. Weight on the pair also came after Australian wage growth data and construction work done were softer than expected, meaning the path of RBA hikes could slow after the RBA makes its tabled hikes in the ‘months’ ahead, versus the RNBZ, that just hiked by 50bps yesterday but gave a hawkish guidance.  Crude oil (CLJ3 & LCOJ3) prices slump ~3% A firmer dollar and expectations of more rate hikes from the Fed gathering pace saw a bearish momentum return in commodities on Wednesday, even ahead of the release of the marginally hawkish FOMC minutes. Crude oil prices slid by close to 3% with WTI below $74/barrel and Brent at $80 despite a Reuters report stating that Russia intends to cut crude exports from its western ports by a quarter in March/February, after prior reports that the country is cutting production in March by 500k BPD. API inventories were however higher, with crude stockpiles increasing by 9.9mn barrels last week suggesting demand weakness. Gold (XAUUSD) slumps to support again Gold gave up its recent gains amid the renewed pressure from USD and higher yields which are now close to their cycle highs despite some softening yesterday. The yellow metal is now close to the $1820 support, which held up last week after inflation concerns escalated. A break below will bring the 200DMA at 1776 in focus.  Read next: The AUD/USD Pair Remains Under Selling Pressure, The GBP/USD Pair Is Below 1.21 Again| FXMAG.COM What to consider? FOMC minutes marginally hawkish Despite the FOMC minutes being pre-January inflation print, they sounded hawkish at the margin suggesting there may be room for further escalation of that rhetoric given how the economic data has fared since the Jan 31-Feb 1 Fed meeting. A few of the participants favoured raising the rates by 50bps, and all agreed more rate hikes are needed thrashing pivot hopes. It also noted that a number of participants observed that financial conditions had eased in recent months, which some noted could necessitate a tighter stance of monetary policy. While this risk of a recession was noted, data since the meeting including the most recent PMI numbers this week have continued to ease recession concerns. US considering release of intel on China’s potential arms transfer to Russia No reports of a peace treaty, and instead Chinese senior diplomat Wang Yi’s visit to Moscow was accompanied with China and Russia confirming stronger ties and President Xi’s visit to Russia in the coming weeks. This is suggesting that these escalated geopolitical tensions are here to stay, and our Defense equity theme basket provides a good way to hedge geopolitical risks. The red line for US and Europe will be if there is evidence that China is supplying weapons to Russia, and that could threaten a potential escalation of the war into a confrontation between Russia and China on the one side and Ukraine and the US-led Nato military alliance on the other. A WSJ article reported that Western nations have picked up on intelligence that Beijing might end its previous self-imposed restraint on weapons supplies to Russia, according to U.S. and European officials, although it appears that China hasn’t yet made a final decision. Rio Tinto’s profits and dividend slide in 2022, but Rio guides for a stronger 2023 - underpinned by ‘climate change scenarios’ Shares of Rio Tinto in NY fell 3.3% overnight and are down 3% on the ASX today after the world’s second largest miner reported underlying profit fell 38% to $13.28 billion in 2022 - vs the expected $13.96 billion consensus forecast. Rio’s profit fell after realised commodity prices fell from their records in the second half of 2022 – while earnings were also impacted by higher energy, raw materials prices and wages. Rio’s free cash flows fell 49% Y/Y in 2022 to $9.01 billion, resulting in Rio cutting its final (HY) dividend to $2.25 a share (down from $4.17), taking its total 2022 dividend to $4.92 - that’s a 60% pay-out ratio. Similar to BHP, Rio’s output looks stronger in 2023 with Rio guiding for higher copper, alumina, aluminium and iron ore production (but lower diamond production). It sees commodity prices being underpinned by ‘climate change scenarios’ which drive demand. Also note - in recent weeks - signs of a recovery in China have fuelled iron ore and copper prices up -with iron ore prices up 15% year to date. Rio is expanding its copper-gold presence, with the purchase of Turquoise Hill Resources- that will see Rio double its stake in the Oyu Tolgoi copper-gold project in Mongolia. Rio is also progressing the Rincon Lithium Project in Argentina – cementing itself in lithium. And despite the Serbian Government quashing its lithium mine Rio is ‘continuing to explore possibilities’. UOB (U11:xses) reports higher Q4 earnings Singapore bank UOB reported 13% increase in Q4 net income on higher net interest income offsetting the drop in fees from wealth management and rising impairment charges. Core net profit, after adjusting for one-off expenses related to the acquisition of Citigroup’s Malaysia and Thailand consumer businesses, rose 37% to S$1.4bn. UOB has recommended a final dividend of 75 cents a share. Together with the interim dividend of 60 cents a share, the total dividend for the full year will be $1.35 a share, representing a payout ratio of 49%. OCBC (O39:xses) reports results on Friday. NVIDIA (NVDA:xnas) jumps on AI chips outlook NVIDIA reported stronger than expected Q4 results with EPS of $0.88 on revenue of $6.05 billion, compared to analyst estimates of $0.81 on revenue of $6.01 billion. After-market gains were however driven by a strong outlook for artificial intelligence processors which is helping to offset the slowdown in PCs. Q1 revenue guidance at $6.50 billion, vs. expectations of $6.35 billion. Alibaba (09988:xhkg/BABA:xnas) and NetEase (09999:xhkg/NTES:xnas) are reporting earnings Reporting results on Thursday after the Hong Kong market close but before the U.S. market opens, Alibaba and NetEase are scheduled to announce earnings. Analysts are expecting Alibaba’s results from last quarter to be soft, with the Adjusted EPS expected to fall slightly to RMB1.999 from RMB2.015 a year ago. Investors’ focus will be on the outlook regarding the current quarter. Analysts are expecting NetEase to achieve growth in both revenues and earnings on strength in the Justice Mobile and Eggy Party games.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source:Markets Today: Pre-CPI FOMC minutes suggest more rate hikes – 23 February 2023 | Saxo Group (home.saxo)
Navigating Uncertainties: RBNZ's Inflation Gamble, Election Dynamics, and Kiwi Dollar's Path Ahead

Travel Stocks Are Continuing To Gain Attention

Saxo Bank Saxo Bank 23.02.2023 09:10
Summary:  The Nasdaq 100, and S&P 500 fall for the second session with bond yields remaining at three-month highs as the FOMC meeting minutes show more tightening is on the horizon. CPI is ahead. Australian equities fall for third day on bond yields remaining at January highs. Reopening bellwethers in logistics, car dealership and air travel guide for stronger earnings ahead. Qube and APE shares lift, while Qantas needs to splurge on more aircraft to keep up with demand. Plus what to know about Rio's results and why to watch the AUDNZD. What’s happening in markets?   The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) fall for the second session with bond yields remaining at three-month highs    US equity markets remain pressured as the US 10-year yields trades in the neighborhood of three-month highs at ~3.92% with the FOMC meeting minutes showing more tightening is on the horizon. The Nasdaq 100 fell for the second day, closing at its lowest level since February 1. The S&P500 also fell the second session - moving under the key 4,000 level, at 3,991, bringing the 200-day moving average just ~1% away - at the 3,941 mark - which will quickly be tested.  Intel shares were a laggard down 2.2% after the computer processor giant cut its dividend 66% - declaring a quarterly payout of 12.5 cents a share. This followed on from Intel reporting one of its weakest quarterly earnings forecasts in its history. All in all, this highlights that companies are trying to preserve capital amid margin compression – and that’s been a major theme of earnings seasons and we think it will continue to play out in Q1 earnings reports.   Australian equities (ASXSP200.I) fall for third day -  but reopening stocks in logistics and car dealing seem supported on stronger earnings The Australian share market is being pressured by Australian bond yields rising, with the 10-year yield at its highest levels since January 4 - after the RBA affirmed it will continue to hike rates in the months ahead. The ASX200 fell briefly under its 50-day moving average with mining giants BHP and Rio trading lower after Rio reported weaker than expected numbers after the market close yesterday – but guided for a stronger 2023.    Travel stocks are continuing to gain attention on the revival of the travel sector – with a lack of fleet becoming an issue to keep up with strong demand. Qantas posted a record profit of A$1 billion in the six months to Dec 31, and announced A$500 million share buy back – as its sees relentless flight demand in 2023 - underscoring the surge in travel, post the pandemic. In fact, Qantas’ flagged higher than expected spending being needed to buy an extra aircraft, including nine Airbus A220s to keep up with surging passenger demand. Capital expenditure in the financial year ending June will rise by as much as A$400 million to between A$2.6-A$2.7 billion and will get as high as A$3.2 billion in the following 12 months. Despite guiding for strong demand, shareholders didn’t like hearing costs will need to rise – which send Qantas shares down 6% to $6.02, below its 100-day moving average. Qantas’ outlook underscores the pace and intensify of the travel industry’s recovery. Logistics giant, Qube is trading up 10% after its half year profit rose 41% to $125 million and it also noted it sees stronger growth ahead in 2023 – supported by China’s reopening. Car dealership giant, APE is up by about 7% after its results beat expectations, and it guides for a stronger year ahead with demand for new vehicles continuing to outstrip supply. Today’s earnings highlight the reopening trade is gaining pace and also growing beyond market expectations – this could be a driver of the Australian equity market in the half year, while commodity companies continue to guide for a stronger year ahead – backing our bullish commodity outlook. FX: A stronger US dollar – pressures the Australian dollar lower  With ‘a few’ FOMC members supporting a larger hike to curb inflation - with James Bullard still favouring hiking rates to 5.375% as fast of possible, the US dollar gained the upper hand, pressuring most G10 currencies lower including the Aussie dollar. The AUD/USD pair closed below trend support, which opens up for a move lower to 0.6629, being the December low.The AUD/NZD pair however made a cleaner break down lower - with the Aussie against the Kiwi falling below its 50-day moving average. Weight on the pair also came after Australian wage growth data and construction work done were softer than expected, meaning the path of RBA hikes could slow after the RBA makes its tabled hikes in the ‘months’ ahead, versus the RNBZ, that just hiked by 50bps yesterday but gave a hawkish guidance.   What to consider with Rio Tinto's results?  Rio Tinto’s profits and dividend slide in 2022, but Rio guides for a stronger 2023 - underpinned by ‘climate change scenarios’  Shares of Rio Tinto in NY fell 3.3% overnight and are down 3% on the ASX today after the world’s second largest miner reported underlying profit fell 38% to $13.28 billion in 2022 - vs the expected $13.96 billion consensus forecast. Rio’s profit fell after realised commodity prices fell from their records in the second half of 2022 – while earnings were also impacted by higher energy, raw materials prices and wages. Rio’s free cash flows fell 49% Y/Y in 2022 to $9.01 billion, resulting in Rio cutting its final (HY) dividend to $2.25 a share (down from $4.17), taking its total 2022 dividend to $4.92 - that’s a 60% pay-out ratio.Similar to BHP, Rio’s output looks stronger in 2023 with Rio guiding for higher copper, alumina, aluminium and iron ore production (but lower diamond production). It sees commodity prices being underpinned by ‘climate change scenarios’ which drive demand. Also note - in recent weeks - signs of a recovery in China have fuelled iron ore and copper prices up -with iron ore prices up 15% year to date. Rio is expanding its copper-gold presence, with the purchase of Turquoise Hill Resources- that will see Rio double its stake in the Oyu Tolgoi copper-gold project in Mongolia. Rio is also progressing the Rincon Lithium Project in Argentina – cementing itself in lithium. And despite the Serbian Government quashing its lithium mine Rio is ‘continuing to explore possibilities   To listen to our global team's take on markets - tune into our Podcast.   Source: Financial Insights: S&P500 and ASX200 pressured. But Travel, Logistics & Car dealerships see stronger earnings ahead | Saxo Group (home.saxo)
Nvidia Is Rolling Out Its Own Cloud Service Together With Oracle

Nvidia Is Rolling Out Its Own Cloud Service Together With Oracle

Saxo Bank Saxo Bank 23.02.2023 09:17
Summary:  Sentiment remains under significant pressure as higher global yields and a firmer US dollar are pressuring sentiment and financial conditions around the world. Europe remains resilient, but can’t expect to hold out on its own if the negative pressure persists. In currencies, focus will swing to Bank of Japan Governor nominee Kazuo Ueda, who will testify before Japan’s Lower House on Friday in Japan. What is our trading focus? US equities (US500.I and USNAS100.I): watch the bond market for clues on direction US equity futures were wobbly yesterday finishing lower with S&P 500 futures closing at the 3,999 level, the first close below 4,000 since 20 January, after intraday briefly flirting with the 200-day moving average. The equity market has now erased a good portion of this year’s rally and the upcoming inflation figures and the bond market’s reaction will determine where we go from here. As we wrote in our equity note yesterday, the next potential themes getting attention is margin compression during the upcoming Q1 earnings in April and May and the discussion about structural inflation. US equity futures were lifted late last night by a better-than-expected outlook from Nvidia. S&P 500 futures are trading around the 4,015 level in early European trading hours. Hang Seng (HIG3) and CSI300 (03188:xhkg) failed to sustain an attempt to rally The Hang Seng Index and CSI300 bounced in early trading but the attempt to rally failed to sustain itself. Both the Hong Kong and mainland benchmarks slipped by about 0.3%. Techtronic (00669:xhkg) plunged 17% and was the biggest loser within the Hang Seng Index, following a forensic research firm published a report alleging the tool maker inflating profits by capitalizing expenses as assets. Baidu (09888:xhkg) lost 1.1% despite reporting revenues and earnings that beat market expectations and announcing a share buyback programme of up to USD5 billion. The hype of ChatGPT concept cooled down somewhat as AI-generated content names were sold on mainland bourses. FX: USD eases off the pedal ahead of BoJ Governor nominee Kazuo Ueda testimony The US dollar eased back lower as risk sentiment stabilized in the wake of another nervous session yesterday and after EURUSD nearly touched 1.0600, AUDUSD took a stab at its 200-day moving average, and USDJPY rose toward 135.00. Risk sentiment will likely continue to drive USD pairs in coming session, with the Friday PCE inflation data the next more important event risk on the calendar (though a weekly refresh of the US labour market data is up with today’s weekly claims number.) Elsewhere, plenty of attention on the Japanese yen later today, as Japan reports its January CPI figures tonight, but even more importantly as the nominee to replace Kuroda as governor of the BoJ will speak at a confirmation hearing at the Lower House of Japan’s parliament overnight. Crude oil (CLJ3 & LCOJ3) prices steady after slumping around 3% A firmer dollar and expectations of more rate hikes from the Fed gathering pace saw a bearish momentum return in commodities on Wednesday, even ahead of the release of the marginally hawkish FOMC minutes in the US session. Crude oil prices slid by close to 3% with WTI below $74/barrel and Brent at $80 despite a Reuters report stating that Russia intends to cut crude exports from its western ports by a quarter in March/February, after prior reports that the country is cutting production in March by 500k BPD. API inventories were however higher, with crude stockpiles increasing by 9.9mn barrels last week suggesting demand weakness. Prices recovered marginally overnight in Asia. Gold (XAUUSD) slumps to support again Gold gave up its recent gains amid the renewed pressure from USD and higher yields which are now close to their cycle highs despite some softening yesterday. The yellow metal edged closer to the $1820 support again yesterday, but has rebounded above 1,830 overnight. A break below 1,810-1,800 would bring the 200DMA at 1,776 in focus. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) ease back from cycle highs US Treasury yields eased back slightly from new cycle highs yesterday, with a strong 5-year auction showing bidding metrics at the higher end of the longer term range. A 7-year auction is up today and US January PCE inflation data is out Friday. The Japanese government bond market could sway global fixed income if nominee Kazuo Ueda makes any pointed comments in his confirmation hearing tonight. What is going on? FOMC minutes marginally hawkish Despite the FOMC minutes stemming from the FOMC meeting three weeks ago and prior to the January US CPI print, they sounded hawkish at the margin suggesting there may be room for further escalation of that rhetoric, given how the economic data has fared since the Jan 31-Feb 1 Fed meeting. A few of the participants favoured raising the rates by 50bps, and all agreed more rate hikes are needed thrashing pivot hopes. It also noted that a number of participants observed that financial conditions had eased in recent months, which some noted could necessitate a tighter stance of monetary policy. While this risk of a recession was noted, data since the meeting, including the most recent PMI numbers this week have continued to allay recession concerns. Apple announces ability to monitor blood sugar non-invasively Apple’s Exploratory Design Group, a previously secretive outfit within the company, is reporting success in measuring blood glucose levels without needing to break the skin to test via a blood sample, with a method using semiconductor chips and silicon photonics. The project has been ongoing for years. The hope is to integrate the technology longer term into the Apple Watch, helping to boost Apple’s effort to grow its presence in health care. US considering release of intel on China’s potential arms transfer to Russia Chinese senior diplomat Wang Yi’s visit to Moscow was accompanied with China and Russia confirming stronger ties and President Xi’s visit to Russia in the coming weeks. This is suggesting that these escalated geopolitical tensions are here to stay. The red line for US and Europe will be if there is evidence that China is supplying weapons to Russia, and that could threaten a potential escalation of the war into an outright proxy-war style confrontation between Russia and China on the one side and Ukraine and the US-led Nato military alliance on the other. A WSJ article reported that Western nations are considering making public the intelligence they possess that Beijing might end its previous self-imposed restraint on weapons supplies to Russia, according to U.S. and European officials, although it appears that China hasn’t yet made a final decision. Nvidia jumps on AI chips outlook Nvidia reported last night Q4 revenue of $6.05bn in line with estimates with the gaming segment beating estimates while the data center segment disappointed. Q4 EPS came in at $0.88 vs est. $0.81 driven by a higher than estimated Q4 gross margin of 66.1% vs est. 65.8%. Nvidia guides Q1 revenue of $6.5bn +2/-2% vs est. $6.35bn driven by strong demand in gaming and data center segments. The company is also rolling out its own cloud service together with Oracle which will later be offered by Microsoft and Google. Nvidia does not expect more downward pressure on GPU prices and thus the inventory risk is largely behind the company. While Nvidia keeps ignoring the cryptocurrency industry’s impact on demand we guess that the acceleration in speculation in cryptocurrencies and higher mining activity is what is driving Nvidia’s higher demand this quarter. Shares rose 8% in extended trading. BAE Systems sees muted 2023 revenue growth The UK-based defence company reports this morning higher than expected FY22 revenue at £23.3bn and underlying EBIT of £2.5bn. The earnings statement the company states that it expects 3-5% revenue growth in 2023 and 4-6% growth in EBIT suggesting expanding margins on pricing power amid surging demand. In our view, the revenue guidance seems a bit conservative given the signals over the weekend from the Munich Security Conference. Rio Tinto’s profits and dividend slide, guides for a stronger 2023 Rio Tinto shares declined 3.4% after reporting underlying profit fell 38% to $13.3bn in 2022 vs est. $14bn. Rio’s profit fell after realised commodity prices fell from their records in the second half of 2022 while earnings were also impacted by higher energy, raw materials prices and wages. Rio Tinto’s free cash flows fell 49% y/y in 2022 to $9bn, resulting in the miner cutting its final (HY) dividend to $2.25 a share down from $4.17, taking its total 2022 dividend to $4.92. Rio Tinto’s output looks stronger in 2023 with higher copper, alumina, aluminium and iron ore production What are we watching next? Market sentiment is fragile after recent break lower in equities – next moves pivotal Rising global yields and the firmer US dollar have risk sentiment and financial conditions under significant pressure, particularly in the US indices, but also in emerging markets and credit spreads on corporate bonds. European equities have fared better, but have lost their upside momentum. With the break of key supports in the US, the next levels of even more critical support are not far away to the downside (200-day moving average in the US S&P 500 at 3,941 on the cash index, for example). Volatility expansion is a prominent risk on a capitulation in sentiment, with further pressure from rising yields or rising concerns of geopolitical tensions possible triggers. Earnings to watch Today’s key earnings are in the European session, so the impact from earnings in the US session is minimal. Thursday: EssilorLuxottica, Deutsche Telekom, Munich Re, Kuaishou Technology, Eni, Anglo American, BAE Systems Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) 1000 – Eurozone Final Jan. CPI 1100 – Turkey Rate Decision 1330 – US Jan. Chicago Fed National Activity Index 1330 – US Q4 GDP Revision 1330 – US Weekly Initial Jobless Claims 1530 – US Weekly Natural Gas Storage Change 1600 – US Feb. Kansas City Fed Manufacturing Activity 2330 – Japan Jan. National CPI BoJ Governor Nominee Kazuo Ueda confirmation hearing 0001 – UK Feb. GfK Consumer Confidence   Source: Financial Markets Today: Quick Take – February 23, 2023 | Saxo Group (home.saxo)
Earnings season: Tesla stock price slipped after yesterday's news. The best selling car in Q1 was Model Y

Tesla Opens Its Global Engineering Headquarters In Palo Alto, California

Kamila Szypuła Kamila Szypuła 23.02.2023 09:52
The car company, led by Musk, is in expansion mode to meet its goal of selling 20 million vehicles a year by the end of the decade. Tesla CEO Elon Musk met with California Governor Gavin Newsom on Wednesday to tour the automaker's new engineering headquarters. Criticism of the region Musk moved Tesla's headquarters to Texas from Silicon Valley in 2021, saying at the time that the company's ability to scale up in the San Francisco Bay Area was limited. He had previously compared California to a sports team that had rested on its laurels after a series of victories. The company has since opened vehicle manufacturing facilities in China, Texas and Germany. On Wednesday, Musk said Tesla will continue to invest in California even as it expands elsewhere. The meeting Tesla initiated the meeting after several previous attempts to establish talks. The meeting at Tesla's engineering office in Palo Alto, California, focused on the company's efforts to create jobs and expand in the state. The expansion will focus on hiring engineers proficient in research development and artificial intelligence. Tesla takes over the lease of office space previously occupied by Hewlett-Packard. The plans will help accelerate the development of autonomous driving and robot technology. Musk said the new facility is "actually Tesla's headquarters" and that it's "kind of a two-headquarters company." Tesla's headquarters are in Austin, Texas. Tesla in California Tesla maintains a presence in Silicon Valley even after moving its headquarters to Texas, and employs about 48,000 people in California, which is more than a third of the company's global workforce at year-end. Many of these employees work across the San Francisco Bay in Fremont, California, where the company's first automobile plant is located. This plant is capable of producing approximately 650,000 vehicles per year. Tesla has had layoffs in California over the past year. Last year Tesla laid off more than 200 people when it closed its San Mateo , California office . The site was home to employees who worked on Tesla's advanced driver assistance system known as Autopilot. Other companies run by Mr. Musk also have a presence in California. Twitter Inc. is headquartered in San Francisco, and rocket company SpaceX is based in Hawthorne. Read next: The AUD/USD Pair Remains Under Selling Pressure, The GBP/USD Pair Is Below 1.21 Again| FXMAG.COM Tesla in Texas Tech companies were among the first to send employees home at the start of the pandemic, and many of the industry's top players have allowed their employees to work remotely on a permanent basis. This shift has prompted many Silicon Valley workers and startup CEOs to relocate to other parts of the country in search of cheaper housing, less traffic, and a better quality of life. Texas, and especially its capital Austin, has attracted more tech companies and startups in recent years, offering lower taxes and less regulation than California and cheaper real estate. Musk moved Tesla's headquarters to Texas from Silicon Valley in 2021. Tesla is considering a more than $775 million expansion to its electric vehicle plant near Austin, Texas, indicating the automaker is maintaining ambitions to increase production. Chief Executive Elon Musk said last year that the company could open 10 to 12 new factories to boost production to meet its goal of selling 20 million vehicles by the end of the decade. Production Tesla last week reported vehicle deliveries for 2022 that fell short of Wall Street forecasts. Those estimates have already fallen after the automaker signaled in October that it would ship fewer vehicles than it originally intended. Despite challenges, including temporary production disruptions at its factory in China due to the Covid-19 outbreak, Tesla increased vehicle shipments by 40% last year compared to the previous year, handing over approximately 1.31 million vehicles. Tesla is also facing more competition in the electric vehicle market as more traditional car companies enter the market. Tesla share price On Wednesday, Tesla shares closed higher than the day before at 200.86. Source: wsj.com finance.yahoo.com
US GDP Ahead, Energy Prices Push Lower, EUR/USD Pair Struggles

US GDP Ahead, Energy Prices Push Lower, EUR/USD Pair Struggles

Swissquote Bank Swissquote Bank 23.02.2023 13:09
Hawkish were the minutes from the latest FOMC meeting. They confirmed that the Federal Reserve (Fed) officials are indeed not lying when they say that they will continue hiking the interest rates to tame inflation toward the 2% mark. US and China Both the US 2 and 10-year yields bounced lower from early-week highs. A part of it was perhaps explained by the rising tensions between the US and China after China said that their relationship with Russia is ‘rock solid’. Stock market The S&P500 eased another 0.16%, Nasdaq tipped a toe into the bearish consolidation zone, but US equity futures are in the positive this morning, as the tech-heavy index is boosted by an almost 9% jump in Nvidia shares in the afterhours trading, after the company announced soft, but better than expected results. US GDP Due today, the US GDP is expected to have expanded 2.9% in the Q4, which is a fairly strong number. A read above expectations will certainly boost the Fed hawks on the idea that the US economy is resilient enough to withstand more hikes, while a number below expectations could ease the hawkish Fed tensions. But the days when bad news was good news are gone. At this point, we can’t really bet that a soft growth would soften the Fed’s hand. Only soft inflation could do that. Watch the full episode to find out more! 0:00 Intro 0:25 FOMC minutes confirmed hawkish stance 2:50 Nvidia results help Nasdaq shake off post-minutes moodiness 4:12 But could the US stock rally extend?! 6:30 Watch US GDP update today 7:30 USD consolidates gains, EURUSD struggles 8:27 Energy prices push lower Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #FOMC #minutes #Nvidia #earnings #EUR #inflation #natural #gas #crude #oil #EIA #US #GDP #data #USD #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Musk Said Tesla’s Next Phase Of Growth Will Be Built Around Building Clean Energy Sources

The Adoption Of Electric Vehicles Has Accelerated At A Dizzying Pace

Saxo Bank Saxo Bank 23.02.2023 14:54
Summary:  When Tesla cut its prices by 20% in mid-January it looked like lunacy because the EV-maker operates at a 25% gross margin which would surely compress its margins. Higher inventories by Q4 were an approximate cause but it turns out that the real decision variable was a high risk bet by Elon Musk and the management team that lithium carbonate prices had finally begun falling from its highs. By the time Tesla made its decision lithium carbonate prices were already down 20% and has continued down since down 34% from the peak. Tesla's bet is paying off for now but risks to its margin remain high. A risky bet by Elon Musk on lithium When Tesla in mid-January announced that it slashed its prices across its various car models by 20% on average it was a big shock to the car industry as an abrupt price change causes big disruptions in the secondary market. Our initial thought was that a 20% price cut on average is a desperate move considering a gross margin of 25%. It would effectively erode the majority of Tesla’s profits. The price cuts also led to angry customers that had just bought a new Tesla. Initially we thought that the price cut was to increase demand that had seen a negative impact from higher and more volatile electricity prices in many key markets. Tesla had also raised prices several times in the previous year increasing the price point. When Tesla announced its Q4 deliveries it was clear that inventory was building as deliveries were lower than production which is a bad signal of demand, but it also locks up capital on the balance sheet. While demand considerations were a key decision variable for Tesla something else was happening. During several speeches in the late part of 2022, Elon Musk expressed his frustration with lithium carbonate prices saying lithium refinery margins were making it a ‘gold mine’ and urged entrepreneurs to enter the industry. Around mid-November the 99.5% lithium carbonate price out of China topped out at CNY 598,000 per tonne and by the time of Tesla’s price cuts the price on lithium carbonate had fallen 20%. This is when Elon Musk and the management made their big bet aggressively cutting prices. It has since worked out for Tesla with lithium carbonate price down 34% from the peak in November offsetting most of Tesla’s hit to its gross margin. However, in the case that lithium carbonate prices should rebound it will eat into Tesla’s gross margin. One of the reasons why lithium carbonate prices are falling is of course extra supply coming into the market but also CATL’s, China’s largest battery maker, decision to dump prices as it is lowering its margin in its mining division to lower prices on its batteries and fuel demand even more. Lithium carbonate price | Source: Bloomberg Tesla share price | Source: Bloomberg EV adoption is continuing at a blistering pace While we are still waiting for Q4 delivery figures from VW and BMW it is safe to say that EV adoption is acceleration at a blistering pace. By the time we get the Q1 2023 figures it will show that BEV (battery EVs) deliveries will have increased 10x in just three years. With Toyota’s new CEO recently saying that Toyota has made a mistake on hybrids and would chase the BEV technology to catch up with Tesla the whole industry will massively accelerate production in the years to come. Extrapolating the expected trend in EV adoption will create massive changes to our society. Right now the current fleet of EVs is displacing around 1.5-2mn barrels per day of oil demand with passenger cars only being less than 20% of this displacement. The expected peak in oil demand from road transportation is expected in 2027, but with the current pace it could very likely earlier. By 2050 the oil demand from road transportation could be down more than 20mn barrels per day. If net-zero carbon is achieved then it is closer to 45mn barrels per day. These are some of the points that this transition will cause: Oil prices will likely remain high as oil and gas majors will adjust capital expenditures to reflect the rapidly declining oil demand. EVs will eventually lead to more stable electricity grids through V2G (vehicle-to-grid discharging) which will happen first in Europe, because the continent has the most advanced electricity grid in the world. Air pollutions levels in big cities will drastically improve potentially creating new biodiversity in cities Massive growth in electricity production potentially creating the second renaissance of electricity with the first growth phase happening 100 years ago. Electric utilities could transition away from boring stable growth to high growth companies. The transition will significantly increase the need for investments and thus add demand for capital underpinning the structural inflation outlook   Source: Teslas big bet on falling lithium is paying off | Saxo Group (home.saxo)
The Commodities Feed: US announces SPR purchase

Crude Oil Prices Rallied, Alibaba Reported Better-Than-Expected Results

Saxo Bank Saxo Bank 24.02.2023 08:23
Summary:  US equity markets erased their losses overnight, aided by a rise in Nvidia shares boosting chip and tech stocks. Fed’s preferred inflation gauge the PCE is up next and may reaffirm sticky inflation again. The Japanese yen volatility is in focus after softer-than-expected January inflation print, and as policy stance of BOJ nominee Ueda is evaluated from the ongoing parliamentary hearings. Crude oil prices reversed higher but Copper back close to the key $4 area.   What’s happening in markets? The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) had a wild session, but ended higher after bond yields fell from three-month highs US equity markets had a bumpy Thursday, awaiting the Fed’s core inflation gauge –the personal consumption index being released. However, after four days of losses, the S&P500 gained 0.5%, although it’s still down 1.6% Monday to Thursday. The S&P500 managed to move back above 4,000 level after the 10-year US bond yield fell from its fresh high - moving back to December levels of 3.871%. While bullish outlooks supported the market higher as well – with Nvidia shares up 14% on its bullish outlook - with Microsoft and Apple following higher. Despite that, US earnings are still muted YoY - highlighting margin compression- while there is still nervousness in the air- as the FOMC meeting minutes pointed to more tightening on the horizon. While there is also risk if the Fed’s inflation gauge (PCE) rises more than expected, the Fed could gain reason to become more hawkish – and that could see the S&P500 quickly test the 200-day moving average.  Hong Kong’s Hang Seng (HIG3) and China’s CSI300 (03188:xhkg) had a mixed day; Techtronic tumbled 19%. Hong Kong's Hang Seng Index and China's CSI300 had a mixed day of trading. The Hang Seng Index slid 0.4%, while the CSI300 was flat. Techtronic (00669:xhkg) shares plunged 19% after a forensic research firm accused the power tool maker of inflating profits by capitalizing expenses as assets. Meanwhile, China internet names, tech hardware, and EV stocks rallied, with Bilibili (09626:xhkg) rising 3.6%, NetEase (0999:xhkg) climbing 4.1%; Lenovo (00992:xhkg) surging 5.5%, and Nio (09866:xhkg) up 4%. Baidu (09888:xhkg) fell 0.5%, despite reporting revenues and earnings that beat market expectations and announcing a share buyback program of up to USD5 billion. According to Nikkei Asia, Chinese regulators have told Tencent Holdings and Ant Group not to offer ChatGPT services to the public as the regulators are increasingly concerned about uncensored replies given to users. Australian equities (ASXSP200.I) moved up after three days of declines The Australian share market moved up 0.3%, up slightly above its 50-day moving average today - after a bevy of better than expected company earnings bolstered sentiment. Global pallet business, Brambles shares rose almost 7% to six month highs after upgrading its profit guidance ~7% to 15-18% growth with pallet demand in the US and UK improving. Australia’s biggest lithium company, Pilbara Minerals shares are up 2.6% after reporting record results- a A$1.24 billion net profit and declared its first ever dividend – of A$0.11. Just like Albemarle, Pilbara sees a strong lithium market ahead. Pilbara also upgraded its production guidance for the year – expecting to produce 600,000 to 620,000 dmt of spodumene concentrate – up from its prior guidance of 540,000 to 580,000 dmt. This reflects what we have been seeing this Australian reporting season – mining companies are upgrading their output guidance to keep up with expectations for strong demand, plus they are also seeing improved labour conditions. Block Inc (SQ and SQ2) rallied 7% to $116.44 on the ASX after 4Q net revenue rose more than expected, up 14% to $4.65 billion, beating estimates of $4.57 billion. It comes as Bitcoin revenue rose more than expected, to $1.83 billion vs $1.79 billion expected, while hardware revenue from its Square in store payments rose slightly more than expected. As for the year ahead  - Block sees 2023 adjusted EBITDA of $1.3 billion - which is more than $1.28b est - and its margin growing by at least 1 percentage point. So far this year, Afterpay sales are up 19% and credit quality is holding up- despite higher interest rates. Afterpay's loss rate is expected to stay 1% in Q1 this year - which is a slight improvement of its Afterpay loss rate in 2019 and 2018 of 1.1% and 1.5%.   Broadly the Aussie market has been pressured by Australian bond yields moving to their highest levels since January- 3.87%. That’s a better yield/ return than the broad Australia share market’s 3.5% yield. This shift has pressured the ASX200 down 3.8% from its record highs. But some stocks are still rising, with a cohort of companies benefiting from the reopening of the Chinese economy  - and on expectations of higher earnings ahead. Such stocks are in the travel sector; shares  FX: JPY volatility in focus The Japanese yen started the Asian session stronger after a weaker-than-expected inflation print for January, but the start of BOJ nominee Ueda’s parliamentary hearings brought a reaffirmation of the loose BOJ monetary policy and that saw USDJPY bidding up to 134.80. Yen volatility will remain in focus today and next week, also parking concerns of volatility in the global bond markets, as Bank of Japan’s renewed policy direction remains in focus. Crude oil (CLJ3 & LCOJ3) prices rebound 2% despite higher inventories Crude oil prices rallied on Thursday despite another higher inventory built. US crude stocks built 7.6mn barrels last week, significantly higher than analyst expectations of 2mn. The supply side concerns may have been in focus after Russia announced this week that it will cut exports to the West in March, in addition the previously announced production cuts. However, focus was also on indications of a pickup in gasoline demand along with a decline in US gasoline inventories. Copper prices decline on higher USD and awaiting China activity improvement Copper prices were down 3% amid rising concerns of further rate hikes by central banks after a marginally hawkish FOMC minutes this week. The market is also becoming increasingly impatient with the recovery in demand in China. There has been little meaningful sign that demand is rebounding. Copper prices fell to $4.05/lb bring the $4 support in focus.  Read next: The Euro Fell Below 1.06, The USD/JPY Pair Is Close To 135.00| FXMAG.COM What to consider? US GDP revised a notch lower, jobless claims fell The second estimate of Q4 GDP was released in the US, and was revised lower to 2.7% from the prelim 2.9%. The Core PCE measure, the Fed’s preferred measure of inflation, was revised to 4.3% from 3.9%, suggesting price pressure in Q4 were higher that previously reported. While slower activity and higher inflation components seem to be making the Fed’s task more difficult, labor market still remained strong which suggests that any slowdown in growth will be likely very slow. Weekly initial jobless claims dropped to the lowest in 4 weeks at 192k from the prior 195k. Japan’s January CPI softer than expected, eyes on Ueda’s hearings January inflation print in Japan came in-line with expectations on the headline at 4.3% YoY from the prior 4.0% YoY but was marginally below expectations on the core measures. Ex fresh food and energy was out at 3.2% YoY, above last month’s 3.0% YoY but below the expected 3.3%. Inflation remains above the Bank of Japan’s 2% target, and price pressures are broad-based. Focus now turns to BOJ nominee Kazuo Ueda’s parliamentary hearings in the lower house today as markets ponder over his policy direction. Worrying signal on the inflation front in the Eurozone Yesterday, inflation was confirmed higher than initially reported in the eurozone in January (headline at 8.6% year-over-year and core at 5.3% - this represents a 0.1 percentage point higher). What is even more worrying is that the EZ CPI basket showed the most broad-based price increase on record. 76 % of the basked experienced a month-over-month increase above 0.2 %. This is up from 52 % in December 2022. There is little doubt that the European Central Bank (ECB) will hike interest rates by 50 basis points in March. But we think the ECB is not done anytime soon with the tightening process. The terminal rate is probably closer to 4% than expected by the market consensus. Booking Holdings (BKNG:xnas) reports record 2022 revenue suggesting travel demand surge Booking Holdings reported higher-than-expected revenue for Q4 at $4.05bn (up 36% YoY), beating analyst forecasts of $3.9bn. Adjusted EPS of $24.74 was also above the expected $21.51. Q1 forecast was also upbeat, suggesting resilient travel demand despite inflation pressures. Booking Holdings is a part of our Asia Pacific Tourism equity theme basket which we launched in anticipation of the recovery in Chinese outbound travel demand. Alibaba (09988:xhkg/BABA:xnas) beats earnings estimates on cost cutting Alibaba reported better-than-expected results for its fourth quarter. Adjusted EPS of 19.26 yuan (on revenue of 247.76bn yuan) was above consensus of 16.63 reflecting deep cost cutting measures. EBITA grew 16% Y/Y on cost cuts and smaller losses from Taocaicai. The cloud computing revenue was only up 3.3% while the core Chinese commerce business slid 1%. The eCommerce giant’s ADRs closed down 2.9% from the level of Hong Kong closing amid management comments on the need to increase investments to stay competitive in the year ahead. OCBC (O39:xses) reports Q4 net income miss Oversea-China Banking Corp. reported an increase of 34% in net profits in the fourth quarter to S$ 1.31bn which fell short of estimates of S$ 1.68bn. Net interest income was up 60% YoY but non-interest income slid 42% due to lower wealth management fee. Final dividend of S$0.40 was up from S$0.12 last year, and the lack of a DBS-like special dividend could mean the stock could be beaten up near-term.     For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Markets Today: BOJ stance in focus, PCE inflation report ahead – 24 February 2023 | Saxo Group (home.saxo)
Nasdaq 100 posted a new one year high. S&P 500 ended the day unchanged

The DAX Index Is Now At Pre-War Levels, Nasdaq 100 Saw Support

Ipek Ozkardeskaya Ipek Ozkardeskaya 24.02.2023 09:03
S stocks had a wobbling trading session yesterday. The S&P500 tipped a toe below its 50-DMA yesterday, near 3980, then rebounded to close the session around 0.50% higher, above the 4000 psychological mark. Nasdaq 100 saw support into the 12000 psychological mark and gained almost 1% into the close. The 14% jump in Nvidia certainly helped improve the overall market mood, whereas the US economic data was mixed and was not supposed to pour water on the equity bears or improve sentiment regarding the Federal Reserve (Fed) hawks. The latest GDP update from the US revealed that the US economy expanded 2.7% in the Q4, instead of 2.9% penciled in by analyst. A softer economic growth could have been encouraging for easing inflation and softening the Fed's hand. BUT NO, because the GDP price index – another gauge of inflation which was released along with the GDP update, showed that inflation in the Q4 eased but eased much less than expected – as a perfect reflection of the CPI and PPI data released last week. The cocktail of slower-than-expected growth and higher-than-expected inflation is the worst possible outcome, and we could see the latter reflected in the corporate earnings. The S&P500 companies now all reported their results and earnings fell 1% in the latest quarter. At first glance, this is not a good number, but these earnings are compared to the blockbuster post-pandemic numbers, and despite a fall, they remain high. The question is, how far they will fall. It will depend on several factors, including how aggressive the Fed will continue tightening policy. How aggressive the Fed will continue tightening policy will depend on how sticky inflation is. We have one more important data point to watch before the week ends... and that's the US PCE index, the Fed's favourite gauge of inflation. Given the previous inflation data, we know that inflation has certainly eased, but not as much as expected. If there is not a big surprise, there should be no bloody market reaction to a slightly higher than expected PCE index. The S&P500 could close the week above the 50-DMA, and Nasdaq above its major 38.2% Fibonacci retracement. There is one more thing that probably helps equities hold their ground, and that's the easing US yields. I believe that the US yields have been easing since a couple of days due to the rising geopolitical tensions between the US and China – after China screamed loud and clear their support to Russia this week. These rising tensions certainly increase the safe haven flows to the US treasuries and interferes with the hawkish Fed pricing. As such, the US 2 and 10-year yields are softer compared to a peak earlier this week. European stocks up, euro down on record inflation!? The European stocks gained and the euro fell on Thursday, even though the latest inflation data from the eurozone revealed that the core inflation advanced to a record high. The rising inflation is normally a boost for the European Central Bank (ECB) hawks, who increase the bets that the ECB will raise the rates more forcefully. The latter should weigh on equity valuations and support the euro. But no. The contrary is happening because the major driving force of the market is the Fed and the dollar. So, the EURUSD fell as low as 1.0577 yesterday, while the European stocks were upbeat. The DAX index for example is now at pre-war levels, whereas the latest data is less than encouraging for the German economy. The European exports are recovering to the pre-pandemic levels, but the German exports are clearly lagging behind the zone's average. Spain and Italy are doing much better than their German peers. Why? Because the energy crisis has taken a toll on German manufacturing, whereas the post-pandemic reopening benefit Spanish and Italian tourism. As a result, the headline data is strong, but the underlying factors warn that the Eurozone growth is perhaps vulnerable. Sticky inflation and hawkish ECB are major risks to the actual European equity rally. 41-year high, Mr. Ueda! Speaking of inflation, the data released this morning showed that inflation in Japan rose to 4.3%, a 41-year high, and gave a rapid boost to the yen, sending the USDJPY down to the 134 mark. But we know that the Bank of Japan (BoJ), under the leadership of its new head Ueda, is not necessarily concerned about the rising inflation. The BoJ prefers keeping rates below zero, for now, and that should continue playing in favour of USDJPY bulls, at a time when the Fed members continue showing the world how serious they are in taming inflation.  
USD/JPY Pair Has Rebounded Firmly From The Upward-Sloping Trendline

Kazuo Uedy Signaled Little Need To Tighten BoJ Policy Which Weakened The Yen

Saxo Bank Saxo Bank 24.02.2023 09:14
Summary:  Markets remain nervous as new local lows were probed yesterday in the US equities but were rejected just ahead of the 200-day moving average in the S&P 500. A first Chinese peace proposal for the Russian aggression in Ukraine was dismissed by commentators on the first anniversary of the war. Elsewhere, nomination hearings for Kazuo Ueda, who would replace Kuroda as Bank of Japan governor, saw the JPY slightly weaker. What is our trading focus? US equities (US500.I and USNAS100.I): back to wait and see on inflation and rates US equities were bouncing around in yesterday’s session with S&P 500 futures ending the session above the 4,000 level as the US 10-year yield came down despite initial jobless claims suggesting the US labour market remains extremely tight. There are no major earnings releases in today’s session, so we expect a quiet session going into the weekend. The key upside level to watch is yesterday’s close in the S&P 500 futures at the 4,019 level on the downside it is the 4,000 level. Hong Kong’s Hang Seng Index (HIG3) and China’s CSI300 (03188:xhkg) declined around 1% The Hang Seng Index declined 1.2% and the CSI300 slid 0.8% as of writing. Alibaba (09988:xhkg) announced results beating estimates but the shares of the eCommerce giant plunged 4.6% following management comments on the need to increase investments to stay competitive. According to Nikkei Asia, Chinese regulators have told Tencent (0070:xhkg) and Alibaba’s Ant Group not to offer access to ChatGPT services to the public directly or through third party as the regulators are increasingly concerned about uncensored replies given to users. FX: USD bobs up and down with risk sentiment. JPY lower after Ueda testimony. The US dollar posted new highs yesterday, as EURUSD probed below 1.0600 for the first time since early January, AUDUSD took a peek below its 200-day moving average and below 0.6800 and GBPUSD tested the waters below 1.2000, but the USD rally seemed a passive coincident development with the swings in risk sentiment, with a late rally in US equities pushing the greenback back lower. In Japan overnight, the JPY was firm early in the Asian session despite slightly softer CPI data, and then weakened slightly later in the session during Kazuo Ueda’s nomination hearings for the Bank of Japan governorship, as he signalled little urgency on tightening BoJ policy. Crude oil rises despite another US inventory build Crude oil trades higher for a second day but remains on track for a monthly loss within the established range, in Brent between $80 and $89, and WTI between $82 and $73. The technical driven bounce occurred despite another built in US inventories, but soaring exports of 4.6m b/d and a continued rise in US gasoline demand helped underpin prices. Supply side concerns may also be in focus after Russia announced this week that it will cut exports to the West in March, in addition the previously announced production cuts. Gold (XAUUSD) slumps to support again Gold dropped to the lowest level of the year on Thursday amid continued pressure from USD and higher yields which both moved close to their cycle highs earlier in the week before easing a bit on Thursday. The yellow metal has so far managed to find support around $1820 but until macro-economic developments turn more friendly the risk remains of a further weakness towards $1788 followed by the 200DMA at $1,776. Gold has been troubled by a recovering dollar and rising treasury yields after recent US data strength supported the view the Fed will keep rates higher for longer to fight inflation and to cool the economy. US PCE deflator, the Fed’s preferred inflation gauge, will be watched closely today with expectations pointing to a robust print, both in headline and core. Copper retreats as hawkish Fed weighs on sentiment. Copper has retreated from the highest close in three weeks, and yesterday’s drop, the biggest one-day slump this year, has taken it back towards key support in the $4 a pound area. Together with other industrial metals, copper is heading for a monthly loss as the market becomes increasingly impatient with the recovery in demand in China. Instead, the attention has been turning to worries that higher US rates for longer may strengthen the dollar and hurt the outlook for growth and demand. However, with supply potentially struggling to keep up with demand, we view the current weakness as temporary and part of the general loss of confidence that has hit markets this month. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) drop. US Treasury yields fell yesterday after probing the cycle highs in the wake of another strong weekly jobless claims number, with the 2-year little changed, but longer yields falling more sharply, as the 10-year closed at 3.87% after posting a cycle-high 3.97% in early US trading. Read next: The Euro Fell Below 1.06, The USD/JPY Pair Is Close To 135.00| FXMAG.COM What is going on? US GDP revised a notch lower, jobless claims fell The second estimate of US Q4 GDP was revised lower to 2.7% from the prelim 2.9%. The Core PCE measure, the Fed’s preferred measure of inflation, was revised to 4.3% from 3.9%, suggesting price pressure in Q4 was higher than previously reported. While slower activity and higher inflation are making the Fed’s task more difficult, the labor market remained strong, suggesting that any slowdown in growth will likely be very slow. Weekly initial jobless claims dropped to the lowest in 4 weeks at 192k from the prior 195k. Worrying signal on the inflation front in the eurozone Yesterday, inflation was confirmed higher than initially reported in the eurozone in January (headline at 8.6 % year-over-year and core at 5.3 % - this represents a 0.1 percentage point higher). What is even more worrying is that the EZ CPI basket showed the most broad-based price increase on record. 76 % of the basket experienced a month-over-month increase above 0.2 %. This is up from 52 % in December 2022. There is little doubt that the European Central Bank (ECB) will hike interest rates by 50 basis points in March. But we think the ECB is not done anytime soon with the tightening process. The terminal rate is probably closer to 4 % than expected by the market consensus. Block results beat on the back of Bitcoin revenue rising more than expected Block rallied over 7% after Q4 net revenue rose more than expected, up 14% to $4.7bn, beating estimates of $4.6bn. It comes as Bitcoin revenue rose to $1.8bn vs est. $1.8bn, while hardware revenue from its Square terminals and Square registers rose slightly more than expected. Block sees FY23 adjusted EBITDA of $1.3bn vs est. $1.3bn. Japan’s January CPI softer than expected, BOJ gov nominee Ueda’s hearings bring flexibility to dovishness January inflation print in Japan came in-line with expectations on the headline at 4.3% YoY from the prior 4.0% YoY but was marginally below expectations on the core measures. Ex fresh food and energy was out at 3.2% YoY, above last month’s 3.0% YoY but below the expected 3.3%. Inflation remains above the Bank of Japan’s 2% target, and price pressures are broad-based. BOJ nominee Kazuo Ueda’s parliamentary hearings in the lower house today brought some clarity over his policy direction, suggesting he will stick to easing for now while remaining flexible to tweaks as needed. What are we watching next? The week ahead in geopolitics after China peace proposal issues and on macro dataNext week’s macro calendar is not the usually busy one as a new month rolls into view, as the key US labor market data is not up until Friday the 10th of March, although the latest string of strong weekly US jobless claims offer no evidence of a softening labor market. Next Wednesday we’ll get the latest ISM survey data as regional US manufacturing surveys for February thus far suggest little chance of a resurgence in the recessionary ISM Manufacturing survey, with the last three readings in a row below 50 ahead of the survey release next Wednesday. The ISM Services survey, meanwhile, is up on Friday and bears watching after two confusing prior readings – a very weak one in December followed by a resurgent one in January of 55.2. Otherwise, the intense focus on geopolitics will remain as the US considers making public the intelligence it has gathered on China considering supporting Russia’s war effort in Ukraine, as well as how China deals with US warnings against China providing lethal aid to Russia in the conflict. China’s first attempt at wading into the situation as a peace-broker with a cease-fire “position paper” today was dismissed by a US official and is seen as a likely “non-starter with the US and most European countries” according to Neil Thomas, a senior analyst at the Eurasia group. Earnings to watch Today’s key earnings release is from BASF which has already reported which is sour reading for investors. The German chemical company is terminating its share buyback programme on top of reporting revenue and EBIT below estimates. In addition, the company is cutting 2,600 jobs in response to the higher energy costs. There is also good news in the Q4 earnings release that might lift the mood of investors, and that is the FY23 revenue outlook of €84-87bn vs es.t €81.8bn. Friday: BASF, Monster Beverage Economic calendar highlights for today (times GMT) 1330 – US Jan. Personal Income and Spending1330 – US Jan. PCE Inflation1500 – US Jan. New Home Sales1500 – US Feb. Final University of Michigan Sentiment1515 – US Fed’s Mester (Non-voter) to speak1600 – US Feb. Kansas City Fed Services Activity1830 – US Fed’s Collins (Non-voter) to speak1830 – US Fed’s Waller (Voter) to speak   Source: Financial Markets Today: Quick Take – February 24, 2023 | Saxo Group (home.saxo)
Canadian Inflation Rises to 3.3%, US Retail Sales Climb: USD/CAD Analysis

The Fight For Evidence Concerns A DoJ Lawsuit Filed Against Google

Kamila Szypuła Kamila Szypuła 24.02.2023 09:47
Google is defending itself against two separate antitrust lawsuits filed by the Department of Justice and groups of states. In addition to the lawsuit over Google's search engine dominance, last month the Department of Justice sued the company for its adtech business practices. Allegations The Department of Justice says Google has a history of automatically deleting employee chats. The Department of Justice said Google employees routinely discussed "relevant and sensitive matters" using a messenger that was said to delete chats after 24 hours. The Department of Justice said Google destroyed written documents needed for an antitrust lawsuit that focuses on how the company maintained its dominance in Internet search. The government asked a federal judge on Thursday to sanction Google for its past practice of automatically removing employee chats, even though the company told the court it would keep records required for litigation. The Department of Justice said in court Thursday that Google had trained employees on the benefits of using "unregistered chat rooms." The government said the company only pledged this week to permanently preserving its employees' chat messages - after Justice Department officials told Google it would file a sanctions request. Application for sanctions Department of Justice attorneys said the deleted chats may have contained particularly sensitive information and revealed frank discussions between executives. The government has asked U.S. District Judge Amit Mehta to impose sanctions on Google after holding a hearing where its conduct could be investigated. Read next: The Euro Fell Below 1.06, The USD/JPY Pair Is Close To 135.00| FXMAG.COM Antitrust lawsuit Google's growth in various lines of business over the years has widened its circle of critics, with competitors and some customers complaining about its tactics. The lawsuit filed in January this year alleges that Google abused its role as one of the largest brokers, providers and online auctioneers of advertisements placed on websites and mobile applications. The filing promises a protracted legal battle with far-reaching implications for the digital advertising industry. The Department of Justice has filed a long-awaited antitrust lawsuit, alleging that Google is using anti-competitive tactics to maintain a monopoly over its flagship search engine and related advertising business, in the most aggressive legal challenge to the company's dominance in the tech sector in more than two decades. The government claimed that Google is using billions of dollars raised from advertising on its platform to pay mobile phone manufacturers, carriers and browsers such as Apple Inc.'s Safari to keep Google as the default search engine, creating a self-reinforcing cycle of dominance. The result is that Google ranks #1 in search across hundreds of millions of devices in the US, with little chance for any other company to break into the market. The Department of Justice is also continuing to investigate Google's ad technology practices. Alphabet gets about 80% of its business from advertising. A new Justice Department lawsuit targets a subset of this ad business that brokers the buying and selling of ads on other websites and apps. Alphabet share price Since mid-February, Alphabet's stock has fallen significantly towards 90.00. Most recently, GOOG stock closed at 91.07. Source: wsj.com, finance.yahoo.com
Turkey cuts rate despite inflation threat, Japanese inflation hits 41-year high

Turkey cuts rate despite inflation threat, Japanese inflation hits 41-year high

Swissquote Bank Swissquote Bank 24.02.2023 10:58
US stocks had a wobbling trading session yesterday. US equities gained, then lost, then rebounded to close the session in the green. Nvidia The 14% jump in Nvidia certainly helped improve the overall market mood, whereas the US economic data was mixed and was not supposed to pour water on the equity bears or improve sentiment regarding the Federal Reserve (Fed) hawks.  US economy The latest GDP update from the US revealed that the US economy expanded slower than expected, while prices rose faster-than-expected. We have one more important data point to watch before the week ends… and that’s the US PCE index, the Fed’s favourite gauge of inflation. Given the previous inflation data, we know that inflation has certainly eased, but not as much as expected. Eurozone Across the Atlantic Ocean, the European stocks gained and the euro fell on Thursday, even though the latest inflation data from the eurozone revealed that the core inflation advanced to a record high. Japan While the data released this morning showed that inflation in Japan rose to 4.3%, a 41-year high, and gave a rapid boost to the yen, sending the USDJPY down to the 134 mark. Watch the full episode to find out more! 0:00 Intro 0:35 Mixed reaction to mixed data 3:55 Watch US PCE index today! 5:40 European stocks up, euro down after record core CPI. Why?! 7:38 Japanese inflation hits 41-year high 8:25 Turkey cuts rate despite inflation threat Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #EUR #JPY #GDP #inflation #data #Turkey #rate #decision #TRY #EuroStoxx #DAX #BIST #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The Fear of Strong Jobs: How US Labor Market Resilience Sparks Global Financial Panic

Summary Of The Week 20-24.02.2023 In Stock Market

Conotoxia Comments Conotoxia Comments 26.02.2023 12:42
Expectations of interest rate rises by the Federal Open Market Committee (FOMC) may be rising as a result of the report of their last meeting, where members declared increased action to combat inflation. This had a negative impact on sentiment, among others, in the US market. What else did the past week reveal to us? Macroeconomic data We started the week of key macroeconomic data on Tuesday. First, we learned about economic sentiment readings in Germany. The PMI industrial managers' sentiment index came in worse than expected at 46.5 (47.8 was expected), while the sentiment index for the next six months among financial analysts positively beat expectations at 28.1 (22 was expected). This is a continuation of the increase in this indicator for 5 months. Rising expectations seem to be keeping the DAX index (DE40) up, which closed at the same level it was at the beginning of the week. Source: Conotoxia MT5, DE40, Daily On the same day, we learnt readings of sentiment indicators from the UK, which surprised analysts positively. The PMI for both manufacturing and service sectors came in at 53 points (49 points were expected). This is the first reading above 50 points since August 2022, which could indicate expected future growth in this economy. This would also be confirmed by UK company valuations. The UK100 Index (UK100) is currently reaching its historic highs. Source: Conotoxia MT5, UK100, Daily We started Wednesday with Germany's CPI inflation reading for February. It was in line with expectations at 8.7%, the first increase in German inflation since November 2022. However, it seems that the most important thing of the day was the minutes of the February FOMC meeting. The transcript of the discussion may have triggered a downward reaction in the US market, as more policymakers opted for a repeat of December's half percentage point rate hike. Most participants in the discussion agreed that it was appropriate to raise the target range for the federal funds rate by another 25 basis points, with many saying they were willing to consider a larger range of future hikes to bring inflation back to the target of around 2% as soon as possible. The FOMC reaffirmed that inflation remains elevated, with growing concerns over Russia's actions, as well as the loosening of Covid tightening in China, continuing to contribute heavily to heightened global uncertainty and posing significant risks to continued high inflation. The S&P 500 Index (US500) is down almost 2% this week. Source: Conotoxia MT5, US500, Daily We started Thursday with the Eurozone CPI inflation reading for January. It turned out to be in line with analysts' expectations, coming in at 8.6% and losing momentum for the fifth time in a month. On the same day, we learnt the GDP reading from the United States, which was slightly worse than analysts' consensus at 2.7% (annualised, 2.9% was expected). We also learned about the number of new claims for unemployment benefits: 192,000 (200,000 expected). It seems that despite the economic slowdown, the US economy remains stable. At the end of the week, we learned the GDP results for the German economy. The market now seems to be struggling with a slowdown, as the reading was minus 0.4% m/m. (minus 0.2% m/m was expected) and this is the second consecutive downward reading. The stock market Following the publication of the transcript of the FOMC meeting discussions, shares of companies from almost all sectors of the S&P 500 index were able to fall. The energy sector lost the most, by as much as 3.2%, while the consumer goods sector (up 0.6%) was the only gainer. What may seem interesting is that the declines in the energy sector came despite increases in commodity prices. Natural gas futures prices have risen by almost 8% since the beginning of the week. Oil prices remained unchanged. Source: https://www.sectorspdr.com/sectorspdr/tools/sector-tracker This week we continue with companies' quarterly reports for Q4 2022. On Tuesday, the largest US retailer, Walmart (Walmart), released its financial results. The chain reported earnings per share EPS of US$1.71 (US$1.52 was expected) and higher-than-expected sales revenue. Source: Conotoxia MT5, Walmart, Daily Technology giant Nvidia (Nvidia) delivered a better-than-expected report on Wednesday. EPS came in at US$0.88 (US$0.81 was expected). The company's shares opened the following day 14% above the previous close following the report. On Thursday, US online accommodation and other travel services booking company Booking (Booking) reported better-than-expected EPS of US$24.74 (US$22 was expected). Source: Conotoxia MT5, NVIDIA, Daily The week ended in the red for most companies, with technology giant Alphabet (Google) pioneering the biggest falls, down more than 6%. Source: https://finviz.com/map.ashx?t=sec&st=w1 Currency and cryptocurrency market After the FOMC 'minutes', the US dollar began to strengthen significantly, as could be seen in the quotations of the EUR/USD pair, which has fallen by 1.1% since the beginning of the week. The Australian dollar lost significantly: quotations of the AUD/USD pair fell by 1.6% since the beginning of the week. Source: Conotoxia MT5, EURUSD, Daily We may see a correction in the cryptocurrency market after a successful start to the year. The price of bitcoin has fallen by more than 3% over the course of this week, while ethereum has fallen by 2.9%. bitcoin seems to have stopped at a price of US$25,000. However, despite the recent increases, an outflow of funds from this market could be noticed. The capitalisation of stablecoin fell by almost 2% m/m. Source: Conotoxia MT5, BTCUSD, Daily Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Inflation Numbers Signal Potential Pause in Fed Rate Hikes Amid Softening Categories

Next Week: Purchasing Managers Indexes Are Due Next Week In Three Major Economies And Eurozone CPI

Conotoxia Comments Conotoxia Comments 26.02.2023 13:11
Purchasing Managers Indexes are due next week in three major economies, which may allow to assess the state of manufacturing in each country and draw some comparable conclusions between them.   Tuesday 28.02. 15:00 GMT, US Conference Board Consumer Confidence (February) Conference Board (CB) Consumer Confidence index measures the consumer confidence level in economic activity. It is a leading indicator that can predict consumer spending, which plays a significant role in overall economic activity. Higher readings indicate greater consumer optimism. A reference point of 100 that is used is the consumer confidence index from 1985.  The consumer confidence index fell from 109.0 in December to 107.1 in January, below the expected 109.0. In particular, consumers were less optimistic about short-term job prospects and expected business conditions to worsen. Nevertheless, consumers expected their incomes to remain stable over the coming months. Purchase intentions for cars, and household appliances remained stable. However, fewer consumers were planning to buy a new or existing home. The consumer confidence index is expected to rise to 109.5 in February.  Higher than expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD Wednesday 01.03. 01:30 GMT, China Manufacturing Purchasing Managers Index (PMI) (February) The Purchasing Managers Index (PMI) provides the first indication of economic activity in the Chinese manufacturing sector as purchasing managers are considered to have access to first-hand data on the performance of their companies. A reading above 50 indicates expansion, while a reading below 50 indicates contraction in the manufacturing sector. China's PMI spent most of 2022 in contraction territory, as the economy faced production disruptions due to the Covid-19 pandemic. Last month's PMI was better than expected, showing the first sign of expansion since September 2022 - 50.1 versus the expected 49.8 and December's 47.0. This month's reading could indicate whether China's manufacturing sector is continuing its upward trend or whether January's positive reading was just a one-off boost. February's PMI is expected to come in at 49.8, indicating a slight contraction in the manufacturing sector. Better-than-expected results may be seen as bullish for the CNY, while lower results may be bearish for the CNY. Impact: CNY Wednesday 01.03. 09:30 GMT, UK Manufacturing Purchasing Managers Index (PMI) (preliminary February data) UK Manufacturing PMI has shown signs of an even sharper contraction than China's. The last time the UK PMI was in expansion territory was in August 2022; since then, the figure has slipped closer to 45. Preliminary data for February are expected to show a slight increase from last month (47.5 versus 47). A UK PMI index below 50 may indicate that the UK manufacturing sector is experiencing uncertainty about the economic outlook and has reduced demand due to lower risk appetite and higher borrowing costs.  Higher than expected reading may have a bullish effect on the GBP, while a lower-than-expected reading could be bearish for the GBP.  Impact: GBP Wednesday 01.03. 15:00 GMT, US ISM Manufacturing Purchasing Managers Index (PMI) (February) The US manufacturing PMI is close to the UK manufacturing PMI - last month's PMI was reported at 47.4. One visible difference between the two is that the UK PMI index has been fairly stable, with signs of improvement in recent months, while the US PMI index has been gradually falling since December 2021. February's data are expected to show a slight increase to 47.9, ending the downward trend. However, the actual data have been lower than forecast for the past 3 months.  A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could be bearish for the USD.  Impact: USD Thursday 02.03. 10:00 GMT, Eurozone Consumer Price Index (CPI) YoY (preliminary February data) The CPI measures the change in prices consumers pay for a given basket of goods and services compared to a year ago. The CPI is the most widely used measure  of inflation - a higher index means higher inflation. The inflation outlook for the euro area appears to be influenced by two opposing factors. On the one hand, lower-than-forecast energy prices may push down inflation faster than previously thought. On the other hand, the pass-through pressure of energy and commodities inflation to production costs is not yet over, keeping the overall inflation high. In addition, as the geopolitical situation in Europe seems  not improving, the ongoing price negotiations in the agricultural sector could lead to higher-than-expected prices, giving an additional boost to inflation figures. This results in a slightly lower inflation rate compared to the double-digit numbers at the end of 2022, but still a long way from the ECB's 2% target. Higher-than-expected data may have a bullish impact on the EUR and a bearish impact on the stock market, while lower-than-expected data may have a bearish effect on the EUR and a bullish impact on the stock market.  Impact: EUR, DAX, STOXX Stocks to watch Target (TGT) announcing its earnings results for the quarter ending on 01/2023. Forecast: 1.39. Positive earnings surprise in 7 out of the last 10 reports. Time: Tuesday, February 28, before the market opens. Costco (COT) announcing its earnings results for the quarter ending on 02/2023. Forecast: 3.21. Positive earnings surprise in 6 out of the last 10 reports. Time: Thursday, March 2, after the market closes. Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Taming the Dollar: Assessing Powell's Hawkish Tone Amidst BRICS Expansion

US Stocks Market: Dow Jones Fell 1.02% To A One-Month Low

InstaForex Analysis InstaForex Analysis 27.02.2023 08:00
Earlier on Friday, it became known that the income of the US population in January rose by 0.6% compared to December, while consumer spending increased by 1.8% in monthly terms. At the same time, analysts had expected revenue growth of 1% and cost growth of 1.3%. The University of Michigan Consumer Sentiment Index was also released, reflecting the degree of household confidence in the US economy. Thus, the University of Michigan (Michigan Consumer Sentiment Index), the index in February increased to 67 points from 64.9 points in January, with an initial estimate of 66.4 points. At the close on the New York Stock Exchange, the Dow Jones fell 1.02% to a one-month low, the S&P 500 index fell 1.05%, and the NASDAQ Composite index fell 1.69%. Dow Jones Dow Inc was the top gainer among the components of the Dow Jones in today's trading, up 0.60 points (1.05%) to close at 57.79. JPMorgan Chase & Co rose 0.90% or 1.26 points to close at 140.93. Verizon Communications Inc rose 0.21 points or 0.55% to close at 38.74. The least gainers were Boeing Co, which shed 9.98 points or 4.80% to end the session at 198.15. Microsoft Corporation was up 2.18% or 5.55 points to close at 249.22, while Intel Corporation was down 1.84% or 0.47 points to close at 25.14.  S&P 500 Leading gainers among the S&P 500 index components in today's trading were Linde PLC, which rose 4.75% to 347.64, Edison International, which gained 4.21% to close at 68.63, and Coterra Energy Inc, which rose 3.61% to end the session at 25.56. The biggest gainer was Autodesk Inc, which shed 12.95% to close at 192.53. Shares of Live Nation Entertainment Inc shed 10.08% to end the session at 68.78. Quotes of Adobe Systems Incorporated decreased in price by 7.63% to 320.54.  NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Bridger Aerospace Group Holdings Inc, which rose 78.73% to hit 7.90, Cyren Ltd, which gained 61.90% to close at 0.34. as well as Connexa Sports Technologies Inc, which rose 49.43% to end the session at 0.21. The least gainers were Fulcrum Therapeutics Inc, which shed 56.09% to close at 5.66. Shares of Sellas Life Sciences Group Inc lost 53.66% to end the session at 1.71. Quotes of ObsEva SA decreased in price by 50.77% to 0.08. Numbers On the New York Stock Exchange, the number of securities that fell in price (2,150) exceeded the number of those that closed in positive territory (867), while quotes of 88 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,731 stocks fell, 914 rose, and 169 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 2.51% to 21.67. Gold Gold futures for April delivery shed 0.47%, or 8.55, to hit $1.00 a troy ounce. In other commodities, WTI crude for April delivery rose 1.53%, or 1.15, to $76.54 a barrel. Brent futures for April delivery rose 1.34%, or 1.10, to $83.31 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.43% to 1.05, while USD/JPY rose 1.28% to hit 136.43. Futures on the USD index rose 0.61% to 105.17.     Relevance up to 03:00 2023-02-28 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314036
How investors can best position themselves amid unclear Federal Reserve rate outlook?

The PCE Deflator For January Came In Hotter-Than-Expected, Japanese Yen Is The Weakest G10 Currency

Saxo Bank Saxo Bank 27.02.2023 08:16
Summary:  Equities and bonds took a hit on Friday amid another hot inflation data from the US as the January PCE came in higher-than-expected. That saw a hawkish shift in market expectations of the Fed path, bringing the terminal rate pricing to 5.4% and reducing the rate cuts priced in for 2023. US 2yr yields surged to fresh highs with the dollar higher as well, and Japanese yen being the weakest G10 currency amid Ueda’s neutral stance at the testimony. Focus this week on geopolitics amid China’s peace proposal, while more convincing signs of a pickup in Chinese activity are also awaited.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) tumbled as expectations of the Fed rate path shifted The white-hot Personal Consumption Price Indices released on Friday weighed on U.S. equities as investors increased rate hike expectations to 25 basis points each in the March, May, and June FOMC meetings as well as the expectation for rate cuts in the second half of 2023 almost completely vanished. The S&P 500 lost 1.1% and the Nasdaq 100 plunged 1.7%, bringing the weekly losses of the two benchmark indices to 2.9% and 3.8% respectively. Nine of the 11 sectors of the S&P 500 declined on Friday, with the rate-sensitive real estate sector and information technology sector, each down 1.8%, leading the charge lower. Autodesk, a leading computer-assisted design software firm tumbled 12.9% on releasing downbeat Q1 earnings guidance below analyst estimates and was the biggest loser in the S&P500 and Nasdaq 100 on Friday. Boeing (BA:xnys) lost 4.8%, following the aircraft manufacturing giant halted deliveries of the 787 Dreamliner jets due to documentation problems. Live Nation Entertainment (LYV:xnys) plunged 10% amid concerns over the COVID reopening play having peaked and increases in regulatory scrutiny. Farfetch (FTCH:xnys), an online luxury apparel product retailer, jumped 11% following an upbeat outlook for 2023. Farfetch is one of the constituent stocks in Saxo’s newly released Luxury Goods theme basket. US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) extended a five-week losing streak Treasuries tumbled in price, rising in yields after the stronger-than-expected PCE reports which registered strong upticks in January (including upward revisions of December data). Powell’s favoured measure, PCE Services less Housing jumped to 4.6% Y/Y in January from 4.3% Y/Y in December. The market has moved to completely price in at least a 25bp hike each at the March, May, and June FOMC meeting plus about a 25% chance that the hike in March is 50bps, bringing the terminal rate to 5.4. SOFR Jun-Dec 2023 spread narrowed 11bps to -11.5bps, eliminating expectations for rate cuts in the second half of 2023. Yields on the 2-year surged 12bps on Friday or 20bps over the week to 4.81%, the highest level since 2007. Yields on the 10-year climbed 7bps on Friday or 13bps over the week to 3.94% Hong Kong’s Hang Seng (HIG3) lost nearly 12% from January highs Hong Kong's Hang Seng Index declined 1.7% bringing the 4th weekly loss in a row to 3.4% or nearly 12% from its intraday high on 27 January. China Internet names reported quarterly results generally in line with market consensus estimates but investors tended to trim positions as sentiment was dampened by resurge of tension between the U.S. and China over Russia and Ukraine and the lack of substantive recovery in the Chinese economy aside from credit expansion and survey data. During the week, JD.com (09618xhkg) was down 15%, Alibaba (09988:xhkg) down 9.5%, and Meituan (03690:xhkg) down 6.8%, as concerns about competition heating up among eCommerce platforms. Alibaba announced results beating estimates but the shares of the eCommerce giant plunged 4.6% on Friday following management comments on the need to increase investments to stay competitive in the year ahead. On Friday, NetEase (09999:xhkg) plunged 11.2%, following an earnings miss dragged down by recognition of royalty fees on expiration of game licence. Techtronic (00669:xhkg) bounced 4.4% but was still down more than 22% over the week on an alleged overstatement of earnings by capitalizing expenses. The auto space was sold, led by a 9.1% decline in Great Wall Motor (02333:xhkg). Baidu (09888:xhkg) slid 6% in the Hong Kong bourse while A-share ChatGPT concept names rallied in mainland bourses. Digital China (000034:xsec) advanced by 6.8%. CSI300 slid 1% on Friday but managed to finish the week 0.7% higher and stay above its 50 and 200-day moving averages. Financial, food and beverage, and new energy vehicle stocks led the charge lower on Friday while defense and computing names bucked the decline. Australian equities (ASXSP200.I) are continuing their short term down trend That said, stocks benefiting from the economic reopening are up the most this year, including Flight Centre, Eagers Automative which are trading up over 20% this year. In terms of the ASX200 sectors- the Consumer Discretionary sector is up the most, up 8%, YTD, followed by the Information Technology sector up 6%. While the Mining (Materials) and Finanical sectors have been pulling back, which is pressuring the market. Some investors were spooked by weaker than expected results from BHP and RIO last year, while big banks such as CBA are allocating more capital for the year ahead - for bad debts provisions, as consumers are felling the pinch of higher interest rates. All in all, the ASX200 is continuing its short term downtrend/correction amid the RBA’s more hawkish tone. For the technical levels to watch, read our Technical Analyst, Kim Cramer Larsson’s note. Australia’s oil and gas giant - Woodside Energy (WDS) reported results today; delivering profits that more than trebled in 2022 - with bottom line profits up 228% - fuelled by the oil and gas price rallies, but also as it acquired BHP’s oil and gas business. Woodside reported a larger final dividend with of US$1.44 a share, up from US$1.05 a share at the same time last year. Its full year pay-out stands at US$4.8 billion thanks to cash flows surging. This sets the tone for energy companies for 2023. Keep in mind at Saxo, we expect the oil price to stay around $80 this quarter and move up to $90 next quarter. FX: Japanese yen at YTD lows, GBP in focus with Brexit talks The dollar strength was back in focus as PCE data on Friday in the US continued to push upwards the repricing of the Fed’s path. With 2year yields surging to their fresh highs, along with BOJ governor nominee Kazuo Ueda’s continued push for a loose monetary policy coming against market’s hawkish expectations, saw the Japanese yen plunge to its lowest levels this year. USDJPY now back top testing 136.50 and Ueda’s testimony in the upper house will be in focus today. Also worth watch will be AUDUSD which plunged in close sights of 0.67 with risk sentiment and commodity prices taking a beating. UK PM Sunak is making headlines with reports saying that he may have won big concessions in the looming Brexit deal, with reports suggesting that an agreement between the UK and European Union on Northern Ireland appears to be very close. UK PM Sunak and EU head Ursula Von Der Leyen will hold talks mid-day on Monday. There are being described as 'final talks'. This will be followed by a news conference and Sunak’s statement to the parliament. GBPUSD dropped below 1.20 with the 200DMA at 1.1928 in focus. Crude oil (CLJ3 & LCOJ3) reversed higher on Friday Crude oil prices jumped back higher recording gains of 1.2% on Friday, and extended gains in the Asian morning hours amid reports of further supply disruptions as Poland’s largest oil company unexpectedly stopped receiving oil via Russia’s Druzhba pipeline. Still, unconvincing signs of a pickup in demand from China so far continues to keep oil prices range-bound, and focus this week will be on geopolitics as well as China’s PMIs. WTI futures are now back above $76/barrel after taking a look below $74 last week, while Brent is above $83. Copper broke the $4 support With the US PCE data further aggravating concerns on Fed’s rate hike path and bringing the 2-year yields to fresh highs, base metals plummeted. Copper prices plunged below the key $4 support to $3.95, closing Friday with a weekly loss of 4%. Incongruent signs of a pickup in Chinese demand also continue to underpin, and the PMI reports this week will be key to signal whether activity levels are picking up. However, with supply potentially struggling to keep up with demand, we view the current weakness as temporary and part of the general loss of confidence that has hit markets this month. Gold (XAUUSD) breaks support but losses still contained Higher US dollar in the aftermath of hot US data and higher yields has weighed on the yellow metal. Gold prices broke below the $1820 support to lows of $1809 bringing the key 1800 level in focus. Risk remains of a further weakness towards $1788 followed by the 200DMA at $1776 amid a tough macro environment. US ISM PMIs in focus this week, along with more Fed speakers, as a guide to high how interest rates could go. Silver (XAGUSD) fell harder, down 2.5% on Friday and closing with a weekly loss of 4.5%, breaking below the 200DMA at $21.   What to consider? Hot US PCE brings terminal rate expectations up to 5.4% The PCE deflator for January came in hotter-than-expected, and together with upward revisions to the previous month’s prints these sent a strong hawkish signal to the markets reinforcing the Fed’s higher-for-longer message. Core PCE rose 4.7% Y/Y, accelerating from the upwardly revised 4.6% and above the expected 4.3%. The M/M rose 0.6%, hotter than the expected and upwardly revised prior of 0.4%. This brought an upward repricing of the Fed path, with increasing calls for 50bps at the March meeting and the terminal rate now priced in at 5.4% and only one rate cut being priced in for this year from three previously. US consumer confidence also rose in February to its highest in a year, with University of Michigan sentiment accelerating to 67 from 66.4 in January. Personal incomes grew 0.6% MoM in January, a notch below expectations but consumer spending was higher-than-expected at 1.8% due to low savings rates and increased use of consumer credit. Resilient spending, along with sustained wage growth, means Fed could continue to find it tough to bring inflation back to its 2% target. Fed members continue to remain cautious on the path of inflation Fed voter Jefferson spoke about labor market strength on Friday, saying that ongoing imbalance between supply/demand for labour suggests high inflation may come down only slowly and said the argument that policymakers should accept that disinflation will be costly is well-reasoned. Bullard (non-voter) was on the wires again as well, and reaffirmed the need to move quickly to shield credibility. Collins, also a non-voter, said that recent US data affirms the case for more rate hikes. Mester (non-voter) said the Fed has to do "a little more" on rate hikes saying the new inflation data affirms the case for more rate hikes to get inflation back to target. BOJ Ueda’s upper house testimony on tap today After Friday’s testimony in the lower house of the parliament, Bank of Japan governor nominee Kazuo Ueda now moves to the upper house today. His initial policy stance appeared to be confirming continuity of the current ultra-easy monetary policy in Japan, coming against market’s hawkish expectations. This saw the yen plunge 1.3% on Friday against the USD and being the weakest currency on the G10 board. Today markets will be looking at more hints on what tweaks may be considered by Ueda and lack of further color could mean more weakness in the yen, especially with global yields surging to new highs. Geopolitics remains in focus with China’s peace proposal talks After threats from US about making public the information on China supplying weapons to Russia, China came up with a 12-point peace proposal on Friday to be a neutral mediator in the Russia-Ukraine conflict. Reports suggested that China’s proposal took a clear anti-West stance, condemning NATO extension and sanctions against Russia, but Ukrainian President Volodymyr Zelensky has signaled he's open to China's new ceasefire plan and meeting President Xi. How these events turn this week will be key to watch, especially US comments and support to Ukraine if it was to accept China as a mediator. China’s Q4 Report on the Execution of Monetary Policy emphasized stability and signalled not to induce excessive investment, debts, and bubbles China’s central bank, the People’s Bank of China, said in its Q4 Report on the Execution of Monetary Policy that the primary objective of countercyclical monetary policy was to smooth the volatility in aggregate demand so as to avoid the destructive effects of excessive fluctuations of aggregate demand on the factors of production and the wealth of the society. The report emphasizes that the force of monetary policy must be stable and not bring about excessive liquidity that induces excessive investment, a surge in debts, and asset bubbles. In support of the real economy, the Q4 Report emphasizes stability and sustainability of credit growth but omits the stronger wording of “more forceful” and “increases of credit support” that were in the Q3 Report. China may be sending a signal to lower the expectations of the market on monetary easing.   For a global look at markets – tune into our Podcast.   Source: Markets Today: Hot US PCE brings 2yr yields to fresh highs – 27 February 2023 | Saxo Group (home.saxo)
Pfizer Is In The Early Stages Of An Acquisition Of Biotech Company Seagen, Twitter's Staff Has Shrunk Since Elon Musk Took Over

Pfizer Is In The Early Stages Of An Acquisition Of Biotech Company Seagen, Twitter's Staff Has Shrunk Since Elon Musk Took Over

Kamila Szypuła Kamila Szypuła 27.02.2023 09:26
After talks between Seagen and Merck & Co fail, Pfizer tries to acquire Seagen. Musk is cutting jobs and other costs at the social media company, which has suffered financial losses since it acquired Twitter in a $44 billion deal in late October. Pfizer and Seagen Pfizer is in talks to acquire Seagen. Talks are in the early stages and there is no guarantee there will be an agreement, people said. A number of hurdles would need to be overcome, including the ability to carry out a rigorous antitrust assessment of each proposal. If a deal were to be struck, it would be a big one: Seagen has a market value of around $30 billion and is expected to earn a premium on top of that. Benefits for Pfizer The deal would help Pfizer, one of the world's largest pharmaceutical companies with $100 billion in sales last year, add a class of agents to its cancer drug portfolio that has shown promise in so-called immunotherapies against some of the most common cancers. It could also help Pfizer offset the $17 billion in sales the company predicts it could lose due to patent lapses by 2030. Pfizer has set a goal of adding $25 billion in revenue by the end of the decade from business development activities, including acquisitions. Seagen had nearly $2 billion in sales last year. Read next: The Effect Of Shifting The Aggregate Demand Curve - Demand Shocks| FXMAG.COM Pfizer's situation New York Pfizer is full of cash. The drugmaker makes about $22.7 billion from sales of its Covid-19 vaccines, drugs, and other products. Last year, Pfizer acquired sickle drug maker Global Blood Therapeutics Inc. for over $5 billion, and the rest Biohaven Pharmaceutical Holdings Co. for over $10 billion. Seagen and Merck & Co Seagen was in advanced talks last year for a takeover by Merck & Co., in a deal that would be worth $40 billion or more, The Wall Street Journal reported at the time, but the two sides failed to reach an agreement. Pfizer share price After reaching 54.48 in mid-December last year, Pfizer's share price dropped significantly. Stock prices recently closed at 41.75. Seagen share price Seagen shares rose to 162.53 after Feb. 10, then fell. After another slight increase, stock prices closed at 161.37. Twitter’s layoff Twitter Inc. carried out another round of job cuts over the weekend, the latest among thousands of staff cuts under new owner Elon Musk. The cuts come as billionaire Mr. Musk makes sweeping changes to the platform, including lowering costs, releasing new features and changing content moderation policies. Musk said in November that the layoffs were necessary because Twitter was losing more than $4 million a day. Around this time, many major advertisers stopped spending on the platform. Major changes Elon Musk adds and enhances Twitter Inc platform features. at a rapid pace since the acquisition . Significant changes so far include Twitter Blue's new subscription service and a new version of the algorithm-driven feed, renamed TikTok "For You," which recommends content to users beyond the accounts they follow. Other changes include allowing US subscribers to write tweets of up to 4,000 characters; golden checkmarks for corporate accounts and gray checkmarks for government accounts, and closing popular third-party apps such as Tweetbot and Twitterrific, which some users have used to get other features not offered by the typical Twitter platform. Twitter has added a view count to tweets, which Musk said helps users know their tweets are being seen. Source: wsj.com, finance.yahoo.com
The Commodities Feed: US announces SPR purchase

Crude Oil Remains Anchored Near The Lower, US PCE inflation data on Friday spooked the market

Saxo Bank Saxo Bank 27.02.2023 09:42
Summary:  US PCE inflation data on Friday spooked the market as the Fed terminal rate for this year was taken higher still, with discussion of the risk of larger hikes even afoot. Both the US S&P 500 Index and Nasdaq 100 touched their 200-day moving averages intraday on Friday as yields jumped. This week’s focus still on geopolitical developments, faltering confidence in the China re-opening narrative and US Feb. ISM Surveys Wednesday and Friday, with the key US employment figures not up until next week. What is our trading focus? US equities (US500.I and USNAS100.I): bonds will continue to dictate where equities go US equities continued their decline on Friday with S&P 500 futures declined 1.1% to the lowest close since around mid-January as US inflation figures (PCE deflator) surprised to the upside. As we have explained in recent equity notes the equity market will be driven by the talk about structural inflation over the coming months and how that discussion recalibrates long-term US bond yields to higher levels. In late April and May when the Q1 earnings are released the discussion about margin compression will heat up again, so there are plenty of downside risks still in equities in 2023. Hang Seng Index (HSI.I) and CSI300 (000300.I) slid amid economic, policy, and geopolitical uncertainties Hang Seng Index and CSI300 extended their declines with both indices falling around 0.4-0.5%. Investors trimmed positions as sentiment was dampened by resurge of tension between the U.S. and China over Russia and Ukraine and the lack of substantive recovery in the Chinese economy aside from credit expansion and survey data. China’s central bank emphasized in its Q4 Report on the Execution of Monetary Policy that the monetary policy must be stable and not bring about excessive liquidity that induces excessive investment, a surge in debts, and asset bubbles. Investors interpreted that as a signal to lower the expectations of the market on aggressive monetary easing. The CCP’s central committee is holding a meeting from 26-28 February to decide on the recommendation list of candidates for top government posts to be sent to the National People’s Congress to finalize during the latter’s meeting commencing from 5 March. FX: Japanese yen touched YTD lows, GBP in focus with Brexit talks The dollar strength was back in focus as hot core January PCE inflation data on Friday took the repricing of the Fed’s path higher once again. With 2-year yields surging to their fresh highs, along with BOJ governor nominee Kazuo Ueda’s continued push for a loose monetary policy coming against market’s hawkish expectations, the Japanese yen plunged to its lowest levels this year, with USDJPY testing 136.50 overnight. Also worth watch will be AUDUSD which plunged in close sights of 0.67 as risk sentiment and commodity prices are taking a beating. Elsewhere, UK PM Sunak is making headlines with reports saying that he may have won big concessions in the looming Brexit deal, with reports suggesting that an agreement between the UK and European Union on Northern Ireland appears to be very close. UK PM Sunak and EU head Ursula Von Der Leyen will hold talks mid-day on Monday. These are being described as 'final talks'. This will be followed by a news conference and Sunak’s statement to the parliament. GBPUSD dropped below 1.20 with the 200DMA at 1.1928 in focus. Crude oil remains anchored near lower end of range Crude oil remains anchored near the lower end of its the established range that has prevailed since the end of 2022, in Brent between $80 and $89, and WTI between $82 and $73. Overall, the sentiment across markets, including commodities, suffered another blow last week after traders and investors in response to another hot US inflation data increased forecasts for US interest rates. Higher rates may hurt economic growth and with that fuel demand from consumers. China meanwhile remains on a recovery track but for now it has only prevented an even deeper selloff in crude oil. A disruption in oil supply to Poland via the Druzhba pipeline from Russia, a day after Poland delivered its first Leopard tanks to Ukraine, is having a limited impact. Speculators meanwhile hold an elevated long position in Brent according to COT data released on Friday (see below). In focus this week, the annual International Energy Week which kicks off in London on Tuesday. Gold (XAUUSD) slumps towards next area of support The US dollar reached a multi-week peak in the aftermath of hot US data and together with higher yields have weighed on the yellow metal, with gold risking further weakness towards the 200DMA at $1776 amid a tough macro environment. US ISM PMIs in focus this week, along with more Fed speakers, as a guide to high how interest rates could go. Silver (XAGUSD) fell harder, down 2.5% on Friday and closing with a weekly loss of 4.5%, breaking below the 200DMA at $21. The gold-silver ratio meanwhile has spiked to 87.80 high, a 16% underperformance relative to gold since mid-December. Copper trades below $4 support With the US PCE data further aggravating concerns on Fed’s rate hike path and bringing the 2-year yields to fresh highs, base metals plummeted. Copper prices plunged to a seven-week low below the key $4 support with the next key support being the 200DMA at $3.77, the break above which triggered January’s surge. Incongruent signs of a pickup in Chinese demand also continue to underpin, and the PMI reports this week will be key to signal whether activity levels are picking up. However, with supply over time potentially struggling to keep up with demand, we view the current weakness as temporary and part of the general loss of confidence that has hit markets this month. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) jump after hot core PCE inflation data The hot core US January PCE inflation data released on Friday (more below) shocked US yields to new cycle highs, with the 2-year treasury benchmark yield reaching above 4.8% for the first time since 2007 as the market moved to completely price in at least a 25bp hike each at the March, May, and June FOMC meeting plus about a 25% chance that the hike in March is 50bps, bringing the terminal rate to 5.4. The Jun-Dec 2023 spread narrowed 11bps to -11.5bps, almost entirely eliminating expectations for rate cuts in the second half of 2023. Ten-year yields poked toward the recent cycle highs just shy of 4.00% and the 2-10 yield slope closed the week at a new multi-decade inversion record of –89 basis points (an intraday spike on Feb. 15 saw it briefly below –90 bps). What is going on? Hot US PCE brings Fed terminal rate expectations up to 5.4% The PCE deflator for January came in hotter-than-expected, and together with upward revisions to the previous month’s prints these sent a strong hawkish signal to the markets reinforcing the Fed’s higher-for-longer message. The Core PCE rose 4.7% Y/Y, accelerating from the upwardly revised 4.6% and above the expected 4.3%. The M/M rose 0.6%, hotter than the expected and upwardly revised prior of 0.4%. This brought an upward repricing of the Fed path, with increasing calls for 50 bps at the March meeting and the terminal rate now priced in at 5.4% (82+ bps of further hiking from current level) and the end-2023 expectation at –12 bps relative to peak rates, Fed members remain cautious on the path of inflation Fed voter Jefferson spoke about labor market strength on Friday, saying that ongoing imbalance between supply/demand for labour suggests high inflation may come down only slowly and said the argument that policymakers should accept that disinflation will be costly is well-reasoned. Bullard (non-voter) was on the wires again as well, and reaffirmed the need to move quickly to shield credibility. Collins, also a non-voter, said that recent US data affirms the case for more rate hikes. Mester (non-voter) said the Fed has to do "a little more" on rate hikes saying the new inflation data affirms the case for more rate hikes to get inflation back to target. Geopolitics remains in focus with China’s peace proposal talks After threats from US about making public the information on China supplying weapons to Russia, China came up with a 12-point peace proposal on Friday to be a neutral mediator in the Russia-Ukraine conflict. Reports suggested that China’s proposal took a clear anti-West stance, condemning NATO extension and sanctions against Russia, but Ukrainian President Volodymyr Zelensky has signaled he's open to China's new ceasefire plan and meeting President Xi. How these events turn this week will be key to watch, especially US comments and support to Ukraine if it was to accept China as a mediator. COT data shows unwavering support for higher Brent prices The ICE Futures Europe exchange released four weeks' worth of delayed COT data on Friday with reporting now up to date following the January cyber-attack on ION Trading UK, which caused delays in trades being reported. The US CFTC meanwhile released one COT report for the week ending January 31 with data unlikely to be up to date for another three weeks. ICE Brent data showed unwavering support for higher prices with funds holding a net long of 277k lots, a 16-month high and the weakest gross short position at 28k since 2011. The ICE gasoil (diesel) net long meanwhile dropped to 33.7k lots and lowest since November 2020. The futures contract (FPH3) trades near a one-year low with refinery margins under pressure as Middle East and Asian shipments replace supply from Russia. Food price inflation continues to ease One year on from the Russian attack on Ukraine which triggered a surge in wheat, corn and edible oils we a seeing prices continuing to deflate. Global wheat prices remain under pressure from a flood of Russian supplies forcing EU and US sellers to lower prices to stay competitive. In Chicago the soon to expire March wheat contract trades near a 17-month low, down 48% from the March 2022 panic peak while Paris Milling wheat has declined by 38%. The focus is turning to the outlook for global wheat crops this year. According to Bloomberg, US farmers are likely to plant more than analysts expect, and nearly all of France’s soft-wheat crop is in good to very good shape. Traders are also watching talks on the Ukraine grain-export deal, which is up for renewal in March. Berkshire Hathaway Q4 operating earnings miss estimates Warren Buffett’s holding company Berkshire Hathaway announced over the weekend operating earnings of $6.7bn vs est. $7.3bn driven by weaker results in its railroad and insurance businesses due to higher input costs for materials and labour. Berkshire Hathaway is still striking a positive outlook on the US economy. Warren Buffett also talks about the repurchases saying that they are not all bad if they are bought below the fair value. Woodside Energy reported profits triple in 2022 Following the theme of strong energy company earnings reports Woodside’s bottom line profits rose 228% fuelled by the rise of oil and gas prices, but also as Woodside output rose over 70%, after it acquired BHP’s oil and gas business. Woodside reported a larger final dividend of $1.44 per share, up from $1.05 a year ago. Its full year dividends payout stands at $4.8bn. On top of that, Woodside is now seeking opportunities to expand again narrowing in on potential buying assets in the Gulf of Mexico. Woodside’s record profit results follow a set of strong numbers from oil and gas producers including Shell, BP and Santos. This also sets the tone for energy companies in 2023. Woodside Energy shares ended 1.5% higher on Monday in Australia. Keep an eye on US and London listed Woodside.  Read next: Pfizer Is In The Early Stages Of An Acquisition Of Biotech Company Seagen, Twitter's Staff Has Shrunk Since Elon Musk Took Over| FXMAG.COM What are we watching next? China Government Work Report is delivered on 5 March This year’s Government Work Report will be delivered on 5 March. This will provide more details on policy action for urbanization and the property market. There will likely be two main points of interest: affordability (measures to increase accessibility to mortgage loans) and rural construction (focus on rural land transfers and reduction of complexity in regulation). With further stimulus measures in sight, we are confident that China will probably announce a higher GDP target at the upcoming National People’s Congress – meaning 5.5 %. US ISM surveys to be the next test for yields and US dollar The recent data out of the US has shown firm inflation and growth dynamics, prompting an upward repricing of the Fed’s path and bringing yields to critical levels. The ISM surveys this week will be key to watch for further direction, with the manufacturing survey out on Wednesday and services out on Friday. The consensus is for the manufacturing ISM to improve to 48.0 in February from 47.4 in January, but still in contraction (below 50) for a fourth consecutive month. The ISM services index saw a surge to 55.2 in January after a drop to 49.2 in December, partially a reflection of winter weather trends. Gains are likely to moderate, and consensus expects 54.5. EVs in focus – Tesla Investor Day and Li Auto and NIO report earnings China reopening theme is under strain, with the Asian reporting season underway, and this week brings earnings reports from two large EV manufacturers. Li Auto (02015:xhkg/LI:xnas) reported on Monday before China open while Nio (09866:xhkg/NIO:xnas) reports on Wednesday. It will be key to watch how Tesla’s steep discounts and the end of government subsidies impacts the outlooks for these two Chinese EV manufacturers which got off to a slow start this year, and whether the decline in lithium prices lifts the outlook higher. Tesla (TSLA:xnas) will hold an Investor Day event on March 1 in what could be one of the key days of the year for the electric vehicle giant. Nio, Li Auto and XPeng (09868:xhkg/XPEV:xnys) also report February deliveries this week, and China’s EV and battery giant BYD (01211:xhkg/BYD:xnys) should release February sales by Friday. Occidental earnings preview Oil and gas companies have again reported the best earnings growth this US and Australian corporate reporting season - with increased profits and higher dividends from Shell, BP and Santos. Occidental Petroleum’s outlook will be a focus today, as well as Canadian Natural Resources results later in the week. Occidental is expected to report its highest-ever Q4 net income, with the US energy giant set to benefit from high energy prices amid tight supplies. The oil and gas giant generated about $2.8bn in free cash flow in the period after years of austerity and debt reduction, according to Bloomberg consensus. Investors will closely monitor its 2023 spending and capital-returns outlook with adjusted EPS of $1.79 expected. Occidental's shares are down 6.6% this year. Earnings to watch Today’s key US earnings releases are Occidental Petroleum, Li Auto, and Zoom Video with a preview of Occidental Petroleum in the section above. Zoom Video will be watched as many retail investors still have a big interest in this pandemic winning company with analysts expecting FY23 Q4 (ending 31 Jan) up 3% y/y and EBITDA of $353mn up from $278mn a year ago. Li Auto is also in focus as the electric vehicle adoption continues to accelerate with Chinese production expected to expand more rapidly in 2023 as the zero-Covid policy has ended. Analysts expect Li Auto revenue growth of 66% y/y. The three other key earnings we are watching this are Salesforce, Snowflake, and Coupang which we highlight in our earnings watch note from last Friday. Monday: Woodside Energy, Alcon, Occidental Petroleum, Workday, Li Auto, Zoom Video Tuesday: Bayer, Moncler, ASM International, Target, Monster Beverage, HP, First Solar, Coupang, Rivian Automotive Wednesday: Royal Bank of Canada, Beiersdorf, Reckitt Benckiser, Kuehne + Nagel, Salesforce, Lowe’s, Snowflake, NIO Thursday: Anheuser-Busch InBev, Argenx, Yunnan Energy New Material, Toronto-Dominion Bank, Fortum, Veolia Environment, Merck, Hapag-Lloyd, CRH, London Stock Exchange, Haleon, Flutter Entertainment, Universal Music Group, Broadcom, Costco, VMware, Marvell Technology, Dell Technologies Economic calendar highlights for today (times GMT) 1000 – Eurozone Feb. Confidence Surveys 1330 – US Jan. Preliminary Durable Goods Orders  1530 – US Feb. Dallas Fed Manufacturing Activity 1530 – US Fed’s Jefferson (Voter) to speak 1700 – ECB Chief Economist Lane to speak 2350 – Japan Jan. Industrial Production 0000 – New Zealand Feb. ANZ Business Confidence 0030 – Australia Jan. Retail Sales Source:Financial Markets Today: Quick Take – February 27, 2023 | Saxo Group (home.saxo)
Commodity: The World's Two Biggest Commodity Consuming Nations, Both Delivered Price Softening News

The New Week Starts With Little Appetite, Metals And Energy Are Under Pressure

Swissquote Bank Swissquote Bank 27.02.2023 10:20
The week starts on a cautious note, as the Federal Reserve (Fed) rate hike expectations intensify the selloff in global stocks and bonds, while pushing the US dollar higher against most majors. PCE data Friday’s PCE data showed that not only inflation didn’t slow in January, but headline figure ticked higher to 5.4% from 5.3% printed a month earlier, and core inflation ticked higher to 4.7% from 4.6% printed a month earlier. The latter fueled the Fed hike expectations, because a slower-than-expected easing in inflation is one thing, but rebound in inflation is another thing. US Yields As a result, the US yields keep pushing higher, and equities lower.In the FX, it becomes increasingly clear that we will see a pause in the USD downside correction. EUR/USD The EURUSD could further fall to and below 1.05, and renewed euro softness could weigh on European equities. Commodities In commodities, rising US yields and the stronger US dollar hint at further decline in gold prices, as well, while crude oil continues struggling. Read next: Pfizer Is In The Early Stages Of An Acquisition Of Biotech Company Seagen, Twitter's Staff Has Shrunk Since Elon Musk Took Over| FXMAG.COM Europe In Europe, Britain’s Rishi Sunak and EU’s Ursula von der Leyen will meet today to finalize the Northern Ireland drama. Watch the full episode to find out more! 0:00 Intro 0:21 Rebound in US inflation sends stocks, bonds tumbling 3:48 USD appreciation is also bad for European stocks 6:35 Metals, energy under pressure 8:11 Light at the end of Northern Ireland tunnel? 9:12 Tesla’s investor day coming! Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #USD #inflation #selloff #Fed #ECB #expectations #EUR #GBP #Brexit #Northern #Ireland #XAU #Crude #Oil #Copper #DAX #Stoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

At The Close Of The New York Stock Exchange All Indices Gained

InstaForex Analysis InstaForex Analysis 28.02.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.22%, the S&P 500 gained 0.31% and the NASDAQ Composite rose 0.63%. Investors remain wary of more hawkish action from the US Fed amid high inflation, which recent data showed is slowing down at a slower-than-expected pace. Dow Jones Caterpillar Inc was the top performer among the components of the Dow Jones index today, up 3.81 points or 1.61% to close at 239.98. Quotes of Boeing Co rose by 2.31 points (1.17%), ending trading at 200.46. JPMorgan Chase & Co rose 1.23 points or 0.87% to close at 142.16. The least gainers were Walgreens Boots Alliance Inc, which shed 0.41 points or 1.15% to end the session at 35.39. Intel Corporation was up 0.95% or 0.24 points to close at 24.90, while Walmart Inc was down 0.72% or 1.03 points to close at 141.44.  S&P 500  Leading gainers among the S&P 500 index components in today's trading were Union Pacific Corporation, which rose 10.09% to 212.17, Enphase Energy Inc, which gained 5.94% to close at 210.78, and also shares of SolarEdge Technologies Inc, which rose 5.89% to end the session at 313.63. The least gainers were DISH Network Corporation, which shed 8.06% to close at 12.20. Shares of Lumen Technologies Inc shed 4.49% to end the session at 3.40. Quotes of Charles Schwab Corp fell in price by 3.37% to 77.88. NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were Lucira Health Inc, which rose 264.29% to hit 0.51, ContraFect Corp, which gained 52.90% to close at 4.74, and shares of Blackboxstocks Inc, which rose 47.27% to end the session at 0.81. The least gainers were Mount Rainier Acquisition Corp, which shed 46.22% to close at 5.05. Shares of Smith Micro Software Inc lost 36.40% to end the session at 1.59. Quotes of Apexigen Inc decreased in price by 33.22% to 0.87. Numbers On the New York Stock Exchange, the number of securities that rose in price (1813) exceeded the number of those that closed in the red (1217), and quotes of 95 shares remained practically unchanged. On the NASDAQ stock exchange, 2042 companies rose in price, 1656 fell, and 197 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 3.32% to 20.95. Gold Gold futures for April delivery added 0.39%, or 7.05, to hit $1.00 a troy ounce. In other commodities, WTI April futures fell 0.72%, or 0.55, to $75.77 a barrel. Futures for Brent crude for May delivery fell 0.86%, or 0.71, to $82.11 a barrel. Forex Meanwhile, on the Forex market, EUR/USD rose 0.59% to hit 1.06, while USD/JPY shed 0.17% to hit 136.23. Futures on the USD index fell 0.52% to 104.61   Relevance up to 03:00 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314214
The European Economy Has Demonstrated Amazing Resiliency Following The Supply Shock Of The Russian Invasion Of Ukraine

The UK And EU Reached A Deal On Northern Ireland's Trading Arrangements

Saxo Bank Saxo Bank 28.02.2023 08:30
Summary:  Risk sentiment revived on Monday, paring some of the jitters from a hot PCE report on Friday. Month-end flows saw Treasuries firmer and stocks higher, and the losses in dollar were accentuated by GBP strength after UK-EU deal to smoothen Northern Ireland trade. European indices however outperformed while Asia Pacific indices ASX and HSI remain in downtrends. Metal prices firmed up amid a softer dollar with Copper back above $4 support. Focus today on Eurozone flash CPI before US ISM and China PMIs take away the headlines.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) moved up cautiously, European equities outperform On Monday markets seemed pacified a little in a thin volume session after US headline durable goods orders fell in January while the UK and the EU reached a deal on Northern Ireland’s trading arrangements after years of friction caused by Brexit. The S&P 500 rose as much as 1.2% to 4018 in early trading before paring much of the gains to close 0.3% higher. Gains in the benchmark index were driven by consumer discretionary, industrials, and information technology stocks. The Nasdaq 100 finished Monday rising 0.7%. Union Pacific (UNP:xnys) surged 9.4% after the railroad company announced to search for a new CEO. Solar energy equipment makers Enphase Energy (ENPH:xnas) and SolarEdge Technologies (SEDG:xnas) each advanced 5.9%.Telsa (TSLA:xnas) rallied 5.5% amid its German plant hitting a production level of 4,000 per week, three weeks ahead of schedule. European equities started the week on a stronger footing as well with EuroStoxx 600 and Germany’s DAX each up 1.1%, France’s CAC index up 1.5% and UK’s FTSE 100 up 0.7%. Some of the optimism came from UK PM Sunak striking a deal with the EU on Northern Ireland trade (read below). Retailers bounced higher as consumer spending remains resilient after fears of recession and energy crunch have eased and the prospect of Chinese demand. The short end of the US Treasury curve (TLT:Xmas, IEF:xnas, SHY:xnas) rallied as the long lend dragged by supply Yields on the 2-year through 5-year Treasury dropped 5bps on short covering amid mixed economic data with a decline in headline durable goods orders due to weak Boeing orders, strong pending home sales, and a weak Dallas Fed manufacturing activity index. The long end underperformed, with yields on the 10-year shed 3bps and the 30-year finished the Monday session unchanged. Upcoming corporate supply estimated to be more than USD30 billion this week weighed on the long end. Across the pond, the 10-year German Bund yield rose to as high as 2.59%, the highest level since 2011 following hawkish comments from ECB Governing Council member Vujcic. Yields on the 10-year Gilts jumped 15bps to 3.81% following the UK and the EU reached an agreement on treading arrangements in Northern Ireland. Hong Kong’s Hang Seng Index (HSI.I) and China’s CSI300 (000300.I) slid; Chinese consumer names bucked the decline Hang Seng Index and CSI300 extended their declines, falling around 0.3% and 0.4% respectively. Haidilao (06862:xhkg), surging 13.7%, was the best-performing stock within the Hang Seng Index, following the Chinese hotpot restaurant chain preannounced positive profit alert with an FY22 earnings beat. The Chinese consumption space did well overall. Budweiser Brewing (01876:xhkg) and China Resources Beer (00291:xhkg) each advanced over 2%. Xiabuxiabu (00520:xhkg) climbed 1.2%. The performance of China internet names was mixed. Kuaishou (01024:xhkg) gained 2.6% and was the biggest winner with the Hang Seng TECH Index. Nonetheless, news about China’s National Radio and Television Administration studying measures to tighten regulation over short videos broke out after the Hong Kong market close. Baidu (09888) rose 2% while Alibaba (09988:xhkg) slid 0.7%. In the EV space, BYD (01211:xhkg) lost 3.4% on price cuts while Li Auto (02015:xhkg) advanced 2.1% after reporting a 41% Y/Y jump in Q4 non-GAAP earnings, beating estimates. XPeng (09869:xhkg) edged up 0.3% after being added to the Hang Seng China Enterprises Index with a weight of 0.59%. In A-shares, solar, AI generated content, media, electronic, and construction materials declined. Food and beverage, and Chinese white liquor names, coal mining, chemical, and communication bucked the overall trend of decline. Kweichow Moutai (600519:xssc) climbed 1.3%; Wuliangye (000858:xsec) advanced 1.8%. Australian equities (ASXSP200.I) move up - but remain at the lowest levels since Jan 12 The ASX200’s short term downtrend still appears to be at play, despite the market rising 0.6% today. Pressuring equities now are a trifecta of reasons- not only a more hawkish RBA, plus its ex-dividend season – marking the 2nd worst month of the year, and thirdly, from a technical perspective, quant traders will be on their toes as the ASX200 is testing a rising trend line, that it formed last year. If it breaks below the area tested yesterday - the market could be at risk of falling further. What does it mean when shares are trading ex-dividend? It’s simply where the dividend right is transferred to shareholders, ahead of dividends being paid out. This typically pressures share price performance. For longer term investors and those seeking yield (dividends)– it be worth considering buying a company’s shares before the ex-date if you wanted to be entitled to the upcoming dividend to be paid. But also keep in mind, when a company goes ex-dividend on the day, it usually falls. For example yesterday Fortescue shares fell 4.1% after going ex-dividend, moving FMG under its 50-day moving average. Today, one day after going ex-dividend Fortescue’s shares trade  3% higher. Though it is worth mentioning, the iron ore price rising 0.7% is adding to positive sentiment after the iron ore price fell over 3% on Monday. So - it’s important to consider companies going ex-dividend ahead. Today, Origin Energy, Evolution Mining, WorleyParsons and Domino’s go ex-dividend. Coles and Woolworths go ex-dividend on March 2, along with Pilbara Minerals. Next week on March 9 - BHP and RIO go ex-dividend, along with Mineral Resources, South32, the ASX, and CSL. FX: GBP surged on Brexit trade deal, AUD still a laggard The USD softened on Monday, nearly erasing all of Friday’s gains as yields fell and stocks jumped in a risk-on environment. US durable goods data missed estimates, cooling off some concerns of another uptick in the tightening pace. However, inflation fears continue to spell caution and no reversal in Fed’s tightening expectations was seen. Most of the USD softness came on the back of GBP strength on UK-EU finalizing a deal to smoothen Northern Ireland trade. GBPUSD surged from 1.1923 to 1.2060 and EURGBP slid below 0.88. AUDUSD failed to break below 0.67 handle but remained near recent lows even as metals recovered a notch. Copper back above $4 amid risk-on, Lithium supply concerns return A broad recovery in base metals was seen as the PCE data from Friday didn’t materialize in risk sentiment capitulation. Copper prices rose ~1.5% after dropping to lows of $3.94 yesterday. Focus this week is on China’s PMI releases due on Wednesday to assess the pickup in Chinese activity after Covid restrictions have been eased. Aluminum also gained following four weeks of losses amid ongoing supply concerns. Zinc and aluminium smelters in Yunnan have been asked to reduce output due to power rationing. Concerns about Lithium supply are also likely to rise as China investigates illegal mining. Operations in Yichun have been ordered to halt work indefinitely. The move could impact between 8-13% of global supply.   What to consider? UK-EU Brexit deal on Northern Ireland trade sealed The UK and EU reached a deal on Northern Ireland's trading arrangements aimed at ending years of friction caused by Brexit. The deal, known as “Windsor Framework”, aims to considerably cut customs paperwork and checks on goods moving from Great Britain but destined to stay in Northern Ireland. Existing requirements on trade from Northern Ireland to the UK will be removed. GBPUSD surged on the news to 1.20+. Yellen in Kyiv to show support Janet Yellen made an unannounced trip to Ukraine to highlight US support. She met with Zelensky and PM Shmyhal and also announced a disbursement of $1.25 billion in fresh economic aid, the first out of a total $10 billion pledged by the administration. It was also reported that the dignitaries discussed additional sanctions on Russia, including confiscating frozen Russian assets to benefit Ukraine's recovery, despite legal obstacles. Food price inflation continues to ease – wheat prices tumble to lowest levels since Sept, 2021   As mentioned in Saxo’s Quick Take global wheat prices remain under pressure from a flood of Russian supplies forcing EU and US sellers to lower prices to stay competitive. In Chicago the soon to expire March wheat contract trades near a 17-month low, down 48% from the March 2022 panic peak while Paris Milling wheat has declined by 38%. The focus is turning to the outlook for global wheat crops this year. According to Bloomberg, US farmers are likely to plant more than analysts expect, and nearly all of France’s soft-wheat crop is in good to very good shape. Traders are also watching talks on the Ukraine grain-export deal, which is up for renewal in March. Click for the technical levels to watch in Wheat, Corn and Soybean Energy giant Occidental goes against the grain of the energy sector and disappoints   Occidental reported adjusted EPS of $1.61, missing the $1.79 Bloomberg consensus expected for the fourth quarter. Despite production increasing by about 3% YoY, the miss on earnings was a result of lower than expected realised prices for natural gas, while it received slightly higher realised prices for oil than expected. This was all while OXY increased capital expenditure to $1.5b, vs the $1.3b expected in the quarter and repaid $1.1 billion of debt. Despite delivering record earnings that missed expectations, OXY increased its dividend by 38% and announced a new $3 billion share buy back. Warren Buffett’s Berkshire Hathaway is the largest Occidental shareholder. The company will hold a conference call to discuss these results Tuesday at 1 p.m. ET. For the year ahead, OXY guides for cap ex to be as high as $6.2b (vs $5.66b). Occidental shares fell 1% after hours, moving further away from its 50-day moving average. Occidental is the only major oil company lately to report results that missed market expectations; with Shell, BP, and Woodside all beating. Softer Eurozone flash February CPI may not be a big relief Broader expectations are for the Eurozone flash CPI to ease to 8.2% YoY in February from 8.6% last month amid lower energy prices. However, the core measure is still expected to be firm at 5.3% YoY, underpinned by higher non-energy industrial goods. This continues to suggest that the underlying price pressures remain firm, and another 50bps rate hike from the ECB remains likely in March. The minutes from the last ECB meeting are also out on Thursday, and the path after the next 50bps rate hike remains on watch. Lagarde previously noted that the ECB will not be at peak rates in March and there will most likely be ground left to cover, which suggested that hopes for a pause in May could be disappointed.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: Risk sentiment recovers; Month-end flows in play – 28 February 2023 | Saxo Group (home.saxo)
UK Gfk Consumer Confidence index got better fourth month in a row

Sterling (GBP) Modestly Firmer In The Wake Of Post-Brexit Settlement Between The EU And UK

Saxo Bank Saxo Bank 28.02.2023 09:23
Summary:  In FX, The US equity market tried to rally yesterday after Friday’s pummeling on hot inflation data, but generally failed to maintain altitude and dropped back close to unchanged on the session as key support remains in place. End of month flows could drive volatility today. In FX, sterling modestly firmer in the wake of post-Brexit settlement between the EU And UK on the Northern Ireland border issue. What is our trading focus? US equities (US500.I and USNAS100.I): S&P 500 futures remain in limbo US equities bounced back yesterday at point engulfing the entire selloff from last Friday before S&P 500 futures gave up its gains towards the end of the session. This morning the index futures opened higher but have sold off trading around the 3,984 level in early European trading hours. Equities have moved into a short-term hibernation until the market gets more clearer evidence of where the bond market wants to go and whether growth is picking up in China following the reopening of the economy post its zero-Covid policy. Hang Seng Index (HSI.I) pared early gains as tech names tumbled The Hang Seng Index jumped over 1% in early trading before paring all the gains and headed south, losing about 0.3% in the absence of headline drivers. Chinese developers, technology, and solar names led the charge lower. While A-share solar, energy storage, and chemical stocks retreated, the CSI300 was supported by consumer, textile, and pharmaceutical names and managed to advance 0.5%. FX: GBP rallies on Brexit trade deal, AUD still a laggard The USD softened in early Monday trading in the US yesterday, nearly erasing all of Friday’s gains as yields fell and stocks jumped in a risk-on environment, but the risk rally faded and the USD rebounded slightly. US durable goods data missed estimates, cooling off some of the momentum in short US yields. However, inflation fears continue to spell caution and no reversal in Fed’s tightening expectations was seen. Most of the USD softness came on the back of GBP strength on UK-EU finalizing a deal to smoothen Northern Ireland trade. GBPUSD surged from 1.1923 to 1.2060 and EURGBP slid below 0.88. AUDUSD failed to break below 0.67 handle but remained near recent lows even as metals recovered a notch. Crude oil remains anchored near lower end of range Crude oil futures slipped again on Monday before finding a bid overnight in Asia. Developments that continue to see the price action being confined within a narrowing range. Crude oil may nevertheless be heading for a fourth monthly loss as concerns about tighter monetary policies raises concerns about a hard landing and with that weaker demand for crude and products. While a slower than expected start to the year has triggered price downgrades from banks, the consensus still points to a pickup in demand and prices above $90 later in the year. A view shared by Vitol, the world’s largest independent oil trader who sees oil rise later in the year in response to a 2.2 million barrels a day jump in 2023 demand. In Brent we find ascending trendline support at $80.70 with resistance at $83.60. Copper back above $4 amid risk-on, Lithium supply concerns return A broad recovery in base metals was seen on Monday as the focus turns to this week’s Two Sessions gathering in Beijing where traders will be looking for fresh signals from the government. Copper trades back above $4 after finding support around $3.94, the December high. Also, in focus this week is China’s PMI releases due on Wednesday to assess the pickup in Chinese activity after Covid restrictions have been eased. Aluminum also gained following four weeks of losses amid ongoing supply concerns. Zinc and aluminium smelters in Yunnan have been asked to reduce output due to power rationing. Concerns about Lithium supply are also likely to rise as China investigates illegal mining. Operations in Yichun have been ordered to halt work indefinitely. The move could impact between 8-13% of global supply. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) flat ahead of end-of-month US Treasury yields rose slightly again yesterday to new 15-year highs after Friday’s jump on hot US PCE inflation but then eased back to approximately unchanged. It’s been a tough month for treasuries, with the 2-year yield benchmark surging some 60 basis points this month and the 10-year benchmark yield up over 30 basis points. Today is the last trading day of February and could see month-end rebalancing as we await incoming US data. Read next: EUR/USD Pair Is Trading Around 1.0560, USD/JPY Is Above 136.20, GBP/USD Gained| FXMAG.COM What is going on? UK-EU Brexit deal on Northern Ireland trade sealed The UK and EU reached a deal on Northern Ireland's trading arrangements aimed at ending years of friction caused by Brexit. The deal, known as “Windsor Framework”, aims to considerably cut customs paperwork and checks on goods moving from Great Britain but destined to stay in Northern Ireland. Existing requirements on trade from Northern Ireland to the UK will be removed. GBPUSD surged on the news to 1.20+. Yellen in Kyiv to show support Janet Yellen made an unannounced trip to Ukraine to highlight US support. She met with Zelensky and PM Shmyhal and also announced a disbursement of $1.25 billion in fresh economic aid, the first out of a total $10 billion pledged by the administration. It was also reported that the dignitaries discussed additional sanctions on Russia, including confiscating frozen Russian assets to benefit Ukraine's recovery, despite legal obstacles. Tesla shares gains 5% on German production ramp up Reuters reported yesterday that Tesla’s German car plant production hits 4,000 cars/wk which is ahead of schedule boosting sentiment. At this point, we do not know how big the cannibilazation is against its Shanghai production plant which has been the main exporter to Europe. On Friday, one of its more prolific investors Ross Gerber pulled his activist board seat bid suggesting shareholders are holding back from their criticism. Overnight one of Tesla’s suppliers, South Korea based L&F, announced that it had won a KRW 3.8trn cathode materials order, again suggesting demand is ramping up for Tesla. Zoom video rallied over 7% in post-market trading on a strong profit outlook The company reported slightly weaker sales than expected, but forecast Q1 profit of 96-98 cents per share versus analyst consensus of 87 cents and full year profits and especially 2024 profits well above analyst estimates. Zoom is reporting growth in enterprise customers while a shrinking revenue from individual consumers and small businesses. Energy giant Occidental reports disappointing results Occidental reported record quarterly earnings, but missed expectations after costs rose more than expected. The company guided for higher spending ahead, including on its direct air carbon reduction project. For the year ahead, it expects capital expenditure to be as high as $6.2b - vs $5.66b expected. OXY increased its dividend by 38% and announced a new $3 billion share buyback. Its adjusted EPS came in at $1.61, missing the $1.79 Bloomberg consensus. The miss also comes as it received lower than expected realised prices for natural gas - while realised prices for oil were slightly higher than expected.  Warren Buffett’s Berkshire Hathaway is the largest shareholder. A conference call to discuss the results for OXY is at 1 pm ET on Tuesday. Occidental shares fell 1% after hours. Occidental is the only major oil company reporting recently that missed market expectations – while Shell, BP and Woodside all beat. What are we watching next? Softer Eurozone flash February CPI may not be a big relief Broader expectations are for the Eurozone flash CPI to ease to 8.2% YoY in February from 8.6% last month amid lower energy prices. However, the core measure is still expected to be firm at 5.3% YoY, underpinned by higher non-energy industrial goods. This continues to suggest that the underlying price pressures remain firm, and another 50bps rate hike from the ECB remains likely in March. The minutes from the last ECB meeting are also out on Thursday, and the path after the next 50bps rate hike remains on watch. Lagarde previously noted that the ECB will not be at peak rates in March and there will most likely be ground left to cover, which suggested that hopes for a pause in May could be disappointed. France and Spain report preliminary Feb. CPI figures today, while Germany reports CPI tomorrow. Earnings to watch Today’s key US earnings to watch is Coupang and First Solar with the former being part of our earnings preview from last Friday and analysts expecting Coupang to announce 7% revenue growth and EBITDA of $197mn up from $-248mn a year ago as the company is under pressure to increase profitability. Coupang reports its Q4 earnings releases after the US market close. First Solar is expected to report its Q4 earnings after the US market close with analysts expecting 10% revenue growth y/y and EBITDA of $48mn down from $262mn a year ago. Tuesday: Bayer, Moncler, ASM International, Target, Monster Beverage, HP, First Solar, Coupang, Rivian Automotive Wednesday: Royal Bank of Canada, Beiersdorf, Reckitt Benckiser, Kuehne + Nagel, Salesforce, Lowe’s, Snowflake, NIO Thursday: Anheuser-Busch InBev, Argenx, Yunnan Energy New Material, Toronto-Dominion Bank, Fortum, Veolia Environment, Merck, Hapag-Lloyd, CRH, London Stock Exchange, Haleon, Flutter Entertainment, Universal Music Group, Broadcom, Costco, VMware, Marvell Technology, Dell Technologies Economic calendar highlights for today (times GMT) 0745 – France Feb. Flash CPI 0800 – Spain Feb. Flash CPI 1215 – UK Bank of England Chief Economist Huw Pill to speak 1330 – Canada Dec. GDP 1400 – US Dec. S&P CoreLogic Home Price Index 1500 – US Feb. Consumer Confidence 1500 – US Feb. Richmond Fed Business Conditions 1530 – US Feb. Dallas Fed Services Activity 1930 – US Fed’s Goolsbee (Voter 2023) to speak 2130 – API's Weekly Crude and Fuel Stock Report 0030 – Australia Q4 GDP 0030 – Australia Jan. CPI 0130 – China Feb. Manufacturing/Non-manufacturing PMI 0145 – China Feb. Caixin Manufacturing PMI     Source: Financial Markets Today: Quick Take – February 28, 2023 | Saxo Group (home.saxo)
Altria Is Trying To Purchase E-Cigarette Startup NJOY

Altria Is Trying To Purchase E-Cigarette Startup NJOY

Kamila Szypuła Kamila Szypuła 28.02.2023 10:12
Traditional cigarettes are slowly becoming a thing of the past to give way to modern e-cigarettes. In order to stay on the market, companies must take action in this direction. Altria and NJOY Altria, the largest US cigarette maker, has been trying to develop or acquire e-cigarettes for years as smoking has declined in the US. Manufacturer Marlboro Altria Group Inc. is in advanced talks to purchase e-cigarette startup NJOY Holdings Inc. for at least $2.75 billion and plans to divest its stake in Juul Labs Inc. A deal for NJOY, one of the few e-cigarette makers whose products are authorized by federal regulators, could be announced as early as this week, people have said, although talks could yet fall apart. The proposed deal includes an additional $500 million in profit if certain regulatory milestones are met. E-cigarette company NJOY Holdings Inc. it hired bankers to advise on a possible sale. The potential deal could value NJOY at around $5 billion, the process is in its early stages and there is no guarantee a deal will go through. The potential deal for NJOY would not be $5 billion or more as some of the company's investors had hoped NJOY would bring. People familiar with NJOY said last summer that if talks with potential bidders did not lead to a high enough valuation, the company could raise more money privately and wait for an initial public offering. NJOY NJOY is the third largest manufacturer of e-cigarettes in the US with 3% of sales in stores tracked by Nielsen. The vaping pioneer has permission from federal regulators to sell tobacco-flavored e-cigarettes in the US, which has so far bypassed the two biggest e-cigarette brands, Juul and Vuse Alto. It sells a single-use e-cigarette called NJOY Daily and a refillable e-cigarette called NJOY Ace. Tobacco flavored versions have been approved for sale in the US by the Food and Drug Administration. In 2018, the tobacco giant paid $12.8 billion for a 35% stake in Juul Labs Inc. , only to see the demise of the vaping market leader. Read next: EUR/USD Pair Is Trading Around 1.0560, USD/JPY Is Above 136.20, GBP/USD Gained| FXMAG.COM Juul and Altria Juul, embroiled in a dispute with federal regulators and flooded with lawsuits alleging it attacked minors, came close to filing for bankruptcy last year. Juul has since settled most of that dispute, but its future remains in doubt amid a dispute with the Food and Drug Administration over whether its e-cigarettes can remain in the US market. Juul said it has never targeted young people and is working to regain the trust of regulators and the public. Altria now values Juul at $714 million - less than the $38 billion valuation when Altria first invested. The Federal Trade Commission is expected to issue a decision in March on whether to withdraw Altria's investment in Juul. Moreover, tobacco giant Altria Group Inc. went to trial, accused of violating antitrust laws by giving up e-cigarettes at the request of rival Juul Labs Inc. A key question at the trial was why Altria ended production of its own e-cigarettes in late 2018, shortly before announcing its investment in Juul. Altria says it has halted sales of e-cigarettes due to pressure from regulators to limit youth use and an internal settlement over the company's inability to develop a successful vaping product. Altria share price At the end of January, Altaria's shares rose and since then remained above 46.00 in February. Most recently, MO shares fell slightly from 47.51 to close at 46.54 Source: wsj.com, finance.yahoo.com
Rates Spark: Balancing data and risk factors

Hawkish ECB May Slow But Not Reverse Euro Selloff

Swissquote Bank Swissquote Bank 28.02.2023 10:26
The Europeans and the Brits finally found an agreement on the very complicated Northern Ireland issue yesterday. But for now, investors warned that they don’t necessarily expect the deal to remove only all of the uncertainty weighing on prices. Brexit deal And if the Windsor Framework could help sterling and small British stocks recover, all the FTSE 100 wants is a rebound in energy and commodity prices, rather than a Brexit deal… Occidental Petroleum  Occidental Petroleum missed earnings and revenue expectations when it announced its Q4 results yesterday, and fell 1.2% in afterhours trading, despite announcing a 38% increase in its dividend and a $3 billion share buyback. Shell Shell, on the other hand, bounced almost 2% higher in Amsterdam yesterday despite a 1% decline in crude oil. European and US markets European and US markets traded in the green yesterday, but the news other than the Windsor Framework was not necessarily encouraging for the central bankers. US core durable orders expanded more than expected, and pending home sales surged 8% thanks to softer mortgage rates on a broad-based decline in yields. The latter data remained consistent with the strong and the resilient US economy, calling for more rate hikes from the Federal Reserve (Fed) to slow inflation. Stocks market So despite yesterday’s relief, the US yields will certainly remain under a decent positive pressure. And higher yields will, at some point, weigh on equity valuations. The S&P500 tested the 200-DMA, which stands at 3940, to the downside last Friday. A fall below that level is expected to accelerate the selloff. Watch the full episode to find out more! 0:00 Intro 0:42 EU & UK finally agrees on Northern Ireland! 3:53 Occidental Petroleum falls after earnings 4:13 Shell up on Goldman upgrade 5:47 Crude oil under pressure 6:24 Equity rally at risk 8:13 Hawkish ECB may slow but not reverse euro selloff Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Northern #Ireland #Brexit #deal #Windsor #Framework #USD #EUR #inflation #Fed #ECB #expectations #Crude #Oil #nat #gas #Occidental #Petroleum #Shell #EVPass #Stoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
The USD/JPY Price Seems To Be Optimistic

Saxo Bank Podcast: The Struggling JPY, Tesla's Incoming Investor Day And More

Saxo Bank Saxo Bank 28.02.2023 11:59
Summary:  Today we look at yields remaining near cycle highs, with US equities struggling into the close after an odd, intraday rally stumbled. Note that end of month is rolling into view today after a terrible month for bonds, with the US 2-year yield up 60 basis points month-to-date into today. On that note, we delve into whether yields really have any bearing on company investment. Elsewhere, pondering what inspires crude to pull itself out of the range, forward curves in the commodity space, the struggling JPY, Tesla's incoming Investor Day and much more. Today's pod features Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Read next: Elon Musk Is Richest Man Again, The State Bank Of India Had Raised $1 Billion From Global Banks| FXMAG.COM   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Can yields also be the cart and not the horse? | Saxo Group (home.saxo)
The European Economy Has Demonstrated Amazing Resiliency Following The Supply Shock Of The Russian Invasion Of Ukraine

ECB Terminal Rate Pricing Briefly Touched 4%, Focus Today Is On Commodities

Saxo Bank Saxo Bank 01.03.2023 08:22
Summary:  Hot Spanish and French inflation data, along with a soft US consumer confidence report and month-end flows, made for a bumpy ride in equities and bonds to close the month of February. Dollar strength however prevailed at the close of the month despite a bump higher in EUR and GBP earlier in the day. A big miss in Australia’s Q4 GDP and January inflation saw AUDUSD plunge 30bps. Target beat earnings estimates but missed margins and lowered annual guidance. On watch today will be China PMIs, German inflation and US ISM manufacturing.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) slipped on falls in consumer confidence and Chicago PMI The major U.S. equity indices posted their second negative month in three - despite starting the year higher. Treasury yields are denting sentiment amid fears that higher Fed Reserve rates would remain in place for longer after inflation fears have been creeping back into the market - while stronger European inflation data strengthened the case for more hikes. On Tuesday, the S&P 500 dropped 0.3% and Nasdaq 100 slipped 0.1% following an unexpected decline in the Conference Board Consumer Confidence and a weaker Chicago PMI print. Most sectors within the S&P500 were down while materials, communication services, and financials inched up. Target (TGT:xnys) gained 1% after the discount store chain beat earnings estimates but missed margins and lowered annual guidance. With traders again reducing bets that the Fed will cut rates this year, the S&P 500 was down 2.6% last month. In contrast, European indices closed in gains for the month of February, with France’s CAC up 2.7%, Euro Stoxx 600 up 1.8% and German DAX up 1.6% despite a big surge in European yields as well. Yields on the short end of the US Treasury curve (TLT:Xmas, IEF:xnas, SHY:xnas) climbed on hotter-than-expected inflation prints in France and Spain Yields on U.S. Treasuries climbed in early trading following the sell-off in European government bonds in response to hot inflation prints in France and Italy. The long end of the Treasury curve recovered after the Chicago PMI, Richmond Fed Manufacturing Index, and Conference Board Consumer Confidence unexpectedly slipped. The 10-year notes pared most losses and finished Tuesday only 1bp cheaper at 3.92% while the yield on the 2-year was 4bps higher at 4.82%. The 2-10 year curve flattened to -89. Hong Kong’s Hang Seng Index (HSI.I) and China’s CSI300 (000300.I) ended a three-month streak of gains The Hang Seng Index and CSI300 index finished February with the first monthly loss since October 2022, ending a three-month streak of gains. In February, Hang Seng Index fell sharply by 9.4% while A-shares’ broad benchmark CSI300 outperformed, sliding moderately by 2.1%. The weakness in Hang Seng Index was driven by large declines in mega-cap e-Commerce platforms. Weighed on by the prospect of intensifying competition, JD.com (09618:xhkg) tumbled 25%, Meituan (03690:xhkg) down 22.4%, and Alibaba (09988:xhkg) down 19.6% over the month. Baidu (09888:xhkg) bucked the market trend and weakness among peers, climbing 1.8% on traction gained in AI-generated content solutions. In the near term, investors will be having a gauge into the strength of the economic recovery from the official NBS Manufacturing PMI, Non-manufacturing PMI, and Caixin China Manufacturing PMI scheduled to release today. After that, the focus will be on the State Council’s Government Work Report which includes, among other items, the growth target for 2023, delivered to the National People’s Congress on 5 March, and then the reshuffling of top leadership in the State Council and other key offices of the Chinese government during the National People’s Congress. Australian equities (ASXSP200.I) retreat back to January levels, with markets pricing in more Fed and RBA hikes Focus today is on commodities – with oil and copper moving higher, while the broad market is being pressured with markets adjusting to higher for longer CPI. We will be watching the reaction to China PMIs - which are expected to boost sentiment in commodities. Short term pressure continues for the Australia dollar after GDP and CPI slowed Australian GDP data showed fourth-quarter economic growth slowed down to pace of 2.7% YoY as expected- quashed by higher inflation and interest rates. Meanwhile, headline monthly CPI showed inflation is cooling – falling to a pace of 7.4% YoY vs the 8.1% price growth forecast. This theoretically pressures the Aussie dollar lower in the shorter term, while the US dollar is continuing to move up – with the dollar index up 4% from its lows - with the market pricing in more Fed rate hikes and potentially no Fed cuts this year – which is in line with our view. Our view is that the Aussie dollar could see strength return in Q2, and we maintain a longer-term bullish view on the Aussie dollar in line with our positive commodity outlook. In other news, Sydney property prices, the bellwether of the Australia market, rose for the first time in 13 months in February in - this is a positive sign for home values – but goes against the grain of what the RBA expected and supports the notion of the RBA keeping rates higher for longer. FX: AUD and JPY were the laggards last month as dollar regained ground The dollar closed firmer at the end of the month which spelled inflation concerns coming back and sent the short-end yields surging to record highs. AUDUSD was the weakest on the G10 board as a beating of the risk sentiment and weaker metal prices saw pair test 0.67 despite the return of RBA’s hawkish stance. Yen had a double blow from surging yields and Ueda’s dovish read, and USDJPY tested 137 last night before getting back below 136.50. EURUSD touched highs of 1.0650 after the French/Spanish inflation prints last night but is back below 1.0570 now. GBPUSD also got in close sights of 1.2150 but back closer to 1.2000 now. Commodities: Copper and oil nudge up - we think the commodity bull market run will be on pause till Q2   The oil prices rose 1.5% with traders reading between the lines at IEA commentary - which alluded to Chinese demand rising - while there is a bigger worry for the EU - should there be a complete halt to Russian flows - which would be a bullish scenario for oil and perhaps see prices move back up to last year's unsustainable highs. As for other commodities - Copper moved further above the key $4 mark after rising almost 2%. Aluminium rose 0.6%, while other metals were lower. At Saxo - our view is that the Commodity bull market will be on pause - before restarting strongly in Q2 with material demand expected to rise from China. Crude oil showing some early signs of life A rally in crude oil prices to the top of last week’s trading range is suggesting some early signs of a recovery towards the top of the trading range that has been established since late 2022. With the Fed rate hikes now well priced in by the markets, focus is moving back to sanctions on Russia that continue to threaten supplies. Meanwhile, sentiment on China demand recovery may be back with the Two Sessions likely to announce a strong policy commitment to growth rebound this year. This is offsetting global demand concerns emanating from API data showing a 10th straight weekly crude build. WTI prices touched $78 overnight and Brent was at $84.   What to consider? US consumer confidence in a surprise drop, labor market strength intact The Conference Board's US consumer confidence index saw a surprise fall to 102.9 in February (vs. exp 108.5) from January’s 106 which was also revised lower from 107.1. The present situation index looked resilient at 152.8 from 151.1 and reaching its highest levels since April 2022, but the forward expectations index declined to 69.7 from 76.0 previously. While the headline figures may be a small input for the Fed, the labor-supply mismatch has become more evident from the consumer confidence report. The report showed that the labor differential improved to 41.5 in February from 37 in the prior month, rising for a third consecutive month and reaching its highest levels since April 2022. The differential represents the percentage of respondents who say jobs “are plentiful” less those who say jobs “are hard to get”. Its rise could be an early indication of labor market strength heading into next week’s payrolls and JOLTs reports. Focus turns to ISM manufacturing survey today which is expected to accelerate but still remain in contraction. ECB rate hike bets pick up after higher French and Spanish inflation Consumer prices in France jumped by a record 7.2% YoY in February as food and services costs increased, while Spain saw a stronger-than-expected 6.1% YoY advance. The strong inflation now results mostly from companies passing through to consumers higher prices in the service sector and higher food prices. Looking at the French data, food prices (price increase of+14.5% YoY) contribute twice more to inflation than energy prices. The increase of prices in the service sector (which represents about 50% of the CPI basket) is another source of worry. Expect it to get worse in the short-term. We also see a similar trend in most European countries (the situation is even uglier in the CEE region), with the first print of German February inflation due today and the Eurozone print due tomorrow. Euro bonds slid with German yields up 7bps and Spanish yields up 6bps as ECB terminal rate pricing briefly touched 4%. China PMIs are expected to show further recovery in the economy Scheduled to release on Wednesday, the official NBS Manufacturing PMI, according to survey from Bloomberg, is expected to bounce further into expansion at 50.6 in February from 50.1 in January and the Non-manufacturing PMI is forecasted to climb to 54.9 from 54.4. Despite the sluggishness in exports, Caixin China PMI is expected to return to the expansionary territory at 50.7 in February, from 49.2 in January. The Emerging Industries PMI jumped to 62.5 in February from 50.9 in January adding to the favourable forecasts for the NBS and Caixin PMIs. Target’s earnings beat with stronger-than-expected sales growth but margins missed and annual guidance weaker-than-expected Target (TGT:xnys) reported FYQ4 (ending Jan 31, 2023) EPS of USD1.89, nearly 28% above the consensus estimate of USD1.48. The earnings beat was driven by a stronger-than-expected 0.7% Y/Y growth in same-store sales and a 1.3% Y/Y growth in total sales, while both were expected to fall. Notable strength was found in food and beverage, beauty, and household essentials. Discretionary categories remained soft. Weakness, however, showed up in the gross margins which declined to 22.7% in Q4 from 25.7% in the prior-year quarter. EBIT margins fell to 3.7% from 6.8% a year ago. For the current fiscal year’s annual guidance, the management is expecting between a low-single-digit decline and a low-single-digit increase in same-store sales and a below-consensus operating income of about USD 4.9 billion. Brewers results on watch amid the reopening trade   Budweiser Brewing Co (1876 HK), the Asia distributor - is due to release results today. Q4 revenue is expected to get a little boost from the FIFA World Cup trading - but is still expected to dive. Its outlook could be tainted as higher beer taxes are ahead for South Korea - while Budweiser’s APAC brands are on notice with proposed liqueur taxes there looming – which could slow business growth. The world’s largest brewer Anheuser-Busch InBev SA/NV (BUD) reports on Thursday, and could see higher volatility - for more click here. EV makers on watch: Tesla bolsters efforts to boost production, Rivian gives lacklustre outlook Tesla is continuing to march ahead with its lofty EV production goals - and now looks set to build a plant in northern Mexico. The news precedes Wednesday's reveal of Elon Musk's next phase "master plan," which will test the resurgent enthusiasm for the EV maker. Further details of the Mexico plan are expected to also be released this week. Meanwhile, Tesla’s competitor, Rivian forecasts 50,000 EVs will be produced this year – which was weaker than the market expected. Its fourth quarter revenue also missed expectations making $663 million – vs the $717 million consensus expected.     For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Markets Today: Crude oil and copper recover – 1 March 2023 | Saxo Group (home.saxo)
Economic Data From China Positively Affected Copper, Aluminum, Zinc And Iron Ore

Economic Data From China Positively Affected Copper, Aluminum, Zinc And Iron Ore

Saxo Bank Saxo Bank 01.03.2023 09:22
Summary:  US equities posted an uninspiring session, as the price action is bottled up ahead of the key support of the 200-day moving average in the major indices. Overnight, China’s official Manufacturing PMI ripped higher in February with its strongest reading since 2012, strong suggesting that the China re-opening is swing into motion. Hot inflation data from France and Spain pulled ECB expectations sharply higher yesterday, with German Feb. CPI up today. What is our trading focus? US equities (US500.I and USNAS100.I): caught between growth and inflation US equities headed lower yesterday with S&P 500 futures closing at the 3,975 level. The index futures are trying to rebound this morning following stronger than expected China February PMI figures suggesting the economy is responding positively to the reopening. This growth impulse lifted Hang Seng futures by 4.2% and breathed fresh air into commodities. The growth impulse from China will keep inflation pressures high in the global economy and that could force long-term bond yields in the US and Europe higher from current levels which will make equities caught between responding positive to growth or negatively to inflation and potentially higher interest rates. Hang Seng Index (HSI.I) and CSI300 (000300.I) jumped on strong China PMIs Hang Seng Index surged 3.5% and CSI300 gained 1.7% by in the morning session following the release of strong PMI data much above consensus estimates. The headline official NBS Manufacturing PMI surged (more below). The NBS non-manufacturing PMI and the Caixin Manufacturing PMI, also released today, both bounced strongly and signaled economic expansion. Mega-cap China internet names surged 5-7% and EV stocks jumped 5-8%. In A-shares, telcos, digital economy, software, gaming, and media stocks led the charge higher. FX: AUD and JPY were the laggards last month as dollar regained ground The dollar closed firmer at the end of the month as inflation concerns returned and sent the short-end yields surging to 15-year highs. AUDUSD was the weakest on the G10 board as a beating of the risk sentiment and weaker metal prices saw pair test 0.67 despite the return of RBA’s hawkish stance. Yen had a double blow from surging yields and the dovish read of Ueda’s nomination hearing for the Bank of Japan governorship, and USDJPY tested close to 137 yesterday before reversing back below 136.50. EURUSD touched highs of 1.0650 after the French/Spanish inflation prints yesterday but is back below 1.0600 this morning. GBPUSD nearly hit 1.2150 yesterday after the N. Ireland border announcement, but is back closer to 1.2050 this morning. Crude oil recovers as strong China PMI re-ignites demand focus Brent crude trades near $84 and WTI at $77.50 as both futures markets continue to recover from the latest the macroeconomic related selloff. With a hawkish Fed having been priced in, the dollar has started to weaken allowing traders to return their focus to an ongoing recovery in China. The strength of which was confirmed overnight when China’s PMI data showed across the board strength. The official headline surged to 52.6 and highest since 2012 while production and new orders improving markedly and new export orders move well above 50 and into expansion territory for the first time in 23 months. Increased tightness is being signaled through steepening prompt spreads with Brent trading at 59 cents a barrel from a recent 34 cent low. Also supporting are reports that Russia is struggling to find new buyers with million of barrels currently stored at sea. Ahead of EIA’s weekly stock report, the API said US inventories rose 6.2m barrels last week. Short-term momentum indicators point to higher prices with Brent once looking to challenge the downtrend from last March around $84.50. Silver led gold higher, but more work needed to shift sentiment Precious metals trade higher for a third day after the market concluded the latest round of hawkish comments from US FOMC members and additional rate hikes were now being fully priced in. Continued strength in US yields, near recent highs, have been offset by weaker dollar, allowing buyers once again to gain the upper hand. Silver, down around 12% in January, led the recovery which gathered speed overnight following the release of stronger than expected economic data in China (see below). The gold-silver ratio which yesterday hit a four-month high at 88.4 (ounces of silver to one ounce of gold) has since retraced to around 86.80. Gold as a minimum needs to break $1864, and silver $22 to signal an end to the current corrections Industrial metals jump on strong China rebound Copper and not least aluminum, zinc and iron ore traded higher following a batch of economic data from China showed improved factory activity as well as rising home sales, both driving expectations for an accelerated demand recovery, thereby once again replacing concerns about the economic impact of additional US rate hikes. Having found support below $4, the HG copper futures contract trades back above its 21DMA, a sign momentum is turning positive again. Since mid January the price has traded within a 30 cents downward trending channel, and for that to change, the price needs to break above $4.20, some 2% above the current level. Focus now turns to on China’s “Two Sessions” starting at the weekend. Yields on US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) steady near recent highs US Treasury yields staid pinned near recent cycle highs, with the 2-year trading above 4.8% this morning again and the 10-year benchmark hovering just below 4.00%. Yields were dragged higher yesterday by a fresh surge in European short yields on the French and Spanish CPI data for February (see below) and stayed elevated in the US despite the weak February Consumer Confidence print. The next test for the US treasury market is perhaps the February ISM Services survey on Friday. What is going on? China's economy shows strong recovery as PMI’s beat expectations The official NBS China Manufactuing PMI surged to 52.6 in February, the highest level since 2012, from 50.1 in January. The strength was across the board with the Production sub-index and New Orders sub-index improving markedly to 56.7 and 54.1 respectively. When a diffusion index goes above 50, it signals expansion. The export sector, which has until now been sluggish, showed signs of a strong recovery. The New Export Orders sub-index in the NBS survey unexpectedly surged to 54.1 in February from 46.1 in January and was the first time returning to the expansion territory in 23 months. The Caixin Manufacturing PMI, which covers smaller and more private enterprises in the export-oriented coastal regions of China relative to those covered in the NBS survey, also recovered strongly to 51.6 in February from 49.2 in January and the new order sub-index in the Caixin survey bounced to 52.2 from 49.3. The NBS non-manufacturing PMI continued to accelerate well into expansion, rising to 56.3 from 54.4. Both major sub-indices rose further, with the Services sub-index advancing to 55.6 and the Construction sub-index soaring to 60.2. US consumer confidence in a surprise drop, labor market strength intact The Conference Board's US consumer confidence index saw a surprise fall to 102.9 in February (vs. exp 108.5) from January’s 106 which was also revised lower from 107.1. The present situation index looked resilient at 152.8 from 151.1 and reaching its highest levels since April 2022, but the forward expectations index declined to 69.7 from 76.0 previously. While the headline figures may be a small input for the Fed, the labor-supply mismatch has become more evident from the consumer confidence report. The report showed that the labor differential improved to 41.5 in February from 37 in the prior month, rising for a third consecutive month and reaching its highest levels since April 2022. The differential represents the percentage of respondents who say jobs “are plentiful” less those who say jobs “are hard to get”. Its rise could be an early indication of labor market strength heading into next week’s February Payrolls data. Focus turns to ISM manufacturing survey today which is expected to improve but still remain in contraction. ECB rate hike bets pick up after higher French and Spanish inflation Consumer prices in France jumped by a record 7.2% YoY in February as food and services costs increased, while Spain saw a stronger-than-expected 6.1% YoY advance. The strong inflation now results mostly from companies passing through to consumers higher prices in the service sector and higher food prices. Looking at the French data, food prices (price increase of+14.5% YoY) contribute twice more to inflation than energy prices. The increase of prices in the service sector (which represents about 50% of the CPI basket) is another source of worry. Expect it to get worse in the short-term. We also see a similar trend in most European countries (the situation is even uglier in the CEE region), with the first print of German February inflation due today and the Eurozone print due tomorrow. Euro bonds slid with German yields up 7bps and Spanish yields up 6bps as ECB terminal rate pricing briefly touched 4%. AUD swings to a gain after China’s economy shows signs of a stronger rebound After China's manufacturing activity hit a decade high as noted above, the Australian dollar against the US dollar (AUDUSD) rose sharply. Iron ore, copper and aluminium prices all gained. This supported the AUDUSD pair rebounding from 10-week lows, which it hit earlier after Australian GDP slowed to pace of 2.7% YoY in Q4 as expected while headline monthly CPI cooled to 7.4% YoY, vs the 8.1% growth forecast. Short covering also added to the Aussie dollar whipsawing higher. What are we watching next? Tesla Investor Day Tesla’s annual ‘Investor Day’ is scheduled for tonight at 21:00 GMT and will be livestreamed on Tesla’s website. Elon Musk has teased in tweets that the Investor Day presentation will revolve around the part 3 in his ‘Master Plan’ which was first announced back in 2006 and Elon Musk has specially written that the ‘Master Plan 3’ is about ‘the path to a fully sustainable energy future for Earth...’ suggesting it might be around energy. One the key variables in the path to electrifying society is about energy production, energy storage, and the electric grid, and as such it might be that Tesla will aim solve these issues so Tesla’s growth is not constrained too early by the lack of investments and solutions on the infrastructure side of the equation. Germany’s Feb. CPI data today, Eurozone Feb. CPI tomorrow After French and Spanish February CPI readings sparked higher expectations for the ECB as noted above, we will get a look at German regional CPI releases this morning for February and the nationwide data this afternoon at 1300 GMT, with the German 2-year yield having leaped to nearly 3.20% yesterday after starting the weak below 2.9%. Expectations are for a reading of +0.5% MoM and +8.5% YoY vs. +8.75 in January, with the “EU Harmonized” reading seen slowing to +9.0% YoY vs. 9.2% in Jan. Earnings to watch Today’s key US earnings releases to watch are Salesforce (reporting after the close), Snowflake (reporting after the close), and NIO (reporting before the open). Analysts expect Salesforce to report 9% y/y revenue growth for the quarter that ended in January and EBITDA of $2.67bn up from $1.02bn a year ago as the software application maker is under pressure from several activist investors to improve profitability. Analysts expect Snowflake to report revenue growth of 50% y/y in the quarter that ended in January and EBITDA of $25mn up from $-146mn a year ago. NIO, that finally ramped up its EV production in Q4 after several quarters of slow increases, is expected to report 73% y/y revenue growth but still delivering an operating loss of CNY -3.4bn. Wednesday: Royal Bank of Canada, Beiersdorf, Reckitt Benckiser, Kuehne + Nagel, Salesforce, Lowe’s, Snowflake, NIO Thursday: Anheuser-Busch InBev, Argenx, Yunnan Energy New Material, Toronto-Dominion Bank, Fortum, Veolia Environment, Merck, Hapag-Lloyd, CRH, London Stock Exchange, Haleon, Flutter Entertainment, Universal Music Group, Broadcom, Costco, VMware, Marvell Technology, Dell Technologies Economic calendar highlights for today (times GMT) 0815-0900 – Eurozone Final Feb. Manufacturing PMI 0855 – Germany Feb. Unemployment Change / Claims 0930 – UK Jan. Mortgage Approvals 1000 – UK Bank of England Governor Andrew Bailey to speak 1300 – Germany Feb. CPI 1500 – US Feb. ISM Manufacturing 1530 – EIA's Weekly Crude and Fuel Stock Report 1830 – Mexico Central Bank Inflation Report 0030 – Australia Jan. Building Approvals   Source:Financial Markets Today: Quick Take – March 1, 2023 | Saxo Group (home.saxo)
Expect the ECB to keep increasing rates at the short-term, at least until the summer

CPI Report Cranked Up The Hawkish ECB Rate Expectations

Swissquote Bank Swissquote Bank 01.03.2023 11:02
Inflation in Europe took the wrong direction in February. The data released yesterday printed a record inflation of 7.2% in France and ticked higher to 6.1% in Spain. Both were higher than expected, of course, and cranked up the hawkish European Central Bank (ECB) rate expectations. US market In the US, cooling US house prices for a seventh straight month, and ugly Richmond manufacturing index cooled the hawkish Federal Reserve (Fed pressures yesterday, but the S&P500 couldn’t hold on to its gains above the 50-DMA, and closed yesterday’s session below this level. As a result, the month of February ended with a 2.7% loss for the S&P500, and with mounting pressure from the bears. Crude Oil Elsewhere, crude oil jumped yesterday, although the latest API data showed another 6.2 million barrel build last week in the US crude inventories. The strong PMI data from China certainly helped keeping the oil bulls alert. It also helped Aussie rebound following soft CPI data. Read next: Elon Musk Is Richest Man Again, The State Bank Of India Had Raised $1 Billion From Global Banks| FXMAG.COM Stocks In individual stocks, Target and Zoom gained after results, while Rivian lost 10% in after hours trading on mixed results and soft outlook. Watch the full episode to find out more! 0:00 Intro 0:36 Hot European inflation boosts ECB hawks 5:24 Strong China PMI counter soft AUD inflation, but... 6:30 S&P500 closes the month 2.7% down 7:59 Crude oil gains but solid inventory data could limit rally 8:44 Target, Zoom gain, Rivian tanks post earnings Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Eurozone #inflation #ECB #rate #hike #EUR #USD #AUD #Crude #Oil #Target #Zoom #Rivian #earnings #Stoxx #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Food companies under pressure to source deforestation-free products under new EU law

Some McDonald's Locations Don't Promote Hip-Hop Stars' New Meal

Kamila Szypuła Kamila Szypuła 01.03.2023 10:24
Franchisees try their best to attract new and retain regular customers. They realize that nowadays influencers and celebrities have a big influence. McDonald's also includes celebrities in its promotional products. Such a promotion is well known, for example in 1992, the star that was on the McDonald's menu was the basketball star Michael Jordan. Bad effect on the image Some McDonald's restaurant owners in the US have raised concerns about the network's collaboration with celebrities, including rappers Cardi B and Offset. Some owners have claimed that multiple McDonald's locations have refused to promote Cardi B and Offset's current meal due to concerns about artist ties. In messages sent to the US branch in recent weeks, several McDonald's franchisees said that the artists' lyrics and lifestyle were not in line with the company's brand. Some owners wrote that select celebrities could undermine McDonald's family-friendly image, and called on other franchisees to remove Cardi B and Offset meal-related advertisements and merchandise from their stores. Famous Orders McDonald's "Famous Orders" meals, which typically combine a handful of celebrity-curated menu items in promotional packaging, have been one of the burger chain's most successful marketing ventures in recent years, executives said. The introduction of meals in 2020 helped the company regain US sales lost at the onset of the Covid-19 pandemic and take over the business from other burger chains. According to McDonald's, celebrity-supported dining largely builds on the existing McDonald's menu, increasing sales without adding complexity to restaurants. They also helped the network increase online ordering and app downloads, which is one of the company's priorities, executives said. Cardi B and Offset In February, McDonald's introduced its first meal supported by a celebrity pair, with the chain promoting food packages selected by Cardi B and Offset with special packaging. The company announced a meal for sharing during the Super Bowl, promoting a cheeseburger with BBQ sauce and Coke for Cardi B and a quarter pound of cheese and Hi-C Orange Lavaburst for Offset. Plus large fries and apple pie. Cardi B, the Grammy-winning rapper, has attracted controversy over the vulgar content of some of her lyrics and videos, most notably her 2020 hit "WAP", and she and Offset have collaborated on several songs. Following the announcement of the meal, some McDonald's operators in the US conveyed their concerns to the company. Some operators questioned whether celebrity affiliations could conflict with the company's branding standards and franchisee policies. It was impossible to determine how many of the more than 1,000 McDonald's franchise owners refused to promote the meal or agreed that celebrities did not fit the brand. McDonald's said on Tuesday that the chain had received widespread support and excitement from owners and employees of their restaurants for Cardi B and Offset's meal. The company said the couple's promotion was to focus on love and celebrating special moments. Read next: Elon Musk Is Richest Man Again, The State Bank Of India Had Raised $1 Billion From Global Banks| FXMAG.COM Others just like McDonald's Other restaurant chains have also signed deals with celebrities. Dunkin' ran a promotion in 2020 tied to TikTok star Charli D'Amelio, and Chipotle Mexican Grill Inc. offered a bowl related to Canadian pop singer Shawn Mendes in 2021. Burger King will release tie-in meals with rapper Nelly and two other stars later in 2021. McDonald's share price McDonald's shares fell late last week, but rose slightly on Monday. Yesterday MCD fell again and closed at 263.91. Today, the stock rose to 264.40. Source: wsj.com, finance.yahoo.com
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

On The New York Stock Exchange Only One Index Rose (Dow Jones)

InstaForex Analysis InstaForex Analysis 02.03.2023 08:02
The main reason for the pessimism of investors is the risks associated with the future actions of the global central banks. Against the backdrop of the persistent high inflation, traders are waiting for toughening the monetary policy of regulators and further raising rates. Traiders also evaluate statistics on the country on Wednesday. The USA Manuapacturn Industry Index in February increased to 47.7% from the January 47.4%. The indicator was predicted at 48%. At the time of closing on the New York Stock Exchange, Dow Jones rose 0.02%, the S&P 500 index dropped by 0.47%, the NASDAQ Composite index fell by 0.66%. Dow Jones The leaders among Dow Jones index components in today's trading were Caterpillar Inc. shares, which gained 9.12p (3.81%) to close at 248.67. 3M Company gained 2.47p (2.29%) to close at 110.21. Salesforce Inc. gained 3.74p (2.29%) to close at 167.35. The least gainers were the Home Depot Inc shares, the price of which fell by 5.75 p. (1.94%), completing the session at the mark of 290.79. Apple Inc shares rose 2.10 p. (1.42%), closed at 145.31, and Walmart Inc decreased in price by 1.98 p. (1.39%) and completed the auction at the mark of 140.15 . S&P 500  The leaders in growth among components of the S&P 500 index in today's trading were shares of Valero Energy Corporation, which gained 5.74% to 139.29, Freeport-McMoran Copper & Gold Inc, which gained 4.95% to close at 43.00, and shares of Phillips 66, which gained 4.56% to close the session at 107.24. The least gainers were the Lowe's Companies Inc shares, which decreased in price by 5.56%, closing at the mark of 194.31. Lumen Technologies Inc shares lost 5.00% and completed the session at 3.23. The Alexandria Real Estate Equites Inc quotes decreased in price by 4.59% to the mark of 142.91. Nasdaq In the growth leaders, among the components of the Nasdaq Composite index, according to the results of today's trading, there were Arcadia Biosciences Inc shares, which went up 1.00% to 8.60, Reata Pharmaceuticals Inc, which scored 198.91%, closing at 93.17, and Also, the Cardio Diagnostics Holdings Inc shares, which increased by 91.30%, completing the session at 6.60. The least gainers became the Performance Shipping Inc shares, which decreased in price by 56.88%, closed at 1.16. The shares of China Jo-Jo Drugstores Inc lost 47.45% and completed the session at the level of 3.92. Xometry Inc quotes decreased in price by 39.49% to 18.40. Numbers On the New York Stock Exchange, the number of cheaper papers (1634) exceeded the number of closed in the plus (1395), and the quotes of 111 shares practically did not change. On the NASDAQ Stock Exchange, 2055 companies fell in price, 1578 grew, and 188 remained at the level of the previous closure. The CBOE VOLATILITY INDEX volatility index, which is formed on the basis of options for the Office Trade on S&P 500, fell by 0.58% to the mark of 20.58. Gold Futures for gold futures with a supply in April added 0.43%, or 7.85, reaching $ 1.00 for a troika ounce. As for other goods, the prices for WTI oil futures with delivery in April rose 0.83%, or 0.64, to $ 77.69 per barrel. Futures for Brent oil futures with delivery in May rose by 1.09%, or 0.91, to the mark of $ 84.36 per barrel. Forex Meanwhile, on the Forex Forex EUR/USD market, 0.86% to 1.07 increased, and USD/JPY quotes fell by 0.02%, reaching 136.18. Futures on the USD index sank by 0.44% to 104.36.   Relevance up to 03:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/314593
EUR/USD Analysis: Continuing Corrections Amidst European Economic Woes

The Nasdaq 100 Index Has The Potential To Continue Its Decline

InstaForex Analysis InstaForex Analysis 02.03.2023 08:18
Nasdaq 100 Index on the daily chart seems continue the decline and currently trying to break below its Bearish Ross Hook at the level 11913.5 where it is also confirmed by the price movement that moves below EMA 10 and MACD indicator which intersects downwards where this all shows that the momentum from #NDX is in a bearish condition so that if this (RH) level is successfully broken down then #NDX has the potential to continue its decline to the level of 11546.3 as the first target and if the momentum and volatility are also supportive then no It is impossible for the 11246.8 level to become the second target with a note that during the descent towards these target levels there was no significant upward correction, especially to break above the 12236.7 level because if this level is successfully penetrated upwards then the downward scenario described previously has the potential not to occur. realized. (Disclaimer)   Relevance up to 05:00 2023-03-05 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120491
Musk Said Tesla’s Next Phase Of Growth Will Be Built Around Building Clean Energy Sources

Musk Said Tesla’s Next Phase Of Growth Will Be Built Around Building Clean Energy Sources

Saxo Bank Saxo Bank 02.03.2023 08:39
Summary:  China’s PMI data came in stronger than expected and signaled the economic recovery is picking up steam. The data triggered sharp rallies in the Hang Seng Index and commodity prices, particularly industrial metals. U.S. bond yields rose and equities slid, following the ISM price paid index rising to 51.3 and Fed officials’ hawkish comments keeping a 50-bp hike in the March FOMC on the table.   What’s happening in markets? Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) slump to new lows on higher Fed rate bets Stocks were pressured after fresh economic data highlighted persistent inflationary pressures remain – pushing the S&P500 to close at its lowest level in six weeks after shedding 0.5%. It’s the second straight day the S&P closed under its 50-day moving average. While most sectors declined within the S&P500, energy rallied strongly by nearly 2%. The strong China PMI data helped sentiment in the materials and industrial sectors, both rising on Wednesday. Nasdaq 100 slid 0.9%. The extra pressure on equities came as the prices paid component of the ISM in surging above the 50 expansion/contraction threshold and higher for longer comments from Fed officials (see below). Key U.S. company news In regular trading, First Solar (FSLR:xnas) shares surged about 16% to its highest since 2009 after the panel maker’s backlog of orders look like they’ll take the 2nd half of the decade to fill. The surging demand comes as the company is benefiting from the Inflation Reduction Act- signed last year by President Joe Biden. Meanwhile, after close of trade - software giant Salesforce (CRM:xnys) gave a surprisingly upbeat forecast for the year ahead - and plans to step up share buybacks to $20 billion, which is positive vs its $167b market cap. Operating margins will be about 27% in fiscal 2024, exceeding Bloomberg consensus estimates of 22.4% growth. This also potentially eases pressures CRMs faces from a group of activist investors. Salesforce shares rose 14% in post market trade, after closing at $167.35 in normal trade. Next, we will be watching - Campbell Soup (CPB:xnys) which reports after market close Thursday. US Treasury curve (TLT:Xmas, IEF:xnas, SHY:xnas) sold off on Fed comments The 10-year yield breached above 4% briefly during the session before closing a touch below that at 3.99%, following comments from the Fed’s Kashkari saying undecided between a 25bp and 50bp hike at the March FOMC and Bostic’s 5-5.25% “well into next year” remarks. Yields on the 2-year notes rose 6bps to 4.88%, the highest level since 2007. The jump of the ISM Prices Paid (see below) also added fuel to the selloff. Hong Kong’s Hang Seng Index (HSI.I) and China’s CSI300 (000300.I) jumped on strong China PMIs Hang Seng Index surged 4.2% and CSI300 gained 1.4% on Wednesday following the release of strong PMI data in China much above consensus estimates. Hang Seng Tech Index jumped 6.6% as technology hardware, China internet, and EV makers advanced sharply. The percentage increase in the Hang Seng Index was the largest since early November and turnover in the Stock Exchange of Hong Kong reached HKD154 billion, the highest since late January. Chinese developers were among the top winners, with Longfor (00960:xhkg) up 9.6% and Country Garden (02007:xhkg) up 8.3% leading the charge higher. The chairman of Country Garden announced retirement. ASMPT (00522:xhkg) jumped 9% after the semiconductor equipment maker reported Q4 revenues beating estimates. After market close, Techtronic (00669:xhkg) reported H2 EPS of USD0.27 and revenues of USD6.2 billion, both below the consensus estimates due to soft demand for power tools.  In A-shares, telco, digital economy, software, gaming, media, and AI-generated content stocks were the top winners. Australian equities (ASXSP200.I) rise to four-day highs on commodities rebounding  - beware of companies going ex-dividend ahead After China PMIs beat expectations, with new orders surging back to 2017 level - focus is on commodities strongly rebounding - with the iron ore (SCOA) price rising to a five-day high $126.70, the spot Copper (HG1) price trading at a five-day high, while aluminium is also higher. Coles (COL), Woolworths (WOW) go ex-dividend today, along with Pilbara Minerals (PLS).  As a reminder – dividend paying giants, BHP and Rio go ex-dividend this time next week, which could pressure equities. FX: Dollar unable to bask in yields glory The US dollar was weaker on Wednesday mostly pressured by the gains in Chinese yuan in the Asian session after the upbeat China activity data sent the China reopening theme roaring once again. USDCNH dropped from 6.96 to sub-6.88. Some reversal in the dollar was seen in the US session but it was not enough to reverse earlier losses. Some other currencies also got a bid from the China theme, particularly EURUSD that surged to highs of 1.0691 also underpinned by rising hawkish ECB expectations after hot regional inflation prints. NZDUSD was the outperformer in G10 FX, rising to 0.6276 with Q4 terms of trade returning to positive territory at 1.8% from last month’s -3.9% QoQ. GBPUSD stayed below 1.2100 despite Bailey signaling more BOE hikes may be needed, and saying that the experience in the 1970s showed that doing "too little with interest rates now" may mean more increases later on.   AUD reverses course, rising above its 100-day moving average The Australian dollar against the US (AUDUSD) advanced for the first time following four days of losses, after China's manufacturing activity boosted sentiment – hitting a decade high – with new orders improving in February, surging to 54.1 - the highest level since September 2017. This enthusiasm is buoying commodity prices on the notion that demand will rise – the iron ore (SCOA) has risen to a five-day high of $126.70, spot Copper (HG1) hit a five-day high, while aluminium is also higher. This optimism is offsetting the slowing Australian prints released yesterday- with GDP grinding down to pace of 2.7% YoY in the 4Q as expected- while monthly CPI cooled to 7.4% YoY vs the 8.1% price growth forecast. It’s also important to note, short covering has also added to the Aussie dollar rising. Our view is that the Aussie dollar could see strength return in Q2, in line with our view that the commodity bull market will strongly restart in Q2. Crude oil struggling to lean on Asia/Europe vs. US demand Crude oil prices remained near recent highs despite the strong signal on Chinese demand recovery from upbeat PMI data. In addition, the inventory data was also bullish signalling a recovery of demand in Asia and Europe. US commercial crude oil inventories gained less than expected last week, rising only 1.2 million barrels as US exports of crude hit a record daily high of 5.6 million barrels last week (+22.4% w/w). However, on the other hand, US ISM data and hawkish Fed speakers continued to highlight inflation fears are here to stay and sparking some US demand concerns. WTI futures traded just below $78/barrel while Brent touched $84.50. Metals complex excited about China Copper, aluminum, zinc and iron all traded higher following the outperformance of Chinese PMI data on Wednesday, driving a return of focus to the China reopening theme. Copper, which earlier found support at $4 surged to $4.17 in the Asian morning today, and may take another look at $4.20. However, our head of Commodity Strategy Ole Hansen wrote that the next sustained move higher is unlikely to be triggered until the second quarter or later, the timing to a certain extend depending on the economic outlook for the rest of the world and whether recession, as we believe, will be avoided.   What to consider? Mixed US ISM survey details – but steady message on inflation The US ISM manufacturing marginally rose to 47.7 from 47.4, coming in below expectations of 48.0. New orders lifted to 47.0 (prev. 42.5), while employment fell to 49.1 (prev. 50.6), entering contractionary territory. But the message on price pressures continued to roil markets. ISM priced paid rose back into expansionary territory to 51.3, well above the prior 44.5 and the expected 45.1, re-affirming that it may be too soon to call goods inflation disinflationary. Hawkish Fed talk brings 10-year yields to top 4% Fed member Kashkari (voter) signaled an openness for a 50bps hike at the March meeting, saying he is open to both 25bps and 50bps. Still, he emphasized that the terminal rate is more important than the size of rate hikes, where also he hinted that it could be revised higher from December. Another member Bostic (non-voter) maintained his view that the Fed policy rate needs to rise to 5.00-5.25% range, but said that the rate should be left there “until well into 2024”. 10-year Treasury yields rose above the key 4% mark for the first time since November, sending another warning signal to equities. China’s PMIs signaled recovery picking up steam The headline official NBS PMI surged to 52.6 in February, the highest print since 2012, from 50.1 in January. The strength was across the board with production and new orders improving markedly and the new export orders unexpectedly surging to 52.4, the first time into the expansion territory in 23 months. The NBS non-manufacturing PMI and the Caixin Manufacturing PMI, also released today, both bounced strongly and signaled economic expansion. Readers can find more on China’s PMI here. Hot German inflation print creates further pressure for the ECB Coming on the heels of hotter than expected inflation prints in France and Spain for February, German CPI print was also hotter than expected at 9.3% YoY (vs. +9.0% exp and +9.2% prior). The message on disinflation has therefore continued to weaken, and both Fed and ECB are likewise pressured to do more on policy tightening to ensure the inflation comes back to target. Th aggregate Eurozone print is out today and expectations of a softening to 8.3% from 8.6% last month may be tested. Tesla plots a path to renewable energy at Tesla Investor Day As part of Tesla’s “Master Plan” for the company, Musk said Tesla’s next phase of growth will be built around building clean energy sources – that can serve a much larger world population - without great economic sacrifice. Moving into sustainable energy might mean moving into heat pumps- as they can dramatically cut home and office heating costs. Tesla dubs them one of the low hanging fruits in the sustainable energy transition. Tesla’s shares are up 97% from their January low.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Markets Today: Sharp rise in China’s PMI data; inflation concerns in the U.S. - 2 March 2023 | Saxo Group (home.saxo)
TikTok Bans Are Gathering Momentum In The US

Twitter Employees Are Overburdened As Elon Musk Tries To Run Twitter With Fewer Staff

Kamila Szypuła Kamila Szypuła 02.03.2023 10:30
Across the tech industry and many other companies, companies are trying to do more with less. Tech companies that have laid off recently include Google Alphabet Inc., Meta Platforms Inc. and Salesforce Inc. More layoffs Elon Musk tries to run Twitter Inc. with fewer and fewer staff the company handled when it took over. Silicon Valley is watching to see if he succeeds. Twitter's staff fell to around 2,000 from close to 8,000. It carried out more layoffs over the weekend. There is a difference between running Twitter with 2,000 people now and running it with 2,000 people in 2013 or earlier, said Jason Goldman, one of Twitter's early executives who served on its board from 2007 to 2010. Some of the bigger tech giants have cut more jobs in terms of total numbers, but Twitter's cuts, as a percentage of staff, are staggering by comparison. Twitter's workforce is the smallest in a decade and below the 2,712 employees it had in 2013 when it went public. Other employees said they were trying to replace laid-off colleagues and were tasked with working on aspects of the platform they had never done before, as their colleagues who knew the tools well were no longer with the company. As a result, they said, it's harder to troubleshoot technical issues when they arise. Financially loss-making Twitter reported a net loss of $221.4 million in 2021, the last full year it publicly reported financial results before going private. Musk said he believes Twitter will break even this year. Slack issues For many employees, a confusing moment came last week when employees said they were unexpectedly logged out of the Slack workplace messaging tool. Staff was informed that Slack was down for maintenance. Losing Slack is a significant hit to productivity, said one employee. One employee said it was frustrating as searching through old Slack messages was a way to find answers to technical issues, especially after so many engineers left and weren't around to help. Twitter informed employees on Monday that maintenance had been completed and Slack would be restored. History of technical errors The social media company has a history of technical glitches that preceded Musk's acquisition. Almost three years ago, it was hit by an attack that allowed hackers to take over a number of accounts, including those of celebrities, politicians and billionaires. A year earlier, the account of Twitter co-founder and then CEO Jack Dorsey had been hacked to send misguided and racist tweets. Recently, many Twitter users were unable to access the social media platform for about two hours. The company did not immediately respond to a request for comment on the matter. This followed an incident three weeks ago when users were unable to tweet and glitches during the Super Bowl halftime. Current and former Twitter engineers say the continued operation of the platform is at least partly a testament to years of prior engineering work. Read next: Euro Is Rising, USD/JPY Falls Below 136.00, The Aussie Pair Also Gains| FXMAG.COM Twitter share price Twitter's last stock quote was at 53.70 SpaceX On the other hand, from other Elon Musk companies SpaceX launched a crew to the International Space Station early Thursday, a mission make-up flight that the company and NASA scrubbed off earlier this week due to a technical problem. SpaceX and NASA canceled the launch attempt on Monday shortly before the flight was scheduled to begin. On Wednesday, the space agency said a clogged filter caused a problem that led to the flight being postponed. The latest mission launched just after 12:30 p.m. EST Thursday, when the company's rocket blasted off from the Kennedy Space Center. Kennedy, Florida, according to a NASA live broadcast. Source: wsj.com, finance.yahoo.com
ECB's Tenth Consecutive Rate Hike: The Final Move in the Current Cycle

Over 70% Chance That The Fed Will Raise Rates By 25 Basis Points

InstaForex Analysis InstaForex Analysis 02.03.2023 10:55
The main component of the dollar's weakness yesterday was a report from China indicating that their manufacturing sector is growing strongly. It is an important component of China's economic recovery after its massive shutdown. Another factor putting bearish pressure on the dollar was the strength of the euro. Together, these fundamental events led to a 0.39% decline in the dollar. Also, in the latest report from the Institute for Supply Management, U.S. manufacturing data shows that inflation continues to rise. The ISM said on Wednesday that the manufacturing purchasing managers' index rose to 47.7% in February from 44.7% in January. These data coincided with the consensus forecast. The report also noted that activity in the manufacturing sector continues to be at its lowest level since May 2020, when the global economy was forced to stop. Values of such diffusion indices above 50% mean economic growth, and vice versa. The further away from 50%, higher or lower, the faster or slower the rate of change. The report said that the price index rose to 51.3%. This is the first time in four months that U.S. producer prices have begun to rise. Analysts say rising manufacturing prices could mean that the Federal Reserve will not be able to control inflation even as it continues to aggressively tighten monetary policy. According to the CME FedWatch tool, there is a 73.8% chance that the Fed will raise rates by 25 basis points and 26.2% that the Fed will be more aggressive in raising rates by 50 basis points. Looking at the components of the report, the new orders index climbed to 47% from 42.5% in January. At the same time, the production index fell to 47.3% from the previous 48%. The labor market lost momentum, returning to a lower reading of 49.1% from 50.6% in January. On such mixed data, the dollar is still holding its former positions with small deviations, reinforcing itself with the yield of 10-year bonds. Yields on 10-year bonds topped 4% for the first time since October.   Relevance up to 08:00 2023-03-03 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/336525
Pound Slides as Market Reacts Dovishly to Wage Developments

European Equities Have Outperformed US Equities Since October 2022

Saxo Bank Saxo Bank 02.03.2023 13:04
Summary:  European equities have not been this hot among investors since 2007 before the US equity market entered their golden era of digitalisation sweeping the world and conquering global equity markets. The comeback of the physical world plays into the advantage and composition of the European equity market. In today's equity note we provide an extensive overview of how Europe's equity market is constructed and how it differs from the US equities, and also why they are more interesting for investors amid the comeback of the physical world. Executive summary European equities have previosly outperformed US equities over long periods of time, but the relentless bull market in US technology stocks over the past 13 years has erased our memory of European equities being an interesting market. But since October last year, European equities have significantly outperformed US equities and clients are most interested than ever. This equity note aims to provide an extensive overview of European equities. The three main points are: Europe lost the digital technology race to the US and with it a 13-year long period of significant underperformance, but since October 2022 things have turned around and maybe we are in the early inning of Europe’s comeback. European equities have 20 supersectors and the diversification of European equities is much better compared to US equities. European equities are cheaper relative to US equities and they have recently improved their operating margins while US equities have seen a significant margin compression. The lost technology revolution Life used to be good in European equities with the continent’s equity market outperforming its nearest competitor across the Atlantic ocean. European equities outperformed US equities from December 1969 to October 1990 in USD terms by 2.7% annualised. The end of that period marked the transition period into the age of digitalisation which was a natural extension of the developments in semiconductors, CPUs and the first versions of an operating system for computers. During the 1990s, the Internet came to live for the ordinary person and the first pure digital companies outside software companies were born including Amazon in 1994. During the 1990s, the US economy began to accelerate faster than the European economy and the Internet boom in Silicon Valley accelerated into the first big bubble in US equities since the ‘Nifty-Fifty’ days in the 1960s. From October 1990 to June 1999 the US equity market outperformed European equities by 6.4% annualised putting US equities on the map in a way not seen in decades. During the subsequent period until November 2007, European equities outperformed again driven by the credit boom, post euro adoption leading to inflows of capital, Chinese driven commodity supercycle, and the first sizeable export boom to the roaring tiger economies in Asia. In November 2007, the US equity market reached its all-time relative low against European equities since December 1969. From November 2007 to October 2022 was a one-way highway for US equities as the digitalisation accelerated at an ever increasing speed with technology giants such as Microsoft, Apple, Amazon, Nvidia, Alphabet (parent company of Google), Meta (parent company of Facebook), Salesforce, and Adobe conquering the world of the digital age. US equities outperformed European equities by a staggering 7.5% annualised outpacing even the run-up to the Dot-Com Bubble. The technology race was effectively lost by Europe many years before this period, but the ultimate crystallisation for investors was during this period. Nobody wanted to touch Europe. It was the old sick man of the global economy according to investors. Silicon Valley was where the returns were to be made. European equities have outperformed US equities by 16.7% since October 2022 with the outperformance this year being 3.9% in USD terms. This significant comeback for European equities have made our clients more interested in European equities and wanting to understand this market. If we are right about the renaissance of the physical world as outlined in our Q1 Outlook, then European equities could continue to outperform. Understanding the European equities and the STOXX 600 Index The European equity market is the second largest combined equity market in the world with the STOXX 600 being the leading benchmark index consisting of the 600 most liquid equities in Europe. The STOXX 600 Index had market capitalisation of €12.7trn on 31 January 2023 compared to the S&P 500 total market capitalisation of around €32.8trn, so almost three times larger. The four largest country weights in the STOXX 600 Index are Great Britain, France, Switzerland, and Germany, and the largest sector being the health care sector. This is also evident in the top 10 components list where four health care companies are on the list (Novo Nordisk, Roche, AstraZeneca, and Novartis). The three biggest individual index weights are Nestle, ASML, and LMVH. Source: stoxx.com Source: stoxx.com Europe’s supersectors The STOXX 600 Index divides its constituents into 20 supersectors defined by the Industry Classification Benchmark (ICB) which can be seen in the table below. The STOXX 600 Index is a free-floating market weighted index and thus we have used the free-float market cap which sums to €9.7trn which is lower than the previously stated market cap. The reason is that free-float market cap only measures the shares that are part of the securities markets. Some shareholders have a more permanent status and are thus not available for sale in public markets. In terms of number of companies the biggest supersector is the Industrial Goods and Services consisting of 103 companies with the three largest being Siemens, Schneider Electric, and Airbus. The most profitable supersector measured by the return on equity (ROE) is Media with a ROE of 43.9%. The three largest companies in the media supersector are RELX, Wolters Kluwer, and Publicis Groupe. In terms of earnings growth over the past year the winner has been energy with earnings per share up 225%. Europe’s three largest energy companies are by far Shell, BP, and TotalEnergies. The most expensive supersector measured by the 12-month forward P/E ratio is Consumer Products and Services and the largest companies in this supersector are LVMH, L’Oreal, and Richemont. A significant contributor to Europe’s outperformance since October 2022 has been luxury stocks which are part of this supersector as investors have looked for good bets on the Chinese reopening post its zero-Covid policy. Interested readers can read our equity note from 17 February on the global luxury industry which is dominated by European companies. The most cheapest supersector measured by the 12-month forward P/E ratio is Automobiles and Parts and the largest companies in this supersector are Mercedes-Benz, Stellantis, and BMW. A more diversified and cheaper equity market Another interesting observation on European equities is the huge difference in GICS sector weights between the STOXX 600 and S&P 500. The biggest difference is in Information Technology with a 19%-points difference. US equities also have a higher exposure to Communication Services which includes media related companies such as Meta. European equities have a higher exposure to Financials, Industrials, Consumer Staples, and Materials (mining and chemical) which are all tangible-driven sectors. If we are right about reshoring, the geopolitical trajectory of the world splitting into two value systems, the green transformation and the tight supplies of key metals such as copper, the need for massive infrastructure spending then European equities should in theory outperform US equities. What we also observe is that European equity markets are more diversified and using the Herfindahl-Hirschman approach of comparing sum of squared weights we can conclude that US equities are 19% more concentrated on sector level than European equities. Being overweight US equities is essentially a significant active bet on technology companies to continue outperforming. Another positive factor for European equities in 2023 is that forward valuations are much more intriguing with STOXX 600 trading at 13.2x on 12-month forward EPS compared to 17.8x for the S&P 500. In other words, US equities are valued at a 35% premium to European equities. Which is still in the highest percentiles of the US valuation premium range since 2008 and a convergence of equity valuations back to the historical average should provide tailwind for European equities. A key driver to close the valuation premium gap is to close the operating margin gap between US and European companies which has been significant since 2009, but over the past year with the comeback to tangible-driven industries Europe has closed a big part of that gap.   Source: European equities A rising phoenix or a continuous fall | Saxo Group (home.saxo)
Italy Eases Windfall Tax Impact Amid China's Deflation, Focus on US Inflation Report

Global Layoffs Are Affecting The Investment Banking Sector In Asia

Kamila Szypuła Kamila Szypuła 03.03.2023 08:09
Employment has increased in many industries during the pandemic, but the situation has changed and many companies are announcing job cuts. Until now, mainly technology companies have significantly reduced employment, aloe has recently been joined by other industries such as banking. In this article: Layoffs in Asian investment banking The Fed renewed investors' hopes The long-awaited update of the Ethereum network in Shanghai Layoffs in Asian investment banking Global banks including Goldman Sachs and Morgan Stanley are in the process of cutting thousands of jobs. Several other financial firms have also slashed jobs in recent months, including major asset managers and fintechs, amid a turbulent macroeconomic environment that has pressured consumers and soured demand in several mainstay business units. Bank of America and Citigroup cut several jobs in investment banking in Asia, joining global partners in cutting jobs Bank of America (BofA) cut about half a dozen Hong Kong investment banking jobs on Thursday, and Citi on Thursday cut four jobs from its China investment banking team. BofA, Citi cut handful of investing banking jobs in Asia - sources https://t.co/QmatsCtb9a pic.twitter.com/vBgz0scq7B — Reuters Business (@ReutersBiz) March 3, 2023 Read next: Despite The Decline Euro Remains Above 1.06, GBP/USD Is Trading Below 1.20| FXMAG.COM The Fed renewed investors' hopes Although inflation is slowing down, the fight against it continues. Banks around the world last year raised interest rates to record levels not seen since 2008. The actions of the Fed are attracting attention. After the publication of inflation data and a series of other reports (GDP, PMI), the market expects that the Fed will decide to hike by 25 bp. Recently, Atlanta Federal Reserve Chairman Raphael Bostic told the media that he favors lower – and slower – rate hikes. On top of that, the data suggests that the labor market, somewhat astonishingly, is still solid, which could prompt the Federal Reserve to raise rates when it meets later this month. Markets opened lower after this news. The situation of interest rates has an impact on the markets, especially currency, stocks and bonds. US stocks rose on Thursday with all major indexes closing in the green. A survey by the American Chamber of Commerce in China found that its members, for the first time in 25 years, do not consider China a top three investment priority. To boost sentiment, the Chinese government is courting potential investors and declaring a "Year of Investing in China". CNBC Daily Open: Markets rallied as Fed official renewed investors' hope for 25 basis-point hike https://t.co/Q5Ofm9iGOl — CNBC (@CNBC) March 3, 2023 The long-awaited update of the Ethereum network in Shanghai The eagerly awaited Shanghai Ethereum update, which will enable the withdrawal of staked ETH, is likely to happen in the first two weeks of April. Although the update was firmly scheduled for the March release, some Ethereum developers began to doubt it. Ethereum developers now plan to launch the Goerli testnet, essentially a comprehensive update dress rehearsal, in Shanghai around March 14. About a month later, if all goes smoothly, the actual Shanghai software update will go live in mid-April. LATEST: #Ethereum developers confirm Shanghai upgrade will likely occur in April instead of March. — CoinGecko (@coingecko) March 3, 2023
Would Federal Reserve (Fed) go for two more rate hikes this year? Non-voting Bullard say he would back such variant

The US Dollar Gained Broadly Against Major Currencies

Saxo Bank Saxo Bank 03.03.2023 08:35
Summary:  Despite U.S. bond yields continuing to climb and the 10-year going above 4% in yield, U.S. stocks managed to rebound nearly 1% on Fed Bostic comments. Hong Kong and China stocks slid and gave back some of the gains from the previous session in the absence of notable headlines ahead of the “two sessions” meeting starting this weekend. The US dollar gained broadly against major currencies. Crude oil continued to climb with WTI crude finishing Thursday at USD78.2.   What’s happening in markets? Nasdaq 100 and S&P 500 rebounded on Fedspeak The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) clawed back early losses after dovish comments were made by the Fed’s Raphael Bostic  - seeing the indices gain 0.9% and 0.8% respectively. All sectors in the S&P 500 except consumer discretionary and financial advanced. Salesforce (CRM:xnys) shares rose 11.5% on a Q4 earnings beat and upbeat guidance – making it the top gainer in the S&P500. Kroger (KR:xnys) rose 5.4% after the grocery chain reported sales and earnings beat. Tesla (TSLA:xnas) fell 5.9% as investors were somewhat disappointed with the EV giant’s Investor Day held on the prior day. US Treasury curve bear steepened, 10-year yield at 4.06% US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) sold off across the curve in the morning following an upward revision of Q4 unit labour costs to 3.2% from the previously reported 1.1% and initial jobless claims continued to come in below 200K. After Atlanta Fed Bostic’s comments in favour of a 25bp hike at the March meeting and the Fed could pause by mid to late summer saw yields on the 2-year paring much of the loss from an intra-day high yield of 4.94% to finish at 4.89%. Yields on the belly of the curve however remained 6bps higher by the time of closing, with the 5-year yield at 4.31% and 10-year at 4.06%. The Treasury Department announced the auction of USD40 billion of 3-year notes, USD32 billion of 10-year notes, and USD18 billion of 30-year bonds next week. Hong Kong’s Hang Seng Index and China’s CSI300 retreated after yesterday’s sharp gains Hang Sang Index (HSI.I) dropped 0.9% and CSI300 (000300.I) slid 0.2% on Thursday after rising sharply the day before. China Internet names led the decline with Alibaba (09988:xhkg) falling 4.7% without notable news. Bilibili (09626:xhkg) plunged 7.8%.  After the Hong Kong market close, the online entertainment platform reported Q4 earnings beating the consensus estimate. Nio (09866:xhkg) tumbled 13.2% on a Q4 margin miss and a weaker-than-expected Q1 2023 guidance. Container liners outperformed, with Orient Overseas (00316:xhkg) rising 6.7% and COSCO Shipping (01919:xhkg) up 4.1% on an improved outlook of China’s exports. In A-shares, telcos and communication equipment makers advanced, following the news that the Ministry of Industry and Technology said that China will accelerate the rolling of 6G infrastructure. Australian equities (ASXSP200.I) trade lower for the fourth week  - markets prices out rate cuts – PMIs rise   So far this week - Monday to Friday the market is trading lower - marking its fourth straight week of losses. It comes as the Australian share market prices out rate cuts this year – and looks ahead to the RBA interest rates decision and commentary next week - with another 25bp hike expected. Today - hotter Australian and manufacturing prints showed PMIs rose back to expansionary phase, pushing Australian bond yields higher, up 6 bps to 3.92% - that’s near YTD highs of 4%, which is a cautionary signal given this is a better return than the average yield for the Australian share market.    FX: GBP edges below 1.2000 on dovish Bailey The US dollar was broadly in gains on Thursday as yields continued to surge higher despite supposedly dovish comments from Fed member Bostic. SEK was the underperformer on the G10 board amid risks of a deepening recession in Sweden. GBPUSD continued to tumble further below the 1.20 handle after dovish comments from BOE governor Bailey this week attempting to engineer a pause in market expectations. EURUSD also gave up some of its post-regional CPI gains to inch below 1.06. AUDUSD still in close sights of 0.67 as risk sentiment deteriorates while pickup in metals prices remains unconvincing for now. Crude oil volatility continues Oil fluctuated with traders weighing up a revival in demand from China, vied with inflation fears and OPEC boosting supplies. OPEC increased supplies by 120,000 b/d to 29.24 million a day in February – with Nigeria accounting for two-thirds of the increase - with its output hitting a one-year high. Meanwhile Russian seaborne diesel exports stranded at sea hit new records. This comes all while nations such as Turkey are trimming purchases of Russian crude. What to consider? Fed officials hinting at a higher dot plot The biggest headlines today are referring to Fed member Bostic’s (non-voter) comments as dovish, while he said he is firmly in favour of a 25bps hike path (to reduce the possibility of a hard outcome) and even said we could be in a position to pause by mid-to-late summer which appears to be exactly in-line with current market expectations. If his comments suggest 25bps rate hikes each at the March, May and June meetings, we still may end up in the 5.25-5.50% terminal rate which is higher than what the December dot plot suggested. Waller (voter) also hinted at an upwards shift in the dot plot, more clearly so, saying that Fed may need to raise rates beyond December's central tendency view of 5.1-5.4% if the incoming job and inflation data does not pull back from strong readings for January. US labor market strength sustains, focus shifting to ISM services US initial jobless claims fell by 2k to 190k last week from 192k prior and 195k expected, continuing to signal a tight labor market. Unit labor costs climbed an annualized 3.2% in the fourth quarter from the initial 1.1% read, well above expectations for a rise to 1.6%. Increased labor costs keep concerns of a wage-price spiral alive, and will likely keep the Fed on its toes in tightening policy. ISM services for February will be on watch later today, and is expected to ease to 54.5 from a big jump to 55.2 last month, but still remain comfortably in expansion. Attention will also be on the prices paid component after a similar component from the manufacturing print this week created jitters and services prices are likely to be more sticky. Worrying inflation prints in the Eurozone Yesterday, the eurozone core inflation rose to 5.60% year-over-year in February with both core goods (6.8%) and services (4.8%) reaching new record highs. This is much higher than expected (5.3%). We pay more attention to core inflation as it can show how entrenched inflation is. As a matter of that, it appears the inflation headache will remain an issue for most of the year. All the country prints which were released earlier this week came in above expectations: Germany 9.3% vs 9.0% exp. France 7.2% vs 7.0% exp. Spain 6.1% vs 5.7% exp. In these circumstances, talks about a potential monetary policy pause are ill-timed. From a monetary policy perspective, we think the ECB is unlikely to slow the pace of tightening until we see the first signs of underlying inflation peaking. Expect at least two other 50 basis point hikes in March and in May (there is no meeting in April). The market consensus forecasts that another 25 basis point hike could happen in June. It will depend on the evolution of inflation, of course. China and Australian trade relations are improving – adding to our optimist view that the commodity bull run could resume in Q2 China and Australia resumed diplomatic and economic discussions to stabilize and improve bilateral relations. It comes as China’s Foreign Minister Qin Gang met with counterpart Penny Wong at the G-20 summit in India. This is supporting commodity prices today – with the Iron Ore (SCOA) price trading higher for the fourth session following on from stronger-than-expected Chinese manufacturing data - showing overall Chinese orders are back at 2017 levels. Despite this the Aussie dollar vs the USD (AUDUSD) is little changed on the day and week at 0.6729 after losing 0.5% on Thursday. Downside is still in play with the Aussie trading below the d Qantas hires 8,500 workers – underscoring the aviation industry’s growth trajectory Qantas Airways (QAN) plans to hire 8,500 more workers in the next decade - which is about the same number it cut during in the pandemic. This highlights the aviation’s growth trajectory less than a year after the crisis. The hires include pilots, cabin crew and airport staff – with about 300 new aircraft arriving in the next 10 years – and Qantas also planning to open an engineering academy to help maintain its feet. For more on the travel sector, refer to Saxo’s Asia Pacific Travel equity theme basket.  We are in the early inning of the comeback of European equities European equities have previously outperformed US equities over long periods of time, but the relentless bull market in US technology stocks over the past 13 years has erased our memory of European equities being an interesting market. But since October last year, European equities have significantly outperformed US equities and clients are most interested than ever. In an article yesterday, Peter Garnry, Saxo’s Head of Equity Strategy, provides an overview of how Europe's equity market is constructed and how it differs from the US equities, and also why they are more interesting for investors amid the comeback of the physical world. His three main points are: Europe lost the digital technology race to the US with a 13-year-long period of significant underperformance, but since October 2022 things have turned around and maybe we are in the early inning of Europe’s comeback. European equities have 20 super-sectors and the diversification of European equities is much better compared to US equities. European equities are cheaper relative to US equities and they have recently improved their operating margins while US equities have seen a significant margin compression. China’s Caixin Services PMI is expected to rise to 54.5 Caixin Services PMI is expected to confirm the continuous expansion of activities in the services sector as indicated in the official NBS PMI survey. According to Bloomberg, Caixin Services PMI is expected to rise to 54.5 in February from 52.9 in January. China’s “Two Sessions” meeting commences this weekend China is holding the annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference, which together are known as the “Two Sessions, this weekend. Premier Li will deliver the Government Work Report on 5 March, in which the focus will be on the GDP growth target for 2023. The weighted average of provincial GDP targets released was around 5.6% and economists are expecting a national target of between 5% and 5.5% for 2023. Investors will also pay attention to the fiscal deficit target and quota for bond financing. In addition, investors will pay close attention to the leadership reshuffle at the State Council and other top government bodies. It is widely expected that Li Qiang will be the new Premier and He Lifeng will be one of the Vice Premiers and given the portfolio of economic and financial affairs. Japan’s Tokyo CPI for February hinting at sticky prices Japan’s Tokyo-CPI for February came in at 3.4% YoY for the headline, softer than last month’s 4.4% but still hotter than the 3.3% expected. The slower print is partially a result of PM Kishida’s latest stimulus announcement to support utilities prices which included a 20% discount on household electricity rates. Core CPI at 3.3% YoY matched estimates while the core-core measure (ex-fresh food and energy) was a notch higher at 3.2% YoY vs. 3.1% expected. Inflation continues to be sticky and above the BOJ’s 2% target although the incoming Governor Ueda is unlikely to rush into any monetary policy moves at this point. Bilibili earnings beat, non-GAAP net loss narrowed as operating margin improved Q4 Revenues in Bilibili rose 6% Y/Y to RMB6.14 billion, slightly higher than the RMB6.12 billion expected. Non-GAAP net loss came in at RMB1.31 billion, better than the consensus of RMB 1.43 billion and 20.6% smaller than in Q4 last year. Mobile games revenue falling 12% Y/Y and advertisement revenue falling 5% Y/Y  were weaker than expected. Revenues from E-Commerce and others grew 13% Y/Y and those from Value-added Services rose 24%, both above consensus estimates. The number of monthly active users increased 20% Y/Y to 326 million. India’s Adani Group gets foreign interest as prices drop After a drop of over $100 billion in market value, Adani group stocks got a respite with US boutique investment firm GQG Partners purchasing shares worth $1.87 billion in four Adani group companies. The deal shows investor interest may be returning to Adani after record drops in its share prices, and any further interest from foreign investors could potentially put a floor to near-term pressures for the conglomerate. This week, the group told bondholders it had secured a $3bn credit line from investors including a sovereign wealth fund.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Global Market Quick Take: Asia – March 3, 2023 | Saxo Group (home.saxo)
Astonished by the week ahead? Barclays, NatWest Group and Microsoft earnings are also released shortly

AI (Chatgpt) Is Controversial Even With Apple

Kamila Szypuła Kamila Szypuła 03.03.2023 09:37
ChatGPT has become increasingly popular since start-up OpenAI released it in November, surpassing one million users a few days after launch. People have been using the chatbot to automate tasks at work and school, raising questions about how AI could replace some of the white-collar jobs. So-called generative AI has become one of the most closely watched emerging technologies in decades. Apple vs AI Apple has delayed approving an update to its email app with AI-powered language tools amid concerns it might generate content that is inappropriate for children, according to communications from Apple to the app developer. The developer of the software does not agree with Apple's decision. According to Ben Volach, co-founder of BlueMail developer Blix Inc., Apple took steps last week to block updates to the BlueMail mail app due to concerns that a new AI feature in the app might display inappropriate content. The app-review team said that because the app could produce content not appropriate for all audiences, BlueMail should move up its age restriction to 17 and older, or include content filtering, the documents show. Volach says it has content-filtering capabilities. The app’s restriction is currently set for users 4 years old and older. Apple’s age restriction for 17 and older is for categories of apps that may include everything from offensive language to sexual content and references to drugs. Volach says that this request is unfair and that other apps with similar AI functions without age restrictions are already allowed for Apple users. Apple's attempt to establish an age restriction to help moderate language-based AI content indicates that the tech giant is keeping a close eye on new technology and the risks it poses. The company has long said it needs to carefully select and screen what software is available on the iPhone and iPad via the App Store to ensure the privacy and security of its products. Read next: Despite The Decline Euro Remains Above 1.06, GBP/USD Is Trading Below 1.20| FXMAG.COM BlueMail BlueMail's new AI feature uses OpenAI's latest ChatGPT chatbot to help automate email writing using the content of previous emails and calendar events. ChatGPT allows users to talk to AI in a seemingly human way and is capable of advanced, lengthy typing on a variety of topics. Workers at some companies have been using ChatGPT to write emails and research topics. Some of the employees say the chatbot helps them work faster while others are trying to avoid being left behind as technology evolves. Some tech companies have raced to launch similar products after OpenAI released ChatGPT Not only Apple Chase & Co. restricts employees from using ChatGPT. The bank did not restrict the use of the popular AI chatbot because of any specific incident, the person said. It was not possible to determine how many employees used the chatbot or what functions they used it for. In addition to JPMorgan, other organizations have also blocked access to ChatGPT. Last week, Verizon Communications Inc. barred the chatbot from its corporate systems, saying it could lose ownership of customer information or source code that its employees typed into ChatGPT. New York City public schools in January banned the chatbot from its internet networks and school devices. Apple share price By mid-February, Apple shares were rising to 155.33. Since then, they have fallen to the level of 145.31. They recently increased slightly and closed at 145.91 Source: wsj.com, finance.yahoo.com
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

Technical Analysis Of S&P 500, Dow Jones And More

Saxo Bank Saxo Bank 03.03.2023 11:41
Summary:  Major US Indices forming bottom and reversal patterns indicating a strong rebound.In this analysis: S&P 500/US500, Nasdaq 100/USNAS100 & Dow Jones Industrial/US30 S&P 500 opened below yesterday the 200 daily Moving Average dipping down to touch the 0.618 retracement at 3,929 to close above key support at 3,949 forming a Bullish Engulfing candle which is a strong indication of a bottom and reversal.RSI is still above 40 meaning it is still in a positive sentiment with no divergence from the February peak. S&P 500 seems set for a rebound and if the Index closes above 4,030 the uptrend is likely to resume.A first indication of this scenario to play out could be if RSI closes above its falling trendline.If S&P 500 closes below Thursday low and RSI closes below 40 S&P 500 has demolished the bottom and reversal picture and would be in a confirmed bear trend. Source all charts and data: Saxo Group US 500 cfd bounced from the 100 daily Moving Average and the 0.618 Fibonacci retracement to close above 200 daily Moving Average to close back above key support at 3,947.50. RSI still in positive sentiment. If US500 moves back above 4,027 it is likely to resume uptrend.A close below yesterday’s low at 3,919 the rebound picture is demolished and US 500 is likely to drop lower towards 3,800. Nasdaq 100 Buyers in control throughout yesterday’s session lifting the Index back above 200 daily Moving Average and key support at 11,906 forming a Bullish Engulfing candle.RSI is still above 40 meaning it is still in a positive sentiment with no divergence from the February peak. If Nasdaq 100 closes above 12,385 and above the 21 daily Moving Average the uptrend has resumed.A first indication of this scenario to play out could be if RSI closes above its falling trendline.A close below 11,830 i.e., yesterday’s low is likely to lead to a sell-off down to around the 0.618 retracement at 11,515 possibly down to support at around 11,259.   USNAS100 Double Top pattern potential is still unfolding. After the break below 12,213 there is down side potential to around the 0.618 retracement at 11,518 as illustrated by the two vertical arrows. However, USNAS100 has found support at the 200 daily Moving Average and after its strong rebound yesterday the bearish picture could be reversed. If USNAS100 closes back above 12,234 and above the 21 daily Moving Average the Double top pattern is demolished and uptrend is likely to resume with potential to February peak level. Dow Jones Industrial has formed a Morning Doji Star bottom and reversal pattern (circled) bouncing from the support at around 32,573. Despite RSI being negative the Index could experience a nice rebound to around the 55 daily Moving Average but room up to resistance at around 34,342-34,712.If Dow Jones closes below 32,500 down trend is set to resume US30 cfd has bounced from support at around 32,472 and seems set for a rebound to the upper range in the side ways range US30 has been trading in since November. A break below 32,470 is likely to push US30 down to 31,715, possibly lower   Source: Technical Update - US Stock Indices set for a rebound: S&P500, Nasdaq & Dow Jones | Saxo Group (home.saxo)
Rates Spark: Escalating into a Rout as Bond Bear Steepening Accelerates

Saxo Bank Podcast: The Lack Of Conviction In The Market And More

Saxo Bank Saxo Bank 03.03.2023 11:45
Summary:  Today we discuss the lack of conviction in the market after the action spilled lower below the 200-day moving average but failed to follow through and backed up to close the session higher, despite fresh pressure from rising yields, as the 10-year treasury benchmark took out the 4.00% level. In equities, a breakdown of what European equities have to offer relative to US equities. In commodities, focus on gold and natural gas. A look at the week ahead calendar for both earnings and especially macro as well. Today's pod features Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX. Listen to today’s podcast - slides are available via the link. Follow Saxo Market Call on your favorite podcast app: Apple  Spotify PodBean Sticher If you are not able to find the podcast on your favourite podcast app when searching for Saxo Market Call, please drop us an email at marketcall@saxobank.com and we'll look into it.   Questions and comments, please! We invite you to send any questions and comments you might have for the podcast team. Whether feedback on the show's content, questions about specific topics, or requests for more focus on a given market area in an upcoming podcast, please get in touch at marketcall@saxobank.com.   Source: Podcast: Neither bulls nor bears have conviction here. Week ahead a big one for macro | Saxo Group (home.saxo)
Rates Spark: Escalating into a Rout as Bond Bear Steepening Accelerates

Stock Market Summary Of The Week 27.02-3.03.2023

Conotoxia Comments Conotoxia Comments 05.03.2023 09:17
There were a number of significant developments in the markets this week, including surprising inflation readings, declines in the cryptocurrency market and hopes for China's industry, which posted its best performance in more than a decade. In addition, many other events took place in the financial markets. What else could we have learned? Macroeconomic data We began our macroeconomic data with Monday's reading of home sales under construction for January in the United States, which rose by as much as 8.1% m/m. (1% m/m was expected). This is the highest reading since September 2020. Could this mean that, despite high interest rates, the property market is starting to recover for this economy? We started Tuesday with the publication of the US CB Consumer Confidence index. The reading fell short of expectations, coming in at 102.9 (108.5 was expected). On the same day, we learned about the PMI Industrial Sentiment Index for the Chinese economy, which positively beat expectations, coming in at 52.6 (50.5 was expected). This is the highest reading for this economy in more than 10 years! The ChinaH index rose by almost 5% this week. Source: Conotoxia MT5, CHINAH, Daily Wednesday brought us data from Germany, such as the PMI industrial business sentiment index, which came in at 46.3 points (46.5 points were expected). In addition, we learned about the CPI inflation reading for February, which came in at 8.7% (8.7% was expected). However, it appears that despite further interest rate increases in the euro area, inflation does not want to fall. The US manufacturing PMI came in slightly worse than analysts' consensus, at 47.7 points (48 points expected). Thursday seemed to be crucial for this week. First, we had a look at inflation in the euro area, which, like inflation in Germany, surprised negatively. It turned out to be higher than expected at 8.5% (8.2% was expected). On the same day, we learnt the reading of new claims for unemployment benefits in the United States, which came in at 190,000 (195,000 was expected). It seems that the labour market remains as strong as ever for this economy. The stock market A large proportion of sectors ended the week on declines. The largest declines of at least 2% included the utilities sector and the retail services sector. The largest increases of 3.4% came from the materials sector. In second place was the industrial companies sector with an increase of 1.66%. Source: https://www.sectorspdr.com/sectorspdr/tools/sector-tracker The companies that had the biggest changes during the week were Tesla's (Tesla) shares down more than 5%, the shares of online short-term rental platform Booking.com (Booking) up more than 6%, or rail holding company Union Pacific Corporation, which rose almost 10%. Source: https://finviz.com/map.ashx?t=sec&st=w1 Currency and cryptocurrency market The US dollar has been weakening in the foreign exchange market against other currencies, with the EUR/USD pair rising by 0.6%. This may be linked to expectations of an interest rate increase in the euro area due to higher-than-expected inflation. The only one of the major pairs to rise during the week is the New Zealand dollar pair against the US dollar. Source: Conotoxia MT5, EURUSD, Daily At the end of the week we saw declines in the cryptocurrency market. The price of bitcoin fell by almost 4% during the week. It seems that this may be related to the so-called Silvergate, the bank that disconnected the ability to make transfers for one of the largest cryptocurrency exchanges Coinbase. Additionally, as is the case every week, investors can look forward to an influx of fresh funds into this market, which could be measured by, among other things, stablecoin capitalisation, which is down by as much as 2.1% m/m. Source: Conotoxia MT5, BTCUSD, Daily Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Kelvin Wong talks JGB, US dollar against Japanese yen and more

Japan's "Shunto" Spring Wage Talks Will Be Key To Watch This Month

Saxo Bank Saxo Bank 06.03.2023 08:16
Summary:  US stock indices had a strong finish to the week, with the Nasdaq 100 rising 1.6% and the S&P 500 surging 2%. Despite the fading expectations for interest rate cuts in 2023, the S&P 500 has risen 5.4% and the Nasdaq 100 has soared 12.4% since the beginning of the year. Yields on the 10-year Treasury notes reversed and returned to below 4%, settling at 3.95% to close the week on Friday. On the first day of the First Session of the 14th National People’s Congress, China's Premier Li delivered his last Government Work Report. The report set a target of around 5% for the real GDP growth for 2023, which was at the lower end of expectations.   What’s happening in markets? US equities bounced on Friday to finish the week higher Nasdaq 100 (NAS100.I) rose 1.6% and S&P 500 (US500.I) surged 2% on Friday, securing a weekly gain of 1.9% and 2.6% respectively. All 11 sectors within the S&P 500 advanced, led by information technology, consumer discretionary, and communication services. Meta (META:xnas), First Solar (FSLR:xnas), and Broadcom (AVGO:xnas) were among the top gainers, rising more than or nearly 6%. Apple (AAPL:xnas) gained 3.5% after announcing the departure of its cloud business head next month. Rivian (RIVN:xnas) jumped 7.6% following raising its EV production target by 24% to 62,000 units. Since the beginning of the year, the S&P 500 has risen 5.4% and the Nasdaq 100 has soared 12.4% despite the expectations for interest rate cuts in 2023 having largely faded. NVidia (NVDA:xnas) up 65%, Tesla (TSLA:xnas) up 63%, and Meta up 53.9% were among the best-performing stocks that drove the indices higher. US Treasuries rallied with the 10-year yield reversing to below 4% After spending one day above 4% on Thursday, yields on the 10-year Treasury notes reversed and returned to below 4% and settled at 3.95% to close the week on Friday. Headlines were light. The decline in the ISM Services Index in February was smaller than expected and initially saw the short-end lower in prices and higher in yields before the losses faded and reversed as strong bids emerged in the long ends in the afternoon. The 2-10-year spread bull flattened 7bps to -91. Hang Seng Index and China’s CSI 300 advanced ahead of the Two Sessions On Friday, Hang Seng Index (HSI.I) was up 0.7%. Hang Seng TECH Index (HSTECH.I) was up 2.1% ahead of the Two Sessions in China, annual meetings of China’s legislature, and top political advisory body. Technology, auto, and Chinese developer stocks led the charge higher. Closing at 20567, Hang Seng Index was up 2.79% over the week.  Hang Seng TECH Index gained 2.8%, with China internet names leading the charge higher. Bilibili (09626:xhkg) surged 10.3% following the online entertainment firm reporting a smaller net loss in Q4. TVB (00511:xhkg) soared 51.6% on heavy volume after the television broadcaster announced cooperation plans with Alibaba’s Taobao for live-streaming broadcasts.  Wynn Macau (01128:xhkg) fell 4.3%, weighed on by hedging flows after the Macao casino operator issued a USD600m of convertible bonds. Benchmark A-share indices advanced. The CSI300 (000300.I) climbed 0.3% on Friday and gained 1.7% over the week. The Shanghai Stock Exchange Composite Index gained for the fifth day in a row, closing at 3328.39, the highest level since July 2022. The net purchase of northbound funds was RMB 2 billion. Large state-owned companies in strategic industries, typically those starting with the prefix “China”, were among the top gainers ahead of the Two Sessions. Australian equities remain pressured The Australian share market fell for the fourth straight week last week. And with BHP and Rio and Woodside all going ex-dividend this week, it could be very volatile week. For more on what to watch this week, refer to Saxo’s Week Ahead. FX: GBP recovers post-Bailey losses The USD was broadly weaker last week after a run higher in February on expectations that most of the Fed’s tightening is priced in and yields are potentially reaching close to their peaks. This week brings a test of this rhetoric with Chair Powell’s testimony and the US jobs report scheduled for release. GBPUSD once again found support at 1.1920 despite a dovish turn by BOE Gov Bailey last week, and returned to 1.2040. AUDUSD worth a watch again this week with support at 0.67 being eyed as the RBA meets this week and China’s lower growth expectations may weigh. USDJPY has reversed back below 136 as yields gains ease, but if US yields continue their run higher and/or Governor Kuroda stays overly dovish at his final Bank of Japan meeting this week then a return to 137+ remains likely.  Crude oil whipsaws but bulls in control Crude oil prices faced 2-way action on Friday with an initial move lower by over 2% on a WSJ report saying the UAE is debating internally whether to leave OPEC. But these reports were denied later on, and enthusiasm of the oil bulls going into China’s policy meetings over the weekend with policy stimulus expectations running high helped crude oil make a quick reversal. WTI prices got close to $80/barrel from a dip to $76 earlier, while Brent rose to $86 from $82.50. A modest weakness is coming back again this morning in Asia, keeping the range intact. However, China’s weaker than expected growth target set over the weekend may still keep oil prices choppy, with eyes also on any possibility of hawkish remarks from Chair Powell this week or the US jobs report.    What to consider? China’s 2023 GDP growth target at “around 5%” China sets a real GDP growth target of "around 5%" for 2023 in the Government Work Report to the National People's Congress. This target is at the lower end of expectations ranging from 5% to 5.5% going into the meeting. Other key macroeconomic targets include adding 12 million jobs to urban area employment for 2023, a consumer inflation target of 3%, and a fiscal deficit target of 3% of nominal GDP. The report emphasizes the importance of boosting domestic aggregate demand, particularly household consumption, and aims to deepen the reform of state-owned enterprises while encouraging private enterprises to grow. For more details, see our note here. US ISM services stays strong The headline ISM services cooled less than expected in February, falling to 55.1 from 55.2 in January, better than the expected 54.5. The prices paid component, which raised concerns again about the disinflation rhetoric from the manufacturing ISM report last week, cooled only slightly to 65.8 from 67.8 in January, showing sticky services prices. Employment rose to 54 from 50.0, matching the highest since March 2022 and therefore showing more signs of a tight labour market. New orders accelerated to 62.6 from 60.4 but business activity slowed to 56.3 from 60.4.  China’s Caixin Services PMI came in at the highest level since Sept 2022 Caixin Services PMI rose to 55 in February (consensus estimate: 54.5), the highest level since September 2022, from 52.9 in January, echoing the strength of the recovery in the official NBS PMI survey earlier in the week. Both the business activities component and the new order components were in the expansion territory. The Biden administration is drafting new rules to prohibit some U.S. investments in China In reports sent to Congress, the Biden administration told lawmakers that the Treasury Department and the Commerce Departing are drafting new regulations to prohibit U.S. companies from making advanced technology investments abroad, which is understood as focusing on China. Fed members continue to sound hawkish, eyes on Powell Fed member Mary Daly was on the wires over the weekend, and sounded hawkish as she raised the prospects of an upward shift in the Fed’s dot plot as well. She said that inflation is still high, and the Fed has to think about 'continuous tightening', signalling higher rates and remaining at elevated levels for a longer period of time, if inflation stays hot. Another member Barkin also clearly said that there will be no rate cuts this year. Focus will be on data in the run upto Fed’s March meeting, but Chair Powell’s testimony and the February jobs report this week will be key for the markets. Japan unions pushing for record wage increase The Japanese Trade Union Confederation (JTUC, more commonly known as Rengo) says its survey of 2000+ unions in the country shows an average pay rise request of 4.49% this year. This is the highest since 1998's 4.36% and is much higher than the 2.97% sought in 2022. The Bank of Japan continues to highlight that wage growth is key for achieving sustained demand-pull inflation. Japan's "shunto" spring wage talks will be key to watch this month as any larger than expected increase in wages will fuel more tightening expectations for the Bank of Japan, having a profound impact on global liquidity as well. COT reporting on Brent and (delayed) gold  Speculators or hedge funds raised bullish bets on Brent crude oil by 9.4k lots to near a 15-month high at 286k lots in the week to February 28. The cost of holding a short position in Brent, reflected through the current backwardation, supported a continued collapse in the gross short to a 12-year low at 22k lots.  While the ICE Europe Exchange is up to date in its reporting, the US CFTC is still catching up following a January 31 cyberattack on ION Cleared Derivatives, a third-party software and service provider for derivative trading. The latest report covered the week to February 7, when gold reached $1975 before crashing to $1885, triggering a 29% drop in the gold net long to 79k. The CFTC is expected to be up to data around mid-March.  Moving Visa, Mastercard, and Paypal from IT to Financials in the S&P500 Starting from 17 March, the S&P 500 will move Visa (V), Mastercard (MA), and Paypal (PYPL), which specialize in payment services from its Information Technology sector to the Financials sector, and Automatic Data Processing (ADP), which provide human resources services from the Information sector to the Industrials sector. For what to watch in the markets this week – read or watch our Saxo Spotlight.  For a global look at markets – tune into our Podcast. Source: Global Market Quick Take: Asia – March 6, 2023 | Saxo Group (home.saxo)
Disappointing activity data in China suggests more fiscal support is needed

The Chinese Government Signalled That This Year's GDP Target Would Be 5%

Michael Hewson Michael Hewson 06.03.2023 08:21
Despite another week of rising yields, European markets still managed to finish last week higher over concern that various inflation measures are starting to tick back higher again, having been in decline over the last few months.   The German DAX had a particularly good week posting its highest daily and weekly close in over a year, as confidence over falling energy prices and a more resilient global economy as China's economy reopens helps to foster a slightly less negative outlook about growth prospects.     The FTSE100 found itself lagging weighed down by underperformance in some of its more defensive names.      US markets also managed to finish the week higher, breaking a losing streak that had lasted three weeks in a row. Both the S&P500 and Nasdaq 100 managed to rebound after finding support at their respective 200-day SMA's.   Friday's rebound came against a backdrop of a sharp decline in US 10-year yields which fell back from their highest level since November, above 4%. Friday's ISM services report showed little sign that the big rebound in the US economy in January was a one-off, with the headline number falling slightly to 55.1, from 55.2, with further gains in employment to 54, and new orders rising to 62.4.   Prices paid did slow, but still remained high at 65.4.   As a leading indicator for this week's delayed non-farm payrolls number for February, it's a further indication that the US labour market continues to remain very resilient, with ADP and job openings (JOLTS) data also likely to add insight.     As we look ahead to this week the main focus, apart from Wednesday's ADP, and Friday's payrolls report, will be on Fed chair Jay Powell's testimony to US lawmakers tomorrow and Wednesday where he is likely to be quizzed on how he sees the US economy in light of recent strong data, and what measures the Fed might feel inclined to take if the data continues to come in strong.   It's unlikely that he will give too many clues given how close to the next meeting we are, and the main takeaway is likely to be data dependence, however, don't be surprised if markets pore over every single nuance just so that they can reinforce their own particular mindset.   We do have two other important rate decisions this week, namely from the RBA tomorrow, and the Bank of Canada on Wednesday, where the central bank may have cause to rue their decision to signal a pause at their last meeting given the strength of recent economic data.   Over the weekend the Chinese government signalled that this year's GDP target would be 5%, which comes across as a little on the low side given that last year saw a 5.5% target under more difficult circumstances. It's also potentially disappointing when it comes to the prospects for global GDP as a more restrained China means less potential for demand.   The lower-than-expected target might also suggest that Chinese officials are less likely to push stimulus into the economy as it strives for stability over anything else.   It could also be an acknowledgment that recent protectionist measures have damaged confidence in China as an investment opportunity, and consequently, investors could well be more cautious over the next 12 months.   This less-than-ambitious target appears to be weighing on commodity prices with Asia markets broadly positive as we look ahead to the start of today's European session, and a positive start to the week.   EUR/USD – struggled to get above the 1.0700 area last week but has remained above the bullish reversal of last Monday at the 1.0530 area. We need to push through the 50-day SMA at 1.0730 to open up 1.0820. While below 1.0730, the bias remains for a test of the January lows at 1.0480/85. GBP/USD – last week saw us ping between the 1.1920 area and the 200-day SMA, and the 50-day SMA at 1.2150 which remains a key resistance area. A break of 1.1900 retargets the 1.1830 area, while a break of the 1.2150 area is needed to retarget the 1.2300 area. EUR/GBP – failed to push above trend line resistance at 0.8900 from the January peaks last week. Above 0.8900 targets the 0.8980 area. We need to push below support at the 0.8820/30 area to retarget the 0.8780 area. USD/JPY – the failure to push through the 200-day SMA at 136.90/00 last week has seen the US dollar slide back. Support comes in at the 135.20 area. We also have interim support at 133.60. A break above 137.00 could see a move to 138.20.   FTSE100 is expected to open 5 points higher at 7,952 DAX is expected to open 47 points higher at 15,625 CAC40 is expected to open 37 points higher at 7,385 Email: marketcomment@cmcmarkets.com Follow CMC Markets on Twitter: @cmcmarkets Follow Michael Hewson (Chief Market Analyst) on Twitter: @mhewson_CMC
Rates Spark: Bracing for more

The RBA, Bank Of Canada And Bank Of Japan Will Be Announcing Their Latest Interest Rate Decision This Week

Ipek Ozkardeskaya Ipek Ozkardeskaya 06.03.2023 08:26
There are plenty of reasons that should push equities lower, but equities continue trending higher. Both European and American stocks closed last week with gains, and futures hint at a positive start to the week despite China's announcement of a modest 5% growth target. But the 5% growth target raises concerns about the amount of stimulus that the Chinese will put on the table, and the possible continuation of the government crackdown. The Chinese officials said that they don't want a disorderly growth in real estate – which is a major ingredient for the Chinese growth. Plus, the local governments could borrow and spend less, even though the Chinese as a whole increased their fiscal deficit projection. This means that China is on its way for more centralization of the power around Xi Jinping and less freedom for local entities. Combined with Xi's fight against euphoric growth and the West's limitation on investment and technology exports to China, we shall see investors reluctant to return to Chinese equities. China's modest 5% growth target weigh on energy and commodity prices. Iron ore and copper futures are down, and US crude's 100-DMA resistance, around the $80pb level, will likely remain strong. On this week's agenda FED talk Federal Reserve (Fed) Chair Jerome Powell will deliver his semi-annual testimony before the Senate this week, and he will certainly reiterate that the Fed is not yet done with its fight against inflation, that the labour market remains particularly strong, that a soft landing is possible, yet the Fed won't hesitate to sacrifice growth to abate inflation as soon as possible. Looking at the latest set of data, the U-turn of easing inflation and last month's blowout jobs figures, we don't expect to hear anything less than hawkish from Mr. Powell. But it's always possible that a word like 'disinflation' slips out of his mouth, and that we get a boost on risk. US jobs The US economy is expected to have added around 200'000 jobs, with the possibility of a negative surprise after last month's above half a million read. Unemployment is seen steady around 3.4% - a more than 50-year low, while average earnings are seen going up from 3.4% to 3.7% over the year. Nothing encouraging for the Fed doves. But who cares? RBA, BoC, BoJ The Reserve Bank of Australia (RBA), the Bank of Canada (BoC) and the Bank of Japan (BoJ) will be announcing their latest policy verdicts this week and among them, only the RBA is expected to hike the rates by another 25bp despite last week's surprise softening in latest inflation and growth numbers. More than 40% of the companies in the ASX 200 posted negative earnings surprise last quarter, up from 28% a year ago. The latest figures from macro and micro fronts raise questions about how far the RBA could go in terms of rate hikes. On the currency front, since the end of February, the AUDUSD slipped into the bearish consolidation zone, but the pair has been following the 100-DMA slightly to the upside, as the Chinese reopening sustains iron ore prices – except for today, of course, as China's 5% growth target hasn't been a boon for energy and commodity stocks. China could still rescue the Aussie from falling further, but the Chinese winds could hardly reverse the negative trend in AUDUSD as the Fed-supported US dollar is certainly not done its positive push yet.
European Markets Face Headwinds Amid Rising Yields and Inflation Concerns

Demand For Automotive Chips Will Continue To Grow As The Outlook For The Electric Vehicle Market Looks Solid

Kamila Szypuła Kamila Szypuła 06.03.2023 10:43
Growing sales of electric vehicles — which typically use more semiconductors than their gas-powered counterparts — coupled with greater automation of all vehicles have kept car chip makers busy. Car chip boom Chip executives say the increase in the number of chips going into cars is staggering. As of 2021, the average car had about 1,200 chips, twice as many as in 2010, and that number is only likely to increase. Companies including Dutch automotive chip company NXP Semiconductors, German Infineon Technologies AG , Japanese Renesas Electronics Corp., an American company Analog Devices Inc. and Texas Instruments Inc. recently reported growing sales in its automotive divisions and made good forecasts for this year. NXP's automotive chip sales grew 25% last year, and the company expects about 15% growth in the first quarter of this year. Renesas' automotive business grew nearly 40% last year, and analysts expect more growth this quarter. Analog Devices, which accounts for nearly a quarter of its sales in the automotive industry, posted 29% growth in this segment last year. It's not just the cars themselves that are using more and more chips; as will vehicle manufacturing as manufacturers introduce more automation to deal with labor shortages and try to cut costs, semiconductor executives said. Car chip resilience comes despite a historic drop in car sales last year, which was the lowest in more than a decade in the US. Sales have been hampered by supply chain issues, including a lack of chips necessary for a new generation of cars with a range of digitally enhanced features, from driver assistance technology to automatic windshield wiper control. The increased digitization of cars means that even lower vehicle sales do not reduce the demand for car chips. Prospects of EV market Long-term EV market outlook looks solid, Tesla Inc. hinted last week as chief executive Elon Musk detailed plans for his car company to increase sales to 20 million vehicles a year by 2030, up from around 1.3 million in 2022. Electric vehicle sales surpassed a global milestone last year, reaching around 10% market share for the first time. While EVs still represent a fraction of U.S. car sales, their share of the overall market is becoming significant in Europe and China. Tesla is still the dominant manufacturer of electric cars in the world, but conventional carmakers are reducing their lead with new electric models. European carmakers have focused their production and sales of electric vehicles on domestic markets in an effort to meet EU emissions regulations. They also began a more aggressive expansion of their electric vehicle business in other major markets last year, especially China and the US. Declines in other sectors of chipmakers The boom in automotive chips contrasts with sharp declines in other sectors of chipmakers whose products end up in electronics closely tied to consumer appetites. Intel Corp. , the largest U.S. chip maker by revenue, reported a loss in the fourth quarter and expects another loss this quarter, hit by a weakening demand for personal computers that house its chips. Rival Advanced Micro Devices Inc. is also battling a volatile PC market where industry-wide shipments are expected to fall by 12.5% this year, according to recent Morgan Stanley estimates. Qualcomm Inc., known for its mobile phone chips, illustrates how some chip vendors feel both sides of market dynamics. The company saw an 18% drop in mobile phone revenue in the last fiscal quarter. NXP Semiconductors N.V. share prices NXP shares have been up since Feb 24. from 176.86 to 182.96. By comparison, Renesas shares also rose to 6.72, a record high in more than 10 years. Infineon Technologies shares also rose to 36.63 after falling to 35.43. Source: wsj.com, finance.yahoo.com
Crude Prices Are Rallying After A Mixed Jobs Report Sent The Dollar Lower

Crude Oil Declined After China Announced Cautious Growth Targets

Saxo Bank Saxo Bank 06.03.2023 11:17
Summary:  Equity markets surged higher on Friday as the treasury market suddenly found solid support on Friday, taking the US 10-year yield back below 4.00%. At the weekend, China set a “modest” growth target of around 5% at key meetings. The week ahead is thick with central bank action, starting with the RBA on Tuesday, with Fed Chair Powell testimony up tomorrow and Wednesday, and Friday’s Bank of Japan meeting the likely highlight of the week, as it is Governor Kuroda’s last meeting. What is our trading focus? US equities (US500.I and USNAS100.I): strong rally as bond yields decline US equities rallied strongly on Friday with S&P 500 futures gaining 1.7% pushing above the 4,000 level closing at 4,050 with the momentum extending this morning. The rally in US equities came on the back of a ISM report showing the US economy is still humming along. US bond yields declined on Friday together with a weaker USD helping lift sentiment in equities which was an odd move given that inflation expectations were rising last week. This week we have Fed President Powell’s speech that could impact equities (read our preview below). In S&P 500 futures the 4,100 is a key upside level to watch if momentum extends. Hang Seng Index and CSI 300 oscillated on a modest Government Work Report The Hang Seng Index and CSI 300 Index oscillated after China set out a modest GDP growth target for 2023 and signalled a measured approach to fiscal and monetary policies as well as balanced support to the housing sector with avoiding systemic risks as a key priority. Lenovo (00992:xhkg) rising over 4% and reaching a new high, was the biggest gainer. The PC and server maker gained following its arch-rival in the server business, Inspur (000977:xsec) might be having difficulties in getting US parts after Inspur’s parent being put on the US ‘entity list’. FX: GBP recovers post-Bailey losses The USD was broadly weaker last week after a run higher in February on expectations that most of the Fed’s tightening is priced in and yields are potentially reaching close to their peaks. This week brings a test of this rhetoric with Chair Powell’s testimony and the US jobs report scheduled for release. GBPUSD once again found support at 1.1920 despite a dovish turn by BOE Gov Bailey last week, and returned to 1.2040. AUDUSD worth a watch again this week with support at 0.67 being eyed as the RBA meets Tuesday and China’s lower growth expectations may weigh. USDJPY has reversed back below 136 as yields gains ease, but if US yields continue their run higher and/or Governor Kuroda stays overly dovish at his final Bank of Japan meeting this week then a return to 137+ remains likely. Crude oil whipsaws with no clear direction yet to emerge  Crude oil prices faced strong two-way action on Friday with an initial move lower by over 2% on a WSJ report, later denied, saying the UAE is debating internally whether to leave OPEC, before finishing on a strong note on short covering after across market risk appetite improved and traders looked to China’s policy meetings over the weekend for support.  Overnight, however, crude declined after China, the world’s top oil imported, announced cautious growth targets and avoided any larger stimulus measures. Crude oil remains stuck within narrowing ranges, Brent between $81 and $89 with focus returning to the US and speeches from Powell to policy makers on Capital Hill Tuesday and Wednesday, as well as Friday’s job report.    Gold supported by drop in US real yields Gold rallied strongly last week after the market started pricing in higher long-term inflation, thereby challenging the FOMC’s own targets. While support was provided by US ten-year yields dropping back below 4% on Friday to end the week close to unchanged, it was developments in Breakeven (inflation) up 14 bps on the week and real yields, down 13 bps that helped support gold’s recovery. The close back above the 21-DMA on Friday, now at $1844, signaling a return of positive momentum, the strength of which may still be challenged this week with Powell speeches and Friday's job report the focus. For the current recovery, to attract support from technical buyers, prices as a minimum need to break $1864, and silver $22 to signal an end to the recent period of weakness. Copper takes China’s cautious growth target on the chin Copper trades close to unchanged after China set a cautious economic growth target with no major new stimulus measures being announced. With the focus primarily on supporting and stabilizing the economy, the metal could still be challenged in the short term by long liquidation from bulls having bet too heavily on the recovery story and increased spending towards infrastructure projects. Especially considering the recent buildup in inventories monitored by futures exchanges in London and not least in Shanghai. We maintain our long-held bullish outlook for copper and industrial metals in general but with China not providing growth stimulus, the short-term outlook may equally depend on whether other large economies can avoid a recession. US Treasuries (TLT:Xmas, IEF:xnas, SHY:xnas) rallied with the 10-year yield reversing to below 4% After spending one day above 4% on Thursday, yields on the 10-year Treasury notes reversed and returned to below 4% and settled at 3.95% to close the week on Friday. Headlines were light. The decline in the ISM Services Index in February was smaller than expected and initially saw the short-end lower in prices and higher in yields before the losses faded and reversed as strong bids emerged in the long ends in the afternoon. The 2-10-year spread bull flattened 7bps to -91. What is going on? China’s 2023 GDP growth target at “around 5%” China sets a real GDP growth target of "around 5%" for 2023 in the Government Work Report to the National People's Congress. This target is at the lower end of expectations ranging from 5% to 5.5% going into the meeting. Other key macroeconomic targets include adding 12 million jobs to urban area employment for 2023, a consumer inflation target of 3%, and a fiscal deficit target of 3% of nominal GDP. The report emphasizes the importance of boosting domestic aggregate demand, particularly household consumption, and aims to deepen the reform of state-owned enterprises. For more details, see our note here. COT reporting on Brent and (delayed) gold Hedge funds raised bullish bets on Brent crude oil by 9.4k lots to near a 15-month high at 286k lots in the week to February 28. The cost of holding a short position in Brent, reflected through the current backwardation, supported a continued collapse in the gross short to a 12-year low at 22k lots.  While the ICE Europe Exchange is up to date in its reporting, the US CFTC is still catching up following a January 31 cyberattack on ION Cleared Derivatives, a third-party software and service provider for derivative trading. The latest report covered the week to February 7, when gold reached $1975 before crashing to $1885, triggering a 29% drop in the net long to 79k. The CFTC is expected to be up to data around mid-March. US ISM services stays strong The headline ISM services cooled less than expected in February, falling to 55.1 from 55.2 in January, better than the expected 54.5. The prices paid component, which raised concerns again about the disinflation rhetoric from the manufacturing ISM report last week, cooled only slightly to 65.8 from 67.8 in January, showing sticky services prices. Employment rose to 54 from 50.0, matching the highest since March 2022 and therefore showing more signs of a tight labour market. New orders accelerated to 62.6 from 60.4 but business activity slowed to 56.3 from 60.4. Fed members continue to sound hawkish, eyes on Powell Fed member Mary Daly (non-voter in 2023) was on the wires over the weekend, and sounded hawkish as she raised the prospects of an upward shift in the Fed’s dot plot as well. She said that inflation is still high, and the Fed has to think about 'continuous tightening', signalling higher rates and remaining at elevated levels for a longer period of time, if inflation stays hot. Another member Barkin (non-voter in 2023) also clearly said that there will be no rate cuts this year. Focus will be on data in the runup to the Fed’s March meeting, but Chair Powell’s testimony before the Congress and the February jobs report this week will be key for the markets, as noted below.. Japan unions pushing for record wage increase The Japanese Trade Union Confederation (JTUC, more commonly known as Rengo) says its survey of 2000+ unions in the country shows an average pay rise request of 4.49% this year. This is the highest since 1998's 4.36% and is much higher than the 2.97% sought in 2022. The Bank of Japan continues to highlight that wage growth is key for achieving sustained demand-pull inflation. Japan's "shunto" spring wage talks will be key to watch this month as any larger than expected increase in wages will fuel more tightening expectations for the Bank of Japan, having a profound impact on global liquidity as well. What are we watching next? Busy agenda this week for central banks, topped by BoJ on Friday It’s a busy week for central bank messaging this week. First up is the RBA, which we expect will hike the policy rate another 25-basis points to 3.60%. This is not fully priced into market expectations, and the market has priced a total of 52 basis points of tightening over the next three meetings, including tonight’s.  The terminal rate is currently priced near 4.15%. On Wednesday, the BoC will discuss the pace of monetary policy, but at its last meeting signaled that it would like to pause the hike cycle to assess the economy, given the steep pace of policy tightening. We expect interest rates will remain unchanged at 4.5% after eight consecutive hikes. In the US, Fed Chair Powell will testify before Senate and House panels on Tuesday and Wednesday, respectively, on the economy and monetary policy. He will face hours of questioning and political posturing from Congress members. Finally, the most anticipated central bank meeting of the week will be Friday’s Bank of JA France general strike against pension reform France will face a rolling general strike against the pension reform starting tomorrow. The strike is likely to be prolonged for at least 10 days according to the trade unions. This could push the country’s GDP into contraction this quarter. Union representatives at EDF warned of the risk of reduced power output from France’s nuclear power plants due to the strike. US February labor market data up on Friday The US Feb. Nonfarm payrolls change report for February will be released on Friday. In January, US job creation increased at a very strong pace (507k). Consensus expectation look for a return to trend in February (consensus at +200k). The February unemployment rate is expected to marginally increase to 3.5% from the multi-decade low of 3.4% posted in January. Overall, the U.S. labor market is still very resilient, in a very good shape. This is unlikely to influence the Fed’s monetary policy decisions in the short-term. Earnings to watch This week’s most important earnings releases are listed below with the most market attention going to earnings from Adidas, CATL, and JD.com. Adidas has a huge inventory of Yeezy sneakers following the abrupt end to the partnership with Ye that caused a massive writedown in the previous quarter and investors have generally lost short-term trust in Adidas following a string of bad results. Analysts expect Adidas to report Q4 revenue of €5.2bn up 1% y/y and EBITDA of €-419mn. CATL is the world’s largest battery maker and is firing on all cylinders with analysts expecting Q4 revenue growth of 87% y/y and EPS of CNY 2.65 down 11% y/y as the company has not passed on all input costs to its EV customers after a significant surge in lithium carbonate prices last year. Monday: Trip.com Tuesday: Ashtead Group, Sea Ltd, Ferguson, Crowdstrike Wednesday: Ping An Bank, Thales, Adidas, Geberit Thursday: CATL, Deutsche Post, JD.com Friday: Daimer Truck, AIA Group, Oracle, DiDi Global Economic calendar highlights for today (times GMT) 0930 – UK Feb. Construction PMI 1000 – ECB Chief Economist Lane to speak 1000 – Eurozone Jan. Retail Sales 1500 – Canada Feb. Ivey PMI 1500 – US Jan. Factory Orders 2330 – Japan Jan. Labor Cash Earnings 0030 – Australia Jan. Trade Balance 0330 – Australia RBA Cash Rate Target announcement    Source: Global Market Quick Take: Europe – March 6, 2023 | Saxo Group (home.saxo)
The Fear of Strong Jobs: How US Labor Market Resilience Sparks Global Financial Panic

Technical Outlook Of DAX, FTSE 100 & FTSE 250

Saxo Bank Saxo Bank 06.03.2023 11:21
Summary:  DAX cancelling down trend build up. Uptrend could be extended.FTSE 100 and FTSE 250 range boundWith levels on GER40, UK100 and UK250MID Today's Saxo Market Call podcast.Today's Market Quick Take from the Saxo Strategy TeamDAX broke below lower rising trend line last week only for buyers to lift it back above cancelling the bearish break out. Testing February peak the Index is set for higher levels.RSI still showing divergence since January but is now back above 60 supporting the bullish move. If closing above 15,659 uptrend is confirmed and DAX is set for a push to all-time highs around 16,290. Minor resistance at 15,736.For DAX to turn bearish a close below 15,150 is needed Source all charts and data: Saxo Group The GER40 cfd is within a few cents of the February peak at 15,656. A close above will confirm uptrend has resumed despite divergence on RSI. An uptrend that will likely take GER40 to all-time high level around 16,298. Minor resistance at 15,738. For GER40 to turn bearish a close below 15,231 is needed. FTSE 100 is holding up above 7,850 support. A close below FTSE will confirm a down trend possible taking the Index down to around 7,708.Until that scenario plays out the uptrend is intact. However, RSI is showing divergence indicating a correction should be expected. UK100 cfd levels. Support at 7,848 and 7,700. Uptrend is intact until a break below 7,848. FTSE 250 still range bound between 19,574 - 19,938. A close below 19,574 i.e., the Neckline will confirm the Shoulder-Head-Shoulder pattern to unfold with potential down to 18,500. A close above the uptrend is likely to resume. Levels on UK250MID cfd RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend   Source: Technical Update - DAX, FTSE 100 & FTSE 250 | Saxo Group (home.saxo)
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

At The Close Of The New York Stock Exchange Only NASDAQ Composite Fell 0.11%

InstaForex Analysis InstaForex Analysis 07.03.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones rose 0.12%, the S&P 500 rose 0.07%, and the NASDAQ Composite fell 0.11%. Markets are also awaiting information from the US labor market, which will be published on Friday. According to market strategist at Nikko Asset Management John Weil, the data for February may turn out to be worse than in January, and this will calm investors a bit in their fears of too sharp tightening of monetary policy. Dow Jones Merck & Company Inc was the top performer among the components of the Dow Jones index today, up 4.22 points or 3.95% to close at 111.10. Apple Inc rose 2.80 points or 1.85% to close at 153.83. Coca-Cola Co rose 0.92 points or 1.55% to close at 60.36. Shares of Dow Inc became the leaders of the fall, the price of which fell by 1.21 points (2.07%), ending the session at 57.11. Walgreens Boots Alliance Inc was up 1.77% or 0.64 points to close at 35.45, while Intel Corporation was down 1.55% or 0.41 points to close at 25.99 S&P 500 Leading gainers among the components of the S&P 500 in today's trading were Lumen Technologies Inc, which rose 4.10% to 3.30, Merck & Company Inc, which gained 3.95% to close at 111.10. as well as Enphase Energy Inc, which rose 3.77% to end the session at 225.35. DexCom Inc was the leading gainer, shedding 7.87% to close at 113.25. Shares of Newell Brands Inc shed 7.23% to end the session at 13.48. VF Corporation (NYSE:VFC) was down 5.37% to 24.85. NASDAQ The top performers in the NASDAQ Composite Index today were Appreciate Holdings Inc, which rose 152.89% to hit 3.06, Unicycive Therapeutics Inc, which gained 153.06% to close at 1.24, and also shares of Bellerophon Therapeutics Inc, which rose 94.11% to end the session at 3.51. The leading gainers were Aclaris Therapeutics Inc, which shed 44.68% to close at 7.07. Shares of Rubius Therapeutics Inc shed 33.55% to end the session at 0.08. Quotes of Embark Technology Inc decreased in price by 32.81% to 2.56. Numbers On the New York Stock Exchange, the number of depreciated securities (1981) exceeded the number of closed in positive territory (1051), and quotes of 109 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,420 companies fell in price, 1,237 rose, and 143 remained at the level of the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 0.65% to 18.61. Gold Gold futures for April delivery lost 0.12%, or 2.15, to hit $1.00 a troy ounce. In other commodities, WTI April futures rose 1.10%, or 0.88, to $80.56 a barrel. Futures for Brent crude for May delivery rose 0.55%, or 0.47, to $86.30 a barrel. Forex Meanwhile, in the Forex market, the EUR/USD pair remained unchanged at 0.44% to 1.07, while USD/JPY edged up 0.06% to hit 135.93. Futures on the USD index fell 0.21% to 104.27.   Relevance up to 03:00 2023-03-08 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315102
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

The RBA Hiked The Rates To 3.6%, ECB’s Holzmann Called For Interest Rates To Be Raised By 50bps

Saxo Bank Saxo Bank 07.03.2023 09:13
Summary:  The snapback rally in equities extended and then faded yesterday, a mirror-image of the action in treasury yields, which failed to hold an extension lower. Oil rebounded and the gold rally faded. In Australia overnight, the Reserve Bank of Australia hiked as most expected, but signaled it would like to pause the tightening regime soon, triggering a sharp slide in the Aussie. Today, Fed Chair Powell will testify on the economy and monetary policy before a Senate panel. What is our trading focus? US equities (US500.I and USNAS100.I): US equity momentum extends US equities gained slightly yesterday with S&P 500 futures closing at 4,052 after trading as high as 4,082 intraday. This morning in early European trading hours S&P 500 futures are extending their gains as the US 10-year yield continues to push lower lifting overall sentiment. During yesterday’s session social media stocks such as Meta, Pinterest, Snap, and Alphabet were rallying as TikTok bans across the US and Europe are gaining traction. The earnings and macro calendars are light today so the only market moving event is Fed Chair Powell’s speech later today at 1500 GMT. Hang Seng Index and CSI 300: rally fades on Sino-American tensions After follow-through rallies in state-owned enterprises in Hong Kong and mainland bourses in the telecommunication and energy space in the morning, the Hang Seng Index and CSI 300 lost steam and turned south, losing 0.7% and 1.2% as of writing. In a press conference on the side-line of the Two Sessions, China’s Foreign Minister Qin Gang reiterated the “China-Russia comprehensive strategic partnership of coordination for a new era” and downplayed Russia’s invasion into Ukraine to that the “Ukraine crisis has complex historical fabrics and practical reasons with the underlying nature being the eruption of the conflicts in the security governance of Europe”. The pro-Russian stance, as opposed to the more conciliatory-leaning stance in recent months toward the West, added to investors’ concern over the Sino-American relationship. FX: AUD in the dumps on dovish RBA, EUR firm The US dollar is not the focus at the moment as the market awaits further signals from Fed Chair Powell today and tomorrow in his two days of testimony before Congressional panels. The euro is firm on hawkish rhetoric from the ECB (more below) that has the market pricing more than 150 basis points of further tightening this year. Elsewhere, the Aussie weakened sharply as the statement overnight suggested the RBA is looking for excuses to pause its tightening regime – more on that below. The JPY trades passively as we await a pivotal Bank of Japan meeting on Friday, Governor Kuroda’s final meeting before he leaves office in early April. Crude oil climbs to a five-week high Cude oil trades higher for a sixth session amid a broader rally in stocks and a softer dollar. The market will keep an eye on comments from oil insiders, currently meeting in Houston at the annual CERAWeek, one of the world's premier energy conferences. Commentary made alluded to a pickup in demand, while supply remains somewhat restricted. It was said at the conference that 75% of global oil demand growth will come from China this year. Meanwhile, Estonia called for the EU to halve the $60 price cap on Russian oil this month. Overall, crude oil remains rangebound with Brent currently stuck between $81 and $87. US natural gas plunged on forecasts for milder-than-expected weather, and in just two trading sessions it gave back almost half the 53% gain achieved during the prior two weeks. Gold eying Powell’s testimony Gold (XAUUSD) hit a five-week high on Monday at $1858 before reversing lower overnight to test support around the 21-DMA at $1844. Together with US real yields reversing higher following last week’s drop when inflation expectations moved higher, the market sentiment is becoming a bit more cautious ahead of testimonies on Capitol Hill from Fed Chair Powell today and tomorrow. However, with the market currently pricing in a terminal Fed fund rate around 5.5%, any weakness in incoming data – the next major being Friday’s job report – may add further support. For the current recovery to become more than just a bounce, the price as a minimum need to break above $1864, the 38.2% of the February drop. US wheat drops below $7/bu as market awaits monthly supply/demand report The Chicago benchmark wheat contract (ZWc1) dropped below $7 a bushel on Monday for the first time in 17 months, pressured by adequate global supplies, especially from Russia, and optimism a deal can be reached to extend the UN-brokered Ukraine grain corridor deal when the current deal expires later this month. Ukraine’s grain exports are down 26.6% at 32.9 million tonnes in the 2022/23 season so far. Meanwhile, the Australian Bureau of Agricultural and Resource Economics raised its estimate of its 2022/23 wheat harvest by 2.6 million tons to a record 39.2 million tons. Traders now look ahead to USDA’s monthly supply and demand report (WASDE) on Wednesday, in which the main change is expected to be another sizable drop in Argentine’s soybean and corn harvests following a troubled crop year hit by droughts and excessive heat. US Treasury yields (TLT:Xmas, IEF:xnas, SHY:xnas) close near unchanged after probe lower The US 10-year yield extended to below 3.90% at one point yesterday before resistance came in and yields rebounded to unchanged near 3.95% ahead of two days of testimony from Fed Chair Powell today, although yields may pay more attention to the February US jobs report this Friday and CPI next Tuesday as Powell may bring little new to the table in his semi-annual testimony today, which is often more about the political theatre of the Congressional politicians. What is going on? Dovish hike from the RBA, which guides for a tightening pause The RBA hiked by 25bps as expected to 3.6%, with the RBA seeing further tightening ahead. But a small change of phrase positioned this as a dovish hike and an RBA that may be seeking to pause its hiking regime at coming meetings. In the guidance on further tightening, February’s “In assessing how much further interest rates need to increase”, was changed in March to “In assessing when and how much further interest rates need to increase”, with the introduction of “when” a tip-off that the RBA is hoping to pause. Australia’s 2-year yield dropped some 14 basis points as the implied Australian cash rate this year peak fell from 4.1% to 4%. The RBA is concerned both that services inflation remains too high, but also that the lag effects of interest rates had not yet been felt in full by mortgage holders. AUDUSD erasing its intraday gain and slid into the red to below 0.6700 at one point. Hawkish ECB chatter supporting EUR ECB’s Holzmann called for interest rates to be raised by 50bps at each of the next four meetings, and suggested a restrictive policy rate would start from ~4%. President Lagarde and Chief Economist Lane were also on the wires suggesting more rate hikes as well. One of the investment banks, as a result, came out with a terminal rate forecast of 4.25% in wake of Holzmann's remarks, and this led to a drop in EU bonds and a surge higher in EUR crosses. HelloFresh slips 9% in pre-market trading The world’s largest meal-kit provider reports Q4 revenue of €1.87bn vs €1.92bn ahead of the European equity session and EBITDA of €160mn vs est. €137mn. HelloFresh is guiding FY23 EBITDA of €460-540mn vs est. €543mn. Investors are not impressed by these figures sending the shares down 9% in pre-market trading. TikTok ban making progress in the US Senate Intelligence Committee Chairman Mark Warner is set to unveil a bill Tuesday that would allow the US to ban the popular video-sharing app TikTok and other Chinese technology. He said that the law will give the US the power to ban or prohibit foreign technology where necessary, considering companies like TikTok do not keep American data safely and is also a propaganda tool. US tech stocks Snap (+9%), Alphabet (+1.6%) and Pinterest (+1%) rallied on reports. Similar TikTok bans are sweeping through the continent of Europe with the EU parliament banning TikTok across three institutions and other EU members are considering national bans. Trip.com beats estimates Trip.com beat revenue and EPS forecasts as it reported Q4 results yesterday, fuelling more weight to the case for the upcoming surge in Chinese outbound travel demand. We had launched the APAC tourism basket to get exposure to this trend, and Trip.com is also included in this basket. Trip.com reported revenue of $729mn (vs. $709mn expected) and EPS of 11 cents (vs. loss of 3 cents expected). What are we watching next? Powell’s testimony kicks off today Fed Chair Powell will begin his two-day testimony today before Congress, beginning with a session before the Senate Banking panel today. Over the last few weeks, data out of the US has been far more resilient than expected, fueling bets that the Fed will have to raise rates beyond what was communicated earlier and rates will stay elevated for longer as well. Most Fed members have also sounded hawkish, raising the prospect of a shift higher in March dot plot. If a similar message is conveyed by Chair Powell, we could see US Treasury yields rising again and the USD reversing back to an uptrend. Earnings to watch Today’s key earnings release is Crowdstrike expected to report FY23 Q4 (ending 31 Jan) results after the US market close. Analysts expect revenue of $625mn up 45% y/y and EBITDA of $113mn up from $7mn a year ago. Crowdstrike is expected to remain optimistic on its outlook as demand overall for cyber security solutions remain strong. It recent partnership with Dell Technologies provides additional exposure to on-premise workloads and should help on the outlook. Tuesday: Ashtead Group, Sea Ltd, Ferguson, Crowdstrike Wednesday: Ping An Bank, Thales, Adidas, Geberit Thursday: CATL, Deutsche Post, JD.com Friday: Daimer Truck, AIA Group, Oracle, DiDi Global Economic calendar highlights for today (times GMT) 1500 – US Fed Chair Powell before Senate Banking Panel 1700 – EIA's Short-term Energy Outlook (STEO) 1730 – Switzerland SNB President Jordan to speak 1800 – US Treasury to sell 3-year Notes 2130 – API's Weekly Crude and Fuel Stock Report 2155 – Australia RBA’s Lowe to speak   Source: Global Market Quick Take: Europe – March 7, 2023 | Saxo Group (home.saxo)
Navigating Inflation and Central Bank Meetings: Assessing Rate Hike Odds

Tyler Perry Has Expressed Interest In Acquiring A Majority Stake Of Bet Media Group

Kamila Szypuła Kamila Szypuła 07.03.2023 10:32
The market of streaming platforms is developing, and with it the interest in the shares of these companies is growing. Tyler Perry and Paramount Talks between Perry and Paramount come as the company is considering selling a majority stake in BET Media Group, which includes cable channels BET and VH1. Perry and Paramount have a long-term relationship. The media mogul, which has its own production studio, has an overall deal to develop programming for Paramount and also has a minority stake in Paramount's BET+ streaming service. The potential sale of a portion of the unit, which is intended primarily for a black audience, is part of the entertainment giant's efforts to bolster resources to bolster its flagship streaming service Paramount+ and advertiser-backed free-to-play streaming platform Pluto TV. Perry is a prolific producer who has created over a dozen television series and over 20 movies. His credits include the "Madea" film series and TV shows such as "Sistas" and "Meet the Browns". While BET and its BET+ streaming service have strong brands, it would be difficult to fold the service into Paramount+ as Mr. Perry owns a minority stake in the streaming platform, said people familiar with the matter. If the company sells the shares, it intends to maintain a commercial relationship with BET. Paramount Paramount had approximately 56 million Paramount+ subscribers as of December 31, and another 21.4 million subscribers to smaller subscription streaming services such as the Showtime and BET+ streaming service. The company does not disclose data on the number of BET+ subscribers. Moreover, earlier this year, the company decided to move its Showtime streaming service to Paramount+ and rename Showtime's premium channel "Paramount+ With Showtime." Rejected offer David Nevins offered to buy Showtime for over $3 billion in recent weeks, but was rejected by Paramount executives. Nevins, an experienced entertainment executive, offered to buy Showtime shortly after leaving Paramount Global, where he was president and CEO of Paramount Premium Group and creative director of storyboards for Paramount+. Nevins' approach, which was supported by private equity firm General Atlantic was the last of many offers Paramount had received for Showtime over the past few years. Paramount has decided to keep the premium channel and streaming service while seeking savings and revenue from moving its Showtime streaming service to Paramount+ this year. Other suitors include Mark Greenberg, another former Showtime executive. Greenberg recently expressed interest in buying Showtime, but according to some people, the talks were not moving forward. People said this wasn't the first time Greenberg had taken this approach: About two years ago, Greenberg offered around $6 billion for Showtime in a deal backed by Blackstone Inc. Lions Gate Entertainment has also approached Paramount over Showtime's merger with Starz in recent years. Paramount share prices Since the beginning of this year, Paramount's shares have been on the rise, and in January they exceeded 20.00. At the beginning of February, the shares exceeded 25.00, but it did not manage to rise. Most recently, stock prices closed above 20.00 at 22.04. Source: wsj.com, finance.yahoo.com
Australian dollar - the sharp drop can be attributed to technical factors and hawkish Fed

RBA hikes, Aussie Falls, Chinese Stocks Under Pressure

Swissquote Bank Swissquote Bank 07.03.2023 10:46
Disenchanting growth target from China was expected to keep the oil bears in charge of the market, but the 100-DMA got surprisingly cleared to the upside yesterday. Forex Stocks closed flat and the dollar softened. The Aussie fell after the Reserve Bank of Australia (RBA) announced 25bp hike and the EURUSD flirted with the 1.07 mark. Fed Today, all eyes and all ears are on Federal Reserve (Fed) Chair Jerome Powell and what he thinks about the latest set of economic data. Since the latest FOMC meeting, we saw a blowout NFP number, an uptick in inflation figures, lower-than-expected decline in the S&P500 earnings, and overall encouraging economic activity data. The S&P500 is above 4000 into Powell’s testimony, and the dollar is soft. Could Jay Powell reverse that? Watch the full episode to find out more! 0:00 Intro 0:38 Chinese stocks under pressure, US stocks zen pre-Powell 3:02 Powell will sound hawkish but investors may chose not to listen 6:24 US crude clears 100-DMA resistance 9:00 FX update: RBA hikes, Aussie falls, dollar bulls in retreat Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #Powell #testimony #inflation #jobs #economic #data #China #growth #target #energy #crude #oil #RBA #rate #decision #USD #AUD #EUR #XAU #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH      
China’s Foreign Minister Qin Gang Downplayed Russia’s Invasion Into Ukraine

China’s Foreign Minister Qin Gang Downplayed Russia’s Invasion Into Ukraine

Saxo Bank Saxo Bank 08.03.2023 08:29
Summary:  Equities tumbled as 2-year Treasury yields surged above 5% and dollar reached its YTD high on Powell opening the door for a bigger rate hike and a higher terminal rate. As risk sentiment deteriorated, AUD was a notable underperformer with RBA also going for a dovish hike. CAD in focus today with Bank of Canada expected to pause. China import data also remained mixed, and oil prices slumped by over 3% while Copper broke below the key $4 mark.   What’s happening in markets? S&P fell below 4000 after Powell’s testimony The Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) retreated following Jerome Powell’s testimony to the Senate. Powell warned that the FOMC would probably hike rates more and possibly faster than previously anticipated, given the latest data has come in stronger than expected. The S&P 500 fell 1.50% to 3986, below the 4000-handle and the benchmark’s 50-day moving average, while the Nasdaq 100 lost 1.2%. Rivian (RIVN:xnas) plunged 14.6% after the EV maker announced a private offering of USD1.3 billion convertible notes. Tesla (TSLA:xnas) shares fell over 3.2% and Apple (AAPL:xnas) lost 1.5%. Facebook’s parent Meta Platforms (META:xnas) closed almost steady after it was reported the social media giant plans another round of layoffs that could affect thousands of workers. Meanwhile, in Europe, stock markets also closed in the red - the benchmark Euro Stoxx 600 fell 0.8% with Santander being one of the worst performers, losing 2.4% most despite the business moving to target institutional clients. 2-year US Treasury yield jumped above 5%, for the first time since July 2007 Following Fed Chair Powell opening the door for a 50bp rate hike at the March FOMC meeting, investors sold the front-end of the Treasury curve and saw the 2-year finishing the session at 5.01%, the highest level since July 2007. The longer end of the curve, however, recovered from their intraday lows with the 10-year yield closing only 1bp cheaper at 3.96% and the 30-year yield 2bps richer at 3.87%. The 2-10-year yield curve flattened to -105bps, the deepest inversion since September 1981. The interest rate futures are pricing an over 60% chance for a 50bp rate hike at the next FOMC and a terminal rate at around 5.64% by September this year. The USD 40 billion 3-year auction went well with strong demand. Hang Seng Index and China’s CSI 300 dropped as SOE telcos rally faded to reverse lower After the follow-through rally, n central-government-owned enterprises in Hong Kong and mainland bourses in the telecommunication space lost steam, and the Hang Seng Index and CSI 300 dropped 0.3% and 1.5%. China Telecom (00728:xhkg) slid 4% and China Mobile (00941:xhkg) retreated 2.7%. China Tower came down 2.1%, paring some of the strong gains yesterday. On the other hand, SOE oil and gas giants managed to sustain gains and finish Tuesday higher with PetroChina (00857:xhkg) up 4.4%, Sinopec (00386:xhkg) up 4.2%, and CNOOC (00883:xhkg) up 3.3%, Chow Tai Fook (01929:xhkg) plunged 6% following the departure of the jeweller’s mainland operation chief. SJM (00880:xhkg) slid 4.1% after the loss widened to HKD7.8 billion in FY22. Australian equities slide after Powell’s comments Despite the RBA today suggesting it is at a closer point of pausing rate hikes, the Australian share market’s benchmark, the ASX200 has fallen 0.93% - taking it below its 50-day moving average. The pressure on Aussie market comes after Fed Chair Powell gave hawkish remarks to the US Senate – the FOMC would possibly hike rates faster than previously anticipated. Some of the day’s laggard on the ASX include Woodside (WDS) which has fallen 1.8% after going ex-dividend. BHP and Rio Tinto down by 0.5% ahead of going ex-dividend tomorrow. For what ex-dividend means for investors and traders, click here for possible implications. Despite the overall tone being negative today – as set by the Fed - the best performing companies are those that are benefiting and are likely to continue to benefit from China’s reopening  - with Qantas and Webjet trading over 1.4% higher, with Webjet hitting a 52-week high of $7.01. US dollar notches its biggest gain in a month. The Aussie dollar sinks over 2% After Powell said the US central bank is likely to raise rates higher than previously thought, the US dollar index surged to a fresh cycle high, moving back to levels not seen since December. That resulted in the Aussie dollar tumbling over 2%. Compounding on the AUD pressure, the RBA Governor said today, it is closer to where it's appropriate to pause rate rises. This comes just a day after Australia’s central Bank hiked interest rates for the 10th straight meeting, taking the cash rate to 3.6%. The RBA said monthly inflation had ‘peaked’, goods prices were expected to moderate in the months ahead, and the Bank alluded to services inflation being only temporary. Futures markets now suggest Australia’s cash rate could peak at 4% in September. The Aussie dollar against the US (AUDUSD) trades at 0.6585. Further declines could see the pair move to the next support level, at perhaps the 0.649 level. FX: JPY descent continues; CAD in focus With Powell’s hawkish remarks, 2-year Treasury yields jumped over 5% after a 12bps gain and the USD was pushed to fresh YTD highs. AUD and NZD were hurt by the deterioration in risk sentiment, with the former also pressured by a dovish turn from the RBA. Widening yield differential between US and Japan weighed on the yen, and USDJPY was seen testing 137.50 in the Asian morning session despite volatility risks from the Bank of Japan meeting scheduled on Friday. GBPUSD broke below the 200DMA to reach YTD lows, with BOE’s Mann commenting that sterling could weaken further. EURUSD dropped below 1.06 paring some of the hawkish ECB Holzmann reaction earlier in the week. CAD could be in focus today with a potential pause coming from BOC (read below), with USDCAD likely to take a look at 1.38+ levels. Crude oil drops over 3% on hawkish Powell After touching the top of the recent range, crude oil prices slid on Tuesday as Powell hinted at bigger and longer rate hikes, raising concerns of demand weakness. This comes along with a weaker-than-expected growth target from China for this year which continues to limit the optimism on Chinese demand recovery. Meanwhile, short-term supply concerns are subdued. OPEC Chief Haitham Al-Ghais also said that slowing oil consumption is US and Europe poses a concerns for the market, despite strong growth from Asia. EIA also released its short-term energy outlook and lowered its crude oil production forecasts for US supply for both this year and next amid signs of subdued growth and higher costs. WTI prices touched lows of $77 while Brent was back at $83 from $86+ earlier. Copper broke below $4 mark Base metals were broadly pushed lower on Tuesday as dollar surged to fresh YTD highs on remarks from Powell’s testimony opening the door for a bigger hike in March and a higher terminal Fed funds rate. China import data also gave mixed signals on the first two months of the year, with mined copper ore imports increasing but inflows of refined copper declining. Supply constraints from Peru also seemed to ease as the Peruvian government expects shipments of copper and zinc will normalise with days, following months of social unrest prompted by the impeachment of former President Pedro Castillo. Copper prices fell 2.8% to close below the $4 mark, bringing last week’s low of $3.93 and the 100DMA at $3.86 into focus. What to consider? Powell’s testimony opens the door to a 50bps rate hike in March Fed Chair Powell, in his prepared remarks to Congress, said if incoming data indicates faster tightening is required, the Fed is prepared to increase the pace of rate hikes, warning that the ultimate level of interest rates is likely to be higher than previously anticipated given the string of hot January data. This is another signal that March dot plot could see an upward shift. Not just that, but Powell has also opened the door to a 50bps rate hike in March and market pricing has shifted more in favor of a bigger hike on March 22. Terminal rate expectations have shifted higher to 5.63% from 5.48% previously. Remarks brought the 2-year yields above 5% and the deepest inversion in the 2-10 year yield curve. China’s exports and imports dropped further in February China’s exports fell 6.8% Y/Y and imports dropped 10.2% in February. The larger-than-expected decline in imports was partially due to the fall in commodity prices while commodity import volume grew. China to establish the Ministry of Science and Technology and the National Data Bureau At the National People’s Congress, China announced the establishment of the Ministry of Science and Technology to promote innovation in technology, the National Financial Regulation Bureau to replace the China Banking and Insurance Regulatory Commission (CBIRC) and take over from the People’s Bank of China the regulation of financial holding companies and from the China Securities Regulatory Commission investor protection, and the National Data Bureau to promote the development of the digital economy. The overhaul of the financial regulatory authorities, as we noted in our Two Sessions preview, is to strengthen the Chinese Communist Party’s leadership in the institutional setup, the division of functions, governance. China’s Foreign Minister reaffirmed the strategic partnership with Russia In a press conference on the side-line of the Two Sessions, China’s Foreign Minister Qin Gang reiterated the “China-Russia comprehensive strategic partnership of coordination for a new era” and downplayed Russia’s invasion into Ukraine to that the “Ukraine cries has complex historical fabrics and practical reasons with the underlying nature being the eruption of the conflicts in the security governance of Europe”. The pro-Russian stance, as opposed to the more conciliatory-leaning stance in recent months toward the West, added to investors’ concern over the Sino-American relationship. The Bank of England (BoE) worries about core inflation Yesterday, BoE’s Catherine Mann, former Global Chief Economist at Citibank, expressed concerns about the persistence of core inflation in the United Kingdom. It is currently running at 5.80% year-over-year versus a long-term average of 1.84%. Mann embraced a hawkish tone, highlighting the need for further interest rate hikes. She indicated that the terminal rate is beyond forecast horizon now. The monetary market forecasts it will be at 4.75 %. This implies three consecutive hikes of 25 bp in March, May and June. She also mentioned that the evolution of the sterling plays a very important role for monetary policy due to the high levels of imports. Despite worries about the state of the UK economy, the sterling has been rather resilient this year. It is down only 0.47% against the euro YTD. Most economists still expect the UK economy will go through a period of recession in 2023 (drop of GDP estimated at 0.6%). But a minority of them even expect the UK economy could avoid a recession if the decrease in energy prices continues. This is quite a change compared to forecasts initially released at the end of 2022. Iron ore price steady ahead of peak Chinese construction season Iron ore  - the steel-ingredient is trading slightly lower today, down 0.2% at $126.75, but holds around 2023 highs, after its price rose 2.1% yesterday. China is expected to increase demand - as it usually does ahead of China’s peak construction season. Around this time of year, steel mills typically start restocking iron ore, ahead of building work ramping up amid supportive weather. Adding to sentiment, yesterday Rio Tinto (RIO) said it’s seeing good demand from China - with the country shaking off pandemic restrictions. BHP and Rio go ex-dividend tomorrow, March 9. For implications of ex-dividends click here.   Bank of Canada meets next After RBA’s dovish hike, the stage is set for the Bank of Canada to pause on its tightening cycle at the meeting today. In light of the weaker-than-expected data and BOC’s signal from the January meeting, market is not expecting any rate hikes today although the message is likely to convey policy flexibility. Read our full preview here to know what it means for the CAD as the divergence of BOC to the Fed widens. Investing with a Gender Lens Gender Lens Investing is a strategy which puts weight on gender-based considerations in your investment decisions, so you can in some way contribute towards efforts to close the “gender gap”. As today is the International Women’s Day, we explore why and how we can invest with a gender lens in this video. We also look at some ETFs and Saxo's Women in Leadership equity theme basket which can help you get exposure to this theme. Here’s wishing everyone a very happy International Women’s Day from Saxo   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Global Market Quick Take: Asia – March 8, 2023 | Saxo Group (home.saxo)
The ECB's Rate Hike: EUR/USD Rally in Question

Adidas Shares Are Down 3%, Gold And Silver Slumped

Saxo Bank Saxo Bank 08.03.2023 09:33
Summary:  Equity markets sold off steeply on a hawkish Fed Chair Powell, who testified before a Senate panel yesterday, and said that the Fed is willing to consider larger hikes again. Market pricing of peak Fed rates rose above 5.6% as the market now leans for a 50 basis point hike at the March 22 meeting. The US dollar was particularly reactive to Powell’s testimony, jumping to aggressive new highs for the cycle across the board. What is our trading focus? US equities (US500.I and USNAS100.I): fresh hawkish pivot from Powell reverses rally US equities turned sharply south yesterday on a hawkish pivot from Fed Chair Powell as he is clearly not comfortable with the most recent data. This took the 2-year rate above 5% for the first time in over 15 years and reversed the recent market rally, taking the S&P 500 back below the 4,000 level, though with some ways to go before the 200-day moving average comes into view just below 3,950. The Nasdaq 100 likewise reversed course, but is far more elevated relative to recent lows and the 200-day moving average – with the cash index trading 12,150, some 250 points above the moving average. Incoming US data and its impact on Fed expectations and especially longer yields will be key through next Tuesday’s US February CPI data. Hang Seng Index and CSI 300 declined on regulatory overhaul and US rates outlook Hang Seng Index dropped by 2.7% and the Hang Seng TECH Index plunged by nearly 4%. EV and China Internet stocks led the charge lower. In A-shares, CSI300 slid nearly 1%. On top of the tighter U.S. interest rate outlook stemming from Fed Chain’s Powell’s testimony, the establishment of the National Financial Regulation Bureau and the National Data Bureau and the consolidation of power around them may have stirred up concerns about uncertainty in the mind of investors about the regulatory trend on areas such as mobile payment and e-platform data.  FX: USD rips higher on hawkish Powell. CAD in focus on Bank of Canada meet today With Powell’s hawkish remarks, 2-year Treasury yields jumped some 13 basis points to close above 5% for the first time since 2007 and the USD rushed to fresh YTD highs. AUD and NZD were hurt by the deterioration in risk sentiment, with the former also pressured by a dovish turn from the RBA. Widening yield differential between US and Japan weighed on the yen, and USDJPY pierced above 137.50 in the Asian session despite volatility risks from the Bank of Japan meeting scheduled on Friday. GBPUSD broke below the 200DMA to reach YTD lows in the low 1.1800’s, with BOE’s Mann commenting that sterling could weaken further. EURUSD dropped below 1.0550, paring the hawkish ECB Holzmann reaction earlier in the week. CAD will be in focus today after the Bank of Canada trid to position for a tightening pause at its most recent meeting (read more below), with USDCAD likely to take a look at 1.38+ levels if the BoC doesn’t shift hawkish in line with the Fed. Gold and silver slump on Powell warning Gold and silver slumped after Fed Chair Powell, in his prepared remarks to Congress, said the Fed was prepared to increase the pace of rate hikes and to a higher-than-expected level should incoming data continued to show strength. Terminal Fed rate expectations shifted higher to 5.66% with the market pricing in a 60% risk of a 50 bp move at the March meeting. Across market risk appetite tumbled with the selloff in metals being led by silver’s 4.6% slump to a four-month low near $20.  Gold meanwhile has given back most of last week's bounce and following the failure to challenge resistance at $1864 and gain a foothold above the 21-DMA, the market is once again looking for support in the $1800 area ahead of $1775, the 200-DMA. With Powell signalling an incredible data dependency, the focus now turns to Friday’s job report. Crude oil drops over 3% on hawkish Powell Crude oil made an abrupt turnaround from a three-week high on Tuesday with growth and demand concerns taking center stage after Powell signaled his determination to fight inflation with more rate hikes. The most inverted US yield curve in decades now signals an even bigger risk of a recession and with that weakening demand for fuel. Together with China’s lower than expected growth target and OPEC Chief Haitham Al-Ghais seeing slowing oil consumption in US and Europe, both WTI and Brent dropped towards support at the lower end of their current ranges, in Brent at $81.30 and WTI at $73.50.  EIA also released its short-term energy outlook and lowered its crude oil production forecasts for US supply for both this year and next amid signs of subdued growth and higher costs. Copper trades back below the $4 mark Base metals were broadly pushed lower on Tuesday as the dollar surged to fresh YTD highs on remarks from Powell’s testimony opening the door for a bigger hike in March and a higher terminal Fed funds rate. China import data also gave mixed signals on the first two months of the year, with mined copper ore imports increasing but inflows of refined copper declining. Supply constraints from Peru also seemed to ease as the Peruvian government expects shipments of copper and zinc will normalise with days, following months of social unrest prompted by the impeachment of former President Pedro Castillo. Copper trades back below $4, bringing last week’s low of $3.93 and the 200DMA at $3.77 into focus. US Treasury yield curve sees next extreme in inversion. (TLT:Xmas, IEF:xnas, SHY:xnas) Fed Chair Powell’s surprisingly explicit rhetoric on the willingness to consider hiking by larger amounts again shocked the 2-year Treasury yield some 13 basis points higher with yields following through a few bps higher still in overnight trading. The 10-year yield only edged a few basis points higher and is still stuck near 4.00% this morning, which means the yield curve inversion has reached its deepest level yet for the cycle and sinc 1981 at below –105 basis points. The 3-year auction yesterday showed strong demand.  A 10-year auction is up today. What is going on? Powell’s testimony opens the door to a 50 bps rate hike in March Fed Chair Powell, in his prepared remarks to Congress, said that if “the totality” of incoming data indicates faster tightening is required, the Fed is prepared to increase the pace of rate hikes, warning that the ultimate level of interest rates is likely to be higher than previously anticipated given the string of hot January data. This is another signal that March “dot plot” of Fed rate forecasts could see an upward shift for this year and next. Powell even explicitly said that a 50-bp rate hike in March is possible and market pricing has shifted to favouring a bigger hike on March 22. Terminal rate expectations have shifted higher to 5.63% from 5.48% previously. Remarks brought the 2-year yields above 5% and the deepest inversion in the 2-10 year yield curve. Adidas cuts dividends and confirms uncertain outlook Adidas shares are down 3% in pre-market trading as the German sports retailer reports Q4 revenue of €5.2bn vs est. €5.3bn and operating loss of €724mn vs est. €717mn in addition to cutting 2022 dividend to €0.70 vs est. €1.64. The key questions remain for Adidas of whether China growth can come back, what to do with the Yeezy inventory of sneakers and clothes, and finally is the brand impacted so much that the turnaround case will take longer than estimated. Investing with a Gender Lens Gender Lens Investing is a strategy which puts weight on gender-based considerations in your investment decisions, so you can in some way contribute towards efforts to close the “gender gap”. As today is the International Women’s Day, we explore why and how we can invest with a gender lens in this video. We also look at some ETFs and Saxo's Women in Leadership equity theme basket which can help you get exposure to this theme. Here’s wishing everyone a very happy International Women’s Day from Saxo What are we watching next?  Bank of Canada meets next After RBA’s dovish hike, the stage is set for the Bank of Canada to pause on its tightening cycle at the meeting today. In light of the weaker-than-expected data and BOC’s signal from the January meeting, market is not expecting any rate hikes today although the message is likely to convey policy flexibility. Read our full preview here to know what it means for the CAD as the divergence of BOC to the Fed widens. More Powell today. Next US macro data and Bank of Japan loom After Powell surprised yesterday, the incoming data will need to support the market’s shift to a more hawkish stance, with potential for a further cementing of a 50 basis point move at the March 22 FOMC meeting possible on uniformly hot data (currently just above 40 basis points priced for March 22). Today we will get the February ADP payrolls change number and January JOLTS job openings data (together with some revisions of prior data), but these weigh less heavily than the official jobs report on Friday. Easily as important, the US February CPI data is up next Tuesday and will likely prove the arbiter of whether the Fed moves 50 basis points at the meeting. In the meantime, the global lift in yields is piling pressure on the yen this week, and on the Bank of Japan to shift away from its yield-curve-control policy ahead of its meeting this Friday, which will be the final meeting with Kuroda at the helm before he leaves early next month. Earnings to watch There are on US earnings releases today of importance. The market will focus on Adidas earnings (see review above) and then focus on earnings tomorrow from CATL and JD.com.  Wednesday: Ping An Bank, Thales, Adidas, Geberit  Thursday: CATL, Deutsche Post, JD.com  Friday: Daimer Truck, AIA Group, Oracle, DiDi Global  Economic calendar highlights for today (times GMT)  1000 – ECB President Lagarde to speak 1315 – US Feb. ADP Employment Change 1330 – US Jan. Trade Balance 1330 – Canada Jan. International Merchandise Trade 1500 – Canada Bank of Canada decision 1500 – US Fed Chair Powell to testify before House Panel 1500 – US Jan. JOLTS Job Openings 1530 – EIA's Weekly Crude and Fuel Stock Report 1700 – USDA's World Agriculture Supply and Demand Estimates (WASDE) 1800 – US 10-year Treasury Auction 1900 – US Fed Beige Book 0001 – UK Feb. RICS House Price Balance 0130 – China Feb. CPI/PPI Source: Global Market Quick Take: Europe – March 8, 2023 | Saxo Group (home.saxo)
Starbucks is moving forward with its web3 journey, as the company teases public access to Starbucks Odyssey

Conflict Between Starbucks And US Baristas Is Developing, Howard Schultz To Testify Before Senate Committee

Kamila Szypuła Kamila Szypuła 08.03.2023 11:29
There is an increase in support for workers' organizations. Baristas voted to form the first union in one of the US coffee giant's 50-year history. The vote was a success for employees, and Starbucks has struggled ever since. Schultz vs Sanders Starbucks interim chief executive Howard Schultz has agreed to testify before a Senate committee over an 18-month standoff between the company and American baristas seeking to unionise. Sanders, an independent who is chairman of the Committee on Health, Education, Work and Pensions, accused the company of disregarding federal employment law, allegations the company denies. Sanders claimed that Starbucks under Schultz "did everything possible to prevent" unionization and collective bargaining. The company and Starbucks Workers United have held dozens of store-level negotiation sessions since October last year, but have yet to agree on a deal. Both sides said they remained in disagreement over how negotiations should take place. Sanders has criticized Starbucks for not yet ratifying a union agreement in any of its stores and wants his committee to investigate Starbucks' employment law practices. Starbucks said in a letter to the committee last week that Schultz delegated decisions on union matters to a circle of executives and instead focused on the company's broader recovery plan. Unionization at Starbucks The push for unionization at Starbucks first appeared in Starbucks stores in Buffalo, New York in August 2021 and has spread nationwide. The union action had preoccupied Starbucks executives for months and attracted the attention of chain employees outside of Buffalo. One Starbucks store in Mesa, Arizona, filed a petition to unionize in November 2021, supporting baristas working with the same Workers United union and claiming to be inspired by Buffalo's effort. The result was a victory for coffee shop workers who petitioned for a union vote in August 2021 to have a direct negotiating channel with the company, and a blow to Starbucks, which spent months urging Buffalo-area baristas to vote against it. At Starbucks, baristas asked for better working conditions, as well as higher pay and more benefits. Starbucks has asked its nearly 250,000 baristas in U.S. branded stores to stick to the chain and address their concerns, not form unions. Last year, the company said it was increasing wages and benefits for U.S. baristas, but cut benefits for workers at stores that didn't vote to unionize. The pace of new union petitions at Starbucks has slowed since the first half of 2022. Since last July, the National Labor Relations Board, the federal body that oversees unionization in private companies, has registered about 11 union petitions a month from Starbucks stores, according to agency records. Complaints against Starbucks Starbucks said it had filed around 90 allegations of unfair labor practices against Workers United in response to problems arising from negotiation sessions with unions and baristas. Meanwhile, the NLRB issued 81 complaints against Starbucks over allegations that the coffee giant broke federal labor laws. The company denied that it had broken rules overseeing union organizing and said it respected workers' right to organize. Starbucks share prices Since November 2022, the shares of the giant coffee - Starbucks have increased significantly from 84.68 to above 100.00. In February, the stock was close to 110.00, but since the second half of February it has fallen below 105.00. Most recently, the stock closed at 103.34. Source: wsj.com, finance.yahoo.com
Lagarde's Dilemma: Balancing Eurozone's Slowdown and Inflation Pressure

S&P 500 And NASDAQ Composite Rose, Only Dow Jones Fell

InstaForex Analysis InstaForex Analysis 09.03.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones fell 0.18%, the S&P 500 rose 0.14% and the NASDAQ Composite rose 0.40%. Fed chief Jerome Powell said the regulator will continue to raise the discount rate in the fight against inflation. According to CME Group, most analysts now expect the regulator to raise the discount rate immediately by 0.5 percentage points, to 5-5.25% per annum. Dow Jones Shares of Intel Corporation led the way among the components of the Dow Jones index today, which gained 0.45 points (1.76%) to close at 25.98. Quotes of Caterpillar Inc rose by 2.58 points (1.05%), closing the session at 248.72. Home Depot Inc rose 2.88 points or 1.00% to close at 291.49. The least gainers were Merck & Company Inc, which shed 2.99 points or 2.69% to end the session at 108.28. The Travelers Companies Inc (NYSE:TRV) was up 2.60 points or 1.44% to close at 177.77, while Verizon Communications Inc was down 0.38 points or 1.00%. and finished trading at 37.53. S&P 500  Leading gainers among the components of the S&P 500 in today's trading were Advanced Micro Devices Inc, which rose 3.97% to hit 85.37, Arista Networks, which gained 3.90% to close at 148.44, and also shares of NVIDIA Corporation, which rose 3.83% to end the session at 241.81. The least gainers were Norwegian Cruise Line Holdings Ltd, which shed 4.20% to close at 15.29. Shares of Brown Forman lost 4.20% to end the session at 63.48. Regeneron Pharmaceuticals Inc fell 3.70% to 745.20. NASDAQ Leading gainers among the components of the NASDAQ Composite in today's trading were Kimball International Inc, which rose 84.35% to hit 12.37, Castor Maritime Inc, which gained 75.93% to close at 0.95, and also shares of Maxeon Solar Technologies Ltd, which rose 44.00% to close the session at 27.00. The least gainers were SRAX Inc, which shed 62.03% to close at 0.60. Shares of Intelligent Bio Solutions Inc shed 42.66% to end the session at 3.40. Quotes of ETAO International Co Ltd decreased in price by 40.75% to 1.89. Numbers On the New York Stock Exchange, the number of securities that rose in price (1564) exceeded the number of those that closed in the red (1446), while quotes of 111 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,934 stocks fell, 1,682 rose, and 194 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, fell 2.40% to 19.12. Gold Gold futures for April delivery lost 0.10%, or 1.75, to hit $1.00 a troy ounce. In other commodities, WTI April futures fell 1.37%, or 1.06, to $76.52 a barrel. Brent oil futures for May delivery fell 0.94%, or 0.78, to $82.51 a barrel. Forex Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.01% to 1.05, while USD/JPY rose 0.13% to hit 137.32. Futures on the USD index rose 0.05% to 105.64.   Relevance up to 03:00 2023-03-10 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315420
EUR/USD Analysis: Continuing Corrections Amidst European Economic Woes

Nasdaq 100 Index Has The Potential To Appraciated Upward

InstaForex Analysis InstaForex Analysis 09.03.2023 08:07
If we look at the daily chart of Nasdaq 100 Index then there will be a few interesting things: 1. The appearance of deviation between price movement with Stochastic Oscillator indicator. 2. Price movement which still moves above its MA 50. 3. The appearance of Bullish Continuation Descending Broadening Wedge pattern. Based on those facts in a few days ahead, #NDX has the potential to appraciated upward up to the level 12880,5 particularly if the Bullish Orderblock level 12131,6 able to be a strong support level however if not, then please look at the level 11821,3 because if this level successfully broken downward then all the Bulls scenario that has been described before will become invalid and cancel by itself. (Disclaimer)       Relevance up to 03:00 2023-03-12 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/120935
The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

The Bank Of Canada Paused Rates Hiking, The ADP Employment Report Had A 242K Increase In Jobs

Saxo Bank Saxo Bank 09.03.2023 08:16
Summary:  The ADP employment and JOLTS job opening numbers released on Wednesday leaned into the notion that the Fed can resume a faster pace. But it seems the market is coming to terms with the fact that interest rates will remain elevated as the VIX Index declined, and the US Dollar Index steadied manner. Ahead are CATL results, JD.com and DocuSign. The all-important jobs report on Friday and the U.S. CPI next week could bring about another round of market volatilities. Read on for more.   What’s happening in markets? US equities edged up modestly, digesting the message from Powell and job data The Nasdaq 100 (NAS100.I) gained 0.4% and S&P 500 (US500.I) inched up 0.1% on Wednesday, remaining calm to the hotter-than-expected ADP employment and JOLTS job openings data and Powell’s congressional testimony in his second day. The volume of 10.2 billion shares across U.S. exchanges was below average. As WTI crude fell by more than 1% to USD76.5, the energy sector was the biggest loser within the S&P500. Telsa (TSLA:xnas) slid 3%, following the National Highway Traffic Safety Administration highlighting potential issues in the EV maker’s Autopilot system and steering wheels that can detach on the Model Y SUVs. Campbell Soup (CPB:xnys) gained nearly 2% on earnings beat and sales increases. Crowdstrike (CRWD:xnas) rose 3.2%, paring some of the post-result after market gains the day before. In Europe, the STOXX Europe 600 finished the session flat. Yields on U.S. Treasuries moved higher on hot JOLTS job openings and a poor 10-year auction The Treasuries market did not act much to the hotter-than-expected ADP employment data and Powell’s second-day congressional testimony. Short-covering flows especially in the futures contracts drove the market higher and yields lower in the morning until selling emerged following the JOLTS job openings data which was stronger than estimates. Demand in the 10-year auction was weak as the auction stopped at nearly 3bps cheaper from the market level at the time of the auction and had a bid-to-cover ratio of 2.35, lower than 2.66 last time. The Treasury is auctioning USD18 billion of 30-year bonds today. The 2-year yield rose 6bps to 5.07% and the 10-year yield edged up 2bps to 3.99%, inverting the curve further to -109bps. Hang Seng Index and China’s CSI 300 decline on regulatory overhaul in China and U.S. interest rates Yesterday, the Hang Seng Index dropped by 2.4% and the Hang Seng TECH Index plunged by 3.2%.  EV and China Internet stocks led the charge lower. XPeng (09868:xhkg) plunged 7.1% and Li Auto (02015:xhkg) lost 6.3%. China internet names slid, with Alibaba (099088:xhkg), Meituan  (03690:xhkg) and JD.com (09618:xhkg) each down 3-4%. On top of the tighter U.S. interest rate outlook stemming from Fed Chain’s Powell’s testimony, the establishment of the National Financial Regulation Bureau and the National Data Bureau and the consolidation of power around them may have stirred up concerns about uncertainty in the mind of investors about the regulatory trend on areas such as mobile payment and e-platform data.  China telecommunication stocks were among the top gainers. China Unicom (00762:xhg) rose 3.5% after reporting Q4 earnings in line with estimates. TVB (00511) jumped 85% on Wednesday, following the Hong Kong TV broadcasting company holding its first live-streaming online shopping on the Taobao platform in mainland China. The 6-hour live-streaming session had around 4.85 million viewers. Over the past 4 sessions, the share price of TVB has gone up by 247%. In A-shares, the CSI300 finished 0.4% lower, clawing back most of the early losses, with telecommunication, defense, computing, media, and 6G concept names leading the rebound.  The US dollar consolidates, post-Powell gains The US dollar was little changed versus major currencies and was consolidating its strong gains after Powell’s first-day testimony the day before. USDJPY fell back below 107. Australia’s shares are under pressure as the heavy weights trade ex-dividend today BHP and Rio are trading ex-dividend, which is pressuring the equity market, while on the other side Myer shares jolted higher after the retailer declared a super-sized dividend. While accounting software company Xero also trades higher on announcing it will cut 800 jobs to improve its profitability. Meanwhile, in breaking news - part of the Aukus security partnership, Australia looks set to buy as many as five nuclear-powered Virginia class submarines from the US, with the submarine plan expected to be announced next week – when US President Joe Biden meets UK Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese  - as part of the 18-month old Aukus partnership. Gold ticks higher as the market digests the latest hawkish Fed commentary that could lead the US into a recession Gold advanced on Wednesday after slipping about 2% in the prior session  - gaining strength as the US dollar's rally cooled. Despite the stronger dollar overall, gold has found support in the $1800 area – driven by economic uncertainty and the probability of a recession creeping higher. We await Friday’s jobs report – given rates are expected to remain higher – weakness in the data on Friday may be a catalyst for the US dollar to take a step back, which could theatrically trigger upside in the precious metal.   What to consider? Bank of Canada kept rates unchanged The Bank of Canada (BOC) was the first major central bank to pause from hiking rates. As widely expected, The BOC kept the policy rate unchanged at 4.50% but the door is open to come back on the hiking track to fight inflation as the central bank dropped the forward guidance that it expects to hold the policy rate unchanged if the economy evolves in line with its outlook. Powell largely repeated his message on the second day of his testimony On the second day of his congressional testimony, this time to the House Financial Services Committee, Powell told lawmakers that no decision had yet been made on the size of the rate hike at the March FOMC while he reiterated that the Fed was likely to bring the policy rate higher than previously anticipated and could move at a faster pace. More hot job data coming out of the U.S. The ADP Employment report had a 242K increase in jobs in February, rising from 119K (revised from 106K previously reported) in January and way above the 200K consensus estimate. JOLTS Job Opening also came in stronger than expected at 10,824K (consensus estimate: 10,546K; January 11,234K). Europe leads Australia, with more females in executive roles. The US lags  Various studies have shown that gender diverse executive teams can outperform the overall equity market. So, for International Women’s Day we dissected the makeup of listed companies' executive teams. We found that Europe has the most female representation followed by Australia - with the US lagging. An astounding 33 companies in the Stoxx600 have executive teams that are made up of over 50% women. Healthcare company Halma - also in the Stoxx600 - has a 60% female executive team. While media business- Future PLC, takes the cake - with a 100% female executive team. Australia follows Europe with a high portion of diversity.  14 of the ASX200 companies have executive teams that are over 50% female lead. Gold mining giant- Newcrest Mining- has an 86% women executive team. What’s also pleasing to see is that the world’s biggest mining company, BHP has over 50% female representation on its executive leadership team. And lastly- in the US- in the S&P500, just five companies have executive teams that are made up over 50% women. That includes Bed & Body Work with its 60% executive team - being female. To explore this thematic further, refer to Saxo’s Women in Leadership equity basket.   China’s inflation is expected to slow in February The growth in CPI is expected to slow to 1.9% Y/Y in February from 2.1% in January and PPI to contract further to -1.3% Y/Y. Eyes on CATL’s growth and outlook CATL, the world’s largest battery maker - and Tesla’s battery supplier - reports results on Thursday. It’s expected to report revenue growth of over 80%. However, there is room for a positive surprise - given strong battery and energy storage demand. CATL is also expanding overseas - teaming up with Ford to build a battery manufacturing plant in Michigan, which we will hopefully get detail on. As for its outlook - we expect it to be strong, as CATL’s increased its war chest, after selling its $856 million stake in Australia’s biggest lithium company, Pilbara Minerals. We also think guidance could be upgraded - given auto sales in China are expected to rise in 2023, following years of lockdowns. CATL outlook’s will be closely watched by not only EV makers - but also by EV investors – as they could give a gauge on how much car maker’s battery costs could rise.   Other company reports to watch ahead include JD.com - a Chinese consumer spending bellwether and DocuSign- a covid-19 stalwart All eyes will be on JD.com, the Amazon equivalent in China. It could give further insight into Chinese consumers’ appetite post lockdown. And what they’re seeing in consumer spending ahead. It's also worth watching Saxo’s China Consumer and Technology basket of stocks. And in the US - DocuSign reports after the market close on Thursday – this will be interesting to watch as over the last two years DOCU has beaten EPS and revenue estimates. The electronic signature company raised full its guidance when it reported third-quarter results that topped expectations. It’s also joined the spate of tech companies making mass-layoffs and cut 10% of its employees.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast. Source: Global Market Quick Take: Asia – March 9, 2023 | Saxo Group (home.saxo)
Astonished by the week ahead? Barclays, NatWest Group and Microsoft earnings are also released shortly

Apple Reorganization From China To India, The Final Bank Of Japan Meeting With Kuroda At The Helm Ahead

Saxo Bank Saxo Bank 09.03.2023 09:13
Summary:  After Wednesday’s sentiment shock on hawkish Fed Chair Powell testimony, yesterday saw markets frozen in their tracks, awaiting key incoming data that will determine whether the Fed must continue turning the rate tightening screws, starting with the US February jobs data up tomorrow. In Asia’s Friday session tonight, we await the final Bank of Japan meeting with Kuroda at the helm before his exit next month. Will he surprise again as in December or leave the next steps in the direction of normalization for his successor? What is our trading focus? US equities (US500.I and USNAS100.I): more wait and see Following the big move in Tuesday’s session on Powell’s hawkish comments on policy rates and inflation yesterday’s session had much lower energy and ended with a small rebound in S&P 500 futures gaining 0.1%. Stronger than expected ADP job figures had a small initial negative impact as the jobs data continue to suggest a strong US labour market despite the higher interest rates underpinning the structurally higher inflation case. This morning the low energy in US equity futures continues and it feels like the equity market is back at the wait-and-see mode on inflation and the economy. As we have said before, it is the bond market that will dictate where equities go from here. If S&P 500 futures slips below Tuesday’s close, then the 3,950 level is the next level to watch and the approximate area for the 200-day moving average. Chinese equities (HK50.I and 02846:xhkg): oscillated in a lacklustre session Hang Seng Index and CSI 300 Index swung between small gains and losses. China’s CPI growth slowed to 1% Y/Y in February, much lower than the consensus estimate of 1.9%. Growth in food prices decelerated to 2.6% Y/Y from 6.2% Y/Y while growth in non-food prices halved to 0.6% Y/Y in February from 1.2% in January. PPI slide 1.4% Y/Y in February, bringing the producer prices deeper into deflation. Semiconductor Manufacturing (00981:xhkg) and Hua Hong Semiconductor (01347:xhkg) advanced, as investors expect the domestic chip making leaders to benefit from government policy initiatives and import substitution. COSCO China Shipping Energy Transportation (01138:xhkg) jumped 11.5% as investors anticipated the Chinese tanker and dry bulk shipping operator to benefit from recent rises in freight rates. FX: USD strength eases ahead of data. JPY firms. CAD weak on BoC The USD strength on the back of Fed Chair Powell testimony failed to find further momentum as the market awaits key incoming US data tomorrow (Feb. jobs report) and next Tuesday (Feb. CPI) for further conviction. With the rise in yields easing slightly, the JPY perked up after USDJPY failed to close above the 200-day moving average and as the market awaits a possible surprise from the outgoing Kuroda at tonight’s (Friday in Asia) Bank of Japan meeting (preview below). The Bank of Canada confirmed its prior guidance and did pause its rate tightening cycle at its meeting yesterday, continuing to signal a wait-and-see stance, which looks dovish in this environement. This saw CAD weak across the board yesterday, and USDCAD traded above 1.3800 at one point for the first time since November. Crude oil holds Powell-led losses, but support is not far away Crude oil futures remain stuck near a one-week low as the negative sentiment around further monetary tightening more than offset a surprise drop in US stocks, the first in ten weeks. Brent and WTI trade below their 21-day moving averages for a second day but the loss of momentum has yet to see either of them challenge trendline support, in Brent at $81.40 and WTI at $73.50. Rangebound for months and in no hurry to change that amid a balanced flow of supply and demand related news, the market is likely to pay close attention to the general level of risk appetite which is currently being dictated by the FOMC and its close attention to incoming data. With that in mind the next major market moving event is likely to be Friday’s US job report. Gold trades near key support on Powell’s higher, faster and longer threat Gold trades near support in the $1800 area as traders continue to digest Fed chair Powell’s comment on Capitol Hill that interest rates could go higher, faster and for longer. In the short-term with Powell signalling an incredible data dependency, the focus now turns to incoming US data, and ahead of Friday’s job report, another report showed US job openings drop to 10.8 million, still a number too high for the Fed. However, given the level of elevated rate hike expectation currently priced in, any weakness in incoming data may now trigger a stronger positive response than otherwise called for. Below the $1800 area the next level of interest is the 200-DMA at $1775. Yields on U.S. Treasuries moved higher on hot JOLTS job openings and a poor 10-year auction The Treasuries market did not react much to the hotter-than-expected ADP employment data and Powell’s second-day congressional testimony. Short-covering flows especially in the futures contracts drove the market higher and yields lower in the morning until selling emerged following the JOLTS job openings data which was stronger than estimates. Demand in the 10-year auction was weak as the auction stopped at nearly 3bps cheaper from the market level at the time of the auction and had a bid-to-cover ratio of 2.35, lower than 2.66 last time. The Treasury is auctioning USD 18 billions of 30-year bonds today. The 2-year yield rose 6bps to 5.07% and the 10-year yield edged up 2bps to 3.99%, inverting the curve further to -109bps. What is going on? The Netherlands proposing a chip gear export restriction to China As part of the US CHIPS Act the US pushing its trading partners to also restrict semiconductor technology to China which has hurt chipmakers including Nvidia. So far, the Dutch-based ASML, the world’s largest lithography machine makers for chip production, has said that those restrictions did not apply to them. However, non-compliance by ASML and other equipment makers would make it possible for China’s semiconductor industry to circumvent the intentions in the new US policy on semiconductors. Yesterday, the Dutch government announced that the Netherlands is proposing chip gear export restrictions to China and will include DUV (deep ultraviolet) lithography machines which are the most advanced machines for chip production. ASML says that the new export restrictions will not affect the 2023 outlook nor the long-term outlook, but the latter part might be a stretch and only time will tell. Apple to put more focus on India growth Apple is revamping its global sales unit shifting its focus to India from China with a new separate sales office and reporting line in India. This move follows the decision to increase production capacity of various Apple products to India from China underscoring the shifting geopolitical interest for the US and its corporate sector. With Apple being one of the most important companies in the US this is an important signal to other US companies about how to change global supply chains and where to get revenue exposure. WASDE adds further downside pressure on corn and wheat futures Chicago corn and not least wheat futures extended their slump on Wednesday after the USDA said domestic stockpiles rose by more than expected in response to lower exports. The agency also boosted the outlook for Ukraine corn exports while wheat, already under pressure from Russian sales and expectations the Ukraine grain corridor deal will be extended, dropped to an 18-month low after the agency raised production estimates for Kazakhstan, Australia and India. Soybeans meanwhile found support after the USDA slashed production from drought-stricken Argentina by more than expected. The world’s biggest exporter of soymeal and soyoil will harvest 33 million tons of beans this year, the smallest crop since 2011 and a 20% decline from its February estimate. More hot job data coming out of the US The ADP Employment report had a 242K increase in jobs in February, rising from 119K (revised from 106K previously reported) in January and way above the 200K consensus estimate. JOLTS Job Opening also came in stronger than expected at 10,824K (consensus estimate: 10,546K; January 11,234K). Bank of Canada confirms pause in rate tightening regime The Bank of Canada confirmed its guidance from the prior meeting and did not hike the policy rate yesterday, a particularly jarring divergence relative to the hawkishness we saw this week from Fed Chair Powell which has the market debating a re-acceleration in the pace of Fed hikes, and at a time when the ECB, for example, is priced to hike another 150 basis points or more this year. The Bank of Canada continues to expect that inflation in Canada will ease to “around 3%” by mid-year. The guidance on further in the policy statement remained unchanged: "Governing Council will continue to assess economic developments and the impact of past interest rate increases, and is prepared to increase the policy rate further if needed to return inflation to the 2% target.". One particularly complicating factor for the Canadian economy is the heavy load of private debt, much of it in mortgages, with a large minority of Canadians financing with adjustable rate mortgages and even fixed rate mortgages adjust their rate every five years, which will stress the budgets of a growing portion of Canadian households with every month that passes at the current yield levels – several multiples of where rates were for the 2020-2021 timeframe. Powell largely repeated his message on the second day of his testimony On the second day of his congressional testimony, this time to the House Financial Services Committee, Powell told lawmakers that no decision had yet been made on the size of the rate hike at the March FOMC while he reiterated that the Fed was likely to bring the policy rate higher than previously anticipated and could move at a faster pace. What are we watching next? Bank of Japan meeting tonight will be Kuroda’s last after 10 years as Governor Significant two-way volatility potential for the JPY tonight on the Bank of Japan meeting as the market well remembers the surprise decision from Governor Kuroda to expand the yield-curve-control “band” for 10-year Japanese Government bonds (really a cap in this era of higher interest rates) to +/- 0.50% from the prior 0.25%. One-week implied volatility in USDJPY options remains very elevated at almost 19% in anticipation of tonight’s decision and guidance, as the market is uncertain whether Kuroda might significantly tighten policy at his last meeting as a kind of declaration of victory on succeeding in bringing more sustained inflation to the Japanese economy, or whether he will leave the bulk of the tough process of policy normalization to his likely successor, Kazuo Ueda. USDJPY rose above its 200-day moving average this week at 137.20 and traded most of the way to 138, but has retreated this morning to well below 137.00. The market is only pricing a policy rate (the short rate) of positive 0.15% by the end of this year, versus –0.10% currently. More likely for the Bank of Japan to focus on loosening yield-curve-control for now rather than tinkering with the policy rate. Earnings to watch Today’s key earnings release to watch are CATL and JD.com which will provide fresh information from China’s corporate sector. JD.com is expected to report FY22 Q4 earnings before the US market open with analysts expecting revenue growth of 7% y/y down from 23% y/y a year ago, and EBITDA of CNY 8.06bn up from CNY 5.08bn a year ago. The outlook from JD.com matters a lot this time as it will reflect management’s confidence and expectations related to the Chinese reopening. CATL is expected to report sometime after the Chinese equity market close and is expected to report Q4 revenue growth of 87% y/y reflecting the strong demand for electric vehicles and batteries. Thursday: CATL, Deutsche Post, JD.com Friday: Daimer Truck, AIA Group, Oracle, DiDi Global Economic calendar highlights for today (times GMT) 1200 – Mexico Feb. CPI 1230 – US Feb. Challenger Job Cuts 1330 – US Weekly Initial Jobless Claims 1400 – Poland National Bank Governor Glapinski press conference 1530 – EIA's Weekly Natural Gas Storage Change 1800 – US Treasury to auction 30-year T-bonds 1845 – Canada Bank of Canada Deputy Governor Rogers to speak Asian session: Bank of Japan meeting   Source: Global Market Quick Take: Europe – March 9, 2023 | Saxo Group (home.saxo)
National Bank of Poland Meeting Preview: Anticipating a 25 Basis Point Rate Cut

Jpmorgan Seeks To Sever Ties With Former Executive Jes Staley With A Lawsuit

Kamila Szypuła Kamila Szypuła 09.03.2023 10:22
JPMorgan is seeking a break with former executive Jes Staley over his ties to Jeffrey Epstein. JPMorgan against Stanley JPMorgan Chase & Co. sued former executive Jes Staley over his ties to Jeffrey Epstein, identifying Staley as the “powerful financial executive” accused of sexual assault in a lawsuit against the bank. JPMorgan's lawsuit against Staley adds it to the woman's lawsuit and another Epstein-related case brought by the U.S. Virgin Islands. A legal maneuver allows the bank to argue that Staley should pay damages if the bank is held liable. The attempt to shift JPMorgan's attention to Staley marks a break with the former executive who rose to the top of the bank and was once considered a potential successor to CEO Jamie Dimon. The bank sought to have the lawsuits dismissed, saying it had no knowledge of Epstein's alleged crimes and could not be held accountable. The U.S. Virgin Islands lawsuit alleges that Staley vouched for Epstein as a client of JPMorgan when internal compliance specialists asked questions. The bank's compliance team repeatedly asked for assurances after Epstein was first charged with sex offenses in 2006, when he pleaded guilty to those charges in 2008. Brad Edwards, one of the lawyers representing the woman in the civil suit against JPMorgan, said the indictment "is a damning admission of wrongdoing on JPMorgan's part." Lawsuit The U.S. Virgin Islands are suing JPMorgan, alleging that the bank facilitated Epstein's alleged sex trade, including at his island home, allowing him access to bank accounts and authorizing wire transfers he used to pay young women. The lawsuit says the bank approved Epstein's payments to at least 20 young women or girls who were victims of Epstein. Late last year, an anonymous woman claimed that JPMorgan was helping Epstein with the sex trade by allowing him to remain a customer and helping him transfer money to victims of the deceased financier. A woman in her lawsuit against the bank said a friend of Epstein sexually assaulted her using aggressive force, but said she was afraid to identify him publicly. JPMorgan said it did not facilitate any possible crimes committed by Epstein. The bank said the U.S. Virgin Islands should have stopped Epstein. The lawsuit also alleges that Epstein wired money to a woman after Staley stayed at Epstein's residence in Palm Beach, Florida, and then again to the same woman when Staley told Epstein he would be in London. The lawsuit also alleges that Staley vouched for Epstein as a JPMorgan client when internal compliance officers asked questions. The bank's compliance team repeatedly asked for assurances after Epstein was first charged with sex offenses in 2006, when he pleaded guilty to those charges in 2008. JPMorgan said it cut off Epstein's accounts in 2013, shortly after Staley left the bank. The bank sought to have the lawsuits dismissed, saying it had no knowledge of Epstein's alleged crimes and could not be held accountable. Staley and Epstein Staley partnered with Epstein when he headed JPMorgan's asset management unit, which covers the company's operations serving wealthy clients. After leaving JPMorgan in 2013, Staley became the chief executive of British banking giant Barclays PLC. Resigned in November 2021 amid a UK regulatory investigation into whether the bank was telling the truth about his relationship with Epstein, who was accused of sex trafficking prior to his alleged suicide in 2019. Staley exchanged more than a thousand emails with convicted sex offender Jeffrey Epstein, some of which contained photos of young women in seductive poses, according to court documents. Staley maintained that he was friends with Epstein, but never knew of his alleged crimes. JPMorgan share price Since the beginning of the year, JP Morgan shares have been growing, exceeding the level of 140.00. Since early March, the stock has begun its decline and recently closed at 137.80. Source: wsj.com, finance.yahoo.com
UK PMI Weakness Supports Pause in Bank of England's Tightening Cycle

Chinese Inflation Slows, Powell Tried To Walk Back A Part Of His Hawkish Comments

Swissquote Bank Swissquote Bank 09.03.2023 10:36
We could see some relief, and correction after two difficult days for risk assets, but investors will likely refrain from opening fresh positions before Friday’s US jobs data, because only God knows what could happen when the data falls in. Risks are two-sided, as soft data could easily spur a risk rally. Watch the full episode to find out more! 0:00 Intro 0:42 Why European stocks should’ve reacted more to the hawkish Powell? 3:53 Powell’s attempt to cool Fed hawks was spoiled by fresh data 6:43 Catch your breath before Friday’s US jobs data 7:42 Wasn’t gold supposed to have a good year? 8:32 Crude oil sold after hitting 100-DMA 9:48 Chinese inflation slows… 10:09 The ’ TikTok bill Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #Powell #testimony #inflation #jobs #economic #data #USD #EUR #XAU #Crude #oil #Occidental #Petroleum #China #TikTok #ban #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
Astonished by the week ahead? Barclays, NatWest Group and Microsoft earnings are also released shortly

The US And India Are Looking To Sign Semiconductors Agreement

Saxo Bank Saxo Bank 10.03.2023 08:37
Summary:  U.S. banking stocks tumbled on Silicon Valley Bank’s liquidity crisis and bond portfolio losses as well as the winding-down of Silvergate Capital, a crypto-focused bank. The KWB Bank index tumbled 7.7%. Yields on the 10-year Treasuries dropped to 3.90%. All eyes today are on the Bank of Japan meeting and the U.S. employment report.   What’s happening in markets? US equities slide with banking stocks being heavily pressured Banks were front and center in yesterday’s sell-off in U.S. equities. Financials plunged 4.1% and were the biggest loser among the 11 S&P 500 sectors. The KWB Bank Index tumbled 7.7%, its biggest drop since June 2022. The S&P 500 broke below its 200-day moving average, a key support level, and ended 1.9% lower, while the Nasdaq 100 shed 1.8%. SVB Financial (SIVB:xnas), parent of Silicon Valley Bank, suffered a record 60% crash in share prices after the bank said it suffered from a liquidity crisis and sold off a swad of securities in a portfolio that’s been hit by significant losses. Silvergate Capital (SI:xnys) plunged 41.8% following the crypto-focused bank said that it was winding down and returning deposits to customers. Bank of America (BAC:xnys) plunged 6.2%; JP Morgan Chase (JPM:xnys) shed 5.4%. Oracle (ORCL:xnys) dropped 4.1% in extended-hour trading following reporting inline revenue and earnings beat but a miss in cloud license and on-premise license. Yields on U.S. Treasuries dropped on a spike in jobless claims and bank stocks woes A bounce in initial jobless claims to 211K (consensus 195K) from 190K triggered the short-covering in the front end ahead of the employment report which is scheduled to release on Friday. The buying intensified as banking stocks tumbled on woes on Silvergate Capital and SVB Financial. Large block buying emerged in the June 2023 SOFR contracts. Yields on the 2-year plunged 20bps to settle at 4.87%. The 10-year yield dropped 9bps to 3.90%. The 2-10-year yield curve steepened to -97bps, Hang Seng Index and China’s CSI 300 retreated as the Sino-American tech friction escalated Hang Seng Index dropped 0.6% and CSI 300 Index slid 0.4%. China’s CPI softened to 1% Y/Y and PPI declined 1.4% Y/Y in February did not excite investors with monetary stimulus expectations but added to the worries about the strength of the economic recovery in China. China consumer names were under selling pressure. Restaurant chains Xiabuxiabu (00520:xhkg) and Haidilao (06862:xhkg) plunged 7%  and 4.5% respectively. China Resources Mixc Lifestyle Services, a leading property management name, dropped 4.7% and was the biggest loser within the Hang Seng Index on Thursday. The latest announcement from the Netherlands to impose additional restrictions on exports of advanced microchip equipment to China and the U.S. moving close to banning TikTok caused concerns of escalation of the technology friction and geopolitical tension between China and the U.S. The Dutch company ASML is the world’s largest and most dominant supplier of advanced chip-making equipment including the immersion DUV lithography machines in the latest export ban. State-owned telcos continued to rise, with China Telecom (00728:xhkg) surging 4% and China Mobile (00941:xhkg) climbing 3.1%. COSCO China Shipping Energy Transportation (01138:xhkg) jumped 12.5% as investors anticipated the Chinese tanker and dry bulk shipping operator to benefit from increases in freight rates. In A-shares, consumer stocks were among the biggest losers with Chinese white liquor, retailer, catering, and tourism stocks leading the charge lower. Semiconductor names gained on anticipation of import substitution. Australian equities (ASXSP200.I) slide 1.6% on Friday, but are almost steady over the week Despite the S&P500 sliding 3% Monday to Thursday, the ASX200 is managing to hold almost steady, and is down 0.2% Monday to Friday (at the time of writing). Today most sectors are under water today, bar the defensive, Utility sector, while Financials down the most following alarm bells being rung in the banking sector on Wall Street. Pressure is also being felt in lithium stocks after CATL’s results beat expectations. Meanwhile BHP is trading 2% lower, despite the iron ore (SCOA) price moving up 1% to $129.10. FX: USD modestly weaker ahead of BOJ and NFP The rise in jobless claims on Thursday saw yields dipping lower, taking the dollar off the recent highs as well. The Japanese yen saw a recovery with lower yields, and focus now shifts to Bank of Japan meeting which can cause significant volatility. USDJPY finding support at 136 for now after reaching 3-month highs earlier this week on Powell’s hawkish testimony. GBPUSD rose back above 1.19 ahead of UK data dump today likely to show that a recession has been delayed, but focus will shift to NFP later as the key USD driver. CAD remained the underperformer, with USDCAD rising to 1.3830, as Fed-BOC divergence widened and oil prices remained weak. The choppiness in crude oil prices continued WTI prices ended the day below $76/barrel after touching highs of $78 earlier, while Brent dipped below $82 from $84 earlier. Even as the jobless claims data cooled, markets were in a flight to safety mode ahead of NFP as jitters on a tighter monetary policy remained. Demand concerns remained despite crude inventory recording its first weekly fall after several weeks of gains. EIA inventory report showed crude stocks down 1.7mn barrels last week vs. expectations of +1.6mn. Signs of a pickup in Chinese demand also remain mixed. The highs earlier in crude oil prices were reached on the back of supply concerns arising out of French refineries because of the nationwide strikes in France. Gold reverses back higher from support Gold caught a bid in the run upto the jobless claims release last night, reversing higher from near its support levels at $1800 to reach $1835. Focus turns to NFP today after Fed Chair Powell in his testimony this week opened the door to a 50bps rate hike in March. Now, data will need to confirm the need for that, else expectations may be quick to reverse. Support at 100DMA at $1806 remains key to hold.   What to consider? Jobless claims cool, focus now on NFP data today Initial claims rose 211k in the week of 4th March, above the 190k prior and the 195k expected. It was the first time that the jobless claims came above the 200k mark since January, and it was the highest claim YTD. The continued claims also rose to 1.718 mn from 1.649 mn, coming in above estimates as well. While this may have raised some concerns that the US labor market is softening, the print is still strong and eyes now turn to the February payrolls data out today in the US. Our full preview is here, which says that Overall message, despite a potentially softer headline print, is likely to be that US labor market is still tight and there are millions of open positions even as layoffs continue to ramp up in some of the sectors. Headline jobs are expected to come in again at 200k+, but risk of disappointment remains given the scope of correction from +517k in January. A strong print could further cement the case for a 50bps rate hike this month. SVB’s nosedive of 60% highlights the venture capital and tech bubble is spilling to banks- Is this just the beginning? Investors were spooked by Silicon Valley Bank announcing its  taking emergency steps to shore up capital after suffering a $1.8 billion after-tax loss in the first quarter. SVB sold about $21 billion of securities from its portfolio and plans to raise $2.25 billion. SVB’s shares tumbled 60% on the announcement, taking its shares to its lowest level since September 2016, while erasing $9.6 billion in market value. This reflects the pain of higher interest rates and tighter liquidity on the venture capital start-up bubble and how that’s heavily flown right to banks - who are also now suffering a liquidity crisis. It seem a vicious cycle. While, at the same time, people’s trust in the financial system is weakening, which is why we saw the banking sector heavily sold off on Thursday, with the KWB Bank Index tumbling 7.7%, its biggest drop since June 2022. Not only have we seen floundering prominent startups go bust – such as FTX, but banks have been making exuberant investment in such firms for years. This is all despite banks slowing their pace of investing and offering stingier terms. This not only reflects the hot air been blown into starts up - yet banks have become heavily reliant on such risky and volatile businesses.Also on Thursday, another California lender, Silvergate Capital Corp, which is targeting cryptocurrency firms, such as FTX, announced its winding down operations, following the meltdown of its financial strength, after digital assets plunged, seeing Silvergate lose billions in deposits. After announcing plans to liquidate, it says it will repay all deposits in full. Silvergate was previously scrutinised by regulators for its dealings with fallen crypto giants FTX and Alameda Research. Silvergate shares sank 40%. Bank of Japan is the biggest event risk While data and commentary from officials has been less supportive of the case for further tweaks in Bank of Japan policy, outgoing governor Kuroda is known for his surprises. At his last meeting on Friday, he may want to part with some sparks resulting in a numb yen in the run upto the meeting. We discussed all this and more in our central banks note this week, and significant scope of two-way volatility in the yen is seen. China’s CPI softened sharply to +1% Y/Y, PPI deep into deflation at -1.4%Y/Y China’s CPI growth slowed to 1% Y/Y in February, much lower than the consensus estimate of 1.9%. Growth in food prices decelerated to 2.6% Y/Y from 6.2% Y/Y while growth in non-food prices halved to 0.6% Y/Y in February from 1.2% in January. PPI slide 1.4% Y/Y in February, bringing the producer prices deeper into deflation. US-India ties expand into semiconductors The US and India are looking to sign an agreement to boost coordination of their chip industry to focus further on information sharing and policy dialogue, as India forges ahead to boost its presence in the global technology supply chain amid China’s crackdowns on the private sector and growing geopolitical issues. CATL delivers stronger than expected results underscoring surging EV demand China’s Contemporary Amperex Technologies Limited (CATL), the world's biggest battery maker and Tesla’s battery supplier, delivered results eclipsing estimates, amid stronger EV demand, while its results also cement CATL as the industry leader. Net income surged 93% y/y, to 30.72-billion-yuan, vs 28.8 billion yuan expected – with both its power battery and energy storage division’s revenue growing far more than expected amid clean energy demand. Power battery revenue rose to 236.59 billion yuan, up from the 91.49-billion-yuan same time last year - while exceeding the 228.46-billion-yuan consensus expected. That said, its power battery gross margin came in at 17.2%, on par with estimates – as EV sales growth in China slowed in Q4 as the economy was hit by a wave of COVID-19 infections with Tesla cutting output in Shanghai, with CATL suffering rising inventory. That said, CATL’s outlook seems bright and it’s continuing its global expansion, planning to set up 13 production bases, including in Germany and Hungary, with five R&D centres. It recently licensed its LFP battery technology for Ford to use in a new $3.5 billion EV battery plant – which Ford will run in Michigan.  We expect CATL’s results will continue to grow strongly given COVID disruptions came to an end. Fitch suggests EV sales in China will account for 35% of vehicles sales this year, up from 27% in 2022. EV sales grew 60% in 2022 to 10.4 million units and are expected to reach 13.9 million units this year, with most growth in China, according to Bloomberg. This also reflects strong demand for EV batteries ahead, as well as the key battery components including lithium, copper, graphite and aluminium. You can explore some of the companies in this space in Saxo's Lithium- Powering EVs equity theme basket.  CATL's had 37% share of EV battery global market in 2022, which is testament to its cheaper-to-produce lithium-iron-phosphate batteries. In joint second place, South Korea’s LG Energy Solution and China’s BYD Co, with a 13.6% share each. JD.COM gave a downbeat Q1 revenue guidance citing cautious Chinese consumers JD.COM (09618) reported Q4 revenue of RMB 295 billion, rising 7% Y/Y, in line with consensus estimates. Benefiting from a 1.4pp Y/Y improvement in operating margin to 2.5%, the e-commerce giant’s non-GAAP net profit came in at RMB 7.66 billion, a 115% increase Y/Y and nearly 40% above consensus. However, the share price of its ADRs plunged 11.3% overnight or 6.2% from its Hong Kong closing price on Thursday, on downbeat guidance on Q1 revenues. JD.COM expects JD Retail’s sales to fall by a low-to-mid single-digit percentage Y/Y in Q1, below analysts’ estimates of 1-3% growth. The Company’s management said the sentiment of Chinese consumers is still fragile and consumers have become more prudent on discretionary items. Reopening might also divert some of the online purchasing to off-line consumption such as dining and traveling.   For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.   Source: Global Market Quick Take: Asia – March 10, 2023 | Saxo Group (home.saxo)
Japan: stronger-than-expected GDP supports BoJ policy normalization

The Bank Of Japan Kept Its Policy Unchanged, Lower Yields Saw The Dollar Trade Softer

Saxo Bank Saxo Bank 10.03.2023 09:36
Summary:  Financial market turbulence returned on Thursday after steep losses in two small US lenders, SVB Financial and Silvergate Capital Corp triggered a 7.7% sell off in the KBW Bank Index which includes major US banks. The S&P 500 fell to the lowest since January 19 while bond yields reversed sharply lower to surrender most of the gains triggered by Fed Chair Powell’s combatant statements on Capitol Hill earlier in the week. Lower yields saw the dollar trade softer while the loss of risk appetite sent crude oil and industrial metals lower. Before the banking woes took center stage, stocks had gained after a bigger than expected jump in weekly jobless claims raised speculation about a soft US job report due later today. What is our trading focus? US equities (US500.I and USNAS100.I): a warning shot has been fired The equity market has moved into risk-off mode following the 60% plunge in SVB Financial (indicated down again pre-market) as the bank has been forced to sell a considerable amount of its bond holdings causing big losses and the need raise more equity and hybrid capital. The S&P 500 Banks Index plunged 6.5% with JPMorgan Chase down 5.4%. We have seen a more muted reaction in the VIX Index only increasing to 22.6 which is a low figure given the risks coming into the market. Bill Ackman, a hedge fund manager, has said that the US government should consider bailing out SVB Financial as the bank is important the Silicon Valley ecosystem and for funding of start-ups in the US. The discussions about zero-days to expiry options (0DTE) and to what extent they can cause a big intraday move in the market will be tested today if the US jobs report fails to calm the market. Chinese equities (HK50.I and 02846:xhkg): tumbled on cautious consumer and tech war Hang Seng Index plunged 2.6% and CSI300 shed 1%. Investors were selling China internet and consumer names following downbeat comments from JD.COM on Chinese consumers.  The management of the Chinese e-commerce giant said that the sentiment of Chinese consumers is still fragile and consumers have become more prudent on discretionary items. In addition, reopening might also divert some of the online purchasing to offline consumption such as dining and traveling. JD.Com (09618:xhkg) tumbled 11.2%. Meanwhile, Hang Seng TECH Index dropped 3.2%. EV stocks fell sharply, led by an 8.7% decline of BYD (01211:xhkg). The tech war on semiconductors may extend from advanced equipment to materials. Investors are concerned that Japan may impose restrictions on the export of essential chemicals such as photoresist to China. The U.S. banking stock turmoil overnight in the U.S. also weighed on sentiment. FX: USD modestly weaker as risk sentiment weakens, JPY sold on unchanged BOJ The rise in jobless claims as well as the broader risk off arising from the SVB scare on Thursday saw yields dipping lower, taking the dollar off the recent highs as well but the decline remained modest with the USD coming in favor on the safe haven bid as well. Swiss franc also got a safe haven bid, and USDCHF plunged below 0.93 bringing the 50DMA at 0.9269 in focus. Bank of Japan’s unchanged monetary policy saw the JPY being the underperformer in the Asian session on Friday, but USDJPY could not pierce above 137. GBPUSD rose back above 1.19 ahead of UK data dump today likely to show that a recession has been delayed, but focus will shift to NFP later as the key USD driver in the very near-term. USDCAD continued to surge to fresh highs as Fed-BOC divergence widened and oil prices remained weak. The choppiness in crude oil prices continued Crude oil is heading for a weekly loss following another choppy session on Thursday which in the end took its cue from another loss of risk appetite as stress emerged in the US banking sector. Brent trades back below $81 after breaking below the trendline going back to the December low. While the signs of a pickup in Chinese demand remain mixed, the market has also been spooked by Powell’s combatant mood on Capitol Hill earlier in the week where he basically said recession was a price worth paying to get inflation under control. Gold finds support as stock market weakness drives bond yields sharply lower Gold caught a bid on Thursday in response to the high US jobless claims number and later a steep drop in US bond yields as the US banking sector slumped. The terminal US Fed fund rate dropped back to 1.5% while the market priced in a 1.25% rate cut in the following 12 months, developments that highlights the potential for US rates not being raised to the extend Fed chair Powell led the market to believe earlier in the week. Focus now turns to today’s job report after Fed Chair Powell in his testimony said the strength and duration of future rate hikes would be data dependent. Gold is once again testing the 21-day moving average resistance at $1835 ahead of at $1858 while support in the $1800 remains firm. Yields drop on financial market turbulence and spike in jobless claims A bounce in initial jobless claims to 211K (consensus 195K) from 190K kicked off the short-covering in the front end ahead of the employment report, due later today. The buying intensified later in the US on safe haven buying after the banking sector suffered its biggest drop since June 2020, with stocks in troubled Silvergate Capital and SVB Financial both tumbling. Yields on the 2-year plunged from 5.08% to 4.78% while the 10-year yield trades down to 3.82% from above 4% earlier in the week. The 2-10-year yield curve steepened to –97bps from –111 bps earlier in the session. What is going on? SVB’s 60% slump highlights the venture capital and tech bubble is spilling over to banks Investors were spooked by Silicon Valley Bank announcing it taking emergency steps to shore up capital after suffering a $1.8 billion after-tax loss in the first quarter. SVB sold about $21 billion of securities from its portfolio and plans to raise $2.25 billion. Having ended the regular session down 60% at 106 it went on the drop another 22% to 83 in afterhours trading. This reflects the pain of higher interest rates and tighter liquidity on the venture capital start-up bubble and it triggered heavy selling across banking stocks with KBW Bank Index tumbling 7.7%, its biggest drop since June 2020. Also on Thursday, another California lender, Silvergate Capital Corp, down 80% this month, which is targeting cryptocurrency firms, such as FTX, announced its winding down operations, following the meltdown of its financial strength, after digital assets plunged. Oracle shares down on cloud miss The software and database maker reported FY23 Q3 revenue growth of 18% y/y and adjusted EPS of $0.71 down 17%, but the disappointment was mostly in the outlook and especially in Oracle’s cloud business as customers are reducing spending growth. Oracle shares were down 4% in extended trading. Bank of Japan’s Kuroda ends term without sparks The Bank of Japan kept its policy unchanged at Governor Kuroda’s last meeting of his decade-long tenure. The target band for the 10-year JGB yield was kept unchanged at around 0%, with an upper limit of 0.50% after being raised in December. The BOJ held its short-term rate at -0.1%. Although data and recent communication had hinted at no change in monetary policy, there were some apprehensions given Kuroda is famous for giving surprises to the market. However, the outcome carried his usual dovish tone, ensuring a smooth handover to incoming Governor Kazuo Ueda who has conveyed policy continuity in his first remarks after being nominated. Jobless claims cool, focus now on NFP data today Initial claims rose 211k in the week of 4th March, above the 190k prior and the 195k expected. It was the first time that the jobless claims came above the 200k mark since January, and it was the highest claim YTD. The continued claims also rose to 1.718 mn from 1.649 mn, coming in above estimates as well. While this may have raised some concerns that the US labor market is softening, the print is still strong and eyes now turn to the February payrolls data out today in the US. Our full preview is here, which says that Overall message, despite a potentially softer headline print, is likely to be that US labor market is still tight and there are millions of open positions even as layoffs continue to ramp up in some of the sectors. Headline jobs are expected to come in again at 200k+, but risk of disappointment remains given the scope of correction from +517k in January. A strong print could further cement the case for a 50bps rate hike this month. US-India ties expand into semiconductors The US and India are looking to sign an agreement to boost coordination of their chip industry to focus further on information sharing and policy dialogue, as India forges ahead to boost its presence in the global technology supply chain amid China’s crackdowns on the private sector and growing geopolitical issues. CATL delivers stronger than expected results underscoring surging EV demand CATL, the world's biggest battery maker and Tesla’s battery supplier, delivered results eclipsing estimates, amid stronger EV demand, while its results also cement CATL as the industry leader. Net income surged 93% y/y, to CNY 30.7bn vs est. CNY 28.8bn with both its power battery and energy storage division’s revenue growing far more than expected amid clean energy demand. What are we watching next? The Australia, UK and US alliance thrusts the Defence and Nuclear sectors into the spotlight US President Joe Biden will host a meeting with the UK Prime Minister Rishi Sunak and Australian Prime Minister Anthony Albanese in San Diego on Monday, where they are expected to decide on how to move ahead with a multibillion submarine plan, which could involve Australia buying as many as five US Virginia class nuclear-powered submarines in the 2030s. They are also expected to deliberate on how to get other high-tech weaponry to Australia. This is all a part of the AUKUS alliance, which was formed 18 months ago, aimed at the countries sharing defence and military capabilities, to protect the Indo-Pacific region, and counter China. For the investor, it makes one reflect on the capital being spent in the industry, which may present as a potential investment opportunity to explore. So, we break down the next steps of the AUKUS alliance, where the vessels will be built, the potential financial outlay, the likely companies involved and Saxo’s Equity Defence and Nuclear theme equity baskets to watch. Read our article here. Earnings to watch Today’s key earnings releases are not market moving and thus the focus is on next week’s earnings with the most interesting earnings releases being Volkswagen, BMW, Adobe, and FedEx. Friday: Daimer Truck, AIA Group, DiDi Global Next week’s earnings releases: Tuesday: Foxconn, Volkswagen, Generali Wednesday: Constellation Software, BMW, E.ON, Ping An Insurance, Prudential, Inditex, Adobe, Lennar Thursday: Verbund, Rheinmetall, KE Holdings, Enel, FedEx, Dollar General Friday: Vonovia Economic calendar highlights for today (times GMT) 1330 – US Feb. Nonfarm Payrolls Change 1330 – US Feb. Unemployment Rate 1330 – US Feb Average Hourly Earnings 1330 – Canada Feb. Employment Data   Source: Global Market Quick Take: Europe – March 10, 2023 | Saxo Group (home.saxo)
Musk Said Tesla’s Next Phase Of Growth Will Be Built Around Building Clean Energy Sources

Muska's City For Tesla And SpaceX Employees

Kamila Szypuła Kamila Szypuła 10.03.2023 10:16
Musk and his executives want his Austin-area employees, including those at Boring, electric car maker Tesla Inc. and space and exploration company SpaceX to be able to live in new homes at below-market rents. Musk’s city Elon Musk plans to build his own city on part of thousands of acres of newly purchased pasture and farmland outside the Texas capital. In meetings with landowners and real estate agents, Musk and his company employees described their vision as a kind of utopia in Texas along the Colorado River where his employees could live and work. Musk has been an advocate of affordable housing for workers. In 2018, during a public panel discussion with then-governor Brian Sandoval of Nevada, Musk spoke about building housing for Tesla employees next to the company's massive complex outside Reno. The planned city is adjacent to the Boring and SpaceX facilities that are currently under construction. The site already features a group of modular homes, a swimming pool, an outdoor sports area and a gym. The management of Musk's tunneling business, Boring Co., discussed and explored incorporating the city into Bastrop County, about 35 miles from Austin, which would allow Musk to set some regulations in his own municipality and advance his plans. Under Texas law, a city must have a population of at least 201 before it can apply for incorporation and subsequent approval by a county judge. Bastrop County has not received an application from Musk or any of its entities. Musk has been planning to build a city for a long time, and a few years ago he helped his brother, Kimbal Musk, perfect the idea of building an off-grid community. Musk's plans don't end with Texas. Last month, Tesla said it was continuing its expansion in California as well, and named the Palo Alto office as its engineering headquarters. Musk property Over the past three years, entities affiliated with Musk's companies or executives have purchased at least 3,500 acres in the Austin area, a total of about four times as much as New York's Central Park, according to county records and other land registries. Some local real estate and land officials said people close to Musk told them the billionaire owned even more land in the area - as much as 6,000 acres. Land purchases in Texas took place through at least four limited liability companies. These companies are linked to Musk's business or their officials in county and land registries and state business records that list their names. Musk was the main driver behind the plans, and all land purchases must be approved by him. In neighboring Bastrop County, about an hour southeast of Austin, SpaceX is building a 500,000-square-foot facility, and Boring is building a new warehouse across state road 1209. Read next: AUD/USD Rose Above 0.66, USD/JPY Drop Below 137.00| FXMAG.COM Tesla share price Since the beginning of the year, Tesla's share price has been rising towards 205.00, but since the beginning of March, the share price has started to fall below 200.00. Tesla shares recently closed at 170.85. Source: wsj.com, finance.yahoo.com
Rising Tensions in Japan Amid Currency Market Concerns and BOJ Insights

Stock Market Summary Of The Week 6-10.03.2023

Conotoxia Comments Conotoxia Comments 12.03.2023 10:19
The Fed announces that it will raise interest rates and one of the big Silicon Valley banks has liquidity problems. As the news becomes widespread, this bank's shares fall by 60% in a single session. This seems to have had a knock-on effect on the shares of the entire financial sector. Could other banks really be in trouble because of this, and what else have we learned during the past week? Macroeconomic data Monday's reading of the UK construction sector sentiment index came as a surprise at the start of the week. The data beat analysts' expectations, coming in at 54.6 points (49.1 points were expected). This is the first reading in two months heralding an improvement in the health of the sector. Tuesday's key event was a speech by Fed Chairman Jerome Powell, who said, among other things: "If the totality of the data indicated that faster tightening of financial policy was warranted, we would be prepared to increase the pace of interest rate hikes." Following Powell's speech, the S&P 500 Index (US500) began to fall, ending the week at minus 3.6%. Source: Conotoxia MT5, US500, Daily Wednesday brought us the US non-farm employment forecast report (ADP). The document, created from the payrolls of US companies, seemed to predict the final readings of the change in non-farm employment quite well. The current reading was better than expected at 242,000 (200,000 was expected). This would indicate that the US labour market is still strong, which may encourage the Fed to raise interest rates further. The Bank of Japan's interest rate decision seemed to come to the fore on Thursday. The institution's new governor chose not to change the negative level of interest rates. Japan's Nikkei index (JP225) was able to gain in anticipation of the announcement of the decision, before returning to levels seen earlier in the week. Source: Conotoxia MT5, JP225, Daily In Germany, CPI inflation for February came in at 8.7%, unchanged for three consecutive readings, as forecast. An important news item for the US market could be the non-farm employment reading, where an increase of 205,000 is expected. The stock market In Thursday's session, we learned of the problems of SVB Financial Group bank, whose shares slumped by as much as 60%. This seems to have caused declines in the entire US financial sector. It ended the week with a performance of more than minus 5%, as could be seen in the listing of the Financial Select Sector SPDR Fund (XLF). Source: Conotoxia MT5, XLF, Daily Source: https://www.sectorspdr.com/sectorspdr/tools/sector-tracker Among the companies whose shares fell the most this week are the aforementioned SVB Financial Group bank, whose shares slumped by more than 60%. Shares of electric car manufacturer Tesla fell by almost 10%. Among the few companies whose shares rose are: Apple, up 3.2%; Meta (Facebook), up 4.1%; and General Electric (GE), up 6.8%. All key changes can be seen below. Source: https://finviz.com/map.ashx?t=sec&st=w1 Currency and cryptocurrency market In the foreign exchange market, we could see another week of strong strengthening of the US dollar. The EUR/USD pair exchange rate fell by 0.4%. The biggest changes in USD quotations could be seen on the pair with the Australian dollar. The USD/CAD exchange rate rose by 1.8%, approaching resistance levels of 1.4. Source: Contoxia MT5, USDCAD, Daily The value of cryptocurrencies is plummeting as a result of the issues surrounding Silvergate bank, a key player in the market. Bitcoin has lost more than 12% of its value over the past week, falling below $20,000, while ethereum has shrunk by 11.6%. The situation appears to be unfavourable for cryptocurrencies. The weekly change in stablecoin market capitalisation, which determines the value of capital in the market, has now fallen by 2% m/m. Grzegorz Dróżdż, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.     search   g_translate    
Tech Executives Tried To Keep Companies Entangled In Collapse Of SVB Alive

Tech Executives Tried To Keep Companies Entangled In Collapse Of SVB Alive

Kamila Szypuła Kamila Szypuła 12.03.2023 12:27
The SVB event shook global markets, knocked bank stocks down, and left California tech entrepreneurs worried about how to make money. In order to protect the smallest tech industries, action has been taken. In this article: UBS Evidence Lab surveyed How defend a sliding currency? Save small businesses UBS Evidence Lab surveyed Changes in payments have passed recently and are constantly changing. These changes are taking place right before our eyes. Many institutions are conducting research to see if cash will go out of circulation and whether new forms of payment will replace old ones. UBS Evidence Lab surveyed 465 Brazilian merchants to assess trends in the LatAm payments industry. UBS Evidence Lab research assessed key trends in the payments industry, capturing the effects of price revaluation activities and changes in the competitive environment in 2022. The lows from the survey are that most traders are likely to use new technologies in the next six months, with the main reasons being keeping up with market changes and ease/security. Only 2% of merchants believe that the main reason for using new technologies is that they are cheaper, suggesting that new technologies may not be as cheap compared to other payment methods. #UBSEvidenceLab surveyed 465 Brazilian merchants to assess trends in the LatAm payments industry. What key trends did #UBSResearch identify? Click the link to read more. #shareUBS — UBS (@UBS) March 11, 2023 How defend a sliding currency? As central banks in the world's major economies lowered interest rates after 2008, smaller emerging market economies, especially those in Asia, faced an influx of capital that caused their currencies to appreciate and interest rates to fall. Global economic and financial integration has weakened the domestic transmission of monetary policy and made international factors a stronger driver of domestic prices and economic conditions. Confidence in the local economy must be restored through credible policies, after which controls can be gradually relaxed and removed. How can countries defend a sliding currency? Bank Negara Malaysia’s former deputy governor Sukudhew Singh sets out six factors that determine success. https://t.co/8sZId5ne7a pic.twitter.com/TB6gSOxaTr — IMF (@IMFNews) March 12, 2023 Save small businesses Friday's dramatic failure for the bank, which focuses on tech start-ups, was the biggest since the 2008 financial crisis. Seeking to avoid what Garry Tan, CEO of startup accelerator Y Combinator, called a potential "extinction-level event" in the tech sector, industry executives quickly acted to do everything in their power to save small businesses. Tech executives, prominent venture capitalists and founders, including OpenAI CEO Sam Altman, raced this weekend to keep companies entangled in collapse alive. Venture investors advised startups to look for alternatives for short-term liquidity. Even small startups are joining the action to help others. Tech execs race to save startups from 'extinction' after SVB collapse https://t.co/3OwU3DAIv5 pic.twitter.com/aFMMPBlSeY — Reuters Business (@ReutersBiz) March 12, 2023
Taming the Dollar: Assessing Powell's Hawkish Tone Amidst BRICS Expansion

At The Close Of The New York Stock Exchange All Indices Were Down

InstaForex Analysis InstaForex Analysis 13.03.2023 08:00
At the close of the New York Stock Exchange, the Dow Jones was down 1.07% to hit a 3-month low, the S&P 500 was down 1.45% and the NASDAQ Composite was down 1.76%. Unemployment in the US rose to 3.6% in February from 3.4% the previous month, while analysts believed that the figure would not change. And the number of people employed in non-agricultural sectors of the economy increased by 311,000, with a projected increase of 205,000. Statistics on the labor market and consumer prices are of great importance for investors, since these are the two main indicators that the US Federal Reserve relies on when determining its further actions in monetary policy. Dow Jones The leading performer among the Dow Jones index components in today's trading was Intel Corporation, which gained 0.78 points or 2.95% to close at 27.22. JPMorgan Chase & Co rose 3.31 points or 2.54% to close at 133.65. The Travelers Companies Inc rose 1.76 points or 1.01% to close at 175.68. The least gainers were Caterpillar Inc shares, which lost 13.95 points or 5.79% to end the session at 227.01. Shares of Goldman Sachs Group Inc climbed 14.42 points or 4.22% to close at 327.67, while American Express Company shed 6.42 points or 3.73% to close at 165.70. S&P 500 Leading gainers among the S&P 500 index components in today's trading were Intel Corporation, which rose 2.95% to hit 27.22, JPMorgan Chase & Co, which gained 2.54% to close at 133.65, and also shares of AbbVie Inc, which rose 1.61% to close the session at 149.72. The least gainers were shares of Signature Bank, which fell 22.87% to close at 70.00. Shares of First Republic Bank lost 14.84% to end the session at 81.76. Charles Schwab Corp fell 11.69% to 58.70. NASDAQ  Leading gainers among the components of the NASDAQ Composite in today's trading were EUDA Health Holdings Ltd, which rose 54.20% to 2.02, Unicycive Therapeutics Inc, which gained 30.10% to close at 2.68. as well as shares of Cingulate Inc, which rose 25.00% to close the session at 1.85. Shares of Loyalty Ventures Inc became the least gainers, which decreased in price by 58.39%, closing at 0.24. Shares of Allbirds Inc lost 47.03% and ended the session at 1.25. Quotes of Cepton Inc decreased in price by 45.75% to 0.42. Numbers On the New York Stock Exchange, the number of securities that fell in price (2594) exceeded the number of those that closed in positive territory (463), while quotes of 75 shares remained virtually unchanged. On the NASDAQ stock exchange, 3,044 stocks fell, 595 rose, and 150 remained at the previous close. The CBOE Volatility Index, which is based on S&P 500 options trading, rose 9.69% to 24.80, hitting a new monthly high. Gold Gold futures for April delivery added 2.08%, or 38.15, to $1.00 a troy ounce. In other commodities, WTI April futures rose 1.03%, or 0.78, to $76.50 a barrel. Futures for Brent crude for May delivery rose 1.21%, or 0.99, to $82.58 a barrel. Forex Meanwhile, in the Forex market, EUR/USD rose 0.57% to hit 1.06, while USD/JPY shed 0.91% to hit 134.90. Futures on the USD index fell 0.67% to 104.60.   Relevance up to 03:00 2023-03-14 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/315761
Rates Spark: Escalating into a Rout as Bond Bear Steepening Accelerates

Analysis Of Movement Of S&P 500 Index

InstaForex Analysis InstaForex Analysis 13.03.2023 08:08
If we look at the movement of #SPX on the daily chart then clearly seen that: 1. Price move below its 10 EMA. 2. The appearance of Bearish 123 pattern follow by Bearish Ross Hook (RH). 3. Still move below down trendline. Based on the those three facts then on a few days ahead S&P500 index has the potential to test and try to break below the level 3763,04 if turns out this level successfully broken below then it is highly likelythat the #SPX will head to the 3696.49 level as its main target and the 3631.93 level as its second target with a note that during its journey to the targets of these levels there is no upward correction movement that exceeds the 4062.45 level because if this level is successfully broken above then all the decline scenario previously described will become invalid and automatically cancel by itself. (Disclaimer)     Relevance up to 04:00 2023-03-18 UTC+1 This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here. Read more: https://www.instaforex.eu/forex_analysis/121115
US Flash, that is to say preliminary, PMI for April came in at a better-than-expected 50.4 versus a downwardly revised 49.2 in March and a forecast 49

Nonfarm Payrolls In The US Rose By 311k Last Month, Less Than The January's Print

Saxo Bank Saxo Bank 13.03.2023 08:14
Summary:  A slight recovery in sentiment was seen into the Monday open as US regulators stepped in to prevent further fallout from the SVB crisis and announced an emergency bank term funding program assuring SVB depositors they will be fully protected and have access to their money as the week begins. US jobs data on Friday was mixed, putting focus on the CPI this week, although the banking crisis reduces the case for a 50bps rate hike this month.   What’s happening in markets? US equites pulled back on Friday after the Silicon Valley Bank fuelled fear The futures turned green, indicating Monday could potentially see buying return. Market jitters were calmed after the Fed announced an emergency bank term funding program, with SVB depositors to have access to all money from Monday. On Friday though, markets were hurting, SVB parent, SVB Financial Group’s (SIVB:xnas) demise was felt through markets, triggering a sharp sell-off in US equities with the Nasdaq 100 and S&P500 falling 1.4% on Friday and wiping off 3.8% and 4.6% over the week. The banking sector was hit hard, as investors worried about the risk of contagion after 16th largest bank failed, which lead to selling in other banks, and deposit withdrawals – with American losing faith in the banking system. The KBW Bank Index shed 3.9% on Friday, and 15.7% over the week. PacWest Bancorp (PACW:xnas) tumbled 37.9% on Friday and a massive 53.7% since Thursday. US equity futures rallied on Monday Asian hours after the Fed assured depositors in the Silicon Valley Bank they will be fully protected. Treasury yields plunged on safe-haven bids amid banking woes and Fed speculation Safe-haven demand and reduced likelihood of aggressive rate hikes drove down Treasury yields. Meanwhile, asset markets were jolted by the Silicon Valley Bank incident, leading to a surge in safe-haven buying of Treasuries. Prices of Treasuries climbed, and yields fell sharply, with the front end and belly of the curve seeing the best performance. Traders are now speculating whether the contagion of the crisis to other banks, and the widening of credit spreads will sway the Fed in favor of keeping the next hike at a modest 25bps, or perhaps even pausing earlier than expected. These speculations are supported by the slight 0.2% month-over-month or 4.6% year-over-year increase in average hourly earnings, and an increase in the labor force participation rate to 62.5% in February. Interest rates implied by SOFR contracts fell significantly, with June, September, and December 2023 plunging 28 basis points, 44.5 basis points, and 52.5 basis points, respectively. This brought the terminal down to 5.29% in June 2023, from 5.70% in September 2023 just two days earlier on Wednesday. The 2-year Treasury yield tumbled an astounding 28 basis points to 4.59%, while the 10-year yield dropped by 20 basis points to 3.70%. As a result, the 2-10-year yield curve steepened by almost 7 basis points to 89 basis points on Friday. Given the ongoing banking crisis, Treasuries are likely to remain in high demand. Hang Seng Index and China’s CSI 300 plummeted amid concerns about consumption recovery in China The Hang Seng Index and CSI300 experienced sharp declines on Friday, with losses of 3% and 1.3% respectively, resulting in weekly losses of 6.1% and 4%. This was attributed to investors selling China internet and consumer names after JD.COM's (09618:xhkg) downbeat comments on consumer spending prospects in China, causing JD.Com to plummet by 11.5%. The Hang Seng TECH Index also dropped significantly by 3.8%. Auto stocks, particularly BYD (01211:xhkg) and Great Wall Motor (02333:xhkg) took a major hit, with declines of 8.1% and 6.2% respectively, due to an intensification of price war prompted by Dongfeng (00489:xhkg) and other Chinese automakers' price cuts. Auto names were among the largest losers in A-shares on Friday. The tech war involving semiconductors may extend beyond advanced equipment to materials, leading to concerns about Japan restricting the export of crucial chemicals like photoresists to China. In addition, the turmoil in U.S. banking stocks overnight further weighed on sentiment. Australian equities (ASXSP200.I) somewhat unscathed following global rout. Gold miners charge After the demise of the US’ 16th largest bank, SVB with other US banks in jeopardy, Australia’s market has so far outperformed global equity markets, falling 1.9% last week, while the S&P500  shed 4.6% and Hong Kong’s Heng Seng slumped 6.1%. The prudential regulation over Australia’s banks is keeping ASX listed banks relativity unscathed, however smaller non-financial companies with less financial strength are being penalised. The worst performing ASX200 stocks today are BrainChip, and Lake Resources, both down over 4.6%. While capturing upside and lot of bids are, gold miners, with Capricorn Metals, Ramelius Resources and Regis Resources all up 7-9%. FX: Dollar on the backfoot on chatter of SVB bailout After slumping to fresh lows on Friday to get in close sights of 104, the US dollar reversed higher into Friday’s close but gains were short-lived as the announcement on a potential backstop funding from the Feb for distressed bank SVB brought risk trades back to the table. AUDUSD pushed back above 0.66 to highs of 0.6647 in early trading amid thin liquidity and a recovery in sentiment. NZDUSD also took another look at 200DMA at 0.6166. GBPUSD testing 1.21 handle again with this week’s focus being the Spring budget and the labor market data. ECB’s hike remains in focus, and EURUSD taking another hit at 1.07 as risk sentiment improved this morning in Asia. Crude oil prices jumped higher on Friday but closed with a weekly loss Fears of further monetary tightening, coupled with risks of a financial contagion, raised concerns of a demand weakness and saw crude oil prices slide lower last week. The weak sentiment was compounded by high crude oil inventories in the US. This dominant narrative continues to overshadow signs of stronger demand in China. Some respite was however seen on Friday and into early Asian trading on Monday as US regulators announced measures to protect depositors and let them withdraw money from SVB starting Monday. WTI prices touched $77 from lows of sub-75 on Friday and Brent was above $83 from sub-81 levels earlier. The spread between Brent and Dubai narrowed to USD2.70/bbl, as Dubai crude gained against the global benchmark, suggesting robust Asian demand. Gold making a fresh stride higher despite easing banking sector crisis concerns Gold prices saw a big jump on Friday and gains were extended further on Monday morning in the Asian session as a mixed US jobs report and risks of a contagion in the banking sector spooked investors and prompted safe-haven demand. Expectations of a rapid Fed tightening also eased, and Fed swaps fully priced in a 25bps rate cut by year-end. This, along with rising inflation (breakeven) expectations and a sharp drop in yields, has made gold attractive for investors with precious metal charging higher and breaking above key resistances. Gold prices touched highs of $1890 this morning before easing slightly.   What to consider? SVB fallout spreads; Fed announces plans to fully protect Silicon Value Bank and potentially Signature Bank After the demise of the US’ 16th largest bank, SVB, on Friday and its takeover by the FDIC – which marked the largest bank failure since the 2008 financial crisis, the fallout spread. Regulators took control of another bank, Signature Bank. Unlike SVB which supports venture capital firms, Signature bank specialises in providing banking to law firms. The Fed stepped in and announced an emergency bank term funding program, assuring SVB depositors they will be fully protected and have access to their money from Monday, with agencies said to enact a similar program for Signature Bank. All this follows the Venture Capital community urging startups to withdraw funds, which led to civilians taking their money out of banks. Regulators are seeking buyers for SVB. Meanwhile, the Fed said it’s providing additional funding to banks. US nonfarm payrolls remained elevated in February Nonfarm payrolls in the US rose by 311k last month, less than the January's blowout print of 504k (revised down from an initially stated 517k) but still remaining elevated and above consensus expectations of 215k. While the headline continued to reaffirm a tight labor market, other indicators from the report were rather weak. Average hourly earnings rose +0.2% MoM in February, lower than the expected and last month’s +0.3% MoM. The annual rate of averag hourly earnings rose from +4.4% in January to +4.6% YoY, a touch short of the 4.7% that the market was expecting. The unemployment also picked up by 0.2% pts to 3.6% against market expectations of no change, likely as participation rose 0.1% pt to 62.5%. The data remained short of cementing a 50bps rate hike possibility for March, also given the recent concerns on the US banking sector from the SVB collapse. Focus now turns to CPI release on Tuesday to further shape Fed expectations. China's February aggregate financing surged beyond expectations with 9.9% Y/Y Growth China's aggregate financing growth in February was much better than expected, reaching RMB 3160 billion, far above the RMB2300 consensus estimate. The outstanding aggregate financing growth also accelerated to 9.9% year-on-year (Y/Y) in February, up from 9.4% Y/Y in January. Furthermore, M2 increased at a faster pace in February, growing 12.9% Y/Y, up from January's 12.6%. The surge in outstanding RMB loans played a major role in driving the credit growth, increasing by 11.6% Y/Y in February, compared to January's 11.3% Y/Y. Corporate loans were the primary driver, while household loans remained weak. Bank of Japan’s Kuroda ends term without sparks The Bank of Japan kept its policy unchanged on Friday at Governor Kuroda’s last meeting of his decade-long tenure. The target band for the 10-year JGB yield was kept unchanged at around 0%, with an upper limit of 0.50% after being raised in December. The BOJ held its short-term rate at -0.1%. Despite some expectations of another tweak, the outcome carried his usual dovish tone, ensuring a smooth handover to incoming Governor Kazuo Ueda who has conveyed policy continuity in his first remarks after being nominated. Incoming data will be key to watch for what tweaks the next governor Ueda can bring, but near-term focus shifts to US data on inflation, as well as the extent of fallout in the US banking sector as the market appears to be a panic mode after SVB’s collapse which may bring some safe haven flows to the yen.   For a global look at markets – tune into our Podcast. Source: Global Market Quick Take: Asia – March 13, 2023 | Saxo Group (home.saxo) 
Rates Spark: Unbroken Momentum in Bear Steepening as Shutdown Aversion Fuels Yields

Icahn Battles Illumina For Three Board Seats

Kamila Szypuła Kamila Szypuła 13.03.2023 10:04
Billionaire activist Carl Icahn plans to nominate three people to the board of the San Diego-based company, claiming the biotech company has cost its shareholders about $50 billion by going ahead with a risky takeover despite regulators' opposition. Illumina vs Carl Icahn The billionaire activist is running for three seats on the biotechnology board. Carl Icahn plans to nominate three people to the board of the San Diego-based company, according to a letter Mr. Icahn plans to send to Illumina shareholders on Monday. Icahn says in the letter that he tried to make a deal with Illumina to avoid a proxy battle. In the letter, Icahn accuses Illumina of overpaying for a business that earned "exactly zero dollars in revenue" and then closing the deal, despite not knowing if European regulators would bless him. He writes that it costs Illumina $800 million a year to hold the Grail, and that it faces a substantial tax bill if eventually forced to sell it. He says his candidates — Vincent Intrieri, founder and CEO of the mutual fund, and two of Icahn's deputies, Jesse Lynn and Andrew Teno — will bring experience in dealing with crises to the board. Illumina said it was advising its shareholders to vote against Icahn's candidates. Illumina and Grail Illumina manufactures and sells genetic sequencing machines and the chemicals they use, and its customers include Grail and Grail's rivals. Once a darling of biotech, Illumina was respected for its DNA sequencing capabilities and was valued at over $70 billion in the summer of 2021. In recent months, however, its value has fallen to about $30 billion as the company acquired cancer screening company Grail Inc and remains on hold as the company faces increased competition from lower-cost rivals. Illumina in 2020 agreed to buy Grail, which is developing blood tests for early cancer detection, and closed the deal in August 2021, despite encountering antitrust resistance from both the Federal Trade Commission and the European Union. Illumina said at the time that if she hadn't, she might have missed the end of the deal. The US has since ruled in favor of Illumina while the EU sought to block the deal. This meant that Illumina had to keep the Grail as a separate entity. The European Union released details of a planned order requiring Illumina to terminate the Grail deal last December. The Commission banned the deal earlier this year over fears it would stifle innovation and hurt consumer choice. Illumina appealed the European Commission's decision last year and said it would review strategic alternatives to Grail in case it was unable to delay the expected EU divestment order. Illumina share prices As of last May, Illumina's share price is below $250.00. At the beginning of March, stock prices rose in the direction of 221.21, but did not hold and fell. Recently, the stock price is below 200.00 and recently closed at 194.01. This level is the lowest level so far in 2023. Source: wsj.com, finance.yahoo.com
Inflation Numbers Signal Potential Pause in Fed Rate Hikes Amid Softening Categories

US regulators closed Signature Bank, HSBC has announced to acquire SVB’s UK

Saxo Bank Saxo Bank 13.03.2023 10:23
Summary:  US equity futures are rallying, the dollar is lower, and Treasury yields have extended their declines following a busy weekend which resulted in regulators backstopping uninsured bank deposits at SVB Financial and Signature Bank. Traders have dialed back Fed rate-hike bets to just one while the yield curve has flattened as bank deposits are being converted to short maturity bonds. Gold jumped in response to these developments but whether the overall improved risk appetite can be maintained remains to be seen, and for this we need to watch credit spreads and default swaps. What is our trading focus? US equities (US500.I and USNAS100.I): be wary of the short-term celebration A busy weekend in the US for regulators have ended with a backstop of all insured and uninsured deposits of SVB Financial and Signature Bank including a new “Bank Term Funding Program” that will offer 1-year loans to banks on easier terms than normal. The Fed is also relaxing terms for lending through its discount window. US equity futures are rallying this morning with S&P 500 futures up 1.4% trading around the 3,955 level (just above the 200-day moving average), but our stance is that investors should be extremely cautious of celebrating too early. The lessons from the Great Financial Crisis and the Euro Crisis are that the early cracks and the first rescue attempt by regulators are often not enough as these events to not happen in vacuum. At this point we simply do not have enough information to guess the secondary effects from this event so investors should remain cautious. Investors should monitor money market spreads, yield curve shape, flows in USD etc., instead of equities this week for information what is happening in the system. Chinese equities (HK50.I and 02846:xhkg): Rally as US backstops depositors Hong Kong and Chinese stocks rallied as U.S. regulators rolled out plans to prevent the woes in Silicon Valley Bank and Signature Bank to turn into systemic risks. Hang Seng Index jumped 1.8% and CSI300 rallied 0.6%. China’s Two Sessions concluded this morning. President Xi secured a third term and his ally Li Qiang took the position of Premier, both being widely expected. The People’s Bank of China’s Yi Qang unexpectedly remains as the central bank’s governor. Nonetheless, his appointment is likely to be transitory pending the establishment of the National Financial Supervision Bureau. Energy, consumer, and internet stocks led the advance of the Hang Seng Index. In A-shares, SOE telcos outperformed. Belt-and-Road-Initiative-related stocks were well bid. FX: Dollar on the backfoot as Fed rate hike expectations recede on financial risks The dollar trades sharply lower following the Sunday announcement from the US authorities that it will backstop bank deposits to avert a deepening crisis after the SVB collapse. With short-end US yields collapsing and the market pricing just one rate hike before a December cut, the dollar index has dropped to a near a one-month low while the euro after finding firm support around €1.035 last week has rallied back above €1.07. AUDUSD pushed back above 0.66 to highs of 0.6672 in Asian session amid a recovery in sentiment. NZDUSD also pierced above the 200DMA to reach 0.62. GBPUSD rose above the 1.21 handle again with this week’s focus being the Spring budget and the labor market data. ECB’s hike remains in focus, and EURUSD taking another look above 1.07 as risk sentiment improved this morning in Asia.  Crude oil prices bounce as risk sentiment improves but economic outlook still weighing Crude oil prices continue to ebb and flow with the general level of risk sentiment and prices are higher overnight after US authorities stepped in over the weekend to restrain the SVB contagion. The result being a commodity supportive drop in the dollar as interest rates collapse and rate hikes are being priced out of the market. However, the risk of a US recession has strengthened on the back of these developments and with that in mind the short-term outlook points to continued range bound trading. Meanwhile, the spread between Brent and Dubai narrowed to USD2.70/bbl, as Dubai crude gained against the global benchmark, suggesting robust Asian demand. Both Brent and WTI will be facing resistance at their 21- and 50-DMA levels, both currently meeting at 83.75 and 77.70 respectively. Also, in focus this week are monthly oil market reports from OPEC and IEA Gold making a fresh stride higher despite easing banking sector crisis concerns Gold together with US government bonds have seen strong safe-haven demand since Friday as the SVB fallout has led to concerns about contagion in the banking sector. Two of gold’s main engines, the dollar and treasury yields have both seen a sharp drop since Friday and together with technical levels being broken and hedge funds holding a much-reduced long position, the market briefly managed to touch $1890 overnight. Despite the Sunday announcement from the US authorities, gold will likely benefit from continued worries about the financial system, increased recession worries and a swap market now pricing in just one rate hike ahead of a December cut. Support at $1871 and $1858 while a break above $1900 is needed to signal a reversal of the February correction. Treasury yields plunged on safe-haven bids amid banking woes and Fed speculation The Silicon Valley Bank Incident has since Friday driven continued safe-haven demand for bonds while the swap market is now pricing in just one more 25 bps rate hike, down from four since Thursday, with the first cut now priced in for December as recession worries and financial stability takes centre stage.  Prices of Treasuries climbed, and yields fell sharply, with the 2-year yield falling to 4.4% after briefly trading above 5% last week. Traders are now speculating whether the contagion of the crisis to other banks, and the widening of credit spreads will sway the Fed in favour of keeping the next hike at a modest 25bps, or even pausing earlier than expected. These speculations are supported by the slight 0.2% month-over-month or 4.6% year-over-year increase in average hourly earnings, and an increase in the labor force participation rate to 62.5% in February. Given the package rolled out by the regulators will backstop depositors but not unsecured creditors and the Fed may downshift, the front end of the Treasury curve is likely to remain in high demand. What is going on? US authorities step in to restrain the SVB contagion – what to watch from here? The US authorities have stepped in with a liquidity backstop of uninsured deposits and announced a new lending program for banks to prevent the risks of contagion from the collapse of Silicon Valley Bank (SVB) on Friday. Fed pause bets for March are increasing, but the authorities’ response on containing the financial risks suggests that the room to fight against inflation has been maintained. Risks to inflation also tilt further to the upside with the added liquidity measures, and the long-run impact on US tech sector innovation will remain key to consider in portfolios. Read more here. HSBC acquires SVB’s UK unit HSBC has announced to acquire SVB’s UK unit after meetings over the weekend highlighted the importance of SVB UK in relation to the UK’s VC and startup ecosystem risking wider economic implications if a plan to safeguard deposits was not found. Signature Bank closed by US regulators Yesterday, US regulators closed Signature Bank which was another smaller US bank that came under pressure Thursday and Friday last week. The bank is less connected to the startup ecosystem but has connections to the cryptocurrency industry which was rattled with the liquidation of Silvergate Capital last week. Signature Bank’s insured and uninsured deposits will be accessible to customers on the same basis and under the emergency process as with SVB Financial. ECB monetary policy meeting on Thursday There is little doubt the ECB will hike interest rates by 50-basis point this week, to 3 %. The uncertainty about the magnitude of the monetary policy tightening beyond the March meeting is high, however. Our baseline is that the ECB will certainly signal another 50-basis point hike in May and give no real guidance after that. There is another possibility: the ECB could confirm it will continue hiking rates by 50-basis point in the coming meetings and could open the door to a faster reduction of holdings after June. This would be a hawkish scenario, in theory good for the euro. But we think the likelihood it will happen is small. Ahead of Thursday's meeting, the money market forecasts that the terminal rate in the eurozone will be slightly above 4 %. Nomura is currently the most hawkish bank. Its economists call for 50-basis point hikes in March, May, June followed by 25-basis points in July, leaving the terminal rate at 4.25 %. US nonfarm payrolls remained elevated in February Nonfarm payrolls in the US rose by 311k last month, less than the January's blowout print of 504k (revised down from an initially stated 517k) but remaining elevated and above consensus expectations of 215k. While the headline continued to reaffirm a tight labor market, other indicators from the report were weak. Average hourly earnings rose +0.2% MoM in February, lower than the expected and last month’s +0.3% MoM. The annual rate of average hourly earnings rose from +4.4% in January to +4.6% YoY, a touch short of the 4.7% that the market was expecting. The unemployment also picked up by 0.2% pts to 3.6% against market expectations of no change, as participation rose 0.1% pt to 62.5%. The data remained short of cementing a 50bps rate hike possibility for March, also given the recent concerns on the US banking sector from the SVB collapse. Focus now turns to CPI release on Tuesday to further shape Fed expectations. China's February aggregate financing surged beyond expectations with 9.9% y/y Growth China's aggregate financing growth in February was much better than expected, reaching RMB 3160 billion, far above the RMB2300 consensus estimate. The outstanding aggregate financing growth also accelerated to 9.9% year-on-year (Y/Y) in February, up from 9.4% Y/Y in January. Furthermore, M2 increased at a faster pace in February, growing 12.9% Y/Y, up from January's 12.6%. What are we watching next? US inflation figures Tomorrow, the first estimate of the US February CPI will be released followed on Wednesday by the February PPI. The CPI is certainly the most important data point to focus on this week. This is the latest major US data release before the FOMC March meeting of 21-22 March. The Cleveland Fed produces nowcasts of inflation based on recent publicly observable price moves. According to their latest forecast, the monthly inflation will come in at a similar level to January for February. If so, that is not encouraging. A 50-basis point interest rate hike is certainly not a done-deal in March. But this is a clear possibility. Credit and money markets Besides the focus on US inflation figures this week, we will be watching financial conditions in the financial markets with a key focus on credit and money market rates and spreads to gauge risks in the banking system. In addition, Bitcoin will be monitored for understanding risks in the wider cryptocurrency system as this part of the market is where the highest marginal risk-taking takes place. Finally , June and December Fed Funds Rate futures should be monitored for assessing the market’s pricing of monetary policy off this event. Earnings to watch This week’s key earnings are Volkswagen, BMW, Adobe, and FedEx with tomorrow’s focus on Volkswagen where everything is about the EV outlook as it is increasingly looking like VW is having difficulties to keep up with the production ramp up at Tesla and BYD. Analysts expect FY23 revenue growth of 2% y/y for Volkswagen which if realized will prove to low to satisfy investors when the leading EV-makers such as Tesla and BYD are growing much faster. Later this week we will focus on Adobe and FedEx. Tuesday: Foxconn, Volkswagen, Generali Wednesday: Constellation Software, BMW, E.ON, Ping An Insurance, Prudential, Inditex, Adobe, Lennar Thursday: Verbund, Rheinmetall, KE Holdings, Enel, FedEx, Dollar General Friday: Vonovia Economic calendar highlights for today (times GMT) No major releases today Source: Global Market Quick Take: Europe – March 13, 2023 | Saxo Group (home.saxo)
ECB Remains Cautious on Inflation, Italian Spreads Recover on Successful Retail Bond Sale

Analysis Of AEX25, BEL20 And CAC40 By Kim Cramer Larsson

Saxo Bank Saxo Bank 13.03.2023 10:27
Summary:  AEX25 and CAC40 still hanging on to key supports. BEL20 is downtrend testing supports potential Today's Market Quick Take from the Saxo Strategy Team AEX25 In the broader picture AEX is still range bound between 772 and 735 with the latter as a key support. A close below 735 the RSI will also close below 40 i.e., confirm a downtrend with down side potential short-term to around 700. Some support at around 712-707 Source all data and chats : Saxo Group BEL20 took out key support at 3,819 with a bang. And is fast approaching strong support at around 3,700. 200 Moving Average will add to the support meaning a minor rebound could be seen. However, trend is down and a move down to support at around 3,913 seems likely. To reverse this bearish picture a close above 3,900 is needed. First indication of this to play out would be a close a of the gap from Thursday CAC40 is testing key support at around 7,187 and the rising trendline. A close below both could fuel a sell-off down to next support at around 6,946If this bearish scenario play out a close above 7,401 is needed to reverse it.     Source: Technical analysis AEX25 BEL20 CAC40 | Saxo Group (home.saxo)
Key Economic Events and Earnings Reports to Watch in US, Eurozone, and UK Next Week

Economic Data Could Remain Under The Shadow Of The Bank Crisis

Swissquote Bank Swissquote Bank 13.03.2023 10:53
The Silicon Valley Bank (SVB) and Signature Bank collapsed.SVB’s flash crash raised questions that other similar local banks in the US could also experience liquidity issues and may not be able to pay their depositors back, unless they also start selling their probably loss-making portfolios. The bank crisis The US authorities now step in to avoid contagion. The bank crisis will likely interfere with Federal Reserve (Fed) rate hike expectations. Fed Activity in Fed funds futures now assesses more than 98% chance for a 25bp hike in March, not because the US jobs data was soft enough to overhaul rate hike expectations last Friday, but because the Fed can’t ignore the issues caused by the steep interest rate increases in the banking sector and can’t afford to trigger a financial crisis to bring inflation back to 2%. CPI Tomorrow’s US inflation data is still important, but the developments across the banking sector could overshadow the data. Watch the full episode to find out more! 0:00 Intro 0:43 US bank crisis widens as SVB, Signature Bank collapse 5:49 The bank crisis hammers Fed expectations 8:05 Economic data could remain under the shadow of the bank crisis Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #SVB #Signature #Bank #collapse #bank #crisis #Fed #rate #expectations #USD #NFP #inflation #jobs #data #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH
UK PMI Weakness Supports Pause in Bank of England's Tightening Cycle

US CPI Still A Key Focus Ahead, Gold Broke Above The $1900 Barrier

Saxo Bank Saxo Bank 14.03.2023 08:20
Summary:  Banking sector concerns continued to roil markets as the SVB fallout still remains a big unknown despite measures from US authorities to stem contagion. Flight to safety accelerated further with 2-year Treasury yields slumping by a massive 60bps, and Fed rate expectations continued to shift lower with terminal rate expectations now down to 4.8% from 5.7% last week. Dollar was broadly sold and gold and silver were in favor on yield drop. US CPI still a key focus ahead but a softer print can prompt a further shift lower in the expectations of the Fed tightening path.   What’s happening in markets? US equities assess the probability of Fed rate cuts, while both the recession and volatility indexes spike After the sweeping failure of regional lenders, including Silicon Valley Bank, and ahead of the all-important US inflation read, tech stocks edged cautiously ahead, while bond yields fell - as SVB’s collapse severely complicated the Fed's rate path. Meanwhile, the NY Fed probability of a recession index, climbed to its highest level since the GFC, while the Volatility index hit its highest level since October last year. As such we remain cautious. The swaps market is now showing a less than 1-in-2 chance probability the FOMC can continue to hike rates, while also showing a probability of several rate cuts this year. So, the two-year treasury (bond) yield plunged 61 bps to below 4%, the biggest one-day slump in decades, while the 10-year yield dropped 16 bps. While the US dollar plummeted, sending the kiwi, yen and Aussie all up by 1.2% or more. Fed launches probe into the supervision of SVB. Bank stocks continue to tumble, notching biggest decline since the COVID19 crash The Federal Reserve will launch an internal probe to the supervision of Silicon Valley Bank after its collapse sparked criticism by the central bank oversight, with Michael Barr leading the review, which is said to be publicly released by May 1. Not only the Fed is concerned, but so too is Washington and investors alike. The KBW Bank Index shed 12% on Monday, continuing last week’s rout that saw the index slide 16%- with the index collectively notcing its biggest monthly pull back since COVID19. First Republic Bank shares tanked 62% on Monday, with other regional banks such as Western Alliance Bancorp falling 47%, and California-based PacWest Bancorp down 21% - as investors fret about the strength of liquidity in the lending market. Larger companies also are not immune to the sell off- Charles Schwab shares slid 12% with traders also de-risking and even perhaps shorting some financial institutions. As mentioned on Monday’s Podcast - we think the rout of several lenders in Silicon Valley could have a profound ripple effect on the innovation eco system – and future lending meaning access to liquidity in the VC and cryptocurrency market could be limited – and this could also impact the private equity market. All this reinforces Saxo long held belief that the physical world will continue to outperform the intangibles (the technology sector). This view was reinforced in our Quarterly Outlook. Massive bull steepening as investors flocked to 2-year Treasuries On the back of U.S. regional bank turmoil, investors quickly repriced the front end of the Treasury curve and removed additional future rate hikes in this tightening cycle. Investors flocked to 2-year Treasuries in safe-haven bids and traders closed out curve-flattening positions. Yields on the 2-year plunged 61bps to 3.98% while the 10-year yields fell “only” 13bps to close at 3.57%. The 2-10-year curve steepened to -46bps, after hitting as inverted as -110bps last week. Hang Seng Index and China’s CSI 300 rallied on U.S. regulators’ decision to backstop depositors Hong Kong and Chinese stocks rallied as U.S. regulators rolled out plans to prevent the woes in Silicon Valley Bank and Signature Bank to turn into systemic risks. Hang Seng Index advanced 2% and CSI300 climbed 1%. China’s Two Sessions concluded this morning. President Xi secured a third term and his ally Li Qiang took the position of Premier, both being widely expected. Premier Li Qiang’s remarks at the press conference had a pro-growth and market-friendly tone. Energy, telco, China consumption, and China internet stocks drove the advance of the Hang Seng Index. Hang Seng TECH Index gained 2.9%. Bilibili (09626:xhkg) jumped 10.7% following the video-sharing platform being included in the Stock Connect. In A-shares, SOE telcos outperformed. Belt-and-Road-Initiative-related stocks were well bid. Australian equities (ASXSP200.I) trade lower for the sixth week. Swaps show RBA’s hiking cycle is over After not only the dovish commentary from the RBA but the recent demise of several large VC and cryptocurrency lending banks in the US, now we are seeing that the RBA’s interest rate hiking cycle could be over. That’s according to the swaps market, which reflects that there is just a 50% chance for an increase in the RBA’s cash rate for the rest of this year. FX: Expectations of a less aggressive Fed weighing on the dollar The USD continued to slide on Monday as Fed expectations were revised further lower (read below) but some floor was being found in early Asian trading. AUDUSD touched highs of 0.6717 before reversing to 0.6650, while NZDUSD surged to 0.6250+ before heading back towards the 0.62 handle. GBPUSD could not move above 1.22 and focus turns to labor market data in the UK today before the budget announcement tomorrow. EURUSD touched 1.0750 with a 50bps rate hike still on the table this week. Safe haven JPY and CHF continued to outperform as bank risks reign, with USDJPY staying below 134 and USDCHF testing support at 0.91. Crude oil prices slump amid risk off Oil prices closed lower by 2.5% on Monday as banking sector concerns continued to spell caution on risk assets. However, expectations of a less aggressive Fed monetary policy helped crude oil to recover from its lows, and focus now turns ahead to the US CPI data due today. WTI futures still trading below $75/barrel while Brent is at $80. OPEC is scheduled to issue its monthly market report later Tuesday, while the International Energy Agency follows with its release on Wednesday, providing on snapshot on the outlook for supply and demand, but focus is unlikely to be back on fundamentals until market concerns ease. Gold and Silver benefitting from the drop in yields Gold broke above the $1900 barrier as flight to safety continued despite the efforts of US regulators to reduce the risk of contagion from the SVB collapse. The massive drop in 2-year Treasury yields of the order of 60bps as well as market pricing in as many as 4 rate cuts this year have seen the dollar come off considerably from its highs and brought the precious metals back in focus. Additional demand for Gold from momentum traders looking for a fresh upside attempt, could bring Gold towards the January high around $1950. Silver was up over 6% on Monday as well breaking the $21.70 resistance which will be followed by $22 and $22.27. What to consider? Bank worries bring a significant shift in Fed expectations Bonds continued to soar as markets digested the measures of the US regulators to stem contagion from the collapse of SVB. But that continued to complicate the path of monetary policy with the Fed having broken something. As markets continued to re-assess the path of monetary policy from here, 2-year Treasury yields plunged 61bps to below 4%, the biggest one-day slump in decades, while 10-years dropped 16bps. The CME FedWatch tool now shows a 35% chance of no move from the Fed next week, and 65% probability of a 25bps rate hike. Fed Funds futures are now pricing in a terminal rate of 4.8% as early as May (down from 5.7% in July earlier) and as much as 100bps of rate cuts this year (compared to one 25bps rate cut expected last week). Upside in US CPI is also unlikely to make Fed go for 50bps in March US inflation has been the talk of town for several months now, although the focus has lately turned to financial contagion risks that may stop the Fed from switching back to a higher rate hike path trajectory. In fact, several banks are now calling for a pause next week, with one also expecting a rate cut and an end to quantitative tightening. Still, February CPI – due to be released on Tuesday – will be a big test after last month’s print reversed the disinflation narrative in goods inflation, and continued to point at sticky services inflation. Headline consumer prices are expected to rise +0.4% MoM in February, cooling slightly vs the +0.5% in January, with the annual rate seen easing to 6.0% YoY from 6.4% previously. Core CPI is expected to rise +0.4% MoM in February, matching the January pace, though the annual rate is likely to fall to 5.5% YoY from 5.6% in January. Overall message is likely to remain that inflation remains stubbornly high, especially after tough weather conditions in California, but the risk of a 50bps rate hike from the Fed in March remains low as the central bank becomes wary of “something breaking”. Submarine deal moves ahead  - the market is still awaiting further detail The US, Australia and the UK unveiled further plans for a new fleet of nuclear-powered submarines when the country heads met in the US on Monday. There will be an initial budget of about A$9 billion through to June 2027, with the tri nations deepening their Aukus Defense partnership that formed 18 months ago, to counter China in the Pacific. The market awaits further detail with much of the discussion remaining confidential. To read more on what to expect, click our article here. Chinese peak construction season ramps up. Iron ore makes green shoots. Iron ore stocks follow higher The iron ore (SCOA) price has extended its rebound - with the steel ingredient's price is up 2.7% so far this week, after rising 2.7% last week. All in all, the iron ore is now trading 8% higher year to date, and above the $132 for the first time since April last year. We’ve been speaking a lot about how iron ore buying usually picks up around this time of year, with Chinese steel mills getting ready for peak construction season - which runs from March through to June. Fresh data released on Friday showed by both steel stockpiles and iron ore inventories fell last week, which implies there is a need to top of up stockpiles. We think buying of iron ore will likely continue in 2023, as the re-opening of China’s economy pick up, all while iron ore supply remains short. And this is underpinning price strength, despite some in Beijing accusing iron ore market participant's of price manipulation. Australian pulse checks: business and consumer confidence and jobs numbers   Australian business and consumer confidence, numbers released today – show consumer confidence is somewhat improving, while businesses remain cautious - feeling the aftereffects of the RBA’s 10th rate hike. Despite the RBA’s comments previously alluding to a potential pause on rate hikes soon - business confidence fell by 4 points in February. The next gauge we will get on Australia’s economy is due on Thursday - with all-important unemployment rate released for February. Bloomberg’s consensus is suggesting the jobless rate will fall from 3.7% to 3.6%, with 50,000 jobs expected to be added last month. If the data shows employment is rising, contrary to what the RBA expects, then the Australian dollar would likely gain pace, as the RBA would gain power to keep rising rates by 0.25%. UK labor data on watch today for the path of BOE The UK labor market data will be released on Tuesday and investors will be scrambling to gauge how much room does the BOE have to tighten further. Bloomberg consensus expects the unemployment rate to rise to 3.8% in the three months to January from 3.7% previously, with headline jobs growth likely to ease to 60k from 102k in January. However, even with a slightly softer jobs report, the BOE is expected to continue its hiking cycle in March as activity data has been stronger than expected, but the trend in labor market from here will be key to see where BOE could pause its tightening cycle. Focus also turns to UK’s budget announcement tomorrow. For what to watch in the markets this week – read or watch our Saxo Spotlight. For a global look at markets – tune into our Podcast.
BRICS Summit's Expansion Discussion: Impact on De-dollarisation Speed

The Federal Reserve Will Launch An Internal Probe To The Supervision Of Silicon Valley Bank

Saxo Bank Saxo Bank 14.03.2023 09:11
Summary:  An historic move in interest rates accelerated yesterday as investors rushed to price an end to the current Fed hiking cycle and even an eventual easing starting as early as Q3 after US officials moved to prevent contagion in the US banking sector. The US 2-year treasury yield, which traded above 5.0% mid-last week, traded below 4.0% late yesterday. The US dollar is down sharply, gold and bitcoin are soaring, and equities can’t decide whether to sell off on the uncertainty or celebrate the sharp drop in yields. What is our trading focus? US equities (US500.I and USNAS100.I): has the dust settled post SVB Financial bailout? Yesterday’s session saw big moves across US government bonds with especially the US 2-year yield declining 60 basis points as many corporates likely converted deposits into short-term bonds to reduce deposit risk. In equities mega caps were seen as safe havens with Apple shares gaining 1.5% while the broader S&P 500 Index was flat, and the Russell 2000 Index was down 1.5%. US financial conditions tightened to the tightest levels since late September and thus under those circumstances the S&P 500 Index should be trading closer to 3,600 than the close of 3,855 yesterday. Moves in times of crisis are always exaggerated and often not consistent so investors should continue to be cautious and not celebrate too early despite equities help up yesterday. The key indicators to monitor remain US bond yields, USD, FRA-OIS spreads (interbank stress), VIX, credit default swaps, and banking stocks. FX: USD weakens as market prices imminent end of Fed hiking cycle The USD continued to slide on Monday as US yields at the front end of the curve suffered an historic collapse, with Fed expectations revised lower (read below), although a floor in US rates was found in early Asian trading near 4.00% for the US 2-year yield. AUDUSD touched highs of 0.6717 late yesterday before reversing to 0.6650. GBPUSD found resistance ahead of 1.22 and focus turns to labor market data in the UK today before the budget announcement tomorrow, although incoming data feels suddenly less urgent than just a week ago, given the uncertainty the turmoil in the financial sector has generated since late last week. EURUSD touched 1.0750 with a 50bps rate hike still on the table this week from the ECB, although the probability for a hike of that size has dropped significantly, and ECB tightening expectations have seen a sharp downgrade since late last week. JPY and CHF continued to outperform, with USDJPY staying below 134 and USDCHF testing support at 0.91. Crude oil tests strength of support near bottom of current range Crude oil prices closed lower by 2.5% on Monday as banking sector concerns continued to challenge growth and demand dependent commodities from cotton and copper to crude oil. However, expectations of a less aggressive Fed monetary policy helped crude oil find support with WTI and Brent both finding support in the bottom 20% of their current ranges. In Brent, the prompt month backwardation remains elevated around 50 cents while the contango in WTI has not widened despite the current weakness, both signalling a discrepancy between current robust fundamentals and the overall weak sentiment. Ahead of today’s US CPI print, OPEC is scheduled to issue its monthly market report, while the International Energy Agency will follow on Wednesday. Gold and silver benefitting from the yield collapse Gold broke above $1900 barrier on Monday as flight to safety continued despite the efforts of US regulators to reduce the risk of contagion from the SVB collapse. The massive drop in 2-year Treasury yields of the order of 60bps as well as market now pricing in as many as four rate cuts this year (from four hikes less than a week ago) have seen the dollar come off considerably from its highs and brought the precious metals back in focus. Since the SVB news broke late Thursday, gold has gained 4.2% while silver has added a massive 8.5%, and with several rate cuts now priced in, and short end yields unlikely to continue their decline, the risk of a profit taking ahead of the CPI print has risen. Support levels that may get challenged in gold are 1900 followed by 1890 and 1872. Copper looks to China for support Copper trades back above $4 after managing to find support around $3.94, the December high. With the arrival of the peak season and the drop in copper prices, consumption in China is expected to continue to recover, potentially offsetting growth concerns elsewhere Massive bull steepening in US Treasuries as investors flocked to 2-year Treasuries On the back of U.S. regional bank turmoil, investors quickly repriced the front end of the Treasury curve and removed additional future rate hikes in this tightening cycle. Investors flocked to 2-year Treasuries in safe-haven bids and traders closed out curve-flattening positions. Yields on the 2-year plunged 61bps to 3.98% while the 10-year yields fell “only” 13bps to close at 3.57%. The 2-10-year curve steepened to -46bps, after hitting as inverted as -110bps last week. What is going on? Fed launches SVB probe as bank stocks tumble the most since the Covid-19 crash The Federal Reserve will launch an internal probe to the supervision of Silicon Valley Bank after its collapse sparked criticism by the central bank oversight. The KBW Bank Index declined 12% yesterday extending last week’s rout that saw the index slide 16%. In biggest declines were among banks such as First Republic Bank (-62%), Western Alliance Bancorp (-47%), and California-based PacWest Bancorp (-21%) as depositors and investors were nervous about smaller financial institutions. Larger financial institutions were not immune to the risk-off with Charles Schwab shares declining 12%. Credit Suisse has found material weakness in financial reporting The Swiss-based investment bank was forced to postpone the release of its annual report last week due to US regulators and the morning the bank says that it has identified material weaknesses in its financial procedures for 2021 and 2022. The bank is working on remediating those errors. Credit Suisse 5-year CDS prices hit a new all-time high yesterday at 485. Bank worries bring a significant shift in Fed expectations Bonds continued to soar as markets digested the measures of the US regulators to stem contagion from the collapse of SVB. But that continued to complicate the path of monetary policy with the Fed having broken something. As markets continued to re-assess the path of monetary policy from here, 2-year Treasury yields plunged 61bps to below 4%, the biggest one-day slump in four decades, while 10-years dropped 16bps. The CME FedWatch tool now shows a 35% chance of no move from the Fed next week, and 65% probability of a 25bps rate hike. Fed Funds futures are now pricing in a terminal rate of 4.8% as early as May (down from 5.7% in July earlier) and as much as 100bps of rate cuts this year (compared to one 25bps rate cut expected last week). What are we watching next? US CPI will still get some attention, even if incoming data’s importance has fallen sharply US inflation has been the talk of town for several months now, although the focus has lately turned chiefly to financial contagion risks that may stop the Fed from switching back to a higher rate hike path trajectory. In fact, several banks are now calling for a pause next week, with one also expecting a rate cut and an end to quantitative tightening. Still, the US February CPI – due to be released today – will be a big test after last month’s print reversed the disinflation narrative in goods inflation and continued to point at sticky services inflation. Headline consumer prices are expected to rise +0.4% m/m in February, cooling slightly vs the +0.5% in January, with the annual rate seen easing to 6.0% YoY from 6.4% previously. Core CPI is expected to rise +0.4% m/m in February, matching the January pace, though the annual rate is expected to fall to 5.5% y/y from 5.6% in January. Despite the SVB’s failure, we still believe the February CPI release will be particularly relevant for the FOMC’s March policy decision as the Fed may try to pretend that it can focus on business as usual. Evidence of economic resilience and persistent price pressures would prolong the Fed’s tightening cycle. However, by year-end, we expect the U.S. economy will start to experience more significant disinflationary pressures. NFIB survey for February Given that small businesses are particularly sensitive to domestic economic dynamics, sentiment among small business owners will provide an update on inflationary conditions and the labor market situation. Earnings to watch Volkswagen earnings are the big focus today at 9:00 CET but VW’s investment plans have already been surfaced increasing to €180bn in investments during 2023-2027 which is 13% higher than previously announced and with 70% going to EV. Next key US earnings are Adobe and Lennar tomorrow with analysts expecting Adobe’s revenue growth at 9% y/y which is unchanged from a year ago suggesting the growth rate is stabilising. Analysts are also expecting Adobe to show meaningful improvement in operating income as the software maker has reduced costs. Lennar is expected to report -3% y/y and –41 q/q revenue growth for FY23 Q1 (ended 28 Feb) and a significant hit to EBITDA at $725mn down from $1,527mn. Tuesday: Foxconn, Volkswagen, Generali Wednesday: Constellation Software, BMW, E.ON, Ping An Insurance, Prudential, Inditex, Adobe, Lennar Thursday: Verbund, Rheinmetall, KE Holdings, Enel, FedEx, Dollar General Friday: Vonovia Economic calendar highlights for today (times GMT) During the day: OPEC’s Monthly Oil Market Report 1230 – US Feb. CPI 1230 – Canada Jan Manufacturing Sales MoM 2030 – API's Weekly Crude and Fuel Stock Report 2120 – US Fed’s Bowman (Voter) to speak   Source: Global Market Quick Take: Europe – March 14, 2023 | Saxo Group (home.saxo)
Rates Spark: Unbroken Momentum in Bear Steepening as Shutdown Aversion Fuels Yields

Pfizer Will Buy Biotech Seagen For $43 Billion

Kamila Szypuła Kamila Szypuła 14.03.2023 11:04
Seagen attracted the attention of Pfizer and other drugmakers because of the potential of ADCs. Merck & Co. discussed buying Seagen last year, but the companies could not agree on a price. However, it was Pfizer that turned out to be the winner. The deal Pfizer Inc has agreed to pay $43 billion for Seagen Inc biotech. and its pioneering class of targeted cancer drugs. Under the terms, Pfizer will pay $229 a share in cash, the drugmaker said Monday. The companies expect the deal, which includes the debt, to be finalized by the end of this year or early next year. The deal is an early sign that despite the threat of tighter antitrust controls and higher interest rates, big pharmaceutical companies are ready for some heavy deals this year. Seagen, which is based outside Seattle, pioneered a class of drugs known as antibody-drug conjugates, or ADCs, that can target tumors with a toxic agent. Drugs could become one of the next big segments of the $375 billion global cancer drug market, accounting for $31 billion in sales in 2028, drug research firm Evaluate estimates. New York-based Pfizer has been looking for acquisitions to help it offset an expected loss of $17 billion in sales by 2030. Pfizer executives said they expect federal antitrust authorities to sign the deal because the company and Seagen provide complementary opportunities. The Seagen acquisition will help Pfizer meet its goal of generating additional revenue of $25 billion by 2030. Seagen, which expects revenue of $2.2 billion this year, could bring Pfizer more than $10 billion in revenue by 2030 if biotech manages to expand the use of its drugs to more types of cancer, Pfizer executives said. Pfizer's revenue targets exceed many analysts' estimates, but Bourla called them reasonable. He said Pfizer could help Seagen expand its commercial capabilities and use its global drug development network to help Seagen accelerate its work. Cancer treatment is central to Pfizer The sale of Pfizer's Covid-19 vaccine and drug has boosted the company's performance in recent years. Executives said they could not count on the same level of sales in the future as the pandemic enters an endemic phase, prompting the company to use tens of billions of dollars in Covid-19 revenue to close deals. Cancer treatment is a key Pfizer franchise, bringing in more than $12 billion of the company's $100 billion in sales last year. Pfizer is looking to increase its influence on anti-cancer drugs. Analysts said Seagen's therapies will expand Pfizer's breast and bladder cancer drug portfolio while complementing its efforts to build a foothold in other cancers with large patient populations, such as myeloma. Pfizer was eager to add cancer drugs to its portfolio, Bourla said. Seagen was particularly attractive because it already has four approved products. Pfizer share price Pfizer's share price since mid-December after reaching a peak of 54.48 began to fall. Stock prices have fallen to 39.39, a level last seen in the first half of 2021. Pfizer shares were up 2.7% on the New York Stock Exchange Monday morning, while Seagen shares were up more than 16%. Thus, Pfizer shares reached the level of 39.86, and Seagen - $ 197.65. Source: wsj.com, finance.yahoo.com
GBP: Implied Yields and Trading Ranges

Unstoppable Momentum: S&P 500 Index Eyes Breakthrough Levels Amid Dominant Buyer Influence

InstaForex Analysis InstaForex Analysis 29.05.2023 10:41
Forex Analysis & Reviews: Technical Analysis of Daily Price Movement of S&P 500 Index, Monday May 29, 2023   With the price movement in the channel that dips upwards and the two Moving Averages which are still in Golden Cross condition on the daily chart, we can see that Buyers are still dominating the S&P 500 index so that in the next few days #SPX has the potential to appreciate an upward rally up to penetrate above the level of 4216.17 and if this level is successfully broken above then the SPX still has the potential to go to the upper line of the bullish channel and/or the level of 4324.96 but please also pay attention if there is a downward correction which is indicated by the appearance of deviations between price movements and the MACD indicator because if a correction occurs If it breaks below the level of 4070.35 then all scenarios of a rally up above that have been described previously will become invalid.        
ADP Employment Surges with 497,000 Gain, Nonfarm Payrolls Awaited - 07.07.2023

European Markets Sink Amid Recession Concerns and Oil Price Slump

Michael Hewson Michael Hewson 31.05.2023 08:09
With the White House and Republican leaders agreeing a deal on the debt ceiling at the weekend markets are now obsessing about whether the deal will get the necessary votes to pass into law, as partisan interests line up to criticise the deal.   With the deadline for a deal now said to be next Monday, 5th June a vote will need to go forward by the end of the week, with ratings agencies already sharpening their pencils on downgrades for the US credit rating. European markets sank sharply yesterday along with bond yields, as markets started to fret about a recession, while oil prices sank 4% over demand concerns. US markets also struggled for gains although the Nasdaq 100 has continued to outperform as a small cohort of tech stocks contrive to keep US markets afloat. As we look towards today's European open and the end of the month, we look set for further declines after Asia markets slid on the back of another set of weak China PMIs for May. We'll also be getting another look at how things are looking with respect to economic conditions in Europe, as well as an insight into some key inflation numbers, although core prices will be missing from this snapshot. French Q1 GDP is expected to be confirmed at 0.2% while headline CPI inflation for May is expected to slow from 6.9% to 6.4%. Italian Q1 GDP is also expected to be confirmed at 0.5, and headline CPI for May is expected to slow from 8.7% to 7.5%. We finish up with the flash CPI inflation numbers from Germany, which is also expected to see a slowdown in headline from 7.6% to 6.7% in May. While this is expected to offer further encouragement that headline inflation in Europe is slowing, that isn't the problem that is causing investors sleepless nights. It's the level of core inflation and for that we'll have to wait until tomorrow and EU core CPI numbers for May, which aren't expected to show much sign of slowing.   We'll also get another insight into the US jobs markets and the number of vacancies in April, which is expected to fall from 9.59m in March to 9.4m. While a sizeable drop from the levels we were seeing at the end of last year of 11m, the number of vacancies is still over 2m above the levels 2 years ago, and over 3m above the levels they were pre-pandemic. The size of this number suggests that the labour market still has some way to go before we can expect to see a meaningful rise in the unemployment rate off its current low levels of 3.4%. EUR/USD – slipped to the 1.0673 area before rebounding with the 1.0610 area the next key support. We need to see a rebound above 1.0820 to stabilise.   GBP/USD – rebounded from the 1.2300 area with further support at the April lows at 1.2270. Pushed back to the 1.2450 area and the 50-day SMA, before slipping back. A move through 1.2460 is needed to open up the 1.2520 area.   EUR/GBP – slid to a 5-month low yesterday at 0.8628 just above the next support at 0.8620. A move below 0.8620 opens up the December 2022 lows at 0.8558. Main resistance remains at the 0.8720 area.   USD/JPY – ran into some selling pressure at 140.90 yesterday, slipping back to the 139.60 area which is a key support area. A break below 139.50 could see a return to the 137.00 area, thus delaying a potential move towards 142.50 which is the 61.8% retracement of the down move from the recent highs at 151.95 and lows at 127.20.   FTSE100 is expected to open 22 points lower at 7,500   DAX is expected to open 64 points lower at 15,845   CAC40 is expected to open 34 points lower at 7,175
Chinese Manufacturing PMI: Accelerating Contraction Raises Concerns! What if Russia didn't follow OPEC's output cuts?

Chinese Manufacturing PMI: Accelerating Contraction Raises Concerns! What if Russia didn't follow OPEC's output cuts?

Ipek Ozkardeskaya Ipek Ozkardeskaya 31.05.2023 08:15
The US 2-year yield fell sharply, while the S&P500 ended flat after hitting a fresh high since last summer on optimism that the US will finally agree to raise the debt ceiling.     The House will vote today to decide whether the debt limit bill gets approved at time to get a Senate approval by next Monday deadline.     The deal between Biden and McCarthy freezes discretionary spending for the next two years, which excludes weighty plans like Medicare or social care, and will only have a minor impact on around $20 trillion budget deficit projected for the next decade. Frozen spending means a spending cut in real terms as long as inflation remains high. The higher the inflation, the higher the spending cut in real terms.   But the problem is that at least 20 conservative Republicans of the House rejected Kevin McCarthy's compromise on debt ceiling, saying that spending cuts are not enough. One hardcore Republican, Dan Bishop of North Carolina, threatened to vote to oust McCarthy because he 'capitulated' to Democrats. Democrats, on the other hand, are not fully happy either as they don't want to freeze or to cut spending.     This is what a compromise is: accepting something without being fully satisfied to avoid a self-induced world economic crisis!    Anyway, any misstep at today's House vote could send the US yields higher and stocks lower.     So far, there has been a widening gap between the way the stock and bond markets priced the threat of a US government default. While the US sovereign bonds cheapened across the board, and violently at the short end, stock investors were confident that a ceiling deal would be reached and weren't discouraged by the rising US yields to stop buying.     And even the fact that the Federal Reserve's (Fed) hawkish stance has a material impact on yields' upside trajectory since the bank-stress dip, stock markets kept on climbing. Looking at how Nasdaq behaved since the bank stress rebound in yields, you could barely guess that there are rate-sensitive stocks in it.    But the reality check is that Nasdaq stocks are rate sensitive, and cannot be rate-hike proof if the Fed continues hiking the rates. It would, however, also be a good thing for the Fed members to consider pulling some liquidity out of the market as the Fed's balance sheet is still worth more than before the bank crisis.    What if Russia refuses to cut output?  In energy, US crude tanked nearly 5% yesterday, and tipped a toe below the $69 pb mark on worries that Russia may not follow OPEC's output cuts, in which case the internal conflict may prevent the cartel from reducing supply in a way to give a jolt to oil prices.   There is little chance that we see the kind of discord like back in 2020, as the Ukrainian war strengthen the ties between two allies. But any Russian veto could materially reduce OPEC's power of hit on oil prices.    Elsewhere, the Chinese manufacturing PMI showed that contraction in activity accelerated in May instead of stepping back to the expansion zone. The faster Chinese manufacturing contraction also weighs on the sentiment this morning.     We shouldn't expect China to post growth numbers comparable to levels pre-2020 because China under Xi Jinping's rule is willing to avoid euphoric, and unhealthy growth.   This is why the government put in place severe crackdown measures on real estate, tech and education. That does not mean that China won't get back in shape, but recovery will likely take longer, and growth will likely be more reasonable and a better reflection of the reality of the field.    
US Retail Sales Boost Prospects for 3% GDP Growth, but Challenges Loom Ahead

USD Demand Rises as Debt Ceiling Lifted: Impact on EUR/USD

InstaForex Analysis InstaForex Analysis 05.06.2023 09:19
EUR/USD: US President Biden signed a law lifting the debt ceiling (to $31.47 trillion) until January 1, 2025, after which it will be raised. Today, the Treasury is already issuing $50 billion in 44-day Treasury bills, $65 billion in 13-week bills, and $58 billion in 26-week bills. According to preliminary data, the Treasury plans to raise $1.4 trillion by the 4th quarter. Such a massive withdrawal of money from the external sector in favor of bond issuance will put pressure on the stock market and significantly increase the demand for the USD.   On the daily chart, this morning, the price reached the target support at 1.0692. Falling below this support opens up the target level of 1.0615, which is the nearest embedded line of the global downtrend channel. This target almost coincides with the low of February 17, so a correction from that level is possible.     On the 4-hour chart, the price has stopped falling at the MACD indicator line. The support at 1.0692 has gained reinforcement, increasing its significance. The Marlin oscillator has established itself in the negative territory, and it will now help the price in breaching this support level.  
Shell's H1 2023 Performance and CEO's Bold Stance on Renewable Energy

Market Sentiment and Fed's Decision: Impact of Upcoming Economic Data and Central Bank Meetings

InstaForex Analysis InstaForex Analysis 05.06.2023 14:18
Market sentiment could change depending on the Fed's final decision at its June monetary policy meeting. This decision, however, could be affected by upcoming economic data from the US. Ahead lies key manufacturing indicators from both the US and Europe, followed by reports on China's export volume, import volume, and trade balance. Equally important will be the meetings of other central banks, where key parameters of monetary policy will remain unchanged. Markets will likely establish equilibrium, as investors expect a 0.25% increase in the Fed's interest rates. However, the recently-released strong US labor market data for May changed the sentiment, pushing market players to opt for a pause. Now, only 19.6% expect a 0.25% increase in rates. Resolving the debt problem, as well as very positive employment data, allow investors to believe that the US will no longer face recession.   As such, the Fed may opt not to raise rates, primarily because they do not want to shake the markets and stimulate another sell-off in the government bond market, given the government's high need for new loans at relatively low interest rates. Most likely, until June 14, consolidation in broad ranges will be observed in the forex market. Similar expectations can be set for stock and commodity markets.   Forecasts for today:     EUR/USD The pair trades above 1.0685. A neutral or weakly positive market sentiment will push the quote between 1.0685 and 1.0825. However, a decline below 1.0685 mark could lead to a `further fall to 1.0540.   XAU/USD Gold trades within the range of 1933.75-1983.75. A pause in the fed's rate hike cycle will push the quote towards 1983.75. Pati Gani Analytical expert of InstaForex © 2007-2023 Back to the list  
Turbulent Times Ahead: ECB's Tough Decision Amid Soaring Oil Prices

Cryptoverse Buzz: Bitcoin Rises Amid BlackRock ETF Filing and EDX Crypto Exchange Launch

Ed Moya Ed Moya 21.06.2023 08:41
Bitcoin is slightly higher as the cryptoverse embraces BlackRock’s ETF filing and as EDX crypto exchange goes live. ​ Given the risk-off start to the trading week, Bitcoin’s slight gain is a positive sign. ​   Bitcoin still seems poised to consolidate here but it could start to muster up a rally if gold remains under pressure and if investors grow cautious with the potential headwinds for the stock market. ​ ​    
Market Sentiment and Fed Policy Uncertainty: Impact on August Performance

Wall Street Anticipates Insights from Fed Chair Powell and ECB Forum

Ed Moya Ed Moya 29.06.2023 08:00
Wall Street awaits Fed Chair Powell and counterparts at ECB forum Mortgage demand rises for a 3rd straight week 10-year Treasury yield down 1.9 bps to 3.745%   The artificial intelligence trade had a major setback after the Wall Street Journal reported that the Biden administration could unveil new restrictions on the exports of AI chips to China. Nvidia, a pivotal mega cap tech trade, gets about 20% of its revenue from China. In Asia, AI related stocks were under significant selling pressure.   Despite a potential headwind for the AI trade, the NASDAQ 100 will likely have a record first half. BlackRock, the world’s largest asset manager is also betting big on AI, coming out with a new overweight call. BlackRock sees a mild recession happening later this year but anticipates a mega force like AI could still help equities outperform, given a weakening macroenvironment.   We should get some volatility going into quarter close as so many traders are starting to become bullish stocks and as so many stocks are near critical option levels. The FOMO trade might be here, but the economy is clearly feeling the effects of the Fed’s tightening cycle and the consumer is weakening but has no trouble getting a job, so it will be interesting how the stock market’s back gets broken.    
GBP: Softer Ahead of CPI Risk Event

Euro Resilient: Seeking Breakout Above 1.0930 Level amidst Market Volatility

InstaForex Analysis InstaForex Analysis 04.07.2023 09:25
Yesterday, the euro showed a range of 60 points, closing the day at the opening level. The upper shadow tested the 1.0930 level, and this morning the price is headed towards this mark again, not giving up hope of reaching the upper band of the green descending price channel around 1.0990.       This is possible if the euro follows the stock market and employment data turn out worse than expected. For now, the price needs to consolidate above 1.0930.   Surpassing yesterday's low at 1.0871 will be a signal for a decline. On the 4-hour chart, the price could not consolidate below the balance indicator line and returned to the 1.0910/30 range. Here, it can linger for a while and try to overcome the MACD line around 1.0952.   The Marlin oscillator in the positive area is ready to join the growth at any moment.     Given that we accept the bearish scenario for the euro as the main plan, the price may not overcome the MACD line and return below the range. Like yesterday, uncertainty persists in the short-term perspective.    
Strong Jobs Data Spurs Fed Rate Hike Expectations, Pressures Equities

Strong Jobs Data Spurs Fed Rate Hike Expectations, Pressures Equities

Ipek Ozkardeskaya Ipek Ozkardeskaya 07.07.2023 08:52
Jobs surprise.  497'000 is the number of private jobs that the US economy added last month. 497'000. The number of quits rose to 250'000. But happily, the job openings fell by almost half a million, and more importantly for the Federal Reserve (Fed) – who is fighting to abate inflation and not necessarily jobs, the sector that saw the biggest jobs gains – which is leisure and hospitality which accounted for more than 230'000 of the jobs added – also saw the sharpest decline in annual pay growth. The pay for this sector's workers grew 7.9% last year, down from 8.4% printed a month earlier. But that detail went a bit unheard, and under the shadow of the stunning 497'000 new jobs added. And the too-strong ADP report that, again, hinted at a too-resilient US jobs market to the Fed's very aggressive rate hikes, ended up further fueling the Fed rate hike expectations. The US 2-year yield spiked above 5%, and above the peak that we saw before the mini banking crisis hit the US in March, while the 10-year yield took a lift as well, and hit 4%, on indication that, recession doesn't look around the corner... at least if you follow the US jobs numbers.  So today, the official US jobs data could or could not confirm the strength in the ADP figures, but we are all prepared for another month of strong NFP data, and lower unemployment. If anything, we could see the wages growth slow. If that's the case, investors could still have a reason to see the glass half full and bet that the US economy could achieve the soft landing that it's hoping for.     Equities pressured.  The S&P500 and Nasdaq fell yesterday as the US yields spiked on expectation that the Fed won't stop hiking rates with such a strong jobs data, as such a strong jobs market means resilient consumer spending, which in return means sticky inflation.   Other data confirmed the US' economy's good health as well. ISM services PMI showed faster-than-expected growth and faster-than-expected employment, and slower but higher-than-expected price growth in June. If we connect the dots, the US manufacturing is slowing but services continue to grow, and services account for around 80% of the US economic activity, so no wonder the US jobs data remains solid and consumer spending remains resilient, and the US GDP growth comes in better than expected, and we haven't seen that recession showing up its nose yet.   But the darker side of the story is, this much economic strength means sticky inflation, and tighter monetary conditions, and the dirty job of pricing it is done by the sovereign markets. And many investors think that when there is such a divergence of opinion between stock and bond traders, bond traders tend to be right.   But at the end of the day, the stock market's performance  will depend on how much pain the Fed will put on the Wall Street from the balance sheet reduction. If the Fed just continues hiking the rates and do little on the balance sheet front, it will only hit Main Street, and there will be no reason for the equity rally to stall. Voila.    By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank  
Risk of Deflationary Spiral in China Impacts Confidence in Equities, while USD Holds Steady Against Yuan

Risk of Deflationary Spiral in China Impacts Confidence in Equities, while USD Holds Steady Against Yuan

Craig Erlam Craig Erlam 10.07.2023 12:28
Deflationary spiral risk has negated confidence in China equities. US dollar has continued to hold steady against the yuan despite a broad-based sell-off against other major currencies ex-post US non-farm payrolls. The key intermediate support to watch on the USD/CNH will be at 7.2160. Weak China inflation data offset positive China Big Tech news flow The dreaded fear of a deflationary spiral in China has reached “code red” where the latest consumer inflation rate for June has flattened to 0% year-on-year from a gain of 0.2% year-on-year in May and came in below expectations of an increase of 0.2%. This latest reading in CPI is the weakest rate since February 2021. In addition, producers’ prices (factory gate prices) continued to deteriorate further into contraction mode; it dropped -5.4% year-on-year, faster than a 4.6% fall in May, and worse than expectations of a -5.0% decline. Overall, it has marked the ninth consecutive month of producer deflation and its steepest fall since December 2015. Time is running out for Chinese policymakers to negate the steepening rout in the internal demand environment that can potentially lead to further loss in consumer and business confidence if the deflationary spiral starts to be persistent. It may lead to a liquidity trap scenario in China where monetary policy tools will be less effective to stimulate real economic growth. The forward pricing mechanisms of the stock market seem to have started to take into account some aspects of the negative feedback loop triggered by the liquidity trap scenario, earlier intraday gains of between 1% to 3.2% seen in today’s Asian session on the Hang Seng indices as well as China’s benchmark CSI 300 driven by China Big Tech equities as Chinese regulators have signalled on last Friday after the close of the Asian session to end a two-year plus of crackdown on the technology sector have been reduced by slightly more than half, CSI 300 (0.5%), Hang Seng Index (0.8%), Hang Seng TECH Index (1.25%), and Hang Seng China Enterprises Index (0.7%) at this time of the writing.     China’s yuan remained soft despite the broader USD sell-off       Fig 1:  US dollar rolling 1-month performance as  of 10 Jul 2023 (Source: TradingView, click to enlarge chart) The US dollar sold off last Friday, 7 July reinforced by technical factors after the US Dollar Index cracked below its 50-day moving average that had been acting as a prior minor support since 28 June 2023, also ex-post US non-farm payrolls for June that came in below expectations (209K added vs. 225K consensus). Based on the rolling one-month performances as of today, the USD is weakest against the EUR (-1.89%), GBP (1.81%), and CHF (-1.35%) while holding steady against the offshore yuan, CNH (+1.44%). In addition, the US Treasury 2-year yield premium over an average of key developed nations’ 2-year sovereign yields (Germany, UK, Japan, Canada, Switzerland, Australia, China) has narrowed as well.     USD/CNH short and medium-term uptrend phases remain intact     Fig 2:  USD/CNH short & medium-term trends as of 10 Jul 2023 (Source: TradingView, click to enlarge chart) Since the start of its upside acceleration on 4 May 2023, the USD/CNH has managed to evolve above its 20-day moving average and today’s price action has managed to stage a rebound after a retest on it. If the 20-day moving average now acting as a key intermediate support at 7.2160 is not broken down, the USD/CNH is likely to remain in its short-term bullish trend trajectory which in turn may see further potential weakness in the CSI 300 and Hang Seng indices. The only catalyst for a potential revival of bullish animal spirits in China equities is a clear signal from China’s State Council on the implementation of new fiscal stimulus measures in terms of scope and timing.  
Deciphering the Economic Puzzle: Unraveling Britain's Mixed Signals

Deciphering the Economic Puzzle: Unraveling Britain's Mixed Signals

Walid Koudmani Walid Koudmani 12.07.2023 15:47
  In analyzing the state of the British economy, this week's macroeconomic readings have provided a mixed outlook. With indicators such as wages, GDP, and industrial production under scrutiny, market observers are eager to gain insights into the potential depth of the recession and the Bank of England's (BoE) approach to interest rates.   Examining the released figures, renowned economist Walid Koudmani highlights the various nuances in the current economic landscape. Wages in the UK continue to rise, with average earnings for a 3-month period surpassing expectations at a 6.9% year-on-year (YoY) growth rate, slightly higher than the previous level of 6.7% YoY. However, the number of unemployment benefit claims has seen a significant increase of 25.7k, reversing the prior decline of 22.5k. Additionally, the quarterly change in employment of 102 thousand falls short of the previous level of 250k, although it exceeds expectations set at 85k.     FXMAG.COM: What do this week's macroeconomic readings - wages, GDP, industrial production - tell us about the state of the British economy? Will the recession be deep? Will the BoE continue to raise rates?   Walid Koudmani The macroeconomic readings released this week paint a mixed picture of the British economy. Wages in the UK continue to rise with average earnings for a 3-month period increasing by 6.9% year-on-year (YoY), slightly higher than the expected 6.8% YoY and the previous level of 6.7% YoY.  However, the number of unemployment benefit claims increased by 25.7k, reversing the previous decline of 22.5k. The quarterly change in employment amounted to 102 thousand, surpassing the expected 85k but lower than the previous level of 250k. The rise in wage growth is a concern as it could indicate persistent inflationary pressures to come which could lead to a decline in consumer spending, leading to a negative impact on economic growth.  Overall, the macroeconomic readings released this week do not provide a clear picture of the state of the British economy. However, they do suggest that the economy could be facing some headwinds, such as rising inflation and slowing growth. It is too early to say whether the UK will experience a deep recession, but the BoE is likely to continue raising rates in an effort to combat inflation and expectations for those rates continue to increase. While the Pound has benefited from this news, there could be a noticeable pressure on stocks as the cost of money continues to rise and investors are left with less resources to allocate. In addition to this, there are several other factors which may influence the British economy including the outcome of the war in Ukraine, the pace of global economic growth, and the direction of commodity prices. 
Eurozone Services PMI Contracts, Global Bond Declines, Yen Rallies: Market Insights

China Big Tech Drives Momentum-Driven Rally in Stock Market

ING Economics ING Economics 13.07.2023 11:09
China Big Tech is leading the current momentum-driven rally in China stock market. Supported by a weaker USD/CNH that broke below key near-term support of 7.2160. Further hints from China’s top policymakers that the prior 3-year of stringent regulatory crackdowns on China’s leading technology companies have ended. Current momentum-driven rally of China Big Tech may still see a bumpy ride due to a weak external demand environment. Prior to yesterday’s release of the key US consumer inflation data for June that came out cooler than expected, China’s proxies stock indices have crept up higher since the start of this week; from Monday, 10 July to Wednesday, 12 July, the Hang Seng Index recorded a gain of 2.06%, Hang Seng Tech Index (+3.45%), Hang Seng China Enterprises Index (+2.3%). A higher positive momentum intensity is being seen in the Hang Seng TECH Index which comprises China’s Big Tech firms that reintegrated back above its 50 and 200-day moving averages. Also, a significant price action development in terms of relative momentum has taken shape on China’s Big Tech equities listed in the US stock exchanges (the ADRs) that have continued their outperformance over its peers, the US Big Tech since last week.   Relative positive momentum seen in China Big Tech The KraneShares CSI China Internet exchange-traded fund (ETF) has recorded an accumulated gain of 8% since the week of 3 July 2023 till yesterday, 12 July over a return of +0.86% seen in the Nasdaq 100 over the same period.       Fig 1:  Relative momentum trends of KraneShares CSI China Internet ETF & other China equities ETFs as of 12 Jul 2023 (Source: TradingView, click to enlarge chart) Also, positive relative momentum can also be seen against global equities, the ratio of the KranShares CSI China Internet ETF over the MSCI All Country World Index ETF has notched up four consecutive sessions of positive momentum readings based on a five-day rolling basis. Inter-market and sentiment are likely the factors that are the key catalysts for the ongoing short-term outperformance since in China Big Tech that is driving the momentum-induced rally in the Hang Seng benchmark stock indices.     USD/CNH broke below 7.2160 support triggering a positive feedback loop into China equities   Fig 2:  USD/CNH short & medium-term trends as of 13 Jul 2023 (Source: TradingView, click to enlarge chart)     Fig 3:  USD/CNH correlation with HSCEI & HSCTECH as of 13 Jul 2023 (Source: TradingView, click to enlarge chart) The USD/CNH (offshore yuan) foreign exchange rate has a high degree of inverse correlation with the Hang Seng benchmark stock indices and China Big Tech theme play ETF; a rise in the USD/CNH (a weaker yuan) tends to see a fall the above-mentioned indices and ETF, and vice versa. In the past five days, the USD/CNH has inched lower since its seven-month high of 7.2745 printed on 6 July and broke below key near-term support of 7.2160 (also the 20-day moving average that price actions have traded above it since 19 April 2023) on the onset of yesterday’s US CPI data release. Also, reinforced by the narrowing of the premium of the US Treasury 2-year yield over China’s 2-year sovereign bond yield. These observations suggest a potential short-term downtrend phase is in progress for USD/CNH which triggers a positive feedback loop into the Hang Seng bench stock indices and China Big Tech equities.    
Top 10 Stocks to Watch: August 2023 - BY: RYAN SULLIVAN

Top 10 Stocks to Watch: August 2023 - BY: RYAN SULLIVAN

Ryan Sullivan Ryan Sullivan 03.08.2023 11:31
Top 10 Stocks to Watch: August 2023 BY:RYAN SULLIVAN Our list of hot summer stocks includes ecommerce, auto, gambling, entertainment, retail and AI S&P 500 E-Mini Futures reached a year-to-date high of about $4,600, with potential for new all-time highs if it surpasses resistance at $4,630 and $4,700.  The $4,500 support level could be tested if the current bull run ends, possibly triggering another push toward all-time highs.  Stock options can be beneficial after earnings reports to dodge binary volatility but exploit short-term fluctuations.  Market update: S&P 500 e-mini futures up 18% year to date  The S&P 500 e-mini futures—electronically-traded futures and options contracts on the Chicago Mercantile Exchange (CME)—pushed to new year-to-date highs this month on July 12. Since then, we have continued higher to $4,600. We are currently retesting this year-to-date (YTD) high. As I type, the S&P is ticking into $4,600. The next key resistance level above current price action is around $4,630, and the next stop after that is around $4,700.  If price action breaks through $4,630 with force, look for bulls to target $4,700. If that happens as we roll into August, and we do tag $4,700, it would not be too surprising if we try to push to new all-time highs in the S&P 500.    It is also possible that this is the last leg up for the current bull run that started at the end of May this year. If that is the case, the next thing the bears are going to want to test is the $4,500 level support. If $4,500 support holds, we could then see a push to all-time highs anyway.   If the market doesn’t want to record an all-time high yet, it is likely that price action bounces around $4,500 looking for either buyers or sellers to take control.  A quick note on the stock picks in this article; you can put on an options position right after an earnings report, so that you can avoid the binary volatility event but still take advantage of short-term volatility.    Year-to-date price percent change chart for SPY, QQQ, SLV and TLT     Top 10 stocks to watch in August 2023   UBER – 8/1 - Before the Open  AMD – 8/1 - After the Close  PYPL - 8/2 - After the Close  SHOP – 8/2 - After the Close  AMZN – 8/3 - After the Close  DKNG – 8/3 - After the Close  RIVN - 8/8 - After the Close  DIS – 8/9 - After the Close  TGT - 8/16 - Before the Open  NVDA – 8/23 - After the Close  1) Uber Technologies Uber (UBER), a multinational ride-hailing company, disrupted traditional taxi services. Beyond transportation, Uber has diversified into new verticals like food delivery with Uber Eats and freight logistics with Uber Freight. It operates in numerous cities globally and primarily makes money by taking a commission from each ride or delivery.  Uber stock is trading at $47.28, an 86.34% increase from its 2023 opening price of $25.37. The current implied volatility rank (IVR) on the tastytrade platform is 34.5, with the implied volatility (IV) in the next two monthly contracts above 47. Uber has reported positive net income in one of the last five quarterly reports.  Uber’s options market in August and September contracts is a couple pennies wide and offers a field to craft almost any assumption you might have. The product is small enough for a strangle position in smaller accounts. Iron Condors and spreads will also set up well. August and September contracts can be used for earnings plays. It may be helpful to play earnings in August and roll out to September if you need to.     2) Advanced Micro Devices Advanced Micro Devices (AMD), a leading global semiconductor company, designs and builds processors and graphic cards for computers and professional systems. AMD is known for its consumer- and professional-grade CPUs (central processing units) under the Ryzen, Threadripper and EPYC brands, as well as Radeon GPUs (graphic processing units). The company competes directly with Intel (INTC) in the CPU market and Nvidia (NVDA) in the GPU market.  AMD is trading at $112.36, up 70.25% from its opening price of $66.00 in 2023. The IVR on the tastytrade platform is 45.4, with IV in the next two monthly contracts above 49. AMD has reported positive net income in four of the last five quarterly reports.  This options market in August and September is pennies wide and offers the opportunity to form almost any options position you’d like to put on. Five- and 10-dollar wide iron condors and spreads set up well. Make your earnings play in August and roll out to September if you need to.    3) PayPal Holdings PayPal (PYPL), an American company operating a worldwide online payments system, supports online money transfers. PayPal serves as an electronic alternative to traditional paper methods like checks and money orders, enabling users to make payments or hold funds in 25 currencies. The company also offers services like credit product offerings and has business solutions that help merchants collect payments.  PayPal is trading at $73.42, a -0.37% change from its 2023 opening price of $73.69. The IVR on the tastytrade platform is 25.3, and the IV in the next two monthly contracts is above 42. Paypal has reported positive net income in four of the last five quarterly reports.  Paypal’s options market in August and September is pennies wide. An eighteen-delta short Strangle sets up well in August and September with a decent premium to buying power requirement ratio. Short thirty-delta Spreads also set up well if you have a directional assumption.    4) Shopify  Shopify (SHOP), a Canadian e-commerce company, provides a platform for businesses to create their own online stores. Shopify offers tools for managing products, inventory, payments and shipping, which are used by businesses of all sizes. Shopify's platform is subscription-based, and it also generates revenue from its payment processing system, Shopify Payments, as well as other merchant solutions.  Shopify is trading at $65.26, up 82.9% from its opening price of $35.68 in 2023. The IVR on the tastytrade platform is 32.6, with the IV in the next two monthly contracts above 58. Moreover, SHOP has reported positive net income in one of the last five quarterly reports.  Short 17-delta Strangles set up well in August and September, with a good premium collected to buying power required ratio. Iron condors and spreads will also set up well if you’d like to define your risk going into an earnings play.    5) Amazon  Amazon (AMZN), an American multinational technology company that started as an online marketplace for books, but has expanded to a wide variety of products and services. It is known for its disruption of well-established industries through technological innovation and mass scale. It is now the world's largest online marketplace, AI assistant provider, live-streaming platform and cloud computing platform, with various other operations in areas like digital streaming, brick-and-mortar retailing and more.  Amazon is trading at $129.10, reflecting a 51.06% increase from its opening price in 2023. The IVR on the tastytrade platform is 30.3, and the IV in the next two monthly contracts is above 38. Amazon has reported positive net income in three of the last five quarterly reports.  Amazon’s options market is very liquid and pennies wide in August and September. A liquid market like Amazon's offers the opportunity to craft almost any type of options position you’d like create. Calendar spreads are available if you’d like to take advantage of the difference in volatility between monthly contracts. Strangles, iron condors and spreads also set up well.     6) DraftKings  DraftKings (DKNG), a digital sports entertainment and gaming company, provides daily fantasy sports, sports betting and iGaming. DraftKings enables users to enter daily and weekly contests and win money based on individual player and team performances in five major American sports, Premier League and UEFA Champions League soccer, NASCAR auto racing, Canadian Football League, mixed martial arts, and tennis.   DraftKings is trading at $31.50, marking a significant increase of 170.15% from its 2023 opening price of $11.66. The IVR on the tastytrade platform is 28.2, while the IV in the next two monthly contracts stands above 60. However, DKNG has not reported positive net income in any of its last five quarterly reports.  DKNG is a small enough product and has liquid enough markets for smaller accounts to consider an undefined risk position. However, be cautious because smaller underlyings tend to make bigger moves when they get going. At-the-money spreads also set up well for directional assumptions.   Read more
Pound Slides as Market Reacts Dovishly to Wage Developments

The Everything Selloff: Examining Global Market Trends Amidst Growing Concerns

Ipek Ozkardeskaya Ipek Ozkardeskaya 18.08.2023 08:00
The everything selloff By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank   The global selloff intensified yesterday, after the FOMC minutes released Wednesday highlighted that the Federal Reserve (Fed) continues to see significant risks to inflation. And if that's not enough, Atlanta Fed's GDPNow printed an eye-popping growth forecast of 5.8% for Q3 on Wednesday, up from 5% printed a day before. Atlanta Fed computes this number using the data available to them at a time t, therefore the number is not necessarily accurate, but it reflects the positive data released lately, and fuels worries that with such a strong growth, the US inflation could only make a U-turn and take a lift. Yesterday, the Philly Fed index printed a surprisingly strong number, as well. This is why, we continue to see the upside pressure in yields persist, in the US and around the world, though we saw some respite in the US 2-year yield that bounced lower from the 5% mark earlier in the week, and the 10-year yield spiked above 4.30% before falling back to 4.25% this morning.   But note that there is more to this story. Long story short, the US Treasury has been printing a lot of T bills lately, and fell well behind the government bond issuance, and the latter helped keeping US liquidity well contained since the US exited its debt ceiling crisis after which the Treasury started refilling its general account. That was supposed to pull liquidity away from the market. But in the meantime, the Fed was pushing liquidity into the system by reverse repo operations, allowing the money market funds to buy T bills and release cash. The problem is, nowadays, the percentage of T bills approaches the 20% level, which is a self-induced limit for the Treasury, and the Treasury will shift back to issuing bonds, instead of T bills. The latter will increase the amount of sovereign bonds in the system at a time the Fed is decreasing its balance sheet by QT, and the banks don't necessarily want to buy bonds either. So, the increasing supply, and the decreasing demand for US sovereigns will be one major force pushing the US yield curve higher. And if the strong economic data translates into higher inflation, the impact on yields will likely be higher. So, yes, the US 30-year yield is at the highest levels since 2011 and that looks appetizing, especially if the risk sentiment sours – due to multiple reasons ranging from geopolitical tensions to China worries – but the downside risks in the US sovereign bonds market prevails. And Bill Ackman said earlier this month that the 30-year yield could hit the 5% mark.  And the upside pressure in sovereign yields is true for other parts of the world as well, because obviously when the US coughs the world catches a cold. More precisely, higher US yields also translate into a stronger US dollar, and a stronger US dollar is inflationary for the rest of the world. If nothing, the energy and raw material prices that are negotiated in USD terms on international markets simply become more expensive when imports are reverted back to local currencies, and that, alone, is enough to push inflation higher in the rest of the world when the US dollar appreciates. The EURUSD fell to 1.0856, the AUDUSD slipped below 64 cents and the USDJPY spiked above 146.50. The correction is in play this morning and we could see the US dollar retreat further into the weekly closing bell, but the stronger dollar trend is clearly in play and it is worrying. Looking at yields elsewhere the US, the 10-year gilt yield has now surpassed the levels last seen during the Liz Truss induced disaster peak and is headed toward the 5% psychological mark while the German 10-year yield hit 2.70%, a level last seen in 2011 as well. Even the Japanese 10-year yield, which is controlled by the BoJ and should not exceed the 50bp benchmark by 'too much', goes up significantly.  As a result, the selloff in equities deepens. The S&P500 sank to 4370 yesterday and is getting ready to test the minor 23.6% Fibonacci retracement on October to July rally, and the base of that positive trend, while Nasdaq 100 is no more than 8 points from its own 23.6% retracement and already fell below the ascending trend base. The Stoxx600 slumped below the 200-DMA and is flirting with its own 23.6% retracement level, and the Japanese Nikkei, which was one of the rising stars of the year, and which recorded a rally past 30% since January, has fallen below its 23.6% retracement and is preparing to test the 100-DMA.   And note that this simultaneous selloff in stocks and bonds is a sign that the market liquidity is draining. Bitcoin, which is a gauge of market liquidity, slumped more than 7% yesterday and traded close to the $25K level. According to CoinGlass, $1 billion left cryptocurrencies over the past 24 hours and Bitcoin suffered almost half of the liquidations.   
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

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

Michael Hewson Michael Hewson 04.09.2023 10:36
Ashtead Q1 24 – 05/09 – has been one of the better performers on the FTSE100 this year, Ashtead's exposure to the US market ensuring that it has benefitted from the resilience of the US economy, through its US subsidiary Sunbelt. When the company reported its Q4 and full year numbers back in June the shares slipped back. Increased rental revenue has helped boost revenues and profits, with Q4 revenue rising from $1.87bn a year ago to $2.13bn. Full year revenues rose by 24% to $9.67bn, helping to boost pre-tax profits by 30% $2.15bn. For Q1 revenues are expected to rise to $2.65bn, with Sunbelt US expected to contribute $2.27bn of that, with operating margins expected to remain steady at 30%. Net profit is expected to increase to $476m.     GameStop Q2 24 – 06/09 – the last two earnings reports have seen decent gains in the GameStop share price, however on both occasions these spikes proved to be the top of the moves higher with the share price now close to its lowest levels this year. It would appear that the higher rate environment is blunting risk appetite to these so-called meme stocks and its not hard to see why. While the company posted a surprise profit in Q4, it slipped back to a loss in Q1 of -$0.14c a share and is expected to see a similar loss in Q2 as well. Q1 revenues came in at $1.24bn, with hardware and accessories making up over half of that total at $726m. For Q2 revenues are expected to come in at $1.14bn, although inventories should reduce to $600m. Same store sales are expected to decline by 0.1%.   DocuSign Q2 24 – 07/09 – DocuSign shares have had a disappointing time of it year to date, its shares slightly lower year to date, despite generally seeing their recent quarterly numbers coming in better than expected. They haven't really recovered from the weak guidance it issued at the end of last year when it gave weak guidance for Q1. When DocuSign reported in June, revenues came in comfortably ahead of expectations at $661.4m, while profits came in at $0.72c a share, sending the shares sharply higher initially, but the gains didn't last, even as guidance was upgraded for Q2 revenue of $675m to $679m, while full year revenue forecast was raised to between $2.71bn to $2.73bn.    
Turbulent Q2'23 Results for [Company Name]: Strong Exports Offset Domestic Challenges

Warsaw Stock Exchange SA: August Sales and Gross Profit Margin Report Unveiled – Impact Expected to be Neutral

GPW’s Analytical Coverage Support Programme 3.0 GPW’s Analytical Coverage Support Programme 3.0 08.09.2023 14:50
This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 4.0.     Event: Sales and gross profit margin for August revealed. On Tuesday, during the WSE trading hours, Action released preliminary sales and gross profit margin on sales for August. The Group’sconsolidated revenues reached PLN 219 million (up 16% yoy) and the gross profit margin on sales arrived at 7.6% (-0.3 mom/ +0.5 ppyoy). For January-August cumulatively, Action’s revenues reached PLN 1,557 million (up 5% yoy) with the weighted average gross margin on salesat 8.0% (+0.5 pp yoy). Expected impact: Neutral, as the impact should have been already discounted. Still, we cannot preclude that ultimately the reported marginproves to be higher than the preliminary one, as it was in the previous quarters.
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

Behind the Scenes: Legal Drama at FTX, Flexport's CEO Reshuffle, Goldman Sachs' Tech IPO Optimism, and More

FXMAG Education FXMAG Education 10.09.2023 06:55
In the ever-evolving world of business, there are always exciting developments and trends to keep an eye on. From legal proceedings to potential IPOs and fundraising activities, the business landscape is constantly changing. Here's a roundup of some of the latest highlights in the business world: Legal Proceedings: FTX's Ryan Salame Pleads Guilty Former FTX executive Ryan Salame has pleaded guilty to two criminal counts. This development has significant implications for the cryptocurrency exchange world, and it will be interesting to see how it unfolds. Executive Shakeups at Flexport Flexport, a prominent logistics and freight forwarding company, is undergoing significant changes at the executive level. This move comes after the resignation of CEO Clark, and it could reshape the company's future direction. Goldman Sachs CEO's Optimism Goldman Sachs CEO David Solomon has expressed optimism about a potential Wall Street rebound, but there's a catch. He believes this rebound hinges on the performance of tech IPOs. This perspective sheds light on the interconnectedness of various sectors in the financial industry. ChatGPT Traffic Trends Downward For the third consecutive month, ChatGPT's traffic has seen a decline. This could reflect shifts in user preferences, technology adoption, or other factors. It's a reminder of how quickly the tech landscape can change. SEC's Interest in Bed Bath & Beyond Trades The U.S. Securities and Exchange Commission (SEC) is investigating trades made by Ryan Cohen, which could have repercussions in the retail industry. Regulatory scrutiny is always of interest to investors and market observers. Earnings and Market Movements Earnings season is in full swing, and companies like DocuSign have beaten Q2 analyst earnings and revenue estimates. These results can provide valuable insights into market trends and investor sentiment. Mergers and Investments The business world is abuzz with merger and investment activities. From French billionaire Francois Pinault's acquisition of Creative Artists Agency to Summit Materials' purchase of Cementos Argos, these deals reshape industries and create new market leaders. Venture Capital and Startups Startups continue to attract significant investments. Notable funding rounds include AI research startup Imbue, Marian Oncology, and H2 Green Steel. These startups are at the forefront of innovation and technological advancements. Crypto Corner Cryptocurrency news continues to make headlines. From legal action against fraudulent schemes to regulatory scrutiny of industry leaders like Digital Currency Group, the crypto world is navigating challenges and opportunities. Executive Insights In a world where data and insights are crucial, Bloomberg's analysis of the S&P 500's top-performing stocks offers intriguing insights for investors. Understanding historical trends can inform future investment strategies. As the business landscape evolves, staying informed about these developments can help investors, entrepreneurs, and industry professionals make informed decisions. Keep an eye on these stories as they continue to unfold in the dynamic world of business.
Why India Leads the Way in Economic Growth Amid Global Slowdown

Capitalizing on Adobe's Potential: A Bullish Outlook Through Call Options

Saxo Bank Saxo Bank 13.09.2023 13:54
Strategies to consider Bullish outlook - buying call options For those optimistic about Adobe's prospects, buying the dip could be a golden opportunity. Through options, this strategy morphs into purchasing a call option, allowing you to capitalize on potential upward movements without owning the stock. Here's a setup for your consideration:       Strategy: buying a call option Trade setup: Action: BuyToOpen Quantity: 1 Expiry: 21-Jun-2024 Strike: 450 Premium: $135.15 (per share) Premium and risk: Premium cost: $135.15 x 100 (per contract) = $13,515 Max risk: $13,515 (if Adobe is below 450 at expiry) Max reward: Unlimited (potential gains amplify as Adobe's stock price rises) Breakeven Point: $450 (strike) + $135.15 (premium) = $585.15 Comparison with buying stock: Leveraging the stock's potential upward movement while limiting the downside risk to the premium paid. It requires a smaller initial investment compared to buying 100 shares at the current price of $541.07.
Why India Leads the Way in Economic Growth Amid Global Slowdown

Capitalizing on Adobe's Potential: A Bullish Outlook Through Call Options - 13.09.2023

Saxo Bank Saxo Bank 13.09.2023 13:54
Strategies to consider Bullish outlook - buying call options For those optimistic about Adobe's prospects, buying the dip could be a golden opportunity. Through options, this strategy morphs into purchasing a call option, allowing you to capitalize on potential upward movements without owning the stock. Here's a setup for your consideration:       Strategy: buying a call option Trade setup: Action: BuyToOpen Quantity: 1 Expiry: 21-Jun-2024 Strike: 450 Premium: $135.15 (per share) Premium and risk: Premium cost: $135.15 x 100 (per contract) = $13,515 Max risk: $13,515 (if Adobe is below 450 at expiry) Max reward: Unlimited (potential gains amplify as Adobe's stock price rises) Breakeven Point: $450 (strike) + $135.15 (premium) = $585.15 Comparison with buying stock: Leveraging the stock's potential upward movement while limiting the downside risk to the premium paid. It requires a smaller initial investment compared to buying 100 shares at the current price of $541.07.
Tepid BoJ Stance Despite Inflation Surge: Future Policy Outlook

Profiting from a Potential Decline: Buying Put Options for a Bearish Outlook on Adobe

Saxo Bank Saxo Bank 13.09.2023 13:57
Bearish outlook - buying put options If you foresee a period of decline for Adobe, buying a put option could be your ally, helping you profit from a potential downturn.         Strategy: buying a put option Trade setup: Action: BuyToOpen Quantity: 1 Expiry: 21-Jun-2024 Strike: 640 Premium: $108.35 (per share) Premium and risk: Premium cost: $108.35 x 100 (per contract) = $10,835 Max risk: $10,835 (if Adobe stays above 640 at expiry) Max reward: Substantial (grows as Adobe's stock price decreases) Breakeven point: $640 (strike) - $108.35 (premium) = $531.65 Comparison with buying stock: This strategy mitigates the risk of short selling, providing a safer route to profit from a potential decline in Adobe's stock price.    
Czech National Bank Prepares for Possible Rate Cut in November

Boosting Income with Covered Calls: A Bearish/Bullish Outlook on Adobe Stock

Saxo Bank Saxo Bank 13.09.2023 13:59
Bearish/bullish outlook - writing covered calls  For Adobe stockholders, writing a covered call might offer an avenue to earn additional income, leveraging the stocks you already own.       Strategy: writing covered calls Trade setup: Action: SellToOpen Quantity: 1 Expiry: 22-Sep-2024 Strike: 575 Premium: $6.10 (per share) Premium and risk: Premium received: $6.10 x 100 (per contract) = $610 Max risk: Moderate (missing out on potential upside if Adobe's stock price surges past 575) Max reward: $610 (retained premium if Adobe stays below 575 at expiry) Breakeven point: Current stock price – premium received = $541.07 - $6.10 = $534.97 Yield: Yield over 10 days: 1.13% Annualized yield: 41.25% Comparison with buying stock: If you are an Adobe stockholder, this strategy allows you to earn a yield of 1.13% over 10 days, which equates to an annualized yield of 41.25% if replicated successfully throughout the year, by agreeing to sell the stock at a predetermined price within a ten-day period.
The Russell 2000 Breaks Below Key 200-Day Moving Average: Implications for the US Economy and Other Benchmarks

The Russell 2000 Breaks Below Key 200-Day Moving Average: Implications for the US Economy and Other Benchmarks

Ed Moya Ed Moya 14.09.2023 10:22
The small-cap Russell 2000 which is considered as a better proxy of the US economy has just broken below its key 200-day moving average. It is the worst-performing major US benchmark stock index since August 2023. Its recent major downtrend phase from 5 November 2021 to 16 June 2022 started ahead of the other indices; S&P 500, Nasdaq 100, and Dow Jones Industrial Average. Given such a leading element, a further down move in the Russell 2000 may trigger a similar negative feedback loop into the other US benchmark stock indices. Watch its key short-term resistance at 1,865.   Since the US regional banking crisis that imploded in early March this year, the performance of the small-cap Russell 2000 has not made any headway as it failed to break above its major “Symmetrical Triangle” range resistance at 2,009 in place since 16 August 2022. Also, in the past two months, it has been the worst-performing major US benchmark stock indices where it ended August with a loss of -5.17%, way below the S&P 500 (-1.77%), Nasdaq 100 (-1.62%), Dow Jones Industrial Average (-2.36%). For the current month-to-date performance as of 13 September, the Russell 2000 has remained in the doldrums with a loss of -3.10% and underperformed against the S&P 500 (-0.89%), Nasdaq 100 (-0.98%), Dow Jones Industrial Average (-0.42%) over the same period.   Broke below key 200-day moving average   Fig 1: US Russ 2000 major and medium-term trends as of 14 Sep 2023 (Source: TradingView, click to enlarge chart) The current price actions of the US Russ 2000 Index (a proxy for the Russell 2000 futures) have inched lower since the 1 August 2023 high of 2,009 and it is now almost at a similar price level during the onset of the US regional banking liquidity crisis that erupted on 9 March 2023. Technical analysis and momentum factor are now flashing signs of potential medium-term weakness as yesterday’s daily price action at the close has broken below its key 200-day moving average slightly at the end of yesterday, 13 September US session. Also, the US Russ 2000 Index is the sole US benchmark index that has breached below the key 200-day moving average ahead of the others (S&P 500, Nasdaq 100 & Dow Jones Industrial Average). Interestingly, in the prior major downtrend phase, the US Russ 2000 Index kickstarted the bearish movement ahead of the rest where its all-time high of 2,464 peaked on 8 November 2021 before the respective peak periods of all-time highs of the S&P 500 (4 January 2022), Nasdaq 100 (22 November 2021), Dow Jones Industrial Average (5 January 2022).   Therefore, if the US Russ 2000 starts to exhibit another bout of multi-week down move sequence thereafter and breaks below the major “Symmetrical Triangle” range support at 1,734, it may signal the start of another major downtrend phase for the US benchmark stock indices. Oscillating within a short-term minor downtrend   Fig 2: US Russ 2000 short-term minor trend as of 14 Sep 2023 (Source: TradingView, click to enlarge chart) Since its 1 September 2023 high of 1,931, the price actions of the US Russ 2000 Index have evolved within a minor descending channel and traded below a downward-slopping 20-day moving average which indicates a short-term minor downtrend is in motion. Watch the 1,865 key short-term pivotal resistance to maintain the short-term bearish scenario to see the intermediate supports coming in at 1,832 and 1,814 (Fibonacci extension from 1 September 2023 high, lower boundary of the minor descending channel & 3 April/19 April 2023 swing lows). On the flip side, a clearance above 1,865 negates the bullish tone for a squeeze up towards the 1,894/1,898 resistance zone (congestion area of 1 September/6 September 2023 & 61.8% Fibonacci retracement of the current minor down move from 1 September 2023 high to 13 September 2023, US session low).  
Technical Analysis of European Indices: DAX, AEX25, BEL20, CAC40, and SMI20 - September Update

Technical Analysis of European Indices: DAX, AEX25, BEL20, CAC40, and SMI20 - September Update

Saxo Bank Saxo Bank 14.09.2023 15:17
In this Technical Update: DAX / GER40, AEX25 / NETH25, BEL20 / BELG20, CAC40 / FRA40 and SMI20 / SWISS20 DAX is range bound between 16,060 and 15,482. Break out needed for direction. Negative sentiment on RSI is indicating break is to be to the down side, and with the 55 and 100 Moving Average slightly declining the underlying trend sentiment is bearish. If closing below key support at around 15,482 there is downside risk to around 15K.Breaking bullish can be a struggle with the two Moving Average acting as a ceiling. It could be a struggle for DAX to penetrate. But if it does a move to July peak around 16,500 is likely       AEX25/NETH25 is bouncing from key strong support at around 730. However, the trend is down and there is no RSI divergence supporting the view of lower AEX levels. If AEX is closing below 730 a swift sell-off down to around 716-710 support is likely.For AEX to demolish the bearish trend a close above 755 is needed.However, with the 55 Moving Average on the verge of breaking below the 100 while they are bot declining thus forming a Death Cross upside potential is limited. That is not bullish for AEX     BEL20/BELG20 is side stepping failing to close above key resistance at around 3,696.RSI sentiment is negative indicating BEL20 is likely to trade lower in coming days and weeks.A close below 3,610 could ignite a sell off down to around 3,600-3,550.A close above 3,696 is needed for BEL20 to reverse to uptrend         CAC40/FRA40 Index has been range bound since April with a bearish undertone. The 200 Moving Average is providing support  but upside potential seems limited with the Index moving below declining 55 and 100 Moving Averages. A re-test of key strong support at around 7,082 is in the cards.If CAC40 is closing below 7,082 there is no strong support until around 6,900       SMI20/SWISS20 is forming symmetrical triangle pattern. Break out is needed for direction.Break out direction is likely to be to the downside as indicated by the negative RSI sentiment and all Moving Averages decliningIf that is the scenario that will play out SMI has downside potential to around 10,515 before finding support.Minor support at around 10,750.If Bullish break out there is strong overhead resistance with the declining Moving Averages above the Index.A close above 11,173 is needed for bullish trend      
Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

Euro-dollar Support Tested Amidst Rate Concerns and Labor Strikes

Ipek Ozkardeskaya Ipek Ozkardeskaya 25.09.2023 11:28
Euro-dollar at important support By Ipek Ozkardeskaya, Senior Analyst |Swissquote Bank   The week started on a cautious note as stocks in Asia mostly sold off following a rough week in the US, where the Federal Reserve's (Fed) hawkish pause triggered a fresh wave of worries that the rates would stay higher for longer. The US 2-year yield bounced lower after hitting 5.20%, yet the US 10-year continues its journey higher and hit 4.50% on Friday. The S&P500 slipped below its ascending base since last October, fell below its 100-DMA, and closed the week at the lowest levels since June, having recorded the worst performance over the week since the banking crisis in March. BoFA said that equity investors are dumping stocks at the fastest level since last December, and Morgan Stanley warned that stocks are now 'fragile'. Indeed! More fragile than the S&P500 are the rate sensitive technology stocks, and the small cap stocks. The growing divergence between the S&P500 and Russell 2000 index is also flashing 'recession', on top of the heavily inverted US yield curve.  Elsewhere, the UAW strikes will broaden to all GM and Stellantis parts plants in the US, which means that 5600 more workers will join the movement (Ford will likely be spared, for now, as some good progress is made on negotiations with the UAW) and the US will shut down by the end of the week if politicians fail to pass a dozen of bills. The latest US GDP update will fall in this chaotic environment, but the expectation is a positive revision from 2.1% to 2.3%.  In the currency markets, the US dollar extends gains. The dollar index entered the bullish consolidation zone after the Fed kept the possibility of another rate hike before the year ends on the table when it met last week, and said that the rates will likely stay higher for longer next year.   The EURUSD tested an important Fibonacci support last week, the major 38.2% retracement level which should distinguish between the positive trend building since last year, and a slide into the bearish consolidation zone. There is a stronger case for further euro weakness than the contrary. Released last Friday, the preliminary September PMI figures were mixed; the Eurozone manufacturing further slowed but German numbers hinted at some improvement. This week, we will see how the recent slowdown impacted the inflation dynamics in September. Headline inflation in the euro area is expected to have slowed from 5.2% to 4.5% this month, a slowdown that would defy the rising energy prices and the euro depreciation. Core inflation is seen softening from 5.3% to 4.8%. Any softness in inflation figures should give further support to the euro bears, while higher than expected numbers, which I believe could be the surprise of this week could revive the European Central Bank (ECB) hawks, but will hardly prevent the euro from seeking into a deeper depression, as further ECB action would also mean a bigger hit on economies. That's a fear that will likely keep euro bulls away from the market for now.  On the corporate calendar, Micron Technology and Nike will be releasing their latest quarterly results, and TotalEnergies Investor Day Event will gather happy industry players as US crude consolidates gains above $91pb with no big sign of a significant downside correction.  
Bank of Canada Preview: Assessing Economic Signals Amid Inflation and Rate Expectations

Market Insights: CFTC Report Reveals Stable Futures Market, Dollar Maintains Strong Positioning

InstaForex Analysis InstaForex Analysis 17.10.2023 15:34
According to the latest CFTC report, the past week was relatively calm in the futures market. One notable change was the value of the net short yen by position, which corrected by 1.2 billion, while changes in other currencies were minimal. The US dollar's net positioning, after sharply rising the previous week, saw a 0.3 billion correction, bringing it to 8.5 billion, indicating a firm speculative positioning for the dollar. Other factors that supported the greenback are the drop in the number of long positions in oil and especially gold, with a weekly change of -4.8 billion, implying further declines. This often signifies growing bullish sentiment for the US dollar.   The University of Michigan's Consumer Sentiment Index fell to 63.0 in October, the reading was below the forecast of 67.2, reaching the lowest level since May. This marks the third consecutive decline and can be largely attributed to rising gas prices and a decline in the stock market. However, consumer spending remains at a good level despite weaker sentiment in recent months. China's consumer price index remained flat from a year earlier in September, while the Producer Price Index fell by 2.5% as concerns linger about weak demand. Both figures were slightly below consensus estimates. This week's data on industrial production, retail sales, and third-quarter GDP will provide a clearer picture of the impact of the government's additional stimulus measures. The conflict between Israel and Hamas has quickly escalated into the bloodiest clash in the past 50 years from both sides. As both Israel and Iran are minor natural gas exporters, European natural gas prices rose by about 40% last week. Oil markets remain calmer due to reduced demand and excess production capacity. US consumer price inflation for September shows headline prices rose 0.4% month-on-month (consensus 0.3%), and the core index slowed down from 4.3% year-on-year to 4.1% year-on-year, which is a positive sign for the Federal Reserve. There is growing confidence that the Fed's rate hike cycle is coming to an end.   The British pound corrected slightly above the resistance level at 1.2305 and then resumed its decline. It is assumed that the local peak has been formed, and the sell-off will continue, with the nearest target being 1.2033 (the low from October 4). In case it breaks below this level, selling pressure may intensify, with the long-term target being 1.1740/90.  
Continued Growth: Optimistic Outlook for the Polish Economy in 2024

Fed Continues Rate Hikes Amid Strong Growth, Inflation Concerns

ING Economics ING Economics 02.11.2023 12:26
Don't expect the Fed to stop amid strong growth, higher inflation.  By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank    The US dollar was bid on Tuesday thanks to a rapid selloff in the Japanese yen, after the Bank of Japan (BoJ) announced mini policy loosening steps that didn't find buyers. Loosening the upper limit on the 10-year JGB yield in the context of a YCC policy is not enough when considering that the BoJ should drop it altogether and for good.   But on the contrary, not only that the BoJ is not giving up on its YCC policy, but is on track to match its record annual bond purchases. Almost all the Japanese 10-year bonds are held by the BoJ – which in my opinion will become illegal one day - and the BoJ hasn't yet moved an inch towards normalization of its rate policy whereas the major central bank rate hikes start plateauing after more than a 1.5 year of aggressive rate hikes. So, no wonder the yen got smashed yesterday. The USDJPY spiked past 151, even though the uptick in the US - Japan 10-year yield spread – which also ticked up because of a jump in the Japanese 10-year yield, didn't attract the yen longs. The only thing that holds traders back from more aggressive selling is the fear of a direct FX intervention. If that happens, there is a good reason to buy a dip.   Zooming out of Japan, the US dollar index consolidated a touch below last month peak. The US consumer confidence index dropped to a 5-month low, but the latest wages data continued to give signs of strength. Yes strength – I am sorry. The employment cost index, a top-notch gauge of what employers spend on compensation, rose 1.1% in Q3 – slightly higher than a quarter earlier. Wages and salaries rose 4.6% - above the US headline CPI, and well above 3% as before the pandemic. And that was before the UAW reached a jaw-dropping deal with Detroit's 3 carmakers where they nailed a 25% increase in wages and around 150% increase in compensations for the low-paid tier of temporary workers. The ADP data is expected reveal around 150K new private job additions in October, and JOLTS data is expected to show a drop in job openings. On Friday, we will have a look at the official figures. The latter won't impact the Federal Reserve (Fed) expectations for this week's policy decision. But any further strength in US jobs data will reinforce a potentially hawkish stance from the Fed policymakers this week.   The Fed.  We know that the Fed is not done hiking the interest rates. We know that Jerome Powell won't call the end of the policy tightening after seeing a blowout growth data – which showed that the US GDP grew almost 5% in Q3 (that's more than China!), and inflation ticked higher because Americans kept spending. Duh! And if people kept spending their savings it was because they didn't necessarily feel threatened to lose their jobs, or remain jobless for long. So yes, the jobs market strength is playing tricks on the Fed, and it's clearly not loose enough. The chances are that we won't hear anything soothingly dovish. 'The higher yields help us do the job' is the best it will get.   You know where growth is not strong?  China is not doing brilliant and this week's economic data in China showed that the Chinese factory sector slipped back into contraction and the Eurozone economies announced gloomy GDP updates, as well. The German economy contracted in Q3, the French and Italian economies stagnated, the overall Eurozone growth fell 0.1% on a quarterly basis.   But at least, inflation slowed. As a result of soft growth and inflation data, the EURUSD couldn't extend gains above the 50-DMA and sank below the 1.06 level yesterday. The positive trend is losing momentum, the divergence between the strength of the US economy versus its European counterparts, and the divergence between the Fed and the European Central Bank (ECB) outlooks play in favour of a deeper depreciation in the euro against the greenback.  Crude approaching $80pb crossroads  US crude slipped below its 100-DMA yesterday as buyers became rare on news that Israel's ground offensive is not as violent as expected. A 1.3mio barrel build in US crude inventories may have helped the bears to push the selloff below the $82pb level. Yet, oil bears will certainly hit a decent support near the $80p level because at this level, they know that Saudi has their back. And the risks of geopolitical nature remain clearly tilted to the upside. For those who bet that we will see a dip near the $80pb level, it is soon time to roll up the sleeves.   Worst since the pandemic, and yet...  The S&P500 rose on the last day of October but recorded its longest monthly slide since the pandemic. Still, the index kicks off the new month a touch above the major 38.2% retracement which should distinguish between the continuation of last year's rally, and a slide into the medium-term bearish consolidation zone. The next direction will depend on whether the US yields will consolidate and eventually come lower, or they will continue their journey higher. In the second scenario, we will likely see major US stock indices sink into a bearish trend. 
Red Sea Shipping Crisis Continues Unabated: Extended Disruptions Forecasted Into 2024

Turbulent Markets: Apple's Disappointment and the Jobs Day Impact

Ipek Ozkardeskaya Ipek Ozkardeskaya 03.11.2023 14:11
Jobs day!  By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank   The S&P500 jumped almost 2% to above its 200-DMA, and Nasdaq 100 gained 1.74% and tested its 50-DMA to the upside as the rally in the US sovereign bonds extended to another day.   Apple disappoints Apple will likely slow the rally in major US indices. Apple shares dived up to 4% in the afterhours trading after announcing that the sluggish Chinese demand for iPhones dented revenue. The Mac computers sales also fell short of a billion USD. Apple sales fell for the fourth straight quarter, the longest such decline in 22 years. As a result, Apple stock could sink to $170 a share, the critical 38.2% Fibonacci retracement level, if taken out, would let Apple sink into the medium-term bearish consolidation zone. The only thing that could save Apple from falling into dark waters is... a further rally in US bonds, and a further fall in yields.  Falling yields are no good for Fed The US bond rally popped this week because the US Treasury said that it would borrow slightly less than previously thought and slightly less 3-, 10- and 30-year papers. The Federal Reserve (Fed) hinted that the rate hikes could be coming to an end because the recent surge in US long term yields helped them tighten the financial conditions without the need for another rate hike.   But if the yields fall at this speed, the Fed expectations will become hawkish very quickly, and depending on how far the market will go, the Fed could be obliged to hike rates again in December, or in January to keep financial conditions tight enough.   Jobs day!  US growth is strong, and the jobs market remains healthy. The Fed thinks that solid labour-force participation and immigration explain the resilience of the jobs market. According to the consensus of analyst estimates on Bloomberg, the US economy is expected to have added 180K new nonfarm jobs, the unemployment rate is seen steady at around 3.8% and the wages growth may have slowed from 4.2% to 4% on an annual basis. Any strength in job additions or wages growth data could bring bond trades back to earth and remind them that if the US jobs market - and the economy - remains this strong, the Fed could turn hawkish again. But strong jobs data in a context of higher supply is not necessarily inflationary.  Gloomy UK outlook  The Bank of England (BoE) kept its interest rate unchanged for the second straight month yesterday. Some MPC members still voted for a 25bp hike to make sure that the pause is not premature, but they all said the same thing: it's too early to talk about rate cuts.   Good news is that inflation may fall below 5% in October and somewhere near 4.5% by the year end. But at 4.5-5%, inflation is still more than twice the BoE's policy target. Therefore, the BOE can't promise that it's done hiking. It could only hope that the cumulative impact of higher rates on the economy would do the rest of the heavy lifting.   In the best-case scenario, the UK's gloomy economic outlook - which seems to become gloomier as months go by - weighs on demand and brings inflation lower. In the worst-case scenario, inflation remains sticky while the economy sinks into a recession. In both cases, the BoE wouldn't hike. The expectation of another hike is down to 1 in 3 and markets now fully price in 3 quarter-point cuts by the end of 2024. The softer economic outlook and softening BoE expectations are threatening for sterling bulls both against the US dollar and the euro.  
Foot Locker Q3 2024: Recovery Path After Q2 Plunge and Earnings Outlook

Foot Locker Q3 2024: Recovery Path After Q2 Plunge and Earnings Outlook

Michael Hewson Michael Hewson 27.11.2023 15:02
  Foot Locker Q3 24 – 29/11 – back in August Foot Locker shares plunged to a 10-year low, just below $15, after sliding to a loss in Q2 of $0.05c a share and falling short on revenues at $1.86bn. Inventory levels came in higher than expected, with signs of softening demand in July. The retailer also slashed its full profit outlook from between $2 and $2.25 to $1.30 and $1.50, as well as pausing the dividend. Since then, the shares have rebounded, helped by stronger numbers from the likes of sector peers like Nike and JD Sports, who own the Finish Line brand in the US. For Q3 revenues are expected to come in at $1.97bn while same store sales are expected to decline by 9.7%, while profits are forecast to plunge from $1.27c a share to $0.26c a share.    
Poland on the Global Investment Map: Analyzing EBRD’s Record €1.3 Billion Investment

Decision Week: Analyzing the Impacts of Strong US Jobs Report on Markets and the Fed's Goldilocks Scenario

ING Economics ING Economics 12.12.2023 14:29
Decision week By Ipek Ozkardeskaya, Senior Analyst | Swissquote Bank   Friday's jobless report from the US was strong. It could've gone both ways, but it went well. The US economy added nearly 200'000 new nonfarm jobs in November, average earnings were higher than expected on a monthly basis, but stable around the 4% level on a yearly basis. That's twice the Federal Reserve's (Fed) inflation target and sticky, but it didn't bother much, and the jobless rate fell from 3.9% to 3.7%, as the participation rate slightly improved.   The stronger-than-expected jobs data sent the US 2-year yield to near 4.75%, and the 10-year yield recovered to 4.28%, but the stock traders gave a cheerful reaction to the news that the US jobs market is softening, not collapsing. The latest data suggests that the Fed is one step closer to realizing its Goldilocks scenario: it could win the inflation battle without pushing the economy into recession. Is it too good to be true? This week's inflation update and the Fed decision will tell.  The S&P500 traded at a ytd high on Friday, and Nasdaq closed a touch below its ytd high. The US dollar index recovered from the selloff of the day before which was mostly driven by a notable jump in the yen following the Bank of Japan (BoJ) Governor Ueda's confession last week that the BoJ's negative rates would get tougher to maintain from the end of the year. The USDJPY – which fell from above 147 to 142 in a single move – is now consolidating gains around 145 level as traders are out guessing whether the BoJ will exit the negative rates before the year ends. Elsewhere, gold slipped below $2000 per ounce, the EURUSD consolidates near its 100-DMA, near the 1.0760 mark, Cable is losing field on the back of a broad-based USD rebound and tests the 1.25 to the downside, while the AUDUSD hovers around its 200-DMA. The pair is still in the positive trend according to the Fibonacci retracement on the latest rebound, but on the verge of sinking into the bearish consolidation zone, as is the case for the other major peers.      
Bank of Japan Holds Steady, UK Public Finances in Focus: Market Analysis

Bank of Japan Holds Steady, UK Public Finances in Focus: Market Analysis

Michael Hewson Michael Hewson 25.01.2024 12:31
Bank of Japan stays on hold, UK public finances in focus By Michael Hewson (Chief Market Analyst at CMC Markets UK)   European markets saw a cautious but broadly positive start to the week, despite weakness in basic resources which served to weigh on the FTSE100. US markets picked up where they left off on Friday with new record highs for the Dow, S&P500 and Nasdaq 100 although we did see a loss of momentum heading into the close, as US yields rebounded off their lows of the day.   The tentative nature of yesterday's gains appears to be being driven by a degree of caution ahead of some key risk events over the next couple of weeks, starting today with the latest Bank of Japan policy decision. This is set to be followed by the European Central Bank on Thursday, and then the Fed and Bank of England next week.   For most of this month central banks have been keen to reset the policy narrative when it comes to the timing of rate cuts which had markets pricing in the prospect of an early move. While US markets have managed to shrug off the prospect of a delay to possible rate cuts, markets in Europe have struggled with the concept probably due to the weakness of the underlying economy relative to how the US economy has been performing. There is a sense that the ECB is over prioritising the battle against inflation which is coming down rapidly and not seeing the damage that is being done to the wider economy by keeping rates higher than they need to be.   Today's Bank of Japan decision didn't offer up any surprises with the central bank keeping monetary policy unchanged against a backdrop that has seen market expectations of rate cuts from other central banks increase markedly since the last Fed meeting. This shift in expectations has helped to ease some of the pressure on the BoJ to look at tightening policy itself to slow the decline of its own currency. The bank also cut its inflation forecast for this year from 2.8% to 2.4%, while nudging its 2025 forecast slightly higher to 1.8%.   Asia markets have seen a more upbeat session on reports that Chinese authorities are looking at a package of stimulus measures to help stabilise the stock market, which could come as soon as next week. Despite this more positive tone European markets look set to open only modestly firmer, with the only economic data of note due today being the latest public finance data from the UK for December.  As far as UK government borrowing is concerned rising interest costs at the beginning of Q4 served to exert upward pressure on the headline numbers, pushing borrowing up to £16bn in October, the second highest October number since 1993. Since those October peaks, gilt yields have declined sharply, along with headline inflation, helping to ease borrowing costs in the mortgage market. This weakness has also come as a welcome relief to the Chancellor of the Exchequer, after UK 10-year yields fell to a low of 3.44%, down from a peak of 4.73% in October. These lower interest costs are likely to see December borrowing slow to £14.1bn, while January could see a surplus as end of year tax payments boost the numbers.     EUR/USD – currently has support at the 200-day SMA at 1.0840. A break below here and the 1.0800 level targets the 1.0720 area. Currently capped at the 50-day SMA with main resistance up at 1.1000.  GBP/USD – remains resilient with support just above the 50-day SMA and 1.2590 area. We need to get above 1.2800 to maintain upside momentum. Also have support at the 200-day SMA at 1.2550. EUR/GBP – continues to find support at the 0.8540/50 level which has held over the last 2-months. A fall through here could see further falls towards the 0.8520 area. We still have resistance at the 0.8620/25 area and the highs last week. USD/JPY – has retreated modestly from the 148.50 area but remains on course for the 150.00 level. Pullbacks likely to find support at the 146.25 level cloud support as well as the 50-day SMA. FTSE100 is expected to open 15 points higher at 7,502 DAX is expected to open unchanged at 16,683 CAC40 is expected to open 7 points higher at 7,420
National Bank of Romania Maintains Rates, Eyes Inflation Outlook

Turbulence in Asia: China's Rescue Plan and BoJ's Inflation Revision

ING Economics ING Economics 25.01.2024 12:48
FX Daily: Asia in the driver's seat The dollar is softer and pro-cyclical currencies are following the yuan higher after news that China is preparing a CNY 2tn rescue package for the stock market. The BoJ revised inflation expectations lower but signalled further progress towards the target, keeping anticipation for a hike in June alive. We expect New Zealand CPI to be soft tonight.   USD: China and Japan in focus The dollar has been mostly moved by developments from outside of the US since the start of the week. China remains the centre of attention before key central bank meetings in the developed world. Risk sentiment was boosted overnight as the Chinese government is reportedly considering a large CNY 2tn package to support the struggling stock markets. The rescue plan should be mostly targeted to the Hang Seng stock exchange, which has sharply underperformed global equities of late. This is a strong message that conveys Beijing’s intention to artificially support Chinese markets in spite of the deteriorating economic outlook in the region, and it is reported that other measures are under consideration. It does appear a temporary solution, though. Ultimately, stronger conviction on a Chinese economic rebound is likely necessary to drive a sustainable recovery in Chinese-linked stocks. For now, the FX impact has been positive; USD/CNY has dropped to 7.16/7.17 and we are seeing gains being spread across pro-cyclical currencies as safe-haven flows to the dollar are waning. Doubts about the impact of Beijing rescue package’s effects beyond the short-term automatically extend to the FX impact. It does seem premature to call for an outperformance of China-linked currencies (like AUD and NZD) and softening in the dollar on the back of this morning’s headlines. Another important development in Asian markets overnight was the Bank of Japan policy announcement. In line with our expectations and market consensus, there were no changes to the yield curve control, and forward guidance remained unchanged. Inflation projections were revised lower from 2.8% to 2.4% for the fiscal year starting in April. The revision was mostly a consequence of declining oil prices, and the inflation path continues to show an overshoot of the target for some time. All this was largely expected, and markets are focusing on Governor Kazuo Ueda’s claim that Japan has continued to inch closer to the inflation goals, keeping expectations for an eventual end to the ultra-dovish policy stance some time this year. The yen is experiencing a rebound which is likely boosted its oversold conditions. Money markets currently price in a 10bp rate hike in June. Extra help from a declining USD this morning might push USD/JPY a bit lower (below 147) today, but we suspect that markets may favour defensive USD positions as the Fed meeting approaches. Domestically, the only release to watch today in the US is the Richmond Fed Manufacturing index, which will give some flavour about the state of the sector ahead of tomorrow’s S&P Global PMIs. DXY may stabilise slightly below 103.00 once the China-led risk rally has settled.

Wiadomości

currency calculator

Komentarze rynkowe

JingRen
A Breakthrough! Japanese Yen (JPY) Helped By Data, Australian Dollar (AUD) Went Up Post Retail Sales Print
Jing Ren
KamilaSzypuła
ECB Will Continue To Hike Rates To Slow Inflation?
Kamila Szypuła
RebeccaDuthie
Euro To US Dollar Index Falls - Touching Levels Not Seen In 20 Years
Rebecca Duthie
KamilaSzypuła
Interest Rates Hiked. The Most Important Indicators Continue Their Downward Trend
Kamila Szypuła
RebeccaDuthie
Russia Suspends Flow Through The Nord Stream 1 Pipeline, Cotton Futures, Gold Prices Increase For The First Time In 3-weeks
Rebecca Duthie
AlexKuptsikevich
How Have BTC And ETH Performed Recently? Cryptocurrencies: Market Cap Increased Slightly, Telekom And Telefonica "Flirting" With Digital Assets
Alex Kuptsikevich
InstaForexAnalysis
This Week USD May Be Fluctuating! Euro To US Dollar - Technical Analysis And More - 10/10/22
InstaForex Analysis
INGEconomics
US Stocks: S&P 500 And Nasdaq Decreased Slightly Yesterday Losing 0.33% And 0.09% Respectively
ING Economics
AlexKuptsikevich
According to Bloomberg's survey Bitcoin may be trading between $17.6K and $25K
Alex Kuptsikevich
KamilaSzypuła
The Australian Dollar Failed To Hold Its Gains, The Pound Strengthened Against The US Dollar
Kamila Szypuła
FXMAG
Social media
Crypto

© 2020 FXMAG. All Rights Reserved

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.

Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events.
Trading on margin increases the financial risks.

Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets,
carefully consider your investment objectives, level of experience and risk appetite,
and seek professional advice where needed.

FXMAG would like to remind you that the data contained in this website is not necessarily real-time nor accurate.
The data and prices on the website are not necessarily provided by any market or exchange, but may be provided bymarket makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.

FXMAG and any provider of the data contained in this websitewill not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify,
transmit or distribute the data contained in this website without the explicit prior written permission of FXMAG and/or the data provider.

All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
FXMAG may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.