KostiaForexMart Posted June 27 Share Posted June 27 Wall Street: Modest gains, choppy trading ahead of inflation data The major U.S. stock indexes ended Wednesday slightly higher after choppy trading. Investors took a wait-and-see approach ahead of the presidential debate and a key inflation report closely watched by Federal Reserve officials. "We're in a holding pattern as we wait for Friday's PCE report for more data," said Michael Green, portfolio manager at Simplify. Shares of chipmaker Nvidia (NVDA.O) rose 0.25%, ending the session higher after earlier losses. Large-cap names such as Apple (AAPL.O), Amazon (AMZN.O) and Tesla (TSLA.O) also saw their shares rise. A flurry of economic data is due out this week, culminating in Friday's Personal Consumer Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge and a key driver of monetary policy decisions. The Federal Reserve is forecasting one interest rate cut in December. However, investors are pricing in a 56.3% chance of a 25 basis point rate cut in September, according to LSEG's Interest Rate Probabilities app, and expecting about two cuts by the end of the year. By 4 p.m., the Dow Jones Industrial Average (.DJI) was up 16.10 points, or 0.04%, to 39,128.26. The S&P 500 (.SPX) was up 8.61 points, or 0.16%, to 5,477.91, and the Nasdaq Composite (.IXIC) was up 87.50 points, or 0.49%, to 17,805.16. "Investors are holding off for now, waiting for tomorrow's presidential debate and more economic data, especially Friday's PCE report," said Sam Stovall, chief investment strategist at CFRA. Strong earnings reports and favorable inflation data could fuel a shift away from tech stocks and into sectors that have underperformed this year, according to Ryan Detrick, chief market strategist at Carson Group. Investors have been flocking to non-tech sectors this week. "We're likely to see continued volatility until we get a catalyst," said Brian Jacobsen, chief economist at Wealth Management. Shares in appliance maker Whirlpool (WHR.N) rose 17.1% after news broke that German engineering group Robert Bosch may buy the company. FedEx (FDX.N) shares soared 15.53% after the company announced that its fiscal 2025 profit forecast would beat expectations, sending the Dow Jones Transport (.DJT) to its highest level in more than a month. Apple (AAPL.O) shares rose nearly 2% after analysts at Rosenblatt upgraded the iPhone maker's stock to buy from neutral. Meanwhile, Tesla shares rose 4.81% after Stifel began coverage of the company with a buy rating. Amazon.com Inc's (AMZN.O) market value reached $2 trillion for the first time on Wednesday, becoming the fifth U.S. company to do so. Optimism about artificial intelligence and expectations of possible interest rate cuts this year have fueled demand for tech stocks. Amazon shares rose 3.4% to $192.70, pushing the e-commerce giant's market value past $2 trillion. That puts it in line with tech giants Microsoft Corp (MSFT.O), Apple Inc (AAPL.O), Nvidia Corp (NVDA.O) and Alphabet Inc (GOOGL.O). Shares of Amazon, which were added to the Dow Jones Industrial Average (.DJI) in February, have gained more than 26% year to date. In February, the company became the fifth-largest U.S. company by market value after Nvidia climbed one spot. Amazon Web Services, the world's largest cloud services provider, has seen growth again after a slump last year, thanks to accelerated adoption of artificial intelligence technologies. Amazon has also invested in AI startup Anthropic and robotics company Fig, looking to capitalize on the rapidly growing interest in artificial intelligence. Late last year, Amazon unveiled a new generation of custom-designed data center chips that are aimed at machine learning and generative AI applications. Shares of major U.S. banks including Morgan Stanley (MS.N), Citigroup (C.N) and Bank of America (BAC.N) fell ahead of the Federal Reserve's annual stress test results. The broader S&P 500 (.SPSY) fell 0.47%. Rivian (RIVN.O) shares rose 23.24% after German automaker Volkswagen (VOWG_p.DE) announced plans to invest up to $5 billion in the U.S. electric vehicle maker. General Mills (GIS.N) shares fell 4.59% after the Cheerios cereal maker reported below-expected full-year profit and a bigger-than-expected drop in quarterly sales. Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by a 1.41-to-1 ratio. Overall, the NYSE posted 106 new highs and 89 new lows. The S&P 500 posted 10 new 52-week highs and 6 new lows, while the Nasdaq Composite posted 41 new highs and 171 new lows. Trading volume on U.S. exchanges totaled 10.59 billion shares, below the 20-day average of 11.83 billion shares. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted June 28 Share Posted June 28 The main thing in the morning: June 28 LNG supplies from the United States to Europe have declined sharply, which could cause a serious blow to the EU economy. Since the beginning of 2024, the volume of liquefied natural gas supplies from the United States has decreased by about a third. Given the current sanctions against Arctic LNG-2 and possible restrictions on other Russian plants, the situation may lead to a shortage of gas. The first debate between Donald Trump and Joe Biden took place. CNN organized the presidential candidates' election debate, where the former president and the current president refused to shake hands. The main focus was on the conflict in Ukraine: Biden warned that Moscow's capture of Kiev could provoke World War III, and Trump blamed Biden for the situation. The Estonian Parliament will not be able to help the government in confiscating frozen Russian assets. The fact is that there is no property in the country that is subject to automatic confiscation in favor of Ukraine. According to the Estonian Foreign Ministry, property worth €37-39 million was blocked in the country. The IMF forecasts the growth of the US national debt to 140% of GDP by 2032. The organization's report highlights the need to urgently stop the growth of borrowing, as the US budget deficit remains at 2.5% of GDP. This creates increasing problems for the global economy. NOVATEK continues to build Arctic LNG 2 despite the severe pressure of sanctions. The foundation of the second line and the first structures will begin to be laid on July 23-25. The previously imposed sanctions led to a big shift in the launch schedule of Arctic LNG 2 and the cancellation of the construction of 1 of the 3 lines. Problems with LNG tankers are added to this. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 16 Share Posted July 16 Trump in Focus: Markets Assess Impact, Bonds Fall, Dollar Steady The dollar was flat on Monday, while long-term U.S. Treasury yields rose as investors weighed whether an assassination attempt on presidential candidate Donald Trump could boost his chances of winning. European stock markets opened lower after weak economic data from China left a cautious mood. Additionally, negative news from British luxury brand Burberry and watchmaker Swatch Group raised questions about consumer confidence. Investors typically react to the prospect of a Trump victory by pushing up Treasury yields, assuming his economic policies will lead to higher inflation and government debt. On online betting platform PredictIT, the odds of a Republican victory rose to 67 cents, up from 60 cents on Friday. The yield on the benchmark 10-year Treasury note rose 2 basis points to 4.208% on Monday. Eren Osman, managing director of asset management at Arbuthnot Latham, said a possible Trump victory would be viewed positively for risk assets. He pointed to the significant gains in Bitcoin since the weekend, but added a note of caution. "You could imagine that this would motivate Trump supporters to go to the polls, but they were probably planning to vote anyway," Osman said. U.S. retail sales data due on Tuesday will be closely watched to understand the health of the consumer sector after recent readings suggested economic growth was slowing, the expert said. The dollar index rose modestly to 104.9, helped by the greenback's strength against the yen, which rose 0.17% to 157.855 after last week's intervention was expected. The euro was down slightly at $1.0907, while Bitcoin, which has likely benefited from looser regulation under the Trump administration, rose about 5% to a two-week high. European stocks were down 0.2% (STOXX), while S&P 500 and Nasdaq futures were up about half a percent. Japan's Nikkei was closed for a holiday. The weak economic data set off a busy week in China, where the five-yearly meeting of top officials is taking place from July 15 to 18. China's second-quarter economic growth was 4.7% from a year earlier, short of analysts' forecast of 5.1%. Consumer spending is a particular concern, with retail sales growth falling to an 18-month low and new home prices falling at their fastest pace in nine years. "Markets are hoping for more support for the weak economy and struggling property sector to be announced at this week's plenary," said Vasu Menon, managing director of investment strategy at OCBC in Singapore. China's onshore yuan remained under pressure, trading at 7.2742 per dollar. Mainland Chinese shares (.SSEC) were little changed, while Hong Kong's Hang Seng Index (.HSI) was down 1.5%. The week will see data on retail sales, industrial production, housing starts and weekly jobless claims released in the United States. Federal Reserve Chairman Jerome Powell is scheduled to speak at the Economic Club of Washington on Monday, where his response to the recent muted inflation data is likely to be discussed. Markets are pricing in a 96% chance of a Fed rate cut in September, up from 72% a week earlier. The European Central Bank is expected to leave its current interest rate unchanged after cutting it in June. "We expect the ECB to keep rates on hold at its July meeting, with a press conference to discuss the rate trajectory and the situation in France," Morgan Stanley said in a note. The second-quarter earnings season kicked off last week and continues on Monday with Goldman Sachs' earnings results. Bank of America, Morgan Stanley, ASML and Netflix Inc. are also set to report earnings this week. Wall Street is expecting strong results for the period, with most of those expectations already factored into current stock valuations. In commodities markets, gold traded at $2,408 an ounce, slightly below last week's high of $2,424. Oil prices edged higher after Friday's slide on signs of progress in ceasefire talks between Israel and Hamas. Brent crude was little changed at $85.04 a barrel, while U.S. crude rose 0.1% to $82.27 a barrel. Fed Chair Powell to Speak Federal Reserve Chair Jerome Powell will be interviewed by David Rubenstein at the Economic Club of Washington, followed by a question-and-answer session. In his final appearance on Capitol Hill, Powell emphasized the Fed's efforts to combat inflation and reaffirmed its commitment to its dual mandate of price stability and maximum employment. He also expressed cautious optimism about inflation trends, indicating some confidence that inflation will decline toward the 2% target. However, Powell stressed that it is too early to say whether the trend toward the 2% inflation target will be sustainable. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 16 Share Posted July 16 Investors lift market on Trump, rate cuts Wall Street ended higher on Monday, extending Friday's gains, as expectations grew for a second term for Donald Trump after a failed assassination attempt raised hopes for looser regulation. Expectations that the Federal Reserve could cut its key interest rate as early as September also helped boost risk appetite among investors. While all three major U.S. stock indexes closed well below their intraday highs, the Dow Jones Industrial Average hit a record close. Small, economically sensitive stocks (.RUT) and transportation stocks (.DJT) have outperformed the broader market. The assassination attempt on Trump, the presumptive Republican presidential nominee, on Saturday in Pennsylvania appears to have boosted his chances of being elected. A Trump presidency is expected to usher in more aggressive trade policies, further tax cuts, and deregulation in areas ranging from climate change to cryptocurrencies. "The main event — the assassination attempt on Donald Trump — hasn't quite hit its mark," said Sam Stovall, chief investment strategist at CFRA Research in New York. "GDP forecasts are unchanged, expectations for a Fed rate cut in September are unchanged, and corporate earnings are ahead of expectations." "So the market momentum remains driven by investor optimism," Stovall added. Investor sentiment was also supported by expectations that the Federal Reserve will begin a rate-cutting cycle as early as September, with as many as three cuts possible before the end of the year. "A rate cut in September is virtually guaranteed," said Ross Mayfield, an analyst at Baird Investment Strategy in Louisville, Kentucky. "We're in the same position we were seven months ago, which is the promise of a Fed rate cut without the risk of a recession. But there's still a lot riding on the Fed's actions." Speaking to the Economic Club of Washington, Fed Chairman Jerome Powell reiterated his confidence that the U.S. economy can avoid a recession, with recent data showing progress in bringing inflation back to the central bank's 2% target. The Dow Jones Industrial Average (.DJI) rose 210.82 points, or 0.53%, to 40,211.72. The S&P 500 (.SPX) rose 15.87 points, or 0.28%, to 5,631.22, while the Nasdaq Composite (.IXIC) rose 74.12 points, or 0.40%, to 18,472.57. Among the 11 major sectors in the S&P 500, energy stocks (.SPNY) posted the biggest percentage gains, while utilities (.SPLRCU) lagged. Goldman Sachs (GS.N) more than doubled its second-quarter profit, beating analysts' expectations on solid performance in debt insurance and fixed-income trading. The brokerage's shares rose 2.6%. Macy's Inc (MN) shares fell 11.7% after the department store ended buyout talks with Arkhouse Management and Brigade Capital. The prospect of a second term for Donald Trump sent shares of Trump Media & Technology Group (DJT.O) soaring 31.4%. Cryptocurrency stocks also saw significant gains, with Coinbase Global (COIN.O), Marathon Digital Holdings (MARA.O) and Riot Platforms (RIOT.O) all rising between 11.4% and 18.3%. Other stocks that would likely benefit from a possible second Trump term also saw gains, with gun maker Smith & Wesson (SWBI.O) and correctional facility operator GEO Group (GEO.N) up 11.4% and 9.3%, respectively. Meanwhile, solar energy stocks fell as the prospect of a Trump election dampened expectations for U.S. renewable energy subsidies. Sunrun (RUN.O) and SolarEdge Technologies (SEDGO.O) fell 9.0% and 15.4%, respectively. U.S.-listed Chinese stocks also fell on concerns about tighter trade restrictions under the new Trump administration. The iShares China Largecap ETF fell 2.2%. On the New York Stock Exchange, gainers outnumbered losers 1.35-to-1; on the Nasdaq, gainers outnumbered losers 1.50-to-1. The S&P 500 posted 65 new 52-week highs and four new lows. The Nasdaq Composite Index posted 203 new highs and 33 new lows. Trading volume on U.S. exchanges totaled 11.07 billion shares, slightly below the 20-day average of 11.59 billion shares. Long-term U.S. bond yields rose on speculation that Trump's policies will lead to higher government debt and inflation. Meanwhile, cryptocurrency stocks rose along with Bitcoin as Trump casts himself as a cryptocurrency advocate. Investors expect a Trump victory to lead to further tax cuts and regulatory easing. The energy-heavy S&P 500 (.SPNY) gained 1.6%. Traders are also betting on a second and possibly third rate cut by December. The MSCI Global Equity Index (.MIWD00000PUS) rose 0.18 points, or 0.02%, to 828.73, while the STOXX 600 Index (.STOXX) fell 1.02%. Bad news from British luxury giant Burberry, with a CEO replacement and dividend suspension, and a 14.3% revenue decline at Swiss watchmaker Swatch Group, raised questions about consumer confidence. The dollar index, which measures the greenback against a basket of major currencies, was down 0.04% at 104.25, while the euro was down 0.01% at $1.0893. Against the Japanese yen, the dollar was up 0.02% at 158.04. The dollar fell to 157.15 during Powell's speech, its lowest since June 17, before recovering. Bitcoin was up slightly after earlier hitting a three-week high of $63,838.86. The yield on 10-year U.S. Treasuries rose 4 basis points to 4.229%, while the yield on two-year Treasuries fell half a basis point to 4.4554%. Oil prices were slightly lower as concerns about demand in China, the world's largest importer, offset support from OPEC+ supply cuts and ongoing tensions in the Middle East. U.S. crude was down 30 cents at $81.91 a barrel, while Brent crude was down 18 cents at $84.85 a barrel. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 18 Share Posted July 18 The main events by the morning: July 17 The return of Donald Trump to the White House may lead to the easing of sanctions against Russia. On the second day of the Republican congress, the ex-president spoke out against the sanctions, considering them detrimental to US international relations. In his opinion, such measures only alienate other countries. Dedollarization is gaining momentum, affecting almost half of the world's countries. Over the current year, 6 more countries have joined the movement aimed at weakening the dominance of the dollar in the global economy. As a result, the number of countries participating in dedollarization reached 81. Of these, 50 actively oppose the hegemony of the dollar, and 31 countries switch to settlements in national currencies or restrict the use of the dollar in their domestic operations. China and Brazil's plan to resolve the conflict in Ukraine is gaining supporters. The peace initiative of China and Brazil on Ukraine is receiving more and more support. Already, 50 countries and international organizations have joined the proposed settlement plan for the Ukrainian crisis. Chinese Ambassador to Russia Zhang Hanhui noted that within the framework of the initiative, it is planned to convene an international peace conference, which both sides of the conflict – Russia and Ukraine – are ready to join. Russia and China are developing options for integrating payments through Mir cards. According to Chinese Ambassador to the Russian Federation Zhang Hanhui, this can help attract tourists from the Russian Federation, improve their conditions of stay, and also allow linking foreign bank cards to Chinese payment platforms. Trump said Taiwan should pay for its protection. In an interview with Bloomberg Businessweek, the Republican candidate stressed that the United States currently acts as a kind of insurance company, while Taiwan does not provide anything in return. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 19 Share Posted July 19 XAU/USD. Review and analysis Today, the price of gold continues its decline. The US dollar, recovering confidently from the previous day's four-month low and slowly rising, has become the main factor dragging the commodity down for the third consecutive day. In addition, some profit-taking, especially after the recent rise of more than 6.5% since the beginning of the current month, further contributes to the decline. However, the potential for further decline is limited. Investors are likely convinced that the Federal Reserve will start lowering borrowing costs in September, with the possibility of two more rate cuts by the end of the year. This keeps the yield on US Treasury bonds defensive and limits the appreciation of the US dollar. However, the tendency to avoid risk amid current market conditions could support gold as a safe-haven asset. Additionally, geopolitical tensions and demand from central banks should help limit significant declines in the price of non-yielding yellow metal. From a technical perspective, any further decline will find decent support around $2413-2412, just before the round level of $2400. This is followed by a horizontal breakthrough point at $2390-2388, triggering technical selling in case of a decisive break. The precious metal will then accelerate its decline to test the 50-day simple moving average (SMA), which is currently near the $2358-2357 area. A sustained decline below this level will expose the 100-day SMA near the $2311 zone, with intermediate support around $2330. On the other hand, the Asian session high of around $2445 now serves as an immediate obstacle, above which the yellow metal may rise to $2469-2470 – the high of the American session. Given that the oscillators on the daily chart remain comfortably in positive territory, bulls may attempt to retest the historical high around $2483-2484 and reach the psychological mark of $2500. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 22 Share Posted July 22 Friday and Biden Weekend: Fiscal Week Outlook Wall Street opened the morning with news that came as no surprise: President Joe Biden announced his withdrawal from the presidential race. The market reacted mutedly to the news, with Wall Street futures slightly higher, bond yields slightly lower, and the dollar virtually unchanged. Biden has thrown his support behind his Vice President Kamala Harris, giving her a lead position for the nomination at the Democratic National Convention, which runs from August 19 to 22. It is also possible that the party may consider a virtual nomination before the convention. According to online betting site PredictIT, the price for Donald Trump to win has fallen 5 cents to 59 cents, while the price for Harris has increased 13 cents to 40 cents. California Governor Gavin Newsom, another possible Democratic candidate, is still behind at 3 cents. Goldman Sachs said in a report that it does not expect significant changes in the Democrats' fiscal and trade policies if Harris wins. Back to Friday's events. U.S. stocks continued to decline on Friday as chaos continued to rage around a global software outage, adding further uncertainty to an already volatile market. Massive technology disruptions have hit industries including aviation, banking and healthcare after a software bug at Crowdstrike (CRWD.O) disrupted Microsoft's (MSFT.O) Windows operating system. While the vulnerability has been identified and fixed, some services continue to experience technical difficulties. Crowdstrike shares fell 11.1%, while rival cybersecurity companies Palo Alto Networks (PANW.O) and SentinelOne (S.N) rose 2.2% and 7.8%, respectively. All three major U.S. stock indexes ended in the red, with the Dow Jones Industrial Average the hardest hit. On a weekly basis, the Nasdaq and S&P 500 posted their worst performances since April, while the Dow, which had hit records earlier in the week, rose Friday to Friday. "This tech disruption adds an element of uncertainty and weighs on the Nasdaq as a whole," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "But overall it won't have a huge impact. Some buying will be delayed. Plus, it's a summer Friday, and the downtime is making investors take a wait-and-see attitude." The CBOE Volatility Index (.VIX), often seen as a gauge of investor anxiety, hit its highest since late April. Small-cap stocks in the Russell 2000 (.RUT), which had previously benefited from a decline in interest in Big Tech, ended the day slightly lower. Nvidia (NVDA.O) was the biggest decliner among chip stocks. The Philadelphia SE Semiconductor Index (.SOX) was among the laggards, down 3.1%. In addition, New York Federal Reserve President John Williams reiterated that the central bank remains committed to reducing inflation to its 2% target. According to CME's FedWatch tool, the chances that the Fed will begin cutting rates after its September meeting are estimated at 93.5%. The Dow Jones Industrial Average (.DJI) fell 377.49 points, or 0.93%, to 40,287.53. The S&P 500 (.SPX) fell 39.59 points, or 0.71%, to 5,505. The Nasdaq Composite Index (.IXIC) lost 144.28 points, or 0.81%, to 17,726.94. Among the 11 major sectors in the S&P 500, energy (.SPNY) was the biggest decliner, while health care (.SPXBK) and utilities (.SPLRCU) were up. The second-quarter earnings season ended in the first full week of August, with 70 S&P 500 companies reporting results. Of those, 83% beat analysts' estimates, according to LSEG. Analysts now forecast that the S&P 500 will post 11.1% annualized earnings growth, up from the previous estimate of 10.6% on July 1. Next week brings big earnings from Tesla (TSLA.O), Alphabet (GOOGL.O), IBM (IBM.N), General Motors (GM.N), Ford (F.N) and many more. "Earnings season is just getting started, but the results are already impressive," said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. "With a lot of big companies reporting next week, we want to hear how strong the consumer is and what the outlook for future economic growth is." Eli Lilly (LLY.N) shares rose 1.0% after China approved its weight-loss drug tirzepatide. Meanwhile, Intuitive Surgical (ISRG.O) shares rose 9.4% on better-than-expected second-quarter results. Travelers (TRV.N) shares fell 7.8% on weaker-than-expected net premium growth. Netflix (NFLX.O) fell 1.5% in choppy trading after warning that third-quarter subscriber growth would be weaker than last year. Oilfield services company SLB (SLB.N) rose 1.9% on strong second-quarter earnings. Declining stocks outnumbered advancing ones on the NYSE by a 2.11-to-1 ratio; on the Nasdaq, decliners outnumbered decliners by a 1.91-to-1 ratio. The S&P 500 posted 27 new 52-week highs and four new lows, while the Nasdaq Composite posted 50 new highs and 99 new lows. Volume on U.S. exchanges totaled 10.54 billion shares, below the 11.72 billion average over the past 20 trading days. Last week saw a significant investor shift away from big tech companies to smaller companies and banks, resulting in a loss of about $900 billion in the S&P 500 tech sector. The pullback was not surprising, given that giants like Alphabet (GOOGL.O), Tesla (TSLA.O), Amazon.com (AMZN.O), Microsoft (MSFT.O), Meta Platforms (META.O), Apple (AAPL.O) and Nvidia (NVDA.O) have accounted for about 60% of the S&P 500's gains this year. That situation has set the stage for strong second-quarter results, including from mega-caps like Tesla and Google parent Alphabet. Expectations are high, with full-year earnings expected to rise 17% in tech and 22% in communications. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 24 Share Posted July 24 Hot forecast for EUR/USD on July 23, 2024 Without any economic or political news, the market has literally come to a standstill. Today's situation is somewhat similar, as aside from the secondary housing market data, the economic calendar is almost empty. Moreover, housing reports have a feeble impact. However, according to multiple statements, US President Joe Biden may address the nation today. He is expected to officiallyendorse Kamala Harris as the Democratic Party candidate. It seems that the incumbent vice president will be the one to challenge Donald Trump. The key point here is that the Democratic Party has quickly settled on its candidate, which significantly reduces political risks. This could potentially support the dollar. The EUR/USD pair has stalled just below the 1.0900 level, while the corrective cycle from the lower range of the psychological level of 1.0950/1.1000 remains intact. On the 4-hour chart, the RSI indicator is moving in the lower area, indicating an increase in the volume of short positions on the euro. As for the Alligator indicator in the same time frame, the lines are intertwined, meaning that the upward cycle is slowing down. Outlook To support the bearish bias, the quote must settle below the 1.0860 level. In this scenario, the euro could move towards the 1.0800 level. The bullish scenario will come into play if the price returns above the 1.0900 level. Complex indicator analysis suggests a correction in the short-term and intraday time frames. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 25 Share Posted July 25 Tech Profits Fail to Save Wall Street from Declines Wall Street's major indices ended the session marginally lower on Tuesday, erasing modest intraday gains in the final minutes of trading as investors looked to fresh earnings reports from Alphabet (GOOGL.O) and Tesla (TSLA.O). The so-called "Magnificent Seven" companies reported results after the market closed, posting positive financial results for the second quarter. Tesla surprised analysts with an unexpected revenue gain, delivering more cars than expected on the back of price cuts and incentives. Meanwhile, Alphabet beat revenue estimates, helped by higher digital ad sales and strong demand for its cloud services. However, ahead of the earnings call, Tesla shares fell 2%, while Google's parent company rose 0.1%. The tech giants' financial results are critical to understanding whether they can sustain their record growth in 2024 or whether U.S. stocks are overvalued. Investors are also concerned about whether the shift away from mega-caps to less-efficient sectors will continue. The Russell 2000 small-cap (.RUT) rose 1% on the day. "We're focusing on earnings because that's what's going to be the story this week and next, and the market's reaction to those numbers will be very telling," said Jack Janasiewicz, chief portfolio strategist at Natixis Investment Managers. Speaking about the shift in focus in smaller-cap stocks, the expert added: "The jury is still out on this and we need more evidence that this is sustainable, which again comes down to earnings." Big-cap stocks initially supported the markets on Tuesday, with all three benchmark indexes in positive territory. However, while the likes of Apple (AAPL.O), Microsoft (MSFT.O) and Amazon.com (AMZN.O) rose between 0.3% and 2.1%, the overall market rally slowed in the afternoon, leading to a slight decline in the final results. Stock markets were also under pressure from disappointing earnings from big-name companies. United Parcel Service (UPS.N), a leading indicator of the health of the global economy, fell 12.1% after earnings fell short of expectations amid weaker delivery demand and rising labor costs. UPS shares ended the day at their lowest in four years. General Motors (GM.N) fell 6.4% despite reporting strong second-quarter results and raising its full-year profit forecast. Comcast (CMCSA.O) lost 2.6% after disappointing revenue data. NXP Semiconductors (NXPI.O) fell 7.6% after reporting third-quarter revenue that missed expectations, dragging the Philadelphia SE Semiconductor (.SOX) index down 1.5%. Spotify (SPOT.N) jumped 12% after reporting record quarterly profit that slightly beat analysts' expectations. Coca-Cola (KO.N) also rose 0.3% after raising its full-year sales and profit forecasts. Of the first 74 S&P 500 companies to report quarterly results this season, 81.1% beat estimates, according to LSEG. Yanasevich noted that while it's too early to draw definitive conclusions, the current earnings call shows that companies that miss expectations are suffering greatly, even if their results are generally positive. High market prices and expectations don't always guarantee significant stock gains. "If your results don't meet expectations, the punishment may be more severe given current market conditions," he added. The S&P 500 (.SPX) fell 8.67 points, or 0.16%, to 5,555.74. The Nasdaq Composite (.IXIC) fell 10.22 points, or 0.06%, to 17,997.35. The Dow Jones Industrial Average (.DJI) lost 57.35 points, or 0.14%, to 40,358.09. Eight of the S&P's 11 major sectors ended the day in the red, with energy (.SPNY) the worst performer, down 1.6% as U.S. oil prices fell to a six-week low. Trading volume on U.S. exchanges totaled 10.45 billion shares, below the 20-day average of 11.33 billion. The Federal Reserve's core consumer spending index, the benchmark inflation gauge, is due out Friday. The yield on the benchmark 10-year Treasury note fell 0.9 basis point to 4.251%. "The market is now at a stage where we need real results to confirm the rally," said Wasif Latif, chief investment officer at Sarmaya Partners. The MSCI World Share Index (.MIWD00000PUS) was down 0.06% at 816.37. On Wall Street, all three major indexes gave up their morning gains to end lower, led by losses in energy and utilities. The pan-European STOXX 600 (.STOXX) was up 0.13%, led by gains in tech. In Asia, the MSCI Asia-Pacific Index outside Japan (.MIAPJ0000PUS) ended 0.30% higher at 566.92. "We have seen a strong rally this year, with a lot of positives already built into it, including earnings and rate cuts," Latif added. Vice President Kamala Harris will campaign in the battleground state of Wisconsin on Tuesday after winning the majority of delegates to the Democratic National Convention, strengthening her position as the party's presumptive nominee. The U.S. dollar was broadly stronger, while the yen extended gains against the greenback for a second straight day. The dollar index, which tracks the dollar against a basket of major currencies, rose 0.14% to 104.45. The euro was down 0.37% at $1.0849, while the yen gained 0.9% against the dollar to 155.63 yen per dollar. Crude oil prices fell about 2% to a six-week low on rising expectations for a Gaza ceasefire and growing concerns about Chinese demand. Brent crude futures were down 1.7% to settle at $81.01 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 1.8% to settle at $76.96 a barrel. Gold was up, with spot prices up 0.43% to $2,407.87 an ounce. U.S. gold futures were also up 0.43% to settle at $2,402.40 an ounce. Bitcoin, which had earlier risen on expectations that a potential Trump administration would be more lenient on cryptocurrency regulations, was down 3.60% to $65,698. Ethereum was also down 0.48% to settle at $3,473. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 26 Share Posted July 26 US Election: How Uncertainty Impacted Markets and Trillions of Dollars Escaped from Stocks "Markets have a strong aversion to uncertainty, and with the polls close to 50-50, it's as uncertain as it gets," said Ross Yarrow, managing director of U.S. equities at investment bank Baird. Wall Street's S&P 500 (.SPX) fell 2.3% on Wednesday, its biggest one-day loss since December 2022, as Big Tech, which accounts for a significant portion of U.S. and global indexes, fell. The decline continued Thursday morning, spreading to European markets. Investors, wary of further selling, have turned to small-cap stocks, UK assets and gold as possible safe havens. Of particular concern to global markets is the possibility that competition for votes on big spending plans could lead to potential turmoil in the US debt market, weighing on global stocks and bonds whose value depends on long-term Treasury yields. The 30-year US Treasury yield rose above the two-year yield last week as big investors began to shy away from long-term US credit risk as the budget deficit widened to nearly $2 trillion. Emerging market stocks and bonds have come under pressure from President Trump's proposed tariff hikes, said Adam Norris, a multi-manager at Columbia Threadneedle. Higher tariffs are having a negative impact on the economies and currencies of exporting countries. Stock market volatility (.VIX) has started to rise from its lows as traders shift between stock sectors based on the changing election odds. Tech stocks from the U.S. to Amsterdam have felt the pressure after Trump proposed earlier this month to cut U.S. support for Taiwan, a key link in the chip supply chain. Meanwhile, the Russell 2000 index of U.S. small-caps (.RUT) has risen on expectations that Trump's growth policies will favor domestically focused companies over global tech giants. The rotation could end, however, if tech or consumer stocks heavily dependent on Chinese supply chains rise as Trump falls in the polls. Benjamin Mehlman, chief investment officer at Edmond de Rothschild Asset Management, expressed caution on European exporters due to potential tariff risks if Trump wins, preferring to invest in smaller, less global European companies. Now on to global financial news. More than $3 trillion has been pulled out of global equities in recent days. Stock markets plunged into a multi-trillion-dollar slump on Thursday as a slide in global tech stocks sent investors seeking refuge in traditionally safe havens like bonds, the yen and the Swiss franc. Europe's biggest bourses opened the day down more than 1% as traders in Europe and Asia reacted to the Nasdaq's worst day since 2022 (.IXIC) on Wednesday following disappointing earnings reports from giants Alphabet and Tesla. Chinese stocks, iron ore and oil prices also extended their losses after a surprise move by China's central bank to cut long-term interest rates added to concerns about the world's second-largest economy. The sell-off in stocks has increased bets on interest rate cuts around the world, with futures pointing to a 100% chance of Federal Reserve easing in September. A sharp rise in market volatility (.VIX) added pressure on carry trades, sending the U.S. dollar down 0.7% to 152.78 yen on Thursday. MSCI's broadest index of global shares (.MIWD00000PUS) fell 1%, while Japan's Nikkei (.N225) fell 3.3%, partly due to an 11% plunge in Nissan Motor (7201.T) after the company reported a 99% drop in quarterly profit. Taiwan (.TWII) markets remained closed for a second day due to a typhoon. Chinese blue-chip stocks (.CSI300) fell 0.9%, while the Shanghai Composite Index (.SSEC) also fell 0.9%, hitting a five-month low. Hong Kong's Hang Seng (.HSI) fell 1.7%, unhelped by Beijing's latest round of economic easing. On Wall Street, the Nasdaq (.IXIC) lost nearly 4% as weak earnings results from Alphabet and Tesla dented investor confidence in the already lofty valuations of Big Tech stocks. The decline added to recent market volatility, with the Wall Street Fear Index (.VIX) hitting a three-month high. Investors sought safety in cash and highly liquid short-term debt as two-year U.S. Treasury yields fell to their lowest in nearly six months on Wednesday. "There are a lot of factors weighing on equity markets right now," said Jeff Yu, senior currency and macro strategist at BNY Mellon in London. He also pointed to declining auto sales in the US, Europe and Japan, as well as recent interest rate moves in China, as clear signs of weakening global consumer demand. Another big factor was the strengthening of the yen, which rose more than 1% to its highest in 2 1/2 months, ahead of a Bank of Japan meeting next week to discuss whether to raise interest rates. The Swiss franc also strengthened 0.5% to 0.88 per dollar, adding 0.7% overnight. Shorter-term bonds extended gains, helped by comments from former New York Federal Reserve President Bill Dudley that the central bank should cut rates, preferably at its policy meeting next week. The yield on two-year Treasury notes fell another 3 basis points to 4.3894%, after falling 4 basis points on Wednesday. Ten-year Treasury yields also fell 2 basis points to 4.2622% on Thursday. In commodities, iron ore prices fell nearly 1% on lingering concerns about China's economy. Copper futures fell 1.2%, while oil prices remained near six-week lows. Brent crude futures fell 0.5% to just over $81 a barrel, while U.S. West Texas Intermediate (WTI) crude also fell 0.5% to $77.23 a barrel. Gold prices fell 1% to $2,373.62 an ounce. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 29 Share Posted July 29 Inflation data, tech gains lift Wall Street Wall Street's major indexes closed higher on Friday as investors turned their attention back to Big Tech. That followed a massive sell-off earlier in the week, and positive inflation data bolstered confidence that the Federal Reserve could soon begin cutting interest rates. While the S&P 500 (.SPX) and Nasdaq Composite (.IXIC) both posted gains, they failed to fully recover from their losses in the previous two sessions. Both indexes ended the week lower, marking their second straight weekly decline. The Dow Jones Industrial Average (.DJI) ended the week higher, helped by gains in industrial conglomerate 3M (MMM.N). Shares of the company jumped 23%, their biggest daily percentage gain in decades, after the company raised the lower end of its full-year adjusted profit forecast. Investors spooked by recent volatility are bracing for earnings from major tech companies, a Federal Reserve meeting and employment data to be closely watched next week. These events could determine the near-term trajectory of U.S. stocks after a period of wild swings. A multi-month rally in Big Tech stocks stalled in the second half of July, triggering a sell-off. The S&P 500 and Nasdaq Composite indexes posted their biggest one-day losses since 2022 on Wednesday, following disappointing earnings reports from Tesla (TSLA.O) and Google parent Alphabet (GOOGL.O). Five of the seven stocks in the so-called "Magnificent Seven" rose 2.7% on Friday. The exceptions were Tesla (TSLA.O) and Alphabet (GOOGL.O), whose weak results on Wednesday triggered a broad sell-off in the market. Both companies fell 0.2%, with Alphabet's shares hitting their lowest close since May 2. The release of more earnings reports from the "Magnificent Seven" next week could have a significant impact on the near-term outlook for the market, as they will determine its future direction. "What we see from Apple, Microsoft and Amazon.com next week will really determine whether the current stock rotation continues and which direction the market goes," said Greg Bootle, head of U.S. equity and derivatives strategy at BNP Paribas. Market rotation refers to investors moving from high-growth stocks with high valuations to less valued sectors such as mid- and small-cap stocks. This process appears to have accelerated in recent weeks, as small-cap indices such as the Russell 2000 (.RUT) and the S&P Small Cap 600 (.SPCY) hit their fourth weekly closing highs. The Russell 2000 (.RUT) posted its third straight weekly gain, its best three-week performance since August 2022. These small-cap, economically sensitive companies were supported on Friday by a modest rise in U.S. prices in June, highlighting weakening inflation and potentially opening the door for the Fed to begin easing policy as early as September. The probability of a 25 basis point rate cut at the Fed's September meeting remained unchanged at about 88% following the release of PCE inflation data, according to CME FedWatch data. Traders continue to expect two rate cuts by December, LSEG data show. "We do think the robust economic data is supportive of broader trading," said Adam Hetts, global head of multi-asset at Janus Henderson, noting that small-cap stocks have outperformed the S&P 500 by more than 10% over the past month. The rise in trading activity has also helped lift cyclical sectors. All 11 sectors of the S&P 500 index rose on Friday, led by industrials (.SPLRCI) and materials (.SPLRCM). On Friday, the S&P 500 (.SPX) rose 59.88 points, or 1.11%, to 5,459.10, while the Nasdaq Composite (.IXIC) rose 176.16 points, or 1.03%, to 17,357.88. The Dow Jones Industrial Average (.DJI) rose 654.27 points, or 1.64%, to 40,589.34. Over the past week, the Dow has gained 0.75%, while the S&P 500 has fallen 0.82% and the Nasdaq has fallen 2.08%. Among the companies that saw their shares rise on positive earnings reports were Deckers Outdoor (DECK.N), which jumped 6.3% after raising its full-year profit forecast, and oilfield services company Baker Hughes (BKR.O), which rose 5.8% after it beat second-quarter profit estimates. Norfolk Southern (NSC.N) shares rose 10.9%, its biggest one-day gain since March 2020, after the rail operator posted quarterly profit that beat Wall Street expectations, thanks to strong pricing for its services. Meanwhile, shares of medical equipment maker Dexcom (DXCM.O) plunged 40.6% after cutting its full-year revenue forecast, causing significant disappointment among investors. Trading volume on U.S. exchanges totaled 10.92 billion shares, below the 20-day average of 11.61 billion shares. While the S&P 500 is still just 5% below its all-time high and has gained nearly 14% this year, some investors are beginning to worry that Wall Street may be overly optimistic about future earnings growth. That could leave stocks vulnerable if companies fail to meet expectations in the coming months. Investors are also looking ahead to comments from the Federal Reserve's meeting on Wednesday to see if policymakers plan to cut interest rates, something many market participants expect in September. Employment data due later in the week, including the monthly labor market report, could provide a clearer picture of how severe the labor market slump is becoming. These events could have a significant impact on the future direction of the market, and investors will be watching closely to adjust their strategies and mitigate risk. "This is a critical time for the markets," said Bryant VanCronkhite, senior portfolio manager at Allspring. "Investors are starting to question why they are paying such high prices for AI-related companies, while the market is worried that the Fed may miss out on a soft landing, causing significant volatility." Recent weeks have shown a shift away from leading tech giants and toward sectors that have long been overlooked, including small-cap and value stocks like financial institutions. The Russell 1000 Value Index has gained more than 3% over the past month, while the Russell 1000 Growth Index has fallen nearly 3%. The Russell 2000 Small Cap Index has gained nearly 9% over the period, while the S&P 500 has lost more than 1%. Markets are currently fairly certain that the Fed will begin cutting interest rates at its September meeting, with a 66 basis point cut forecast by year-end, according to the CME FedWatch tool. Expected employment data due later this week could change those forecasts. If the data shows the economy is slowing more quickly, the odds of a rate cut could increase. Conversely, if employment picks up, it could signal an economic recovery, which could in turn impact the Fed's decisions. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 30 Share Posted July 30 XAU/USD. Review and Analysis Today, the price of gold attracts some buyers on the decline but remains constrained within the broader trading range of the previous day, staying below the round level of $2400. A weaker tone in the stock markets and geopolitical risks stemming from conflicts in the Middle East are the main factors supporting precious metal prices. Increasing expectations of the start of the Fed's rate-cutting cycle keep dollar bulls on the defensive below the two-week high reached on Monday, benefiting the non-yielding yellow metal. However, gold price growth will remain limited as traders prefer to wait for additional signals on the Fed's monetary policy path before making a firm decision on the short-term direction. Accordingly, attention will remain focused on the results of the two-day Federal Open Market Committee (FOMC) meeting, which concludes on Wednesday. Along with important U.S. macroeconomic data, including Friday's nonfarm payrolls (NFP) report, this will influence the dynamics of the U.S. dollar and, consequently, the XAU/USD pair. Therefore, it would be prudent to wait for some follow-up buying before confirming that the recent pullback from the all-time high has ended. From a technical perspective, the overnight failure to gain acceptance above the round level of $2400 and the subsequent decline call for some caution before positioning for significant growth. Moreover, the oscillators on the daily chart have just begun to gain negative momentum, suggesting that the path of least resistance is likely downward. However, bearish traders will need to wait for a sustained break below the support at the 50-day simple moving average (SMA), currently around the $2358 level, before opening new positions. Some follow-up selling below last week's swing low, around $2353, will confirm a negative outlook, dragging XAU/USD to the next relevant support at the $2325 level. The downward trajectory could extend further, potentially testing the round figure of $2300. On the opposite side, momentum above the $2400 mark is likely to face some resistance around $2415 before last week's swing high in the $2432 level. A sustained break beyond this would indicate that the corrective decline from the all-time high has run its course, paving the way for additional gains. Gold prices could then rise to intermediate resistance at $2469-2470 and challenge the record all-time high in the $2483-2484 zone. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted July 31 Share Posted July 31 Tech in stress: Stocks fall, chipmakers rise amid AI debate US stock indices ended trading mixed on Tuesday, with the S&P 500 and Nasdaq falling under pressure from weak chipmakers and tech giants, while the Dow Jones Industrial Average showed a slight increase. Microsoft missed expectations Tech giant Microsoft, considered a leader in artificial intelligence, ended the day down 0.89%, reaching $422.92 per share. The company's shares fell another 5% in after-hours trading as quarterly results for its cloud service Azure fell short of analysts' forecasts. Nvidia and other chipmakers are losing ground Shares in Nvidia, a recognized leader among the beneficiaries of AI growth and the second-largest player in the S&P 500, fell 7.04% to $103.73 per share. The decline had a negative impact on other chip companies, leading to a 3.88% decline in the Philadelphia Semiconductor Index. Expectations from the giants' reports This week, investors are eagerly awaiting reports from giants such as Apple, Amazon, and Meta Platforms. Apple shares rose slightly by 0.26%, reaching $218.80, while Amazon lost 0.81%, falling to $181.71. Meta Platforms also showed a decline of 0.54%, ending the day at $463.19. Investors are concerned about the valuation of these companies against the backdrop of the current economic situation. "A lot of people are wondering right now how to profit from investing in artificial intelligence," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. Investors are choosing caution: high stock prices are in question With expectations of a Fed rate cut growing, market participants are starting to question the fair value of stocks. "Companies are showing good financial results, but the main issue is how much their shares are worth. These are expensive securities, and investors should carefully evaluate their investments," the expert comments. Indices: Dow Jones rises, Nasdaq falls The Dow Jones Industrial Average (.DJI) rose 203.40 points, or 0.5%, to 40,743.33. At the same time, the S&P 500 (.SPX) fell 27.10 points, or 0.5%, to 5,436.44. The Nasdaq Composite (.IXIC) lost 222.78 points, or 1.28%, to end the day at 17,147.42. Small Caps and Financials on the Rise The Russell 2000 Small Cap Index (.RUT) rose 0.35%, while the S&P Value 500 (.IVX) rose 0.52%, helped by the Financials (.SPSY) index, which rose 1.19%. The gains are driven by a recent shift from more expensive stocks to less expensive ones, amid expectations that the Federal Reserve will cut interest rates this year, which is linked to slowing inflation. Energy and financials lead, technology falls The energy sector (.SPNY) rose 1.54%, the biggest gainer of all sectors. Financials also performed well, leading the S&P's list of 11 key sectors. Against this backdrop, the technology sector (.SPLRCT) fell 2.2%, the weakest on the day. Continued sell-off: The impact of earnings Last week's sell-off in mega-cap stocks, triggered by disappointing Tesla results and Alphabet's outlook for high spending, continues to weigh on the market. These events have heightened investor concerns, leading to a correction in stock prices and a decline in their appeal. Market prepares for Fed decision: Expectations of rate cuts Investors continue to hope for easing monetary policy from the US Federal Reserve. The policy meeting is on Wednesday, and the market is pricing in a small chance of a 25 basis point rate cut. However, according to CME's FedWatch tool, that scenario is looking very real at the September meeting. Labor data expectations Investors are focused on labor market data this week, culminating in the government's payrolls report on Friday. The Survey of Job Openings and Turnover on Tuesday showed 8.18 million job openings in June, beating economists' expectations of 8 million. Failures and successes: The impact of corporate news Among the companies whose shares fell, Procter & Gamble (PG.N) stood out, falling 4.84% to $161.70 after disappointing fourth-quarter sales data. Drug giant Merck (MRK.N) lost 9.81% to $115.25 after the company revised down its full-year profit forecast. Cybersecurity was also in the spotlight, with CrowdStrike (CRWD.O) falling 9.72% to $233.65 on news of a compensation claim from Delta Air Lines (DAL.N) over the global cyber outage. Against this backdrop, shares of cybersecurity and cloud services company F5 (FFIV.O) rose 12.99% to $200.66 on a better-than-expected fourth-quarter earnings forecast. Market Breakdown On the New York Stock Exchange, advancing stocks outnumbered declining stocks by a 1.54-to-1 ratio. On the Nasdaq, the picture was less optimistic, with declining stocks outnumbering declining stocks by a 1.16-to-1 ratio. This reflects the current mood in the market, where investors continue to actively re-evaluate their portfolios amid uncertainty. S&P 500 and Nasdaq: Highs and lows amid volatile market The S&P 500 and Nasdaq Composite indices showed interesting results on Tuesday, with the S&P 500 hitting 73 new 52-week highs and one low, while the Nasdaq recorded 133 new highs and 126 lows. Trading volume on U.S. exchanges was 11.25 billion shares, slightly above the 20-day average of 11.19 billion shares. Microsoft disappointment and the impact on the AI market Microsoft's (MSFT.O) quarterly results were below expectations, wiping out about $340 billion in market value for the company and its rivals vying for leadership in artificial intelligence technology. Despite this, chipmakers such as Nvidia (NVDA.O) and others showed gains after Advanced Micro Devices (AMD.O) reported results. The contrast between the chipmakers' gains and their biggest customers' declines highlights the disconnect in AI, with some investors wondering whether Wall Street's rally in AI has become too long-winded. Expert Comment: Wealth Transfer in AI Gil Luria, senior software analyst at DA Davidson, said: "Microsoft reported slower growth in its core cloud business but a significant increase in capital expenditures. This could be seen as a wealth transfer from Microsoft shareholders to Nvidia shareholders." In its earnings call, Microsoft said revenue from its Intelligent Cloud division, which includes the Azure platform, rose 19% to $28.5 billion in the quarter ended June 30. However, that was below analysts' expectations of $28.7 billion, according to LSEG. Thus, the current changes in market dynamics highlight the volatility and uncertainty in the technology sector, especially amid changes in demand for AI and cloud computing solutions. AI Spending: Tech Giants Under Pressure In the last quarter, Microsoft increased capital expenditure by 78% to $19 billion, including finance leases. This spending is related to the need to expand its global network of data centers to meet the growing demand for AI technologies. Investors are looking forward to the results of significant investments in AI Investors are very eager to see the results of significant investments in AI. Daniel Morgan, senior portfolio manager at Synovus Trust, said: "This has become a major concern. Stocks have risen strongly in the run-up to these reports." High expectations for tech companies have led to a jump in their share prices, which is now causing concern among investors. High Stakes and Rising Costs Rising AI costs added to concerns after Alphabet announced a significant increase in capital expenditures to support its generative AI technology. The higher-than-expected spending has raised concerns among investors who are concerned that the cost of building AI infrastructure could be higher than expected profits. Amid high expectations for tech giants, analysts are forecasting that S&P 500 tech companies will increase their combined profits by nearly 10%, according to LSEG I/B/E/S. Market Correction: Nasdaq Under Pressure However, concerns about skyrocketing AI costs that aren't being matched by similarly strong revenues have dragged the Nasdaq down 8% from its record high close on July 10. This reflects the overall market sentiment, with investors continuing to closely monitor the tech sector, balancing expectations for strong revenues with the reality of the costs of developing new technologies. Tech Stocks: Slip and Slip Ahead of Earnings Ahead of Microsoft's earnings, the Nasdaq has slipped more than 1%, reflecting investor caution. Other major tech stocks have also come under pressure amid the decline. However, despite the overall negative backdrop, AMD has posted a 6% gain, thanks to an upbeat third-quarter revenue outlook based on strong demand for its AI chips. Contrary trends: chipmakers on the rise Among other AI-related chipmakers, Broadcom (AVGO.O) posted a 1.4% gain, while Intel (INTC.O) and Qualcomm (QCOM.O) also increased their market value, gaining almost 1% each. This suggests that despite the overall decline in the tech sector, the chipmaker segment continues to attract investor interest. AI: Reality and Challenges Rishi Jaluria, an analyst at RBC Capital Markets, noted: "We are still in a difficult macroeconomic environment. AI is indeed a significant factor, but it requires significant investment, which is clearly reflected in the capital expenditure numbers." This highlights the current challenges that companies face in the context of global economic uncertainty and the high costs of developing advanced technologies. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 1 Share Posted August 1 Hot forecast for EUR/USD on August 1, 2024 The results of the Federal Open Market Committee meeting implied a significant rise in the dollar, but it never happened. The market continues to stagnate despite statements from Federal Reserve Chair Jerome Powell. He explicitly mentioned the need to begin easing monetary policy. However, he did not specify when this process would start. Although there is no doubt that interest rates will be lowered as early as September, the market was generally prepared for this development. Furthermore, according to preliminary estimates, inflation in the eurozone accelerated from 2.5% to 2.6% instead of slowing down to 2.3%. This creates a precondition for the European Central Bank to slow down the pace of interest rate cuts, contributing to the single European currency's strength. In other words, these factors somewhat balanced each other out. Today, the focus will be on events unfolding in Europe. First, investors expect another interest rate cut from the Bank of England, which will support the U.S. dollar. Second, the eurozone is expected to see a sharp increase in the unemployment rate from 6.4% to 6.9%. Due to the scale of the change, this is likely to have the most significant impact. Therefore, despite Powell's statements yesterday, there are all the prerequisites for further strengthening of the dollar. Despite a rich flow of information, the EUR/USD pair has not shown any speculative activity. The quote has formed a characteristic stagnation around the local low of the corrective cycle, as the support level of 1.0800 serves as a support. On the 4-hour chart, the RSI indicator is moving in the lower area of 30/50, indicating that the bearish sentiment persists in the market. Regarding the Alligator indicator on the same time frame, the moving average lines point downward, corresponding to a downward cycle. Expectations and Perspectives Subsequent price fluctuations within the 1.0800/1.0850 range are possible in this situation. When the price breaks out of either boundary of the established range, a major spike in speculative activity is expected. Complex indicator analysis points to a stagnant phase in the short-term and intraday periods. The indicators are unstable. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 5 Share Posted August 5 The Week Ahead on Wall Street: Economic Fears and Last Week Buying Opportunities in a Falling Market Despite the sell-off, some market participants saw a buying opportunity. Jonathan Golub, a strategist at UBS, noted in a note to clients that the market historically performs best when the VIX index widens, presenting a short-term investing opportunity. Bearish Sentiment Prevails Declining stocks outnumbered advancing stocks by nearly three to one on the New York Stock Exchange, 2.92 to 1, while the Nasdaq saw a 4.52 to 1 ratio. The S&P 500 posted 62 new 52-week highs and 15 new lows, while the Nasdaq Composite posted 34 new highs and 297 new lows. Trading Volume and Earnings Expectations Trading volume on U.S. exchanges reached 14.75 billion shares, well above the 20-day average of 11.97 billion shares. Eyes on Earnings to Come Investors will be watching earnings reports from giants like Caterpillar and Walt Disney next week, which will provide important insight into the health of the consumer and manufacturing sectors. Healthcare leaders including Eli Lilly are also expected to report, providing insight into the health of the pharmaceutical sector and its prospects. Strengthening Safe Havens With concerns mounting, investors have been flocking to safe haven bonds and other assets. The yield on the benchmark 10-year Treasury note fell to 3.79%, its lowest since December. This indicator moves inversely to bond prices, indicating increased demand for safe havens. Stable Sectors in Popularity Amid economic uncertainty, sectors traditionally considered stable have attracted increased attention. Investors have flocked to these areas in an attempt to protect their capital and minimize potential losses. Sector Performance: Healthcare and Utilities on the Rise Over the past month, the healthcare sector has posted a 4% gain, while utilities have risen more than 9%. These sectors have become safe havens for investors amid economic uncertainty. At the same time, the Philadelphia SE Semiconductor Index (SOX) has fallen nearly 17%, led by sharp losses in popular names like Nvidia and Broadcom. Looking Ahead: Profit Taking or the Beginning of a Correction? Some investors believe that the current data may simply reflect a desire to take profits after the market's significant rally in 2024. This approach does not exclude the possibility of further growth, but also indicates the possible beginning of a correction, especially in sectors that previously showed a confident rise. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 6 Share Posted August 6 The main events by the morning: August 6 Goldman Sachs forecasts a rise in gold prices to $2,700 per ounce. Goldman Sachs Group analysts noted that long positions in gold currently represent the most valuable hedge among all commodities. The average maximum deposit rate in the largest banks of the Russian Federation exceeded 17% per annum. This is the maximum since March 2022. Rutube has more than doubled its audience over the past year. Experts believe that this is due, among other things, to the appearance of pirated content from Western majors on the platform. There is a rebound on the Asian stock exchange. Japan's Nikkei index rose 10% after a record 13% drop on Monday. The Ministry of Finance of the Russian Federation has increased oil revenues. The Ministry of Finance of the Russian Federation increased oil revenues by more than 60% in seven months compared to the same period last year. More analytics on our website: bit.ly/3VobLUv  Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 7 Share Posted August 7 From sell-off to gains: stock indexes show positive dynamics Markets recover from sharp decline The S&P 500 and Nasdaq jumped 1% on Tuesday, showing a strong recovery from the recent sell-off. Investors began to actively buy stocks again, inspired by positive comments from Federal Reserve officials, which eased fears about a possible recession in the U.S. Global growth and a return to risk Equally on the day, stocks around the world began to recover from the aggressive declines the previous day. Amid this gain, U.S. Treasury yields increased and the dollar strengthened. Investors have returned to buying riskier assets despite lingering concerns about an economic slowdown. Cooling Optimism The Dow Jones Industrial Average also showed positive dynamics, but, like other major indices, it fell by the end of the trading day, falling short of the daily highs. This shows some caution among market participants despite the overall improvement in sentiment. Fed calms markets U.S. Federal Reserve officials issued statements rejecting the view that weak July employment data points to an approaching recession. However, they warned that lowering interest rates may be necessary to prevent a possible economic slowdown. Rate cuts likely Amid weak economic data, stocks were under pressure, fueling fears of a U.S. recession. According to CME Group's FedWatch tool, traders are pricing in the likelihood of a rate cut at the next meeting in September, with 75% expecting a 50 basis point cut and 25% expecting a 25 basis point cut. S&P 500 Sectors Advance: The Day's Top Performers All of the major sectors of the S&P 500 ended the day higher, with real estate and financials leading the way. Tech company Nvidia was a particular highlight, jumping nearly 4% to lead the gains for the S&P 500 and Nasdaq. Investors Return to the Market "The market has been oversupplied, but there's a significant recovery happening, particularly in the Nasdaq. Investors are starting to believe again that lower interest rates will be good for stocks," said Rick Meckler, a partner at Cherry Lane Investments, a family-owned investment firm in New Vernon, N.J. Indices Are Rising The Dow Jones Industrial Average gained 294.39 points, or 0.76%, to 38,997.66. The S&P 500 gained 53.7 points, or 1.04%, to 5,240.03, and the Nasdaq Composite gained 166.77 points, or 1.03%, to 16,366.86. The Impact of Artificial Intelligence The Nasdaq Composite has risen 9% in 2024, helped by strong earnings and a bullish outlook for AI. However, as Meckler noted, "while recent earnings have been good, they have fallen short of expectations in many cases." Market valuations remain high, with the S&P 500 trading at 20 times trailing 12-month earnings, according to LSEG, well above the long-term average of 15.7. Expectations and Risks Amid unexpected developments such as the Bank of Japan's recent rate hike, investors have begun to unwind the yen-denominated financing that has been used to buy stocks for years. This has added to market uncertainty and left many wondering about the outlook. Awaiting Powell's Speech One of the key events investors are watching is Federal Reserve Chairman Jerome Powell's speech at a symposium in Jackson Hole, Wyoming, scheduled for August 22-24. His words could influence future market moves and provide insight into the future of monetary policy. Uber and Caterpillar Succeed Uber shares soared 11%, beating Wall Street's second-quarter revenue and profit expectations. The company was able to show solid growth thanks to strong demand for its ride-sharing and food delivery services. Meanwhile, Caterpillar shares rose 3% as the company also beat analysts' forecasts despite weaker demand in North America. Rising prices for heavy equipment such as excavators helped offset those losses. Trading Activity on the Rise Trading volume on U.S. stock exchanges totaled 13.52 billion shares, above the 20-day average of 12.48 billion. Advancing stocks outnumbered declining stocks on the New York Stock Exchange by a 2.59-to-1 ratio, while the Nasdaq saw a 1.93-to-1 ratio. Highs and Lows The S&P 500 posted 12 new 52-week highs and seven new lows, while the Nasdaq Composite posted 31 new highs and 144 new lows. These figures highlight the continued volatile market, with gains and losses alike. Oil Prices Rebounding Oil prices also edged higher after falling to multi-month lows on Monday. Investors' attention has shifted to supply-side concerns, which, along with a recovery in financial markets, has eased concerns about future energy demand. Nikkei recovery: relief after collapse Tokyo's Nikkei index rose 10%, providing some relief after its 12.4% plunge on Monday. The drop was the biggest one-day sell-off in Japan since Black Monday in 1987, causing global investor jitters. Fed: Slowdown, not recession U.S. Federal Reserve officials on Monday dismissed speculation about a recession despite weak employment data for July. San Francisco Fed President Mary Daly stressed that current data suggest the economy is slowing, but not collapsing. She noted the importance of preventing a labor market crisis. Global Markets Rise The MSCI index, which tracks shares around the world, rose 8.91 points, or 1.17%, to 770.99, off its daily high of 777.81. That followed a more than 3% drop on Monday, marking the third straight day of losses for the global market. European Markets Volatility Europe's STOXX 600 index ended the session up 0.29%, despite earlier volatility, when it fell 0.54%. That underscores the nervousness among European investors trying to adjust to rapidly changing market conditions. FX Market Jitters On the FX front, the dollar strengthened against its major counterparts, while the Japanese yen hit seven-month highs against the US dollar. Some of the more dramatic moves of recent days have eased, and markets are beginning to feel a sense of calm again. Dollar Strengthens Amid Currency Volatility The dollar index, which tracks the dollar against major currencies including the yen and euro, rose 0.07% to 102.94. Against the Japanese yen, the dollar gained 0.4% to 144.74, while the euro weakened 0.2% to $1.093. U.S. Treasury Yields Rise U.S. Treasury yields rose as fears of a potential recession in the country proved overblown, dampening demand for safe-haven U.S. bonds. The 10-year yield rose 12 basis points to 3.903%, while the 30-year yield rose 12.1 basis points to 4.1924%. The yield on 2-year bonds, which often react to changes in interest rate expectations, also rose to 3.9936%. Oil prices recover Oil prices have stabilized after falling on Monday. U.S. crude rose 0.36% to $73.20 a barrel, while Brent crude ended the trading session at $76.48 a barrel, up 0.24% from the previous day. Precious Metals: Gold Loses Ground With the dollar strengthening and bond yields rising, precious metals prices fell. Spot gold fell 0.82% to $2,387.88 an ounce. U.S. gold futures also fell 0.37% to $2,392.70 an ounce. However, expectations of a U.S. interest rate cut in September and ongoing tensions in the Middle East limited gold's losses, maintaining its appeal as a safe haven asset. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 9 Share Posted August 9 Nasdaq in the red: weak bond auction, tech companies fall Tech sector under pressure The U.S. stock market closed lower on Wednesday, with the Nasdaq index losing 1%. The main reason was a decline in tech stocks, exacerbated by weak interest in the 10-year Treasury auction, which caused investor jitters amid volatile trading. Morning gains turn to losses Trading started on a positive note with tech giants rising, but both indexes began to lose ground as the day progressed. Investors, still jittery from the recent global sell-off in equities, added to the sell-off after a weak Treasury auction sent the market lower. Red Zone: All Indexes Die All three major indexes ended the day in the red, with losses widening just before the close. The tech-heavy S&P 500 (.SPLRCT) fell 1.4%, becoming the biggest drag on the benchmark index. Recession Worries Investors are worried about a possible U.S. recession, as well as weaker forecasts from major U.S. companies. These factors are weighing on the market. Day's Results: Big Losses The Dow Jones Industrial Average (.DJI) fell 234.21 points, or 0.6%, to 38,763.45. The S&P 500 (.SPX) lost 40.53 points, or 0.77%, to 5,199.5. The Nasdaq Composite (.IXIC) fell 171.05 points, or 1.05%, to 16,195.81. Expert Opinions Lindsey Bell, chief strategist at 248 Ventures in Charlotte, North Carolina, said investors may also have been taking profits after stocks rebounded Tuesday. Big Losses The Nasdaq and S&P 500 each lost at least 3% on Monday, underscoring the volatility of the current market environment. Impact of Comments from Japan Stocks received some support Wednesday after Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said the central bank has no plans to raise rates amid volatile financial markets. Nikkei surges after decline Japanese stocks rose on the news. The Nikkei (.N225) rose 1%, extending a 10% rebound that began on Tuesday after a sharp decline on Monday. The Nikkei's sudden 12.4% decline triggered a global decline in equities as investors turned away from risky assets. Japan rate hike fallout The Bank of Japan's surprise rate hike on July 31 to a level not seen in 15 years triggered a sell-off in global markets. Investors began unloading their yen positions in a carry trade, sending the low-yielding Japanese currency, which is typically used to buy high-yielding assets, sharply higher. Disappointing Corporate Results Walt Disney Shares Slide Walt Disney (DIS.N) shares fell 4.5% after the company warned of "moderate demand" for its theme parks in coming quarters. Super Micro Computer Slide Super Micro Computer (SMCI.O) shares tumbled 20.1% after the company reported lower-than-expected quarterly adjusted gross profit. Rival Dell Technologies (DELL.N) also fell 4.9%. Market Expectations Federal Reserve Eyes Investors are eagerly awaiting further comments on monetary policy from the Federal Reserve, with particular attention focused on an event in Jackson Hole, Wyoming, where Fed Chairman Jerome Powell is scheduled to speak. Trading Activity Trading volume on U.S. exchanges on Wednesday was 12.93 billion shares, slightly above the 20-day average of 12.63 billion shares. Declining Stocks Prevail Declining stocks outnumbered advancing stocks on the New York Stock Exchange (NYSE) by 1.48 to 1. On the Nasdaq, the ratio was even more pronounced, with decliners outnumbering advancing stocks by 2.08 to 1. Highs and Lows: Market Trends S&P 500 and Nasdaq Performance The S&P 500 posted 16 new 52-week highs and 9 new lows. The Nasdaq Composite posted 34 new highs and 195 new lows, putting the tech sector under significant pressure. External Factors Oil Price Rise Oil prices rose on a bigger-than-expected draw in U.S. crude inventories and a possible escalation in the Middle East. However, investors continue to voice concerns about weak demand in China. S&P 500 Volatility Daily Performance After a morning rally on Wednesday, the S&P 500 began to lose ground around midday and then fell further after the 10-year U.S. Treasury auction. Profit Taking Bell also noted that some investors are using short-term stock gains to take profits, adding to the volatility in the market. MSCI falls, STOXX 600 rises The MSCI World Share Index (.MIWD00000PUS) fell 0.35 points, or 0.05%, to 770.64, after hitting a session high of 783.83. Meanwhile, Europe's STOXX 600 (.STOXX) ended the day up 1.5%, reflecting positive momentum in European markets. FX Markets: BoJ Statements React Yen Falls The Japanese yen weakened after the Bank of Japan's rate hike announcements, somewhat reassuring investors worried about the volatility of the Japanese currency. The yen strengthened sharply against the dollar on Monday amid concerns about a possible U.S. recession, sending markets falling broadly. Strengthening dollar The US dollar strengthened 1.75% against the yen, reaching 146.83. The dollar index, which tracks the greenback against a basket of currencies including the yen and the euro, rose 0.2% to 103.19. The euro, meanwhile, fell 0.08% to $1.0921. Bond yields: An analysis of supply and demand US Treasury yields rise US Treasury yields rose after weak demand at a $42 billion auction of 10-year notes. Companies rushed to place their debt amid growing risk appetite. Traders are closely monitoring supply and awaiting more economic data to assess the health of the US economy. Specifics The 10-year Treasury yield rose 7 basis points to 3.958%, up from 3.888% late Tuesday. The 30-year yield also rose, adding 8.1 basis points to 4.2579%. These moves highlight the current market sentiment, with investors seeking to balance risk and return amid economic uncertainty. Two-Year Yields Decline The two-year Treasury yield, which closely tracks interest rate expectations, fell 0.2 basis points to 3.9827%, down from 3.985% late Tuesday. The move reflects a slight softening in investor expectations for future Federal Reserve action. Energy Markets: Oil Prices Rising Oil Prices Strengthening Energy markets are seeing a significant rise in oil prices. US crude oil rose 2.77% to $75.23 per barrel. Brent crude prices also rose, rising 2.42% to $78.33 per barrel. These changes come amid concerns about depleting reserves and a possible escalation of conflicts in the Middle East. Precious Metals Market: Gold Prices Fall Gold Price Decline Precious metal prices declined. Spot gold lost 0.2% to $2,384.59 per ounce. US gold futures also fell, falling 0.05% to $2,387.80 per ounce. These changes may be related to fluctuations in currency markets and changing investor sentiment. Results and Prospects Markets continue to show volatility in response to changes in economic indicators and geopolitical risks. Investors are closely monitoring developments, trying to adapt their strategies to the new conditions. Interest rate expectations and rising oil prices play key roles in shaping market sentiment. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 11 Share Posted August 11 New round of gains: Nasdaq, S&P 500 up 2% on US unemployment report US stocks rally: S&P 500 and Nasdaq jump more than 2% US stock markets surged higher on Thursday, with major indices including the Nasdaq and S&P 500 ending the day up more than 2%. The gains were driven by an unexpected drop in jobless claims, which eased concerns about a possible sharp slowdown in the labor market. Rebound Across Sectors All sectors of the S&P 500 gained, with the biggest gainers being technology (.SPLRCT) and communications services (.SPLRCL). Small-caps also saw strong gains, with the Russell 2000 (.RUT) up 2.4%. Eli Lilly Rises Among the top gainers was pharmaceutical company Eli Lilly (LLY.N), which soared 9.5% after the company raised its full-year profit forecast and sales of its popular weight-loss drug Zepbound topped $1 billion for the first time in a quarter. Positive Labor Market Data A larger-than-expected decline in jobless claims gave markets a boost. Impact of Reports and Recession Fears Last week, the US employment reports for July raised concerns about a possible recession, leading to a sharp decline in stocks. Traders also noted an unwinding of positions in the carry trade, a strategy in which investors borrow money from low-interest-rate economies to invest in high-yielding assets. The market continues to react to macroeconomic data, and investors will be closely watching new data in the coming weeks to assess the state of the economy and possible prospects. Dow Jones, S&P 500 and Nasdaq ended the day on a solid rise US stock indexes ended the trading day with significant gains. The Dow Jones Industrial Average (.DJI) rose 683.04 points, or 1.76%, to 39,446.49. The S&P 500 (.SPX) rose 119.81 points, or 2.30%, to 5,319.31. Meanwhile, the Nasdaq Composite (.IXIC) rose 464.22 points, or 2.87%, to end the day at 16,660.02. Volatility Declines: Wall Street Calms Down The Cboe Volatility Index (.VIX), often called Wall Street's fear gauge, declined Thursday, suggesting that sentiment is stabilizing. However, experts caution that the current gains do not necessarily mean the market has bottomed out. "Once volatility starts to rise, it takes a while for it to calm down," said David Lundgren, chief market strategist and portfolio manager at Little Harbor Advisors. He also added that the current growth does not guarantee an immediate continuation of the rise, but if we look at the three- to six-month horizon, the probability of above-average returns is quite high. End of the earnings season: Investor expectations As the second-quarter earnings season comes to an end, investors are eagerly awaiting the final results. There were some disappointments at the start of the reporting period, but the market remains focused on the latest data. Under Armour surprises the markets One of the most significant events of the day was the sudden rise of Under Armour (UAA.N) shares by 19.2%. The company pleased investors with a surprise first-quarter profit, which was the result of successful efforts to reduce inventory and promotions. Trading activity: Moderate recovery Trading volume on U.S. exchanges amounted to 11.98 billion shares, slightly below the average of 12.60 billion over the past 20 trading days. However, the market remains active, and participants continue to closely monitor further economic indicators and corporate reports. Advances outnumber decliners on the New York Stock Exchange (NYSE) 3.59 to 1. The same was true on the Nasdaq, where for every decliner, there were 2.76 gainers. The S&P 500 has posted 7 new highs in the past 52 weeks, but also 4 new lows. Meanwhile, the Nasdaq Composite has posted 32 new highs, but 183 new lows. Global Markets Strengthen on Better Unemployment Data A closely watched global stock index jumped more than 1% on Thursday, helped by lower-than-expected U.S. jobless claims data. The results eased recession fears and helped lift Treasury yields and the dollar. Oil Market Rises as Supply Concerns Outweigh Demand Oil futures prices rose for a third straight day, led by rising supply risks in the Middle East, offsetting demand concerns that earlier this week sent prices to their lowest since early 2024. Jobless Claims Drop Sharply in 11 Months The Labor Department reported Thursday that initial claims for federal unemployment benefits fell by 17,000 to a seasonally adjusted 233,000 in the week ended Aug. 3. That was the largest decline in 11 months and below economists' forecast of 240,000. Data Focus Amid Market Volatility These jobless claims data are especially important following Friday's weaker-than-expected July jobs report, which triggered a slump in financial markets on Monday that affected not only the U.S. but also global markets. Amid such volatility, investors continue to watch economic data closely to gauge future market developments. Markets on Edge: Investors Unwind Carry Trades The recent market selloff was driven in part by investors unwinding their carry trades, a strategy that involves using cheap borrowing in Japan to buy dollars and other currencies that are then invested in higher-yielding assets. The unwinding of such trades sent Japanese stocks down 12% on Monday, followed by a 3% decline in the S&P 500 (.SPX). Volatility Ahead: Uncertainties Rise Experts warn that there could be more volatility ahead, and it won't just be driven by the seasonal weakness that is typical in August and September. Heightened geopolitical tensions in the Middle East, the upcoming US elections and economic data that the Federal Reserve will be watching closely are creating a high degree of uncertainty in the market. "The market doesn't like uncertainty, and we are in that period now," says Irene Tankel, chief US equity strategist at BCA Research. European and global indices: modest gains amid volatility While US markets faced turbulence, Europe's STOXX 600 index (.STOXX) closed with a modest gain of 0.08%. The MSCI Global Equity Index (.MIWD00000PUS) also showed positive dynamics, rising 11.40 points, or 1.48%, to 782.10. FX: Dollar strengthens amid global uncertainty In currency markets, the dollar index, which tracks the greenback against a basket of major global currencies including the yen and the euro, rose 0.09% to 103.20. The euro, by contrast, weakened slightly, falling 0.04% to $1.0917. Against the Japanese yen, the dollar strengthened 0.3% to 147.13. Record volatility: Global markets on edge Before Thursday, the global equity index had posted 16 days of gains or losses of more than 1% this year, while the S&P 500 had recorded 32 such moves. This highlights the record volatility that markets have seen this year, and investors should brace for more volatility in the coming months. U.S. Treasury yields continue to rise on positive economic data U.S. Treasury yields continued to rise on Thursday, helped by jobless claims data that bolstered confidence that the U.S. economy can avoid an imminent recession. The data supported expectations for economic resilience, pushing yields higher. In addition, weak demand at the 30-year bond auction added to the yields' upward movement, continuing a trend that began amid similarly weak selling of 10-year notes the previous day. Yields Rising: Key Indicators The yield on the 10-year U.S. Treasury note rose 2.1 basis points to 3.988%, up from 3.967% at the close of trading on Wednesday. The yield on the 30-year note also rose, adding 1.6 basis points to 4.2775%, up from 4.261% the previous day. Meanwhile, the yield on the 2-year note, which often reflects expectations for future interest rates, rose 2.9 basis points to 4.0297%, up from 4.001% the previous day. Oil Markets: Oil Prices Continue to Rise Strongly Energy markets also saw gains. U.S. crude oil rose 1.28%, or 96 cents, to $76.19 a barrel. European benchmark Brent crude settled at $79.16 a barrel, up 1.06% from the previous day. Gold Shows Strong Gains In the precious metals market, gold prices also continued to rise. Spot gold prices rose 1.78% to $2,423.87 an ounce. U.S. gold futures also showed positive dynamics, rising 1.25% to $2,420.50 an ounce. Economic confidence boosts demand for assets Rising Treasury yields and stronger oil and gold positions indicate continued optimism in the markets despite some economic concerns. Investors continue to seek assets that can protect them from potential volatility, and current economic data only strengthens their confidence in the resilience of the U.S. economy. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 12 Share Posted August 12 S&P 500 Erases Losses: Week in Review and Wall Street Scenarios for Next Week Markets Stabilize: S&P 500 Ends Week Little Changed The S&P 500 stock index showed solid gains on Friday, managing to almost completely recoup losses suffered earlier in the week amid recession fears and a curtailment of global yen-financed trade. The market remained almost flat for the week, despite sharp fluctuations. Technology Pulls Market Up Technology was the biggest contributor to the S&P 500's gains on Friday, proving to be the engine that pulled the market out of the negative territory. Meanwhile, the Cboe Volatility Index, known as Wall Street's "fear gauge," fell sharply after a sharp jump earlier in the week. Monday's swings and recession fears The market had a particularly bad start to the week, with a sharp drop on Monday continuing the sell-off that began the previous week. Investors were spooked by a weaker-than-expected July employment report, raising concerns about a possible recession. In response, many began to close their carry trades linked to the Japanese yen. Investors looking for a foothold "Investors are trying to determine whether the market has bottomed out," said Robert Phipps, managing director at Per Stirling Capital Management in Austin, Texas. He said the market is in a period of high uncertainty, and participants are actively looking for signals for further action. Fed Offers Confidence The Federal Reserve said Thursday that slowing inflation is setting the stage for a possible rate cut in the future. However, they said any decisions would be based on current economic data, adding to the uncertainty. Waiting for More Data It's been a volatile week, with investors eagerly awaiting more data on inflation, corporate earnings, and presidential polls. These could be key factors in determining the direction of U.S. stocks and helping to smooth out the current market turbulence. Market Volatility: U.S. Stocks on a Swing The quiet months in U.S. stock markets have suddenly given way to bouts of volatility. Sharp price movements became a new reality for investors in August, driven by a string of worrisome economic data that coincided with the completion of a major deal financed by the Japanese yen. The deal triggered the biggest selloff in stocks this year. Despite recent recovery efforts, the S&P 500 remains 6% below its all-time high set last month, though it has rebounded from a dramatic plunge earlier in the week. Recovery May Take Time While the past few days have brought relief in the form of rising stocks, experts warn against expecting calm to return to markets anytime soon. Historical data on the Cboe Volatility Index, also known as Wall Street's "fear gauge," shows that periodic spikes in volatility can last for months. On Monday, the index posted its biggest one-day gain, indicating a high degree of anxiety among investors. Wall Street's Fear Gauge: Echoes of Anxiety The Cboe index measures demand for options, which provide protection against sharp market swings. When the index closes above 35, as it did on Monday, it takes about 170 trading sessions on average for the market to return to calmer levels. This is in line with the index's long-term median of 17.6, signaling significantly less anxiety among market participants. New Test: Inflation Data A new potential test for the market is on the horizon. On Wednesday, U.S. consumer price data will be released. If inflation shows too sharp a decline, it could fuel concerns that the Federal Reserve has made a mistake in leaving interest rates high for too long. This could lead to further market instability as investors worry that tight monetary policy will push the economy into recession. U.S. stocks, which have been going through periods of ups and downs, are in a state of heightened anxiety, and there are no signs that this situation will change quickly. Investors continue to watch the new data closely, hoping for stability that so far seems out of reach. Market ends week with minimal changes Friday's trading ended with a slight increase in the main indices, which allowed them to compensate for some of the weekly losses. The Dow Jones Industrial Average added 51.05 points, which corresponds to an increase of 0.13%, and reached 39,497.54. The S&P 500 index rose by 24.85 points, or 0.47%, closing at 5,344.16. The Nasdaq Composite also showed positive dynamics, increasing by 85.28 points, or 0.51%, and ended trading at 16,745.30. Weekly results: small losses against expectations Despite the positive end of the week, the indicators for the week as a whole were in the negative. The S&P 500 fell 0.05%, the Dow Jones lost 0.6%, and the Nasdaq Composite slipped 0.2%. The current market situation reflects the nervousness of investors who are waiting for more signals from the Federal Reserve. Waiting for the Fed's decision: What's next? Michael James, managing director of equities at Wedbush Securities, notes that the market will remain in a state of heightened uncertainty until the next Federal Reserve meeting on September 17-18. The main focus of traders is on whether the Fed will decide to cut interest rates by 25 or 50 basis points. According to CME Group, the probability of a 50 basis point cut is estimated at 51%, while the probability of a softer 25 basis point cut is 49%. Investors Await Inflation Data In addition to the Fed's decisions, investors are eagerly awaiting consumer price and retail sales data for July, due out next week. These figures could provide a clearer picture of whether the U.S. economy will avoid a hard landing and provide direction for the market going forward. Yearly Gains: Tech on the Rise Despite recent wobbles, all three major indexes have continued to post strong gains since the start of 2024, helped by strong earnings from major tech companies and optimism around artificial intelligence. Stocks have shown strong gains early in the year, helping the market stay positive amid the overall turbulence. Investors continue to watch the events unfold, awaiting more economic data and policy decisions to see where the market will head in the near future. S&P 500 and Nasdaq Continue Strong Gains The S&P 500 and Nasdaq have both posted impressive gains to end the year, up about 12% each since Dec. 31. The recent selloff in stocks has made tech stocks more affordable on a price-to-earnings basis, bringing them back into the spotlight. The Day's Winners: Take-Two and Expedia Friday's trading was marked by gains for individual stocks, particularly in the tech and entertainment sectors. Video game publisher Take-Two Interactive Software jumped 4.4% after forecasting higher net bookings in fiscal years 2026 and 2027. Meanwhile, online travel agency Expedia rose 10.2% after reporting quarterly earnings that beat analysts' expectations. Trading Activity: What's Happening on the Stock Markets? Trading volume on U.S. exchanges on Friday was 11.13 billion shares, slightly below the 20-day average of 12.59 billion. Advancing stocks outnumbered declining stocks on the New York Stock Exchange by a 1.39-to-1 ratio. However, the situation was slightly different on the Nasdaq, with decliners outnumbering gainers by a 1.14-to-1 ratio. New Highs and Lows: Who's Leading the Way? The S&P 500 posted 15 new 52-week highs and just three new lows, while the Nasdaq Composite was more mixed, with 52 new highs and 159 new lows. The data reflects continued uncertainty in the market despite the overall gains in the indices. Market Expectations: Rate Cuts on the Horizon? Futures markets are increasingly biased toward the Federal Reserve cutting its benchmark interest rate by 50 basis points at its next meeting in September. The probability of this scenario is estimated at 55%, a sharp change from the 5% chance recorded a month ago. Economic Risks: A New Reality Slower wage growth confirms that economic risks in the U.S. are becoming more balanced, especially against the backdrop of lower inflation and slower economic activity, said Oscar Munoz, chief U.S. macro strategist at TD Securities, emphasizing that the current economic environment requires special attention and caution from investors and analysts. The market remains in a state of anticipation, and the coming months will show whether U.S. stocks can continue their rally or face new challenges. Corporate Earnings Do Not Send Clear Signals to the Market Corporate earnings for the second quarter did not have a significant impact on the market, leaving investors in uncertainty. Charles Lemonides, head of hedge fund ValueWorks LLC, said the results were neither strong nor weak enough to provide a clear direction for the market. Solid Results: S&P 500 Meets Expectations The S&P 500 reported results that were, on average, 4.1% above analysts' estimates. That's close to the long-term average of 4.2% above expectations, according to LSEG. While the results suggest stability, they haven't significantly changed market sentiment. Earnings to Watch: Walmart, Home Depot, Nvidia Investors will be focused on earnings next week from giants like Walmart and Home Depot, which could provide insight into how U.S. consumers are coping with the effects of a prolonged period of high interest rates. Also expected by the end of the month is earnings from chip giant Nvidia, whose shares have already risen an impressive 110% year-to-date despite recent market wobbles. Jackson Hole Meeting: Key Event for the Fed The Federal Reserve's annual meeting in Jackson Hole, scheduled for August 22-24, will be a key venue for monetary policy discussions ahead of the Fed's September meeting. The event is attracting investors' attention because it could provide insight into the regulator's next steps amid ongoing economic uncertainty. Volatility as a Signal to Action Lemonides, an investment expert, believes that recent market volatility is a natural and healthy correction in a strong bull market. He sees it as an opportunity for strategic investing and recently began building positions in Amazon.com, betting on a recovery from the recent weakness in its shares. Political Uncertainty Rises The U.S. presidential race is also adding uncertainty to the market. According to an Ipsos poll released Thursday, Democratic candidate Kamala Harris leads Republican Donald Trump 42% to 37% in the upcoming November 5 election. Political instability will certainly be a factor in investor sentiment in the coming months. Investors continue to monitor developments, waiting for new data and signals that will help determine the future direction of the markets. Kamala Harris Enters the Presidential Race Vice President Kamala Harris officially entered the presidential race on July 21, after President Joe Biden ended his campaign following a poor performance in the June 27 debate against Donald Trump. The decision significantly changed the political landscape, adding intrigue to the race. Election Turbulence: Markets Anticipate More Twists With three months to go until the November 5 election, investors are bracing for more surprises in what has already been a dramatic election year. According to JPMorgan analysts, the early stages of the campaign provided a clearer picture of the likely outcome of the presidential and congressional elections, but recent events have once again thrown the outcome into doubt. Election Volatility: Experts' View Chris Marangi, co-chief investment officer at Gabelli Funds, predicts that the presidential race will inevitably lead to increased volatility in financial markets. However, he believes that the expected rate cuts in September could cause capital to rotate into sectors of the market that have been lagging amid the dominance of Big Tech. "We expect volatility to increase during the election period, but at the same time, we expect the market to continue to rotate as lower rates offset economic weakness," Marangi said. Political and Economic Uncertainty: What's Next? The election year has already become one of the most unpredictable in recent memory, and investors continue to closely monitor political events, trying to assess their impact on the economy and markets. As November approaches, volatility is likely to only increase, adding new challenges for all market participants. 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KostiaForexMart Posted August 14 Share Posted August 14 Awaiting CPI: How Wall Street is preparing for the next round of events Wall Street ends trading session with mixed results as investors await key economic data Wall Street ended trading mixed on Monday as market participants prepared for important economic data to be released this week. Investors are particularly focused on the upcoming U.S. consumer price data, which will determine the future course of the Federal Reserve's monetary policy. Indexes mixed The Dow Jones Industrial Average lost ground, while the benchmark S&P 500 and tech-heavy Nasdaq Composite ended modestly higher. Meanwhile, the Russell 2000 index of smaller companies fell 0.9%. Popular rotation is losing momentum "The recent trend of investors to switch to smaller companies like the Russell 2000, cyclicals and financials has already begun to wane," said James Abate, chief investment officer at Centre Asset Management in New York. He said current economic conditions are not conducive to sustained earnings and stock price growth. Focus on Consumer Prices and Retail Sales Investors are looking ahead to the U.S. consumer price index (CPI) this week, due on Wednesday. The data is expected to show inflation accelerating 0.2% in July from June, with the annual inflation rate remaining at 3%. Market participants are also focused on reports from major retailers, which will help gauge current consumer demand. Rate Forecasts: What the Market Expects The consensus in the money market is that the Fed could cut interest rates by 25 or 50 basis points as early as September. According to CME's FedWatch tool, a total monetary easing of 100 basis points is expected by the end of 2024. Investors Await Retail Sales Data: Potential Impact on the Economy Investors will be focused on the US retail sales report for July on Thursday. While expectations point to a modest increase, any weakness in the data could reignite concerns about slowing consumer demand and even the possibility of a recession. Walmart and Home Depot earnings under scrutiny Big retailers like Walmart and Home Depot are also set to report earnings in the coming days. The results will be closely watched by analysts and investors as they provide an important indicator of the health of the consumer market amid rising unemployment. Market Risks: Inflation and Consumer Sentiment James Abate, chief investment officer at Centre Asset Management, warns that a surprise rise in inflation that exceeds expectations could seriously disappoint the market. He says retail earnings are especially important now given recent signs of labor market trouble. Indices mixed The trading session ended mixed, with the S&P 500 up 0.23 points to 5,344.39 and the Nasdaq Composite up 35.31 points, or 0.21%, to 16,780.61. Meanwhile, the Dow Jones Industrial Average fell 140.53 points, or 0.36%, to close at 39,357.01. Starbucks on the rise, KeyCorp attracts investors Starbucks shares soared 2.58% after reports that activist investor Starboard Value, which holds a stake in the company, is pushing for measures aimed at boosting the coffee giant's stock. KeyCorp also posted a strong gain of 9.1% after Canadian bank Scotiabank announced it had acquired a minority stake in the U.S. regional lender for $2.8 billion. Hawaiian Electric's Future in Doubt Meanwhile, Hawaiian Electric shares plunged 14.45% as the utility expressed concerns about its ability to continue operating amid mounting financial difficulties. Equity Market: Declines Prevail, but Volatility Eases Trading on the New York Stock Exchange (NYSE) and Nasdaq ended with decliners dominating. On the NYSE, the ratio of decliners to gainers was 1.46 to 1, while on the Nasdaq, the ratio was even higher at 1.54 to 1. New Highs and Lows: Daily Stats The S&P 500 posted 10 new 52-week highs and 7 new lows, while the Nasdaq Composite posted 51 new highs and 179 new lows. These figures show that despite the overall decline, there are still some growth points in the market. Soothing Volatility: Markets Try to Stabilize While volatility in the markets has eased significantly since last week, when U.S. stocks suffered a sharp decline, nervousness among investors may persist for some time. The panic flare-up appears to have died down, but history shows that markets can remain under pressure for months. Cboe Volatility Index Returns to Normal The Cboe Volatility Index, commonly known as the VIX and often referred to as the "fear index," has stabilized near 20 after hitting a four-year high last week. That's down from its recent peak of 38.57 on August 5. The rapid decline in the VIX is a sign that the sharp moves in the market were driven by short-term factors, such as the unwinding of highly leveraged positions, rather than fundamental issues related to the state of the global economy. Bet on Stability: Short-Term Factors Dominate Many market participants see the dissipation of fears as further confirmation that the recent collapse was driven by technicals, including the unwinding of leveraged positions and carry trades financed by the Japanese yen. Investors are confident that these factors are temporary and do not point to deeper structural problems in the global economy. Markets Remain Tense: VIX Volatility as an Anxiety Indicator Despite the recent decline in the VIX volatility index, history shows that markets can remain in a state of heightened anxiety for months after a sharp decline. Episodes where the VIX has risen above 35 are usually followed by a prolonged period of investor caution, which dampens the risk-taking that had previously fueled asset prices. Volatility Takes Time to Normalize According to experts, after the VIX reaches a level above 35, which is often associated with a high degree of anxiety among market participants, it takes about 170 trading sessions on average for the index to return to its long-term median of 17.6. This highlights that even after an initial calm, markets can remain volatile for a long time. Investors Are Temporarily Calmed, But Anxiety Remains J.J. Kinahan, CEO of IG North America and president of online broker Tastytrade, said: "Once the VIX stabilizes in a range, investors begin to feel more relaxed again. However, shocks like the current one usually linger in the memory for six to nine months, maintaining a heightened sense of caution." The S&P 500's Long Rise The recent turmoil in the U.S. stock market has come after a long period of stability and growth. The S&P 500 has risen 19% for the year, hitting a record high in early July. However, the rally has proven to be unsustainable: poor earnings reports from several major tech companies in July triggered a massive sell-off, sending the VIX rising from the low end of the tens of points to higher levels. Unexpected BOJ Action Adds Volatility The crisis deepened in late July and early August when the BOJ unexpectedly raised interest rates by 25 basis points. The move hurt carry traders who had borrowed cheaply in Japanese yen to invest in high-yielding assets such as U.S. tech stocks and Bitcoin. Fast Fall and Rebound: Positional Risk Dominates Mandy Xu, head of derivatives research at Cboe Global Markets, said the sharp market decline followed by an equally rapid rebound suggests that the current gyrations are largely due to position unwinding and risk shifting among market participants. Volatility Isolated: Equities and FX Under Pressure Mandy Xu, head of derivatives research at Cboe Global Markets, stressed that recent spikes in volatility, such as the one seen on August 5, have been concentrated in equities and FX. She noted that other asset classes, such as interest rates and credit, have not seen a significant increase in volatility, suggesting that the current swings are limited. Investor Jitters: Awaiting Key Data With uncertainty still looming, investors have every reason to be nervous in the coming months. The biggest worry remains economic data due out of the US. The consumer price report due out later this week will be a key indicator of whether the economy is facing a short-term slowdown or heading for a more serious slowdown. Political Tensions Add to Uncertainty Political uncertainty is also adding fuel to the fire. With the US elections in November and tensions rising in the Middle East, investors remain on edge as they watch for developments that could significantly impact the market. Awaiting Inflation and Retail Earnings Data Investors will be focused on the CPI data due out on August 14. In addition, earnings reports from giants like Walmart and other major retailers this week could be key to shaping market sentiment. Mark Hackett, head of investment research at Nationwide, said these data could have a decisive impact on investor behavior. Emotional reactions in the market: forecasts and risks "It is not surprising that in light of recent events, investors may overreact to inflation data, retail earnings and retail sales," Hackett said. In the current emotional environment, any deviations from expectations could cause significant volatility. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 14 Share Posted August 14 Wall Street Bulls: Weak PPI Data Pushes Market Higher Indices Rise on Rate Cut Expectations US stock markets posted solid gains on Tuesday, finishing at a nearly two-week high. The gains were driven by data showing slower PPI growth, bolstering expectations for a Federal Reserve rate cut as early as September. Slow Producer Price Growth: What It Means for the Economy US producer prices increased less than expected in July, according to new data. This was due to a decline in services costs, which offset the rise in goods prices. On an annualized basis, the producer price index (PPI) rose by 2.2%, which is lower than the 2.7% increase in June. This suggests that inflationary pressures continue to ease, which supports market optimism about possible monetary easing. Expectations of rate cuts boost the market rally Wall Street reacted positively to the data, betting on interest rate cuts soon. According to Paul Ashworth, chief North American economist at Capital Economics, while the modest 0.1% month-on-month increase in PPI and the flat core PPI may not seem like much, they are still in line with the Fed's target of inflation below 2% year-on-year. Investors await new data Market participants' attention is now focused on the upcoming consumer price data for July, which will be published on Wednesday, and retail sales data, expected on Thursday. These reports will help investors form clearer expectations about the Fed's further actions. Michael James, managing director of equity trading at Wedbush Securities, noted that the stable PPI data confirms the effectiveness of the Fed's efforts to control inflation. He also emphasized that the likelihood of a rate cut in the near future is becoming increasingly real. Thus, the market is optimistic about the prospects for monetary easing, which contributed to today's growth of indices. Crucial inflation data Ahead of the publication of the consumer price index, market participants are in a state of heightened anxiety. Economists and investors agree that any deviations in inflation indicators can significantly affect the dynamics of trading. "Any information we get tomorrow morning will have a significant impact on the market because everyone is very tense right now," analysts said. Cut bets: The odds are rising The chances that the US Federal Reserve will decide to cut rates by 50 basis points has risen to 55%, according to the latest FedWatch data from CME. That's a significant increase from less than 50% before the latest report. Traders are increasingly confident that the Fed will take such a step, given the current economic conditions and the need for monetary easing. Market wobbles: Unpredictability continues Uncertainty reigned in trading on Monday. The S&P 500 (.SPX) was little changed, showing a muted reaction to the latest economic news, while the Nasdaq (.IXIC) posted a small gain. This came after a week of mixed economic reports and an unexpected rate hike by the Bank of Japan. The S&P 500 (.SPX) closed the day up 90.04 points, or 1.68%, at 5,434.43. The Nasdaq Composite (.IXIC) rose 407.00 points, or 2.43%, to 17,187.61. The Dow Jones Industrial Average (.DJI) also advanced 408.63 points, or 1.04%, to 39,765.64. Sector Winners and Losers Among the sectors, information technology (.SPLRCT) and consumer discretionary (.SPLRCD) were the top gainers. These sectors continue to attract investors amid robust demand and a positive outlook. Meanwhile, energy stocks (.SPNY) came under pressure. The fall in oil prices, caused by OPEC's decision to revise down its 2024 demand growth forecast, was compounded by concerns about potential supply disruptions due to the ongoing conflict in the Middle East. This led to a decline in energy stocks despite the overall optimism in the market. Thus, the market is eagerly awaiting tomorrow's inflation data, which could be decisive for the Federal Reserve's further actions and the indexes. Russell 2000 on the rise The Russell 2000 index, which measures the performance of small companies, showed a solid increase of 1.6%. The result highlights the positive sentiment of small business investors despite overall market volatility. Starbucks' Historic Surge Starbucks shares soared a record 24.5%, marking the company's biggest one-day gain ever. The gains came after Brian Niccol, formerly of Chipotle Mexican Grill, was named chairman and CEO of Starbucks. Investors were enthusiastic about the news, seeing it as an opportunity to further grow and strengthen the company's market position. Chipotle Shares Slip In contrast, Chipotle shares fell 7.5% following the appointment. The decline may reflect investor concerns about the company's future without Niccol, who has been instrumental in its success. Home Depot: Mixed Results Home Depot shares also rose 1.2% despite announcing a decline in full-year profit and an expected drop in same-store sales. The company was able to recoup early losses, indicating investor confidence in its long-term prospects. BuzzFeed: Narrowing Losses Boosts Shares BuzzFeed posted a stunning 25.9% gain after the company reported a quarterly report in which it narrowed its second-quarter net loss to $6.6 million from $22.5 million a year earlier. The gains encouraged investors, leading to a sharp jump in the stock. Exchange Dominance: Gainers Lead the Way On the New York Stock Exchange, gainers outnumbered decliners by a wide margin 4.36-to-1. On the Nasdaq, the ratio was 2.59-to-1, indicating that optimism was prevalent among market participants. New Highs and Lows The S&P 500 posted 17 new 52-week highs and three new lows, while the Nasdaq Composite posted 55 new highs and 128 new lows. The data highlights the mixed dynamics of the market, with some stocks peaking and others struggling. Global Stocks Rise, Bond Yields Fall The MSCI World Stock Index rose 1.5%, indicating that global markets are strengthening. Meanwhile, U.S. Treasury yields fell on expectations of monetary easing. The 10-year Treasury yield fell to 3.8484% and the two-year yield fell to 3.9398%, reflecting growing expectations of interest rate cuts. The broad-based rally in stocks and the decline in bond yields underscores investor confidence in further monetary easing and a stabilizing economic environment. STOXX 600 and Nikkei on the rise again Europe's STOXX 600 index gained 0.5% and Japan's Nikkei jumped more than 3% after the holiday, providing a welcome break from the volatility of the past week. The recent volatility in the markets began with a sharp sell-off, fueled by a stronger yen and growing concerns about a possible recession in the US. Yen Strengthens: New Round Against the Dollar The yen has continued to strengthen, reaching 146.77 per dollar, representing a significant recovery from a seven-month high of 141.675 hit early last week. By comparison, the yen was at a 38-year low of 161.96 per dollar in early July, highlighting the scale of recent moves in the currency market. Carry Trade Challenges: Unpredictable Japanese Policy The Bank of Japan's rate hike last month following a series of foreign exchange market interventions has forced many investors to rethink their strategies. Popular carry trades, which use the yen as a low-interest currency to fund higher-yielding investments, have been particularly hard hit. This has led to significant market corrections as investors have begun to unwind their yen positions en masse. Sharp Unwinding: Investors Pull Back Fast As of August 6, leveraged funds, including hedge funds and asset managers, have unwound their yen positions at the fastest pace since March 2011. The rapid unwinding reflects market participants' concerns and attempts to minimize risk in a volatile environment. Forward to the Future: The Yen Will Remain in Focus Carsten Junius, chief economist at Bank J. Safra Sarasin, noted that the current dollar-yen exchange rate now better reflects the yield differential between the two currencies. However, he believes that further unwinding of the carry trade financed by the yen could further strengthen the Japanese currency by the end of the year. At the same time, he does not expect USD/JPY to fall significantly below 140. Thus, with markets recovering and exchange rates continuing to adjust, investors will remain focused on the yen and the Bank of Japan's decisions, which could continue to influence global financial markets. The Fed at a crossroads: upcoming decisions in question This week, investors are awaiting the release of key economic data that could influence the Federal Reserve's (Fed) next steps. At the moment, forecasts are divided: some see the Fed cutting rates by 25 basis points, while others expect a more aggressive 50 basis point cut at the September meeting. Traders are betting: a 100 basis point cut? Amid speculation about what the Fed might do, traders are pricing in the possibility of a rate cut of as much as 100 basis points within a year. That scenario has gained traction after last week's weak payrolls data sent markets lower, although strong economic data from the US have eased fears of a slowdown. Inflation in the crosshairs: Dollar weakness possible Christina Clifton, senior economist at the Commonwealth Bank of Australia, said any sign of easing inflation pressures could push financial markets into anticipation of a sharp rate cut by the Fed. That could put the dollar under pressure as investors look to possible monetary easing. Upcoming data: Inflation and retail sales July consumer price index (CPI) data is due out on Wednesday, with monthly inflation forecast to rise to 0.2%. The data will be key to assessing the current state of the economy. Retail sales data is due out on Thursday, which could also have a significant impact on market expectations. Bond stability and currency volatility Eurozone bond yields remain largely unchanged as the data continues to stagnate. German 10-year yields, the region's benchmark, fell to 2.188%, off last week's low of 2.074%. The dollar index, which tracks the U.S. dollar against six major currencies, fell 0.49% to 102.58. Meanwhile, the euro rose 0.6% to $1.09968 and the pound sterling rose 0.8% to $1.28670. These moves in the currency market reflect the current mood of market participants, who are closely watching any signals from the Federal Reserve to anticipate the future direction of U.S. monetary policy. Oil prices fall after sudden spike Brent crude prices fell 1.9% to $80.78 per barrel, while WTI futures fell 2% to $78.46 per barrel. Markets correct after wild start to week Recall that Brent crude posted impressive gains on Monday, rising more than 3%, while WTI futures added over 4%. However, despite this rise, markets have returned to decline, indicating continued volatility in the commodity market. Factors Affecting Price Fluctuations Current oil price fluctuations are linked to a variety of factors, including expectations about global supply and demand, as well as geopolitical risks and economic data. These dynamic changes continue to cause sharp fluctuations in the market, forcing participants to be constantly prepared for sudden turns. 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KostiaForexMart Posted August 16 Share Posted August 16 EUR/USD. U.S. inflation slows to 2.9%. What does the pivotal report indicate? The EUR/USD pair hit an 8-month price high on Wednesday, marking a level of 1.1048. For the second consecutive day, traders are trying to consolidate within the 1.10 figure, reacting to the inflation reports released in the U.S. On Tuesday, we received the Producer Price Index and the Consumer Price Index on Wednesday. Both reports were unfavorable for the U.S. currency, leading the U.S. Dollar Index to test the 101 figure again. To the disappointment of dollar bulls, inflation did not serve as a lifeline for the greenback. On the contrary, inflation reports have become an anchor for the dollar, both "in the moment" and (at least) in the medium term. So, the overall CPI on an annual basis fell into the "red zone," coming in at 2.9% against a forecast of 3.0%. This is the slowest growth rate since March 2021. The index has decreased for the fourth consecutive month, indicating a clear trend. The core index, excluding food and energy prices, slowed to 3.2%. There is also a noticeable trend, as the indicator has been falling for four months. The report's structure reveals that new cars have become 1% cheaper (down 0.9% in June), while used cars have dropped by 10.9% (following a 10.1% decline the previous month). The rate of price growth for transportation services slowed to 8.8% (after rising 9.4% in June), and clothing prices grew by 0.2% (down from 0.8%). Food prices remained unchanged at 2.2%. Energy costs increased by 1.1% (up 1% in June), but gasoline fell by 2.2% (previously down 2.5%). The CPI report released on Wednesday adds to the overall picture, following earlier reports on the PPI and wages. On Tuesday, it was revealed that the overall PPI rose by only 2.2% year-over-year in July (forecast 2.3%). This is the first slowdown after five months of consecutive increases. The core PPI also fell into the "red zone," at 2.4% year-over-year in July (forecast 2.7%). The indicator had accelerated for the last three months, but growth rates slowed sharply in July. In addition, the July Non-Farm Payrolls report indicated that average hourly earnings grew by only 3.6% (forecast 3.8%). This is the slowest growth rate since May 2021. In other words, inflationary pressures in the U.S. continue to ease, and the market has reacted accordingly. According to CME FedWatch tool data, the probability of a 25-bps rate cut at the September meeting has risen to 54.5%, while the likelihood of a 50-bps cut is 45.5%. The reaction of the EUR/USD pair was swift: the price surged nearly 150 pips over two days and is now trying to consolidate around the target level of 1.1050 (whereas before the release of inflation reports, the pair was drifting near the base of the 9th figure). What do the latest figures indicate? Primarily, the Federal Reserve will begin to ease monetary policy in September. The only question is how much. The balance may tilt towards a 50-bps scenario after releasing the core PCE index for July (expected at the end of August) and August's Non-Farm Payrolls (to be published in early September). The outcome of these two releases will clarify how aggressively the Fed will ease monetary policy. However, the fact that the central bank will start easing monetary policy is not up for debate. Meanwhile, the European Central Bank is puzzled by the latest inflation data in the Eurozone. To recap, the overall CPI in the Eurozone accelerated to 2.6% in July (from 2.5% in June), while the core CPI remained at the previous month's level, i.e., 2.9% (forecast was a decline to 2.8%). Inflation indicators also accelerated in Germany. Inflation remained "stubborn" amid stronger GDP growth data for the Eurozone in the second quarter: the economy grew by 0.3% quarter-on-quarter and 0.6% year-on-year (growth has been recorded for three consecutive quarters). This situation suggests that the ECB might not rush into the next round of rate cuts—at least not in September. Such speculations have been increasingly heard in the market recently. The impending divergence between ECB and Fed rates supports EUR/USD buyers. From a technical perspective, the pair on the H4, D1, and W1 timeframes is at the upper line of the Bollinger Bands indicator and above all lines of the Ichimoku indicator, which is showing a bullish "Parade of Lines" signal on the daily chart. Downward pullbacks are advisable for opening long positions. The main target for the upward movement is the 1.1100 level, which corresponds to the upper Bollinger Bands line on the MN timeframe. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 16 Share Posted August 16 Growth on One Side, Challenges on the Other: Unexpected Financial News from the U.S. and Asia Sustainable Growth: Wall Street Ends Thursday with Confident Gains Wall Street's major indexes ended Thursday's trading session with significant gains, with the Nasdaq jumping more than 2%. The gains were helped by fresh retail sales data for July, which confirmed the stability of consumer spending, dispelling fears of a possible recession in the U.S. economy. Consumer Confidence Nine of the S&P 500's 11 key sectors advanced, led by consumer staples and information technology. July's retail sales report showed a 1.0% increase, up sharply from a downwardly revised 0.2% fall in June. The data helped ease concerns about a potential economic slowdown caused by last week's rise in unemployment. Retail Giants on the Rise Walmart, one of the world's largest retailers, surged 6.58% after raising its profit forecast for the second time this year, as U.S. consumers flocked to its stores in search of affordable essentials. Rivals were also on the rise, with Target up 4.35% and Costco up 1.69%. Unexpected Unemployment Decline Separate data also helped boost investor sentiment. The number of new U.S. jobless claims unexpectedly fell last week, adding to the market's strength. "We are seeing the wall of worry begin to crumble as sentiment improves and fundamentals are driving risk appetite," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Retail sales data beat expectations and inflation is in the low range, creating a favorable environment for equity prices to rise." Treasury Bonds and Rates: Market Reacts to New Data U.S. Treasury yields rose sharply after the release of new economic data. In particular, two-year and 10-year bonds showed gains, which is due to a change in trader sentiment. The probability of the Federal Reserve cutting rates by 25 basis points has now increased to 76.5%, compared to 65% before the release of the data. Investors Await Powell Speech Market participants are closely watching the latest economic data this week before Federal Reserve Chairman Jerome Powell delivers a key speech next week in Jackson Hole. That event could have a significant impact on the markets as investors await cues on the future of monetary policy. Stock Markets Continue to Rise The Dow Jones Industrial Average rose 554.67 points, or 1.39%, to close at 40,563.06. The S&P 500 gained 88.01 points, or 1.61%, to close at 5,543.22. The top gainer, the Nasdaq Composite, rose 2.34%, up 401.90 points to close at 17,594.50. Individual Stocks Score Cisco Systems posted a stunning 6.8% gain after announcing plans to grow first-quarter revenue above expectations and cut 7% of its global workforce. Nike shares rose 5.07% after billionaire investor William Ackman announced a new stake, signaling renewed interest in the sportswear maker. Ulta Beauty soared 11.17% after news that Warren Buffett's Berkshire Hathaway investment fund had acquired a significant stake in the beauty retailer. Market Balance Advancing stocks outnumbered declining stocks by a wide margin 3.22-to-1 on the New York Stock Exchange on Thursday. The same pattern was seen on the Nasdaq, where gainers outnumbered decliners by a ratio of 2.66-to-1. New Record: S&P 500 and Nasdaq Riding a Wave The S&P 500 posted 30 new 52-week highs and only one new low, while the Nasdaq Composite posted 76 new highs and 104 new lows. The numbers underscore a mixed market where companies continue to set new records despite continued volatility. Global Trends: Europe and Asia in Focus The situation in global markets is evolving rapidly. Past market turmoil caused by fears of a global economic downturn is quickly fading into the background. Recent data from the US has given investors confidence that the US economy is avoiding a deep crisis. This positive trend has helped calm markets and reduce fears of a possible recession. Rates and forecasts: investors are lowering expectations Investors are revising their expectations for further actions by the US Federal Reserve. Previously, the probability of the Fed cutting rates by 50 basis points was estimated at 55%, but now the market is showing only a 25% chance of such a significant reduction. This is due to the fact that the recent inflation report for July has allayed fears of drastic action by the Fed. Japan's Nikkei and Yen Slip: Asian Markets Rise In Asia, Japan's Nikkei Index stood out, jumping 3% on Friday to post its best weekly performance since April 2020. The index is on track to reclaim its record high despite recent wobbles. The yen, on the other hand, remains under pressure, having fallen nearly 5% from a seven-month high last week. It was last trading around 149 to the dollar. Despite the currency's apparent cheapness, volatility is forcing investors to rethink their yen exposure. Expectations vs. Reality: What's Next? With market sentiment shifting, investors remain cautious, although optimism about the US economy is keeping the tone positive. How the Fed will respond to the data remains a key question, and markets will be watching closely, especially as global economic uncertainty continues. Futures and retail sales: what awaits European and US markets Stock futures point to a positive opening in Europe and the US on Friday. Amid these expectations, investors are focused on UK retail sales data, which will be released in the morning hours in London. Forecasts suggest buyers will return to the market after an unexpected decline in June. The Bank of England and rates: expectations for a cut Economists and analysts continue to bet that the Bank of England may cut interest rates further this year. Such a decision is justified by easing inflation pressures and a deterioration in the economic outlook in the UK for the rest of 2024. Lower rates could support the economy, which faces new challenges. Australia takes a different path: a bet on stability While many central banks around the world are looking to ease monetary policy, Australia is going its own way. Reserve Bank of Australia Governor Michelle Bullock stressed on Friday that it is too early to talk about rate cuts. According to her, the country's core inflation remains too high and the bank continues to closely monitor potential risks to price increases. Global Markets: Focus on Central Banks The situation in global markets remains dynamic, with investors closely monitoring the actions of central banks. While the UK may be preparing for further rate cuts, Australia, by contrast, is maintaining a cautious approach. These divergent strategies reflect the different economic realities that countries face, and their possible impact on global financial markets will be in focus in the coming months. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
KostiaForexMart Posted August 18 Share Posted August 18 Growth on One Side, Challenges on the Other: Unexpected Financial News from the U.S. and Asia Sustainable Growth: Wall Street Ends Thursday with Confident Gains Wall Street's major indexes ended Thursday's trading session with significant gains, with the Nasdaq jumping more than 2%. The gains were helped by fresh retail sales data for July, which confirmed the stability of consumer spending, dispelling fears of a possible recession in the U.S. economy. Consumer Confidence Nine of the S&P 500's 11 key sectors advanced, led by consumer staples and information technology. July's retail sales report showed a 1.0% increase, up sharply from a downwardly revised 0.2% fall in June. The data helped ease concerns about a potential economic slowdown caused by last week's rise in unemployment. Retail Giants on the Rise Walmart, one of the world's largest retailers, surged 6.58% after raising its profit forecast for the second time this year, as U.S. consumers flocked to its stores in search of affordable essentials. Rivals were also on the rise, with Target up 4.35% and Costco up 1.69%. Unexpected Unemployment Decline Separate data also helped boost investor sentiment. The number of new U.S. jobless claims unexpectedly fell last week, adding to the market's strength. "We are seeing the wall of worry begin to crumble as sentiment improves and fundamentals are driving risk appetite," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. "Retail sales data beat expectations and inflation is in the low range, creating a favorable environment for equity prices to rise." Treasury Bonds and Rates: Market Reacts to New Data U.S. Treasury yields rose sharply after the release of new economic data. In particular, two-year and 10-year bonds showed gains, which is due to a change in trader sentiment. The probability of the Federal Reserve cutting rates by 25 basis points has now increased to 76.5%, compared to 65% before the release of the data. Investors Await Powell Speech Market participants are closely watching the latest economic data this week before Federal Reserve Chairman Jerome Powell delivers a key speech next week in Jackson Hole. That event could have a significant impact on the markets as investors await cues on the future of monetary policy. Stock Markets Continue to Rise The Dow Jones Industrial Average rose 554.67 points, or 1.39%, to close at 40,563.06. The S&P 500 gained 88.01 points, or 1.61%, to close at 5,543.22. The top gainer, the Nasdaq Composite, rose 2.34%, up 401.90 points to close at 17,594.50. Individual Stocks Score Cisco Systems posted a stunning 6.8% gain after announcing plans to grow first-quarter revenue above expectations and cut 7% of its global workforce. Nike shares rose 5.07% after billionaire investor William Ackman announced a new stake, signaling renewed interest in the sportswear maker. Ulta Beauty soared 11.17% after news that Warren Buffett's Berkshire Hathaway investment fund had acquired a significant stake in the beauty retailer. Market Balance Advancing stocks outnumbered declining stocks by a wide margin 3.22-to-1 on the New York Stock Exchange on Thursday. The same pattern was seen on the Nasdaq, where gainers outnumbered decliners by a ratio of 2.66-to-1. New Record: S&P 500 and Nasdaq Riding a Wave The S&P 500 posted 30 new 52-week highs and only one new low, while the Nasdaq Composite posted 76 new highs and 104 new lows. The numbers underscore a mixed market where companies continue to set new records despite continued volatility. Global Trends: Europe and Asia in Focus The situation in global markets is evolving rapidly. Past market turmoil caused by fears of a global economic downturn is quickly fading into the background. Recent data from the US has given investors confidence that the US economy is avoiding a deep crisis. This positive trend has helped calm markets and reduce fears of a possible recession. Rates and forecasts: investors are lowering expectations Investors are revising their expectations for further actions by the US Federal Reserve. Previously, the probability of the Fed cutting rates by 50 basis points was estimated at 55%, but now the market is showing only a 25% chance of such a significant reduction. This is due to the fact that the recent inflation report for July has allayed fears of drastic action by the Fed. Japan's Nikkei and Yen Slip: Asian Markets Rise In Asia, Japan's Nikkei Index stood out, jumping 3% on Friday to post its best weekly performance since April 2020. The index is on track to reclaim its record high despite recent wobbles. The yen, on the other hand, remains under pressure, having fallen nearly 5% from a seven-month high last week. It was last trading around 149 to the dollar. Despite the currency's apparent cheapness, volatility is forcing investors to rethink their yen exposure. Expectations vs. Reality: What's Next? With market sentiment shifting, investors remain cautious, although optimism about the US economy is keeping the tone positive. How the Fed will respond to the data remains a key question, and markets will be watching closely, especially as global economic uncertainty continues. Futures and retail sales: what awaits European and US markets Stock futures point to a positive opening in Europe and the US on Friday. Amid these expectations, investors are focused on UK retail sales data, which will be released in the morning hours in London. Forecasts suggest buyers will return to the market after an unexpected decline in June. The Bank of England and rates: expectations for a cut Economists and analysts continue to bet that the Bank of England may cut interest rates further this year. Such a decision is justified by easing inflation pressures and a deterioration in the economic outlook in the UK for the rest of 2024. Lower rates could support the economy, which faces new challenges. Australia takes a different path: a bet on stability While many central banks around the world are looking to ease monetary policy, Australia is going its own way. Reserve Bank of Australia Governor Michelle Bullock stressed on Friday that it is too early to talk about rate cuts. According to her, the country's core inflation remains too high and the bank continues to closely monitor potential risks to price increases. Global Markets: Focus on Central Banks The situation in global markets remains dynamic, with investors closely monitoring the actions of central banks. While the UK may be preparing for further rate cuts, Australia, by contrast, is maintaining a cautious approach. These divergent strategies reflect the different economic realities that countries face, and their possible impact on global financial markets will be in focus in the coming months. More analytics on our website: bit.ly/3VobLUv Quote Link to comment Share on other sites More sharing options...
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