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US Market Technicals Ahead (27 September – 1 October 2021)Expect markets to remain at last week’s levels of raised volatility for the final week of the third quarter with investors keeping an eye on fresh economic data for the US including the ISM Manufacturing PMI and PCE inflation. Fed Chair Powell will also testify on Coronavirus and CARES Act before the Senate and lawmakers will try to pass a funding plan to avoid a government shutdown on October 1st. The Evergrande limbo is set to continue as markets expect an update on interest payment for a dollar-denominated bond and hope a default could be avoided. The 2-days ECB Forum on Central Banking will be keenly watched for more clues on the monetary policy outlook and traders will also pay attention to the outcome of the German federal election. Here’s what you need to know to start your week.
ULong
by jfsrevg
US Market Technicals Ahead (20 September – 24 September 2021)This Wednesday’s Fed policy announcement will be the main directional driver for equity markets as investors will be expecting to hear if the central bank will begin withdrawing stimulus this year. Several policymakers have been calling for early tapering despite the recent slowdown in inflation numbers. On the economic data front, notable publications include building permits and housing starts, the flash Markit PMI survey, new and existing home sales. Several other central banks will also hold meetings in the week ahead, including the Bank of Japan and the Bank of England. Meanwhile, embattled Chinese property developer Evergrande (HK:3333) faces the prospect of defaulting on its debts, stoking fears of contagion that could spread to markets outside of China. Here’s what you need to know to start your week. S&P500 (US Market) With stocks struggling in this seasonally weak month for the market, all three major averages are negative month to date , but still sit less than 3% below their all-time highs. The benchmark index $SPX ended with week on consecutive losses, posting a further loss of -0.97% (-43.3 points). The Federal Reserve’s highly anticipated September meeting is set to occur this week. Fed Chair Jerome Powell will hold a press conference Wednesday at the conclusion of the two-day meeting. Investors are awaiting for more specifics about the Fed’s tapering of its easy monetary policy, particularly after mixed economic data released over the past weeks. $SPX breached its 20DMA and 50DMA support, currently trading at the support zone of its medium term trend channel. This is the 7th occurrence since 25th March 2021, where $SPX would rebound in the immediate week and swing towards another all time high. The immediate support to watch for $SPX this week is at 4,375 level; a significant 2ATR breakdown from its current up trend channel, a first sign of weakness in this mid-term rally. Federal Reserve meeting The Fed will begin its two-day policy meeting starting Tuesday ahead of its policy announcement on Wednesday afternoon and investors will be on the lookout for any details of the central bank’s plans to start paring back its $120 billion a month emergency stimulus program. The Fed’s timeline for scaling back economic stimulus is important as it represents a first step towards eventual interest rate hikes. Several Fed officials have said tapering should start this year, a view Fed Chair Jerome Powell may echo, while stressing a rate hike is still way off. The Fed may stick to a cautious approach giving economic uncertainty due to rising COVID-19 cases and a weak jobs report for August. Economic data The U.S. data calendar for the week ahead is centered around housing figures, which are set to stabilize after a slight uptick in mortgage approvals for home purchases in recent weeks. Data on housing starts and building permits data are due out on Tuesday, followed by figures on existing home sales on Wednesday and data on new home sales is due for release on Friday. Market watchers will also be looking at Thursday’s report on initial jobless claims amid concerns over the hit to the economic recovery in the current quarter from the spread of the Delta coronavirus variant, especially among people who are hesitant to take vaccines. Central bank meetings Besides the Fed, several other major global central banks are also holding meetings in the coming days. The Bank of Japan, which also meets on Tuesday and Wednesday, is widely expected to keep policy steady but may warn about growing risks to exports from supply disruptions. On Thursday, Norway’s central bank is set to become the first from the developed world to hike rates since the pandemic, likely raising its main 0% rate to 0.25%. The Bank of England is unlikely to change policy at its Thursday meeting but may indicate whether it still views inflation as transitory. Crunch time for Evergrande Indebted Chinese property developer Evergrande has a bond interest payment of $83.5 million due on Thursday, with investors pricing in a high likelihood of default. That such a tiny amount could be the tipping point for a $355 billion behemoth with more than 1,300 developments across China and over $300 billion of liabilities shows how bad things are. China’s second largest developer has been scrambling to raise cash, with fire sales on apartments and stake sales in its sprawling business network, but with little success. Concerns that Evergrande could default on its debts is spilling over into China’s financial markets and even risks contagion that could spread to markets beyond China.
ULong
by jfsrevg
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US Market Technicals Ahead (28 June – 2 July 2021)The second quarter is ending. Global stocks are on track to post their second strongest H1 gains since the turn of the century, but the second half looks harder to predict. All eyes turn to the US employment report on Friday, with investors hopeful for signs of improvement in the labor market after two months of slower than expected jobs growth. Meanwhile, the ISM Manufacturing PMI survey should point to a strong pace of expansion in factory activity, not far from March's 37-year high and despite the ongoing supply constraints. President Joe Biden’s $1.2 trillion infrastructure deal will continue to boost U.S. markets, but other concerns remain. Elsewhere, OPEC+ meets on Thursday with expectation to offer guidance into the coalition's production plan. Energy traders are anticipating another production increase as the demand outlook continues to recover. Here’s what you need to know to start your week. S&P500 (US Market) The benchmark index $SPX rallies to all time high, posting a weekly gain of +3.17% (+131.8 points), closing at 4,285 level. It is important to remain cautious of last week's rally as volume displayed was lacking, and seasonality is still in play. End of quarter 'window dressing' by portfolio managers could be a reason for the 'mark-up'. $SPX have now rebounded off the breach of its 20D and 50DMA (key levels highlighted last week), remaining within the trend channel established since early November 2020. The immediate support to watch for $SPX this week is at 4,135 level; a pivot low confluence with trendline support break. Jobs report The June nonfarm payrolls report is expected to show that the economy added 675,000 new jobs, pushing the unemployment rate down to 5.7% from 5.8%. With concerns over rising inflation and the strength of the recovery to the fore of investors’ minds, markets will also be looking at other labor market statistics, including wage growth and labor force participation. Last week Federal Reserve Chairman Jerome Powell reiterated the central bank’s commitment to encouraging a "broad and inclusive" recovery in the labor market, adding that there is still a long way to go, and that support is still needed. Economic data Ahead of Friday’s jobs report, markets will get updates on pending home sales, ADP private sector payrolls, jobless claims and ISM manufacturing activity. The ISM data is likely to underline strains on the supply chain that are pushing up costs, boosting the chances that inflation will remain at higher levels for longer. OPEC+ meeting The Organization of the Petroleum Exporting Countries and allies, known as OPEC+ will hold a series of meeting in the coming week to review the situation in the global oil market ahead of an official meeting on Thursday. Thursday’s meeting is expected to result in another boost in output as the demand outlook continues to recover. Oil prices climbed to their highest since October 2018 on Friday, putting both benchmarks up for a fifth week in a row.
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by jfsrevg
US Market Technicals Ahead (21 June – 25 June 2021)The Federal Reserve sent ripples across financial markets after its Wednesday meeting, when it signaled that interest rate hikes could come sooner than expected. US Dollar jumped, indices fell and bond yields moved to imply higher short-term interest rates in the future. An appearance by Fed Chair Jerome Powell before Congress on this Tuesday will be in focus as are expectation for the tapering in bond-buying program to remain as a dominant trading theme this week and likely for the rest of the summer; as market participants digest the hawkish shift in policy guidance. Investors in the US will also turn their attention to the June flash Markit PMI survey, with forecasts suggesting growth rates in both manufacturing and services sectors remained close to May’s all-time highs due to broader economic reopening and a labor market recovery Here is what you need to know to start your week. S&P500 (US Market) Major US Indices ended sharply lower last week, with the $DJI (-3.71%) and $SPX (-2.19%) recording their worst weekly performances since late October and late February, respectively. The tech-heavy $NDX index closed with slight positive (+0.26%). The declines were marked by a slide in value stocks, a pullback in some commodity prices as well as a rally in the dollar and U.S. government bonds. This decline was also signaled previously on the bearish divergence highlighted last week. $SPX have now currently breached its 20D and 50D Moving Averages on its third consecutive session for the first time since October 2020. With $SPX now currently trading back on its mid-term trendline support, the immediate support to watch for $SPX this week is at 4,110 level; a high volume volatile price support zone set in May 2021. Hawkish Fed shift The Fed surprised markets last week when it projected two potential rate hikes in 2023, sooner than markets had anticipated and signaled that it was also reaching the point where it could begin talking about tapering its $120 billion a month stimulus program. The shift in guidance was underlined when St. Louis Fed President James Bullard said on Friday that a move towards faster tightening of monetary policy was a “natural” response to economic growth and rising inflation as the economy reopens in the wake of the coronavirus pandemic. The question of whether stronger than expected inflation would prompt the Fed to act sooner had already been hanging over financial markets in the run up to the policy meeting. Powell testimony Market participants will be closely watching comments by Fed Chair Jay Powell on Tuesday when he is due to testify, via satellite link, on the Fed’s emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis. In addition, several other Fed officials are due to make appearances during the week and their comments will also receive a lot of attention as markets look for fresh cues on the future direction of monetary policy. Economic data Investors will be paying close attention to the week’s upcoming economic data for clues on whether the recent surge in inflation – which saw consumer prices accelerate in May at the fastest rate in almost 13 years – is continuing. Data on personal income and spending for May is due out on Friday, which contains the core PCE price index, supposedly the Fed’s favorite inflation gauge. The economic calendar also features reports on new and existing home sales, durable goods orders, manufacturing and service sector activity and the weekly report on initial jobless claims, which is given close attention, given the uneven recovery in the labor market.
ULong
by jfsrevg
US Market Technicals Ahead (14 June – 18 June 2021) The Federal Reserve two-day policy meeting is the main event event for the markets this week, although the central bank is not expected to take any action but maintain an ultra-loose monetary stimulus. All eyes will turn to comments from Fed Chair Jerome Powell for clues about the central bank's latest view on inflation. While the outcome of the Fed meeting will take the limelight, investors will also be looking closely at economic data on U.S. retail sales and producer prices for an update on the strength of the economic recovery. Here is what you need to know to start your week. S&P500 (US Market) $SPX rose +0.41% (+17.4 points) for its third straight positive week, closing at a all time high level of 4,250. Investors are giving growth stocks another chance as bond yields come down. The 10-year Treasury went below 1.43% on Friday, a three-month low. Stock markets are likely to tread water, with investors reluctant to take new positions ahead of Wednesday’s Fed statement which will be scrutinized for clues regarding its timetable for raising interest rates. $SPX continues to reflect a minor bearish divergence as highlighted last week. The immediate support to watch for $SPX is now at 4,165, a breakdown of its classical support, along with 20D and 50D major moving averages. Fed meeting Investors will be zeroing in on the Fed's statement at the conclusion of its two-day policy meeting on Wednesday against a background of persistent concerns over whether inflation spikes could pressure the central bank to start tapering its stimulus sooner than expected. The Fed has repeatedly said that near-term price spikes will not translate into lasting inflation and Chairman Jerome Powell is expected to stick to this stance and reassure markets the Fed’s policy will remain accommodative. While inflation numbers are rising, the recovery in the labor market remain sluggish. The economy added 559,000 jobs last month after gains of just 278,000 in April. That left employment about 7.6 million jobs below its peak in February 2020. Most analysts are not expecting the Fed to begin discussing scaling back its asset purchase program before its annual conference in Jackson Hole, Wyoming, in late August. Economic data Away from Fed meeting, the U.S. is to release May data on retail sales and producer price inflation on Tuesday. Also out on Tuesday is industrial production data which will be closely watched amid issues over supply constraints and labor market shortages. This could translate into increases in producer price inflation. The economic calendar also features reports on housing starts and initial jobless claims. Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly 15 months as the reopening continues. Meme Stocks Mania Meme stocks could also remain in the headlines after a volatile ride last week. GameStop ($GME) hit a high of $344.66 Tuesday and dropped as low as $206.13 Friday before closing at $233.34 per share. Besides meme stocks, Treasuries could also be in focus after an unexpected slide in yields. There was a major move in the rate of the benchmark 10-year, watched most closely by investors, as it influences mortgages and other important lending rates.
ULong
by jfsrevg
US Market Technicals Ahead (7 June – 11 June 2021)Investors will keep a close eye on Thursday’s U.S. consumer price data amid concerns that rising inflation could prompt the Federal Reserve to begin pulling back on stimulus. The consumer price report for May will probably show the inflation rate rising to 4.6 percent, the highest since September 2008 and well above the Federal Reserve’s target of about 2 percent. Meme stocks look likely to continue to grip investors’ attention after a wild ride last week. Markets will also be monitoring the progress of President Joe Biden’s proposed $1.7 trillion infrastructure plan, which has already boosted the industrials and materials sectors this year, leaving many industrials and materials stocks vulnerable to a selloff if a large spending bill in Washington fails to materialize. Elsewhere, the European Central Bank (ECB) is to meet on Thursday and may discuss tapering stimulus. Here’s what you need to know to start your week. S&P500 (US Market) The benchmark index ($SPX) kicked off the 2nd half of 2021 on a positive note, gaining +0.55% (+23 points) during the week. $SPX remains less than a percentage point away from recapturing its all time high level of 4,245 level. The past two weeks of low market volatility have seen $SPX trading in a range less than 36 points, the lowest since April 2021. In the meanwhile, $SPX continues to reflect a minor bearish divergence within its falling price volatility along with daily trading volume on its up-days as highlighted since last week. The immediate support to watch for $SPX is now at 4,150, a breakdown to the lowest price level traded over the past two weeks. Inflation threat All eyes will be on the latest CPI data on Thursday, after a much stronger than expected inflation number sparked a selloff last month, as many worried rising price pressures could force the Fed to begin unwinding stimulus soon. Friday’s jobs report indicated that while jobs growth picked up from the previous month wage growth also accelerated. This could bolster the argument that higher inflation may persist rather than being transitory, as is currently viewed by the Fed. The inflation reading is one of the last major pieces of economic data ahead of the next Fed meeting on June 15-16 and Fed officials will be in their traditional blackout period during the coming week ahead of that meeting. The economic calendar also features Thursday’s figures on initial jobless claims, which fell below 400,000 in last week’s release for the first time since the start of the pandemic. Meme stock frenzy The wild ride for meme stocks looks set to continue, after AMC ($AMC) shares ended last week with gains of more than 80% despite falling more than 6% on Friday. AMC has been at the center of a fresh wave of buying by retail investors who hyped the stock in forums such as Reddit’s WallStreetBets, breathing new life into a phenomenon that began with January’s more than 1,600% gain in GameStop ($GME). AMC, which was on the brink of bankruptcy not long ago, on Thursday completed its second share offering in three days, cashing in on a nearly 400% surge in its share price since mid-May. But most analysts say that the scale of the rally is out of line with AMC’s fundamentals and high valuations on the meme stock names are unlikely to last. There are no actively managed stock funds among AMC’S 20 largest shareholders, according to Refinitiv data, leaving open the risk that a shift in retail investor opinion could quickly sink its shares. Infrastructure deal Market participants will be closely following negotiations between Democrats and Republicans in Washington over President Joe Biden’s proposed $1.7 trillion infrastructure deal. Transportation Secretary Pete Buttigieg had said the White House sees Monday – when Congress returns from a one-week break – as a critical date to see progress in talks. Expectations of government spending on infrastructure have already boosted value stocks this year, particularly the industrials and materials sectors, which have both gained around 20% since the start of the year, against a 12.5% gain for the S&P 500. Those large gains may leave many industrials and materials stocks vulnerable to a selloff if a large spending bill in Washington fails to materialize. ECB dilemma The ECB meets on Thursday and will release its updated growth forecasts for 2021 and 2022. Policymakers will debate whether to prolong their support for the euro zone recovery through emergency stimulus, a decision that will hinge on how strong they believe the region’s economic recovery is. Recent dovish comments by several ECB policymakers have highlighted the risks of premature tightening. Any indication from ECB head Christine Lagarde that the debate on tapering is getting underway could push euro zone bond yields still higher and undermine the economic recovery in the bloc.
ULong
by jfsrevg
US Market Technicals Ahead (31 May – 4 June 2021)In a week shortened by Monday’s Memorial Day holiday, Investors' focus turns to the May's nonfarm payrolls report to see if the unexpectedly weak April employment report was just a one-time blip Meanwhile, the ISM PMI surveys should signal solid manufacturing and service growth rates during May, on the back of the country's re-opening efforts, the ongoing government support. Energy traders will be eyeing Tuesday’s OPEC+ meeting and the euro zone is to release inflation data against a backdrop of concerns over what rising price pressures could mean for expansionary monetary policy. Here is what you need to know to start your week S&P500 (US Market) The benchmark index ($SPX) erased all losses for the month of May, re-gaining +1.07% (+44.4 points) during the week. $SPX have successfully broke out of its sideway box range channel that was highlighted last week, infusing clarity on its short term trading direction for the month of June. $SPX is currently just 20 points away (+1.00%) from its all time high level of 4,245 level. In the meanwhile, $SPX is reflecting a minor two weeks bearish divergence within its falling price volatility along with daily trading volume on its up-days. The immediate support to watch for $SPX is remains at 4,110 level, a potential renewed test of both 20D and 50D moving averages. May jobs report could echo April weakness Friday’s May jobs report will indicate whether the unexpected weakness seen in the April jobs report was a one-off or the start of a more persistent slowdown the labor market recovery. The economy is expected to have added 650,000 new jobs in May. Just 266,000 jobs were created in April, far short of the nearly one million expected. The economy is still more than 8 million jobs short of where it was before the pandemic. Economists generally are still expecting strong job growth in the months to come, as the economy reopens. ISM PMIs, Fed speakers ISM manufacturing data is scheduled for release on Tuesday, followed by ISM services data on Thursday. Both readings are expected to be strong, but to highlight supply chain issues that are leading to shortages and higher prices. ADP nonfarm payrolls data is due on Thursday, one day later than usual due to Monday’s holiday, along with the weekly figures on initial jobless claims. The Fed’s beige book on the economy is due out on Wednesday and several Federal Reserve officials are scheduled to speak during the week, including Chair Jerome Powell. The Fed Chair will participate in a panel at a climate change conference on Friday together with International Monetary Fund chief Kristalina Georgieva and European Central Bank President Christine Lagarde. Wary stock market Stock market investors will be closely watching economic data and comments from Fed officials amid ongoing concerns the central bank may begin to pull back on its massive stimulus measures as price pressures rise. Inflation concerns have persisted for several weeks and weighed on growth names, pulling down the tech-heavy Nasdaq, which posted its first monthly decline since October. Volatility has risen even as the S&P 500 has rebounded to less than 1% below its May 7 record high, and the index saw its smallest monthly gain in the past four in May. The U.S. stock market will be closed on Monday for the Memorial Day holiday.
ULong
by jfsrevg
US Market Technicals Ahead (3 May – 7 May 2021)As markets enter into the month of May, investors will turn to the US jobs report due this Friday, which will probably point to an acceleration in the labor market recovery. Appearances by Federal Reserve officials and other data, including PMIs for indications on the health of the U.S. economy will also be closely watched, as the reopening continues On the corporate front, the first-quarter earnings season continues, with reports to watch including Pfizer ($PFE), General Motors ($GM), PayPal ($PYPL), Uber ($UBER), and Berkshire Hathaway ($BRK) Here is what you need to know to start your week. S&P500 (US Market) The benchmark index ($SPX) squeezed out a gain of, +0.34% (+14.1 points), with price action remaining flat and muted as cautioned previously. The current ATR-14 range of $SPX is trading at its lowest of the year at 40 points/day, an almost 50% shave off from the Year to Date peak of 71 points per day (March 2021). With $SPX daily price action transiting into a consolidation phase at its high, along with sessional volume well remaining below its 50 days average range for the 4th consecutive week, it is worth to note that the number of US equities trading above its individual 100 Day Moving Average have declined to only 66%. At such juncture, it is of utmost importance for market participant to remain prudent with their risk exposure on the long side of the market. The immediate support to watch for $SPX remains at 4,110 level, a minor classical support level. Bumper job gains expected The U.S. economy is expected to have notched up another strong month of jobs growth in April with Friday’s nonfarm payrolls report expected to show 978,000 jobs created, after 916,000 jobs were added in March – the largest increase since last August. The unemployment rate is expected to tick down to 5.7% from 6%. Data late last week showed that economic growth accelerated in the first quarter, putting the economy on track for what is expected to be the strongest performance this year in nearly four decades. Unprecedented fiscal stimulus and easing anxiety over the pandemic, with all adult Americans now eligible for vaccination, have resulted in a faster economic rebound in the U.S. compared to the rest of the world. Earnings Earnings are rebounding from last year’s pandemic-fueled lows, with results now in from more than half of the S&P 500 companies. Dozens more companies are due to report in the coming week, with vaccine makers Pfizer ($PFE) reporting Tuesday, followed by Moderna ($MRNA) on Thursday. Travel related earnings to watch include results from Hilton Worldwide Holdings Inc ($HLT) and Caesars Entertainment ($CZR), while some consumer brands are also on the schedule, including Anheuser Busch Inbev ($ABI) and Estee Lauder ($EL). Some other notable earnings include General Motors ($GM), Uber ($UBER), ViacomCBS ($VIAC), DraftKings Inc ($DKNG) and Beyond Meat ($BYND). Earnings are raising some fresh questions in the debate over growth versus value. After a decade of steadily under-performing the overall market, value has been a favorite reopening bet and investors will be watching to see if this trend continues. Fed Chairman speaks Fed Chairman Jerome Powell is speaking on Monday, but he is not expected to offer any fresh insights on the economy during his appearance to discuss community development at an online conference hosted by the National Community Reinvestment Coalition. Last week Powell said the “time is not yet” to talk about tapering the Fed’s $120 billion monthly pace of bond buying.
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by jfsrevg
US Market Technicals Ahead (26 Apr – 30 Apr 2021)The earnings season enter into its busiest phase in the coming week, with most of the focus will be on the quarterly earnings result of five big-name mega-cap tech companies – Facebook ($FB), Amazon ($AMZN), Apple ($AAPL), Microsoft ($MSFT), and Google-parent Alphabet ($GOOGL), Market participants will also be bracing for heightened volatility on the economic data front the release of the first estimate of Q1 GDP (Advance GDP QoQ), alongside durable goods orders, and personal income and outlays. This should lend further support to the notion that the economy is continuing to recover from its virus-related slowdown. New spending and tax proposals from the White House, along with Federal Reserve Policy Decision will also be in focus. Here is what you need to know to start your week. S&P500 (US Market) The benchmark index ($SPX) traded with a muted tone, losing -0.14% (-5.7 points) for the week. With $SPX trading flat, a pause in the existing rally is plausible with the previously highlighted Bearish Divergence of $SPX remains valid, as sessional volume remains below its 50 days average range for the past week without any committed buying pressure reflected in this rally. With price volatility expected to pick up this week due to almost one-third of Dow ($DJI) and S&P500 ($SPX) companies reporting earnings this week, the immediate support to watch for $SPX is now at 4,110 level, a minor week long support coinciding with break of 20D MA level. FAAMG + Tesla TSLA Earnings There are about 180 S&P 500 companies, including 10 Dow components, reporting corporate results in what will be the busiest week of the first quarter earnings season on Wall Street. Most of the focus will be on the five big-name mega-cap tech companies – Facebook ($FB), Amazon ($AMZN), Apple ($AAPL), Microsoft ($MSFT), and Google-parent Alphabet ($GOOGL) – collectively known as the ‘FAAMG’ group of stocks. All five are set to enjoy another quarter of blockbuster earnings and sales growth, given their growing dominance in the tech space. Software and cloud giant Microsoft and internet search titan Google are both expected to release their latest numbers on Tuesday after the markets close. Tech and consumer electronics conglomerate Apple and social media company Facebook then follow with their respective earnings after the bell on Wednesday. E-commerce and cloud behemoth Amazon is slated to release Q1 results after the market closes on Thursday. Meanwhile, Tesla ($TSLA) – the sixth most valuable company listed on the New York Stock Exchange – reports on Monday. Some of other high-profile tech names reporting this week are Advanced Micro Devices ($AMD), Twitter ($TWTR), Pinterest ($PINS), Shopify ($SHOP), eBay ($EBAY), Qualcomm ($QCOM), and Texas Instruments ($TXN). Boeing, Caterpillar , GE Highlight Blue Chip Earnings Staying on the earnings front, a diverse group of blue chips, such as Boeing ($:BA), Caterpillar ($CAT), General Electric ($GE), 3M Company ($MMM), Visa ($V), Mastercard ($MA), and United Parcel Service ($UPS) will also report their latest quarterly results this week. Q1 reports from restaurant operators McDonald’s ($MCD), Starbucks ($BUX), and Domino’s Pizza ($DPZ) are also on the agenda, as are corporate results from automakers Ford Motor Company ($F), and Nio ($NIO). Pharmaceutical companies, like AstraZeneca ($AZN), Merck ($MRK), Bristol-Myers Squibb ($BMY), and Gilead Sciences ($GILD) are all on the docket as well. Finally, Big Oil majors, ExxonMobil ($XOM) and Chevron ($CVX), are both set to round up the week when they release their latest earnings on Friday. The Q1 corporate earnings season has gotten off to a strong start, with 86% of companies reporting earnings beats so far, according to Refinitiv. Federal Reserve Rate Decision The Federal Reserve is not expected to take any action on interest rates at the conclusion of its two-day policy meeting at 2:00PM ET on Wednesday, keeping it in a range between 0.0%-0.25%. Fed Chair Jerome Powell will hold what will be a closely watched press conference 30 minutes after the release of the Fed’s statement. Powell is widely expected to defend the central bank’s policy of letting inflation rise above its 2% target, reiterating his message that the recent pick-up in prices is seen as temporary. U.S. Advanced Q1 GDP Investors will keep an eye on a preliminary reading of first quarter U.S. gross domestic product (GDP) for fresh clues on the strength of the economy. The data is expected to show the economy expanded at an annual rate of 6.5% in the January-March period, accelerating from growth of 4.3% in the previous quarter.
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by jfsrevg
US Market Technicals Ahead (19 Apr – 23 Apr 2021)Investors will look for further confirmation of the private sector’s recovery from the pandemic as the earnings season gathers pace, with dozens of companies from a wide range of industries will report quarterly results this week. So far with one week in, companies are beating earnings estimates by a wide margin of more than 84%, according to Refinitiv. Meanwhile, U.S. economic data will remain in focus as investors watch for further signals on the strength of the economy, with the latest reports on home sales and manufacturing activity topping the agenda. Elsewhere, in Europe, markets are keeping an eye on the European Central Bank’s monetary policy meeting for further guidance on interest rates and stimulus. Here is what you need to know to start your week. S&P500 (US Market) The benchmark index ($SPX) increased 1.41% (+58.3 points) to another record close, extending its weekly rally into its 4th consecutive session. The newly established all time high is now at 4,191 level for $SPX. US 10-year rates extended 5-week lows of 1.566%, despite strong inflation and employment data last week. In addition, housing starts rose to the highest level since 2006 last week, pointing to a strong rebound in both consumer spending and the jobs market. The previously highlighted Bearish Divergence of $SPX remains valid, as sessional volume remains below its 50 days average range for the past week without any committed buying pressure reflected in this rally. A price retracement upon a eutrophic rally beyond the structure of a technical trend channel is always imminent on such scenario. However, the hypothesis of a short term correction for $SPX would remain healthy and strong for the bullish sentiment of the index. The immediate support to watch for $SPX is now at 4,060 level, a break of the two weeks low. Earnings Step Up into High Gear There are about 80 S&P 500 companies reporting earnings in the week ahead, including 10 Dow stocks, in what will be the first big week of the first quarter earnings season. In addition, this week’s earnings calendar also includes high-profile names like Coca-Cola ($KO), Johnson & Johnson) ($NJ), Procter & Gamble ($PG), Intel ($INTC), and IBM ($IBM), Snap ($SNAP), AT&T ($T), Verizon ($VZ), Lockheed Martin ($LMT), Halliburton ($HAL), Honeywell ($HON), and American Express ($AXP) Most of the focus will be on Netflix ($NFLX), which is due to report its latest financial results after the closing bell on Tuesday. The streaming giant is forecast to report adjusted earnings per share (EPS) of $2.97 on revenue of $7.14 billion, according to estimates. NFLX shares hit a record high on Jan. 20, right after Q4 results, but has since slipped back. Options markets are pricing in a post-earnings move of 7% in the stock. Earnings from battered airlines American Airlines ($AAL), United Airlines ($UAL), and Southwest Airlines ($:LUV) are also on the docket. Flash U.S. PMIs IHS Markit’s composite flash U.S. Purchasing Managers’ Index (PMI) for April is due on Friday, amid expectations for an increase to 59.9 from a reading of 59.7 in March The index, which measures the combined output of both the manufacturing and service sectors, is seen as a good guide to overall economic health. In addition, this week’s rather light economic calendar also features the latest data on initial jobless claims, which fell to a new pre-pandemic low last week. European Central Bank Policy Meeting The European Central Bank is all but certain to keep interest rates at their current record low levels at the conclusion of its monetary policy meeting on Thursday. President Christine Lagarde will hold a closely watched press conference 45 minutes after the rate announcement as investors seek further clues on central bank’s future pace of bond purchases. The ECB has boosted its bond buying program to prevent a rise in borrowing costs from derailing the region’s economy, however recent signs of a swift recovery could raise questions over when it will start to withdraw support.
ULong
by jfsrevg
US Market Technicals Ahead (12 Apr – 16 Apr 2021)Price volatility is expected to pick up this week. First-quarter earnings season gets underway with updates expected from major banks such as JPMorgan Chase ($JPM), Citigroup ($C) and Wells Fargo ($WFC). While results are expected to be fairly strong, most will be watching to see what companies say about the outlook for the current quarter and the rest of the year, given expectations for faster economic growth. On the economic data front, U.S. consumer price inflation (Tuesday) and retail sales (Thursday) will be the biggest data points of the week. Global financial markets will also pay close attention to comments from a Fed Chair Jerome Powell at the Economic Club of Washington on Wednesday, for additional insight into the outlook for monetary policy in the months ahead. Elsewhere, in Asia, China will become the first major economy to report first-quarter growth data when it publishes highly anticipated GDP numbers. Here is what you need to know to start your week. S&P500 (US Market) The benchmark index ($SPX) furthered its ascend with a gain of +2.12% (+85.5 points) for the week, establishing an all time high closing of 4,122 level. This was aligned with our weekly market analysis highlighted last week. It is important to note that the past week of daily incremental price action on $SPX has reflected a clear Bearish Divergence with its transactional volume. A price retracement upon a eutrophic rally beyond the structure of a technical trend channel is always imminent on such scenario. However, the hypothesis of a short term correction for $SPX would remain healthy and strong for the bullish sentiment of the index. With price volatility expected to pick up this week due to the series of major economic events, the immediate support to watch for $SPX is at 4,030 level, a trendline resistance turned support level. U.S. 1Q Earnings Season Kicks Off The first quarter earnings season on Wall Street will kick off in the coming week, with banking giants JPMorgan Chase ($JPM), Goldman Sachs ($GS), and Wells Fargo ($WFC) all set to release their latest quarterly results on Wednesday. Earnings from Bank of America ($BAC), Citigroup ($C), and Blackrock ($BLK) are then due on Thursday, followed by Morgan Stanley ($MS) on Friday. Overall, Q1 earnings are expected to have jumped nearly 25% year-over-year, according to Refinitiv. That would be the biggest quarterly gain since 3Q 2018, when tax cuts under former President Donald Trump drove a surge in profit growth. Financials are expected to show one of the biggest earnings gains, up 75.6% year-on-year, while materials are seen up 45.4%. U.S. Consumer Price Inflation (CPI) CPI is expected to have risen 0.5% last month and 2.5% over the prior year, according to estimates. If confirmed, it would mark the fastest increase in eight months. Excluding the cost of food and fuel, core inflation is projected to climb 0.2% from a month earlier and 1.6% on a year-over-year basis, a tad faster than the 1.3% increase registered in February. Rising inflation expectations helped spark a first-quarter selloff in Treasuries that drove yields to pre-pandemic highs in recent sessions. U.S. Retail Sales The consensus forecast is that the report will show retail sales jumped 5.5%, rebounding from February’s steep decline of 3%, which was the biggest drop since April 2020. Excluding the automobile sector, sales are expected to rise 4.8%, snapping back from a drop of 2.7% in the preceding month. Fed Speakers A number of Fed speeches will get market attention in the week ahead, as traders watch for further clues on interest rates. Topping the agenda will be remarks from Fed Chair Jerome Powell who will be speaking on Wednesday at an Economic Club of Washington event. The Fed chair has reiterated lately that any emergence of inflation should be temporary and that the central bank will keep its accommodative policies in place for a long time. China 1Q Gross Domestic Product (GDP) China will post its first quarter gross domestic product (GDP) on Friday morning. The data is expected to show the world’s second-largest economy grew 18.8% in the first three months of 2021 when compared to the year-ago period, accelerating from the previous quarter’s 6.5% pace. Besides the GDP report, the Asian nation will also publish data on March trade balance, industrial production, retail sales, unemployment, and fixed asset investment. China’s economy has shown signs of improvement in recent months, with activity rebounding to pre-pandemic levels thanks to a resurgence in global manufacturing and a sharp recovery in domestic spending.
UShort
by jfsrevg
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