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By Swissquote Analysts
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Netflix up 15% on solid subscription growth, Tesla next!

British efforts to reverse the Liz Truss-induced calamity, and better-than-expected earnings in the US give a boost to the global financial markets. But the recession fears, the hawkish Fed expectations and headache around a too-strong US dollar are looming risks to the actual investor optimism.

In the UK, Britain’s newest Chancellor of Exchequer Jeremy Hunt scrapping almost all that was promised in the mini budget, pulled British gilt yields lower, and pushed sterling higher. But a survey from Bank of America showed that investors cut their exposure to the UK stocks since Liz Truss took office.

On the earnings front, US bank earnings were mixed, but most banks topped market estimates.

Beyond banks, Johnson & Johnson topped estimates, although the shares closed the day slightly down as the company narrowed its outlook due to the strong US dollar, while Netflix jumped up to 15% in the afterhours trading as Netflix added 2.4 million new subscribers in the latest quarter, versus 1 million they had forecasted.

Tesla is the next to announce earnings today, after the bell. The Q3 results will likely be good, but will they leave up to high market expectations, is the million-dollar question.

The market environment remains harsh as hot inflation from the US, the hawkish Fed expectations, and global recession fears remain major risks.
Bloomberg now says the US will be in recession for sure next year, and it is possible that the latest equity rally could again be a flash in the pan before a deeper selloff in equities.

Watch the full episode to find out more!

Netflix up 15% on solid subscription growth, Tesla next! | MarketTalk: What’s up today? | Swissquote
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Swissquote (in English)
Video news

What are you doing, Mr, Bailey?!

We are only Wednesday, and the Bank of England (BoE) already intervened twice this week, to cool down the unbearable negative pressure on the British sovereign bonds. But the BoE Governor Bailey’s lack of tact sent all efforts up in smoke. The UK sovereign and sterling remain under a decent selling pressure.

Beyond Britain, all eyes are on FOMC minutes and the US inflation data.
Today, the minutes from the FOMC’s latest meeting will reveal if some Federal Reserve (Fed) members are concerned about going ‘too fast’ in terms of rate hikes. US will also reveal the latest producer price index for the month of September. The US factory-gate prices are expected to have slowed from 8.7% to around 8.4%.

Then tomorrow, we will have a better insight about the situation in consumer prices. The headline CPI is expected to have slowed from 8.3% to 8.1%, but core inflation may have spiked higher, which is bad news for those praying for the Fed to slow down the pace of its rate tightening.
Elsewhere, the IMF cut its global growth forecast for next year to 2.7%, from 2.9% in July, and from 3.8% in January, and said that there’s 25% probability that growth will slow to less than 2%. In the euro area, the GDP could rise just 0.5% next year.

The EURUSD remains under a decent pressure of the strong dollar, and only a soft inflation data from the US could help the euro bears take a pause.

In Japan, things are not necessarily better. The USDJPY spiked above the 146 level for the first time in 24 years, and investors couldn’t trade the 10-year JGBs for three days, because the BoJ broke the system by buying just too much of the 10-year bonds to conduct a yield curve control strategy.
Swap traders are now betting that the BoJ can’t carry on with abnormally low interest rates for so long, and will be forced to hike its rates at some point.

Watch the full episode to find out more!

What are you doing, Mr, Bailey?! | MarketTalk: What’s up today? | Swissquote
By
Swissquote (in English)
Video news

War, Covid, US-China tensions, inflation, market panic..

Risk sentiment is morose this week with the escalating tensions in Ukraine, rising Covid cases in China, mounting tensions between US and China, the selloff in US and other treasuries, the relentless appreciation in the US dollar and the drop in safe haven currencies.

The Swiss franc lost ground against the greenback and the USDCHF rose above parity. The Japanese yen continued its historic fall as well, the dollar yen advanced to 145.80.

Gold fell for the fifth day to $1660 per ounce, and is set to dive deeper toward the $1600 level on the back of a relentless rise in the US yields and the dollar.

And the US yields press higher on the back of hawkish Federal Reserve (Fed) pricing, despite a couple of less hawkish comments from some Fed members at the start of the week.

The US 2-year yield advanced to 4.35%, and activity on Fed funds futures price 77.5% chance for a 75bp hike at next FOMC meeting. Even the UK yields shot higher despite the Bank of England’s (BoE) announcement of more measures to calm down the Truss-hit gilt market.

At least, the avalanche of bad global news has been successful in pulling oil prices lower yesterday. The barrel of American crude eased to $90 this morning, after having flirted with $94 a barrel on Monday.

US earnings season kicks off in a dark and depressed environment. According to data from FactSet, the EPS growth of the S&P500 companies should fall by 2.6% to below 10% in the Q3.

Watch the full episode to find out more!

War, Covid, US-China tensions, inflation, market panic.. | MarketTalk: What’s up today? | Swissquote
By
Swissquote (in English)