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By Swissquote Analysts
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US earnings resilient to inflation, war & China lockdown?| MarketTalk: What’s up today?

Twitter swings between gains and losses as Elon Musk’s unsolicited offer to buy the company hit a severe resistance from the board, which launched a poison pill.

Elsewhere, the week started quietly on Monday, as many European markets were closed for the Easter holiday. Trading volumes were slim, and the US indices swung between slim gains and losses following a bearish session on Friday which sent the S&P500 1.20% down and Nasdaq more than 2% lower, to a fresh one-month low.

Inflation worries, the hawkish Federal Reserve (Fed) expectations, the intensifying war in Eastern Ukraine and rising energy prices weigh on appetite, while better-than-expected earnings from big US banks, including the Bank of America, Morgan Stanley and Citigroup, hint that the US earnings season could be a positive surprise and confirm that the US economy is resilient to higher inflation, higher energy prices, war disruptions and the Chinese lockdown.

Earnings from big US technology companies should help determining the short-term direction in US equities. Johnson & Johnson, IBM and Netflix will go to the earnings confessional today. Procter & Gamble, Tesla and United Airlines are due to report earnings on Wednesday, Snap, Dow, American Airlines and Philip Morris International on Thursday and American Express on Friday.

In commodities, gold flirted with the $2000 per ounce as crude oil hit $110pb mark on rising tensions in Eastern Ukraine, and unrest in Libya.
Bitcoin trades near $40K, as appetite remains limited in technology assets.

Watch the full episode to find out more!

US earnings resilient to inflation, war & China lockdown?| MarketTalk: What’s up today? | Swissquote
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Swissquote (English)
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Oil up, inflation up, as focus shifts to bank earnings

US equity investors jumped on an emotional roller-coaster following the release of the inflation data in the US yesterday, yet the core inflation, which filters out the impact of volatile food and energy prices, came in at lowest since September, giving some hope to investors that inflation may soon hit a high and start easing, hence get the Fed to move less hurriedly for raising the interest rates. Perhaps a wishful thinking that helped the US equities gap higher at the open, but couldn’t cement gains as all three major US indices ended the session in the negative.

Crude oil, which made a sharp U-turn and jumped above the $100pb level didn’t help.

US equity futures are in the positive at the time of recording, hinting at a minor rebound at today’s session, but the high energy prices, the pandemic and the war, combined with the Fed’s tied hands can’t do much to boost the investor mood. Only hope is earnings, but…

JP Morgan will announce its Q1 earnings today, and the CEO Dimon warned that the bank could lose about $1 billion on its Russia exposure. JP Morgan has been trading lower since last October despite the hawkish shift in Fed expectations. Worries that the economic slowdown could result in lower trading activity, and lower loan growth, and jeopardize the gains from higher interest margins weigh on the sector appetite.

US LNG stocks however continue outperform, and Citi analyst say that Apple could buy back $80-$90bn worth of stock & boost dividend by 5-10%.

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Oil up, inflation up, as focus shifts to bank earnings | MarketTalk: What’s up today? | Swissquote
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Swissquote
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Equities, Bitcoin under pressure before March CPI print

Investors feel the heat before today’s inflation print in the US. All three major indices extended losses yesterday, as the consumer prices in the US are expected to print an advance to the eye-watering level of 8.5% in March, from 7.9% printed a month earlier. And of course, there is a chance that we see a higher print on the back of higher energy and commodity prices, rising wages and rising rents.

Bitcoin slipped below the $40K mark as the broad risk selloff tainted on the mood in cryptocurrencies, gold advanced to $1970 per ounce as a broad-based risk selloff benefited to the yellow metal on Monday and crude oil rebounded after extending losses below $93pb.

We will dive into the rising correlation between Bitcoin and Nasdaq that places Bitcoin closer to a proxy for Nasdaq than an alternative safe-haven asset like gold.

In the FX, the US dollar index consolidates a touch below the 100 mark. The divergence between the more hawkish Fed and the relatively little responsive ECB continues weighing heavily on the EURUSD, although European consumer prices are rising at a pace which is as scary as the US’. The ZEW index due today will confirm how fast the sentiment deteriorates in Germany. An ugly figure could further weigh on the single currency, but we will probably see a floor into the 1.08 level in the EURUSD before Thursday’s ECB decision, just in case the ECB would sound more hawkish.

Watch the full episode to find out more!

Equities, Bitcoin under pressure before March CPI print | MarketTalk: What’s up today? | Swissquote
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Swissquote