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InstaForex Gertrude · Guru

CHINA GDP GAINS 5.2% ON YEAR IN Q4

China's gross domestic product expanded 5.2 percent on year in the fourth quarter of 2023, the National Bureau of Statistics said on Wednesday - shy of expectations for 5.3 percent but up from 4.9 percent in the third quarter.

On a seasonally adjusted quarterly basis, GDP rose 1.0 percent - in line with expectations and slowing from 1.3 percent in the three months prior.

Also, the NBS said that industrial production climbed 6.8 percent on year, beating forecasts for 6.6 percent - which would have been unchanged from the November reading.

Retail sales grew an annual 7.4 percent, missing forecasts for 8.0 percent and down from 10.1 percent in the previous month.

Fixed Asset Investment was up 3.0 percent on year, beating forecasts for 2.9 percent, which would have been unchanged.

The jobless rate in China was 5.1 percent in December versus forecasts for a steady reading of 5.0 percent.

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InstaForex Gertrude · Guru

NZ DOLLAR RISES AGAINST MAJORS

The New Zealand dollar strengthened against other major currencies in the Asian session on Thursday.

The NZ dollar rose to a 6-day high of 90.81 against the yen and a 3-day high of 1.0692 against the Australian dollar, from yesterday's closing quotes of 90.61 and 1.0703, respectively.

Against the U.S. dollar and the euro, the kiwi edged up to 0.6137 and 1.7765 from Wednesday's closing quotes of 0.6116 and 1.7779, respectively.

If the kiwi extends its uptrend, it is likely to find resistance around 91.00 against the yen, 1.05 against the aussie, 0.63 against the greenback and 1.74 against the euro.

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InstaForex Gertrude · Guru

YEN FALLS AGAINST MAJORS

The Japanese yen weakened against other major currencies in the Asian session on Friday.

The yen fell to more than a 1-1/2-month low of 161.62 against the euro and nearly a 2-month low of 188.62 against the pound, from yesterday's closing quotes of 161.10 and 188.22, respectively.

Against the U.S. and the Canadian dollars, the yen dropped to a 2-day low of 148.48 and more than a 2-month low of 110.06 from Thursday's closing quotes of 148.15 and 109.84, respectively.

The yen edged down to 171.00 against the Swiss franc, from yesterday's closing value of 170.64.

If the yen extends its downtrend, it is likely to find support around 164.00 against the euro, 190.00 against the pound, 151.00 against the greenback, 112.00 against the loonie and 173.00 against the franc.

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InstaForex Gertrude · Guru

Oil Loses Altitude: How the Economic Downturn Affects the Market

Brent crude oil futures dropped by 14 cents, or 0.2%, to $79.92 per barrel by 01:25 GMT, while West Texas Intermediate (WTI) crude oil futures last declined by 10 cents, or 0.1%, to $74.66 per barrel.

Both contracts had risen by approximately 2% on Monday as a Ukrainian drone strike on Novatek's fuel terminal in Ust-Luga raised supply concerns and led to a price surge. Analysts suggest that Novatek is likely to resume full-scale operations within a few weeks.

While the damage to loading docks at the Ust-Luga terminal only "briefly impacted exports," this move increases the likelihood of the Russian-Ukrainian conflict "shifting into a new phase, with both sides targeting key energy infrastructure," stated analysts at ANZ Research in their report.

Geopolitical tensions were overshadowed by ongoing concerns about the slowdown in China's economic recovery, raising worries about global oil demand, given that the Asian giant is the world's largest crude oil importer.

China has implemented measures to support its economy, but domestic consumption remains sluggish, making oil traders nervous about demand prospects.

In the Middle East, the United States urged Israel to protect innocent people in hospitals, medical staff, and patients as Israeli forces assaulted one hospital and besieged another, advancing into the western Khan Yunis sector in Gaza.

American and British forces also conducted a new round of strikes on the Houthi rebels' underground storage and missile and reconnaissance capabilities linked to Iran.

Houthi attacks on ships in the Red Sea region have disrupted global navigation and heightened concerns about inflation. The group claims their attacks are in solidarity with Palestinians when Israel strikes Gaza.

Additionally, crude oil inventories in the United States are expected to decrease by approximately 3 million barrels by January 19. Distillate stocks were anticipated to decrease last week, while gasoline stocks are expected to increase.

Managers seem to conclude that ongoing economic growth in the United States will continue to exert pressure on prices, while the conflict in the Middle East will provide some support to prices in Europe and Asia.

Funds appear to be betting on contrasting economic outlooks between the ongoing U.S. economic growth and a protracted recession in Europe.

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InstaForex Gertrude · Guru

Global oil game: new rounds in light of events in the USA and China

This trend was reflected in the increase in the March Brent crude oil contract price by 0.3%, reaching $80.24 per barrel. A similar dynamic was observed with West Texas Intermediate crude, which appreciated by 0.3% to $75.31 per barrel.

To****aka Tadzawa, an analyst at Fujitomi Securities, emphasized the role of the decrease in U.S. oil reserves and expectations regarding China's economic upswing as the main factors fuelling oil price growth. He also noted that political instability in the Middle East is encouraging investors to buy oil.

According to the U.S. Energy Information Administration, crude oil inventories decreased by 9.2 million barrels, far exceeding the analysts' forecast of 2.2 million barrels. This decrease was due to a reduction in imports and the closure of refineries due to bad weather, which restricted vehicle movement.

The Chinese economy also impacted the oil market. The People's Bank of China announced a significant reduction in the bank reserve requirement ratio, suggesting an injection of about $140 billion into the economy, potentially a strong boost for economic growth.

An important aspect was the decrease in U.S. domestic oil production. Bob Yager, Director of Energy Futures at Mizuho, notes that production in Bakken was particularly affected, experiencing a significant drop.

Amid Arctic freezes, U.S. oil production fell to a five-month low of just 12.3 million barrels per day. Officials from North Dakota stated that restoring oil production in the state, a key player in shale extraction, might take about a month following severe damage caused by extreme weather conditions.

Thus, events in both the U.S. and China are shaping new trends in the global oil market, demonstrating the interplay of economic strategies and natural phenomena in today's global economy.

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InstaForex Gertrude · Guru

Two sides of the market: record growth of the S&P 500 and the Tesla crisis

U.S. Economic Strength: Surpassing Expectations
The U.S. economy demonstrated remarkable growth, surpassing all forecasts in the fourth quarter. This rise was a surprise to experts, highlighting the resilience of the country's economic dynamics.

Comcast and American Airlines: Symbols of Growth
Comcast reported revenues exceeding expectations, contributing to the rise in their stocks. Meanwhile, American Airlines also pleases investors with an optimistic profit forecast, demonstrating the health of the aviation industry.

S&P 500 Index: At the Peak of Success
The S&P 500, reflecting the overall market trend, grew by 0.53%, reaching a historical high for the fifth session in a row. This record growth is backed by investors' confidence in the U.S. economic potential.

Global Market in the Rhythm of the American Economy
Global stocks rise on the wave of American economic growth. At the same time, the euro loses positions, reflecting the European Central Bank's decision to keep interest rates unchanged.

U.S. Economy: Impressive GDP Growth
The U.S. Gross Domestic Product in the fourth quarter showed an impressive 3.3% annual growth. This significantly exceeds forecasts, disproving fears of a possible recession in 2023.

Tesla: Challenges Amidst Overall Growth
In contrast to the general market optimism, Tesla faces problems. After the publication of a disappointing sales forecast, the company's stocks fell, standing out against the general market upswing.

S&P 500: New Horizons of Growth
The rally of the S&P 500 index continues, marking a new record high reached for the first time in two years. This indicates investors' optimism regarding the future of the American economy and reduced interest rates, as well as growing interest in artificial intelligence.

GDP a Pleasant Surprise for the Market
Rob Haworth from U.S. Bank Asset Management Group emphasized that the U.S. GDP growth is a pleasant surprise for the market. The absence of inflation issues and active consumer spending create a favorable environment. This circumstance strengthens confidence that companies' revenues and sales will grow in the future.

Unemployment Level: A Slight Increase in Claims
Recent data indicate a slight increase in the number of unemployment benefit claims, reaching 214,000, slightly exceeding the forecast of 200,000. This points to minor fluctuations in the labor market.

Tech Giants: Awaiting Quarterly Reports
The upcoming quarterly reports from Apple, Microsoft, Amazon, Alphabet, and Meta Platforms will provide investors valuable insight. This will help assess whether the high valuations of these companies are justified after their stock growth since the crisis on Wall Street in 2022.

Dow Jones, S&P 500, and Nasdaq: The Rise Continues
The Dow Jones Industrial Index showed significant growth, adding 242.74 points. S&P 500 and Nasdaq also increased, indicating the continuing rise in the market.

Global Market: Steady Growth
At 16:14 Eastern European Time (214 GMT), the global MSCI stock index, reflecting dynamics in 49 countries, rose by 0.32%. The European STOXX 600 index also closed with a 0.3% increase, confirming a stable positive trend in the global economy.

Electric Vehicles: Stock Fall After Tesla's Report
Following the publication of Tesla's quarterly report, shares of other electric vehicle manufacturers also suffered. Rivian Automotive and Lucid Group recorded a decrease in their shares by 2.2% and 6.7% respectively, reflecting overall concern in the sector.

Healthcare Sector: Drop in Humana's Shares
Humana's shares sharply fell by 11.7%, following the forecast of modest annual profits, which impacted the S&P 500 healthcare sector index, decreasing it by 0.2%. This reflects current challenges in the health insurance sector.

UnitedHealth and Cigna:
Falling Following Humana Following Humana, shares of other health insurers also incurred losses. UnitedHealth and Cigna showed a decrease of 3.9% and 2% respectively, highlighting instability in this market segment."

IBM and Comcast: Stock Growth Following Positive Forecasts
IBM shows impressive stock growth of 9.5%, thanks to a revenue forecast that exceeds expectations. Comcast's shares also rose by 3.4% after the company surpassed quarterly revenue forecasts.

American Airlines: Sharp Rise in Shares
Shares of American Airlines sharply increased by 10.3%, thanks to a very optimistic annual revenue forecast, which is a good sign for the aviation industry.

S&P 500: Earnings Surpass Expectations
According to the latest data, 82% of the companies in the S&P 500 index that have reported their earnings have exceeded expectations. This is significantly higher than the long-term average of 67%, indicating an overall positive sentiment in the market.

Boeing: Stock Decline Due to FAA Ban
Boeing's shares noticeably fell by 5.7%, following the decision of the U.S. Federal Aviation Administration to prohibit the company from expanding the production of 737 MAX models due to technical issues.

S&P 500 Index: Predominance of Growth Over Decline
The S&P 500 index exhibited a positive ratio of rising to falling stocks, at 4 to 1, indicating a prevailing upbeat trend in the market.

Indices Hitting New Highs and Lows
The S&P 500 recorded 50 new highs and only two new lows, while Nasdaq registered 97 new highs and 119 new lows, reflecting the current market's volatility.

Trading Volume:
Market Stability The trading volume on U.S. exchanges remained consistent, reaching 11.5 billion shares, in line with the average level of the last 20 sessions.

The U.S. Dollar Strengthens, Euro Weakens
The U.S. dollar showed an increase, signaling the Federal Reserve's reluctance to lower interest rates. Concurrently, the euro hit a six-week low against the dollar following the European Central Bank's statement about maintaining high interest rates.

Oil and Gold: Price Increase
U.S. oil prices reached their highest since late November, with futures for West Texas Intermediate and Brent crude oil rising by 3% and 2.99% respectively. Gold prices also saw an increase, with a 0.32% rise in spot prices.

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InstaForex Gertrude · Guru

S&P 500 peaks: hopes for upcoming Fed meeting and tech profits

U.S. stock indices showed growth on Monday. Investors prepared for a busy week, expecting a large number of financial reports from high-market-cap companies, new economic data, and a Fed meeting dedicated to monetary policy. All three major U.S. stock indices showed growth, with the high-tech Nasdaq (.IXIC) index growing the most. The S&P 500 index (.SPX) reached a new record closing level. After the main index rose by 3.3% in the first month of 2024, BlackRock revised its assessment of U.S. stocks, raising it.

In anticipation of upcoming reports, investors' attention is focused on high-profile companies in technology and related sectors. A number of key companies, including Alphabet Inc (GOOGL.O), Microsoft Corp (MSFT.O), and Qualcomm Inc (QCOM.O), are preparing to publish their financial results, starting from Tuesday and peaking on Thursday with reports from giants such as Apple Inc (AAPL.O), Amazon.com (AMZN.O), and Meta Platforms Inc (META.O). Also of interest are the results of other significant companies: General Motors Inc (GM.N) on Tuesday, Boeing Co (BA.N) on Thursday, as well as leading oil corporations Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N), which will present their reports on Friday.

The main event of the week for investors is the press conference of the chairman of the Federal Reserve (Fed) Jerome Powell and the results of the two-day meeting of the U.S. central bank, scheduled for Wednesday. Additionally, the publication of U.S. unemployment data is expected on Friday. There is speculation that the Fed will maintain its key interest rate at 5.25%-5.50%. However, some investors do not rule out that the central bank may deviate from its plans to raise rates.

Fed Chairman Jerome Powell and other members of the policy leadership have already stated that a reduction in interest rates should not be expected until inflation falls to the annual target level of 2%. They also emphasized their readiness to take a flexible approach in response to changing economic data. The list of economic reports this week includes labor market data, including job vacancies and workforce turnover research, the ADP report, fourth-quarter employment cost data, productivity metrics, layoff plans, and the January employment report, to be published on Friday.

In addition to the aforementioned reports, this week will also see the release of the Case-Shiller home price index, consumer confidence indicators, the Purchasing Managers' Index from the Institute for Supply Management, construction spending statistics, and information on manufacturing orders. Recent positive economic data, including impressive gross domestic product and personal consumer expenditure figures released last week, have, on one hand, alleviated concerns about a possible recession, and on the other hand, reduced the likelihood of the Federal Reserve cutting interest rates soon, possibly as early as March.

The industrial Dow Jones index (.DJI) increased by 224.02 points (0.59%) to 38,333.45. The S&P 500 index (.SPX) gained 36.96 points (0.76%) to 4,927.93, and the Nasdaq Composite index (.IXIC) rose 172.68 points (1.12%) to 15,628.04. Out of the 11 sector indices of the S&P 500, ten showed growth. The largest increase was in the consumer discretionary index (.SPLRCD), which grew by 1.37%, followed by a 0.97% increase in the information technology sector (.SPLRCT). The energy sector (.SPNY) was the only one to show a decline. Microsoft (MSFT.O), a company that drew market attention to the field of artificial intelligence thanks to its partnership with Open AI in 2023, is expected to report a 15.8% increase in quarterly revenue. Its shares closed up by 1.4%.

Tesla Inc (TSLA.O) shares rose by 4.2% following the electric car manufacturer's announcement of capital investment plans. Shares of robot vacuum maker iRobot (IRBT.O) fell by 8.8% as the company and Amazon abandoned merger plans due to opposition from EU antitrust authorities. Meta Platforms (META.O) shares increased by 1.7% after brokerage firm Jefferies raised its target price from $425 to $455.

Shares of Warner Bros Discovery (WBD.O) lost 1.2%, as brokerage firm Wells Fargo downgraded the streaming platform's rating to 'equal weight'. Financial technology company SoFi Technologies (SOFI.O) shares jumped by 20.2% following the announcement of profits in the fourth quarter. On the NYSE, there were 397 new highs and 50 new lows.

On the Nasdaq, 2975 stocks rose and 1314 fell, as the number of rising stocks outnumbered falling ones by approximately a 2.3 to 1 ratio. The S&P 500 index set 45 new 52-week highs and did not find any new lows, while the Nasdaq recorded 226 new highs and 101 new lows. The trading volume on U.S. exchanges was relatively small, with 10.3 billion shares traded compared to the average of 11.5 billion shares over the previous 20 sessions.

Investors were also sensitive to geopolitical risks related to the rise in oil prices following a missile attack in Kauta, which caused a fire on a fuel tanker in the Red Sea, and a drone attack in Jordan.

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InstaForex Gertrude · Guru

Wall Street is on the verge of change: how the US economy ignores the Fed

The current version was alarmed by evidence suggesting that the economy might be too heated for the Federal Reserve to cut rates without risking an inflation rebound. Friday's U.S. employment data served as the latest indicator of stronger-than-expected growth after Federal Reserve Chairman Jerome Powell, a few days earlier, quashed hopes that the central bank would begin to lower rates in March.

"Looking back at the fourth quarter and the recent stock rally, it can largely be attributed to the anticipation of a Fed pivot, and we are witnessing this pivot evaporate before our eyes," said Matthew Miskin, one of the chief investment strategists at John Han**** Investment Management.

The Friday employment report revealed that non-farm payroll employment increased by 353,000 last month, significantly surpassing the 180,000 growth anticipated by economists. Additionally, the economy added 126,000 more jobs in November and December than previously reported.

Many investors consider strong growth a positive sign for stocks, especially if it is accompanied by higher-than-expected corporate earnings. The S&P 500 index reached a new high on Friday following the employment data release, spurred by a sharp rise in shares of Facebook's parent company Meta Platforms (META.O) and Amazon (AMZN.O), which surged by 20% and 8% respectively after their corporate results.

In 2024, S&P 500 earnings are expected to grow by almost 10% following a 3.6% increase in 2023. These expectations will be tested in the upcoming week with another significant batch of reports, including from Eli Lilly (LLY.N), Walt Disney (DIS.N), and ConocoPhillips (COP.N).

Analysts predict a remarkable year for U.S. stocks: 2024 will end more than 10% higher at 5500 points. They attribute this growth to optimism about the business potential of artificial intelligence, which helped stocks like Nvidia (NVDA.O) last year, likely contributing to this growth.

However, sustained growth above trend poses another problem – concerns about inflation rebound.

A longer period of high interest rates could also exacerbate stress in sectors of the economy that are already suffering, such as commercial real estate.

Shares of New York Community Bancorp (NYCB.N), a major CRE lender in New York, fell in recent days, sparking broader regional banking issues after the company cut dividends and announced unexpected losses.

As the fourth-quarter earnings season continues, 230 companies in the S&P 500 index have reported. Of these, 80% exceeded Wall Street's expectations. Overall, analysts forecast a 7.8% year-over-year increase in S&P 500 earnings for the October-December period, a significant improvement from the 4.7% estimate as of January 1.

Meta Platforms shares rose 20.3% to a record level after announcing the payout of its first dividends on the eve of Facebook's 20th anniversary.

Amazon.com (AMZN.O) shares jumped 7.9% following a revenue increase in the fourth quarter as new generative artificial intelligence features in cloud computing and e-commerce spurred solid growth during the holiday season.

Regional bank shares stabilized after two days of sharp sell-offs triggered by disappointing earnings from New York Community Bancorp (NYCB.N). The bank's shares rose 5.0% on Friday, and the KBW regional banking operations index (KRX) increased by 0.2%.

The S&P 500 index rose 1.07% and closed at 4958.61 points. The Nasdaq index gained 1.74% to 15628.95 points, and the Dow Jones industrial index increased by 0.35% to 38654.42 points.

Of the S&P 500's 11 sector indexes, six rose, led by the communication services index (.SPLRCL), which gained 4.69%, followed by a 2.49% increase in the consumer services index (.SPLRCD).

Cigna (CI.N) shares increased by 5.4% after the health insurance provider raised its annual profit forecast.

Microchip Technology (MCHP.O) shares fell by 1.6% following a disappointing sales forecast from the chipmaker.

Skechers USA, a footwear manufacturer, also provided a gloomy forecast, resulting in a 10.3% drop in its shares. Shares of the largest oil company, Chevron Corp (CVX.N), increased by 2.9% after exceeding analysts' estimates.

In the S&P 500 index (.AD.SPX), declining shares outnumbered advancing ones at a ratio of 1.2 to one.

The S&P 500 set 68 new highs and four new lows; Nasdaq recorded 75 new highs and 144 new lows. Trading volume on U.S. exchanges was relatively low: 11.2 billion shares were sold compared to an average of 11.6 billion shares over the previous 20 sessions.

Accelerated growth and expectations that rates will remain at their current level for an extended period could lead to an increase in the yield on treasury bonds. Higher yields may pressure stocks as they compete with bonds for investors, and higher rates increase the cost of capital in the economy.

The yield on 10-year treasury bonds, which moves inversely to bond prices, reached 4.05% on Friday.

Investors continue to anticipate the Federal Reserve cutting rates by about 125 basis points this year. This is less than the approximately 150 basis points estimated earlier this week but still significantly more than the 75 basis points forecasted by the Fed.

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InstaForex Gertrude · Guru

S&P 500 on the finish line: the impact of US earnings and interest rates

S&P 500: Slow gains amid expectations of interest rate changes

Tuesday brought modest gains in the S&P 500, where investors were scrupulously analyzing mixed reports from U.S. giants and evaluating statements from Fed officials looking at hints of an upcoming interest rate cut.

Minneapolis FRB head Neel Kashkari emphasized that the fight against inflation is not over, but noted its accelerating decline, pointing to data that has been largely in line with the Fed's 2% target over the past three and six months.

FRB Cleveland Chairman Loretta Mester expressed the view that a rate cut is possible under favorable developments, although she did not go into details of possible policy easing due to uncertainty around inflation.

Dynamics of shares and sectoral changes of the market

Equity dynamics were erratic throughout the day but recorded gains towards the close.

The Dow Jones Index (.DJI) jumped 141.24 points, or 0.37%, to 38,521.36. The S&P 500 (.SPX) strengthened 11.42 points, or 0.23%, to 4,954.23, while the Nasdaq Composite (.IXIC) rose 11.32 points, or 0.07%, to close at 15,609.00.

On Tuesday, U.S. Treasury Secretary Janet Yellen expressed concern about tensions in the banking sector and among commercial real estate owners, but emphasized that with the help of regulators, the situation remains under control.

The KBW Regional Banks Index (.KRX) ended the day down 1.4%, marking a 12.6% decline over the past six trading sessions. Shares of New York Community Bancorp (NYCB.N) collapsed 22.2% after the bank reported an unexpected quarterly loss due to real estate debt forgiveness for some customers, losing about 60% of its value for the week.

Meanwhile, airline stocks pushed the Dow Jones Transportation Average (.DJT) index up 2.1%, pointing to the demand for air travel. Frontier Group Holdings (ULCC.O) delighted the market by jumping 20.8% thanks to reporting reaching breakeven.

According to LSEG, more than half of the companies in the S&P 500 have already reported earnings that beat expectations 81.2% of the time. Total S&P 500 fourth-quarter earnings are projected to be up 8.1% from a year ago.

GE HealthCare Technologies (GEHC.O) rose 11.6% after posting quarterly earnings that beat expectations, fueling record gains in the healthcare sector of the S&P 500 Index (.SPXHC).

The materials sector (.SPLRCM) posted the best performance of any S&P 500 sector.

The MSCI Global Index (.MIWD00000PUS), which reflects stocks in 49 countries, rose 0.51%.

Shares of chemical giant DuPont de Nemours (DD.N) jumped 1.7%, up 7.4% after the company beat quarterly profit forecasts and also announced a $1 billion share repurchase program and a dividend hike.

Palantir Technologies (PLTR.N) soared 30.8% in anticipation of an upbeat full-year earnings forecast.

Meanwhile, shares of Eli Lilly (LLY.N) are down 0.2% despite a 2024 earnings forecast that exceeds expectations.

Shares in the semiconductor segment added to the tension on the Nasdaq Technology Market, with the Philadelphia SE Semiconductor index (.SOX) down 1%. Rambus Inc (RMBS.O) was at the epicenter of the decline, losing 19.2% after posting quarterly results.

On NYSE actively growing stocks outperformed falling ones, demonstrating a ratio of 2.6 to 1. There were 190 new highs versus 64 new lows on this floor.

The Nasdaq showed 2,721 stocks went up and 1,476 went down, with rising issues outnumbering falling ones by a ratio of 1.8 to 1. The S&P 500 marked 27 new 52-week highs versus 8 new lows, while the Nasdaq recorded 110 new highs and 122 new lows.

Total trading volume on U.S. exchanges reached 11.21 billion shares, compared with the usual average of 11.54 billion over the past 20 sessions.

Strengthening Chinese stocks and the international market

In China, authorities have taken to strengthening its stock market, leading Chinese blue chip stocks (.CSI300) to climb more than 3%. In New York, the iShares China Large-Cap ETF (FXI.P) rose 5.7% and the Golden Dragon China Index (.HXC) jumped 5.9%.

A series of statements from China's financial markets regulator and President Xi Jinping's upcoming meeting with regulators indicated Beijing's determination to combat losses in the domestic market.

State-owned investment fund Central Huijin Investment announced it is expanding its investment in ETFs.

China's blue chips hit a five-year low last week amid a slowing economy, prompting state investors, known as the "national team," to step up purchases of ETFs tracking shares of leading companies to support the market.

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InstaForex Gertrude · Guru

Global challenges: rising oil prices in response to the Gaza crisis and data from the United States

On Thursday, oil prices surged more than 3% due to concerns about the potential expansion of conflict in the Middle East after Israel rejected a ceasefire offer from HAMAS.

The price of Brent crude oil increased by $2.42 to $81.36 per barrel, while West Texas Intermediate crude rose by $2.36 to $76.22 per barrel. As a result, the cost of Brent surpassed the $80 mark, and WTI exceeded $75 per barrel for the first time in February.

The escalation of the situation affects the rise in oil prices, with Brent and WTI prices expected to increase by more than 5% over the week.

"We are watching further developments, assessing potential consequences," said John Kilduff from Again Capital LLC, highlighting the impact of attacks by Houthi rebels supported by Iran on global oil trade.

For peace agreement discussions, HAMAS representatives arrived in Cairo, where they met with Egyptian and Qatari mediators.

A stronger-than-expected decrease in US gasoline and distillate inventories also supported oil prices.

Aker BP reported that production at the Johan Sverdrup field, the largest in the North Sea, would be maintained at 755,000 barrels per day until the end of the year, exceeding the initially planned 660,000 barrels per day.

According to UBS analyst Giovanni Staunovo, the demand for oil remains high among the largest consumers, including India and the US.

The US Department of Labor reported a decrease in unemployment claims, indicating the labor market's underlying strength.

IG analyst Tony Sycamore expressed that deflation risks in China, the world's largest crude oil importer, are pressuring global oil prices.

"The decline in oil prices in Asia is largely related to recent challenges in the Chinese stock markets and the unexpected consumer price index figure, undermining confidence ahead of the Lunar New Year," he added.

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InstaForex Gertrude · Guru

US yield data raises stakes: global equities back on top

The global stock index MSCI All Country (.MIWD00000PUS) increased by 0.4%, marking its third consecutive weekly gain.

The S&P 500 index closed above 5000 for the first time on Friday, and Nasdaq briefly traded above 16,000, thanks to growth from large corporations and chip manufacturers, including Nvidia, as investors focused on artificial intelligence technologies and expected high profits.

Shares of Nvidia (NVDA.O) jumped 3.6%, reaching a record high after Reuters reported the creation of a new business unit focused on developing specialized chips for cloud computing companies and others, including advanced AI processors.

This followed a Wall Street Journal report that OpenAI CEO Sam Altman was negotiating with investors to fund a technology initiative aimed, among other things, at increasing chip production for powerful artificial intelligence.

"So far, the AI story has been about building infrastructure, chips, and data centers," said David Lefkowitz, head of US equities at UBS Global Wealth Management, adding that it "highlights potentially huge demand for AI infrastructure in the future."

Besides the 1.99% increase in the Philadelphia Semiconductor Index, contributions were also made by technology giants, including Microsoft (MSFT.O), Amazon.com (AMZN.O), and Alphabet (GOOGL.O), to index profit.

According to LSEG data, with results from about two-thirds of S&P 500 companies, Wall Street's earnings growth expectations for the fourth quarter are now 9.0% compared to 4.7% at the start of January, with 81% of companies exceeding estimates compared to an average of 76% over the last four reporting periods.

Strong corporate earnings, positive employment data, GDP, and decreasing inflation create a favorable backdrop for further stock market development.

Consumer prices in the US for December rose less than initially expected, but core inflation remained somewhat high, as data released on Friday showed. The data revision changed little in the expectations for changes in the Federal Reserve's rates.

Inflation data for the US in January is expected next week.

The Dow Jones Industrial Average (.DJI) fell by 54.64 points, or 0.14%, to 38,671.69, the S&P 500 (.SPX) added 28.70 points, or 0.57%, to 5,026.61, and the Nasdaq Composite (.IXIC) grew by 196.95 points, or 1.25%, to 15,990.66.

Positive earnings and optimism regarding artificial intelligence helped the S&P 500 index achieve ten intra-day record highs this year.

Nasdaq closed just 0.4% below its record closing high of 16,057.44, registered in November 2021.

Over the week, all three indices recorded their fifth consecutive weekly gain: S&P rose by 1.4%, Nasdaq by 2.3%, and Dow by 0.04%.

Earlier data showed that consumer prices in the US for December rose less than initially expected, but core inflation remained somewhat high - a mixed picture that clouded expectations regarding the timing of the Federal Reserve's interest rate cuts.

Strong economic data and recent comments from Federal Reserve officials dispelled hopes that the central bank would start cutting interest rates in March.

Market participants are waiting for consumer price data for January next week to get more clues about when the Fed will reduce borrowing costs.

It's also worth noting that shares of Cloudflare (NET.N) rose by 19.5%, as optimistic revenue and profit forecasts for the first quarter were expected. However, shares of PepsiCo (PEP.O) fell by 3.6% after its fourth-quarter revenue fell short of estimates, as multiple price increases reduced demand for its juices and Lay's chips.

Shares of Pinterest (PINS.N) fell by 9.5% after the company forecasted first-quarter revenue significantly below Wall Street estimates.

The yield on benchmark 10-year US Treasury notes rose by 0.7 basis points to 4.177% from 4.17% late on Thursday.

The yield on 2-year notes, which typically moves in step with interest rate expectations, increased by 3.2 basis points to 4.4883% from 4.456%.

Gold prices were pressured by higher yields: spot gold fell by 0.44% to $2024.16 per ounce. Futures on American gold decreased by 0.4% to $2038.7.

Futures on Brent crude oil increased by 0.7% to $82.19 per barrel, while futures on American oil rose by 0.8% to $76.84.

European stocks closed slightly lower under the influence of rising yields and falling shares of L'Oreal.

The pan-European STOXX 600 index closed down by 0.1%, but still showed a weekly gain of 0.2%.

Shares of L'Oreal fell by 7.6% after the French cosmetics company reported unsatisfactory sales growth in the last quarter.

Inflation in Germany, Europe's largest economy, fell in January to 3.1%, fueling bets on when the European Central Bank will start cutting interest rates.

However, the yield on eurozone bonds reached a multi-week high after several ECB rate-setters warned against prematurely easing monetary policy.

"Indeed, it now seems entirely evident that the ECB will wait for wage statistics in Europe at the end of April before likely cutting rates in June," said ING.

Japanese stocks reached a 34-year high. The yen recovered after falling to a 10-week low as traders reassessed their bets on how quickly the Bank of Japan might raise rates.

In China, mainland markets were closed, and in Hong Kong, trading was sluggish and ended early, with the Hang Seng index falling by 0.8% amid concerns that authorities might not fulfill promises to support.

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InstaForex Gertrude · Guru

Stocks and the dollar: stability vs. growth ahead of key consumer price index

At the start of the week, global market indices remained virtually unchanged, while the US currency slightly strengthened ahead of Tuesday's consumer price index report in the US, which could hint at when the Federal Reserve might begin cutting interest rates.

In the realm of cryptocurrencies, Bitcoin reached $50,000, a level not seen in over two years, with its value increasing by 5.6% to $50,207. Cryptocurrency stocks also saw gains: Coinbase Global (COIN.O) increased by 3.7%.

The S&P 500 index slightly fell after reaching a new intraday record high. Last week, the S&P 500 index surpassed 5,000 points for the first time in history. The MSCI global stock index remained unchanged after reaching its highest level since January 2022.

The January report on the consumer price index is expected on Tuesday, with the US producer price report to follow later in the week. Investors are also eagerly awaiting the January US retail sales report, set for release on Thursday.

Initial expectations of a Fed rate cut at the upcoming meeting were not met due to data indicating the economy remains stable.

Market estimates put the likelihood of rates staying unchanged in March at 84.5%. According to CME FedWatch Tool data, the chance of a rate cut of at least 25 basis points in May dropped to 61% from over 95% at the start of 2024.

"Moderate consumer price index data and soft retail sales should reinforce the Fed's confidence that inflation is returning to its target," said Mark Chandler, chief market strategist at Bannockburn Global Forex in New York.

The Dow Jones Industrial Index (.DJI) rose by 125.69 points, or 0.33%, to 38,797.38, the S&P 500 (.SPX) lost 4.77 points, or 0.09%, to 5,021.84, and the Nasdaq Composite (.IXIC) dropped 48.12 points, or 0.30%, to 15,942.55.

Among the Dow Jones index components, Nike Inc (NYSE:NKE) shares increased by 2.71 points (2.59%) and closed at 107.21. Shares of Goldman Sachs Group Inc (NYSE:GS) went up by 8.63 points (2.25%), finishing at 392.89. Shares of 3M Company (NYSE:MMM) rose by 1.76 points (1.89%), closing at 94.66.

Shares of Salesforce Inc (NYSE:CRM) fell by 3.76 points (1.29%), ending the session at 287.54. Shares of Microsoft Corporation (NASDAQ:MSFT) rose by 5.29 points (1.26%), closing at 415.26, while shares of Apple Inc (NASDAQ:AAPL) dropped in price by 1.70 points (0.90%), finishing trading at 187.15.

Among the S&P 500 index components, shares of VF Corporation (NYSE:VFC) appreciated by 13.92% to 17.43, Diamondback Energy Inc (NASDAQ:FANG) gained 9.38%, closing at 165.98, and shares of Mohawk Industries Inc (NYSE:MHK) increased by 6.61%, ending the session at 117.28. Shares of Motorola Solutions Inc (NYSE:MSI) decreased in price by 3.20%, closing at 320.30.

Shares of ServiceNow Inc (NYSE:NOW) lost 3.19%, ending trading at 786.98. Quotes of Monolithic Power Systems Inc (NASDAQ:MPWR) dropped by 2.98% to 729.87.

Among the NASDAQ Composite index components, shares of Beamr Imaging Ltd (NASDAQ:BMR) surged by 371.56% to 9.95, Renalytix Ai Plc (NASDAQ:RNLX) increased by 228.00%, closing at 1.25, and shares of Millennium Group International Holdings Ltd (NASDAQ:MGIH) rose by 201.94%, ending the session at 3.11.

Shares of AN2 Therapeutics Inc (NASDAQ:ANTX) decreased in price by 74.50%, closing at 5.10. Shares of Medavail Holdings Inc (NASDAQ:MDVL) lost 43.22%, ending trading at 1.80. Quotes of TOP Financial Group Ltd (NASDAQ:TOP) dropped by 40.63% to 3.20.

Shares of Goldman Sachs Group Inc (NYSE:GS) reached a 52-week high, increasing by 2.25%, 8.63 points, and finished trading at 392.89. Shares of Beamr Imaging Ltd (NASDAQ:BMR) reached a historical high, rising by 371.56%, 7.84 points, and ended trading at 9.95. Shares of Medavail Holdings Inc (NASDAQ:MDVL) fell to a 3-year low, losing 43.22%, 1.37 points, and closed at 1.80.

The global stock index MSCI (.MIWD00000PUS), tracking stocks in 49 countries, dropped by 0.01%. European stocks (.STOXX) increased by 0.5%.

Markets in China, Hong Kong, Japan, South Korea, Singapore, Taiwan, Vietnam, and Malaysia were closed for holidays.

Financial markets in mainland China were closed for the Lunar New Year holiday and will resume trading on Monday, February 19. Trading in Hong Kong will resume on February 14.

Investors also tempered their expectations for a European Central Bank rate cut after two policy makers stated last week that the ECB needs more evidence of inflation falling before it can reduce rates.

On Monday, the Federal Reserve Bank of New York published its January survey of consumer expectations, which showed that inflation expectations for one year and five years remained unchanged at 3% and 2.5%, respectively. The predicted inflation growth over three years fell to 2.4%, the lowest level since March 2020, from December's 2.6%.

The dollar index, which tracks the dollar's performance against a basket of other major trading partners' currencies, increased by 0.1% to 104.13.

The dollar rose by 0.03% against the yen to 149.35, while the euro dropped by 0.1% for the day to $1.0769.

The yield on US Treasury bonds fell, with the rates on benchmark 10-year bonds decreasing after three consecutive periods of growth.

The yield on the benchmark 10-year US Treasury bonds decreased by 1.9 basis points to 4.168% from 4.187% late on Friday.

Oil futures closed mixed, almost unchanged. Concerns over interest rates and global demand caused the market to pause after prices jumped by about 6% last week.

US oil increased by 8 cents and settled at $76.92 per barrel. Brent crude oil decreased by 19 cents and settled at $82.

Spot gold prices fell by 0.3%.

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InstaForex Gertrude · Guru

Inflationary explosion in the US: how do the dollar and bonds react?

The consequences of high inflation are felt across the financial market. Specifically, the main Wall Street indices reacted to this news with a decrease after the publication of data indicating a higher than expected rise in consumer prices. This event pressured the expectations regarding the imminent lowering of interest rates, which in turn led to an increase in the yield of US Treasury bonds.

Among other things, the Dow Jones Industrial Average recorded its most significant drop in almost 11 months after the US Department of Labor's report showed an unexpected increase in consumer prices in January, especially due to the rise in housing costs.

Against this backdrop, market indices, which were on the rise in anticipation that the Federal Reserve System (FRS) would begin to lower rates as early as May, showed negative dynamics. The S&P 500 index, for example, closed above the 5000 point mark for the first time, and the Dow Jones index traded near record-high values. However, the publication of inflation data revised expectations regarding the FRS's policy, increasing the likelihood that rate cuts may not occur until June.

Mega-cap companies sensitive to rates, such as Microsoft, Alphabet, Amazon.com, and Meta Platforms, showed a decrease in stock prices amid the rise in yields of US Treasury bonds to a two-month high. A similar situation was observed among chip manufacturers, including Micron Technology, Qualcomm, and Broadcom, which led to a 2% drop in the Philadelphia SE Semiconductor index.

The real estate, consumer discretionary, and utilities sectors faced the most significant losses among the 11 major industry indices of the S&P 500, especially real estate, which reached its lowest values in more than two months.

Small-cap companies also felt the pressure, with the Russell 2000 index showing the most significant daily drop since June 2022.

"Various statements by Federal Reserve System officials in recent weeks have indicated that the market-anticipated rate cuts in the first half of the year might have been premature. The latest consumer price index data certainly confirms this trend," commented Bob Elliott from Unlimited Funds.

The consumer inflation data followed a modest revision of inflation figures for the last quarter of 2023, giving investors temporary relief regarding inflation expectations.

The Cboe Volatility Index reached its highest level since November, highlighting the growing market concern. The S&P 500 and Nasdaq Composite indices lost 1.37% and 1.79% respectively, while the Dow Jones Industrial Average fell by 1.36%, marking its most significant decline since March 2023.

Among other developments, JetBlue Airways shares surged by 21.6% after Carl Icahn disclosed his stake in the company, calling the shares "undervalued." Arista Networks' shares declined by 5.5% following a gross profit forecast below expectations, and Marriott International lost value after forecasting annual earnings below analyst expectations.

Cadence Design Systems and toy manufacturer Hasbro also faced a drop in share value after publishing gloomy forecasts. Meanwhile, Tripadvisor shares jumped by 13.8% following the announcement of the creation of a special committee to review deal proposals.

The total trading volume on US exchanges reached 12.9 billion shares, comparable to the average of the last 20 sessions at 11.71 billion shares.

The US stock market continues to demonstrate record levels, supported by leading technology companies and expectations of Federal Reserve rate cuts. The global stock index MSCI and the Stoxx 600 European index also showed a decline amid current events.

The dollar index reached a three-month high, and bitcoin set a new record since December 2021, despite subsequent declines.

Data on US retail sales and the producer price report are expected shortly, which may further influence market sentiments.

The rise in oil prices continues amid tensions in the Middle East and Eastern Europe, with Brent crude futures and West Texas Intermediate showing significant increases. Meanwhile, gold prices fell below the key level of $2000 per ounce after the CPI data was released, reaching a two-month low.

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InstaForex Gertrude · Guru

Intraday Price Movement of Litecoin Cryptocurrency, Friday February 16 2024

If we look at the 4-hour chart of the Litecoin cryptocurrency, we can see a Bearish 123 pattern followed by the apperance of a Bearish Ross Hook (RH) pattern and a Rising Wedge pattern, all of which confirms that in the near future Litecoin has the potential to weaken down to level 68.16. If this level is successfully broken downwards then Litecoin will have the potential to continue weakening to level 66.45, but if on its way down there suddenly occurs an upward correction which breaks above level 72.93 then all the decline scenarios that have been described previously will automatically cancel themselves.

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InstaForex Gertrude · Guru

Gold and oil raise rates

In Asian markets on Tuesday, gold prices remained within a narrow range amid fears of long-term interest rate hikes. The absence of trading signals was also due to a holiday in the American market.

Gold demonstrated some strengthening, reaching the $2000 per ounce mark after recovering from a two-month low over the last two trading sessions. However, current fluctuations in gold prices are still occurring within the range of $2,000-$2,050, which was established for the majority of 2024.

Spot gold prices increased slightly by 0.1% to $2,019.17 per ounce, while the price of gold futures expiring in April settled at $2,030.20 per ounce as of 23:34 Eastern Time.

Analysts from Citibank highlight three main catalysts that could push gold prices to $3000 per ounce and oil to $100 per barrel in the next 12-18 months. Among them are a sharp increase in gold purchases by central banks, stagflation, and a deep global recession. Currently, gold is trading around the $2016 mark and could rise by approximately 50% in the event of any of these scenarios materializing.

Analysts point to dedollarization in central banks of developing countries as the most likely path to reaching $3000 per ounce of gold. This would lead to a doubling of gold purchases by central banks and shift the focus of demand from jewelry to gold as the main driver. Central bank gold purchases have reached record levels in recent years, aiming to diversify their reserves and reduce credit risk. Leading this trend are the central banks of China and Russia, as well as India, Turkey, and Brazil, actively increasing their gold bullion purchases. According to the World Gold Council, global central banks have maintained a level of net gold purchases exceeding 1000 tons for two consecutive years.

In the context of a global recession, a deep economic downturn could force the United States Federal Reserve to drastically cut rates, which, in turn, could be the reason for gold prices to rise to $3000. Gold traditionally exhibits an inverse correlation with interest rates, becoming a more attractive asset compared to fixed income in a low-rate environment.

Stagflation, combining high inflation with economic slowdown and rising unemployment, could also trigger a rise in gold prices, despite the low likelihood of such a scenario. Gold is perceived as a safe haven in periods of economic instability, attracting investors looking to avoid risks. In addition to the above factors, Citi suggests that the baseline scenario for gold involves reaching a price of $2150 per ounce in the second half of 2024, with an expected average price just over $2000 per ounce in the first half of the year. Record prices may be achieved by the end of 2024.

Although geopolitical tensions in the Middle East provide support for gold prices, a more significant price increase is restrained by the prospect of long-term interest rate hikes in the US.

Traders are lowering expectations regarding the Federal Reserve's imminent rate cuts following reports of high inflation in the US, and statements from Fed officials reinforce assumptions about maintaining high interest rates over a longer period.

The outlook for gold in the near future remains uncertain, similar to the situation in the market for other precious metals. Prices for platinum and silver show a decline, and copper experiences a slight drop in price, despite a reduction in the base interest rate in China, the largest importer of the metal.

In the context of the oil market, analysts consider a scenario where oil prices could once again reach $100 per barrel, considering risks associated with geopolitical tensions, actions by OPEC+, and possible supply disruptions from key oil-producing regions. Tensions in the Middle East, particularly the conflict between Israel and Hamas, and increasing tension on the border between Israel and Lebanon highlight potential risks for oil suppliers in the OPEC+ region.

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InstaForex Gertrude · Guru

Nikkei Hits New Highs: How Nvidia Became the Driving Force Behind the Semiconductor Industry's Growth

A landmark milestone was recorded in the Japanese stock market on Thursday: the Nikkei average breached the threshold set in December 1989, thanks to a significant rise in the share prices of companies operating in the microelectronics sector. This leap was driven by the superior earnings forecasts of American chip giant Nvidia, surpassing market expectations.

The Nikkei index reached 39,029.00, updating the historical high of 38,957.44 set on the last trading day of 1989, when the Japanese economy was at the peak of the "bubble." This was made possible by low asset valuations and corporate reforms, which attracted the attention of foreign investors looking for alternatives to weakening Chinese markets. Since January 2023, the index has jumped by 52%, showing impressive growth.

It took 34 years to recover from the downturn, a record period for a major market, surpassing Wall Street's recovery from the Great Depression by ten years.

To date, the index has shown a growth of almost 17% after a 28% increase in 2023, leading among major Asian exchanges. While the Nasdaq technology index grew by 43% last year and by 6% this year.

The Nikkei rally successfully resists recession in Japan, military conflicts in Europe and the Middle East, global inflationary pressure, and rising interest rates worldwide. Trading activity and a weak national currency contributed to increased exporter revenues, protecting the market from a decline in domestic demand.

The implementation of corporate reforms in Japan, including share buybacks and reduction of cross-shareholdings, as well as foreign investments such as Warren Buffet's significant investments in 2020, highlighted the attractiveness of valuations and contributed to the rally. Last year, the Japanese stock market received 6.3 trillion yen ($42 billion) in foreign investments, and in January of this year, 1.16 trillion yen.

The success of the Japanese market at the beginning of 2024 was also due to a strong earnings season, a drop in the yen's value, and expectations that the Bank of Japan will continue its ultra-loose monetary policy. Analysts raised their year-end forecasts from 35,000 to 39,000, noting the potential for further growth.

Comparing the current market situation to the boom of the 1980s and the subsequent crash, which led to a prolonged period of deflation, there is no fear of a new crisis today, as inflation is controlled at just over 2%, and company incomes continue to grow.

Companies like Fast Retailing Co (owner of Uniqlo), chipmakers Advantest Corp and Tokyo Electron have become the backbone of the current rally, unlike past decades when bank and real estate stocks were in focus.

The growth of the Japanese market is also supported by robust corporate reforms and opportune timing for growth amidst a downturn in China. While the Nikkei index is on the rise, indexes in Hong Kong and China are experiencing a downturn, attracting investments to Japan.

Corporate cash reserves and household savings in Japan also have the potential to stimulate stock price growth, encouraging their entry into the market.

A 6% increase in Nvidia shares after a revenue forecast exceeding expectations highlighted the company's steady demand for chips, becoming a key factor for the market. Shares of Tokyo Electron and Advantest, along with other companies in the microelectronics sector, showed significant growth, contributing to the overall success of the Nikkei index and demonstrating a healthy dynamic in the industry.

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InstaForex Gertrude · Guru

THE MARATHON CONTINUES: S&P AND DOW SET NEW RECORDS, NVIDIA STOCK KEEPS UP ITS MOMENTUM

According to the FedWatch Tool by CME Group, Fed funds futures show a 52.6% probability of rate cuts in June and a 35.5% probability of keeping them at current levels, which is a sharp change compared to the probability of cuts in March, which stood at 62%.

The pan-European STOXX 600 index (.STOXX) rose by 0.43%, continuing its fifth consecutive week of gains and reaching a new record closing level. The French CAC40 index (.FCHI) and the German DAX index (.GDAXI) also closed at new record levels. The dollar is poised for its biggest weekly decline in 2024 as investors slow their pace and await further cues regarding the global economy.

The dollar index increased by 0.029%, while the euro decreased by 0.03% to $1.082.

Regarding European data, sentiment among German businesses in the largest economy in Europe unexpectedly declined in December, according to a survey by the Ifo Institute.

Yields on German bonds continue to rise for the third consecutive week as economic data and statements from central bank officials undermine investors' hopes for a swift interest rate cut by the European Central Bank this year.

The Japanese stock market was closed due to a holiday on Friday, but Nikkei futures rose by almost 1%, suggesting that Japanese stocks will continue their record growth next week.

Chinese stocks fluctuate between gains and losses. The Shanghai Composite index (.SSEC) rose above the key psychological level of 3,000 points. For the week, it rose by 4.6%, climbing approximately 10% from a five-year low set over two weeks ago.

The Hang Seng index (.HSI) in Hong Kong fell by 0.1%.

Data released on Friday showed that new home prices in China declined in January for the seventh consecutive month, causing instability in sentiment as policymakers' efforts to restore trust in the debt-laden sector are slowly progressing.

The yield on two-year Treasury bonds, reflecting expectations regarding interest rates, fell by 2.2 basis points to 4.692%, while the yield on benchmark 10-year bonds decreased by 7.5 basis points to 4.252%.

10-year bond yields reached a three-month high at 4.3540% overnight. Futures for US crude oil fell by $2.12 to $76.49 per barrel, while Brent crude oil prices dropped by $2.05 to $81.62 per barrel. Gold prices are poised for a weekly gain, thanks to the weakening dollar. Futures for US gold rose by 0.9% to $2049.40 per ounce.

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InstaForex Gertrude · Guru

EUR/USD OUTLOOK: DOLLAR MAY FALL INTO BULLISH TRAP

Today's focus is on crucial economic indicators and events that could significantly impact the financial markets. The spotlight is on the US GDP data for the fourth quarter, providing insights into the country's economic performance. Additionally, preliminary statistics on the trade balance for goods and speeches by influential Fed representatives - Bostic, Collins, and Williams - are on the agenda. In the Eurozone, the economic sentiment index for February has been released, offering a comprehensive view of the current economic climate in the region. Looking ahead to the end of February, a meeting of finance ministers and central bank governors from G20 countries is scheduled for the 28th and 29th. This gathering will bring together global financial leaders to discuss key economic issues that could impact financial markets. On Thursday, attention will shift to the core US Personal Consumption Expenditures (PCE) price index, a pivotal measure for assessing inflation. Traders will carefully analyze this data to formulate potential trading strategies as the dollar index fluctuates. In Wednesday's trading, the dollar index regained control at 104.0, despite weak industrial orders data in the United States. Traders are eagerly anticipating new information on inflation, which could hint at the Federal Reserve's possible timeline for interest rate adjustments. The unexpected drop in US consumer confidence to 106.7 points in February, contrary to the expected rise to 115.0, has limited the dollar's strengthening. Additionally, statistics reveal a record monthly decline in new orders for durable goods in January, down 6.1% from December, surpassing analysts' expectations of a 4.5% decline. Bloomberg economists have revised their forecast for US economic growth in 2024 to 2.1%, reducing the likelihood of a recession to 40%. The US economic growth rate, updated on Wednesday, showed a year-on-year increase of 3.2% in the fourth quarter, slightly lower than the 3.3% advance estimate, with the downward revision attributed to rising private sector inventories. The dollar retreated from its intraday high following mixed second US GDP data, emphasizing the market's sensitivity to economic indicators and the potential impact on currency valuations. Technical outlook The dollar index surged, catching some bearish investors off guard. Despite this, the path to a substantial recovery appears challenging, given the hurdles posed by the latest US GDP data and its components. The Federal Reserve, led by Jerome Powell, has consistently emphasized its reliance on economic data. Presently, the data suggests a potential need for further rate hikes, a development conflicting with market expectations. This discrepancy may cool sentiment as the Fed evaluates the extent of potential disappointment. Examining the technical landscape, the 100-day simple moving average (SMA) near 104.00 has been tested, with its resistance being overcome. However, there is a looming risk of a bull trap formation. A breakthrough at 104.60 for the USD would pave the way to the next significant resistance levels at 105.12, followed by 105.88. Looking ahead, a shift in market expectations for a delayed Fed rate cut until late 2024 could bring the 2023 high at 107.20 back into relevance. In the face of sustained selling pressure, support may weaken, potentially leading to further declines to 103.16, marked by the 55-day SMA, before testing the crucial level of 103.00. Monitoring these technical and fundamental factors is essential for a comprehensive assessment of the dollar's trajectory in the current market environment.

In recent developments, it's notable that negotiations in the US Congress aimed at preventing a government shutdown and providing assistance to Ukraine, Israel, and Taiwan did not yield an agreement between Republicans and Democrats. The potential for a government shutdown looms, which could trigger a decline in risk asset markets while bolstering the position of the dollar. Market sentiment is also influenced by the anticipated likelihood of a 25 basis point Fed rate cut to 3% at the March meeting, with a 21% chance of a similar decision at the April-May meeting. On the international front, Germany, France, and Spain are set to report inflation data on Thursday, preceding eurozone statistics scheduled for Friday. ECB officials remain cautious about rapidly easing monetary policy in the eurozone. Christine Lagarde highlighted stable wage growth in the region, and Yiannis Stournaras from the ECB's executive board ruled out interest rate cuts before June. In Germany, the GfK consumer sentiment index continues to show negative readings, reaching -29.0 in February compared to -29.6 in January. German citizens persist in viewing cost-saving as a prudent strategy in the face of rising prices and more pessimistic forecasts for the national economy this year. Furthermore, lending to households in the eurozone recorded a mere 0.3% year-on-year growth in January, marking the slowest pace since March 2015. This underscores a notable deceleration in economic activity in the eurozone amid ECB rate hikes. Monitoring these diverse factors provides a comprehensive understanding of the dynamic forces shaping the current economic landscape. Euro's weakness The EUR/USD pair declined to the psychological level of 1.0800 amid the dollar's uptrend and deterioration of the consumer sentiment in the euro zone. These signals indicate that the euro's recovery cycle may be completed.

The preceding day saw the currency pair reaching its peak at 1.0866, only to experience a subsequent decline to 1.0813, triggered by a dip in the European Commission's Economic Sentiment Index (ESI) for February to -9.5. This was against the forecast of -9.2 and the previous value of -9.3. The eurozone economy continues to grapple with challenges, and the decrease in economic sentiment indicators suggests that risks lean towards further deterioration in the short term. Although the euro has exhibited growth against the dollar since mid-February, primarily driven by the dollar's weakening due to early-year economic slowdown, the latest sentiment data emphasizes the challenging economic environment in the eurozone. This points to ongoing difficulties that may constrain the euro's potential for recovery. There is speculation that the ECB might opt for an interest rate cut earlier than June, which could limit the euro's growth prospects. Scotiabank observes a weakening of the euro around the 1.0850 mark, reinforcing bearish sentiment on short-term charts. A rebound above the 1.0835 resistance level could alleviate pressure on the euro, potentially guiding it towards higher ground around 1.0800. As the month concludes, additional pressure on the dollar is anticipated, confirming the technical nature of the recent dollar weakening rather than a shift in the fundamental trend, according to experts. Despite recent fluctuations, the prevailing trend suggests the dollar's upward trajectory. The dollar's downward trend is expected to be short-lived, considering the outperformance of the US economy and bond yields near three-month highs, which make the greenback appealing. Moreover, the Federal Reserve is not likely to implement interest rate cuts anytime soon, especially given the more accommodative policies pursued by other major central banks globally. Stronger-than-expected data from the US and the cautious stance of Fed officials against premature policy easing contribute to the likelihood of a revision in market expectations, potentially leading to further gains for the dollar following the ongoing consolidation period.

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InstaForex Gertrude · Guru

AHEAD OF THE STORM: DOLLAR GAINS STRENGTH, STOCKS LOSE GROUND ON US INFLATION

According to the latest data, economic growth in the United States for the fourth quarter of last year was revised slightly downwards, suggesting a possible weakening of economic momentum. This downturn could have long-term implications for overall economic stability and may influence policymakers' decisions regarding monetary policy.

During this period, Applied Materials, a leading supplier of equipment for semiconductor production, faced a decline in its stock value after receiving a subpoena from the Securities and Exchange Commission (SEC) of the USA. This highlights increased regulatory pressure on the technology sector, which could restrain investment potential and growth in this area.

Also noteworthy is the drop in shares of UnitedHealth, one of the largest providers of healthcare services in the U.S., following the announcement of an antitrust investigation. This event underscores growing concerns about market power concentration and its impact on consumers and pricing in key economic sectors.

Stock indices such as the Dow, S&P 500, and Nasdaq showed a decline, reflecting overall investor caution. This caution is intensified in anticipation of the release of key inflation data, which could significantly affect the future actions of the U.S. Federal Reserve System in regulating interest rates.

The Personal Consumption Expenditures (PCE) index, which is the preferred inflation indicator for the Federal Reserve, is expected to show an increase in prices, confirming the continuation of inflationary pressure in the economy. This, in turn, could lead to a reassessment of expectations regarding the pace and timing of changes in the Fed's key interest rate.

Stocks in the market have struggled to maintain an upward trend following a series of data publications, leading to a moderate decline after a prolonged period of growth based on optimism around the potential of artificial intelligence and outstanding quarterly performance by Nvidia. This period of growth was abruptly interrupted when data confirming the persistence of inflation began to emerge, causing investor concern and leading to a reassessment of their expectations regarding the future monetary policy of the Federal Reserve System.

Evidence of sustained inflation in recent reports on consumer and producer prices, along with statements from Federal Reserve officials, has led investors to contemplate the possibility of delaying the first rate cut to a later date, possibly until June instead of the previously expected March.

Keith Buchanan, a senior portfolio manager at GLOBALT Investments, expressed the opinion that the market may face a period of uncertainty as investors will need to closely monitor inflation trends and adjust to the Federal Reserve System's long-term policy and rhetoric. He emphasized that any signs of inflation resurgence would be met with particular caution by the market and could cause significant fluctuations in financial markets.

Against this backdrop, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite demonstrated a decline, reflecting the general sentiment of uncertainty among investors. These data indicate that despite confident growth in the previous quarter, the beginning of 2024 may be marked by a slowdown in economic activity.

In addition to PCE data, this week is also expected to see other important economic reports, including weekly data on unemployment claims and manufacturing activity indices. These reports will provide a more complete picture of the economy's state and help assess further interest rate dynamics.

Statements by the president of the Federal Reserve Bank of Boston, Susan Collins, and the president of the Federal Reserve Bank of New York, John Williams, indicate the Federal Reserve System's cautious approach to changing monetary policy. Both leaders highlighted the importance of careful analysis of economic data before making decisions that could affect the goals of maximum employment and price stability.

In summary, global stocks have shown a decline, the yield on treasury bonds has fallen, and the dollar has strengthened its positions ahead of the publication of key inflation data, which could significantly impact the future policy of the Federal Reserve System. These events highlight the complexity of the economic landscape and the importance of careful monitoring by investors and policymakers to adapt to changing conditions.

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IFX bella · Veteran Member

Forex Analysis & Reviews: Euro to suffer losses, dollar to edge higher

The European currency ended February with slight gains against the US dollar. However, this week, the EUR/USD pair risks resuming a decline ahead of the ECB's monetary policy meeting. If the regulator openly starts preparing the ground for rate cuts, the euro will face a steep sell-off.

ECB meeting: what to expect and prepare for? The European Central Bank will hold a monetary policy meeting on Thursday, March 7. The regulator is widely expected to keep interest rates unchanged, so all investors' focus will be on updated economic forecasts and any signals regarding the timing of rate cuts.

Market participants are leaning towards the ECB beginning to ease monetary conditions in the second half of the year, specifically at the June meeting. This scenario was reinforced by recent statements from European officials. Most members of the central bank called June the most likely month for rate cuts, emphasizing that premature actions could trigger another round of inflation. Meanwhile, price growth in the euro area continues to slow down steadily.

Data published last week showed that annual inflation fell to 2.6% in February from 2.8% a month earlier. Wage growth, one of the main indicators for the ECB in assessing inflation, also started to slow down but remained at a high level. This factor is currently preventing the regulator from a dovish policy shift, which, according to economists, poses a significant risk to the European currency. According to analyst Marios Hadjikyriakos, delaying interest rate cuts for too long could cause unnecessary damage to the European economy and lead to a situation where rates are eventually cut sharply and abruptly. This paints a grim picture for the euro, even if the ECB calls for patience this week. However, let's not jump ahead and focus on the near-term prospects of the European currency, which depend on the ECB's rhetoric at the upcoming meeting.

ING analyst Carsten Brzeski believes that the March meeting cannot be considered routine. As inflation in the EU continues to decline and the European economy remains weak, interest rate cuts will be the subject of heated debate. He is confident that persistent core inflation, uncertainty regarding wage dynamics, and enduring confidence in the EU economic recovery will not allow the regulator to cut rates in March. However, Brzeski believes that the central bank will definitely change its rhetoric, thus preparing the ground for rate cuts in June.

What should traders pay attention to during the ECB meeting? Here are three key points: Fresh inflation forecast Recall that in December, the ECB anticipated inflation to be at 2.7% this year and 2.1% next year. Any downward revision of the price growth forecast for 2024 and 2025 will likely open the door for earlier rate cuts in the EU, which could exert significant pressure on the euro.

A "balanced" risk assessment of the inflation outlook would be a strong signal in favor of rate cuts,. Brzeski noted. Changes to communication The ECB is not one of those regulators that quickly change its policy stance. It took several months to move from "we didn't even spell 'rate cuts" to "it is too early to discuss rate cuts." But if this time things are different, the euro is doomed to fall. If the bank says that members "had a first discussion on preconditions for rate cuts" or "we decided to start this discussion at the next meeting", this would mark a further shift in the direction of policy easing, ING believes.

Recession concerns Currently, the eurozone economy is not in a recession, but concerns about a slowdown in economic growth persist. Last year, Germany's economy, the largest in the EU, was particularly hard hit. The slowdown in global trade severely damaged its export-oriented business model. If the regulator voices concerns about a further downturn in the region at the March meeting, it could fuel speculation about a deeper ECB cut this year. Currently, the market expects the EU rates to be cut by 90 bps by the end of the year. A similar reduction is forecasted in the US as well. However, if the forecast regarding European rates is raised, EUR/USD is set for an inevitable fall. The American economy looks much more resilient at the moment, leading to speculation that the Fed could avoid a pivot this year. Why does the dollar have a better chance? With a strong US economy, the dollar is currently the most effective major currency this year.

Since the beginning of January,its exchange rate has added almost 3% against its main competitors. Gloomy economic prospects elsewhere also favor the dollar. The UK and Japan have entered a technical recession, the euro area is plagued by stagnation, and China is still grappling with a real estate market crisis. As we see, there is simply no alternative to the dollar at this stage, and this week's events may further underscore the dominant role of the American currency. On Wednesday and Thursday, all eyes will be on Fed Chair Jerome Powell's speech to Congress. The policymaker's assessments regarding further economic prospects in the US will be of crucial importance to the market. If the head of the Fed expresses optimism, it could further dampen expectations regarding the Fed's future dovish policy, thus supporting the dollar. On Friday, traders will shift their focus to the most important event of the week - the release of the latest US employment report.

Economists expect another round of robust job data, confirming that the American labor market remains in good shape. This could also strengthen investors' belief that the Fed will not rush to cut rates this year, giving a boost to the greenback across the board, including against the euro. Currently, investors have almost entirely ruled out a cut in the US in March and April. Most market participants expect the Fed to start cutting rates at the June meeting. However, some analysts believe that this may happen much later or not at all this year. For example, economist Torsten Slok holds such a view. In support of his theory, the expert presents 10 arguments: The American economy is not only maintaining its pace but also gaining new momentum, with improved growth forecasts. Indicators tracking inflation trends continue to rise. The core inflation rate closely monitored by Federal Reserve Chair Jerome Powell is also increasing. The US labor market remains resilient. Surveys among small business representatives indicate their plans to raise product prices. Research in the manufacturing sector shows an increase in paid prices, which is a harbinger of inflation. A similar trend can be seen in the service sector. Surveys among small businesses show that more and more employers plan to increase wages. Landlords are raising rates, and the cost of housing continues to rise. Financial conditions in the country continue to improve, creating a favorable economic environment. Therefore, if traders receive further evidence this week that the American economy is on the rise, it may cause investors to abandon forecasts of an imminent rate cut in the US. In such a scenario, the dollar has a chance to gain strong upside momentum against the euro.

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IFX bella · Veteran Member

Forex Analysis & Reviews: Bitcoin vs. S&P 500: who will win in anticipation of economic data?

Wall Street securities posted declines at the end of trading on Monday, missing previous strong gains. Meanwhile, U.S. Treasury bond yields rose amid investor expectations of key employment data and Federal Reserve Chairman Jerome Powell's speech to Congress later this week.

Bitcoin has been at the center of the action, helped by its incredibly sharp rise and nearing its first record high since November 2021. At the same time as European stocks have failed to come close to their previous performance, the major US stock indices have also failed to break through their ceiling and push higher. The three major US indices fought desperately to rise over the latter part of the session, but failed to show positive momentum in the final hour.

The S&P 500 index showed a moderate decline, while the Nasdaq and Dow indices registered more pronounced declines. Continued gains in shares of chip makers such as Nvidia (NVDA.O) helped the S&P 500 Index set new intraday trading records during the session as investors continued to bet on demand for artificial intelligence (AI)-enabled products, although they were generally cautious ahead of economic data. The S&P 500 Communication Services Index (.SPLRCS) was the underperforming sector on the list, down 1.5%, while the Defense Index (.SPLRCU), which added 1.6%, posted the largest positive gain of the day. In contrast, Apple (AAPL.O) was negative, down 2.5% after a $2 billion EU antitrust fine barred Spotify (SPOT.N) and other music streaming services from informing users about payment options outside its App Store.

Based on the words of Scott Wren, senior global market strategist at Wells Fargo Investment Institute, investors were on the lookout for information on the health of the U.S. economy from key monthly data such as services sector data due out on Tuesday and non-farm payrolls data due out on Friday.

The Nasdaq started the month by incredibly breaking its own record on Friday during the trading day, while also ending trading at its highest level in two consecutive days as the artificial intelligence-driven technology rally continues to draw attention on Wall Street. Shares of artificial intelligence server maker Super Micro Computer (SMCI.O) were up 18.6%, and shares of footwear maker Deckers Outdoor (DECK.N) were up 2.6% ahead of its inclusion in the S&P 500 index. Securities of retailer Macy's posted an excellent 13.5% gain as real estate investment holdings Arkhouse Management and Brigade Capital Management raised their offer to buy the supermarket chain.

Investors are wary of Powell's upcoming two-day congressional testimony on Wednesday and Thursday, the European Central Bank's policy decision and the Labor Department's important February employment report, which will be released early Friday morning. On average, analysts believe the U.S. economy added 200,000 jobs in February and the unemployment rate remained at 3.7%. The Dow Jones Industrial Average (.DJI) fell 97.55 points, or 0.25%, to 38,989.83, the S&P 500 Index (.SPX) lost 6.13 points, or 0.12%, to 5,130.95, and the Nasdaq Composite (.IXIC) fell 67.43 points, or 0.41%, to 16,207.51. European stocks closed just below an all-time high as investors digested recent gains and waited in anticipation for the European Central Bank's monetary policy meeting on Thursday. The pan-European STOXX 600 index (.STOXX) lost 0.03%, while the MSCI World Stock Index (.MIWD00000PUS) lost 0.01%.

Emerging-market stocks rose 0.51%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed 0.57% higher and Japan's Nikkei (.N225) rose 0.50%. Bitcoin rose to a more than two-year peak. The cryptocurrency was last up 8.1% to $67,655, approaching the intraday record reached in November 2021. The dollar was little changed against a basket of global currencies.

The dollar index (.DXY) fell 0.03%, while the euro rose 0.16% to $1.0854. The Japanese yen weakened 0.27% against the U.S. dollar to 150.53 per dollar, while the pound sterling last traded at $1.2689, up 0.31% for the day. U.S. Treasury bond yields rose. The benchmark 10-year bond was last down 9/32 to 4.217% from 4.182% late Friday night. The 30-year bond was last down 14/32 at 4.3522% from 4.327% late Friday night. Oil prices reversed earlier gains as demand concerns offset a widely expected OPEC+ decision to extend production cuts. U.S. crude oil fell 1.54% to settle at $78.74 a barrel, while Brent settled at $82.80, down 0.9% for the day. Gold jumped as market participants bolstered their bets that the Federal Reserve will start cutting interest rates in June. Spot gold added 1.6 percent to $2116.77 an ounce.

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IFX bella · Veteran Member

Forex Analysis & Reviews: Wall Street comes alive: Powell talks about lowering rates

On Wednesday, the leading indexes on Wall Street ended trading in the plus side, motivated by economic indicators and statements by Federal Reserve (Fed) Chairman Jerome Powell, which confirmed speculation about a possible lowering of the federal benchmark interest rate this year. During Wednesday's speech, Powell expressed his view on the Fed's upcoming rate cut, emphasizing that the U.S. economy remains stable and a recession seems unlikely. However, he refrained from making specific promises about the timing of monetary easing, citing a lack of confidence in inflation dynamics.

In preliminary comments announced ahead of his speech to the U.S. Congress, Powell said inflation has "come down significantly" since hitting a 40-year peak in 2022. However, he said, additional confidence in a further decline in inflation is needed to begin the process of lowering interest rates. In addition to Powell's remarks, Mark Luschini, who is a senior investment strategist at Philadelphia-based Janney Montgomery Scott, emphasized that Wednesday's economic reports further bolstered expectations for lower interest rates and also boosted confidence in the state of the labor market. Fresh statistics indicated that the U.S. private sector job gains in February were slightly lower than expected. Job Openings and Labor Turnover Survey (JOLTS) data for January showed a slight decline in the number of job openings and a decrease in the pace of hiring, indicating a gradual improvement in the labor market. The upcoming nonfarm payrolls report for February, due on Friday, is expected to shed light on the current state of the labor market and the potential impact on economic policy. The Dow Jones Industrial Average (.DJI) index registered an increase of 75.86 points or 0.20% to close at 38,661.05. The Standard & Poor's 500 Index (.SPX) gained 26.11 points or 0.51% to close at 5,104.76, while the Nasdaq Composite (.IXIC) index moved up 91.96 points or 0.58% to close at 16,031.54. On the previous trading day, Tuesday, indexes on Wall Street experienced a drop of more than 1% due to a decline in the value of large-capitalized stocks and in anticipation of Powell's remarks, which were eagerly awaited by investors. On Wednesday, nine of the eleven key S&P 500 industry sectors ended the day in the green. Leading the way were the utilities sector (.SPLRCU), whose shares jumped nearly 1%, and the information technology sector (.SPLRCT), up 0.9%.

The Durable Goods sector (.SPLRCD) was the least dynamic, declining by 0.4%. Chip makers stood out among the rest, rebounding from the previous day's decline: the Philadelphia Semiconductor Index (.SOX) rose 2.4%, hitting an all-time closing high for the fourth time in the past five trading sessions. Tesla (TSLA.O) was among the companies pressuring the consumer staples sector, with shares falling 2.3% and notable declines for the third straight session. An analyst at Morgan Stanley, whose opinion the market is paying close attention to, adjusted downward the stock's target price, pointing to continued waning interest in electric vehicles in leading markets, including China, even as prices have fallen markedly. Additionally, the Baird specialist expressed concerns about Tesla's first-quarter earnings, suggesting that delivery volume forecasts may still need to be adjusted downward. Shares of Chinese company JD.com, which is traded in the U.S. market, posted a significant rise of 16.2% after the e-commerce company announced quarterly revenue that exceeded analysts' expectations and an expansion of its share repurchase program. Shares of cryptocurrency-related companies also saw a rebound. Specifically, shares of Coinbase Global (COIN.O) were up 10% and MicroStrategy (MSTR.O) shares were up 18.6%. Shares of CrowdStrike Holdings (CRWD.O) jumped 10.8% as the company predicted full-year results that beat Wall Street analysts' forecasts. That was driven by increased cybersecurity spending by companies in response to growing threats on the Internet. At the same time, shares of their competitor, Palo Alto Networks (PANW.O), showed a decline of 4%.

The European STOXX 600 Index (.STOXX) was up 0.39%, while the MSCI Global Equity Index (.MIWD00000PUS) was up 0.59%. Emerging market equities also performed positively, rising 0.67%. MSCI's broad index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) finished 0.78% higher. While Japan's Nikkei index (.N225) declined slightly, losing 0.02%. Bitcoin, after hitting record highs on Tuesday but subsequently pulling back, rallied again. At the last mark, the cryptocurrency was up 5.6%, reaching a value of $66,884. The U.S. dollar showed a decline compared to major world currencies. The dollar index (.DXY) lost 0.4%, while the euro added 0.38% to reach $1.0896. The U.S. dollar showed a decline against major world currencies. The dollar index (.DXY) lost 0.4%, while the euro added 0.38% to settle at $1.0896. The Japanese yen strengthened 0.45% against the U.S. dollar, settling at 149.39 per dollar. The British pound sterling was last seen at $1.2735, reflecting an increase of 0.25% on the day. The yield on 10-year U.S. Treasuries fell to a one-month low. The price of benchmark 10-year government bonds last rose 8/32, pushing the yield down to 4.1078% from the 4.137% recorded at the end of the day on Tuesday. The price of the benchmark 30-year government bond also increased, most recently by 18/32, bringing its yield down to 4.2406% from 4.274% recorded at the end of the previous day. Oil prices experienced an uptrend after U.S. oil inventory data showed a smaller-than-expected increase and in light of Powell's promise of lower interest rates. US West Texas Intermediate (WTI) crude oil rose 1.25% to settle at $79.13 per barrel, while Brent rose to $82.96, marking a 1.12% increase for the day. Gold continued to set new records for the second consecutive day, driven by expectations of monetary policy easing in the US. The spot gold price rose 0.9% to $2146.29 per ounce.

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IFX bella · Veteran Member

US election: Wall Street at a crossroads

The S&P 500 and Nasdaq indices ended the trading session in the negative on Friday, retreating from the record highs reached during the day. This decline occurred against the backdrop of a decline in the sector of chip manufacturers and mixed data on the labor market, reflecting the exceeding of expectations for the number of jobs created while the unemployment rate rose.

During the trading session, the S&P 500 and Nasdaq indices briefly hit all-time highs, but by evening their dynamics changed to decline. The Philadelphia Semiconductor Index (.SOX) experienced a noticeable drop, losing 4% by the close of the day after earlier reaching the day's high. Shares of Nvidia (NVDA.O), highly regarded in the market for its contributions to the development of chips for artificial intelligence, suffered a 5.6% loss, ending their six consecutive sessions of gains.

This was despite the fact that they were up more than 5% in early trading. Broadcom (AVGO.O) shares in the chipmaker index also experienced a significant decline of 7%, driven by low investor expectations for the company's full-year outlook. In addition, Marvell Technology (MRVL.O) lost 11.4% in value after its first-quarter guidance fell short of market expectations due to weaker demand.

The stock posted gains at the open after data showed that U.S. job growth accelerated in February, with job openings in the nonfarm payroll sector rising by 275,000, exceeding analysts' forecasts for a gain of 200,000. At the same time, the January jobs data was downwardly revised. There is also an increase in the unemployment rate in February to 3.9% compared to the previous figure of 3.7%, which was maintained for three months. It should be noted that the rate of wage growth fell to 0.1% on a month-over-month basis. Brian Price, head of investment management at Commonwealth Financial Network, highlighted a trend toward more restrained spending on the part of consumers. This is reflected in shares of Costco Wholesale (COST.O), which posted a 7.6% decline as its quarterly sales volumes fell short of expectations due to moderate demand for higher-priced goods.

Nevertheless, Price emphasized that overall market sentiment remains optimistic with the anticipation of continued growth in the absence of any negative factors. He expressed his belief that the market is focused on the continuation of the favorable situation: inflation is expected to be maintained at a moderate level and the Federal Reserve is expected to initiate a policy of easing economic conditions. Upcoming data for February, which will be released next week and include information on the consumer price index (CPI) and retail sales, will provide additional information that could influence the assessment of the possibility of lowering interest rates.

In a speech on Thursday, Jerome Powell, chairman of the Federal Reserve, shared his view that the central bank is nearing the point where it is confident enough that inflation is falling, allowing it to begin the process of lowering interest rates. While investors continue to analyze possible profits and keep an eye on monetary policy, they are also beginning to consider a new factor that could significantly impact market conditions this year - the upcoming U.S. presidential election in 2024.

In an address to the nation on Thursday, US President Joe Biden put forward a proposal to raise corporate taxes, while his predecessor and potential Republican Party rival, Donald Trump, earlier in 2017 passed legislation aimed at cutting taxes for companies and the wealthy. Biden also expressed pride in U.S. economic achievements during his presidency. It is difficult to determine how politicians' proposals and initiatives ahead of the election will affect asset market prices. The winner of the election is likely to face the challenge of dealing with a divided Congress, which could significantly complicate any legislative initiatives. This uncertainty does not stop analysts from trying to assess how political changes may interact with other key elements influencing market dynamics.

Such factors include increasing interest in the business outlook for artificial intelligence and adjusting expectations about when the Federal Reserve might begin easing monetary policy. The S&P 500 Index (.SPX) has made notable gains, up 7.4% YTD and near all-time highs. Polls show a tight contest between the 81-year-old Biden and 77-year-old Trump. Despite the U.S. economy performing better than most advanced economies, the American people generally express higher confidence in Trump's economic competence in polls. As part of his speech on Thursday, Biden unveiled an initiative to impose a 21% minimum tax on the profits of corporations whose revenues exceed $1 billion, building on the provisions of the 2022 Clean Energy Act.

In addition, he expressed his intention to reinstate his "billionaires tax" initiative, which would impose a minimum tax of 25% on the income of U.S. citizens whose wealth exceeds $100 million. Analysts note that the Republicans' success in the elections is likely to entail an extension of the 2017 tax cuts, which could lead to higher inflation. At the same time, the Democrats' victory will result in an increase in tax rates for households and corporations with high income.

The Dow Jones Industrial Average (.DJI) index of industrial companies closed down 68.66 points, or 0.18%, stopping at 38,722.69. The S&P 500 Index (.SPX) fell 33.67 points, or 0.65%, to settle at 5,123.69, while the Nasdaq Composite (.IXIC) fell 188.26 points, or 1.16%, to 16,085.11. Among the 11 key sectors in the S&P 500, the technology sector (.SPLRCT) posted the largest decline, losing 1.8%. It was followed by the consumer staples sector (.SPLRCS) with a 0.8% drop, where Costco made a significant contribution. Over the past week, the S&P 500 Index declined 0.26%, the Nasdaq fell 1.17%, and the Dow Jones lost 0.93%. Meanwhile, real estate stocks (.SPLRCR) were the biggest gainers, rising 1.1%.

Behind them are shares of energy companies (.SPNY), which grew by 0.4%. Shares of Gap (GPS.N) jumped 8.2% as the retailer beat Wall Street analysts' forecasts for fourth-quarter results. That was due to increased demand for a revamped assortment of Old Navy and Gap-branded merchandise during the holiday season, as well as lower volumes of discounted merchandise.

On the New York Stock Exchange, the number of stocks that increased in value outnumbered those that declined by a ratio of 1.25 to 1, with 708 new highs versus 48 new lows. On the Nasdaq exchange, the number of stocks that increased totaled 2,086, while 2,192 declined, showing a predominance of declining over rising stocks with a ratio of about 1.05 to 1. The S&P 500 index marked 65 new 52-week highs and recorded no new lows, while the Nasdaq recorded 351 new highs and 83 new lows. Trading volume on U.S. exchanges reached 12.29 billion shares, which compares with an average of 12.08 billion over the past 20 sessions.

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IFX bella · Veteran Member

Oracle Changes the Game: S&P 500 Hits Unprecedented High

On Tuesday, the American stock markets showed significant growth: the S&P 500 index set a historic record, thanks to the rise in Oracle's stock price, while the consumer price data failed to undermine investors' expectations regarding the possible lowering of interest rates in the coming months.

Oracle's (ORCL.N) shares rose by 11.7% and reached an all-time high the day after the company published positive quarterly results and announced an upcoming joint statement with Nvidia (NVDA.O), a leader in the production of chips for artificial intelligence. Nvidia's shares increased by 7.2%, and the semiconductor index (.SOX) rose by 2.1%, halting a two-day streak of declines.

The U.S. Department of Labor announced that the Consumer Price Index (CPI) jumped by 0.4% last month, following a 0.3% increase in January. Excluding volatile items such as food and energy resources, the core consumer prices also showed a growth of 0.4% in February, mirroring January's outcome.

Over the 12 months ending in February, the CPI rose by 3.2%, slightly exceeding the forecast of 3.1% after a 3.1% increase in January. On Tuesday, the global stock index was on track to recover after two days of declines, stretching along with the yield on government bonds.

This came following the publication of data confirming that inflation in the U.S. remained stable in February. These details hint at the possibility that the Federal Reserve might continue to keep interest rates at a heightened level for longer than previously anticipated.

Investors have embraced the idea that the key question is not when the Federal Reserve will start to cut rates, but how aggressive these cuts will be. The question of whether this will happen in May, as many initially hoped, or be delayed until September, is not considered decisive by experts. Oliver Pursche, Senior Vice President and Advisor at Wealthspire Advisors in Westport, Connecticut, expressed this viewpoint.

According to the CME FedWatch Tool, traders currently estimate a 70% chance of the first interest rate cut occurring in June, slightly less than the previous estimate of 71% before the inflation report was published. "An inflation rate exceeding expectations indicates consumer well-being and shows the economy's 'pricing power' that businesses are leveraging.

Analysis of other economic indicators suggests that this is not having a negative impact," noted Rob Haoworth, a senior investment strategist at a bank's asset management division in Seattle. The Dow Jones Industrial Average (.DJI) rose by 235.74 points, or 0.61%, reaching 39,005.4. The S&P 500 (.SPX) increased by 57.3 points, or 1.12%, to 5,175.24, while the Nasdaq Composite (.IXIC) grew by 246.36 points, or 1.54%, closing at 16,265.64.

The producer price index report is expected to be published at the end of this week. Boeing's (BA.N) shares fell by 4.3%. On Tuesday, Boeing informed its employees through an internal memo about the implementation of weekly compliance checks at each work site of the 737 production plant, as well as the introduction of additional equipment inspections with the aim of minimizing product quality issues.

The Federal Aviation Administration (FAA) of the U.S. imposed restrictions on Boeing's production following an incident where a panel peeled off in flight on a new Alaska Airlines 737 MAX 9 airplane on January 5th. U.S. airlines also expressed concerns that their strategies for expanding transport capacity might be jeopardized due to delays in the delivery of airplanes from Boeing.

Shares of Southwest Airlines (LUV.N) fell by 14.9%. Trading volume on U.S. exchanges reached 10.97 billion shares, compared with the usual average level of 12.07 billion over the last 20 sessions. On the New York Stock Exchange (NYSE), the number of advancing stocks exceeded the number of declining ones in a ratio of 1.28 to 1; on Nasdaq, the ratio was 1.20 to 1 in favor of declines. The S&P 500 index recorded 48 new 52-week highs and showed no new lows; the Nasdaq Composite index registered 59 new highs and 118 new lows.

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IFX bella · Veteran Member

Forex Analysis & Reviews: The inflation effect: how news affects stocks, the dollar and bond yields

The Producer Price Index (PPI) for final demand increased by 0.6% last month, exceeding the growth forecast of 0.3% predicted by economists surveyed, after an unreviewed rise of 0.3% in January, according to the Labor Department. Data on consumer inflation at the beginning of this week also showed some resilience in inflation levels. Further reports revealed that retail sales in the United States bounced back last month, increasing by 0.6%, but fell short of the 0.8% estimate. Meanwhile, the number of initial weekly unemployment claims dropped to 209,000, below the forecast of 218,000.

The data indicated that producer prices in the U.S. in February rose more than expected, driven by increased costs of goods such as gasoline and food. Interest rate-sensitive sectors like utilities (.SPLRCU) and real estate (.SPLRCR) were among the weakest of the day: real estate fell by 1.6%, and utilities by 0.8%. Nvidia (NVDA.O) shares fell by 3.2%, and the semiconductor index (.SOX) declined by 1.8%. Over the week, the index dropped by 3.5% as investors took profits following a recent sharp increase.

Since the beginning of the year, the S&P 500 index has increased by about 8%. Shares of the small-cap Russell 2000 index (.RUT) fell by 2% for the day, lagging behind the overall market. Shares of Robinhood Markets (HOOD.O) rose by 5.2% after the trading app operator reported a 16% increase in custodial assets in February. The trading volume on U.S. exchanges amounted to 13.1 billion shares, compared to the average of 12.1 billion for the entire session over the last 20 trading days. Decliners outnumbered advancers on the NYSE by a ratio of 3.77 to 1; on the Nasdaq, the ratio favoring decliners was 3.08 to 1. The S&P 500 recorded 39 new 52-week highs and no new lows; the Nasdaq Composite reported 57 new highs and 186 new lows. The Dow Jones Industrial Average (.DJI) fell by 137.66 points, or 0.35%, to 38,905.66, the S&P 500 (.SPX) lost 14.83 points, or 0.29%, to 5,150.48, and the Nasdaq Composite (.IXIC) dropped 49.24 points, or 0.30%, to 16,128.53. Ahead of next week's Federal Reserve policy meeting, where a rate cut is nearly ruled out, the market reduced the chances of a cut at the June meeting, expecting a reduction of at least 25 basis points at a 59.9% likelihood, according to CME's FedWatch Tool, compared to 81.7% a week ago.

Bank of Japan officials will also meet next week. Officials, including Governor Kazuo Ueda, have attempted to temper expectations for an imminent departure from negative interest rates, which led to the yen's worst weekly performance in a month. The yield on 10-year bonds was expected to see the largest one-day rise since February 13th. The MSCI global stock index (.MIWD00000PUS) fell by 2.75 points, or 0.35%, to 772.53, while the STOXX 600 index (.STOXX) closed down 0.18% after reaching its third consecutive intraday record high. The overall European index, FTSEurofirst 300 (.FTEU3), lost 3.37 points, or 0.17%. The dollar index rose by 0.53% to 103.29, and the euro fell by 0.5% to $1.0891. Against the Japanese yen, the dollar strengthened by 0.32% to 148.22.

The yen briefly strengthened against the U.S. dollar after Jiji news agency reported that the Bank of Japan had begun taking steps to end its negative interest rate policy at the meeting on March 18-19. Investors are assessing the likelihood of a policy change this month, especially after news of significant wage increases at some of Japan's largest companies during this year's annual wage negotiations. As for commodities, U.S. oil rose by 1.93% to $81.26 a barrel, and Brent oil reached $85.42 a barrel, up 1.65% for the day, marking the highest settlement price since November 6th, following the latest International Energy Agency (IEA) report predicting a tighter oil market in 2024.

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IFX bella · Veteran Member

Forex Analysis & Reviews: Wall Street's decline driven by tech sector and Fed rates

The global stock index also showed a decrease on Friday, setting a course for a weekly decline after seven consecutive weeks of gains, while the dollar strengthened, heading for its most significant weekly gain since mid-January as the latest US inflation data fueled new hopes for interest rate cuts.

Data released on Friday showed a slight increase in US import prices in February, as the rise in the cost of petroleum products was partially offset by modest growth in other areas, suggesting an improvement in the inflationary landscape. Stocks this week faced challenges after US consumer and producer price data indicated that inflation remains persistent, dampening expectations that the Federal Reserve would cut rates by its June meeting.

Market assessments of a Fed rate cut of at least 25 basis points in June stand at 59.2%, down from 59.5% in the previous session and 73.3% a week ago, according to CME's FedWatch Tool. The central bank is expected to maintain interest rates at its meeting next week, but investors will closely monitor the central bank's economic forecasts, including interest rate projections. On Wall Street, the Dow Jones Industrial Average (.DJI) fell by 190.89 points, or 0.49%, to 38,714.77, the S&P 500 (.SPX) lost 33.53 points, or 0.65%, to 5,116.95, and the Nasdaq Composite (.IXIC) dropped 155.35 points, or 0.96%, to 15,973.17.

Over the week, the S&P 500 lost 0.13%, the Dow dropped 0.02%, and the Nasdaq decreased by 0.73%. Additionally, a study by the University of Michigan showed its preliminary consumer sentiment and inflation expectations data barely changed in March, while a separate report indicated that US factory production in February increased more than expected. Adobe (ADBE.O) shares fell by 13.7% the day after the company forecasted second-quarter revenue below analysts' estimates, citing competition and weak demand for photos, illustrations, and videos integrated with artificial intelligence. Among other declining stocks, Ulta Beauty (ULTA.O) shares fell by 5.2% after its projected annual profit came in below Wall Street estimates, as rising supply chain costs and intensified promotional activities negatively impacted its profits. The S&P 500 technology index (.SPLRCT) dropped by 1.3% for the day, leading the downturn among sectors.

Shares of Microsoft (MSFT.O) fell by 2.1%, marking one of the index's most significant declines. The semiconductor index (.SOX) decreased by 0.5% on Friday, registering its most significant weekly percentage drop since the beginning of January. Announcements related to AI at Nvidia's (NVDA.O) GTC developers conference, scheduled for March 18-21, will be closely watched.

The Russell 2000 index of small-cap companies (.RUT) fell by 2.1% for the week. Friday's volume was the highest of the year on US exchanges, with 18.76 billion shares traded. The average full-session volume over the last 20 trading days was about 12.4 billion. Although Wall Street's AI-driven growth has stalled, the S&P 500 index has continued to rise by 7.3% since the beginning of the year. According to data released on Friday, US factory production in February grew more than expected, but the January figure was sharply revised downwards, as production continues to be constrained by higher interest rates. The dollar index gained 0.05% to 103.43, recovering some of the previous week's decline with a 0.71% increase, while the euro rose 0.06% to $1.0889 for the session. The sterling weakened by 0.13% to $1.273.

Against the Japanese yen, the dollar strengthened by 0.49% to 149.05, despite expectations that the Bank of Japan is expected to end its negative interest rate policy at its meeting next week.

The MSCI global stock index (.MIWD00000PUS) fell by 5.07 points, or 0.66%, to 767.58, heading for its third consecutive daily drop, the longest streak since the beginning of the year, and a 0.48% decrease for the week.

The STOXX 600 index (.STOXX) closed down by 0.32%, while the broader European index FTSEurofirst 300 (.FTEU3) fell by 7.42 points, or 0.37%. The yield on benchmark 10-year US Treasury bonds rose by 1 basis point to 4.308% after reaching 4.322%, the highest level since February 23.

The yield on 10-year bonds this week jumped by 22 b.p., the most significant increase since mid-October. The yield on 2-year Treasury bonds, which typically moves in step with interest rate expectations, rose by 3.9 basis points to 4.7297% and increased by 24.6 b.p. for the week, marking the biggest jump in two months. Oil prices fell a day after exceeding the $85 per barrel mark for the first time since November. Oil indices finished the week with a growth of more than 3%. U.S. crude oil decreased by 0.27% to $81.04 per barrel, and Brent crude fell by 0.09% to $85.34 per barrel.

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IFX bella · Veteran Member

Forex Analysis & Reviews: AI Powers Wall Street Growth Despite Fed's Caution

At the beginning of the week, Wall Street's key indices saw growth, thanks to the influence of large-cap companies like Alphabet and Tesla, which contributed to strengthening the Nasdaq's technology sector.

The market is also anticipating the upcoming meeting of the Federal Reserve System of the U.S., drawing investor attention. A significant boost to the market came from the announcement that Apple is discussing with Google the incorporation of the Gemini AI engine into the iPhone, which had a substantial impact on Alphabet's shares, the parent company of Google.

This innovation supported the communications services sector, which grew by nearly 3%, becoming the leader among the 11 key sectors of the S&P 500 and reaching its highest level since September 2021. Tesla (TSLA.O) shares demonstrated significant growth, increasing by 6.3%, and leading the S&P 500 companies in growth pace. This increase followed the company's announcement of imminent price hikes for the Model Y electric vehicles in certain European regions.

Nvidia (NVDA.O) shares also saw an increase, this time by 0.7%, but their closing was notably lower than the day's high. This event coincided with the start of the company's annual artificial intelligence developers conference, where the community anticipates new chip announcements from CEO Jensen Huang. Lindsey Bell, a leading strategist at 248 Ventures in Charlotte, North Carolina, highlights the growing dilemma for investors torn between optimism about AI applications in the tech sector and concerns over the upcoming Federal Reserve policy update.

"The market is eager to continue trading activity, yet the focus is on the Federal Reserve's actions this week," notes Bell, emphasizing the tension among investors ahead of crucial decisions. The Dow Jones Industrial Average gained 75.66 points (0.20%), closing at 38,790.43, while the S&P 500 increased by 32.33 points (0.63%), reaching 5,149.42.

In turn, the Nasdaq Composite added 130.27 points (0.82%), closing at 16,103.45. This marked the end of a three-day losing streak for Nasdaq. The Philadelphia Semiconductor Index gave up its preliminary gains and ended the day almost unchanged, while the S&P 500 technology sector grew by 0.5%. Among the 11 key S&P sectors, the most vulnerable to declines were real estate, sensitive to interest rate changes, and the healthcare sector, where the decrease was 0.02%. Higher-than-expected inflation figures led market participants to reassess expectations regarding how soon and aggressively the central bank will cut interest rates this year.

The change in perception was reflected in the decreased probability of rate cuts in June from the previous 71% to 51% in the short term, as indicated by CME FedWatch data. The speculation that the Federal Reserve might adopt a tough stance in its upcoming meeting poses risks for equity capital. "Today's growth gives investors a chance to lock in profits before the Fed potentially expresses a stance that is more likely to disappoint the market than provide confidence after recent gains," noted Samir Samana, a senior global market strategist at Wells Fargo Investment Institute in Charlotte.

In its latest statement on Monday, Goldman Sachs adjusted its forecasts, now expecting three interest rate cuts in 2024 instead of the previously predicted four, after actual inflation data showed higher than expected figures. "Given that market indicators are near recent highs, it's hard to imagine what could act as a catalyst for further growth. At the same time, it's not too hard to envision scenarios that could lead to investor disappointment," Samana points out, focusing on the actions of the Federal Reserve and the high valuations of technology companies' stocks. Nasdaq (NDAQ.O), the exchange trading shares of leading American technology giants, reported the resolution of a technical malfunction that disrupted trading operations two hours before opening on Monday, emphasizing that all systems are now functioning normally again. The company did not provide details regarding the severity of the issue, which marked the second technical glitch in recent months.

The official website statement mentioned that the incident was related to the order matching mechanism, i.e., the software systems processing buy and sell orders. Last year, its competitor, the New York Stock Exchange (NYSE), also experienced a technical malfunction, preventing auctions for a significant number of stocks from starting at the usual time. This led to extensive trading delays, confusion regarding the accuracy of stock order executions, and the temporary suspension of trading for more than 250 securities. Xpeng shares, traded on the American market, increased by 1.9% thanks to the company's ambitious plans to offer a more affordable range of electric vehicles amidst fierce competition in pricing. Boeing (BA.N) shares experienced a decline of 1.5% after media reports emerged that the company was summoned to federal court in Seattle. The summons was related to an incident on January 5, when an explosion of a door plug occurred during a flight operated by Alaska Airlines (ALK.N) involving a Boeing aircraft. Super Micro Computer (SMCI.O), a company that joined the S&P 500 index at the beginning of the week, lost its previous gains and ended the day down by 6.4%, marking the most significant percentage loss among the companies of the base index for the day.

Nevertheless, shares of companies that have recently shown sharp growth due to bets on their potential benefit from the development of artificial intelligence continue to remain positive since the beginning of the year, showing an increase of more than 252%. At the New York Stock Exchange, the day ended with 224 new highs and 58 new lows, while the number of stocks that rose exceeded the number that fell by a ratio of 1.17 to 1. On the Nasdaq exchange, the number of stocks that closed in the plus was 1905 versus 2400 that ended the day in decline, reflecting a predominance of the latter by approximately a ratio of 1.26 to 1.

The S&P 500 index recorded 41 new highs for 52 weeks and just one new low, while Nasdaq registered 102 new highs and 131 new lows. The trading volume on American exchanges reached 11.16 billion shares, compared with an average of 12.41 billion over the last 20 trading sessions.

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IFX bella · Veteran Member

Forex Analysis & Reviews: The Federal Reserve navigates interest rates: stocks are up, the dollar is on the decline

Global market indices rose, and the dollar halted its upward trajectory following the Federal Reserve's announcement of plans for three significant rate cuts this year, despite expectations of a slower decrease in inflation.

Jerome Powell, the Federal Reserve Chair, noted that despite recent high inflation figures, the main trend of easing price pressure remains unchanged. However, he emphasized that fresh economic data did not add confidence in conquering inflation. Shareholders positively received the Federal Reserve's decision to stay the course on planned interest rate cuts.

The global MSCI stock index reached a historic high, rising by 0.61%, thanks to the steady growth of stocks on Wall Street following the Fed's announcement. The Dow Jones Industrial Average increased by 1.03%, the broad-market S&P 500 index rose by 0.89%, and the Nasdaq Composite Index showed a growth of 1.25%. Irene Tunkel, a leading strategist for U.S. stocks at BCA Research based in Florida, noted, "The market feels relieved, seeing that the Fed still plans three rate cuts this year."

Expectations for rate cuts led to a decrease in the yield of government bonds. The yield on two-year Treasury notes decreased by 7.9 basis points to 4.6129%, while the yield on ten-year bonds fell by 1.5 basis points, reaching 4.281%. "It is particularly noteworthy that the Federal Reserve has significantly revised its GDP forecasts upwards not only for 2024, which was expected in light of the latest data, but also for 2025 and 2026," comments Ellen Heizen, the chief market strategist at F.L. Putnam Investment Management, located in Massachusetts. Following the Federal Reserve's meeting, the dollar lost ground.

The dollar index decreased by 0.433%, which contributed to a partial recovery of the Japanese yen. Its rate fell by 0.30% against the dollar, reaching 151.29 per dollar compared to the four-month low of 151.82, recorded earlier that same day. Most sectors in the S&P 500 index showed growth, with nine out of the eleven main industries demonstrating an increase in stock value.

Particularly, consumer sector stocks stood out, where growth was 1.5%, taking the lead in gains. The healthcare sector proved to be the least effective, showing a decline of 0.23%. In healthcare, notable decreases were observed in the U.S.-registered shares of BioNTech, which fell by 4.4% after announcing a decrease in revenue and profit for 2023 due to a focus on the development of cancer drugs.

Additionally, shares of COVID-19 vaccine manufacturers experienced a downturn: Moderna lost 1.9% in value, while Novavax dropped by 2.2%. A rise in the consumer goods sector was led by shares of Amazon.com, which increased by 1.3%. Furthermore, Tesla shares grew by 2.5% following news of a price increase for Model Y cars produced in China by 5,000 yuan ($694.55) starting April 1.

In addition to successes in the consumer sector, shares of Chipotle Mexican Grill rose by 3.5% after the board of directors announced a decision to conduct a 50-for-1 stock split. Shares of Equinix lost 2.3% in value following a report by research firm Hindenburg Research that it had taken a short position on this data center operator's stock. The Japanese yen faced challenges following the Bank of Japan's decision to raise interest rates for the first time in 17 years. Analysts believe this move contributes to maintaining a significant yield differential between U.S. Treasury bonds and Japanese government bonds, putting pressure on the yen. The European STOXX 600 index remained unchanged throughout the day, while shares of Kering, the owner of the luxury brand Gucci, experienced a decline following announcements of potential profit reductions.

In Tokyo, the Nikkei index remained closed due to a national holiday in Japan on Wednesday, while the broader Asia-Pacific MSCI index outside Japan showed no changes. In Seoul, the market rose by 1.3%, contributing to an overall growth of 5.6% in the Asia-Pacific region. Samsung's shares saw a significant increase following Nvidia's announcement about the start of using high-bandwidth memory (HBM) chips manufactured by the South Korean chipmaker. Chinese stock markets slightly rose after the national central bank kept the key lending rates unchanged, aligning with analysts' expectations. The Shanghai Composite Index increased by 0.5%, while the Hong Kong Hang Seng Index went up by 0.2%. Key figures of the European Central Bank (ECB) expressed support for June as the optimal moment for initiating interest rate cuts, with some advocating for four reductions within the current year.

Christine Lagarde, President of the ECB, emphasized the importance of flexibility in decision-making at an event in Frankfurt on Wednesday: "Our actions must be based on current data and considered at each meeting. This means we cannot make any predetermined commitments regarding the specific direction of interest rates following their initial reduction." By the close of the trading day, the euro had notably strengthened against the dollar, rising by 0.51% to reach $1.092.

Meanwhile, oil prices adjusted after reaching multi-month highs, influenced by the strengthening of the dollar. The price of Brent crude oil fell by 1.95%, settling at $81.68 per barrel, while gold was valued at $2185.69 per ounce, remaining below the record monthly high of $2194.99.

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IFX bella · Veteran Member

Forex Analysis & Reviews: The Federal Reserve navigates interest rates: stocks are up, the dollar is on the decline

Global market indices rose, and the dollar halted its upward trajectory following the Federal Reserve's announcement of plans for three significant rate cuts this year, despite expectations of a slower decrease in inflation.

Jerome Powell, the Federal Reserve Chair, noted that despite recent high inflation figures, the main trend of easing price pressure remains unchanged. However, he emphasized that fresh economic data did not add confidence in conquering inflation. Shareholders positively received the Federal Reserve's decision to stay the course on planned interest rate cuts.

The global MSCI stock index reached a historic high, rising by 0.61%, thanks to the steady growth of stocks on Wall Street following the Fed's announcement. The Dow Jones Industrial Average increased by 1.03%, the broad-market S&P 500 index rose by 0.89%, and the Nasdaq Composite Index showed a growth of 1.25%. Irene Tunkel, a leading strategist for U.S. stocks at BCA Research based in Florida, noted,

"The market feels relieved, seeing that the Fed still plans three rate cuts this year." Expectations for rate cuts led to a decrease in the yield of government bonds. The yield on two-year Treasury notes decreased by 7.9 basis points to 4.6129%, while the yield on ten-year bonds fell by 1.5 basis points, reaching 4.281%. "It is particularly noteworthy that the Federal Reserve has significantly revised its GDP forecasts upwards not only for 2024, which was expected in light of the latest data, but also for 2025 and 2026," comments Ellen Heizen, the chief market strategist at F.L. Putnam Investment Management, located in Massachusetts.

Following the Federal Reserve's meeting, the dollar lost ground. The dollar index decreased by 0.433%, which contributed to a partial recovery of the Japanese yen. Its rate fell by 0.30% against the dollar, reaching 151.29 per dollar compared to the four-month low of 151.82, recorded earlier that same day.

Most sectors in the S&P 500 index showed growth, with nine out of the eleven main industries demonstrating an increase in stock value. Particularly, consumer sector stocks stood out, where growth was 1.5%, taking the lead in gains. The healthcare sector proved to be the least effective, showing a decline of 0.23%. In healthcare, notable decreases were observed in the U.S.-registered shares of BioNTech, which fell by 4.4% after announcing a decrease in revenue and profit for 2023 due to a focus on the development of cancer drugs.

Additionally, shares of COVID-19 vaccine manufacturers experienced a downturn: Moderna lost 1.9% in value, while Novavax dropped by 2.2%. A rise in the consumer goods sector was led by shares of Amazon.com, which increased by 1.3%. Furthermore, Tesla shares grew by 2.5% following news of a price increase for Model Y cars produced in China by 5,000 yuan ($694.55) starting April 1.

In addition to successes in the consumer sector, shares of Chipotle Mexican Grill rose by 3.5% after the board of directors announced a decision to conduct a 50-for-1 stock split. Shares of Equinix lost 2.3% in value following a report by research firm Hindenburg Research that it had taken a short position on this data center operator's stock.

The Japanese yen faced challenges following the Bank of Japan's decision to raise interest rates for the first time in 17 years. Analysts believe this move contributes to maintaining a significant yield differential between U.S. Treasury bonds and Japanese government bonds, putting pressure on the yen. The European STOXX 600 index remained unchanged throughout the day, while shares of Kering, the owner of the luxury brand Gucci, experienced a decline following announcements of potential profit reductions.

In Tokyo, the Nikkei index remained closed due to a national holiday in Japan on Wednesday, while the broader Asia-Pacific MSCI index outside Japan showed no changes. In Seoul, the market rose by 1.3%, contributing to an overall growth of 5.6% in the Asia-Pacific region. Samsung's shares saw a significant increase following Nvidia's announcement about the start of using high-bandwidth memory (HBM) chips manufactured by the South Korean chipmaker.

Chinese stock markets slightly rose after the national central bank kept the key lending rates unchanged, aligning with analysts' expectations. The Shanghai Composite Index increased by 0.5%, while the Hong Kong Hang Seng Index went up by 0.2%. Key figures of the European Central Bank (ECB) expressed support for June as the optimal moment for initiating interest rate cuts, with some advocating for four reductions within the current year.

Christine Lagarde, President of the ECB, emphasized the importance of flexibility in decision-making at an event in Frankfurt on Wednesday: "Our actions must be based on current data and considered at each meeting. This means we cannot make any predetermined commitments regarding the specific direction of interest rates following their initial reduction."

By the close of the trading day, the euro had notably strengthened against the dollar, rising by 0.51% to reach $1.092. Meanwhile, oil prices adjusted after reaching multi-month highs, influenced by the strengthening of the dollar. The price of Brent crude oil fell by 1.95%, settling at $81.68 per barrel, while gold was valued at $2185.69 per ounce, remaining below the record monthly high of $2194.99.

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IFX bella · Veteran Member

Forex Analysis & Reviews: S&P 500: from stability to records - growth analysis

Optimistic expectations about the economic future and the Federal Reserve's accommodative policies are motivating investors to broaden their investment horizons beyond the high-growth stocks and technology giants that have been the growth drivers of the U.S. stock market in the past year.

While stocks such as Nvidia (NVDA.O) and Meta Platforms (META.O) have been key drivers of market growth in 2024, the financials (.SPSY), manufacturing (.SPLRCI) and energy (.SPNY) sectors have also outperformed the S&P 500 Index, rising 9.7% YTD. This eases concerns that the market is becoming overly dependent on the success of a limited number of stocks. Next week, investors' attention will turn to Friday's Personal Consumption Expenditures Cost Index, which promises to provide an update on inflation.

In addition, the end of the first quarter could trigger market volatility as investment fund managers adjust their portfolios. The current surge in market activity contrasts with last year, when uncertainty about the economic outlook led investors to seek protection in the stocks of the so-called "Magnificent Seven" - companies with the largest market capitalizations that were attracted by their leading market positions and strong financial reports.

Last year, the sectors dominated by large-cap companies - technology (.SPLRCT), communication services (.SPLRCL) and consumer staples (.SPLRCD) - outperformed the S&P 500 Index, rising 24%. This year, the financial and industrial sectors have posted gains of 10.1% and 9.9%, respectively, while the energy sector has gained 10.3%. In a broader context, a group of seven major companies - Apple (AAPL.O), Nvidia (NVDA.O), Alphabet (GOOGL.O), Tesla (TSLA.O), Microsoft (MSFT.O), Meta Platforms (META.O) and Amazon.com (AMZN.O) - have underpinned 40% of the S&P 500 Index's gains so far this year, according to analysis from S&P Dow Jones Indices.

By comparison, their contribution was more than 60% in the prior year. The explosive interest in artificial intelligence has led to an impressive 90% increase in Nvidia's share price this year, while Microsoft registered a 14.5% gain. At the same time, Apple and Tesla's share prices have shown a decline of 11% and 32% respectively over the same period. Apple faced an additional hurdle this week when the U.S. Justice Department accused the company of monopolizing the smartphone market, raising questions about regulatory risks that could make investors uneasy about investing in large tech firms.

Evidence of the broadening market interest is the increase in the number of S&P 500 stocks that have outperformed the benchmark index, from 150 last year to 180 this year, as of last Thursday. The S&P 500 Index was little changed on Friday, but recorded its biggest weekly gain for 2024. That followed the Federal Reserve's announcements this week of a projected three interest rate cuts by the end of the year.

The Nasdaq rose slightly, similar to the Semiconductor Index (.SOX), which also posted significant gains for the week thanks to sustained enthusiasm for artificial intelligence. The Dow Jones index, on the other hand, closed lower. On the same day, stocks from the consumer staples sector experienced declines. Shares of Nike (NKE.N) lost 6.9% after the world's largest sportswear maker warned of a possible low single-digit percentage decline in revenue in the first half of fiscal 2025. Shares of Lululemon Athletica (LULU.O) fell 15.8% as the company predicted full-year revenues and profits below expectations.

Earlier this week, despite leaving rates unchanged, the Federal Reserve confirmed its intention to make three rate cuts this year. "The market interpreted this as a signal that the Federal Reserve is no longer a threat and will eventually become supportive," commented Matt Stuckey, chief investment officer at Northwestern Mutual Wealth Management Company. According to CME's FedWatch Tool, investors now rate the probability of the first rate cut in June at 71%, up from 56% earlier in the week. The Dow Jones Industrial Average (.DJI) lost 305.47 points or 0.77% to close at 39,475.90, the S&P 500 Index (.SPX) fell 7.35 points or 0.14% to 5,234.18, while the Nasdaq Composite Index (.IXIC) rose 26.98 points or 0.16% to 16,428.82. For the week, the S&P 500 added 2.3%, the largest weekly percentage gain since mid-December. The Dow index gained 2%, posting its biggest weekly gain since mid-December, and the Nasdaq climbed 2.9%, its biggest weekly percentage increase since mid-January. Among the growth leaders, FedEx (FDX.N) shares soared 7.4% a day after the company beat Wall Street's quarterly forecasts.

Meanwhile, Digital World Acquisition's (DWAC.O) share price fell 13.7% after its shareholders decided to approve a merger with a media-tech company linked to former U.S. President Donald Trump. Trading volume on U.S. exchanges reached 9.45 billion shares, well below the average of 12.34 billion over the past 20 trading sessions. Despite some growth, some segments of the market, particularly small-capitalization companies, continue to struggle. The Russell 2000 Small Company Index (.RUT) is up just 2.2% YTD.

Some investors believe this category of companies can expect support in light of the latest outlook from the Federal Reserve, which reiterated its plan to cut interest rates by 25 basis points three times this year despite an increase in projected economic growth from the central bank. "As the Federal Reserve begins to cut interest rates, we're seeing increased liquidity and easier financing," said Jack Ablin, chief investment officer at Cresset Capital. "Who benefits the most from this? Not large-capitalized companies with their fail-safe access to capital in any environment, but rather smaller and lesser-known businesses."

This process of market diversification could face hurdles if the economy enters a period of instability or overheating, casting doubt on the so-called "golden mean theory" that has supported market indexes of late. Some investors suggest that the current market rebound, which has seen the S&P 500 Index rise 27% since the end of October, may soon experience a correction.

At the same time, other analysts are confident that the current trends will continue. Peter Tooze, president of Chase Investment Counsel, shared that his firm recently invested in shares of Goldman Sachs (GS.N) and oilfield services company Tidewater (TDW.N), while reducing stakes in large-capitalized companies, including selling shares of Apple. "The market is becoming more diverse," he says. "There are more opportunities to make money this year than there have been in the past."

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IFX bella · Veteran Member

Forex Analysis & Reviews: On the verge of inflation: how the Dow Jones and S&P reacted for the third session in a row

On Tuesday, amid expectations of important economic releases during the short holiday week, US stock markets fell, marking the third consecutive decline for the Dow Jones and Standard & Poor's 500 indexes. Investors are in a wait-and-see mood as they analyze potential changes in Federal Reserve policy. Tesla (TSLA.O) rose 2.92% on CEO Elon Musk's announcement that he would test self-driving technology for the company's vehicles, available to both new and existing customers in the United States. Over the current week, the stock price has increased by about 4%, although during the year their quotes have decreased by more than 28%. Market participants are particularly focused on the Personal Consumption Expenditures (PCE) price index, the Federal Reserve's main tool for assessing inflation. It is expected that the latest data on this indicator will be published on Friday, a day when trading on American exchanges will not be held due to the celebration of Good Friday. It is predicted that in February the inflation index will increase by 0.4%, reaching 2.5% at the annual level. Meanwhile, core inflation, which excludes volatile items such as food and energy, is expected to rise 0.3% for the month, keeping annual growth at 2.8%, according to expert forecasts. "Friday is key. All attention will be focused on this day, and any events before then will be perceived as background. Therefore, we should not expect significant changes in the market until the data is published," said Stephen Massocca, deputy president of Wedbush Securities. San Francisco. "It would be extremely risky for the market if there were any speculation that Fed rates have not yet peaked. Any hint from the Fed that interest rates could be raised further could signal an immediate shift away from risk assets." The U.S. economic sector is growing, with February orders for durable goods exceeding forecasts and equipment investment pointing to the start of a recovery. According to the Conference Board, consumer confidence remained virtually unchanged in March at 104.7. The Dow Jones Industrial Average lost 31.31 points, down 0.08%, to 39,282.33. The S&P 500 was down 14.61 points (down 0.28%) at 5,203.58, while the Nasdaq Composite was down 68.77 points (down 0.42%) at 16. 315.70. Last week, all three major US indexes hit new all-time highs after the Federal Reserve confirmed its forecasts for three interest rate cuts this year. Market expectations for the Fed to cut rates by at least 25 basis points in June continue to rise, now reaching 70.4% probability according to CME's FedWatch tool, up markedly from last week's 59.2%. Shares of the media and technology group linked to Donald Trump rose 16.1% to close at $57.99 after temporarily hitting $79.38 on the first day of trading following its reverse merger with the company. , specializing in the issue of securities. McCormick (MKC.N) jumped 10.52% to become the top gainer in the S&P 500, as its first-quarter sales and earnings beat market expectations. Shares of Seagate Technology (STX.O) also posted strong gains, rising 7.38%, after analysts at Morgan Stanley upgraded the hard drive maker's stock from overweight to overweight. At the same time, United Parcel Service (UPS.N) shares lost 8.16% following the release of the company's 2026 guidance. On the New York Stock Exchange, decliners outnumbered advancers by a 1.24-to-1 ratio. A similar trend was seen on the Nasdaq, where decliners outnumbered advancers by a 1.34-to-1 ratio. Trading volume in US stock markets reached 10.43 billion shares, less than the average volume of 12.23 billion shares over the past 20 sessions. Trading activity is expected to remain moderate throughout the current week, and as the holidays approach, volumes may decline further. The pan-European stock index STOXX 600 gained 0.24%, while MSCI's index of Asia-Pacific shares ex-Japan closed 0.25% higher at 535.59. Market attention is focused on the Japanese yen, which remains at its weakest against the dollar since 1990 despite the Bank of Japan raising interest rates last week for the first time in 17 years. The dollar strengthened 0.1% against the yen to hit 151.56, raising the risk of Japanese intervention to prevent further weakening of its currency. In October 2022, the dollar/yen exchange rate rose to 151.94, followed by a decline due to intervention.

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IFX bella · Veteran Member

Forex Analysis & Reviews: S&P 500 breaks records: the most successful quarter in the last five years

Amid the latest economic data, the S&P 500 ended the week with positive dynamics, marking its best quarterly result in the last five years. Investors are optimistic about the future, awaiting new information on inflation. Breakout of leading indices In addition to the S&P 500, two other key US indices also posted significant gains this quarter. The 10.16% rise for the S&P 500 was driven by growing interest in artificial intelligence stocks and speculation that the Federal Reserve will cut interest rates this year. Dow Jones on the verge of historic achievement The Dow Jones index is approaching a significant milestone of 40,000 points, less than 1% away from this goal. Economic progress and labor market sustainability The latest data shows the US economy grew faster than expected in the fourth quarter, helped by strong consumer spending. Additionally, the decline in initial unemployment claims underscores the stability in the labor market. Optimism among experts "The economy and consumers are doing well as they continue to spend. Unemployment remains low and there are regions where the economy is thriving... There are funds that want to be spent in a variety of ways," shares George Young, portfolio manager at Villere & Company. Nasdaq reaches new heights The tech-heavy Nasdaq Composite Index also posted its first record peak since November 2021, opening up new opportunities for investors. Belief in a "soft landing" of the economy A key factor in this year's success has been investor confidence in the possibility of a "soft landing" for the economy, which involves lowering inflation without leading to a major recession. Looking to the future: soft landing is a priority A BofA Global Research survey conducted in March shows more than two-thirds of asset managers view a soft landing as the most likely scenario for the economy over the next 12 months, while just 11% expect a hard landing. Fed maintains optimism The March Federal Reserve meeting, which confirmed expectations of three interest rate cuts during the year while improving the economic outlook, added confidence to investors. Overcoming rising bond yields The stock has successfully weathered the rise in Treasury yields that previously weighed on stock prices heading into 2023. The yield on the 10-year Treasury note reached 4.2%, up from 3.86% at the end of last year. Expanding the Boundaries of Optimism BlackRock Investment Institute strategists say risk optimism could expand beyond the tech sector thanks to the integration of AI across industries, as well as support from the Federal Reserve and slowing inflation. This is pushing for more investment in US stocks. Rising share prices reflect confidence The forward price-to-earnings ratio for the S&P 500 reached 21, a two-year high and reflecting increased investor optimism in the stock market, according to LSEG Datastream. Wind of change in the stock market The stock market remains under the influence of large companies that dictated trends in 2023. However, the current year has brought diversity to growth dynamics, especially among the tech giants known as the "Magnificent Seven." Artificial Intelligence Stars Nvidia stands out, posting impressive growth of over 80% thanks to its role as a leader in AI chips. Meta Platforms is also showing notable success, increasing its value by 37% and paying dividends for the first time in February. Tests for titans of technology At the same time, not all major players are lucky. Apple faces an 11% loss as the company comes under pressure in China and from regulators. Tesla is also experiencing a 29% decline, driven by concerns about demand for electric vehicles. Redistribution of influence According to S&P Dow Jones Indices, the Magnificent Seven are responsible for 40% of the S&P 500's year-to-date gain, down significantly from last year, when they contributed more than 60%. This suggests the rally is expanding to other stocks, offsetting the current decline. A look at inflation ahead of the holiday Against the backdrop of the upcoming Good Friday celebration and the closure of US stock markets, analysts are eagerly awaiting the publication of the PCE index. The index, the Federal Reserve's preferred measure of inflation, will provide insight into the possible timing and extent of upcoming interest rate cuts. Minor changes compared to expectations The Dow Jones Industrial Average gained some ground, gaining 0.12%, while the S&P 500 also rose a modest 0.11%. In contrast, the Nasdaq Composite fell slightly by 0.12%, reflecting the market's mixed reaction to the current economic outlook. Weekly and monthly achievements Over the past week, the Dow Jones rose 0.84%, the S&P 500 rose 0.39%, and the Nasdaq rose 0.3%. March gains were notable, with the Dow Jones up 2.08%, the S&P 500 up 3.1% and the Nasdaq up 1.79%. This quarter was marked by significant gains for all three indexes: the Dow by 5.62%, the S&P 500 by 10.16%, and the Nasdaq by 9.11%.

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IFX bella · Veteran Member

Forex Analysis & Reviews: Financial market turmoil: stocks and earnings at risk due to rates

This trend suggests a decrease in inflation, which, however, does not allow the Federal Reserve to accurately determine when the process of lowering interest rates will begin. Previously, there were expectations that the Federal Reserve would begin the process of cutting rates as early as June.

However, this week's robust economic indicators have sent government bond yields rising to levels not seen in months. This became the reason for market speculation regarding a possible deviation from the planned rate reduction schedule. In this context, Federal Reserve Chairman Jerome Powell emphasized the consensus among policymakers that rate cuts will become necessary at some point this year. However, such a decision will only be made after there is credible evidence that inflation is reliably approaching the target level of 2%.

Stock prices fell after the release of the National Institute of ADP's report on employment, according to which the number of jobs in the private sector grew by 184 thousand in March. This indicates the dynamism of economic development. The report also shows a significant increase in the average salary of employees changing jobs - an increase of 10% in annual terms compared to 7.6% in February, which acts as a negative signal for inflation trends.

However, an analysis by the Institute for Supply Management (ISM) in services found input costs for businesses to fall to a four-year low, indicating a positive outlook for inflation. At the end of the day, the S&P 500 and Nasdaq indexes showed gains, supported by news of a slowdown in the US services sector in March. However, the rise was muted in light of statements by Jerome Powell, chairman of the Federal Reserve, that changes in interest rate policy were not expected in the near future.

The leading sectors of the S&P 500 index showed positive dynamics, with the most significant gains observed in the energy, materials and telecommunications services sectors. Additional data from the Institute for Supply Management released Wednesday showed the services PMI fell to 51.4 in March from 52.6 in February.

The result was below analysts' expectations, who had expected better results in a Reuters poll. A score above 50 symbolizes expansion in the services sector, which accounts for a large portion of the American economy. It is reported that despite the slowdown, the US economy continues to grow, albeit at a more moderate pace. The Dow Jones Industrial Average suffered minor losses, falling 43.1 points (0.11%) to close at 39,127.14.

Meanwhile, the S&P 500 gained 5.68 points (0.11%) to finish at 5,211.49 and the Nasdaq Composite rose 37.01 points (0.23%) to close at 16,277.46. The revision of forecasts for interest rate cuts by the US Federal Reserve from June became the subject of discussion in the market after the publication of the latest positive economic data. Ulta Beauty shares fell 15.3% after the company gave a downward outlook at a cosmetics industry conference. Shares of other players in the sector such as e.l.f. Beauty and Coty also recorded declines.

Intel reported a $7 billion loss at its foundry division for 2023, topping the previous $5.2 billion loss reported a year earlier. This caused the company's shares to fall by 8.2%. Total stock trading volume on U.S. exchanges reached 11.03 billion, slightly below the average of 11.76 billion over the past 20 trading days. On the New York Stock Exchange, advancers outnumbered decliners by a 1.66-to-1 ratio, and on the Nasdaq, advancers outnumbered gainers by a 1.25-to-1 ratio.

The MSCI global equity index recorded a slight rise of 0.1%, while government bond yields fell. The 10-year U.S. Treasury yield fell 1.6 basis points to 4.349%, after earlier setting a four-month record of 4.429%. The pan-European STOXX 600 index rose 0.29%, reflecting positive reception of ISM data by European investors. In the US financial market, the S&P 500 index rose 0.11%, the Nasdaq Composite index rose 0.23%, while the Dow Jones Industrial Average suffered slight losses, decreasing by 0.11%. Atlanta Federal Reserve Bank President Raphael Bostic, speaking to CNBC, stressed that the Federal Reserve should not cut its key interest rate until the end of this year. He repeated his position that the reduction in borrowing costs should only occur once in 2024.

The dollar index, which measures the value of the US dollar against a basket of six major currencies, stabilized near its highest in the past four and a half months, supporting the Japanese yen at lows not seen in many years. However, the risk of foreign exchange market intervention from the Japanese authorities limited the further fall of the yen.

The dollar index fell slightly by 0.50%, while the dollar strengthened against the yen by 0.11%, reaching 151.68 yen per dollar. The price of US oil increased by 28 cents, reaching $85.43 per barrel. Meanwhile, Brent crude rose 43 cents to settle at $89.35 a barrel. Gold also posted notable gains, reaching a new record high. US gold futures rose 1.5% to $2,315 an ounce. Bitcoin rose marginally, adding 0.21% to reach $65,801.00.

News are provided by InstaForex.

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IFX bella · Veteran Member

Forex Analysis & Reviews: Analysis and trading tips for USD/JPY on April 5 (US session)

Analysis of transactions and trading tips on USD/JPY Further growth became limited as the test of 151.40 coincided with the sharp rise of the MACD line from zero. Dollar bulls took advantage of the morning dip, but everything could change upon the release of US data. Weak figures on the growth of new jobs will lead to a decline in USD/JPY, which could end with a retest of weekly lows. Strong statistics, on the other hand, will quickly push the pair back towards the yearly high, although that may be unlikely. FOMC members Thomas Barkin and Michelle Bowman will also speak today.

For long positions: Buy when the price hits 151.52 (green line on the chart) and take profit at 152.14. Growth will occur after strong reports from the US and hawkish statements from Fed representatives. When buying, ensure that the MACD line lies above zero or rises from it. Also consider buying USD/JPY after two consecutive price tests of 151.28, but the MACD line should be in the oversold area as only by that will the market reverse to 151.52 and 152.14. For short positions: Sell when the price reaches 151.28 (red line on the chart) and take profit at 150.63. Pressure will return in the case of poor labor market data. When selling, ensure that the MACD line lies below zero or drops down from it. Also consider selling USD/JPY after two consecutive price tests of 151.52, but the MACD line should be in the overbought area as only by that will the market reverse to 151.28 and 150.63.

What's on the chart: Thin green line - entry price at which you can buy USD/JPY Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely. Thin red line - entry price at which you can sell USD/JPY Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely. MACD line- it is important to be guided by overbought and oversold areas when entering the market Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.

Analysis are provided by InstaForex.

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IFX bella · Veteran Member

Forex Analysis & Reviews: EUR/USD. April 8th. Preparations for the ECB meeting are in full swing

The EUR/USD pair dropped to the support zone of 1.0785–1.0801 on Friday, rebounded from it, and resumed the upward process towards the Fibonacci retracement level of 38.2%–1.0866. A new rebound from this level will again benefit the US dollar, as will a return to the zone of 1.0785–1.0801. Consolidation of the pair's rate below this zone will increase the probability of further decline towards the Fibonacci level of 0.0% at 1.0696. In my opinion, the option with a decline remains the most consistent.

The wave situation remains quite clear. The last completed downward wave broke the low of the previous wave (from March 19th), and the new upward wave has not yet approached the last peak (from March 21st). Thus, we are currently dealing with a "bearish" trend, and at the moment there is no sign of its completion. For such a sign to appear, the current upward wave must break the current last peak (from March 21st). If the new downward wave fails to break the low from April 2nd, this will also be a sign of the end of the "bearish" trend. The news background on Friday was very strong and extensive. It all started with the report on retail trade in the European Union. Volumes decreased by 0.5% m/m and by 0.7% y/y. Thus, from the very morning on, bears had reasons to counterattack. Next, in the United States, three reports on the labor market, unemployment, and wages were released, which also supported the bears, but the zone of 1.0785–1.0801 proved to be an insurmountable obstacle for them. This week will see the ECB's third meeting this year. I expect that interest rates will not be changed, but Christine Lagarde's statements will indicate that the regulator will be ready to lower rates at the next meeting. It's difficult to say whether the strengthening of the ECB's "dovish" sentiment will help the bears, as the market has long understood that the first easing of monetary policy awaits it in June. But once again, the news background will be on the side of sellers.

Analysis are provided by InstaForex.