At the close of the New York Stock Exchange, the Dow Jones was down 1.07% to hit a 3-month low, the S&P 500 was down 1.45% and the NASDAQ Composite was down 1.76%.
Unemployment in the US rose to 3.6% in February from 3.4% the previous month, while analysts believed that the figure would not change. And the number of people employed in non-agricultural sectors of the economy increased by 311,000, with a projected increase of 205,000.
Statistics on the labor market and consumer prices are of great importance for investors, since these are the two main indicators that the US Federal Reserve relies on when determining its further actions in monetary policy.
Dow Jones
The leading performer among the Dow Jones index components in today's trading was Intel Corporation, which gained 0.78 points or 2.95% to close at 27.22. JPMorgan Chase & Co rose 3.31 points or 2.54% to close at 133.65. The Travelers Companies Inc rose 1.76 points or 1.01% to close at 175.68.
The least gainers were Cate
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Dow Jones Index: A Corrective Decline That Will Take Years Has Begun InstaForex Analysis 29.09.2022 09:29 Today we will look at the long-term chart of the Dow Jones Index dating back to 1921, but the period we would like to focus on is from the 1932 low at 40.56 to the peak on January 2022 at 36,952. If our long-term count is correct, then we have a complete five-wave rally. A corrective decline that will take years has begun. Looking at the major corrections of 1932 - 2022 (90 years), we see the first correction from 1937 - 1942 (5 years). The next major correction stretched from 1966 to 1974 (8 years). Then, we had the 2000 to 2009 correction (8-9 years). Now the index is going through a correction as well. This correction is of a larger degree and therefore is likely to take at least 8 years and possibly even longer. The expected correction doesn't have to be very deep, but the rally from 40.56 to 36,952 does open up for a decline to near the bottom of wave 4 which was the 2009 low. If that is seen, then it is likely to terminate near 7,363, but a decline closer to the 50 to 61.8% corrective targets at 18,303 or maybe even closer to 13,993 is the most likely scenario, though that's also quite a distance to cover from the present 29,684 level.We are braced for hard times in the years ahead with some major changes to the society as we know it today.Relevance up to 07:00 2022-09-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.Read more:https://www.instaforex.eu/forex_analysis/294749
Market Focus Will Likely Be On Putin’s Warnings To The West, Nike (NKE) Reported Slightly Better Revenues And More Saxo Bank 30.09.2022 08:37 Summary:Fresh lows return in US equities with more hawkish Fed comments and fear of earnings downgrades picking up as the Q3 earnings season draws closer. Cable extended its rally despite UK PM’s commitment to fiscal plan and weakening BOE hike expectations, while the EUR gained strength on the back of hot German CPI and uptick in ECB rate hike expectations. Talks of OPEC+ production cuts are gaining momentum, and focus today will be on China PMIs. Also watch for Eurozone CPI, US PCE data as well as Putin’s speech in the day ahead.What is happening in markets?Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) fall to 22-month lowsUS stocks sank to their lowest levels since November 2020 after another round of Fed speakers continued with hawkish remarks, while oil maintained gains on expectations of OPEC+ cuts. Nasdaq 100 was down almost 4% at one point, but trimmed the losses before closing 2.9% lower, while the broader S&P500 met a similar fate nearing 3,600 before ending 2.1% down. All 11 sectors of the S&P 500 dropped, with Utilities falling the most and followed by Consumer Discretionary. Retail favorites Tesla (TSLA) and Apple (AAPL) led the declines falling 6.8% and 4.9% while chip makers followed with AMD (AMD) down 6.2% with PC demand falling away. On the upside, oil stocks like Devon Energy (DVN), and Diamondback Energy (FANG) and Occidental (OXY) moved higher. Separately the European Commission announced an eight package of sanctions that would include a price cap on Russia’s oil exports.U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) climbed againAfter plunging sharply the day before on the Bank of England move, yields of U.S. treasury securities rose, with the 10-year note yields rising 6bps to 3.79% on Thursday. Yields initially crept higher on bounces of U.K. Gilt yields and higher German regional CPI data, but paring their rise in the afternoon.Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg)Hong Kong and mainland equity markets opened higher on Thursday and pared the gain through the day and settled moderately lower, with the Hang Seng Index down by 0.5%, and CSI300 little changed. The news of the imposition of a 3-day mandatory PCR test in the financial district, Lujiazui in Shanghai due to one new Covid-19 case triggered some fears among investors. In spite of PBoC’s supportive statement coming out from its quarterly monetary meeting saying that the central bank will expand its special lending program to ensure the delivery of delayed housing projects, Chinese developers declined, with Country Garden (02007:xhkg) plunging 11.6%, Longfor (00960:xhkg) down by 7.5%, and CIFI (00884:xhkg) tumbling 16.3%. Chinese EV maker, Zhejian Leapmotor (09863:xhkg), tumbled 33.5% in its first day of trading after an IPO priced at the bottom of a guided range. XPeng (09868:xhkg) dropped 5.3%. Trading in the China Internet space was mixed with Alibaba outperforming (+2.9%).Australia’s ASX200 (ASXSP200.1) likely to follow Wall Street lower: futures suggest a 0.3% fall today, aluminum stocks to be bright sparkAs above, on the ASX today, it’s worth keeping an eye on aluminum related stocks on the ASX including Rio Tinto (RIO) and Alumina (AWC). Meanwhile, diversified miners including the major retail favorites, like BHP (BHP) are worth watching after the Iron Ore (SCOA) price remains supported with China ramping up housing support. This morning the iron ore price (SCOA, SCOV2) pushed up ~1.1% to US$96.50. In NY BHP closed 0.6% higher, implying the ASX primary listing of BHP will likely move up, especially after the aluminum and iron ore prices rose.Cable stays bid and Euro followsThe US 10-year yields as well as the dollar could not catch a strong bid on Thursday, which helped other G10 currencies gain some ground. Sterling was the strongest on the G10 board, with GBPUSD now testing 1.12 in early Asian hours. BOE’s emergency bond-buying measures however hints at a push lower in gilt yields, and GBP will likely come back under pressure if the surge in global yield resumes. This will need a focus shift back on Fed tightening as we think there is still some room for upward repricing of terminal rate Fed expectations and higher-for-longer rates. Meanwhile, expectations for an ultra-aggressive BOE hike in November cooled slightly. EURUSD also surged above 0.98 with ECB rate hike expectations for October meeting picking up after the hot German inflation, and with the ECB downplaying the chance of an emergency move to prop up Italian bonds. EURGBP was however lower from 0.8950 to 0.88.Aluminum and aluminum stocks on watchIt’s worth watching aluminium related shares across the Asian-Pacific region today after the record jump in Aluminum price on the LME after Bloomberg reported plans to discuss a potential ban on new Russian metal supplies. The metal jumped 8.5% (its biggest intraday jump in record) before paring back.Crude oil(CLU2 & LCOV2) prices maintain gainsCrude oil prices maintained the momentum with OPEC+ production cuts becoming a key factor going into the next week’s meeting. OPEC+ commenced discussions around an output cut with one saying it a cut is “likely”, according to Reuters sources. This comes after previous reports that Russia will likely propose OPEC+ reduces output by around 1mln BPD. Demand conditions are likely to weaken as global tightening race heats up, and this has prompted expectations for a supply cut as well. Brent futures touched $90/barrel mark but reversed slightly later, while WTI futures rose to $83/barrel before some decline later in the session.What to consider?German inflation sparks EZ inflation fearsGerman inflation touched double digits, as it came above consensus at 10.9% YoY for September from 8.8% YoY previously. Germany is also preparing to borrow an additional €200 billion to finance a plan to limit the impact of soaring energy costs, which could keep consumption high even as shortages loom. Up today will be the September eurozone inflation print. Expect a new record which will increase the pressure on the European Central Bank to hike interest rates by at least 75 basis points in October. The economist consensus expects that the headline harmonized index of consumer prices (HICP) will reach 9.7% YoY against 9.1% in August. The core rate is expected to climb to 5.6% YoY against 5.5% previously. The spread between the headline and the core inflation figures is mostly explained by a decrease in oil and natural gas prices in recent months. However, this is clear that inflation is becoming broad-based, including in the services sector. This means that inflation is here to stay for long. The HICP is likely to continue increasing in the coming months. A peak in inflation in the eurozone is possible in the first quarter of 2023, in our view. This is much later than in the United States.Fed speakers push for more hikesLoretta Mester remains more hawkish than the Fed’s median dot plot, and said that rate are not in restrictive territory yet and more rate hikes will be needed. No signs of concern on economy or dollar strength were noted, while inflation remained the key point of concern for her. James Bullard also made some key comments on ‘bad idea to mess’ with the inflation target while the labor market conditions remain tight and recession is only a risk. Mary Daly was more cautious, saying officials should work to avoid "inducing a deep recession." However, she still raised the bar on expectations on the Fed funds rate saying that she is comfortable with median Fed rate path projection of 4%-4.5% by year end, 4.5%-5% in 2023 (pointing to upside risks as the dot plot suggested 4.6%, or 4.5-4.75% if we talk in ranges).US initial claims come in strong againInitial claims came in lower than expected at 193k with last week’s also revised lower to 209k from 213k. Continued claims cooled to 1.347mln from 1.376mln despite the expected rise to 1.388mln. The data shows how tight the labour market is in the US and Fed's Bullard labelled today's claims metric as "super low". Meanwhile, the third estimate of Q2 GDP was confirmed to decline 0.6%, notably with consumer spending revised higher to 2% from 1.5% previously.Australian inflation rose 7% in the year to July, based on new monthly CPIAt this rate it doesn’t appear CPI will peak at just shy of the 8% the RBA forecasts, given price pressures have resumed this month from the largest inflation contributors. Based on theABS’s new monthly CPI print, some of the largest price jumps year-on-year to July were in fuel (+29.2%) and fruit & vegetables (+14.5%). The concern is that, with La Nina set to hit Australia and population growth continuing, food and housing (rent) prices will continue to rise apace. In September alone, contributors to food prices have risen markedly, as the global supply outlook has weakened amid poor crop conditions. This could tilt the RBA back toward a more hawkish stance.Australian rents to drive higher, adding to inflation woesAustralia’s population growth resumed after borders reopened and business employment remains strong for the time being, at 50-year highs. New office and residential supply is expected be subdued in 2023 as interest rates rise;
A Peak In Inflation In The Eurozone Is Possible| H&M’s Challenging Position And Micron's Shocking Forecast Saxo Bank 30.09.2022 09:44 Summary:After celebrating the injection of liquidity from the Bank of England on Wednesday, global markets swooned again yesterday, taking the major US indices. Elsewhere, sterling has recovered most of the lost ground since the announcement of last week’s tax cuts on the stabilization of the gilt market, with other major sovereign yields also easing lower. The drop in yields and a consolidation in the US dollar have supported gold, which is poking higher toward important resistance.What is our trading focus?Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I)US equities traded lower yesterday after hawkish remarks from Mester and Bullard that policy rates will stay higher for longer than what the market is expecting (pricing in). In addition, the market is increasingly at edge with the expectation that Russia will annex four regions of Ukrainian territory because the fear is that it could escalate the war to new levels. Nasdaq 100 futures are most sensitive to the hawkish Fed messages and tumbling growth outlook, so watch this index going into the weekend. Nasdaq 100 futures are trading around the 11,265 level this morning and 11,000 is naturally the big next level on the downside in case selling resumes into the weekend.Hong Kong’s Hang Seng (HSIU2) and China’s CSI300 (03188:xhkg)Hong Kong and mainland China markets were treading water ahead of the week-long National Day golden week holiday. Chinese developers rallied to recoup some of the recent losses following PBoC’s supportive statement coming out of its quarterly monetary meeting saying that the central bank will expand its special lending program to ensure the delivery of delayed housing projects. Country Garden (02007:xhkg) rebounded 10% after plunging 11% yesterday. Chinese EV maker, Zhejian Leapmotor (09863:xhkg), tumbled another 11% after having tumbled 33.5% yesterday on its first day of trading. Other Chinese EV names traded in the Hong Kong bourses plunged from 2% to 9%.Strong USD fades as bond yields punched lowerThe weak US dollar suggests that the market was more focused on rising US treasury yields during the recent upswing than the accompanying risk sentiment deterioration: yesterday, the USD weakened sharply as yields were flat to lower while risk sentiment was in the dumps. Hard to tell if some end-of-month/quarter rebalancing through today might be in play as well. A proper reversal of the recent USD bull move would require far more weakness, for example: EURUSD back above the 0.9900-0.9950 area and AUDUSD above perhaps 0.6700 (more on GBPUSD below). Next week features a full line-up of key US macro data and should bring a test of the USD’s status.Was that the climax for sterling bear market?Too early to draw conclusions here, as sterling has not yet recovered sufficient ground in the most important EURGBP and GBPUSD pairs to suggest that we have seen a climax reversal, although overnight, GBPUSD did reverse the entire plunge sparked by the announcement of the special budget last Friday by Chancellor Kwarteng, which started around 1.1200. Arguably, a close above 1.1200-1.1250 suggests a chance over reversal, though really 1.1500 was a more significant starting point for the recent slide. For EURGBP, the key support/pivot zone is 0.8750-0.8700. While there was nothing specifically supportive about the Bank of England’s emergency QE, if the logic is that the BoE saved the system from a financial crisis and that the exercise demonstrated that quantitative tightening will prove impossible elsewhere eventually (and therefore the BoE is only the first of many), sterling’s situation looks less bad if other central banks eventually follow suit.Gold (XAUUSD)Gold continues to rebound from key support at $1615 with the focus now being the critical resistance zone into 1,680-1,700 that is the departure point for this latest bear market move. While global bond yields and the USD will continue to lead the way as coincident indicators, the market has held up relatively well with geopolitical concerns (Putin’s N threat) and investors increasingly worried the FOMC with its hawkish actions may break the currency and bond market. Some signs of that were seen this week with some extreme moves in local bond and currency markets. Speculators hold a rare net short in COMEX gold futures and any further strength will trigger short covering, while total holdings in ETFs backed by bullion have declined to a 30-month low.Crude oil (CLX2 & LCOX2)Crude oil is heading for its first albeit small weekly gain in five and the first quarterly drop since 2020. The market remains troubled by forces pulling prices in opposite direction, and while the strong dollar, surging yields, and continued lockdowns in China have raised demand worries, the risk to supply continues to be a supporting theme.That focus returned on Thursday when OPEC+ said a production cut would be discussed at next week's meeting with Russia proposing a 1 mln barrels per day cut, a reduction towards which they are unlikely to contribute much as they are already producing below their quota. In addition, the combination of Russian sanctions and embargo and the US pausing its sales from strategic reserves will continue to dampen the downside risks.US treasuries (TLT, IEF)US treasury yields remained calm yesterday as we can infer that the recent wild ride in UK gilts had triggered contagion into US treasury yields, likely aggravating the recent rise toward 4.00% for the 10-year treasury benchmark before the BoE’s emergency efforts took major sovereign yields back lower. US macro data next week, including the ISM surveys and the September jobs report next Friday, will be key for the direction in US yields, with the major 3.50% level, the June high, the key downside pivot point.What is going on?Apple shares (AAPL:xnas) crater after the company announced it will skip production increase and on analyst downgradeApple shares ended the day nearly 5% lower, helping to drag the broader market lower as it is world’s largest company by market capitalization. A Bank of America analyst cut the rating on the company to “neutral” from “buy”. Apple’s demand is hurt by the cost-of-living crisis and the earnings outlook last night from the chip manufacturer Micron Technology is indicating that demand is coming down fast.Fed speakers push for more hikesCleveland Fed president Loretta Mester (voter this year) remains more hawkish than the Fed’s median dot plot and said that rates are not in restrictive territory yet and more rate hikes will be needed. No signs of concern on economy or dollar strength were noted, while inflation remained the key point of concern for her. St. Louis Fed president James Bullard, likewise a voter this year, said it was a ‘bad idea to mess’ with the inflation target while labor market conditions remain tight and recession is only a risk. San Francisco Fed president Mary Daly (voter in 2024) was more cautious, saying officials should work to avoid "inducing a deep recession." However, she still raised the bar on expectations on the Fed funds rate saying that she is comfortable with median Fed rate path projection of 4%-4.5% by year end, 4.5%-5% in 2023 (pointing to upside risks as the dot plot suggested 4.6%, or 4.5-4.75% if we talk in ranges).Eurozone inflation is set to hit a new record in SeptemberThe September eurozone inflation will be released today. Expect a new record which will increase the pressure on the European Central Bank to hike interest rates by at least 75 basis points in October. The economist consensus expects that the headline harmonized index of consumer prices (HICP) will reach 9.7 % year-over-year against 9.1 % in August. The core rate is expected to climb to 5.6 % year-over-year against 5.5 % previously. The spread between the headline and the core inflation figures is mostly explained by a decrease in oil and natural gas prices in recent months. However, this is clear that inflation is becoming broad-based, including in the services sector. This means that inflation is here to stay for long. The HICP is likely to continue increasing in the coming months. A peak in inflation in the eurozone is possible in the first quarter of 2023, in our view. This is much later than in the United States.Earnings recap (H&M, Nike, and Micron)H&M delivered a big miss yesterday on operating profit as input costs surprised to the upside. H&M is starting charging for online returns to save costs and the demand in China is still weak due to H&M’s challenging position in the country. Nike surprised positively on revenue but missed on earnings against estimates as margin compression has begun, and the company’s inventory is building up fast creating a potential headache going forward as consumer demand is expected to decline in the coming quarters. Micron delivered a shocking outlook for the current quarter with revenue expected at €4-4.5bn vs est. €6bn.CEE currencies under strain, likely on geopolitical uneaseCEE currencies are under significant pressure since the news of the pipeline explosions this week – this was likely triggered by the sabotage of the Nord Stream pipelines to Germany, which could be a prelude to the cutting off of other pipelines from Russia. EURHUF has pulled above 420 for the first time ever, EURPLN yesterday spiked to the highest level since the timeframe just after the breakout of war in Ukraine. Hungary continues to not support new sanction efforts against Russian energy imports. In Prague, protests have broken out against the country’s energy policy, while EURCZK remains sedated by heavy Czech central bank intervention.US initial claims come in strong againInitial claims came in lower than expected at 193k with last week’s also revised lower to 209k from 213k. Continued claims cooled to 1.347mln from 1.376mln despite the expected rise to 1.388mln. The data shows how tight the labour market is in the US and Fed's Bullard labelled today's claims metric as "super low". Meanwhile, the third estimate of Q2 GDP was confirmed to decline 0.6%, notably with consumer spending revised higher to 2% from 1.5% previously.Aluminium prices bolt higher; fuelling a rally in major mining companiesAluminum prices on the London Metal Exchange briefly jumped by a record 8.5% on Thursday before retracing lower. The sudden burst which to a minor extent was replicated in zinc and nickel was driven by a Bloomberg report saying that the LME as an option is looking into whether and under what circ*mstances they might place a ban on Russian metal being cleared via the exchange. Any such move by the LME to block Russian supplies could have significant ramifications for the global metal markets given their importance as a supplier of the mentioned metals, which to a smaller extend also includes copper.What are we watching next?Change of course from UK government after recent events?UK Prime Minister Liz Truss and Chancellor Kwarteng will meet with the Office of Budget Responsibility today for emergency talks before they receive the first draft of fiscal forecasts from the OBR next week. The recent crisis in the UK gilt market and downward spiral in sterling could elicit a response and possible backtracking on some portion of the recent policy announcement, although Truss said as recently as yesterday that she will stay the course. The most recent YouGov political poll release yesterday shows the Conservatives trailing Labour by a whopping 33 points, the largest gap since the 1990’s.Election in Brazil at the weekendBrazilian voters go to the polls on Sunday, with left-leaning former president Lula leading strongly in the polls over the incumbent right-populist Bolsonaro, but with many fearing the risk of disorder and violence as Bolsonaro has already made claims of election fraud and has hinted at not wanting to leave office. A run-off election between the two candidates will be held on October 30 if neither gets more than half the popular vote this weekend. The Brazilian real is at the weak end of the recent range versus the US dollar.Fed preferred inflation measure, US PCE, on the radar todayThe data point is for August and comes nearly three weeks after the BLS CPI data for the month. It will likely echo the same message as given by the last strong CPI number which has made the Fed even more hawkish in the last few weeks since the Jackson Hole. Headline numbers may be lower due to the decline in gasoline prices, but the price pressure on services side will likely broaden further. At last week’s FOMC meeting, the Fed also raised its forecasts for inflation, with the central bank now seeing core PCE at 4.5% by the end of this year (it previously projected 4.3%), moderating to 3.1% next year and at 2.1% at the end of its forecast horizon in 2025, but thinks that headline PCE prices will be at its 2% target by then.Earnings calendar this weekToday’s earnings release to watch is from Carnival which is expected to deliver strong results but there are significant downside risks to the outlook from fuel costs, staffing costs and the cost-of-living crisis hurting disposable income.Today: Carnival (postponed from last week), NitoriEconomic calendar highlights for today (times GMT)0755 – Germany Sep. Unemployment Change/Rate0800 – Poland Sep. Flash CPI0800 – Norway Daily FX Purchases0830 – UK Aug. Mortgage Approvals0900 – Eurozone Sep. Flash CPI1230 – US Aug. PCE Deflator/Core Deflator1300 – US Fed Vice Chair Brainard to speak at Fed conference on Financial Stability.1345 – US Sep. Chicago PMI1400 – US Final University of Michigan SentimentFollow SaxoStrats on the dailySaxo Markets Callon your favorite podcast app:AppleSpotifyPodBeanSticherSource:https://www.home.saxo/content/articles/macro/market-quick-take-sep-30-2022-30092022
Japanese Yen (JPY) Suffers The Most, Expectations For The Chinese Economy (CPI, Export) Saxo Bank 14.10.2022 10:48 Summary:A choppy session in equity and bond markets despite a hot US CPI print for September pushing up Fed funds rate expectations by over 25bps on the terminal rate projections which limits the room for Fed officials to out-hawk the markets. Japanese yen suffers the biggest blow as intervention remains weak, while GBP and Gilts generally supported higher with another potential U-turn in UK fiscal plan. Further tightening from Monetary Authority from Singapore boosts the SGD, and China’s CPI will be on watch in the Asian session before Bank earnings take away the limelight later in the day.What’s happening in markets?The Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) indices plunged after hot CPI data then whipsawed higher, moving in a ~5% rangeCore inflation (which excludes volatile food and energy items) rose to a 40-year high in September which gives the Federal Reserve reason to continue with its aggressive interest-rate hikes. The Nasdaq 100 fell over 3% and the S&P500 fell 2.35% before both major indices whipsawed higher with the Nasdaq ending up 2.3% and the S&P500 up 2.6%. Short covering and macro trading would have played a huge role in the reason markets whipsawed higher. ETF volume accounted for 39% of the turnover, just a touch lower than the record high of 40%. In terms of sectors, financials and energy led the benchmark index higher. Amid the energy crisis, there are the most rising-free cash flows in energy markets, which offer value.U.S. treasury yields (TLT:xnas, IEF:xnas, SHY:xnas) made new highs before waningU.S. treasuries had a volatile after the hot CPI prints. Now the money market fully prices in a 75bps hike in the November FOMC and a terminal rate of 4.9% early next year. The front end of the treasury curve was hit most with 2-year yields rising to as much as 24bps to 4.53% before paring back some of the move to finish the day 17bps higher at 4.65%. 10-year yields made a new high, hitting 4.08% soon after the CPI but spent the rest of the session waning to up only 4bps to close at 3.94%, despite a weak 30-year auction in the afternoon. The sharp rally (yields falling by over 20bps across the curve) in U.K. gilts contributed to stabilising U.S treasuries. The Bank of England bought a record£4.68 billion of gilts in its emergency bond purchase programme which is set to end on Friday. Traders snapped up gilts on speculation that the Truss government will announce the reversal of some of the tax cuts in the mini-budget when the Chancellor of the Exchequer Kwasi Kwarteng returns from the IMF meeting in Washington.Australia’s ASX200 (ASXSP200.1) may likely meet a similar fate to US equities and have a wild day of tradeIn Australia a similar situation is playing out with the futures market is now pricing in interest rates will peak at 3.9% next year. We have seen the RBA express ‘peak hawkishness’, is behind it. But the market is still pricing in rate rises will continue, but at a steady pace. This means growth sectors remain pressured and value strengthens. Consider; amid the energy crisis, there are the most rising-free cash flows in energy markets, which offer value and support share price growth. This is worth perhaps reflecting on, especially given coal prices hit fresh highs and we are not at peak coal demand season (January) yet. As such energy prices seem supported higher.Hong Kong’s Hang Seng (HSIU2) China’s CSI300 (03188:xhkg)Hong Kong and mainland China equities retreated, Hang Seng Index down 1.9% and CSI300 lower by 0.8%. HSBC (00005:xhkg) outperformed and gained 0.7%. Country Garden Services (06098:xhkg), tumbling 14.1%, and Country Garden Holdings (02007:xhkg), falling 9.8% were the worst performers in the Hang Seng Index, as the China property space continued to sell off. Machinery stocks declined on weak excavator sales in China. Weaknesses in China Internet and EV stocks dragged the Hang Seng Tech Index (HSTECH.I) down by 3.4%. On the other hand, local Hong Kong developers, Sun Hung Kai Properties (00016:xhkg), up 2.7%, New World Development (00017:xhkg), up 2.2%, and CK Asset Holdings (01113:xhkg), climbing 1.2% were among the best performers in the benchmark index, following news reports saying the Hong Kong Government is considering to relax the 15% extra stamp duty that non-resident buyers need to pay when buying a property in Hong Kong. In addition, Hong Kong is considering allowing 12 people instead of the currently 4 to gather in public. Macao casino stocks dropped from 1.9% to more than 7% on the dim prospect of relaxation on zero-Covid policy in mainland China. The head of China’s Epidemic Response and Disposal Leading Group, Liang Wannian, said on TV that China had no timeline for an exit from its Covid strategy. Sands China (01928:xhkg) was also troubled by a lawsuit in the U.S. in which the claimant is seeking more than USD7.5 billion in compensation. Healthcare stocks gained at the Hong Kong and mainland bourses. In the A-share market, computing, software, and digital currency concept stocks gained, following China’s central bank’s pledge to promote the development of the digital renminbi.Weak verbal intervention in the Japanese yenUSDJPY traded to a fresh record high of 147.67 overnight, and stayed above the 147 handle despite a reversal in US dollar strength later in the session. Only some weak comments were noted from Japanese authorities, with FinMin Suzuki saying that FX volatility was discussed at the G20 meeting. There was also some speculation of more Japanese intervention after some sudden price movements in the Yen yesterday as USDJPY hit a high of 147.47 before knee-jerking lower to 146.52, albeit if it was intervention it wasn't successful with USDJPY back above 147.00. That is perhaps a reason why Japanese MoF official has stayed away from confirming or denying Thursday’s intervention. BOJ Governor Kuroda kept easing bias saying not appropriate to raise rates in Japan now, and with US yields still seeing some more room on the upside, there could be more room for yen weakness. Ourtechnical analysthighlights that if USDJPY breaks 147.65 resistance, 149.34 level is not unlikely.Crude oil(CLX2 & LCOZ2) followed the USD price actionWhile there were enough drivers for the oil prices overnight, price action in crude oil generally followed the USD trend which initially rose after the hot US CPI report cementing expectations for another 75bps rate hike at the November meeting and a small chance of a 100bps rate hike, but it fell later as risk sentiment revived. The IEA's monthly oil market report saw its Q4 demand view lowered by 300k BPD, while its 2023 demand outlook was cut by 470k BPD (both are still expected to show growth). But supply concerns also remained with the weekly US inventory reporting tight market in distillates following a decline of 4.9mln barrels in domestic supply. Crude stocks build was significantly above expectations (9.88mln vs an expected 1.75mln), while stocks at Cushing drew down by 309k; and gasoline posted a surprise build (2.023mln vs an expected -1.825mln). US-Saudi tensions also continue to slide downhill as the White House accused Saudi Arabia of coercing other OPEC+ members into agreeing to a huge output cut, and said it had asked the kingdom for a pause.What to consider?Hot US CPI pushing Fed tightening expectations higher –can Fed members continue to out-hawk the markets?Core US inflation jumped to a 40-year high of 6.6% y/y in September, making more jumbo Fed rate increases inevitable. Headline CPI also came in higher than expectations, at 8.2% y/y with shelter, food and medical care contributing to the biggest gains. Fed funds rate expectations have pushed higher, with a full 75bps rate hike priced in for November with increasing expectations of a 75bps rate hike in December as well. March 2023 terminal rate expectation pushed higher by about 30bps to 4.94% now. This is above the 4.6% depicted by the Fed’s dot plot, and may leave little room for the Fed members to continue to out-hawk the markets. Fed speakers George, Cook and particularly Waller will be on the wires today.Reports of another potential UK fiscal U-turnThere’s no ending the drama in the UK markets, with reports of another potential U-turn in the fiscal plans of Liz Truss government. Now, there are talks that the government is mulling hiking corporation tax despite initial plans to scrap the corporation tax hike and keep it unchanged. Such reports, along with the BOE’s increased bond-buying thus week, could help put a floor on UK assets next week as the central bank halts its bond purchases today. Still, the credibility of UK authorities remains in question, and that would mean it remains hard to include Gilts in asset allocation.Treasury Secretary Yellen warned about the risk of a loss of liquidity in the U.S. treasury marketU.S. Treasury Secretary Janet Yellen voiced concerns about a potential breakdown in treasuries trading when answering questions yesterday and said that the Treasury is “worried about a loss of adequate liquidity in the market”. The concern about the potential risk of a sudden loss of liquidity or even a breakdown of trading in the U.S. treasury market has recently risen among some traders as the treasury market loses the largest buyer, the Fed in quantitative tightening. After rounds of QE and large fiscal deficits, the outstanding amount of treasuries has grown to USD23.7 trillion. The daily turnover in treasuries was USD627 billion a day in September. The turmoil across the pond in the U.K. gilts markets has also added to the worries among traders and probably policy makers in the U.S.U.S. Bank earnings, potential CET1 capital shortfalls to watchSeveral leading U.S. banks, including JPMorganChase (JPM:xnys), Morgan Stanley (MS:xnys), Citigroup (C:xnys), Wells Fargo (WFC:xnys), US Bancorp (USB:xnys), PNC Financial (PNC:xnys), First Republic Bank (FRC:xnyc) are reporting on Friday. The market focus will be on JPMorganChase, Morgan Stanley, and Citigroup. The key things to watch for are these banks’ net interest margins and their updates on the quality of their loan books, as well as the impact of mark-to-market losses incurred to their available-for-sale investment portfolio, which are largely treasuries and agency mortgage-backed securities, on their common equity tier-1 (CET1). Some of the banks may be hit by falling bond prices and are facing CET1 capital shortfalls.Taiwan’s TSMC, South Korea’s SK Hynix, and Samsung Electronics secured U.S. approval for getting U.S. equipment for 1 yearTaiwan Semiconductor Manufacturing Co said the company had secured a 1-year license from the U.S. government to continue to get U.S. chip-making equipment for its expansion in manufacturing capacity in China for the next 12 months. Likewise, South Korean chip maker, SK Hynix said it had gotten a 1-year waiver from the U.S. government to import American equipment to its factories in China. Reportedly, Samsung Electronics got a similar waiver. On the other hand, China’s top semiconductor equipment maker Naura Technology was said to have told the company’s American engineers to stop working on research and development projects with immediate effect.The Chinese Communist Party convenes its 20thNational Congress on Oct 16General Secretary Xi Jinping will make a speech and presents the Work Report of the 19thCentral Committee to the 20thNational Congress of the Chinese Communist Party (CCP) on Oct 16. From Oct 16 to 22, around 2,300 delegates from all over the country will elect 205 full members and 171 alternate members of the 20thCentral Committee and select the members for the 20thCentral Commission for Discipline Inspection. On Oct 22, the 20thNational Congress will vote to approve the Work Report of the 19thCentral Committee and approve an amendment to the charter of the CCP. The 20thNational Congress ends on Oct 22 and the newly elected 20thCentral Committee will hold its 1stplenary session on Oct 23 and decide on the most important 25-member Politburo and its 7-member Standing Committee, as well as members of the Central Military Commission and Central Secretariat. Nomination of Premier and Vice-premiers of the State Council are matters to be decided not this time but later in the 2ndplenary session which may be held in February 2023 and that nomination will need to be approved by the National People’s Congress in March 2023.ECB QT likely to begin in Q2 2023, lower ECB terminal rateECB discussed possible timeline for balance sheet reduction at Cyprus meeting earlier this month. Consensus appeared to emerge for quantitative tightening to start sometime in Q2 2023. Reports suggested that the ECB could already tweak its language on reinvestments at its October meeting and then could provide a detailed plan possibly in December but more likely in February. Meanwhile, Reuters reported that an ECB staff model puts the terminal rate in Europe at 2.25%, beneath the 3% that markets are currently pricing in; however, the response from ECB policymakers was mixed, with some fearing the model contains errors.China’s CPI is expected to rise to 2.9% in SeptemberChina is releasing CPI and PPI data on Friday. The median forecast in the Bloomberg survey is expecting the CPI to rise to 2.9% Y/Y in September from 2.5% Y/Y in August. The rise is likely attributed to higher food prices, including pork prices during the month. PPI is expected to fall to 1.0% Y/Y in September from 2.3% in August, helped by a high base last year.China’s export growth is expected to decelerate in SeptemberThe median forecast in Bloomberg’s survey of economists calls for a sharp deceleration of China’s export growth in USD terms to +4.0% Y/Y in September from +7.1% in August, citing tightened pandemic control measures and a high base of last year.China’s LNG imports are set to decline this winterBloomberg analysts estimate that China’s LNG import in November and December will be 12.7 million metric tons, a decline of 17% from last year, citing Chinese LNG users canceling LNG import terminal access slots.Singapore avoids a technical recession, MAS re-centres currency bandSolid Q3 GDP growth of 4.4% y/y in Singapore according to advance estimates, crushing estimates as construction and services industries outperformed. This reaffirmed that Singapore not only avoided a technical recession, but is on a solid recovery track after the pandemic restrictions were removed. Q/Q growth turned positive to come in strongly at 1.5% from -0.2% previously. This has given further room to the Monetary Authority of Singapore (MAS) to tighten the policy, and it announced re-centring of its currency policy band to the prevailing level. No changes to the width or slope of the band were announced, meaning the boost to the SGD could remain temporary as potentially more USD gains remain likely for now.What is the thinking about what will happen to interest rates in Australia?In Australia the futures market are now pricing in interest rates will peak at 3.9% next year. We have seen the RBA express ‘peak hawkishness’, is behind it. But the market is still pricing in rate rises will continue, but at a steady pace. This means growth sectors remain pressured and value strengthens. Consider; amid the energy crisis, there are the most rising-free cash flows in energy markets, which offer value and support share price growth. This is worth perhaps reflecting on, especially given coal prices hit fresh highs and we are not at peak coal demand season (December-January) yet. Also consider oil prices have moved off their lows. As such energy prices look supported higher for longer despite A.Most traded instruments at Saxo Australia this weekThe most traded stocks this week at Saxo in Australia are Tesla, Apple, Whitehaven Coal (hit new high), Coles, and Bank of Queensland results. What’s the takeaway here? We need to reflect on the trends. Trends are your friends when it comes to making profits in markets. In the banking sector; we heard from Bank of Queensland who is forecasting house prices to drop and loan growth to slow. Coal prices are moving up and continues to be supported. And in when it comes to the most transacted upon futures, in commodities; we've seen a pick-up in buying of Crude oil Futures; with the OPEC and EIA still predicting demand will outpace supply in 2023, meaning we could expect higher oil prices into next year.For a week-ahead look at markets– tune intoourSaxo Spotlight.For a global look at markets– tune intoourPodcast.Source:https://www.home.saxo/content/articles/equities/market-insights-today-14-oct-v2-14102022
Dow Jones Industrial Average Index And Its Movement InstaForex Analysis 20.10.2022 08:25 Relevance up to 07:00 2022-10-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.Read more:https://www.instaforex.eu/forex_analysis/297555
The Down Jones Industrial Average Index Chart InstaForex Analysis 28.10.2022 08:27 Relevance up to 06:00 2022-10-31 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a tradeRead more:https://www.instaforex.eu/forex_analysis/298727
Technical Outlook Of The Dow Jones Index InstaForex Analysis 30.11.2022 08:50 Over the last one and a half months, we have seen the DJI correction in a possible B or X wave to a high of 34,386 or just above the 61.8% corrective target at 33,785. This should be enough and we should see the DJI lose steam from here and start to push lower towards support at 31,727. A break below here will confirm that the DJI has peaked for now and a new strong push lower towards at least 22,613 is in the cards.That said, we might first see the real push lower at the beginning of 2023 as Christmas time always is beneficial for the equity markets.Relevance up to 06:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.Read more:https://www.instaforex.eu/forex_analysis/303105
Analysis Of The Dow Jones Industrial Average Index InstaForex Analysis 22.12.2022 08:20 If we look at the 4-hour chart, the Dow Jones Industrial Average index seems to be corrected upwards to test the SBR (Support Become Resistance) level which also happens to be the Daily Breaker Block from #INDU, namely level 33415.9 where this level also happens to be in the Bearish Fair Value Gap area. even though the upward correction of the rally has been confirmed by the appearance of deviations between the #INDU price movement and the Stochastic Oscillator indicator, if the Resistance levels previously described are strong enough to withstand the upward correction rally and/or as long as it does not break above the 33756.6 level, then #INDU has the opportunity to fall back down to the level area 32612.4-32241.9 as the first target and the area level 31761.6-31240.1 as the second target.Relevance up to 05:00 2022-12-23 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.Read more:https://www.instaforex.eu/forex_analysis/116177
The World Bank Cut Its Global Growth Forecast To 1.7%, Copper Continues To Get Support From China’s Reopening Saxo Bank 11.01.2023 09:05 Summary:Despite Powell’s relative silence on policy outlook, there were other Fed and non-Fed speakers that continued to sound hawkish and raising alarms on inflation. Bonds slumped although equities and USD struggled to find direction in pre-US CPI positioning moves. Some optimism seen on European growth outlook while the World Bank still cautious about a global recession. Australia’s November CPI was hotter-than-expected, aiding further gains for the AUD which is underpinned by China’s reopening and policy stimulus.What’s happening in markets?Nasdaq 100 (NAS100.I) and S&P 500 (US500.I) rise and trade nearkey technical levelsAfter two Fed speakers reminding markets US rates could rise to over 5%, JPMorgan CEO Jamie Dimon joined the party, saying there’s 50% chance rates could go to 6%, while money managers BlackRock and Fidelity (among others) warned that markets are underestimating the ultimate rate peak. The World Bank slashed growth forecasts in half, saying new adverse shocks could tip the global economy into a recession. It estimates GDP will rise 1.7% this year, (that’s almost half the pace forecast in June). So this sets the stormy tone for the major indices in 2023. That said, JPMorgan's trading desk says there a two-in-three chance Thursday’s inflation data for December (released on US Thursday), could be on the soft side and spark a 1.5-2% S&P500 rally. On Tuesday the major US indices rose in choppy conditions;
Essential Factors To Watch For 2023 And Stock Indices Are The Short-Term Bond Yields Santa Zvaigzne Sproge 02.02.2023 14:34 „The future’s so bright, I gotta wear shades”, or about shares and ETFs„The future’s so bright, I gotta wear shades” is the title that, unfortunately, we cannot use to forecast 2023. Although, the new year will have to really work hard to surprise anyone who has lived through the past couple of years. It appears that all investors’ eyes are on China and its success in resuming economic activity. A rebounding China will boost imports of oil, commodities and raw materials while fueling demand for airline tickets, hotel rooms and foreign real estate. „Surely it will push up global inflation if China reopens fully,” says Iris Pang, chief economist for Greater China at ING Group NV. There is a risk that China will act more inflationary in 2023, but this risk seems limited due to the very real likelihood that supply will also improve in many sectors of the economy.Inflation and bond yields are the major risks for 2023 stock indices performance. While a mild recession in 2023 is almost certain, the Fed possibly will slow its rate hikes in case inflation starts to show signs of easing. With slowing growth, wage increases would slow, which, among others, would help stabilize corporate margins. „It’s astonishing,” said Harvard University professor Jeremy Stein, „If you told any one of us a year ago, ‚we’re going to have a bunch of 75 basis-point hikes,’ you’d have said, ‚Are you nuts? You’re going to blow up the financial system.’” Guess what? 75 basis-point hikes are done, and the financial system has not broken – and it is not even near that happening.Stock indices are open to another downward phase (we didn’t have a capitulation yet), but by the end of 2023, they could be back on the upward trend even if the world is in a „mild” recession. Investors should watch the market and remain cautious until the new trend is proven. However, someone may say it might be a good to have some exposure and adjust when your asset allocation gets out of whack. Essential factors to watch for 2023 and stock indices are the short-term bond yields, put/call ratio and bank liquidity. Finally, one should remember that stocks are hostages to the tyranny of round numbers, so it might be good for the support and resistance lines to be always near them. As we move further, let us look at what the companies expect the year 2023 to bring. We have studied the earnings forecasts of all 30 companies that are part of the Dow Jones Industrials index (US30).Read next:Santander Bank Polska Shareholders Can Expect A Solid Dividend, The ETH Liquid Staking Narrative Is Already Going Strong| FXMAG.COMIt’s going to be tough at first, and then it’s downhill for the Dow JonesCollecting the data of Q1 2023 earnings per share forecasts, we can see that 12 of the 30 companies in this index (40%) are expected to improve their quarterly earnings, resulting in an 11.7% growth in EPS from Q4 2022 to Q1 2023. The average price-to-future earnings ratio within the index is expected to be 16.8, an improvement compared to the current average P/E ratio within the index of 18.5.The most considerable improvement for the upcoming quarter is forecasted by the aircraft and missile manufacturer Boeing Co., which was the only company within the index to record a loss in Q3 2022. In fact, if we exclude Boeing Co. data from the calculations, the estimated EPS growth in the following quarter diminishes to a meagre 2.00%.The second most substantial growth is forecasted by Goldman Sachs Group Inc., which is also expected to report the highest quarterly EPS (9.99) within the index. The investment bank would be able to boost its earnings by taking advantage of the increasing interest rate environment. Two companies expecting their EPS to decrease in the upcoming quarter are Chevron Corp. and McDonald’s Corp.The cumulative annual earnings figures are similarly presented. Cumulative EPS is calculated by summing annual EPS for all companies within the index, allowing us to evaluate the EPS changes between two periods. However, to compare the full annual periods, we have taken the expected results for the last quarter of 2022. The data show that the anticipated annual EPS increase in 2023 within the index would be 10.37% (6.19% if we exclude Boeing Co. as an outlier). Furthermore, 26 of the 30 companies in the index are likely to report year-on-year earnings growth.These results show that analysts are currently predicting a slowdown at a large proportion of companies in the medium term and a slow improvement by the end of next year. The companies’ employee retention activities and job postings share the same relatively gloomy sentiment for the upcoming year.Good morning, but unfortunately you are firedLast year, all major tech companies announced job cuts – some significant, some smaller. The motivation for companies to reduce the employee count comes from various factors, such as changing business models and a slowing economy. However, the biggest reason for the extensive tech firing in 2022 is the growth opportunities in cloud computing services and online shopping upon Covid-19 pandemic that drove people to organize their lives remotely. For example, due to this change in consumer behavior, Amazon doubled its workforce and had its most profitable period in the two years since the pandemic’s beginning.As the pandemic slowed in most of the world, such companies as Amazon were left with the high costs of rapid expansions, slower sales, and high inflation. Amazon’s growth stalled to the lowest rate in 20 years in mid-2022. During the period between April and September, Amazon laid off around 80,000 people around the world. In November, it announced another 10,000-employee layoff (the number was increased to 20,000 in December) and froze hiring. In total, Amazon’s downsizing amount to approximately 6.6% of its total workforce. While this has been the biggest job layoff in the history of Amazon in absolute terms, Amazon is experienced in managing its workforce amid recessions – it cut 1,500 jobs during the dot-com crash (which at that time was 15% of the staff).Besides large tech companies such as Amazon, Meta and Twitter, also startups – especially those emerging in response to the needs of a pandemic-hit world - and cryptocurrency companies are also feeling the pressure of inflation, the difficulty of raising new funding and, in the case of the latter, falling Bitcoin prices and investor sentiment. According to the Crunchbase database of public and private companies in the United States laying off employees, nearly 400 companies have announced layoffs, from which 21 reported a complete shutdown and 15 more fired 40% to 60% of their workforce. The major layoffs took place in Fintech, Crypto, E-commerce and Social media industriesIf anyone is wondering whether redundancies continue into 2023, they will (at least at Amazon). It has been confirmed by the company’s CEO Andy Jassy. Although, it is relatively safe to say that the layoffs would continue in 2023 for other tech companies and may spread out to other sectors as well. While the US labour market still shows meager unemployment data, if taking a closer look, it is visible that a considerable part of the hiring takes place in those industries trampled by the pandemic. And the downsizing among Tech companies also seems to become a problem for other sector workers. Among other (potentially more logical) factors is that corporate leaders are just people with a sense of herd unity. Therefore, if their competitors announce layoffs to prepare for the coming recession, they would probably consider doing the same.While it is harder to look for the silver lining in getting fired, it may be an absolute necessity for the company to undergo downsizing as part of a strategic restructuring. Downsizing allows companies to save cash, improve efficiency and, if necessary, survive economic slowdown. Nevertheless, it is crucial to do the due diligence and see what other activities the company is performing in order to optimize its operations – no company has earned billions by simply laying off employees.While cutting jobs is not necessarily bad for the company, the overall market typically perceives it as a negative sign, which is clearly reflected in its stock price. Studies involving 141 companies announcing layoffs between 1979 and 1997 and 1,445 companies announcing layoffs between 1990 and 1998 clearly show that downsizing negatively affects the companies’ stock prices following the news and in the longer period after the announcement. Interestingly, even though the key objective for downsizing typically is cost-cutting and optimization, not all companies achieve reliable results in this field. On the contrary, as a result, companies face the risk of losing valuable employees, may need to rehire some of them at a later stage and is likely to deal with a fall in customer service quality, productivity, and innovation due to demoralized workforce.The bottom line is that companies don’t fire employees if they are expecting a high growth period ahead. It is true whether we speak about one particular company or the market in general.Investors should pay attention to employee retention activities, reasons for necessary downsizing, and how the company expects to handle any negative consequences. Based on current market trends, it is safe to say that further downsizing will continue as we officially enter a recession in 2023.Good to watch ETFsRead thefull Yearly Outlook 2023 by Conotoxia here!
