Archives of “October 2019” month

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Stock market: The earnings of JPM, Netflix, Coca-Cola and more

  
Analysis, US Market
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A look at earnings season in the US this week

FBS 1
The new earnings season is starting this week in the United States. This means that stocks of the largest American companies will likely make big moves. Below we have gathered some important information for those who want to trade on these releases.

Tuesday, October 15

Citigroup
EPS forecast: $1.95
Revenue forecast: $18.52B

Citigroup is the forth fourth biggest of the four “too big to fail” American banks. It has a long history of reporting better-than-expected earnings: that happened during the past 18 quarters. This time, analysts expect the bank to once again deliver good results.

Apart from earnings per share and revenue, investors will look at Citigroup’s margins (the bigger, the better for the stock) and the buyback program (the bigger, the better for the stock).

Technically, this year the stock of Citigroup has performed rather well after having a bad 2018. The price has firstly recovered 50% of the last year’s decline and then consolidated in a broad range between $61 on the downside and $73 on the upside.

However, Citigroup still didn’t manage to regain the highs of 2018 as bank stocks, in general, are pressured by the falling interest rates. Now it’s closer to the upper border of this sideways range, in the $70.00 area: the stock got support from the 50- and 100-week MAs at $65 and $68.25. Notice, however, that both weekly and daily MAs are horizontal.

This means that the price lacks overall momentum. The movement after the earnings report should be tied to the mentioned technical levels.

(more…)

Fed’s Bullard: Zero rates, forward guidance, QE still in the play book for “ordinary recession”

  
  Analysis
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Bullard Q&A session after his earlier speech

Suddenly, he’s back to a bit of a more dovish stance following his earlier comments about possible rate hikes if the economy improves again. That said, he’s hardly pushing the issue for a 25 bps rate cut this month and I think that’s the key takeaway in all of this.

OPEC’s Barkindo: Demand is what drives the oil market, not supply

  
Analysis, Crude

Comments by OPEC secretary general, Mohammed Barkindo

  • Volatility, geopolitical tensions hurt oil market
  • Cautious in projecting demand for 2019, 2020
  • Says that producers are committed to maintain stability beyond 2020
Yeah, I don’t think that’s how it works. In an efficient market, the dynamics of supply and demand are what drives prices to where they are.
So, it is either he is saying that the market is manipulated or he doesn’t understand the proper dynamics of a functioning market.
Questionable

Eurostoxx futures +0.4% in early European trading

  
Analysis, Global Indices
  Tags

Relatively mild gains observed in early trades

  • German DAX futures +0.3%
  • French CAC 40 futures +0.3%
  • UK FTSE futures +0.2%
This is largely reflective of the mood seen in US futures, which are slightly higher as well to start the European morning.
That said, the overall risk mood remains more measured with Treasury yields on the weaker side playing catch up to price action yesterday.
So far, there’s still the feeling that traders and investors are still quite indecisive about risk trades following the US-China trade truce. As such, the next set of headlines is likely the spot to watch to push risk towards a certain direction.

Nikkei 225 closes higher by 1.87% at 22,207.21

  
Analysis, Global Indices

Japanese stocks play catch up after the long weekend

Nikkei 15-10

The gains are in part to do with the US-China trade truce but also some talk of reconstruction demand after the hit from Typhoon Hagibis.

The overall risk mood in the region remains more mixed with the Hang Seng and Shanghai Composite both sitting lower.

Markets are still very much lacking direction at the moment as traders and investors are awaiting the next push in risk sentiment. The trade truce looks to be old news at this point so let’s see if we’ll get any other headlines to move things along.
US futures are up by 0.3% currently and that should lend to mild gains in European futures as well but there isn’t anything in that to really shift the dial for now.

China Sept. CPI: 3.0% y/y (expected 2.9%) & PPI -1.2% y/y (expected -1.2%)

  
Analysis, Economy

Inflation data out of China, pork prices a big factor in the CPI

CPI expected 2.9% y/y, prior 2.8%

  • fastest rise since October of 2013

PPI expected -1.2% y/y, prior -0.8%

  • fastest rate of decline since July 2016
more to come
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Background to the rising price of pork ( swine flu outbreak ):
  • supply issues worsened over the summer
  • pig inventories fell at a sharp rate
  • live pig prices hit a record high last month
  • the Chinese government to announced price caps, quotas, subsidies to pig farmers

USD up trend is 99 months old soon. Is it over? No, another 12-24 months still to come

  
Analysis, Forex
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The headline is the in summary version of a client note from UBS on the US dollar.

Its a detailed look at the US dollar trend, but adding to the to the headline points in brief.
When and how the dollar might turn is anyone’s guess
  • longterm dollar trend …  As of last month, it was still levying upward pressure … did not appear to be waning materially
  • medium term trend  …  duration of 2-5 years … more or less mirrors intra business cycle growth surges and slowdowns
  • shorter term one that averages about a year…. seems to relate to shocks caused by politics and supply disruptions to commodities … a modest dollar drag today … could reflect the … trade war coming home to roost and the drag on Chinese leading indicators passing, as fiscal stimulus from tax cuts and modest credit easing have begun to filter through

Brexit – slightly more positive reports coming out on deal progress

  
  Analysis

The ebb and flow of Brexit indications continues, this latest via the UK Telegraph

Says the report:
  • Brexit deal appears to be taking shape
  • sources on both sides said a positive day of negotiations had yielded a potential solution to the Northern Irish border problem
  • was “cautious optimism” that a narrow path to a deal could now be appearing
  • marked shift in tone from the downbeat assessment from the EU’s chief Brexit negotiator Michel Barnier on Sunday
GBP up a few tics

US stocks end the day with modest declines

  
Analysis, US Market

Semi holiday trading leads to modest price action

The US major stock indices are ending the day with modest declines. The Columbus Day holiday limited price action.  Government offices and agencies were closed as was the bond market. However the US stock market and futures markets were open.
The final numbers are showing:
  • The S&P index -4.12 points or -0.14% at 2966.15
  • The NASDAQ index -8.391 points or -0.10% at 8048.64
  • The Dow industrial average is down -29.23 points or -0.11% at 26787.30.
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