The income report of Meta (Facebook) alongside the durable goods orders data of the United States were among the most significant events in the markets yesterday. Now let’s take a look at the markets and the events that unfolded yesterday, and then move on to analyzing the market today.
Economic Events:
The most important data being released today includes the US GDP data and the country’s unemployment claims. Additionally, the Core PCE (Personal Consumption Expenditures) data will also be published. Forecasts for the advance GDP for the first quarter of 2024 indicate a growth rate of 2.5%, which is relatively good but lower than Q4 2023.
The continuous unemployment claims will also be released, and considering all of these data points, the health of the US economy can be evaluated.
Source : Dailyfx
Yesterday, the US durable goods orders were released at 2.6%, which was higher than the market expectations. Given the recent strengthening of the US dollar over the past few weeks, the effects of this news had already been priced in by the market.
Earnings:
Today, the spotlight is on the earnings reports of two tech titans, Microsoft and Google, slated for release after the market closes. These companies wield significant influence, collectively commanding a market cap that exceeds that of many emerging economies. Microsoft is estimated to report revenue of $60 billion, while Google’s anticipated revenue stands at $78.69 billion. The estimated EPS for Microsoft is 2.82, and for Google, it’s 1.51. These reports have the potential to heavily impact the Nasdaq, a renowned tech index..
Source : Earnings whispers
Meta disclosed an earnings per share of $4.71 for the quarter, while revenue stood at $36.46 billion. According to analysts’ estimates compiled by Bloomberg, Wall Street had expected an EPS of $4.30 on revenue of $36.12 billion. Meta’s stock experienced robust growth, soaring 131% over the past 12 months and more than 39% year to date.
Meta:
In Wednesday’s after-hours trading, Meta’s stock witnessed a decline of approximately 15%. Analysts attributed this to concerns among investors, citing a lack of upside in the sales outlook as one factor. Another factor was Meta’s decision to raise its capital expenditure outlook for the full year, reflecting increased spending on areas such as artificial intelligence infrastructure.
MSFT:
Alphabet:
Gold (XAUUSD):
Gold continues to consolidate within a narrow range, showing indecisiveness. Support levels around $2295 may provide a solid defense in the event of a renewed downturn.
NQ100:
The index reversed its trajectory yesterday, relinquishing most of Tuesday’s gains, as sentiment soured following Meta’s earnings release. Although the price remains comfortably above last week’s low for now, upcoming earnings reports from major tech companies in the following week could hinder further upward momentum. As long as the price maintains support above last week’s low at 16,970, there is potential for a rebound. However, a close above 17,700 would be needed to strengthen the bullish outlook.
Foreign Exchange Market (FOREX):
US dollar traders are now anticipating three significant US data releases: US durable goods on Wednesday, US Q1 Flash GDP on Thursday, and US Core PCE on Friday. While all three have the potential to impact the market, it’s the latter two that are particularly noteworthy.
Despite a slight dip post-PMIs, the US dollar index remains relatively high. A move above 106.58 could expose October’s high at 107.335 and potentially lead to a complete retracement of the sell-off observed from July 2023 to December 2023. Notably, all three simple moving averages maintain a bullish formation, with the 50-/200-day bullish crossover in late March continuing to guide the market upwards.
DXY:
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Bitcoin (BTC):
Bitcoin initiated its downward momentum yesterday with the commencement of the US trading session. The key support level at 61600 emerged as the primary support for Bitcoin. With increased volume and the formation of bearish candles around the 66300 range, sellers’ expectations were met, leading to a culmination.
US Crude Oil WTI :
U.S. crude oil traded below $83 per barrel on Wednesday, experiencing a slight retreat following a nearly 2% increase in the previous session.
Traders have redirected their attention to supply and demand dynamics as concerns about potential conflict between Israel and Iran have diminished.
The current market sentiment leans somewhat bearish, with global oil inventories on the rise. This increase is attributed to the unloading of crude that was previously stranded at sea due in part to disruptions in the Red Sea, as highlighted in a note from Goldman Sachs on Tuesday. According to the bank, this has alleviated some of the tightness in the market.
Goldman Sachs also anticipates that the geopolitical risk premium embedded in oil prices will decrease by an additional $5 to $10 per barrel in the upcoming months.
Furthermore, U.S. commercial crude stockpiles, excluding the strategic petroleum reserve, experienced a significant decline of 6.4 million barrels last week, marking the largest drawdown since mid-January, according to data from the Energy Information Administration.
Additionally, President Joe Biden signed a foreign aid package on Wednesday that expands sanctions against Iranian oil. The measures target ports, vessels, and refineries that knowingly accept crude exports from the Islamic Republic.
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