Daily Video Review - 28/01
- Donald Herison
- English
- MARKETS NEWS
- Hits: 1151
US stocks dropped, experiencing their biggest drop in 3 weeks. Markets were hit by weaker than expected data with Core Durable Goods Orders declining by 0.8%, instead of increasing by the expected 0.6%. The data sparked speculation that the Federal Reserve may postpone their rate hike further and it is now expected in June. Markets were also hit by weak earnings.
Asian markets were mostly higher today. The Nikkei climbed 0.15% reaching a monthly high as the Dollar strengthened against the Yen in anticipation of the upcoming FOMC statement.
European markets are mixed today.
Oil is falling as it is pressured downwards by the stronger Dollar. In addition the API released an inventory report which showed that supplies climbed by almost 13 million barrels in the past week. A further report will be released from the EIA at 3:30pm GMT.
Gold is heading back down as investors become wary ahead of the upcoming FOMC statement. Losses appear limited as it is expected the Fed will be dovish and may postpone hiking rates to later in the year. Nevertheless, traders should watch the report closely as it is likely to spark short term movement in the market.
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Here are 4 tips for today's trading. This will help you decide where you should invest and what to look for:
1) Big Tech Gets a Boost
Shares in Apple (AAPL, Tech30) are expected to jump at the open after the company posted the biggest profit in corporate history in the last quarter, when it sold 74.5 million iPhones.
Apple's earnings are helping ARM Holdings (ARMH, Tech30) in London, a company that sells chip designs to Apple and other smartphone makers. Shares in ARM were rising by 2% in London.
Yahoo (YHOO, Tech30) shares are also expected to soar at the open after the company said it would spin off its remaining stake in Chinese e-retailer Alibaba (BABA, Tech30). The deal is expected to save shareholders $16 billion in tax, according to Yahoo CEO Marissa Mayer.
2) Greek Stocks and Bonds Plunge
Greek markets plunged again, with banks suffering the most, after the country's new anti-austerity government was reported to have canceled a planned privatization -- one condition of its international bailout. The benchmark Athens index has now fallen nearly 10% already this year.
The yield on Greece 10-year government bonds jumped 60 basis points to more than 10%.
3) More Earnings
Quarterly results are coming in thick and fast.
Boeing (BA), Hess (HES) and Fiat Chrysler (FCAM) are among the main companies reporting earnings before the opening bell.
Facebook (FB, Tech30) will report after the close.
4) Focus on the Fed
At 2:00pm ET, investors around the world will be focusing on the latest announcements from the US Federal Reserve. The Fed is concluding its two-day meeting Wednesday and investors will be parsing through the Fed's new statement to guess when the central bank may be ready to raise interest rates.
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What is it? It checks the difference in value between imported and exported goods during the reported month.
Export demand and currency demand are directly linked because foreigners must buy the domestic currency to pay for the nation's exports. Export demand also impacts production and prices at domestic manufacturers.
When? January 28th at 4:45pm Eastern Time.
Trading Tip: If the actual number is higher than the forecast, you can expect the NZD to rise.
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What is it? It's among the primary tools the RBNZ uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.
When? January 28th at 3:00pm Eastern Time.
Trading Tip: If the announcement will hint towards higher interest rates, you can expect the NZD to rise.
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What is it? It checks the interest rate at which banks lend balances held at the RBNZ to other banks overnight.
Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
When? January 28th at 3:00pm Eastern Time.
Trading Tip: If the actual number is higher than the forecast, you can expect the NZD to rise.
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What is it? It checks the interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight.
Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future;
When? January 28th at 2:00pm Eastern Time.
Trading Tip: If the actual number is higher than the forecast, you can expect the USD to rise.
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What is it? It's the primary tool the FOMC uses to communicate with investors about monetary policy. It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.
When? January 28th at 2:00pm Eastern Time.
Trading Tip: If the announcement will hint towards higher interest rates, you can expect the USD to rise.
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What is it? As head of the central bank, which controls short term interest rates, he has more influence over the nation's currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy.
When? January 28th at 1:50pm Eastern Time.
Trading Tip: If the announcement will hint towards higher interest rates, you can expect the GBP to rise.
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US markets climbed as investors shrugged off news from Greece. The left wing Syriza party won the elections and came to power. The party is strongly against the austerity program but shock in the market was short lived and traders believe that the result is unlikely to destabilize the European economy.
Asian markets were mixed today. The Nikkei added 1.72% after the Dollar advanced strongly against the Yen throughout the day, climbing from 117.5 to 118.65. Traders also tracked U.S markets after fears regarding Greece subsided.
European markets are lower today.
Crude Oil declined following the news that the Syriza party won the Greek elections. Today, the price dropped back down and the commodity is now trading choppy. Traders appear to be looking for direction and volatility is expected to remain high unless oil producing countries make an agreement. The API will release inventory data at 9:30pm GMT and could spark short term movement.
Gold declined as traders locked in profits following gains made after the Greek election. In addition, traders appeared to reinvest in riskier assets, ditching the metal for equities. Attention will now turn to Wednesday’s FOMC meeting as investors are eager to learn when the interest rate hike will occur.
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Here are 4 tips for today's trading. This will help you decide where you should invest and what to look for:
1) Markets Getting Snowed Under
US stock futures are all pointing down ahead of the open as traders express disappointment over some quarterly results.
Shares in Microsoft (MSFT, Tech30) and Caterpillar are both declining more than 7% after releasing their latest earnings.
Microsoft reported a drop in quarterly profit, largely due to the ongoing restructuring of the company. But sales are growing for just about every product Microsoft makes, except for Windows.
2) Natural Gas Bounce
Natural gas futures are bouncing by about 3% in New York. Traders appear to be expecting a surge in heating demand because of the cold weather slamming the northeastern United States.
3) International Markets Overview
Most European markets are down in afternoon trading, with some major indexes off by more than 1%.
However, the Swiss stock exchange is up by about 1%. Swiss markets are clawing back some of the losses endured earlier this month after the central bank allowed the currency to float freely instead of being pegged to the euro.
Asian markets ended with mixed results.
4) Monday Market Recap
The Dow Jones industrial average gained a mere 6 points on Monday, while the S&P 500 and the Nasdaq both put on about 0.3%.
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What is it? It checks the change in the price of goods and services purchased by consumers.
Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.
When? January 27th at 7:30pm Eastern Time.
Trading Tip: If the actual number is higher than the forecast, you can expect the AUD to rise.
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What is it? It checks the annualized number of new single-family homes that were sold during the previous month.
It's a leading indicator of economic health because the sale of a new home triggers a wide-reaching ripple effect. For example, furniture and appliances are purchased for the home, a mortgage is sold by the financing bank, and brokers are paid to execute the transaction.
When? January 27th at 10:00am Eastern Time.
Trading Tip: If the actual number is higher than the forecast, you can expect the USD to rise.
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What is it? It checks the level of a composite index based on surveyed households.
Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity.
When? January 27th at 10:00am Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the USD to rise.
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What is it? It checks the change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items.
It's a leading indicator of production - rising purchase orders signal that manufacturers will increase activity as they work to fill the orders.
When? January 27th at 8:30am Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the USD to rise.
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What is it? It checks the change in the inflation-adjusted value of all goods and services produced by the economy.
It's the broadest measure of economic activity and the primary gauge of the economy's health.
When? January 27th at 4:30am Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the GBP to rise.
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On Friday, the EUR/USD pair continued downward as nervousness on the market persisted.
During the weekend, the Greek election took place and as expected, Syriza party won. The pair declined and again tested to break through. However, the pair lost the momentum and bounced back up.
At 9:00am GMT the German Ifo Business Climate will be released and is expected to show the highest figure since July 2014. If the reading disappoints the pair may test the support third time. The movement is sideways.
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