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Trends & Analysis
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Trends & Analysis
News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

News

Dow rises after being in the red for 5 sessions

 

Wednesday, March 15, 2023

The news shaping the markets today

A Russian fighter plane sent a US spy drone into the Black Sea. Despite the ongoing conflict, the safe-haven US dollar index fell this morning.


China’s industrial production rose 2.4% year-over-year in January-February combined, below market expectations of 2.6% growth, which exerted pressure on the CNY/USD forex pair.


Argentina’s monthly inflation rate rose to 6.6% in February, from 6% in the previous month, sending the ARS/USD pair slightly lower in forex trading this morning.


New Zealand’s current account deficit widened to NZ$9.4 billion in the fourth quarter, from NZ$7.5 billion in the year-ago period, exerting pressure on the NZD/USD forex pair.


Singapore’s unemployment rate fell to 2.0% in the fourth quarter of 2022, the lowest level since Q1 2016, which sent the SGD/USD pair higher in forex trading this morning.

 

What’s happening: US stocks moved higher after recording losses in the previous session.

What happened: The Dow Jones index snapped a five-session downturn, following the release of US inflation data.

Investors await the upcoming Federal Reserve meeting, scheduled for next week.

Why it matters: US stocks began the week with a sharp decline amid a plunge in banking stocks and government bonds on concerns around a financial crisis, after the collapse of Silicon Valley Bank and Signature Bank.

Experts said the deteriorating banking environment could force the US Federal Reserve to soften its hawkish tone, despite inflation remaining above the central bank’s target.

The Federal Reserve Board announced funding to support depositors and businesses having deposits with SVB Financial.

Some calm returned to the US markets on Tuesday and banking stocks rebounded sharply, leading gains in the S&P 500. First Republic Bank’s stock surged around 27% on Tuesday. Shares of KeyCorp and Charles Schwab also recorded strong gains.

The S&P 500 financials sector rallied around 1.9%, driven by gains in regional banking stocks, which had suffered a massive selloff in the prior session.

Data on US consumer prices, released on Tuesday, showed the annual inflation rate easing to 6% in February, reaching the lowest level since September 2021. This marked a significant deceleration from January’s 6.4% reading.

Yields on the US Treasury note, which had declined sharply on Monday, moved higher on Tuesday, with traders now expecting the Fed to hike interest rates by only 25 basis points at next week’s meeting.

The Dow Jones index jumped around 336 points, or 1.06%, to close at 32,155.40 on Tuesday, after recording losses for five sessions. The S&P 500 added 1.65% to reach 3,919.29, while the Nasdaq 100 gained 2.32% to settle at 12,199.79.

What to watch: Traders will now focus on US PPI data, due to be released today. Producer prices for final demand, which rose 0.7% in January, is expected to increase 0.4% in February.

Data on retail sales, NY Empire State manufacturing index and NAHB housing market index will also remain in focus today.

The markets today

United Airlines Holdings will be in focus today after filing an 8-K with the SEC

Context: Shares of United Airlines fell on Tuesday after the company issued an update to its first-quarter outlook.

Details: United Airlines filed an update with the Securities and Exchange Commission (SEC), reducing its outlook for the first quarter due to lower demand and higher costs from a potential new labour deal with its pilots.

The company said it now expects an adjusted loss of $0.60 to $1.00 per share, versus its previous outlook of $0.50 to $1.00 per share. United Airlines also projected capacity of 23%, compared to its earlier forecast of 20%.

The company raised its total operating revenue growth guidance to 51%, from its prior forecast of 50%.

UAL also said it expects total revenue per available seat mile of 22% to 23%, down from its earlier forecast of 25%.

The company maintained its guidance for fiscal 2023, reflecting adjusted earnings of $10 to $12 per share.

However, Delta Air Lines reaffirmed its forecast for the first quarter, saying that travel demand was getting stronger.

How shares responded: Shares of United Airlines fell 5.5% to close at $46.21 on Tuesday, following the update on its guidance.

What are expectations: Investors will keep an eye on overall travel demand and rising expenses. Markets also await the full release of quarterly results for more insight into the company’s performance.

Other Markets: European indices closed higher on Tuesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 1.17%, 1.83%, 1.86% and 1.53%, respectively.

Support & resistances for today

Technical Levels News Sentiment
EUR/USD  – 1.0754 and 1.0760 Positive
USD/CHF – 0.9123 and 0.9135 Positive
Silver – 21.925 and 21.968 Positive
Natural Gas  – 2.576 and 2.581 Positive
Nasdaq 100  – 12103.55 and 12250.14 Positive

Market snapshot

Futures at 0400 (GMT)
EUR/USD (1.0754, 0.20%) Dow ($32,428, 0.08%) Brent ($78.41, 1.2%)
GBP/USD (1.2174, 0.12%) S&P500 ($3,963, 0.21%) WTI ($72.36, 1.4%)
USD/JPY (134.19, -0.03%) Nasdaq ($12,367, 0.24%) Gold ($1,908, -0.2%)

What else to watch today

Saudi Arabia’s inflation rate and wholesale price inflation, France’s inflation rate, Turkey’s central government budget balance, Eurozone’s industrial production, South Africa’s retail trade, US MBA mortgage applications, business inventories, crude oil stocks change, gasoline stocks, distillate stocks,  net long-term TIC flows, net purchases of US treasury bonds and notes and net treasury international capital flows, Canada’s housing starts, Germany’s current account, as well as India’s balance of trade.


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