News & Analysis

Earnings lifts stocks; Oil drops; GBPUSD fails to hold new 2018 highs.

Apr 17, 2018 | Daily Market Outlook

Upcoming high impact news:

Ôû© 18:30 GBP CPI
Ôû© 00:00 CAD BOC Monetary Policy Report – BOC Rate Statement – Overnight Rate EXP 1.25%
Ôû© 00:30 OIL Crude Oil Inventories
Ôû© 01:15 CAD BOC Press Conference
Ôû© 08:45 NZD CPI

US markets – made it two in a row as stock indices closed higher on Tuesday. Easing geopolitical tensions and bumper earnings lifting buyer confidence. Netflix was the best performer in the S&P 500 after reporting in-line quarterly earnings and higher-than-expected subscriber growth. “The fact that Netflix is reacting so well to earnings helps the market,” said Tom Martin, senior portfolio manager at Globalt. “Netflix is a bellwether stock.” UnitedHealth shares rose 3.6 percent after it reported better-than-expected earnings and raised its outlook for 2018. Goldman Sachs posted better-than-expected earnings and revenue for the first quarter, boosted by a 38 percent jump in equities trading revenue. “The Q1 earnings season has started solidly,” said Jeremy Klein, chief market strategist at FBN Securities.

The Dow Jones added a further 213.59, the S&P500 closed 28.55 higher and the NASDAQ closed 124.81 points higher.

European markets – markets bounced back after Monday’s declines, earnings one of the key influences. The STOXX 600 closed the session up 0.8 percent provisionally, with almost all sectors ending in the black. Basic resources stocks with heavy exposure to China were among the top performing sectors Tuesday, jumping 1.3 percent. Positive Chinese GDP data helping to boost the sector. Genmab jumped to the top of the index after reporting higher than expected sales of the drug Darzalex during the first quarter. Genmab closed 8.74 percent higher by the close. Intrum Justitia soared 8 percent after it reportedly filed a binding bid for Intesa Sanpaolo’s debt collection unit. Germany’s ZEW research institute said its monthly survey found economic sentiment among investors slumped for the third straight month to -8.2, the lowest level since November 2012.

The FTSE gained 27.85 – the DAX surged by 194.16 and the CAC closed 40.58 pts higher.

Oil – finished higher after a choppy session, traders weighed the impact of geopolitical tensions against the physical market’s fundamentals. Some traders said risks included potentially spreading conflict in the Middle East and renewed U.S. sanctions against Iran. Others say concerns that a renewal of U.S. sanctions on Iran will rock oil markets are overdone. “We’re starting to see a little of the premium come off from geopolitics, and the focus is shifting to inventories,” said Bill Baruch, president of Blue Line Futures in Chicago. USOUSD closed 34 cents higher after testing 70 cents lower.

Forex – the USD made a small fight back overnight, the GBP run hit a pause. The EUR and AUD also finished lower. After making new 2018 highs hitting 1.4376, the GBPUSD ended the session 51 pips lower. The EURUSD had a choppy session trading in an 80 pip range closing 11 pips lower. The AUDUSD lost 15 pips after failing to hold earlier gains. The Japanese Yen had a stronger session against the majors. The USDCAD made a breakout that failed, buyers returning to the range with further gains this morning. A break of 1.2566 could be the start of a counter-rally. Gold traded in a choppy session adding just over two dollars. Price traded in a twelve dollar range. Gold’s quite range bound atm and needs time to work its self out.

GBPUSD – sellers have made their first move, will we see further follow through to test 1.4250?

Good trading from Eightcap.

Sources; CNBC. All times are AEST

* The information provided here has been prepared by EightCap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of EightCap.

In addition to the disclaimer on our website, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. EightCap accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

Please note that past performance is not a guarantee of or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.