News & Analysis
Tech higher – Europe lower; USD fights back – JPY continues higher – BOJ stimulus news;
Upcoming high impact news:
Tech shares led the way for U.S. stocks in last night’s session. Alphabet shares rose more than 4% after hours and 1.1% before the close. Facebook closed 0.6% higher during the session, while Amazon shares declined nearly 0.7%. Technology shares have been the best performers of 2018, rising 15.4% by Friday’s close.
“It’s early days for Q2 earnings season, but so far this is looking to be a very good reporting cycle,” Nicholas Colas, co-founder of DataTrek Research, said in a note Monday. “Here’s the strange bit, however: analysts are not yet raising their Q3 earnings estimates. In fact, they are marginally lower than at the end of June.”
“This is not what we expected to see, given the magnitude of the beats so far for Q2. Our explanation (for now) it that the revisions will come as more companies report and analysts assimilate all that data into future earnings expectations,” Colas said.
So far, more than 17% of S&P 500 companies have reported earnings for the previous quarter, with 82% of those companies topping analyst expectations. Wall Street has high hopes for this earnings season, with analysts expecting year-over-year growth of 20%.
The Dow Jones lost 13.83 pts – The Nasdaq gained 21.67 and the S&P500 added 5.15.
European stocks traded mainly lower, FTSE lost 23.00 – the DAX lost 12.85 and the CAC gave back 20.07 pts. Auto stocks lost ground, down by 0.28%, as trade concerns weighed on sentiment. European Commission President Jean-Claude Juncker is heading to the White House this week in an attempt to persuade the U.S. not to impose tariffs on European carmakers.
Auto stocks were also impacted by news that Fiat Chrysler CEO Sergio Marchionne has been replaced after nearly a decade at the helm, due to concerns around his health. Fiat Chrysler was down by 1.5% while Ferrari, which was also led by Marchionne, dropped 4.88%.
Shares have started today’s Asian session stronger, ASX200 +33 – Nikkei +78 – Shanghai Composite +31 and the Hang Seng +32. US tech rally and calmer trade helping buyer confidence.
After a continued JPY buying and a fightback from the USD in last night’s session which saw falls from the main risk majors after Friday’s solid rallies to the USD. This morning has been quiet so far with little movement to the USD from the risk majors. The Yen has continued firmer knocking out some early session rallies from the USD, GBP and EUR. The AUDJPY now trading in the red.
The yen strengthened broadly on Monday following a Reuters report that the Bank of Japan was debating moves to scale back its massive monetary stimulus, spurring bids for the Japanese currency. The yen’s gains were modest, with the 10-year Japanese government bond yields hitting a six-month high, as traders wanted to see concrete measures from the BOJ. –CNBC
Gold failed to hold overnight losing $7, this morning sellers are testing Friday’s opening price. A break lower starts to ask the question, are we set to see new 2018 lows?
Good trading from Eightcap.
Sources; CNBC – All times are AEST
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