News & Analysis

Equity Markets – US stocks surge off earnings; AUDUSD touches 80cents; EURUSD retreats; Gold dumped; Bitcoin breaks below 10K

Jan 18, 2018 | Daily Market Outlook

Today’s high impact news:

Ôû© 18:00 CNY GDP – Retail Sales – Industrial Production – Fixed Assets Ex Rural
Ôû© 00:30 USD Building Permits
Ôû© 03:00 OIL Crude Oil Inventories

U.S markets – hit the gas last night surging to new records, following the release of stronger than expected quarterly results from some of the biggest U.S. companies. The Dow Jones jumped above 26,000 after adding 322.79 points. The S&P500 closed above 2800 after adding 26.14. The NASDAQ finished 74.59 higher. Bank of America reported adjusted quarterly earnings that surpassed analyst estimates. U.S. Bancorp also posted better-than-expected results. Earnings season is off to a strong start thus far. Of the S&P 500 companies that had reported as of Wednesday, 78 percent have surpassed earnings-per-share estimates while 89 percent have beaten expectations on the top line, according to Nick Raich, CEO of The Earnings Scout. “Basically, what you saw was a market digesting strong gains,” said Tom Essaye of The Sevens Report. “We’re up 4 percent and we’re still in January. When you see this, the market looks for a reason to consolidate.” Essaye also noted that, even if the government experiences a shutdown, “that’s not going to deter from the strength in the economy and in earnings.” Oil traded higher for a second day on Wednesday adding 20 cents. Price still remains in the shadow of Monday’s bear candle. Short term support looks set from $63.25 – $63.70. Bitcoin took another flogging last night hitting as low as 9120 on quotes. Bulls did recover taking price back above 11,000. We’re watching 10,284 as it looks to be developing into short-term support. European markets – drifted lower on Wednesday, Burberry was the STOXX 600’s worst performer, after reporting lower sales in its third quarter. Positive trade on Wall Street failed to lift sentiment, the US indexes look to be running a one-way race. The FTSE closed 30.50 lower, the DAX lost 62.37 and the CAC fell by 19.83 points. News that Interserve is being monitored by the U.K. government on concerns over its financial health weighed on the construction sector, following the collapse of Carillion. Interserve ended in the red, but off its highs. Europe’s top performer was Steinhoff, which rose 16.13 percent by the close, having posted sharp gains at the end of the session. In other news, Swiss food group Nestle announced Tuesday that it had agreed to sell its U.S. business to Ferrero for $2.8 billion.

Forex – Wednesday saw mixed trade for the USD, it gained to the EUR after ECB officials raise concerns about surging common currency. The EURUSD finished 75 pips lower after hitting new Jan highs. The USD surged to the JPY adding 84 pips. The GBP surged to the USD hitting 1.3941, but failed to hold gains settling 36 pips higher. The JPY looked to be making a comeback during the London session, buyers backed off and majors finished higher. The AUDJPY tested 89.00. The GBPJPY broke out above 153.40 adding 159 pips. Gold stumbled to the USD losing $11.77, buyers did test 1343.90 during the session but once sellers took hold price descended to new weekly lows. 1323.50 is the next lower level we’re watching for possible support is reached.

US30 – blew my correction idea out of the water as better than expected earnings drove the index to a new break out above 26,000.

Good trading from Eightcap.

Sources; CNBC. All times are AEDST

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