News & Analysis

US markets end lower for a 2nd day. Apple hits tech sector – Europe higher – Ericsson Jumps; USD drives higher knocking risk and Gold lower.

Apr 23, 2018 | Daily Market Outlook

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US markets – closed lower on Friday, sellers making it two in a row. Apple shares fell 4.1 percent after Morgan Stanley said the company’s iPhone sales for the June quarter will disappoint Wall Street. The decline in Apple offset a 4 percent gain in General Electric. The industrial giant reported quarterly earnings and revenue that beat analyst expectations. Wall Street also kept an eye on interest rates as the 10-year Treasury yield added to strong gains for the week on Friday. The yield reached 2.96 percent ÔÇö its highest level since 2014 ÔÇö while the two-year yield rose to its highest level in a decade. Federal Reserve Governor Lael Brainard said further escalation of trade tensions could raise worries about the global economic recovery. Brainard added, however, the U.S. economy appears capable of handling tighter monetary policy.

The Dow Jones fell by 201.95, the S&P500 closed 22.99 pts lower and the NASDAQ closed 91.93 points lower.

European markets – finished the week mixed on Friday, as positive earnings supported buying. Ericsson reported smaller-than-expected losses during the first three months of the year. Shares consequently finished at the top of Europe’s benchmarks, soaring 17.5 percent on the news. ASM International traded lower, down almost 8.5 percent, after reporting earnings late Thursday. The firm saw net sales for 2018’s first quarter come in at 159 million euros ($195.7 million) ÔÇö a decrease of 12 percent, compared to the previous quarter.

The FTSE closed 39.25 higher, the DAX dropped 26.92 points and the CAC closed 21.19 pts higher.

Oil – continued to hold close to 2014 highs as the OPEC meetings drew to a close. President Trump tweeted about the current prices “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” OPEC and its allies have been withholding production since 2017, helping push up prices. The deal to cut is currently scheduled to expire at the end of 2018. “Global oil demand data so far in 2018 has come in line with our optimistic expectations, with 1Q18 likely to post the strongest year-on-year growth since 4Q10 at 2.55 million barrels per day,” U.S. bank Goldman Sachs said in a note published late on Thursday.

Forex – saw a continued surge from the USD, risk continued to sink. The EUR, AUD and GBP all continued into the red. The AUDUSD getting smacked back down to .7655. The EUR closing back in the 1.22 handle. The Japanese Yen strengthened to risk knocking it lower. The GBPJPY closing lower for the fourth session in a row. The USDJPY moved higher notching its third straight gain to close 28 pips higher back above 107.50. Further data misses continued to drive the CAD lower. The USDCAD jumped by 92 pips to cap off an impressive week. Price jumping 160 pips over the last week. Gold accelerated loses losing $9.50 to close back below 1335. Only a day earlier it tested its range high at $1354.88.

USDJPY – daily is one to keep an eye on as buyers have returned to the range high. Supply has been thick from this level going back to the 14th of February. Odds are we could see a short-term pause at this point.

Good trading from Eightcap.

Sources; CNBC. All times are AEST

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