Energy Companies Will Likely Reveal Another Excellent Quarter
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US inflation came in line with expectations. The kneejerk market reaction to the data was surprisingly negative, but the major US stock indices extended rally, while the US dollar dropped sharply.
S&P500
The S&P500 ended the session at a very important technical level – the index is now testing the ceiling of the 2022 bearish trend and the 200-DMA to the upside.
The 200-DMA has not been broken since April 2022, and has, so far, acted as a sign to sell the top. It could take more (…better-than-expected earnings) to clear resistance around 3990-4000 range.
Tech stocks will likely deliver their second straight quarter of negative growth
From now, investors’ focus will shift to earnings. According to FactSet, the S&P500 companies could post earnings growth of -4.1% for the Q4. Energy companies and tech stocks are an exception to this, of course. Energy companies will likely reveal another excellent quarter due to high energy prices, while tech stocks will likely deliver their second straight quarter of negative growth, with a decent 9.5% contraction expected across the sector.
But don’t forget that high expectations are difficult to beat, while low expectations are easier to beat, and the prices move regarding where the results fall compared to expectations.
Read next: The USD/JPY Pair Drop To 130, The Aussie Pair Keeps Trading Above 0.69$| FXMAG.COM
Q4 results
Today, big US banks including JP Morgan, Citigroup, Bank of New York, Bank of America and Wells Fargo will reveal their Q4 results.
Watch the full episode to find out more!
- 0:00 Intro
- 0:27 US inflation in line with expectations…
- 3:47 … boost expectation of slower Fed rate hikes
- 4:34 USD depreciates
- 6:29 S&P500 tests key resistance, but needs more to extend gains
- 8:07 S&P500 earnings are expected to fall in Q4
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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