I believe BP’s upcoming quarterly figures are set to surpass expectations
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Who doesn't like weeks like this one? Central banks' decision, earnings season... Although major tech companies report their earnings this week with Alphabet and Apple leading the pack, they're BP, Shell and Exxon, that should be in focus too. What about gold's future? Let's hear from Ali Daylami, Chief Market Data Scientist at BITMarkets.
It's been a good year for energy companies - what do you expect from BP earnings?
Ali Daylami: 2022 was phenomenal for energy giants. We’ve witnessed a spike in oil & gas prices amid constricted supplies caused by political and economic turmoil. Investors shifted their asset allocation from valuable stocks and cryptocurrencies towards energy companies. We’ve seen this at BITmarkets; crypto prices were hammered, but have been very bullish in the new year.
I believe that given omnipresent forecasts that oil prices will continue to rally and the concurrent upscaling by energy companies, 2023 can bring about higher profit margins for energy sector behemoths. Last year, the S&P 500 Energy index propelled over 45% with a notable winner being the BP stock, which gained more than 30%.
A quarter not to be forgotten, BP beat Wall Street yet again with bumper results. Earnings per share of $2.59 represented a 50% upside from analyst expectations, reflecting the company’s efforts in upscaling global operations to meet skyrocketing demand for energy. Hand-in-hand with its endeavors in accelerating the transition towards sustainable renewables, I believe BP’s upcoming quarterly figures are set to surpass expectations.
What's next for gold prices, after rising 16% in 3 months and after pretty good data from the U.S. economy for Q4 2022?
Gold was a victim of a calamitous 2022 for the markets, characterized by contrasting impacts of red-hot inflation and central banks, specifically the Fed, aggressively hiking interest rates to offset the wounding effects of inflation. Since October of 2022, gold retrieved its status as an inflation hedge, recovering in a rapid manner and impressively breaching the psychologically-significant $1,900 price tag.
China re-opened its economy and lifted its strict COVID restrictions, and the US economy has also reversed the GDP growth downtrend for another quarter, driven by higher consumer spending; thus, releasing the bullion bulls into a frenzy of investments into gold.
It's not just gold futures which grew exponentially. Gold-backed cryptocurrencies like Tether Gold climbed relentlessly in 2023. At BITmarkets, we’ve seen a rise in trading activity for gold-focused assets for a couple months now.
Arguably losing its characteristic as a ‘safe haven’ for over half a year, the precious metal is back in the spotlight, and I expect gold prices to escalate given expectations of an imminent recession in the horizon. Yet, the slowdown of interest rate bumps and the possibility of rate cutting given inflation is cooling down presents an alternative scenario for gold and other commodities. As the S&P500 index rose by 6.6% year-to-date and Bitcoin soared nearly 40% in a months’ time, we may witness a transition from utility and conservative investments towards equities and cryptocurrencies.
