US equities and European stocks are little changed during US pre-market trading as investors look for more signs for the strength of the US economy which so far gave little indication for an upcoming recession.
United Airlines jumped in pre-market trading after beating its earnings forecast. General Electric fell after a profit forecast fell short of estimates. Consumer staples giants J&J and P&G are trading positively after reporting further improving revenue growth data. Much focus will be on Netflix, which reports post closing. Investors are optimistic – I am not so much – and see in particular margins and profit with disappointment potential. European companies, such as Swedish Ericsson AB fell after warning about a slowing global demand and Swatch Group disappointed with as the Swiss watch company missed reaching a new sales record as the management projected in the previous quarter.
We saw short-term strength in the JPY – following statements by the Bank of Japan that the normalization of monetary policy is approaching – I see this as a weak tailwind, as I don't see much pressure on the Japanese central bank to change the status quo. However, the market assumes 100% that the Bank of Japan will start to normalize its monetary policy – in July at the latest.
In contrast to yesterday's losses, yields have risen slightly, which has helped the USD to regain ground against its peers. I expect yields to rise further in the coming sessions.
Gold has hardly changed and now seems to be very sensitive to yield changes again. Bitcoin has fallen further – even below $39K. I warned of an impending wave of selling after the ETF approval – that is exactly what we are seeing now and that is putting further pressure on crypto stocks like Coinbase.
👁 ROB'S MARKET OVERVIEW:
January 23, 2024
🌐/🇺🇸 Global/US Markets ↗️/➡️ (slight additional gains)
Cyclical Stocks ↗️/➡️ (slight additional gains)
Tech/Growth Stocks ↗️ (big tech remains in outperformance also pushing up other tech stocks)
Financial Stocks ↗️/➡️
Defensive Stocks ➡️
Energy Stocks ➡️
Materials Stocks ↘️/➡️
AUD ↗️/➡️ (benefits from hopes of China stimulus)
JPY ↗️/➡️/↘️ (benefited from talks about upcoming rate hikes – but words are only words)
USD ↘️/↗️ (we see sliding yields / improve risk sentiment weighing on USD)
GBP, CHF ➡️
⚡️Cryptos ↘️ (fall below $40K shattered near-term optimism)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)