Fed induced rally stalls; Spotlight on mega earnings day

📰 U.S. stocks struggled to hold onto their strong gains Thursday after investors reacted very positively to hints of slower monetary tightening by the Federal Reserve. It was the biggest jump in tech stocks since at least early 2021, but the focus is now on the most important day of earnings season. 

In particular, earnings from Apple, Amazon and Intel will provide a good view of what the rest of the year will bring, as the three companies are strong gauges of demand for cell phones, PCs, chips and overall consumer spending. Shares of the social media companies fell in premarket trading after Meta reported its first-ever revenue decline. Mastercard reported strong results due to an increase in cross-border spending driven by this year's travel boom – we expected strong results from the credit card giant.

European companies reported positive results (Nestle, Shell, Linde).

I think the market took Powell's signal too positively – I also don't see the Fed moving to a significantly more dovish stance. Also, the GDP data just released from the US was worse than expected, showing that GDP in the U.S. fell for the second quarter in a row. Bad news is good news in the short term, as it likely raises expectations that the Fed will slow its tightening plans – but in reality, a shrinking economy means falling revenues and will weigh on equities (as well as commodity prices). However, US GDP data should always be taken with a grain of salt as they are often revised later.

I believe investors will remain positive overall for today before the realization that we are still headed for a recession and that many risk factors (global tensions, commodity/energy shortages, foreclosure, more regulation, tighter monetary policy, high inflation) remain. So I also disagree with the overall very optimistic view of a strong sustained recovery – but strong earnings from Apple and Amazon after the close would drive markets higher.


🇺🇸 US Markets ↕️/↗️
Cyclical Stocks ↕️/↗️
Tech/Growth Stocks ↕️
Financial stocks ➡️/↘️
Energy ↗️

💱 Forex Markets
JPY ↗️
CHF, CAD ➡️/↗️
GBP ➡️/↘️
EUR ↘️

⚒ Commodity Markets ↕️/↗️
Oil prices ↗️
Natural Gas prices ↕️
Metal prices ➡️/↗️
Precious Metals ↕️

⚡️Crypto Market ↕️/↗️

(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)

Yours, Robert 🔋📱🚀🤔