📰 Wall Street, as well as equity futures in Europe, are poised for their best monthly performance since November 2020. Although recession concerns linger, another positive (and still ongoing) earnings season and hopes that the Fed will slow its monetary tightening process outweigh medium-term pessimism.
The Nasdaq 100 was up more than 1% in after-hours trading after Wall Street had already hit a seven-week high in regular trading on Thursday. Strong quarterly reports from tech giants Apple and Amazon sent Wall Street as a whole, and tech stocks in particular, sharply higher – a very disappointing report from Intel failed to dampen optimism.
Other sectors, such as consumer cyclicals, financials and energy, also traded in the green. Hermes International rose about 6%, joining strong results from LVMH and Kering, showing that luxury consumption has so far withstood high inflation and concerns about a possible economic downturn. Strong results from European banks Banco Bilbao Vizcaya Argentaria, Standard Chartered and BNP Paribas helped the banks outperform.
Exxon and Chevron posted record second-quarter 2022 earnings as high commodity prices boosted earnings while both energy giants kept expenses and costs in check. We expected strong earnings from ExxonMobil (as well as Amazon and Apple) and benefit from once again being well ahead of the markets.
However, sentiment in Asia, particularly China, was dampened by a plunge in Chinese tech stocks that caused Hong Kong to correct more than 10% from its June peak. China's top leadership gave a negative assessment of economic growth, but did not announce any new stimulus measures and maintained its strict zero-COVID policy.
Meanwhile, the eurozone economy grew much faster than analysts expected. However, inflation in the eurozone also continued to rise, reaching a new record of 8.9% year-on-year, well above expectations of 8.6%.
The general optimism is likely to continue today, although signs of more stubborn inflation could raise expectations for further monetary tightening, which would drive stock prices south again (I think this is a very likely scenario). The JPY continues to strengthen and some investors are exiting the USD, but are finding little reason to move back into the EUR or GBP. Commodity prices remain supported, and cryptocurrencies could also rise a bit further (but I would stay away from them!).
👁 ROB'S MARKET OVERVIEW:
🇺🇸 US Markets ↕️/↗️
Cyclical Stocks ↕️/↗️
Tech/Growth Stocks ↕️/↗️
Financial stocks ➡️/↗️
💱 Forex Markets
EUR, USD ➡️/↗️
AUD, CAD, CHF ➡️
⚒ Commodity Markets ↗️
Oil prices ↗️
Natural Gas prices ➡️/↗️
Metal prices ↗️
Precious Metals ➡️/↗️
⚡️Crypto Market ➡️/↗️
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Yours, Robert 🍏🛒📈📈