MongiIG

Netflix earnings last night provided more support for bullish sentiment, after the streaming giant announced subscriber numbers that were well ahead of forecasts. While it missed on earnings expectations, Netflix did beat on revenues. Asian markets were more positive overnight, though the Nikkei 225 slipped back. Chinese markets made some headway after the proposed stimulus announcement yesterday, though enthusiasm was muted. Alibaba stock was supported by news that Jack Ma was actively buying shares in the retailer. Global PMI figures dominate the day in Europe and the US, while Tesla takes its turn in the spotlight as it reports earnings.

DAX rebounds despite ECB's unexpected hawkish stance. This week's meeting takes center stage for insights on rates and growth. Technical analyses for DAX and FTSE highlight key levels. Source: Bloomberg Indices European Central Bank Inflation DAX FTSE 100 Monetary policy Written by: Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 23 January 2024 04:55 Overnight, the German stock market, the DAX extended its rebound, driven by gains in the tech sector. Its recovery in recent days has come despite ECB members sounding more hawkish than expected ahead of this week's meeting; despite evidence of slower growth and falls in underlying inflation. What is expected from this week's ECB meeting? At its last meeting in December, the ECB kept its deposit rate on hold at 4.00%, as widely expected. The ECB noted that with interest rates at this level, it will make a "substantial contribution" to returning CPI to its 2% goal in 2025. Inflation data for December received in early January showed core inflation cooling to 3.4%, the lowest since March 2022, and headline inflation stayed below 3%. While this shows that tighter monetary policy settings are winning the battle against high inflation, tighter monetary policy also impacts growth and activity data. Reflecting concerns that the European economy, led by Germany, will enter recession in 2024, the European rates market is pricing in 130bp of ECB rate cuts for 2024. Nonetheless, in the lead-up to this week's meeting, ECB officials, including president Lagarde, have noted that aggressive pricing of rate cuts is not "helping our fight against inflation". As such, the ECB is expected to keep rates on hold this week and reiterate that rates will be set "at sufficiently restrictive levels for as long as necessary." ECB deposit rate chart Source: TradingEconomics DAX technical analysis In our last update, we noted that a sustained break below support at 16,600/500 would increase the chances that a medium-term high was in place in the DAX at the early January 17,123 high. However, given the brief time that the DAX spent trading below the bottom of the support band and the three-wave nature of the decline, it is likely that the decline was a correction, and that the DAX can push to new highs in the 17,200/400 area. In summary, providing the DAX holds above support 16450ish, we expect a retest of the January 7,123 high before a move towards 17,200/400. DAX daily chart Source: TradingView FTSE technical analysis In the final weeks of December 2023, the FTSE broke higher above the 200-day moving average at 7570 before running into a cluster of horizontal resistance near 7750, highlighted on the chart below. Since then, the FTSE has erased all of its December gains despite a favourable tailwind from US stock indices in recent days, which isn't a particularly encouraging sign. As such, while the FTSE remains below the 200-day moving average at 7567 (sustained basis), the risks are for a deeper decline in the coming sessions towards range lows, 7300/7200. FTSE daily chart Source: TradingView Source: TradingView. The figures stated are as of 23 January 2024. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

The Bank of Japan left policy unchanged at its meeting, noting that deflationary expectations were firmly entrenched in Japan. The next policy meeting is mid-March, but annual wage talks will still be in progress then, so markets are unlikely to see any movement in policy until 26 April at the earliest. The Hang Seng was was lifted by reports of a potential support package of around $278 billion from offshore accounts of state-owned enterprises, to buy shares on the Hong Kong exchange. Netflix becomes the first of the 'Magnificent 7' tech stocks to report earnings, and expectations are generally optimistic thanks to the moves to end password sharing and the start of paid sharing in key markets.

Netflix (NASDAQ:NFLX) is set to disclose its Q4 2023 earnings report on January 23rd, 2024 after the US markets close. What are the expectations, and what is the outlook for the stock price? Source: Bloomberg Shares Netflix Revenue Streaming media Share price Technical analysis Written by: Hebe Chen | Market Analyst, Australia | Publication date: Wednesday 17 January 2024 08:47 Netflix earnings date Netflix (NASDAQ:NFLX) is set to disclose its Q4 2023 earnings report on January 23rd, 2024 after the US markets close. Netflix earnings key expectations Q4 Expectation Q3 reported Q4,2022 QOQ YOY EPS: $2.15 $3.49 $0.51 -38% 322% Revenue: 8.7B 8.54B 7.86B 2% +11% Source: Netflix Netflix earnings key watches Strong growth momentum Netflix's performance in the third quarter of 2023 was remarkable. The company achieved an impressive 8% growth in revenue, reaching a record high level, primarily attributed to the higher-than-expected paid membership growth. Its global expansion of its streaming services played a crucial role, with a net addition of 8.76 million paid memberships in Q3 alone, pushing the total paid membership to a new record high of 247 million. Into the fourth quarter, the company remains optimistic about its growth prospects and anticipates the continuation of robust user growth momentum.According to forecasts from the streaming giant, its Q4 revenue is projected to increase by 11% year-over-year, reaching $8.7 billion. The net addition of paid memberships is projected to be close to the previous quarter, potentially with another 8-9million new subscribers. Seize a share opportunity today Go long or short on thousands of international stocks. Increase your market exposure with leverage Get spreads from just 0.1% on major global shares Trade CFDs straight into order books with direct market access Learn more Netflix Q4, 2023 Forecast Source: Netflix Cost and margin headwind The streaming king’s rosy outlook does not come without challenges. Netflix’s operating margin is projected to take a dip in the fourth quarter. After reaching a 22.4% record high in the Q3, the notably surging content costs combined with a moderating global ARM (Average Revenue per Membership) are likely to mark an inflection point in Netflix’s profitability from Q4 2023 and onwards. Earlier this month, Citigroup revised down its rating on Netflix from "Buy" to "Hold" emphasising its concerns about the stream king’s falling margins. Citigroup projected that Netflix's content spending would rise to around $20.4 billion by 2025, casting doubt on the company's profitability in the next two years. Based on the company’s forecast, its operating margin could plunge to 13% in Q4 from 22% in the recent quarter. Additionally, Netflix also admitted that a strong US dollar versus other currencies would cost roughly $200M on the company’s Q4 revenue and ARM. Netflix stock price and technical analysis Before we embark on another year of uncertainties for price movements, let's first take a glance in the rear-view mirror at Netflix stock's past performance. Over the last three years, Netflix's share price has experienced a rollercoaster ride, recording gains of 11% in 2021, a significant decline of -51% in 2022, and a juicy 65% gain in 2023. In contrast, the S&P 500 exhibited returns of 27% in 2021, faced a downturn of -19% in 2022, and rebounded with a 24% rise in 2023. It’s also not hard to see from the comparison charts below that Netflix's share price has demonstrated wilder volatility compared to the key benchmark in the past five years. Source: Tradingview At the moment, Netflix's share price is hovering around the key threshold of $500, maintaining a clear and valid uptrend since July 2022 with the prices trading above all the major moving averages. Its remarkable performance in the past 18 months has earned an 8 out of 10 score rating by TipRanks, coupled with a strong endorsement from 25 buy ratings out of 35 global analysts in the past three months. Source: IG In the short term, trend followers may welcome the breakout from the $500 hurdle as a robust bullish momentum in harmony with the longer-term uptrend, and set their sights on the next target, near $560. Nevertheless, it's worth noting that the range between $500 and $560 might pose a greater challenge, considering its historical congestion patterns dating back to June 2020 to August 2021 (as highlighted in the chart). Conversely, a breach below the $480-$490 range could potentially serve as an early warning sign for a correction risk, as the ascending trajectory formed since October 2023 would lose its efficacy. Source: IG Netflix Q4 earnings preview summary Overall, I believe the crucial watch for the impending earnings would be on Netflix's strategy and outlook to navigate declining profitability while sustaining its growth trajectory. In terms of stock prices, the upcoming quarterly update is poised to play a crucial role in determining if the stock price can successfully surpass the significant psychological level of $500. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Tesla’s share price: what to expect from Q4 results Written by: Monte Safieddine | Market analyst, Dubai | Publication date: Wednesday 17 January 2024 05:57 When is Tesla reporting? It’s expected to get volatile for Tesla’s share price on Thursday, January 25th at 8am (AEDT) after market close, as that’s when they’ll be releasing their fourth-quarter results. Analysing Tesla's Q3: a disappointment It wasn’t a pretty picture last time around, as third-quarter results were a miss on both earnings and revenue and came with added caution on the Cybertruck’s potential (or lack thereof) to deliver significant short-term positive cashflow. Breaking down Tesla's Q4 production and deliveries Looking beyond these challenges and breaking down deliveries and production for the final quarter of 2023, it was a record. Deliveries totalled over 484,000 with production nearly reaching 495,000. Overall, Tesla produced 1.846 million and delivered just under 1.81 million vehicles. While these figures were above 2022’s 1.37 million and within the October guidance of 1.8 million, they fell short of its earlier 2023 goal of two million. The breakdown for the final quarter of 2023 showed that nearly 477,000 Model 3/Y vehicles were produced and over 461,000 were delivered. Meanwhile, “Other Models” accounted for 18,200 (3.8% of the total) and 23,000 respectively. Tesla’s eventful quarter This quarter saw Chinese rival BYD, with its lower-priced models, overtake Tesla as the world's largest producer of electric vehicles. Elon Musk, however, argues that Tesla is “an AI/robotics company that appears to many to be a car company,” suggesting it shouldn't be directly compared to traditional car manufacturers. The quarter was also busy on other front including: Troubles in Scandinavia, which, however, didn’t seem to dent its sales in the region Mixed numbers in other areas, with testing in Germany and the UK but strong performance in China, reporting a 69% increase year-on-year for December according to the CPCA (China Passenger Car Association) The Cybertruck release A Model 3 refresh for some markets, which is considered necessary as the lineup, aside from recent releases, has aged significantly Further progress on the charging port adoption front, with its massive network of chargers Recalls, which are not uncommon among automakers and for Tesla only required an over-the-air software update Price cuts, with the average being lowered again during the fourth quarter (cargurus.com). And then came more at the start of this quarter with rising labor costs, further price cuts, and supply chain woes on recent geopolitical factors. Investors are expected to take note of these issues and any further updates on the low-cost model, which is reportedly “quite far advanced” and targets the mass market with a lower price point, unlike the Cybertruck. Key points of interest include Tesla's guidance for 2024 in light of subsidy and tax credit reductions/removals, potential further price cuts this year to sustain growth, the impact on profit margins, and plans for geographic expansion. All these factors are in the context of anticipated rate cuts this year, which might ease what was expected to be a “stormy” macroeconomic situation. EPS and revenue forecasts In all, expectations for the fourth quarter indicate an earnings per share (EPS) of $0.74. This figure is lower both quarter-on-quarter and year-on-year. Revenue is anticipated to be stronger, rising to $25.5 billion, with growth expected across all key segments. Although margins are likely to remain tested relative to figures prior to 2023, they are predicted to improve to around 18%, up from 17.89% in Q3 (source: Refinitiv). As for analyst recommendations, there are five in the ‘strong buy’ category, 12 ‘buy’, 19 ‘hold’, and four for both ‘sell’ and ‘strong sell’. The average price target among these analysts has only recently surpassed its falling share price (source: Refinitiv). Trading Tesla’s Q4 results: weekly technical overview and trading strategies There’s no denying the strength of 2023 for the ‘magnificent seven’, with Tesla notably outperforming among them (Nvidia +233%, Meta +188%, Tesla +109%, Amazon +78%, Alphabet +57%, Microsoft +55%, Apple +48%). However, these gains were primarily realized in the first half of the year, with Tesla's share price starting to be tested after mid-July. The technical overview on the shorter-term daily timeframe was more positive when the price managed to remain within its bull channel. The break below this channel at the start of this year disrupted its key technical indicators. This included a negative DMI (Directional Movement Index) cross and the price falling below all its main short and long-term daily moving averages. When we zoom out to the weekly timeframe, while the same negative cross has occurred, the proximity of price-indicator and indicator-indicator relationships has made it difficult to gain clear insights on the technical front, given the ease with which they can generate signals on a not-so-significant move. This has led to a more cautious overview at this stage, despite the negative technical bias, with most weeks showing relatively controlled intraweek moves. It's important to note that the earnings release is a fundamental event where technical analysis is less relevant, particularly if there's a surprise. This means technical levels will likely struggle, or even fail, to hold once the latest figures are released. Conformists should approach with added caution, avoiding fading any move towards 1st levels and maintaining that caution even when approaching 2nd levels. Contrarian breakout strategies may see added follow-through if the price has already neared these levels just before the event. Source: IG Tesla weekly chart with key technical indicators Source: IG Tesla weekly chart with IG client sentiment Source: IG IG client sentiment* and short interest for Tesla shares In terms of sentiment among IG clients, there has been a consistent trend of heavy to extreme buy bias for several months. This bias saw some unwinding when the price reached the upper end of the channel, and increased again following the recent price pullback. Starting last week at 77%, the bias has escalated to 80% at the beginning of this week after a red weekly close. Short interest has remained relatively stable in recent months, briefly exceeding 92 million shares in November. The most current data indicates over 86 million shares in short interest, accounting for 2.73% of the total (source: Refinitiv). Source: IG *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of the start of the week for the outer circle. Inner circle is from the start of the previous week. This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

S&P 500 surges past 2022 highs on tech and sentiment boost. Key earnings and economic events ahead signal a pivotal week for US markets. Written by: Tony Sycamore | Market Analyst, Australia | Publication date: Monday 22 January 2024 04:56 After a choppy opening three weeks of 2024, the S&P 500 showed its hand on Friday night, surging above the January 2022 4818 bull market high. Precisely two years in the making, and with a 28% pullback in between, the push to new highs was supported by the tech sector buoyed by Taiwan semiconductors' better-than-expected earnings report and a broker upgrade for Apple. A giddy mix of data within the University of Michigan's consumer sentiment survey also helped fuel the move. Consumer sentiment in January soared to 78.8 from 69.7 in December, the largest two-month increase since the recession of 1991 ended. Notably, inflation expectations for the year ahead fell to 2.9%, the lowest since 2020 from 3.1%. This week, the drivers of US equity markets will be earnings reports from tech giants Netflix, Tesla, and Intel Corp, along with Johnson and Johnson, Procter and Gamble, Visa and American Express. The key economic events will be Flash PMIs for January, Q4 Advanced GDP, the Fed's preferred measure of inflation, and the Core PCE price index for December. The Fed speakers' blackout period has commenced before the Fed's January meeting. What is expected from the core PCE inflation report (Saturday, January 27th at 12.30 am AEST)? Two months ago, annual headline PCE inflation eased to 2.6% from 2.9% prior. The Fed’s preferred measure of inflation, core PCE, cooled to 3.2% YoY, the lowest level since mid-2021, from 3.4% prior. In December, headline PCE is expected to remain stable at 2.6% YoY and core PCE inflation is expected to fall to 3% YoY. On a six-month annualised basis, core PCE will remain at close to 2%. At 2%, monetary policy is too tight and will likely see the Fed cut rates several times in 2024. Headline PCE price index chart Source: TradingEconomics S&P 500 technical analysis After a strong rally for the S&P 500 into the end of 2023, we started the New Year in a more cautious/neutral frame of mind. While we would not be fighting Friday night's break higher, given the risk the rally overshoots, we remain of the view that the S&P 500 is in the final stages (Wave V) of its rally from the October 2023 low and note again the bearish RSI divergence. Bearish RSI divergence occurs when prices make new highs, but the RSI fails to make a new high. As such, we remain patient, waiting for a pullback to develop in the coming weeks in the order of 5-8% - a pullback we will be looking to buy. S&P 500 daily chart Source: TradingView Nasdaq technical analysis After a strong rally for Nasdaq into the end of 2023, we started the new year in a more cautious/neutral frame of mind. While we would not be fighting Friday night's rip higher, we remain of the view that the Nasdaq is in the final stages (Wave V) of its rally from the October 2023 low and note again the bearish RSI divergence. Bearish RSI divergence occurs when prices make new highs, but the RSI fails to make a new high. As such, we remain patient, waiting for a pullback to develop in the coming weeks in the order of 5-10% - a pullback we will be looking to buy. Nasdaq daily chart Source: TradingView Source: TradingView. The figures stated are as of 22 January 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation. This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

US earnings will accelerate from tomorrow with Netflix, J&J, General Electric and Verizon reporting financial results. Written by: Angela Barnes | Financial presenter/producer, London | Publication date: Monday 22 January 2024 11:56 On Wednesday, it will then be the turn of IBM, Tesla and AT&T; followed by Intel, Visa and American Airlines on Thursday. American Express quarterly earnings will then conclude this busy week, as IGTV’s Angela Barnes explaines. Next week, we can expect to see a bunch of big companies reporting their financial results in the US. Some of these companies include Netflix, Johnson & Johnson, General Electric, Procter & Gamble, and Verizon. Let's break it down: Netflix First up, let's talk about Netflix. In the third quarter of 2023, Netflix did really well. They had an 8% increase in revenue and gained 8.76 million new paid members. In the fourth quarter, they expect to keep up their strong performance with an 11% increase in revenue and 8 to 9 million new subscribers. Basically, things are looking good for Netflix. Their stock has even gone up by 73% since the beginning of the year. Tesla Now, let's move on to Tesla, the electric vehicle company. Tesla will also announce its fourth-quarter report. Experts predict that they will earn around $0.72 per share and bring in revenue of $25.52 billion. People are especially interested in Tesla's margins, which is basically how much money they're making from sales. Tesla's focus has been on sales rather than margins, which has caused a decline in automated growth margins from 30% to 16.3%. But don't worry, Tesla's stock has still gone up by a crazy 120% since January 2023. American Airlines Lastly, we have American Airlines. They will be releasing their quarterly report too. It's estimated that they will earn $0.11 per share and have revenue slightly over $13 billion. People will be closely watching something called the total value per available seat mile. Basically, they want to see if it has gone down between 5.5% and 7.5% compared to last year's fourth quarter. Right now, American Airlines' stock has dropped by 1%. Overall, these earnings reports are really important because they will have a big impact on these companies' stock prices. Investors will be closely examining their financial performance, how much money they're making, and what they predict for the future. So keep an eye out for these reports, because they could have a huge effect on the market. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

This week, three major central banks are due to decide on their monetary policy path. First on Tuesday, the Bank of Japan, which will also publish its quarterly outlook report. Written by: Angela Barnes | Financial presenter/producer, London | Publication date: Monday 22 January 2024 11:32 It will be followed by the Bank of Canada’s decision on Wednesday and the European Central Bank’s update on Thursday. IGTV’s Angela Barnes looks at what the market is expecting. The Bank of Japan and the Bank of Canada This week, three big banks - the Bank of Japan, the Bank of Canada, and the European Central Bank (ECB) - are going to make some important decisions about their money plans. Many people in the market think that the Bank of Japan will lower interest rates, which could be a sign that other banks might follow and lower rates too. But the people in charge have been saying that they need to be careful and work together so they don't cause any big problems by lowering rates too soon. The Bank of Canada is expected to keep their rates at 5% because there has been a recent increase in something called the headline CPI growth, which is a way to measure the cost of things going up. Inflation, which means when prices go up, is expected to be a little higher than what the bank wants until around 2024. European Cenral Bank On the other hand, the European Central Bank (ECB) is planning to keep their main interest rate at 4.5% and another rate at 4%. The President of the ECB, Christine Lagarde, has been hinting that they might lower rates sometime in the summer. Since January 19th, the value of the euro compared to the US dollar has been going up. And since Friday, the value of the Japanese yen compared to the US dollar has been going down. This shows that people think the Bank of Japan will keep doing what it's been doing with its money policy, which is called ultra-delicate. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Asian markets continue to witness the surge in Japanese stocks and the ongoing rout in their Chinese counterparts. US markets finished the week on a high, with the S&P 500 joining the all-time high club again after more than 500 days without a new record. In Asia Japanese markets continue to be the beneficiary of flows out of China, where the absence of any policy stimulus is keeping investors in firmly risk-averse mode. In addition, the Bank of Japan's dovish policy stance, weakening the yen, is providing additional impetus for the rally. The week sees the resumption of earnings season, while central bank decisions in Japan, the eurozone and Canada also dominate the calendar.

Microsoft, Apple, Alphabet, Amazon and Nvidia could be the best AI stocks to watch next month. These stocks are the largest AI stocks in the US based on market capitalization. Source: Bloomberg Shares Microsoft Apple Inc. Amazon OpenAI Alphabet Inc. Written by: Charles Archer | Financial Writer, London What's on This Page? Best AI stocks to watch How to invest or trade in AI stocks with us 2023 was arguably the year of AI — the NASDAQ Composite rose by 43% in the calendar year, driven by AI-fuelled bubbles in Nvidia alongside the rest of the so-called ‘magnificent seven.’ The year was immediately preceded by the launch of revolutionary — and crucially, free to use — ChatGPT, which was swiftly followed by a response from both Alphabet in the form of Bard, while many other tech companies soon ensued. In March 2023, the more advanced GPT-4 hit the market, which was swiftly followed by multiple AI-generated imagery tools — in one case, a realistic fake image of Pope Francis wearing a certain clothing brand circulated the internet, highlighting the openness of AI to abuse. That same month, tech leaders from across the US spectrum signed an open letter urging a pause on AI development for six months to assess the risks. A couple of months later, ChatGPT gained internet connectivity — and was soon incorporated into Bing, Microsoft’s search engine. For context, Microsoft has a significant stake in ChatGPT’s parent, OpenAI. Add in the constant stories of academic controversies, and the months-long Writers Guild of America strike over concerns that AI had the potential to replace human writers, and it’s easy to see how AI is already embedded throughout the global markets. AI is already in use across a wide variety of real-world applications, including in entertainment, social media, art, retail, security, sport analytics, manufacturing, self-driving cars, healthcare, and warehousing alongside dozens of other sectors. Every Netflix recommendation, every supermarket rewards purchase, and every football match is analysed ever more relentlessly in order to provide more and better data. And analysts think the sector will only grow. Best AI stocks to watch As a caveat, there is some disagreement on what constitutes an AI stock — and whether it must be the main focus of a company or simply be a significant growth area. Microsoft Microsoft is the original global computing power, so it makes sense that the US behemoth tops the list of the best AI stocks to watch. The company already had a strong relationship with OpenAI prior to the ChatGPT launch and has invested $13 billion into the company since 2019. In Q1 results, revenue rose by 13% to $56.5 billion. CEO Satya Nadella enthused that ‘with copilots, we are making the age of AI real for people and businesses everywhere. We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers.’ Most recently, the US titan has agreed a decade-long partnership with Vodafone to bring generative AI, digital, enterprise and cloud services to more than 300 million businesses and consumers. Vodafone will invest $1.5 billion in customer-focused AI developed with Microsoft's Azure OpenAI and Copilot technologies and will replace its physical data centres with Azure cloud services — meanwhile, Microsoft plans to become an investor in Vodafone's managed IoT platform. Market Capitalisation: $2.90 trillion Apple Apple is in the middle of a sea change — it’s now topped Samsung as the largest smartphone maker by volume in the world but has lost its crown to Microsoft as the largest company on the planet. Investor hopes for continued growth may lie in future innovation, and in particular, the long-awaited Vision pro headset which releases on 2 February in the US with a $3,499 price tag. For context, Meta’s Quest 2 can be reliably found on sale for circa £250. In Q4 results, Apple saw revenue decline by 1% to $89.5 billion — though CEO Tim Cook noted that the company managed a ‘September quarter revenue record for iPhone and an all-time revenue record in Services’ alongside ‘our strongest lineup of products ever heading into the holiday season, including the iPhone 15 lineup and our first carbon neutral Apple Watch models.’ Market Capitalisation: $2.82 trillion Alphabet Google parent Alphabet may control 84% of the global search market share — but Yahoo was once king of search too. In addition to launching Bard, AI is already used across many of Google’s current functions. And it’s got at least two more AI-focused projects; its coding-focused Generative Language API, and DeepMind which it acquired in 2014. In Q3 results, CEO Sundar Pichai noted the ‘product momentum this quarter, with AI-driven innovations across Search, YouTube, Cloud, our Pixel devices and more.’ Revenue increased by 11% year-over-year to $77 billion. Perhaps most importantly, Alphabet plans to launch its most advanced chatbot ever this year — Gemini. This is seen as the company’s serious answer to ChatGPT-4, with Pichai arguing that it ‘represents one of the biggest science and engineering efforts we've undertaken as a company.’ Then there’s its new custom-built AI chips to consider — Apple may win its crown back before too long. Market Capitalisation: $1.79 trillion Amazon Amazon is well-known as the largest e-commerce retailer in the world, but the company is also a growing operator in the AI space. It offers several cutting-edge AI tools within its AWS business, including Code Whisperer and SageMaker — and clients can customise Amazon’s own machine learning model. Of course, competitors have their owns services, but Amazon is by far the largest cloud computing company, with circa a third of the global market share. Within its e-commerce offering, Amazon uses AI to identify consumer trends, manage inventory and also make personalised product recommendations — including targeted advertising. Then there’s the smart devices, including Alexa and the Fire tablets. CEO Andy Jassy enthuses that the AI opportunity will be ‘tens of billions of dollars of revenue for AWS over the next several years.’ Market Capitalisation: $1.58 trillion Nvidia Nvidia is arguably the prime beneficiary of the AI boom, with Q3 results seeing revenue rise by 206% year-over-year and 34% quarter-on-quarter to $18.12 billion. CEO Jensen Huang now considers that ‘NVIDIA GPUs, CPUs, networking, AI foundry services and NVIDIA AI Enterprise software are all growth engines in full throttle. The era of generative AI is taking off.’ Barclays analysts remain particularly enthusiastic over the AI company, noting that ‘With supply constraints, customers are often using the entire NVDA platform in order to get priority shipments of accelerators.’ Market Capitalisation: $1.39 trillion How to invest or trade in AI stocks with us How to invest in AI stocks with us 1. Create an account or log in 2. Search for the stock you'd like to invest in 3. Select 'buy' in the deal ticket (you can only go long when investing) 4. Choose the number of shares you want to buy 5. Open and monitor your position How to trade AI stocks with us 1. Create an account or log in 2. Choose between spread bets and CFDs and search for your opportunity 3. Select 'buy' to go long or 'sell' to go short 4. Set your position size and take steps to manage your risk 5. Open and monitor your position Learn more about the differences between investing and trading. Investing in shares directly is typically lower risk, while trading on leverage offers higher rewards in exchange for increased risk. This means you could gain – or lose – money much faster than you might expect, including losing more than your deposit. You should assess your risk appetite carefully before engaging in leveraged trading. No returns are guaranteed. New to investing or trading? Try out our demo account. Past performance is not an indicator of future returns. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

A rally in semiconductor stocks has re-enegerised the global market rally, lifting the Nikkei 225, following on from a strong session in US markets. Once more Chinese stocks fell however, resuming the trend of the week. In the US last night tech stocks led the way higher, with only Tesla failing to make headway out of the 'Magnificent 7'. A spending bill to avert a US government shutdown also helped to restore sentiment, after a week in which diminishing expectations of early rate cuts had put pressure on global equities. Japanese December inflation rose by 2.3% annually, in line with forecasts, and down from last month's 2.5%. UK retail sales slumped by 3.2% in December, much worse than forecast.

In a surprise move OPEC has given its global oil demand predictions early in the year. Written by: Jeremy Naylor | Analyst, London | Publication date: Thursday 18 January 2024 10:54 It has stuck to its forecast for relatively strong growth in global oil demand in 2024 and said 2025 will see a robust increase in oil use led by China and the Middle East. These type of announcements usually come mid-year. Is it a sign that OPEC is concerned that oil demand will start to fade and OPEC feels the need to boost the market? It is a view which contrasts with other bodies. The IEA for example predicts oil demand will peak by 2030 as the world shifts to cleaner energy. The IEA executive director Fatih Birol, told Reuters on the sidelines of the World Economic Forum yesterday he expected a comfortable, more balanced oil market with a significant increase in oil output from the United States, Canada, Brazil, and Guyana this year, just as global demand growth slows. (AI Video Summary) Growth in China and the Middle East OPEC recently made an announcement about the future of oil demand. They believe that the demand for oil will continue to grow strongly until 2024 and even extend into 2025. This growth will mainly be driven by China and the Middle East, where people are using more and more oil. This announcement was surprising because OPEC originally planned to give this prediction in July. The International Energy Agency However, the International Energy Agency (IEA) has a different view. They predict that oil demand will reach its peak by 2030 as people start to transition to cleaner energy sources. The executive director of the IEA, Fatih Birol, thinks that the oil market will become more balanced and comfortable. He believes that countries like the United States, Canada, Brazil, and Guyana will increase their oil production, which could lead to lower prices due to the combination of higher supply and slower demand growth. Brent oil prices Looking at the price of Brent, which is the benchmark for oil prices according to OPEC, there has been a recent downward movement indicated by Elliott Wave. However, analysts are still waiting for a breakthrough of a symmetrical triangle formation to determine the direction more clearly. If the breakthrough is upwards, it could result in a three-wave recovery and oil prices could reach as high as $8,508. On the other hand, if the breakthrough is downwards, oil prices could drop to levels not seen since March 2023, when they went above $70. The American Petroleum Institute Meanwhile, the American Petroleum Institute (API) reported that US crude oil inventories increased by half a million barrels last week. Gasoline stockpiles, on the other hand, decreased by 2.5 million barrels, while distillates saw an increase of 600,000 barrels. To summarize, OPEC believes that oil demand will continue to grow strongly, but the IEA predicts a more balanced market with declining demand in the future. The future direction of oil prices is uncertain, as it depends on a breakthrough from a symmetrical triangle. Additionally, inventory data shows mixed results for crude oil, gasoline, and distillate stockpiles. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Weak Chinese economic growth meets Conservative yearly target, SSE composite index faces deep sell-off with limited reversal prospects. Meanwhile, high 'beta' Australian dollar vulnerable amid global index decline. Source: Bloomberg Forex Indices China /business/market_index Economy of China Dollar Written by: Richard Snow | Analyst, DailyFX, Johannesburg | Publication date: Thursday 18 January 2024 05:01 China’s economy grew by a modest 1% quarter-on-quarter (QoQ) in the three-month period between October and December, and rose 5.2% when compared to Q4 of last year, to end 2023 having achieved growth of 5.2% - meeting the conservative target set by Chinese officials. A similar target is anticipated for 2024 as challenges around deflation, weak demand and an ailing property sector continue to weigh on the world’s second largest economy. Source: DailyFX The prospect of further policy easing becomes more and more likely but any changes to the interest rate could see the yuan depreciate even further than what we have seen playing out in January thus far. SSE composite index sell-off surpasses prior low with little chance of reversing fortunes The Chinese index sold off on Wednesday amid the disappointing growth data, likely charting a new path to the downside. Looking at the weekly chart, price action fell beyond the major low of April 2022, with the March 2020 low next insight. The Chinese economy has been plagued by the deteriorating property sector, worsening aggregate demand and deflation. it is now widely believed that Chinese officials will have to come to the rescue and provide sufficient stimulus to support the Chinese economy in 2024. However, cutting interest rates will leave the local currency vulnerable after already depreciating against the dollar since the turn of the new year. Policy setters may also consider adjusting banks’ reserve ratio requirements but ultimately the market appears dissatisfied with existing stimulatory efforts. SSE composite index weekly chart Source: TradingView High ‘beta’ Australian dollar appears vulnerable amidst a general decline in global indices The Australian dollar, not too long ago, was propped up by two factors, which have subsequently reversed. The first was the increasing expectation around Fed rate cuts in 2024, and the second was the lingering threat of rising Australian inflation at a time when other countries had already seen massive improvement on this front. Fast forward to today and stubborn inflation in the EU, US and UK, particularly in December, has caused a general repricing in bond markets as expectations around the timing of interest rate cuts have been pared back. With rate cut expectations easing, the US dollar has picked up a bid in recent trading sessions forcing AUD/USD to break beneath the ascending trend line - which has been acting as support - as well as the 0.6580 level. There can be little doubt that today's Chinese growth data played a part in the continued selling, which has now breached the 200-day simple moving average, on the cusp of oversold territory. The challenge here is to assess whether the majority of this move has already played out; and given the fact that we are nearing oversold territory, it may be more prudent to monitor a potential pullback from such overheated levels before considering bearish continuation plays. Nevertheless, the ‘high beta’, procyclical Australian dollar reveals further vulnerability by virtue of its relationship with the S&P 500 - as it tends to rise and fall in a similar fashion. Major equity indices have turned lower recently while the S&P 500 holds up well. Keep in mind rising geopolitical uncertainty, a stronger dollar and a recent rise in US yields does pose somewhat of a headwind for the index ahead of the mega-cap US earnings which is set to get underway next week. AUD/USD daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Dive into our detailed analysis of the latest US equity market trends, where sectors across the board, including tech and consumer discretionary, face declines. Source: Bloomberg Indices Stock market Nasdaq United States Nasdaq-100 Bond Monte Safieddine | Market analyst, Dubai | Publication date: Thursday 18 January 2024 07:43 US equities in retreat again Equities faced another retreat, with all sectors finishing in the red. This downturn affected sectors like technology, communication, and consumer discretionary, with bond proxies hitting the lowest point after a rise in yields. The Nasdaq 100, known for its tech-heavy composition, experienced a larger loss than the Dow 30, declining about 0.6%. Despite this, it remained close to recent highs, indicating potential shifts in the market narrative. Stronger retail sales lead the data dump A wealth of economic data emerged from the US, including: Retail sales for December, which grew 0.6% month-on-month (m/m) and core sales up 0.4%, surpassing forecasts Mixed trade pricing data for the same month, with import prices exceeding estimates and export prices falling below expectations, showing a decrease of 0.9% m/m A slight increase in industrial production The NAHB's housing market index for this month remained below 50 but improved from 37 to 44 Mortgage applications, as reported by the MBA, rose by 10.4%. Further housing data is expected, along with the University of Michigan’s (UoM) preliminary consumer sentiment and inflation expectations due for release tomorrow. In Congress, optimism is growing for an agreement to avoid a partial government shutdown, although it remains a point of concern if the deadline is not extended to March. Yields rise again, rate cut likelihoods fall back Treasury yields ended the session higher, particularly in certain parts of the curve, while maintaining stability at the longer end. This comes alongside a disappointing 20-year bond auction. Market pricing, as per CME's FedWatch, suggests a slight inclination towards a rate cut in March following the strong retail sales data, but not by a considerable margin. The likelihood of rates falling below 4% by year-end remains a topic of debate. Central bank discussions predominantly focused on banking capital requirements, with more commentary expected from Federal Reserve members today and tomorrow. Nasdaq technical analysis, overview, strategies, and levels The fall in price reached Wednesday’s 2nd Support level, followed by a partial recovery to, as of this morning, above its previous 1st Support level. This movement has favoured contrarian sell-breakouts, while also stopping out even cautious conformist buys on their second attempt. According to one calculation, there has been a negative DMI (Directional Movement Index) cross, with another imminent. This is another test for its struggling ‘bull average’ overview. In this context, purchases at the first Support level are typically made only after a significant reversal by conformists, while contrarians anticipating sell-breakouts from this key level are likely to outperform. Source: IG IG client and CoT sentiment for the Nasdaq Retail trader bias among IG clients is maintaining a heavy sell stance at 73%, despite the drop in price, with short-sellers expecting further downward movement. Commitment of Traders (CoT) speculators are currently in a heavy buy territory, albeit narrowly, at 65%. Source: IG Nasdaq chart with retail and institutional sentiment Source: IG *The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 7am for the outer circle. Inner circle is from the previous trading day. **CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior. This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Oil price rises on heightened Iran/Pakistan tensions while cotton and orange juice slip Outlook on WTI, cotton and orange juice. Source: Bloomberg Written by: Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Thursday 18 January 2024 12:53 WTI rises on Iran/Pakistan missile hits Front month WTI futures swiftly reversed their recent minor downtrend which took these to Wednesday’s 70.61 low as Pakistan has responded to Iran's strikes on terrorist groups inside the former with an attack of its own. Tuesday’s high and the 55-day simple moving average (SMA) at 73.66 to 74.03 are thus back in sight. Further up lurks last week’s 75.27 high which also presents a potential resistance level. Support below Tuesday’s 71.85 low sits at Monday’s 71.38 low and the 71.33 late December low. The December-to-January uptrend line and Wednesday’s low at 70.61 to 70.50 offer further support. While the next lower current January low at 69.41 holds, a medium-term bullish reversal may unfold. Source: ProRealTime Cotton price flirts with December high Front month cotton futures have been steadily rising since the beginning of the year and have now reached the 200-day simple moving average (SMA) at 83.02 which capped on Wednesday. The next higher December high at 83.17 nonetheless remains in sight. If overcome, the 85.00 region could be in focus as well. Medium-term upside pressure should be maintained while the last reaction low on the daily chart at 81.33, made on Tuesday, underpins on a daily chart closing basis. Minor support above this level can be seen at Thursday’s 82.31 intraday low and the early January 82.23 high. Tuesday’s high at 82.04 may also act as support, were it to be revisited at all. Source: ProRealTime Orange juice futures approach five-month low Front month orange juice futures have resumed their descent and are swiftly approaching their May high and August trough at 287.24 to 287.21 which may offer interim support. If fallen through, the April peak at 280.38 would be next in line. Resistance above Thursday’s 293.31 intraday high sits at Friday’s 301.73 low. While Friday’s high at 308.90 caps, downside pressure should prevail. Source: ProRealTime

The US dollar gains momentum with surging treasury yields, diminishing odds of March fed rate cut. Explore technical outlooks for gold, EUR/USD, and USD/JPY. Source: Bloomberg Forex Shares Commodities United States dollar United States USD/JPY Written by: Diego Colman | Market Analyst, New York | Publication date: Thursday 18 January 2024 07:54 The US dollar, as measured by the DXY index, extended its recovery, reaching its strongest level in more than a month at one point in Wednesday’s trading session, supported by the solid jump in US government bond yields, with the 10-year note pushing past its 200-day simple moving average and settling above 4.10%. Yields accelerated higher following strong December US retail sales, which surprised on the upside at 0.6% m-o-m versus the 0.4% expected, a clear indication that the consumer maintains generous spending habits and remains in good health. In this environment, the likelihood of recession is very low. Source: DailyFX US dollar index vs US yields Source: TradingView With the US economy holding up remarkably well and experiencing above-target inflation, the Fed will be reluctant to start lowering borrowing costs prematurely or to slash rates too aggressively, as such a scenario could complicate the path to price stability. Markets are slowly adjusting to the idea that the US central bank may not pull the trigger too soon in terms of policy easing. To provide context, earlier this year, traders assigned an 80% probability to the first cut arriving in March, but the likelihood of this occurrence has since dwindled to around 50%. The hawkish repricing of the Fed's path has caused an upward shift in the Treasury curve, as seen in the chart below, reinforcing the greenback’s recovery in the process. This move may have gas to run a bit higher so it would not be surprising to see additional gains for the US dollar in the near term. US treasury curve shifts upwards Source: TradingView Gold price technical analysis Gold extended its retracement on Wednesday, breaking and closing below its 50-day simple moving average – a bearish development for the precious metal. If losses intensify in the coming days, initial support lies at $1,990, followed by $1,975. On further weakness, the focus shifts to the 200-day SMA. Conversely, if buyers regain the upper hand and trigger a turnaround, initial resistance emerges at $2,010 and $2,045-$2,050 thereafter. Taking out this ceiling could prove difficult, but a decisive breakout could pave the way for a rally toward the late December highs located around $2,085. Gold price daily chart Source: TradingView EUR/USD technical analysis EUR/USD was subdued, but ended the session above its worst levels on Wednesday, after bouncing off its 200-day simple moving average. If prices manage to hold above this indicator, buyers could trigger a move towards 1.0930. Continued gains from this point onward could expose resistance at 1.1020. On the other hand, if sellers retain control of the market and push the pair below the 200-day SMA, currently positioned at 1.0840, bearish momentum could gather pace, setting the stage for a pullback towards 1.0770. If weakness persists, a move towards trendline support at 1.0700 could follow. EUR/USD daily chart Source: TradingView USD/JPY technical analysis USD/JPY soared past its 100-day SMA on Wednesday, reaching its best level since late November. With sentiment around the yen deteriorating, USD/JPY could soon defy resistance at 149.00. Bulls must protect this ceiling at all costs; failure to do so could lead to a retest of the psychological 150.00 threshold. On the flip side, if sellers return and push prices lower, the first line of defense against a bearish assault is situated at 147.25, followed by 146.00. The bears are likely to have a hard time driving the pair below this technical zone, but if a breakdown takes place, a rapid decline towards 144.65 could ensue. USD/JPY daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Dow and Nikkei 225 hold steady, while Hang Seng stages a small rebound A cautious tone continues to prevail for indices, though the Hang Seng has managed to lift itself off yesterday’s low. Source: Bloomberg Written by: Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 18 January 2024 11:43 Dow continues to track lower A gentle pullback has continued here, with the price resuming a short-term topping pattern. A deeper retracement below 37,000 could bring the 50-day SMA into view, which would take the price to its lowest level since early December. Even this, or a deeper drop would leave the uptrend intact. Shor-term support may be found at the early 2022 highs at 36,954. Source: ProRealTime Nikkei 225 stabilises after Wednesday reversal The index’s remarkable run higher stopped yesterday as the price dropped back below 36,000. The price has registered some small gains overnight, and remains close to this week’s multi-decade high. A close below 35,000 might signal that a deeper retracement has begun. In the event of a much deeper pullback, the summer highs at 34,000 come into view. A close back above 36,000 puts the buyers in charge again in the short-term. Source: ProRealTime Hang Seng edges off 14-month low This week saw the index plummet to its lowest level since November 2022, with disappointing Chinese GDP data adding to the tough outlook for that economy. After the steep losses earlier in the week a bounce has taken place overnight, though it remains to be seen if it can muster up additional strength towards 16,000 and the previous low. Further declines target the October 2022 low at 14,830. Source: ProRealTime

Thus far, communications around a policy-pivot timeline have been muddled, which will leave markets scouring comments for any hints at the upcoming meeting. Source: Bloomberg Forex Bank of Japan Inflation Bond Japan Government bond Written by: Yeap Jun Rong | Market Strategist, Singapore | Publication date: Thursday 18 January 2024 10:25 What to expect at the upcoming Bank of Japan (BoJ) meeting? The BoJ is set to hold their monetary meeting across 22 – 23 January 2024, with broad expectations for its short-term interest rate target to be kept unchanged at -0.1% and for the 10-year bond yield around 0%, at least for now. Earlier policy tweaks from the BoJ include raising the flexible bandwidth around its 10-year yield target to 1% in July last year, before the central bank headed for more policy flexibility in October 2023 by referring to the 1% bound as purely a ‘reference’. These intermittent steps seem to lay the groundwork for an eventual policy pivot, but communications around the timeline from BoJ officials have been muddled, which will leave markets scouring the BoJ Governor’s comments for any hints at the upcoming meeting. Positive wage-inflation and sustainable 2% inflation conditions still on the lookout While BoJ Governor Kazuo Ueda acknowledged last month that prices and wages appeared to be moving in the right direction, he mentioned that conditions remained uncertain, seemingly calling for more time to assess that the pricing and wage trend will stick. Fresh economic data following his comments also provided some validation for further policy hold, with Japan’s November headline wage growth slowing to its lowest pace (+0.2% year-on-year) since December 2021. Tokyo’s core inflation data, which served as a precursor to nationwide price trends, has also eased to its June 2022 level of 2.1%, giving the BoJ more room for patience in its exit plan. Not to mention a devastating earthquake, which rocked Japan on New Year's Day. With the economic impact still uncertain and the country engaging in disaster relief efforts currently, it seems rational for the central bank to avoid rocking the boat for now. Source: Refinitiv Market pricing for BoJ to end negative rates in 2Q 2024, fresh economic projections in focus Market expectations are for the BoJ to end negative rates only in 2Q 2024, with comments from BoJ Governor Kazuo Ueda on watch to validate the timeline. Updated economic projections from the central bank will also be released. With an increase in inflation forecasts for FY2024 and FY2025 in the previous report, further upward revisions in inflation, though an unlikely case, could be a signal for markets for a quicker policy shift. Source: Refinitiv, as of 17 January 2024. A look at Japanese 10-year bond yields revealed a moderation from its November 2023 peak to a near five-month low lately, seemingly a reflection of some dissipation in bond traders’ hawkish bets. The implied volatility for the 10-year government bonds futures has also been tame as compared to previous pre-meeting surges, which suggests broad expectations in place that the upcoming meeting may deliver less surprise and more of further wait-and-see. Source: TradingView USD/JPY: Renewed move higher on widening yield differentials Widening US-Japan bond yield differentials since the start of the year have driven a recovery in the USD/JPY, as US 10-year Treasury yields saw a renewed resurgence with some pushback against earlier Federal Reserve (Fed) rate cuts. The pair has managed to reverse above its Ichimoku cloud on the daily chart, with its daily relative strength index (RSI) reclaiming its 50 level for the first time since November 2023, leaving a near-term upward bias in place. Further upmove could leave the 150.00 level of resistance on watch, where the BoJ has intervened in October 2022 with aggressive yen-buying. On the downside, the 146.50 level may serve as immediate support to hold, where the upper edge of the cloud stands. Source: IG charts Nikkei 225: Starting the year strong with a record-breaking rally The Nikkei 225 index has been an outperformer this year, pushing to its multi-decades high to trade at levels last seen in February 1990. Recent economic data has offered room for equities to continue basking in the supportive policy environment from the BoJ, with any dovish validation from policymakers at the upcoming meeting likely to keep the upward momentum going. Thus far, foreign buying of Japanese stocks has been robust, with the latest data by the Japanese Ministry of Finance revealing a net 1.2 trillion yen ($8.1 billion) inflows into Japanese stocks last week, which marked its strongest buying spree since October 2023. For now, a 10% rally since the start of the year calls for a near-term breather for the index, but a bullish flag continuation pattern remains in place to keep the broader uptrend intact. Further retracement may leave the 34,800 level on watch as support to hold, where a 23.6% Fibonacci retracement level stands. On the upside, the year-to-date high at the 36,200 level will be a near-term resistance for buyers to overcome. Source: IG charts IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed. The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer. Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Stock markets tumbled further yesterday as investors continued to reprice expectations around central bank rate cuts. The UK's stronger inflation reading and ECB head Christine Lagarde's comments about no rate cuts in sight yet continued to cast a pall over risk appetite. While Chinese markets rebounded overnight, the overall tone in Asia was still cautious. Geopolitical tensions are on the rise, as the US conducts another strike on the Houthis in Yemen, while Pakistan has responded to Iran's strikes on terrorist groups inside the former with an attack of its own. US weekly jobless claims are on the calendar for the day, but the main event comes in the form of Japanese CPI late this evening.

Welcome to the first episode of 2024's Sentiment study with Monte, where he dives into the world of silver. Join us on this exciting journey to understand and capitalise on the silver market's potential in the year ahead. Monte Safieddine | Market analyst, Dubai | Publication date: Tuesday 16 January 2024 06:06 It's our first Sentiment Study video of 2024, and we’re looking at another precious metal. This time it’s silver and clients on our end are holding a far larger buy bias compared to gold. The latter managed to end the year with double-digit price gains, while silver finished 2023 largely unchanged. We plot sentiment from both IG clients and CoT speculators onto the chart and also examine the gold/silver ratio. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Oil, gold and silver prices slide on greenback strength Outlook on Brent crude oil, gold and silver ahead of US retail sales publication. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Wednesday 17 January 2024 12:32 Brent crude oil price slides The price of Brent crude oil once again slides as a stronger Us dollar and global demand concerns overshadow heightened tensions in the Middle East ahead of Wednesday’s API crude oil inventories. Monday’s low and the December-to-January uptrend line at 76.71 to 76.36 are thus back in play. More significant support comes in at last Monday’s 75.21 low and the previous week’s 74.81 low. Were this support zone to be fallen through, the 7 December low at 73.69 would represent the next downside target ahead of the 72.50 December low. Resistance above Wednesday’s intraday high at 77,71 comes in between Tuesday’s high and the 55-day simple moving average (SMA) at 79.16 to 79.32. Source: ProRealTime Gold price pushed lower amid strong greenback Spot gold’s slide from last week’s $2,062 per troy ounce high amid a strengthening US dollar has taken it back to the 55-day simple moving average (SMA) at $2,019, below which lies last week’s low at $2,014. Were it to give way, the October and late November highs at $2,009 to $2,007 would be back in sight. Minor resistance above Wednesday’s $2,033 intraday high sits at last Wednesday’s $2,040 high with further resistance to be found at Monday’s $2,046 low. Source: ProRealTime Silver price slides towards current January low Spot silver’s descent from last week’s $23.53 per troy ounce high is fast approaching last week’s $22.48 low as a rising greenback makes the purchase of the precious metal less attractive. A drop through the $22.48 current January low would likely engage the November low at $21.89. Minor resistance above Wednesday’s $22.94 intraday high can be seen at Monday’s $23.11 low ahead of the more significant 5 to 12 January highs at $23.51 to $23.53. Source: ProRealTime

Netflix (NASDAQ:NFLX) is set to disclose its Q4 2023 earnings report on January 23rd, 2024 after the US markets close. What are the expectations, and what is the outlook for the stock price? Source: Bloomberg Shares Netflix Share price Revenue Streaming media Technical analysis Hebe Chen | Market Analyst, Melbourne | Publication date: Wednesday 17 January 2024 08:48 Netflix earnings date Netflix (NASDAQ:NFLX) is set to disclose its Q4 2023 earnings report on January 23rd, 2024 after the US markets close. Netflix earnings key expectations Q4 Expectation Q3 reported Q4,2022 QOQ YOY EPS: $2.15 $3.49 $0.51 -38% 322% Revenue: 8.7B 8.54B 7.86B 2% +11% Source: Netflix Netflix earnings key watches Strong growth momentum Netflix's performance in the third quarter of 2023 was remarkable. The company achieved an impressive 8% growth in revenue, reaching a record high level, primarily attributed to the higher-than-expected paid membership growth. Its global expansion of its streaming services played a crucial role, with a net addition of 8.76 million paid memberships in Q3 alone, pushing the total paid membership to a new record high of 247 million. Into the fourth quarter, the company remains optimistic about its growth prospects and anticipates the continuation of robust user growth momentum.According to forecasts from the streaming giant, its Q4 revenue is projected to increase by 11% year-over-year, reaching $8.7 billion. The net addition of paid memberships is projected to be close to the previous quarter, potentially with another 8-9million new subscribers. Netflix Q4, 2023 Forecast Source: Netflix Cost and margin headwind The streaming king’s rosy outlook does not come without challenges. Netflix’s operating margin is projected to take a dip in the fourth quarter. After reaching a 22.4% record high in the Q3, the notably surging content costs combined with a moderating global ARM (Average Revenue per Membership) are likely to mark an inflection point in Netflix’s profitability from Q4 2023 and onwards. Earlier this month, Citigroup revised down its rating on Netflix from "Buy" to "Hold" emphasising its concerns about the stream king’s falling margins. Citigroup projected that Netflix's content spending would rise to around $20.4 billion by 2025, casting doubt on the company's profitability in the next two years. Based on the company’s forecast, its operating margin could plunge to 13% in Q4 from 22% in the recent quarter. Additionally, Netflix also admitted that a strong US dollar versus other currencies would cost roughly $200M on the company’s Q4 revenue and ARM. Netflix stock price and technical analysis Before we embark on another year of uncertainties for price movements, let's first take a glance in the rear-view mirror at Netflix stock's past performance. Over the last three years, Netflix's share price has experienced a rollercoaster ride, recording gains of 11% in 2021, a significant decline of -51% in 2022, and a juicy 65% gain in 2023. In contrast, the S&P 500 exhibited returns of 27% in 2021, faced a downturn of -19% in 2022, and rebounded with a 24% rise in 2023. It’s also not hard to see from the comparison charts below that Netflix's share price has demonstrated wilder volatility compared to the key benchmark in the past five years. Source: Tradingview At the moment, Netflix's share price is hovering around the key threshold of $500, maintaining a clear and valid uptrend since July 2022 with the prices trading above all the major moving averages. Its remarkable performance in the past 18 months has earned an 8 out of 10 score rating by TipRanks, coupled with a strong endorsement from 25 buy ratings out of 35 global analysts in the past three months. Source: IG In the short term, trend followers may welcome the breakout from the $500 hurdle as a robust bullish momentum in harmony with the longer-term uptrend, and set their sights on the next target, near $560. Nevertheless, it's worth noting that the range between $500 and $560 might pose a greater challenge, considering its historical congestion patterns dating back to June 2020 to August 2021 (as highlighted in the chart). Conversely, a breach below the $480-$490 range could potentially serve as an early warning sign for a correction risk, as the ascending trajectory formed since October 2023 would lose its efficacy. Source: IG Netflix Q4 earnings preview summary Overall, I believe the crucial watch for the impending earnings would be on Netflix's strategy and outlook to navigate declining profitability while sustaining its growth trajectory. In terms of stock prices, the upcoming quarterly update is poised to play a crucial role in determining if the stock price can successfully surpass the significant psychological level of $500. This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Rolls’ shares rocketed in 2023, buoyed by improved financial fortunes as it reaped the fruits of CEO Tufan Erginbilgic’s turnaround strategy. Where next? Source: Bloomberg Indices Shares FTSE 100 Roll-Royce Stock Investment Charles Archer | Financial Writer, London | Publication date: Monday 15 January 2024 18:30 Rolls-Royce shares soared by circa 220% in 2023, buoyed by recovering civil aviation, increased state defence spending, and a newly appointed energetic CEO with a clear turnaround strategy. Indeed, Rolls was the top performing large cap stock in Europe last year as measured by the Stoxx Europe 600 index. For context, Marks & Spencer — which re-entered the FTSE 100 last year — returned ‘just’ 120%. However, while Rolls shares are now changing hands just above the 300p mark, multiple brokers consider that the company has further to run in 2024. But remember, past performance is not an indicator of future returns. Rolls-Royce share price: results and targets In August’s half-year results, underlying operating profit came in at £673 million with free cash flow of £356 million reflecting ‘continued end-market growth and focus on commercial optimisation and cost efficiencies across the Group.’ Further, the FTSE 100 operator raised its 2023 guidance for underlying operating profit to between £1.2 billion and £1.4 billion, and free cash flow to £900 million to £1 billion — due to transformation efforts accelerating its ‘financial delivery.’ Then at its Capital Markets Day on 28 November, the company announced a plan to develop a ‘high performing, competitive, resilient and growing business.’ Among other things, this included a mid-term target to deliver operating profit of between £2.5 billion and £2.8 billion, on an operating margin of between 13% and 15% — with free cashflow of £2.8 billion to £3.1 billion and a return on capital of between 16% and 18%. This is all intended to create an ‘investment grade’ profile for the stock, as part of a strategy to support at least £1 billion of gross disposals over the next five years. CEO Tufan Erginbilgic enthused that ‘Rolls-Royce is at a pivotal point in its history. After a strong start to our transformation programme, we are today laying out a clear vision for the journey we need to take and the areas where we must focus. We are creating a high performing, competitive, resilient and growing Rolls-Royce.’ Where next for Rolls Royce shares? Setting financial targets is one thing — achieving them is another. However, city brokers seem impressed. Citi has a price target of 431p, while JP Morgan has set theirs at 400p and Barclays has gone down the middle at 409p. And all three price targets are set with the expectation of being achieved within the next 12 months. Barclays analysts are particularly positive about the increased expected cash flow — which should boost the net cash position over the next year, allowing Rolls to recover its investment grade credit rating — and also help the FTSE 100 company pay down its debt pile. Looking beyond civil aviation recovery, increased defence spending, and the promising UltraFan gearbox programme, the next catalyst may be Rolls’ small modular nuclear reactors. Prime Minister Rishi Sunak plans to relax planning ruleS restricting the plants, noting that ‘nuclear is the perfect antidote to the energy challenges facing Britain.’ The long-term plan is to get 25% of the UK’s energy needs from nuclear by 2050, representing some 24GW of capacity, and almost double the 14% of today. The government retains a golden share in Rolls-Royce and has already granted the company some funding to get started. However, the FTSE 100 business still needs to compete for government contracts alongside five other hopefuls, with a winner set to be announced within months. Erginbilgic came in at the start of 2023 to fix, in his own words, a ‘burning platform.’ The share price performance and near universal ‘buy’ targets suggest more growth may be imminent. But the FTSE 100 company cut 9,000 staff during the pandemic and even more throughout last year. This loss of institutional knowledge could be a problem as demand for services return. However, given the success thus far, Rolls-Royce remains one of the best FTSE 100 stocks to watch in 2024. Financial results are due in February. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

US presidential election 2024 The last US election garnered widespread interest, with an aftermath that will likely be remembered for generations to come. Learn more about the next US election and how the markets may be affected.

Poor Chinese economic data set the tone for another difficult session across Asian markets. Q4 GDP in China grew 5.2%, up from the 4.9% of Q3 but it was insufficient to cheer investors, and Chinese stocks fell sharply once again, led by the Hang Seng. A fall in China's population also added to the gloomy tone. UK inflation rose by 4% for the year to December, above November's 3.9% and ahead of forecasts. Monthly price growth rebounded to 0.4% from -0.2%, putting a brake on hopes that the Bank of England may begin cutting rates soon. A weak start is expected across European and US markets.