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Gold and silver losses pause, while Brent crude oil tiptoes higher Gold and silver continue to form an apparent higher low, while oil prices are aiming to resume their move higher. Source: Getty Images Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Thursday 25 April 2024 14:02 Gold selling halted for now For the moment the price has managed to halt any further declines. Early trading has seen the price attempting to move higher, having found buyers at the lows just above $2300. A close above $2340 could trigger a new move to the upside that would target $2400. Sellers will want to see a close back below $2300 and then below $2291, the low from Tuesday, though the broader uptrend is still firmly intact. Source: ProRealTime Brent edges higher Oil prices wobbled yesterday after the solid gains seen on Tuesday, but have put their best foot forward in early trading this morning. A higher close today would help to reinforce the view that a higher low was created last week when the price bounced off the 50-day simple moving average. Further gains would head towards $90, and then on to the early April high around $91.50. Source: ProRealTime Silver stabilises above $27 Silver prices have also stemmed the losses over the past week, holding above $27. A higher close today will help bolster the bullish outlook and suggest that a higher low has formed around $27. Additional gains target the mid-April highs at $29. A close below $26.50 would mark a bearish development and, as with gold, suggest a deeper retracement in a broader uptrend. Source: ProRealTime

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Microsoft, Apple, Nvidia, Amazon and Meta could be the best AI stocks to watch next month. These stocks are the largest AI stocks in the US based on market capitalisation. Source: Bloomberg 2023 was inarguably the year of AI — as the big NASDAQ tech stocks experienced huge surges in market capitalisation — backed by hopes that artificial intelligence progress, in particular in generative AI, could displace current models of working. These so-called ‘magnificent seven’ have driven much of the gains in the US market, with market darling Nvidia rising to $950 per share in March. However, the company has since corrected to $824, recently suffering a 10% one-day fall as investors weigh up the relative risks and rewards. AI in 2024 While AI is undoubtedly filtering into ever more aspects of daily life and work environments, new tech has a history of inspiring market bubbles which pop before the winners go on to generate sustainable growth. This was arguably the case with the dot-com crash — and while no two scenarios are exactly the same, history does tend to rhyme. On the other hand, the AI advances of the last 18 months have been extraordinary — with artificially generated text, imagery and video available to the masses on a scale never before seen. There are even rumours that OpenAI has developed a model approximating Artificial General Intelligence (AGI) — capable of surpassing human-like intelligence with the ability to self-teach. And then there’s the employee question: many companies are already laying off staff in favour of AI-based replacements, and this trend could be set to continue. With some disquiet not just at Nvidia, but other popular shares including Super Micro Computer, Palantir, ARM and AMD, it remains to be seen whether this is the end of the bubble or simply some profit taking before a sustained move higher. As ever, while there may be significant growth opportunities, there are also risks. Past performance is not an indicator of future returns. Best AI stocks to watch 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. Here we have listed the top AI stocks in the US based on companies where AI is a growth area and ordered by market capitalisation. Microsoft Apple Nvidia Amazon Meta Platforms Microsoft Microsoft remains the original global computing power, so it makes sense that the US behemoth tops the list of the best AI stocks to watch — and is now the most valuable company in the world. The business retains a close relationship with OpenAI prior to the famous ChatGPT launch and has invested billions into the company since 2019. In Q2 results, revenue increased by 18% year-over-year to $62 billion, while net income rose by 33% to $21.9 billion. CEO Satya Nadella enthused that ‘we’ve moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.’ In upcoming earnings, two metrics will be closely watched: revenue derived from Azure and related services — which rose by 30% in Q2, including 6% from AI — and revenue from the company’s Microsoft 365 Copilot AI tool, as Q3 will be the first full quarter of sales. Arguably, the two are key bellwethers for AI sentiment. Market Capitalisation: $3.03 trillion Apple Apple is in the middle of a market struggle — independent research firm Counterpoint estimates that iPhone sales in key market China fell by 19% in the March quarter — the worst performance since covid-19 struck in 2020. But in Q1 results, Apple saw revenue rise by 2% year-over-year to $119.6 billion, while quarterly earnings per diluted share increased by 16% to $2.18. CEO Tim Cook noted the company’s ‘all-time revenue record in Services’ and also enthused that the company’s ‘installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments.’ The focus of upcoming results may be on new product launches, including new iPads on 7 May and iOS 18, which is rumoured to host artificial intelligence capacity entirely offline on customer iPhones. Market Capitalisation: $2.58 trillion Nvidia Nvidia is arguably the prime beneficiary of the AI boom, with a wide economic moat as the ‘picks and shovels’ stock for the artificial intelligence age. In Q4 2024 results, the company saw revenue rise by 265% year-over-year and 22% quarter-on-quarter to a record $22.1 billion, driven by Data Centre revenue which increased by 409% in the year to $18.4 billion. CEO and founder Jensen Huang enthuses that ‘Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations… NVIDIA RTX, introduced less than six years ago, is now a massive PC platform for generative AI, enjoyed by 100 million gamers and creators.’ However, clouds may be gathering on the horizon. The 10% one-day drop mentioned above was potentially caused by Super Micro Computers failing to preannounce positive Q3 results as it had last quarter — the business is deeply tied to Nvidia as it makes the titan’s servers. Market Capitalisation: $2.06 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. Total Q4 net sales increased by 14% year-over-year to $170 billion. 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.’ Positively, Bank of America analysts consider that next week’s earnings will see Amazon Web Services and its advertising segment come in on the upside of Wall Street guidance. Market Capitalisation: $1.87 trillion Meta Platforms Meta Platforms now boasts monthly active users of 3.98 billion people across its ‘family’ of apps, comprising Facebook, Instagram, threads and WhatsApp — an increase of 6% compared to Q4 2023. 2023 full-year results saw ad impressions across the family rise by 28% year-over-year, while the average price per advert dropped by 9%. Accordingly, revenue rose by 1% to $134.9 billion. CEO Mark Zuckerberg enthuses that ‘our community and business continue to grow. We've made a lot of progress on our vision for advancing AI and the metaverse.’ A common theme among analysts for 2024 is that the company needs a new catalyst to sustain further gains. But the next catalyst could well come externally — with US politicians considering a ban on competitor TikTok unless parent ByteDance sells the app to a non-Chinese company. Market capitalisation: $1.26 trillion 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.

Microsoft, Apple, Nvidia, Amazon and Meta could be the best AI stocks to watch next month. These stocks are the largest AI stocks in the US based on market capitalisation. Source: Bloomberg 2023 was inarguably the year of AI — as the big NASDAQ tech stocks experienced huge surges in market capitalisation — backed by hopes that artificial intelligence progress, in particular in generative AI, could displace current models of working. These so-called ‘magnificent seven’ have driven much of the gains in the US market, with market darling Nvidia rising to $950 per share in March. However, the company has since corrected to $824, recently suffering a 10% one-day fall as investors weigh up the relative risks and rewards. AI in 2024 While AI is undoubtedly filtering into ever more aspects of daily life and work environments, new tech has a history of inspiring market bubbles which pop before the winners go on to generate sustainable growth. This was arguably the case with the dot-com crash — and while no two scenarios are exactly the same, history does tend to rhyme. On the other hand, the AI advances of the last 18 months have been extraordinary — with artificially generated text, imagery and video available to the masses on a scale never before seen. There are even rumours that OpenAI has developed a model approximating Artificial General Intelligence (AGI) — capable of surpassing human-like intelligence with the ability to self-teach. And then there’s the employee question: many companies are already laying off staff in favour of AI-based replacements, and this trend could be set to continue. With some disquiet not just at Nvidia, but other popular shares including Super Micro Computer, Palantir, ARM and AMD, it remains to be seen whether this is the end of the bubble or simply some profit taking before a sustained move higher. As ever, while there may be significant growth opportunities, there are also risks. Past performance is not an indicator of future returns. Best AI stocks to watch 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. Here we have listed the top AI stocks in the US based on companies where AI is a growth area and ordered by market capitalisation. Microsoft Apple Nvidia Amazon Meta Platforms Microsoft Microsoft remains the original global computing power, so it makes sense that the US behemoth tops the list of the best AI stocks to watch — and is now the most valuable company in the world. The business retains a close relationship with OpenAI prior to the famous ChatGPT launch and has invested billions into the company since 2019. In Q2 results, revenue increased by 18% year-over-year to $62 billion, while net income rose by 33% to $21.9 billion. CEO Satya Nadella enthused that ‘we’ve moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.’ In upcoming earnings, two metrics will be closely watched: revenue derived from Azure and related services — which rose by 30% in Q2, including 6% from AI — and revenue from the company’s Microsoft 365 Copilot AI tool, as Q3 will be the first full quarter of sales. Arguably, the two are key bellwethers for AI sentiment. Market Capitalisation: $3.03 trillion Apple Apple is in the middle of a market struggle — independent research firm Counterpoint estimates that iPhone sales in key market China fell by 19% in the March quarter — the worst performance since covid-19 struck in 2020. But in Q1 results, Apple saw revenue rise by 2% year-over-year to $119.6 billion, while quarterly earnings per diluted share increased by 16% to $2.18. CEO Tim Cook noted the company’s ‘all-time revenue record in Services’ and also enthused that the company’s ‘installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments.’ The focus of upcoming results may be on new product launches, including new iPads on 7 May and iOS 18, which is rumoured to host artificial intelligence capacity entirely offline on customer iPhones. Market Capitalisation: $2.58 trillion Nvidia Nvidia is arguably the prime beneficiary of the AI boom, with a wide economic moat as the ‘picks and shovels’ stock for the artificial intelligence age. In Q4 2024 results, the company saw revenue rise by 265% year-over-year and 22% quarter-on-quarter to a record $22.1 billion, driven by Data Centre revenue which increased by 409% in the year to $18.4 billion. CEO and founder Jensen Huang enthuses that ‘Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations… NVIDIA RTX, introduced less than six years ago, is now a massive PC platform for generative AI, enjoyed by 100 million gamers and creators.’ However, clouds may be gathering on the horizon. The 10% one-day drop mentioned above was potentially caused by Super Micro Computers failing to preannounce positive Q3 results as it had last quarter — the business is deeply tied to Nvidia as it makes the titan’s servers. Market Capitalisation: $2.06 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. Total Q4 net sales increased by 14% year-over-year to $170 billion. 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.’ Positively, Bank of America analysts consider that next week’s earnings will see Amazon Web Services and its advertising segment come in on the upside of Wall Street guidance. Market Capitalisation: $1.87 trillion Meta Platforms Meta Platforms now boasts monthly active users of 3.98 billion people across its ‘family’ of apps, comprising Facebook, Instagram, threads and WhatsApp — an increase of 6% compared to Q4 2023. 2023 full-year results saw ad impressions across the family rise by 28% year-over-year, while the average price per advert dropped by 9%. Accordingly, revenue rose by 1% to $134.9 billion. CEO Mark Zuckerberg enthuses that ‘our community and business continue to grow. We've made a lot of progress on our vision for advancing AI and the metaverse.’ A common theme among analysts for 2024 is that the company needs a new catalyst to sustain further gains. But the next catalyst could well come externally — with US politicians considering a ban on competitor TikTok unless parent ByteDance sells the app to a non-Chinese company. Market capitalisation: $1.26 trillion 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.

Meta’s share price plunged as much as 16% in post-market trading, following the release of its 1Q 2024 results. Source: Getty Shares Price Share price Meta Platforms Revenue Artificial intelligence Written by: Yeap Jun Rong | Market Strategist, Singapore Publication date: Thursday 25 April 2024 03:51 Meta’s share price plunged post-results Meta’s share price plunged as much as 16% in post-market trading, following the release of its 1Q 2024 results. If this is followed through in the US session, this will be the largest percentage drop for the company’s share price since October 2022 (-24.6%). Meta’s results have a negative knock-on impact on the share prices of other big tech as well. Alphabet and Amazon are down close to 3% after-market, while Microsoft and Nvidia are down close to 2%. Source: Refinitiv Meta had a stellar 1Q, with a beat in both top and bottom-line. Revenue was 1% higher than consensus at $36.46 billion, up 27% year-on-year. This is the highest year-on-year (YoY) growth since 3Q 2021. Earnings per share (EPS) has beaten expectations by 9.8%, coming in at $4.71 and up more than two-fold from the $2.20 a year ago. Net profit margin was above estimate too, coming in at 33.9% versus the 31.1% consensus. Its other operating metrics have been encouraging as well. Average price per ad increased 6% YoY, ad impressions were up 20% YoY, while family daily active people (DAP) increased 7% YoY. Lacklustre revenue guidance overshadows stellar 1Q 2024 performance With the 40% run-up in its share price year-to-date, expectations are in place for the company to outperform on all fronts, leaving little room for error. It seems hard to find fault with the current set of results, but market participants were expecting more from Meta in terms of its forward sales outlook. The company guided for 2Q 2024 total revenue to be in the range of $36.5-39 billion, with the midpoint of the revenue outlook ($37.8 billion) falling below the $38.3 billion market consensus. There may be some concerns as to whether we have already seen the peak in growth momentum, with year-on-year revenue growth to potentially fall to 18.1% in 2Q 2024 from the current 27.3%. Huge cost increases put market participants off as well Given the ongoing artificial intelligence (AI) race among the big tech, Meta has been under pressure to keep up on its AI capabilities in order to fend off competition as well. The company is anticipating a $5 billion cost increase from its AI infrastructure investments for 2024 and expects capital expenditures to continue to increase next year. "We anticipate our full-year 2024 capital expenditures will be in the range of $35-40 billion, increased from our prior range of $30-37 billion." This will be a new record high for the company’s capital expenditure, but there may be some reservations on whether the huge amount will pay off. Having invested heavily in the metaverse since the end of 2020, its metaverse-oriented Reality Labs division is still faced with growing losses ($3.85 billion operating loss in 1Q 2024). This may lead to questions on whether it will be another expensive long-term bet this time round. Technical analysis: Meta’s share price unwind all of its past two months’ gains pre-market Failure to meet the sky-high market expectations for its results has prompted a 16% plunge in its share price pre-market, effectively unwinding all of its gains over the past two months. As such, an attempt for its daily relative strength index (RSI) to revert back above its key 50 level has also failed to materialise, which may keep the trend on a downward bias in the near term. The hefty fall also marked a dip in share price below its daily Ichimoku Cloud support for the first time since October 2023. There may be some expectations on whether the 16% plunge is overdone, given a stellar set of 1Q 2024 numbers, which may potentially catch the attention of some dip buyers. Buyers will have to face the arduous task of potentially pushing above the US$436.00 level (the lower band of the Ichimoku Cloud) to signal some control. Immediate support may be found at the key US$400.00 level, with any failure to hold the line potentially paving the way for a retest of the US$360.00 level next. Source: IG charts 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.

Facebook owner Meta Platforms saw its shares down heavily in extended trade after revenue forecasts disappointed. Some analysts are also now questioning the staggering amounts of money Meta is investing in artificial intelligence. Written by: Jeremy Naylor | Analyst, London Publication date: Thursday 25 April 2024 10:28 Earnings per share came in at $4.71, comfortably above estimates of $4.32 and revenues up 27% year-on-year, at $36.46bln, above the forecasts of $36.16bln. That was the fastest rate of revenue expansion for any quarter since 2021. However, shares have quite clearly been priced for perfection as the outlook, however strong it is, quite clearly disappointed the market. Q2 revenue is expected at $36.5 to $39bln with the midpoint at $37.75bln, which would represent 18% year-over-year growth, but below analysts' average estimates of $38.3bln. However, the company is also expected to invest between $30-37bln into AI, possibly as much as $40bln, which some said was too much given current engagement. (AI Video Summary) Meta Meta Platforms, the parent company of Facebook, experienced a significant stock drop post-market following its quarterly earnings report, despite beating earnings expectations with a share price of $4.71 against a forecast of $4.32, and posting revenues of $36.46 billion. Meta's aggressive investment in AI technology This drop was attributed to concerns over its aggressive investment in AI technology, with spending on AI expected to be between $30 to $40 billion. Despite initial investor trepidation, there's notable buying interest in the stock at the lower prices, with 87% of clients holding long positions. The heavy investment in AI technology continues to spark debate among investors regarding the company’s future direction. 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.

Despite ECB rate cut forecasts, the Euro climbs against the USD and GBP. US economic data could influence this uptrend. Source: Getty Forex Shares Euro Pound sterling EUR/GBP EUR/USD Written by: Nick Cawley | Analyst, DailyFX, London Publication date: Thursday 25 April 2024 06:37 The euro has gained against the US dollar and the British pound recently, even as markets anticipate a European Central Bank rate cut in June. However, any weakness in the US dollar could be temporary, as upcoming US Q1 GDP and core PCE data may support the view of sustained higher US interest rates. The daily EUR/USD chart shows the pair trading on either side of 1.0700 after rebounding from 1.0600 last week. The April 16th multi-month low coincided with a heavily oversold CCI reading which is now being erased. All three simple moving averages are above the spot price and in a negative pattern, while the pair has posted two major lower highs and lower lows since the end of last year. The next level of resistance is seen at 1.0787, while a confirmed break of 1.0600 will bring 1.0561 and 1.0448 into play. EUR/USD daily price chart Source: TradingView EUR/USD sentiment analysis: traders build net-shorts, prices may still fall Retail trader data shows 59.30% of traders are net-long with the ratio of traders long to short at 1.46 to 1.The number of traders net-long is 3.54% lower than yesterday and 16.77% lower than last week, while the number of traders net-short is 20.90% higher than yesterday and 35.35% higher than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current EUR/USD price trend may soon reverse higher despite the fact traders remain net-long. EUR/GBP jumped last week after Bank of England (BoE) commentary that UK inflation is falling towards target. The BoE rate cut expectations were brought forward, weakening sterling against a range of currencies. EUR/GBP hit a multi-month high but partially retraced the move yesterday after the CCI indicator flashed a heavily overbought reading. In the short term, the recent double high around 0.8645 should act as resistance if the 200-day simple moving average is broken. The 0.8550 is currently guarded by both the 20- and 50-day SMAS. EUR/GBP: traders cut net-shorts on the week, prices may fall According to the latest retail trader data, 51.62% of traders are net-long on EUR/GBP, with a long-to-short ratio of 1.07 to 1. The number of net-long traders has increased by 22.75% compared to yesterday but decreased by 26.67% from last week. Conversely, the number of net-short traders has decreased by 15.19% since yesterday but increased by 61.45% from last week. The contrarian view to crowd sentiment suggests that EUR/GBP prices may continue to fall, despite the current mixed trading bias. EUR/GBP daily price 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.

Australia's CPI exceeded expectations at 3.5%, suggesting the RBA might keep rates steady, pushing AUD/USD up amid risk-on sentiment and ahead of US data. AUD/NZD shows bullish potential above key supports. Source: Getty Forex Market sentiment Inflation United States dollar AUD/NZD AUD/USD Written by: Richard Snow | Analyst, DailyFX, Johannesburg Publication date: Thursday 25 April 2024 07:15 Australian inflation eases less than anticipated in Q1 Monthly, quarterly and yearly inflation measures showed disappointing progress towards the Reserve Bank of Australia’s (RBA) target. The monthly CPI indicator for May rose to 3.5% versus the prior 3.4% to round off a disappointing quarter where the first three months of the year revealed a rise of 1%, trumping the 0.8% estimate and prior marker of 0.6%. Source: DailyFX Generally higher service cost pressures in the first quarter have made a notable contribution to the stubborn inflation data – something the RBA will most likely continue to warn against. The local interest rate is expected to remain higher for longer in part due to the sluggish inflation data, but also due to the labour market remaining tight. A strong labour market facilitates spending and consumption, preventing prices from declining at a desired pace. Markets now foresee no movement on the rate front this year with implied basis point moves all in positive territory for the remainder of the year. This is of course likely to evolve as data comes in but for now, the chances of a rate cut this year appear unlikely. Implied basis point changes in 2024 for each remaining RBA meeting Source: Refinitiv AUD/USD continues to benefit from the return to risk assets After escalation threats between Israel and Iran appeared to die down, markets returned to assets like the S&P 500 and the ‘high beta’ aussie dollar. AUD/USD subsequently reversed after tagging the 0.6365 level – the September 2022 spike low and surpassed 0.6460 with ease. Upside momentum appears to have found intra-day resistance at a noteworthy area of confluence resistance – the intersection of the 50 and 200-day simple moving averages (SMAs). The move could also be inspired by reports of Israel preparing to move on Hamas targets in Rafah, which could risks deflating the recent lift in risk sentiment. US GDP data tomorrow and PCE data on Friday still provide an opportunity for increased volatility and a potential USD comeback should both prints surprise to the upside, further reinforcing the higher for longer narrative that has reemerged. All things considered, AUD may be susceptible to a sifter end to the week. AUD/USD daily chart Source: TradingView AUD/NZD bullish continuation shows promise AUD/NZD entered into a period of consolidation as prices eased in the form of a bull flag pattern. After yesterday’s close, a bullish continuation appears on the cards for the pair despite today’s intraday pullback from the daily high. A move below 1.0885 suggests a failure of the bullish continuation but as long as prices hold above this marker, the longer-term bullish bias and the prospect of a bullish continuation remains constructive. One thing to keep in mind is the risk of a shorter-term pullback as the RSI approaches overbought once more. Upside target appears at 1.1052 (June 2023 high) and 1.0885 to the downside. AUD/NZD 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.

The yen trades at 34-year lows versus the US dollar as the Bank of Japan kicks off its two-day monetary policy meeting. USD/JPY reached the June 1990 peak at ¥155.56 while EUR/JPY is fast approaching the October 2007 high at ¥167.74. Asian stocks were mixed and a lower open is expected for European stock markets following disappointing after-hours Q1 US earnings by the likes of Meta Platforms which dropped by 15%. In the US preliminary Q1 GDP, initial jobless claims and pending home sales are on the agenda while in Europe German Bundesbank President Nagel will speak at 4:15pm ahead of Friday's US PCE inflation data release.

Rallies in FTSE 100, DAX 40 and Dow have further to go Outlook on FTSE 100, DAX 40 and Dow as investors pile back in to global stock markets. Source: Getty Images Written by: Axel Rudolph FSTA | Senior Financial Analyst, London Publication date: Wednesday 24 April 2024 13:48 FTSE 100 hits yet another record high A weaker pound sterling and foreign investor buying of the undervalued UK blue chip index propelled the FTSE 100 to a record high on Monday. The pound sterling bouncing back following hawkish comments by BoE chief economist Huw Pill has not put a spanner in the works with the FTSE 100 hitting yet another record high and remaining on track for its fourth straight day of gains. Minor support sits between the early-to-mid-April highs at 8,046 to 8,017. Medium-term the 161.8% Fibonacci extension of the March-to-June 2020 advance, projected higher from the October 2020 low, around the 8300 mark represents a possible upside target. Source: ProRealTime DAX 40 regains lost ground The DAX 40’s strong rally off last week’s 17,400 low has gained traction and is trying to overcome last week’s high at 18,195. If overcome on a daily chart closing basis, the 8 April high at 18,329 will be in focus, together with the 4 April high at 18,429. Minor support can be spotted around the 5 April low at 18,085 and around the psychological 18,000 level. Source: ProRealTime Dow sees strong three straight day rally Since last week the Dow Jones Industrial Average regained lost ground and has risen by around 3% with the 55-day simple moving average (SMA) at 38,783 representing the next upside target, together with the 10 April high at 39,029. Potential slips may find support around the 38,452 March low and further down, around the late February 38,336 low. Source: ProRealTime

Gold price drifts down, while WTI crude price and natural gas price move higher Commodities recovered overnight, as natural gas prices rallied to their highest level since February, while oil prices surged off Tuesday’s low. Meanwhile, the gold price drifts downwards. Source: Getty Images Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Wednesday 24 April 2024 13:33 Gold struggles to hold its ground Gold prices found buyers yesterday as it dipped below $2300, briefly hitting a three-week low. Early trading this morning has seen a cautiously-positive start, and further gains above $2350 may suggest that a low is in place. Sellers will look for a reversal back below $2300 in order to open the door towards the 50-day simple moving average (SMA). Source: ProRealTime WTI forms a higher low? Oil prices staged an impressive bounce off the 50-day SMA on Tuesday, having spent the previous three sessions forming a short-term low above $81. A higher low looks to be in place for the time being, which then opens the way back to the peak from early April above $87. A fresh bearish view would require a reversal back to $81, and then a close below the lows of last week. Source: ProRealTime Natural Gas rallies to three-month high Natural gas has finally enjoyed a strong rally over the week so far, moving above 2000 at last and returning to the 100-day SMA for the first time since the beginning of the year. Of course, all this merely results in a substantially lower high relative to January, though the move above the February high at 2068 does help to bolster a short-term bullish view. The 2200 low from December becomes the next target. Meanwhile, sellers will be looking for a reversal back below the February high to suggest that a new leg lower has begun. Source: ProRealTime

Tesla, the first of the Magnificent 7 to report earnings, surged after it announced plans to build more affordable electric vehicles (EV). Source: Getty Images Shares Tesla, Inc. Electric vehicle Vehicle Share price Technical analysis Written by: Axel Rudolph FSTA | Senior Financial Analyst, London Publication date: Wednesday 24 April 2024 09:55 Tesla share price surges after Q1 results Tesla, the first of the Magnificent 7 to report earnings, surged after it announced plans to build more affordable electric vehicles (EV). New affordable model plans offset earnings miss Tesla shares surged in after-hours trading as the electric vehicle maker announced plans to accelerate the launch of new affordable EV models, despite reporting first quarter (Q1) earnings that missed Wall Street estimates. For the Q1 of 2024, Tesla reported revenue of $21.3 billion, down 9% year-over-year, attributed to reduced vehicle average selling prices and a decline in deliveries. Analysts had expected revenue of $22.15 billion. Adjusted earnings per share (EPS) came in at $0.45, slightly below the consensus estimate of $0.46. Investors cheer plans for cheaper models In a statement accompanying its Q1 2024 earnings report, Tesla said it plans to launch new models, including more affordable EVs, ahead of its previously communicated start of production in the second half of 2025. "These new vehicles, including more affordable models, will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up," the company stated. Cost reduction plans trimmed Tesla acknowledged that this accelerated timeline "may result in achieving less cost reduction than previously expected but enables us to prudently grow our vehicle volumes in a more capex efficient manner during uncertain times." Gross margins hit by price cuts Gross margins at Tesla were 17.4% in Q1, down from 19.3% a year ago, reflecting the impact of the company's repeated price cuts on its vehicles to boost demand. Tesla stock price: technical analysis Despite the earnings miss, Tesla shares surged 6.3% to around $153 in after-hours trading following the release of its Q1 report and new EV model launch plans with these now showing a pre-market price of around $164. Source: Google Finance Tesla had seen its stock price fall more than 43% so far in 2024 amid concerns about pricing pressure and layoffs prior to the Q1 report. Tesla weekly candlestick chart Source: TradingView For the July 2023 to April 2024 downtrend to be questioned, a bullish reversal would need to take the Tesla share price to above its late-March high at $184.25 on a weekly chart closing basis. While this is not the case, the Tesla share price remains in a downtrend as a series of lower highs and lows can be made out on the weekly chart. 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.

Surprising US PMI drops contrast with Europe’s gains in services, pushing EUR/USD higher as markets recalibrate economic outlooks and monetary policy expectations. Source: Getty Forex Euro Pound sterling European Union Inflation EUR/USD Written by: Richard Snow | Analyst, DailyFX, Johannesburg Publication date: Wednesday 24 April 2024 07:28 Flash PMI data provides unflattering US outlook, Europe improves German and EU manufacturing remains depressed but encouraging rises in flash services PMI results suggest improvement in Europe. UK manufacturing slumped well into contraction, but also benefitted from another rise on the services front. It was the US that provided the most surprising numbers, witnessing a decline in services PMI and a drop into contractionary territory for manufacturing – weighing on the dollar. EUR/USD rises after us PMI shock EUR/USD responded to lackluster flash PMI data in the US by clawing back recent losses. The euro attempts to surpass the 1.0700 level after recovering from oversold territory around the swing low of 1.0600. The pair has maintained the longer-term downtrend reflective of the diverging monetary policy stances adopted by the ECB and the Fed. A strong labour market, robust growth and resurgent inflation has forced the Fed to delay its plans to cut interest rates which has strengthened the dollar against G7 currencies. The surprising US PMI data suggests the economy may not be as strong as initially anticipated and some frailties may be creeping in. However, it will take a lot more than one flash data point to reverse the narrative. If bulls take control from here, 1.07645 becomes the next upside level of interest followed by 1.0800 where the 200 SMA resides. On the downside, 1.06437 and 1.0600 remain support levels of interest if the longer-term trend is to continue. EUR/USD daily chart Source: TradingView EUR/GBP surrenders recent gains EUR/GBP rose uncharacteristically on Friday when risks of a broader conflict between Israel and Iran subsided. In addition, the Bank of England’s(BoE) Deputy Governor Dave Ramsden stated that he sees inflation falling sharply towards target in the coming months, sending a dovish signal to the market. Today the BoE’s chief Economist Huw Pill tried to walk back such sentiment, stressing that the bank needs to maintain restrictiveness in its policy stance. He did however, echo Ramsden’s remarks by saying the committee is seeing signs of a downward shift in the persistent component of the inflation dynamic. EUR/GBP appears to have found resistance around 0.8625 and has traded lower after the PMI data, even heading lower than the 200 SMA. A return to former channel resistance is potentially on the cards at 0.8578. Prices settled into the trading range as central bankers mulled incoming data and the prospect of a first rate cut appeared a fair distance away. Longer-term, the ECB is on track to cut rates in June, meaning sterling will extend its interest rate superiority and is likely to see the pair test familiar levels of support. EUR/GBP 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.

Asian stocks, led by tech shares, rallied sharply on Wednesday as investors shifted focus to upcoming earnings from major US tech companies like Meta, Alphabet and Microsoft. Tesla's shares surged 12.5% after-hours as it promised new electric vehicle models, despite missing Q1 expectations. This boosted sentiment in Asia's tech sector. The Japanese yen remained depressed near 34-year lows against the US dollar around 154.85, keeping traders wary of potential intervention by Japanese authorities. Broad gains were seen across Asian markets like Taiwan, South Korea, Japan's Nikkei and the MSCI Asia-Pacific ex-Japan index. China and Hong Kong stocks were mixed. The risk-on rally is expected to extend to Europe with futures pointing to a higher open. Apart from tech earnings, markets are also eyeing US GDP and core PCE inflation data this week for clues on Fed rate path. US Treasury yields and the dollar index eased after data showed a cooling in US business activity and inflation pressures in April. The Australian dollar jumped on hotter-than-expected inflation data, prompting removal of rate cut bets for this year. Oil prices were largely flat as geopolitical tensions offset economic concerns.

Dow, Nasdaq 100 and Nikkei 225 make headway off recent lows The selling in indices has stopped for now, with major markets higher after finding at least a short-term low last week. Source: Getty Images Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Tuesday 23 April 2024 13:38 Dow recovery goes on The index continues its recovery from the lows of last week, and Monday’s session saw it move back above the 100-day simple moving average. The flood of major earnings over the coming two weeks may mean that the index experiences a more volatile period, even if it does continue to rebound. Further gains target 39,000, which provided some resistance earlier in the month, and then on to 40,000. A close back below 38,000 could suggest the price will head back towards 37,500, retesting last week’s low. Source: ProRealTime Nasdaq 100 braces for big tech earnings The pullback in the index paused yesterday, as the price reached 17,000. A small gain helped to suggest that a low may be forming. The big tech earnings that dominate this week and next may mean that the index struggles in the short-term, though with the percentage of index members below their 20-day SMA hitting 5% last week a short-term bounce still seems likely. A close above 17,415 and the 100-day SMA helps to build a short-term bullish view. Sellers will want to see a close back below 17,000, which could then open the way to the January low at 16,177. Source: ProRealTime Nikkei 225 returns to 100-day SMA As with other indices, the Nikkei 225 has seen its pullback pause over the past three sessions. Buyers appeared last week when the index dropped below 37,000, and the index then pushed back to the 100-day SMA. A close above the 100-day SMA would add strength to the bullish view, while the price then targets the early April highs around 39,860. 37,000 continues to hold as support for now, so a break below here is needed to put the bearish view back on track. Source: ProRealTime

While the price of crude oil stabilises, gold and silver prices fall sharply De-escalation in the Middle East leads to risk on sentiment and flows out of save haven commodities such as precious metals. Source: Getty Images Written by: Axel Rudolph FSTA | Senior Financial Analyst, London Publication date: Tuesday 23 April 2024 13:23 Brent crude oil price recovers slightly from near one-month low The Brent crude oil price’s sharp decline from its 91.67 mid-April high to Monday’s 85.21 near one-month low amid de-escalation in the Middle East has been followed by a minor bounce which so far remains tepid and below the 87.11 mid-March high, though. Were 85.21 to give way, the key mid-November-to-early March previous resistance area, now because of inverse polarity a support zone, at 84.58 to 83.79 would probably be tested. Source: ProRealTime Gold price plunges to three-week low as geopolitical tensions ease Spot gold is on track for its second straight day of losses, having so far fallen by around 5% from its mid-April $2,431 per troy ounce record high, as tensions in the Middle East ease. A potential downside target is seen at the 5 April low at $2,268. If fallen through, a more significant correction might take the precious metal price to its 20 March $2,223 high. Minor resistance sits between its mid-April low and Tuesday’s intraday high at $2,335. Further minor resistance can be spotted at the 17 April $2,354 low. Source: ProRealTime Silver price comes off its three-year high The spot silver price is seen coming off its $29.79 per troy ounce mid-April high, a level last traded in February 2021, towards its 5 April low and the February-to-April uptrend line at $26.29 to $26.16 as geopolitical tensions in the Middle East abate. Another potential downside target is the 21 March high at $25.77. Minor resistance above Tuesday’s intraday high at $27.36 can be seen at the 10 April low at $27.53. Source: ProRealTime

Monday’s session saw the FTSE 100 finally reach a new record high, joining its peers which saw fresh peaks earlier in the year. Source: Getty Forex Indices Shares FTSE 100 Federal Reserve Pound sterling Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Tuesday 23 April 2024 10:22 FTSE 100 hits new peak as rate cut hopes boost index Monday’s session saw the FTSE 100 finally reach a new record high, joining its peers which saw fresh peaks earlier in the year. FTSE 100 closes at record after broad up day for UK stocks The UK's premier FTSE 100 stock index hit an all-time closing high on Monday, with the blue-chip benchmark surging 1.6% to finish at 8,023.9 points. The rally was broad-based across most index constituents. Weaker pound helps boost UK exporters A key factor driving the FTSE 100's record close was the renewed weakness in the British pound versus the U.S. dollar. Sterling slumped 0.3% to $1.2333, its lowest since mid-November. With most FTSE 100 companies earning the majority of their revenues overseas, the weaker pound boosted their relative valuations. Diverging rate outlook for Fed and Bank of England Market expectations are building for the Bank of England (BoE) to start cutting interest rates as soon as August. This contrasts with views that the U.S. Federal Reserve (Fed) will keep rates higher for longer. The diverging rate outlook between the BoE and Fed is seen as benefiting the globally-exposed FTSE 100 index. New highs come despite cheaper valuations Even after setting a new all-time closing peak, UK stocks continue to trade at a record discount to their peers like the S&P 500. This depressed valuation gap reflects years of underperformance by British equities relative to other major markets. UK companies continue to be snapped up by foreign investors, with engineer Tyman agreeing to a takeover on Monday and other major names in focus. Energy and bank stocks support FTSE 100 gains Sector boosts from rising oil prices lifting energy giants like Shell, as well as gains for UK bank stocks amid an emerging economic recovery, have helped drive the FTSE 100's recent rally to new highs. FTSE 100 technical analysis The FTSE 100 finally managed to overcome its previous record high dating back to February of last year and is fast approaching the 8,100 mark. Since over the past decade the index several times fell just short of the psychological 8,000 mark, the question is whether this time round a valid break above that level has finally been made. For now at least, the index seems to be on track for its third consecutive month of gains. This is encouraging for the bulls as it shows consistent buying pressure. FTSE 100 Monthly Candlestick Chart Source: TradingView A technical upside target can be found at the 161.8% Fibonacci extension of the March-to-June 2020 advance, projected higher from the October 2020 low, at 8301.90. This bullish view will remain intact while the 200-day simple moving average (SMA) and the 2020-to-2024 uptrend line at 7,597.9 to 7,582.1 underpin on a weekly chart closing basis. Immediate upside pressure should be maintained while the FTSE 100 stays above Friday’s one-month low at 7,748.8 on a daily chart closing basis. FTSE 100 Daily Candlestick Chart Source: TradingView Minor support above these levels can be seen between the 8,016.5 early April high and the psychological 8,000 mark. 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.

As Amazon gears up to release its Q1 2024 earnings on April 30, market watchers are eyeing potential growth in AI technology, cost-cutting measures, AWS expansion, and advertising revenues. Written by: Tony Sycamore | Market Analyst, Australia Publication date: Tuesday 23 April 2024 05:45 When will Amazon report its latest earnings? Amazon is expected to report its first quarter (Q1) 2024 earnings after the market closes on Tuesday, 30 April, 2024. Amazon: a titan among the Magnificent Seven Amazon is an American multinational technology company specialising in e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. It is a member of the so-called "Magnificent Seven", along with Tesla, Microsoft, NVIDIA, Apple, Meta, and Alphabet. In its Q4 2023 earnings report, Amazon surpassed Wall Street's expectations, resulting in its share price surging 8% higher in after-hours trading. The company reported revenues of $170 billion in the fourth quarter, 14% higher than the $149.2 billion reported in the fourth quarter of 2022. The company reported EPS of $1.00 per share, beating market forecasts of $0.80, significantly exceeding reported EPS of $0.03 in the fourth quarter a year earlier. "This Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon," said Andy Jassy, Amazon CEO. "As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about." Amazon projects robust sales growth and profitability in Q1 2024 guidance Source: Amazon Amazon's key financials Slowing revenues Current Quarter (Q1 2024): $142.53 billion Previous Quarter (Q4 2023): $170.00 billion EPS takes a dip Diluted EPS Q1 2024: $0.83 Diluted EPS Q4 2023: $1.00 Amazon sales revenue Source: TradingEconomics Andy Jassy's vision for Amazon: what to watch for? Amazon embraces the AI revolution Jassy mentioned AI and Gen AI more than 30 times in his letter to shareholders earlier this month, noting that "Generative AI may be the largest technology transformation since the cloud – which itself is still in the early stages – and perhaps since the internet." As such, there will be keen interest in seeing how Amazon continues integrating and utilising AI technology within its business and product offerings and the potential it can create for shareholders. Jassy's cost-cutting crusade After overspending during the pandemic, Jassy is expected to continue cutting costs, specifically in the fulfilment and logistics division. "As we look toward 2024 (and beyond), we're not done lowering our cost to serve. We've challenged every closely held belief in our fulfilment network, and re-evaluated every part of it and found several areas where we believe we can lower costs even further while also delivering faster for customers." Riding the AI wave: AWS's growth trajectory Last quarter, revenue for the AWS segment increased by 13% year-on-year. There will be keen interest in seeing that rate of growth maintained in this AI-heavy area of Amazon as more businesses shift their data storage to the cloud. Prime video and sports: the advertising goldmine Amazon's Advertising revenue increased by 24% year over year in 2023 to $47 billion from $38 billion in 2022. Shareholders will look for continued strong growth in this area powered by various measures, including incorporating advertisements into Prime Video Shows and Movies and live sports. The rise and fall of Amazon's cashier-less dream Amazon's cashier-less technology, designed to help shoppers skip the line, was intended to reshape the future of retail. However, shoppers appeared uncomfortable using the technology. While Amazon has announced that they are walking back the technology, there will be interest in seeing what plans the company has for the technology already developed. Amazon's 2023 letter to shareholders Source: Amazon Amazon technical analysis In a move that took almost three years to complete, Amazon's share price recently reached a new all-time high after dropping more than 55% from its July 2021 high of $188.65. Amazon's ascent to new highs was driven by an 18% increase in the share price during the first quarter of 2024 - a performance that exceeded the tech-heavy Nasdaq, which saw a more modest 8.50% rise during the same timeframe. Amazon weekly chart Source: TradingView The daily chart below illustrates that after an 8% jump in early February (following its Q4 2023 earnings report), Amazon's share price recently surged to new highs, propelled by a bullish trend channel. Looking ahead, bullish trend channel resistance lies at around $192, which would be a logical spot for profit-taking type sell orders. On the downside, initial support is identified at $170, where we would expect dip buyers to step in, ahead of more significant support at the lower boundary of the trend channel, coming in at around $148.00. Amazon daily chart Source: TradingView Source TradingView. The figures stated are as of 17 April 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 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.

Upcoming McDonald's earnings on April 30th could signal key shifts in market dynamics, with investors eyeing potential impacts of inflation, geopolitical concerns, and competitive challenges. Source: Getty Shares McDonald's Fast food Franchising Relative strength index Inflation Written by: Monte Safieddine | Market analyst, Dubai Publication date: Tuesday 23 April 2024 02:14 When will Tesla report its latest earnings? If you're craving a Big Mac on Tuesday, April 30, it might be because that's when McDonald's Corporation is expected to release its figures for the first quarter of this year. A snapshot of last quarter's performance Hopes are it won’t be mixed results as we saw in the final quarter of last year where it outperformed on earnings per share at $2.95 versus $2.82 forecasts but suffered a slight miss on revenue at $6.41 billion instead of the $6.45 billion expectations. McDonald's and the changing tides of fast-food consumption In the past, it was a story of snatching market share from pricier chains when the cost of living rose significantly, but it has since begun to impact even fast-food companies. Polling from Revenue Management Solutions back in February painted a picture of low-income consumers cutting back on fast food, and at times avoiding it altogether, instead of merely reducing consumption at the franchise. That has meant concern over receiving less from budget-conscious consumers, and pushing more into that camp where previously it had been more about tastes and preferences. Inflation has generally been moderating, but slight panic is resurfacing once more that controlling it in the next phase will be a more challenging task. And focusing on the state of California, prices are expected to be higher for the current quarter after the minimum wage increase to $20 at the start of this quarter, as leaders in the industry said they’d adapt to incorporate the higher costs, even if for some it’ll be up to their respective franchisees. McDonald's ambitious leap towards 50,000 restaurants Higher costs in general will be observed and not just in the Golden State. There's also how it's faring on its expansion plans to reach 50,000 with the majority of capital expenditures on opening new restaurants, whether in the US or abroad, any update on evaluating its spinoff CosMc's, and the tie-in with Krispy Kreme going nationwide that benefited the doughnut maker’s share price significantly when it was announced, with little effect on McDonald’s share price. Those in the food industry have always sought further clarity regarding the impact of weight loss drugs, given the intent is on reducing appetite and feeling full for a longer period. Geopolitical concerns and revenue impact Then there’s the geopolitical angle. The ongoing boycott in the Middle East and its impact on sales in the final quarter of last year, and not just in the region but in other countries as well. It’s expected to have “a negative impact…as long as the war continues,” according to its regulatory filing back in February, which resulted in the announcement earlier this month about acquiring all of its Israeli franchise restaurants. For now, reliance will remain high on its core regions where the US is well on top by a big margin followed by Japan and China, and the extent to which the slower start to the year on weather woes can play a larger role in reducing customer traffic. How does McDonald's stack up against Chipotle and Domino’s Pizza? Looking at the competition, there have been stellar gains over the past year for Shake Shack's share price (up over 70%), Chipotle (nearly 60%), and Domino's Pizza (by over 40%), while McDonald’s is down by 7%. That means while its established brand and strong balance sheet might have been a plus when investors became defensive preventing its share price from falling too heavily when the AdvisorShares Restaurant ETF was in retreat, it hasn’t been able to come close to matching the rest of the industry when they are enjoying double-digit percentage gains. Source: Getty McDonald’s forecasts from Q1 results In all, expectations this time around are for an earnings per share of $2.72, higher than the same period last year at $2.63 but quarter-on-quarter experiencing another consecutive drop, and an estimate that has been revised higher recently. Revenue is expected at around $6.2 billion, above 2023's Q1 $5.9 billion but below the three quarters that followed. Gross profit margin is anticipated to improve, and there's also the potential for a small dividend hike (source: LSEG). As for recommendations, the majority remain in the 'buy' category, with none opting for an 'underperform' or 'sell'. Eight analysts are advancing into 'strong buy' territory, 19 are opting for a 'buy', and eleven suggest a 'hold'. Regarding their price targets, the average among them of $324 is above the current share price (source: LSEG). Trading McDonald’s Q1 results: technical overview and trading strategies Examining the weekly chart and dissecting the primary technical indicators individually reveals the price positioned below most of its main weekly moving averages, close to the lower end of the weekly Bollinger Bands. The DMI (Directional Movement Index) is negative, with a considerable margin between the DI- over the DI+, and the RSI (Relative Strength Index) indicator still not reaching oversold territory. Additionally, the ADX (Average Directional Movement Index) is below the ranges indicative of trending movements. The daily timeframe indicates a deteriorating technical outlook. Given this analysis, it's understandable why determining a technical overview in these circumstances becomes more complex for the long-term weekly perspective, whereas, for the daily perspective, a 'bear average' appears more apparent. For those predicting the persistence of this overview (and its bear channel), selling strategies may be considered, whether through a significant reversal from the weekly 1st Resistance or a breakout from the first Support. The increased volatility in this current phase, triggered by the upcoming fundamental release, could necessitate adjustment to strategies, perhaps shifting focus to secondary levels depending on how significantly the results diverge from expectations. Source: IG McDonalds weekly chart with key technical indicators Source: TradingView IG Client sentiment* and short interest for McDonald’s shares When it comes to sentiment amongst retail traders (image below), the bias has been extreme buy and has risen over the past two weeks to 91% as of this morning from 80% prior. Short interest on the exchange was somewhat rangebound for a few years and beneath 1% of shares float, but over the past two quarters has started trending higher with the latest print at over 8 million representing 1.12% of shares float (source: LSEG). 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 8am for the outer circle. Inner circle is from April 2, 2024. 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.

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